§ The following Questions stood upon the Order Paper:
§ 59. Mr. CROUCH
To ask the Minister of Agriculture if he will make a statement on the negotiations that have been taking place between himself and the farmers' union with regard to prices to be paid for farm produce during the coming year.
§ The Minister of Agriculture and Fisheries (Mr. Heathcoat Amory)
I will, with permission, answer Questions Nos. 59 and 63.
Yes, Sir. The statutory Annual Review of the economic conditions and prospects of the agricultural industry in the United Kingdom has been concluded. The Government have made their determinations on the guarantees to the industry in the light of the Review. These are set out in a White Paper which is now available.
The general production policy of the Government is unchanged. The main objectives of policy continue to be to foster a high level of net output by encouraging beef, mutton and lamb and the production and use of home-grown feeding-stuffs. It is necessary to avoid stimulating further the production of pigs.
The condition of the industry has been adversely affected this year by the particularly bad weather. There has also been a substantial net increase in costs. The actual farm net income for 1954–55 is forecast at £280 million, as compared with the final figure of £320½million for the previous year, though on a normal weather basis—hon. Members may wonder what a normal weather basis is in this country—the forecasts are £312 million for this year and £306½ million for last year. Net output is estimated at 53 per cent. above pre-war, as compared with 55 per cent. a year ago. I am sure the House will join with me in paying a tribute to the determination, hard work and skill of the industry, but for which a greater decline could have been expected.
These circumstances, with the other factors to be taken into account, have been fully considered by the Government in determining the changes to be made in the price guarantees and in the production grants. The net effect of the determinations is to increase the total value of the guarantees in a full year by £28 million. The Government regard this increase as necessary to give the industry the stability and resources that it needs in present circumstances, if it is to play its full part in meeting the requirements of the national economy.
It has been decided to increase the price guarantees for fat cattle, fat sheep and lambs, milk and eggs for 1955–56, and for coarse grains, potatoes and sugar beet of 619 the 1956 harvest; to increase the calf subsidy, the lime and fertiliser subsidies and the ploughing grants, and to make a special payment on hill sheep; to reduce the price guarantee for pigs; and to leave unchanged the price guarantees for wool for 1955–56, and for wheat and rye of the 1956 harvest. The importance of minimising the cost to the Exchequer has been recognised by the reduction in pig prices. The increased production grants and cereal prices are designed to help reduce the strain on the balance of overseas payments by encouraging the production and use of home grown feedingstuffs.
The Government is confident that these determinations should substantially help the industry, in the face on this occasion of heavy increases in costs coupled with exceptionally bad weather, to maintain and indeed increase its net output and income.
§ Mr. Crouch
May I congratulate my right hon. Friend in making this statement one week earlier than either of his predecessors? May I also ask him whether this is an agreed statement with the National Farmers' Union and whether, with the increase in the amount of the Government subsidy of £28 million, he is really happy about the pig position, because the pig breeders have responded to the appeal of the Government for greater output? Today we have some 240,000 pig breeders as opposed to 140,000 before the war, and a lot of them are small men, who will feel the drop in price.
In reply to the first part of my hon. Friend's question, I am glad to say that this was an agreed settlement with the three Farmers' Unions. As to the second part of his question, I should like to assure him that we have looked at the position very carefully indeed, and at the present prices and costs of production it is simply impossible to envisage a further increase in numbers without a substantial reduction in cost. When he looks at the White Paper, he will see that, in general, we have done our very best to meet the position of the small farmers to whom he refers.
Mr. T. Williams
I should like to ask the right hon. Gentleman three very small questions. Can he tell us what is the total increase in costs for the past year? 620 Secondly, could he sub-divide the cost into increased prices and into the cost for the various increased subsidies, such as ploughing, calf subsidies, lime and fertilisers? Thirdly, will he tell the House whether the increased subsidies form part of the £28 million increase?
I am not quite sure that I have got the three questions correctly, but if I do not give the right hon. Gentleman the answers now, he will find them in the White Paper. First of all to answer the last point, yes, the increase in the production grants is part of the £28 million. As regards the next question, I am not quite sure that I got it right, but the estimated total increase in costs for the coming year which will fall on the industry is something like £45 million. But, as he knows very well, that has to be reduced to keep it to the terms of the Price Review commodities, and when that process has been carried out, the £45 million comes down to £25 million to arrive at the commodities that fall to be covered by the Price Review. I could explain the difference to the right hon. Gentleman, but I think he will find it explained in the White Paper. I think I have missed out a question, the second one.
I asked the right hon. Gentleman—it is my fault for putting three questions—whether he would subdivide the proportion of the £28 million that will go to increased prices and the proportion that will go to increased subsidies?
Again, the right hon. Gentleman will find it in the White Paper, but from memory the £28 million is divided like this. About £11½million of the increase is for production grants and about £9 million for crop prices, which, as the right hon. Gentleman knows, will go to crops of the 1956 harvest. The remainder, some £8 million, goes on increased livestock prices.
§ Mr. Hurd
May we deduce from what my right hon. Friend has told us that on this occasion the Government have stretched a point or two in the reckoning so as to take some account of the bad season that has handicapped farming, and also so as to refresh the confidence of the farming community in the profitability of high output?
As my hon. Friend knows, normally the Price Review takes place on the basis of normal weather and one disregards the bad weather. But this year the weather has been so exceptionally bad that the effects of it, in our opinion, may well run into a second season, so that we have felt it impossible to disregard the effects on the industry generally. So this review is designed to put the industry into good heart and to provide it with resources to enable it to recover from this season and to continue with its record of excellent progress.
§ Mr. Elliot
Would my right hon. Friend expand a little further his reference to hill sheep, because the situation is acute and great anxiety is felt by the flock masters. Can he say whether his proposals apply to the present season?
As regards the special payment for hill sheep, it is really a certain payment in advance as against a possible hill sheep subsidy that may be payable next year. It would have to be taken into account in that connection, but it is so clear that the hill sheep producers have suffered exceptional losses in the recent weather that we thought it important to take action now. The sheep producers will also, of course, receive benefit from the slightly higher prices for mutton.*
§ Mr. Elliot
May I assure my right hon. Friend that the steps which he has proposed will be gratefully received by the hill sheep owners in all parts of the United Kingdom?
§ Mr. Grimond
Arising out of that last answer by the Minister, can he say whether a claim for the payment can now be put in by producers who have lost sheep in the recent storms? Is it an immediate payment? Can he also give a little more detail as to the form it will take?
The hon. Gentleman will see it in the White Paper. It is a payment per head and will not require an immediate claim.
§ Mr. Peart
On a point of order, Mr. Speaker. Is it not usual, when the Price Review is announced in this House, that* [See correction in OFFICIAL REPORT, 11th March, 1955, c. 852, last paragraph.]622 there is liberty for back benchers to put questions?
§ Mr. Speaker
It is a matter for my discretion. I would point out to the hon. Member, and to the House in general, first, that there is a White Paper available in the Vote Office; secondly, that there is a Motion about agriculture for tomorrow's business in very wide terms, when these matters can be pursued. At the present moment there is no Question before the House, and therefore the matter cannot be further debated.
§ Mr. Mellish
Further to that point of order, Mr. Speaker. With regard to your statement concerning the Private Member's Motion tomorrow, would you not express an opinion that the Motion should not be on the Order Paper in view of this important statement today? This is a matter for which the Government should find time for the Opposition. It is not a matter to be discussed in Private Members' time.