st and to concentrate upon them. There is
also no doubt that even at low prices there is plenty of scope for
better farming, and that better manuring, particularly of grass land,
will pay. But the farmer is faced with an economic principle--the law of
diminishing returns. It may be stated thus: beyond a certain point which
rises and falls directly with the value of the product, extra doses of
labour and manure do not give a corresponding return. It is this
principle which accounts for what we see everywhere--that farmers are
tending to economise as much as they can on their labour and to let
arable land go back to grass.

And if this is clear to farmers who are thinking of intensive arable
farming, still more is it true in comparing arable with grass. If you
take the same sort of quantity of arable and grass farms, farmed by men
of the same skill and diligence, over a range of seasons under low world
prices for farm produce, you will, I believe, find something like this:
grass land needs half the capital and one-third of the labour of arable;
it produces three-quarters the receipts with half the payments, and
yields double the profit per acre and four times the profit on capital.
The moral of all this is clear. Unless the nation is willing to go back
to protection for agriculture, which I am glad to believe in the general
interest unthinkable, and unless it is willing to guarantee the farmer
against loss from that method of agriculture which means most production
and most employment, we must let the farmer set the tune and farm in the
way it best suits him to farm. We must try, in fact, not to talk too
much nonsense about intensive production as the cure for agricultural
depression. It is useful to remember that all countries overseas which
combine high wages with agricultural prosperity have a very low output
per acre judged by our standards.

EMPLOYMENT AND WAGES

It follows directly from what I have just said that a time of high costs
and low prices like the present, like the time of lower costs but still
lower prices of the late '80's and early '90's, is not a favourable time
for expecting employment to be brisk or wages high. And reasons other
than those which we have yet considered make the farmer feel his labour
to be specially burdensome at present. He finds that the prices he gets
on the average are one and one-third times what they were before the
war: what he has to buy costing from one and a half to one