§ 10.38 p.m.
§ The Joint Parliamentary Secretary to the Ministry of Agriculture and Fisheries (Mr. G. R. H. Nugent)
I beg to move,
That the Draft Ploughing Grants Scheme, 1954, a copy of which was laid before this House on 13th May, be approved.
This is the fourth scheme for England, Wales and Northern Ireland, and the Order is broadly the same as it has been during the last few years since we started paying grants; it is exactly the same as last year in every detail. It provides grants of £5 an acre for leys of three years and over and £10 for grassland that has been down since pre-war, and is subject to the same conditions as last year's scheme.
I expect that the House would like to know some details of the operation of the scheme during the year 1952–53, which ended on 31st May last—it being the last full year for which we have details. In that 12 months grants under the £5 an acre scheme were made for 868,000 acres and under the £10 an acre scheme for 39,000 acres. The net increase in tillage in that period was about 50,000 acres, raising it from 10,517,000 acres to 10,567,000 acres. In assessing the value of that increase, the House will have in mind that we probably lost about 60,000 acres because of the East Coast floods. The total cost in that full year was £4,730,000. I have not complete figures, for the scheme which ended yesterday, and we can only make a rather rough estimate based on the forecast of tillage crops and cereal and root crops in the March returns.
That is no more than a broad indication of what the final outcome is likely to be over the 12 months. Those figures give us a broad indication that the tillage acreage is likely to be somewhat down this year compared with last year, and we shall have the final figures of the June returns by the end of July. Nevertheless, although it appears probable that there has been some decrease in the tillage acreage during the past 12 months, I still commend the scheme to the House as being good value to the national economy and as an incentive to good husbandry.
We continue to make a high tillage acreage the basis of our agricultural pro- 1228 ductivity programme. We believe that a high tillage acreage is, in fact, the basis of good farming which it is our policy to encourage, and the £5 an acre ploughing grant is the most direct incentive to maintain that high tillage acreage. Therefore, despite the fact that there has probably been some decrease in the tillage acreage over the past 12 months, we feel that it will continue to be good value. Therefore, I commend the scheme to the House.
§ 10.43 p.m.
§ Mr. A. J. Champion (Derbyshire, South-East)
In view of the announcement that was made by the Leader of the House that we are to have a full agricultural debate on Thursday, obviously I am not going to take up as much of the time of the House on this matter as I otherwise would. I think the Minister will find on Thursday that he has been chased from Crichel Down to Walsingham and back again, and indeed from Land's End to the Border. But I am not going to chase him through these ploughed fields which have resulted from the ploughing grant which was introduced two years ago and which was continued by this House last year.
However, I think we are bound to ask the Parliamentary Secretary and the Government how they can justify further expenditure on these ploughing grants in the light of what seems to be staring out of both the Price Review and the Chancellor's Budget speech this year. It seems to us on this side that the Government, while talking in terms of trying to secure a considerable increase in the productivity from our soil, are taking steps which will make it inevitable that the targets which they have set will not be reached. What they have got to do, in the light of their decision, is to justify to the House this expenditure which I understood the Parliamentary Secretary to say amounts to over £4 million a year on these ploughing grants alone, in the form of subsidy. That will not be easy for the Parliamentary Secretary to do, and it is a subject to which obviously and inevitably we shall have to return on Thursday as it is a matter of importance.
I think, too, that we have to ask the Parliamentary Secretary, in justification of these ploughing grants, to tell us how these grants are working out in the light of what he talked about last year as being 1229 the freer market. We have moved from the position that we had under the Labour Government to a condition which he calls a freer market. When these points were put to him last year, his reply was to this effect: "We have no actual experience yet of how this is going to work out, but we think it will work out in this way, that way and the other way."
