WEST AFRICAN PRODUCE CONTROL BOARD

HC Deb 24 February 1949 vol 461 cc2088-102

Motion made, and Question proposed, That a Supplementary sum, not exceeding £13,000,000, be granted to His Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1949, for the salaries and expenses of the West African Produce Control Board, including the cost of trading services; and for grants in aid of sums equivalent to accumulated profits realised under the West African cocoa control scheme for allocation to the Governments of the Gold Coast, Nigeria and Sierra Leone, and to accumulated funds under the West African oils and oilseeds control scheme for allocation to those Governments and the Government of the Gambia."—[Mr. Rees-Williams.]

6.29 p.m.

Mr. Rees-Williams

The Secretary of State, in reply to a Question in the House on 30th July, 1948, said that it was proposed in 1949 to establish marketing boards in West Africa to take over from the West African Produce Control Board the responsibility for marketing oilseeds. This incidentally relieves me of an obligation, because I am the chairman ex officio of the Board. These arrangements have since progressed. The actual date of transfer will be different for the various territories. In Nigeria, the major producing territory involved, the new organisation will, subject to the passage of the necessary legislation, take over about 1st April I should think, but that is not certain.

As the House was informed, since 1947 the prices paid by the West African Produce Control Board to the producer have been less than the prices at which the produce was sold even after paying freight and other charges. The balance accrued to the Exchequer as a surplus on the trading account of the Board and the present estimate is presented in order to obtain the authority of Parliament for the payment of an amount equivalent to the major portion of this surplus to the West African Governments for the new Boards. The total amount of the surplus up to 30th March, 1949, is now estimated at £17 million. The balance of this amount, together with the amounts accruing thereafter, will be included in the Estimate for 1949–50. The surplus has been accumulated in the following circumstances, and I am glad that the hon. Member for Louth (Mr. Osborne), whom we do not often see during these Debates, is present to hear them.

During the war, as there were no world prices on which to base selling prices, the policy was adopted of fixing the price to the producer at a level which would ensure maximum production whilst avoiding, as far as possible, domestic inflation. All purchases were passed to the Ministry of Food at cost. By the end of 1946, and particularly following the removal of the United States price ceilings in the Autumn of that year, international trade in oilseeds began to re-establish itself and world prices rose rapidly. It became apparent that, in spite of the steady increases made during the war years, the prices fixed for West African oilseed were becoming increasingly out of line with world prices so far as they were ascertainable. For internal economic reasons in West Africa, it was not felt that producer prices could be increased immediately to the equivalent of world prices, such as they were, although it is very difficult in these circumstances to fix a world price, because so often the only price available is a marginal price.

It was also felt important that during the period of relatively high prices some portion of the proceeds should be set aside as a price stabilisation fund. Since 1947, therefore, whilst the Ministry of Food's buying prices have been brought as closely as possible into line with outside market values for equivalent products, a portion of the proceeds of sale has been steadily placed to reserve. This is in line with our general policy in order to set up these funds, which have been accumulated to a considerable extent. The last figure I saw, which was quite a recent one, was that there were some £81 million now in various funds throughout the Empire for this purpose. The purpose for which they will be used is to provide producers with a cushion against a future fall in the world price of oilseeds and to protect them, as far as possible, from any sudden or extreme drop in the return received for their produce.

Secondly, the funds are available to finance development and research in the areas of production and they have been so used not only in the case of oilseeds but in connection with other commodities. I mentioned that I hoped that the necessary legislation would be passed soon, and I have given the date as it affects Nigeria. If necessary, I can give the date for the other areas. I have also details about selling prices per ton and it might interest hon. Members to have details so that they can see the sort of reserve which has been built up. The details show: groundnuts, 1948–49 crop, decorticated £55 a ton; undecorticated, £46 10s. a ton. Typical buying prices for the crop are, decorticated, £19 4s., and the approximate amount added to reserve is £19 per ton. All these prices are c. and f. because the Ministry of Food carries its own insurance. The selling price of the 1949 shipment of palm kernels was £50 a ton and the buying price was £26, the amount placed to reserve being £12. The price for palm oil was £75 a ton, the buying price £42 5s. a ton and the amount placed to reserve was £15.

