Mountain Home Republican. [volume] (Mountain Home, Idaho) 1915-1946, 1925-07-31
FARMING AND
FINANCE


Farming has become big business
during the last few years and many
of the farmers difficulties may be
traced directly to the fact that this
change has not been appreciated by
either the farmer or the general pub
lie. The transformation in farming
has happened before in many other
lines of activity and has demanded
a similar period of adjustment. A
few years ago whe inland was cheap
and labor was also cheap farming
could be carried on profitably under
the heading of "arts and crafts" but
today with high priced land and ex-
pensive help the old methods will
The farmer who still thinks along
not produce a satisfactory return.
the old lines and runs his farm as he
used to when his fixed charges were
very low is doomed to be disappoint
ed in his returns. 1t is as though
the shoemaker, who had worked by
hand and at home, bought a shoe
factory with modern machinery and
power equipment and then sat in the
middle of it and worked by hand at
his little bench just as he always had
before. His personal output would
perhaps be just as great but the
overhead and costs of the new and
larger plant and equipment would
more than eat up his individual
earnings and he would find himself
in the hole no matter how hard he
worked. A change no less unusual
has taken place in farming.
Land values have climbed until
the farmers return on his factory
investment" has become one of the
largest items in his budget. A wheat
crop may be raised at a good profit
on land that is worth fifty dollars
an acre but if the same crop is raised
on land that is valued at one thou
sand dollars an acre it fails to cover
the rent on the capital invested.
Manufacturers must earn return
on their plant Investment and the
farmer must do the same. Two chief
difficulties have developed in this
connection. During the speculative
boom following the war much good
farm property skyrocketed in price
to level far above practical invest
ment values. The land was bought
at an exhorbitant price in the hope
that it would sell at a still higher
figure The man who owned it when
the crash came has been trying to
raise a crop on it that will give him
a return and has found that it can
not be done. The other difficulty lies
in the fact that all plant investments
are not alike. Wheat growing went
from the east into Michigan years
ago because the cheaper land there
yielded a better profit, then it moved
on to the Northwest for the same
reason, and lately the migration has
carried on into the cheap lands of
Canada. TIL efarmer on high priced
land cannot compete successfully
with the farmer who has cheap land
any more than the manufacturer
who has a million dollars invested in
a factory can compete with the man
who has practically the same factory
at the cost of one hundred thousand.
The cost of the land should be con-
sidered carefully and much disap-
pointment will be avoided when the
farmer recognizes this fixed overhead
and plans definitely. to earn an add
ed return to cover it before he goes
ahead.
The other important change has
come in labor costs. Hand work |
could be done when hand labor was
cheap but since wages have gone so
high the farmer who continues with
old methods is much like the shoe
maker who sat in the middle of the
well-equipped shoe factory and made
shoes by hand. 1t is principle in
big business that any improvement
Dr. added equipment that will save
more than the cost of the capital in
volved after proper depreciation
should be adopted at once. Machin-
cry that will do certain work cheap
sr than it can be done by hand, and
that will multiply the
man power on the farm is not only
desirable but will soon be absolute
" necessary if the farmer is to sue
.eed in working his high-priced fac
tory to earn a good return on the
and to earn an added
profit for himself.
We are not pessimistic about the
of farming. It will forge
ahead as all other industries have
forged ahead after power methods
and mass production have replaced
hand work. 1t is only necessary that
he farmer appreciate his large in