270. The development of cereal growing in the Argentine may be kept back by the grazing interests; the extension of wheat in Australia will depend on the feasibility of irrigation; the place of India in the intra-imperial system may be affected by its newly-acquired power of determining its own economic policy. But the reappearance of large Russian supplies in western markets would seem to be only a matter of a few years; and the early possibilities of Canada appear to be very great. A high agricultural authority in Canada declared in 1904 that "the wheat grown on one-fourth of the land suitable to it "i.e., on a four-course rotation-" in the Canadian North West, even with the low yield of Manitoba for the previous decade, would bring a crop of more than 800 million bushels, which would feed 30 millions of people in Canada and three times supply the import need of Great Britain."* He may have been biassed by national or professional pride; but the enlargement of the area under wheat in Canada from 2 million acres in 1901 to 231 million in 1921, together with what is generally known of the settlement of the new provinces of the North-West, suggests that Canada may be entering upon a development similar to that of America fifty years ago, and with an effect of like character on wheat importing countries. 271. Meanwhile England will remain a country in which manufacturing activities vastly preponderate over agricultural, and which must depend on the export of its manufactures to the outside world. Nevertheless the disadvantages attaching to any further considerable decline in the arable area will be so grave that it will be worth while for the country to pay a substantial price for its maintenance. 272. Any measures which the Government could take to this end would be of the nature of "Protection." We think nothing is to be gained by passing lightly over a really fundamental issue like this. Anything the Government might do would be intended to induce farmers to pursue a line of action which they would not pursue left to themselves. And that means that the nation must bear, for some time at any rate, a burden which otherwise it would not bear. Whether in the long run the result, even measured in total national wealth" in the ordinary commercial sense, would not be advantageous, is a problem on which it is not necessary to embark. It is sufficient to recognise that there would certainly be a burden to be carried for a time. And that burden would have to be shouldered if it is desired to secure certain national objects. 66 273. Whether it be by import duties or by subsidies or by guaranteed prices, achieved with or without State control of imports-all are methods of protection differing from one another not in principle but on grounds of administration and practical expediency. * Saunders, cited in Professor Smith (of Columbia University). The World's Food (1919). 274. Any conceivable plan will meet with difficulties, which the State will only encounter if it believes there are national advantages to be secured thereby. And until the nation has decided upon the principle, it would be waste of time to consider at any length the machinery to carry it out. 275. Under a Free Trade system Great Britain can only maintain its tilled area by going over to arable stock farming. This, under English conditions of land tenure and cultivation, British farmers have no pecuniary inducement to do, with their present experience. They can make a form of farming pay which will seriously lessen tillage and seriously lessen, also, the production of food and employment on the land. They can be expected to abstain from such a policy only if it can be shown that arable stock and arable dairy farming will pay. In the interests of the maintenance of a Free Trade policy, it is of the utmost importance that the State should carry out experiments on a large scale which will settle the question of the profitableness of the new methods. Sufficient time should be allowed for demonstration. If such experiments are not carried out, or do not demonstrate the financial feasibility of the new methods, Great Britain must be content to see its agriculture dwindle greatly in all those respects which promote food production and employment on the land, or else it must resort to measures which will be essentially protective in character by whatever name they are called. We have the honour to be, Sir, D. B. TOYE, Secretary. 7th May, 1924. WM. ASHLEY. W. G. S. ADAMS. C. S. ORWIN (Agricultural Assessor). Report of Professor D. H. Macgregor. To the Rt. Hon. J. RAMSAY MACDONALD, M.P., Prime Minister and First Lord of the Treasury, and Secretary of State for Foreign Affairs. SIR, I HAVE the honour to submit a Report on the matters referred to the Tribunal by your predecessor in December, 1922. PREFACE. 1. The purpose of the following Report is to make a contribution of fact and argument to an important national problem. The aspects of that problem are so many that no summary would be adequate. But the following are salient considerations which emerge from the study of the problem in its national and international relations. A fuller résumé is given in the concluding Part of the Report. 2. There are two main aspects of agricultural policy-(a) the creation of the highest efficiency, and (b) the maintenance of the industry in terms of employment and output. 3. In view especially of the great development of our manufactures, it cannot fairly be said that British agriculture suffers by an international comparison of existing efficiencies, with respect to either (a) the actual produce of the soil, or (b) the level of wages paid. With regard to produce, it is important to observe that great misconception exists as to the nature and results of what is known as the "Middleton Report."