AGRICULTURAL MARKETING BOARDS.

HC Deb 09 April 1934 vol 288 cc16-87

3.11 p.m.

Sir HENRY CAUTLEY

I beg to move, to leave out from "That" to the end of the Question, and to add instead thereof: while appreciating the great benefits conferred on agriculture by the establishment of marketing boards, this House is of opinion that every effort should be made to speedily remove all difficulties and inequalities that have been disclosed in their working, to encourage more economy, and that steps should be taken to set up marketing boards in such other agricultural products as may be necessary to establish a complete structure of the reorganisation of agriculture, and that the policy of such boards, in the limitation of numbers of registered producers and of the quantity of the products that such producers may produce, should be clearly defined. At the outset I desire to express my extreme regret at the absence of the Minister of Agriculture. I need hardly say that I much regret the cause of his absence, and am glad to think that he is going on well towards recovery. Since my Amendment was put on the Paper, the milk price-fixing provisions have been brought into operation, and the result has been to cause considerable consternation among large numbers of milk producers, some of whom even go so far as to say that the whole success of the Milk Marketing Board is being jeopardised. Therefore, although I realise the ability of the Ministers who, I understand, are going to reply on this question, I cannot but feel that we shall very much miss the Minister of Agriculture, who has to so large an extent made the Milk Marketing Board his own care. Whether this method of treating agriculture in separate compartments is a final method of dealing with the agricultural industry, time alone will show, but I cannot but feel that the action of the present Government in dealing with agriculture by means of the Wheat Act and the Beet Sugar Subsidy Act, and by requiring the carrying out of the regulation of various branches of the industry by marketing boards, has given to the agricultural industry and to the farmers a new hope and a new view for the future, and has prevented the bankruptcy of many branches of agriculture; and, if these schemes can be worked out to a satisfactory conclusion, as I believe they can, those in the agricultural industry will one and all thank the Government in general and the Minister of Agriculture in particular.

The same causes that have brought about in industry import duties, quotas and prohibition or limitation of imports, have operated in agriculture, but for a longer period and with greater vehemence. For years this country has received the surplus agricultural products of the whole world without let or hindrance, with the result that, in the case of many branches of agriculture, it has become hopelessly impossible to carry them on, by reason of the cost of production exceeding the selling price. The Wheat Act, which has been highly successful, and the Beet Sugar Subsidy Act, which is now being investigated with a view to making it less wasteful in expenditure and more efficient, have saved those departments of agriculture. That statement is not exaggerated when the House remembers that last year, for the first time in a good many years, the number of workers in the agricultural industry increased by something like 17,000. The other branches of agriculture which have been dealt with by marketing boards are those of milk, bacon, potatoes and hops, and one or two others are foreshadowed; and it is to them that I intend to draw particular attention.

I would premise that the marketing boards, though different in form, are really the same in principle. They set out to secure for the public a better quality of produce and better regulated supplies, and to secure for the producer a better price; and, by the better regulation of the industry and a lessening of the waste that takes place in the middleman's margin, they think that those advantages can be secured in great measure without any appreciable extra cost to the consumer. That is the object of all marketing boards. But the main provision of them all, and the only one which makes them acceptable to the industry, is that, in return for the control that is so exercised, they secure the control and limitation of imports of those products which come within the purview of the marketing board. If it were not for that control, either by import duties or by the limitation or prohibition of imports, the marketing boards would be entirely unacceptable to the producers, and would really be, to my mind, absolutely ineffective.

In calling attention to this question, I propose, while welcoming these boards, recognising their necessity and hoping for their continuance and perfection, to point out the difficulties and inequalities that have hitherto appeared, and the objections that have arisen in the minds of such farmers as I have come across, and to give the Minister an opportunity of speaking upon them. The first difficulty which arises, and which I do not think has had sufficient attention paid to it by the Ministry, is that agriculture has been worked on a very narrow basis of profits and costs, and, when one looks at the salaries that are paid and the number of officials employed, when one considers that, to take the milk industry alone, you have something like 78,000 contractors whose average production is only 25 gallons a day and that you have 50,000 retailers and distributors, and when one thinks of the very small sum that is paid to them by the Milk Marketing Board, one looks aghast at the costs that have to be provided and doubts whether it is possible to supply food necessities cheaply.

I propose to call attention to the schemes that are in operation. The Milk Marketing Board was brought about by absolute necessity. The production of milk is greater than the quantity that can be sold as milk for consumption in its natural state, and the balance has to go for manufacturing purposes. It has to be used for making butter and cheese, milk powders, condensed milk, and even condensed skimmed milk. The quantities have been steadily increasing, and it has been found that, owing to the unlimited importation of butter and cheese from foreign countries, and particularly from our Dominions, the value of milk for manufacturing purposes has steadily decreased to about 3¾d. a gallon. From New Zealand alone immense quantities of butter have been sent. It has been sold at 9d. a lb., 2d. of which goes in shipping charges. That price is only rendered possible by the subsidy paid by the New Zealand Government itself. That has been going on without let or hindrance, and it has absolutely ruined the position of the home producer. I attended a meeting a year ago where we had six managing directors of the great distributing combine which has been allowed to grow up, and they told us that they were stocked out with butter and milk products for the year and, unless something was done to limit foreign, Colonial and Dominion imports, they could offer no price at all to the milk producer, and the whole industry would be in chaos. It is for that reason that the Government, very rightly, set up the milk scheme. I urge among all the farmers that I know how impossible it is to go back to that position of affairs. The only hope for keeping the industry alive and at all prosperous is to maintain and to support the milk scheme. I hope the Minister will tell us how this is to be done. The scheme works in this way. First of all, the Minister has taken some slight steps to try and regulate these imports of milk products, but without success. His hands are tied by the Ottawa Agreements till a year hence, and he has some difficulty in accomplishing this result, although I would ask him even now to see whether something cannot be done to accomplish it.

Let us see what is the framework of the milk scheme. Its intention is to secure for all producers a level price. The country is divided up into 12 areas. You may take the total production of milk in the winter months at about 50,000,000 gallons a month. Of that, 16 or 17 per cent. goes for manufacturing purposes. In the summer months the production goes up to 70,000,000 gallons or a little more, and it is estimated that the percentage used for manufacturing is something like 40, and this is the problem that has to be dealt with. Here is a hardship from which in my county the producer suffers very substantially. The first period of price-fixing came in the winter months from October to April. Let us take a comparison between Sussex and Devonshire. The surplus, milk that we have to sell for manufacturing purposes in the winter is about 6 per cent. In the West Country it is about 32 per cent. The producer in the West Country formerly sold what milk he could as liquid milk and the balance as manufacturing milk, and he had to take the best price he could get. Now under the scheme he is paid out of a pool, and he receives a very much larger cash price than he did before.

Lieut.-Colonel ACLAND-TROYTE

Is my hon. and learned Friend sure that he receives more than he did before? My constituents all say that they have received less.

Sir H. CAUTLEY

I cannot state exactly what the total price is, but he is receiving very much more proportionately, because he sold a very large percentage for manufacturing purposes, for which he got from 3¾d. to 5d. a gallon, and during last winter he was, at any rate, getting about 1s. 2d. The pool is provided by charging a sum which amounts to about 1¾d., or possibly a little more, and a farthing of that goes towards the cost of running the scheme. The 1¾d. is taken from everybody. It forms the pool and goes towards paying the constituents of my hon. and gallant Friend for the full price of his milk, whereas the farmers in my county of Sussex for whom I speak have the 1¾d. taken from them and have a very small amount of surplus manufacturing milk to make good. That is a grievance which is felt very much by the Sussex farmers, who think that the scheme ought to be so varied as to be made a little more equitable.

I now come to what is an unanswerable grievance among all farmers. Until the marketing scheme came into operation the retailer, when he made his contracts, bought as much milk as he required at the full price of the day and himself ran the risk of having a surplus which he had to manufacture into cheese or butter and other products. He bore that risk himself, and it was a very substantial risk. There was also the risk of undercutting in the market on the retail sales. That again was a very considerable risk which the distributor had to carry. Under the scheme the retailer is guaranteed against both these risks. He is guaranteed against the risk of having to buy manufacturing milk at liquid milk prices in this way, that, although he pays the farmer the full regional price, less the deduction which I have mentioned, he is entitled to come on to the pool for every gallon of milk which he has to sell or has sold, or which he uses for manufacturing purposes and obtain the difference in price between that which he has paid and the marketing price of manufacturing milk which is fixed by the contract or by the board. He is further saved from the risk of undercutting in the retail trade. There is no wonder or surprise therefore that the Commission reported that part of the margin of the distributor should go at once to help the price paid to the producer. One of the complaints, so far as this scheme has been in operation, is that no attempt has been made to take some of this margin from the distributor and add it to the producer's price. The distributor has scored all along the line at the expense of the producer.

I come to the last episode of the Milk Scheme which has occurred in the last fortnight or three weeks. The summer price had to be fixed. There was a meeting and a further meeting between the board and the distributors. They did not agree. I am informed—and I think that my information is accurate—that the distributors offered 1s. ½d. for the summer milk. The board said that the minimum ought to be 1s. 2d. Under the terms of the scheme the fixing of the price had therefore to go before the three appointed persons to be settled by arbitration. Would you believe it, the arbitrators have awarded a price less than that which the distributors themselves offered. They have awarded a price of 1s. Every item, as far as I can make out, has been awarded in favour of the distributors and against the farmers. The House must remember that in regard to this large block of small farmers who farm from 50 to 100 acres of land and, on an average, deal with the distribution of about 25 gallons of milk a day, their estimated earnings amount only to a labourer's wage, plus the cost of his house, whereas the retail trade to-day is carried on at a rate of gross profit amounting to 40 per cent., an almost unknown profit in retail trade. Further, when I say that the average price for the goodwill of the vendor's or retailer's business runs to about £12 or £15 per gallon of milk sold, hon. Members will understand that the distributors are making a very good thing out of it. One has only to look at the report of the combine—the United Dairies—who are paying regularly 15 per cent. on some millions of capital mostly watered by large payments for goodwill of acquired retail businesses and putting large sums to reserve. And they get this result from the arbitrators.

I have some difficulty in speaking about the arbitrators, because I do not know who they are. I know that one is a King's Counsel, and another an accountant, but I do not know who or what the third arbitrator is. I think that they have no practical knowledge of the small farmer or milk producer. I do not know—and I hope that the First Commissioner of Works will tell me—how the arbitration was carried out, but I do know, because I have it here, that the Milk Marketing Board put in a written case before the arbitrators. To my mind, it is an unanswerable case. I do not know what the distributors did, or how the arbitration was carried out. I read in the "Times" newspaper that at a meeting of all the Milk Recording Societies it was alleged that the arbitrators received evidence from the distributors, and did not receive any evidence from the producers. If that was so—I can hardly believe it—I do not see how their decision can stand. I shall be very glad if the right hon. Gentleman can tell me how the arbitration took place, whether it was decided in secret, whether any evidence was heard, and whether any argument was made, or how they came to fix a price which affects 78,000 contractors and 50,000 milk producers, and is so disastrous to them. They are bound by this decision, and it has created a state of consternation. It is ruining them. The price has been fixed at 1s. per gallon from which about 3d. or 4d. has to be deducted for the expenses of the scheme and making up to the regional price the price of manufactured milk owing to the much larger quantity of this milk to be dealt with; also 2½d. for the cost of collection, railway carriage and transport risks. It is estimated that there will be left not more than about 6½d. Per gallon for the farmer for his summer milk. That is an impossible price at which to sell his milk if he is to live.

I understand that these men have been appointed for 12 months. Is there any way of getting rid of them? If you go to arbitration and one side offers 1s. 0½d. and the other side asks 1s. 2d. and the arbitrator gives less than the amount offered, I should say that as a matter of business that arbitrator ought to be got rid of. I cannot understand how the decision was arrived at, and that is why I ask for information. One thing I do understand is that the farmers will not and cannot submit to have their next winter price fixed by these three gentlemen, because they have lost all confidence in them. If they are to continue, the whole milk scheme will be jeopardised.

There were others matters that I should have liked to speak about, but I do not think it is desirable to go into them now. I should, however, like to say something about the question of condensed milk and so-called cream which is artificial and made in this country. Condensed skimmed milk which is imported is useless. Can we not limit the importation of condensed milk either by duty or quota or in some other way, or can we not do something to deal with the question of artificial cream? Cream is more or less of a luxury. These so-called creams do not contain the slightest element of cream, and yet we allow them to be sold to the general public, and they form the basis of the ices sold in the streets and of the cream used by confectioners. If we could stop the importation of this so-called cream we could use a great deal of our surplus milk. It is a most pressing and urgent question.

I should like to say a few words about the bacon marketing scheme. That scheme, on the whole, has been a success. Large quantities of bacon are now being made in England and Englishmen are being used in making it. [Laughter.] Hon. Members laugh. If that statement is not right, I will say that a large number of men are now engaged in making bacon. There is great scope for development of the bacon marketing scheme. I believe there is some difficulty in getting the quality uniform, but that is only a matter of time. One of the difficulties that arose under the scheme was that, owing to the control of imports and the large number of contracts made for supplying bacon pigs, the market improved very much for the pork trade and pigs were kept for pork, with the result that when the next contract time arrived there was very great difficulty in persuading the farmer to go into the bacon scheme. He said, "What do I want with the bacon scheme? I have done very well with pork, and I will go on selling pork." He had not the sense to see that the pork market had been improved by reason of the operation of the marketing scheme. It has been suggested that what is necessary is a separate marketing board for pork. Members of the Opposition have made a cry that the result of the scheme is to raise the price of bacon. The price has never been as high as it was when they were in office in 1925. The price to-day has gone down 2d. per pound. Therefore there is not much fear of bacon being unduly costly to the consumer.

