consignment. It is the form of co-operation that has to be adapted to the national conditions. The fact that we import Danish produce in the worked-up form of butter and bacon, does not mean that we should produce a great deal of this import at home, so long as the British farmer has a good market for fresh milk and pork. In Germany, which is well developed for co-operative business, its application to preserved meat products has been a failure; the investigation made into this result by the Imperial Federation of Agricultural Co-operative Societies found that the general conditions of the German and Danish cattle trades were widely different, so that "a systematic transference of the Danish organisation to Germany was impossible," "since German farmers do not aim at exporting salted meat, but at delivering fresh meat to German slaughter-houses,"* Germany has therefore organised the co-operative selling of milk and of livestock. She has applied the general method to her own conditions; and this is what is required in other food-importing countries. Holland is the country . which has carried furthest the sale of fresh produce in co-operative marts; about five million pounds worth of produce was thus sold in 1922, her cultivated area being only one-sixth of that of Britain. The co-operative method is not defeated by a home market; but it will be applied in a different degree to fresh as distinct from preserved products.

119. It is evident that in any case the large field of co-operative purchase is not affected by the nature of the selling market for produce. In Denmark, it was a much later development than co-operative sale; in Germany, France, and Belgium it has been. closely associated with the rural credit societies for a long time. If the principle of organisation can be well established for one purpose, history shows that it will extend; and in this country organised sale and purchase will react on each other through the methods of obtaining credit. The large number of farmers who buy their requirements individually from merchants, cancel the credit they obtain by undertaking to sell their produce through these merchants, so that one form of individual dealing leads to another, and the farmer is not in so close a relation to his market either way as he could be if associated. In our conditions, organisation for either purchase or sale will give the farmer an alternative both ways, so that if he still desires to make use of mercantile credit he can do so without any further binding conditions.

120. As regards the amount of co-operative association in this country, our evidence was generally discouraging. On the side of purchase, facts are given in the Report of the Agricultural Organisation Society for England for the year ending 31st March, 1922. From this Report, it appears that the total value of the turnover of all the English Societies in respect of requirements amounted to about 6 millions, the total membership of the societies being 64,000. This would make an average purchase of £100 per member, but it should be added that many societies

* Cd. 6626, p. 206.

deal with non-members. The number of farmers in England in 1921 was 211,000, to which figure some addition should be made for horticulturists. It may be estimated that one English farmer in four is associated for the sake of purchase. In Holland, in 1920, there were 109,000 holders of over 12 acres, while the membership of purchasing societies was nearly 120,000. In Denmark, in 1919, there were 140,000 holders of over 20 acres, and the number associated for purchase of feeding stuffs and manures was over 150,000 individuals, plus dairy societies, with at least 150,000 members, associated for purchase of machines. In Germany, at least a quarter of the value of feeding-stuffs and fertilisers consumed was purchased co-operatively before the war.

121. As regards sale, the foreign figures are not reduced to values, and it is only by the fact that the societies are numbered by the hundred, even in small countries like Holland and Denmark, that an impression can be obtained. In Denmark the member

ship is certainly greater than the number of cultivators, and it is frequent for the same farmer to join several societies. For this. country an estimate can be made on the basis of value of produce thus sold. The report of the Agricultural Organisation Society already referred to shows for 1921 sales of the value of 7 millions. There is no official estimate of the value of produce sold off farms in that year, but for 1922 it was officially estimated for Britain at 261 millions, of which 201 millions represents livestock, dairy produce, and other produce to which co-operation is specially applicable. On the basis of the agricultural index number, this would be equivalent to 340 millions in 1921, which may be written down to 300 millions. Of this, on the basis of acreage, about two-thirds is in respect of England alone. It appears then that 71 out of 200 millions was co-operatively sold in England, and it may be estimated that the ratio is under 4 per cent. of the whole output in question. For international comparison, however, this standard would be more justly compared with 50 than with 100 per cent.

122. The problem of public policy in relation to agricultural co-operation arises out of the fact that it is a method of doing business. Further, it depends on agreements or understandings which, so far as they go, are exclusive, and affect existing forms of intermediate trading. We have had evidence in defence of these latter forms. While the case for more co-operation rests on a broad view of the economic conditions of farming, it should also be realised that it comes near the limits of public policy to induce the members of an old industry to do their business in one way rather than another, the fundamental motive of that business being profit, whether its marketing methods are co-operative or not. In Great Britain, the State has given assistance to the propaganda of societies formed to promote co-operation, and in other countries grants have been given which range from small sums to cover foundation expenses, to , the more continued assistance which obtains in France. It is

proper, and most necessary in this country, that the scheme of agricultural education in Colleges and Farm Institutes should include the study of organisation at home and abroad, and that there should be "extension" of such information. But if the question is whether public assistance to the propaganda of private societies should now be followed by the creation of public officials, who would advise farmers or their associations to remove their custom from existing dealers and apply it in another way, then dealers and merchants who pay taxes would rightly object to this policy. The control of profiteering is a different question. In saying that co-operation must come from the farmers themselves, it is not intended to dismiss the question with a general phrase, but definitely to indicate a principle of policy. It is not desirable that veiled forms of agricultural protection should seek justification on the ground that they are of assistance to certain forms of co-operation. Nor is it intended to throw an undefined policy on the State; its policy should be defined as educational.

E-Transport Facilities..

