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the agricultural policy in other countries has been directed to increase the prosperity of agriculture and to secure the fullest possible use of the land for the production of food and the employment of labour at a living wage, and by what means these ends can be secured in this country. It is evident to us that increased output of food and increased employment depend mainly on the extension and more intensive cultivation of the arable area. In this country the arable area has declined and is declining, and unless that decline can be checked the output of food and the employment of labour will be relatively diminished. But the decline in the arable area reflects the opinion of the farmers as regards the relative profitableness, including the risks under present conditions, of arable and grass farming respectively. We are clear that if the nation wishes to take steps which offer a reasonable chance of staying the present decline in the arable area, such measures as we have suggested in our Interim Reports are the best means of preventing the immediate conversion of land from tillage to grass. The long term causes with which this Report is chiefly concerned can only produce their effects gradually and cumulatively over a considerable period of time, and their ultimate outcome must be affected by the character and cost of production in other countries. We regard these long term causes as of great importance in securing the prosperity of the industry, but if meanwhile the decline in the arable area is to be checked, more directly acting measures are required. These may be of a temporary character, or they may prove to be of such value as to become relatively permanent elements of national policy.

PART I.

THE PLACE OF AGRICULTURE IN NATIONAL LIFE.

8. The first question to which we wish to direct attention is the place of agriculture in our national life. What is the end in view? There are, as our Terms of Reference indicate, three purposes which may not be mutually compatible, or at least may limit one another; viz.: (1) "the fullest possible use of the land for the production of food"; (2) "the fullest possible use of the land for the employment of labour at a living wage"; (3) "the prosperity of agriculture "--which we are no doubt justified in understanding in the commercial sense of financial profit to those carrying on the industry.

9. Here are certain fundamental matters on which, if there is to be a definite public opinion and a public policy, it is necessary that there should be as clear an understanding of the issues as possible. In the case of other industries the question is not commonly asked by the public: Does the industry have as great an output as possible, or does it employ as many persons

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as possible. The industry is left to itself to find out what, in the narrow sense of the term, is its most economic organisation. The test is not output or employment, but profit; though this test is to a certain extent modified by the enforcement of national standards with respect to the conditions of labour. Nevertheless the contrast in the public mind between agriculture and other industries is very marked. Agriculture has not been regarded simply as a business, but as something more. What is that something more, and why? It is partly that agriculture is charged with the use of the land, which is limited in amount and of peculiar economic and social value; partly the great importance of the produce of the soil to the life and industry of the people, in peace and especially in war; and partly ideas as to the value of a flourishing rural population in the concentrated and intense life of the modern industrial state.

10. These considerations have influenced the policy of European states to a greater degree than in this country, and they complicate the problem of the treatment of agriculture. If agriculture were to be regarded as an industry which must determine its production simply by the consideration of profit-then there would be little or no ground for State action as regards this rather than any other industry. The distribution of the land and the use of the soil should then be directed simply to the most profitable return to the occupier or owner. If large grazing ranches-with a very small employment of labour and a relatively low production of food-were more profitable and less risky than arable production, then in that direction agriculture would inevitably be drawn. But in most countries we find that the State has been consciously developing an agricultural policy which treats the industry not simply as other industries, but as one which has special claims on and obligations to the nation.

11. As, then, the consideration not simply of profit, but also of the greater rather than the less production of home-grown food and of the greater rather than the less employment of labour, enters to an unusual degree into agriculture, how far is it possible to find a reconciliation or adjustment of the different factors and to strike the mean which constitutes "a prosperous agriculture " in that larger sense which includes social as well as economic objects, viz., an agriculture distinguished by the large number of homes on the land, the large production of food and a profitable return on the capital and labour expended? Step by step, not one, but most countries, are seeking to build up a national agricultural policy which shall solve the problem. In Europe this is most markedly the case with Germany and Denmark. But in very different circumstances in the North American and in the Australian continents, the movement of thought shown both in legislation and in social and economic organisation, is tending in a like direction. The "family farm," "the homestead," and the "small holding" in the New World and in the Old express an idea which is not simply economic, but

social. It is very deep in its roots, and is persisting and growing despite fluctuating and often unfavourable economic conditions. Among well-informed observers the value of a combination of large, medium and small holdings is generally recognised. Nevertheless the preponderance of the small farm is increasing and the movement in its favour is strengthened by the evidence that the “family farm” is weathering the difficult economic conditions of the times. Thus, in agriculture, the tendency has been in the reverse direction from that in other industries, in which great aggregations of capital and labour and the submergence of the domestic industry and of the small independent workshop or factory have been so general.

