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More correct ratios of the distribution of the three factors of production on poultry, tree-fruit, and.. 1931

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! U . B . C . L J D ^ ^ R Y ^ j CAT. WO. ¿-C3/37. /n^ ! ^cc. N<5! ! MORE CORRECT RATIOS OF THE DISTRIBUTION OF THE THREE FACTORS OF PRODUCTION ON POULTRY, TREE-FRUIT, AND DAIRY FARMS INBRI- TISH COLUMBIA. by Vladimir Nico las Snesarev, A Thes is submitted f o r the Degree of MA S T E R 0 F S u i E f! C E 1 A' A ^ i u u L T U R E in the Department of AC^NO '̂LEDGLiENI. The w r i t e r takes t h i s opportunity of e x p r e s s i n g h i s s i n c e r e thanks and g r a t i t u d e to a l l those who have a s s i s t e d so m a t e r i a l l y in supplying informat ion f o r t h i s t h e s i s . His thanks are due e s - p e c i a l l y to P r o f e s s o r h.R.Hare f o r h i s kind advice and to i''.H.Cle ment, Dean of the F a c u l t y of A g r i c u l t u r e of the U n i v e r s i t y of J r̂i t i s h Columbia, who made p o s s i b l e t h i s undertak ing . C 0 f! T E N T S . Pages. Introduct ion 1 - 7 I METHODS OF INVESTIGATION USED l/ Assumptions adopted 7 - 10 2/ S t a t i s t i c a l data used 11 - 13 3/ D i s t r i c t s chosen 13 - 15 4/ method of securing s t a t i s t i c a l data . 16 - 16 3/ .i-etod of determining the degree of p r o f i t a b l e n e s s of the e n t e r p r i s e . . . 17 - IK 6/ Hethod of determining percentages of investments in d i f f e r e n t f a c t o r s of production 18 - 19 7/ d i v i s i o n of farms into s i z e groups . .2 J - 21 II POULT .Y FARMING 22 - 36 I I I TREE-FRUIT FARMING 37 - 55 IV DAIRY FARMING 56 - 76 V YEARLY CHANGES IN THE DISTRIBUTION OF THE THREE FACTORS OF PRODUCTION 77 - H3 VI APPENDIX H4 -IO5 3 Farming i 3 becoming more and more a b u s i n e s s p r o o o s i t i o n . The ownership of even a l^rge s i z e d farm does not in i t s e l f mean economic power to the owner. .Tiat does g i v e t h i s power is an income. Therefore i t i s the income, a c t u a l or p o t e n t i a l , which determines the value of the farm. The c a l l of a p a r t i c u - lar v a l l e y , the l u r e of a c u r t a i n farming l o c a l i t y , doe^ not aeem to be so s trong or to come so f r e q u e n t l y now-a-days a s was the case two g e n e r a t i o n s ago . hy? Because there are few farms complete ly s e l f s u s t a i n i n g a t the present t i m e , and be- cause the say ing t h a t "The bones of our f a t h e r s and g r a n d f a - thers g r e ; on the produce of t h i s s o i l " does not hold true any longer. People do not want to s t - y on t h e i r farms simply be- cause they were born t h e r e . They are w i l l i n g to abandon the farm and to move to a ne^ l o c a l i t y , or to a l t e r t h e i r farms i f saoh a procedure w i l l i n c r e a s e the e f f i c i e n c y of the l a b o r or the invested c n n i t a l . Farmers want t h e i r farms to pay and they have a p e r f e c t r i g h t to expect t h i s and to s t r i v e to a t t a i n i t . Only the people who share the above s t a t e d b e l i e f might be interested in the study t h a t f o l l o w s t h i s i n t r o d u c t i o n . There can be l i t t l e doubt that a g r i c u l t u r a l e n t e r p r i s e s are p e c u l i a r l y s u b j e c t to improper c o - o r d i n a t i o n of the economic factory, of production and t h a t economic m i s f i t s are met wi th more f r e q u e n t l y in a g r i c u l t u r e than in i n d u s t r y . Professor of Economics i n the U n i v e r s i t y of Minnesota John D. Black w r i t e s : " A farm b u s i n e s s i s p e c u l i a r l y s u b j e c t to m i s - f i t s of c a p a c i t i e s . I t i s l i k e l y t o be e i t h e r too l a r g e or tee small f o r s e v e r a l of the e lements of p r o d u c t i o n . " Much has been w r i t t e n and s a i d about the law o f d iminishing iwtnms i n a g r i c u l t u r e . A g r i c u l t u r e has been cons idered to be at a disadvantage as compared to o ther i n d u s t r i e s . The farmer has been warned a g a i n s t i n v e s t i n g too h e a v i l y i n equipment a id i a labour as the i n c r e a s e d output could mean decreased e f f i c i e n - cy of a l l the i n v e s t e d c a p i t a l . This warning may l a y undue amphasis on the p o s s i b i l i t y of an i n a p p r o p r i a t e apportionment ef labour and equipment i n r e s p e c t to the amount of l a n d . The r e s u l t o f the wrong p o r t i o n i n g of l a b o u r and c a p i t a l t o land i s v e r y d i s a p p o i n t i n g but the r e s u l t o f wrong p o r t i o n i n g of land to equipment or of l a b o u r to equipment i s a l s o v e r y d i s a p p o i n t i n g . The i n t e n t i o n of the w r i t e r of t h i s a r t i c l e i s f a r from being a d e s i r e to c r i t i c i z e the law of d iminishing r e t u r n s . Be r e c o g n i s e s the soundness of the law when a l l the modi fy ing tasumptions are born i n mind. The d i f f i c u l t y a r i s e s however when the n e c e s s a r y assumptions are not remembered and when, toneequent ly , the m i s i n t e r p r e t a t i o n t a k e s p l a c e . As a matter ef f a c t the m i s i n t e r p r e t a t i o n of the law of d iminishing r e t u r n s i s r a t h e r oommon. One hears the opinion expressed t h a t whi le ^ * Production Economics " by John D. B l a c k , P h . D . , New J o r k , Henry Holt and Company, page$67. - 3 - e a s t of production o f an a r t i c l e manufactured i n an i n d u s t - r i a l p l a n t which has adopted an i n t e n s i v e mass product ion s y s - tea tends to he lower than the c o s t of product ion o f the same grt io le manufactured i n an i n d u s t r i a l p l a n t with s m a l l e r o u t - pat, the c o s t of product ion of a g r i c u l t u r a l commodities f o l l o w the law of d iminishing r e t u r n s . This statement i s somewhat spang as the law i s not understood p r o p e r l y ; the assumptions are not remembered and the law i s made a p p l i c a b l e to a g r i c u l t u r e paly, whi le i t i s v a l i d f o r any product ion a c t i v i t y whatsoever . Kereover the f i r s t p a r t of the law i s over looked as i f i t did set e x i s t . * The c o n f u s i o n caused by the above s t a t e d i d e a can be g r e a t iMeed. I t may r e s u l t i n a d e s i r e on the p a r t of a farmer to have more land than i s j u s t i f i e d by the amount of c a p i t a l he oaa i n v e s t i n h i s farm or by the type of farm he i n t e n d s to e s - tabl i sh . The i d e a t h a t i f a farmer has a f i x e d acreage of land can i n c r e a s e the s i z e o f h i s b u s i n e s s only by i n c r e a s i n g the i n t e n s i t y o f c u l t i v a t i o n o f the l a n d , though t r u e , some- times i s a l s o m i s l e a d i n g . I t might be understood from t h i s 3hat an i n c r e a s e i n the s i z e o f the farm b u s i n e s s without the i M i l t y to add new a r e a s of land would always mean decreased e f f i c i e n c y of the c a p i t a l - l a b o u r i n v e s t e d . Such a s u g g e s t i o n a&ght prompt a farmer to " i n s u r e " h i m s e l f a s f a r as the acreage As a summary of the law o f d iminishing r e t u r n s i n a g r i c u l - tare the f o l l o w i n g quotat ion from B . C . T a y l o r i s g i v e n : "In a g r i c u l t u r a l product ion the r e t u r n s to succeeding compo- site u n i t s made up of l a b o r e r s and equipment may be s a i d to f o l - lew the law of i n c r e a s i n g r e t u r n s u n t i l a point has been reached after which the law of d iminishing r e t u r n s per succeeding u n i t eonmences to o p e r a t e . " - 4 - of h i s farm i s concerned. He would l i k e l y t r y t o be on thp ' s a f e * s i d e and to guarantee a " s u f f i c i e n t " amount of land. , i S The tendency t o have more land than i s j u s t i f i e d by the c a p i t a l and labour investment on farms i s p l a i n l y s e e n . The w r i t e r does i , \ ' not presume to say t h a t t h i s tendency i s the r e s u l t of the mis* ! ^ understanding of the law of d iminishing r e t u r n s ; there are mad^ ether economic and s o c i a l reasons f o r t h i s phenomenon. The w r i t e : simply wishes to warn the p o s s i b l e farmer from buying too much ^ land, should he be prompted to do so because of the b e l i e f t h a t ! the land w i l l n e c e s s a r i l y b r i n g him diminishing r e t u r n s en e v e - ry e x t r a u n i t o f c a p i t a l and labour i n v e s t e d per a c r e . This l a s t should happen o n l y , l / i f the point o f investment should be reached a f t e r which the law of d iminishing r e t u r n s per succeeding u n i t commences to eperate; 2/ i f the managerial e f f o r t should remain e x a c t l y equal to the e f f o r t g i v e n to the other combination of the f a c t o r s of produc- tion; 3/ i f there were no opportunity of adopt ing d i f f e r e n t t y p e s or methods of farming; 4/ i f the f a c t o r s of product ion could not be combined i n v a r i - ants r a t i o s . Seldom a l l these " i f s " e x i s t i n r e a l l i f e f o r the a c t u a l farmer. Land i s l e s s s p e c i a l i z e d than most of the elements of pro- duction. An i n d u s t r i a l e n t e r p r i s e i s planned a c c o r d i n g to the v o l u - me o f b u s i n e s s a n t i c i p a t e d and d e s i r e d . None o f the e lements t f product ion i s a c t u a l l y f i x e d and t h e i r r a t i o i s chosen d e - pending on the kind o f the e n t e r p r i s e and on the amount o f i n - vestment decided upon or a v a i l a b l e . I f any element of produc- t ion i s f i x e d - f a c t o r y b u i l d i n g s f o r i n s t a n c e - i t becomes u n - wise to s t a r t planning the o r g a n i s a t i o n by a s s i g n i n g the volume of b u s i n e s s to be handled. The law o f d iminish ing r e t u r n s may i n t e r f e r e wi th the e f f i c i e n c y of p r o d u c t i o n . Even more unwise would i t be to s t a r t a p a r t i c u l a r i n d u s t r i a l p l a n t having two or a l l of the f a c t o r s o f product ion f i x e d . The e f f i c i e n c y o f the e n t e r p r i s e i n which the f a c t o r s of product ion have not been co-ordinated i s v e r y p r o b l e m a t i c a l . This i s w e l l understood by manufacturers and they c l o s e l y watch the combination of the f a c t o r s of product ion on t h e i r f a c t o r i e s . Sometimes, due t o var ious c a u s e s , the combination c e a s e s to be e f f i c i e n t (changes i n p r i c e s , the i n v e n t i o n of new manufacturing p r o c e s s e s , an i n - crease i n the amount i n v e s t e d , e t c . ) . When t h i s i s r e c o g n i s e d a r e o r g a n i s a t i o n u e a a l l y t a k e s p l a c e . Why should not farmers do the same? Why should a f a n n e r bo perplexed by the a d v i c e not to i n v e s t on h i s land more l a - b o u r - c a p i t a l u n i t s than the number which has a s i t s l a s t item the u n i t producing an output a t l e a s t equal to an output a v e - rage f o r a l l the prev ious u n i t s i n v e s t e d ? This good a d v i c e presupposes an unvarying combination of the two f a c t o r s of pro- d u c t i c n . Such a p r e s u p p o s i t i o n can d i v e r t the a t t e n t i o n of the Even three - i . e . l a b o r , c a p i t a l , and management. s e t . An o r g a n i z e r o f an i n d u s t r i a l e n t e r p r i s e w a i t s to wi-& f l e x i b l e , adaptable f a c t o r s of p r o d u c t i o n . The f a r - ater i s persuaded more or l e s s t h a t c e r t a i n f a c t o r s of product ion a g r i c u l t u r e are i n f l e x i b l e and t h a t h i s p o l i c y i s to do the H i ' best he can wi th the handicap of having c e r t a i n f a c t o r s beyond § "i h i s c o n t r o l . Sometimes t h i s i s s o , e s p e c i a l l y on the o ld con- ^ ^ A farmer may f r e q u e n t l y plan h i s f u t u r e e n t e r p r i s e q u i t e but by no means i s i t a lways s o . Î ^ f e r ^ n t l y fr^m a manufacturer . In many c a s e s a farmer f i r s t i*es land without c a r e f u l c o n s i d e r a t i o n of the r e s o u r c e s be a v a i l a b l e f o r the working* of i t . This r e s u l t s i n en i n e f f i c i e n t , sometimes c lumsy, combination of the e lements of product ion. I t i s a u s u a l e x p e r i e n c e i n a g r i c u l t u r e to see the e f f i c i e n c y of product ion hampered by the f a c t of there be ing ajf; a d e f i c i e n t f a c t o r . Therefore the adjustment and c o - o r d i n a t i o n of the f a c t o r s of product ion and the t y p e s of c a p i t a l would W appear to be very important . I t i s not to be presumed t h a t i n a l l i n s t a n c e s r e d i s t r i b u - t ion o f the investment w i l l be the remedy f o r u n p r o f i t a b l e f a r - ming. There are c o n d i t i o n which may make r e d i s t r i b u t i o n i n e f - f e c t i v e . I t i s understood that i n many i n s t a n c e s farmers are 9 naable t o r e o r g a n i s e t h e i r e n t e r p r i s e s owing t o market c o n d i - ; t i e n s o r , i t may b e , to t h e i r own economic weakness. I t i s assumed t h a t the b e s t combination of the f a c t o r s of roduct ion i s one which y i e l d s the l a r g e s t n e t r e t u r n per d o l l a r Of a l l e lements of product ion i n v e n t e d . This l a r g e s t net r e - turn i s not n e c e s s a r i l y r e a l i z e d , when the product ion i s c a r r i e d en with l a n d , l a b o r and equipment c o - o r d i n a t e d i n such a way a s to o b t a i n the l e a s t c o s t combinat ion. A farmer i s not i n t e r e s t - ed i n low c o s t s a s an end i n themselves . Low c o s t s are means to g e t high p r o f i t s . I f the opportuni ty to o b t a i n s t i l l h i g h e r p r o f i t p r e s e n t s i t s e l f , the f a r m e r , s u r e l y , w i l l be w i l l i n g to accept i t . There i s a p o s s i b i l i t y t h a t one combination of the f a c t o r s of product ion may g i v e the s m a l l e s t c o s t s and t h e r e f o r e the g r e a t e s t p r o f i t per u n i t of the r e s u l t a n t p r o d u c t , but a t the same time i t w i l l not r e s u l t i n the g r e a t e s t t o t a l p r o f i t . This can happen when another combination of the f a c t o r s of p r o - duct ion without y i e l d i n g the h i g h e s t p r o f i t per u n i t of product a l l o w s such an i n c r e a s e i n the number of u n i t s produced t h a t the t o t a l p r o f i t i s g r e a t e r than i n the f i r s t i n s t a n c e . As an i l l u - s t r a t i o n pure ly imagined f i g u r e s are g i v e n i n the t a b l e below: P r i c e of Cost o f P r o f i t EumberTotal one u n i t , one u n i t . p e r u n i t . u n i t s p r o f i t s L e a s t c o s t combination 90 80 10 200 2000 Higher t o t a l p r o f i t combination % 82 8 270 2160 I t i s to be assumed t h a t the p r i c e s on d i f f e r e n t products and d i f f e r e n t elements of product ion a r e not s u b j e c t to penaa- ' tH changes . F l u c t u a t i o n i n p r i c e s may cause f l u c t u a t i o n s i n *yawfly r e t u r n s , whieh are l i a b l e to balance eaoh o t h e r . The permanent changes i n l e v e l s of p r i c e s can make p r e v i o u s l y e f f i - e n t combination of the f a c t o r s of product ion s t r i k i n g l y i n e f - f i c i e n t . In the l a s t case r e o r g a n i z a t i o n i s the only remedy. I t i s assumed that the s i z e of an a g r i c u l t u r a l e n t e r p r i s e ? i i a determined by the t o t a l investment . The a c r e a g e or the v a l u e Of the land i s net the c r i t e r i o n of the s i z e when d i f f e r e n t t y - pes of farms are compared; n e i t h e r i s a very good measure even when a d j a c e n t farms of the same type are d e a l t w i t h , as p o s s i b - l e surp lus a r e a s may be bare t r a c t s of eubmarginal land wi thout any t a x a b l e v a l u e , or they may be h i g h l y product ive and expen- Í alve f i e l d s l y i n g as a r e a l burden on the e n t e r p r i s e . I t i s not presumed t h a t the t o t a l q u a n t i t a t i v e investment i s whol ly r e p r e s e n t a t i v e of the s i n e of an e n t e r p r i s e ; a poorly organised and poor ly managed u n . t may be f o r a l l p r a c t i c a l pur- t poses a s m a l l e r e n t e r p r i s e than the w e l l o r g a n i s e d and w e l l ma- naged u n i t , whi le a t the same time they are equal as jfar as the f t o t a l investment i s concerned. The second e n t e r p r i s e w i l l show ^much b e t t e r r e s u l t s and a l a r g e r output due to i t s a c t i v i t y and w i l l p lay a more prominent p a r t i n the economical l i f e of the d i s t r i c t than the f i r s t . E f f i c i e n c y of o r g a n i z a t i o n and e f f i - c iency of o p e r a t i o n are important f a c t o r s i n measuring the s i z e ) of an e n t e r p r i s e . E f f i c i e n c y of o r g a n i s a t i o n and e f f i c i e n c y of operat ion depend on q u a l i t y and the amount of management i n v e s - ted . This q u a l i t y and t h i s amount r e a l l y should be inc luded in t o t a l investment as one of i t s compound i t e m s . But manage- - 9 - i t i s such an i n t a g i b l e f a c t o r t h a t i t i s u s e l e s s to attempt measure i t wi th any degree of a c c u r a c y i n terms of d o l l a r s ; ther elements of product ion are measured i n such terms. I t i s t h e r e f o r e assumed t h a t the s i z e o f an a g r i c u l t u r a l srpTfise i s determined by the t o t a l farm i n v e s t m e n t . In t o - investment a l l the owned, r e n t e d , and borrowed elements o f product ion, a s w e l l a s labour a r e i n c l u d e d . More p r e c i s e l y , i n the t o t a l investment i s i n c l u d e d the v a l u e of the land ! / the l a b o r 3/ the machinery the l i v e - s t o c k the farm b u i l d i n g s 6/ the f e e d and s u p p l i e s the cash i n v e s t e d the house. A s e r i o u s d i f f i c u l t y i s immediately c o n f r o n t e d : how should the land be va lued? In the