Last year, quite obviously, my questions were bound to be somewhat academic, and the reply by the Parliamentary Secretary was equally bound to be academic. But can he now say how these grants are working out? If I understood him aright, I think he was suggesting that the stimulus from these grants is losing the impetus it once had. In this year's Price Review—the Annual Review and Determination of Guarantees, 1954—it is stated in paragraph 15:It is important to continue to encourage lay farming as the best and most economical form of food production in this country. This requires the maintenance of a large tillage acreage. The Government have, therefore, decided that the two ploughing grants should be continued at the existing levels of £10 and £5 an acre. It should, however, be possible to reach the objective of 60 per cent. without such a big increase in tillage as the 1,000,000 acres mentioned in the 1952 White Paper but to do this the steady improvement in crop yields and in the management and use of grass must continue, and increasing skill and economy must be exercised in the use of concentrated feedingstuffs.I cannot help but wonder if that is intended to cover something of a failure; and that failure seems to be implicit in paragraph 5 of the same Review, where it is stated:Although the expansion of tillage has been slower than expected, the tillage area increased by 43,000 acres in 1953–4, with a special emphasis on wheat.I understood the Parliamentary Secretary to say just now that it was thought that the Government had secured by their effort in 1952–53 an additional 50,000 acres. I understood him to say that, but that he was not in a position to tell us the increase for 1953–54 because the returns have not come in. But we have a figure less than this 50,000 of 1952–53. It has dropped to 43,000, and my hon. Friend sitting beside me pointed out while the Parliamentary Secretary was speaking that what, in fact, had happened, was a decrease in the tillage area over the period 1953–54, and not merely 1230 a decrease in the amount of expansion. I am not quite sure what he meant, but I thought that perhaps he meant that there had been a slowing up in the increase rather than a net decrease. But, if we see a net decrease, then it would be difficult to justify continuance of these payments which, as the Parliamentary Secretary says, amount to more than £4 million a year to the farmers; that is, of course, if we are not getting a return.
I think that we are bound to come back to a point which was asked last year, which is still occasioning some doubt, and that is how much are these additional acres ploughed up costing the country. It may be that they are costing the country nothing, but someone is paying a lot of money for a few additional acres. For example, if we get 43,000 additional acres in 1953–54, would not that work out at some £100 per additional acre over 1952–53, or is not that a fair way to put it? Quite obviously there would be a large number of acres ploughed whether or not there were ploughing grants, and it is right that the Government and the Opposition should consider whether the amount being spent in this way is securing the return required by way of an increased yield in agriculture.
The question whether there is actually an increased amount of land under the plough at the present time as a result of the ploughing grants is one which deserves an answer, as do some of the other points I have mentioned. I am sure that the Parliamentary Secretary, with his usual courtesy, will at least attempt to answer them, for they are matters about which the House should know before it decides to pass this scheme, which will obviously cost the country, or someone, quite a lot of money.
§ 10.51 p.m.
§ Major H. Legge-Bourke (Isle of Ely)
The hon. Member for Derbyshire, South-East (Mr. Champion) has said that whether or not there had been ploughing grants a good deal of ploughing would still have gone on, and I do not suppose that anyone in the House would dispute that statement. But it is only right to bear in mind that even supposing there had been a decrease—and my hon. Friend said tonight that the final figures 1231 are not yet known—it is arguable that that decrease would have been bigger without the grant than with it.
There is another factor which the hon. Member has overlooked. A certain number of farmers who have been turning to ley farming since the war have in mind that if they leave their leys a little longer than they originally planned they may get ploughing grants when they plough them up in the end. Not many years have passed since special emphasis was laid on ley farming in many of the arable areas, and we should bear in mind the possibility that some farmers who have been on a three-year ley have left them a little longer in the hope of getting grants when they do plough up.
So far as the total tillage acreage is concerned, we should be quite clear whether or not it includes all the acreage down to short-term leys. As I understand it, it does, but perhaps my hon. Friend will confirm or deny it. It is now the generally accepted fact that ley farming is part of the arable programme, and that a grass crop is just as important as a cereal crop.
The hon. Member for Derbyshire, South-East and many people outside the House have made the mistake of assuming that what sacrifices the farming industry has had to make this year in the Price Review will take effect this year. The hon. Member must remember that many of the prices mentioned in this year's Price Review do not take effect until 1955, and by that time there may be a considerable further reduction in some of the overhead costs which the farming industry has to bear.
§ Major Legge-Bourke
The hon. Member says that there may be a change of Government. Perhaps he had better deal with that question on Thursday, rather than now, as I imagine that it is a matter more suitable for that occasion.
