§ 11.4 a.m.
§ Sir Ian Fraser (Morecambe and Lonsdale)
I beg to move,That, in view of the contribution which a prosperous and thriving agriculture makes to the well-being of the country generally and especially to the balance of trade, this House urges Her Majesty's Government to continue and increase its efforts to develop home production of food.The constituency of Morecambe and Lonsdale is one of the most beautiful in Britain. It includes some 600 square miles of moor and fell and lake, some rich valleys and some beautiful rivers, which, incidentally, contain salmon, trout and many other fish. It is not peopled by those who sit in the seats of the mighty but by ordinary, warm-hearted, hardworking farmers and farm workers and others who love the countryside. I consider it extremely good luck to have won in the Ballot and I hope that it may bring good luck to my constituency also.
I have heard it said that it is somewhat unfortunate that this debate should occur today immediately after the Price Review. Indeed, I have been urged to withdraw my Motion so that other important matters may be discussed. I do not see why I should do that. I venture to think that my good fortune renders a service to agriculture as well as to the country by offering an opportunity of reviewing the affairs of this great industry. If we also have the great advantage of being able to comment upon the Price Review, so much the better.
May I start by offering my congratulations to the farmers and farm workers of Britain for the good showing which the Price Review evidences of their courage, steadfastness and hard work during a most adverse year? [HON. MEMBERS: "Hear, hear."] I offer my sincere congratulations to my right hon. Friend the Minister of Agriculture and 820 his assistants, to the Government and to the National Farmers' Union for once again having arrived at agreement as to the financial provisions to be made for the industry in the forthcoming year.
If I have read it correctly, the Price Review will make certain that at least a further £28 million will be guaranteed to the farmers, although, of course, if they have good fortune, and if they improve their efficiency, as they have done from year to year, they may well do better than that.
I rejoice that the hill farmers, of whom there are many in my constituency, will gain especially by the additional sheep subsidy and by the calf subsidy, but they need more help. I take the opportunity of thanking my right hon. Friend the Minister for arranging last autumn, when some of us represented to him the special hardship which these persons had suffered from the weather, that the benefits which were then available could be wholly paid out to them to provide feed for the winter instead of, as is normally the case, their having to spend a substantial part of those benefits upon improvements.
I rejoice that milk and eggs have been, if not favoured, at any rate dealt with by an improvement in the Price Review. These commodities are produced in the main by "small men", and I am sure that the whole House would wish to encourage the small farmer throughout the land to render his most valuable service to the community. So far as eggs are concerned, Lancashire is well known to be a county which provides these valuable commodities in great abundance.
What are the dominant considerations which have influenced the Minister and the National Farmers' Union in coming to the arrangements which they have made? They will, I am sure, have had in mind our balance of payments. They will have had regard to the fact that the terms of trade may have turned slightly against us and that this trend may continue for some time. We can see this reflected in certain of the provisions that have been made. For example, those methods of helping farming which tend to reduce imports and to stimulate home production have been especially encouraged—the provisions for fertilisers and lime, ploughing grants, the encouragement of grass farming. I pause there to ask the Government not to forget the very great 821 importance of dried grass, which is a very rich mixer in all kinds of animal foods. All those provisions, it seems to me, should go some way towards enabling agriculture to make a further contribution to our balance of payments.
It is well understood that we live only by exporting. It is equally understood that anything we can grow in Britain is as good as an export so far as the balance of payments is concerned. That is why in my Motion I include a brief reference to the contribution which can be made by agriculture towards improving our import-export position. I am sure this will not be lost on the Government, and I urge them to make use of the industry here in our own land, amongst other reasons, because of the great contribution it can make to the solution of this present difficulty. While touching upon balance of payments, I ask the Government one question, whether they have in mind any new proposals for cheaper credit for agriculture.
Another consideration which must have weighed with farmers, the N.F.U. and the Government alike, must have been the weather. I have sat in this House a very long time, and I have noticed that whenever the weather is made an excuse for anything most Members on both sides of the House laugh, but if ever there was an occasion which was not one for laughter, so far as the farmers and farm workers of Britain are concerned, it was the weather last year. It really was a great blow to them, a great blow to the country and to the Government, that such misfortune should have fallen upon us during the period of transition from the way of life to which we had become accustomed during the war and during the years of shortage that followed the war to the newer conditions which now prevail. That we should have survived it so well, with so little dislocation, so little misgiving and uncertainty, was a very remarkable feat.
Another factor that must have weighed with the Government was, of course, that costs are rising, the costs of labour and machinery and maintenance, and, of course, the costs of importing feeding-stuffs from overseas. All these factors must have weighed with them, I have no doubt, and the result is a Price Review which some may think generous, some 822 may think wanting in some respects, but which, I venture to think, is fair in the interests of agriculture and fair to the taxpayers and the nation as a whole.
There is one group of farmers and animals that has not fared so well. It is the pig farmers and the pigs. There are, of course, too many pigs, too many for the bacon factories, and it does not surprise me that the Minister and his advisers have found it necessary in their judgment and with the agreement of the National Farmers' Union to suggest to those who raise pigs that they must do their very best to produce the best quality and not to increase the numbers above those which we now have in our country.
Farmers are wise enough to know that they cannot have it all their own way, that miscalculations may sometimes be made, and I am sure they will be the first to realise that, taking the good with the bad, this particular aspect of the Price Review must be borne and dealt with, and it is my hope that these farmers, with their skill, may, nevertheless, on the reduced price, be able to make a good living by comparison with others and even a good living by comparison with what they have been accustomed to in the past.
I notice that some hon. Gentlemen have put down an Amendment to my Motion, an Amendment which deplores the provision made for pigs. I am very flattered that so much notice is taken of my Motion as this. I am particularly glad to observe that all or almost all of those who have put their names to this important Amendment are townsfolk. Let us who are interested in agriculture rejoice that at any rate five Members of Parliament who sit for populous industrial districts should feel so much concern for the pigs, and let us hope they will also be found to be powerful supporters of agriculture in general.
I think we must resist the Amendment, should it be moved, for it is really an irresponsible wrecking Amendment. Let me, nevertheless, thank the hon. and gallant Member for Brixton (Lieut.-Colonel Lipton), who put it down, for his courtesy in telling me about it and for the interest he shows in agriculture. May I hope that, having shown his versatility, with which we are so familiar, and having, I hope, made a splendid 823 speech, he may think fit not to press the matter, so that this House may be united in its encouragement to agriculture?
I turn to the direct help which the country gives to agriculture by other means that the Price Review, because I cannot help thinking they are of very great importance. Production grants, for example, do not suffer from some of the disadvantages which guaranteed prices suffer from. Production grants go where it is judged best to encourage production in the national interest. They are grants to the people who need them, and not so much to those who do not. They are the most economical way of directing the nation's help to agriculture, and I am glad that by and large the White Paper encourages and increases them.
There are other ways in which the nation helps and should help the countryside. There is water supply, for example. I am surprised and gratified to note that in my constituency alone there have been 48 water schemes in the last few years, which have cost some £200,000. One of those, it is true, is in a small town and absorbs about one-third of that amount, but the remainder are water schemes which bring water to the countryside and especially to farmers.
Then I have learned that some 2,000 telephones have been put into my constituency, especially on farms, during the last three years. A very large number of farms have had electricity brought to them, and there have been some special schemes, which I have encouraged and fostered, which have greatly increased the number of farms which have this most valuable asset not only to the farmer but to the farmer's wife. I would mention water, electricity, drainage, houses, schools—all these amenities—roads, rail development, even T.V. I notice that no less than 5,000 people have television sets in my constituency, which is one of the largest and most remote constituencies in Britain. All these improvements and amenities, which have been made and are being made from time to time, make their direct contribution to the welfare of the countryside. They make it more agreeable for people to live there and are a direct incentive to better agriculture.
I ask the Government, through all their Departments, to continue the process which has been so long a custom in 824 Britain of giving all these national services to the countryside on the best possible terms. They are more usually special terms which, of course, represent a charge on the rest of the country, because these services are vital to the well-being of the whole countryside.
I turn now to the call-up. It is a subject which should be approached with responsibility by all of us, but none can deny that it is a matter of the deepest concern to the countryside. I offer my thanks and congratulations to the Minister of Labour and National Service for the announcement recently made that deferment will take place until some date in May in order that the ravages of last year's weather should be made up to some extent, but I ask that this good provision should be reconsidered and the deferment continued until the end of October. I ask also that the Services should be asked to do what I have found they are very ready to do at the lower levels, that is to give what are called compassionate postings and goodwill postings to young men who come from the rural districts and work on farms so that they may continue their National Service during the coming season but nevertheless lend a hand on the farms during the long evenings or at the week-ends.
We have just had a week during which we have been discussing defence, and it seems clear that the great changes that have taken place in weapons is leading to a reconsideration and possible recasting of the whole problem of personnel to serve the weapons. I notice in particular that Civil Defence has now become, in the consideration of the Government and their advisers, one of the most important aspects of our national defence. Indeed, special battalions are to be raised to deal with this matter, and no one would say that such battalions would not be in the front line.
It seems to me that here is an opportunity, not hitherto presented, of considering in this entirely new situation an entirely new way of using our agriculturists in their military service. Why should they not specially serve in these battalions or some equivalent home defence service, perhaps doing their term of military service over five years for four or four and a half months a year during the months which are not the farming months? In that way they would be able 825 to render their full service to the nation, which I am sure no agriculturist wishes to avoid, and at the same time be able to help on the land during the important times of planting and reaping our harvests. I sincerely commend that suggestion to the Government. I hope that at least they will acknowledge that they have heard what I have said and will give it some consideration.
The Milk Marketing Board has proved itself. Other boards are doing good work in their particular spheres, and I hope that it will not be long before the egg marketing board passes out of the stage of discussion and becomes a reality. That, coupled with the rise in the minimum price for eggs, should go a long way towards giving satisfaction to this most important part of the farming industry. In passing, I congratulate the National Farmers' Union upon the success it has had with the Fatstock Marketing Corporation. In urging the further development of marketing boards, I prefer that they should be producer boards rather than that the aspects of the industry which they would cover should be nationalised.
Agriculture is our most fundamental industry and our most ancient and, I think, the most respected, but the agricultural vote is a minority vote. We ought to realise that it does not consist solely of farmers and farm workers. It should be in the minds of accountants, solicitors, professional men generally, doctors, nurses, local authority servants and all those who live in the countryside, as well as a great many workers in mechanical industries who make tractors and agricultural instruments, that their livelihood is also in the soil of Britain. Those who have an interest in agriculture may well be a very large part indeed of the whole community.
When all is said and done, however, political power is in the constituencies and there are not many constituencies where the agricultural vote, even including all those ancillary persons whom I have mentioned, would be a majority. It is, therefore, profoundly important for the agricultural industry and its future that any policy pursued at any time should be a reasonable one. It is one thing to ask what is reasonable from the standpoint of a farmer or a farm worker, but it may be another to ask what is reasonable for the man or woman in the town or the housewife in Birmingham or Manchester. 826 The two may look at the matter quite genuinely and sincerely from different points of view. It is important that agricultural policy should be reasonable and should appear to be reasonable, because that way lies the greatest possible degree of stability.
We have passed through times of war, through times of acute shortage after a war, and for 15 years we have had a national policy which was born of adversity and of fear but which, nevertheless, has been one in which farming has flourished and considerable improvements have been made to our land and farming machinery and to the whole heart of the industry. But time passes, and inevitably the ravages of war are healed, devastated lands throughout the world come to be tilled, and once again shortage passes into regular supplies, even in some instances into plenty.
What are we to do then? If one is a Socialist, and especially if one is on the Opposition side, it is easy. All one has to do is to have the best of both worlds. One does not have to face the possibility of a financial crisis. The Opposition think they have nothing to do but to complain and point to the good years that have passed which they claim to have invented. But that is not true. If the prosperous period was invented by anybody, it was invented by the adversity of war, and if any individuals are to get credit for the results, they would be Lord Woolton, Lord Hudson, and the right hon. Gentleman the Member for Don Valley (Mr. T. Williams). The credit for the new way of dealing with our land and its problem is shared by all parties, and it ill befits any party to take particular credit for it.
But the years pass and the economic circumstances pass. I consider it most fortunate for Britain that at the time when this problem fell to be dealt with a Conservative Government was returned to power. Had it been otherwise, I have no doubt that the Labour Party, running true to form, would have stuck to its controls and its rationing because it had not been able to think out any policy that is dissociated from controls until a crisisarose—crises are part of its meat and drink—and then agriculture would have been in a worse position. It will be remembered that in the six years of Labour Government there was a crisis every year.
827 So Britain was fortunate enough at this particular time to have a Government with a new philosophy which was capable of thinking what to do and capable of adjusting matters in the time of transition. I would offer my sincere congratulations to the country on its good fortune, and the Government on its good administration and policy in bringing this stability to this important industry.
I conclude by saying that nothing is more important to the farmer and the farm worker than stability, but he will not get it by an undue measure of controls and restrictions. He will get it by the goodwill of the people as a whole and by a reasonable policy which commends itself to all, not only to those in my constituency, for example, but to all those who live in the great industrial districts. Because the Government have pursued such a policy, I offer them my thanks and my congratulations.
§ 11.32 a.m.
§ Mr. Anthony Hurd (Newbury)
I beg to second the Motion.
I am sure the whole House would wish to congratulate my hon. Friend the Member for Morecambe and Lonsdale (Sir I. Fraser), on the thoughtful speech which he has made in opening this debate. I think it is a good thing that chance gained for him the top place in the Ballot and that he picked agriculture as the subject of his Motion so very soon after the farm Price Review settlement was announced, because it gives us an opportunity of considering what has happened in agriculture and what we think is going to happen in the context of the farm Price Review.
I hope that the Leader of the House will in due course give us the opportunity for more mature discussion of the Review. That opportunity generally comes in the summer rather than immediately after the Review, and I hope that it will come. Today we can all join with my hon. Friend in urging Her Majesty's Government to continue and to increase their efforts to increase home production of food, because we know that at the moment farm production has had a setback.