12. But there are also other considerations which account for the special position which agriculture holds in national economy. Agriculture stands out with mining as the greatest of the primary industries. But, compared with mining, agriculture shows one fundamental and most important difference. Mineral wealth is exhausted as it is extracted. The wealth of the soil, when rightly developed, is inexhaustible, and, to a certain degree, progressive in character. For, in dealing with the soil and with crops and stock, we are dealing with active organic material. Not only does the soil improve permanently by good draining and tillage; the scientific rotation of crops conserves and increases the fertility of the soil, while the selection and breeding of strains of seed of high yield and quality, and in like manner the selective improvement of live stock, offer lines in which progressive returns are still possible. The problem of strain is peculiar among the great industries to agriculture, and is no less important in crops than in animals. At no time has so much attention been directed to progress on these lines as during the past twenty years. The scientific breeding of improved strains, both in crops and in stock, stands out as one of the most notable features of modern agriculture; and it is important that the fullest advantage should be taken of the results of this work. The community whose economic conditions enable it to develop its agriculture on lines of modern science will have not only an annual increase in its wealth, but also the best security for a continued output of high standard. Its capital, as well as its annual returns, will grow.

13. The importance of agriculture is also due to the large and steady demand for goods and services which intensive farming makes on the community. In this respect the paramount importance of tillage is seen; and the claim can justly be made that the increase and maintenance of tillage should be the main object of national agricultural policy. To state this does not overlook the fact that the improvement of the permanent pastures is also important. But no system of grass farming has in it the potentialities of wealth and well-being that tillage affords. Good tillage yields far more than the best grass. not only gives greater production per acre, but it employs more

labour, and it requires much more machinery and equipment. It is true that the consideration of commercial profit comes in as a limiting factor and that high tillage may for the individual be less advantageous than high grass farming. But, from the national standpoint, tillage produces more goods and makes a larger demand for goods. It is a matter difficult of assessment how much the prosperity of the towns depends upon the prosperity of the country, but there can be no doubt that one of the things which makes for the general stability of the economic life of the country is a prosperous agriculture; and vice versa, a declining agriculture means the decline of many subsidiary urban occupations. No industry maintains so steady a level of regular employment within itself and no industry is so widely diffused. The farm cannot close down as the factory does. And stability in one great industry conduces to stability of employment in others. Agriculture in this respect is a pivotal industry in national economic policy.

14. There is, however, an even wider social consideration. Varying economic conditions affect the proportion in different countries between the population engaged in rural and urban occupations. To speak of a "balance" between rural and urban population is to use a phrase of doubtful meaning. But there is reason for saying that, when a nation becomes predominantly industrial and its agriculture is very much restricted, the national life suffers. Every nation should, therefore, strive to maintain a substantial portion of its population employed on the land. The ratio between those occupied on the land and those in manufacturing industry is a matter of far reaching importance, and deserves attention. The character of the body politic is profoundly influenced by the character of the various occupations of its members, and we have as yet paid too little attention to the social consequences of the different types of employment.

PART II.

THE COMPARISON OF BRITISH AND FOREIGN
AGRICULTURE.

A. GENERAL SURVEY.

15. We were directed in our Terms of Reference to inquire into "the methods which have been adopted in other countries" to achieve the objects under consideration. Two courses have lain before us to consider in order each of a number of countries, studying in each the methods in fact adopted therein; or to consider in order each of a number of methods, studying under each head their application in particular countries. Both these courses have their advantages. When we take a broad

survey of the world during the last half century, we find that the methods have not really been very numerous; that most countries have resorted to some of them, and that the weight of example is increased by concurrence. On the other hand, the success or failure of a particular method in a particular country is bound up with the whole social and historical background in that country, and is unintelligible apart from its context.

16. For obvious reasons we have limited our view to countries which are highly developed in their agricultural production and organisation. And among such countries there is an evident distinction to be drawn between new countries more recently settled or still in process of settlement, like the United States, the Argentine, and most of the British Dominions on the one side, and old and long settled countries like Germany, France, Denmark and other lands of Western and Central Europe. The agricultural problems that have been presented to these two groups of countries during the last half century have been fundamentally different.

17. The position in Great Britain resembles more closely that in the North Western European lands. Its agriculture during the half century has shared with theirs the experience of the impact upon it of the cheaper produce of the new lands. But it differs vitally from those other countries in that, before the competition of the new lands began, it had to a much greater extent lost its peasantry. It is not necessary to explain here how this remarkable divergence between Great Britain and countries which started in the Middle Ages from conditions substantially similar has been brought about. It is sufficient to observe that it was the outcome of complex forces which have been in operation for at least four centuries.

18. The other countries had not remained purely agricultural; they also had become in varying measure industrial; and even where the agricultural population had maintained its absolute strength, its relative strength had declined, in proportion to the non-agricultural, since the advent of machine manufacture. But at the beginning of the critical period, in the years following 1870, the agricultural population was in other countries still in a position, if it chose, to determine the policy of the nation, either because of its numerical preponderance or because of its unanimity. In England, on the other hand, not only had the industrial population itself grown more rapidly; the agricultural population had been lessened by the consolidation of peasant holdings to create large farms; and the real or apparent identification of the agricultural interest with the landlord interest introduced elements of class antagonism, real or imaginary, which abroad did not exist on anything like the same scale. This is a sufficient explanation of the fact that the other countries, when faced with great dangers to their agricultural population, did adopt a definite policy, whether wise or not, for its strengthening and

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