World Agriculture
DAMPIER.
BY SIR WILLIAM AMONG the good deeds which have been done at Chatham House, this account* of the state of agriculture over the world at large takes a high place. Each nation is so apt to regard its own agricultural and industrial problems at this time of depression as unique and self-contained, that a wider survey is of especial value.
*World Agriculture : An International Survey. A Report by a Study Group of Members of the Royal Institute of Inter. national Affairs. (Oxford University Press. 12s. t3d.)
In spite of industrial and commercial development, two- thirds of the world's population still get their living by agriculture, and food is still largely grown for home con- sumption by peasant fanners. The annual value of wheat grown is estimated at £1,480,000,000, while only £230,000,000 worth enters into international trade, and the proportion entering trade in the case of meat is even less. The production of wheat during the years 1927-1929 was about thirteen per cent, higher than in 1913. Beef and veal increased by about seventeen per cent., but mutton by only one per cent. The population of the world increased by about ten per cent. in the same time. Thus the growth in production would provide for but a small increase in average consumption. "Not even to-day, in spite of accumulated and accumulating stocks, is the supply of any agricultural product anywhere near the limit of potential demand. Effective demand is a very different matter." "Food surpluses are almost wholly the result of restricted purchasing power in the great industrial countries of Europe. That is to say, the problem is mainly one of under-consumption" and of maldistribution. Cereal food is cheap and in excess on the American prairies, while China and Japan are short of wheat.
Where circumstances allow, output has been enormously cheapened and increased. "With the sickle and flail, from thirty-five to fifty hours of labour were required to harvest and thresh an acre of wheat with a yield of fifteen bushels. With the combined harvester, three-quarters of an hour of labour is required." The scientific plant breeder also has increased production by developing early maturing varieties which allow wheat to be grown one hundred miles further north. But, in spite of cheap mechanized production, the factory wheat farms get into great difficulties in times of depression. "The small European family holding, with its diversity in crop production and animal husbandry, has its advantages in bad times." It is better able to meet changes in demand, and it is free from the troubles of hired labour. There is an essential difference in outlook. New countries try to economize labour, old ones to maintain a large rural population. Indeed, the low standard of life of the peasant with his land-hunger, is one reason for the fact that, on the average, the financial retArns from agriculture, even in normal times, are less than those from commerce, industry or professional occupations.
Since an agricultural index number, giving the variation in the average level of prices of agricultural produce compared with that of a standard year, has been available, it has become clear that, while of course the prices of individual products (pigs, it may be, or potatoes) depend on individual causes, the average price of all farm produce varies very closely with that of other wholesale goods. There must be some one common cause underlying both changes. While England was on the gold standard in the normal times of the nineteenth century, the history of prices shows that this cause was the supply of money. When gold. was discovered in Australia and California, prices rose and agriculture entered on the
flourishing times of 1850 to 1870. When the output of gold flagged and the demlind was increased by the adoption of a gold standard by other countries, prices fell, and the long depression Of 1875 to 1900 began, only to be cured by the later inflow of South African gold.
The present depression is more complex in origin. There is enough gold, but it is concentrated in countries that cannot or will not use it. Other nations, impoverished by war, cannot buy commodities. Demand falls, and prices with it. The burden of debts and of fixed wage-rates become too great to be borne. Each nation thinks that the fall in prices is due to foreign competition, and tariffs and quotas, which may perhaps alleviate the symptoms of the disease; increase the fundamental evil they are meant to cure. International trade languishes, merchants make no profits, shipping is laid up. Thus cause and effect, monetary and non-monetary' factors, act and re-act ; the whole process becomes cumu- lative, prices collapse, the system of exchange breaks down, and a world crisis develops, with ruin and unemployment in its train.
The authors of the book say, "it is outside the scope of this Report to deal with the methods by which the means of exchange should be made adequate to the reasonable demands of world economy." Yet their analysis of the causes of the depression at least shows that several much-advocated policies will prove ineffective. Neither the efforts of pro- ducers themselves and their Governments towards "measures of valorization and marketing, national or international, nor the various measures of protection undertaken by single national units nor by groups of units, nor a combination of the two, can of themselves provide a remedy for the world depression in agriculture . . . the instability from which agriculture now suffers is part and parcel of the malaise affecting the economic systems of all civilized countries."
That conclusion we believe to be profoundly true. The agricultural problem is part of the general problem. Moreover, only by a restoration of confidence, whereby currency and credit are drawn into active circulation, and by a provision for the expansion of currency and credit when reviving trade needs them, can the average level of wholesale prices be first raised and then stabilized, and the present economic evils of the world be overcome.
This conclusion, however, does not mean that other developments are useless. In a complete agricultural policy there is clearly room for further co-operation among farmers, for an improvement in marketing, and for the more effective application of scientific research to the production of crops and live-stock. Again, the wheat quota and the voluntary restriction of meat imports may have been the best emergency measures which were possible in the existing economic and psychological conditions. But, in the minds of some of our statesmen, there seems to be no distinction between a healthy general rise in wholesale prices, due to an increase in trade accompanied by the necessary expansion in currency and credit, and a local rise in the price of specified commodities brought about artificially by some means of restricting supply. The latter may help a few trades over a time of crisis, but it needs a general revival in business with -appro- priate measures of reflation to free the industry of the world, and British agriculture with it, from their present troubles. This book should do much to clear the issues to prevent agriculturists from thinking too narrowly in terms of their own indastry, and help to show statesmen the road to per- manent economic prosperity.
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