market p r i c e f o r land the p o t e n t i a l r e a l e s t a t e p r o f i t and the c a p i t a l i z e d e f f i c i e n c y of the present operator are o f t e n i n c l u d e d . No r i g i d r u l e s as to the way of v a l u a t i o n can be g i v e n . Conservat ive p r i c e s f o r the land p l u s the t a x e s paid f o r i t , are entered under the item of land v a l u e . For farms of v a r i o u s t y p e s and s i i e s , and f o r d i f f e r e n t d i s t r i c t s , the elements of product ion must be combined i n d i f - f e r e n t p r o p o r t i o n s . The types of farms which r e q u i r e but l i t t - -10- ^ land u s u a l l y demand a l a r g e r investment i n l a b o r and e q u i p - n t than the t y p e s of farms which need l a r g e a c r e a g e . An inc- rease i n the s i z e of a farm by an a d d i t i o n to one of the f a c - t o r s of production o f t e n demands a d d i t i o n s to the other f a c t o r s $f p r o d u c t i o n , but not a l l of the elements of product ion should be i n c r e a s e d i n the same p r o p o r t i o n . D i f f e r e n t t y p e s of farming with d i f f e r e n t combinations of erops and l i v e s t o c k demand d i f f e r e n t amounts of investment , d i f f e r e n t d i s t r i c t s are b e s t s u i t e d f o r v a r i e d combinations o f erops and l i v e s t o c k . S o i l , c l i m a t e , p r i c e s and market c o n d i t i o n s determine the most remunerative combination of the f a c t o r s of product ion . These c o n d i t i o n s vary with the d i s t r i c t s , t h e r e f o r e i t i s im- p o s s i b l e to compare farms o f d i f f e r e n t t y p e s , or of v a r i e d s i - z e s , or those s i t u a t e d i n d i f f e r e n t d i s t r i c t s . ^ * I t i s p o s s i b l e , though, t o compare a r e p r e s e n t a t i v e farm of one group wi th the r e p r e s e n t a t i v e farm of another i n the same d i s t r i c t when the groups are determined by the s i z e of the farms. L i k e l y a c e r t a i n s i z e may prove b e t t e r s u i t e d f o r a g iven type of farm operated i n a p a r t i c u l a r d i s t r i c t . I n the determinat ion of the s t a t i s t i c a l data t h a t was d f o r forming c e r t a i n c o n c l u s i o n s as to the b e s t r a t i o s of the f a c t o r s of product ion i n a g r i c u l t u r e , i t proved to be very d i f f i c u l t to choose the d i s t r i c t s which would be c h a r a c t e r i z e d the s i m i l a r i t y of methods of f a r m i n g . The f a c t t h a t the s a - me d i s t r i c t s had farms of d i f f e r e n t s i z e s did not cause much d i f f i c u l t y ; farms could be c l a s s i f i e d according to t h e i r s i z e s a f t p r the data v;aa g a t h e r e d , " i t h the gathered s t a t i s t i c a l ; drt'a proper ly arranged a p o u l t r y farm could be e a s i l y separated frdm a d a i r y farm. But i t would be h a r d l y j u s t i f i a b l e to c l a s s i - fy,' farms more thoroughly by p i c k i n g out the farms which seemed to belong to the same type a s f a r as t h e i r methods of c a r r y i n g On the a g r i c u l t u r a l product ion was concerned. The adoption of such a p r a c t i c e would a l low too much opportuni ty f o r a r b i t r a r y d e c i s i o n s . Probably the d i v i s i o n s would be made according to &he tendency of the s t a t i s t i c a l data to show the i n c l i n a t i o n t o prove s i m i l a r t h i n g s or t o i l l u s t r a t e s i m i l a r p r o n e i p l e s . In d e a l i n g w i t h h i g h l y i n d u s t r i a l i z e d t y p e s of farming such a s p o u l t r y f a r m i n g , the d i f f i c u l t y was not e x p e r i e n c e d . P o u l t r y farming i s a s p e c i a l i z e d type of farming which i n order t o ob- atin the b e s t r e s u l t s h a s , more or l e s s , s i m i l a r ways of hand- l i n g the e n t e r p r i s e . T r e e - f r u i t farming a l s o has methods of management uniform enough not to present s e r i o u s d i f f i c u l t i e s in summarizing the s t a t i s t i c a l d a t a . -12- Dairy farming on the other hand, shows g r e a t v a r i a t o n i n i t s thods of o r g a n i z a t i o n and msnagesent. Various types of mana- ent n e c e s s i t a t e d i f f e r e n t o r g a n i s a t i o n s . The same d i s t r i c t s ve farms managed by d i f f e r e n t methods. hat i s good f o r one jltype of d a i r y farm may prove to be b; d f o r another type of d a i - ry farm. There i s not v e r y much u n i f o r m i t y about d a i r y farm e n t e r o r i z e s , e s p e c i a l l y when the farm i s l a r g e . Although knowing beforehand that i n d e a l i n g w i t h d a i r y fcrms ¡*t i s impossible to expect to obta in an o r d e r l y and w e l l - d e f i n e d tendency to r e a c t i n a c e r t a i n way on the v a r i a t i o n s i n the o r - d u a t i o n , one can hope, n e v e r t h e l e s s , t h a t c e r t a i n p r i n c i p l e s - i l l be found t h a t w i l l apply in a g e n e r a l way to a l l the d a i r y -farms of a g iven d i s t r i c t . M a t e r i a l suppl ied by the F a c u l t y of A g r i c u l t u r e of the Uni- v e r s i t y of B r i t i s h Columbia formed the s t a t i s t i c a l b a s i s f o r t h i s s tudy . Since 1*?20 the Farm Survey work has been c a r r i e d on by the Department of A g r i c u l t u r e of the above-mentioned Uni- v e r s i t y . Df;iry, f r u i t and p o u l t r y farms of d i f f e r e n t d i s t r i c t s have been included in the Survey. For the purposes of t h i s s t u - dy the data was used concerning: 1/ 68 da iry farms of the Courtenay, Lower F r a a e r , and Upper F r a - Ser V a l l e y d i s t r i c t s ; 2/ 74 t r e e - f r u i t farms of the Okanagan d i s t r i c t , and 3/ 67 p o u l t r y farms of the Lower F r a s e r V a l l e y d i s t r i c t , and the Duncan d i s t r i c t on Vancouver I s l a n d . - 1 3 - The o l imcte and s o i l c o n d i t i o n s which p r e v a i l i n the Cour- tenay d i s t r i c t are t y p i c a l of c o n d i t i o n s i n the d a i r y i n g d i s - t r i c t s on Vancouver I s l a n d and on the Gulf I s l a n d . S o i l s vary from a sedimentary d e p o s i t s of the v a l l e y s to a g r a v e l l y g l a c i - a l - d r i f t tyne of s o i l of the uplands . The annual p r e c i p i t a t i o n f l u c t u a t e s around 40 i n c h e s . The summer r a i n f a l l i s l i g h t but i s ample f o r good crop production when proper t i l l a g e i s p r a c t i - ced. A market f o r the mi lk produced i n t h i s area i s provided by the Comox Creamery. This i s a farmers C o - o p e r a t i v e o r g a n i z a - t i o n whieh m&kes b u t t e r and, i c e - c r e a m , and which handles a c e r - t a i n amount of whole m i l k . The c l imate of the Lower F r a s e r V a l l e y d i s t r i c t i s very f a - vorable f o r d a i r y f a r m i n g . This d i s t r i c t i n c l u d e s area l o c a t e d near the town of Ladner, i n c o r p o r a t i n g the D e l t a , Lulu and Sea I s l a n d s , and the Hud Bay a r e a . The s o i l i s of a sedimentary o r i g i n formed by d e p o s i t s of the F r a s e r i v e r . I t i s r i c h and h i g h l y p r o d u c t i v e . The topography of the land i s f l a t which n e c e s s i t a t e s p r o t e c t i o n from the sea and r i v e r o v e r f l o w , ^he annual p r e c i p i t a t i o n a l s o f l u c t u a t e s around 40 i n c h e s . But the summer r a i n f a l l i s l i g h t as compared to the w i n t e r . The Upper F r a s e r V a l l e y d i s t r i c t i s a d j a c e n t to the Lower Fraser V a l l e y d i s t r i c t . I t extends from C l o v e r d a l e to Rosedale . "he s o i l i s of s i l t and c l a y nature streaked with g r a v e l . The Upland, of which there i s c o n s i d e r a b l e amount, i^. ^ g l a c i a l d r i f t o r i g i n tends toward a g r a v e l y loam. Lost of the d a i - ry farms are l o c a t e d on the lower l a n d , which i s b e t t e r s u i t e d f o r da iry f a n n i n g . The p r e c i p i t a t i o n i s about 40 i n c h e s . The market f o r the mi lk produced both i n the Lower and i n the Upper F r a s e r Val ley d i s t r i c t s i s provided mostly by the F r a s e r V a l l e y Milk Producers A s s o c i a t i o n . This i s a fa imers c o - o p e r a t i v e o r - g a n i z a t i o n , which makes b u t t e r , i c e - c r e a m , condensed m i l k , and which s u p p l i e s with f l u i d milk the c i t y of Vancouver. In g e n e r a l the c l i m a t e , s o i l , and market c o n d i t i o n s are s i - mi lar f o r Courtanay, the Lower F r a s e r and the Upper F r a s e r Va- l l e y d i s t r i c t s . * * I t ..as found t h a t f o r the puroose of t h i s s t u - dy the d a i r y farms of a l l the three d i s t r i c t s could be c o n s i d e r ed as e n j o y i n g s i m i l a r economic and c l i m a t i c c o n d i t i o n s . The c l imate of the Okanagan D i s t r i c t d i f f e r s from the c l i - mate of the F r a s e r 'Val ley. The seasons of the y e a r are more c l e a r l y d e f i n e d ; the summer i s warmer and the w i n t e r i s c o l d e r and l o n g e r . The s o i l v c r i e s from a heavy c l a y i n the v i c i n i t y of Armstrong to a sandy s i l t and g r a v e l y loam a t Vernon and kelowna,.^, The p r e c i p i t a t i o n v a r i e s ; i t i s h e a v i e r a t Armstrong and Lumby than a t Vernon end kalowna. 1 Vernon and kelowna an average annual p r e c i p i t a t i o n i s about 14 i n c h e s . In t h i s par t of the Okanagan d i s t r i c t i r r i g a t i o n i s used to a c o n s i d e - r a b l e e x t e n t . Joth da iry and f r u i t farms are numerous i n the Okanagan d i s t r i c t . This paper w i l l d e a l w i t a t r e e f r u i t farms o n l y . The n a t u r a l and the n e a r e s t markets f o r the Okanagan f r u i t are Vancouver and tae P r a i r i e P r o v i n c e s . A l l the t r e e - f r u i t farms which supplied the s t a t i s t i c a l data ore l o c a t e d i n the seme d i s t r i c t and have to adapt them- ^ the l o s t d i s t r i c t p r a c t i c e s somewhat more i n t e n s i v e methods of d a i r y farming t , a n the othc two. -15- s e l v e s to the saine market c o n d i t i o n s . Poul t ry farms au a. r u l e are h i g h l y s p e c i a l i z e d e n t e r p r i s e s and t h e i r success and the type of t h e i r o r g a n i z a t i o n does not denend to any g r e a t e x t e n t on the s l i g h t v a r i a t i o n s i n the c l i - matic c o n d i t i o n s snd the s o i l f e r t i l i t y . As f a r as p o u l t r y farming i s concerned, both the Duncan d i s t r i c t on Vancouver Is land and the Lower F r a s e r V a l l e y d i s t r i c t may he considered as providing the same opportunity f o r c a r r y i n g on the b u s i n e s s under c o n s i d e r a t i o n . The market c o n d i t i o n f o r p o u l t r y products i s very much the same in both d i s t r i c t s . I t might be expected that the e f f i c i e n t type of o r g a n i z a t i o n would prove the same f o r the two d i s t r i c t s . The d e t a i l e d information as to the methods of secur ing data by the B r i t i s h Columbia Farm Survey can be found in "Dairy Farming of B r i t i s h Columbia", B u l l e t i n B o . l o 3 by H.R.Hare " T r e e - f r u i t Farming i n B r i t i s h Columbia", B u l l e t i n N0.I05 by F.M.Clement, and "A Survey of Poul try Farms i n B r i t i s h Columbia", B u l l e t i n '70,102 by N . J . R i l e y , E . A . L l o y d , V.S.Asmudson. Short ly the method was as f o l l o w : A f ie ld-man v i s i t e d i n - d i v i d u a l farms and obtained a c o n f i d e n t i a l statement of r e c e i p t s and expenses incurred during the y e a r . Besides t h i s , the f i e l d - man took an inventory of l a n d , b u i l d i n g s , s t o c k , and equipment of the farm. As a r u l e , c o n s e r v a t i v e v a l u a t i o n s were made. Information was secured and recorded each year f o r a number of y e a r s , aid the data concerning each farm was recorded on a form s p e c i a l l y printed f o r t.,e purpose. The accumulated data were then c l a s s i f i e d and tabulated on separate o f f i c e s h e e t s . Thus the systematized data became a v a i l a b l e f o r purposes of r e s e a r c h . So f a r the induct ive method was f o l l o w e d . As the next s t e p , in an attempt to a r r i v e a t c e r t a i n conc lus ions which could become of some value both to the farmer and to the econo- m i s t , the deductive method became j u s t i f i e d . The purpose of t h i s study was, as a l ready mentioned, the de- s i r e to come to c e r t a i n conc lus ions as to the more c o r r e c t r a - t i o s of the d i s t r i b u t i o n of the d i f f e r e n t f a c t o r s of production - 1 7 - i n a g r i c u l t u r e T ^ I t i s agreed t h a t the degree of success with which the p a r t i c u l a r o r g a n i s a t i o n of an a g r i c u l t u r a l e n t e r p r i s e meets i s measured by the net r e t u r n ner d o l l a r of the t o t a l i n - vestment. The most s u c c e s f u l o r g a n i s a t i o n w i l l t h e r e f o r e pro- vide the l a r g e s t net r e t u r n per d o l l a r of the t o t a l investment . In order to a r r i v e a t the n e t r e t u r n per d o l l a r i n v e s t e d , t o t a l expenses are subtracted from t o t a l r e c e i p t s and the r e s u l t ob- tained div ided by the number of d o l l a r s r e p r e s e n t i n g the t o t a l c a p i t a l i z a t i o n of the farm e n t e r p r i s e . U n f o r t u n a t e l y t h i s method of comparison i n v o l v e s the d i v i - sion of the farms i n t o too many d i f f e r e n t s i z e - g r o u p s . The f i n e g r a d a t i o n i n s ine would become a n e c e s s i t y as one cannot consider 4% r a t e of r e t u r n per d o l l a r i n v e s t e d i n an e n t e r p r i s e with the t o t a l c a p i t a l i s a t i o n of 3,000 a s denoting the same degree of s u c c e s s when compared wit^ the 4/, r a t e of r e t u r n per d o l l a r inves ted in an e n t e r p r i s e w i t h the t o t a l c a p i t a l i z a t i o n of ( 13 ,000. In order to have the r i g h t to proclaim the same degree of s u c c e s s , the smal ler e n t e r p r i s e haa to show h i g h e r ra te of re turn per d o l l a r i n v e s t e d . Accordingly another method of determining the degree of the p r o f i t a b l e n e s s of the e n t e r p r i s e by the measurement of the am- ount of the o p e r a t o r ' s l a b o r income was a.donted. The operator labor income r e p r e s e n t s the farm net revenue, l e s s 7", i n t e r e s t on the investment i n l a n d , b u i l d i n g s , machinery, l i v e s t o c k and ^ not a l l of the a g r i c u l t u r a l d i s t r i c t s of B r i t i s h Columbia were c o n s i d e r e d . Only three types of f a r ing were d e a l t w i t h . I f the c o n c l u s i o n s a r r i v e d a t w i l l prove of some i n t e r e s t , the same method of i n v e s t i g a t i o n may be a p p l i e d to other d i s t r i c t s end f o r other types of farm e n t e r p r i s e s . -18- ed and s u p p l i e s r T h e o p e r a t o r ' s l a b o r income r e p r e s e n t s the farm o p e r a t o r ' s r e t u r n f o r h i s work and f o r h i s managerial a b i - l i t y . then the i n t e r e s t on investment exceeds the farm net r e - venue, the d i f f e r e n c e becomes a minus o p e r a t o r ' s l i b o r income. The same o p e r a t o r ' s l a b o r income i n d i c a t e s the same decree of success even when the s i z e s of the farms compared d i f f e r s i g - n i f i c a n t l y . For the smal ler e n t e r p r i s e the same l a b o r income would mean g r e a t e r r a t e of r e t u r n s per d o l l a r i n v e s t e d . Only the p r a c t i c a l i m p o s s i b i l i t y of d i v i d i n g the farms i n t o many s i z e groups prompted the adoption of the method of measur- ing the p r o f i t a b l i n e s s of the e n t e r p r i s e by i t s o p e r a t o r ' s l a - bor income. The number of the farms u n ' e r the c o n s i d e r a t i o n -.-as not l a r g e enough to make a f i n e c l a s s i f i c a t i o n by s i z e s po- s s i b l e . The t o t a l c a p i t a l i z a t i o n of the d i f f e r e n t f i r m s placed in the same s i z e group v a r i e d too much. As the f i r s t s tep each one of the 209 farms had to be con- sidered i n d i v i d u a l l y . The t c t s l c a p i t a l i z a t i o n , o p e r a t o r ' s l a - bor income, and the percentage of the t o t a l c a p i t a l i z e t i o n i n - vested i n l a n d , i n l a b o r , and i n equipment had to be a r r i v e d a t . In order to f i n d out the p e r c e n t a g e s , the a b s o l u t e f i g u r e s r e - presenting the investment in the d i f f e r e n t f a c t o r s of product ion had to be f i r s t c o n s i d e r e d , "he f i g u r e r e s u l t i n g from the sub- t r a c t i o n of the sum of v a l u e s of land plus l a b o r from the v a - lue of the t o t a l c a p i t a l i z a t i o n , was considered as the a b s o l u t e Farm Net Revenue i s the d i f f e r e n c e between y r o s s r e c e i p t s and g r o s s expenses . value of the investment i n equipment. As an i l l u s t r a t i o n of the method used, an examole of the c a l c u l a t i o n i s g iven: Poultry farm No.313 has a t o t a l c a p i t a l i z a t i o n of ",8,379.70 I t s land value plus taxes on land amount to -1*1,843.00. I t s l a - bor expenditure amounts to .'¡¡725.00. The sun of investment i n land plus labor equals ¿2,568.00 (1 ,843.00 + 725.00 = 2 ,568.00) . The l a s t f i g u r e when subtracted from the f i g u r e r e p r e s e n t i n g the t o t a l c a p i t a l i z a t i o n g i v e s the amount invested in the equip- ment: 8,379.70 - 2,568.00 5 , 8 1 1 . 7 0 . % The percentages of the t o t a l c a p i t a l i z a t i o n i n v e s t e d in the' d i f f e r e n t f a c t o r s of production can be e a s i l y worked out now: Total c a p i t a l i z a t i o n 8,379.70 100% Investment in land 1 , 8 4 3 . 0 0 . . . . . . 22.0% " " labor 7 2 5 . 0 0 . . . . . . . . . . . 8.7% " " e q u i p m e n t . . 