Transactions of RHASS Volume 1940 - Page 008
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| Year | 1940 |
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| OCR Text |
4 THE EFFECTS OF THE \VAR ON AGRICULTURE. RISE IN PRICES. The first effect of the war has been, as expected, a rise in prices. In peace—time, prices were controlled by the com- petition of overseas producers. War removes this competition. The fall in the value of the pound raises the prices of agricultural produce in the country of origin. They are raised still further by the great increase in freights. The cost of tranSport is now two or three times as high as it was before the war broke. Even though the Government does its utmost to stabilise prices it will be difficult, if not impossible, to prevent prices rising still further. As war expenditure increases, the value of money must inevitably fall. As the value of the pound falls, prices will rise. Apart altogether from monetary causes, a rise in prices of agricultural products must accompany increased production. The cost of production is lowest on the best lands. As prices fall it becomes unprofitable to work the poorer lands, and the cultivated area contracts on to the most fertile lands or those having special advantages, such as easy and cheap access to markets. As production increases we must move on to the less profitable marginal land, and the price of agricultural products must increase to cover the higher cost of production on the new land brought into cultivation. In this respect agriculture differs from most other industries where the cost of production per unit falls as output increases. For most agricultural products in this country, costs are reduced when production is slowed down. Therefore, apart from a rise in prices due to a fall in the value of money, which is a fictitious rise, there will be a real rise in prices accompanying increased production, with the extension of the area under cultivation to include marginal land which had been allowed to go out of cultivation with the post-war fall in prices. The difference in cost of production on different farms forms one of the most difficult problems in fixing reasonable prices. If the prices are sufficient to cover the cost of pro- duction and leave a reasonable profit on poor land, they will leave an excessive profit on the highly fertile land. The present subsidy of £2 per acre for ploughing up old pasture and the subsidy for lime and slag help to compensate for the increased cost of production on the marginal land being brought into cultivation. It is doubtful, however, whether the compensation is sufficient to ensure that the land once broken up will be kept in cultivation. This is a problem which calls for study in any long-range planning. ' Farmers would be ill—advised to regard the sudden rise in prices as an increase in real wealth. The value of a cow may ,5 . i. THE EFFECTS OF THE WAR ON AGRICULTURE. 5 rise from £25 to £50, but it is still the same cow. The change is not so much in the value of the cow as in the value of the money. In the last war the great rise in prices followed by the post-war slump brought ruin to many farmers, especially those who bought their farms or who went into farming when prices were at their peak. What agriculture needs is not temporary exorbitant prices, which will be followed by a slump, but permanent prices which will cover the cost of production of farms managed with average efficiency and leave a reasonable margin which should be applied to improving farms to increase their efficiency. With no certainty that prices will be maintained high enough to keep marginal land in cultivation, farmers would be well advised to plough as much of their profits as possible back into their farms. Im- provements in fencing, draining, buildings and equipment, and in soil fertility is the safest form of investment for whatever surplus profits agriculture may make during the war. ' INCREASED PRODUCTION. Home production must be increased to meet increased food requirements during the war and to replace decreased imports. Though little attention has been given to increased war requirements, the amount of the increase is quite considerable. The calorie 1 requirements of an unemployed man or one in a sedentary occupation, who takes little muscular exercise are not more than 2250-2500 calories per day. Manual workers need about 3500 and soldiers about 4000. Before the war finishes we may have between three and four million men under arms, and practically the whole of the unemployed who are employable will be engaged in industry. The resulting increase in food requirements will amount to between 5 and 10 per cent. Hence, even if home production and imports were maintained at the same level as during peace-time there would still be a food shortage during the war. As home production accounts for only about one-third of the total food consumed, it would need to be increased by about _20 per cent to make up the increased requirements even if imports were.maintained at the peace-time level.) In the last war the increase in the output of home—grown food in 1918_ amounted only to about 8 per cent of the total food requirements, which did little more than meet the increased reqmrements due to the war. It is estimated that at the end of the last war the total national food supply was actually 1 T e . . , . h calorie is the unit used for measuring energy requirements, human and animal, and the ener - ' ld' ‘ ‘ ' indicates the total argguynl: ofufgo‘ddii‘ezggdfOOdS. Th6 number 0f calories Stated |
| Title | Transactions of RHASS Volume 1940 - Page 008 |