In 1953–54 we had an increase of no less than 55 per cent. in output above the pre-war level, but in 1954–55 that has fallen to 53 per cent. We know the 828 reasons. I, as a farmer, know them. I just did not get the corn and did not get the potatoes. I got a lot more pigs and some more milk and eggs, but on balance output is down. But even so, the gains in output are remarkable, and I should like to draw the attention of the House for one moment to a table of figures which my right hon. Friend the Minister of Food gave in answer to a written Question on 8th March. I will pick out three figures from the table, which was a comprehensive one.
First, there is wheat. Before the war our home production of wheat and flour accounted for 12 per cent. of our consumption. In 1951, it was 24 per cent., and in 1954 it was 31 per cent. Wheat grown here saves dollars, and any Chancellor of the Exchequer must be well aware of that. Any extra wheat production at this time is good business for the nation as a whole. Our output of wheat has been raised from 12 per cent. of total requirements before the war to 31 per cent. of total requirements now.
Then there is carcase meat. Before the war home output represented 51 per cent. of our total requirements, and that figure had reached 65 per cent. by 1951, and 67 per cent. by 1954. Interpreting those figures, I would remind the House that in 1951 meat was still rationed. Last year it came off the ration, and quite obviously the total amount required to satisfy the housewife's free choice was increased. Even so, home proportion has gone up to 67 per cent. as the market has increased for beef, mutton, lamb, and, of course, pigmeat.
I take one other figure, that for bacon. Before the war we produced 29 per cent. of the bacon we ate. By 1951, we produced 48 per cent. and today the figure is 46 per cent. There again, comparing 1951 and 1954, bacon is now off the ration. It is a remarkable increase from 29 per cent. before the war to 46 per cent. now.
Clearly agriculture has in recent years taken a vital part in keeping the balance of payments straight, and in my view it has still a more important part to play. If we mean to live well we must grow more food for ourselves. Above all, there is the consumer's interest in beef. We are a beef-eating nation, and beef is what the housewives always 829 wanted in greater quantity while meat rationing existed. They disliked the ewe mutton and frozen lamb which was offered to them, and they were continually demanding beef.
There is today, in the stores controlled by the Ministry of Food and in private hands, plenty of frozen beef awaiting a market. But housewives with full purses are giving the utmost preference to home-killed fresh beef. That is good for the farmer and good for the Chancellor of the Exchequer in that he does not have to pay any subsidy on home-killed beef because of the demand at the butcher's shop at the moment is keeping the market price well up to the standard price guaranteed by the Government.
Last summer, I had the opportunity of making an extensive tour through Australia, particularly through the beef-raising areas of the Northern Territory of Queensland. I also had the opportunity last month of talks with Senor Hogan, who is the Argentine Minister of Agriculture. I cannot think that Britain will be able to rely on largely increased supplies of beef from Australia or the Argentine. We shall get more better-quality chilled beef instead of frozen beef from the Argentine, but I do not believe, and I do not think that Senor Hogan believes, that we shall get greatly increased supplies from his country.
The story there is the same as in Australia: a rising standard of living, a rising demand for beef, with their own people in the towns demanding more of the beef produced. Therefore, the Government were right to emphasise, in the White Paper on the farm Price Review the importance of increasing the production of beef here, as well as of lamb and mutton. I am sure that this is sound economics for the nation.
It is not only a matter of producing more food for direct consumption by humans. We must also produce more food for livestock. We now have a record output of pig-meat, the numbers of pigs being over 6 million, but the cost of imported feedingstuffs has gone up by £55 million in two years. I believe that the total bill for imported feedingstuffs is now about £125 million a year.
Pigs are great consumers of barley and other imported feed, and any Chancellor of the Exchequer relying on agriculture 830 to help him with the balance of payments must look with a critical eye on this heavy and increased importation of feedingstuffs. Indeed, that must be one of the reasons why the Government have decided that farmers here should make greater efforts to produce more of the feed that their stock requires.
All this heavy importation of grain makes the wheels of world trade spin, but not in the direction we want. We cannot afford to relax our efforts to grow more feedingstuffs for ourselves. Perhaps it is a good thing that many farmers consider that the price of compound feedingstuffs is too high. With the in creased ploughing-up grant and the higher guaranteed price for barley and oats the present tillage acreage should be maintained. I believe it would be good business for many farmers to increase their tillage acreage, which has fallen considerably in the years since the war.
The better use of grass, including short-term leys, can make an important addition to our feedingstuff supplies and in saving imports. As my hon. Friend said, dried grass and also silage and well-made hay can greatly supplement, and to some extent replace, imported feedingstuffs. Here is the justification for the increased lime and fertiliser subsidies. They are called production grants. Some of us agree with that line of policy and some of us are not so sure, but they prime the pump and, whether or not we like the principle, they have produced results both in the days of the Labour Government and in the days of the present Government.
At a difficult time the Government, by this Price Review, have steadied farming confidence in the future. That was necessary because the weather has given farming a nasty knock from which it will take some time to recover. I am thinking of spring sowing. On my own farm we generally get a quarter of our corn into the ground in the autumn and, in a reasonable spring, we are well through our spring sowing programme by the middle of March. But we have not a single acre of corn sown yet and, when the frost goes out of the ground, it will take some time for the surface to dry.
There is a heavy programme of spring cultivation to be accomplished. The crops will go into the ground, even if late, 831 and, with a reasonably good summer, the results should be satisfactory. An all-out effort will be required to do the job. It will mean that tractor drivers will be on the job night as well as day if we are to get through this programme in the next four weeks, as soon as the ground dries.
The Conservative Government have shown themselves to be realists. For instance, as soon as a suggestion was made last week that the call-up of farm workers should be deferred for a time to enable this all-out effort to be made, the Minister of Labour readily agreed with the Minister of Agriculture to that suggestion and deferment has been given until 15th May. I agree that it would be better for the farming industry if that blanket deferment could continue until the end of October.
As soon as we have finished spring sowing and have dealt with the potatoes and sugar beet, we shall be into haytime and then the corn harvest. So all operations will be jammed together in the short growing season remaining to us. Therefore, I ask my right hon. Friend to look again at the problem to see if he can help further to retain essential labour, particularly tractor drivers, on the farms this summer.
What is the manpower prospect for agriculture? It is important, indeed worrying, to farmers as well as to politicians. There was bound to be an overall decrease in the manpower and woman power in agriculture after the war. Yet, looking at the figures, it is remarkable to find that for Great Britain the total number employed on farms in 1939 was 711,000 and in 1954 the number was 755,000. That is, 44,000 more were employed on the land in 1954 than in 1939, according to the June annual census of each year.
That comparison needs a qualification. The numbers of regular workers, the key men who can be relied upon, are down. What has happened, as the House knows, is that we have invested heavily in mechanisation, and every man, having more power to his elbow, is able to get through more work and is able to command a better wage and a better standard of life.
I find that the manpower position is most difficult in the districts where new 832 industrial or defence projects have sprung up. I was in Lincolnshire a week ago today, talking to farmers who have had Scunthorpe grafted on to the economy of their district. They are finding, as we find in Berkshire, where we have two atomic stations at Harwell and Alder-maston, that employment in these industrial or defence projects, and the high wages that can be paid, draw men from the surrounding countryside.
§ Mr. S, N. Evans (Wednesbury)
Would the hon. Gentleman agree that farming efficiency is highest where the industry has to compete with engineering for its labour?
§ Mr. Hurd
No, I do not think it is.
I should say that farming efficiency is highest in some of the areas represented by my hon. Friends from East Anglia and the eastern side of Scotland. That is where they get the right conditions for mechanisation and the kind of efficiency which is always a joy to the hon. Member for Wednesbury (Mr. S. N. Evans).
It is not always only a matter of the higher wages which industries and Government Departments can afford to pay. Housing standards and amenities count for much. We must tackle more vigorously the problem of housing standards in the agricultural areas if we are to hold the men, and their wives, on the jobs which are essential to the economy and well-being of our nation.
Thanks to the energy of the Government, we have made some progress with the housing improvement grants, but it is hard work to get some local authorities to do what they should do. I contend that they should contribute 50 per cent. of the cost of the work required to bring a farm cottage up to a proper standard, which means not only that it should have proper window space and proper height in the rooms, but, more important, a bath and full modern sanitation.
Some rural district councils give a 50 per cent. grant, some 25 per cent., and some nothing at all. I wish that the Minister of Housing and Local Government, in conjunction with my right hon. Friend the Minister of Agriculture, would look at the problem afresh to see whether it would not be right and proper for the Government, in making their contribution, to insist that local authorities should 833 give grants at the full rate of 50 per cent. Using improvement grants where the structure of houses is reasonably sound is the most economical way of putting rural housing right. It is much better than having to rely on more and more council house building.
§ Lieut.-Colonel Marcus Lipton (Brixton)
Will not the hon. Gentleman agree that most of the local authorities about which he is justifiably complaining are Tory controlled, and that they should listen more assiduously to what the Government have to say on the matter?
§ Mr. Hurd
Some of them are Tory controlled, but I have found the authorities in my area which are Tory controlled very reasonable. They have listened to the case that I have made and are giving a 50 per cent. grant, although it was hard work to achieve it. However, I was depressed to hear farmers in Lincolnshire say that they were being stalled by the rural district councils and could get no grants at all. I hope that the Minister will look at the matter again and ascertain how many councils are not doing what Parliament expected of them. Such authorities should be told that unless they provide a 50 per cent. grant the Government will reduce their contribution.
Electricity is of great importance in the outlying areas. My hon. Friend referred to television. I do not know how many television sets there are in my rural areas, but the aerials are sprouting like mushrooms. We are getting on well with the Southern Electricity Board, which shows commendable enterprise in extending the rural service although there are still a few black spots. We have got on well with water supplies and sewerage schemes, and they count for much.
With regard to transport, one area I know is so isolated that we have to provide a taxi service on Tuesday and Friday afternoons, which we underwrite if the taxi is not full, so that the wives of farm workers may do their shopping and bring their parcels back dry. There is no bus service, and I do not think there ever will be one. The taxi venture is a sound investment from the farming point of view.
In these days everybody expects decent living standards, and we are making progress in equating standards between town 834 and country. A great advance in recent months has been the promise that all the children in the villages will soon have the opportunity of a proper secondary school education. Every area is to be provided for. The plans are to be put forward by 1960.
The manpower problem is important in deciding the future of agriculture, and upon agriculture's future may well depend the standard of living of our people in the years ahead. If we want to be sure of an ample choice of food we must grow more for ourselves. In the world at large there are another 70,000 people to breakfast every morning, an alarming thought, and more of them are demanding a meat breakfast.
Looking 10 years ahead, we ought to be asking ourselves where we shall come in unless we are better able to fend for ourselves. Do we really expect that we shall be able so to expand the markets for our industrial goods and the other overseas services that we render that we shall command the type of food that we want to buy in a world in which so many other people are demanding more?
In this age, with the terms of world trade as they are and are likely to be, we need a settled programme for agricultural development. That is why I support the Motion. I look upon home production as an insurance policy covering risks for the nation as a whole. Through the Chancellor, we taxpayers pay our premium, which this year will be nearly £250 million. As agriculture gets fully into its stride, and as a greater pace in efficiency is gained, the annual insurance premium will fall, and no one will be better pleased than the farmers themselves. The House will do well to urge the Government on with the task of developing the home production of food. I heartily support my hon. Friend's Motion.
§ 11.58 a.m.
§ Mr. Clifford Kenyon (Chorley)
I congratulate the hon. Member for Morecambe and Lonsdale (Sir I. Fraser) on his luck in the Ballot and on having produced this Motion. I thoroughly enjoyed his speech, but he ought not to have spoilt it towards the end by introducing politics, which we have always heard from the Conservative Party ought to be kept out of agriculture. He made himself very vulnerable indeed by doing so.
835 I am astonished when I hear hon. Member's opposite talking about freedom from controls and so on and, almost in the same breath, applauding marketing boards. Whether they are producer-marketing boards or national boards, they are the most rigid form of control that is imposed upon any industry in this country. Take the Milk Marketing Board, for instance. The moment one squirts the milk into the tin it belongs to the Board. One cannot sell a pint of it where one wishes without a licence from the Board. One is told where one has to deliver it and the price at which one has to sell it. There is no freedom there.
Let me say that it was this Milk Board that put the dairy industry on its feet. There is not a shadow of doubt about that, but it has meant complete control over the sale of milk. It has compelled the farmer who always throws a spanner into the works to come into line. For hon. Members opposite to condemn controls is as inconsistent as it is foolish.
I am a sheep farmer, among other things. Let us consider the Wool Board. The moment we clip the wool it belongs to the Wool Board. We are told to which merchant we have to send it and what he will pay us for it. Free competition? No. Yet sheep farmers would not change that for the free market for anything, and nor would the dairy farmer change the Milk Marketing Board for the free market. The Minister of Agriculture in his last speech said that he was very optimistic about being able to set up an egg board.
§ Mr. Kenyon
The Potato Board is set up. So eggs will be controlled. The time will come when we will tell the hens where they have to lay the eggs. If the board is set up, it will undoubtedly be a tremendous asset to the poultry industry. We have the position that agriculture, which is looked upon as one of the most conservative industries in the country and is a tremendous asset to the Conservative Party, is building up its stability and its success on Socialist principles.
§ Mr. Denys Bullard (Norfolk, Southwest)
I am very interested in the hon. Member's thesis, but surely there is a distinction between a producer board and 836 a commodity commission. His argument is that they are the same, but surely the Labour Party in its recent publication on marketing rejected the idea of a producer board and adopted that of a commission. Surely the Labour Party would not have made that distinction if the distinction did not exist?
§ Mr. Kenyon
I am drawing illustrations of the positions which exist at the moment. Conservative Members are running down controls of all kinds, yet these are not voluntary controls. The farmers are compelled by the Milk Board and the Wool Board and the other boards to do what they decide. I hope that hon. Members opposite will be slightly more generous towards Socialist principles, because all these things which they are setting up are established on the basis of the agricultural marketing Acts piloted through the House by Dr. Addison when he was Minister of Agriculture. These schemes have grown on that foundation.
