§ Order for Second Reading read.
§ 3.50 p.m.
§ The Minister of Agriculture (Major Sir Thomas Dugdale)
I beg to move, "That the Bill be now read a Second time."
This short Bill carries out an undertaking which I gave to the House on 29th November last that I would ask Parliament to make the necessary provision for the fertiliser subsidy, the introduction of which I then announced. The House will recall that at that time some farm price adjustments were made arising out of the Special Review held under Section 2 of the Agriculture Act, 1947. This review was occasioned by an award of the Agricultural Wages Board for England and Wales; but, in addition to the increase in the wages of agricultural workers, the Government also agreed to consider an unexpectedly large increase in the price of fertilisers.
It had been estimated that the withdrawal of the second half of the war-time fertiliser subsidy on 1st July, 1951, would increase the farmers' bill for fertilisers by about £10 million—that is to say, if the fertiliser consumption remained at the same level during this year as during 1950 to 1951. This increase was taken into account in the Annual Review in the early months of 1951.
Following that Annual Review, steep and quite unexpected rises in freight rates and the costs of imported materials, combined with other higher costs, turned the estimated increase of £10 million into one of a little over £19 million. The increase was particularly heavy on phosphatic fertilisers, and on behalf of the Government I promised that the excess of just over £9 million would be dealt with separately by means which would more effectively encourage the proper use of fertilisers on crops and grass, and this was to be done through payments of contributions to farmers towards the cost of acquiring phosphatic fertilisers in the United Kingdom.
Further increases in the costs of fertilisers have recently been announced, and they were included in an Order made 242 by the Minister of Materials which came into force on 1st February this year. These increases have been taken into account by the Agricultural Departments in considering the details of this particular subsidy. It is now estimated that the rise of just over £9 million, to which I referred in my statement in November, 1951, is now a shade over £10 million, and it is this figure which the Government had in mind in fixing the rates at which the new subsidy would be paid during the first year of operation, that is, the year starting on 1st July, 1951. I should like to remind the House, in connection with that calculation in regard to fertilisers, that the fertiliser year runs from 1st July of one year to 30th June in the following year.
It has been thought expedient in dealing with this problem, in drafting this Bill, to look beyond the implementation of the promise that was given in November last and to prepare a Measure which contains powers to enable—and I stress that word "enable"—should occasion arise, contributions to be made to farmers which would not be limited as regards the type of fertilisers. The Bill is so drafted that a fertiliser subsidy amounting to one-half of the cost of any or all fertilisers bought by farmers could be brought within the scope of a Statutory Instrument made in accordance with its terms, and with the approval of the Treasury.
At this point I must make it perfectly clear to the House that for the first fertiliser year that the subsidy will operate—the year extending from 1st July, 1951 to 30th June, 1952—it will be limited to phosphatic fertilisers, and the amount of the subsidy will be calculated on the basis of the £10 million increase in cost based on the 1950–51 usage which I have already mentioned to the House. The House will observe from the Bill that the powers taken in this Bill have a life of five years and expire on 30th June, 1956—
§ Mr. Frederick Peart (Workington)
The Minister mentions the limitation to phosphates. However, the Bill itself does not make the limitation to phosphates. I think the Minister is giving the impression that it will. Am I right in saying that?
§ Sir T. Dugdale
The hon. Member is perfectly right there. The first scheme 243 which will be introduced as a result of the passage of this Bill will be limited to phosphates.
As I was saying, the House will observe that the powers taken in this Bill have a life of five years and expire on 30th June, 1956, unless they are extended for a period or periods by Statutory Instrument subject to affirmative Resolutions by both Houses of Parliament.
Here again, I wish to make it perfectly clear to the House that, while the Bill contemplates that these fertiliser subsidies may be continued up to 30th June, 1956, or even longer through the procedure of affirmative Resolution, nevertheless the Government have given no undertaking that the fertiliser subsidies will in fact continue for so long a period. The power thus taken is permissive, and what use is made of it will depend on the needs of agriculture and the prevailing financial circumstances during the next few years. I hope that I have made that position clear to the House.
The House will realise that, when I made the announcement last November, which was a result of the Special Review, to which both sides of the House were, I think, agreed in principle, I was dealing with the situation as we found it at that time, but when the Government found it was necessary to legislate, the only right and sensible course to take was to see that we took powers, with the approval of the House, to continue this kind of help to the agricultural industry, if the House, in its wisdom in due course of time, thought it was the right and proper thing to do. That is why we take these powers in this Bill.
During the last three years—I ask the House to mark this particular fact—the costs of fertilisers to farmers have almost doubled, and as a result, not surprisingly, many farmers today are ordering much smaller quantities. If this tendency is not checked—and I am quite certain that many of my hon. Friends in all parts of the House will agree with me in this—a reduction of crop yields will inevitably follow. I have enough faith in the farming community to trust them to realise that it is a false economy to cut down on fertilisers, and I believe that they will respond to the suggestion and the provisions of this Bill, which will materially assist them to buy the fertilisers that are 244 so necessary if productivity is to be maintained and, indeed, increased.
§ Mr. George Brown (Belper)
The right hon. and gallant Gentleman has told us that the first scheme he introduces will be limited to phosphatic fertilisers, and yet he now says that he hopes that the Bill will encourage farmers to use more. Will he tell us what is the current supply of phosphatics against the present use of them?
§ Sir T. Dugdale
I should not like to go into any great detail at this stage, other than to assure the right hon. Gentleman that the supply is adequate for the need that may arise for these particular manures. I can give him that very definite assurance.
Many hon. Members will remember the criticisms that were made in the House against the removal of the old fertiliser subsidy, which had maintained the price of fertilisers at a low and steady level for a number of years by means of subventions paid by the Board of Trade. The Government's proposal will provide a useful means of dealing with the fertiliser situation as circumstances change, and will allow assistance to be given from time to time when it may be most needed and where it will do most good in the way of increasing food production.
I turn now from the general principles to the immediate future. In regard to the immediate future, should the House, as I hope it will, give its approval to this Measure, a scheme will be laid before Parliament, without delay, as a Statutory Instrument setting out details of the contributions towards the cost incurred by farmers on buying phosphatic fertilisers, and indicating the amount of contributions which will be paid. It is our intention that payments should begin immediately thereafter. Meanwhile, farmers—I wish to emphasise this—should continue to preserve their receipted accounts for fertilisers, or, indeed, their accounts even though they are not receipted.
§ Sir T. Dugdale
As from 1st July, 1951.
The Agricultural Departments will make the fertiliser subsidy scheme as straightforward and clear as possible, so that it can be readily understood by farmers and agricultural merchants alike. 245 The scheme proposed for Great Britain will, for the first year at any rate, follow very closely the procedure of the lime subsidy scheme, which has been easily worked and readily understood by those for whose benefit it was devised.
Included in the scheme which we shall make will be a schedule giving in detail the rates of subsidy that will be paid in respect of each kind of phosphatic fertiliser, and, subject to the Statutory Instrument being accepted by Parliament, farmers can expect to receive a contribution amounting to nearly one-third of the cost of any purchases made since 1st July last of superphosphates and other phosphatic fertilisers.
Contributions will also be paid in respect of phosphates contained in compound fertilisers, except where that phospate element is wholly derived from organic material. I have with me a copy of the schedule, which is, of course, provisional until the Bill is passed and a Statutory Instrument is made, but I thought that the House might wish to have some examples of the actual subsidies which it is proposed to pay if hon. Members in their wisdom decide that the Bill shall go forward in its present form.
To give examples of what the actual effects will be: A ton of superphosphates costing £14 19s. would attract a subsidy of £4 17s., while a grade of basic slag at £6 8s. 6d. a ton would attract a subsidy of £2 2s. A ton of ground mineral phosphates costing £12 11s. would be subsidised to the extent of £4, and in the case of a compound fertiliser containing 12 per cent. P2 O5, in soluble form, the contribution would amount to £3 18s. per ton, whilst a national compound fertiliser containing 12 per cent. of P2 O5 partly soluble and partly insoluble, costing, at the present controlled price, £19 10s. 6d. a ton, would attract a subsidy of £3 9s.
I hope that the House will forgive me for giving these figures this afternoon, but I know that the agricultural community will be interested to have examples, and it will give an opportunity for the House to consider the effects of the Measure before we debate at a later stage the actual scheme; and it may, perhaps, facilitate the passage of the original scheme through the House, because I am very anxious that not only the Bill, but the first scheme, should be 246 on the Statute Book at the earliest possible moment.
I repeat that for the first fertiliser year beginning on 1st July last, the subsidy will be on phosphates only, while the contributions will be at the rate indicated in the schedule of the Statutory Instrument setting out the scheme, from which I have already quoted. I recognise, of course, that other fertilisers, especially nitrogen, are at least of equal importance, but the exceptional price rise that occurred in July last year, for which insufficient allowance was made at the previous Annual Review, affected phosphatic fertilisers very much more than either nitrogen or potash. The limitation of the subsidy to phosphates is designed to bring prices of the several fertilisers into something like their previous relationship.
The Bill is so short and simple that it is hardly necessary to deal with it Clause by Clause at this stage other than to say that Clause 1 provides power to make contributions to farmers towards their fertiliser purchases, Clause 2 prescribes the maximum rates of contribution, Clause 3 sets a limit to the period in respect of which the subsidy can be paid, and Clause 4 lays down supplementary provisions which may be included in any particular scheme.
The Bill extends to the United Kingdom, but under Clause 6, which I should like the House to note, my right hon. Friend the Secretary of State for Scotland may, if he so desires, produce a different scheme for Scotland, and a separate and different scheme may also be made for Northern Ireland. It is hoped that, in regard to England and Wales and Scotland, it will be possible, in order to avoid complications and difficulties to agricultural merchants and others who deal in fertilisers, to make joint schemes for these countries.
§ Captain J. A. L. Duncan (South Angus)
When my right hon. and gallant Friend talks of separate schemes for England and Scotland, is it contemplated that there will be separate schemes for England and Scotland during the fertiliser year 1951–52, because that would make a lot of difference to the producers?
§ Sir T. Dugdale
Perhaps I did not make the position quite clear. I will repeat that it is hoped that, in regard to England and 247 Wales and Scotland, it will be possible, in order to avoid complications, to make joint schemes for these countries.
§ Sir T. Dugdale
Yes. To sum up the Bill, it is designed, first, to implement the undertaking which I gave to the House on behalf of the Government on 29th November, 1951, to ask for the necessary legislative authority for the subsidy on phosphates to which I then referred, and secondly, to place on the Statute Book a Measure sufficiently flexible to enable, subject to the approval of Parliament, schemes to be introduced which may be essential in the interest of maintaining the national food supply.
I believe that financial assistance towards the cost of the fertilisers they buy is a sound way of encouraging the adequate use of fertilisers by farmers, thereby ensuring high crop yields from the limited area of land in this country. May I emphasise that the ultimate beneficiary is the consumer, whose supplies of food would be diminished and costs increased if the use of fertilisers by farmers were restricted through excessively high prices.
I hope that this small but important Bill will commend itself to the House, that not only will it receive an unopposed Second Reading but that the House will be prepared to give early consideration to its further progress, so that it may receive the Royal Assent at an early date. The first scheme can then be considered in detail.
§ 4.14 p.m.
§ Mr. Thomas Williams (Don Valley)
The first thing that I ought to do is to congratulate the right hon. and gallant Gentleman upon introducing his first Measure since becoming Minister of Agriculture. I am equally sure that the highly-complex nature of the Bill, and particularly the components of various fertilisers, has been made transparently clear to us by the right hon. and gallant Gentleman this afternoon, but if not, it will be when we have had an opportunity of reading his speech tomorrow morning.
I should like to ease the Minister's mind at once by telling him that it is not our intention to divide the 248 House against the Bill. It is possible that there may be different points of view on the wisdom or otherwise of this method of encouraging the industry, but it is true to say that a fertiliser subsidy in some form was in existence from 1937 to 1951; and I think that it was largely due to the price-fixing procedure of the 1947 Act, and possibly a desire to remove misunderstanding about the nature of some subsidies, that it was decided to abolish the fertiliser subsidy in two stages during 1950 and 1951, and add whatever the cost of the subsidy had been to the commodity prices under the first Schedule of the 1947 Act.
It therefore makes no difference whatever to the Treasury or to consumer prices whether we make this fertiliser payment or whether we increase prices to the extent of the same sum of money. I know that there were many doubts expressed when a decision was reached to remove the subsidy. It was first argued that if maximum production was really our aim, it was folly to remove the fertiliser subsidy. It was also urged that we knew that the subsidy was paid only on fertilisers used, whereas an addition to the prices of commodities of the same figure would give no guarantee that the fertilisers would be used, and certainly no guarantee that we would get the maximum output of the food which we require.
