HC Deb 10 March 1938 vol 332 cc2111-6
Mr. T. Williams

(by Private Notice) asked the Minister of Agriculture and Fisheries whether he is in a position to make any statement as to the policy of the Government in relation to the pig and bacon industry.

Mr. W. S. Morrison

In the statement of policy which I made on 29th July last, in reply to a question by the right hon. Gentleman the Leader of the Opposition I indicated that the difficulties of the bacon industry appeared to be due in part to the high cost of pig feeding-stuffs and in part to high costs of bacon manufacture. I said that if the Government could be assured that there would be effective reorganisation of the bacon factories, they would be willing to propose that some assistance should be accorded to the industry over a sufficient period to enable the contract system for the sale of pigs to curers to be reestablished.

The negotiations with the Pigs and Bacon Marketing Boards foreshadowed in that statement have resulted in agreement as to the nature and form of the changes in organisation that are required. It is proposed to reconstitute the Bacon Development Board, to increase the number of independent members, and to give that Board wider powers of co-ordination and of policy control than it has had in the past.

The Bacon Marketing Board are preparing a scheme of factory rationalisation, having for its object a reduction of the number of curing units and of total curing capacity and the introduction of higher and more uniform standards of efficiency in bacon production. The Government are assured that rationalisation on these lines will proceed. The method of sale of pigs to curers on annual contract will be restored. Accordingly, the Government propose the following financial arrangements for a period of three years:

In the first year, pig producers will receive in respect of pigs of a prescribed standard produced in Great Britain and delivered to bacon factories in fulfilment of annual contracts a basic price of 12s. 6d. a score deadweight when the cost of a standard feedingstuffs ration is 8s. 6d. per cwt. To enable this basic price to be paid, curers will be compensated from the Exchequer in the event of any fall in bacon prices below a notional price of 94s. 9d. per cwt. Pig producers for their part will be similarly compensated in the event of the cost of the feedingstuffs ration exceeding 8s. 6d. per cwt.

In the second year, the basic pig price will be reduced by 1d. per score and the notional bacon price by 1s. per cwt.; in the third year, the price to be paid for pigs will be reduced by a further 2d. per score and the notional bacon price by a further 2s. per cwt.

If, during the three-year period, the cost of the feedingstuffs ration falls below 8s. 6d. per cwt. or bacon prices are above the notional figure, there will be a corresponding recoupment by the Exchequer.

The number of pigs that may be assisted under these arrangements will be 2,100,000 in the first year, 2,400,000 in the second year, and 2,500,000 in the third. It will be a condition of assistance that the industry itself shall finance an approved programme of research, education and related services, with the primary object of reducing the costs of pig production. During the three-year period, the regulation of bacon supplies will be continued so as to maintain reasonable prices in the general interest, but the Government will not regard themselves as restricted to any given total.

The cost of these proposals to the Exchequer will depend on certain unpredictable factors, including the course of prices of feeding stuffs and the price of bacon, but on certain assumptions the cost might average approximately £1,000,000 a year. Legislation will be introduced before Easter to give effect to these proposals as a whole. The Government commend them to Parliament as being calculated to assist the industry to reduce its costs of operation, attain a higher level of efficiency and put itself generally on a self-supporting basis.

Mr. Williams

May I ask, first, whether the right hon. Gentleman will give the House the benefit of the calculation that has been made as regards price and foodstuffs; whether the calculation was made at the agricultural colleges, and if so will all Members of the House be given the privilege of that calculation? Secondly, if this scheme does come to fruition does he intend to insist upon really effective rationalisation of bacon factories? Thirdly, does he think it possible to get a really successful stabilised bacon industry, if all pork pigs are left outside the scheme?

Mr. Morrison

In reply to the first question, the calculation that has resulted in the formula which is the basis of the scheme is a matter of some detail. There will be ample opportunity for discussing it when the Bill comes before the House. With regard to the second question, I am satisfied that rationalisation will now proceed. The Bacon Board has been engaged, through a committee, for some time preparing a scheme, and I am satisfied that effective rationalisation will result. In reply to the third question, I think these proposals will be sufficient to put the industry in a very much stronger position as regards its efficiency and self-supporting character.