It is very true that we must not rest upon the good will of the people. Unless we are very careful in these Price Reviews, the Government—of whichever party—and the National Farmers' Union will create a consumer resistance that will be exceptionally detrimental to the interests of agriculture. We have seen the effect of consumer resistance on tea prices. We have seen the effect of consumer resistance on egg prices. Unless we are very careful, we shall have consumer resistance against agricultural production.
It is rumoured in the Lobby—I do not know if it is true—that on this occasion the Chancellor has come down with a heavy hand on the side of the farmers and has given them almost everything for which they asked. If that is correct and it is because an election is in prospect, it shows an utter disregard for the balance of payments, the import-export position. I should not like to think that that was the case, but if so, the Chancellor stands to be condemned. If one must make a lot of promises to the National Farmers' Union, one should at least be responsible about them. I speak as one of those who will be receiving some of the things which the Price Review has put forward.
The "British Farmer" last month said that we were now producing 50 per cent. of the food required in this country. I think that the figure is more than that, 837 but even if we take the figure of 50 per cent. we still have unbalanced production. We have a surplus of liquid milk, we have a surplus of pigs. We are very short of beef, and we are very short of lamb and mutton. The Minister has had to put the brake on production of pigs, as he had to put the brake on milk production last year. The little increase for milk this year is really a brake, because it does not cover the increase in the cost of feedingstuffs.
Some method must be devised for correcting this situation of unbalance, or we will find ourselves in difficulties. Our people are not renowned for eating pork. If we have a hot summer—and everybody knows we deserve one—the danger is that we shall have a tremendous amount of pork that cannot be consumed and cannot be stored because there are not the necessary storage facilities. It will just go to waste. We must realise that the present pig situation could become very dangerous to our economy. Pigs require more imported feedingstuffs than any other livestock. We now purchase £125 million worth of feedingstuffs a year, and, with our present balance of payments position, we should cut down where we can. If pig production be increased, we shall not be able to cut down on our imported feedingstuffs costs. We shall be obliged to import more, and with the grain market against us the cost will be greater than ever.
We should be careful about increasing pig production. The people of this country do not want any more pork. Farmers must face the fact that bacon can be imported much cheaper than we can produce it here. This is a case in which consumer resistance will increase. If we are unable to produce cheaper bacon, we shall find increased opposition from the consumer. In pre-war days, according to statistics, we were the greatest mutton-eating nation in the world. I do not know whether the term "mutton-head" comes from that fact. In those days pork was just a supplement, and that is what it should be in the future. Dairy cattle, pigs and poultry are the three things which require imported feedingstuffs.
We are in a position to provide feedingstuffs for cattle. We must obtain more from grass leys. I agree that grass is our greatest asset. It is the ideal crop to be produced in this country, because the 838 growing conditions here are ideal. Last year we had any amount of grass, but the trouble was that we could not harvest it. If the farming community would concentrate more on early grass and the conversion of it into silage, we could cut down the cost of feedingstuffs for cattle. It is impossible to do that with feedingstuffs for pigs. Even fodder beet will not solve that problem.
I wish to utter a word of warning about dried grass. The cost is far too high. If farmers increased their silage stores the amount of dried grass could be reduced.
§ Sir I. Fraser
The hon. Member will admit that dried grass is a new technique. Most new techniques need time before they become generally adopted and well organised. Does not he think that the production of dried grass should be encouraged because it is so rich, and that it could become cheaper were it more widely used?
§ Mr. Kenyon
I agree that it is a new technique, but the indications are that, far from becoming cheaper, it is becoming dearer. So much depends on the fuel used in the drying of grass, and so many grass-drying plants use a tremendous amount of fuel. I am all in favour of continuing the experiment, but it will prove a failure if the price of the commodity is increased. I hope that some method will be devised to reduce the price, but so far I see no hope whatever of that.
Few of us have as yet mastered the art of growing leys properly and continuously. We find ourselves up against so many difficulties, and in this connection I can quote my own experience. On the Pennines, in Lancashire and Yorkshire, we are faced with the problem of smoke pollution. Latest agricultural tests in this area reveal that the acidity in the air, due to smoke and the bleaching of the ground through rain, is taking 11 cwt. of lime from every acre of ground each year. It is necessary to put half a ton of lime per year on every acre of ground before we can recover what was originally in the soil. That is one of the costs of smoke pollution.
When we wash our sheep, they are as black as soot within a fortnight. Only a short while ago a farmer from the Isle of Man told me that when an east wind blows across from Lancashire to the Isle of Man, the fleece of their sheep begin 839 to blacken within three days. That is a very serious matter which the Government should take into account when considering the problem of smoke pollution in the countryside. When we are haymaking, by the end of the day we find that our hands, arms and faces are almost as black as if we had been down a coalmine. The effect of smoke pollution on agriculture in these areas is tragic.
Last year we had 77 inches of rain. The average amount is over 50 inches, and it is difficult to grow leys in such areas. We lose the clovers, and in addition to lime we have to use phosphates extensively in order to retain the clovers. One agricultural officer commented, "The tragedy of this sort of land is that if you put down a ton of fertiliser it will not produce half the crop that could be produced in another area." It does not matter how much the ground is worked, how much manure or fertiliser is used, it is impossible to get a good crop. That is one of the difficulties with which we are faced, but nevertheless I feel that the grass crop is the most vital crop that we can grow.
I come now to the question of beef and mutton. Here we require stability. In agriculture that is a very elusive thing. In an attempt to increase stability in beef production the Minister is increasing the calf subsidy. This House knows well enough that I have been opposed to the calf subsidy from the beginning. My right hon. Friend the Member for Don Valley (Mr. T. Williams) felt that I was a thorn in his flesh every time he mentioned the calf subsidy—and I was. It is a most costly subsidy; it is a wicked subsidy. If, without the subsidy, a man produces nine calves, he produces 10 with it. I do not say that the figure is quite accurate, but that is about the proportion. In order to produce the extra calf a subsidy has to be paid upon the previous nine.
§ Mr. Kenyon
For which we pay a subsidy on all the others which were reared before them. If we could devise a scheme 840 by which the subsidy was paid upon the extra calves reared, I should not object, but the hon. Member knows that it cannot be done.
Under the previous subsidy of £5 per head the cost of producing an extra calf was £50. Now that it has been increased by £2 10s. the subsidy will be £75 for the one extra calf. It is ridiculous. I have always argued that the final price of the animal will determine the numbers which the farmers would produce. If the present price of stores in the market is not going to produce any extra calves, I just do not know what will happen. Everyone knows that the price for store cattle today is fantastic, and yet we are to have the calf subsidy increased by £2 10s. If the subsidy had been left as it was, or had been reduced, we should still have got the increase. The final price would have brought it.
§ Mr. Kenyon
Because I am speaking like this hon. Members must not think that I agree with my hon. Friend the Member for Wednesbury (Mr. S. N. Evans). I never knew an hon. Member of this House whose thoughts and speeches were so much in the clouds and so far from reality as my hon. Friend's.
It is an astonishing thing that when we make progress in one aspect of agriculture we counter-balance it by a loss on another. This year we find that whereas we have increased in cattle, sheep and pigs, we have lost in tillage. It is due in part, but not wholly, to the weather. The problem is how to keep all our items of agriculture moving along at the same time and at the proper rate. We have now reached saturation point with milk and pigs, but we need to improve with beef and sheep. How we shall do it I do not know, because one seems to cut out the other.
When the ploughing-up subsidy lapsed the amount of tillage fell. Now, although the subsidy has been brought back, the amount of tillage is still falling.
§ Mr. Frederick Willey (Sunderland, North)
Is my hon. Friend aware that the White Paper for which the Minister is responsible makes it quite clear that the tillage acreage in the last year fell following the return to free marketing conditions?
§ Mr. Kenyon
It may have fallen following the return to free marketing conditions, but that is not the answer. There is something about which the individual farmer is not satisfied. It is not very satisfactory to have to anticipate that if a subsidy is withdrawn there will be an immediate fall in production, or that even if it is continued it will not go on having its proper effect.
One type of stock which has been neglected is sheep. There are thousands of acres of land which could be carrying sheep but which are not doing so. We always suffer sheep losses when there is a heavy snowstorm, and it is time that the National Farmers' Union set up an insurance fund, so that sheep farmers could contribute to it, thereby recompensing those who suffer the loss. I made this point when we suffered heavy losses from flooding. It ought to be done. It is all very well for the National Farmers' Union to trot along to the Minister for this, that and the other, but it is time that it dealt with the question of insurance for losses in agriculture.
In regard to sheep, the Minister is working almost entirely on the wool price and the market price of mutton and lamb. If he had left the calf subsidy alone we would have had a similar situation. The sheep farmer is keeping up his stock because of the price of wool and mutton, and the finished sheep in the market. It is the hill farmers who are so often overlooked. They and their families are living a hard life, and they are working hard land. They are working under the worst conditions of all, and they live in isolation in the hills. They ought to be recognised to a greater extent than they are by Governments and hon. Members.
I disagree entirely that subsidies should be granted to farmers who work good land. Why should a man whose farm is on the richest land receive payment for 70 per cent. of the cost of his lime when he is making good production, good profits and is paying his way? Why should he have a fertiliser subsidy when, in the ordinary way, he can well afford to pay for the lot? We are wasting our money by giving subsidies to these farmers. It is the farmers out on the hills who require subsidies for lime, phosphates and nitrogen. My hon. 842 Friend the Member for Wednesbury a short time ago deplored the fact that there were no farms to let. If he comes out on to the hills he can have as many as he wants. It would do him good to farm a bit, because he would then know more about it than he does now.
Hill sheep are one of our greatest assets. They require no feedingstuffs at all. They live entirely on the grass that is produced, and they add to our economy in wool, mutton and lamb. They are keeping what fertility can be kept on the hills. They are laying land open for cattle to follow. Yet they are almost unmentioned in the White Paper.
§ Mr. Frederick Gough (Horsham)
Is not manpower the real problem in regard to sheep? The genus shepherd is practically non-existent today, and particularly so in the younger generation. Is not that one of the main problems and difficulties concerning sheep?
§ Mr. Kenyon
I agree that it is one of the problems and one of the difficulties, but has not that difficulty arisen because it was not recognised sufficiently early? The young men feel that this is a neglected part. They want to get down to the lowlands where agriculture is more recognised. [Interruption.] An hon. Friend asks how much we pay the shepherds. I will give him one instance of a farmer in Westmorland whom I know well. He offered a salary of £1,000 a year to a shepherd to take charge of his flock of 1,800 sheep. Two men came. They brought their wives, and when their wives saw where the house was situated and the conditions under which they would have to live, they would not take the job, even at £1,000 a year. It is the conditions that matter. It is not a question of money.
We are losing young men, and we are losing the skill. I learned to lamb sheep when I was a schoolboy. We are losing that art, and we are doing so because we have not watched the situation and realised that sheep are one of our greatest assets. There is no dollar mystery there; no balance of payments crisis. If we help the sheep farmer in whatever way we can to increase his stock, we shall be providing an asset to the country and an asset to the countryside.
§ 12.34 p.m.
§ The Minister of Agriculture and Fisheries (Mr. Heathcoat Amory)
This is the time of the year when we review the economic conditions and prospects of the agricultural industry, and I am grateful to my hon. Friend the Member for Morecambe and Lonsdale (Sir I. Fraser) for giving me the opportunity of reporting to the House rather earlier than I should otherwise have had the opportunity of doing. I should like to congratulate my hon. Friend on the foresight which he has shown in selecting the earliest possible day for this debate. He must have gazed into the crystal ball and decided when the Review was likely to end. He certainly guessed the date a good deal more accurately than I could have done a few days ago, when, frankly, I did not know when it would be.
This debate also coincides with the issue of another White Paper today—a White Paper by the Soviet Government on the prospects for their agricultural industry. I think that must be a coincidence, too. My hon. Friend referred to the river running through his constituency and to the salmon in it. I hear that occasionally he is to be seen on the banks of that river doing his best with rod and line to reduce the population of salmon in the river.
I should like, before turning to the Annual Review, to refer to the proposal of my hon. Friend in his speech that the call-up of the agricultural workers should be altered, and that they should be called up for shorter periods, and only in the winter months. He will realise that that is a novel suggestion, which will have to be carefully examined. It does seem to me, at first sight, to bristle with difficulties. While speaking of the call-up, I should like to support what other hon. Members have said by expressing my gratitude to my colleague the Parliamentary Secretary to the Ministry of Labour for the promptness with which he has agreed to meet the requirements of the industry this spring by making a concession in the call-up of agricultural workers between now and 14th May. I am quite certain that that will substantially help in catching up with the arrears of work. I will later refer to two other points which my hon. Friend raised in moving the Motion.
I should like to turn now to the Annual Review. No doubt, hon. Members will have read, or, at any rate, 844 looked through the White Paper, and there is no need, therefore, for me to go through it in detail. I want only to refer to one or two of the main points. First, I want to refer to the quite exceptional difficulties which farmers have encountered this season as a result of the really atrocious weather. By this season, I mean last summer, last autumn, and this spring—if we have started this spring. The effects are bound to be felt into the next season.
The weather last autumn made autumn sowing almost impossible, and the weather so far this spring is still giving us great cause for anxiety. I realise particularly the rather special difficulties which have confronted farmers in the constituencies of my hon. Friend and other hon. Members. I think that Lancashire has had about as difficult a time as any, including the constituency of the hon. Member for Chorley (Mr. Kenyon).
Farmers, of course, understand that they must carry the risk of bad weather as part of the job, but when we were considering this year the position and prospects of the industry we felt that we simply could not disregard the quite exceptional difficulties of the past year and the continuing burdens which they will leave on the industry. All this has been accompanied by quite considerable increases in the industry's costs outside its control. We realise what the whole thing adds up to for it.