On the other hand, it was argued, not unnaturally, that farmers ought to be fully appreciative of the value of the use of fertilisers, and that, in fact, wise farmers would use fertilisers in any case. There is, surely, logic on both sides when we are thinking in terms not of two or three dozen large farmers but of anywhere between 360,000 and 370,000 farms of all types and sizes. The best farmer does and will use fertilisers because he knows and appreciates their full value, and because he always, or nearly always, has capital behind him.
There is, however, one thing upon which every hon. Member will be agreed; it is that we require the maximum production of food from our own soil. That certainly involves the use of the right quantity and the right quality of fertilisers at the right time. It has been said very often—and I do not want to go into this question of food production on a wide scale—that large, cheap, imported supplies 249 of food are no longer available and will not be available for a very long time ahead. One only needs to think of the Argentine, where 50 years ago two-thirds of the population were engaged in agriculture, whereas today only one-third are so engaged. Industrial development means that there is more spending power in the hands of the multitude, and therefore they consume more of their own produce than they did before That means less for export.
We see a similar situation in Australia. As the population grows and industrialisation grows, agriculture becomes less and less primary, and they are unable to export the quantities of food which they did previously. We know that in India, Pakistan and some other countries the position is either more and better food or Communism Therefore, we must, as far as we possibly can, make the best use of our limited acres to get all the food we can from them.
As I understand this small but fairly important Bill, it does two things. As the right hon. and gallant Gentleman truly said, it corrects an unforeseeable miscalculation of the price of fertilisers on 1st July, 1951. The calculation, of course, was made in the February Price Review, and therefore the blame cannot be laid on anybody in particular. Unfortunately, because of the miscalculation, there has been a noticeable decrease in the utilisation of fertilisers since that time. Secondly, instead of recouping farmers by means of increased prices, we are to recoup them by means of the fertiliser payment. This costs the Treasury no more and the consumers no more, and it leaves things financially just as they were.
Under the 1947 Act there was a prima facie case for a Special Review last October because of the sudden substantial increase in the cost of production, involving wages, fertilisers, transport charges, petroleum and many other things, but it was left to the Government either to agree or disagree upon the facts once an examination had taken place. As the right hon. and gallant Gentleman has said, he made an announcement of the Government's decision in November last. In effect, the decision was that the Government felt that the industry was entitled to something like £26 million, £16 million of that to be in respect of prices and £10 million in respect of fertiliser payments.
250 I do not believe there is a party in the House which is really in love with subsidies as such, although over the past 11 years all kinds of subsidies have been used for certain purposes and have not been wholly unsuccessful. The Labour Government were criticised very severely in 1947 over the calf subsidy, but if it had not been for the calf subsidy we should have had much less red meat in this country in 1951. While many forms of subsidy have been used, many have also been allowed to lapse. Still, it may be that a subsidy here and there will prove very useful.
In any case, the position in 1952 is very different from what it was pre-war. If a subsidy was provided pre-war, it was done just to keep the farmer's head above water or it was given to the farmer without there being any central long-term policy at which the nation was aiming. Now the machinery of long-term policy is firmly established in the 1947 Act, and the gross income and the net income of farmers are decided in the Annual February Review, which embraces any subsidy that there may be. Therefore, any aids to increased production which impose no further burdens on the consumers will not be opposed by the Opposition for the sake of opposition. We shall, however, watch every instalment very carefully with our minds on both the size of our weekly ration and consumer prices.
I believe that a case can be made, on grounds of agricultural production, for this small Bill. We certainly want maximum production from our own soil, and because of that, and because we think the Bill may help to stop the reduction in the use of fertilisers and may help to increase our food supplies and may help the right hon. and gallant Gentleman to reach the target which we ourselves set in 1947 of 50 per cent. above the 1938 production, we shall not oppose the Bill.
§ 4.24 p.m.
§ Mr. Gerald Williams (Tonbridge)
I am glad that the former Minister of Agriculture has started so well and been so conciliatory, and has approved the introduction by my right hon. and gallant Friend of this very excellent Bill. I welcome the Bill particularly. It is bound to increase the crops of this country in a business-like way. We are extremely hard up at present and it is very difficult to know how best to spend our money 251 but when one is hard up is the very time that it pays to put out money in order to bring in more money. That is precisely what the Minister hopes to do by means of the Bill.
More especially, I hope that the extra fertilisers which the farmers will use as a result of the subsidy will enable them to grow more cereals to feed our pigs and other livestock. There is only one way of getting rid of the objectionable rationing scheme, based on pre-war quotas, which we now have. We all want to get rid of it, but if we are to do so we must find a better scheme, and nobody has yet done so. However, this is a step in the right direction because it will at least produce a great many more cereals at home. If it is as successful as we hope it will be, I shall urge the Minister of Agriculture very strongly to see whether he can get rid of the present quota scheme.
I should like to know whether the Bill applies to horticulturists. I imagine that it does. I do not know where the line is drawn.
§ Mr. Williams
Evidently the Bill does apply to horticulturists. I should like also to know the size of the horticultural concerns to which the scheme will be applied. It is obvious that we cannot give a subsidy on half a sack of fertiliser. It would be useful if the Minister would tell us the size of the smallest concerns to which he intends the subsidy to apply. Also, I should like to know why Clause 1 enables a subsidy to be given to distributors. I am sure there is a very good reason for it, but the Minister did not tell us what it was. I hope we shall hear about this later.
My right hon. and gallant Friend said that the scheme would apply retrospectively to 1st July last and said that the fertiliser year began on 1st July. I am not quite sure what he means by the "fertiliser year." It seems to me that the Bill should encourage the use of fertilisers by people who would not otherwise use them. Surely people who have been applying fertilisers since 1st July last do not need a payment now. They may complain that they have been badly treated and ask why they should 252 not receive for the fertiliser which they used earlier the subsidy which is now being paid to people who applied fertiliser later; but there is always an anomaly in this sort of thing, and the whole point of the Bill is to encourage the use of fertilisers in future by people who would not otherwise use them. It seems to be throwing money away unnecessarily to make the payment retrospective as far back as 1st July.
§ Sir T. Dugdale
I should like to make this point quite clear right away. It was decided that the payment should be retrospective to 1st July as a result of the Special Review in regard to the prices for the year 1951–52. This subsidy was decided upon by the Government after an examination of the facts as a result of the Special Review which took place in October last.
§ Mr. Williams
I thank my right hon. and gallant Friend. The only other criticism I wish to make concerns the scheme. The Minister says that this year he will apply it only to phosphatic fertilisers. He gave as his reason the fact that the price of phosphatic fertilisers had risen. This may well encourage farmers to use phosphatic fertilisers when nitrogen or potash would be better, and I cannot agree that he is being very wise in not leaving the choice of fertiliser to the discretion of the farmer. We should give the farmers a 33 per cent. subsidy on fertilisers in general and let them decide which is best for their land.
I see this danger in the present arrangement. Phosphatic fertilisers are chiefly used for grassland because grassland is chiefly lacking in phosphate. The new grass in this country in May, June and July, when it is full of protein, is created in such abundance that there is a good deal of wastage because in those three months we have not got the stock to consume the grass. It seems that if we are going to encourage more grass to grow by using phosphatic fertiliser, we may be on the wrong lines. I urge the Minister to consider, at any rate in future, schemes which would leave this to the farmer's own discretion. If the Minister will do that, I shall not have spoken in vain. Otherwise, I welcome the Bill, and I hope that it will be given a speedy Second Reading.
§ 4.30 p.m.
§ Mr. A. J. Champion (Derbyshire, South-East)
I welcome this Bill. I had very serious doubts about the late Government's policy in bringing the fertiliser subsidy to an end, and that doubt was considerably strengthened during the short period I was at the Ministry of Agriculture.
I would agree that the logical method is that of no subsidy on a part of the means of production. Such a subsidy seems to me to be as illogical, as it would be to give a manufacturer subsidy for the oil which he uses for the running of his machines. Logically, it is difficult to justify this sort of subsidy on one of the factors in the means of production, but men—farmers are not excluded from this category—are neither wholly rational nor logical beings, and I regard this subsidy as doing something to encourage the increase in productivity that we so much want.
Fertilisers happen to be one of the things that farmers are inclined, when prices of fertilisers are high, to put off using in order to save money in the hope that times will improve. What farmer would ever agree that times could not possibly improve? As a matter of fact, they are always living in the state of hoping that next year will be a better year than this year, and so on, even though they happen, at the moment, to be living in fairly good times.
I do not want to cover all the reasons why this fertiliser subsidy should be paid. It is a fact that the West Midland province of the National Agricultural Advisory Service, in examining a number of farms with a low output, found that many were not using a sufficient quantity of fertilisers, and that points to one of the reasons for the low output. Those farmers were not receiving the returns which their acreage and, indeed, their initial capital outlay would justify. One of these lower output farmers had not applied any fertiliser since 1939. That man is doing a disservice to the nation. He ought to have been dealt with under Part II of the Agriculture Act and have been deprived of the farm he was holding. That is the sort of thing that is going on in some cases and we ought to do everything in our power to encourage farmers to expend more on fertilisers, 254 even if we have to resort to a subsidy to do it.
It is also said that the National Agriculture Advisory Service is spending half of its time persuading farmers to use more fertiliser in order to increase productivity. The Service might well be using that half of its time advising farmers about so many other things upon which they need advice, assisting them in education on the many subjects about which they need education. I was surprised when, in the debate on 31st January of this year, I heard my right hon. Friend the Member for Ebbw Vale (Mr. Bevan) use these words:…we have consumed the least potash per acre than in any part of the Continent of Europe."—[OFFICIAL REPORT, 31st January, 1952; Vol. 495, c. 399.]I was inclined to doubt that statement, but this morning I spent some time looking up the figures and I was surprised to find that that statement is largely correct, taking the more important parts of Western Europe. In 1949–50 we just managed to catch up with France in the amount of phosphatic fertiliser that we used. Germany is using three times as much per acre as we are, Holland six times as much, Denmark just over three times as much per acre, but Italy is one of the countries which happens to be below Britain. Perhaps that is one of the reasons why it is such a poverty-stricken country.
I particularly welcome this Bill from the point of view of the market gardener. Market gardeners—I happen to represent a few—are part of the farming community which did not get as much benefit from the 1947 Act as did other types of farmers, and for that reason I give a special welcome to the Bill.
The cost of fertilisers is an important factor and a subsidy is, I think, the right idea. But there is not much use in subsidising with the one hand if it is taken away from the farmer with the other. The use of fertilisers to a great extent depends upon the credit facilities which are granted to the farmer both by the banks and by agricultural merchants. The Government's action in connection with this very important aspect of farming may go far to outweigh the benefit conferred by the price review and the subsidy. Bank advances to agriculture and fishing increased by £25 million 255 between February, 1951, and August of that year, and the amount granted to farmers by the banks reached the record figure of £202 million by August, 1951.
The Government raised the Bank rate by a half of 1 per cent. soon after they came into office. That increase will cost the farming industry at least £1 million per annum. That, of course, is an important factor. If we give £10 million with one hand and take away £1 million by action such as this with the other obviously the farmers will not receive the full benefit of the subsidy.
§ Mr. S. N. Evans (Wednesbury)
My hon. Friend has been telling the House something about the farmers' current accounts. Can he give us any information about their deposit accounts?
§ Mr. Champion
That is hardly a fair one. Perhaps I ought not to go into the state of the banking accounts of such merchants. I must confine my remarks to the farming industry. It would be stupid of farmers to pay interest on loans if they had standing to their credits in the banks amounts which they could use for purchasing fertilisers, capital expenditure, and so on. I do not regard the farmers as living in dire poverty or, on the other hand, as being engaged in an over-fed and much "feather-bedded" industry. I do not want to see times return such as those in which farmers were living, and of which I had some experience, during part of the period between the two wars.
The £202 million to which I referred does not take into account the tremendous sums advanced by agricultural merchants, who, undoubtedly, will be affected by the increase in the Bank rate. They will begin to contract the amount of credit that they will give, and I fear the result of that contraction upon agricultural production. The use of fertilisers will be especially affected by credit facilities being restricted at the request of the Government. One other factor in this connection which is of importance is that the Agricultural Mortgage Corporation has raised its rate from 4¼ per cent. to 4¾ per cent. The sum on loan here is about £5½ million, and the increased rate of 256 interest will take a considerable amount of money out of the industry.