I should like to raise one point of principle. A board has been formed for dealing with potatoes. Under the potato scheme no one in the future will be able to sell more than an acre of potatoes except under the scheme. The persons who are entitled to be registered under the scheme are the growers of potatoes in the last year, and the amount they are allowed to grow is based on the amount of potatoes they grew in the last year. If they object to that arrangement, they can claim to be registered on the average of the three preceding years, 1931, 1932 and 1933. I do not object to that provision so much, but a further provision has been inserted that if anybody wants to grow an additional quantity of potatoes or to come under the scheme and grow potatoes, he is to be fined £5 an acre.

I should also like to call attention to a similar question of principle in connection with the hops scheme. The producers of hops have the benefit of a large duty as well as the hops scheme. The hops scheme has been very successful. It has increased the price of hops and hop growers are doing very well, but now, under the hops scheme, the existing registered producers are claiming the right to exclude anybody else from growing hops and to keep the hop trade a close corporation. It will then have become a monopoly for certain vested interests. If that policy is to be pursued, it will be the end of the marketing scheme; it will be the knock-out. In regard to this scheme and any future schemes, the Government must declare their policy. There must, of course, be some limitation on the amount, but, at the same time, it must be open to anybody who wishes to grow any particular agricultural produce to come under the scheme. They must not be shut out; there must not be a vested interest created for a few. There is not the same difficulty in the wheat scheme with its subsidy. Anybody can come in and grow wheat and get the subsidy. The more growers there are the more the subsidy diminishes; the more it balances itself.

I welcome the Minister's determination to make these schemes a success, and I welcome, particularly in regard to the milk scheme, his suggestion that what he is doing is to give a subsidy towards the milk-producing part, to raise the price to 5d. or 6d. That would be of considerable value, but at the same time I do not think he is attacking the problem on the right lines. I think he should approach it from the point of view of doing something to raise the price of fat cattle. The reason why there has been such an accretion to the numbers of producers of milk is that arable farmers have suffered very much lately and have been turning their attention from arable farming to the production of milk. They have given up rearing cattle, because they have lost too much money. Why cannot the Minister pay some attention to this side of the problem? According to the lowest figure I have heard mentioned, farmers are losing £3 per head on the cattle that they sell. The Minister might do something to help this side of agriculture. In spite of all the steps he has taken—he can deal with this question under the Ottawa Agreements—cattle are still coming into this country in large numbers; they are much larger this year than a year ago, and the price of cattle has been kept below the cost of production. The result is that cattle are not being reared, and the farms themselves are suffering from the lack of manure; the land is being impoverished.

If the Minister of Agriculture would do something to put arable farming right, to make the industry profitable, he would not only save arable farming in this country, but at the same time would be doing a great deal to put the milk scheme on its feet; he would be taking away the overplus of milk, and would thus kill two birds with one stone. I wish the Minister of Agriculture had been present this afternoon, as I should like to commend him for the good work he is doing. I should regret if opposition from milk farmers were to arise against the scheme and spoil what I think is a good plan, but I would earnestly beg the right hon. Gentleman, with a view to putting this matter right, to deal first with the question of arbitration, and then to do something to put the beef farmer and meat producer right, because by that means he would be doing something to save the milk scheme as well.

3.50 p.m.

Lieut.-Colonel ACLAND-TROYTE

I beg to second the Amendment.

The hon. and learned Member for East Grinstead (Sir H. Cautley) has suggested that farmers in Devon are doing very well, while farmers in the south-east of England are doing badly. One of the peculiar things about the milk marketing scheme is that one part of the country thinks the other part is doing very well. We in Devon think that the south-east of England is doing very well. I am old-fashioned enough to dislike all these marketing schemes, because I dislike compulsion and control, but I am convinced that they are necessary under modern conditions. Without them, we cannot expect the consumers to accept the restrictions on imports which are necessary. I shall have to criticise the marketing schemes, but I hope it will not be thought that I am unfriendly. I do not want to see them abandoned. I want to see them amended, so that they may achieve the purpose for which they were started. I want to see the mistakes made in the first schemes put right.

Obviously, the intention of these marketing schemes is to provide a fair price for the producer and to ensure that the consumer pays only a reasonable price for the produce; if possible, that there should be no increase in the price. The pig marketing scheme has been successful to a large extent. There has been an increase in the price received by the producer, and the price paid by the consumer has not been increased to any great extent. It is true that the price of bacon has gone up, but it is now no larger than it was three years ago. Everyone will agree that the producer is entitled to get fair remuneration for his capital, his work, and the risks he takes in the business. I do not think that consumers should grumble at the small increase in the price of bacon.

But if one can say that the pig scheme has been successful it cannot be said that the milk scheme has been a success. In some cases the result has been that producers are getting less and consumers have to pay more, exactly the opposite of what the scheme was designed to do. The hon. and learned Member says that in Devonshire we have benefited by the scheme. I attended a meeting on Friday last at a place where there is a factory, and in my speech I said that if any farmer was getting any benefit from the milk scheme I hoped he would let me know. So far I have not had one single reply. I dare say there are districts where some of the farmers are benefiting by the scheme, but so far I have not been able to find them. There is no doubt that the seller of liquid milk is suffering heavily, and there is no doubt that the production of high grade milk is being affected. The prices fixed by the arbitrators are absolutely ruinous. There is no doubt about that, and there is a grave risk, unless an alteration is made immediately, that the scheme will be abandoned. I am certain that unless something is done at once there will be a demand by farmers for the scheme to be abandoned. You can go into Exeter any Friday and get 500 signatures at any time for the abandonment of the scheme. Unless some amendment is made that is what will happen before very long.

I wonder if the seriousness of the position is fully realised. The producer of liquid milk is now getting a reduction of more than 50 per cent. compared with this time last year. The cost of production and delivery of liquid milk is about 10½d. The net amount received after deduction is about 6½d. Therefore, the producer of liquid milk is losing at least 3d. a gallon on every gallon of milk he produces, which makes it obviously impossible for a man to carry on. I have examined the 1932 balance sheet of a man who farms 149 acres with 40 cows, producing Grade A milk. The accounts were certified by a chartered accountant. In 1932, not a specially good year, the chartered accountant informed my friend that, although he had been through a very large number of farm accounts, he was the first man who had shown a profit in that year. His capital was approximately £2,000. The profit which he made in 1932 was £239 18s. 3d., allowing nothing for his own labour, and the whole profit was not made out of milk, for he also sold other things such as apples. The average price of milk that year was 1s. 3d. The average price of milk from October, 1933, to October, 1934, will be 1s. 1½d. without any deductions. During February the average deductions per week were £5 1s., that is to say, for the year they will be somewhere about £260, while his profit in 1932, with the higher price of milk, was £239 18s. 3d. Where is he going to find the money? This man, as I say, produces high grade milk, and spends £1 per week on washing his cows and supplying washing materials for the men before milking. It means that he will have to produce a lower grade milk, and, in any case, it will be impossible for him to carry on with all the economy he can make, unless there is some improvement in the price.

There is no doubt that, as a result of the arbitration, a great many men are being dismissed, and more will be dismissed in the future. It appears to be clear that the distributors were too clever for the Milk Board. They seem to have been able to get away with the cash every time. The producer loses, and the consumer loses, but the retailer takes more and more, and gets his profit all the same. We all hoped that by this scheme the farmers would be in a better position to bargain. We thought they might have been in a better position to put forward their case if organised, but, unfortunately, it has not been so. We may be told, and probably will be told, that if there had been no scheme, the position would be worse. That may or may not be true. There is no means of proving it, and I do not think anyone can prove or disprove it. But whether true or not it is not much comfort for the poor man who is losing money on every gallon of milk he sells, and he sees his capital dwindling day by day.

It is said that the problem is a surplus milk problem. There is no such problem in this country. Every pint of milk not needed for liquid requirements could be used up for manufacture. The reason why there is any sign of a surplus in this country is because we allow foreign countries to send their surplus milk here made up into milk products. The Minister has power to put restrictions on this milk. He may not be able to touch the Empire under the Ottawa Agreement, but he can put restrictions upon and tax milk products coming from foreign countries. Why does he not do it? It may be of interest to compare the margin with which retailers were satisfied in past years with the margin they get now, and the amount which the producer gets now. In 1914—I have not had a chance of checking these figures, but I give them from a reliable source—the producer got 11d. and the retailer's margin was 5d., with which in those days he was satisfied. In 1918, the producer got 3s. and the retailer 8d. In 1934, if the producer is very lucky indeed, he may possibly get 8d. In the vast majority of cases the producers of liquid milk will get 7d. or 6½d., and the retailer's margin is now 10d. How is it possible to justify that, considering with what the retailer was satisfied in past years? Even in the case put before the arbitrators, the producer of 175 gallons a week in winter made a profit of only £1 1s. 6d., and in order to get that amount, he worked at least 70 hours a week, and probably more. The retailer, on the other hand, got a profit of £4 14s. 1d. retailing the same quantity of milk. That seems impossible to justify.

That is not the worst of it. The only quarrel I have with the Milk Board is that they have not put forward a strong enough case. They could have put forward a much stronger case than they did before the arbitrators. They made no allowance for overtime, which has to be paid on Saturdays and Sundays, and is a very serious item on many of these small farms. They allowed nothing for horse labour, or for loss of cattle, and the amount allowed for depreciation is, I am told by practical men, a great deal too small. Practical men tell me that the amount allowed by the Milk Board for depreciation ought to be doubled. It will, therefore, be seen that their case was not put forward as strongly as it might have been. If the price is allowed to continue at its present level during the whole summer, a great many men will be turned out of work, a great many farmers will be ruined, and no doubt will lose a tremendous amount of capital. Many of them are smallholders under the county councils, and there is nothing facing them but bankruptcy. It is absolutely essential that something should be done to improve their position. An increase of 1d. or 2d. in the price of milk might make things better for the time, but we must have a bigger price if the milk scheme is to be a success.

There is another point with which I will deal briefly, because there will probably be a chance of dealing with it at a future date. I refer to farmhouse butter. Does the Minister of Agriculture wish to kill completely the making of farmhouse butter? It is absolutely impossible for the makers of farmhouse butter to compete with the factory, which is getting milk for the butter at 3¼d. a gallon. This is an important matter in my county. The Minister recognises that it is impossible for the cheese-maker to compete. When he can help cheese with a special provision, why should he not also help farmhouse butter?

In conclusion, there are two questions that I want to ask, but first I want to make it clear that I am making no accusation whatever. It must, however, be remembered that when an award, which appears to be absolutely unjustifiable and unfair, like this award, is made by the arbitrator, there are bound to be rumours and suspicions put about. I want to ask these two questions, and I very much hope that whoever replies for the Government will give satisfactory answers. I think he will. It is most important that rumours should be denied. My first question is, whether the arbitrators on appointment, or at any other time, give a pledge that they will deal with the matter fairly to the best of their ability; and, secondly, whether any of the arbitrators are in any way interested in any distributing firm?

4.11 p.m.

Sir FRANCIS ACLAND

The House will agree, I think, that the hon. and learned Member for East Grinstead (Sir H. Cautley) has done a considerable service in bringing forward this question. I join in the regret, as everyone else must do, at the absence of the Minister, not only on account of its cause, but because, having a Motion brought forward by the hon. and learned Member without one of those breezy and illuminating replies we get from the Minister, is a little like having the Ghost without Hamlet. The hon. and learned Member's Amendment is a very judicious mixture. He praises the existing milk schemes with faint damns in the Amendment, but not so faint in his speech, and expresses the hope that the whole of the agricultural industry will be covered by similar schemes. I rather wish he could have been a little more specific in his Amendment, although he was specific enough in his speech, as to what is wrong with the schemes and in suggesting remedies, but, personally, the more I try to study and follow these matters, the more doubtful I am whether it is right, as he would urge, to regiment, direct and control the whole complex industry of agriculture under schemes of this kind, and I am certain that no further progress ought to be made with schemes until certain difficulties which have arisen are boldly faced and, as far as possible, dealt with.

The schemes, of course, that are most widely known, and about which alone I want to say something, are the milk and bacon schemes, and there can be no doubt that they have had a pretty bad send off from the point of view of the consumer, at any rate. If there could be a referendum to the whole country on these schemes now, it is fairly certain that they would be overwhelmingly rejected, and if the milk scheme, with regard to which my hon. and gallant relative has not spoken a word which was too strong or not wholly justified by the figures he gave, were referred to those who were chiefly to benefit from it, namely, the producers, I think it would be very heavily defeated indeed, and if, as the hon. and learned Member the Mover said, things are very much better in Devon than they are in Sussex, I can only wonder what they must be in Sussex, because there are very few champions of the milk scheme certainly in Devon. What has gone wrong? Many things seem not to have been done too well, but I will confine myself to one. That is, that the interests of consumers have not been brought in in a sufficiently definite way and at an early enough stage. An interesting thing which has happened during the last few weeks illustrates that point with regard to milk. There was distributed to the Press about a fortnight ago a Report of the Consumers' Council for England, on retail milk prices in England and Wales. It is not a Parliamentary Paper, but one can obtain copies from the Ministry of Agriculture. That report in measured and moderate language condemns the system under which the milk scheme was started by allowing retailers to fix the prevailing retail prices in their districts, and putting under penalties anyone else who sells at less than that price. The report recommends instead that the board: in prescribing minimum margins should base them on figures low enough to give not more than a reasonable return to the distributors in that area, working under the most economical conditions for giving the least expensive service consistent with efficiency. They agree with the criticisms we have heard that the distributor has been getting very much too good a thing out of it, and that the scheme ought not to have been started in the way it was started. One would have thought that a condition as to retailers' margins of that kind—that they ought not to be more than would give a reasonable profit to those who were working under the most economical conditions—would have been such sheer common sense and its absence so certain to start the scheme off wrongly and make it unpopular, that the initial mistake would not have been made. But undoubtedly the Milk Board started in a hurry. The fact that that village Hampden, Mr. Hollow, who came, I expect, from Cornwall, successfully appealed against the fine which was imposed upon him, testifies to the hurried and inverted way in which things were started off. But the important thing, and this is the main practical point that I want to make, is to avoid the same sort of mistakes in future. I am bold enough to suggest that that can be done, but that it needs legislation to do it.