I feel that the Government are quite light in reintroducing this scheme, because I am quite certain that it is a stimulus, and the important thing is to ensure that we get the best value for what is spent; I agree with the hon. Member for Derbyshire, South-East on that point. But there are many other factors besides that 1232 which the hon. Member cited, and I have mentioned a few of them. It is important that the Scheme should continue in operation, and I congratulate the Government on their action.
§ Mr. Tudor Watkins (Brecon and Radnor)
Will the Parliamentary Secretary give the House further information as to the decrease in the tillage acreage? I am anticipating that the figures may be given separately for Scotland. I should like to know where the areas are where there has been a decrease in tillage acreage on the 1953–54 figures. Will the Parliamentary Secretary tell us where Wales stands in this matter? Has there been an increase or a decrease, or do we carry the decrease belonging to England?
§ 10.55 p.m.
§ Mr. Nugent
By leave, I have not the precise figures with which to answer the hon. Member for Brecon and Radnor (Mr. Watkins) on how the tillage acreage stands for Wales. My impression is that the decrease has taken place mainly in the west, and to some extent in the Midlands, and that the eastern counties have, broadly speaking, maintained their tillage acreage. I would expect there to have been some decrease in Wales. I would emphasise that the figures I have for 1953–54 are only the farmers' forecasts on their March returns. They are only a broad indication of the final result. When I get the final result on the June returns, I will make a point of sending the hon. Member the figures for the Welsh counties.
Regarding the point raised by the hon. and gallant Member for the Isle of Ely (Major Legge-Bourke) in his helpful speech, tillage includes cereal crops, root crops, and fallow. Arable includes grass crops. The figures with which we have been dealing are tillage, not arable. In answer to the hon. Member for Derbyshire, South-East (Mr. Champion), our justification for the ploughing subsidy—I am speaking of the £5 an acre subsidy; there has been no dispute about the £10 an acre subsidy for ploughing land into tillage which has been grassland since pre-war days—is that it is obviously a clear gain. I recognise that the £5 an acre subsidy is being given to some grassland which would be ploughed anyhow in the course of rotation; but, in deciding where the balance of advantage lies, we 1233 have to consider not only that, but many other factors.
The amount of money involved, about £5 million, is taken into account in the Price Review as one of the receipts which the farmers will receive which are necessary to bring them a certain return in the global figure of the net income of the industry. As I explained last year, we are concerned not only with returns of tillage crops, such as wheat and potatoes, but to some extent with live-stock products, because a lot of the tillage crops, for instance, barley and oats, will be fed to the livestock, and the farmer will finally realise his cash return by the sale of these livestock products.
These amounts are taken into account when we estimate the net income of the industry, and what we think is necessary to ensure that the industry has a sufficient net income to maintain stability. If the ploughing subsidy were ended, we would consider that if we were to maintain the same net income, we would have to add to it in other ways; for instance, by increasing the net return on the different tillage crops involved, and the net return on the livestock products affected.
Again, if the amount which it is considered necessary to pay to the farmer is to be paid by way of an increase per ton on the cereals or potatoes grown, one has to recognise that many farmers will grow these crops, irrespective of whether the return is adequate. Also, it must be recognised that those with the best land yielding the highest crops will get the biggest share, and those with the worst land will get the smallest share.
From that point of view it has always seemed to me that these production grants—we call them that to make them respectable, but nevertheless they are a subsidy—are a most useful specific aid to the small farmer. They give him some cash in hand at the beginning of the process of growing the crop and they give him a specific incentive to maintain under tillage land which otherwise he might hesitate to keep in rotation.
We want to maintain a high tillage acreage in order to maintain our drive towards greater efficiency and lower costs in farming, and while it is true that in the freer economy into which we are gradually moving still further there are certain factors which will militate against 1234 the maintenance of a high tillage acreage—I am thinking principally of the ending of feedingstuffs rationing, and on balance I am certain that the ending of feeding-stuffs rationing is a great strengthening of the agricultural economy, because it enables the individual farmer to build up his livestock units to the most efficient economic level—although I admit that there may be some reduction in the incentive to maintain the highest possible tillage acreage, I have no doubt that there is an overall advantage in doing so.