5 , 8 1 1 . 7 0 . . . . 69.3% The weakness of t h i s study l i e s in the f a c t that too many d i f f e r e n t items are covered by the same f a c t o r of production -namely, the equipment. In equipment are included the i n v e s t - ments in b u i l d i n g s , i n machinery, in l i v e s t o c k , i n feed and s u p p l i e s , and in cash used f o r current expenses , exc luding the expenses i n l a b o r . D i f f e r e n t farms have d i f f e r e n t shares of t h e i r investment i n equipment represented by l i v e s t o c k , or by machinery, or by b u i l d i n g s , " h i s f a c t does not make the com- parison of the d i f f e r e n c e s of the investment in equipment accu- r a t e . The same percentage of the investment i n equipment may mean d i f f e r e n t t h i n g s , however, i t may be considered t h a t the adopted method was the only one p r a c t i c a b l y p o s s i b l e when the d i s t r i b u t i o n of the t o t a l c a p i t a l i z a t i o n i s d e a l t w i t h . Later on, a s the cont inuat ion of t h i s study an attempt may be made to f i n d out the b e s t r a t i o s of the d i s t r i b u t i o n of the t o t a l investment in equipment among the d i f f e r e n t items of equipment. -20 t o r ' s l a b o r income f o r the same farm i s $2 ,010.63. The same procedure was f o l l o w e d f o r each of the 209 farms, i t was n e c e s s a r y to know the amount of the t o t a l c a p i t a l i s a t i o n of the farm i n order to be a b l e to c l a s s i f y farms according to t h e i r s i z e s ; i t was n e c e s s a r y to know the amount of the opera- t o r ' s l a b o r income i n order to be a b l e to compare the degree of the p r o f i t a b l e n e s s of the s e p a r a t e farms; and i t as n e c e s s a r y to know the percentages of the t o t a l investment r e p r e s e n t e d by the d i f f e r e n t f a c t o r s of product ion. Shen a l l c-f the 20? farms had t h e i r r e s p e c t i v e f i g u r e s t h a t Were needed, the p o u l t r y farms were separated from the d a i r y farms and from the t r e e - f r u i t farms. From now on each of the three type groups.were cons idered i n d i v i d u a l l y . Lach of the type groups was again d i v i d e d i n t o s e v e r a l s i z e groups. Dairy Farms were d i v i d e d i n t o throe s i z e groups: group " I " - i n c l u d i n g the farms wi th the t o t a l c a p i t a l i z a t i o n between ^5,000 and ¡¡,18,000; Oup " I I " - i n c l u d i n g the farms with the t o t a l c a p i t a l i z a t i o n between §18,000 and [¡35,000; Sroup " I l l " - i n c l u d l n g farms with the t o t a l c a p i t a l i s a t i o n b e - tween §33,000 and ^110.000. T r e e - f r u i t Farms were d i v i d e d i n t o f o u r s i z e groups: roup " I " - i n c l u d i n g the farms with the t o t a l c a p i t a l i z a t i o n between $3,000 and -¡¡'7,000; Croup " I I " - i n c l u d i n g the farms with the t o t a l c a p i t a l i z a t i o n between *7,000 and i l 5 , 0 0 0 ; - 2 1 - Sroup " I I I " - i n c l u d i n g the farms wi th the t o t a l c a p i t a l i z a t i o n between §13,000 and §23,000; Group " 1 7 " - i n c l u d i n g the farms with the t o t a l c a p i t a l i z a t i o n between $23,000 and $120,000. P o u l t r y Farms were d i v i d e d i n t o f o u r s i z e groups. Group " I " - i n c l u d i n g the farms with the t o t a l c a p i t a l i z a t i o n between $4,000 and $5,530; Group " I I " - i n c l u d i n g the farms with the t o t a l c a p i t a l i z a t i o n between $3,530 and §9,000; Group " I I I " - i n c l u d i n g the farms with the t o t a l c a p i t a l i z a t i o n between $9,000 and $16,000; Group "IV" - i n c l u d i n g the farms w i t h the t o t a l c a p i t a l i z a t i o n between $16,000 and $25,0u0. The farms of the d i f f e r e n t s i z e - g r o u p s were never a g a i n grou- ped t o g e t h e r ; each of the s i z e - g r o u p s was d e a l t wi th s e p a r a t e l y . Much care was e x e r c i s e d when l i m i t s of the s i z e groups were de- termined. These l i m i t s were determined more or l e s s a r b i t r a r i - l y , judging by the tendency of the farms to vary i n the.amounts of t h e i r t o t a l c a p i t a l i z a t i o n s but l i t t l e . The f i r s t d i v i s i o n according to s i z e proved to be i n c o r r e c t and other s i i e l i m i t s .had to be adopted. As the g u i d i n g p r i n c i p l e f o r determining the s i z e l i m i t s was taken the tendency of the farm e n t e r p r i s e s to be the most remunerative when the same o o r t i o n s of t h e i r t o - t a l c a p i t a l i z a t i o n were i n v e s t e d i n the same f a c t o r s of produc- t i o n . -22- P O U L T R Y F A R H I N G OF B. C. From the f o r e g o i n g i t i s seen that the farms have been c l a - r i f i e d according to d i s t r i c t s , t y p e s , and s i z e s . Each farm 3 p l i e s ' t h e information concerning the amount of i t s o p e r a t o r ' s labor income and concerning the percentages of i t s t o t a l c a p i - t a l i z a t i o n inves ted i n l a n d , l a b o r , and equipment. I t remains to a s c e r t a i n how the e n t e r p r i s e s r e a c t on the d i f f e r e n c e s i n the above percentages . Poul try farms o f f e r i n g the l e a s t d i f f i c u l t y Y^ill be f i r s t considered. Of the t o t a l of 6? farms i t w i l l be seen t h a t f i v e farms f a l l i n t o the f i r s t group, 30 i n t o the second, 21 f a l l i n - to the t h i r d , and 1 1 f a l l i n t o the f o u r t h s i z e - g r o u p . The f i r s t s i z e - g r o u p i s represented by farms which as j e t are i n the process of development. These are r e c e n t l y begun ' farms which had not time enough to develop f u l l y and t o accumu- l a t e needed c a p i t a l . Puch of t h e i r t o t a l investment i s r e p r e s e n - ted by l a b o r , an i n s u f f i c i e n t amount i s represented by equipment, probably too l i t t l e i s inves ted in l i v e s t o c k . Kith t h i s f i r s t s i ze-group of Poultry fa ims t h i s study w i l l begin i t s i n v e s t i g a t i o n . The f i r s t s tep of t h i s i n v e s t i g a t i o n r e q u i r e s f i n d i n g out the d i f f e r e n t percentages of the t o t a l c a p i t a l i s a t i o n r e p r e s e t - ed by l a b o r , l a n d , and equipment on the farms wi th the l a r g e s t o p e r a t o r ' s l a b o r income, on the farms with the small o p e r a t o r ' s -23- bor income, and on the farms with the minus o p e r a t o r ' s l a b o r 'income. The farms which have the o p e r a t o r ' s l a b o r income above +$600.00 w i l l be termed "Above-marginal Farms" ; the farms which have an o p e r a t o r ' s l a b o r income of from "0" up to +$600.00 w i l l be r e f e r r e d to as "marginal Farms"; and the farms which have a minus o p e r a t o r ' s l a b o r income w i l l be termed "Submarginal Farms'! The r e s u l t of the i n v e s t i g a t i o n i s as f o l l o w s : AVERAGE PERCENTAGE DISTRIBUTION OF THE THREE FACTORS OF PRODUC- TION. GROUP " I " . Land Labor Equipment Above-marginal farms - Marginal farms 19.8% 13.1% 67.1% Sub-marginal farms 36.8% 12.1% 51 .1% There are no Above-mar i n a l farms i n the f i r s t group; none of the e n t e r p r i s e s r e a l i s e a.ore than +,¡600.00 o p e r a t o r ' s l a b o r income. The more s u c c e s s f u l farms have much s m a l l e r shares of t h e i r t o t a l c a p i t a l i z a t i o n invested in l a n d . They have l a r g e r shares i n v e s t e d i n equipment. In order to be able to determine what percentages of the t o - t a l c a p i t a l i z a t i o n should be i n v e s t e d in l a n d , and whet percen- tages should be i n v e s t e d in l a b o r , and what percentages should be invested in equipment, the farms of t-ne s i :e gro^p w i l l be c l a s s i f i e d according to the percentages of tne investment i n the d i f f e r e n t elements of product ion. The farms are d i v i d e d i n t o This does not mean t h a t they a c t u a l l y are Marginal or Sub- marg ina l . I t should be remembered t h a t 7% r a t e of i n t e r e s t on investment v,as deducted from the f a r m ' s net revenue. Probably 7% r a t e i s too high a r a t e . - 2 4 - sub-groups according to the percentage of the investment in l a n d . A ten percent i n t e r v a l i s adopted, so t h a t i n the f i r s t sub-gro-ip are included the farms which have from 10% to 20% of t h e i r t o t a l c a p i t a l i z a t i o n i n v e s t e d i n land; i n the second sub- group are included the farms which have from 20% to 30% of t h e i r t o t a l c a p i t a l i z a t i o n i n v e s t e d i n l a n d , and so on. Tho farms are then d i v i d e d i n t o sub-groups according to the percentage of t h e i r t o t a l c a p i t a l i z a t i o n represented by l a b o r . A two percent i n t e r v a l i s adopted. The farms are f u r t h e r d i v i d e d i n t o sub-groups according to the percentage of t h e i r t o t a l c a p i t a l i z a t i o n i n v e s t e d in e q u i p - ment. A ten percent i n t e r v a l i s here adopted. Bach sub-group becomes a s e p a r a t e item which has to be d e a l t with s e p a r a t e l y . For each sub-group three c h a r a c t e r i s t i c s are found i n order - l / To a s c e r t a i n the r e l a t i v e importance of the d i f f e r e n t sub- groups the percentages of the number of farms of each sub-group to the t o t a l number of the farms i n the s i z e group are worked out ; the t o t a l number of the farms of the s i z e group i s taken as 100%,- the percentages of the r e s p e c t i v e to each sub-group number of farms i s worked out a c c o r d i n g l y . 2/ To a s c e r t a i n the r e l a t i v e number of f a i l u r e s i n each of the sub-groups, the p e r c e n t a g e s of the number of the sub-marginal farms i n the sub-group to the t o t a l number of the farms in the same sub-group are worked o u t . 3/ To a s c e r t a i n the degree of p r o f i t a b l e n e s s of a c e r t a i n share of the t o t a l c a p i t a l i s a t i o n being i n v e s t e d i n d i f f e r e n t f a c t o r s -28- produotion , the average o p e r a t o r ' s l a b o r income i s worked f o r each of the sub-groups. Here i s the r e s u l t of the procedure: POULTRY SURVEY - 1 ? 2 4 . GROUP " I " . Percentage of Percentage of the investment farms i n the sub-group to i n land the t o t a l No. of farms i n Percentage of submarginai farms to the t o t a l No. of farms i n the the s i z e - g r o u p , same sub-group. Average opera- t o r ' s l a b o r income f o r each sub-group. 10% to 20% 20% to 30% 30% to 40% in l a b o r 9% to 11% 11% to 13% 13% t o 13% in equipment 40% to 30% 30% to 6o% 6o% to 70% 70% to 80% 20% 6o% 2 0% 20% 20% 40% 20% 20% 0% 33.3% 1001 100% 0% 30% 100% 50% ot 0% +432.34 +238.68 - 60.60 - 60.60 +424.34 +210.00 - 60.60 +210.00 + 336.13 +492.34 The bulk of the farms of the f i r s t s i s e group have from 20% to 30% of t h e i r t o t a l c a p i t a l i z a t i o n i n v e s t e d i n l a n d , l i e farms with l e s s land appear as being b e t t e r o f f ; the farms with more land would seem worse o f f . The tendency to have more land than i s j u s t i f i e d by the a v a i l a b l e equipment can be r e a d i l y seen. The farms which have the l e a s t amount of land have the l a r g e s t o p e r a t o r ' s labor income and they a l s o have fewer f a i l u r e s . The bulk of the farms have from 5J', to 6.J-, of t h e i r t o t a l c a p i t a l i z a t i o n invested in equipment; one h a l f of such farms -26 - sub-marginal . The tendency to be s h o r t of equipment i s t i n l y s e e n . The farms which nave the l a r g e s t share of t h e i r t o t a l c a p i t a l i z a t i o n r e p r e s e n t e d by equipment are b e t t e r o f f , a s they have l a r g e r o p e r a t o r ' s l a b o r income and they a l s o have a smal ler number of sub-marginal farms. I t would appear t h a t the farms of the f i r s t s i z e group Should endeavour to i n c r e a s e t h e i r investment i n equipment. I t has a l r e a d y been mentioned t h a t t h i s group i s represented by the r e c e n t l y s t a r t e d farms. Sooner or l a t e r a l l these farms w i l l move i n t o the second group. The m a j o r i t y of the p o u l t r y farms are l o c a t e d i n the second s i z e group, namely i n the group which i n c l u d e s the farms wi th the t o t a l c a p i t a l i z a t i o n of from (5 ,550.00 to [9,000.00. For the a n a l y s i s of t h i s group the same method was p r a c t i c e d as the method descr ibed when d e a l i n g with the f i r s t s i z e group. As a matter of f a c t , the same method of a n a l y s i s i s c a r r i e d on through out a l l the s t u d y . For the second s i z e group the r e s u l t of the i n v e s t i g a t i o n i s as f o l l o w s : AVERAGE PERCENTAGE DISTRIBUTION OF THE THREE FACTORS OF PRODUC- TION. uROUP " I I " . * Above-marginal farms Marginal f a n a s Sub-marginal farms Land. Labor . Equipment. 20.2% s.y% 70.9% 28.3% 11.9% 5 9 . 8 1 24.2% 7 .2 * 68.6't -27- In the second s i z e group only one sub-marginal farm i s Consequently, the "averages" f o r the sub-marginal farms ^ef the second s i z e group cannot be considered as being s t r i c t l y r e p r e s e n t a t i v e . I t would be b e t t e r to d i s r e g a r d them e n t i r e l y . The more remunerative poultry farms of the second s i z e group have a much smal ler share of t h e i r t o t a l c a p i t a l i z a t i o n i n v e s t - e d i n l a n d . They have a g r e a t e r share of t h e i r t o t a l c a p i t a l i - z a t i o n invested i n equipment. The d i f f e r e n c e s of the amounts of the investments : in l a b o r do not seem to a f f e c t the a c h i e v e - ments of the e n t e r p r i s e s . Hore d e t a i l e d information can be obtained from the t a b l e which f o l l o w s : POULTRY SURVEY-1924. GROUP " I I " . g Percentage of Percentage of Percentage of Average ope- investment the farms i n the submarginai r a t o r ' s l a - sub-group to the farms i n the sub- bor income i n land t o t a l No. of farms group to the t o t a l f o r each i n the s i z e - g r o u p , number of farms i n sub-group. the same sub-group. Less than 10% 10% 10% to 20% 46.7% 20% to 304 26.7% 30% to 40% 10% 40% to 30% 6.6% in labor 7% to y% 63.3% 9 - 11% 20.0% 11% - 13% 10.0% 15% - 17% 3.3% 17% - 1?% 3.4% in equipment 40% - 30% 10.0% 0% - 60% 10.0% ot - 70% 23.3% 70^ - 80% 46.7^ 80% - 90% 10.0% 0% 0% 12.5% 0% 0% 3.3% 0% 0% 0% 0% 14.3% 0% 0% +1716.51 + 1 1 7 1 . 9 3 +1309.1$ + 754.37 + 834.01 +1338.35 +I323.29 + 589.89 +1191.60 + 16.28 + 612.81 + 929.02 +1002.92 +1482.10 +1722.13 -28- Continning the a n a l y s i s o f the investments i n l a b o r the f a c t be noted t h a t , p r o b a b l y , the p o u l t r y farmers of the second ze group should g i v e somewhat more a t t e n t i o n to t h e i r f l o c k s , amoung a l l the farmers 63.3% of them have i n v e s t e d i n l a - from 7% to 9% o f the t o t a l c a p i t a l i z a t i o n of t h e i r e n t e r p i - !S. The n e x t group of the farmers who have a somewhat l a r g e r ^Bhare of t h e i r t o t a l c a p i t a l i z a t i o n i n v e s t e d i n l a b o r , namely, from 9% to 11%, r e a l i z e a g r e a t e r o p e r a t o r ' s l a b o r income. The more c o r r e c t r a t i o s of the investment i n the d i f f e r e n t ^factors of product ion f o r the p o u l t r y farms of the second s i z e ¡Lp seem to be around 10% i n l a n d , 10% i n l a b o r , and 80% i n ^equipment. For the t h i r d s i z e group the r e s u l t o f the i n v e s t i g a t i o n I s f o l l o w s : AVERAGE PERCENTAGE DISTRIBUTION OF THE THREE FACTORS OF PRODUC- TION. GROUP " I I I " . Land. Labor . Equipment. Above-marginal farms 21.0% 7 .5^ 71.5% - -Marginal farms 3?.3% 6.3% 36.2% Sub-marginal farms 16.2% 8.3% 75.3% In t h i s group there are only two submarginal f a r m s , - c o n s e - quently a v e r a g e s f o r sub-marginal farms are not r e l i a b l e . Comparing the Above-marginal farms with the Sub-marginal the f a c t can be seen aga in t h a t the more p r o f i t a b l e farms have l e s s land and more equipment than have the l e s s p r o f i t a b l e farms. See Table N 1 a t the end.Page 34. -29- # The Above-mar ¡?inal farms have a l i t t l e l a r g e r share of t h e i r t e l c a p i t a l i z a t i o n Invested i n l a b o r . POULTRY SURVEY - 1924. CROUP " I I I " . ^ r e e n t a g e of Percentage of investment f a n a s i n the Percentage of sub-marginal in l a n d . 10% 20% 38% 20% 10% $0% sub-group to farms in sub- the t o t a l No. group to t o t a l o f farms i n the No. of farms i n in labor 3% - 7 % 7% - 9% 9% - 11% 11% - 13% i n equipment 40% - 50% 30% - 6o% 6o% - 70% 70% - 80% s i z e group. 38,1% 47.6% 4.8% 9.5% 9.3% 38.1% 33.3% 14.3^ 4.8% 2*3% 38.1% 47.6% the same sub- group. I2.3?" 10.0% 0% 0% 0% 0% 28.i 0% 0% 20% s'u opera- t o r ' s l a b o r in- eome f o r each sub-group. +I547.63 +1416.98 + 445*07 + 295.34 + 332.15 +1602.09 +1152.75 +1562.12 +1230.05 + 304.71 + 3&5.52 +I553.82 +1410.42 The l a r g e s t number of the poul t ry farms of the t h i r d s i z e group have from 20% to 30% of t h e i r t o t a l c a p i t a l i z a t i o n i n v e s t - ed in l a n d . The farms which have from 10% to 20% of t h e i r t o - t a l c a p i t a l i z a t i o n represented by land have l a r g e r o p e r a t o r ' s labor income. The d e s i r a b l e thing f o r the t h i r d s i z e group would be the increase of the number of the farms i n i t s f i r s t sub-group. The more c o r r e c t r a t i o s of the investment i n the d i - f f e r e n t f a c t o r s of production f o r the poul try farms of the t h i r d Size group seem to be around 13% i n l a n d , 10% i n l ^ b o r , and 73% -SO- i n equipment. For the f o u r t h group of the p o u l t r y farms the r e s u l t of the I n v e s t i g a t i o n i s as f o l l o w s : AVERAGE PE.iCENT^GE DISTRIBUTION OF TRE 'TiRËK FACTORS OF PRODUC- TION. GROUP " I V " . 