We have, therefore, felt it right this year to bear that in mind throughout the Review, and I think that when hon. Members examine the tables, which reflect our determinations in detail, they will find that we have had regard to the points put to us by the industry. It would be too much to expect that we should be able to see exactly eye to eye with the representatives of the producers as to the extent of the help that the Government should afford, but I am glad to say that eventually we were able to reach agreement with the leaders of the three farmers' unions as to what should be done. I think that that is the right way to settle this business, if we can.
I am sure that the resulting guaranteed prices and production grants will go a very long way towards ensuring to the industry the stability and resources to 845 enable it to adapt its production as necessary, to maintain its net output, and, indeed, to increase it in the directions that the national interest requires. In fact, I think that the effects are so helpful that I am quite sure the hon. Member for Wednesbury (Mr. S. N. Evans) will himself be going actively into the production side of this industry.
I always enjoy listening to a speech by the hon. Member for Chorley on this subject. We respect his views very much, in view of his practical experience, and we respect his independence of mind. I often think that I should like to see him sitting with us on this side of the House, but, on further consideration, I think that he exercises a very helpful influence indeed sitting exactly where he does.
However, I must take him to task on one point, and that is his reference to the attitude of my right hon. Friend the Chancellor of the Exchequer to this matter. I must ask the hon. Gentleman to read the White Paper once more, because at the very basis of these proposals this year is a recognition of the special importance of the national balance of payments, and the steps which we have taken are designed—remembering that our home agriculture is one of the most effective possible savers of foreign currency—to pay attention to that very important aspect.
I will now turn to one or two of the major factors with which we have been concerned. Although net output is slightly down—by two points—I really do not think that the industry has any reason to feel at all discouraged on that score. The effects of the decline in the tillage area have been more than offset by increases in the output of livestock.
That is, had the weather been normal—as I said yesterday, goodness knows what that means now; we may, in the light of our recent experience, have to reassess what one calls "normal weather" in these islands—the net output would have been larger this year than last, and the trend of steadily increasing output could have been expected to continue. I think it is a very striking tribute to the progress of the industry that, even though the yields of cereals this past year have gone down between 5 and 10 per cent. as against the previous year, they are still above the average of the past 10 years.
846 The same thing applies also, I think, to the industry's net income. I do not want to put too much reliance on a single figure in this connection, because the calculation of net income is bound to be subject to some margin of error. But I remember that a year ago my predecessor forecast that the net income of the industry might decrease unless the industry could, somehow or other, accelerate still more its improvement in efficiency.
It is encouraging to note that the calculation to which I have referred shows that, on a normal weather basis and taking account of the estimated increase in costs, the net income of the industry would have been estimated to be higher and not lower. I think all this adds up to the fact that we have no need to be downhearted about anything except the weather in the past season, and no reason to feel other than proud of the industry's achievements.
I feel now that I ought to refer very briefly to the burden on the Exchequer, because that has increased, and, as the White Paper says, it will amount this year to nearly £250 million. That includes the bulk of the milk subsidy, except school and welfare milk. Of course, one can argue a great deal as to whether that subsidy is a consumer or a producer subsidy. The major items in this bill are for pigs, milk, wheat and eggs.
My right hon. Friend the Chancellor of the Exchequer and I have on many occasions during the past six months been reminding people that this is a formidable total cost of price support to the industry, and that, in the light of the continuing achievements and progress of the industry, opportunities must be found in due course for reducing the bill. But we have also said that reductions must not be sought without regard to the industry's ability to bear them.
Six months ago, we hoped that the rising trend of output and of net income would provide an opportunity for some reduction this year, but rising costs and the interruption to progress caused by the disastrous season have made it impossible to do that if we are to be realists this year. But the aim to achieve a reduction as soon as that can be done without damage to the basic resources of the industry is something which we must all keep continually before us.
847 In these circumstances, the industry clearly wants guidance in setting its course for the future. We gave it such guidance last year, and this year there is very little need for much change. The greatest importance must still be attached to an increase in net output, and we must keep pegging away at lowering unit costs. These considerations both point in the same direction, namely, to the fundamental importance of making the most of our own resources—grass, arable land, and the saving, as far as possible, of imports of feedingstuffs. This is the point at which agriculture can most help the national economy and the external balance of payments, and at the same time, of course, increase its net output.
The increase in the purchase of feeding-stuffs, mainly imported, has reached a rather alarming figure—an increase of £55 million over the past two years. Admittedly, part of that is due to the increase in livestock which we now have, but the point I am making is not that some increase was not to be expected or tolerated, but that the increase has been rather too big. Therefore, as we said last year, the general objective is not a continued expansion of output, whatever the commodity, but an increase in the produce from our own soil.
In present circumstances, the greatest contribution which the industry can make is to replace imported feed by grass, silage, hay and other home-grown feedingstuffs. I have no quarrel with the emphasis which the hon. Member for Chorley puts on grass and its conservation.
§ Lieut.-Colonel Lipton
Will the right hon. Gentleman say to what extent he wants imported feedingstuffs to be cut, because, without some practical indication on that point, it is very difficult to work out what are the results he seeks?
I think that it would be quite unhelpful if I were to specify any particular figure, because I do not see to what it would lead if I did. What I know is that the more home-grown feedingstuffs we can produce and use effectively, the better.
Now I want to describe shortly what we are setting out to do, and the changes in the price guarantees and production grants that we have made this year. First, 848 we are giving further encouragement to the expansion of beef cattle and sheep. The consumption of meat is still not up to pre-war levels but it is rising very fast. The demand for home-grown beef is strong, and that is a great tribute to the quality of our home-grown beef cattle.
There is a good deal of evidence that the number of animals is not keeping pace with the improvement in our grass. It looks as if, temporarily, we may have more grass than we have animals to eat it. If that is so, it would be very sad indeed. The answer is not less attention to the improvement of our grass and its conservation, but the substitution of grass products for concentrates and more beef cattle and sheep, including more beef cattle from our dairy herds.
Now I will refer to a proposal made by my hon. Friend the Member for Morecambe and Lonsdale that hill farmers should receive additional assistance. I have very much sympathy with hill farmers about the position because of the many difficulties with which they have to grapple. Hon. Members will see from the White Paper a special measure, the non-recurring payment, which we are proposing to make for hill sheep. Apart from that and the other increases from which hill farmers will benefit, I hope that they will benefit a great deal from the increase in the calf subsidy, in spite of what was said by the hon. Member for Chorley. I am glad to see the increase in the calf population, but I should like to see still more. We want the added incentive.
I should like to take this opportunity to correct an answer which I gave in the House yesterday in reply to a supplementary question by my right hon. Friend the Member for Kelvingrove (Mr. Elliot). I said that the special payment for sheep would be taken account of when, in a year's time, the question of whether there was to be a hill sheep subsidy came to be considered. I was wrong in that, because that is a separate payment. When I came to think of it afterwards and to work it out, I realised that the payment has to be made on the basis of the number of sheep at the end of 1954,and will be separate from the Review next year. I apologise for that mistake.
We are encouraging as far as we can the saving of imported feedingstuffs through various measures designed to 849 increase the production of home-produced food. We have the increase in the ploughing grants and the fertiliser subsidies, as well as additions to the guarantee prices for barley and oats. I hope that these will do the trick and relieve the strain on the balance of payments on this account.
One word now about pigs, for the particular benefit of the hon. and gallant Member for Brixton (Lieut.-Colonel Lipton). The hon. Member for Chorley put the position in this respect so well that I could almost sit down and leave the matter there, but I want to reiterate that the production of pigmeat is now past the total that was aimed at three years ago. The rate of subsidy has continued to rise, and it will be almost £60 million this year. At present prices, if we left them alone, it would probably be quite a substantial sum more next year. The difference in price between home-produced and imported pigmeat from the Continent is too wide at present. Somehow we have to reduce that differential. We simply must get it down, while improving our quality at the same time.
We must face realistically the position that we cannot afford any further expansion in the numbers of our pigs until we can do the two things I have referred to—get down our costs substantially and improve our quality. The reduction of 2s. 6d. that we propose ought to be more, but in view of the response that producers made to the Government's call three years ago for more pigs, and of the need to give them time to adjust their policy, as well as the other factors which I have mentioned, we think it right not to make a steeper reduction than 2s. 6d. this year. We shall do all we can to help producers to adjust themselves to this reduction in the guarantee.
Pig recordings have made a good start. I hope that the first progeny testing stations will be in operation in a little over 12 months. We recently appointed a committee under Sir Harold Howitt to give advice on the type of pig that would give commercial advantage to the producers in this country. We want to be sure that producers are able to market their pigs to advantage.
The pre-war Pigs Marketing Board and the Bacon Marketing Board are still in suspense under the Defence Regulations. We are now anxious to decide what future 850 organisation for pig and bacon marketing will be required. The appropriate means of doing this under the agricultural marketing Acts is through a reorganisation commission to inquire into the position. The Secretary of State for Scotland and I have decided to set up a Reorganisation Commission. I am sorry if I have to borrow a term from the agricultural marketing phraseology of the Opposition.
It is quite a different kind of Commission, I assure the House. We hope to be able to announce soon the names of the Chairman and the members of the Commission.
Reference has been made to the marketing of milk and eggs. The Milk Board has made good use, as we all expected it would, of the powers given to it a year ago. Discussions have taken place with producers' organisations about an egg-marketing scheme, and the Government have indicated the financial arrangements which, in their opinion, would be appropriate to give effect to the guarantees under the Agriculture Acts.
It is now for the producers to push on with the promotion of a scheme, if they wish to do so. I can only assure them that we are ready to give sympathetic consideration, under the procedure laid down in the marketing Acts, to a proposal, if and when one comes forward.
I want to make it plain that the increases in the guarantees for milk and eggs are intended only to ensure and to maintain stability of output at present, in the face of cost increases and bad weather. We realise the importance of both these products, particularly to small-scale farmers, and in respect of both of them we must move very carefully. It would be wrong to expand the production of liquid milk further except in step with an increase in its consumption. I hope that the enthusiastic efforts of the Milk Marketing Board and distributors can bring about an increase in the consumption of liquid milk.
Any further expansion in egg production will be very expensive indeed to the taxpayer, unless the market is stronger or we can get down unit costs. If it had not been for sharp increases in costs and the exceptionally bad season, we should undoubtedly have been more severe with the guaranteed prices on both 851 these products. We have given the benefit of the doubt to the producers. Some people may say that we have been too lenient on these two items but on balance, I think we have done just right in respect of both of them.
We must consider the condition of the industry as a whole and the effect that these changes will have on its earnings. Any calculation of net increases must inevitably be imprecise because other factors enter into the matter, such as the strength of the market. I think, however, that when hon. Members weigh up all these changes, they are bound to come to the conclusion that we can expect and hope for a substantial increase in the net income of the industry from now onwards.
No Government can, in free conditions, insulate an industry entirely from the effects of changes in world prices or supplies or from alterations in market demands or the state of the national economy; but I am sure that farmers understand that, and that they expect no more than an opportunity to show what they can do in fair conditions.
I am sure that when hon. Members have time to study the White Paper carefully and think it over, they will conclude that it represents a fair and just settlement, and a settlement which will ensure, under conditions of free markets, that our farmers and farm workers will have the opportunity, and our farmers the resources, to move steadily forward to fresh records of output and net income, with fair remuneration for their efforts.
§ 1.1 p.m.
§ Mr. Harold Davies (Leek)
I am sure that the House is grateful to the hon. Member for Morecambe and Lonsdale (Sir I. Fraser) for introducing this subject today. In reply to the Minister, and despite what my hon. Friend the Member for Chorley (Mr. Kenyon) may have said about pigs and the importation of feeding-stuffs, I would say that that is not the point at issue; that was well known before.
What I am worried about is the position of the small farmer who tries to produce pigs, perhaps, on a couple of allotments. He has been told to produce the pigs, and he should not be blamed for not knowing all about the problem of our balance of payments and the difficulty of 852 getting feedingstuffs. While my hon. Friend was quite right on the economics of the problem, and nine out of 10 of the small pig producers have not taken the trouble to think about the economics, nevertheless they have been urged by the Government to go ahead.
I regretted that the hon. Member for Morecambe and Lonsdale at the end of his remarks spoilt his speech by introducing a political note. We are always delighted to hear my hon. Friend the Member for Chorley when he speaks, and also Members on the other side who speak from practical experience, because the House derives great benefit from hearing them. In some strange way, when my hon. Friend was speaking, with his rich experience and knowledge of the Pennines, I could almost hear those old brooks tinkling down the valleys and see the clouds scudding over the hills, and I pictured my hon. Friend up to his arms in the smoky grass which he was grumbling about. This is a real problem that the nation must face as far at atmospheric pollution and its effect upon agriculture is concerned.
§ Mr. Davies
That is true.
There are three points that I wish to bring out. We all appreciate the great difficulties that the mass of the farming fraternity has had to suffer, especially in hill districts such as those with which my hon. Friend and I are familiar, around Leek and on the edge of the Derbyshire, Buxton and Staffordshire moorland areas. There have been 12 to 14 ft. snowdrifts, and transport problems have been difficult.
When that kind of thing happens—and the nature of our climate seems to be changing a little each year—all the Ministries concerned, including Agriculture and Transport, as well as others, must be prepared to help local authorities to be ready to meet these exceptional conditions that we seem to have had several times during the last dozen years.
No one so far this morning has referred to a matter which is of vital importance to the small farmer: that is, the effect of the increase in the Bank Rate on the small man who wants legitimately to expand his business. We have heard nothing from the other side of the House 853 about this. There was all that wonderful talk about setting the nation free and setting the small farmer free, but although the small farmer has been set free he now finds it more difficult than ever to get capital from his local bank. Although the interest rate at the bank may be 4½ per cent., when the farmer tries to get money for agricultural purposes it might be as much as 5½ or 6 per cent.
If Members on the Government side are really anxious about agriculture, I sincerely hope that in three weeks' time, when I hope to have the privilege of introducing into the House my private Bill to implement the report of the Gowers Committee on conditions in agriculture and in shops and offices, the agricultural enthusiasts on the benches opposite will come into the Lobby to support my Bill to improve conditions in agriculture.