As the Minister of Agriculture has already got certain Bills on the stocks this Session, it may be difficult for him to add to the number. But my point is this: Under present legislation—it is the Act of 1931 which is in questnon and not that of 1933—the Consumers' Council can do nothing until it reports to the Minister on the effect of any scheme which he has approved. It has to wait for some months during the working of a scheme before it can report at all. It seems to me that that is too late. As was the case in many districts with regard to milk, if a scheme has the result of putting up prices, it becomes unpopular and harm is done. Of course, the scheme can be afterwards corrected, as the milk scheme has been. But there it is; harm has already been done, and it is very difficult to undo. Village people have found fresh milk out of their reach in many parts of the country, and they have taken to Swiss tinned milk and to Horlick's Malted Milk, according to a report which has reached me, and it will not be easy to bring them back to the consumption of fresh milk. I doubt whether the fresh scheme will do it, but we shall see. It would be well worth while for the Government to extend the scheme, which we are to discuss in a few days, with regard to the provision of milk for school children, and to give that supply free universally.

My point is that the Consumers' Council should be given a say in these schemes while the schemes are being worked out, and the Minister should not approve of any scheme or of any amendment of it until the Consumers' Council has certified to him that in its opinion the consumers' interests will be reasonably safeguarded. Once these schemes become unpopular it is extraordinarily difficult to get them back to popularity. I am certain that if that could have been done in the case of milk, and that if the scheme had been started without the justified complaints we have heard to-day as to the distributors having it all their own way, much good would have been done. I ask for that suggestion to be considered. I would like the Government to say to-day whether or not they will consider it. I do not, of course, want an answer as to whether they will amend legislation in order to give the representatives of the consumers a greater say and an earlier say in these matters, but I do raise the very practical point, as to prices being settled by distributors in each district. It was a bad mistake, and it can only be corrected in future by bringing in representatives of the consumers before a mistake is made.

Unless something of the sort is done, as commodities are more and more brought under these schemes, we shall see that prices will go up, and the less well-off consumers will cease to buy the commodities. The consumers will find something else. Then there will be a demand, such as we have had to-day, that that other particular thing to which the consumers are turning shall in someway be excluded or that a higher duty shall be put on it. The Government, in order to safeguard the interests of that particular section of the farming industry, will in some way or other give way to that complaint about the importation of the thing which has become more popular, and the consumer will be driven to seek for something else which is still within his means. I am thinking of the millions of people who are either unemployed or are earning very low wages, and who have to think about every farthing that they spend. To them these schemes are anathema. How can we avoid their doing what they will do, namely, when a general election comes, making it certain that all these schemes will be brought to an end, in which case the state of agriculture will be very much worse than if no scheme had been started? The Government ought to be warned by that Report of the Consumers' Council with regard to milk and ought to see to it that the consumers' interest is thought about earlier.

Other points with regard to these schemes are very tempting. I disagree with the statement of the hon. and learned Member for East Grinstead about the necessity of duties being imposed before these schemes are initiated. There is already a tendency in all these schemes for duties to be imposed first and for reorganisation and improvement, of the supply in this country to come along a good deal later, if at all. The fact that the farmers are quite content with the restrictions on bacon and are not hurrying into the new bacon contracts, which would mean that they would have to improve the quality of their bacon, is an instance. But although I disagree with my hon. and learned Friend about that, I agree very much with what he said, and said so well, on the absolute impossibility of maintaining schemes on the basis of a close preserve of particular sets of producers, whereby farmers and landowners were to have vested interests in hops and potatoes, and in other things it may be. That will be an intolerable position to the general public and cannot be maintained. No wonder that an amended hops scheme is suggested. I hope it will be properly managed so as to have regard to the sort of criticism we have heard.

I come now to the main point of the Amendment, the desire that marketing schemes should be made to cover the whole range of agricultural production. I expect we shall get weighty support for that idea from the Government benches. It makes one marvel how quickly and completely Conservatives can be converted to Socialism in its most extreme form. I am bound to confess that once a beginning is made it is extraordinarily difficult to stop. Facilis descensus averni. I doubt whether the bacon scheme, although it has been said that it is going quite well—as to that I am not so sure—can ever be properly run without extending the control to pigs. I think that Sir William Haldane was right on that matter in his minority report of the Pig Reorganisation Commission. We shall see. What a prospect the control of everything opens up, and how carefully we ought to look round and consider before we embrace the policy presented to us by this Amendment. I cannot help think of livestock. We are to have a report on the livestock industry, I suppose, in the next fortnight. It must, of course, revolutionise the structure of the industry, and do away with all the small fat stock markets up and down the country. I do not want to deal with that now, but no doubt on that side it will entirely destroy the employment of a great many people.

My point is that as long as we are bound by the Ottawa Agreements, if we are to expect the Dominions who accept a quota a definite limitation of their supplies, we shall have in this country to accept a similar quota. We cannot expect them to agree that they should be limited when we are not under control as to what we produce. It may be that even when we are free from these agreements there will be a national quota and national control in the endeavour to hold up prices. That is almost implicit in these schemes. The enemy nowadays seems to be production, and the control of production seems to be the specific. The way that will affect the individual farmer is what I confess really frightens me. A national quota means, of course, fixing the quantities of livestock to be produced for each country, each county, each district, and each farm. That is what is going to prove the real difficulty.

Everybody who knows farmers must be aware that the farmer does not like the present method. He does not like driving his stock to market and having to choose between taking an impossibly low price and driving the stock back home again, with the prospect that when he brings it to market on a future occasion he may find that the price is lower still. But anyone who knows the farmer as an individual and is acquainted with his daily life and conversation would agree that he will not be any happier when he is told by the local agent of some scheme that he is to be limited to sending in a certain number of stock and that the date on which he is to send them in is to be fixed for him. But that sort of thing will be necessary in order to level out supplies under a national quota. My point is that a farm is not a factory and that is where these schemes will break down.

The most economic method of production on one farm may differ entirely from that on the next because of variations of soil, of aspect, and so forth. A few weeks' drought or a few weeks' rain may change the date on which a farmer wants to dispose of one sort of stock or another. There are endless complications simply because agriculture is not an exact science but an art dependent on constant changes of weather and things of that kind. To control it, and to tell every farmer exactly what stock he is to be allowed to send in to market and when he is to send it, will be a terribly difficult matter to organise and arrange. I doubt whether there are men in the country capable or organising a system of that kind so that it will not work unjustly in practice.

Of course, I know the arguments. I know the terrible depression. Every landowner knows that well enough. This calamitous decision with regard to milk is going to make the position of people like my hon. and gallant Friend and myself who are landowners in Devonshire even more difficult than it is at present, which is saying a good deal. I know how in times of depression people think that any change is sure to be a change for the better, but I ask the Government to consider carefully what they are in for and what the industry is in for before they adopt the suggestion in the Amendment to go full speed ahead in putting all branches of agriculture under schemes of this kind.

One further word about the milk position. I agree with what has been said as to the disastrous effect of the recent milk award. There is a terribly strong feeling about it. Even the man who has hitherto sold large quantities of his milk as fresh milk will be lucky if he gets two-thirds of the cost of production. The thing to do is to look ahead and to see if anything can be done with regard to the future. Unfortunately, the future is rather remote because apparently this award holds for a year. [HON. MEMBERS: "Six months."] So much the better.

Sir H. CAUTLEY

The arbitrators hold for a year.

Sir F. ACLAND

The conclusion to which one comes after studying this question is that the National Farmers' Union was rather short-sighted in regard to their permanent interests in not accepting that part of the recommendations of the Reorganisation Committee which recommended a sort of superstructure on top of the scheme as at present set up, a superior committee or body on which both farmers and distributors should be represented and which would be the main body concerned with fixing prices. I think the farmers naturally were afraid of being associated too closely with United Dairies and the very able people at the head of that extraordinarily able organisation. But I think events have shown that it does not work to bring in three arbitrators from outside. Of course, they have done their work fairly and have acted according to what they thought was right, but it has not worked fairly—certainly not to the producers. It would be better to have a superior body on which all interests would be represented as the committee originally recommended. I hope that that change will be made, and that the scheme will be put into operation in the form originally proposed. I conclude by reiterating the practical proposal that the consumers should be brought in, in some specific and organic way, and I again thank the hon. and learned Member for East Grinstead for having brought up this subject in his Amendment.

4.37 p.m.

The FIRST COMMISSIONER of WORKS (Mr. Ormsby-Gore)

I intervene at this early stage in the Debate to say, first of all, how sorry I am that my right hon. Friend the Minister of Agriculture has not been able to be here and to listen to this discussion on a subject in which he takes the greatest personal interest and in regard to which he has shown so much personal energy and enthusiasm. The Under-Secretary of State for Scotland will reply later on to any further points which may be made in the course of the Debate, but I think there are one or two remarks which I might usefully make at this point, on behalf of my right hon. Friend the Minister. I realise how inadequate I am to replace him at the last moment, but such information as I have been able to get, on the points so far raised, I would like to place at the disposal of the House, and I shall endeavour to answer as far as I can the various questions which have been put by hon. Members.

My hon. and gallant Friend the Member for Tiverton (Lieut.-Colonel Acland-Troyte) and the right hon. Gentleman the Member for North Cornwall (Sir F. Acland) both spoke of what would happen if you had either a referendum of consumers or a re-poll of producers in regard to these schemes at this moment. As I listened to them, the query passed through my mind: "What would happen to the First Commissioner of Works if there was a poll of the people of London as to the display of tulips in St. James's Park at this moment?" I think they would vote at the moment that it was a very poor display, but, if they waited a little longer, I think they might agree that it was a very good display. The truth of the matter is that, while one welcomes a Debate on this subject because it is of the greatest importance, it is really too soon to pass anything like a final judgment either on the form of any one of these schemes or on the working of the Agricultural Marketing Acts of 1931 and 1933. I would say, having regard to the terms of the Amendment on the Paper, that our general point of view ought to be that we must hasten slowly in these matters. I would also say that where there is a demand for the extension of these boards, where there is a clear case for the introduction or the establishment of a new board, then by all means let the process which is laid down in these two Acts—with very abundant safeguards—be gone through and let us continue what must inevitably be a great change in the history of British agriculture, but one which is still in its early and experimental stage. After all, with the exception of the hops scheme, not one of the schemes in existence—the pigs scheme, the bacon scheme, the milk scheme or the potato scheme—is yet a year old. Therefore they are only as yet in the "running-in" stage.

Let me immediately in that connection take up one comparatively small point made by my hon. and learned Friend the Member for East Grinstead (Sir H. Cautley) when he spoke about the costs and the salaries and the number of officials in connection with these marketing boards. I have an all too lively recollection of having seen during the past 25 years farmers' co-operative societies break down merely because the farmers would not realise that in order to get able men with real business experience as the managers or directors of those societies it was necessary to pay those men the rates which are usually paid in business circles. These undertakings have broken down again and again because of the farmer's attempt to equate his income with the amount which it is necessary to pay to the kind of man who can run one of these societies or boards and his failure to realise the facts of the situation in this "in-egalitarian" world. No greater disservice could be done to the farming community than to lead them to believe that these boards can be run with cheap men. That is a real danger. In business—and the same remark applies to the law—in order to get men of a special type of experience it is necessary to pay them more than you would have to pay perhaps to get an equally able civil servant or politician or any person of that kind. In the business world in order to secure the services of men with a particular business ability and training you have to pay the rates of salary ruling for such men in that particular business.

As I say, these schemes may be described as being in their infancy as yet. I think it is fair to say as the right hon. Gentleman the Member for North Cornwall said in regard to the milk scheme that there has been a necessity for something in the nature of hurrying. Certainly if in the beginning either of the right hon. Gentleman's two suggestions had been adopted—either to bring in the consumers committee right at the beginning or to have had the superstructure recommended by the Grigg Commission right at the beginning—I doubt if we should have got the board into working order even as far as it is in working order. The pressure was terrific—the pressure of economic circumstances. My hon. and gallant Friend the Member for Tiverton passed, I think, rather too lightly over the basic facts of the case, namely, that but for the existence of this scheme and but for the machinery which we have there would have been a real crash and consequences far more serious even than the real difficulties which the farmers are facing to-day.

I do not deny that under the award the present prices for milk in this country are very low indeed having regard to the cost of production on a great number of the farms of the country. Why? Because the prices of milk products, particularly of butter and cheese, over the last four years have been rushing down, and the whole agricultural industry of this country has been working under the pressure of a steadily continuing decline in world prices. If it were not for tariffs, regulations, quotas, and the like, I do not think there is a single branch of agriculture in this country that could survive in the face of the kind of competition that we have to-day. On the purely free import basis there is hardly a single agricultural product of this country that we could not at this moment get far cheaper from overseas, and as it is the fixed policy of the Government, whatever it may cost us, to maintain British agriculture—and until the people of the country frankly say otherwise, it is our bounden duty to do it, for social and national reasons—it is necessary to control matters to a certain extent, and these boards are one factor in that control.

My hon. and gallant Friend the Member for Tiverton said that the basis of all the trouble was the continued imports, and that, whereas we are tied by Ottawa for another 18 months, the Minister could freely propose the taxation and limitation of foreign imports, but he has not done it. But he has. There is not one of the foreign dairy products that is not restricted, in some cases both by quantitative restriction and by a tariff, and in other cases by a tariff pure and simple.