'Land. Labor . Equipment. Above-marginal farms Marginal farms Sub-marginal farms 17.3% 7.6% 73.1% 33.0% 6.0% 61.0% 48.0% 7*9% 44.1% Just as i t was i n the e a s e of the p r e v i o u s l y cons idered groups, i t can be seen t h a t the most p r o f i t a b l e farms have the s m a l l e s t share of t h e i r t o t a l c a p i t a l i z a t i o n invested i n t h e i r land, as compared with the l e s s p r o f i t a b l e farms, which have a much l a r g e r share of t h e i r t o t a l c a p i t a l i z a t i o n i n v e s t e d in l a n d . The l a r e s t share of the t o t a l c a p i t a l i z a t i o n of the most p r o f i t a b l e farms i s represented by equipment. The l e t s p r o f i t a b l e the farm i s , the l e s s equipment i t h a s . More de- t a i l e d informat ion i s provided by the t a b l e which f o l l o w s : POULTRY SURVEY -1924. GROUP " I V " . Percent of Percentage of investment farms i n the sub-group to i n land t o t a l No. of farms i n the s i z e group. Less than 10% 18.1% 10% - 20% 34.3% 20% - 30% 9.1% 30% - 40% 18.1% 40% - 30% 9.1% 30% - 60% 9.11 Percentage of sub-marginal farms i n sub- group to t o t a l No. of farms i n the same sub-group. S 0% 0% 0% 100% 100% Average o p e r a t o r ' s l a b o r income f o r each sub-group. +2867.43 +2094.10 + 992.23 + 36I.68 - 396.96 - 63.96 -31- l a b o r . - g - 9% -11% L -13% equipment 30% - 40% 40% - 50% - 60% - 70% - 80% g0% - 90% 9.1% 27.2% 9.1% 9.1% 9.1% 9.1% 18.2% 27.3% 27.2% 0% 100% 0% 0% 0% 0% + 955.34 + 606.20 +1854.29 +1866.26 - 63.96 — 396.96 + 935*34 + 380.13 +2050.09 +2653.67 ^ The bulk of the farms of the f o u r t h s i z e group have from ,10% to 20% of t h e i r t o t a l c a p i t a l i z a t i o n i n v e s t e d i n l a n d . The farms which have l e s s land have l a r g e r one a t o r ' s l a b o r income; the fanns which have more land have smal ler o p e r a t o r ' s l a b o r inoome. With the i n c r e a s e of the share of the t o t a l c a p i t a l i - z a t i o n i n v e s t e d i n equipment, the o p e r a t o r ' s l a b o r inco:ae i n - e r e a s e s . The farms which have l e s s than h a l f of t h e i r t o t a l c a p i t a l i z a t i o n represented by equipment have minus o p e r a t o r ' s l a b o r income. The bulk of the farms have from 5% to 9% of t h e i r t o t a l c a p i t a l i s a t i o n invested i n l a b o r . This percentage does not seem to be l a r g e enough. The more c o r r e c t r a t i o s of the investment i n the three f a c - t o r s of production f o r the p o u l t r y farms of the f o u r t h s i z e group seem to be 10% i n l a n d , 10% i n l a b o r , and 80% i n e q u i p - - 3 2 - Locking e v e r a i l the f o u r -roups of the p o u l t r y farms, i t would appear t h a t there i s no tendency f o r the l a r g e r fanns to r e q u i r e a l a r g e r p o r t i o n of t h e i r t o t a l c a p i t a l i z a t i o n to be represented by l a n d . There i s no tendency f o r the l a r g e r farms t o r e q u i r e a smal ler p o r t i o n of t h e i r t o t a l c a p i t a l i z a t i o n to be represented by equipment. What i s good f o r the farm of one s i z e , seems to be b e n e f i c i a l f o r the farm of another s i z e . The more c o r r e c t r a t i o s of the investment i n the d i f f e r e n t f a c - § t o r s of production are the same f o r the ¡arms of a l l the s i z e s . These more c o r r e c t r a t i o s a r e - 10% i n l a n d , 10% i n l a b o r , and 80% i n equipment. The bulk of the farms appear to have more land than seems to be the most remunerative amount, and the bulk of the farms have l e s s equipment than i s j u s t i f i e d by the b u s i n e s s . F u r - *; thermore, the bulk of the farmers appear to provide t h e i r e n - t e r p r i s e s wi th somewhat an i n s u f f i c i e n t amount of l a b o r . A l l t h i s amounts to the statement t h a t the p o u l t r y b u s i n e s s of B r i t i s h Columbia has not reached the l i m i t of i n t e n s i t y which would f o r b i d f u r t h e r a p p l i c a t i o n of l a b o r and equipment to the same a r e a s of l a n d . In other words. P o u l t r y of B r i t i s h Columbia has not reached the point of decrea&ing r e t u r n s as j e t . Among the number of the farms of the group which i n c l u d e s the e n t e r p r i s e s wi th the l a r g e s t t o t a l c a p i t a l i z a t i o n , 18.2% are sub-marginal farms; among the farms of the next s i z e group which Inc ludes the e n t e r p r i s e s with somewhat s m a l l e r t o t a l c a - p i t a l i z a t i o n , the percentage of the sub-marginal farms i s 9.5%; t h i s percentage f o r the s t i l l s m a l l e r s i z e group i s only 3.3%. I t may be concluded t h a t among l a r g e r farms t h e r e i s a g r e a t e r number of f a i l u r e s than among smal ler farms. Bat t h i s does not o f n e c e s s i t y mean the c o n c l u s i o n t h a t the s m a l l e r the farm i s the more chances to succeed i t h a s . There i s the l i m i t to the mentioned tendency: the farms of the f i r s t s i z e group, namely the farms with the t o t a l c a p i t a l i s a t i o n under $5,550.00 have 40% of t h e i r t o t a l number a s submarginal farms. I t seems that i n order to a t t a i n an economical s u c c e s s the p o u l t r y e n - t e r p r i s e o f B r i t i s h Columbia should be c a p i t a l i z e d f o r a t l e a s t §5*530.00. - 3 4 - TABLE " I " * P O U L T R Y S U R V E Y . 1 9 2 4 . C a p i t a l i z a t i o n . Number of Bumber of farms. sub-margi- n a l farms. %% of sub- marginal f a r m s . Group " 1 " $ 4,000 - 5,550 3 2 40% Group " 1 1 " $ 3,550 - 9.000 30 1 3.3% Group " H i " § 9,000 -16,000 21 2 9.5% Group "IV" §16,000 -26,800 1 1 2 18.2% AVERAGE PERCENTAGE DISTRIBUTION OF THE THREE FACTORS OF PRODUC- TION. 1924. Land. Labor . Equipment. G R O U P " I " . Above-marginal farms Marginal farms Sub-marginal farms Above-marginal farms Marginal farms Sub-marginal farms Above-marginal farms Marginal farms Sub-marginal farms Above-marginal farms Marginal farms Sub-marginal farms 19.8% 13.1% 36.8% , 12.1% G R O U P " I I " . 20.2% 8.9% 28.3% 11.9% 24.2% 7.2% G R O U P " I I I " . 21.0% 7.3% 37.3% 6.3% 16.2% 8.5% G R O U P " I V " . 17.3% 33.0% 48.0% 7.9% 7.6% 6.0% 67.1% 51.1% 59^3% 68.6% 71.5% 36.2% 73.3% 61.0% 44.1% -38- CORRELATION OF THE PERCENTAGE OF THE TOTAL CAPITALIZATION OF THE FARMS INVESTED IN LAND AND THE OPERATOR'S LABOUR INCOME. P O U L T R Y S U R V E Y . 1 9 2 4 . Percent of the t o t a l c a p i t a - l i z a t i o n of the farm i n v e s t e d in land 17- - io% 10% - 20% 20% - 30% 30%*-- 40% 40% - 30% 30% - 60% i n equipment 30% - 40% - 50% 30% - 6o% 60% - 70% 70% - 80% 80% - 90% Number of farms i n the sub- group. 22 7 6 1 1 6 8 18 28 6 operator ' ] labour income. +2+284.38 +1,400.99 +1+273.26 + 646.36 + 300.1? 63.96 - 63.96 + 280.93 + 611.6? +1,163.73 +1,482.02 +2,188,23  37 TREE-FRUIT FARMING. There are 74 farms div ided i n t o f o u r s i z e groups. The f i r s t group c o n s i s t s of farms with the t o t a l c a p i t a l i z a t i o n of from §3,000 to $7,000; the second group i n c l u d e s farms w i t h the c a - p i t a l i z a t i o n of from $7,000 to §13,000; the t h i r d group has farms with the c a p i t a l i z a t i o n of from „15,000 to ^25,000; and the f o u r t h group c o n s i s t s of farms with the c a p i t a l i s a t i o n of from (25,000 to ^120,000. In the y e a r 1928 which i s the year under c o n s i d e r a t i o n 16 farms belonged to the f i r s t group, 38 farms belonged to the s e - cond group, 14 farms belonged to the t h i r d group, and s i x farms belonged to the f o u r t h group, TREE-FRUIT SURVEY, 1328. C a p i t a l i z a t i o n . No.of No.of sub- %% of sub- farms. marg. farms, marg . farms. Group M̂ t! * 3,000 to $ 7,000 16 2 12.3% Group " 1 1 " § 7,000 to $15,000 38 1 1 28.9% Group " I I I " §13,000 to ^25,000 14 5 35.7% Group 'tgyn §25,000 to$120,000 6 3 50.0% AVERAGE DISTRIBUTION OF THE THREE FACTORS OF PRODUCTION.GROU?"n Land. Labor. Equipment Above marginal farms 72.8% 14.8% 12.4% Marginal farms 67.1% 21.9% 11.0% Sub-marginal farms 69.1% 17.1% 13.8% - 3 8 - As compared to the marginal and sub-marginal farms, the above-marginal farms have a l a r g e r share of t h e i r t o t a l i n v e s t - ment represented by land; they i n v e s t a s m a l l e r share of t h e i r t o t a l c a p i t a l i z a t i o n i n l a b o r ; l i t t l e or no v a r i a t i o n of the Investment i n the equipment i s seen* U n f o r t u n a t e l y the value of the t r e e s i s inc luded i n the land v a l u e . This f a c t i s apt to d i s t o r t the p i c t u r e of the d i s t r i b u - t i o n of the t h r e e f a c t o r s of product ion. The orchard i s r e a l l y the equipment of a t r e e - f r u i t f a r m , i n s p i t e of the f a c t t h a t i t cannot be s o l d s e p a r a t e from the l a n d . More t r e e s per acre and i n the ease o f the t r e e s of b e t t e r q u a l i t y a l a r g e r expenditure of c a p i t a l i s made per a c r e . This means the i n t e n s i f i c a t i o n of fanning i n the rame sense as when on a p o u l t r y farm the number of the b i r d s per acre and the q u a l i t y of the f l o c k are i n c r e a s - ed and improved. For the f i v e y e a r s of the survey ( 1 ? 2 1 - 1925) b e a r i n g orchard land was valued a t from $700.OJ to $1,000.00 per a c r e . In the same d i s t r i c t (Okanagan) the average land v a - l u e per t i l l a b l e acre was $ 1 5 9 . 1 0 . i ^ * I t i s t rue that the l?nd of the orchard n e c e s s i t a t e s more expenditure f o r i t s improvement than the a r e a of land under g r a i n crops or under p a s t u r e . Orohards need i r r i g a t i o n i n the most of the f r u i t growing d i s t r i c t s of the e s t . C e r t a i n l y the orchards of the Okanagan d i s t r i c t need the improvements, not i n - c l u d i n g the t r e e s themselves . h a t i s the va lue of the t r e e s ? Kfhen and to what e x t e n t the i n c r e a s e of the investment in land i s due to the increased mun- Based on I925 crop-nurvey y e a r . - 3 9 - t * r of c o r e s of land on the farm, and when and to what e x t e n t i s i t due to the increased number of the bearing t r e e s ? Unfortunately f i g u r e s that are a v a i l a b l e do not a l low con- c l u s i o n s to be reached in t h i s connect ion. The w r i t e r w i l l do h i s b e s t with the f i g u r e s t h a t are a t h i s d i s p o s a l . THEE-FRUIT a U R V R Ï - i 9 2 S . GROUP " I " . Percent of Percent of farms the i n v e s t - i n the sub-group ment in l a n d . 301 60% 80% 60% 70% 80% 90% i n labor 10% - 12% 12% - 14% 14t - 16% 16% - 18% 18% - 20?, 20% - 22% 22% - 24% - 26% to the t o t a l Bo. of farms i n the s i z e group. 12.5% 31.3% 30.0% 6*2% 12.3% 12.3% 12.3% 31.3% 18.7% 12.3% i n equipment H - 10% 10% - 20% 20% - 30% 43.73% 31.23% 23.O % Percent of sub- Average operator marginal farms labor income.for to the t o t a l No. each sub-group, of f a n a s i n the same sub-group. 30% 0% 0% 100% 0% 40% 0% 14.3% 0% 25.0% - 309.39 + 816.40 + 743.34 - 461.7H +1264.7? + 869.38 + 868.47 + 1 2 3 . 3 1 + 598.62 + 264.96 + 469.62 + 738.27 + 467.34 This t a b l e g i v e s u s more d e t a i l e d information about the r e - a c t i o n of the e n t e r p r i s e s on the v a r i a t i o n s of the d i s t r i b u t i o n of the three f a c t o r s of product ion. Both the farms which heve from 60% to 70% and the farms which have from 70% to 80% of t h e i r t o t a l c a p i t a l i z a t i o n invested i n land are Above-marginal farms, i . e . e i t h e r sub-group r e a l i z e s more than +$600.00 opera- t a r ' 8 l a b o r income. The "60% - 70%" sub-group has a g r e a t e r #voratge o p e r a t o r ' s l a b o r income (+816.40) as compared with the o p e r a t o r ' s l a b o r income of the "70% - 8o%" sub-group (+743.34) . And j e t there a r e more farms i n the sab-group which i n c l u d e s the e n t e r p r i s e s with the 70% to 80% of t h e i r t o t a l c a p i t a l i z a - t i o n represented by l a n d . There are 31.3% of the farms of the f i r s t s i z e group i n the sub-group which i n c l u d e s the e n t e r p r i - s e s with the 60% t o 7J% o f t h e i r t o t a l c a p i t a l i z a t i o n r e p r e s e n - ted by land; there are $0% of the farms of the f i r s t s i z e group i n the sub-group which i n c l u d e s the e n t e r p r i s e s wi th the 70% to 80% of t h e i r t o t a l c a p i t a l i z a t i o n represented by l a n d . I t appears t h a t the t r e e - f r u i t farms of the f i r s t s i z e group would do b e t t e r i f they i n v e s t e d a somewhat s m a l l e r share of t h e i r t o t a l c a p i t a l i z a t i o n i n l a n d . Studying the f i g u r e s which d e a l wi th the investment i n l a - b o r , i t can be p l a i n l y seen t h a t most of the farms were o v e r - burdened i n t h a t r e s p e c t ; p a r t of the share of the c a p i t a l i n - v e s t e d i n l a b o r could be u t i l i z e d t o a g r e a t e r advantage i f i n - v e s t e d i n equipment. However i t must not be f o r g o t t e n t h a t probably the o p e r a t o r of the farm suppl ied most of the l a b o r h imsel f and had no chance to apply h i s work i n other d i r e c t i o n s . In c o n s i d e r i n g the investment i n equipment there i s no d i - f f i c u l t y to see t h a t more equipment would prove advantageous f o r many of the f a r m e r s . 43.75% o f the farms have l e s s than 10% of t h e i r t o t a l c a p i t a l i z a t i o n i n v e s t e d i n equipment, l i e farms which have from 10% t o 20 of t h e i r t o t a l c a p i t a l i z a t i o n i n v e s t e d i n equipment r e a l i z e a g r e a t e r o p e r a t o r ' s l a b o r i n - -41- do the fanms which have l e s s than ten percent i n v e s t - i n equipment* For the f i r s t s i z e group of the t r e e - f r u i t farms of the Oka- d i s t r i c t the more c o r r e c t r a t i o s of the d i s t r i b u t i o n of d i f f e r e n t f a c t o r s of product ion seem t o be 6 % i n l a n d , i n l a b o r , and 20% i n equipment. The g e n e r a l tendency o f the farms i s t o have somewhat more EanA, more l a b o r , and l e s s equipment* I f the v a l u e of the t r e e s a l s o placed under the item of equipment, the s t a t e d tenden- would appear even more pronounced. According to the t r e e - Lt s u r v e y , i n s p i t e of the f a c t t h a t about 85% of the t o t a l i i p t s of the t r e e - f r u i t farms come from the s a l e s of f r u i t , '43.4% of the area of the farms has nothing to do wi th the f r u i t AVRRAGE DISTRIBUTION OF THE THREE FACTORS OF PRODUCTION . G R O U P " I I " - 1 % 8 * Above-marginal farms Marginal f rms Sub-marginal farms Land* Labor* Equipment. 72.3% 12.0% 13.7% 70*2% 11.3% 18*3% 65*7% 16*9% 17.4% As compared with the sub-marginal f a r m s , the marginal and the above-marginal farms have more l a n d , l e s s l a b o r , and the same amount of equipment. I t i s a g a i n n e c e s s a r y to emphasize the f a c t t h a t the value Of the t r e e s i s inc luded i n the land v a l u e , whi le from t h i s stu- dy the c o n c l u s i o n i s made t h a t the va lue of the t r e e s should be -42- included in equipment. I t i s necessary a l s o to point o u t , that under nc circumstances should the average f i g u r e s of the t a b l e above be taken as r e p r e s e n t a t i v e of the a c t u a l percentages of the t o t a l c a p i t a l i z a t i o n s of the Margina l , Sub-marginal, and Above-marginal farms i n v e s t e d i n t h e i r f a c t o r s of product ion. The tendency to have a smal ler or a g r e a t e r share of the t o t a l investment represented by a c e r t a i n f a c t o r of production alone can be shown by the above a v e r a g e s . The more c o r r e c t or the l e s s c o r r e c t percentages of the i n - vestments in the d i f f e r e n t f a c t o r s of production may be seen from the f o l l o w i n g t a b l e : T R E E - F R U I T S U R V E Y . G R O U P " 1 1 " . Percentage of investment i n land 40% - ^ - 6o% - 70% - 8o% - 30% 60% 70% 8o% ?o% i n l a b o r 4% - 6% 6% - 8% 8% - 10% 10%-- 12% 12% - 14% 14% - 16% 16* - 18H 18% - 20% 24% - 26% 26% - 28% 33.2% Percent of farms i n the sub-group to the t o t a l S o . of farms in the s i z e - g r o u p . 2.6% 3 + % 39.3% 47.3% 3.3% 2.6 3- 34.2% 13.2% 10.7% 13.8% 2.6% 3.3% 2.6% 3.2% 2.3% Average ope- r a t o r ' s l a - Percent of sab- marginal farms to the t o t a l No. bor income of farms in the f o r each same sub-group. 0% 100% 22Ì2Ì 0% 0% 30% 30 J 20% 0% 100% 100% 100% sub-group. + 443.51 - 954.26 + 839.47 + 584.83 +1273.59 +1080.45 - 361.12 + 650.34 + 800.71 +1370.28 +1129.33 + 445.51 + 838.30 - 648.95 - 731.28 -1241.84 i n equipment 3% - 13% 10% - 20% 21+0% 30.0% 23.7% 3 . % 33% - 30% 33% - 40% 30% + 174.SL + 733.24 + 968.70 - 110.38 Mast o f the t r e e - f r u i t farms have from 60% to 80% of t h e i r t o t a l c a p i t a l i z a t i o n i n v e s t e d i n l a n d . The farms which have from 70% to 80% r e a l i z e s m a l l e r o p e r a t o r ' s l a b o r income than the farms which have from 60% to 7J%, and j e t i t w i l l be seen t h a t the number of the farms i n the "70% - 80%" sub-group i s l a r g e r than the number of the farms i n the "60% - 70*" group. The o p e r a t o r ' s l a b o r income of the farms T?hich have from 80% to 90% of t h e i r t o t a l c a p i t a l i s a t i o n i n v e s t e d i n land i s the l a r g e s t of a l l the sub-groups, but the number of the farms i n t h i s sub-group i s too small (3.3%) to make the f i g u r e r e l i a b l e . In the second group of the t r e e - f r u i t farms 71.0% of the t o t a l number of the farms have l e s s than 20% of t h e i r t o t a l i n - vestment represented by equipment, and j e t the most s u c c e s s f u l farms have from 20% to 30% of t h e i r t o t a l c a p i t a l i z a t i o n i n v e s - ted i n equipment. As a whole , the second s i z e group appears to have too much investment i n l a n d . The farmers of t h i s group might do b e t t e r i f they a l lowed a g r e a t e r p o r t i o n of t h e i r t o t a l investment to go i n t o equipment, and a s m a l l e r p o r t i o n of i t to go i n t o l a n d . The most c o r r e c t r a t i o s of the d i s t r i b u t i o n of the d i f f e r e n t f a c t o r s of product ion f o r th^ second s i z e group of the t r e e f r u i t farms appears t o be: 63% i n l a n d , 13% i n l a b o r , and 22%" i n equipment. -44- AUERAGE DISTRIBUTION OF THE THESE FACTORS OF PRODUCTION. S R O U P " I I I " . Laad. Labor. Equipment. 