Here is one of the real tests. In giving a recent verdict, the coroner at York said:I have seen machinery brought on to farms in large quantities and the whole art of the agricultural industry change due to the use of machinery. I have also, sitting in my position as coroner, increasingly more year by year seen deaths resulting from the use of machinery on farms.I ask hon. Members to note these words:Deaths, in my opinion, in many cases could have been avoided by the simplest application of safety regulations arising out of the misuse of machinery such as would never have been tolerated in any factory.In my private Bill, I am introducing Clauses which would avoid that. I am sure that the Government, being so concerned for the safety of workers and the advancement of agriculture, and realising how inefficient it is to have deaths—
§ Mr. Deputy-Speaker (Sir Rhys Hopkin Morris)
Is the hon. Member anticipating the debate on his own Bill?
§ Mr. Davies
Not yet, Mr. Deputy-Speaker. I merely want to point out that, since the Government are so keen on efficiency, it is legitimate to expect that whenever an opportunity occurs in the House, no matter by whom a Bill is introduced, hon. Members opposite will pour into the Lobby to support any legislation to eliminate the misuse of machinery and to reduce the kind of 854 accidents that now arise through the increasing use of machinery on farms.
As a result of the use of fertilisers, sprays and chemical apparatus, new types of industrial diseases on certain farms appear to be growing. Whichever party is in power, it is our duty to eliminate these complaints and diseases so that the maximum of efficient production can be obtained from our farms.
I come now to my third point. My hon. Friend the Member for Chorley spoke about the big farmer on prosperous farms in the lowlands who gets high subsidies, often unnecessarily. The man about whom I am concerned—he represents the vast majority of British farmers—is the small farmer who has a struggle to manage; and today is the right occasion for this discussion. It is not only the recent bad weather that has affected or afflicted farming; it has been afflicted by lack of policy.
We can dispose of one aspect of the debate very easily. Food prices are rising. In comparison with 1953,the volume of our meat imports fell last year by nearly 7 per cent. while the price rose by 3 per cent. The volume of cereals fell by nearly 15 per cent.; the price fell by about 13 per cent. The cost of meat imported between January last year and January this year rose by nearly 18.4 per cent. The cost of wheat rose in the same period by 58 per cent. Yet the problem of securing higher output is with us still, and it is one that has confronted the Government quicker than they expected it would. Moreover, there are 150,000 tons of meat which the Ministry of Food does not know how to use, how to dispose of, how to sell. Why should that be? Is that part of the policy of setting the people free?
How are we to get production at home? That is the problem. According to the 1952 Census there were 1,080,000 males and females in Britain working on the farms and in horticulture. Of those, 115,000 were employers, 9,000 were managers, and 227,000 were workers on their own account. The number employed was then 712,000. In addition, there was the new type of workers, the tractor drivers, of whom there were 85,000. It is the quarter of a million farmers on their own account whom we should encourage. We should encourage them and their wives.
855 The small farmers, who usually have their sons or daughters working with them, have not had a prosperous time, especially on the hill farms of Britain. I do not want to bore the House with masses of statistics, but one can work out how they fare from the statistics. For example, the small farmer farming 70 acres whose wife works with him is lucky to get an income of £300 or £400 a year. That is the income for both of them. It is not even a proper payment for their long hours of labour. We can work out how much the small farmers make from the statistics we have.
What are we doing about it? What policy have we? I am not going to refer to the subsidy policy, with which both Governments have been entangled, some of which was justified, some of which was not justified. However, I do think most of those subsidies find their way to the big men and the quick-fingered entrepreneurs while the little man suffers as he does. This is at once an economic question and a social question. The question is, what type of person do we want to see on the land? Whom are we encouraging to go to work on the land?
How will the Conservative Government's policy of a property-owning democracy, if they were really to follow it out, affect farming? One wonders, because last year the bankruptcies in farming were higher than the year before, higher than ever. I have said many times that the richest jewel in the Conservative Party's crown is the countryside vote. Yet it was only by the skin of their teeth that the Government escaped a motion of censure from the National Farmers' Union. When the National Farmers' Union falls out with its bosom pals, the Conservative Government, something really must be wrong.
Hon. Members opposite talk about divisions on this side of the House, but the divisions between the Government and the National Farmers' Union are real, and if the Government are not careful they will find themselves in such trouble in the countryside that they will not be in power in the next generation. They certainly will not if they lose the countryside vote, and they are losing it, because of their lack of a constructive policy for agriculture. What is the Government's agricultural policy, apart 856 from the policy of subsidies? That is the only one that they seem to have.
We on this side of the House have asked that the problem of monopolies should be looked into. I cannot develop that subject now in the two or three minutes I have left. However, the high price of fertilisers must be a matter of concern to both sides of the House, and I think that it should be investigated. We should investigate the problem of the high cost of fertilisers and the monopolies in this respect. We very seldom debate horticulture in this House. The horticulturist, especially the small man, has a hard struggle, surrounded by the ogres—perhaps that is an exaggeration—surrounded by people who extort the highest prices for many commodities because they have a monopoly situation.
There is a parallel situation in the motor industry. There are traders now flying the skull and crossbones because they are objecting to the private fines and private courts in that industry, objecting to the type of monopoly that goes on under the Government who were going to set the people free. If there are monopolies in fertilisers and in the chemical industry they should be investigated. The British farmer has long been anxious about the high price he has to pay to these monopolists and to the merchants.
I believe that wholesalers in feeding-stuffs are taking more than their fair share from the hard-working, honest, small horticultural producer and the small farmer. The Census of Distribution in 1950 showed a gross margin of £60 million on a turnover of £644 million. The distributors of feedingstuffs paid £15½million in wages and salaries and about the same an transport. Thus I think that margin between the £60 million and the £644 million is too much. It means that the producer at the focal point of production, on the farm or in the lettuce trench, is not getting the price he deserves for his labours through the prices at which the commodities are sold over the shop counters.
New capital is of vital importance. It is of importance not to my party or to he party opposite, but of vital importance to the destiny of Britain. What is the policy of the Government? Unlike my hon. Friend the Member for Chorley, I have little practical knowledge of farming and should not like to tell the farmer 857 how he should do his job, but on the question of the supply of tools for the job and of capital for the job, on the question of the supply of electricity and water to the farms, I believe I am justified in talking.
What is the policy of right hon. and hon. Gentlemen opposite for bringing in new capital to the farm? We have not heard about it because there is none. There is no policy for this. The Chancellor's notion to maintain subsidies is not enough. The Minister said his policy was to make more capital available to the industry. How is he going to do it? It is reported that the Chancellor of the Exchequer, speaking at the annual dinner of the National Farmers' Union, said:Our aim is, a prosperous industry with adequate capital which can attract and provide it.As he said that, up went the Bank Rate. One hon. Member on the other side asked if we could find any different methods for helping the agricultural industry. It is a fair question, and I repeat it. Can we find a cheaper method of making loans for legitimate expansion in British agriculture? We have heard the appeal from both sides of the House in this debate.
I promised the House I would not take too long, so I think I had better not seek to develop these questions now, and I leave them with this final observation. I do not intend to introduce into this debate on agriculture foreign policy or anything like that. However, I have taken the trouble to read about the problems Japan is facing because of the radioactive effects of the hydrogen bomb. I brought to this House Professor Nishiwaki to speak to hon. Members, and he told us of the effects of the hydrogen bomb on agriculture, and the effects of the experimental tests in the Pacific. Some of the milk from cows on one of the islands of Japan was radioactive.
Can the Government guarantee a radius of safe farming round the nuclear power stations which are to be built in this country? Can we have a guarantee that the small farmer will be able to work within a reasonable radius of these stations? That is a question which we must face, and a question to which the country should receive an answer.
Having made these remarks and suggestions, I sincerely hope that the year 858 ahead will be a more prosperous one and that the farmers of Britain will suffer less from wind and weather than they suffered during the years through which we have so melancholically passed.
§ 1.21 p.m.
§ Mr. Phelim O'Neill (Antrim, North)
I am sure that all of us on both sides of the House will agree that the main difficulty that faces those who take part in the Price Review negotiations is that, somehow or other, they have to find a flat rate of guarantee or assistance to all farmers, whose conditions in various parts of the country vary to quite an astonishing extent. That must inevitably mean that the fortunate receive more than they really need and those in remote areas and those who only have small farms, very often in western districts where the weather is very bad, receive less than they need. If it be true that the smallest are sufficiently catered for, none would disagree with the view that the most fortunate must have far more than their requirements.
In my constituency in Northern Ireland, which is typical of the whole country, I do not suppose that the average farm is more than 30 acres in extent. I was astonished when the hon. Member for Leek (Mr. Harold Davies) referred just now to "a small farm" of 70 acres. In Northern Ireland, a farm of 70 acres is a large farm, and the owner of a farm of 100 acres or more is regarded as a man of great possessions. Hon. Members who come from the eastern counties will find that hard to believe but, nevertheless, it is profoundly true.
It is inevitable that small farmers must take to the production of four commodities. They are pigs, eggs, milk, and potatoes—all cash crops with a fairly rapid turnover. I do not disguise from the Minister that, although I am quite sure that our farmers realise that it is inevitable, the cut in the pig guarantees will be a cause of serious concern to them. It is right that all hon. and right hon. Members should realise that we in Northern Ireland produce a very large number of pigs.
I admit and agree quite frankly that in our commodity production we are top-heavy in pigs. That is bound to be so among a large collection of small farmers, and this further reduction in the price will 859 undoubtedly have serious consequences for us because, during the last three or four months, we have already been receiving for our bacon pigs very much lower prices than farmers in the United Kingdom have received.
I do not wish in the least to overstate my case, because I fully realise that it is possible that some adjustments have still to be made, but we are receiving for our very best grade A bacon pigs, which I am assured are as good or better than any in any other part of the United Kingdom, less than all farmers in the United Kingdom are receiving for grade C bacon pigs. That is a very difficult and alarming position.
What interests the small farmer above all else is long-term stability. The Government have undoubtedly, and quite rightly, given the red warning light about pigs. In the course of his speech, the Minister was not too happy about the long-term outlook for milk and eggs. In a district such as mine we should indeed be in a serious position if, in the future, the profitability of pigs was still further reduced and that of eggs and milk was to decline.
I should like to thank the Minister for the increase in production grants, because I believe that these contribute in a substantial way to the benefit of the small farmer. I hope that during the months ahead my right hon. Friend will consider the difficulties in which small farmers, wherever they may be situated, are bound to find themselves.
I was very interested in the speech of the hon. Member for Chorley (Mr. Kenyon), and I agree with a great deal of what he said. I am sure that the time is bound to come when we shall have to find some means of directing these very large subsidy payments in the direction where they are most needed. I am sure that production grants, which in some cases may possibly be limited to certain types of farms, are the best means whereby this can be done.
In Northern Ireland we are always sensitive about our somewhat vulnerable position. The House will be aware that at present we are affected, in our industry, by a most distressing rate of unemployment. Exactly the same features which render our industrial position so 860 difficult at the present time are liable to render our agricultural position more vulnerable than that anywhere else.
I would ask my right hon. Friend if, during the summer, he will pay us in Northern Ireland a visit so that he can see our problems at first hand. They are very difficult and very real, and while, with the exception of pigs, I am sure that he and his right hon. Friend the Chancellor have done their best for agriculture in this Price Review, I feel that in the future we shall require to have very tolerant consideration of our problems.
§ 1.30 p.m.
§ Mr. S. N. Evans (Wednesbury)
I have heard the hon. Member for Antrim, North (Mr. P. O'Neill) speak before. He always pleads the cause of Northern Ireland with eloquence and clarity, but I must say I was a little surprised when he said that in Northern Ireland they get less for the grade A pig than the English farmer gets for the grade C pig. It is extraordinary, and I am sure that the Minister will want to say something about it through his Joint Parliamentary Secretary.
The more I listen to the talk about the farming industry, and the more I study it, the more I am convinced that we need an inquiry into it. It is a pity that the Fleck Committee was demobilised. I think it might have studied this industry with very considerable advantage. It is, of course, a basic industry and it is an important industry, but it is a very expensive one. It is what one might describe as the pampered Madame Dubarry of the British economy.
We ought to remember that since the passing of the Agriculture Act, 1947, British farming has cost the taxpayer over £2,000 million in subsidies. There are direct subsidies like those for calves and subsidies on home-produced food, and these together amount to over £2,000 million. They are still running at the rate of nearly £300 million if we include welfare milk, milk for schools and suchlike social services. If it is true that money talks, then this is a story without parallel in British industry.
I think we need to inquire not only into the efficiency of the industry, which I rate at a very low level, but also as to what the frontiers for it should be in this post-war period. It seems to me that 861 every year the February farm Price Review settles the problems of the farmers and of the agricultural industry, and the rest of the economy has somehow or other to fit into it. I do not think that that can go on, and I want an impartial inquiry to help us to decide where the frontiers should be.
From time to time we hear a lot about a 60 per cent. increase over pre-war production. I want to know, 60 per cent. of what and at what price? There are many questions that are relevant to this position as to where the frontiers should be and how much we should be prepared to pay for the required production. For example, there is a lot of controversy in this country at the moment over the arrival of a very large number of Jamaicans from the West Indies. We in this country are producing about 600,000 tons of sugar a year. The West Indians have virtually a single-crop economy. They have been compelled to cut back sugar production by about 20.000 tons.
It seems to me that sooner or later we shall have to ask ourselves whether we should not create conditions in the West Indies which would lessen the inclination of the Jamaicans to come here, because we shall have to provide them with a living either there or here. I should have thought it would have been much better to grow natural cane sugar in Jamaica so that the natives would feel no temptation to come here; rather than that they should be coming here in such large numbers and creating such a social problem as well as adding to housing and other problems. This is something we have got to think about.