Lieut.-Colonel ACLAND-TROYTE

Not from the Dominions.

Mr. ORMSBY-GORE

I am coming to that. I have been very careful to get the figures. The two most important products of milk manufacture are butter and cheese, and it is true that the imports of foreign butter annually over the last three years are almost identical. There has been, in regard to butter from foreign countries, the imposition of a 15s. per cwt. tariff and with regard to Ireland, which used to be a large supplier, there is the special 40 per cent. ad valorem tax on Irish butter, but the foreign imports of butter have remained practically constant during the last three years—practically no variation between 1931, 1932, and 1933. With regard to cheese, there has been a very substantial and remarkable reduction in the imports of foreign cheese, particularly last year as against the year before. The import figures given to me show a reduction from 361,000 cwt. in 1931, to 314,000 cwt. in 1932, and down to 244,000 cwt. last year.

I had better complete the picture by referring to skimmed milk, condensed whole milk, milk powder, and cream. Those in every case are covered by agreed quantitative regulations arranged with the exporting countries. I will not go into the full details, but, quite apart from and on top of the tariff, there has been a reduction in the imports from foreign countries of condensed skimmed milk of 215,000 cwt. last year as against the year before, of 78,000 cwt. of condensed whole milk, and of 19,000 cwt. of milk powder, with a small reduction of cream, but the total import of cream from foreign sources is comparatively infinitesimal. While it is true, therefore, that with the exception of butter, which remains constant in imports from foreign sources, in spite of the tariff, there has been a substantial reduction in the last three years of the imports of foreign dairy products, there has been and continues to be a rapid and unexpected increase in Dominion imports, particularly of butter and cheese, and it is the imports of Dominion butter and cheese, I want to say quite frankly, that are the basic cause why the arbitrators' award on the price of milk in this country is so unsatisfactory. It is owing to the fact that there is little possibility at present of getting anything like a decent price for manufactured milk in this country in face of the enormously increased Dominion imports of milk products of all kinds, that the Milk Marketing Board is faced with something like a crisis. That is a perfectly frank statement, and I think it should be realised.

Mr. LAMBERT

The right hon. Gentleman mentioned the arbitrators having come to that decision because of the imports of Dominion products.

Mr. ORMSBY-GORE

The basic cause which has led up to the present crisis is the fact that we have this rapid increase in Dominion imports into this country, coupled with the rapid fall in price. I have here, for instance, the price in England of the finest quality Canadian cheese during the first week in April this year as against last year and the year before. In the first week in April, 1932, it was 72s. per cwt., last year it was 68s. per cwt., and this year it is 56s. per cwt., showing a tremendous fall, without benefiting the consumer, in the price of the finest quality Dominion cheese coming into this market.

Let me deal next with the suggestion of the hon. and learned Member who moved the Amendment that the only way in which this matter can ultimately be resolved is by a flank attack in regard to livestock, particularly beef. I remember that it was said when the Wheat Act passed that if you could restore the cultivation of wheat, you would thereby, by a useful flanking movement, arrest the great attack on the prices of dairy products. I would not like to be confident that you can solve the milk problem of British agriculture by dealing with beef. After all, British beef, which represents a very high proportion of our supplies already, is of high quality, demanding a higher price than the imported beef, and though there is admittedly a certain amount of competition between home and imported beef, there is still a wide differentiation between British prime beef and any kind of imported beef.

Another fact also must be borne in mind. All statistical evidence goes to show that the consumption of beef by the population of these islands, as of other countries in the world, is steadily going down. People do not like the larger cuts. There is a definite change in diet, and large classes of the community that can still afford beef and that used to have a Sunday joint of beef now have a much lighter diet, and have completely changed over to more fruit, vegetables, poultry, eggs, and the like. The possibility of an expansion of the beef market as a whole in this country is, I believe, definitely at an end, and we have to look forward to a period of time—and this is fair to say to this country, to the Argentine, and to the Dominions—when the idea that there is a possibility of expanding the beef market in this country, even with the present low prices ruling, must be put out of the picture.

What, therefore, is the real solution? It has been suggested in every speech that we have had this afternoon, and it is to increase, by every means possible, the consumption in the home market of fresh liquid milk. The problem of the surplus milk in this country, which varies so tremendously from one time of the year to another, owing to our grass, which is almost unique in its seasonal flush and the like, makes it extremely difficult to establish a really stable and economic factory system in this country, because, owing to our climatic conditions, the amount and the quality of milk available differ so tremendously from one time of the year to another. We want, particularly in the summer period, when incidentally milk will do people most good, to increase the consumption of liquid milk, and only to a steady increase in the consumption of liquid milk can we in the long run look for the successful working of any milk marketing scheme and of the milk industry as one of the pivots of British agriculture.

As one who is outside, not inside, the Ministry of Agriculture, I am amazed at the skill with which the organised milk producers have got going. After all, the potato scheme, the hops scheme, and the pig scheme were small compared with the gigantic task set before the people who had to run the milk marketing boards, which have been in existence less than a year. They are dealing with the accounts and the marketing of the whole of the product of 78,000 producers and 50,000 producer-retailers, and it has been a gigantic organisation which has had to be set up in a comparatively short space of time, even to get the machinery going. There is no doubt that difficulties have arisen and are arising.

Let me come to the burning question of the arbitration and make perfectly clear, what the Minister has already made clear, that beyond appointing the arbitrators he has had no voice in the arbitration or submitted any evidence or had anything to do with it. The essential part of these schemes is that these boards cannot be interfered with by the Minister. They are democratic, self-supporting bodies which are voted on by those interested. The reference to arbitrators in the event of the distributors and producers not coming to terms was an integral part of the milk scheme, and it was impossible for the Minister to intervene. I hope that the hon. and gallant Member for Tiverton will take every possible opportunity to contradict the rumours to which he alluded. There really is not a shadow of foundation for the kind of rumours that are going about. As to the procedure of the arbitration, I am informed that the arbitrators first obtained from both sides their case in writing. They then heard both sides and afterwards gave their decision. As to the personnel, one of the arbitrators is a well-known King's Counsel, another is a well-known chartered accountant, and the other is Mr. Fraser of the Anglo-Persian Oil Company.

Sir H. CAUTLEY

What does he know about milk?

Mr. ORMSBY-GORE

The essential thing when you have arbitrators is to choose people who have no connection with and no interest in either side of the quarrel on which they are to arbitrate. In this case anybody who had any personal interest in distributing or producing milk was ruled out. The abitrators must be people who are inherently completely independent. If we had as arbitrators people who knew the subject, the parties on either side who lost the arbitration would immediately say that the appointments were unfair. I do not think that anybody can say the appointments in this case were unfair. The award of the arbitrators lasts until 1st October, and no doubt valuable experience will be gained in the meantime. I can say no more than that. Let me say a word about the actual development of boards, existing and prospective.

Mr. CAPORN

Before my right hon. Friend leaves the question of the arbitration, will he reply to the question asked by my hon. and learned Friend whether it was a fact that only one side was heard by the arbitrators?

Mr. ORMSBY-GORE

I think I made it clear that both sides put their case in writing and both sides were heard. The Amendment seeks for some statement of policy with regard to future development. The most immediate new development is the establishment of the first Development Board. Members who were on the Committee on the 1933 Act will remember that the point was raised that where two boards desired to come together for arranging for processing or for effective co-operation it was desirable that they should be able to do so and to submit a scheme for the creation of a new Development Board. Such a board is in process of being established in connection, as is perhaps natural, with the Pig Board and the Bacon Board. The point has already been made in the Debate to-day that in view of the experience in the first two contracting periods in relation to pork and the like, it is desirable that such a board should be established. It is to be established and the machinery is now commencing whereby it can be brought into existence.

Similarly in regard to hops, and a later opportunity will occur of raising important points in connection with hops when the amended scheme comes before the House. A new committee consisting of four representatives of the hop producers, four representatives of brewers and three independent persons is to be formally established this week or next week. It has already had its first provisional meeting with the idea of endeavouring to adjust differences of view and to investigate what can best be done to make sure that the interests of both producers and consumers—in this case brewers are the only consumers—are not the subject of conflict so that the board can go forward without friction. As to future boards, the report of the Reorganisation Commission on Fat stock has now been presented to the Minister of Agriculture and it will be printed and published as soon as possible. The next in importance for which, having regard to the marketing situation, it would seem as if there were some pressure from the point of view of time, are eggs and poultry. Those products, as the House knows, are the subject of another reorganisation commission under Dr. Addison, and it is hoped that we shall receive the report of that commission in the course of the summer months. I have no doubt that as soon as it has been received active steps will have to be taken to examine that industry in relation to a possible marketing board. Meanwhile, we understand that, without a reorganisation commission, the National Farmers Union are themselves producing a scheme to deal with fruit.

The five existing boards cover roughly one-third of our total agricultural output. If fatstock, eggs and poultry, and fruit also establish boards, at least another one-third, if not more, will be added to the area of British agriculture covered by the operation of marketing hoards. The establishment of this new marketing structure is a great experiment in agricultural organisation. We have really no analogy on which to go even in foreign countries. There is little experience upon which to draw even in the industrial field. Consequently, we have to learn a new technique. The valuable experience which has been gained in the working of the first few boards will be of inestimable value to the establishment of any future board, but it would he the height of folly, because there have been difficulties which we all foresaw, to throw away at this early stage what I think must he, and what in the opinion of most people who have studied British agriculture, must be an essential part of the rehabilitation of British agriculture if it is to survive in this modern highly organised world. After all, what has been the complaint this afternoon? It is that the distributors in every case have got the best of the bargain in spite of the fact that for the first time the producers have been able to speak with one voice. The reason is that for generations past the British farmer has been the most individualistic person in the country, particularly in regard to marketing. I hope he will continue to be individualistic in carrying out the art of agriculture, because every field and every animal is individual, and it is essential that production should be individualistic.

Faced with the growth of tremendous organisation by farmers in every other country in the world and particularly in our own Dominions, faced with the growth of combines, whether it be the Co-operative Wholesale Society or United Dairies, and faced with the fact that modern distributing is highly organised, it was impossible for the farmer ever to hope to get a square deal unless he gave up the idea that his interests when he went to a local market were to beat down his next-door farmer regardless of everything else. As long as the farmer's marketing ideas were limited to getting a shilling better than his neighbour in selling the same product, one could see no hope for the future of British agriculture on the selling side. Now for the first time in the history of British farming British farmers are really co-operating and are really united. If because these new organisations come into existence at a difficult time on what is still a falling market, when world factors are still an influence in spite of what has been done in the way of protection and the like—if because this is a most difficult time to carry on farmers throw away the machinery which has been set up by themselves on a democratic basis, they will indeed go back into the slough of despond. It really would be a most serious thing for British agriculture if impatience, if restlessness because the new marketing boards cannot work a revolution, cannot produce an entirely new order of things in the first 12 months cause them to be condemned as failures. Looking at the position from outside I venture to say that it will take some years before it is possible to get these boards fulfilling effectually the functions for which they were set up. They will have to feel their way gradually, and only the loyalty of the British farmer to his industry, to his colleagues in the industry, and, above all, to his magnificent organisation, the Farmers' Union, will pull him through these difficult times.

5.16 p.m.

Mr. DAVID GRENFELL

I am sure all Members of the House will wish to join with the right hon. Gentleman who has just spoken in expressing sympathy with the Minister of Agriculture in his absence to-day. We on this side of the House hope to welcome his presence in this House very soon, and his early return to the very onerous task which still awaits his attention. The concluding sentences of the right hon. Gentleman confirms us in the view that this will be a very long job and that many difficulties will have to be overcome before the course has been fully run. The right hon. Gentleman knows this subject very well, knows the Bill upon which these schemes and the boards are based, and knows agriculture, but I thought he found a little difficulty this afternoon in dividing himself between his own special task as First Commissioner of Works, responsible for ancient monuments, to which he appropriately devotes himself because of his veneration and love for old institutions, and this new project, this very revolutionary project, which the Government have taken in hand. The House will have to realise how far we shall have to travel before we reach the end of the journey which we have begun.

We on this side have dissented from the outset from the direction which the Government have asked us to follow. We found the right hon. Gentleman, despite his usual clarity of mind, floundering in many difficulties this afternoon. Only once did I think that I had detected a glimmer of reason and light in what he had to tell us. He did say that the only solution in the case of one commodity, milk, was to increase consumption in the home market by every possible means. If he adds bacon and ham, eggs, fruit and vegetables to milk we will agree with him. The only solution is to increase the consumption of all those commodities. That is why we disagree with hon. Members opposite and those who are responsible for these Orders. They have embarked on a system of marketing which has regard only to the interests of the producer. Not one word was said by the right hon. Gentleman to indicate that he looked upon the market as an institution in which two parties meet. The interests of the producer have been to the fore from the moment the hon. and learned Member for East Grinstead (Sir H. Cautley) opened the discussion, except for a brief interlude when the right hon. Member for North Cornwall (Sir F. Acland) called attention to the consumer, who is the most important party, the party who goes to the market to buy and who consumes the goods.