3ve-marglnal fa^as 10.4% 16.0% rg inal farms "* ** * ?2.7% 13.3% 14.4% The above-marginal f a n a s have more land than have the sub- marginal farms; the above-marginal farms have l e s s l a b o r , and they have more equipment than the sub-marginal farms. T R ^ E - F R U I T S U R V E Y , G R O U P "3 0% - 90% in l a b o r 4% - 6% - 8% 8% - 13% 14% - 16% 2 0% -- in equipment 1% - 10% 10% - 20% 20% - 30% Percentage of the investment i n l a n d . Percent of farms Percent of sub- Average ope- i n the sub-group to the t o t a l No. of farms i n the s i z e group. 28.6% 37+1% 14.3% 21.4% 14.3% 28.7% 21.4% 7.1% 2 8 . i 37.3 1 4 . : r a t o r ' s l a - t o the t o t a l No. bor income of farms i n the f o r each same sub-group, sub-group. 50% 23% 33.3% 0% 73*0% 1 2 . 5 i 30.0% + 382.05 + 360.87 +1221.02 +1100.79 - 492.26 +1289.60 +1973.91 -2882.02 -3058.81 - 654.64 +1277.05 + 429.80 I t w i l l be seen t h a t , a l though the l a r g e s t o p e r a t o r ' s labor income i s r e a l i z e d by the farms which have from 80% to 90% of - 4 5 - t h e i r t o t a l c a p i t a l i z a t i o n i n v e s t e d i n land , h a l f of the num- ber of these farms are sub-marginal . This sub-group appears to have an organozat ion t h a t seems to be on the whole too r i s k y . The group which i n c l u d e s the farms w i t h from 70^ to 80,L of t h e i r t o t a l c a p i t a l i z a t i o n represented by land may be c o n s i d e r - ed as bein^- i n the most s a t i s f a c t o r y p o s i t i o n . The c o r r e c t n e s s of t h i s c o n c l u s i o n i s confirmed by a c o n s i d e r a t i o n of the v a r i - ed investments i n equipment, and i n l a b o r . I t seems t h a t the farms should have a t l e a s t 12 t of t h e i r t o t a l investment represented by l a b o r , and a t l e a s t 13% r e p r e - sented by equipment. 12 + 13 makes 2 7 , and only 73% i s l e f t f o r the share of the t o t a l c a p i t a l i z a t i o n which could be i n v e s t e d i n l a n d . The f a c t must be always borne i n mind t h a t , under t h i s s y s - tem of survey r e c o r d s , the l a r g e r percentage of investment in land may mean a g r e a t e r share of the t o t a l area of the f a r m ' s land under the f a r m ' s o r c h a r d , or i t may mean a b e t t e r orchard with a l a r g e r number of t r e e s per a c r e , or i t ray mean a b ig t r a c k of land which has nothing to do with the orchard . THE AVERAGE DISTRIBUTION OF THE ""EREE FACTORS OF PRODUCTION . G R 0 U P " i ? " - 1928. Land. Labor . Equipment. Above-mar i n a l farms - - Marginal farms 69.4% 12.1% 18.3% Sub-marginal farms 36.9% 13.3% 29.8% —46** As i ê the case' o f the three previous groups, the sab-margi- farms have l e s s land and more l a b o r than have the marginal i s . None of the farms of the f o u r t h s i z e group r e a l i z e d 3re than +$600*00 o p e r a t o r ' s l a b o r income. As w i l l be seen the t a b l e that f o l l o w s , some of the sub-marginal farms owe t h e i r minus o p e r a t o r ' s l a b o r income to the e x c e s s i v e investment in the equipment, probably i n the unproductive equipment, such -.as too expensive or o b s o l e t e b u i l d i n g s , e t c . T R E E - F R U I T G R 0 U F Percentage of Percent o f farms the investment i n the sub-group t o the t o t a l No* of farms i n the s i z e group* l a n d . 30% - 40% 40% - 50% 30% - 6o% S U R V E Y , 1728* Percent of sub- Average opera- marginal farms t o r ' s l a b o r to- the t o t a l Bo. income f o r each of farms i n the sub-group. i n l a b o r L 8% - 10' 10% - 12% - 14 14% - 16 , 18% - 20% i n equipment 1% - 10% 10% - 20% 20% ? 30% 30% - 40% 40% - 30% 16.?% 16*7% 16.6% 33. S% 16*7% 16*7% 33*3% 16*?% 16*7% 16.6% 16.7% 33.3% 33.4% 16*6% lOi 10( 3% 01 100% 0% )0% 0% 100% 100% -6434.30 -4648.54 + 239*04 + 293.33 -1338*30 -1338.50 + 132.47 -4648*54 + 361 .7? -6434.30 -1338.50 + 293.83 -2304.73 -6454.50 Although few farms e n t e r i n t o the f o u r t h s i z e group, t h i s group g i v e s the same answer to the quest ion as to what c o n s t i - - 4 ? - t n t e s the moat s a t i s f a c t o r y r a t i o s of the d i s t r i b u t i o n of the d i f f e r e n t f a c t o r s of p r o d u c t i o n . The l a r g e s t o p e r a t o r ' s l a b o r income i s r e a l i z e d by the farms which have from 70% to 80% of t h e i r t o t a l c a p i t a l i z a t i o n invested i n l a n d ; which have from 14% to 16% of t h e i r t o t a l c a p i t a l i z a t i o n i n v e s t e d i n l a b o r , and which have from 10% to 20% of t h e i r t o t a l c a p i t a l i z a t i o n i n v e s - ted i n equipment. The b e s t r a t i o s , then, may be s t a t e d a s be ing 70% i n l a n d , 1$% i n l a b o r , and 15% i n equipment. T r e e - f r u i t farms are h i g h l y s p e c i a l i z e d e n t e r p r i s e s . Con- sequent ly i t i s expected t h a t d i f f e r e n t s i z e groups do not vary much as f a r a s the b e s t methods of t h e i r o r g a n i z a t i o n are c o n - cerned. At the same time however the l a r g e r farms should show c e r t a i n operat ing and m a t e r i a l expenses f o n a i n g a s m a l l e r por- t i o n of t h e i r t o t a l c a p i t a l i z a t i o n . Bes ides t h i s , c e r t a i n ma- chinery and c e r t a i n b u i l d i n g s cannot be a s f u l l y u t i l i z e d on a smal ler farm a s they can be u t i l i z e d on a l a r g e r farm; the machi- nery can be used each season f o r a longer period of time on a l a r g e r farm than on a s m a l l e r farm, and so on. The b e s t r a t i o s of the d i s t r i b u t i o n of the d i f f e r e n t f a c t o r s of production on the t r e e - f r u i t farms of the d i f f e r e n t s i z e s are as f o l l o w s : Land. Labor. Equipment. For Group " I " For Group " I I " For Group " I I I " For Group "IV" 69% 11% 20% 65% 15% 22% 73% 12% 1 5 t 70% 15% 15% These f i g u r e s confirm e i t h e r of the e x p e c t a t i o n s : l / the b e s t r a t i o s o f the d i s t r i b u t i o n of the d i f f e r e n t f a c t o r s o f production do not d i f f e r much w i t h the v a r i a t i o n s of the s i - zes of the t r e e - f r u i t farms; 2/ the l a r g e r farms need a smal ler share o f t h e i r t o t a l c a p i t a - l i z a t i o n to be inves ted i n equipment, e x c l u d i n g the t r e e s . Thus l a r g e r farms seem to have a d i s t i n c t advantage over the s m a l l e r farms i n t h a t t h o i r overhead charge of o p e r a t i n g , ma- t e r i a l , and f i x e d expenses can be made s m a l l e r than the o v e r - head charge on a s m a l l e r farm. At the same time however the l a r g e r farms as compared with the s m a l l e r farms have a r e l a t i - v e l y g r e a t e r number of the sub-m-rginal f a r m s , T R E B - F R U I T S U R V E X - 1928. PERCENT OF 3UBHARJINAL FARMS IN DIFFERENT SI'^E GROUPS. The f a c t t h a t among l a r g e r farms there i s a g r e a t e r number of f a i l u r e s than among smal ler farms i s not inherent to the s i - ze of the e n t e r p r i s e . The proper combination of the three f a c - t o r s of production on a l a r g e farm i s l i a b l e to be more e f f i c i - ent than the proper combination of the three f a c t o r s of produc- t i o n on a smal ler farm. U n f o r t u n a t e l y , or f o r t u n a t e l y perhaps, there i s a w e l l def ined tendency f o r the l a r g e r farms to be more l i a b l e to have an improper combination of the three f a c - Group " I " Group " I I " Group " I I I " Group " 1 7 " 12.3% 28.9% 35.7% 30.0% t o r s of product ion. The s m a l l e r farms seem to he mere a b l e to o r g a n i z e t h e i r f a c t o r s o f product ion i n a more remunerative way; the range of the r a t i o s of the d i s t r i b u t i o n of t h e i r f a c - t o r s o f product ion i s n e a r e r to the standard r a t i o . The range of the r a t i o s of the d i s t r i b u t i o n of the f a c t o r s of production of the l a r g e r fcrrae i s more s c a t t e r e d , has g r e a t e r d e v i a t i o n s , and v a r i e s very muoh from Hie s tandard. In coming back to the t a b l e s d e a l t w i t h p r e v i o u s l y , i t wdl l be seen t h a t the percentage of the f - rms which have more than 80% of t h e i r t o t a l c a p i t a l i z a t i o n i n v e s t e d i n land i s For Group " I " 6.2% For Group " I I " 3.3% For Group " I I I " 14.3% For Group "IV" IG.7% The percentage of the farms which have l e s s than of t h e i r t o t a l c a p i t a l i z a t i o n i n v e s t e d i n land i s For Group " I " 12.3% For Group " 1 1 " For Group "IV" 34.4% The percentage of the f a ms which have more than 33% of t h e i r t o t a l investment represented by equipment i s For Group " I " 0% For Group " 1 1 " 5.3% For Group " I I I " 0% For Groun "IV" 50% -50- Tbe range o f the percentages o f the t o t a l c a p i t a l i z a t i o n invented i a land l a as f o l l o w s : For Group " I " ^P to 80.3% (23.4) For Group " I I " 48.4% up to 83.1% ( 3 4 . 1 ) For Group " I I I " 64.1% up to 85.4% ( 2 1 . 3 ) For Group " I ? " 38.2% up to 83,1% (44.9) The range of the percentages i n v e s t e d i n equipment i s as f o l l o w s : For Group " I " ' 2.8% up t o 24.7% ( 2 1 . 9 ) For Group " I I " 7.2% up to 35.6% (28.4) For Group " I I I * 6.6% up to 29.7% ( 2 3 . 1 ) For Group " I V ' 7+9% np to 43.6% ( 3 5 . 7 ) As compared to s m a l l e r f o r m s , a r e l a t i v e l y g r e a t e r number of the l a r g e r farms do not seem to be capable of d i s t r i b u t i n g t h e i r f a c t o r s of production to the b e s t advantage . I t i s a u s u a l exper ience i n a g r i c u l t u r e that the e f f i c i e n c y of produc- t i o n i s hampered by the d e f i c i e n t f a c t o r . In the case of l a r g e s i z e d far-;s , adequate management seems to be the d e f i c i e n t f a c - t o r . The investment i n l a n d , i n l a b o r , and i n equipment seems to i n c r e a s e more r a p i d l y than the investment i n management. The same i n a b i l i t y to d i s t r i b u t e t h e i r f a c t o r s of production i n the most e f f i c i e n t way i s pronounced s t r o n g e r on the p o u l t r y farms of a l a r g e r s i z e a s compared to the p o u l t r y farms of a smal ler s i z e . P o u l t r y a s w e l l as t r e e - f r u i t farming i s a h i g h l y s p e c i a l i z e d b u s i n e s s . I t s standard type of o r g a n i z a t i o n should be a p p l i c a b l e with b e n e f i t to p r a c t i c a l l y e v e r y farm. I t has —31** been found t h a t the standard d i s t r i b u t i o n of the three f a c t o r s Of product ion f o r p o u l t r y farms of B r i t i s h Columbia i s : 10% i n l a n d , 10% i n l a b o r , and 50% i n equipment* The nearer to t h i s standard d i s t r i b u t i o n of the f a c t o r s of product ion the a c t u a l d i s t r i b u t i o n o f the f a c t o r s of product ion approaches , the b e t t e r i t seems to be f o r any p o u l t r y farm. The s m a l l e r the s i x e of a p o u l t r y farm, the s m a l l e r are the d e v i a t i o n s from the s t a n - d a r d s . The spread of the percentages of the t o t a l c a p i t a l i z a t i o n i n v e s t e d i n land i s t h i s : P 0 U L T 3 Y F A RM S U R 7 E Y , 1924. For Group " I " from 10% to 40% (30%) For Group " I I " from 10% to $0% (40%) For Group " I I I " from 10% to 50% (40%) For Group "IV" from 10% to 60% (30%) The spread of the percentages o f the t o t a l c a p i t a l i z a t i o n invested i n equipment i s : For Group " I " from 40% to (40%) For Group " I I * from 40% to 90?. (30%) For Group " I I I " from 40% to H0% (40%) For Group "IV" from 30% to 90% (60%) The inadequacy of the i n c r e a s e of the management i n propor- t i o n to the i n c r e a s e of the investments i n other three f a c t o r s of production i s w e l l R e f i n e d . The f a c t t h a t i n the case of the p o u l t r y farms the s m a l l e s t s i30 group provides the r e l a t i v e l y l a r g e s t number o f sub-marginal f^rms does not c o n t r a d i c t t h i s The d e f i c i e n t f a c t o r o f the p o u l t r y farms of the s i z e gronp i s the equipment, t h i s i s p l a i n l y seen and, i e r e f o r e , the managM&ent cannot p o s s i b l y be blamed f o r the r e - l a t i v e l y l a r g e number of sub-marginal farms dar ing the f i r s t few y e a r s of the farm e x i s t e n c e . Probably the management could be he ld r e s p o n s i b l e f o r the i n a b i l i t y to move the farm from the f i r s t s i z e group i n t o the second. J e t , s u r e l y , a c e r t a i n time ought to be a l lowed f o r such a t a s k . Summarising the i n f o r m a t i o n r e g a r d i n g the t r e e - f r u i t farms of the Okanagan D i s t r i c t , i t may be s a i d t h a t a s a whole the farms should i n c r e a s e the share of t h e i r t o t a l c a p i t a l i s a t i o n i n v e s t e d i n equipment, and they should decrease the share of t h e i r t o t a l c a p i t a l i z a t i o n i n v e s t e d i n l a n d . As i n the case of the p o u l t r y farm, the t r e e - f r u i t farm of the Okanagan D i s t r i c t has not a s j e t reached the p o i n t of d e c r e a s i n g r e t u r n s . For the t r e e - f r u i t farm o p e r a t o r s there s t i l l r e g a i n s the opportu- n i t y to i n t e n s i f y the u t i l i z a t i o n of t h e i r lend a r e a s . In c o - mmon language the meaning o f t h i s l a s t paragraph amounts to the f o l l o w i n g recomendation: more boxes of a p p l e s should be grown per a c r e , and the q u a l i t y of the bulk of the apple grown should be improved. The above c o n c l u s i o n s were a r r i v e d a t a f t e r a n a l y s i s of the data obtained from the 74 farms under the survey of 1*?28. Though the above descr ibed t e n d e n c i e s of the farms to have more -53- ^ t^an they should and t o have l e s s equipment than i s the M a t profitable for them to have seemed t o be w e l l d e f i n e d , the figures did not all follow the g e n e r a l d i r e c t i o n of the d a t a . In order t o check on the c o r r e c t n e s s of the conc lus ions a r r i v e d a t , Hie analysis was r e p e a t e d , working with data obtained from the same farms but gathered during the year 1927. The r e s u l t s obtained from the a n a l y s i s of the data of 1927 ere i d e n t i c a l to the r e s u l t s obtained from the data of 1928. In f a c t in some r e s p e c t s the l a t t e r (1927) more c l e a r l y i l l u s t r a t e s the same thing that had been i l l u s t r a t e d by the data of 1928. For i n - s t a n c e , the d e v i a t i o n s from the standard r a t i o s of the d i s t r i - bution of the d i f f e r e n t f a c t o r s of production on the farms of d i f f e r e n t s i z e s are as f o l l o w s : THE RANGE OF THE PERCENTAGES OF THE TOTAL CAPITALIZATION INVEST- ED IN LAND: According to 1927. According to 1928. Group " I " from 50% to 80% (30%) from 30% to 90% (40?,) Group " I I " from 30% to 80% (30%) from 40'. to 90% (30%) Group " I I I " from 30% to 90% (40%) from 60* to 90% (30%) Group "IV" from 40% to 90% (30%) from 3J% to 90% (60^) THE RANGE OF THE PERCENTAGES OF THE TOTAL CAPITALI'^TION INVEST- ED IN EQUIPMENT: Group " I " from 1% to 30% (30%) from 1% to 30% (30%) Group " I I " from 1% to 40% (40%) from 1% to 40% (4J%) Group " I I I " from 1% to 40% (40%) from 1', to 30t (30*.) Group "IV" from 1% to 30% (50%) from 1% to 50% (30%) , a s the data gathered i n 1<?2? prove the same thing and b r i n g u s to the same c o n c l u s i o n s a s the data gathered i n 1928, i t may be considered t h a t the r e s u l t s of the i n v e s t i g a - t i o n and a n a l y s i s of the f i g u r e s obtained during the survey of 1928 a r e c o r r e c t and v a l i d a s l o n g , as there i s no r a d i c a l and permanent change i n the p r i c e s of the commodities produced or i n the p r i c e s of the d i f f e r e n t f a c t o r s of product ion, Tables d e a l i n g wi th the data of 1<?27 are a t the end page 84 . to -58- Tree F r u i t Survey, 1928. C o r r e l a t i o n of the percentage of the t o t a l c a p i t a l i z a t i o n t f farms invested in land and the o p e r a t o r ' s 1 . income. Percentage of the t o t a l c a p i - t a l i z a t i o n i n - vested i n land. Average o p e r a t o r ' s labour income. Number of farms. 30% 40% 50% 80% - 50% 60% 70% 80% 90% -6 ,434.30 - 2 , 1 0 1 . 3 2 - 437.63 + 758.42 + 398.56 + 397.79 1 2 5 2 A 36 5 50% Invei 30% 60% 70% ient i n l a n d . 90% - 5 6 - B . C . D A I R Y F A RM I N G. How l e t u s c o n s i d e r the Dairy farms. For the y e a r 1926 there a r e 68 farms d i v i d e d i n t o three s i z e groups . The f i r s t s i z e group i n c l u d e s the farms with the t o t a l c a p i t a l i z a t i o n of from .¡¡4,000 to $18,030; the second s i z e group i n c l u d e s the farms with the t o t a l c a p i t a l i z a t i o n of between $18,000 to $35,000; and the t h i r d s i z e group i n c l u d e s *the farms with the t o t a l c a p i t a l i z a t i o n o f between $35,000 t o §110,000. There are 33 farms i n the f i r s t group, 21 farms i n the s e - cond group and there are 14 farms in the t h i r d group. DAIRY FA3HING, 1926. C a p i t a l i z a t i o n . No. of farms. No. of sub- %% of sub- marginal marginal farms. farms. Group " I " 33 3 9.1% Group " 1 1 " 21 3 23.8% Group " I I I " 14 6 42.9% THE AVERAGE DISTRIBUTION OF TEE THREE FACTORS OF PRODUCTION . G R 0 U P " I * . Above-marginal farms Marginal farms Sub-marginal farms <and. Labor. Equipment 46.7% 8.5% 44.8% cn T'? 