RESERVATIONS BY COMMISSIONER COSTIGAN RESPECTING THE
COMMISSION’S REPORT ON THE COSTS OF PRODUCTION OF
SUGAR BEETS
The accompanying report on sugar beets fails to make note of cer-
tain limitations which affect the commission’s findings. Care should
be exercised in considering the data presented and particularly in
basing conclusions on such data. So far as the undersigned is con-
cerned, such data are submitted subject to the following qualifica-
tions and reservations:
Practically no statistical nor accounting data can be pronounced
absolutely accurate. However, the information which is available
in industrial accounting is especially dependable because of the great
care and the large sums of money devoted to such accounting in the
regular course of efficient modern business. Farm accounting is at
present more liable than industrial accounting to uncertainties and
inaccuracies, partly for the reason that the data secured rest largely
upon memory rather than upon reliable records. Nor does it suffice
to suggest that error must always be expected, since it is unfair to
conclude -that some margin of error in industrial accounting may be
used to excuse any margin of error, however wide, in farm account-
ing. Moreover, with particular reference to the present investiga-
tion, the business of the average sugar-beet farm consists in effect of
a number of farm enterprises. It is a task of extraordinary difficulty
bo determine accurately costs of and returns from a single one of these
enterprises. This is so because of the complementary character of
the various farm costs and farm returns, because they represent a
combination of business and family affairs, and finally because so large
a part of the total consists of imputed costs necessitating a large num-
ber of appraisements.
As stated, the commission in the sugar-beet investigation adopted
the “enterprise survey.” This method of accounting has been gener-
ally accepted by farm-management experts in the United States,
and the details of its application have been described. For farm-
management studies and for comparing conditions in different areas
such surveys have value. It is to be borne in mind, however, that
their use in determining profits, losses, and absolute costs is open to
serious objections, not merely because of the inaccuracies referred
to, but also because of the principles of accounting implied in such
surveys.
The farm accountant either does not accept, or is unable to insist
upon, certain principles developed in industrial accounting. This
becomes evident when the differences in methods of treating land
values and interenterprise profits are considered. For example, the
industrial cost accountant ordinarily questions the use in computing
capital charges of data which reflect the present estimated values of
farm lands in place of the costs of such lands.
The evaluation of labor charges for the farmer and his family
presents great accounting difficulties. It is self-evident that farmers
and their families are entitled to reasonable returns for their work.
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