We anticipate that the total amount from West Africa will be 350,000 to 380,000 tons of decorticated groundnuts, 150,000 tons of palm oil and 450,000 to 475,000 tons of palm kernels. All these products are of immense importance to the Empire as a whole and also to the people of this country. They provide many of the fats, soaps and other articles so dear to the hearts of the housewife. I therefore hope that the Committee will give this Estimate its blessing.

6.36 p.m.

Mr. Oliver Stanley (Bristol, West)

I want to say only a few words on this subject. Of course, this is not really an expenditure in the ordinary sense. This is merely the transfer of profits which have accumulated over a number of years and which, owing to the different system set up in West Africa, are now no longer to be retained by the Treasury. I was partially responsible, in the days of the war, not only for this scheme but for similar schemes in cocoa and cotton in Uganda. I still feel that in the circumstances it was the right way to handle the difficulties of the moment.

But certainly at that time we never anticipated that the sums which were to be withheld, for that is what they are—they are being withheld from the actual producers of the goods—would attain these quantities or be withheld for such a long time. There is a danger in making this cushion too big and this reserve too large, although it is true that the Government can say, as they honestly will, that they will spend this money in the locality or in the interests of a particular sort of producers. That expenditure is apt to seem a little indirect to the farmer on the spot compared with a slight addition to his price.

Although I do not think that the time has yet come to reverse projects of this kind, I think that this new organisation taking over this scheme in West Africa, as well as the organisations running the other schemes, ought to consider whether the time has not come when rather more of the profit being made could with safety be given to the producer and rather less retained in a pool which I agree is for their ultimate benefit. That, of course, is linked up with another question which is far beyond the scope of this Debate, and that is the ability to give consumer goods. If only we could give consumer goods, the danger of inflation would tend to disappear and we could safely increase the money to the producer. That, however, is a wider topic which we shall have to discuss on some other occasion.

6.40 p.m.

Mr. H. D. Hughes (Wolverhampton, West)

I am surprised at the tone of the right hon. Member for West Bristol (Mr. Stanley). I had rather expected that on this issue the long expected all-out attack on the Government's policy would materialise—

Mr. Stanley

I never expect very much from the hon. Gentleman, but today he has fallen below even my expectation. I explained to the Committee. I thought it unnecessary, but I did explain to the Committee. Now I see that it was necessary from the point of view of the hon. Member, who does not appear to understand at all. These are accumulated profits of the past which have simply been transferred from one Government Department to an organisation outside.

Mr. Hughes

Yes, but if the right hon. Gentleman had allowed me to explain the reason for my remarks, he would have learned that what we are, after all, discussing today is simply a very successful example of bulk purchase and organised marketing. In the last few weeks, I have on a number of occasions addressed gatherings at which supporters of the right hon. Gentleman opposite have been repeating silly parrot cries against precisely that kind of bulk purchase of which this scheme is an example.

The Temporary Chairman (Colonel Ropner)

The hon. Gentleman must not raise the whole question of bulk purchase on this Estimate.

Mr. Hughes

I do not wish to raise the whole question, but to confine my remarks to the particular case of bulk purchase with which this £13 million is concerned. I wish to go a little further into this particuar example and to consider its effects. What effect has it had upon this country? It has already increased the supplies of oil seeds and vegetable oils and the export of groundnuts from Nigeria, which has trebled in the last five years, and has also increased the supplies of palm oil and palm oil products. It has meant vastly improved prices for the Colonial producers and some guarantee of stable markets for their produce.

Earl Winterton (Horsham)

On a point of Order. May we have it laid down quite clearly what we may discuss on these Supplementary Estimates? The hon. Gentleman is claiming that he can discuss policy and is giving his views about bulk purchase. I have always understood that, on the Supplementary Estimates, we cannot discuss policy.

The Temporary Chairman

The hon. Gentleman will not be in Order in discussing policy on the Supplementary Estimates. As I have already indicated, he is going a little too far.