Then what about our responsibility to O.E.E.C.? If we believe in European integration, then we have got to get this clear. Nations will not be allied militarily if they are slitting each other's throats economically. There is this question of pig production. The Minister quite rightly said that we have to discourage it, and I have no doubt that that is so for for a number of reasons. My hon. Friend the Member for Leek (Mr. Harold Davies) is a great advocate of East-West trade. He thinks that that will help to lessen international tension. We are already importing Polish bacon. That is something of which I am sure he would approve, but if we go on stepping up British pig production, how are we going to absorb the Polish bacon?
862 Then, again, we have a lot of friends in the Nine-Power Treaty countries, including Denmark and Holland. A great trading nation like Britain has a very special responsibility to the allied countries that depend for their livelihood on the export of agricultural products. That is the only way they can get a living, and if they are to be allied to us then we must be prepared to help them in disposing of their primary products.
§ Mr. P. O'Neill
We in Northern Ireland, of course, depend for our livelihood on the export of our agricultural products. In view of that, would the hon. Gentleman say what he suggests should happen to our products?
§ Mr. Evans
We have to take the whole of these very important factors into consideration, because we must remember that when we cut back imports from Northern Ireland, from Denmark, and from Holland, who are our friends, we do not save dollars, and we must remember that there is no balance of payments problem with them. Denmark and Holland are at present importing from this country goods to the value of about £200 million a year. Nobody, including the N.F.U., thinks that this country can get by on a policy of selling to everybody and buying from nobody. It will not work.
So I say to the Government, and, indeed, to both parties, that it would be a good thing if it were decided that this inquiry should be held, whoever wins the Election. I am sorry that the hon. Gentleman the Member for Morecambe and Lonsdale (Sir I. Fraser), who spoke so disparagingly of my party's contribution to the prosperity of the farming industry, is not here. If anybody contributed to it it was my right hon. Friend the Member for Don Valley (Mr. T. Williams) and his colleagues in the last two Labour Governments.
Farmers sometimes talk about their industry as the Cinderella of the national economy. Many an industrial Cinderella has flourished under the benevolent and watchful aegis of political "sugar daddies." But no Cinderella in my time has ever had quite such a bountiful fairy godmother as Miss Rural Vote. So I should like to see this decision agreed to by the two parties before the Election and, in the light of this settlement, I cannot think that will be long in coming.
863 The Minister said he did not think that the February Review announcement would be made before this debate. He said that three days ago he did not think for one moment that it would be made but, of course, one can always put an end to negotiations by capitulation, and that is what has happened here.
Such an inquiry would be good for some of the reasons I have given. I feel that both political parties are a hostage to the rural vote. They are both a bit terrified of the N.F.U., which is a remarkable institution. The majestic simplicity of N.F.U. psychology is almost awe-inspiring. Americans have a word for it—"gimme."
When it comes to negotiating high prices and high subsidies and tax allowances necessary to protect Weary Willie from the economic consequences of his own inertia, the N.F.U. is the most brisk, vocal, and hard-working body this country has ever known, but when it comes to measures designed to step up productivity, to lower costs, and to reduce selling prices, one might think it was deaf, dumb and paralysed.
Now the success or failure of this industry in the future depends on a much more vigorous initiative from within the industry itself, and that means Bedford Square. This industry has for 15 years been on Easy Street. Its profits, £56 million in 1938, have blossomed—the appropriate word with spring coming—to an average of £315 million for each of the last four years, including last year, which was a bad year, and no field glasses are needed to see why. It has been due to the £2,000 million subsidies which the farmers have had since the passing of the Agriculture Act, 1947.
I want an inquiry into this industry and into the results which have flowed from that Act, because it must be a source of great worry to thinking farmers to know that, if they were paid the same price for their milk and their crops and their livestock as the Danish and the Dutch farmers, they would have no income at all.
§ Mr. Evans
I am talking about the Danes and the Dutch, I will come to the Americans later. The British farmers would have no income because their milk 864 and livestock and crops are being paid for at between 30 and 50 per cent. more than are those of the Danes and the Dutch. This would worry me if I were a farmer because, without any advantage of soil, climate or wages, the Danish farmer is clouting the British farmer right over the sight screen. That would worry me.
I will tell you, Mr. Deputy Speaker, what else would worry me if I were a farmer. It is this. The industry is dependent for its income as to about four-fifths on these subsidies, and if these subsidies were removed again the industry would be left virtually without any income. It is in these circumstances that we have to examine the latest February farm Price Review agreement.
I have heard a lot said today about the need to grow more feedingstuffs so that we shall not have to import them, and I do not disagree. Yet between July and November last year we exported to Germany, Belgium, Holland and Denmark over 100,000 tons of barley and oats at up to £6 10s. a ton less than we paid to the British farmer. We often hear the "moan" that the British farmer has to contend with subsidised imports—for instance, wheat subsidised by the French Government. Yet last year, between July and November, we exported over 100,000 tons of barley and oats at prices up to £6 10s. a ton less than we paid the British farmer. So apparently we were dumping.
Did we or did we not? I cannot understand why, in a bad year and in the light of the present situation, we exported 100,000 tons surplus and now, in this Review, we are paying more for barley and more for oats. I hope someone will explain to me why we could not absorb that 100,000 tons, and why we exported it to the Continent, and why now, such is our dire need, we have to give more for oats and barley, two commodities of which apparently we had too much last year, because we exported over 100,000 tons of them.
I will tell the House something else that would worry me if I were a farmer. It is an almost incredible situation in which the Danish farmer is paid 70 per cent. less for his milk than is the British farmer. We are getting ourselves into a thorough tangle in this industry, and it is quite time that we had an inquiry. Whilst 865 the Danish farmer gets 70 per cent. less, we are still paying the British farmer more for a gallon of milk than the Danish farmer gets for 1 lb. of butter, and yet, at the end, the Danish farmer last year finished with a net income 22 per cent. per acre higher than the British farmer. The Danish farmer earned 22 per cent. more per acre than the British farmer after selling his products between 30 and 50 per cent. cheaper. That is what I should like to know about.
The Minister said that we do not know what to do with the milk because the sales of liquid milk have reached saturation point. We are paying the British farmer over 3s. a gallon for milk, so if we convert it into butter, the raw material—of a pound of butter—costs 7s. 6d. We are buying Danish butter and New Zealand butter for about 3s. a lb., but the raw material of one lb. of butter in this country costs 7s. 6d. We have arrived at the stage here where we cannot sell any more milk in liquid form so that is all we can do with it, and to discourage the production of more milk we give British farmers another¾d. per gallon.
These are the economics of Bedlam. It will not go on, it cannot go on. The Government would do well to start some talks through the usual channels—whoever wins the next Election—to see whether we cannot get an agreement to have an inquiry into this industry. It is in a bad way. Over a large section it could be described as moribund. An ancient Briton returning to earth could take over any one of 100,000 British farms without any training and without a refresher course of any kind. If that is not true, how do the farmers on the benches opposite explain the gap between Danish and Dutch standards and our own?
It is five years next month since I made my speech at Manchester suggesting that the high subsidies were concealing a good deal of inefficiency and inertia, and asking that the matter should be looked into. It is almost incredible to me that throughout those five years—I have kept "having a go" from time to time—nobody has ever explained to me why it is that the Danes and the Dutch are able to sell us butter and bacon—of better palatability, many housewives think—at such substantially lower prices. The difference in price between Danish and 866 British bacon at the moment is about 1s. 2d. a lb., certainly more than 1s.,and there are very few housewives who do not prefer the Danish bacon.
I want to be told why that is. I am getting on now and am beginning to despair, but I should like to be told, before I go to join my ancestors, how it is that the Danes and the Dutch are able to produce agricultural products which are so attractive to British housewives, at anything from 30 to 50 per cent. cheaper than British farmers can produce these commodities, and then wind up with an income 20 per cent. higher per acre than British farmers. I hope somebody will tell me why this afternoon.Hope deferred maketh the heart sick,and I have been waiting for five years for somebody to tell me.
Of course, really I know why it is. It is because the industry is hopelessly inefficient. I am not at all sure that subsidies paid in the form in which they are paid will do the trick. The British farmer is a very conservative animal, and he has the feeling that he might increase productivity, but that higher productivity, while the result of change, is also the cause of change. The British farmer loves change in the same way as my right hon. Friend the Member for Ebbw Vale (Mr. Bevan) loves my right hon. Friend the Member for Leeds, South (Mr. Gaitskell). There is, therefore, reluctance to have change.
My view is that many farmers look upon higher productivity, lower costs and reduced selling prices as a strategic reserve to be kept up their sleeves pending the time when there will have to be lower prices. I believe that only lower prices will bring out the strategic reserve.
For all these reasons, I hope that the Government will give sympathetic attention to the request for an impartial inquiry into the industry. Things cannot go on as they are now. Since the passing of the 1947 Act, £2,000 million has been provided for the industry, and what have we got for it? I have mentioned some of the things that we have got. We can buy bacon of less attractiveness than, and at about 1s. 2d. per lb. more than, Danish bacon. We have so much milk at 70 per cent. more than the Danish farmer gets for his milk that we do not know what to do with it. In addition, we are not likely to be short of Welsh 867 mutton at 1s. per lb. more than New Zealand lamb. That is the situation.
To sum up, we ought to begin to examine the future of British agriculture against the background of our international and colonial commitments. We ought, in particular, to consider our position in relation to O.E.E.C. I said earlier that these nations are our friends and are allied to us, and I say again that we cannot be allied militarily for very long if we are slitting each other's throats economically. Denmark and Holland are spending more than £200 million a year in the United Kingdom, and that creates very considerable employment in my constituency. I make no bones about pleading the cause of the industrial worker and the housewife in the way that the farmers plead the cause of their own industry.
I want the agricultural industry to be looked at against the background of our responsibilities to the colonial Empire and the sterling area. I would again raise the problem of the Jamaicans who are coming here. Another 1,000 arrived this week. We must create conditions in Jamaica which will induce them to stay at home, or else we must let them come to this country, with all the housing and other social problems that that creates.
The future of British agriculture must be judged against these responsibilities. When we refuse Australian wheat because we have enough home-grown wheat subsidised to the extent of £10 a ton, there comes a time when the Australian Government has to say, "No more cars. No more Austin cars. No more Morris cars. No more Hillmans. No more Fords." This is it, and unemployment is again created in the industrial areas.
It is not simply a matter of creating an agricultural "welfare state" within the Welfare State, which is what we have been doing. It is a problem which has very wide implications, and it must be viewed against not only a Commonwealth and sterling area background but a world background. I hope that after this long time I shall have some encouragement from the benches opposite in demanding an inquiry.
What a chance the agricultural industry has, with its equable climate, fertile soil, nearness to markets, amenable and skilled labour and an ever-expanding population. 868 All these things add up to the chance of a lifetime. However, nobody owes the farmers a living; they have to earn it like everybody else.
§ 1.59 p.m.
§ Mr. C. N. Thornton-Kemsley (North Angus and Mearns)
The hon. Member for Wednesbury (Mr. S. N. Evans) has returned to his favourite theme, as he often does, of the feather-bedding of British agriculture, only this time he has changed the metaphor slightly. He has talked about the farming industry as the pampered Madame Dubarry of the British economy. If it is not slightly improper for me to say so, I think that in this matter the hon. Member has a slightly one-track mind.
After hearing the hon. Gentleman, I am always left with the feeling that he has really not made up his mind whether British agriculture is worth while and whether it is worth paying the price. Make no bones about it, it is expensive for us to maintain a flourishing agriculture. We on these benches say that it is absolutely vital that we should do so, if only for two reasons. First because in time of peace it is, as my right hon. Friend the Chancellor of the Exchequer said in the country not long ago, an essential import-saver and secondly because in time of war it is a vital measure of defence.
The hon. Member for Chorley (Mr. Kenyon), whose speech the House so much enjoyed, said that he would like to take the hon. Member for Wednesbury to his hill sheep farm in the Pennines and let him see what a hill farm was like. He said that it would do him good. I should like to take him to the North-East of Scotland—where we do know how to farm good land and where I have been during the last few weekends—to see whether he would still suggest that the farming is inefficient.
He might say that it was moribund, because it is almost impossible to farm in the conditions there at present. I am sure that he would no longer talk about an equable climate. We are in a desperate plight in Scotland, as are so many parts of Britain at present. Over large areas of the countryside no outside work is being done other than work of an essential nature like carting fodder to the stock. Occasionally one sees a man hacking at frosted turnips and trying to 869 get them out of iron-hard frozen ground, or, as I saw them last week, hopefully and optimistically carting dung to snow-covered fields. In the main, all one sees are great wastes of snow lying deep over the unploughed fields. There will be a tremendous task facing us to get these fields ploughed when the snow goes away and the ground has dried sufficiently for us to get our spring cultivations done and the seed planted. It is going to mean an all-out effort.
I join with my hon. Friend the Member for Morecambe and Lonsdale (Sir I. Fraser), who has rendered such a good service by initiating this debate, and with my hon. Friend the Member for Newbury (Mr. Hurd) in saying how glad I am that it has been possible to announce the deferment of the call-up of agricultural workers. This will be a great thing. It will indeed be a happy day when our defence position is such, and our Services are such, that it will no longer be necessary for agricultural workers to be called up to make their contribution by joining the Forces for two years. I know the difficulties. I know that it cannot be done at present. The trouble is not only that the call-up means that a farmer loses a man for two years—perhaps a promising lad—with virtually no opportunity of replacing him in present circumstances. It so often means—and this is the real hardship—that that lad will be lost to farming for ever. That is why the position is so serious.
I am sure that farmers are alive to the need to do all they can to make farm work less of a drudgery, and living in the countryside less of a bore, than some young people nowadays seem to think it to be. Most certainly the Government have helped in a great many ways. They are doing all they can by encouraging grants under the Housing (Rural Workers) Acts for improving farm cottages, encouraging by grants the provision of piped water, the expansion of rural electrification, the encouragement of rural bus services and so on.
