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diseases to the total of £2,500,000; but it would seem to me reasonable to put the losses to be saved, directly and indirectly by the complete eradication of tubercle, at £2,000,000 out of a total of £3,500,000 a year. As regards the diffusion of this benefit through the community as a whole (paragraph 13), it is true that under competitive conditions the primary and final incidence of such items between producer, distributor, and consumer will differ widely; but unless the results achieved by the Milk Marketing Boards altogether disappoint the hopes which led to their foundation, the diffusion of the two millions accruing primarily to the farmer will at least be very much slower than it would have been without the Boards.
(3) Loans.
These are not to be regarded as inducements to join the voluntary eradication scheme, but as necessary to remove otherwise fatal hindrances, viz.: (1) the difficulty of finding the very large numbers of breeding herds required at the outset, (a) of the right breeds for the producer-retailer herds, (b) in the right places, and (c) in the right hands, if the choice is further restricted to farmers with the necessary free capital; and (2) the very short time allowed before the producer-retailer must either clean up his herd or drop out, giving in fact no choice unless those in need are allowed access to capital. But loans should be restricted to those for whom they are unavoidable, and, as herds in the ordinary course of life will frequently change hands, it is desirable that those granted for the replacement of reactors should be paid off in the shortest possible time.
:
Putting the loss on each reactor replaced at £10 (probably a low figure at first, while clean cattle are scarce and demand urgent) the average sum required (not all in the first year) would be £4 per head of the herd, with 40 per cent. infection. But for the essentially "flying" herds of producer-retailers infection will average much higher 80 per cent. will be frequent in many districts and some herds are said to reach 100 per cent. Taking 70 for producer- retailers, the sum for a 50-cow herd would be £850. If, of the 50 cows, 10 were dry, or heifers not yet calved, bonus at 1d. a gallon on the milk of 40 cows at 600 gallons each would produce £100 a year and roughly this should pay off loan and interest in four years. Further, if loans averaging £7 per cow were required for half the first 500,000 cleaned up, the total borrowed for reactors would be £1,750,000 in the first four years; and, the advances being spread fairly evenly over that period and the repayments beginning at once in the next four years, a point would soon be reached at which the loans and repayments would approximate to a revolving fund, and the total outstanding at any time might not exceed £2 millions.
As regards loans for building purposes and the like, the circumstances of different farms differ so widely that it is not possible to give even illustrative figures here. It may be hoped that the cases in which any large amount is required will be few; but, as
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the Hannah experiment showed, one such case in which neither the farmer nor his landlord can provide the necessary funds might endanger success over a whole neighbourhood. There are technical questions of some difficulty in connection with such matters as security, tenure, and the position of the landlord in the matter, into which it has been impossible for us to enter, but it is not to be supposed that such difficulties are insuperable; and the recent lowering of interest rates for agricultural credits, and the powers of the Milk Marketing Board mentioned below should help towards solutions.
Under paragraph 66 of the milk marketing scheme it is provided that the Board may lend to any registered producer up to a limit of two-thirds the total value of his milk and may guarantee payment of any sums secured by an agricultural charge under the agricultural credits act of 1928. Free use of these powers would admirably facilitate the arrangement and recovery of eradication loans for both purposes.
(4) Inducements to join the scheme.
Free advice and testing (except in cases where the farmer draws back from the scheme), with some eventual share of the £2 millions of paragraph 13, do not promise an early and direct increase of income; for that attraction the scheme relies on a bonus on all "certified" milk (in its new signification) provided by a levy on all milk produced. In originating this proposal, the Grigg Commission provided that half the levy should be recovered from the producer and half from the distributor. Where the shares of these parties in the total divisible product are annually resettled, the primary incidence of such a levy is likely soon to cease to be the ultimate incidence, and 1 here assume that the levy, whatever its amount, would be recovered primarily from the producer, as provided in the milk marketing scheme. The working of the levy-bonus plan would not be free from difficulty. Breeding herds would only come into it to a minor extent; their main reward would come from an active sellers' market for clean cattle. For milking herds, assume a bonus of 1d. per gallon, i.e., £2 10s. Od. a year for a 600-gallon cow. At first the only cows earning bonus would be those (say 20,000) already registered in tubercle-free herds, with perhaps an equal number now in herds clean in fact, but not registered as such, which might secure an accepted certificate in the first year. The total bonus on these lines would be £100,000, and the levy a small fraction of a penny per gallon. Each year, as eradication progressed, the rate of levy would have to be raised until at last the total of levy and bonus alike had reached £6 millions, and, each farmer receiving exactly what he paid out, the plan would have come to an end.
What any producer received under such a plan would depend on the date of his " accepted" certificate; and the owners of the last 500,000 cattle cleaned up would receive nothing, though they would have paid levy all along. (Facts would not, of course,
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