Mr. Hughes

The only issue which I have touched upon does arise on this Supplementary Estimate of £13 million, and it is only this Estimate and the transactions which arise in connection with it that I wish to discuss. It is precisely this system that has led to increased production in West Africa and to vastly improved prices for Colonial producers, who were desperately impoverished in the period prior to the introduction of this scheme. The Under-Secretary gave various examples of prices, all of which I was not able to follow, but it is quite clear that, as a result of this scheme, the producer in Nigeria today is getting something like a reasonable standard of living, which is vastly better than he enjoyed before.

The Temporary Chairman

The hon. Member is out of Order and must obey my Ruling. Those questions to which he is now addressing himself, do not arise on the Estimate before the Committee.

Mr. Hughes

If I may, I will pass from that point to a second point which I wish to make on this issue. We are handing over £13 million to the Governments of Nigeria and other associated Colonies. That is going to have a very striking impact on the economies of those territories. That money is going to be spent in establishing stabilisation funds and in other expenditure of benefit to the producers of palm oil and groundnuts in these territories. This sum of £13 million is an enormous one in relation to the economies of these territories.

If we take Nigeria alone, the total budget of that Colony is something in the nature of £20 million, and this sum coming into the territory is almost equivalent to the total annual revenue. The money to be received by these territories under this scheme is vastly in excess of what they will be receiving under the Colonial Development and Welfare Fund. Much of this money will be reserved for stabilisation purposes, which will be of tremendous importance, but there will be a good deal over for other forms of expenditure, and it seems to me of great importance that some thought should be given as to how this money will be expended in the Colony and how it will be related to the ordinary budgetary expenditure of the Colony and the Colonial Development and Welfare Fund.

It has been stated by the Under-Secretary that one important point arises concerning the amount to be handed over directly to the individual producer, compared with what is retained up to the present by the Produce Control Board, and, shortly, by the Marketing Boards in the Colonies, for what may be called collective expenditure. The individual producer is getting a much better price today, and is receiving something like £19 for groundnuts compared with the £3 which was all he got in 1938. Therefore, it is quite clear that, from that point of view, he is better off, and there is already some inflationary danger in the Colonial territories from the amount of money being handed over.

The Temporary Chairman

I really must ask the hon. Member to keep to the item which is before the Committee, as he is now out of Order again. It is not possible to rule from this Chair that an hon. Member is out of Order until he has already gone a considerable distance. I hope he will bear that in mind in the remainder of his speech; otherwise, I shall have to ask him to resume his seat.

Mr. Hughes

I am anxious to keep within your Ruling, Colonel Ropner, and I will therefore leave the question of price and deal solely with the sums available for collective expenditure arising from the Produce Control Board and its successors.

Mr. A. Edward Davies

On a point of Order. May I ask how far we can go in discussing these Supplementary Estimates? Is it not correct to say that we are discussing the amount which has accumulated, which has been described as a reserve from the sales of West African produce, and has already been referred to by the right hon. Gentleman opposite. Is it not quite right for us to take account of the prices paid to the producers? I should have thought that, since the right hon. Gentleman opposite was at pains to discuss that very point, my hon. Friend would be correct in drawing attention to the prices paid at different periods to the producers in West Africa, and in relating that matter to the present Vote.

The Temporary Chairman

I should prefer to allow the hon. Gentleman to continue his speech, and I will tell him whether he is in Order or not.

Mr. Sorensen (Leyton, West)

Do I understand that we cannot discuss these Estimates in relation to the disposal of this very impressive sum?

The Temporary Chairman

Yes, I think that is so.

Mr. Hughes

With respect, Colonel Ropner, the position is that we are handing over £13 million under this scheme, and this is the first opportunity which this House has had for a discussion of the impact of this scheme on the Colonial territories themselves, which is of tremendous importance. It is also the last opportunity which we shall have, and, without in any way seeking to evade your Ruling, may I ask for my own guidance whether it is in fact in Order to discuss the ways in which this money can be used in the Colonial Territories?