§ Mr. Coldrick (Bristol, North-East)
Can my hon. Friend indicate whether those factors, including the Bank rate, are taken into consideration in the price fixing that takes place, and thus appear in the total cost?
§ Mr. Champion
They are not taken into consideration, unless I am very much mistaken.
I hope that the Minister who replies to the debate will deal with some of the points I have raised. They are matters which will affect the agricultural production rate of this country. I hope that the Minister of Agriculture will make representations to his colleagues within the Government, after considering these things, which are factors of some importance in relation to aims which he and all of us are trying to achieve.
§ 4.43 p.m.
§ Mr. Robert Crouch (Dorset, North)
I give my support to the Bill, which has become necessary on account of Her Majesty's Opposition failing to take the advice which was given to them against withdrawing the fertiliser subsidy. What has happened as the result of that withdrawal is what we anticipated and what the Minister of Agriculture told the right hon. Member for Don Valley (Mr. T. Williams) would happen. I believe my right hon. Friend suggested that the withdrawal of the subsidy should be postponed until 1952.
No one in the House regrets more than I do the necessity of introducing another subsidy for agriculture. I look forward to the day, which may be distant, when our industry can stand upon its own feet, but I cannot see that that will be possible until we get outside the system of fixing prices within a global figure. For far too long it has been considered by certain politicians a crime for the producer of food to get a fair profit for the work and energy that he has put into production.
A right hon. Gentleman on the benches opposite has drawn attention to the possibility of shortage of food as a result of what is happening overseas. It therefore becomes more and more necessary that we should produce all the food that 257 is possible in this country. As a result of the withdrawal of subsidy there was an immediate fall in the sales of fertilisers.
§ Mr. G. Brown
The hon. Member has several times used the phrase "withdrawal of the subsidy for fertilisers." Will he make it clear that when the element of price was taken out by way of subsidy the increase in cost was taken into account in fixing prices?
§ Mr. Crouch
The subsidy was removed in July of last year and there was a greater advance in the price of fertiliser than was expected at that time. It would have been wiser to leave subsidy removal until this year. Last autumn there was an immediate cessation of sales of fertiliser, and that was reflected elsewhere. Looking through the Supplementary Estimates, I noticed a surplus of £1 million in the lime subsidy. That means that last year £2 million worth of lime was not applied to our land. When farmers seek advice from research workers about how to get better crops from their land, more often than not the first suggestion is that lime should be applied to it. We shall feel the effect of that loss of £2 million worth of lime during the next year.
During the last 30 years there has been a very great increase in the amount of fertiliser used in this country. Through the use of that fertiliser we have been able to increase the yield per acre of our major crops. It was a great disappointment to our research workers, who have done so much to encourage use of fertiliser and to ascertain a better way of making it and applying it to our land, when suddenly, last autumn, fertiliser became almost unused on a great number of farms in this country.
Among the smaller farmers this withdrawal of subsidy has been more serious because it is they who farm the greatest amount of land. They have been finding it exceedingly difficult for several months to buy what is required to keep up production on their farms. The interjection by the hon. Member for Wednesbury (Mr. S. N. Evans) indicated what I have suspected for a long time, his lack of knowledge of the agricultural industry. He suggested that although the farmers are running overdrafts they have something on deposit account in the Banks. Our farmers are just not built that way.
258 It is not only the application of fertilisers that will bring about the increase in crops that is required. It is no use just scattering fertiliser on the land and hoping that all will be well. What is wanted also is proper drainage of the land to which the fertiliser is to be applied. There is a great deal of waterlogged land in this country. In many instances there is need of the assistance that can be given by the research workers if the drainage is to be carried out.
Mention has been made of the increase in the amount of coarse grains that we hope to get next autumn as the result of the subsidy. I also hope that as a result of this subsidy we shall get an increase in the amount of fodder beet to be sown this spring. That crop will be exceedingly important in the future, and I look to it more than I do to cereals, as far as the West Country is concerned, to help us have more carbohydrates available for feeding our pigs. In conclusion, may I say that I have appreciated the way in which Her Majesty's Opposition have indicated their support of the Second Reading of this Bill. I know it will be appreciated by the entire agricultural community and, in particular, will be appreciated by the small farmers of this country.
§ 4.51 p.m.
§ Mr. S. N. Evans (Wednesbury)
As the hon. Member for Dorset, North (Mr. Crouch) has made some reference to my knowledge or lack of knowledge of the agricultural industry, perhaps I had better deal with him first. For the last 32 years I have worked in a hard and tough field where the price of apathy, inertia and inefficiency is bankruptcy, with all the social stigma attached to it—no subsidies, stand on your own feet or go to the wall.
The second thing that gives me a vested interest in this subject is the fact that I represent 70,000 hard-working Black Country people who are very much affected by the price of the contents of the housewife's shopping bag. Thirdly, let me tell the hon. Member that my quarries are six miles from the nearest railway, that I have been surrounded by farms and farmers for the last 30 years, that some of my best friends and closest political associates are farmers and that I am not in ignorance of agricultural economics.
259 Let me say at once that if there is to be another shot in the arm, another financial blood transfusion, further public assistance, then perhaps this is the best way of giving it. I challenge, however, the contention that this industry is in need of financial assistance. Further, I challenge whether the nation is getting value for money. I do not mind what the farmers have. They can have the shirt off my back if it helps the recovery of our economic independence and financial self-respect. But I am suggesting to the House that the present policy is having exactly the opposite effect. In 1938 the profits of this industry were £55 million; last year they were £302 million and the year before they were £304 million—an increase of 500 per cent.
I want to find out what we have had for this substantial increase in profits—
§ Mr. Evans
We are told that the increase is 40 per cent., but we have never had yet a contrast in goods between prewar production and the production in these post-war years. The first thing I want to ask the Minister is this: Will he give an undertaking to prepare a statement of the production of the industry in goods in 1938, 1937 and 1936 and also for the last three years? Then, and not until then, shall we be able to assess whether the nation is getting value for money.
This industry is what somebody once described as an enigma wrapped in mystery. I have been trying to get the number of A, B and C farmers and their respective acreages. As I recall it, this was to be done during the war. The industry was to be analysed in terms of efficiency of A, B and C farmers. In these past few years we have paid out hundreds of millions of pounds in direct subsidies and subsides on home-produced food through the Ministries of Food and Agriculture, yet, when a Member of Parliament asks for the information without which he cannot determine whether or not this industry is improving its efficiency and productivity, he is told that it is not available and, furthermore, that it is highly improbable that it ever will be available.
This is a scandalous thing. We were given a promise that information would 260 be made available with regard to A, B and C farmers and the acreages farmed by each. If we do not know how many C farmers there are and the acreage they are farming, how shall we be able to get rid of the agricultural drones, misfits and workshies? How shall we be able to make this industry efficient unless we have the relevant information which is the necessary pre-requisite?
I suggest that in voting this industry further assistance we shall not promote increased production and that the effect will probably be the very opposite. What has happened already? With all the assistance given to the industry we are getting the following situation. At the top there is the good farmer who, farming the land scientifically and because of the assistance given by this and other Bills, is brought into the higher Surtax brackets too early.
I speak here as a business man running a business with a six-figure turnover and I know of no more serious deterrent to effort and production than being brought into the higher Surtax groups too early. Furthermore, those farming good land scientifically and energetically find themselves regarded as profiteers. This is inevitable when the policy is to give such assistance as enables the drones, the misfits at the bottom, to survive.
I believe that the sooner this industry experiences a few healthy bankruptcies, the better it will be for the country and for the industry itself.
§ Mr. G. Brown
Would my hon. Friend also give his view of the result of that situation upon those who work in the industry?
§ Mr. Evans
In present circumstances the efficient producers in any industry, not only this industry, can absorb any temporary unemployment almost overnight. It is very important that my own party should not start mixing what I call sociology with economics. I would regard providing crutches for "Tired Tims" in order that they can maintain employment in their own field as a disastrous policy.
§ Mr. Crouch
The hon. Gentleman has referred to the fact that there are certain farmers with good farms who make very large profits. He then referred to those at the other end of the scale. I admit that there is some land on which, under 261 any conditions, whether through good or bad farming, a profit can always be made; but would the hon. Gentleman tell the House the proportion of that exceedingly good land which is always safe in comparison with the amount of poor marginal land which forms the majority of our land?
§ Mr. Evans
If the hon. Gentleman had been listening to my argument he would know that it is precisely this absence of information about which I am complaining. I started my speech by deploring the fact that there was no means of knowing how many A, B, and C farmers there were, or the acreage farmed in the various categories. I am quite satisfied that this industry is not in need of further assistance. Last year and the year before the profits of the industry were £120 million more than the total wages paid to 640,000 full-time agricultural workers working a 47-hour week.
§ Mr. G. Brown
If one is to answer my hon. Friend's case, as I have discovered in the past, it is important to take the points as he makes them, so perhaps I might be allowed to interrupt. He says that the profits were £120 million more than the wages paid to the full-time agricultural workers. Over half the farms employ no agricultural workers; the labour is entirely that of the farmer and his wife. In my hon. Friend's own £6 million turnover business, the managerial salaries are charged before assessing the profits. Would he therefore tell us what proportion of the £120 million he is prepared to allow for the labour of the farmer and his wife, who are not paid? Their profits on agriculture include the whole of their managerial services.
§ Mr. Evans
If my right hon. Friend will insist on interrupting and then making a speech himself he cannot expect me to answer him at length. If I were to do so I should be told to sit down; and I should certainly be very unpopular with other of my hon. Friends who wish to speak.
The profits were £120 million more than the total wages paid to 640,000 full-time agricultural workers working a 47-hour week. Is my right hon. Friend suggesting that there is a good deal more labour in this industry other than the 640,000? The farmer is in precisely the same position as I am on the question of 262 profits. [HON. MEMBERS: "No."] Oh, yes. Friends of the agricultural industry should not be in such a hurry to silence an opposition point of view. The industry has enough friends in the House to stand one or two hon. Members having a different point of view.
The bovine complacency of the dinner-jacket farmers of 45, Bedford Square is such that I am terrified. I therefore hope that my hon. Friends will not mind my putting a different point of view. The farmer is in the same position as the proprietor of a one-man business, someone running a factory, a grocer's shop or a wholesale business. He has not made it a limited liability company.
Now I want to give further evidence to substantiate my contention that the farmers do not need this assistance, and that it will, in fact, do them no good. My right hon. Friend the former Minister of Agriculture, speaking on 20th May, 1950, as reported in the "Manchester Guardian" said:Farming capital before the war was £350 million. Today, it is nearly £1,000 million. Out of their much-criticised net profits the farmers have put back £650 million into the industry.I am not complaining about that, but do say that there must be a lot of fat/upon which they could survive, for a time at any rate, while we get through the very serious financial crisis with which the nation is faced.
They are to be given another £10 million for fertilisers. Well, if anybody wants the real truth about the financial health, or lack of it, of the agricultural industry at the moment he need only look at the scramble for land which is taking place. There has never been such a scramble. Heavyweight boxers, international footballers, radio commentators and television stars are all taking up farms. Indeed, before long there will only be Muffin and myself out in the cold.
Mr. W. M. F. Vane (Westmorland)
It must have been because of the gravel under it.
§ Mr. Evans
Certainly; the bungalow was the living accommodation. We now have the spectacle of industrialists, financiers, professional footballers and radio and television stars climbing on the agricultural bandwagon. I should have thought that that in itself was evidence of the extraordinary prosperity of this industry at the moment.
§ Mr. Archer Baldwin (Leominster)
Not a bit of it. It is evidence of the prosperity of the footballers, the radio stars and everybody else. It is not evidence of the prosperity of members of the farming industry, because they are not buying the farms.
§ Mr. Evans
I would like to go on at some length, but I dare not. [HON. MEMBERS: "Go on."] I was interested in the remarks of a professional international footballer, Kirchen, an outside-right, who was interviewed by the "Daily Express" and said:There were five good years…then I sold my 150 acres for three times what I had paid.The "Daily Express" agricultural correspondent, Kenneth Pipe, commented:Remember, this country lad started life as a carpenter's apprentice—not on a farm.It is quite obvious that this industry is taking the nation, taxpayers, and the housewives for a Piccadilly hayride. I think it about time that this House of Commons got down to the problem. I am tempted to believe that we are now 264 to have a rather more regular and careful examination of the very large sums that are passed into this industry than we have had in the past.
