those of today. There is therefore good reason to believe that the American farmers will continue indefinitely to produce an abundant food supply for our increasing population.

Whether the consumers in our cities will be able to obtain food at reasonable prices, after the farmer has received a fair reward for his labor and capital, will depend on the world's food supply and on the cost of distribution after the food leaves the farm.

THE EFFICIENCY MOVEMENT IN ITS RELATION TO

AGRICULTURE

BY W. J. SPILLMAN,

Agriculturist in charge, Office of Farm Management, United States
Department of Agriculture.

BRANCHES OF AGRICULTURAL SCIENCE

During the past century dozens of new sciences have sprung up in connection with agriculture, but these can be grouped into three general classes.

First we have the technique of production, involving many recently developed sciences, such as agronomy, soils, plant physiology, genetics, animal husbandry, dairy husbandry, technical dairying, The large number of new sciences in this phase of agriculture is indicative of the enormous amount of money and time that has been given to this phase of our fundamental industry.

The second general branch of agriculture relates to the economics of production. This branch of science is generally termed farm management. It is very new and as yet poorly developed, though considerable progress has been made within the last decade in the discovery and application of its principles.

The last general phase of agriculture relates to the distribution of agricultural products from the farm to the consumer. Its various phases are comprehended under the one general term marketing. The importance of this branch of agriculture has always been recognized, but it is only in very recent years that it has been given serious consideration by the agricultural authorities of the country. It is the most complex and most difficult branch of agriculture. Its possibilities are greatly overrated by many enthusiasts and are perhaps not fully understood by any of us.

Take, for instance, a crop like apples. One even hears the remark that there is no such thing as overproduction; the trouble is underconsumption. The apple crop occupies less than 1 per cent of our crop area in this country, and there is probably fifty times as much, more or less, adapted to this crop not now devoted to it; yet at the present time enormously more apples are produced than can

find a market, and the business is temporarily distinctly unprofitable. It is hardly probable that any one would be bold enough to claim that if the marketing of apples could be simplified and the cost reduced to a minimum that this crop, which when prices are good is. distinctly profitable, would be in no danger of overproduction. Experience clearly shows that in the case of all those crops that occupy a small acreage but which at times bring a very large income per acre, if anything happens which broadens the market or in any way increases the profit, the room for expansion is so great that in a very short period overproduction is brought about again. If we had the most perfect system of marketing for all perishable products, so that the difference between the price received by the producer and that paid by the consumer became very small, in a few years production would expand until the price received by the farmer would be reduced to its present level, which, on the average for a long series of years, is just about the cost of production. A little familiarity with the history of prices and production of any of these intensive crops will convince anyone of the truth of this statement. But if the cost of distribution be reduced and production expands until the producer is in the same position he now occupies, the consumer would benefit greatly, because he would be getting practically all of the saving from our present wasteful methods of distribution. This makes it highly desirable that systems of marketing be developed that are as efficient as possible. These systems will temporarily benefit the farmer; ultimately, however, the benefit will go entirely to the consumer.

ECONOMICS OF PRODUCTION

Farm Management. The subject of farm management deals with the profits made by the farmer and the various principles involved in making these profits, or the factors which affect profits. The study of this science has shown clearly that any attempt to stimulate production beyond legitimate demand is ruinous to the farmer. It can benefit the public only temporarily, and that at the expense of the farmer. The ideal is to increase production as rapidly as is consistent with profit in production.

There are two factors governing the rate at which increased production has an economic justification. One is increase in demand. This comes about from growth in population, and from the cheapen

ing of farm products to the consumer, which latter can be accomplished by better systems of marketing. Both of these will permit increase in production without ruinous decrease in price.

The second factor involved is the cost of production. If this can be reduced, then the price at which the farmer can sell with profit will be lowered, and the resulting increased demand will justify increase in production. Perhaps this point may be made clearer by considering its application to other industries. Take coal mining, for example. Suppose that by greater efficiency the annual output of coal were doubled in a short time. Supply would exceed demand, and prices would fall probably far below even the new low level of cost of production. This in turn would automatically reduce production. Approximate equilibrium would ultimately be reached between production and consumption at price levels below those formerly prevailing. Consider also the application of this principle to the great steel plants of the country. If these steel plants were to produce twice their present product, assuming the same kind of competition between steel plants that exists between farmers, the price of manufactured steel would fall. With an increase of 100 per cent in production without a corresponding increase in demand the price would fall to a ruinous point. As a result of these low prices consumption would probably increase, but the price under competition would fall back to the point where the plants would be making only a reasonable profit. This principle applies everywhere where there is free competition and unlimited production. These conditions obtain in agriculture, and anyone who discusses agricultural subjects without taking these conditions into consideration will be led into serious error.

But let us see what service the new science of farm management can render to the farmer and to the public in general. As stated above, this science deals with the economic factors which affect the profits in farming.

Types of Farming. The first and most important of these factors is the type of farming. If a farmer makes a mistake in selecting the various enterprises on which to base the business of his farm, especially if this mistake be a radical one, the resulting effect on his business is so overwhelming that he soon is either driven out of business or compelled to change his type of farming. For this reason in all those sections where agriculture has been long estab

lished and where economic forces have had ample time to produce their legitimate effect, we find very few serious mistakes in type of farming. Thus, in one of our farm management surveys in a locality near the Atlantic seaboard, where farming has been in progress for more than two centuries, we found only one case of a gross mistake in type of farming. The region is one very poorly adapted to fruit. This particular farmer had planted two-thirds of his land in apple trees. He lacked $750 of having enough to pay interest on his investment, and as the interest on investment was less than this he actually had an income too small to pay his running expenses. It is inevitable that this farmer must ultimately fail.

But in the West and in certain sections of the South, where agriculture is developing on land recently brought under cultivation, mistakes of this kind are frequently met. A very large proportion of the real estate promotion schemes on the irrigated lands in the West have been based on the utterly false assumption that merely because the climate and soil were adapted to fruits and vegetables, the most intensive kinds of farming, it was possible for all this land to be devoted to this intensive farming. As a result of this egregious error thousands of men have lost their savings by undertaking types of farming utterly unadapted to local economic conditions. That is, there were no markets for their products. Combined with this mistake, and in reality as a result of it, the area of the farms has been made in many cases entirely too small to permit success with types of farming that are adapted to local economic conditions. Not only that, but the prices these men have paid to real estate speculators for their land are such that no type of farming can be made continuously profitable upon the land.

Even in the older parts of the country the science of farm management can render farmers an important service in connection with their types of farming. Thus, in a given region, where a farm management survey was conducted, three-fourths of the farms are dairy farms. Most of the remainder are hay farms. A few instances were found where the major source of income is poultry, or potatoes, or wheat, or several of these enterprises. A careful analysis of the business of some five hundred farms in this locality shows plainly that certain types of farming which are found on a few farms are quite poorly adapted to the region. When the results of this survey are published it will show those farmers who are engaged in