The Temporary Chairman

If I apprehend completely the question which the hon. Gentleman asks me, the answer is in the negative.

Mr. Hughes

If I may, I will proceed, and, if I trespass again it will be unwittingly. There is this sum of £13 million, and it is quite clear that that is of profound significance to these territories. It would seem to be important that some message of goodwill should go from this Committee to the Colonial Governments and the people involved, and I hope that we may express the wish that this money will be used constructively and actively for the benefit of these territories.

Some of the points which seem to arise are these. This money is to be used for the benefit of the oilseeds producing interests. One thing which is desperately needed is research into the problems of improving methods of oil production. At present, as I understand it, expenditure on research, for which this money will be available in the future, is limited in Nigeria to something like £152,000 under the Colonial Development and Welfare Fund. The Oil Palm Research Station is struggling with a staff of six, whereas it requires a staff of 16 or more to carry out its present plans. Therefore, I hope that the authorities who will be dealing with the disposal of this fund will bear very carefully in mind the requirements of research to raise the standards of production.

The Temporary Chairman

May I suggest to the hon. Member that he reserves his speech for the main Estimate on the salary of the Secretary of State? Then I think he will be in Order.

6.52 p.m.

Squadron Leader Kinghorn (Great Yarmouth)

I hope that I can keep within the bounds of Order for the next few minutes, Colonel Ropner. I should like to introduce a spirit of tranquillity into this Debate. If the Press is going to take any notice of this Debate tonight, I think that probably the finest advertisement for this Committee would be the utmost publicity for the fact that this sum of £13 million is to be disposed of in the way that the Under-Secretary has mentioned. I am viewing you, Colonel Ropner, with great apprehension.

In these days when in certain parts of the world strictures are made on this country for its present and former activities in the Commonwealth and Empire, I think that many of our critics would be dumbfounded if they realised the significance of the work which is being carried out in the expenditure of this money, not only by this Government but by the Government of which the right hon. Member for West Bristol (Mr. Stanley) was a Member and which, as he told us, instituted this arrangement during the war years. It is a very fine thing that the old idea of Empire is not being carried out in this instance—that it is not simply a source of wealth to those who own the land, but that people are being encouraged under a system of tutelage, to make the best of their territory.

The Temporary Chairman

I think that the hon. and gallant Member knows that he is out of Order. I must ask him to deal with the Estimate which is before the Committee.

Squadron-Leader Kinghorn

This Estimate relates to money which has been saved on behalf of people who are not in a position to save it themselves, and now it is to be given back to them to enable them to make further progress. Their territory will be all the richer for the work done by our Commissioners, our Government representatives and the Colonial Office. That is a matter of which we ought to be very proud. I only regret that it is not possible to go further into the matter tonight and discuss what has already been mentioned by the right hon. Member for West Bristol—namely, how the money could be used if world conditions were better. However, it is a source of great hope to some of us that this will not be the only scheme of its kind but that throughout many parts of the Empire which we shall be discussing later, we shall see more schemes which will redound to the benefit of all in the Commonwealth and Empire.

6.55 p.m.

Mr. A. Edward Davies

The item which we are now discussing has been described as a transfer of a current item. As I understand it, it is a credit which rightly belongs to four Colonial Governments and is derived as a trading profit from oilseeds and oils. I should like to stress something which the right hon. Member for West Bristol (Mr. Stanley) said earlier. He emphasised the point that while it is admirable to have this surplus—and the Government ought to be congratulated on making it available for the Colonial Governments—there is a danger in having a fund like this if it means that the producers of the primary products feel a sense of injustice that they are not getting the proper price for their produce.

Some of us know that in West Africa, for instance, while there has been a much better price paid for oilseeds and oils, there has been a great hiatus between the world price and the price paid to the producer. While it is excellent that there should be some provision, as explained on page 34 of the Estimates, for the future marketing arrangements and other purposes of benefit to the oils and oilseeds producing interests in the respective territories. and while undoubtedly there has to be a great deal of research and the cushioning, as it has been described, against bad times, we must be careful that we do not build up a fund in such a way that it will be regarded as a blanket to smother the enterprise of the people on the spot. I hope that we shall try to keep a sense of balance between the price paid to the producer and the reserve which goes to build up the fund in this way.