123. In times of agricultural depression, the problem of transport charges has usually been raised. The farmer regards his produce as having been obtained from the land at a certain cost, and transport is another process whose cost is then measured against all the rest. That food which has been produced" should not be saleable because it cannot be cheaply enough carried" then appears as an anomaly, and a national waste.

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124. Such an argument might be applied to all produce in a time of depression. Its special application to agriculture rests on (a) the perishability of some agricultural products which cannot be held back for a better price; (b) the seasonal nature of agricultural production, since the farmer's product is once for all what the seasons make it, and is not the result of a system of production in which new engagements are accepted or refused throughout the year.

125. In some foreign countries, where the railways are nationally owned or controlled, agricultural depression has been alleviated by what is really a subsidy worked through the railways. Secondly, apart from actual conditions of depression, agriculture as an industry has been subsidised by regulation of rates for longer periods. Thirdly, in the case of Belgium, a special system of transport has been highly developed which has been of great advantage to the industry as a whole..

126. The Report of 1894 on Assistance to Agriculture (C. 7356) states that the national ownership of railways has enabled the Belgian Government to lower tariffs whenever they considered it desirable.

"The State has frequently come forward during commercial and industrial crises and, by the increased facilities of transport afforded by the lowering of rates, has in a great measure tended to lessen their injurious effects. In determining the character of the reduction, the nature of the object is always taken into consideration." Examples are the favouring of small consignments; the favouring of products used for certain purposes, such as fodder; the favouring of seasonal requirements, such manure destined to be employed during the month of January"; and the favouring of produce which has a long distance to go. In the drought of 1894, a reduction for some months of 25 per cent. was given on forage and feeding stuffs. It is also reported that at that time free transit was granted on rivers and canals to all cargoes consisting solely of manures or fertilisers.

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127. The same Report explains the system of Vicinal railways, organised in Belgium in 1885, and favoured by the great density of the population, which increases the traffic available per mile of line. The Vicinal railways, laid at small expense along the roads, were connected with the main railways and organised under a company in which most of the capital was held by the State, the Provinces, and the Communes. On these railways, special tariffs and other facilities for agriculturists are granted. No other country approaches Belgium in facilities of this kind. It is important to note that the Belgians are satisfied if these lines can be run without loss.

128. It is stated in the same Report that in Denmark State management has resulted in special railway facilities to agriculture. We have referred in the First Interim Report to the subsidy of £75,000 paid in a recent year for the transport of lime. For some years also, her export trade to this country was subsidised by grants to the shipping lines from Esbjerg.

129. In the case of Germany our Consular Reports refer frequently to the care taken to promote agricultural interests by special transport facilities. "A very complete system of preferential rates" is reported in 1898. Under the "Emergency Rate special terms were given during depression to manures especially; in 1904 an exceptional tariff was introduced for some months to alleviate the results of drought in half-a-dozen provinces; fodder was placed for the period on a rate 50 per cent. below the regular rate.

130. There are similar statements concerning France, but the evidence is more doubtful. The use of special long-distance rates has led to complaints, similar to those that are familiar in this country, of preference to foreign importation.

131. An enquiry on the subject of railway rates as affecting agriculture in this country was held in 1906, by Lord Jersey's Committee. The conclusion was that "Evidence has failed to

show that the railway companies are giving undue preferential 'treatment to foreign and colonial produce." (Cd. 2959, p. 36.)

132. Our evidence goes to show that the fact of public ownership of railways has enabled some quickly applicable methods of relief to be used in depressions, and has for longer periods contributed to agricultural development.

F.-Official and Voluntary Organisations.

133. There are some forms of organisation, official and voluntary, which have been an important factor in the development of foreign agriculture. Of these, the voluntary organisations are the most widespread, being the natural result of a more populous countryside, and giving to the industry of agriculture the appearance of a social union which is a notable contrast with Britain. But, in Germany in particular, these are supplemented by the institution of the official Chambers of Agriculture, which have a wide range of "welfare " activity.

134. The Chambers of Agriculture were instituted by provinces in Prussia in 1894, and were afterwards extended to other States, such as Baden, Hesse, Oldenburg and Saxe-Weimar. Their purpose is to provide a local organisation, with the double function of advising the Government, and of providing a channel for the execution of the national agrarian policy. "They focus the whole organisation of agriculture within their area, and promote the progress, both technical and economic, of agricultural interests generally, which they officially represent." It is one of their special purposes to promote agricultural co-operation. Their members are such persons as cultivate land sufficient to provide an independent livelihood, with the addition of retired agriculturists, officials of Agricultural Associations, or others who have rendered services to agriculture. They have power to levy rates on their members, and receive in addition subsidies from the State.

135. Our Consular Reports bear continual witness to their activity, They act as intermediaries for the supply of agricultural labour, conduct agricultural schools and courses of lectures, subsidise agricultural associations of all kinds, promote the consolidation of the too sub-divided holdings, maintain travelling experts, and act, by issue of publications and otherwise, as central bureaux of information. Their work was centralised in the German Agricultural Council, a body of considerable prestige, whose status was enhanced by the official nature of the chambers represented in it.

136. In no other country has so much authority been delegated to local bodies. The Chambers of Agriculture instituted in Italy in 1866 (Comizi Agrari) had a general commission to advance the interests of agriculture in their district, and for this purpose might receive subsidies to balance their budgets; while in Belgium the "Comices," united in the Provincial Commissions, have