I wish to ask one more question about whether this assistance is really needed. I remember that in December, 1950, the President of the N.F.U. said that in five years we would be getting 375 million gallons more milk from the same number of cows. That is an extraordinary things because when I suggested that the kind of treatment this Bill continues was concealing a good deal of agricultural inefficiency and inertia, the "balloon" went up. I have come to the conclusion that I made a terrible mistake and that I should have blamed "Bluebell and "Buttercup."
§ Mr. Evans
No. What I was suggesting was that there is this vast amount of inefficiency to be overcome and that this method of bribing people to get their own living—because that is what it is—will not lead to that healthy, stable agricultural industry which we all want. I think we have to get down to this. I do not think there is anybody so successful as the British farmer at growing one blade of grass where two ought to grow. We have the best farmers in the world, hut we have not enough of them. We have too many drones, too many misfits and too many workshies.
For so long as this sort of policy is carried on these people will be frozen to the land at a time when literally thousands of young, strong, able, knowledgeable men and women are hungry for land. Recently, when Birmingham Corporation advertised for a tenant farmer, they received more than 400 applications and the estates department told me that 87 of them were fully qualified to farm any kind of farm, of any acreage. Yet we are pursuing policies—of which this is another step—of freezing to the land people who are too slow to walk last.
There are many of them. No one has yet explained to me how it is that we have to pay the British farmer more money for a gallon of milk than the Dane charges for a pound of butter—
§ Mr. Evans
Just one moment—when, in fact, it takes two and a half gallons of milk to make one pound of butter. Yet the Dane sells one pound of butter for less than we pay the British farmer for a gallon of milk, with no advantage of soil, climate or wages.
I am opposed to this "featherbedding" I think it has gone on long enough. A lot of people in this industry are not pulling their weight. We are at a very critical period of the nation's history. We shall all have to make a tremendous effort if we are to get by. One of the first things we need is a Saint Bartholomew's Eve of the Shibboleths throughout all our industries and it would be a very good thing to make a start with the agricultural industry.
§ 5.15 p.m.
§ Mr. Anthony Hurd (Newbury)
It is rather bewildering to have to follow the hon. Member for Wednesbury (Mr. S. N. Evans) because he gets intoxicated with figures which obviously he does not understand. I am not going to attempt to lift the veil for him. He says he lives in an agricultural district, passes farms every day of his life, and has many close friends among the farmers. All I say to him is, "Keep your eyes open and use your common sense and very soon you will talk more sense in this House and in public."
The hon. Member asked, in connection with the subsidy which we are to vote this evening, whether there is any evidence that this kind of Measure has increased productivity in this country. There again, I say to the hon. Member, "Keep your eyes open and you will see the condition of fields which have benefited by lime subsidy, the basic slag subsidy and so on." He will see much better crops growing in this country today than he would have seen 10 or 15 years ago. They beat the world and there is no doubt, either in terms of tons of food or gallons of milk, that the production of British agriculture has risen in the last decade. The hon. Member asked why he cannot have figures showing how production has changed. He has only to look at the Digest of Statistics in the Library of the House to satisfy himself. I will take him along there after the debate and show him the figures.
We have been told that the agricultural industry does not need this Measure and 266 that it is time farmers either stood on their own feet, or went bankrupt. The hon. Member has told us that the farmer is in just as good a position as a quarry owner to make a six-figure income. That just is not true.
§ Mr. Hurd
That the efficient farmer is in just as good a position as the quarry owner to make a six-figure profit a year —[HON. MEMBERS: "Turnover."]—the hon. Member confused us with his figures. A man in the position of the hon. Member does not work to a price ceiling as the farmer has to. We have heard a lot about guaranteed prices, but, make no mistake, the guaranteed prices allowed to the British farmer have created a ceiling, and if he were as free as the quarry-owner to exploit his customers, he would not need that guaranteed price.
§ Mr. Hurd
There is really no question of further assistance to the agricultural industry being given by this Measure. I wish hon. Members opposite would get that into their heads. What is happening is that the price of fertilisers has risen very sharply, more than was expected by anyone a year ago. The Government—I think the previous Government would have taken the same view—consider that, as we must not only maintain but increase food production, which is vitally important, the cost of fertilisers to farmers should not get so out of proportion to their other costs that they cut down the use of fertilisers, and that it is in the national interest that the use of fertilisers should not only be maintained but, if possible, increased.
I am certain, and I think it is well known to the hon. Member for Wednesbury, that this subsidy of £10 million to relieve the farmer of part of the increased cost of phosphatic fertilisers will be taken fully into account at the Annual Price Review and we shall get correspondingly less than we should otherwise receive for potatoes, wheat, barley and other crops.
267 It is not any further assistance to farmers, but a matter of assuring those farmers who are not well-to-do—some, I grant our critics, are not very energetic or skilful farmers but they are just the people whose land will benefit most from the use of these fertilisers—that they will be enabled by reason of this assistance to continue to increase the use of fertilisers.
This Measure will raise our productivity. As the hon. Member for Wednesbury goes about with his eyes open, he will see grass fields which need phosphates particularly in order to stimulate more growth so that they can carry more livestock to get some of this extra 375 million gallons of milk about which he spoke. One builds up farm fertility, increases livestock output on the land and in turn one gets better wheat crops and barley crops. The whole standard of one's production is raised. That is what we must do. It is what the late Government were seeking to do, and I am sure that the present Government will continue to do that. It is the right course for our country at present.
I fully concede to our critics that we have some who should make way for younger men, and I am hopeful that the new Government will be courageous in tackling that problem. We must first see that we have the level of prices that is needed and then we must make quite certain that everyone farming land in this country is taking not only his opportunities as a business man but is producing to the full.
The subsidy which we are discussing will not add to the profitability of individual farms but it will add to the production of food to this country. That is something which I am sure all Members of the House want. We farmers—and I would speak for the farm workers in this —can disregard with a good heart ignorant criticisms that show too much sectional bias and too little good sense in the public interest.
We do ourselves no good today by one section of the community continually carping at another. We have to pull together, and I assure the House that this small Measure will help the agricultural community to do what the country wants. It will not line the purses of farmers who are already doing quite 268 well enough in the ordinary course of business.
This Bill has my full support, and I am pretty certain that it will have the full support not only of the agricultural scientists to whom one of my hon. Friends referred, but of everyone who knows what is really needed in British agriculture today to get what the country wants, which is still higher production from our own soil.
§ 5.25 p.m.
§ Mr. George Brown (Belper)
I am glad to have an opportunity, for which I have been waiting for some time, to be called upon to speak in an agricultural debate just after my hon. Friend the Member for Wednesbury (Mr. S. N. Evans). We are discussing a Bill to which I am not prepared to give the wholehearted support that was given by my hon. Friend and political neighbour the Member for Derbyshire, South-East (Mr. Champion). I have some reservations about it which I shall mention in a moment. I am not sure that we were completely wrong to remove this particular payment from the subsidy and put it in the end price of the product, but I will say a word about that later.
What I think my hon. Friend the Member for Wednesbury has never been clear about is that what we are discussing is not the sort of thing he talks about so freely in terms of slogans—"Another shot in the arm," "another blood transfusion," and "more public assistance." By the way, he seems to be running out of slogans; he is now repeating the previous ones. It is not that at all. If he would be a little less interested in the news value of slogans and a little more interested in the needs of this industry, he would learn that what is under discussion is the best way to pay a proper price for the article.
§ Mr. S. N. Evans
May I make just this one comment of a most inoffensive character? When dealing with bovine complacency of this magnitude, one has to paint pictures in a very broad canvas.
§ Mr. Brown
I am not responsible for my hon. Friend's bovine complacency. I am sorry that he suffers from it and that it causes him to use a certain extravagance of language.
What is under discussion is which way is the price to be paid for the article; 269 do we pay it wholly in the end price or do we pay part of it in the end price and part by way of a special payment for a special part of the job? The question is, how do we provide the best incentive?
My hon. Friend is perhaps surprised that some of us on this side of the House do not share his amusement at this kind of attack on the industry. I am not a farmer but I have a number of personal friends among farmers of all political views. I have very few political supporters among the farmers of my constituency, and it may seem to my hon. Friend that I ought to join in the hilarity which he himself derives.
I do not do so because as an agricultural workers' organiser I spent a good deal of time in this industry when we had the "healthy bankruptcies," when we had the outlook which my hon. Friend is now urging. I know what happens if we do not introduce sociology. Why did the party to which we both belong come into existence if not to introduce sociology so that the industries of the country would be good enough to afford a proper return to our workers in them?
This continual attack on the agricultural industry as though it consisted of inefficient and incompetent farmers, as though the industry were, as he puts it, "living on the back of the nation," is doing us no good because it is bound to throw us back to the outlook of mind of the urban dweller in this country which produced the results we saw in the farming industry and on the workers in it in the 'thirties.
My hon. Friend tells us that £55 million was the profit of the industry in 1938. I shall have a word to say about profit my hon. Friend clearly does not understand it now. In the industry in 1938 the wages of the members of my organisation were 34s. per week—indeed, we only got 34s. just before the war broke out in 1939. Therefore, I am not amused, and those of us who are concerned with the industry are not amused, because the result of this attitude to any industry, particularly one which shares the particular difficulties, insecurities and uncertainties of agricultural food production is disastrous for our friends who work in it.
I share another interest with my hon. Friend. I have a constituency which is 270 one-third agricultural in industrial makeup but which includes, like his, very nearly 70,000 consumers. The major interest of my consumers today—and, with great respect, of his—is how they are to be sure of getting the supply of food they want.
The hon. Gentleman and his friends must really get this matter clear. We are not again likely to get the cheap food that was the catchword in this country before the war. We are not likely to get it from abroad. As time goes on, we shall not get it from abroad anyhow, because the people of Australia, New Zealand and other places will eat more of what they produce. The only certain way of getting it is to produce it here. What we must consider—and this is the spirit in which we must approach this Bill—is whether what we are doing agriculturally will enable us to get the food we want from the fields of this country, because this is the only certain place. That is the interest of my constituents. It is the interest of the hon. Gentleman's.
§ Mr. S. N. Evans
As the right hon. Gentleman is so critical of me and the comments I have seen fit to make on the efficiency of this industry, I wonder whether he would care to comment on the leading article in the "Farmers' Weekly" of 18th January, which says:At such a time one might expect N.F.U. thought and action to be positive and progressive, matching both the needs of the hour and the parlous condition of the agricultural industry. But there is little hope of this. County resolutions are like a dismal gramophone record with the needle stuck in a groove made at 45, Bedford Square.That is not the Member for Wednesbury speaking: that is the leading article of the "Farmers' Weekly," the leading farm journal.
§ Mr. Brown
But that leading article is criticising the National Farmers' Union of 45, Bedford Square. I am not disposed to defend them. Let them do that. The hon. Gentleman must address that query to them. That has nothing to do with my argument. It may well be that Bedford Square is slothful and backward and all that the leading article says. I do not know. I do not pay them. I do not belong to their union. If that journal had made similar comments about the Transport and General Workers' Union, I should have had a lot to say about it, 271 but I have nothing to say about the National Farmers' Union.
I am dealing with the economics of the industry. The hon. Gentleman should get it out of his head that I am dealing with the N.F.U. He set out to attack the industry and to attack those who, by implication, have been concerned with a certain policy. I am not attacking him. I am defending the ground that he chose to attack.
I should like to deal with another of his comments. There was this business about apathy, inertia and inefficiency in this industry. My hon. Friend says that he comes from a tough field in which one has to be efficient in order to live and to get on. That just is not true of all other industries except agriculture. It just is not true.
§ Mr. Brown
This is not a question of getting personal. If someone chooses to allege that the fanning industry is in a certain condition, then I am entitled to reply by reference to other industries. I happen to know the sand and ballast industry, and what the hon. Member said is not true of them.
It is not our view that in order to get an efficient industry of any kind, we must have prices and conditions that will force out all but the toughest, all but the most aggressive and the most ruthless. In every industry that I know, prices are fixed in a way in which the small man, whom we need as much as the big man—and that is particularly true in farming—is able to provide his service to the community in the job that he is doing.
My hon. Friend used one revealing phrase which shows how little he really knows about this industry which he chooses to attack so much. He spoke of the good farmer farming on good land. But the good farmer is by no means always farming on good land. It is a condition of this country that our land is simply not divided like that. Nor is 272 the farmer able to produce, nor can we allow him to produce, only those crops which he is most capable of producing and for which the land is most suitable.
