AGRICULTURAL DEVELOPMENT ACT, 1939. (Hansard, 21 November 1939)

§ The Minister of Agriculture (Colonel Sir Reginald Dorman-Smith)
I beg to move, That the Supplementary Scheme under the Agricultural Development Act, 1939, varying the estimated average price for homegrown barley provided for in the Barley Scheme, 1939, and making certain consequential amendments, a copy of which was presented to this House on the 15th day of November, be approved. There is no point of principle involved in this scheme. It is one merely designed to meet the changed circumstances which have come over the barley world owing to the outbreak of war. It is also designed to try and save to the Government and to the users of barley and importers of beer unnecessary trouble and expense. The House will remember that in August last it approved a barley scheme arising out of the Agricultural Development Act. The main feature of that scheme was that brewers and importers of beer should pay into a fund certain levies which are laid down in the scheme, so that the producers of barley would be assured that they would receive an average price of 10s. per cwt. The amount of these levies was determined by the difference between the average price of barley in England and Wales and the 10s. per cwt. at which we aimed. That was to be ascertained during the six months 1st August, 1939, to January, 1940.
The scheme provided also that, in order that these levies should flow evenly, the 1085 Ministers concerned should make an estimate of the average selling price of barley. That estimate was made in August—an estimate of 8s. 7d. per cwt. On that estimate the provisional collection of the levies has proceeded. 'It is pretty clear that, owing to present conditions, the average price of barley will, in fact exceed the figure of 10s. per cwt., above which there is no levy payable. To date actually the average price is at about 11s. 8d. per cwt., and there is no sign of that price dropping. This scheme, therefore, has been made to enable the Ministers to vary their estimate of the average price and bring it to the reality, and also to enable us to pay back those levies which have already been collected to the brewers and to the importers. The principal scheme also provided that applications for barley subsidy were to be made by growers at a date not later than 30th September this year. Owing to the outbreak of the war no forms of application have gone out and, unless there is a real fall in the price, it will be unnecessary to send those applications out, but the supplementary scheme, in order to be on the safe side, makes provision against a fall in prices by allowing an extension of the closing date for the receipt of applications. In other words, if a fall did come about, in order to give full expression to the scheme, forms could be sent out early next year if necessary. I hope the House will approve the scheme.

§ Mr. T. Williams
We have no objection to this very modest scheme, but perhaps it would not be out of place to draw the attention of the very large number of Members in the House to one of the peculiar factors which ever follow the case of agricultural products and prices. It is only about six or seven months since we were dealing with the price of barley because of the very bad season for barley growers. They were receiving a very small price because their output had been large, they had knocked the bottom out of their own prices and Parliamentary action had to be taken and the Treasury had to step in to safeguard them. Parliament in its wisdom provided a price below which barley should not fall, and the scheme to which, the right hon. Gentleman has referred gave an element of security to the producer. But we went further. We actually provided barley 1086 growers with a special subsidy for the 1938 crop and in 1939, in order to relieve the barley growers' anxiety, it was intimated that, if the price fell below a certain point, the Treasury were willing to step in to fill the breach. The war has been proceeding for only 10 or 11 weeks and we find that what might have been, according to the Minister's calculations, an economic price for barley has been exceeded by about 20 per cent. already. Hence the need for this scheme to replace such contributions as have already been advanced and to revoke the original scheme made in August.
When the House is called upon to deal with agricultural commodities, when we are providing guaranteed prices, when the Treasury is called upon to pay out millions for the present or last year's crop, it ought not to be a case of one party, the Treasury, putting all the time and the other party taking all the time, as appears to be the case. The first opportunity that presents itself to enforce considerably higher prices is taken advantage of. I suppose if the right hon. Gentleman is confronted with this problem six months ahead and if, as I hope with all my heart, there is an end to hostilities, the price of barley naturally will tend to fall and, once it falls below the estimated price of 8s. 7d., the Treasury again will have to step in to fill the breach—I repeat the word "breach." I am glad the farmer is receiving an economic price for his commodity. I want him always to receive that. Indeed I should prefer to guarantee him what was a recognised economic price, based upon careful calculations, so that year by year fluctuating prices would be flattened out and he would always know where he is, but while we continue with this, taking the chance when it arises and getting the Treasury to supply the means when the opportunity is not there, is really not playing the game. However, this revocation scheme is very necessary, but I hope that the right hon. Gentleman, at meetings of the National Farmers' Union, will whisper a word of wisdom in their ear not to upset Parliament by taking advantage of every possible opportunity that presents itself, or Parliament may at some time, sooner or later, go back upon their promises, which would not be healthy either for the farmers or for agriculture, or even for the nation.

§ Mr. John Morgan
This looks an innocent Measure, but I am glad that my hon. Friend has drawn attention to the almost unholy haste with which the brewers are trying to get back their levies. After all, the original scheme, I gather, was only for 12 months on an experimental basis. If so, could not the brewers have left the whole scheme for the 12 months? I take it that there may be anything up to £100,000 already in the "kitty." That cannot mean much to the brewers, and it would have remained a very good insurance to meet the fear that farmers have that the moment this business is over they will once again he in the cart. I feel that the Minister is placing facilities—I do not know under what pressure—before the brewing industry which ought not to be so readily given them. The money would not be in the kitty had they not been buying their barley at a good price. When the sales cross the border-line Parliament is called upon to enable a refund to be made. I hope that once again the brewers and the farmers between them will realise that the brewing industry is capable of paying a proper price for barley. It is now living mainly upon the production of the home crop, and it is buying it at a satisfactory price to the farmer without an undue increase in the price of beer. Surely that lesson ought not to be lost on the farming industry and the country at this time.
I should like to ask whether this means that actually the hope of a barley scheme is abandoned. Having refunded these amounts, and presuming that the war should go over the experimental period, does that automatically mean that once again a fight would have to be made for the farmers and once again the barley price would have to be put upon some kind of insured basis? How does the acceptance of this Measure affect that? Also are the brewers under any kind of statutory obligation at this moment to buy only home-grown barley or are they free to buy imported if they can get release of that imported from the Food Controller? Farmers to-day are seeking every kind of guarantee for their future. Their future is not very well assured. Surely the brewers could give the farmers a guarantee that they would hold the price position for 12 months after the termination of the war, because we are going to 1088 see a very real extension of barley acreage in the spring and they can buy the home crop barley and at the same time not face a worsened economic position for themselves.

§ Sir Richard Wells
I am sure the hon. Member did not intend to leave a wrong impression, but I should like to say on behalf of the brewers that they did not oppose the scheme and they gave a great deal of assistance to the Minister. They did not ask for this levy to be removed. It has, obviously, been removed because the price of barley has gone above the estimate. If there is one section of the community who would like to see the farmers get a fair average price, and a regular price, it is the brewing industry.