18 DECEMBER 1926, Page 9

How to Make British Farming Pay

VI.—Are Sheltered Markets Necessary ?

CAN British farming be made to pay without giving the British land some shelter in its home markets ? Can reasonably skilful and prudent British farmers as a class—not a few especially intelligent and fortunate individuals who could make anything pay in any circumstances—succeed under strict Free Trade con- ditions, given cheap credit, efficient and plentiful agricultural education, and skilful co-operation in the matter of transport and marketing ?

In my opinion, no. They must have some shelter— at any rate for a time—in their home markets from foreign competition : and in my opinion can have that shelter without increasing the average cost of food to the consumer.

To establish the case for shelter, I plead that British agriculture is, though not an infant industry, a sorely debilitated industry that cannot face the free winds of competition.


England, a century or so ago, rested her national life on' agriculture, trading, manufactUres and fisheries in that order of importance. When the age of coal, steam and power-machinery came, with its demand for a great mining and factory population, England responded first : partly because of her coal measures, partly because of her national genius for organization, and because her supremacy at sea had kept away from her territory the wars which had ravaged the rest of Europe. For a while the British Isles had almost a monopoly in supplying the world's call for machinery, railways and the other material of the new civilization. Great prosperity came from this, but also great unsettle- ment of equilibrium. In other countries the growth of the new industrial life was much more slow, and the unsettlement very much less.

If there had not been a Free Trade system adopted in England shortly after the rise of the new industrialism, there would thus still have been a grave agricultural crisis, due to the withdrawal of labour and capital from the fields for factories and mines. England's landowners had to face, on a larger scale, the same difficulty as Australian landowners when the gold discoveries were announced—a transfer of credit and labour to more profitable spheres. (It is interesting to, note that the authorities in Australia attempted for some time to suppress the news of gold discoveries as " the reports would take away the settlers and their labourers from the farms.") How CHEAP FOOD CAME.

The withdrawal of labour and capital from agriculture, and the quick growth of an industrial population, were responsible in the first instance for dear food conditions. A remedy was sought in throwing down the barriers against imports of food : and that was the second blow (not the first) to the English landowner. Then the third blow fell. The great empty spaces of the New World began to be colonized. They were cultivated roughly, cheaply, and a virgin soil responded with good crops, letting loose a flood of cheap agricultural products which threatened for a time the economic stability of every old landed industry. The wheat—to take one typical instance—of the new lands, grown without fertilizers, with but the lightest cultivation, on lands subjected to no Lurdens of supporting great armaments, transported across the oceans by the new cheap means of communica- tion which steam had made possible, could reach the industrial centres of Europe at a price lower than the cost of European production. It could reach, and it did reach, those of Great Britain. In other countries it was stopped by tariff barriers. The cheap products of the New World thus concentrated on British markets.


The British land had thus to face, first a keen compe- tition for the capital and labour supply, then an open market for its products, and then an era of low prices for agricultural products, an era which can never recur in all probability since it was due to the first exploitation of virgin soils. The crisis in agriculture caused by the opening-up of the virgin soil of the American West was not confined to Great Britain. It was felt even in the Eastern States of the American Republic and in Old Canada, where many farms were abandoned altogether or, like English wheat farms, went under grass. On the continent of Europe, where the farmer was barricaded against competition by high tariffs, and where there had not been the sudden withdrawal of capital and labour from the land, the crisis was not so severe. But in England the land industry was prostrated. Rents were practically abolished and the landlord allowed his tenants to use his land, and sometimes his capital, free, to tide over the crisis. But even so, much of the land went out of culti- vation, and has remained out of cultivation since, except for a brief and partial revival during the War.


Agriculture is thus an invalid industry which has suffered over half a century from wasting disease. It cannot be now restored to full vigour without being granted some shelter, some " coddling." In giving that shelter, practical statesmanship will encounter difficulties since the proportion of the agricultural community to the rest of the population has sunk so low, and since political and humanitarian considerations veto any changes which would add appreciably to the cost of living. But it can be done. In other countries the task has not been so difficult because shelter has been always given, or was given at the first stage of agricultural depression, or because they can feed their population without imports. In Australia, for instance, after a policy of agricultural Protection had been adopted, the range of food duties reached an average of about 80 per cent, without increasing the cost of living. (I have had experience in Australia, both under Free Trade and under Protection.) France, with her system of agricultural protection, has a slightly lower cost of living than England, though comparison is difficult while the exchange fluctuates. An unbiassed examination of the facts will lead to the conclusion that it is possible for any country with a fair range of natural resources to encourage its agricultural industry without raising the cost of living.


If, then (it will be asked), a policy of sheltered markets is not going to raise prices to the consumer, what is its use to the farmer ? The answer to that is that the advan- tage sought would be a steadiness of market, which would not put burdens on the consumer. (Those lands whose own surplus products form our cheap food supplies are all lands of high agricultural protection !) The conditions of agriculture make it necessary that the landowner should be assured of a steady market. A manufacturer may close down his works at a time of cheap and unprofitable prices and start again. When the farmer " closes down " it takes years to get the land back to the plough and to recruit the labour. to till it. He should, therefore, have shelter against " dumping," against spasmodic competition.


Let me illustrate with the case of one food staple, potatoes. England is naturally one of the finest potato- growing countries of the world, and could provide 'cheap potatoes for all its population, and a surplus for use in making starch, alcohol, &c., and for stock food. But it does not ; though there is little cause for valid criticism, so far as I can see, of British methods of potato pro- duction. But the nigger in the fence is that when it is a good potato year in England it is usually also- a good potato year in the rest of the potato zone of Northern Europe, and Germany, probably Belgium and Holland also, have surpluses to export. There is only one market open, that of England, and their surpluses are " dumped " here : the English market is " broken " : growers cannot get a reasonable price for their bountiful crops, and sometimes have to be content with less than the crop has cost to plant and raise and market. Nor does the consumer usually benefit to the full ; the middlemen see to that. Granted that co-operation among our pioducers would' do something to help, since the foreign surplus available is not enough to supply our market fully. Nevertheless, it would be imposing an impossible burden on any co-operative association of potato-growers to ask it to be prepared to buy up all foreign imports and to " hold the market."

Confining the argument to this one point of potatoes, I insist that the present Free Trade in potatoes does not benefit the population with cheap potatoes, and that reasonable statesmanship should be able to keep the British -market for the British producer without raising the price to the consumer.

I do not despair of converting even Mr. Lloyd George to this practical view when I remember his refusal before the War to stamp out the infant industry of beet sugar-growing by exposing it to Free Trade (Next Article : Sheltered Markets—contd.)