Much can be done by the farmers themselves in making the utmost use of modern farm implements. Farming can be made much more attractive to the farmworker by the extended use of combine harvesters, pick-up balers, green crop elevators, dung spreaders and so on. If 870 someone could invent a really satisfactory potato harvester, then we would really have broken the back of that problem.
Large parts of the countryside which I have the honour to represent are composed of small farms, although not to the same extent as those of which my hon. Friend the Member for Antrim, North (Mr. P. O'Neill) spoke so eloquently a few minutes ago. Alongside the larger farms are men trying to make a livelihood on comparatively small farms, and it is these men who will be very much helped by the production grants which I am glad to see are once again a feature of the Price Review.
The history of these production grants is interesting. When my party came into power, the expansion of British agriculture had lost its impetus. Costs were rising, output was more or less stationary at about 41 per cent. above the pre-war level. What we had to do at the outset was to give farmers—especially small farmers—some help in meeting rising costs. The 1952 Price Review gave something like 40 per cent. of the help that was given to British agriculture in the form of production grants; the calf subsidy, the fertiliser subsidy, the new and better ploughing-up grants and that sort of thing. They were very well worth doing and they produced an immediate result. Almost immediately the decline in tillage acreage was arrested and there was a slight increase in the number of calves, sheep, pigs, eggs and in milk.
Last year, out of the £200 million odd that was injected into the industry, as a result of the Price Review about £50 million, 25 per cent., was in the form of production grants. This year, if my arithmetic is correct, about £61½ million will be in the form of production grants out of the total of about £250 million, a fractionally higher proportion than last year. That is certainly on the right lines. Of course the economy of small farms is very much aided by the keeping of poultry and pigs. This year eggs are slightly up, pigs have very definitely taken a knock. It is important in these circumstances that the small farmer should be helped—as he will be helped under these proposals—by an increase in the lime subsidy, by increases in the fertiliser subsidy, by ploughing-up grants and the continuation of the calf subsidy.
871 May I say in parenthesis that I hope that rumours which I have heard are incorrect. I hope that it is not true that it will be suggested that the calf subsidy is to be made more attractive to the owners of de-horned cattle and less attractive—or perhaps not given at all—to the breeds which are horned. I hope that that rumour is false and that the Parliamentary Secretary will be able to allay the fears of those of us who know the value to the economy of the Scottish countryside, at any rate, of breeds like the Highlander, which is certainly not de-horned.
It is rather remarkable that in this first agricultural debate this year there has not been a single reference from hon. Members opposite to the new Socialist marketing policy—what I might call the "South-Norfolk edition" of their agricultural policy—which was hurried through as a result of that bye-election which they were not successful in winning. No one has heard much about that policy since. I should have thought that some hon. Member opposite would have spoken about it and expounded it. What a wonderful opportunity this debate provides for an hon. Member opposite to explain to the countryside what they meant. But perhaps it is not surprising that we have not heard anything about it. In my opinion, one of the best things written about that policy appeared in the "Scottish Farmer," which stated that it isimpossible to avoid the conclusion that it implies a return to the straitjacket conditions of Socialist Government, both for the producer and the consumer, turning their backs upon freedom and accepting a tremendous extension of bureaucratic rule.In any debate about farming—and here I agree with the hon. Member for Wednesbury—we cannot turn our minds from the world food position. Farming in this country cannot live or thrive in insulation from farming conditions in the rest of the world where there has been quite a remarkable change. The report of the Food and Agricultural Organisation for the year 1953–54, the latest report, shows, for the second year in succession, that world food prices are out-pacing the growth of the population. The world farming output is up by 3 per cent., and the number of mouths to be fed is up by 1½ per cent. Production per head is now 872 above the pre-war level and international prices of primary foodstuffs are falling.
That is a generalisation. There are marked disparities between different regions. In North America, Western Europe, the Near East and Africa we are above the average; whereas Latin-America, the Far East and Australasia are below the average. I suppose that it is true to say—certainly I have come to that conclusion, after studying these reports over a number of years—that, nutritionally, the rich get richer and the poor get poorer; with the poor very near the famine level.
Relating this to our own problems, we see that when the party opposite launched their expansion programme in 1947, it was comparatively easy—I am not making a party point now—because what the country wanted then was as much as possible as quickly as possible, and regardless of quality. Now, circumstances are quite different. Clearly we can no longer continue along those lines. Somehow we have to strike a balance between home food production and consumer interests.
In this situation, what are the long-term prospects for British farming? As a farmer, I am certain expanding my production. I am doing so for three reasons, two of which I have already given. Certainly as regards meat supplies, and in some other products also, the producing countries of the world are consuming more of their own production. Secondly, because we know that our home agriculture in time of peace—as the Chancellor suggested—is the greatest import saver; and thirdly, in time of war it is essential to our defence.
The Government recognise this. They recognise the need to maintain a healthy and profitable farming industry. The first phase which has now passed, was one of expansion at all costs. Now the emphasis is upon economy and efficiency by raising the quality of our production, meeting consumer choice and reducing costs.
The broad picture which seems to emerge fairly clearly from the White Paper on the Annual Review and Determination of Guarantees is this—and I speak in very broad terms: that British agriculture has had to face a £40 million drop in income and a £30 million rise 873 in costs. The Government are looking after the rise in costs, and are looking to increased efficiency and "know-how" on the part of the farmers to take care of the increase in farmers' incomes, which all of us, or almost all of us, desire to see.
§ 2.17 p.m.
§ Mr. Frederick Willey (Sunderland, North)
The speech of the hon. Member for North Angus and Mearns (Mr. Thornton-Kemsley) falls into three parts. He made some platitudinous remarks which will bring him consolation in his constituency; he made what I think was a misleading estimate of world food prospects, and he threw out a challenge which I readily accept.
First, I should like to say that we are obliged to the Minister for the contribution which he has made. I was not quite sure whether he proposed to speak as the Minister of Food or as the Minister of Agriculture, but I gather that he spoke as the Minister of Agriculture. I am, however, surprised that the Chancellor of the Exchequer is not present. It is an open secret that the Chancellor overruled the Minister of Agriculture and Food on the question of the Price Review. I have always taken the view that there should be a divorce between food and agriculture, because it would be better for two Ministers with a common interest to stand up to the Treasury, but I never expected for a moment that the Minister of Agriculture and Food would be overruled by the Chancellor in the way he was at this year's Price Review.
I wish to deal with a cardinal problem which the Minister, speaking as the Minister of Agriculture, has overlooked. I will come to the point about the marketing policy, because that follows from what I have to say. We now have subsidies running at a level of £330 million. The figure of £250 million mentioned is a notional figure for British agriculture. Apart from bread and milk, however, the party opposite has destroyed the food subsidies. In fact, two years ago the Government said that subsidies were running at a level of £250 million. They now say—although all the subsidy consumer relief has gone, except for bread and milk—that they are estimated to be running at £330 million. That is something which was clearly unexpected.
874 I think that the burden is on the Government to explain why this has happened and for what purpose these subsidies are operating. I could make suggestions to the Parliamentary Secretary. They could operate for different reasons. They could be, as was said by one hon. Member, part of the Welfare State mechanism. It could be a national decision to help the countryside. If that be the purpose, I shall argue forthwith for the raising of the status of the agricultural worker. This would then be then-primary purpose. But I cannot see that these subsidies have that purpose.
I am prepared to argue that the agricultural worker, as a national responsibility, ought to be accepted at a higher level than he is at present, but the Government have not said that. I would have appreciated the argument that the subsidies were given to increased production—but that has not been argued. A good deal has been said about the weather, but the plain fact is that production has fallen. Anyone who reads the White Paper can see that it has fallen in ways which the Government can explain only by referring to free marketing conditions.
I could understand on argument for the subsidies if it were something to do with the balance of payments position, but until this morning even that has never been suggested. As my hon. and gallant Friend the Member for Brixton (Lieut.-Colonel Lipton) knows, and as my hon. Friend the Member for Wednesbury (Mr. S. N. Evans) said, the appalling muddle over the past 12 months has substantially contributed to our present difficulties. We know that the Chancellor's difficulties today have been very much aggravated by the increased prices of imported foodstuffs, which state of affairs has partly arisen from the return to a free market. We know that, but that does not affect the food subsidy, because it has led, for example in cereals, to a decrease in the subsidy.
The Minister of Food is able to say, "I do not have to pay so much for cereals because the world price is rising, thanks to the market which we created." That, then, is not an argument. We want a specific statement, therefore, from the Government as to the purpose which these subsidies are serving, and why they have now decided to follow this deliberate 875 policy—because we know that hitherto they had no such policy. They fell down on the job and involved the country in enormous trading losses.
Why has the Ministry of Food these large stocks of meat? Is it to be sold abroad as sugar was? Did we not sell subsidised sugar to Russia?
§ Mr. Willey
And subsidised barley and oats have been sold abroad, as my hon. Friend says. We now have the fantastic position where we are exporting foodstuffs bought on behalf of the country by the Government and subsidised by the taxpayer. I have never heard of anything so ridiculous. If that is not a trading muddle I do not know what is.
On the production front, too, we have no policy. We go from expedient to expedient. I share the views of the National Farmers' Union, and my hon. Friend the Member for Wednesbury, that the two cardinal aims which should be pursued are, first, production efficiency and, secondly, marketing efficiency. The two things go hand in hand. I should like to hear an arguable case against this, if there be one. I challenge the Parliamentary Secretary to show how the new policy of subsidies, which disregards the consumer—who has had no price benefit from them—has led to a decrease in production costs.
I invite him to explain how it happened that when we began the last financial year the bacon subsidy was estimated to be £6 million, whereas we are now paying £60 million on pigs. The housewife is getting no benefit. I do not quarrel with the increase in the subsidy during the previous 12 months, from £6 million to £15½ million, because that did reflect itself in price decreases, but where has the £60 million gone? The farmer is no better off; the housewife is no better off. Who is? In any case, what was the purpose of this increased subsidy?
The plain fact is that we cannot deal with this matter without establishing some orderly system of marketing—so I shall answer the challege of the hon. Member for North Angus and Mearns. I would first remind him that this is not a partisan matter. What was the position 876 before the war? We had a Cattle Committee and the Exchequer subsidy, and that was not enough. We got Board of Trade powers to regulate imports, and that was not enough. We set up the Livestock Commission, consisting of independent members. What did the 1939 Agriculture Development Act do? It gave the Livestock Commission the task of preparing a scheme for sheep and lambs. What had we for pigs? We had a Pigs Board, a Bacon Board, a Development Board, and, finally, the decision that full marketing powers should reside in the Development Board.
Where are the party politics in all those things? With regard to slaughtering, we had a report in 1929 recommending the rationalisation of marketing and deadweight grading, and there was the 1932 De La Warr Committee, which recommended that a non-profit-making public body should be set up to run slaughtering. Where are the party politics in that? The truth of the matter is that the Government Front Bench were so harried by the people behind them, on doctrinaire grounds, that they gave way without having thought anything out.
If the Parliamentary Secretary thinks that they have thought anything out, does he not think that it is childish to say after two years that the producers might present to us a scheme for marketing eggs? Eggs are costing the taxpayer about £30 million a year. The Government do not believe in the subsidy. If they did, they would not have destroyed it—but it is larger than it was under the Labour Government. They do not believe in it, but it is there. But the taxpayer has no redress because it is not properly administered. I have not the time to deal with each commodity. I only point out that in the matter of livestock and pigs there was a wealth of experience in the 1930s to which the Government could have turned. They should have known, in the light of their experiences then, that they would be in for trouble, which would be accentuated if they had to operate between free retailing and guaranteed prices.
For the enlightenment of the hon. Member for North Angus and Mearns, who has apparently only read the Press notice of our livestock policy, I should like to say what we propose. We say that a non-profit-making public body should be set up to 877 be responsible for slaughtering. What is wrong with that? Let us call it the Livestock Commission. It will have independent members, appointed by the Government. The Government will shortly receive an inter-Departmental report upon slaughtering. It is no good expecting local authorities to deal with this matter if there is to be moderate concentration, and private enterprise will not put any money into it because it is not sufficiently attractive.
What is the next stage? The Parliamentary Secretary does not appear to know. He should have read what we propose. The next stage is that the Livestock Commission should accept beasts on a deadweight basis. Deadweight grading was recommended as long ago as 1929. We should institute a Fatstock Board, a Producers' Board responsible for delivery to the slaughterhouse. All this is sensible. It would be easier to implement the guarantees with such machinery. The Livestock Commission would have to deal with a Bacon Board and the Fatstock Board, and it would be responsible for pork and bacon, because we know what an unholy mess the National Government got into in 1937. Surely that is sensible. No Tory who has read what his party did in the 1930s can oppose this argument. He cannot decry this as doctrinaire. He can only express surprise that this doctrinaire clamour in his own party has inhibited the present Government from doing anything.
What about imports? We know that the real difficulty about the policy of guarantees is the isolation—and it is no good trying to avoid it—ofhome agricultural production from world markets. That is something against which we must safeguard our British agricultural industry in the most efficient and expeditious way possible. All that is required is that the Livestock Commission, as a nonprofit-making public body, should have the power at the point of control to determine the movement of imports. That, in short, is the proposal of the Labour Party about livestock marketing.
I will deal with one other matter which has not been particularly emphasised today, but which is in the minds of the Government, and that is fruit and vegetables. Again this is not a partisan matter. Everyone in the country knows that there will have to be greater physical 878 facilities for the marketing of fruit and vegetables. Therefore, we propose—and we have proposed this for years—that there should be more auction markets provided by a responsible public body. What is wrong with that? But the Government are so hag-ridden today by this notion of a free market that they cannot even say so. The Minister has to say, "Well, I have set up a committee."
So we have got right down the line all the experience of what even Conservative Governments were obliged to do in the 1930s,and in a much easier position. There was not then proper national responsibility for British agriculture and the machinery for guaranteed prices. This is what every knowledgeable farmer knows and why there has been disquiet over the past twelve months. He knows that the machinery of guarantees cannot survive on a free market.