The hon. and learned Member who moved the Amendment began with a word of faint praise for the Government, saying these boards had already brought great benefits to the farming community, but as he went on I failed to find in his words a conviction which would lead one to think that he fully believed that initial statement. He called attention to a whole series of difficulties and irregularities and flaws in the administration of these Orders. We on this side of the House can say with more pride than ever, "We told you so." Twelve months ago we said that this departure would be accompanied by difficulties and traps of all kinds, and we have already experienced a few, and the First Commissioner of Works has also handsomely confirmed the view we then took. I ask the Members of the Government, "Do they think a plebiscite among farmers about the Milk Board would find a majority in favour of it." I am sure it would not. These schemes already stand condemned in the minds of the farmers. [Hon. MEMBERS: "No"]—in many respects. The Government will have to pay attention to these difficulties and be prepared with immediate and tangible means of remedying the just complaints of the farmers. The hon. and learned Member for East Grinstead, who is not a wild revolutionary, but one whom we respect for his knowledge of the law and his faithful advocacy of those whom he inadvertently described as "his clients who sent him to this House," told us what he desired in the words of his Amendment and I thought that was what the First Commissioner of Works was working up to as a climax, though he did not reach that climax. This is what the Amendment says: While appreciating the great benefits conferred on agriculture by the establishment of marketing boards this House is of opinion that every effort should be made speedily to remove all difficulties and inequalities that have been disclosed in their working, to encourage more economy, and that steps should be taken to set up marketing boards in such other agricultural products as may be necessary to establish a complete structure of the reorganisation of agricutlure. The First Commissioner told us that already there has taken place a really revolutionary departure in the economic life of this country. That is only a very mild beginning compared with the terms of this Amendment, which expresses appreciation of a plan for the complete structural reorganisation of agriculture. I do not believe the hon. and learned Baronet intended to put the same interpretation on that sentence as we do on this side of the House. We agree that the reorganisation of our agriculture must inevitably go very much further than it has gone. Marketing, important as it is, ought not to be regarded as the sole object of agricultural reorganisation. Agriculture is much more than marketing, though marketing plays a very important part. The right hon. Gentleman rightly called attention to the mental outlook of the farmer, the sturdiest individualist of our race. He has been taught to regard himself as a competitor in all things. He tries to grow better crops and to show better cattle than his neighbours, if he is a good farmer, and when he goes to market he will let his right hand almost cheat his left hand rather than allow a neighbour to get the better of him in a marketing transaction. There lies the difficulty of bringing so keen an individualist as the farmer under some kind of co-operative system which will give him a fair price.

We on this side of the House stand for fair remuneration for the food producers of this country. We recognise agriculture to be a very important industry. It grows a very large part of our food. Here let me say, in passing, that the British agriculturist has been able to hold his place in comparison with the agriculturist of other countries. His standard has been more nearly maintained than is the case with agriculturists in other countries in the last few years. Farmers have been reduced to beggary by the millions, by the tens of millions, in all parts of the world. It would be wrong to assume that our own agriculturists have suffered more than or as much as farmers in other parts of the world. Still, we do know that in face of the competition he has to meet his slackness in marketing methods and his unwillingness to co-operate tell against him when there is a surplus on the market. The farmers are learning. They have learned much in every country in the world from the events of recent years. The best indication of that is that these schemes have been accepted so unanimously by the farmers. Propaganda and experience combined have brought the farmer round to agree to the need for an organisation of this kind. We on this side go along with those who say they desire to have improved marketing conditions in this country, but we cannot agree with those who urge that all the care of the House of Commons should be devoted to the producers.

The country will go very far wrong if it is assumed that it is only the interests of the producers which have to be regarded in the reorganisation of our marketing system. There are significant omissions from this Amendment. Not one word is said about the efficiency of marketing methods, about the efficiency of production, of grading, of improvements in quality, and not one word about prices. The despised consumer is not mentioned. He is to pay and say nothing about it. Nobody talks about him, although he is in the overwhelming majority. Of the people who send us here 93 per cent. are consumers. The farmers who go to market are 7 per cent. and the consumers whom they meet in the market are 93 per cent. The 93 per cent. are not mentioned in this Amendment; but it would be a fatal mistake to assume that they do not mind. The price wholesale of the agricultural products of this country runs to about £250,000,000 a year, but that price is almost doubled by the time the produce has travelled from the farm through the market and the butchers' shops and other shops. There are people who say that the proportion which the retailer, the wholesaler and the middleman claim for themselves is excessive, but there is an enormous volume of trade which commences at the farm and which ends with the small consumer who has no cupboards in which to store large quantities of food, and who buys his few pennyworths of farm produce in the neighbourhood where he lives. This trade has to run side by side with the trade carried on in goods imported from abroad.

It is an astounding fact, which I think will bear repetition, that we grow only a small proportion of the food that we consume in this country. Of the beef and veal that we consume we grow 43 per cent. and we import 57 per cent.; of the mutton and lamb we grow 44 per cent. and import 56 per cent.; of pig meat we grow 32 per cent. and import 68 per cent.; in poultry our own production is 63 per cent. and our imports 37 per cent. When we consider cheese, to which reference has been made this afternoon, and butter there is an even greater disproportion. We produce only 11 per cent. of the butter which we consume at home, and we import 89 per cent. We produce 23 per cent. of the cheese and import 77 per cent. There is an enormous disparity between goods grown at home and those imported from other countries. We are not satisfied that that disparity should remain, because there is no sound economic reason for it.

In a kindly way we ought perhaps to utter a word to those who represent the farming interest in this House. Those representatives come here faithfully year after year to defend the claims of the farmers, but very often the so-called gentleman farmer spends a great deal too much of his time riding around his estate on horseback or in chasing foxes, instead of going to see that the work of production is being efficiently carried on. He lets the less socially-ambitious but harder working foreign farmer get in between him and his market, because of his indifference. Marketing is very important, and we should not ignore the fact that there are two sides to the marketing question. I need only repeat what has been said among farmers themselves at a recent meeting. Farmers have made more intellectual progress in the last five years than any other class of our people. No other section has advanced so much, and I hope that they will go very much farther and much faster than they have travelled so far. The speech to which I have alluded would do credit to any expert economist. It was made by a farmer at a Farmers' Union meeting somewhere. He is reported to have said: The Economics Committee had met only twice and its members had disagreed all the time, and he came to the conclusion that there was no intention at all on the part of headquarters to work the Committee, which met in June for the second and last time. The position was a very serious one. If ever there was need for an Economics Committee to enable farmers generally to understand the present economic system, that need existed to-day. It was no use considering the supply end; it was the consumer end that had to be considered. There could be no final solution of the problem until the masses of the people had the money to buy the goods they needed at a reasonable price. At the present time there was a glut of cheap imports, due to the fact that in the past tremendous quantities of manufactured goods had been dumped into other countries, which could only pay for those goods in agricultural products, because the debtor countries of the world were chiefly agricultural countries. The matter should be considered and studied by an organisation such as the National Farmers' Union if an improvement was to be brought about; otherwise the setting up of the Marketing Schemes would only make matters worse. The question was the most important one with which the union could deal. Other speeches followed of a similar character and of an equally high standard, and we ought to congratulate the farming community not only on their knowledge of the technique of their business but upon their clear grasp of the world situation, and of the need for attention to that situation by every class of people in this country.

There is the diagnosis, and the remedy proposed by the farmers themselves, but that remedy does not correspond with the Motion now before the House. Those farmers' speeches called for a much wider treatment than has been offered in this House this afternoon. I invite hon. Members to look at the matter from that point of view. In the Second Reading speech of the Minister of Agriculture last year, he said that the legislation which we are now discussing and the schemes arising from it were admittedly drastic, far-reaching and novel. He said: Our only justification for them is that they are not more drastic than the situation demands, that they are not more novel than the circumstances which confront us, and that they are not more far-reaching than the emergency which has brought these proposals into being."—[OFFICIAL REPORT, 13th March, 1933; col. 1624, Vol. 275.] That is a very bold statement of the justification for these schemes. How little has been the result and the effect in 12 months of these very drastic, far-reaching, vital and fundamental schemes, which were launched with so much flag-wagging and cap-throwing in this House 12 months ago. It is a very much chastened First Commissioner of Works that we see before us as compared with 12 months ago. The Minister of Agriculture has not had as much benefit out of these schemes as was expected. I do not want to kill all marketing projects because they have not worked well in 12 months. It would be folly on the part of an Opposition whose business it is to oppose to condemn the whole idea of marketing, but we say that we are not proceeding on sound lines unless we have regard to many more factors than have been brought into consideration in this House this afternoon, even by the First Commissioner of Works.

Hon. Members who represent the farming industry know quite well that certain branches of that industry have derived a large measure of benefit this year. For example, the home farmer in Scotland, England and Wales has put a substantial sum into his pocket. He has not done badly at all, because of the increase in the price of wool. Perhaps the hon. Member for South Croydon (Mr. H. Williams) will tell us how that came about. The farmers who have fared best in the last 12 months are not those who have come under these special schemes, but those who have produced wool, wheat, and beet and who have never been touched by the schemes. There are certain economic laws which we have to keep in our minds. It is said that no Englishman or Welshman can understand a Scottish joke. In something that the right hon. Gentleman the Minister of Agriculture said the other day I failed to follow him, and that must have been a Scottish joke. He said that he was going to solve the problems of agriculture at his own back door. Imagine a Scotsman standing by his own back door watching affairs in all parts of the world and not taking a hand in them. People who believe that you can stand at your own back door or hide yourself away from the rest of the world and still solve the problems of agriculture do not know the kind of problems with which they are confronted. It is a vital error of policy for them to commit themselves to ideas such as the limitation of goods in the home markets, as the right hon. Gentleman has mentioned this afternoon, with the intention of raising prices and only of raising prices. There is no suggestion from the right hon. Gentleman except that of raising prices by limiting supplies in the home markets.

We view this as the losing of a great opportunity for the development of a marketing system. We can be proud of our record on this side of the House. I was a member in a humble way of an agricultural committee of our own party which reported in 1925 in favour of marketing boards, and of an organised marketing system for this country. That programme for agriculture was put on record. The newspapers of 1925 will reveal the kind of programme which was discussed at the Liberal party conference in that year. Dr. Addison went further and put it into effect. At no time have the Labour party been under the delusion that you can simply raise the farmer's income by raising the prices of the products which he takes to market without the possibility of a reaction by a boomerang effect which might destroy the very market that you desire to build up.

I represent farmers and mine workers. The mineworkers in my division and in South Wales number 150,000, and they are striving for improved wages. They have been making a demand for the improvement of wages which are admittedly deplorably low and are utterly inadequate to maintain a decent standard of life. They have not yet been successful, but I am hoping that the negotiations will end happily in the next few weeks. The owners are very reluctant to make the slightest concession in wages. They want cheap coal, and in order to get it they enforce low wages, That is the quandary in which we are placed. The manufacturing producer who employs industrial workers wants cheap production, but the right hon. Gentleman says that he wants dear food—you can hide it as much as you like, but that is what it means. The employers want low wages and cheap labour. You cannot reconcile those desires, and that is why the words of the Motion do not go far enough, and why we must have regard to something very much more.

We want a marketing system which will organise marketing. We do not fear competition. Everybody must realise that there are enormous quantities of food that can come into this country, and that by climate we are adapted for certain kinds of food production. It is a pity, and is rather a condemnation of all of us, that, in regard to certain commodities, for the production of which this country is favoured by climate and soil, we are behind and that we fail to produce enough. We believe that we can benefit by the natural advantages of this country and that we can produce a very much larger annual proportion of the food which our people eat. We do not believe that agriculture is going to employ fewer and fewer people, and we do not fear this foreign producer. We are not afraid of selling goods side by side with him in this market, which has been described as the best market in the world, and which is the best market in the world so long, and so long only, as decent wages are maintained for the people who form that market. We are not afraid of competing in agricultural production—in dairy products, for instance, when the production is properly organised—with people in any country in Europe or in the world.

Sir JOSEPH LAMB

Can the hon. Gentleman say whether dairy products produced in foreign countries or in the Dominions have been produced at less than the cost of production here?

Mr. GRENFELL

It is no use talking about the person in some other country who is always producing at a low cost. He will be feeding on his own tail, and his tail will disappear in the process. The Minister has referred, both in this House and when speaking on a wireless a few nights ago, to the presence of the spectre of some selected man producing a selected product, in a selected place, at a selected time, to put in a selected market. I do not think that there is any such selected person in existence. Who is this selected person? What is he made of? Where is he? I think it is all a fantasy, and it is the most defeatist thing that I have ever heard. Hon. Gentlemen are always insisting in this House that we must have some special method of protecting ourselves against some fellow whose size and proportions we do not know. We shiver and tremble at the thought of someone who can outdo us in agricultural production. I am an internationalist, but I have a profound respect for the people of our own country, and I will not admit that they are inferior to any people I have ever known. We cannot be beaten in this, the best market—we who stand so close to it. With this market at our very doors we cannot be beaten if we set about the task of reorganising agriculture from top to bottom, and reorganising our marketing methods.

I will close with a few suggestions as to how I think this marketing reorganisation could be carried out. Section 3 of the Act of 1933 refers to a Market Supply Committee. We have always looked to that Market Supply Committee for more power and influence than it has displayed so far. We are sorry that right hon. Gentlemen opposite do not realise the vital necessity of some central body. I would prefer to call it, if you like, the National Market Supply Board.

You can have your commodity boards, on which producers and consumers will be represented. You can have a milk board, upon which the milk producer will sit side by side with the representatives of the general community. You can have a meat board representing the meat producers, the importers, and the consumers of meat. You can have a thoroughly representative commodity board for each separate commodity. But, over and above all that, there should be some central directing authority, which is itself a board, and which would not only have the power to supervise, but the power to buy and to store and maintain supplies of food for the emergency which must come, as has already been said, from time to time in the agricultural life of the world. I do not see why there should not be, overriding and surmounting this system of boards, a central authority with capital at its disposal, and with warehouses and storehouses at its disposal, so that food could be bought in large quantities, stored, and made available to the public whenever the natural supplies of one part or another of the world fell short. Over £1,000,000,000 is spent on food in this country year by year. This requires organisation, and such a National Board as I suggest would be responsible, not only for organising supplies in our central markets, but also for directing their distribution.