I am not quite clear on this point, but I take it that the intention is that when this amount is disbursed to the several Governments, it is to provide for the future development of the industry; and that we consider that it is wise not to pay the producer all the money because of the danger of inflation and the problem of consumer goods. However, perhaps the Minister will tell us that account will be taken of such problems as are being experienced on the Gold Coast and elsewhere, where disease is affecting some of the trees, and that some provision will be made for compensation out of such a fund. In short, could we be told more about what is intended to be done with the fund? The news that the British Government are not getting a "rake off" from these primary products in Africa, but are honest and above board in putting the money back into the country in this way, will be welcomed in the Colonial territories and will do much to establish happy relations between the people in those territories and ourselves.

6.58 p.m.

Mr. Sorensen (Leyton, West)

I appreciate that we are confined to a very narrow scope in this Debate. However, I presume that it is in Order briefly to refer to certain statements which were made by the right hon. Member for West Bristol (Mr. Stanley) and the Under-Secretary of State for the Colonies. The latter referred to the fact that the moneys from which such a large sum has accrued are for the benefit of the people in this country in providing them with very valuable fats. I am quite sure the Under-Secretary will agree that we must consider the expenditure of these moneys in terms of abundance not merely to this country but also to West Africa.

That being so, I should like to link up that fact with the remarks of the right hon. Member for West Bristol, who claimed that it was largely due to him that during the war this excellent principle was put into operation. I congratulate him on supporting that principle now. I hope he will long continue to do so, because out of sheer necessity we find that this particular method of marketing is good for all concerned. For that reason I hope that in this and other ways we shall have the support of the Opposition to all such developments of this kind.

There is one small point on which I should like some illumination, and perhaps the Under-Secretary could help me. I see that in the centre of page 34 the original total Estimate for 1948–49 was £2,044,000, to which has been added the sum of £13 million. I can well understand the larger Estimate being required, but surely there is a considerable disparity between the original Estimate and the additional sum now required. If I could be given some explanation of the reason why the original Estimate was so small, by comparison with the total amount we are now considering, I should be very much obliged.

7.1 p.m.

Dr. Segal (Preston)

On analysing the figures given to us by the Under-Secretary, one finds that a figure of roughly 20 per cent. of the total selling price has been placed to reserve in each case, both for palm kernels and palm oil. By what means is this figure of 20 per cent. arrived at? Is it purely an arbitrary figure? How does it compare with sums placed to reserve in previous years? In other words, are we finding that a smaller percentage is being placed in reserve than on previous occasions when these Estimates have come before us?

There is another matter upon which I should like to have some enlightenment. It is quite obvious from the figures given by the Under-Secretary that palm kernels are a highly profitable crop. Is he satisfied that the yield we are obtaining at present is the maximum possible one? I ask him to go into more detail when he replies and to let us know to what extent these quantities of palm kernels we are now receiving might be increased by improved methods of transport. If, instead of having transport by foot by which people have to carry palm kernels a distance of 15 to 20 miles, we could have collection by means of mechanical transport, would not we obtain a very much higher yield and greater profit to this country? There is one other matter. Can the hon. Gentleman give an assurance to the Committee that the number of mechanical grinding mills has been increased and—

The Temporary Chairman

The hon. Member is really out of Order and he must address his remarks to the Supplementary Estimate.

Dr. Segal

Can the Parliamentary Secretary, perhaps in general terms, give an assurance to the Committee that the yield of palm kernels and palm oil we are obtaining at present is the largest available amount? Finally, of the balance of the selling price which has now been repaid to the territories concerned, what, if any, is the amount which is to be paid to the producers themselves? Is any to go back to the African who carries the palm kernels on his head, or is the whole repayment going into the pockets of the farmers?

7.3 p.m.