It is a condition of modern farming that we have to lay on all sorts of farmers on all sorts of land the obligation to produce crops in the quantity and in the order of priority that consumers need regardless of the fact that their land may be better suited to the production of something else. There are a whole lot of farmers, many of them on anything but good land, with enormous differences in rainfall, and two-thirds of them farm under 50 acres. Not the few but the bulk, over 80 per cent. of them, farm under 100 acres and two-thirds farm under 50 acres. Two-thirds of them are tenant farmers. They are not the chaps who are selling land. This scramble for land does not prove what my hon. Friend thought that it proved.
§ Mr. Brown
No, with great respect, it is not. My hon. Friend does not follow his own argument. To the two-thirds who are tenant farmers that scramble for land means nothing at all. To the few of these dinner-jacket farmers whom he talked about that is a very small problem, and I am not sure how much of a problem it is.
I have always taken the view that if a fellow comes into farming from an outside industry, he may well come in with the intention of losing some of the profits from the other industry; but if he has been good in another industry, before very long he is usually good in the new one. What is more, it is particularly true of Warwickshire and Stratford-upon-Avon, which always seems to attract these chaps, that if they go out of farming they leave behind them a holding which is very much better equipped than it was before they came in. They have done something of permanent value.
273 Our industry is one largely composed of tenant farmers on small holdings to whom this alleged scramble for land is of no interest whatever. Since we have protected them—and that is what has made the land valuable—since we have prevented the holding from being sold over their heads, since we have prevented them from being kicked out, they cannot be affected by the scramble for land. Therefore, the few holdings which come on the market have an increased scarcity value. That is really the essence of the matter.
But it is not that part of the Act with which this Bill is concerned. I could continue with a whole lot of these points. Let us look at the profitability figure of £55 million rising to £304 million last year. Actually it will be less than that when the latest figures come out. We are always considering figures which are behind the event because of the time it takes to get out the up-to-date figures. We are considering this year the figure for a previous year.
My hon. Friend said at first that the small farmer was in the same position as be was himself. Then, after some interruption, he amended that to say that the small farmer is in the same position as the owner of a small one-man business anywhere else. He is not.
§ Mr. Brown
He is not because the alleged profits of this industry make no allowance at all for the labour—not the management, but the ordinary labour of the farmer and his wife. Not only do they make no allowance for the management services or for interest upon capital, but all those matters ought really to be taken out of account before we get the figure which is labelled as profit.
In addition, what happens to the man who this year has bought a calf, which he will keep to sell three years hence for fat meat? That calf cost him more money. I do not know the current price —[An HON. MEMBER: "About £8."] All right, about £8. Between now and the end of the year, that calf will have done nothing but cost him still more money; yet, at the end of the year, it will have come into his profitability figure as being worth £10 or £12, and a profit is assumed. There is no machine in business or industry that eats and 274 grows like that during the year. Machines depreciate during the year.
§ Mr. Evans
Really, I must be allowed to say a word about that. The right hon. Gentleman has great gifts and is a very charming fellow, but quite obviously what he knows about accountancy might have passed in the time of the First World War, but is not good enough now. The fact of the matter is that the farmer is in precisely the same position as the proprietor of any small business. He receives the same allowances for managerial functions and for whatever work he does, just the same as I said earlier I would receive myself. There is no difference at all, and there is no hardship by comparison.
§ Mr. Brown
The hon. Gentleman has said all that once before. This is the first time that I have answered him. I have listened to him four or five times, and I beg of him to follow my argument and not to be in such a hurry to repeat his own.
Nowhere in his business has he got anything like that calf, which does nothing but cost more money, but which is alleged to add to his profit figure at the end of the year. This situation is peculiar to agriculture. It may well be that the Minister of Agriculture ought to do what I know his predecessor would have done, and which I myself urged several times at 55, Whitehall, should be done.
I think we ought to look at the form in which we use these accounts. I think they are lending themselves to a good deal of quite honest misunderstanding which should be cleared away. These alleged profitability figures are really quite misleading. They are wrong because they leave out the labour content, the management content and the element of interest upon capital, and they are misleading because the more cattle the farmer keeps, even though they are giving him nothing, the higher seem to be his earnings, whereas the fact of the matter is that he has increased liabilities and has made no profit at all.
Even so, the figure has gone up, we are told, five or six times. Wages of farm workers have gone up by three times. I will not weary the House with figures, although I have come prepared with them. Of course, the commitments of the industry have also gone up. We 275 had to face the fact, when we became the Government in 1945, that we were asking for a substantial urgent and sudden expansion of this industry, when, behind us, we had a whole period of years during which the industry had earned nothing which could make provision for that expansion. It is out of these earnings since the war that we have had to finance this immediate and current expansion, and, if the industry had not had that money, the expansion could never have been financed.
Let us remember, too, as my hon. Friend said, that growing food is very much a long-term business, and particularly the element of food production. We want our chaps to produce more beef, but there is nothing slower in terms of return, and nothing more long-term, than raising cattle for beef, and the farmer has got to put in a whole lot of money before he can get the output and his reward in terms of production.
My hon. Friend said how much better it would be if we could see the figures. If I had known that he was going to raise that question I should have brought them for him. He has no idea of the number of figures which I have collected in order to answer the questions I expected him to ask, but I did not bring this particular one. I have no doubt that the figures can be obtained, and, if my hon. Friend is more interested in developing an argument and following it through than he is in sloganising, he will find that the figures are there to be had. I invite him to get them. Sloganising is all very well, but what value has it to the 70,000 people of Wednesbury who want food? While they cannot eat the hon. Gentleman's slogans, they could eat the output of the agricultural industry.
The returns for last June which I got last week are now fairly up-to-date, and show progress in terms of cattle and livestock and the output of crops. My right hon. Friend the previous Minister of Agriculture has several times answered Questions in this House giving comparative figures in terms of beef, mutton, lamb and milk production compared with previous years, and the figures are all in HANSARD and can be compared. No doubt, one can get them from the present Minister, if the hon. Gentleman wants them. 276 I could go on for a long time answering these statements by my hon. Friend. He talked of agricultural "drones and work-shies" just as the present Prime Minister once talked about "weary Willies and tired Tims." We objected to that expression at the time, just as we object to these expressions from my hon. Friend.
My hon. Friend says that the figures do not tell him what the farmers are doing, but the figures of the supervised farmers and of those concerning dispossession orders are available. Again, I wanted these figures last week; I rang up and asked for them, and I had them. The figures are available of the number of farmers placed under supervision, the number of orders made, the time of revocation and the number dispossessed, and my hon. Friend may be surprised to find how many there are in each category.
§ Mr. S. N. Evans
But the figures for which I asked are not available. My right hon. Friend is a very eloquent defender of inefficiency and inertia within this industry, but the fact of the matter is that the figures for which I have asked and which I am hoping to get—figures of comparison between the pre-war period and now—are not available, despite what the right hon. Gentleman says.
§ Mr. Brown
The hon. Member is proceeding now from inaccuracy by misunderstanding to inaccuracy by repeated assertion. The figures are available, and, if my hon. Friend will not do it, I will myself put down a Question to the Minister and obtain the figures for him. They are available on meat, milk and egg production, on crop output, cattle and so on. It is no use the hon. Gentleman continuing to assert that these figures cannot be obtained; they can. Indeed, with a little energy in 55, Whitehall, they might even be produced tonight.
Now I come to the hon. Gentleman's reference to myself as a "defender of inertia" in his attack on an industry which I have come to love very much and with which a great part of my life has been concerned. It is no good abusing a comrade by calling him a "defender of inertia." I believe that the hon. Gentleman is sincere in his attack on the industry, but I also believe that he is misinformed and that he also misunderstands 277 the situation. If he will discuss these things with the rest of us, we may get somewhere and be able to remove the misunderstandings.
I really ought to leave the hon. Gentleman now, but with very great reluctance, because there was so much that I have been wanting to say about these matters. However, I think I have said enough to show that the hon. Gentleman is as misinformed as he was on a previous occasion when he spoke of a man who had grown potatoes at £10 an acre. The hon. Gentleman makes use of these inaccurate figures, but they are never withdrawn.
§ Mr. Brown
I know very well what is in HANSARD. The hon. Gentleman said he had received a letter from a farmer saying that he got £1,000 for planting 100 acres of potatoes, and that he sold them for £5,000. If that does not mean that it cost him £10 an acre to plant, then it is difficult to see why the figures were put in that form, because the hon. Gentleman did not say it cost him so much to plant. He used the £1,000 which everybody took to mean the cost, despite the actual form of words he used. If it was not, then the whole example was meaningless because the cost was not given. In that case the deduction drawn would not exist. Therefore, if the hon. Gentleman is being wrongly quoted it is due to the way he put it. I knew the kind of retort he would make, and therefore I came prepared for it.
Whilst leaving the rest of the hon. Gentleman's argument until the next time he gets involved in this House, I would mention that I heard one of my hon. Friends, who I know is associated with the Co-operative movement, expressing agreement with the hon. Gentleman when he was speaking. I ask any who are associated with the Co-operative movement to have a word with those societies who have been or are running farms, to have a word with Mr. Walworth, with Mr. Gemmill, of the London Society, or with the Lincoln Society. They should ask them what has been their experience in the years when there is 278 supposed to have been so much inertia. They will find the story does not back up what is being said.
One last word to the hon. Gentleman. We have had quotations from the N.F.U. journals, but I now invite his attention to the "Economist" for 16th February, which states:It is an exaggeration"—and the "Economist" is not noted as being a particular friend of the farming industry—It is an exaggeration to say that the ordinary farmer is feather bedded; his prices have been high enough since the war to enable him (except in one or two bad seasons) to make an adequate living out of a moderate turnover.In the good seasons farmers make no more than an adequate living out of a moderate turnover, and therefore the whole of the hon. Gentleman's case falls to the ground.
I will now turn to the comments I want to make to the Minister on the Bill. I asked him just now a question about the supply of fertilisers. He has told us that the first scheme to be issued under this Bill will be limited to phosphatic fertilisers because that is where the largest part of the increase has fallen. But the argument in favour of the Bill is not so much that. It is that, paid in this way, it will encourage farmers to make better use of fertilisers than they are doing at the moment. It is no use encouraging them to use more than there is available of a particular kind of fertiliser.
The Minister nodded his head, and then said he had not got the figures, but could assure the House that there was enough available for whatever it was. I hope that the Under-Secretary of State for Scotland will give us the figures when he winds up the debate. If they are not available today—I know how the mechanics work in the Ministry, after having been there for five years—let us have them at some other time. I doubt it very much. The only statement I could get hold of today was that of the N.F.U. at the end of last year. It said:There is no immediate threat to supplies of nitrogenous fertilisers. The superphosphate position is serious,and they went on about potash, and said there was only enough for current supplies.
279 Such inquiries as I have been able to make lead me to believe that the position of phosphatic fertilisers is still serious and that we cannot jump up the demand for them without running into difficulties. This is important, because if we reduce the price and there is cornering of this fertiliser by the bigger men who are able to produce the money quickly, the result of this subsidy could easily be that the small man got less and not more. Therefore, I hope the hon. Gentleman will put our minds at rest either tonight or in Committee regarding this point, because I personally shall not be very content until it is cleared up.
There is one small point in the Bill on which I want to return to the Minister some of the brickbats I had from him over the course of the last few years. Clause 4 (5) provides that:A statutory instrument making, varying or revoking a scheme under this Act shall be subject to annulment in pursuance of a resolution of either House of Parliament";in other words, shall be subject to negative procedure. I warn the right hon. and gallant Gentleman that on the Committee stage I shall come armed with quotations from his speeches made in earlier years unless he takes out the negative procedure and puts in the affirmative procedure. In the past he has been one of the greatest fighters for the affirmative procedure. What is good for the goose is good for the gander, and he will have to do some eating of his own words, because I think that provision ought to come out of the Clause.
I said at the beginning that I have some reservations about the Bill in general. Indeed I have, and this, in part, is because, after a period in the Ministry of Agriculture, I came to the conclusion that there is a tremendous amount of misunderstanding and distortion about the agricultural industry which is encouraged every time we pay half the price in this way. It is not only the urban-minded man who thinks in this way. The hon. Member for Dorset, North (Mr. Crouch) repeated it today. He said—I remember his exact words—that the industry must stand on its own feet. The fact that we are proposing to give this subsidy does not mean that the industry is not standing on its own feet. This is part of the price which would 280 otherwise have had to be paid to maintain the Price Review settlement.
It is that attitude—which comes from within the industry as well as from without—which makes me very doubtful about this sort of thing. It looks expedient, but I am not sure how much good it does in the long run. We have had not only a fertiliser subsidy running since 1937, but 11 or 12 years of the fullest agricultural advisory service which exists anywhere in the world. We have been telling the farmers, not as ex cathedra pronouncements, but from their own experience, that by fertilising the soil to the proper extent they will increase their output and at the same time their income.