7.3% 42.6% 47*3% 3.8% 43.9% As compared w i t h the marginal and sub-marginal farms, the above-marginal farms have a s m a l l e r share of t h e i r t o t a l i n v e s t - - 5 7 - ment represented by land; they have a g r e a t e r share of t h e i r t o t a l investment represented by equipment; taey have the same share o f t h e i r t o t a l c a p i t a l i z a t i o n represented by 1 b o r . f a c t o r s of product ion corresponding to the above-marginal , mar- g i n a l , and sub-marginal farms show only the tendency of the three k inds of farms to have r e l a t i v e l y more or l e s s i n v e s t e d i n a o e r t a i n f a c t o r of product ion. The a erage percentages corresponding to the above-marginal frrms cannot be considered a s the b e s t to f o l l o w . They are b e t t e r to f o l l o w than the p e r - c e n t a g e s of the other two k inds of f a r m s , but by no means should they be looked upon a s an i d e a l s tandard. The more d e t a i l e d t a b l e below r e v e a l s more a c c u r a t e l y the c o r r e c t p e r c e n t a g e s of the d i s t r i b u t i o n of the three f a c t o r s of product ion f o r the farms included i n the f i r s t s i z e group. This t a b l e s e t s f o r t h the in format ion which makes i t p o s s i b l e to determine the standard percentage d i s t r i b u t i o n of the three f a c t o r s of product ion f o r the d a i r y farms of the f i r s t group. When adopted, the standard d i s t r i b u t i o n w i l l probably prove b e n e f i c i a l f o r the dairymen who adopt i t . B A 1 R X S U R V E Y - I926. G R 0 U p " I " . Percent of the Percent of farms Percent of sub- Average ope- investment i n the sub-group marginal farms r a t o r ' s l a - to the t o t a l No. to the t o t a l No. bor income of farms i n the of farms i n the f o r each i n l a n d . s i z e group. same sub-group, sub-group. The average p e r c e n t a g e s of the d i s t r i b u t i o n of the three 20? - 301 30% - 40% 40% - 50% - 6ot b0% - '70% + 610.02 + 1039.43 + 539.15 + 592.26 4- 7 7 1 . 7 3 - 5 8 - i n l a b o r . 3t - 5% 12.1% 0% +1031.61 3% - 7% 30.3% 0% + 716.40 7% - 9% 30.3% 10% + $84.32 ?% - 11% 18.2% 3 3 . + 363.86 11% - 13% 0% 0% - 15% 3.0% 0% + 406.88 13% - 17% 6.1% o% +1235.93 i n equipment. 20%.- 30% 9*1% 0% + 894.13 30% - 40% 18.2% 16.7% + 538.68 40% - 50% 48.3% 12.5% + 592.15 30% - 63% 1 8 . 2 t 0% + 933.07 60% - 70% 6.0% 0% + 610.02 For the f i r s t s i z e group the more a c c u r a t e percentage of the t o t a l c a p i t a l i z a t i o n i n v e s t e d i n land seems to be around 35%. The "30% - 40%" sub-group r e a l i z e s the l a r g e s t average o p e r a t o r ' l a b o r income. The s i g n i f i c a n t f a c t i s t h s t 81.7% of the t o t a l number of the fsrms of the f i r t s i z e group have a much l a r g e r share of t h e i r t o t a l c a p i t a l i z a t i o n i n v e s t e d i n l a n d . The t e n - dency to have more land than i s j u s t i f i e d by the t o t a l r e s o u r - c e s of the e n t e r p r i s e i s q u i t e e v i d e n t . In the f i r s t group 75.8% o f the ferms have l e s s than 30% of t h e i r t o t a l c a p i t a l i s a t i o n represented by equipment. Y e t , farms which i n v e s t from 50% to 60% i n the equipment a r e ab le to g e t a l a r g e r o p e r a t o r ' s l a b o r Income than the farms which i n v e s t i n t h e i r equipment l e s s than 50% of the t o t a l c a p i t a l i z a t i o n . The tendency to be s h o r t i n equipment i s as p l a i n l y seen as the tendency to have an e x c e s s of l a n d . The g r e a t l y needed equi pment c a p i t a l i s i n v e s t e d i n the unnecessary acreage which be- comes burdensome f o r the e n t e r p r i s e . The two extreme sub-groups are not l a r g e enough to make the averages r e l i a b l e . Up to a c e r t a i n point the farms which have a smal ler share of t h e i r t o t a l c a p i t a l i z a t i o n represented by l a b o r seem to be a t an advantage when compared to the farms which have a l a r g e r share of t h e i r t o t a l c a p i t a l i z a t i o n invested i n l a b o r . The o p e r a t o r ' s l a b o r income i n c r e a s e s with the decrease of the i n - vestment i n l a b o r . But then, when the farms have more than % of t h e i r t o t a l c a p i t a l i z a t i o n invested i n l a b o r , the tendency r e v e r s e s : the farms which have t h e i r l a b o r investment equal to 14% r e a l i z e a l a r g e r o p e r a t o r ' s l a b o r income than the farms ?hich have t h e i r investment in l a b o r equal to 12%; the farms with 16% are b e t t e r o f f than the farms with 14%. When c o n s i d e r i n g the investments i n l a b o r , one should be very c a r e f u l indeed. Labor and equipment sometimes mean r e a l l y the same t h i n g . The pay to a h i r e d man who hauls potatoes to the s t a t i o n i s considered a. l a b o r expense, but the nay to a truck owner who hauls the p o t a t o e s u s i n g h i s truck i s c o n s i d e r - ed an equipment expense; a hired man on a binder i s a labor ex- pense, a man hired with a binder i s an equipment expense; the horse-shoeing i s sometimes a l ? b o r expense, but sometimes i t i s an equipment expense - a l l depends on the person who does the shoeing. Probably the s a f e s t nay to f i n d out which percenta/e of the t o t a l c a p i t a l i z a t i o n when i n v e s t e d in l a b o r may be considered the standard percentage , i s by f i n d i n g out the standard percen- tages of the investments i n land and of the investments i n e q u i - pment. 100% minus the sixn of the standard percentages of i n v e s - tments i n land and in equipment may be considered the standard - 6 o - p e r c e n t a e of investment i n l a b o r . The more accurate r a t i o s of the d i s t r i b u t i o n of the d i f f e r e n t f a c t o r s of production f o r the d a i r y farms of the f i r s t s i z e group a r e : 35% i n l a n d , 55% i n equipment, and 10% i n l a b o r . The averages f o r the above-margi- nal f a u n s of the same f i r s t group are:46.7% i n l a n d , 44.8% i n equipment, and 8.5% i n l a b o r . THE AVERAGE DISTRIBUTION OF THE THREE FACTORS OF PRODUCTION . D A I R Y S U R V E Y , l ? 2 6 . G R O U P " I I " . Land. Labor . Equipment. Above—average farms 53.2% 3.7% 41.1% Marginal farms 56.0% 5+8% SR.2% Sub-marginal farms 66.0% 6.0% 28.0% As i n the c a s e o f the f i r s t group, the above-marginal farms of the second group have a smal ler share of t h e i r t o t a l c a p i t a - l i z a t i o n invested i n land; they have a l a r g e r share of t h e i r t o t a l c a p i t a l i z a t i o n i n v e s t e d i n equipment; and they have a l - most the same share of t h e i r t o t a l c a p i t a l i z a t i o n i n v e s t e d i n l a b o r . As compared t o the above-marginal farms and to the mar- g i n a l f a r m s , the sub-marginal farms have the most of the land and the l e a s t of the equipment. The r e a c t i o n of the v a r i a t i o n s i n the d i s t r i b u t i o n s of the three f a c t o r s of production on the p r o f i t a b l i n e s s of the farm can be observed from the t a b l e t h a t f o l l o w s : -61- D A I R Y S U R V E Y - 1 9 2 6 . G R 0 U P " I I * . Percent o f Percent o f farms Percent o f sub- Average o p e r a t o r ' investment i n the sub-group marginal farms l a b o r income f o r to the t o t a l No. t o the t o t a l No. each sub-group. Of farms i n the of farms i n the i n l a n d . s i z e group. same sub-group. 30% - 40% 40% - 30% 30% - 60% 6 o l - 70% 70% - 80% 9.3% 42.?% 19.1% 19.0% 0% 0% 1 1 . 1 % 30 30% +520.89 +361.84 +732.34 -193.16 - 2 6 7 . 3 1 i n l a b o r . 3% - 3% 3% - 7% 7% - % 9% -11% 33 .3t 47.6% 9.6% 9.3% 28,6% 20.0% 0% 50.0% +$44.05 +299.09 +290*00 - 2 3 1 . 3 1 i n equipment. 20% - 30% 30% - 40% 40% - 30% 30% - 60% 23.8% 42.9% 23.8% 9.3% 60% 22.2% 2% 0% -436.20 +351*70 + 6 1 7 . 9 1 +320.89 The l a r g e s t o p e r a t o r ' s l a b o r inoomeis r e a l i z e d by the sub- group which i n c l u d e s farms w i t h the investments i n land o f from 30% to 60% of t h e i r t o t a l c a p i t a l i z a t i o n . A f t e r having s t u d i e d the f i g u r e s c a r e f u l l y one comes t o the c o n c l u s i o n t h a t the p e r - centage of investment i n land f o r t h i s second group of d a i r y farms i s n e a r e r to 30% r a t h e r than t o 60%. '¿hen subdivided i n two p a r t s , the "30% to 60%" sub-gro p g i v e s the f o l l o w i n g r e - s u l t s : Percent of investment O p e r a t o r ' s l a b o r i n land: income: 30% - 55% +949.24 33% - 601 +339.22 - 6 2 - In order to see t h a t the more c o r r e e t percentage i s n e a r e r to 50% than to 60%, i t was not n e c e s s a r y to subdiv ide the sub- group. The t a b l e shows q u i t e c l e a r l y t h a t the farms w i t h the investment i n land s m a l l e r than 50% are much b e t t e r o f f than the farms w i t h the investment i n land g r e a t e r than 60%. As a matter of f a c t the fanns which have more than 60* of t h e i r t o t a l c a p i - t a l i z a t i o n represented by land could not pay 7% r a e of i n t e r e s t on t h e i r c a p i t a l investment - they y i e l d on the average a minus o p e r a t o r ' s l a b o r Income. The more a c c u r a t e percentage of the t o t a l c a p i t a l i z a t i o n t o be i n v e s t e d i n land i s approximately 30%. About one h a l f of the farms have more land than t h i s standard p e r c e n t a g e . The l a r g e s t o p e r a t o r ' s l a b o r income i s r e a l i z e d by the sub- group which i n c l u d e s the fanns with the investment i n equipment of from 40% t o 50%. In the second s i z e group 66.7% of the farms have l e s s than 40% of t h e i r t o t a l c a p i t a l i z a t i o n i n v e s t e d i n equipment. I n s p i t e of the f a c t t h a t according to the f i g u r e s i t seems to be w i s e r to have too much of equipment r a t h e r than t o have too l i t t l e of i t , there a r e more farms which have an i n s u f i c i e n t amount of equipment than there are farms which have an e x c e s s of i t . The l a r g e s t o o e r a t o r ' s l a b o r income 3fas r e a l i z e d by the sub-group which i n c o r p o r a t e s the farms with the s m a l l e s t share of t h e i r t o t a l c a p i t a l i z a t i o n i n v e s t e d i n l a b o r . This f a c t may be taken as proof that l a b o r saving d e v i c e s when adonted on the d a i r y farms of B r i t i s h Columbia i n c r e a s e the economic e f f i - c i e n c y of the e n t e r p r i s e and, t h e r e f o r e , w e l l j u s t i f y t h e i r - 6 3 - a p p l i e a t i o n . The mare c o r r e c t r a t i o s of the d i s t r i b u t i o n of the d i f f e r e n t f a c t o r s of product ion f o r the d a i r y f r m s of the second s i z e group a r e : i n l a n d , 4 % i n equipment, and $.1. i n l a b o r . THE AVERAGE DISTRIBUTION OF THE THREE FACTORS OF PRODUCTION . D A I R Y S U R V E Y - 1 9 2 6 . 3 R 0 U P " I I I " . Lsnd. Labor. Equi pment. Above-marginal farms 63.2% 3.2% 29.6% Marginal farms 36.1% 36.9% Sub-marginal f rrms 62.3% 3.1% 32.4% Not l i k e the above-marginal ferms of the two preceding g r o u p s , the above-marginal farms of the t h i r d s i z e group have a g r e a t e r share of t h e i r t o t a l c a p i t a l i z a t i o n i n v e s t e d i n land than have the marginal and the sub-marginal farms. There are two p o s s i b l e e x p l a n a t i o n s of t h i s f a c t . Here are the e x p l a n a - t i o n s : l / For d a i r y farms of l a r g e s i z e a h igh degree of s p e c i a l i z a - t i o n can be p r o f i t a b l e when an e x t e n s i v e method of farming i s p r a c t i c e d ; 2/ In order to be p r o f i t a b l e the h i g h l y i n t e n s i v e d a i r y farms of a l a r g e s i z e f i n d i t i s n e c e s s a r y to have a w e l l developed s i d e l i n e , " h i s means t h a t the l a r g e and h i g h l y i n t e n s i v e d a i - ry farms should 'iot be too s p e c i a l i z e d . Their d a i r y d i v e r s i t y index should not b e , l e t us s f y , above 60 . Such farms should have a secondary p r o j e c t or p r o j e c t s y i e l d i n g a c o n s i d e r a b l e - 6 4 - p a r t of t h e i r t o t a l r e c e i p t s . Sueh secondary p r o j e c t s , cash crops or s ide l i n e s may he s e l e c t e d from a long l i s t and com- p r i s e crops such as p o t a t o e s , peas , c e r e a l s , h a y , or they can be other branches of a g r i c u l t u r a l a c t i v i t i e s as the r a i s i n g of pure bred c a t t l e , h o r s e s , p i g s and numerous of o t h e r s . The s i d e l i n e s p r e f e r a b l y should be those which w i l l u t i - l i z e by-products of the d a i r y b u s i n e s s and supply the d a i r y c a t t l e wi th the necessary f e e d . From what has been said i t i s a l r e a d y understood t h a t there are s e v e r a l t y p e s of d a i r y f a r m s , d i f f e r e n t l y organized to s u i t the v a r i o u s methods of c a r r y i n g on the b u s i n e s s . The o p e r a t o r s of l a r g e s i z e d farms are p a r t i c u l a r l y prone to vary i n the me- thods of the management of t h e i r farms and i n the ways of t h e i r o r g a n i z a t i o n . They f r e q u e n t l y a l t e r t h e i r methods when the changes i n the market c o n d i t i o n s take p l a c e . Consequently the standard d i s t r i b u t i o n of the f a c t o r s of production f o r the d a i - r y farms of the t h i r d s i z e group should be he ld as such only f o r the y e a r s s i m i l a r to the y e a r 1^26. This i s the y e a r which provided the s t a t i s t i c a l data upon which t h i s t r e a t i s e i s based. D A I R Y S U R 7 3 Y - 1926. O R O U P " I I I " . Percent of Percent of farms Percent of sub- investment in the sub-group marginal farms i n l a n d . Avera-;e opera- t o r ' s l a b o r i n - to the t o t a l Bo. to the t o t a l 3 o . come f o r each of farms i n the of farms i n the sub-group, s i z e group. same sub-group. 50?, - 60% 6o% - 70% - 80/, 21.4% 5 7 . l t 21.5% 50.0^ 33.3% + 57.64 -201.48 +445.63 -63** i n l a b o r 42.9% 33.3% 57.3% +728.30 -7&O.I5 +847.98 301,3% 7.1% 0% i n equipment 20% - 30-, 30% - 40% 40% - 30% 35,7% 57.1% 7.2% 20% 30% 100% + 990.74 .519 .31 -901.24 According to the above t a b l e 75% i s the more c o r r e c t share of the t o t a l c a p i t a l i z a t i o n to be i n v e s t e d i n land by the d a i r y farm o p e r a t o r s of the t h i r d group. The farms of the t h i r d s i z e group which have a s m a l l e r share of t h e i r t o t a l c a p i t a l i s a t i o n represented by lend real ized- a much smal ler o p e r a t o r ' s l a b o r income. But "75%" i s a somewhat exaggerated p e r c e n t a g e . The e x a g g e r a t i o n i s due to the l a r g e n e s s of the s i z e of the adopted c l a s s i n t e r v a l s . Hone of the farms inc luded i n the survey had more than 72.9% invested i n l a n d . The "70% - 80%" sub-group r e a l l y i s the "70% - 72.9%" sub-group. This l a s t sub-group r e a - l i z e d +443.63 d o l l a r s as the o p e r a t o r ' s l a b o r income. The "65% - 70%" sub-group ( the upper h a l f o f the "60% - 70%") r e a - l i z e d +949.62 d o l l a r s a s o p e r a t o r ' s l a b o r income. T h e r e f o r e the more c o r r e c t share o f the t o t a l c a p i t a l i z a t i o n i n v e s t e d i n land i s not 73%, but i s c l o s e to 68't.*%* According to the t a b l e the more c o r r e c t share of the t o t a l c a p i t a l i z a t i o n to be i n v e s t e d i n equipment f o r the t h i r d group i s from 20% to 30%. As i n the ease of the investment i n l a n d , the f i g u r e i s somewhat m i s l e a d i n g due to the wide c l a s s i n t e r - The f i g u r e s of 1927 i n d i c a t e t h a t G5% i s the more c o r r e c t . - 6 6 - v a l adopted. The "20% - 30%" sub-group when f u r t h e r subdivided g i v e s the f o l l o w i n g r e s u l t s : The more c o r r e c t percentage of the t o t a l c a p i t a l i z a t i o n to be i n v e s t e d i n equipment i s around 28%. The v a r i a t i o n s of the investments i n l a b o r a r e included b e - tween the 3% and 9%. The upper l i m i t seems to be as good a s i s the lower l i m i t . In determining the standard percentage of the investment i n l a b o r i t i s wise to p r a c t i c e the p r e v i o u s l y u s ' d method: The more c o r r e c t r a t i o s of the d i s t r i b u t i o n of the three f a c t o r s of production f o r the d a i r y farms of the t h i r d s i^e group a r e : 68% i n l a n d , 28% i n equipment, and 100% - (68% + 28%) ss 4% i n l a b o r . Dairy farms are not adapted to extremely h igh degree of spe c i a l i z a t i o n . One should not expect to f i n d t h a t the most a c c u - r a t e o r g a n i z a t i o n i s s i m i l a r f o r a l l d a i r y farms. Dairy farmin d i f f e r s v e r y much i n i t s methods of o r g a n i z a t i o n and management That o r g a n i z a t i o n which i s good f o r one type of a da iry farm may be bad f o r another t y p e . Percent of investment i n equipment 20% - 25% 2$% - 30% O p e r a t o r ' s l a b o r income + 443.63 +1808.39 -67- For the d i f f e r e n t s i z e groups of d a i r y farms the more c o r r e c t r a t i o s of the d i s t r i b u t i o n of the three f a c t o r s of pro- duct ion appear to be as f o l l o w s : Land. Labor . Equipment. Group " 1 " 33% 10% 33% Group " 1 1 " 30% 5% 43% Group " I I I " 68% 4% 28% For the above-marginal farms of the d i f f e r e n t s i z e groups the average r a t i o s of the d i s t r i b u t i o n of the three f a c t o r s of product ion a r e : Land. Labor. Equipment Group " 1 * 46.7% 8.3% 44.8% Group " 1 1 " 33.2% 3.7% 41.1% Group " I I I " 65.2% 3.2% 29.6% The l a r g e r i s the f a m - the l a r g e r the p o r t i o n of i t s t o t a l c a n i t a l i z a t i o n which should be and i s represented by land; the l a r g e r i s the farm - the smal ler the p o r t i o n of i t s t o t a l c a p i - t a l i z a t i o n which should be and i s r e p r e s e n t e d by l a b o r ; the l a r - ger i s the farm - the s m a l l e r the port ion of i t s t o t a l c a p i t a l i - z a t i o n which should be and i s represented by equipment. These c o n c l u s i o n s i n v o l v e very s e r i o u s consequences. The o p e r a t o r ' s l a b o r income i s the farm n e t revenue minus 7% i n t e r e s t on investment i n l a n d , b u i l d i n g s , machinery, l i v e - s t o c k , and f e e d and s u p p l i e s . The farms which r e a l i z e " p l u s " o p e - r a t o r ' s l a b o r jncome y i e l d 7% r a t e of i n t e r e s t on t h e i r i n v e s t - -68- ment i n l a n d , they y i e l d 7% r a t e o f i n t e r e s t on p r a c t i c a l l y a l l t h e i r investment in equipment, and they y i e l d the wages f o r t h e i r h i r e d and f a m i l y l a b o r . The farms which have the same o p e r a t o r ' s l a b o r income may be considered as prov id ing the same r a t e of r e t u r n s on the t o - t a l investment of the e n t e r p r i s e ; - o r , the e f f i c i e n c y of the a p p l i c a t i o n of the l a b o r and of the equipment to land may be considered e q u a l , when the e n t e r p r i s e y i e l d s the same o p e r a t o r ' l a b o r Income. THE AVERAGE OPERATOR'S LABOR INCOME OF THE DIFFERENT SITE GROUP D A I R Y S U R V E X -I926. Group " I " +679.38 Group " I I " +329.36 Group " I I I " - 7 .29 With the i n c r e a s e of the s i z e of the farms the average ope- r a t o r ' s l a b o r income f o r the group d e c r e a s e s . I t has been shown, however, t h a t wi th the i n c r e a s e of the s i z e of the farm the l a r g e s t t o t a l p r o f i t combination of i t s f a c t o r s of produc- t i o n demands a s m a l l e r proport ion of the f a r m ' s t o t a l c a p i t a l i - z a t i o n to be represented by equipment and l a b o r . The conc lus ion i s t h i s : to a g iven a g r i c u l t u r a l area more They do not y i e l d i n t e r e s t on t h e i r investments i n l a b o r and in cash f o r c u r r e n t expenses . This i s not s t r i c t l y c o r r e c t , but the mistake i s in f a v o r of the smal ler farms. The same o p e r a t o r ' s l a b o r income on a smal ler farms means a g r e a t e r r a t e of r e t u r n s per every d o l l a r i n v e s t e d i n the & n t e r o r i s e . 