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(a) The inability of the small settler to prepare his product m 
such a manner as to command remunerative prices , 
(b) The difficulty experienced in disposing of his produce in the 
best markets. 
The second of these two factors is to some extent dependent 
upon the first, but the extra cost entailed in making small ship- 
ments, the want of accredited agents at the terminable markets— such 
as exist among European firms, the absence of combination and 
the ignorance of the native in commercial matters generally, must 
also be taken into consideration. I may mention that quite recently 
a case came under my notice where a Malay, after preparing some 
eight to ten pikuls of sago flour, had to take it personally to Singa- 
pore in order to obtain a fair price for it. He might, ot course, 
have disposed of it on the spot to a Chinaman, but at a ridiculously 
low figure. 
4. In support of my contention that indolence alone does not 
account for the present state ©f affairs, I would instance the fact 
well known to you— that some five years ago, when the cultivation 
of coffee was considered a remunerative employment there were 
many thousands of acres under this cultivation in the Klang district 
alone ; practically the whole of which has been abandoned since 
the decline in the price of this commodity, and I therefore incline 
to the belief that if there was a good prospect ot a ready market 
at fair prices, the native would be ready and willing to cultivate 
his land. 
5. This brings me to my proposal, which is roughly as follows 
(1) Government should, by the aid of a grant, assist 111 
the erection of modern machinery for the preparation 
on the most approved principles of the particular pro- 
duct or products it is decided to foster; 
(2) The person or persons in consideration of such finan- 
cial assistance would enter into agreement with the 
Government— furnishing securities— to take the whole 
of the crop grown on a definite area for a specified 
(3) The area from which the crop is produced and the 
number of years for which the agreement holds good— 
which should not be less than five— would depend on 
the amount of the bonus ; . 
(4) The cultivator should deliver his crop at the mill and 
be paid cash for the same on delivery ; 
(3) The market price for the raw product should be fixed 
weekly by Government and accepted by all concerned. 
The above are the salient features of a scheme which 1 do not 
for a moment claim to be complete or original, but it is unnecessary 
here to go into the numerous details. 
6. The errant made by Government, whether in the form of a 
lump sum towards the erection of the machinery or a fixed sum per 
annum so as to enable the Manager to pay cash for the raw produc t, 
