Investment on the rural scene

Abstract

This paper begins by distinguishing between investment from the individual and national viewpoints; purchase of existing assets is investment only for the individual whilst the creation of new assets is investment for both the individual and the nation. It discusses the reasons why investors buy rural properties; expectations and the wherewithal to act upon them. Expectations involve technical change and product prices or net incomes, both of which are commented upon, and the wherewithal will be dependent upon aggregate money supply and the buyer's own resources. Capital expenditure on farms on which we will be dependent for a large proportion of future increases in output if technical progress slows down, generally gives higher current returns than farm purchase. Nevertheless the level of capital expenditure on farms was too low in the years after 1967-68, and the discussion focuses on the tax deduction scheme designed to stimulate investment, together with an alternative which would give greater equity within the farming industry, and between farmers and the rest of the community.