The individual farmer, instead of thinking simply in terms of producing the greatest volume of cereals, concentrated feedingstuffs and so on from his farm in order to feed his livestock, looks at the position more critically in considering what is the best economic yield in terms of the yield capacity of his fields and the climate in which he lives. I see no harm in that, because it is encouraging the more realistic atmosphere in which our farmers are producing. The desirability of maintaining a high tillage acreage is nevertheless the high road to more intensive farming, and therefore lower costs and the ability of the farmer to make a living out of lower prices continues to be the basis of our policy.
As the hon. Member has recognised, we shall be dealing with these subjects at greater length on Thursday, and I therefore feel that I should not delay the House longer in dealing with this very important and interesting point of policy, but I hope I have said enough to show that there are very sound reasons, both economic and technical, for maintaining this ploughing subsidy. It gives a specific aid exactly at the point where it is wanted and it helps the small farmer, in particular.
In reply to the hon. Member's question—how much per acre is this extra tillage costing?—I would say that it is not a fair question; indeed, he asked me whether I thought it was a fair question. This is part of the net income of the industry, and if it were not granted in this way it would be granted in another. In our view, we get the greatest advantage by doing it in this way.
The hon. Member asked whether there was a net decrease in tillage, and I confirm that that is the indication. We cannot be sure of the exact position until we have the June returns, but the broad 1235 indication seems to be that there was some decrease in tillage acreage in the 12 months ending yesterday, 31st May. Despite that, and for the reasons which I have adumbrated, I feel that the subsidy continues to give good value. My hon. and gallant Friend the Member for the Isle of Ely rightly said that without this aid the decrease would probably be greater, to the disadvantage of the individual farmer and the national economy.
§ Mr. Champion
Do I understand that paragraph 5 of the Price Review White Paper is wrong and that the hon. Gentleman does not expect the tillage area to be increased by 43,000 acres in the year 1953–54? In fact, he expects not an increase but a net decrease.
§ Mr. Nugent
I think that would be correct. I think the 12 months used in the White Paper is a different 12 months from that to which I have been referring, but certainly over the 12 months ending 31st May and beginning 1st June of last year we do expect the net decrease in tillage. I cannot give precise figures because it is not possible on the basis of the March returns forecast. Nevertheless, I do commend this Scheme to the House. It is serving a most useful purpose, both in helping production and in helping to get the food we need grown, and is generally of value to the national economy. I ask the House to approve it.
§ 11.6 p.m.
§ Mr. Thomas Fraser (Hamilton)
I propose to make a few remarks on the Scottish scheme later, but before we dispose of this scheme I wish to make one reference to what the Parliamentary Secretary described as the helpful speech from his hon. and gallant Friend the Member for the Isle of Ely (Major Legge-Bourke).
The hon. and gallant Member, in the course of his remarks, let slip some words which were very acceptable support for a contention I offered to the House when the Bill was going through two years ago. He said there were some farmers who put down a three-year ley, but, in the expectation of a ploughing grant, allowed the ley to lie a bit longer in order to get the grant. So that instead of putting down his ley, keeping it for three years and ploughing it up, the 1236 farmer will look to this scheme and keep his land in grass for another year, and by doing that will get a £5 ploughing grant when he ploughs it up. Therefore, for that particular farmer, this grant has the consequence of reducing the tillage acreage, or delaying the ploughing up of his grassland.
§ Mr. Nugent
I think the hon. Gentleman is wrong on a point of fact. If he will refer to paragraph 5 (c) he will see that the ploughing grant applies to leys which were in grass before the first day of June, 1951; in other words, it does apply to three-year leys, which was an alteration we made in the later schemes to meet the very point the hon. Member is making.
§ That the Draft Ploughing Grants Scheme, 1954, a copy of which was laid before this House on 13th May, be approved.
§ 11.9 p.m.
§ The Joint Under-Secretary of State for Scotland (Mr. McNair Snadden)
I beg to move,
That the Draft Agriculture (Ploughing Grants) (Scotland) Scheme, 1954, a copy of which was laid before this House on 13th May, be approved.
This scheme, which applies to Scotland, is, with the exception of the concession which we make to the crofting areas, identical to the one just approved by the House, and in view of the information which my hon. Friend has already given on the various points of the scheme, I do not think the House will expect me to repeat what he has said. I would, however, for the information of the House and for the record, like to indicate what is the position in Scotland, to give a few relevant Scottish figures, and to say why we feel this scheme is necessary in Scotland.