A real national marketing policy is required in order to afford to the man on the spot, the farmer here at home, the possibility of first entry to the market which stands at his door, by means of a marketing organisation equal to that of the farm producers in other countries. We know at present that our producers are not as well organised as are the producers in, for example, Denmark and other countries that could be named. We believe that there should be such a national system of marketing organisation as would give to our producers the first and the best chance in this home market, which we hope to maintain as the best market in the world for as long as we can. We want to provide our people with the cheapest and best food supplies possible. I was very pleased the other day when I read a comparison of the consumption of food in this country in 1933 with that of 1913. I found that we were consuming much more meat and very much more milk, although our consumption of milk is deplorably, and, indeed, pathetically, low at the present time. We are consuming twice as much bacon and ham, and twice as much butter. We have greatly improved our dietetic standards in this country. I was further gratified to find that that had been made possible, in all probability, not by a general addition to the wage fund such as I would advocate, but by a very much smaller consumption of beer and spirits.

There is this change in fashion in diet by which our people are benefiting, and anyone as old as I am who looks at the children of the present generation, even in these difficult times, must realise that our children are better fed than they were 25 or 30 years ago. But we have not reached the limit. There are hundreds of thousands of underfed people in this country at the present time. Children are still being badly nourished in this country. As regards milk, if our children were given as much milk as they need for the proper building of their bodies there would not be a pint of surplus milk in the country. If the people who work in the coal mines, in the shipyards and in the factories were able to eat as much meat, as much butter, as much cheese, as we who sit in this House, there would be no great immediate marketing problem for the agriculturists of this country. We must raise the dietetic standards of our people. We can only do that by building up an organisation which will provide the most widespread distribution of the most generous supplies of food at prices within the reach of the masses of our wage earners. Because we believe in that complete structure of reorganisation which has been the dream and ambition of the hon. and learned Gentleman who moved this Amendment, we shall not divide against it. We shall support the Amendment, but we shall often be found urging the Government to go the full distance which the hon. and learned Gentleman has suggested, until we have attained the complete structure of a reorganised agriculture.

5.55 p.m.

Sir J. LAMB

Despite the difficulties which the marketing boards are undoubtedly experiencing at the present time, and the criticism which they have received outside, and to a certain extent inside, the House, I think it is the first duty of anyone who takes part in this Debate to congratulate the Government most sincerely on the action which they have taken in this matter, and the assistance which they have given to agriculture since they have been in office. I do not say that merely as an agriculturist, but because I am confident that not only the agriculturist, but the country as a whole, benefits by an improvement in agriculture. Any country which neglects its agriculture undoubtedly suffers in the end, and any improvement in agriculture must ultimately, and sometimes very rapidly, be of advantage to other sections of the community. Consequently, I do not think we ought to regard this as entirely a question of the interests of agriculture; it is a national question, and one which will have a national effect. I do not want again to refer too pointedly to the absence of the Minister, but I would like to say that, while congratulating the Government on the action they have taken, we can also congratulate them on the personality and ability of the Minister who has had to take charge of these various operations. Undoubtedly his personality and ability have had a very great deal to do with the success so far of what has been done.

When I say that the Government were forced into taking this action, I do not want it to be considered that I am in any way detracting from the action they have taken, but I do not think we ought to forget the conditions in which the country previously was. After all, whatever value we may place upon the action of the Government, the estimate must be made by comparison, and, if we compare the conditions to-day with the conditions which existed before the Government set up the Marketing Board, I think we shall appreciate the value of what has already taken place, although we hope it may be further extended. It was common knowledge that agriculture was then in a most deplorable condition. I am well aware that farmers are charged with crying "Wolf," but the facts proved that agriculture at that time was in a most deplorable condition. The number of bankruptcies which had taken place was astounding, and, in addition, there were those who were being carried by the landlords and by the banks, until, indeed, the banks found themselves in a very perilous position in some districts because of the money which they had out in agriculture and for which, under the conditions of that time, they could see no possible chance of getting a return. Undoubtedly, there were still others who were carrying on simply because their love for the soil prevented them from leaving it, and they were continuing to expend capital which they took from other sources or which they had been able to accumulate in previous years. When we consider the conditions in which agriculture was at that time, and the effects which are now beginning to appear as a result of the action of the Government, I think we shall get a better idea of the value of the action which the Government have taken.

Some complaint was made by the hon. Member for Gower (Mr. D. Grenfell) that in this Debate agriculturists had been referred to only as producers, but, although we refer to them as producers, we do not forget that the agriculturists are the largest set of consumers in this country. Throughout the whole world there is no one who is so large a consumer of other commodities as the agriculturist. I agree with the argument that the farmer cannot consume if he does not receive the wherewithal to buy that which he wishes to consume. Unless the agriculturist is enabled by his production to consume the products of other industries, the desired result cannot be obtained. Reference has been made by several speakers to the amount of foodstuffs produced in this country and the amount which we import. I believe that very few people have realised the advantage that an increased production of agricultural products in this country represents to other industries, by relieving them of the responsibility of paying in exports for agricultural products which are imported into this country. Industrialists throughout the country have very great difficulty at the present time in finding markets for their products. The principle which we should all say is the correct one is to produce all that we possibly can at home for home consumption. The hon. Gentleman who spoke last said he was not afraid of producers abroad, but he did not answer my question whether he was referring to articles sent in at the cost of production plus a reasonable profit or articles produced below cost and dumped here, which is a very different point. Again, although we can produce a better quality of certain articles, perhaps, than anyone else, climatic conditions here throughout the year prevent production at as low a cost as other countries with more favourable conditions. When we criticise these marketing schemes, we must remember what a small amount of time there was for organising them, and, when one remembers the number of producers—about 128,000—and the amount of produce to be dealt with by the marketing board, the success that has been attained is wonderful, admitting, of course, that very serious difficulties have arisen and that some amendments will have to be made.

I am confident that, if a referendum were taken of farmers, if it were put to those who have had any experience whatever of the previous difficulties of organising markets under voluntary and not Government control, they would immediately say they must stick to the schemes. Take milk. It must be admitted that, where a man had a fair market, he is not much better off, perhaps a little worse off, to-day than he was. But how many men were assured of that market? The conditions under which other farmers were producing meant that they could not retain the markets that they were then enjoying. Then there is the class who were producing for manufacturing purposes only and getting from 3d. to 5¾d. a gallon. They are now getting a full price, and, though it may not be the price they think they should have or the price that we think desirable, it is undoubtedly a better price than they were getting. There is another class still. There is the man who had no market at all for his milk. He is better off, because he is having a market found for him. Throughout the country, undoubtedly, the position is better than it was before. I have asked many meetings of farmers, although they were grumbling at the present scheme, whether they thought it better to stick to it and try to amend it or go back to the old days when there was no scheme, and they say emphatically, "Give us the scheme every time, but with amendments."

I congratulate the Government on their courage in setting up marketing boards. It is an entirely new system. When you get a new system, dangers and difficulties arise which have not been anticipated, but not so very long ago individualism and freedom were two of the greatest rights which the agriculturists demanded and enjoyed, and now that you are giving him, in place of that, collectivism and control, you can see the stupendous difference between the two systems. When history is written, it will be said that this is a period of collectivism. I have said that before and have been challenged by hon. Members opposite who said I was a Socialist. I am not a Socialist. I admit that Socialism is collectivism, but the collectivism that I require is not one controlled by politics and bureaucratic officials, but one controlled by those who are concerned in the industry and understand it, and that is a very different thing. That is the system which we are now putting into operation. Although I am a very strong advocate of collectivism in agriculture, it must be confined to distribution. I know of no industry where individual effort and individualism is so essential in production; every farm varies, every field varies and every animal varies, and it is only by the individualism of the farmer in recognising those variations and dealing with them as and when they occur that he can be successful as a producer. It is a very different thing when you come to distribution, where you are up against imports from abroad and where you have not control of the market.

When considering the question of prices, whether for agricultural produce or for any other commodity, there is a limit on two sides. Prices are undoubtedly in some cases too high, but, because they can be too high, we should not lose sight of the fact that it is undoubtedly a great evil to have prices too low, and I cannot understand hon. Members opposite who represent colliery districts grumbling at the price of agricultural produce when they have obtained the Coal Mines Act which enables them to secure reasonable prices. It is not in the interest of the community as a whole when prices are below those which will secure a reasonable standard of living for those in the industry.

The right hon. Gentleman said that a great deal had been done by the Government with regard to the restriction of imports. I believe, although there has been a reduction in the amount of imported skimmed milk, that is not sufficient. I can conceive of no reason why there should be any imported skimmed milk at all. I admit that the amount is not sufficient in itself to remedy the difficulties that we have in regard to the price of milk but every mickle makes a muckle, I am told, and an article of such little food value should be excluded from the market altogether. Cheese and butter are difficult questions to deal with because of the Ottawa Agreements, but I hope that, when the time comes, the Government will take the matter seriously in hand and will see that the home market is preserved for the home producer. Butter is a rather different thing. A very great deal of our butter comes from Russia, and I cannot conceive why we should have it. If we do not produce all the butter we need, we could get it from our own Dominions, and that would reduce the amount of other dairy produce which they have to send us to equalise the balance of trade. I have asked several people if they can tell me where this Russian butter goes, and I should like to find out, because I think if anyone were to go into the City or any of our towns and ask for Russian butter he would not be able to get it. I believe it is camouflaged and largely appears in the shops as a blended article, but certainly under the name of the small percentage put into it, and not under the name of the large percentage that comes from Russia Consequently, I think the Government might take further steps to restrict the part of our butter supplies that comes from Russia.

I most heartily support the suggestion with regard to the increased consumption of liquid milk. Here again I congratulate the Government on the assistance they have given to the Milk Publicity Board in encouraging the extra consumption of milk in the schools. I believe that is the best method of increasing consumption, because, if you can create in the mind of the child the idea of the desirability of milk as a liquid food, and a taste for it, that will probably have a very great effect on the child, who becomes the parent of future generations, so that you will have the children of to-day and the parents of the future, and their children, all consumers of milk to a very much larger extent than at present. The amount that we consume in liquid form as compared with other countries is deplorably low, and I hope we shall do something to increase the amount consumed in the schools, which will be very much better for the health of the children.

With regard to pure milk, it may be a rather dangerous thing to say, but I do not think we shall ever have, either here or in any other country, milk with absolutely no fear of contamination from tuberculosis. It is all very well for doctors to talk about milk absolutely immune from infection. When doctors have told me how they can prevent colds in human beings, I will believe it is time for them to tell the farmer how he can produce milk without risk of contamination. On the other hand, it is up to the farmer to see that milk is as pure as it can possibly be. I am told by the medical officer of a large sanatorism—I am chairman of another myself, so I know something about it—that if milk were consumed in larger quantities, even of the amount of purity to-day, the community as a whole would be far better for it and there would be less tuberculosis. The persons consuming the milk might obtain so much food value from it that they would be able to throw off or withstand any danger of contamination from the small proportion of infection which might be in the milk. That is the opinion given to me by the superintendent of one of the largest sanatoria in this country, and one to which I give a great deal of support.

I should like to say a few words about potatoes. There has been criticism with regard to growers being subject to a charge of £5 in respect of every additional acre of potatoes they put down. I think that it is just, and I support what is being done in that case. Potatoes constitute one of the crops of which we can produce the whole of our requirements in this country, and it is one of the crops which sometimes suffers very largely through not being remunerative because of low consumption. It may be that, owing to a larger acreage and to the season being particularly good, the crop is much larger, and it is essential that there should be a compensating fund to help those who are not able to sell the whole of their crop for edible purposes. Those men who are putting down the extra acreage—and they are not prevented from doing so if they are prepared to pay £5 an acre—are only contributing to the fund which ensures for them and for others a market for potatoes, and there is no injustice in that respect.

I could enumerate a good many instances to show that these boards have not only done a great deal of good, but are likely to continue to do a great deal of good. I sincerely congratulate the Government on what they have done, and I implore them to go on with their schemes as fast as possible, particularly in regard to meat and poultry. It has been foreshadowed that a report by the committee on poultry and eggs may be produced during the summer, and I would ask the hon. Member who is to reply whether it is not possible for us to have an interim report with regard to eggs only, if it is impossible to give the full report on poultry and eggs. The question of the importation and price of eggs is a very serious matter. It not only affects the large farmers, who have the advantage of producing other products, but touches very vitally the small men, among whom are smallholders who have put the whole of their savings into small farms with the idea of producing poultry, and are being very hard hit by the prices ruling in the egg market at the present time. If we could possibly have an interim report dealing with the question of eggs only, on condition that it was impossible to have the full report within a reasonable time, it would be very much to the advantage of those men, especially if the Government could possibly bring forward measures to relieve them, as they are suffering very acutely at the present time.

6.19 p.m.

Sir ROBERT HAMILTON

I am sure that the House will agree with me in thinking that, though we regret the absence of the Minister of Agriculture, we have been very fortunate in having a delightful speech from his understudy who has left his "ancient monuments," as the hon. Member for Gower (Mr. D. Grenfell) said, for a short time to come and tell us something about agriculture, a subject with which he is particularly capable of dealing. I do not desire to deal with any particular schemes, some of which have been criticised very severely, but rather with the general line and tendency of the policy. The time has now arrived when we might fairly ask in what direction we are really going. The Amendment before the House speaks of the general reorganisation of agriculture by building up a complete structure of marketing boards, and also desires that the policy should be clearly defined with regard to the system of restrictions which has already been introduced. It is common knowledge that these schemes were initiated at a time of great difficulties. First of all, there was the collapse of world prices, and, at the same time, the desire to frame schemes for the future. It was extremely difficult to frame schemes for the future in a collapsing world, and also it has to be realised that we in this country have entirely changed our fiscal system. Therefore, there were three difficulties with which to contend when these schemes were initiated. Some of those difficulties we hope will be transient, but when we are framing policies for the future, they must be on a permanent basis, and we hope that they will be on a basis which will enable them to succeed whatever difficulties they may have to face.

