No profit and loss account has been made up for these farms, for no profit has ever been made. The loss shown represents the difference between revenue and expenditure as per Treasury books. The whole expenditure on this farm including the butter and bacon factory comes from one Treasury item; consequently the figures here are combined. From the beginning of this financial year the factory has been separate from the farm.

11840. By the CHAIRMAN: Does the department intend to continue to run the butter factory at the Denmark State farm?—Yes.

11841. And in regard to the bacon factory, what is to be the policy?—I do not know whether the policy has been decided. It has, however, been decided that pigs should be purchased at that farm at 4d. per lb. live weight, provided they are in forward store condition.

11842. Did you have a look at the boiler on that farm that supplies the factory with steam, and observes its condition?—Not specially. These are details I leave to the manager, and he has made no recommendations on this point. Mr. Wicken went down to the farm last week, and he advised me this morning that he had certain recommendations to make.

11843. Is there anything else you would like to tell us in regard to these farms?—No, I think I have indicated the policy. It will be our aim to run these farms as economically as possible, having in view the main objective of supplying the best information possible to the settlers and to the State generally at the lowest possible cost.

11844. In regard to herd testing, will you give us your views on this matter?—In the first place I have determined that our own herds shall be put on a basis of test as soon as this can be done, and I should like to arrange for settlers' herds to be systematically tested throughout the State. I think this should be done in the first place for any man who has a pure bred herd. There are something like 21,000 milking cows in the State, and if we were to test all of these at an average cost of 5s. a test, it would run into a big sum.

11845. By Mr. CLARKSON: Do you not think for ordinary purposes that it would be better to foster amongst dairying people a system of testing for themselves?—If that could be done so much the better, but I think it would be difficult. On the north coast of New South Wales you will find that the dairying people there do not undertake it themselves. The object will be to foster the idea that some cows in dairying herds return the owner a profit, and some of them a distinct loss, and that by making these separate tests they can determine this. By testing the pure bred herds first therefore we should be able to show farmers the advantages to be gained, especially in regard to keeping the progeny from their best animals, and more especially in respect to the bulls used.

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WILLIAM CATTON GRASBY, F.L.S., Agricultural Editor Western Mail, affirmed and examined:

11846. By the CHAIRMAN: We sent you a list of questions which would be asked. They are very wide in their scope. The first question is as to what you consider are the prospects of citrus culture in this State, and also the prospects of its expansion?—Estimates in regard to costs, yield and profits from orchards are of little practical use. Success depends first on the selection of right conditions, second, on the man, his knowledge, industry, methods, and so forth. In regard to conditions, it may be laid down as a fixed rule that a high price for land is of very small importance in reducing profits. For example, the difference in interest at 6 per cent. between £10 and £100 an acre is 12s. against £6, or £5 8s. per acre, but the difference in yield may easily be 400 cases, and this at only 2s. 6d. is £50. It may be stated as a basic principle that it is arrant folly to plant fruit trees, and especially citrus trees, on any but land proved to be thoroughly suited for the purpose. Citrus region: say, from Carnarvon to Bunbury on local select areas of the coastal belt, also pockets with suitable water all through the Murchison; also in select gullies in the Darling Range. Soils: in every case it is rather the soil than the climate to which the greatest care should be given. There are two types of soils which observation, as well as experience elsewhere, shows that orange trees will thrive, prove profitable and reach the ripe old age to be expected from orange trees under good conditions. These are (a) Deep friable, well-drained, sandy loam alluvials, alongside the many rivers and brooks; (b) The deep, rich, friable, loamy slopes usually found near streams. I cannot recall a single exception. No man, except under some special condition, should plant a commercial orangery where the water table is within, say, 8 and preferably 10 feet, from the surface for more than a few days at a time. No orange orchard should be planted where artificial drainage is required. Provided these principles are followed, there is enormous scope for development of the citrus industry, but it will be at once realised that there is no large area of land in a single locality, all of which is suited for orange growing. In other words, and this is most important, the citrus industry will be confined to pockets and patches. You will have seen, in going round, that all the successful orange orchards are in more or less isolated patches. It will also be realised that, sooner or later, a very large proportion of the orange trees now in existence will have to be grubbed out, and in regard to hundreds of acres, the sooner that is done the better for the industry. For reasons stated, I will not give estimates of costs, but I will say that, unless the conditions are such that properly cared for trees may be expected to average 400 bushels per acre per year, after coming into full bearing at 10 or 12 years of age, a man is not wise to plant oranges. Any land chosen under condition to give less than that yield should not be planted because the other fellow on better land will raise fruit at less cost and undersell. The reason fruitgrowing is not paying is because trees, to a large extent, have been planted under wrong conditions, and to a certain extent they have not been looked after. If under proper management, they will not produce 400 bushels per acre, then I think orange growing had better be left alone. There is plenty of land on which this can be guaranteed, and on that basis of yield oranges can be grown at a profit at an average price of 2s. or 2s. 6d. per bushel net. And at this price the consumption