HC Deb 23 March 1953 vol 513 cc487-90
Mr. G. Brown

(by Private Notice) asked the Minister of Agriculture what effect he estimates the award announced in the White Paper on the Annual Review will have on food production.

The Joint Parliamentary Secretary to the Ministry of Agriculture (Mr. G. R. H. Nugent)

Unfortunately, my right hon. Friend is laid up temporarily and, in his regretted absence, it falls to me to make the reply.

The award which the Government have made is designed to further the production objectives announced last year. It will enable farmers to maintain their incomes and continue the good start that has already been made following last year's award towards the objective of raising production to at least 160 per cent. of the pre-war level by 1956.

The Government have had to consider the commodities subject to review in two groups. For the commodities still subject to fixed prices, the award, taking increases in price and adjustments to production grants together, amounts to a total of £15,400,000, against increases in costs incurred in respect of these commodities in a full year estimated at £17,100,000.

The remaining review commodities for which there are no fixed prices, this year include wheat and hen eggs. The producers' returns for these commodities will be those obtained on a free market supported by the Government's arrangements for implementation of the 1947 Agriculture Act.

In this way, together with the award of £15,400,000 on fixed price commodities, producers will have a sound basis for further expansion of production.

The changes in prices and production grants now announced have been calculated to give the necessary distribution of emphasis to attain the production objectives now re-affirmed. In the last two years the overall index of agricultural production has increased from 143 to 149 and 151 respectively. This expansion of production already recorded encourages us to believe that the objectives laid down can at least be achieved.

Mr. Brown

We all regret the scars sustained by the right hon. Gentleman in the course of the battle which has just taken place. Is the hon. Gentleman aware that the producers' representatives have forecast that as a result of this settlement there is likely to be a considerable drop in production, notably of milk and eggs. Does not he regard this as serious following on a year in which, despite favourable weather, production was almost static? Is not he aware that the award involves the consumer in committing himself to a high minimum at times when some commodities may be freely available, without any protection during the rest of the year against scarcity prices? Does not he regard this as giving the consumer the worst of both worlds while leaving the producer with a maximum uncertainty? Finally, how much of the £15½ million is to be passed on to the consumer?

Mr. Nugent

I have seen the comments by the National Farmers' Union on the settlement which they have accepted with reservations only on eggs and milk. I do not accept the suggestion that milk production will suffer seriously. I ask the right hon. Gentleman to look at Appendix I of the White Paper, where he will see that during the past 12 months milk production has significantly increased. There is no reason to expect with this award, which I think is a fair one. that it will not continue to do so at a moderate rate.

With regard to the reservations on eggs, we have introduced a support price for the first time at an average level of 4s. a dozen over the year. I think that that is a fair level at which to fix it. The producers have the opportunity to make the best price that the consumer is prepared to pay, less distribution costs, and they have the guarantee of a price which at least will cover the cost of production in most cases. At the same time, they will have the advantage of the derationing of feedingstuffs this summer which will enable them to adjust their economy. We think that the support prices that we have fixed are at about the right level to give the producer the stability that he needs in order to continue to expand production.

I believe that the consumers, the housewives, are capable of using their purchasing power to protect themselves against exploitation. On the third point about how much of this will be passed on to the consumer, the answer is nothing at present. My right hon. Friend the Minister of Food has taken account of some increase in price in making his Estimates. But if and when these increases in price are passed on to the consumer, they will amount to about £10½ million on subsidised commodities. That would represent an increase of two-fifths of a point on the food index or about 1d. per head per week.

Mr. Brown

We ought to have this made clear. Both the Treasury and the Ministry of Food have been involved in the negotiations. Have they, in fact, decided that the subsidies will be increased to prevent the £15 million being passed on or have they decided to pass it all on? We ought to know. They must know at this stage what has been decided. Will the hon. Gentleman give us a straight answer on this, because we could not get one last year?

Arising out of the hon. Gentleman's supplementary answer, may I ask him again about consumer protection. Those of us who regard ourselves as mostly concerned with producer interest recognise that we cannot expect the consumer to guarantee prices if she in turn is not guaranteed against exploitation. When eggs are very scarce is the price now going to be allowed to rise to any limit while at other times it will be stopped from falling? The producers had a very much bigger income last year than was forecast in the Review. Ought not we to have some protection?

Sir H. Williams

On a point of order. Is this a private debate, or are the rest of us allowed to join in?

Mr. Speaker

We cannot debate this matter now. Mr. Thorneycroft.

Mr. H. Morrison

On a point of order. I understand it is proposed that the President of the Board of Trade shall now make a statement, but my right hon. Friend the Member for Belper (Mr. G. Brown) has put some very pertinent questions to the Joint Parliamentary Secretary to the Ministry of Agriculture, and, moreover, there may be other questions which back benchers might wish to put. May I ask you very respectfully, Mr. Speaker, if you will allow supplementary questions on the agricultural statement to run a little longer?

Mr. Speaker

If it is the desire of the House, I will permit an answer, but we cannot now have an agricultural debate arising out of this statement.

Mr. Nugent

I am afraid I cannot enlarge upon the announcement I have already made, and, quite obviously, a large part of this question falls to be answered in the Budget. With regard to the second point on the price of eggs, I personally think that consumers, on balance and taking into account what they have paid over the counter and in taxes, will be better off under this arrangement than before.

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