It is a sad commentary that we have to risk distortion of this kind and arouse a great deal of misunderstanding simply because all the educational work done so far has gone over the heads of a minority of the farmers. I am not going to oppose the Bill, but I think there is something to be said for the point of view that it would be well to do less of this, however politic it may seem, and drive home the advisory information harder and make the farmer understand that he must do something in his own interest as well as in ours.
There are two other points I wish to make. No one has said a word about the position of the manufacturers of these fertilisers. They have a fairly powerful lobby, and I sometimes wonder how much this is a case of "feather-bedding" the manufacturers of fertilisers rather than the users of them. I have some figures relating to the main manufacturers in this field. These figures do not lead me to believe that those people could not have borne some part of this price increase themselves. Their profits and earnings are substantial and there are a large number of free capital bonus issues involved. They have been doing very well. Before he brings more than the first scheme into operation, I ask the Minister to have a look at the financial position of the manufacturers.
It is not good enough only to say that prices have gone up and therefore we have to subsidise the farmers. It is much better, if there is room for bringing down prices at the source, to do that, and my suspicion is that there is a fair amount of room for that to be done. I hope the 281 Minister will bring some pressure to bear in that direction. That is another reason why I have a reservation about this kind of Measure now.
An old and besetting sin of the Ministry of Agriculture, which the Minister will find will take the most vigorous and energetic work on his part to eradicate, is their habit of putting out fairly bald announcements about a change of policy which then bring in a great flood of inquiries from farmers to the county committees. Then there is a long delay before it is learned how the change of policy is to be brought about.
November was the date of the announcement of this scheme and I know from friends I have in the county committees that they have been driven nearly barmy in trying to answer the tremendous number of applications they have received in respect of it, and a whole lot of confusion has been caused. I suggest it would not have been at all difficult, even though we could not have had the Bill for other reasons any sooner than this, to put the county committees in a position to answer the kind of inquiries which on past experience Government Departments must know arise. The same delay will occur with the ploughing-up subsidies if we are not careful.
I apologise for the length of time I have taken and for perhaps abusing to some extent the hospitality of the House, but I felt that what I have said had to be said and I hope that those who take the other view will reconsider the position. While I am not giving the Bill a warm welcome, because I have certain doubts about it, I support its Second Reading.
§ 6.3 p.m.
§ Mr. J. Grimond (Orkney and Shetland)
After the eloquent defence of farmers by the right hon. Member for Belper (Mr. G. Brown) I do not think there is much need for me to enter into controversy with the hon. Member for Wednesbury (Mr. S. N. Evans). I listen to his speeches on agriculture with interest, if with surprise and disagreement, and I must confess I sometimes hear in them echoes of what might be thought old-fashioned Liberalism coupled, also, with the financial views which I think were held by Mr. Bernard Shaw about the undesirability of Surtax or, indeed, of any tax which affected him.
282 I should like to support what has been said in the debate about the smaller farmers and those who farm the poorer land. Lately, in the Orkneys, we have looked into the circumstances of these farmers, following the damage they suffered from the gale. I think it would surprise even the strongest advocates of farming in this House to find how untrue it is to say that those farmers are in a particularly prosperous condition today. Far from it. Many of them have extremely little capital and not a few of them are seriously indebted not only to the banks but also to agricultural merchants.
The idea that they are people living on large profits that they can put away on deposit or in some other way is totally untrue in my experience of my constituents. It may be said by the hon. Member for Wednesbury that since they are not making large profits they are idle drones, who ought to make larger profits. The fact is that they are working poor land in a difficult climate. If the crofters in the north of Scotland were put in the easier conditions of the south they would more than hold their own. Indeed, even in the sand and gravel trade they would more than hold their own. It is by no means the case that they are idle drones. It is the case of their having poor land and working it very hard.
If we are to have greater agricultural production that land must be worked and we must make it possible for those men to obtain some livelihood. As has been said in this debate, the assessment of profits on these farms can be totally misleading because on most of them the work is done by the farmer's family and the cost of that labour is not calculated in assessing profits.
I regret that when the Minister introduced the Bill he made it clear that at least in the first year it would apply only to phosphatic fertilisers. He gave the reason, a perfectly true one, that their price has risen very considerably. But the price of other fertilisers has also risen. He himself mentioned one factor making for those increases in price, namely, the continuing rise in freight charges. That applies to all fertilisers. I ask the Minister whether it would not at least be possible for him to review his decision to apply the subsidy only to phosphatic fertilisers; if the price of other fertilisers and the cost of freight continue to rise.
283 The Bill is designed to encourage the use of fertilisers and if it is to succeed advantage of it must clearly be taken by small farmers and the crofters who make up such a large proportion of our farmers today, as well as by the bigger farmers. I suppose most people would agree that it is particularly on the smaller and poorer farms that fertilisers are needed. Certainly, in some parts of the Highlands of Scotland we have suffered very greatly from the lack of proper manuring of land not only in the last year or two but for generations.
Bearing that in mind, I should like to put two or three things to the Joint Under-Secretary of State for Scotland. The first is that under the previous scheme for a subsidy for fertilisers a minimum amount of fertiliser was fixed, and a minimum can be fixed under this Bill. Crofters have brought to me many cases where they have been prevented from obtaining a subsidy because the amount of fertiliser which they wanted was too small. A croft is a very small holding and a crofter a very poor man, and in many cases he has no use for that amount of fertilisers as he would have to obtain a subsidy and cannot pay for them.
I should have thought that it was just these men, who, in many cases, have not benefited to the same extent as the bigger farmers from the general agricultural policy, who ought to be helped by this Bill. Even guaranteed markets have not been of the same use to crofters as to the big farmers. There is a very great need for more fertilisers to be applied to the land in the crofting counties and when schemes are drawn up under this Bill I ask the Under-Secretary either to strike out the minimum and leave it to the discretion of those administering the scheme or else make special provision for the small crofters.
Am I right in supposing that under this Bill a subsidy can be claimed for fertiliser no matter to what sort of land it is applied? Under the previous scheme one could only claim a subsidy if one laid the manure on certain types of land. Is that the case under this Bill or not? There is every room for the improvement of hill pastures in Scotland and of common grazings or "scattold" as they are termed in Shetland.
284 Are any experiments being carried out in the spreading of fertilisers from the air? I believe there have been experiments in the past. I believe an experiment was carried out or projected at a farm called Burg in Mull, sponsored by Sir David Russell for the National Trust of Scotland and, of course, there have been other experiments. I know it is extremely expensive to do this, but I see that the New Zealand Government, or the New Zealand farmers, are facing the expense of fertilising marginal or hill land from the air and, as far as I know, there is no cheaper or better way of doing it. I do feel that when we have to make more and more use of the poorer and higher land we should at least carry out some experiments to see if we can improve these hill grazings by this method of fertilising from the air.
§ 6.11 p.m.
§ Mr. Denys Bullard (Norfolk, South-West)
I should like to welcome this Bill as an opportunity to tackle the problem of increased food production, which is one that is exercising the minds of everybody so much at the present time. It is an extremely complicated process and, while it is very easy, by agricultural policy, to shift the emphasis from one line of production to the other, it is not always easy to devise means of increasing production all round.
I believe that if we can find a means of increasing the rate of fertiliser application we shall not only increase the production of crops but increase the production of livestock as well. That is why I think this Bill is so vitally important at this time. It seems to me that the point which we are discussing is not whether the price should be paid for the agricultural production, but the way in which it should be paid. I think the arguments for paying it by way of subsidy are very convincing as regards fertilisers.
I should like to instance to the House one or two examples. I think that everyone who follows agricultural production knows the risk of a decline in the production of potatoes. In addition to growing potatoes on the best land a certain acreage has to be grown on the poorer land, for instance, on the lighter fens in my own constituency. Those people who undertake the very expensive job of potato growing at the present time, where the cost can rise to £80, £90, or even £100 an 285 acre—and not £10 which has been quoted earlier in this debate—are taking a very great risk and, in so far as we are able to help them with the purchase of their fertilisers, we are contributing to a certain extent to the decrease of that risk.
I think that a great number of small and poor farmers on these lands will look twice before they undertake such an expensive crop as potatoes when they find their fertiliser bill, at the prices which have been running, can easily run them into almost £20 an acre for fertilisers alone. Therefore, it is not only from the point of view of increased production that this subsidy is justified, but also to prevent a decreased production of those expensive commodities which we cannot do without at the present moment.
I think everyone agrees that, as regards the use of fertilisers on grassland, we are only at the beginning of what can be achieved. By intensive management and heavy application of fertilisers it will be possible to get a still further increased production from our grassland and so, from the point of view of both arable and grassland farmers, I think this subsidy is a very desirable thing.
Mention has already been made of horticulture. Horticulture is not just an isolated section of the farming community, because all farmers—or many farmers—are engaged more or less in horticulture and, in so far as we can assist them with fertiliser applications to those crops which are also expensive crops, I think we shall do good not only to the horticultural industry but to agriculture as a whole.
There is one point which was mentioned by the right hon. Member for Belper (Mr. G. Brown) which, I think, is of importance in connection with this subsidy and which ought to be made; that is, the charges made by the manufacturers. I do believe it is a fact that when the fertiliser prices were increased after the removal of the subsidy the increased prices charged were not only contributed to by the cost of raw materials, but by the fact that manufacturers did take the opportunity of claiming very substantially increased margins for their process of manufacturing compounds, and there is a widespread feeling within the industry that the margins claimed at that time were in excess of what they need have been. I think that 286 is a point which should be very closely watched.
From all points of view, especially from the point of view of increased production and of preventing a decrease in very expensive cropping at this time. I welcome the Bill.
§ 6.17 p.m.
§ Mr. M. Philips Price (Gloucestershire, West)
I am glad that this debate has got back to the provisions of the Bill. I am sorry that the hon. Member for Wednesbury (Mr. S. N. Evans) succeeded in diverting the attention of the House for quite a considerable time. I very much regret that he should have thought fit to say so much which would have been much better said on a general agricultural debate.
§ Mr. Philips Price
Yes, but up to an hour ago we were having a much more general debate. I know that people like me do not count very much. The hon. Gentleman is more important than I am. But it happens that I am one of the "useless drones" who is trying to produce a little food, and I think that the least thing the hon. Gentleman might have done was to have come along yesterday and discussed the provisions of this Bill with some of us who are interested in the industry, before sailing into the House and delivering an ignorant tirade against the agricultural industry in the way he has done.
Having said that, I proceed to the Bill. I wish to say that I think the Government have done the right thing in assisting the industry in this particular way. Although I agree with practically everything my right hon. Friend the Member for Belper (Mr. G. Brown) said in his most interesting speech, I did not agree with one point he made at the end. He seemed to think that this was not the best method of helping the industry. I am sorry that he is not in his place at the moment, but if I understood him aright he thought it better to give the assistance by direct help to prices. I do not think that is so.
Rather than giving direct subsidies to the end-product of agriculture I think it is much better to do it in an indirect way, by lowering the cost of production. My reason for saying that is that I am 287 certain that this method assists the better type of farmer—the progressive farmer —rather than the one who is not so progressive—and, of course, there are some who are like that, and it is upon those whom we have to put pressure in order to bring them up to scratch.
The non-progressive farmer would much prefer to receive the help in his prices and not bother about his method of cultivation, but those of us who know something about the industry know that the planning and systematic use of fertilisers takes a lot of trouble but it does bring about, in the long run, much greater returns than direct subsidies of the type I have just mentioned, because for a given expenditure of money by the State—or by the consumer in this case—a twofold or threefold return is given for the outlay. It is, in fact, an investment.
I am sorry that the subsidy was taken off 18 months ago on this very thing. Again, I do not agree with my right hon. Friend, who seems to think it desirable, because the effect has been a bad one. I do not know the exact figure, but I think that the decrease in the use of artificial fertilisers in this country since the subsidy was taken off has been in the neighbourhood of 30 per cent.
Moreover, this is not confined to phosphates. It also covers potash and nitrogenous manures. I find in my costings accounts that a good dressing of artificial manure might involve an expenditure of up to 25 per cent. of the cost of producing a crop. If that is raised from 25 per cent. to 35 per cent., which was the result of the removal of the subsidy, farmers will think twice before they put on quite so much artificials. That is what happened. It is a wise policy to restore the subsidy and to encourage farmers to add more fertiliser.
