HC Deb 12 July 1946 vol 425 cc739-42
Mr. R. S. Hudson

(by Private Notice) asked the Minister of Agriculture if he is now in a position to state what adjustments of prices of agricultural commodities will be made as a result of the recent special review.

The Minister of Agriculture (Mr. Thomas Williams)

Yes, Sir. A special review has been conducted of the effect on costs of production of the principal agricultural products of the substantial increase in the minimum rates of wages in agriculture that will take effect in England and Wales on 14th July. In accordance with the established procedure, discussions have taken place with representatives of the Farmers' Unions of the United Kingdom. Account has also been taken of the unexpected interference with breeding and production programmes that will be caused to livestock and milk producers as a result of the severe reductions in rations of feeding stuffs which these farmers are being called upon to face. In the light of this review, and of future national food requirements, the Government have fixed revised prices for crops of both the 1946 and 1947 harvests and for fat livestock, milk and eggs, during the remainder of the current production year.

In addition, certain special temporary price supplements and grants will be given for a limited period to producers of milk, pigs and eggs. These are designed to assist such producers to overcome the serious difficulties that will be caused by the heavy reductions in rations of feeding stuffs, and to give them every encouragement to maintain production of these commodities at the highest level possible.

Details of the various price changes will be available in the Vote Office, but in view of their special importance at this juncture, I would mention that the average price of milk from 1st August will be increased by an amount equivalent to 1d. per gallon in a full year, plus a special supplement of 2d. per gallon in November, December, and January next. As an inducement to farmers to thresh and sell as much as possible of this year's crop of wheat in August and September, the price during those two months will be raised by is. 6d. per cwt., while the price of wheat of the 1947 crop will be increased by 2s. 6d. per cwt. I hope that farmers will regard the new prices as a fair and equitable settlement, and that they will make every effort to respond wholeheartedly to the calls that are being made upon them to meet the needs of the nation at this difficult time.

Mr. York

The Minister said that discussions have taken place with farmers' representatives. May I ask if the figures he has just given represent an agreement with the Farmers' Union?

Mr. Williams

No.

Mr. R. S. Hudson

The right hon. Gentleman states that account has been taken of two things—of the unexpected interference with breeding, and also of the increase in the minimum rates. Can he make any estimate of the cost to the Exchequer of these increased prices in the current financial year?

Mr. Williams

I could only give some sort of estimate. Taking into account the increased cost for harvesting the 1946 crops, the prices for which were decided in February, 1945, the temporary assistance given as a result of the loss on rationing of feeding stuffs, plus the increment in prices that will accrue to milk producers and livestock producers from 1st July, I think the total cost to the Treasury will be, approximately, £11 million for the financial year ending on 31st March, 1947.

Mr. Hudson

I am much obliged to the right hon. Gentleman, but it is difficult to appreciate the extent of such an important announcement. I rather assume from the figures—I may be wrong—that this increase does not, in fact, cover to the full extent the increased costs farmers will be put to as a result of the wages increases, and the cut in feeding stuffs. It is my guess that it does not completely cover that.

Mr. Williams

I think that before the right hon. Gentleman starts to assume whether he may be or may not be accurate, it will be far better for him to look at the now schedule of prices in 1946 and 1947. He should do so before reaching definite conclusions.

Mr. Hudson

I quite agree but I am not sure that even then it will be quite clear. The simplest thing would be to ask a direct question—whether these prices are not estimated to cover to the full the increased cost the farmers will incur in wages, and also the amount they may be estimated to lose as a result of the cuts in feeding stuffs and the dimunition of breeding and production?

Mr. Williams

The right hon. Member well knows that, from time to time, he had to tell the House that he could give no guarantee of an automatic increase, should there be an increase in wages. I myself repeated those words on several occasions, that there was no guarantee of an automatic complete recoupment should there be a sudden rise in the cost of production. due to wages, or any other reason.

Mr. Hudson

I am well aware that I gave those warnings, and I am quite sure that I was right at the time to do so. I take it from the guarded reply which the Minister has given that, in fact, these prices do not cover the increased costs that the farmers will incur. On that assumption, I venture to think that the decision of the Government, in view of the world food shortage, and the need to get every bit of food out of the country during the next 18 months, is an unwise one.

Mr. Williams

I think it would not be unreasonable if I reminded the right hon. Gentleman that before making statements of that description, calculated to cause dismay and apprehension, he should bear in mind what I said about assistance that is being granted to the farming community because of the estimated loss which they may suffer, due to the reduction in the ration of feeding stuffs. Perhaps the right hon. Gentleman will be interested to learn that, for the first time, the Govern-men have accepted a new principle, and something like£3,800,000 is to be given to the industry on that item alone. Therefore, I think it would be wise, before creating apprehension and alarm in the minds of anyone, to get the full figures and the full significance of the whole statement, before reaching very definite conclusions.

Mr. Hudson

I am much obliged to the right hon. Gentleman for giving us these figures. But may I point out, with all respect, that if he had given the figures earlier, it would have avoided the necessity of putting these questions? It is a matter of the utmost importance to get the maximum food production during the next 18 months, and if the right hon. Gentleman wants, on this occasion, to get the maximum food production and establish the confidence of the farmers, it is to everyone's advantage, including the Government's, that full information and figures should be given. Then we should not have to go through this lengthy process of extracting this information.

Mr. Williams

I am sure it is within the recollection of the House that I told the right hon. Gentleman, that a full statement on the new schedule of prices for 1946 and 1947 was in the Vote Office at this moment. I am sure that no hon. Member would have expected me to use a multiplicity of figures which would have been meaningless to most Members of the House. Therefore, I deemed it wise, in the interests of hon. Members, to place copies in the Vote Office.

Mr. A. Edward Davies

Could my right hon. Friend tell us briefly whether the adjustments of prices will immediately, or at some time shortly, affect the price to the consumer, to the man in the street—retail prices?

Mr. Williams

That is a question for my right hon. Friend the Chancellor of the Exchequer, who informed the House, when he introduced his last Budget, that it was his intention to keep the cost of living steady.

Lieut.-Commander Gurney Braithwaite

Then the increase will be carried by the Exchequer, will it not?

Mr. Williams

I presume so.

Mr. Gallaeher

In view of the catechism to which the right hon. Gentleman has been subjected, would he not consult with his colleagues with a view to eliminating interest, mortgage and rent to landlords, and the farmer would then be able to meet the increased costs?