6? l a b o r and mere equipment can be e f f i c i e n t l y applied^ when the a g r i c u l t u r a l e n t e r p r i s e s are r e l a t i v e l y small i n s i z e . Consequently , the d i s t r i c t s which have an i d l e surp lus of l a b o r , and the d i s t r i c t s which are anxious to apply e f i c i e n t l y the a c c u - mulated e x c e s s of equipment ( i f such an e x c e s s e x i s t s ) should t r y to make t h e i r a g r i c u l t u r a l e n t e r p r i s e s r e l a t i v e l y small i n s i z e . From the point of view of nn i n d i v i d u a l who i s about to e s - t a b l i s h a new a g r i c u l t u r a l e n t e r p r i s e , i t seems to be wise not to undertake an o r g a n i z a t i o n of a l a r g e s i zed farm. There i s more chance f o r s u c c e s s on a r e l a t i v e l y small farm than there i s on a r e l a t i v e l y l a r g e farm. When d e a l i n g with h i g h l y s p e c i a l i z e d types of farming , na- mely with p o u l t r y and with t r e e - f r u i t f a n n i n g , the f a c t t h a t the l a r g e r farms have a l a r g e r percentage of sub-marginal farms was expla ined as an i n a b i l i t y of the o p e r a t o r s of the l a r g e farms to i n c r e a s e t h e i r investments in management i n a needed proport ion wi th the i n c r e a s e s of investments i n l a n d , i n equip- ment, and i n l a b o r . The decreased adequacy of the management D ¿ I R Y F A HR I N G - 1926 . %% of sub-marginal Average f o r the farms, group o p e r a t o r ' i a b o r income. Group " I " Group " I I " Group " I I I 9.1% 2 3.8% 42.9% + 679.38 + 329.36 - 7 . 2 9 with the i n c r e a s e of the s i z e of farm was i l l u s t r a t e d by show- ing t h a t the range of the r a t i o s of the d i s t r i b u t i o n of the d i - f f e r e n t f a c t o r s of product ion on l a r g e r farms i s more s c a t t e r - e d , and has g r e a t e r d e v i a t i o n s from the standard r a t i o s than on the smal ler farms. Such an i l l u s t r a t i o n i s v a l i d only when d e a l i n g with the types of farming which have uniform methods of management and of o r g a n i z a t i o n independent of the s ine of the e n t e r p r i s e . The more c o r r e c t r a t i o s of the d i s t r i b u t i o n of the three f a c t o r s of production are the same f o r the p o u l t r y or t r e e - f r u i t farm of any s i z e . The more c o r r e c t r a t i o s of the d i s t r i - but ion of the three f a c t o r s of production are not the same f o r d a i r y farms of d i f f e r e n t s i z e s ; more c o r r e c t method of o r g a n i - z a t i o n f o r a s m a l l e r d a i r y farm i s d i f f e r e n t from the more c o - r r e c t method of o r g a n i z a t i o n of a l a r g e r d a i r y farm. Various methods of o r g a n i z a t i o n do not provide the same o p p o r t u n i t y f o r d e v i a t i o n from the corresponding to each method standard type of o r g a n i z a t i o n ; - on a ranch type of d a i r y fana the s h re of the t o t a l c a p i t a l i z a t i o n i n v e s t e d i n land cannot vary from 2J% to 7 0 ^ on a small d a i r y farm t h i s i s a p o s s i b l e v a r i a t i o n . The f r e t t h a t among the l a r g e r d a i r y farms there i s a g r e a - t e r percentage of sub-marginal farms should be e x p l a i n e d i n the same way as i n the case of p o u l t r y and in the case of t r e e - f r u i t farms: i t i s due to the i n c r e a s e d d e f i c i e n c y of management. But the i l l u s t r a t i o n which was s a t i s f a c t o r y when d e a l i n g with two prev ious types of farming cannot be used when d e a l i n g wi th the d a i r y farms. -71- TEE AVERAGE OPERATOR'S LABOR INCOME FOR TEE THREE BEST FARMS OF THE DIFFERENT SIZE GROUPS . DAIRY SURVEY - 192b. Average o p e r a t o r ' s l a b o r income f o r the three best farms. Group " I " +1986.02 Group " I I * +1573.4$ Group " I I I " +1914.08 The farms of the t h i r d s i z e group can be managed i n such a f a s h i o n a s t o y i e l d an income e q u a l i n g t h a t of the farms of both o f the o t h e r groups which on the average proved more s u c - c e s s f u l . There are however more sub-marginal farms i n the th i rd s i z e group than there are i n the second or i n the f i r s t s i z e group. The r e s o u r s e a of the farms of the t h i r d s i z e group when compared to the r e s o u r s e e of the farms o f the second or of the f i r s t s i z e groups are g r e a t e r ae f a r a s the amount of the i n - vestment i n l a n d , i n equipment, and i n l a b o r are concerned. The farms belong to the th i rd group because t h e i r c a p i t a l r e s o u r s e s are g r e a t e r than are the c a p i t a l r e s o u r s e s of the farms of the f i r s t or of the second s i z e group. The amount of the manage- ment i n v e s t e d i n farms of any of the s i z e groups i s alone un- known. The e f f i c i e n c y of product ion i s hampered by tne d e f i c i e - ncy of one or the other f a c t o r . As compared to the farms of a s m a l l e r s i z e , l a r g e r farms do not s u f f e r because of the d e f i c i - e n t amount of l a n d , or o f l a b o r , or of equipment. I t i s the i n e f f i c i e n c y of the c o - o r d i n a t i o n of the three above s t a t e d f e e - t o r s which e r a e t e s the i n e f f i c i e n c y of the production on the -72- l a r g e s i z e d a g r i c u l t u r a l e n t e r p r i s e s . The inadequate management i s r e s p o n s i b l e f o r the i n e f f i c l e n c o - o r d i n a t i o n . T h e r e f o r e , r e f e r i n g back to the i n d i v i d u a l farmer who i s about to e s t a b l i s h a new a g r i c u l t u r a l e n t e r p r i s e , the g e n e r a l recomendation t h a t there i s more chance f o r success on a smal ler farm presumes t h a t the managerial a b i l i t y of the new o p e r a t o r i s not above the average managerial a b i l i t y of the farmers o f the d i s t r i c t . I f the managerial a b i l i t y of the new operator be above the a v e r a g e , by a l l means l e t him e s t a b l i s h a l a r g e farm. There i s no inherent weaknesses i n the da iry farms of B r i t i s h Columbia even when they approach the l a r g e s t s i z e t h a t has been y e t e s t a b l i s h e d . As the c o n c l u s i o n of t h i s study and, a t the same t i m e , as i t s summary the f o l l o w i n g three statements seem to be approp- r i a t e : l / The tendency t o have more land than i s j u s t i f i e d by the c a - p i t a l Invested on farms i s p l a i n l y s e e n . Farmers of B r i t i s h Columbia should not be a f r a i d to i n v e s t more c a p i t a l per u n i t of land they posses; t h i s i s not l i k e l y to b r i n g them diminish- i n g r e t u r n s on every e x t r a u n i t of c a p i t a l i n v e s t e d . 2/ Among t h e i r number,the l a r g e r farms have a. g r e a t e r percentage of sub-marginal e n t e r p r i s e s than have the smal ler farms. F a r - mers do not seem to be able to i n c r e a s e t h e i r investments i n management correspondingly to the i n c r e a s e d investments i n l a n d , i n l a b o r , and i n equipment. -73- 3/ I f the Province d e s i r e s to i n v e s t i n i t s a g r i c u l t u r e e f f i c i - e n t l y as much of l a b o r and of equipment as i t i s p o s s i b l e , i t should adopt the p o l i c y of f a v o u r i n g smal ler a g r i c u l t u r a l u n i t s of p r o d u c t i o n . UBC Scanned by UBC Library -74- D A I R Y S U R V E Y, 1926. G R 0 U P " 1 " . C o r r e l a t i o n of the percentage of the t o t a l investment of the farms represented by land and the o p e r a t o r ' s labour income. a +$2,000.' + §1 ,000. . 20% 30% 40% 50% 60% 70% Investment i n l a n d . C o r r e l a t i o n of the percentage of the t o t a l c a p i t a l i z a t i o n of the farms i n v e s t e d i n equipment and the o p e r a t o r ' s labour income. g +$2,000. o a -H M O n) <D O .,000. 20% 30% 40% 50% 60% 70% Investment i n equipment. -78- D A I R Y S U R V E Y, 1926. G R 0 U P " I I " . C o r r e l a t i o n of the percentage of the t o t a l c a p i t a l i z a t i o n of the farms i n v e s t e d i n land and the o p e r a t o r ' l a b o u r income. p2,000. § 1 , 0 0 0 . §1,000. / 30% 40% 50% 60% ^ — 80% Investment i n l a n d . C o r r e l a t i o n of the p e r c e n t a g e of the t o t a l c a p i t a l i z a t i o n of the farms i n v e s t e d i n equipment and the opera t o r ' s l a b o u r income. $1,000. 30% 40% 50% 60% Investment i n equipment. $1,000. -76- D A I R Y S U R V E Y , 1926. G R 0 U P " I I I " . C o r r e l a t i o n of the percentage of the t o t a l c a p i t a l i z a t i o n of the farms i n v e s t e d in land and the o p e r a t o r ' s labour income. +$1,000. o a H m o {6 <P O A / \ § o K) o a3 )L< <0 a. o 8070 Investment in l a n d . -$1 ,000. C o r r e l a t i o n of the percentage of the t o t a l c a p i t a l i z a t i o n /* of the farms i n v e s t e d i n equipment and the ope- / ^ r a t o r ' s labour income. +§1,000. / ^ / \ ^ / \ S / -^1,000. 2 0% 30;', \ 40% 50% Investment i n equipment. - 7 7 - Tables s i m i l a r to those worked out oil the b a s i s of the r e - cords of the year 1<?2& have been worked out f o r the d a i r y farms of B r i t i s h Columbia u s i n g the f i g u r e s f o r each of the y e a r s 1927, 1928, and 1929. The number of the farms under the survey v a r i e d from year to year s l i g h t l y . D A I R Y S U R V E Y , B. C. -1926 ¿ 3 , j 1927 ! 1728 1<?29 A n -n *t'M Ei'Bt SQ * * ! co * * i S E g g s ' s s a ' 8 J§ & ^ ^ d - K t ^ ^ ?! ) 3 ^ t 4-) a a 9-)3-t O'^ttw a catsu a a t g o * . ). . !* ^ OC9 Od o O T^t O O O Otg ^(3 tgtw &;a ^ . a ' ^ m s-R-tSa: !.<<=H B ! ! t ) ! ' ! t ' Group " I " 33 3 9.1%33 3 l5.14jo 2 5.0{33 3 9.1% < ! ! Group " I I " 21 3 23.8%2{3 7 30.42.4 10 4 1 . 7 4 19.1% Group"III" 14 6 42.%1;? 9 47.31{9 9 47.4 ¡L6 2 12.5% ) ! t ! ! ! ! ! ( ! ' ' According to the t a b l e s the best r a t i o s of the d i s t r i b u t i o n of the three f a c t o r s of production vary s l i g h t l y from year Lo y e a r , but the v a r i a t i o n s are not too g r e a t to negate the con- c l u s i o n s a r r i v e d a t a f t e r having analyzed the f i g u r e s of the 1926. l i g h t v a r i a t i o n s should e x i s t because of f l u c t u a t i o n s in p r i c e s on the farm cocrnodities sold as w e l l as on the com^no- d i t i e s bought. I f the n r i c e s on d i f f e r e n t products and on d i - f f e r e n t elements of production are s u b j e c t to peimanent chanres , the best r a t i o s of the d i s t r i b u t i o n of the d i f f e r e n t f a c t o r s -78- of product ion a s determined by 1926 w i l l cease bo be c o r r e c t . A i t a s long as the p r i c e s f l u c t u a t e without any marked tendency to s h i f t i n the same d i r e c t i o n , the y e a r l y v a r i a t i o n s i n the b e s t r a t i o s of the f a c t o r s of production w i l l tend to b a l a n c e . As an i l l u s t r a t i o n of the l a s t statement one may use the data provided by the r e c o r d s of the y e a r I929. In B r i t i s h Co- lumbia during the y e a r 1929 the p r i c e s of f i e l d crops rose v e r y markedly: Average p r i c e per bushel of wheat i n I929 was ^1.39 as compared to the f i v e year average p r i c e (1924-1928) which was #1.33; Average pri ' je of o a t s i n 1929 was §0.72 per bushel as compared to the f i v e y e a r average of $0.64; Average p r i c e per c w t . of p o t a t o e s i n 1929 was ; 2 . 6 0 a s compar- ed to f i v e y e a r s average of $ 1 . 3 3 . As the r e s u l t of such a r i s e of p r i c e s of the f i e l d crops i n 1929 the farms, which had a l a r g e q u a n t i t y of crops f o r s a l e , g a i n e d , while the farms which had to buy them became the l o o s e r s . The b e s t r a t i o s of the d i s t r i b u t i o n of the d i f f e r e n t f a c t o r s of product ion during the y e a r 1929 were not i d e n t i c a l with the b e s t r a t i o s of the f a c t o r s of production during the year I926. For the farms of the f i r s t and the second s i z e groups during the I929 i t was more p r o f i t a b l e to have a l a r g e r shart of t h e i r t o - t a l c a p i t a l i z a t i o n represented by l a n d , a s the f i e l d cro^s grown on t h a t land y i e l d e d a handsome r e t u r n . For the farms of the t h i r d s i z e group i t became more p r o f i t a b l e to have a smal ler percentage of t h e i r t o t a l c a p i t a l i z a t i o n to be i n v e s t e d in l a n d . -79- a s t h i s meant more f i e l d crops which y i e l d e d a l a r g e p r o f i t . The l a r g e farms which have too much land belong to the range t y p e . They have not equipment enough to c u l t i v a t e t h e i r lands and they are not engaged i n the growing of the f i e l d crops to a g r e a t e x t e n d . The l a r g e farms which have r e l a t i v e l y l e s s l a n d , have s u f f i c i e n t equipment w i t h which to work t h e i r f i e l d s and, c o n s e q u e n t l y , they b e n e f i t e d from the s a l e of the p o t a t o e s and of the o a t s they grew. The b e s t r a t i o s of the d i f f e r e n t f a c t o r s of production s h i f - ted wi th the s h i f t of the p r i c e s . The p r i c e o f the f i e l d crops dropped during the y e a r 1930, r e t u r n i n g to and even below the 1926 p r i c e l e v e l . The f i g u r e s of the farm survey of 1930 are not a v a i l a b l e a s y e t , but i t i s not d i f f i c u l t to p r e d i c t t i e s h i f t o f the b e s t r a t i o s of the f a c t o r s of product ion i n the oppos i te t o the 1929 y e a r ' s d i r e c t i o n . I t i s imposs ib le to compare farms of d i f f e r e n t t y p e s , or of v a r i e d s i z e s , or s i t u a t e d i n d i f f e r e n t d i s t r i c t s , or those work- i n g under d i f f e r e n t market c o n d i t i o n s . This statement i s par- t i c u l a r l y t rue when d e a l i n g with the farms which have s e v e r a l l i n e s of product ion w i t h the p o s s i b i l i t y of s t r e s s i n g one l i n e during one y e a r and s t r e s s i n g another l i n e during another y e a r . Each y e a r prov ides somewhat d i f f e r e n t market c o n d i t i o n s . As Ion?? a s - p r i o e s f l u c t u a t e about the I92& p r i c e s , the more c o r r e c t r a t i o s of the combination of the three f a c t o r s of product ion may be considered s i m i l a r to those of I926. The f i g u r e s worked out from the s t a t i s t i c a l data obtained during the y e a r s 1 9 2 7 , 1928, and 1929 provide the opportuni ty to observe the changes i n the d i s t r i b u t i o n of the three f a c t o r s of product ion which took p lace on B r i t i s h Columbia Dairy f a r m s . ' A f t e r having c a r e f u l l y studJed the t a b l e s which d e a l wi th the f i r s t g r o u p . o f the d a i r y farms ( T a b l e s ' 1 6 , 1 7 , and 18) the s i g n i f i c a n t tendency i s n o t i o e d : the farms a d j u s t themselves t o the most e f f i c i e n t c o - o r d i n a t i o n of the f a c t o r s of produc- t i o n . The number of farms r h i c h had too e x c e s s i v e amount of land d e c r e a s e s ; the number of farms which had been low i n equip- ment c a p i t a l d e c r e a s e s as w e l l . In I92& 21.2% of the farms be longing to the f i r s t s i z e group had from 30% t o 60% i n v e s t e d i n land; 13% of the f a ms had from 60 * to 70 ' invested i n l a n d . In the preceding chapter i t was found t h a t about 35% of the t o t a l c a p i t a l i s a t i o n i s the optimum percentage of t o t a l c a p i t a l to be represented by l a n d . I t i s seen from the t a b l e 16 t h a t i n 1927 only 9.1% of the farms b e l nging to the f i r s t s i z e grouo had from 30% to 60% i n v e s t e d i n l a n d , and t h a t 9.1% had from 60% to 70% i n v e s t e d i n l a n d . At the same time the number of arms which had from 40% to 50% i n v e s t e d i n land i n c r e a s e s : i n 1926 there were 43.3% i n t h a t sub-group,, i n I927 there were 51 .5? , . The number of farms which have from 30% to 40% investment i n land i n c r e a s e s a s w e l l : i n 1926 there were 12.2% , but i n 1927 there were 24.2%. The f a n n e r s had i n c r e a s e d t h e i r share of i n - vestment i n