The Secretary of State for the Colonies (Mr. Creech Jones)

It is not my intention to wind up the Debate, but I am anxious to deal with one of the criticisms which has been made about the method by which these payments are being made. I should be out of Order, I am afraid, if I attempted to reply to my hon. Friend the Member for Preston (Dr. Segal) and I shall confine myself to one or two small points which have been made in the Debate.

The first thing I want to say is that the producers enjoy a very much better arrangement than would be possible if their marketing were left to normal competitive conditions, and consequently the price which they receive for their commodities is very much higher than it was previously. The second point I want to make is that the marketing Board is now being broken up so as to cover the respective Governments and it will be the local producers themselves and their organisations who will be in control in regard to the dispersal of what funds are available. As has been pointed out, the whole desire is to have a cushion to preserve a good price for the producer and to have money available for reserve and for the development of the industry, but this arrangement makes for greater efficiency in the industry and it gives producers a control over the marketing of their own products. There is no danger whatsoever of a blanketing of the producers because the producers themselves have an effective voice in the manner in which the money is used.

It is on those points that I wished to make the situation clear, although there is one further point I wish to add. The right hon. Member for Bristol (Mr. Stanley) said that possibly the time was coming when the whole of these schemes should be brought into review again. I can say that this particular scheme is comparatively new and these moneys have accumulated only in the past couple of years. Obviously, if this money were released on the country there would be the danger of inflation, but in any case if the producer's price were very much higher there would be a real danger, as consumer goods are not available, that inflation for normal commodities would arise from the high prices and that consequently a very disastrous and difficult situation would overtake the economy of the country.

I want to assure the right hon. Member for West Bristol that the point he has raised is continuously in our minds—the question whether these large funds cannot be better utilised and a larger price given to the producer. It is, however, a matter of very great difficulty in the existing economy of the territory to do other than what is being done at the present moment.

Mr. Sorensen

Will the right hon. Gentleman deal with the simple technical point which I put to him? I am not quite sure whether the Secretary of State or the Under-Secretary is to reply. The point on which I should like a little enlightenment is why the original Estimate falls so far short of the total Estimate now required. Probably there is an obvious explanation.

Mr. Rees-Williams

Obviously the explanation is that at the beginning of the year one cannot estimate how much will come into the coffers during the period. That depends on the crop. This is a transfer item, as the right hon. Member for West Bristol (Mr. Stanley) has pointed out. This is the amount which will come in for the period about which we are talking and which will be transferred from the Exchequer to the bodies in West Africa.

Mr. Stanley

Is it not a fact that when the Estimates were prepared the decision had not been taken to make this transfer and to set up this new organisation? Is that not why no figure appeared in the main Estimates?

Mr. Rees-Williams

We were considering doing it and for some time had been considering it, but we were not certain when it was going to be done and we did not know how much would actually come into the coffers of the Exchequer in this particular period.

7.9 p.m.

Sir W. Smiles

Some of us have felt rather guilty about the large surplus which is piling up in this fund. The hon. Member for West Wolverhampton (Mr. H. D. Hughes) said that this was a wonderful example of the advantage of bulk purchase, but of course the people in the Colony had to submit—

The Temporary Chairman

The hon. and gallant Member will also recall that I interrupted the hon. Member for West Wolverhampton when he made that remark.

Sir W. Smiles

At any rate I was glad to hear from the Secretary of State just now that these funds are to be made available very soon for the people who actually toil by the sweat of their brows in a very bad climate to produce these oilseeds. We have been supplying cheap food for the people here while the people out there have not been getting a fair market value for their produce. I was extremely glad to hear the explanation given by the right hon. Gentleman tonight, and I am quite sure it will please many of the producers in the Colonies affected.

Question put, and agreed to.

Resolved: That a Supplementary sum, not exceeding £13,000,000, be granted to His Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1949, for the salaries and expenses of the West African Produce Control Board, including the cost of trading services; and for grants in aid of sums equivalent to accumulated profits realised under the West African cocoa control scheme for allocation to the Governments of the Gold Coast, Nigeria and Sierra Leone, and to accumulated funds under the West African oils and oilseeds control scheme for allocation to those Governments and the Government of the Gambia.