49

The data portrayed in the Figures centre about the marginal farm. This
is represented by the straight line drawn through zero farm surplus. The
marginal farm would represent that farm which, during the year of the study,
paid operating and depreciation expenses and $700 to the operator. It netted
no surplus for interest on investment, debt retirement or savings.

A marginal farm, then, would fall short of being a satisfactory farm unit
in at least two respects. First, a farmer with owned capital legitimately could
expect to earn a fair rate of interest on it. Second, a farmer with borrowed
capital would need a surplus with which to make the annual payments of
interest and principal. The latter farmer definitely would require additional
income if living expenditures were to be maintained at $700 per year. The
satisfactory farm, then, is somewhat larger than a marginal one.

The probable surplus also gives an indication of the debt-carrying capacity
of the farm. As an example, the operator of a farm which netted a surplus of
$100 would be able to make the annual payment necessary to amortize a loan
of $1,485 in 25 years at an interest rate of 45 per cent.

From the figures the marginal farms appear to be approximately as follows:

19 productive livestock units and 63 acres of cropland at Prince
George; 21 productive livestock units and 90 acres of cropland at
Vanderhoof; 29 productive livestock units and 135 acres of cropland at
Smithers; 37 productive livestock units and 135 acres of cropland at
Francois Lake.

It is necessary to make some reservations in interpreting the results shown.
The crop in the Smithers and Francois Lake districts was a partial failure in
the year of the study and it is improbable that it was completely offset by the
favourable price of farm products which prevailed. In all probability, then,
the farm unit in those districts that will return a positive farm surplus over a
period of years is somewhat smaller than is indicated by the data. At Prince
George and Vanderhoof the crop was more nearly normal. It may be, then,
that because of the favourable price situation prevailing at the time of the
study the minimum size that would ensure solvency on a long time basis would
be somewhat larger than was indicated by the data.

CONCLUSIONS

The study indicates that the rate of progress in agricultural development
in the area had been fairly slow. This serves to emphasize the difficulties which
face a settler who attempts to improve forested land. The fact, too, that farm
income per farm in the area was only one-half of the provincial average suggests
the desirability of a considerable adjustment in many farm businesses.

Two factors which have been instrumental in retarding agricultural
development in the area are worthy of consideration in the light of this study.
The first is the cost of bringing the forested land under cultivation. The second
is the handicap of comparatively high shipping costs from the area.

The first factor is particularly significant in view of the direct relationship
which appeared to exist between size of farm business and income. Under
typical production practices of the area livestock and improved acreage were
the important components which determined size of farm business. Improved
acreage, though, tended to be the limiting factor for land had been brought
under cultivation only at a fairly slow rate. By hand labour it would require
15 to 65 years to clear the 60 to 135 acres needed for the minimum satisfactory
farm unit. It was understandable, then, why more than one-half of the farms
were still below the minimum satisfactory size.