the l a n d . This process goes on during the f o l l o w i n g year 1928. From the 9.1% of the fauns of the sub-group w i t h - 60%" of t h e i r t o t a l c a p i t a l i z a t i o n i n v e s t e d i n land only 7.5;, are l e f t . The sub-group of the farms which had from 40% to $0% decreased be- cause some of i t s farms moved i n t o the next more r a t i o n a l l y o r - ganized sub-group of the farms which have from 301 t o 40% of t h e i r t o t a l c a p i t a l i s a t i o n i n v e s t e d i n l a n d . In 1927 the "40% to 30%" sub-group had 51.3% of the f x r n s of the f i r s t s i z e group, i n I928 i t had only 42.5%. On the c o n t r a r y , the number of the farms i n the "30% - 40%" sub-group i n c r e a s e d from 24.2% i n 1927 to 33% i n 1928. The r a t i o n a l i s a t i o n of the fanning b u s i n e s s i s qu i te n o t i c e a b l e . The f i g u r e s d e a l i n g with the equipment of the f i r s t s i z e group of d a i r y f a n s s ( Table 18 ) show a s i m i l a r tendency to r a - t i o n a l i z e . From the sub-group of farms which have from 30% to 40% i n v e s t e d i n equipment some of the farms were moved i n t o the "40% - 50%" sub-group. In I926 there were 18.2% of the farms of the f i r s t s i z e group i n the "30% - 40%" sub-group; in 1927 there there were l e f t only 3.0%. In 1926 there were 48.3% the farms of the f i r s t s i z e group i n the "40% - 50'." sub-group, in 1927 there were 54.5%. In the "50% - 60%" sub-group i n 1926 there were 18.2%, i n 1927 t h i s f i g u r e became 24.3%, and i n 1928 t h i s percentage became 50.0%. In I92S there were l e s s farms i n the "40% - 50%" sub-group because some of them moved i n the next more e f f i c i e n t "50% - 60*." sub-group, and so on. The f i g u r e s i l l u s t r a t e aga in the same tendency of the r a t i o n a - l i z a t i o n of the a g r i c u l t u r a l community. -82- The second group of d a i r y farms ( T a b l e s 1 9 , 20, and 21 ) has the same tendency to r a t i o n a l i z e the o r g a n i z a t i o n of the farms i n the group. The optimum r a t i o s of the d i s t r i b u t i o n of the three f a c t o r s of product ion f o r the d a i r y farms of the s e - cond s i z e group were: 30% i n l a n d , 4$% i n equipment, and 5% i n l a b o r . The sub-group of the f a r a s which have from 3J to 6J% of t h e i r t o t a l c a p i t a l i z a t i o n i n v e s t e d i n land increased from 42.9% i n 1926 to 32.4% i n 1929. The sub-group of the farms which had from 401 to 50% of t h e i r t o t a l c a p i t a l i z a t i o n i n v e s t - ed i n equipment grew as the y e a r s passed: i n 1926 the percentage was 23.8%, i n 1?2? i t was 30.4%, i n 1929 i t was 42.9% (Table 2 1 ) . Both the "20% - 30%" and the "30% - 40%" sub-groups l o s t t h e i r r e l a t i v e importance i n 1929 as compared with the y e a r 1926. The "20' - 30%" sub-group in 1929 had 19.1% of the f i r m s of the second s i z e group, w h i l e i t had 23,8% i n 1926. The "30% - 4o%" sub-group i n 1929 had 23.8% of the farms of the second group, whi le i t had 42.9% i n 1926. The r e l a t i v e number of the poorly organized farms d i m i n i s h e s , and the r e l a t i v e number of the w e l l organized farms i n c r e a s e s . The optimum r a t i o s of the d i s t r i b u t i o n of the three f a c t o r s of product ion f o r the d a i r y farms of the t h i r d s i z e gro p a r e : 68% i n l a n d . 28% i n equipment, and 41 i n l a b o r . The w e l l d e f i n - ed tendency of the f i r s t and of the second s i z e groups of the d a i r y farms to r a t i o n a l i s e t h e i r o r g a n i z a t i o n i& not to w e l l i n d i c a t e d by the t a b l e s - d e a l i n g with the t h i r d s i z e group of the d' i r y farms ( Tables 22, 23 , and 24 ) . The b e s t "60 '- - ?0%" -85- of investment i n land sub-group had 57*1% of the t o t a l number of the farms of the t h i r d s i z e group i n 1926, i t had only 47.4% i n 1927 , and 32.7% i n 1928. I t i s t rue t h a t i n 192? the percen- tage rose up to 62.5%.^The "70% - 80%" decreased from 21.5% i n 1926 to 6.3% in 1?29. Tiie "40% - 30%" sub-group i n c r e a s e d . The management of farms of the t h i r d s i z e group does not appear to be c o r r e c t a s f a r a s the re-adjustment of t h e i r i n - vestments i s concerned. Instead of d a c r e a s i n the number of the farms wi th the e x c e s s i v e amount of equipment, t h e i r number was i n c r e a s e d . The number of farms which have more than 40% of t h e i r t o t a l c a p i t a l i z a t i o n i n v e s t e d in equipment i n c r e a s e d from y e a r to y e a r : i t was 7.2% in 1 5 2 6 , 10.5% i n 1 9 2 7 , 21.1% i n 1928, and 25.Of, in 1929. The o p e r a t o r s of the farms of the t h i r d s i z e group t r y t o i n t e n s i f y t h e i r p r o d u c t i o n , whi le i t seems t h a t t h e i r p o l i c y should be j u s t the opposi te - they should not i n - t e n s i f y t h e i r product ion t o a g r e a t e r degree than having 32% of t h e i r t o t a l c a p i t a l i z a t i o n i n v e s t e d i n equipment and l a b o r . A l l sa id i l l u s t r a t e s aga in the f a c t that the farms of the l a r g e r s i z e s u f f e r more from the l a c k of an adequate management than do the s m a l l e r farms. While o p e r a t o r s of s m a l l e r farms r e - a d j u s t the o r g a n i z a t i o n of t h o i r e n t e r p r i s e s approaching thaLt type which seems to be the boat f o r thorn to a d o p t , the l a r g e r farms are a d j u s t e d more s lowly or adopt an i n c o r r e c t method of r e - a d j u s t m e n t . ^The f i g u r e s of 1929 do not f o l l o w the d i r e c t i o n of the f i - gures of the y e a r s b e f o r e i t ; t h i s may be e x p l a i n e d by the r a - ther d r a s t i c change i n the p r i c e s which made the increased pro- duct ion of f i e l d crops i n B r i t i s h Columbia very p r o f i t a b l e f o r the season in q u e s t i o n . <D e a & e o B C0[ tL. Mi Olì t-t r-t! r-t a! C¡ M t̂ a: E n! m t̂ O M Ol '¿S. r-t ta E ^ CO c9 M <t-t m r-t r-t (g t3 M g ^ a m <n o t-M o is; r-t H) e co M ta Oi tw r-t tw O lASiSAR. tooitr-^ M co LO t í ) r-t M M r- M o r-t ^ r-t to ̂  to ^ r-t r-t O O O O O O O O O O O O M C- M M r-t tO to w w H ÍT) o w S M H O E-t & M Et fC E-¡ ¡H m M co O CO f) -=f O O to ai) M * - * Ol M r-t MS to co t co en r-t r-t r-t r-t r-t r-t r-t r-t r-t ,-t M O m S A a H C-t OtDO-M] . * * Cl) Mr̂ r-t r-t) r-t r-t M O t-1 CO Ol r-t r-t r-t M r-t toe- 's)'r-co r-t r-t tO Œ M <-t r-t r-t o to as M r-t tO O f) to O O M r-) r-t r-t co to to ¡o r-t CO r-t M <M * < * o n r-t r-t CD O tO 03 M) r-t < t t r-t M M t̂ t ! ) co <-t r-t M M r- to E- -F os ! * * co M E-Ol M O to M Ol tf) M t0 to C-- ta t- to to Oi <-t 13 o M tO Oi ^ si-Oi a t ! ! a r- M O Ol r-t M to to r-t ¡-3 M t- to r- r- f- t- 'O a M t- to ta o r-t O t t : M > m E S g <3 a ts " m ta pt< m Ps H Pc E s E o o o o Et ti P< o o o o r-t ^ ta r-t B M r-t ta ai r-* SI t] ai o o o o si B Pu ai t< &< Si S Pu Ci B ^ c: M P- to tO r-t M § C! ni Pu r-t M to ^ a a s .WfDr-t ai a <3 -w ai r-t Ht ci t, a ... * CÚ r-t -W Ci r-t -̂t r-t M tO ^ r-t ^ ai 60 a ^ M ai &C a *< S Ki g) "d- H g Ĉ A P te —t Ci p <c -w ai p P V a) a c s s o 3 O > &c B O L. ^ a o > B o ^ -o r< o ^ o > M B o ^ ̂  ti t< â 6) a ai 3 ai a t* ai O c5 G! -s a M Ü ^ m O -3 S ta c9 S ^ r-1 i-3 M & M Oi M t-< r-< n n tw P & a M ft) o S ^ & ta w w M ft! ts o M -S \ M M M W t a t a <D —< to o <C ) M B M t< <p a tM a a ** o a B <B ) o a cr. (D <-) <c <C B tc -a o &C <B 4* 13 <D # a! o o a +* <t-< 4* 4̂  a <3 a) ) 6 to 0) ** ) a A o a o O 4* t) A t a , <D <B O m t so E t* a) t< O +* o a a) w a CL) <a B a t a O <D to t< r-) <B 00 O <c B a 6C R <p a o <e a a o o a ^ 4* 4* a o r- t to <a V t E A O a o o -*-* * * o H A t a , <D ta O t M E M ^ 0) Hi a a! r-4 a &< 4* O M B a o r- ! a ^ o <c m r-< m o c B <r) a 43 t< M ^ B m a) <3 o O a o 4* <w 4* 4* a ! tc (0 V a) ** ! E A o a o <3 4* o ) ) J a to ta o <B # ) 66 B ^ ^ h <8 t-< 8 a r-t a Pt 4̂  O <B S H! TR. ) < o a 'O 0) n <6 o W B a 43 o &0 4* a <B a a o .a O a p̂  4̂  4* 4* a o to a V t S A o a o O 4* o t< <B -H o o N <o CO E- tO o <o t- CO + O O M M) O to M CO SO o PS M to + P- M <T< w o CO 4- o to to M M OS o to M m C- O m ¡E! {M et M S3 ¡s M r-¡ fB E-< P C3 M O ti a O M M M {M &t Et R M K CE! At SA M ) a ) 8 t3 <D M ^ tg ^ t< <c a o ta ^ B ¡a B m ë r-t H) m t t) a? o 0 ^ ' m a) a! ^ r-t c -n 4-t o ^ ^ a ni ta 4) ^ t E tC o O o P. o O m 60 ! tC a) 4t 3 < a * M a *t ^ ta <-< ta o M O ta -=j< tO 9 oo M <-< r-t o M ^ tO r-t M M Pt 4* o ta a ta Pu t r-t o tO M <p !0 ta te nO r-t o m H *-t 4̂  .o o r-t M <c O a M r-t O <B ta ta O 4* O 4* Pt 4* a 4* O r-t 00 r-t t ta to 00 00 t a tí) Et ^ o ^ **< r-t + 4- < a t t) m m o o <p t M a ^ M o O œ ta s-t ta r-t ta to &t 4* o ta a ta &< ) O a M << ta r-t c ta r-t <-t o <c a *-< ta .o M M o M ^ tD 4* a r-t O r-t ta o .a O a 4? Ĉ  4* 4* Q co M r-t M {0 ) r- ta tC ca <0 <y tp ^ ! B M sO P< o H o ^ co O +* o 4- + H ) a o <C <rt ta O c ) 60 S o ti 60 .o t< o O m ci in (9 r-t ta r-t Pt 4* o <B 8 ta &< ! "4 0 tt m <a r-t te c- M M) o <p a «-t ta -O r-t h M t* te 4* a M 03 <P tu ta O O a O r-t Pi 4* tt 4" 4* 4* a 4" O S3 M r-t to t O ? B-M m V OO ^ M ) B P< O g o ta O 4<* -rt o ) M r-t - f t) ta c-<B N M O! Ol r-t <*9 c m <-< t- &4 M ä t3 n M M r-t F"' Ei )-t P H ¡3 Cl o Ct. t* &< O M M P3 03 &t -=<! H H M tJ! M ^ ) t e <D O <C M a M -a o O H ci ^ a a t-< a o CD E Hi <M t tO Q M to M e r-t o <!) B -O M O M ^ <B a ^ ß <-t 4* <u a a) O ^ a o S3. ^ M M CK ) os Os <a <0 -d* 3) t S o A o H o T* M O -ft o h 4- ) a ) C w m o m t Ë* a t< to JO O ! V M M a a! <-t ai O a B o ^ ^ t M a M 9) m <-4 <B M S3. O a a Ci -O O M m 4* S M M <C O .a O o t-t 4* 4* 4* 4* t) O 4. O S3. M M M ) sO M <3! 3) <0 t< t S O ) O ^ ) ) a a <0 «-< ta o m t ti M R 0 a ^ 3 r-t ai O O &) O ¡a Ci a n< SS. SS. 0) ta r-t <B M O o <o S ai r- M t̂ M 4* E <s H) H) o .g O O to O co o 4-t 4* 4* a -tJ <-t SS. S3. O co M M r-t ! M <a H) ta V f-t co <t) t* ) B M (A Pt O a o tO tA O 4* *-< o + 4- ) t a 0 <9 to ) o c ) s O h ^ c ai ^ a te <-t ai CL) o <9 B a) ) a M ss. S3. V ta <-< <e O ) <30 o V S w M M <-) ti M S 3) 4* E r-t O H! o ja O a O 4* M 4* 4* 4* a 4* SA S3. <o M CO M r-t a) to h <n ) 3 C a O P) O *-< o <-t O 4* o + t< p- ao a) M M o Os Os >4 r-t r-t a a <B ta o 4) ) SO a *< 60 tL. 4) a 44 a ä r-t R) CLt 4* o ta a a t a V o 3 <3 m <B S M t, <¡j o t< r-t tD ^ ^ E O 3 pi ^ 4* n ^ a ) ? <f t. t g p< o 3 o O 4̂  ^ e; h-t ^ t> o n M ùT r-( H <-< P & a M o t* &< Ü O n M. o: E-t M Ci M P3 o ¡o o -sA o M SsS. O M O SA o 'SA o o 4* a a to <c -w ta to O 4) t SO M) M t- 60 tt M e a S4 a a a Ck o M B a <n t< O O h r-t <c o <c a <rt a 43 O to ^ SO ^ C S M M m a a O 43 O a 4* 4* 4* 4* a O ) r-t to a ta <t) r-t f-<C ^ t a to P< O a o M O 4̂  -r-t o + t a ! a . f ta tO O 4) so a t< so 43 O 4> a ^ a a <-< a r-t 4* o ta a a Et ) a t< to a; ta <-) 4) P- M O <B S a 4=) h 6aK 4) 4* a tO r-t V a a O 43 O 3 tO P-t 4* 4* 4* 4* a o t* M M a ̂ m m to CO 4) ^ ) a to P̂  O a o O P* O 4" -w o r-t 4- + ) a t a to ta O 4) ) so E <3* ^ sc ^ ^ o r-t 4ì a a a <-) a PL, 4* o ta a a Po ) to a *< to r- <" g t* r-t 4) o m a -rt a -o to to t. sot* m 4* s to a; a ta O 43 o 3 4̂  4* 4* 4* a M tO M r - t 3 t--M Os M <o <30 M en e .3 ta 8 -e ) M B t< M ^ t. a) <a ^ a Si <-t ai O CL, ** o m B Si 4-t t 3 tu Œ ta H< r-t a; O a) B e) -o to ^ 60 tu B & ai si .3 O 3 to Pi 4̂  4-t 4* 3 - - Ol ) to ai ^ ta te to at ) B p- p< O 3 o M O 4̂  o r-t t 3 3 a; ta Oi M o m ) 63 B ^ 43 t< ^ t- M o ai 44 3 ta <-4 ai <-4 M P4 4* o m B ai 44 ) a ^ <B <a r4 <B o o S —' n) ^ 6C ^ v 4* B a at a o .a o a (i, ** ** a < g „ C ^ ) p< o a O -K* -W ) a O <C t M Ô <D 04 44 O p4 +* O M E 3 <-< g ta E ai 44 t a <D " r-t o te a 60 *** 9) (K <3 ai O .3 o 3 On 3 ) ta ta m C ^ ! E Pt O 3 o O --t O 3 o c t 0 {g 4̂ a a r-t ai 4* o ta a ta t̂ 3 3 ^ V ta t< r-t <H OWE ^ ca ^ &c E e ^ B e ai ta o â o 3 p̂  4# 4< 4f 4* 4* a t ai ̂ m ) <p m ^ 3 a A o --t o O 4- O 3 3 a) *-t o P ) h¡) m ^ CtC -o ^ B ta 44 3 g ,-t ^ a, 4* O ta a g ai 44 ! 3 ^ M O o c a -w ta ^ ttc ̂  o 4* a te a! ai o <3 o 3 pt, 4* 44 4* 4* 4* 3 ) $ S w i B P< o 3 o O 4* -̂t t) ai m f3 to to ti* <-t o Ol M o% -y tO tí) <-) t̂ M CO to M <-t M oí to e- M CO ^ co g) M to to Ol to fi SP Oü to CO o o to tô M to ? o to M to to tf CO M Ol h w M <3 M M n P a o fr! f̂ M W a) n as. M O S3. O SA o co S3, a) S3. TA to t o O ) he 43 ta a <U ai 3 tO r-t m CL, 4* 8 ta a o) ) a 8 <p e ^ ^ 60 K (P ^ C tC O o o t! 4* 4* 4* 4" O ) s s p, o O 4* 0 t a o o O 0 a <p «-< m t) <p t &o a O M 0) a! 44 a ta ri ta O O 4* o ta a ai 44 M ) a Í4 te ta f4 <-) <B <-t M o <p a -4 ta 43 ^ M %4 a tQ te a) ai O 43 O 3 <-t r-t P4 44 4* 4* 4* a tO ! M r̂ a) Ĉ  M o ! a O P) O a o O O 4* *-< o r-l CO H a ... - CO a) -w o o M a O ^ ta t< ^ r-t to a) a! 44 a ta <-4 ai Pu 4* o ta a a! 44 ) <D tn r-4 <D g g *g <c st ni o .ct o a pLf 4" 4* 4* 4* o t ta ta t* A o O 4* 4) i E a o -4 o O <p ) t* 6C 0 3 44 3 P4 4* o ta M a r-t <3 a! 44 ! a t< <p <a m omB <w g <9 ^ ^ 4* a e <a a o o g ^ 4* 44 4* 4* 4* o ) a ta w <P K ! a P< o a o O 4* -4 t) H W - - O- <0 -4 m h * t M a 6 ta ja*4 h ^ a 44 3 ca r-t at O O ta a O 44 ) O! ^ a ta $4 <-t te 6 * a <a 43 H&h g * a <th a at o o a at+*4i<*4*4*a t ^ H) 0 ^ t a p< o a o O 4* o a) 4) M tj) 00 tO C- O CO M O t<S O M OS CO Os tO M M Os OS Os M O M O tO to o to M M tO M to to ta r-t tO M t- M Os tO M tO O CD O CO M Os SA M SA M M ¡M ë & co M n P 3 & O m t< M W w M et w H cl o m <3 -s n M M M Pt SA M M O O M SA o M TA ta SA oo r-t SA to SA <3 SA Et * C O m O <D t -w E (D y ti 'S ^ r-t n? PL, 4̂  o ta o á si e â ^ <t H ^ r-t O <D E -rt " ^ 60 ^ m *B c a) <ü o 43 o 3 p, 4* 4* 4* 4* a S ¡n (p <u ^ t a p, o a o O 4* *-t O a a o te t çn a ^ 60 43 ^ H a? ai a ta r-t a! Pt 4* o ta B ai 4-t ) a ta ^ i-) <t O <D S Ci 43 ^ 60 a? 4* g m m ta o 43 o 3 4̂  4* 4* a t ^ m <9 !< P< O O 4* (D ' a a o --t o ta H ë a <c o m ) )Li 60 a; ta st 3 a rt ta P, 4* O m a Ci S-t ) a ^ <D M t-< ,-] <t) o <B B ai 43 ' ^ <D 4̂  a a) c3 O 43 o a Pt 4* ŝ  ^ a o O o O to r-t co M M os O to 4* SA to tO OS M 00 M íO to r-t ĉ - "3 r-t t-- 'O M O SA ty M o o M tí) os 03 tO o to t s m *t ) Pt o a OS) t M ^ 6o 4) !L< V O Sw a a) Pt 4* o -- - . . ai S a) ) a tp ta o <p a tC c3 ta o 3̂ O Pi 4* S-< 4* 4? r-t te ta 43 a 4* s a a t ai ̂ m <p ** ) a P< O a o O 4* v-t o ) a te o a) 6c 9) <3 P4 o ! a —t ta ë ta <-t ta Btpst a <D ta r-t <B omB -rt ai *t 60 ^ <B 4* s te ta a O 4S o a Pl 4* ^ 4* 4* 4* a e w ta Q) ta ^ t a a, o a o O 4* t̂ O ta a> O to co M co o to Ol -sí* Ol er* M p- M N M tO tO to o o <o to SA <-t M t- to M to E-M to to OS M CO M o to to 00 M tm M os w g fr{ C3 C/3 M K t-t P a [Y! o ta M M E-' 'A o o M o te, O M O M o o o sa. t a ) a <C O o 4) ) 6s B ^ o o " 4-t a a r-t a to en 4* O m s a Et t a <p r-t <D o y s a 43 ^ tO )L. 60 4) 4* a c a a O 43 O 3 M tí) Pt 4* <H 4* 4* 4* a O 00 t r-t to a ^ m a 00 o 4) ^ s <o r-t c. O a o M r-t o 4* o <-t ! a t a m ta O M o a ) 60 B *< 60 C3 to a a a a r-t a M to 4* O <a a a â <D tü¡ r-t $ V r -O te B a t< 4) 4* B to S) a a O 43 O a M M P) 4* 4* a to O ! ta a ^ ? 4) t - <o 4) t a co to P< O a O M Ô O 4* —t O r-t ) t a a * s ta 00 o 4? ) 60 B f-t 6C 43 *< t< to <c a 44 3 a r-t a m r-t Pt 4< O ta a a t a ^ <B m ^ r-t a t - O 4) a a ^ se t* <C 43 a O 4) O 43 o 3 tO to Pl +< 4-< 4* 4* 43 a ) M ^ m s P< o C* 4̂ <P ) 60 .o ta ta o 4* O 60 H) r-t <a B a m 6 ai S4 ) a o o B V o a o o P̂  4* 4. 4̂  4* m a 4a B a a ) a t< tu C V ^ ! B P< o a o O 4" <rt O a o r-t r.T E-! H' t-4 w ^ g Eá tn M E4 P M 3 M Í3 o %4 c3 -4 M M O fx! 64 M Ë ta o ri M Ot "S3. OS o SS. o CO o CO se. o r- S3. o o tO SS. o to ss. o to ) ci <D O <D CLi 43 o < a M ta <a B a 44 t a V ta O O S 6C tC a) oi - PL, 43 ! Mi !-' m 0) ^ & o f 0) ^ -g o O a e t E a o O 43 -H o a a ta ta o t!D g tM c3 44 ¡3 a) r-t ci Ht 4* o m s ai 4-t . *4 %< r4 <P -4 CS Ci B 0) ÍS ai O ¿3 O B 0, 4s 4" 4" a <M S M E ! S c* ° m e < t ci a * <D <a O te ! 63 B ^ 60 43 K <D CE 44 S g r-4 H) CL, 4" o ta g W 4-t e ta o te S *< tu ^ a; ca ta t4 ^ r-t S) ai 43 m 43 B o o a Pl 43 4l 4* 43 4* a ) ^ ta 4) h p4 O O 43 ) tC a a .r4 O Ó ) a a <c H ta to o a) ! M S tu M 43 t4 to V ta 44 a a) r-t 0) to Pt 43 o ta a a) 44 ta *4 r-t te o o o a —' a) 43 t< (P 43 a o <t) ta ce o o 3 M Pt +3 44 43 43 43 a ) a] <a a) c ^ t a o< o a o CS 43 .w o ta M to M M Os O M tO M M co O to M tO M tO M M M ^ tf) to r-t S3. O to to -y M O M M S3, to M r- to e- co o tû to S3. 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A b o v e m a r g i n a l M a r s i n a l S a b - m a r t r i n a l 1 9 2 6 4 6 . 7 5 0 . 1 4 7 . 3 1 9 2 7 4 5 . 9 4 0 . 4 5 0 . 3 1 9 2 8 4 1 . 6 4 7 . 2 4 3 . 9 1 9 2 9 4 3 . 1 4 6 . 8 3 9 . 3 LABOR 1 9 2 6 8 . 5 7 . 3 8 . 8 1 9 2 7 8 . 7 8 . 4 1 0 . 0 1 9 2 8 8 . 6 8 . 3 5 . 3 1 9 2 9 8 . 8 6 . 9 9 . 1 EQUIPMENT 1 9 2 6 4 4 . 8 4 2 . 6 4 3 . 9 1 9 2 7 4 6 . 3 5 1 . 2 3 9 . 7 1 9 2 8 4 9 . 8 4 4 . 5 5 0 . 8 1 9 2 9 4 8 . 1 4 6 . 3 5 1 . 6 LAND (230UP 2 1 9 2 6 5 3 . 3 5 3 . 0 3 6 . 0 1 9 2 7 5 7 . 9 5 7 . 2 5 9 . 2 1 3 2 8 t 6 1 . 1 5 7 . 3 1 9 2 9 5 8 . 5 5 7 . 5 4 7 . 2 t A p p R 1 9 2 6 5 . 7 5 . 8 3 . 0 1 9 2 7 5 . 1 5 . 4 6 . 3 1 9 2 8 6 . 1 5 . 2 5 . 9 1 9 29 5 . 6 5 . 5 6 . 2 EQUIPMENT 1 9 2 6 4 1 . 1 3 8 . 2 2 8 . 0 1 9 2 7 3 7 . 0 3 7 . 4 3 4 . 5 1 9 2 8 3 9 . 8 3 3 . 7 3 6 . 8 1 9 29 3 5 . 9 3 7 . 0 4 3 . 6 - 1 0 4 - (?E3UR ,3. LMR 1 9 2 6 6 6 . 2 6 6 . 1 6 2 . 5 1 9 2 7 6 4 . 2 5 9 . 8 6 4 . 9 1 9 2 8 6 3 . 3 6 2 . 4 6 0 . 0 1 9 2 9 5 8 . 6 6 6 . 3 6 7 . 9 ijLaoR 1 9 2 6 5 . 2 7 . 0 5 . 1 1 9 2 7 5 . 7 4 . 5 5 . 1 1 9 2 8 4 . 7 4 . 4 5 . 6 1 9 2 9 5 . 3 4 . 9 4 . 5 1 9 2 6 2 9 . 6 3 6 . 9 3 2 . 4 1 9 2 7 3 0 . 1 3 5 . 7 3 0 . 0 1 9 2 8 3 2 . 0 3 3 . 2 3 4 . 4 1 9 2 9 3 6 . 1 2 8 . 8 2 7 . 6 - 1 0 5 H M Ss- M !3=< ^ M t-4 xo CM PO ox r-! r-t * CM Ox Ox CM ¡a r-t <-t r-t ! Ëc3 O t- ¿3 e! CM Í3CHC-- r-t tr--m f-t r-t C— H M o e cM -W Ox O t— -SA òu<-t r-t to c!xO H co Ox S Sx Ox to CM r-t CM st CM -3- CM - Ox t r-t ¿3 CE ^ SCO m H tu (M O Ox a: ox r-t <n H O f-t <D g H c- ai CM H cr, -ri r-t &0 Cj CM e Ox (M m ox ci CO CM ex S-t H o c- f-< CM r-t ts; CM ox r-t LT\ E— Ox tQ xD M M O -sf tC to M te CM CM to CM r-t CM xO r-t Ox r-) Ox r-t H o O 0 o c O o O 0 O co -H r-t to H c: r-t N -W O O r-t Ci ta ^ +3 43 O O -r) O O n O O ai M c? OD "A r-t to - Mt r-t t-t t-t t-t & & S O O !-) fLl M Ü¡

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