Prior to 1951 there had been a steady decline in Scotland in the tillage acreage, and the agricultural returns for 1951 indicated that the decline was accelerating. The first Scottish scheme not only had the effect of arresting the falling acreage, but resulted in an increase of 13,000 acres in 1952 over the previous year. The grants paid in respect of that year were approximately for 283,000 acres. The second scheme did much to help the position, although we have to admit that the 1237 difference in tillage acreage over 1951 was now only some 6,000 acres. Over 336,000 acres qualified for grant, including 8,500 at the higher level of £10 per acre. That is a very good figure for Scotland.
Final figures for the third scheme will not be available until the 4th June returns are received, but, as my hon. Friend the Parliamentary Secretary to the Ministry of Agriculture said, just as is apparent south of the Border, we in Scotland think that certain factors will result in a slight decline in the tillage acreage. These factors include the fall in world prices, resulting in cheaper feedingstuffs, and the uncertainty which is natural at a time when we are changing over from fixed prices into a system of freer market conditions. Also, we must not forget the increased labour costs with which farmers have to cope this year. We estimate that the acreage attracting grant this year will be of the order of 330,000 to 340,000 acres, including 9,000 to 10,000 acres at the higher rate of grant of £10 per acre.
We believe that the ploughing up grant this season has been a safeguard against what in its absence might well have turned out to be a serious fall in tillage because of the factors to which I have just referred. Looking to the year ahead, with which this Order is concerned, we feel that the highest level of arable cultivation possible consistent with a balanced farming system is still required by the nation. We also must remember that we have not yet reached our target of 60 per cent. in excess of the pre-war level of production.
In the new conditions into which we are moving, while we have to seek expansion in crop production from improved fertility of our land and higher yield rather than from sheer expansion of acreage, nevertheless we feel that we have to endeavour to hold the tillage acreage at the highest possible level consistent with a proper rotational farming system. We must not forget the need to develop our grassland. This year, when we are passing from fixed prices into a system of free marketing, we want to make sure that we do not have any serious setback in arable cultivation. For that reason, I commend the fourth Scottish scheme to the House.
§ 11.13 p.m.
§ Mr. T. Fraser
I feel very sorry that the Government have seen fit to bring forward this scheme for approval. It is beyond me to understand how the Government can boast about agriculture moving into a freer economy and then come to Parliament for a subsidy of £5 per acre for ploughing up land which I think that the Parliamentary Secretary to the Ministry of Agriculture said would be ploughed up anyway.
When the Bill authorising this procedure was before the House I said that I did not believe that the Government would repeat the £5 per acre subsidy. I felt that it could run for only one year. I have been proved wrong in my forecast. I have been proved wrong in the faith I had in Her Majesty's Ministers. The Government have indulged in extravagances in the expenditure of public money which, to me and I think to many people, are inexcusable.
This subsidy, on the figures given by the Joint Under-Secretary, represents more than £1,600,000 of public money given away quite needlessly in Scotland alone. The figure given by the Parliamentary Secretary was of £4,730,000 of public money given away quite needlessly in England and Wales every year. Last year the scheme was justified on the ground that it was bringing about a much needed recovery of tillage acreage, but as the Joint Under-Secretary was making his speech a year ago—was he was making his case—Scottish farmers were allowing the tillage acreage to slip back.
In his speech just now the hon. Gentleman said that in 1952 there was a gain of 13,000 acres over 1951. The Joint Under-Secretary went on to say that last year we were only 6,000 acres up on 1951, but what he did not make clear was that last year we actually slipped back 7,000 acres. I am sure that it was inadvertence on his part. He said that we went up by 13,000 acres. Last year we were up by only 6,000 acres.
The facts are given on page 17 of the Report of the Department of Agriculture. It shows that the total tillage acreage for Scotland went down by 7,000 last year at the time when the case was made out for the subsidy on the ground that it was boosting the tillage acreage. The Report shows that in 1952 the total tillage acreage in Scotland was 1,743,000, and 1239 in 1953 it was 1,736,000, a drop of 7,000 acres. Last year I made a calculation that I cannot repeat. I took 13,000 acres and spread them over the £1,400,000, and said that the money represented some £111 per additional acre. This year we have spent rather more than £1,600,000 and have lost 7,000 acres.