The work of the National Agricultural Advisory Service in this respect has been very good. The tendency in my county has been largely in the direction of getting farmers to analyse their soil. That has been done on an extensive scale. I have done it myself, and some fields which I did not realise were deficient in certain ingredients were found to be deficient in them.
It has been said that potash has not been used as much in this country as on the Continent. The answer is probably 288 this. I do not think our soils—at least, our heavy clays—are as deficient in potash as are the lighter sandy soils of the Continent. That is probably the reason why it has not been used so much. The soil analyses which the Agricultural Advisory Service is helping farmers to undertake on their farms is finding out just where deficiencies exist. An astonishing thing is that not only are some fields deficient while adjoining fields are not deficient, but, also, some parts of the same field show deficiencies while other parts do not.
In this way, scientific research and the encouragement of the application of its results to the industry, will bring about increased food production. In this respect, the experiments made by the Imperial Chemical Industry about two years ago—the so-called "early bite" experiments—showed that an application of 2 cwt. of nitro-chalk on one acre of land increased the grass growth by 6.5 cwt. and the crude protein content went up by 17.5 per cent. The total cost was £1 10s. per acre and the product would keep a dairy cow for three months, giving between three and four gallons of milk a day.
If we wanted to achieve the same result with feedingstuffs the cost would be £3 10s.—and they would be imported feedingstuffs at that, which would involve a burden on this country. I contend, therefore, that by the scientific use of these fertilisers great value can be found for the nation through savings in dollar imports or in expensive imports from outside the Sterling Area. We can produce them here as a result of these scientific methods, about which so much more is known today than was known in the past.
The Minister has told us that the scheme which he proposes to put into operation will concern only phosphatic manures. It is very important to have balanced dressings, not only of phosphates but, in some cases, of potash and, particularly, of nitrogenous manures. Quick returns will come with nitrogenous manures. If we want quick returns to help us in our difficulties, I hope we shall take action to include in a subsequent scheme, which, I hope, will not be long delayed, nitrogenous manures or balanced artificial manures which, I am sure, will give good results. I am very glad that the Government have taken this 289 way of carrying out assistance for agriculture, because I am sure it is much better than giving the direct subsidy in food prices.
§ 6.26 p.m.
§ Mr. Archer Baldwin (Leominster)
I should have had no intention of speaking in the debate but for the fact that the hon. Member for Wednesbury (Mr. S. N. Evans) "had a go." Before I deal with what he said, however, I want to express my views on the Bill. As many of my hon. Friends know, I have spoken against subsidies—whether subsidies for the farmer or for the consumer—on almost every possible occasion in the House, but of all the subsidies which have been paid to the farming industry I think this is the best, because it is one which will help the marginal land farmer who cannot afford to buy artificial manure. If we are to get the increased production which is necessary in this country, it must come from marginal land. I give this Bill my blessing, therefore, and I hope my right hon. and gallant Friend will give me credit for that, because I do not always have a good word for subsidies.
I want to say a few words about the speech of the hon. Member for Wednesbury. Perhaps it is not necessary; he has already had a good milling from his own side. I thought the speech of the right hon. Member for Belper (Mr. G. Brown) was an excellent one. He and I have not agreed on many occasions, but on this occasion I agree wholeheartedly with what he said, and also with what was said by the hon. Member for Gloucestershire, West (Mr. Philips Price).
One thing which terrifies me in the House, and possibly in the country, is the absolute division between town and country. That division is fostered by speeches such as that which we heard today from the hon. Member for Wednesbury, who often makes that sort of statement which, although it may give many of us a certain amount of light amusement during the afternoon, will probably make headlines in the newspapers tomorrow and will be believed by many people who do not know the facts any more than does the hon. Member for Wednesbury. I wish he would accept the advice which I have given him on many occasions, which is to take a farm himself and let me see the accounts. I have invited him to my farm, and I do so 290 again. I will show him my accounts for the last 45 years and he will find no feather-beds there.
What are the facts of the case? There is not one single commodity for which the farmer is getting what is called a guaranteed price today which he could not take into the open market and sell at a higher price—not one single commodity; and I challenge the hon. Gentleman to tell me of a single commodity for which I am getting a guaranteed price and on which I could not make more money in the open market.
§ Mr. S. N. Evans
As the hon. Gentleman has challenged me, may I tell him that my barber's complaint is that he is having to pay 12s. a dozen for black market eggs. He thinks the price should be frozen, so I think the hon. Gentleman is right.
§ Mr. Baldwin
I am not talking about black market eggs. The hon. Gentleman talks about guaranteed prices and about feather-beds and says that farmers can sit on a deck chair to do their farming; and he says they spend most of their lives in dinner jackets. The farmer has just as much right to a dinner jacket as a gentleman connected with sand and ballast. I want the public to know the facts. Today, farmers are compelled to sell 75 per cent. of their wheat to the Ministry of Food at £10 a ton less than they have to pay for the food with which they feed their pigs. The farmer is being paid £10 a ton less for wheat than we are paying to the other countries of the world. Barley is being bought in the world at as much as £20 more than the British farmer is getting. Is that much of a feather-bed? Is that much of a guaranteed price?
The hon. Member should remember this. What we are getting is not a guaranteed price: we are getting a controlled price. We have fed the public for the last 12 years at something less than the food has been costing from abroad. What has in fact been happening is that a subsidy is paid to the consumer, and that subsidy is charged up against the farmer. I think it is a great mistake. I am against guaranteed prices, and on this I am against my right hon. and hon. Friends. This policy of a guaranteed price leads to all sorts of misunderstandings. I say that if the farming industry were given the same protection as any other industry gets 291 in this country, guaranteed prices, so called, would go by the board. We farmers can fight our own battles under the same protection as other industries have.
If we in the farming industry are not entitled to that protection, we must have something else, and we want that guaranteed price. We cannot pay our workers good wages unless we get that price. It is about time the consumers of this country realised they have got to pay more for their food. They will never get cheap food again. If there were cheap food available in the world, we would not have the money to buy it. Therefore, the day of cheap food has gone. The sooner we begin to realise that the better it will be for the country.
I hope that in the February Price Review that is taking place, instead of talking of giving subsidies and all that sort of thing, they will give us the price for the articles we are producing and let the best man win it. I think that guaranteed prices and these controls, and all these sorts of things, ought to go by the board, and if they were to go by the board we should get rid of that misunderstanding that people have that the farmers are cosseted—as the hon. Member for Wednesbury has suggested. I should have liked him to come down into the country—
§ Mr. Baldwin
—in January when I invited him to my farm. I could have shown him my men and women pulling sugar beet, up to the neck in mud. I do not think that is much of a feather-bed.
§ Mr. Baldwin
Before the hon. Member makes any more speeches in this House, I hope he will acquaint himself with the true facts about the farming industry. There are hundreds and thousands of farmers who are farming today and not making farm labourers' wages. There was a case that occurred very recently in my district. There were two brothers who were farming, and when the farm wages went up to £5 8s. they could not earn this wage on their farm. One of them took a job as a stockman and left his brother to carry on with casual labour. That is the sort of thing that will go on happening if we do not meet the increased cost 292 of production, particularly on the marginal land from which increased production must come.
§ 6.33 p.m.
§ Mr. Maurice Webb (Bradford, Central)
I think it will be agreed on all sides of the House that we have had a lively debate. I do not think that any of us, before the debate began, could have thought that fertilisers would have provoked so much interest and discussion; but I am afraid that the debate has gone into realms that do not quite belong to the Bill, which is a simple Bill—a modest Bill concerned with a very limited field. Although I want to make one or two points on the general case I want, if I can, to confine myself to the Bill in the short time I propose to speak.
The debate has ranged over those wider issues for very obvious reasons. I think all of use feel some concern about the future of agriculture, and it is a pity that we should allow any exaggerated terms to divert us from the actual technical problem we have got to face. The technical problem is quite a simple one. How can we get more food out of our soil? It is not a matter of going back to the old days of cheap food at the expense of the livelihood of the farmworkers or of the farmers.
It is a matter, however, of getting food at the most economic cost—of getting food as cheaply as we can. That is the practical problem in front of us, and it is my view—and I think it is the view of all of us on this side of the House—that this Bill does make a contribution to that end. It does, in fact, provide some means whereby we can improve our crop yields.
It is quite clear to all of us—and there is no need for us to make the case over and over again, but it has to be said—that our food supplies present a problem of increasing gravity, and it is quite clear that we have got to get more food from our own soil. How are we to do that? We certainly cannot do it by just throwing money away recklessly. After all, the money involved in this operation, as in all the operations in which we have been concerned in the support-price policy in recent years, is public money, and it is our duty in this House to see that it is directed to the most productive needs. That is the simple technical problem in front of us tonight and I am sure that 293 this Bill will, in fact, make productive use of that element of public money which is involved—the sum of £10 million.
Nevertheless, the general issues do require some examination. I do not think any of us can sit back and think that all is well. I recall reading a most interesting letter from Lord Bledisloe in "The Times" recently, where he complained about 15 per cent., as he put it—it may be a guess: I do not know on what basis he was calculating, but he is a responsible man who knows this industry—and he said that about 15 per cent. of the farmers in this country are inefficient and are not doing their job and ought to be cleared off their farms. I do not know what is the order of the inefficiency, but in so far as there is inefficiency in the industry it ought to be the common concern of both sides of this House to try to root it out, because we want to make the industry efficient.
My feeling is that we have reached the point where it would be a useful thing to examine afresh the whole basis on which we are conducting this system of guaranteed prices. I was interested to see that the Lincolnshire—I think it was—branch of the National Farmers' Union, in a resolution that, I think, they sent to their annual assembly, complained that the present method of paying out the money was not an incentive to the efficient farmer. They wanted—I cannot actually say what they wanted, but I think they probably wanted—to go back to the old acreage system of payment.
There have been a lot of complaints about that. A lot of people think that that is a bad system. What is clear is that a lot of people in the farming industry, in the House, and in the various Ministries connected with the supply of food, are concerned about the mechanics of the administration of the system of supporting farm prices. Let us think about this clearly, without any prejudice, and consider what is the best way of applying this method to the public advantage.
With that in mind all I want to do is to ask one or two questions which, I hope, the Minister will be able to answer, although if he cannot I shall not complain. I wonder if he would tell us what steps are being taken to reduce the pro- 294 duction costs of fertilisers? After all, here is a plan to extend the use of fertilisers, which gives great guarantees to the people engaged in the production of fertilisers. They are getting the subsidy, and I think we are entitled to ask what they are doing to reduce the economic cost of their production.
I think that is something we may explore. I do not want to press the point, but it is a question that seems to me to be reasonable. After all, we should not always expect the taxpayers to pay. If we do, that is the road to ruin. We must, in the end, find out what is the economic result of the use of the taxpayers' money.
Another question I would put is: What is the effect of this on the global food subsidies? I do not want to argue this on any party basis. It is a much wider issue, in the end, as to whether or not the present ceiling of £410 million is too high or too low. It is a much wider issue than this Bill raises, but it is important for us to be quite clear what is the effect of this particular operation on the amount of money available for food subsidies.
Is it not a fact—I am merely putting it as a question, and seeking information —that the Ministry of Food, which is the Department concerned with the payment of food subsidies, will have less credit for subsidising rationed foods to the extent of £10 million? I should like to know, merely for the purpose of clearing up this position, what will be the effect of this operation on the subsidy ceiling.
The issue of what is the best way to inject this subsidy into the industry has been raised in earlier speeches. This is a matter upon which we can, quite honestly, take contrary views, without having any prejudice about it. Is it better to use the subsidy directly in price subventions on the crops completely? Is it better to reduce the subsidy by putting up the price to the farmer or putting up the price to the consumer, by in any way directly using the subsidy to affect the actual price of the commodity, either to the farmer or to the consumer? Or is it better to use the element of subsidy in operations of this kind, in subventing and supporting actual elements in production, such as we are now doing with fertilisers?
295 We might do it with tractors and in all sorts of ways. That is a matter for argument and discussion. All I hope is that we do not begin to develop a policy that has not been thought out. Whether we go one way or the other, it should be subject to examination. It raises such important principles that we should not slip into one method or another by accident, just by feeling our way. I wonder whether the Minister could tell us whether there is to be some examination of the way in which, generally, the Government will approach the use of this subsidy for the better production of food?
I think the answer to my next question is in the Bill itself, but it is not very clear. It may be made clear in the scheme the Minister is to produce later. To whom will this be paid? Clause 1, I think, makes it fairly clear that it will be paid to suppliers, distributors or to groups of farmers. That is not very clear, and it may be that the scheme itself will clear up that point. However, it would be useful to the House to have rather more information about that, because it involves an important aspect of administration.