From the results that we see so far in some of the schemes which have been introduced, aided by restricted imports and duties, and aided also by a restriction of production, we have a minimum price fixed for sale, and, as a consequence, the marketing board so-called is a machine rather for raising the price of the article than for dealing with the marketing of the article in the market itself. As was referred to by my right hon. Friend, and by the hon. Member for Gower, the position of the consumer has not been recognised as it should have been in any scheme of marketing. I am sure that it is the pretty general opinion outside that these schemes are devoted more to the raising of prices than they are to considering the interests of the consumer. Whether that is right or not, I am not saying at the moment. I am saying that it is the general opinion, and in order that that opinion should be respected and the position of the consumer protected, it is essential that the Government should give some further thought and emphasis to machinery which should have the effect of protecting the consumer.

As the right hon. Gentleman the First Commissioner of Works said, we have devised these schemes in the absence of any technique. We had to learn our technique as we went along in circumstances such as have never been experienced before, but it may not be out of place at the moment to look at the picture of that highly educated and advanced agricultural country, Denmark, which showed the way to the rest of the world as to what might be done by what the hon. Member for the Stone Division (Sir J. Lamb) calls collectivism, but which we used to call co-operation. There is a very vast difference between what can be done and what has been done by co-operative schemes in Denmark, and what is being done and what is proposed to be done in the marketing schemes which are now before us. In the first place, the co-operative schemes in Denmark were built up entirely upon a voluntary basis. The people themselves were educated up to the value of co-operation, and consequently they had the whole scheme growing from the bottom, whereas here we have a scheme imposed from the top—a very different state of affairs. As has already been said in the course of this Debate, there is no one so individualistic as the farmer in this country.

Sir J. LAMB

The hon. Member says that in Denmark the schemes were on a voluntary basis. They may have been in a sense voluntary, but they were compelled to go into them, because they were dependent entirely upon the export market.

Sir R. HAMILTON

I agree that there was some difference in that they were chiefly for export, but it does not alter the fact that the schemes were on a purely voluntary basis. The greatest punishment that a farmer in Denmark could receive was to be turned out of his co-operative society, because he would have very great difficulty in obtaining a market for his products. I was making the point that those schemes grew from the bottom, and that we have schemes—I am not criticising, but rather trying to state the facts—imposed from the top upon a very individualistic body of farmers which make it exceedingly difficult for them to accommodate themselves to the new conditions. Under the Danish system the management of the society was a membership management. The members took an active part in the direction and the management of their own society, whereas here the management is left to a national board, again a very different state of affairs. Under the Danish system there was every opportunity for members of a society to get the advantage of purchasing in bulk and for the farmer to get credit from his society. There is nothing of that kind under our marketing schemes. When it came to sales, the sales were made by the sales manager of the society at the best price, having regard to the market—sales made on purely business lines—whereas here the sales are made at prices fixed by a board. Under the Danish system, there was every encouragement both to enterprise and efficiency, but it cannot be argued that under our schemes there is any direct encouragement either to enterprise or efficiency, when people have to pay a fine in order to increase their production area, or when the person who produces milk in a second or third class dairy gets exactly the same advantage of a fixed price as his neighbour who is spending much money and producing milk under very much better conditions.

Under the Danish system a great incentive to success was that failure fell upon the shoulders of the members, but here, as far as we have had experience, when mistakes and failures have been made, the taxpayer has been called upon to pay for them. That I regard as rather a serious matter. If our farmers under the working of these boards are to allow themselves to get into the way of thinking that mistakes made by the boards, costing perhaps hundreds of thousands, or millions of pounds, can be made good by going to the taxpayer, I am afraid it is not likely to encourage a system of self-reliance and enterprise, but rather to make them lean upon the prop of the poor unfortunate taxpayer. Under the Danish system there was every incentive to increase production, and with increased production there was a cheapening of production and a wider market, whereas the marketing system in this country has a definite tendency to make the industry static, to keep it as it is, and not to increase production; in fact, to prevent more people from coming into it, and under orders possibly not to allow farmers to grow as much as they could under ordinary natural conditions. The difficulties with which co-operators were faced in this country mostly came from their members being enticed away by higher prices—selling at a higher price than that which the society fixed. To-day we see the difficulty of preventing farmers from selling at a lower price, although that lower price is one at Which it would pay them to sell. We have to look at the two pictures which I have tried to draw to see what a vast difference there is between a system which was built up as a live plan, growing from the bottom and expanding, and one which contains within itself so many influences which may tend to take away enterprise and to make the industry static.

I do not want to spend time in criticising the various mistakes that have been made. We all know that mistakes have been made. The right hon. Gentleman was justified in saying that mistakes were bound to be made in undertaking these new and vast schemes, and that only a short time has gone by. As the time goes by a little further we may avoid mistakes. One lesson that has been learned, and should be borne in mind with a view to avoiding futurr mistakes, is that planning on paper is a very different thing from putting the plans into operation in agriculture. Pigs on paper are not the same thing as pigs in the factory. They may look very nice in a scheme, and a contract for the production of pigs may look very nice on paper, but you must not be satisfied until you have go the pigs into the factory. To imagine that you can turn agriculture on and oft as if with a tap, is wrong. You cannot turn quotas on and off and try at the same time to keep your level stable. Agriculture is far too complex a business for that. I am inclined to think that when these schemes were being originally worked out, it was thought that such methods of dealing with agriculture would be possible, but experience is showing that it is very much more difficult than it seemed on paper.

I have endeavoured to indicate briefly the difference between the Danish system and the system covered by our new marketing schemes. In regard to bacon, I should like to say that anyone who has studied the production of bacon in Denmark realises that the great success of Danish bacon depends upon the creamery. It is the skimmed milk that goes back from the creamery to the feeding of the pig that makes the cheap production of the pig possible. If we are to compete on really economical lines in this country, and produce our bacon on the best and most economical lines, we shall have to follow the lesson that Denmark has taught us. A scheme of national control cannot, it seems to me, stop half-way. That is a matter which is exercising a good many minds. Once you have endeavoured to introduce complete national control of some product, you must control the product from start to finish. You must have an import board. If you are to be effective, you cannot keep out pork and try to control bacon. You must control the pig the whole way. You must go the whole hog, so to speak, from the birth of the pig to its death and the transaction into cash. I would ask the Government very seriously whether they realise the steps they may have to take if they want to make the control efficient. I do not see, when you have a national scheme controlling bacon, that it is possible to stop without controlling the whole system of the pig from life to death in every process. That being so, we have to think where such a system may lead us. It is not only with the pig that it will stop. I should like to quote from a very interesting article by Sir Robert Greig, who was recently responsible for the Department of Agriculture in Scotland, which appears in a quarterly entitled "Scotland": It is not perhaps sufficiently realised that the new farm policy inaugurated by the Marketing Acts is not merely a change from drift to steerage way, it is the setting of a new course over a sea which has not been charted. I think that describes pretty accurately what we are doing. As the First Commissioner of Works indicated, we are getting experience as we go along. We are sailing over an uncharted sea. I hope that we do not run on to the rocks. There are some pretty big rocks ahead. May I quote further from Sir Robert Greig: We may see the right to produce milk, or potatoes, or beef attached to the farm. This right may become valuable. To whom is it to belong—to the tenant, the landlord or to the State, which might contend that it had conferred the right? I am always in favour of a man getting the value of the return from his own work, but I do not like to see any man being given a present, a monopoly, by the State and taking it for his own advantage. When we look at what is projected in the hops' scheme and in the potato scheme, I think we shall have to consider very seriously whether the monopoly values which may attach to the farm are to be given to the landlord, or the tenant, or whether the State is to have a share. These are questions to which I should like to have an answer, if the Government have been thinking about them.

Reference has been made to the Minister's courage in undertaking these various schemes. We know that the Minister is very keen on planning. He must be planning ahead, and he must have some idea of the ultimate course on which we are embarking. Therefore we are entitled to have now from the Under-Secretary of State for Scotland, or whoever replies, an idea as to the ultimate objective which is in the Government's mind, because not only is the future of agriculture involved, but the future structure of the Government in this country. I should be only too glad to see agriculture prosperous and taking a larger and larger share in our own great markets, the greatest and best in the world, and to see it regarded with a friendly eye by our great industrial centres, but I find it difficult to believe that those ends can be attained, or that agriculture in this country can ultimately be prosperous in the long run, if it is based on a system of restriction, or on a system of prices raised toy artificial scarcity.

6.40 p.m.

Mr. DREWE

I want to support the speeches made by the hon. Members who moved and seconded the Amendment. I have always been one of those who realise that these marketing schemes are essential if we in this country are to compete with world conditions in agriculture, and I have always done my best in the country to persuade the farmers to give their support to the marketing scheme; but we must make quite clear to the Government what the feeling is at the moment with regard to the crisis in milk. I do not attribute it to the failure of the marketing scheme, but undoubtedly it is a serious and definite crisis, and one which is causing more heat among farmers than any other question that has cropped up for a very long time. Within the last week farmers in East Devon have been joining a new organisation, joining almost unanimously with dairy farmers, with the one object of using the whole of their influence to try to get some alteration in the milk scheme.

I do not agree with the hon. Member for Stone (Sir J. Lamb) when he said that if a referendum were taken, farmers all over the country would again poll the same way. I am very much afraid that if there were a poll in Devonshire at the present time, there would be a demand to rescind or very drastically to amend the scheme. We are anxious to avoid anything of that sort happening. I want to see the scheme maintained and worked effectively. The right hon. Gentleman said, quite rightly, that it is too soon to judge, condemn or criticise very much these schemes as they have been in operation for less than 12 months. That is true, and it is also true that at the present time dairy farmers, certainly in Devonshire, when the deductions have been made, get a return of only 6d. a gallon for their milk. That is a figure with which they will have to put up during the whole of the summer settlement. There is a definite crisis, but it has nothing to do with the ordinary working of the marketing scheme.

We recognise that the Government showed very good faith when they came forward with a grant for publicity and for clean milk, but when all has been done, the fact remains that the farmers will get only 6d. a gallon for milk during the summer months. If we take a farm where an average of about 25 gallons of milk a day goes off the farms at 6d. a gallon, it will bring in only 12s. 6d. a day to the actual producer, out of which he has to pay his labour, his rent, his other charges, and keep himself. We are told sometimes, and we have been told to-day, that we do not consider sufficiently the consumer, but I suggest to hon. Members who take that line that if we are to have these very low prices definitely in favour of the consumer, how are the low wages in agriculture to be raised? We are anxious to see the price of labour raised in agriculture if it is possible to do it. It is impossible to ask the Minister to reverse the arbitration award, but we feel that there is an absolute emergency, and that the Government ought to step forward and see if they can do something to give the farmers a better price than 6d. a gallon during the summer months.

It has been said that the trouble in the main is the foreign imports. The right hon. Gentleman has pointed out that the imports of butter and cheese from foreign sources have not increased during the last two years, and that the increase which is causing the glut in our markets is from our own Dominions. Is it not possible to approach the Dominions asking them—if we kept out still further quantities of foreign butter and cheese—to be content not to send us any more? I can understand the argument that if we kept out more foreign butter and cheese the Dominions would fill up the gap at subsidised prices, but have the Dominions been asked not to send us further quantities of butter and cheese if we kept out more foreign butter and cheese? That would certainly be a help. I asked a question of the Minister of Agriculture on the question of imported milk products, other than butter and cheese, from foreign sources; that is, condensed milk and other milk products. The right hon. Gentleman, in reply, said that these amounts had been already restricted, and took some credit for the fact that there was a tariff and a quota. But the fact remains that sweetened condensed milk imports in 1933 were 1,800,000 cwts., and if you translate that amount in gallons of milk, it means an import of 83,000,000 gallons of milk in 1933. That, of course, will not solve the problem; but it is a matter to which the Government might devote further consideration. There is another point; have the factories in this country been approached by the Government and the point put to them specifically as to whether they could supply the whole of this condensed milk and other milk products at a lower price if the Government kept out the whole of these imports? There is a demand for this condensed milk and skim milk, and we are always told that certain people must have tinned milk at low prices. If our own factories were given security, I think that they have sufficient plant to turn out this type of milk at competitive world prices.

The Minister of Agriculture is, no doubt, looked upon in the country as the best and most sympathetic Minister we have had for many years past. There is no doubt also that the Government are recognised as being in earnest in trying to save British agriculture, and, until the recent milk award, confidence in agriculture was being restored, and farmers were beginning to feel that the turn had come. Unfortunately, that position has been completely reversed, and the milk industry has been brought to the verge of complete ruin. We are most anxious to see these marketing schemes prosperous. We want to see further developments, but in the West of England, if we have to go through the whole of the summer with these ruinous prices and are flooded by subsidised milk products from our Dominions and foreign sources, farmers will be prejudiced against these schemes, and we shall find it much more difficult to get a satisfactory poll than it has been in the past.

Let me say one word with regard to the pig scheme. My own experience is that it has been a success. There have been a few criticisms, but, in the main, it has been successful. The Government are rather disappointed with the numbers contracted for during the coming period, but that is attributable mostly to the fact that the pork market has been so good. There is another important point which has been rather laughed at, that is, the question of the 14 months. Farmers have found it almost impossible accurately to forecast the pigs they will put on the market in 14 months' time. The Government must know for long periods ahead how many pigs are going to the factories, but when I fill up my own contract form, saying month by month how many pigs I am going to send, I find it an almost impossible task, and if you want to be on the safe side, the only thing to do is to under-estimate and rely on the board. If the Government would work the quota system on a much shorter period, say three or four months, they would find that the pigs would come in much more freely and farmers be better satisfied to rely on the scheme. I want to impress on the Government the intense feeling there is in the West of England with regard to the milk scheme. At the same time, farmers are anxious to see the board continue, and, therefore, I appeal to the Government for some assistance in order to keep the industry going.

