IF New Zealand is to provide higher living standards for an increasing population it will have to speed up its rate of exporting. Obviously increased exports must come mainly from the agricultural industry. With a 2% per annum population increase, and to provide a 2% per annum increase in living standards, we will probably have to increase our export income by somewhere around £15 million per annum. The farming industry has the potential to provide greater exports. A recent conference of the Institute of Agricultural Science estimated that the application of known methods of production on all our farms would lead to an increase of 80% in production above the present level. This is a reflection of the great advances which have been made in New Zealand in scientific research where, in some fields, we lead the world. However, setting potential targets is only the first step. In order to turn an 80% potential into a 4% per annum rate of growth, we will need constructive economic policies to encourage increased exports. This means an expanded economic research programme to supplement the vigorous scientific research mentioned above. The present article describes the programme of economic research which has now been put in train at the Agricultural Economics Research Unit recently established at Lincoln College.

It is proposed to discuss, at the broad aggregate level, the implications of a specific rate of growth of agricultural production in the future, and for this purpose, 4% per annum has been chosen. At this rate of increase, it would take 15 years to reach the required targets. As all the implications of an increase to this level cannot be discussed in the space available, this paper will be confined to the following special questions: (1) What resources are required for a 4% rate of growth? (2) What rate of return would be earned on these resources? (3) How can the resources be shifted in to agriculture? (4) The indirect use of resources. (5) Some special quasi economic objections to faster agricultural growth.

The formal use of farming standards in the organisation of agricultural advisory work dates from about twelve years ago, when arrangements were made for closer liaison between the Provincial Agricultural Service and the National Agricultural Advisory Service in the United Kingdom. Since that time a large volume of data has been collected in the United Kingdom and, to a lesser extent, in New Zealand. The standards derived from the data are used in a semi-formal analysis of management problems at the individual farm level. This process, the farm business method of comparative analysis is at present being developed in New Zealand by the Department of Agriculture's Economic section. Candler and Sargent (1962) have pointed out that 'the development of farm standards as a research technique has been characterised by a complete lack of theoretical underpinning". They presented an elementary theoretical analysis of the resource allocation problem applied to farming, and concluded that the publication and use of simple factor/product relationships as guides to better farming was not satisfactory. This was especially true in times of rapid technological and price change. They further argued that changing price relationships may place an individual farm in say the top ten per cent of a specific group of farms in one period, but exclude it in another period. This is a result more of the characteristic inflexibility of farm organisation, rather than of an inability of the farm standards approach to cause movement along the production possibilities curve. Their criticisms of the approach are nevertheless, correct, as presented. But as Blagburn (1962) has pointed out in a rejoinder, the theoretical deficiencies of the approach do not necessarily make the farn standards approach invalid. Certainly, there is a "technologist's dilemma"; but advice from a professional adviser which required that output per stock, or land unit be maximised would be unacceptable to the farmer if he could see no obvious increase in profit, in leisure time, or in ease of management as a result. The studies in this thesis originated from the desire of the Department of Agriculture to test the validity of criticisms such as those of Candler and Sargent.

The Seventh Approximation was found to be very useful for classifying soils in Venezuela. The system was helpful in three ways: in classifying unfamiliar and little-studied soils; in working with people generally unversed in soil classification; and in making agricultural predictions. In working with unfamiliar soils the Seventh Approximation provided quantitative definitions of most of the known soils of the world and also made provision for soils not included in the old system. The Seventh Approximation was understood by Spanish-speaking botanists and geologists who were relatively untrained in soils, as well as by trained soil scientists. It was found that agricultural predictions were possible at all levels of abstraction used. Making predictions is important in new areas because the great need is to find the locations of the better soils for both dryland and irrigation development. The Seventh Approximation proved to be an effective framework around which to organize the soils information in new areas. Because it does this well it helps sell the soil surveyor and his science.

Professor Higbee has presented in this volume a picture of the modern farmer different from that which comes down to us from traditional observers. It is different also from that held by most of those shaping today's government policy and by many agricultural economists. We believe it is one, nevertheless, which deserves careful consideration in various quarters -- and not least by farmers themselves. Today's farmer, Professor Higbee argues, is essentially a new man. His work and outlook have been shaped by conditions which did not exist in previous generations. A remnant still carries forward the old ways and traditions, and government policy is largely shaped with the idea of supporting and sustaining this group. But the benefits of such a policy actually go preponderantly to the new farmer, who is a capitalist frequently operating on a large scale, and more in tune with an urban than a rural society. - Foreword.