That is not a good basis upon which to build intensive cultivation or any other active policy. There being now no legal or patriotic call to intensive production, we are driven back to ask, "Does intensive production pay?" and the broad answer is that at a time of low prices it does not. There is no doubt that slowly and steadily education will gradually improve farming, and that farmers will learn to find out what parts of their business pay best 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