The gradual destruction of this policy began in the House of Lords. They
allowed themselves to be swept away by the popular cry against
Government interference with industry, and cut out the power of control
of cultivation. The Prime Minister had said that this was an absolutely
essential part of the Bill, and of the Government's policy, but the
Government quietly and characteristically accepted the Lords' amendment
and the Bill was passed.
Then troubles began. Other industries began to ask why the Government
satisfied agriculture and not them, and as the Government could not
plead their control of agriculture in justification, no real reply was
possible. Also the cold fit came on as regards national expenditure. The
Bill for the corn subsidies threatened to be very high. Though Europe
was starving, it could not buy, so cheap American grain flooded our
markets; but cost of production here was still at its peak, and, for
oats especially, the amount to be paid to the farmer threatened to be
large. It was realised that it might cost 25-30 millions to implement
the guarantees for the first year, and perhaps 10-12 millions a year
later. In short, the guarantees had to go. Instead of four years' notice
of any change, a Bill to repeal the great Act was introduced five months
after it had been passed. And it was unfortunately part of the bargain
with the farmers who received for the single season perhaps six or
eight millions less than they might have been entitled to under the Act,
that the Wages Boards should be abolished--and they were. There remained
of the original structure only the depreciation of the value of all
agricultural landowners' property by about one-twentieth, owing to the
extra compensation for disturbance.
Every one felt that they had been had, and they had been. The industry
which had lately been talked up and made much of was dumped into the
dustbin. The farmers had lost their guarantees on the strength of which,
in many cases, they had bought their farms dear or planned their
rotations. The labourers, who particularly needed the protection of
Wages Boards during a time of fall in cost of living and unemployment,
had lost all legal protection. The landlords, willing enough to give
what was asked of them if any national purpose was to be served, found
that their loss brought no corresponding national gain. Agriculture
retired as far as it could from any contact with perfidious Governments,
to lick its wounds.
That is not a good basis upon which to build intensive cultivation or
any other active policy. There being now no legal or patriotic call to
intensive production, we are driven back to ask, "Does intensive
production pay?" and the broad answer is that at a time of low prices it
does not. There is no doubt that slowly and steadily education will
gradually improve farming, and that farmers will learn to find out what
parts of their business pay best and to concentrate upon them. There is
also no doubt that even at low prices there is plenty of scope for
better farming, and that better manuring, particularly of grass land,
will pay. But the farmer is faced with an economic principle--the law of
diminishing returns. It may be stated thus: beyond a certain point which
rises and falls directly with the value of the product, extra doses of
labour and manure do not give a corresponding return. It is this
principle which accounts for what we see everywhere--that farmers are
tending to economise as much as they can on their labour and to let
arable land go back to grass.
And if this is clear to farmers who are thinking of intensive arable
farming, still more is it true in comparing arable with grass. If you
take the same sort of quantity of arable and grass farms, farmed by men
of the same skill and diligence, over a range of seasons under low world
prices for farm produce, you will, I believe, find something like this:
grass land needs half the capital and one-third of the labour of arable;
it produces three-quarters the receipts with half the payments, and
yields double the profit per acre and four times the profit on capital.
The moral of all this is clear. Unless the nation is willing to go back
to protection for agriculture, which I am glad to believe in the general
interest unthinkable, and unless it is willing to guarantee the farmer
against loss from that method of agriculture which means most production
and most employment, we must let the farmer set the tune and farm in the
way it best suits him to farm. We must try, in fact, not to talk too
much nonsense about intensive production as the cure for agricultural
depression. It is useful to remember that all countries overseas which
combine high wages with agricultural prosperity have a very low output
per acre judged by our standards.