SECTIONAL TRANSACTIONS.— M. 441 



The causes are not due to infertility of the soil, animal or plant diseases, 

 or incompetent management. On the contrary it can be said that manage- 

 ment generally is too good and production too great for the present level 

 of consumption. Therefore, under-consumption is the main cause of 

 agricultural depression. This under-consumption is the result of the low 

 purchasing power of the masses due to low wages. 



The low wage psychology that still prevails extensively among industrial- 

 ists and financiers is an inheritance from the scarcity age when it was neces- 

 sary to increase capital goods at the expense of consumption goods. 



In a profit economy, this surplus of capital goods, i.e. ' production kept 

 back from consumption,' accrues to a comparatively small class, leading to 

 waste and extravagance on the one hand, and over-investment on the other. 

 Hence the anxiety about the foreign investment market. 



For a very long period this country has been engaged in the profitable 

 game of lending abroad. Profitable that is to certain interests. By the 

 nature of the case these loans will be made to the so-called backward 

 agricultural countries, who can only pay interest and sinking fund by ship- 

 ping raw materials and foodstuffs to the creditor country. 



These foodstuffs coming in on interest account force down prices generally 

 and so cause distress to agriculture, and, because they are tribute goods 

 needing no exports of manufactured goods to pay for them, are a direct cause 

 of general unemployment, and so lessen effective demand. 



Mr. A. N. DucKHAM. — Marketing policy and special features (11.30). 



The marketing devices utilised under the Hops, Milk, Potatoes, Pigs and 

 Bacon Marketing Schemes, the Cattle, Sugar and Wheat Subsidy, and the 

 National Mark Schemes are outlined : — 



{a) Regulation and standardisation of commercial practices (through 

 grading services, registration of dealers, and other devices) save time, 

 trouble and marketing costs, and broaden the basis of demand by improving 

 quality and by facilitating the custom of new wholesale and retail buyers. 



(6) Statutory combination of farmers can enhance their bargaining power 

 and help them to obtain the price which various outlets (e.g. liquid milk, 

 manufacturing milk) can afford to pay, instead of the price the least profit- 

 able outlet is willing to pay. Limitation of the volume of (physical) market- 

 ing and processing facilities can aid agriculture by concentrating buyers' 

 competition and reducing their overhead expenses. 



(c) Price stabilisation schemes foster efficiency by reducing the speculative 

 nature of agriculture and help to satisfy the demand of farmers for security 

 of livelihood (and potentially of the consumer for security of supplies and 

 price). 



{d) Protection from or limitation of imports is not alone enough to secure 

 stable profits or increased home output, as consumer-demand may not 

 automatically switch from imported to home-grown food. Intensive study 

 of the consumer, and an aggressive ' sales ' policy for British agriculture 

 {sic) and home-grown food are, therefore, indicated. The relation between 

 marketing policy and agricultural science is also discussed. 



General Discussion on preceding communications (12.0). 



Afternoon. 



Excursion to the Midland Agricultural College, Sutton Bonington, 

 Loughborough. 