§ Captain J. A. L. Duncan (South Angus)
My right hon. and gallant Friend explained that it would be done on the same lines as the lime scheme.
§ Mr. Webb
I am going by the Bill and not what the Minister said. I think that there is an obscurity here which might be cleared up; there is no great issue in it, and I think it can be cleared up as we go along.
Those are the only points I wish to make. I do not want to enter into any great controversy about this Measure, because it is obviously a useful Measure. If we are to use public money in this way, this is one of the most useful ways of using it. It will give a direct incentive to those farmers who will grow more food. We need to grow more food, and on that basis I commend the Measure to the House.
§ 6.44 p.m.
§ The Joint Under-Secretary of State for Scotland (Mr. McNair Snadden)
I should be lacking in courtesy, and perhaps also a little in my duty, if I did not say that on the whole this has been a very helpful 296 debate, during the course of which we have had one or two interesting incidents. I found the debate extremely interesting, because I confess that we were not very sure what the attitude of hon. Members would be when we recalled the reception accorded to my right hon. and gallant Friend's announcement on 29th November, when he indicated that a subsidy of the kind embodied in this Bill will be provided.
Tonight, as on that occasion, the hon. Member for Wednesbury (Mr. S. N. Evans) has had a day out. He enjoyed himself very much trying out a series of new phrases which seemed to come trippingly to his tongue, and we now have the picture of "feather-bed" farmers with dinner jackets thrown in.
Although some of the debate has been irrelevant, it does give me the opportunity to say at least two things which I very much want to say. The critics conveniently forget—and in justice to the farming industry it is necessary to make this clear—that since the last February Price Review, in 1951, the costs of production have risen phenomenally; so much so that before the General Election the Labour Government recognised that a Special Price Review was necessary to meet the situation.
When the results of the Special Review were announced last November, some critics seemed to jump to the conclusion that farmers were getting away with something; that they were, as we say in the North, getting away scot-free, with a sort of extra dole of £26 million provided through the medium of a subsidy on fertilisers and higher commodity prices. The fact is that their annual expenditure on inescapable charges over which they have no control had risen, even at that time, by no less than £40 million. That is since the last February Review. Since then the figure has again gone up considerably. Farmers are accordingly at present meeting the difference out of their own resources. It must be emphasised that the arable crop farmer will have to wait until the crops of 1952 are harvested, stored and threshed before he gets recoupment through the price machine in respect of the rise in costs resulting from increased wages as apart from fertilisers. It is just as well that these facts should be emphasised.
297 When my right hon. Friend replied on 29th November to a supplementary question asked by the hon. Member for Wednesbury, he said:The Government are very well aware of the extremely difficult financial position, but they are equally aware of the danger of a fall in production from the farms of Great Britain."—[OFFICIAL REPORT, 29th November. 1951; Vol. 494, c. 1730.]Unfortunately, statistics show that there is a distinct danger of a decline in the overall production of food in this country Our tillage acreage is falling, and we have had to come forward with a scheme quite recently offering a subsidy of £5 per acre in order to get more tillage for the coarse grain feedingstuffs pool. The number of cattle is also less than a year ago. Yet circumstances are such that the need for British agriculture to produce all the food it can economically produce was never greater than it is today.
We want more coarse grains for the feedingstuffs pool so that we can increase the pig population. We want better grass management and better grass conservation; and we want better utilisation of the result of intensive grass management Finally, in the background behind it all, there is the not unimportant question of the maintenance of soil fertility itself.
All these things call for the greater use of fertilisers, but the increase in prices arising from the removal of the remaining half of the fertiliser subsidy on 1st July last, has resulted in a drop in demand, which until then had been well maintained. This, in turn, has created a serious storage problem for the trade. It is hoped that this Bill, with the reintroduction of a subsidy on phosphatic fertilisers, will dissuade farmers from attempting to economise by reducing their fertiliser intake, and we hope it will encourage them to maintain, and even increase, their applications in the interests of maximum production from their farms.
In the course of this debate, various hon. Members have asked for information and I will do my best to deal with certain of the questions. The right hon. Member for Bradford, Central (Mr. Webb) asked what steps we were taking to reduce the production costs of fertilisers. We are doing everything that can be done in that connection. He will know that fertiliser prices are controlled. The controlled prices are decided upon 298 only after a very careful and detailed costing inquiry carried out by the Ministry of Supply. The recent rise in July last was allowed only after such an inquiry. I can say that we are watching that position very closely.
§ Mr. Frederick Peart (Workington)
The hon Gentleman's right hon. Friend mentioned that one of the reasons for thescheme for phosphatic fertilisers coming to an end was the increased cost relative to nitrogen fertilisers. I should have thought that both types would have felt this impact of the rise in costs, because the manufacturing processes are practically the same and freightage costs are practically the same.
§ Mr. Snadden
In the case of phosphates, of which phosphatic manure is composed in the main, they are to a very large extent imported into this country. The other question put to my right hon. and gallant Friend is one which I do not think I can be expected to deal with, namely, the guaranteed prices structure. Naturally, that is often thought about, but I cannot say anything about it, except that any approach to that question needs to be very cautious indeed.
The right hon. Member also mentioned the question of the efficiency of food production. On the question of efficiency, we are aware of the need to make sure that we have the most efficient system of farming possible. The machinery exists already under the Agriculture Acts both for Scotland and for England and Wales, and it is up to us to see that it is properly administered. The hon. Member for Tonbridge (Mr. G. Williams) also asked several questions. I think that his first question has been fairly generally put by several hon. Members, and if I deal with it in one reply, I hope that they will not feel that I have forgotten to mention them individually.
I was asked: What is the smallest amount on which the subsidy will be available?—that is to say: What will be the minimum quantity for which a contribution will be made under this Bill? We intend to make that minimum 10 cwt., and we think that is quite a reasonable thing to do. It should be remembered that under the Bill the small people are looked after by a special provision—that is to say, they can, through the various 299 associations which buy fertilisers in bulk, take advantage of the provisions in the Bill; so the small man will be looked after.
The hon. Member for Orkney and Shetland (Mr. Grimond) asked about retrospective payments to the people who had already bought fertilisers since last July in small amounts, and what would we do about them. All I can say is that, so far as the Department of Agriculture in Scotland is concerned we will look very sympathetically at any application, but I would throw out a warning that this dealing with many applications in respect of small amounts would involve considerable costs in administration.
Then there was a general question put by many hon. Members, including the hon. Member for Tonbridge: Why does this Bill provide only for phosphatic manures? The hon. Member made the rather astonishing statement that phosphates were not by any means the most important manure. I do not know how one can differentiate, because they all work together, but phosphates are required for all plant growth, whereas other fertilisers are not necessarily required for all plant growth.
§ Mr. Peart
Surely this Bill applies to other fertilisers which may come from non-organic materials; it is not a specifically phosphatic Bill? The scheme in the Bill applies to phosphatics, but surely that does not prevent the Minister from introducing a scheme affecting other non-organic fertilisers.
§ Mr. Snadden
The Bill is intended to cover schemes for any kind of fertiliser subsidy, but what we are introducing in the first scheme is a subsidy payable only on phosphatic fertilisers. I am dealing with a specific scheme under this Bill, and the question is: Why are we paying a subsidy for phosphatic fertilisers only and not for nitrogenous and other manures?
In so far as phosphatics form the basis of all manures for farm crops—for every hundredweight of nitrogen put on the land, there are probably two of phosphatics and one of potash—they are of very great importance; and also we felt when we decided upon the scheme that this was the way in which we could best 300 assist farmers to meet the increased costs of fertilisers, since the increases have been, broadly speaking, greatest for phosphatic manures. Another point is this: Had we extended the scheme to cover nitrogen, we might not have been able to meet the demand that might arise through a subsidy.
The right hon. Member for Belper (Mr. G. Brown) asked a question about the supply position. We believe that our resources will be sufficient to meet any foreseeable increase in the demand for phosphatics of any kind arising out of the subsidy. We could not say that in regard to nitrogenous fertilisers.
§ Mr. G. Brown
The hon. Gentleman used the words "we believe." I am not casting any reflection upon the Ministry of Agriculture, but may we have the figures on which the belief is based? There are, I think, some who are not quite so strong in that belief.
§ Mr. Snadden
I do not think that it would be possible for anyone to produce the figures. I certainly have not got them here, and I do not think that they can be got. It is true that because of the abolition of the subsidy, or the removal or relaxation of it last July, production tended to fall, but the point I am trying to make is that phosphates, we believe, are available to meet any increased demand that may arise out of this Bill, whereas an increased demand for nitrogenous manures would put us in very great difficulty indeed. The hon. Member for Tonbridge also asked why 1st July was chosen. That is really because, as my right hon. and gallant Friend explained, it is the beginning of the period that has always been taken as the fertiliser subsidy period.
The hon. Member for Derbyshire, South-East (Mr. Champion) welcomed the Bill on behalf of the horticultural industry in a very interesting speech, and I think that he will appreciate that this Bill deals with the horticultural industry as well as the agricultural industry, in that the horticultural industry is to be assisted in regard to phosphatic manures in exactly the same way as the farming industry. I think that I have dealt with his point about the 10 cwts. in reply to the hon. Member for Tonbridge.
The hon. Member for Dorset, North (Mr. Crouch) referred to drainage, and I 301 agree with the points that he made. The hon. Member for Wednesbury is, I see still waiting here—
§ Mr. Snadden
The right hon. Member for Belper dealt with him so well that I do not think that it is necessary for me to take up the arguments which he made. There is one point which he attempted to make, rightly or wrongly, when he quoted the figure of £300 million as the net aggregate income. Comparing that with the figure of the national income of over £11,000 million, it represents about 2.8 per cent. on the recent calculation of the national income, and, considering that agriculture: is a basic industry, I do not think that anyone can say that 2 per cent. or a little over is an unreasonable proportion for that industry to take of the national income.
The hon. Member asked why we could not produce a statement of the production of the agricultural industry in the various commodities. That statement is in existence. I have a copy here. In the Annual Review of the Fixing of Farm Prices, 1951, we have the particulars for every commodity which is produced in this country.
§ Mr. Snadden
The hon. Member will there find all the facts for which he is asking. If he should not get them all there, it would not be very difficult to go to the Library to obtain from the Statistical Digest all the details which could not be given in the Review because of lack of space.
§ Mr. Snadden
If in referring to "goods" the hon. Gentleman means products of the agricultural industry whether in tons or in acres, all that is available to everybody. At home I have statistics going gack to about 1924. I do not think there is anything at all in the point he has raised.
The hon. Member for Orkney and Shetland (Mr. Grimond) was the only hon. Member to speak for a Scottish 302 constituency. We all sympathise with him about the terrific gales in Orkney, and we hope that things are a little better there now and that the damage is being repaired. When the news came through, the Scottish Office did everything it could to press button A or button B to try to help Orkney. The hon. Member asked whether we would review prices if other fertilisers and freights increased in cost.
§ Mr. Snadden
We shall certainly keep this under review. As I have said, the Bill gives power to produce any kind of fertiliser scheme. The hon. Member also asked about the minimum quantity to be considered, and I have said that it is 10 cwt. If the hon. Member has any cases to submit to the Department of Agriculture for Scotland, he will get sympathetic consideration. He also asked what kind of land would rank for the subsidy, and the answer is that any land will.
The hon. Member also referred to air experiments. I believe he was referring to lime spreading experiments carried out by aircraft. I understand that this is in the hands of the Agricultural Research Council. A committee is looking after the matter at the moment and experiments have been carried out. I do not know what progress has been made, but I can make inquiries. I believe that the great trouble, as one would expect, is to find a method of distribution which is economical.
We have had a year of very steeply rising costs. Labour, feedingstuffs and fertiliser costs have all gone up, and the sharpest advance has probably been in the case of fertilisers, which has adversely affected sales and, in turn, storage space. It ought to be said that the trade has gone to all sorts of lengths to increase storage space in order to meet the spring demand. The production of fertilisers has necessarily had to be curtailed. In these circumstances, the only wise course for us is to do everything we possibly can to reverse this very serious tendency.
We are trying to do that by means of this Bill. We believe that the provisions in the Bill to provide a subsidy for phosphatic fertilisers with retrospective effect to 1st July should bring about the desired result of stimulating sales of what every- 303 one agrees is an indispensable raw material for agriculture. Without it we cannot possibly hope to secure the high level of production we need today.
Question put, and agreed to.
Bill accordingly read a Second time.
Committed to a Committee of the whole House.—[Mr. Heath.]