1912."] Costs of Production in Agriculture. 1029 



One of the objects to which the grant for Agricultural 

 Research, recently placed at the disposal of the Board of 

 Agriculture and Fisheries, will be de- 

 Costs of Production voted is the maintenance of an Institute 

 in Agriculture. f or the study of the Economics of Agri- 

 culture, a subject of which little has been 

 heard hitherto in this country. A marked feature of the pro- 

 gress in recent years in the technique of business management 

 has been the prominence given to what are technically known 

 as "costs." The majority of large manufacturing concerns 

 have nowadays a costs department, one of whose functions it 

 is to ascertain and record the cost of each operation that is 

 required to convert the raw material into the finished article 

 ready for the market. Thus, if the manufactured product is 

 worth a sovereign, the costs department ascertains to the 

 fraction of a penny the value of the raw material 

 used, the cost of labour at each successive stage of 

 manufacture, and even such details as, say, the cost 

 of the coal used in producing power for any necessary 

 machinery, the fractional share of management charges 

 properly debitable to the article in question, and so on, in 

 as minute detail as may be considered desirable. It is thus 

 possible to institute comparisons and so check waste, to drop 

 unprofitable "lines," and develop profitable departments. 



So far, work of this kind has not been done in relation to 

 agriculture in this country, but a beginning has been made 

 in the United States by the Bureau of Statistics, and some 

 interesting papers on the subject will be found among the 

 publications of that department. 



The need for accurate information on the cost of agricul- 

 tural operations may be illustrated from the recent controversy 

 in the daily press on the subject of the cost of growing 

 sugar beet. No general agreement has been reached on this 

 vital question — vital because on the answer to it the useful 

 •employment of many thousand pounds of capital may depend 

 —and estimates differing by 100 per cent, from one another 

 have their advocates, each of whom produces an ostensibly 

 convincing array of figures. A common feature of all these 

 figures is that they are based on arbitrary assumptions as to 

 the cost of such things as, for example, horse labour, a subject 