It is high time that this subsidy was discontinued. In any case, how can the Government boast that agriculture is moving into a freer economy, presumably a more competitive economy, and reduce the guaranteed minimum prices for cereals, as they have done in this year's Price Review, and then ask for this liberal subvention from public funds? Make no mistake about it; this is taxpayers' money. It is nobody else's money.
In moving into the freer economy, the farmers are allowed to sell their commodities in the open market and get the best prices. When we were giving them fixed prices for their farm products we could say: "We take the global sum, and in as much as we take part of that global sum and give it in the ploughing grant, a smaller amount is loft to be given in the fixed prices." When we depart from the fixed prices and move into this freer economy it is clear enough that we then dip our hands into the taxpayers' pockets and make a gift of public money to this private industry.
§ Mr. Fraser
The hon. Gentleman is being a bit hasty. We must complete our speeches before we vote. We quite understand how some hon. Members will vote, without their making speeches.
The White Paper on the Annual Review and Determination of Guarantees, Cmd. 9104, published in March, said:The present cost to the taxpayer of the support given to British agriculture is very high—of the order of £200 million. Further consideration will be given to means of limiting the dependence of the industry on Exchequer assistance.This is the subsidy on which the Government could have begun to limit the dependence of the industry on the Exchequer. I asked the Government in July last year not to repeat the scheme 1240 this year. I very much regret that they did not take my advice. I honestly think that in the interests of agriculture they were wrong not to take it. Let me repeat it. Let this be the last year. There is no case for continuing this subsidy, and I submit to the House that neither Minister who has spoken here tonight has made out a case for the subsidy.
It the Government will not take heed of my advice, I ask the National Farmers' Union to recognise the growing opposition to such subsidies from people in other walks of life. Let me mention people who were much criticised at times in this House, the railwaymen and the miners, whose industries are much more depressed than this one, and who receive no subsidy, in spite of the propaganda we have heard from the Tory Party and have seen on the hoardings. This industry is receiving a subsidy of £200 million, and although none of us will deny a decent return to the farmers and farm workers for their labours, we consider that it should cease.
This subsidy was promised in the annual Price Review, and the Parliamentary Secretary in winding up the debate on the previous scheme said that if this money had not been given in this way it would have been given in some other way. He could have meant that the cereals price minimum would have been higher, and I submit that the better way to deal with this would have been to have raised the minimum prices for cereals. It is because the Parliamentary Secretary says a thing like that that it is difficult to vote against the scheme. But the Government have seen fit to reduce the guaranteed minimum price for cereals, by ls. a cwt. for most of them, and by 2s. a cwt. for rye, which they expect to be grown on the grassland that is ploughed.
We all know that the periods for which the annual Review determines the prices, but the Parliamentary Secretary in justifying the scheme says that if the Government did not give the money in this way they would require to give it some other way. If that is so, the Under-Secretary will not deny that the only way the Government could have done it would have been to have raised the guaranteed minimum price on some of the commodities governed by the annual Price Review, and that would have given higher prices for cereals. But they reduced it, and if 1241 one reads the Review it is said it was done because the world market prices were going down. Now they come along for the subsidy to be continued for another year. If they would not take heed of what I said last year, I hope the National Farmers' Union will do so.
I do beg the Government, and the leaders of the farmers in Scotland, and, if my words can reach them, in England and Wales as well, to realise that there is nothing more calculated to lose for agriculture the sympathy and support of the masses of the people of this country who are not actively connected with it than to have subsidies for which no good case can be made. We are all most anxious to give a decent return to the farmers. I am always most anxious to give subsidies where subsidies are needed.
I have never criticised the £10 per acre subsidy for grassland. I have never criticised subsidies for the reclamation of land which is not yielding food at the present time, but where there is a subsidy given to farmers who would, in the normal course of events, plough up their grassland after three or four years, they are given it without doing anything extra for it. It is just given to them for carrying out their routine duties. When they are given a subsidy costing many millions of pounds of the taxpayers' money, it seems to me that we are risking sacrificing the co-operation and good will of masses of people in this country who are otherwise well disposed to agriculture.
§ That the Draft Agriculture (Ploughing Grants) (Scotland) Scheme, 1954, a copy of which was laid before this House on 13th May, be approved.