228 



The Control of Farm Makagement. 



[Jtjne,. 



as the state of the flock or herd is maintamed at a constant level 

 by the sale of old animals and the introduction of young ones. 



The valuation of stock on a market value basis robs the 

 accounts of their whole use as a guide to management. The 

 final product-cost will include a concealed profit or loss. For 

 temporary causes, such as a shortage of keep at home or the 

 closing of foreign ports to imported live stock, may turn a profit- 

 able year into one, apparently, of serious loss if market values 

 are assigned annually to breeding stock not intended for immediate 

 sale. Similarly, a temporary inflation of values for any cause 

 would lead to unwarranted optimism as regards the year's results 

 in the particular department concerned. Many men to-day are 

 farming with the same stud of horses they had seven years ago. 

 They have seen the average market value rise, in many cases 

 by some 200 per cent., and fall again nearly to the original 

 value. An annual valuation based on the market value of the 

 day could have caused nothing but confusion, as introducing 

 paper profits first and then paper losses, neither of which would: 

 have had any actuality. 



In valuing crops the same cost principle must be adopted.. 

 There is no need to speculate as to the probable yield of a field 

 of roots or a stack of corn and then apply some market price tO' 

 the result which, in the former case, can have no possible reality, 

 and in the latter case may be entirely falsified by the turn of 

 events before the corn can be marketed. The cost of the crop 

 up to the date of valuation compared with the market price sub- 

 sequently reaHsed enables the farmer to assess the results of his 

 management in this department. If the crop be fed to stock on. 

 the farm instead of being marketed direct, the financial result 

 is obtained when the stock is sold, and the farmer is in a position 

 to contrast the results of direct and indirect marketing, together 

 with such questions as crop substitution and so forth. If once the 

 actual facts of the farmer's own experience as revealed in his 

 books are allowed to give place to values assigned by others, 

 all basis for comparison is lost. 



Having settled the basis on which to make the valuation, other 

 questions arise in agricultural costing for the treatment of which 

 definite principles must be laid down if the results are to have 

 any real value as a guide to management. One of these is how 

 to deal with Rent. In the sense in which the term is used by 

 economists, rent is not an element of cost, for it represents 

 nothing more than the value of production due to variations in 

 situation and the inherent capabilities of the soil. " Rent is due 



