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THE COST OF PRODUCING COTTON. Ad 
: VARIATIONS IN COST AND RELATION TO PRICE. 
At the beginning of such a discussion it should be clearly under- 
stood that there is not one cost of production, but, in fact, many 
costs of production. This is due to the variation in the producers 
themselves as weil as in the instruments of production which they 
employ. This variation in the cost of production has a direct rela- 
tion to prices and renders the subject more complex than has been 
assumed by those who have asked that the price should equal the 
cost of production plus a fair profit. Few people have appreciated 
either the wide range in cost or the significance of such a wide varia- 
tion in cost. It has been assumed that most costs would be close 
to the average of production, and, this being the case, would facili- 
tate the usage of the average cost to determine price. The futility 
of using the average in this way is shown by the accompanying 
charts (see fig. 13 and Table XLVI), which give the range in the cost 
of producing cotton. Because of this wide variation in the cest of 
producing cotton it does not necessarily follow that there is no rela- 
tion of cost to price and therefore the cost data have no significance, 
for, as a matter of fact, there is an important relation of cost to price. 
The first question that at once arises is what proportion of the 
producers in any given line of production must receive the cost of 
production in order to stimulate the production of the desired sup-. 
ply. This question can not be answered offhand for the various 
Imes of agricultural production largely because data have not been 
gathered which will answer it. Neither has it been determined just 
how widely the costs on a given farm vary from year to year, but 
it is obvious that the important thing in the mind of the farmer 
that provides a basis for deciding whether or not a specific product 
is to be produced is the relation between the cost and the price 
through a series of years. 
There are a number of other considerations which enter into a 
discussion of the relation of cost to price on which no authoritative 
data are available. It is not known to what extent farmers con- 
tinue to produce at a loss through a series of years through force of 
custom instead of adjusting their production to the market condi- 
tions. Neither has it been determined how high a percentage of 
producers are just getting into farming and produce at a loss while 
gaining the ability to manage the farm profitably. Furthermore, 
it is not known what percentage of those who are now producing at 
a loss in a given year will drop out and be replaced by more capable 
farmers. All of these conditions have a direct bearing and influ- 
ence on prices. = 
The question of what proportion of the farmers must receive the 
cost of production of a given crop in order that their returns shall 
be an adequate stimulus to further production can at this stage of 
our studies be no more than an off-hand guess. In the absence of 