Mr. Williams

The right hon. Gentleman says that the maximum for which guarantees will be available for the first three years will be 2,100,000 pigs, 2,400,000 pigs and 2,500,000 pigs. In view of the recommendations of the Pigs and Bacon Reorganisation Commission which were accepted by the Government of the time, that available supplies in this country should be equivalent to 10,750,000 cwts., will he assure the House that, apart from the calculated home product, over 8,000,000 cwts. will be permitted to be imported during each of the first three years?

Mr. Morrison

I said in my statement that during the three-year period the regulation of total supplies will be continued so as to maintain reasonable prices in the general interest, and I think that carries with it sufficient guarantee in this matter.

Mr. A. V. Alexander

Is the Minister aware that the adoption of this basis in the last three years has maintained such high prices that large numbers of people cannot buy bacon and that this policy is, in effect, breaking many people off the bacon-eating habit? Would he also say whether his statement means that the Government have abandoned the proposal for the levy subsidy and will meet the whole cost from the Exchequer?

Mr. Morrison

With regard to bacon prices I do not accept the right hon. Gentleman's contention that the scheme hitherto in operation has raised bacon prices. As a matter of fact, bacon as an article of food has risen less in cost than the average rise in the cost of food, and the cost of food in general has risen less than that of other commodities. With regard to the right hon. Gentleman's other point, these proposals are quite independent of any levy subsidy proposal.

Mr. T. Williams

Can the right hon. Gentleman say whether, as last year the total available supply fell short and was only 9,000,000 cwts, there will be an increase of imports this year?

Mr. Morrison

Increased importation must depend upon increased supplies being available. Owing to the rise in the cost of feeding stuffs and the reduction in the pig population, not only in this country but in countries like Denmark and Holland which normally export bacon, I could not give a guarantee of what will be exported until I know what the capacity of those countries for bacon production will be.

Mr. Turton

Can the right hon. Gentleman say from what date he expects the new contracts to operate?

Mr. Morrison

That depends on the speed with which we can get the legislation through the House, and the readiness of the House to agree that these are reasonable proposals. As to that I cannot prophesy, but I should desire, if it were possible, to start the new contracts on 1st July next.

Sir Joseph Nall

Has the Department considered the alternative of encouraging the production of cheaper feeding-stuffs, the need for which is felt in every branch of agriculture?

Mr. Morrison

Yes, Sir. All these matters have been considered and noted. Under the Agriculture Act we are doing what we can to' encourage the growth of native supplies of feeding-stuffs. With regard to feeding-stuffs as a whole, as my hon. Friend must be aware, the supply depends very largely on climate, not only in this country but in foreign countries.

Mr. de Rothschild

When the Minister indicated that a figure of 2,500,000 pigs would be the limit for the subsidy—would be the aggregate—did that mean that production over that minimum would be discouraged and that there would be restrictions put upon production in this country?

Mr. Morrison

Not at all. That is the figure for the third year, and after the third year we hope that the industry will be in such an advanced condition of efficiency that it may be possible for any number of pigs to be produced, without assistance, exceeding the limit of 2,500,000.

Sir John Haslam

The right hon. Gentleman has spoken of an increase in the number of independent members of the board. Will he see that the wholesale and retail sections of the trade which deal with the public are better represented on the board? The Minister also referred to Great Britain. Does that include Northern Ireland? May I further ask, will he take care that the small curers who cure for their own retail trade, are not penalised by the proposed legislation?

Mr. Morrison

With regard to the first question, I would say that it seems at first sight, rather difficult to reconcile the status of an independent member of the board with that of a representative of the retail trade. Of course all the matters which affect the retail trade will be taken into consideration. With regard to the question about the smaller curers, I would reassure the hon. Member and the House. There are, approximately, 650 curers licensed by the board, and it has been decided in these proposals to let off from rationalisation and from the contract system the smaller curers. That is to say out of 650 there will be 400 of the smaller curers who will have no other obligation than to license with the board, and who will not be subject either to compulsory acquisition or to the contract system.

Sir J. Haslam

What about Northern Ireland?

Mr. G. Strauss

How is it that the Government are increasing the subsidy to the pig industry while, at the same time, reducing the subsidy for the building of working-class houses?

Mr. Mathers

How does it come that pigs have got in front of poultry in the queue of subjects waiting for the Minister's attention?

Mr. Macquisten

Is it not the case that the whole result of these marketing boards has been to increase food prices and bureaucracy?