6.53 p.m.

Mr. JOHN WALLACE

I find myself in agreement with much that the hon. Member for Orkney and Shetland (Sir R. Hamilton) said with regard to these marketing schemes. I am not an agriculturist, but I share the desire of everyone to see agriculture rehabilitated in this country. I do not see how we can have a prosperous industrial country with a decaying countryside. At the same time, I have certain misgivings with regard to some of the schemes which have been set up. It is true that one must have patience and not arrive at decisions too hastily, but in my part of Scotland something like exasperation exists regarding the administration of the milk marketing scheme. The Under-Secretary of State for Scotland knows all the details. He was good enough to receive a deputation from farmers in the east of Scotland a week or two ago, and if he can tell us how he proposes to answer the case put to him, if it is convenient, Scottish Members will be glad indeed. There are one or two points which are rather difficult to follow in connection with the Milk Marketing Board in Scotland. We have a system which is supposed to help the producer of milk, but, in spite of that, the actual price received for milk in December by the dairymen producers in Scotland was 2½d. per gallon below the price in 1932. A meeting of the Dunfermline and West Fife Dairymens' Association was recently held and passed the following resolution: That this meeting, fully representative of registered producers in the east of Scotland, humbly presents to the Secretary of State for Scotland that the Scottish Milk Marketing scheme is proving disastrous to the producers in that area, and that he should have such immediate investigations as to him seems proper and issue an order amending the scheme. All these producers, or most of them, are strong supporters of the National Government, but the method in which this particular scheme is being administered is causing some of them to become rather shaken in their faith. I hope that the representations which have been made by responsible people will receive the attention they deserve from the Department. There is also the point of the differentiation in prices, in regard to quantity. For example, if you buy 10 gallons of milk you pay 1s. 8d. per gallon; if you buy more than 10 gallons the price is 1s. 5d. per gallon, and if you buy over 80 gallons the price is 1s. 4d. Why this differentiation? The object of the scheme is to help the producers, and my contention is that the best way to help the producer is to fix a definite price for his milk, and allow prices, so far as the consumers are concerned, to find their own level. There is rather too much bureaucracy about this scheme, and it is not working out so happily, as far as the reputation of the Government is concerned, in the east of Scotland. We all deeply respect the objects which the Minister of Agriculture has in view, but some of us have misgivings about the steady growth of bureaucracy. It may be difficult to avoid if you are to have control, but there is a danger in too much control. It may be necessary in certain departments to have this control; and it is possible that the Minister of Agriculture has a longer vision than some of us and can see the completed structure in the far distant future. I hope that it will be a satisfactory structure, but, in the meantime, and making allowances for all the difficulties of administration, the results up to now, so far as the east of Scotland is concerned, are not encouraging.

7.0 p.m.

Lieut.-Colonel HENEAGE

I wish to make a point which, I believe, has not yet been touched on—the question of payment for licences for milk of a higher grade than ordinary milk, especially certified and grade A. I believe that these licences cost £5 and £3, and as the sale of high-class milk does not in some cases produce more than that of ordinary milk, and it is most important to encourage the sale and production of this good milk, will the right hon. Gentlemen see whether, in the beginning, while this scheme is still in its infancy, he could not have the price of these licences reduced to a nominal amount? I understand that it will be quite easy later on, when the scheme is successfully launched, and also when the number of producers of these specialised milks increases, to put these licences up to their original price. I also understand that there are in existence fewer than 250 licences to produce the highest kind of specialised milk; if that is so, in order to encourage milk which is free from tuberculosis, will he do his best to have these licences reduced to a nominal amount?

7.2 p.m.

The UNDER-SECRETARY of STATE for SCOTLAND (Mr. Skelton)

Let me deal with the last question first. I will ask the Minister to have that question looked into, and see what can be done concerning the point which the hon. and gallant Gentleman made. Next, in my process of dealing with matters in reverse order, is the point made by the hon. Member for Dunfermline (Mr. J. Wallace). I will not go in detail into those of his points which are special to the south of Scotland milk scheme, but I may perhaps assuage his fears by saying that I have arranged for a meeting between the producers of the eastern part of Scotland and the board, and, on the result of that meeting, which takes place the day after to-morrow, will follow the decision whether, and if so what, questions should be put before the committee of investigation with regard to the broad situation which has arisen in the case of the supply by producers of the east of Scotland.

Turning to what remains to be said after the speech of my right hon. Friend the First Commissioner of Works, I do not think that any very new criticisms or comments upon marketing schemes have emerged. None the less, in my judgment this has been a most valuable and important Debate, because there has been, for the first time since the schemes came into operation, a general review in this House of their character and working. I do not think that anyone who has listened to the Debate so far can fail to be struck by the fact that the criticisms of this scheme and of the marketing system have been both limited in nature and restricted in scope. There has been general agreement as to the necessity for marketing schemes and as to the soundness of the general structure of the Marketing Acts of 1931 and 1933; and, in fact, the criticisms have been confined to the detailed working of the English and Welsh milk schemes. Even there it must be remembered that there are a large number of producers of milk, and that their situation has been greatly benefited by the scheme, the benefit being in direct proportion to the amount of the milk which is used for processing purposes. The House may take it that every producer of milk—I speak in, broad terms—has benefited in proportion, to the amount of the milk which was dedicated for processing.

Sir H. CAUTLEY

The hon. and gallant Member for Tiverton (Lieut.-Colonel Acland-Troyte) will not have that.

Mr. SKELTON

The examination of the situation in various regions will show that that is the case. Nobody, either in England or Scotland, would deny that there have been difficulties. The House is agreed that at the outset of a scheme dealing with a product so vast and universally produced, and one produced under such different conditions in different parts and districts of the country, there must be difficulties. I see, however, no reason to doubt—and I have had to examine very closely the character and the working of the Scottish scheme, and am not unfamiliar with what has happened south of the Tweed—that further experience will enable these difficulties to be overcome. The proposals which the Government are introducing—and with which I must not deal, for they will take legislative form—to meet the situation during the next 18 months or two years will also in their way materially assist the situation.

When, however, one turns to the other marketing schemes in existence, there has hardly been a word of criticism, nor indeed is there any opportunity for it, despite the immense and revolutionary character of the pig and bacon scheme. I use the word "revolutionary" in connection with this scheme for the reason that the bacon scheme is attempting, and not without success, to create what is practically a new industry in this country. Hardly a word of criticism has been uttered, or could be uttered, against the general results of the pig and bacon scheme up to date. Much may be said for the view that it should have been, or might have been, or may be, accompanied by a pork marketing scheme, but within the four walls of the pig and bacon scheme, as we have known it during the last month, its success has been remarkable, and there is no reason to doubt that that success will not only be continued but will be increased.

So it is with the hops scheme, and though the potato scheme is in its early days and the work of the board has been confined to compiling a sufficient census of information with which to proceed for the next season, I see no reason to doubt that the method adopted, and in particular the provision by which it is open to the board to deal with the surplus in whatever way may seem to them to be best, and the board is not confined to dealing with it by the method of the riddle, seems to me to give the scheme just the necessary stimulus it needed. My own Department has a considerable amount to do with the potato farmers and the production of potatoes, and many of the problems connected with the potato trade in this country. For the life of me I cannot see how a scheme more likely to avoid the flux and uncertainty of home production in the future could easily be framed.

In particular I should like, if I may, to correct one error into which the hon. and learned Gentleman who proposed the Amendment fell. It is not the case that newcomers into the production of potatoes are automatically fined on an acreage basis.

Sir H. CAUTLEY

Not automatically, but power is taken to fine them.

Mr. SKELTON

Power is taken to place a levy upon them in one circumstance only: if there is a surplus and that surplus involves cost to the Marketing Board. Although in this case the levy will fall first, and indeed more heavily upon them, the other producers are not exempt from payment. The House will agree that it is a sound and equitable measure that people coming newly into the production of potatoes, who are the cause of an increase of acreage which in its turn may well be the cause of a surplus or glut, should be the first, though not the only, people to bear the resulting cost.

That consideration would lead me to deal in more general terms with an observation which has been made in one form or another by more than one hon. Member who has addressed the House. It has been suggested both in regard to the hop scheme and the potato scheme that there is something going on in the way of the formation of a monopoly. With our historical background, that is always an attractive criticism to make, that something is turning into a monopoly. If, however, the problem with certain products, of which both potatoes and hops are marked examples, be to prevent a glut coming from our own production, quite independently of any import from overseas, how can you deal with that problem except by taking some means to prevent an overplus of production? That is certainly the case with hops, and I should be prepared, if the hour were not late, to argue at length that it is true also in the case of potatoes. You can be faced with a home-produced glut for which there will be no compensating increased demand. It is quite clear that a large increase of the acreage under hops would not be accompanied by a large increase in the amount of beer drunk by the people of this country. A large increase in the acreage under hops would have one result, and one only: it would make every acre more unprofitable. In my judgment it is a complete misuse of English to describe as a monopoly steps taken to prevent a result which would be so disastrous to all the possible producers—all the economic producers—in that branch of the agricultural industry.

Sir R. HAMILTON

Would not the effect be to give an enormously increased value to the land on which the hops were produced?

Mr. SKELTON

That was not the point with which I was dealing just now. I was asking, from the point of view of a marketing scheme, whether restrictions to be imposed in the case of potatoes and of hops could fairly be described as a monopoly. I do not propose to follow the hon. Gentleman into the discussion of the whole future rights, liabilities, privileges and so on that may or should flow from such a scheme. I think he is quite right in saying that new and very valuable rights may emerge, but that is certainly not a proper subject for this Debate, which deals with the question from the point of view of the marketing scheme. Nevertheless, the development of the topic along these lines has been extremely interesting and provocative. We must rigidly avoid the easy fallacy of wanting to prevent a home-produced glut and then calling the steps, and the only steps, by which we can do so, a hard-and-fast monopoly.

I do not want to pursue the hon. Member for Orkney and Shetland (Sir K. Hamilton) on that point, nor into a close analysis of the difference between the co-operative system of Denmark and the marketing system of the 1931 and 1933 Acts. There are only two observations I wish to make. As was pointed out by my hon. Friend the Member for Stone (Sir J. Lamb), a system such as the Danish system was made a thousand times easier by the fact that the Dane were catering for an export trade. If our predecessors in office and ourselves have turned to the marketing system, it is not without full trial of the co-operative system. The hon. Member for Orkney and Shetland will know that for years, both in Scotland and in England, the best efforts of some of the most enterprising and enlightened agriculturists and publicists were concentrated on trying by voluntary means to make the British farmer co-operative. The British farmer on the whole has sedulously refused to become so. I do not say that that is the case always, for there are certain examples to the contrary, but if we, faced with the economic crisis in agriculture in 1931, had not renewed efforts to secure voluntary co-operation, then indeed the plight of agriculture would have been desperate.

The criticism of the schemes to-day has been on narrow lines. The truth is that in the case of the products for which there are already schemes, or for which there will be schemes, there is no better alternative to the marketing system. An unregulated system of free imports would have done nothing other than what it has done in the last 30 or 40 years, and that is, destroy the agricultural industry. Would tariffs alone have been more successful? I know of no section of thought that would support such a view. Every quarter of the House agrees that organisation is necessary for the British farmer, and that a tariff in itself does not produce any internal organisation. It is striking that in the case of one product in which we North of the Tweed are particularly interested, we have found that even a heavy increase of the tariff has failed to some extent to check the import of produce at cut-throat prices. Therefore, I say with perfect confidence that if we were to save British agriculture a tariff alone was not preferable to the marketing method which has been adopted. Organisation at home, and restriction as far as possible of imports from abroad, and in some cases a certain amount of restriction of production here, formed a weapon far more precise than any other weapon that could have been formed. The House had every reason to be satisfied that it did a good bit of work in passing the Marketing Act of 1933. Taken broadly, the schemes now functioning under that Act show every sign of success, even though at the moment, in connection with one of them, there are temporary difficulties, the importance of which no one would seek to minimise.

The only other general observation in this Debate has been that here we have some sort of Socialism. It suits hon. Members opposite to call it Socialism in all that is doing well, and to point out that it is not Socialism where they think it has not succeeded. What is this regulation? It is certainly not bureaucratic, as has been suggested, because it is entirely in the hands of the producers themselves. In fact I do not suppose that the passage into law of the marketing scheme necessitated the addition of a single human being to the ranks of the bureaucracy. Secondly, what is the underlying principle? It is only the introduction of a system of law and order into a new sphere of national life, into the economics of farming. It leaves individual farmers as free as we ourselves are free, despite the presence of the policemen and the soldier. It is a step which no Conservative and no Liberal should have any hesitation in supporting, because it leaves independent action to the individual farmer.

What the schemes do pre-eminently is to prevent the economic efforts of one farmer becoming so extended and so selfish that he interferes with the just requirements and needs of his fellows. That is the whole function of law and order in every other department of the State—freedom within properly regulated limits. These schemes have not undermined the initiative of the individual farmer. So far as the Government are concerned I have only one further comment to make on the Debate, and that is to express gratification that the area of criticism has been so narrow and that observations of a most useful sort have been made from every quarter of the House.

Sir H. CAUTLEY

Although the answers of the Minister on the questions of difficulty and policy that have been raised, are insufficient, I do not propose to proceed further with the Amendment, and I beg to ask leave to withdraw it.

Amendment, by leave, withdrawn.

Main Question again proposed.