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the profits to be derived from it will
increase also; and land in the margin
between intensive and extensive
secupation will tend to fall into the
‘ormer catecorv. either because the
F. MARKETING
1. In paragraph 70 (12) we say
that—
“ Most vexed and most impor-
tant of all Australian questions
is that of the cost of production
with its effect upon export indus-
ries and of the combined effects of
the Tariff and the Arbitration
Acts.”
Australia must look for her future
development in great measure to re-
munerative exports. To-day wool and
wheat are the principal exports which
show a profitable return.
9. Costs have seriously increased in
wool and wheat production, but the
strong demand for wool and the highly
organized and mechanized production
of wheat still permit of clear profits
being obtained from their sale. As to
minerals, only the richest mines can
be worked under Australian condi-
tions; we have been told that there
are many properties which would be
considered of high grade in countries
such as Canada and the United States
of America, which are left unworked
in Australia owing to the high costs
of operation.
3. A great variety of agricultural
products has been produced to meet
the demand of the home market. In
most cases this demand has been arti-
ficially retained for the home produc
tion by a system of tariffs on im-
ports, with a consequent increases in
the cost of living.
4. A great problem facing Australia
when production overtakes the home
demand and a surplus is available, and
this surplus has been produced at a
higher cost than in other exporting
countries, is that of marketing such
surplus. So long as it is but a small
percentage of the total production,
the difficulty can be and has been met
by schemes for assistance from within
the industry itself or from the Govern-
ment. When the surplus assumes large
proportions, then the problem of
marketing becomes greatly intensified
and even critical because the home
sceupier will turn from sheep or cattle
aising to agriculiure, or because the
ising value and price of land will in-
luce him to sell his ground for that
yurpose.
«ND DISTRIBUTION.
sonsumer may be unwilling to bear the
sost imposed on him to assist the over-
seas market. The surplus of produc-
-ion has been intensified by far reach-
ng developmental schemes which have
yeen embarked upon without due con-
sideration of the question of how the
esulting increase in production can
ne marketed. Improved and scientific
nethods of production, although they
will reduce costs, will at the same time
sermit of a bigger output being pro-
luced on the same areas.
5. Nevertheless, the first step is to
educe the cost of production. This
reed is common to all industries in
\ustralia and is dealt with in our
nain report. It is often said that
she price of agricultural land is too
1igh and that this high price is an
mportant element in high costs of
yroduction. But though there is an
wonomic ‘lag’ in land prices, so
shat they move slowly, in the long run
shey must reflect what a willing seller
vill accept from a willing buyer. No
doubt the grant of subsidies, direct
>r indirect, to the products of the
land tends to raise land prices, but
shen the farmer gets the benefit of
he subsidies in relief of his costs of
yroduction. No doubt high prices,
serhaps too high prices, have been
sharged for land on which heavy ex-
senditure for irrigation and the like
1as been incurred. But they cannot
emain permanently too high. If they
sre not justified by the profits which
san be made from the land they must
ome down. Generally, high land
yrices are an effect of high profits, no
ess than a cause of high costs of nro-
{uction from land.
6. As the producer is usually in a
imall way of business, it is necessary
hat he should join with his neigh-
sours for the co-operative handling of
iis product, or for its disposal through
some central organization. We have
investigated a number of ec-operative
activities; we realize that all profits
accruing return to the co-operators,