* A careless use has frequently been made of the summarised results of this enquiry, so that discussion of the agricultural question has been turned on to wrong lines. These results do not refer to farming efficiencies, but to degrees of national self-sufficiency between two countries, one of which has Free Trade, while the other is strongly protected on all agricultural produce. If the method of the enquiry is applied to the two Free Trade countries of Britain and Denmark, no difference is shown between them. While if a similar method were applied to another industry, such as textiles, it would give indefensible results. With regard to wages, British agriculture has nothing to lose by comparison with other European countries, and in most cases it has much to gain. 4. There are certain aspects of the industry which distinguish agriculture from manufacture. Beyond the general services which the State owes to all industries, the special services which it owes to agriculture arise out of these distinctions. They are all based on the fundamental fact that agriculture is more scattered, more individual, and less corporate than manufacture. * Recent Development of German Agriculture, Cd. 8305/1916. 5. The main aspects of an efficiency policy are: (a) Facilities for agricultural credit, because of the limited scope of Joint Stock in agriculture. (b) Facilities for an "extension" system of technical education, because of the scattered nature of the industry. (c) Facilities whereby the best labourers may rise into a position of independence, because farming is administered. by individuals. (d) The education of the industry, in respect of steps which farmers may take to organise themselves into associations for co-operative purchase of requirements and sale of produce; such associations being the proper agricultural counterpart of corporate establishments in manufacture. 6. It is in respect of these four methods that the chief differences exist between foreign, especially European, agriculture and our own. They have a more special organisation of agricultural credit, more agricultural advisers," a greater amount of small-scale cultivation, and much more co-operative organisation and association. 66 7. A policy of further efficiency for British agriculture would be directed to bringing all farming up to the level of the best. This would cause the industry to be more profitable, and result in a greater money value of produce than would otherwise have been the case. But if the question is one of increasing the production of food, however reckoned, in this country, and of increasing or at least maintaining the number of persons employed in agriculture, it is impossible to say that these results would be obtained. 8. The size, in terms of output or employment of the industry will not depend on its absolute efficiency, but on the relative costs of obtaining food by the direct method of home farming and by the indirect method of exporting manufactures. In a country with a national economy like our own, the problem of maintaining agriculture is the other aspect of our manufacturing progress. 9. Other European countries whose economy is similar to our own, in that they have also the conditions of great manufacturing development, have protected their agriculture. They have not thereby been able to prevent an absolute as well as a relative decline in employment in the industry, the decline having been in some important countries more rapid than in Britain. So far as international comparison shows a special urgency in the case of Britain, this rests on the fact that our agricultural industry is a smaller proportion, in terms of employment, of industry as a whole than is the case abroad. 10. The reasons which have been given for the urgency of our position are mainly (a) public health, and (b) national defence. The facts do not, however, show that our public health is worse than that of countries with a much larger proportion 3 20800 D 3 of persons engaged in agriculture; on the contrary, it is sometimes better. And the rate of improvement of public health has been as fast in England and Wales during the past 50 years as in so rural a country as Denmark. The improvement of public health depends chiefly on administrative development of the service all along the line. 11. National defence has been urged as a reason for agricultural protection. The most notable instance is Germany. But the defensive policy of. protection in countries which could in war rely only on their home soil for supplies is based on conditions different from those of a country which has our resources for food supply at Fome, overseas, and on the seas. No foreign country assists us to solve this aspect of the problem; its urgency depends on considerations of future war probabilities, dispositions, and methods on which the Tribunal cannot decide. 12. If, as a measure of defence, it is decided that those forms of agriculture on which food supply especially depends-that is, in general, arable cultivation-could not be allowed to decline further, some form of subsidy would be necessary which would specially assist arable cultivation. And any such subsidy will be so expensive that, for the sake of stability of policy, it could only be granted by consent of political parties. 13. So far as maintaining employment alone is in question, the same amount of money applied to the small holdings movement, as a subsidy to existing costs of equipment, will go further than if applied to arable cultivation. 14. In some districts of the country, agricultural employment would be assisted by a policy of afforestation, if this is carried out on a regular plan, which is not interfered with in order to provide temporary relief for unemployed persons other than agriculturists. 15. The conditions of labour in agriculture are those which in other industries have led to the establishment of Trade Boards. The agricultural labourer is entitled to the advantages of this legislation. 16. The causes of rural exodus are largely social, and an increase of opportunities for agricultural employment alone will not solve the whole of that problem. In order to maintain variety of occupations, or prevent the removal of other industries from sparsely populated districts, it should be considered whether further measures can be taken to maintain small industries in sparse rural districts. At present, very limited grants are given for this purpose. The maintenance of such industries is important to agriculture in these districts, partly because they may be supplementary, partly because they bring social advantages into the districts. It may be possible to give some benefit, especially by way of rating relief, to industrial undertakings, not highly capitalised, in defined areas. As will be shown later, some precedent already exists for relief of this kind. The decline |