This Government have been on a free market now for a considerable time. This has meant enormous losses to the taxpayer and disturbed the confidence of the farmer, because he knows that this cannot persist, and he knows that if there were an election and the present Government got a substantial majority, it would be quite useless for the farmers if they were to clamour about prices, because the Government have utterly failed to face up to the responsibility of providing the machinery to safeguard the guarantees. What I emphasise this afternoon is that this need not be the partisan matter which doctrinaire Members opposite have made it; we have the experience of the 1930s and the machinery then set up. We can surely learn from that experience.
The purpose of the marketing policy of the Labour Party—and this applies to all guaranteed commodities—is simply to accept the guarantees to the farmers and free retailing and to provide reconciliation through orderly, properly-conducted, responsible marketing.
I conclude with a word or two about the proposals of the hon. Member for Wednesbury. I do not accept, of course, every argument which he advances. But I put this quite seriously to the Parliamentary Secretary. I think that there is, particularly in view of the doctrinaire politics which we have had from the other side, something to be said for such an inquiry. It would certainly embarrass 879 hon. Members opposite who talked so airy-fairily about free marketing.
What I object to is that we have the worst of both possible worlds from the present Government. We have, for example, had the difficulty about eggs for two years, we have the question of livestock now, and whenever the Government are cornered they say, "We will set up a reorganisation commission—set up a committee—or ask the producers to let us know what they think is best for them." I say that there is no reason at all why action should not have been taken in respect of each one of the guaranteed commodities. The Government have involved the taxpayer in enormous avoidable expense. The farmers get nothing but uncertainty. That uncertainty could be ended now by having for our home-produced agricultural products a system of orderly marketing which recognises the necessity of implementing the guarantees at less expense to the taxpayer and providing security to the farmer.
There is no need to upset industry further and avoid responsibility by saying that this is a matter for further inquiry. I would warn all those hon. Members opposite who have agricultural constituencies of their duty, if an election comes, to advise their constituents of the significance of the failure of the present Government to take action. It means, as many hon. Members opposite apparently believe, that this Government is wedded to a free market and that is a black outlook indeed for the British farmer.
§ 2.36 p.m.
§ Mr. Denys Bullard (Norfolk, Southwest)
When I heard that this debate on agriculture was to take place today, and when I knew that it was to follow immediately, by chance as it turns out, the publication of the Price Review, I was one of those who thought that it was a pity in one way that the debate was not on a day other than a Friday, so that more hon. Members would have been here.
We have had a very good debate in which we have looked at this problem from many angles, and I think that we have very largely kept clear of party arguments. We returned very closely to party argument when the hon. Member for Sunderland, North (Mr. Willey) was 880 speaking, and when I saw the right hon. Member for Belper (Mr. G. Brown) appear from behind the Chair I thought that we might be reverting to an agricultural debate true to form. But he has left the Chamber, which I think must indicate that he at any rate, of Members on the other side of the House, is broadly satisfied with the proposals of this Price Review.
We have heard arguments advanced today which have dealt with the weather conditions, with, defence considerations, and other important considerations as to why it is necessary to give special support to agriculture. I thought that the weather argument was a valid one because I believe that the weather will affect production not only in this year but next year, and possibly for several years to come. It certainly has had a great effect on the tillage acreage.
I should like to think that the justification for all the measures taken to help the farming industry have been taken, not just for the benefit of the farmers or even for the benefit of the farm workers, but out of a real belief, which I certainly hold very deeply, that agriculture has a tremendous contribution to make to the economic life of the nation. We have heard from the hon. Member for Chorley (Mr. Kenyon) and from the hon. Member for Antrim, North (Mr. P. O'Neill) about the extreme variations of conditions in the country. The real problem of this support procedure in agriculture is how we are to keep all the many different kinds of farming at a reasonable level of profitability.
The hon. Member for Wednesbury (Mr. S. N. Evans) asked questions about the difference between the state of affairs in this country and in Denmark. He then promptly left the Chamber so that anyone who wants to answer him is in some difficulty. Although there the soil is not particularly good, they have not had the extraordinary variations which we have, and certainly nothing like our hill farming, although I admit that the general level of their land is not particulary good as regards its fertility.
In this very complicated system of price support which has been provided, I welcome the measures which, I think, will especially help the small farmer. That, after all, is one of the great aims. The increased calf subsidy is a help to 881 the small farmer in that he gets his money in the early stage of production rather than having to wait weeks, months, or years until he sells his final product, whether it be a store or a fat animal.
Again, the subsidy which helps him to buy fertiliser is a direct help, at the time he has to pay the bill or very soon after, and fixing slightly higher prices for milk, sugar-beet and potatoes is of direct help to the small producer. As I have already said, I regard the measures set out in this annual Determination of Guarantees as being directed to help not only farmers but the whole industry. To my mind, that fact is never sufficiently stressed.
A great revolution has occurred in connection with farm work. I do not remember times very far back, but I can remember when farm workers used to go out to work in all sorts of weather, ploughing throughout the winter in the rain, often covered with bags and all sorts of peculiar "regimentals." I can remember when it was the regular practice to work until 5 o'clock on Saturday afternoons, and when conditions for the agricultural workers were certainly very hard. But conditions have altogether changed.
The hon. Member for Sunderland, North asked what was the purpose of the money which is being paid out in the form of agricultural subsidies. If he will give me his attention for a moment, I would say that I think that one of the direct results of the support plan has been to give the agricultural worker a much higher standard of conditions and also of pay. As the hon. Gentleman knows, there has been a very considerable increase in both wages and earnings. Earnings, after all, are the most important, and I should have thought that their increase was one of the definite results aimed at and achieved by this policy.
Although there has been a revolution in the conditions of work, I do not think that it has gone nearly far enough. Living conditions in the countryside are nowhere near as good as they should be, in spite of the fact that in this matter, too, there have been some tremendous improvements. The rural housing programme of the present Government is certainly one of which we are proud, and the extension of electricity into the countryside during the last year or so has been a great help, as will also be the plan of my 882 right hon. Friend the Minister of Education for increasing the number of rural schools.
During the debate on a Bill which was before the House a few days ago, I was pleased to note the increase in the number of rural water supply and sewerage schemes. I believe that £10 million was spent on such schemes two years ago, £12 million last year, and that £17 million is to be spent on them in the present year. All these things represent advances, but those advances, I agree, are not fast enough.
Housing conditions in rural areas are in many places still very bad. When we get away from the picturesque village street and go down some of the lanes and by-ways, we find ancient, small houses with no sanitation and very often with no water supply, all of which await replacement or at least improvement. Anyone who knows those conditions knows that we still have a very long way to go in the countryside. But we have made some quite considerable advances.
I now come to the question of marketing. It is very difficult to speak in this debate because some hon. Members who raise points seem promptly to go away after raising them instead of waiting for an answer. The interest of the hon. Member for Sunderland, North in the matter seems to be as emphemeral as that of the rest of hon. Members opposite, because he also has disappeared.
§ Mr. Bullard
I agree with the hon. Member for Sunderland, North that a marketing organisation is a very good thing, but I differ from him as to the method. He spoke of a non-profit-making commission handling these things, and said that if there were commissions for the slaughtering and the handling of cattle, the difficulties would automatically disappear. He seemed to be advancing the same argument as that which has been advanced many times before to the effect that when industries are nationalised, the difficulties automatically disappear. They do not disappear with nationalisation, and they would not disappear in marketing any more than elsewhere. But that is no argument against organisation in marketing. 883 I was very glad when my right hon. Friend announced that he had reached agreement with the National Farmers' Union on the financial basis for a scheme for eggs. I thought that represented an advance. We should all welcome an indication that another commodity was going to be covered by a scheme. I believe that a scheme for pigs, about which my right hon. Friend also spoke today, would be desirable.
The day of the small individual sale is very largely over. Every commission which has reported on agricultural marketing has stressed the fact that the individual producer is in a very difficult position when making his individual small bargain, and that a marketing scheme for agricultural products is a very desirable thing. I must say that most of the other industries with which farmers have to deal are very highly organised. I would not go so far as to say that they should be referred to the Monopolies Commission, but there are some very widespread price-fixing schemes in the industries which supply farmers with many of their commodities.
§ Mr. Bullard
Yes, fertilisers is one of them, and feedingstuffs is another.
The feedingstuffs industry is very highly organised indeed. Many of the compounders have a first say in the marketing of the oil seed and protein foods. They get an advantage all along the line, and they tend to take advantage of the fact that many farmers are faced with labour shortage difficulties, and must, therefore, buy their feedingstuffs already compounded.
In the matter of price-fixing, I must also include the agricultural machinery industry, despite the very rapid and very good progress which that industry has made. Retail margins in the agricultural machinery industry are quite high enough. In the old days, when one bought a horse-hoe for about £12, no one grudged the retailer his 25 per cent. because it amounted to only £2 10s. or £3. But when a man buys a combine harvester for £1,500, it seems to me that a retail margin of 25 per cent., representing £375, just for selling it, is too high.
The position with regard to spare parts for agricultural machinery is worse still, 884 because, unfortunately, the suppliers know that if a combine harvester for which a man has paid £1,500 has a breakdown, it will not be very long before the owner comes to them for a spare part, and that he will not inquire very particularly what it is going to cost. The cost of these spare parts has been pushed up higher than ever.
§ Mr. J. Johnson
Is the hon. Member aware that I asked a Question on this subject last Thursday, and that the answer showed that costs have gone up only 2 per cent. since 1951?
§ Mr. Bullard
I was not aware of that. Maybe prices were already high in 1951. An increase of 2 per cent. since then is not very high, in any case.
I am particularly concerned about pigs. I do not think that the Amendment in the name of the hon. and gallant Member for Brixton (Lieut.-Colonel Lipton) and other hon. Members opposite is good, because it does not take account of the whole situation. In discussing any system of accounts where there are two sides of the book, it would be easy to put down a Motion to deplore everything that was going out or going down. I feel that that is what the hon. and gallant Member has done, ignoring the other side of the picture.
Very few pig producers produce only pigs. I hope that the hon. and gallant Member does not confine his agricultural activities to the production of pigs but produces other commodities as well. If the mechanism of price-fixing is to be permanent, the Government must balance one commodity against another. It would not be proper for the lion's share of support to go to one particular section of the industry. One of the purposes of the support is to balance one side of agriculture with another. I hope that pig producers will see that the other commodities which they are probably producing receive a benefit if the pig price is to go down.
There is room for improvement in our methods of producing pigs. The hon. Member for Wednesbury cannot have seen the recent publication issued by the Ministry of Agriculture comparing the costs and efficiency of pig production in England and Denmark, and giving interesting facts. We have some way to go in this matter, and I wonder whether 885 the methods which the hon. Member suggested will be adequate. A committee has been set up to inquire into the type of pig, but we know very little about the organisation.
I should like to know about the scheme for progeny testing, who is going to run it, and whether pig producers are to have their say. Unless the scheme carries the good will of the pig producers it will not succeed. I am rather concerned about that, and I should like to know whether the Minister is satisfied that this is the best method of achieving the results which he wishes to see achieved.
§ Lieut.-Colonel Lipton
Pig producers have been asked to pay 1d. a score if the pig progeny scheme is to be set on foot. That has given us an additional claim to representation.
§ Mr. Bullard
I do not think 1d. a score will be ruinous. Pig producers should be taken along in the development of this scheme rather than that the scheme should be imposed upon them.
What is the prime purpose of assistance? It surely is to keep agricultural production at a high level. I speak as a farmer on pretty good land, and I and many other people like me might be able to produce, even if all agricultural support were removed; but we should be producing at a much lower level and should be specialising. Much of the land would be ranched, and much other land would be out of production altogether. The whole idea of guaranteed prices is to keep up the level of production and to see that, on the best land, it is possible for livestock production to be carried on in conjunction with the arable, rather than that farmers should go in for a single line system at a lower level of production.
This puts a great duty on farmers themselves. An hon. Member stressed that the National Farmers' Union had a great part to play in emphasising to its members the importance of this duty and the service that the industry can give to the community, and which it is very anxious to give. It is, therefore, most important that the Price Review negotiations should not become too much of a wrangle and dispute between the farmers and the Government, in which relationships become estranged, each side trying to get a bargaining 886 advantage over the other. That is one of the problems in any of the price-fixing systems. My right hon. Friend has achieved a fair balance and a fair settlement, and I congratulate him upon it.
§ 2.55 p.m.
§ Sir Leslie Plummer (Deptford)
I promise to discipline myself and not to suffer, like other farmers in this debate, from a superfluity of words to the head. No farmer, it seems, can discuss agriculture in under 20 minutes or half an hour.
§ Sir L. Plummer
I congratulate the hon. Member for Norfolk, South-West (Mr. Bullard). I follow his articles in the "Farmers Weekly" which are entitled "A Farmer in Parliament." Hitherto I thought the articles should have been entitled "A Tory Farmer in Parliament" because we are getting from him and from most of the farming papers in this country agricultural news and views with a Tory slant.
We no longer have an independent agricultural Press. Both in what they call, God save the mark, their leaders and in the antics of the radio comedians with heavy rural accents who write in the "Farmers Weekly" and the "Farmer and Stockbreeder"—I make an exception in the case of the hon. Member—we get nothing week by week but the hand-outs from the Ministry of Agriculture. It is time we had independent agricultural papers that would speak for the farmers, rather than for the Government, the Conservative Party and the National Farmers' Union.
The hon. Member for Morecambe and Lonsdale (Sir I. Fraser) poured scorn on the Amendment—which I understand is not to be called—put on the paper by my hon. and gallant Friend the Member for Brixton (Lieut.-Colonel Lipton), other hon. Members and myself, on the ground that it comes from urban Members. I am sure that agriculture is a concern of every one of the 50 million people living in this island. We have every reason to take an interest in agriculture.
§ Sir I. Fraser
I am sure that the hon. Member wishes to be quite fair in this matter. I did thank both him, the Brixton chap, and other hon. Members for their interest.
§ Sir L. Plummer
The Brixton bath chap has a perfectly legitimate interest in this matter.
I regret to say that it did not seem right for my hon. Friend the Member for Chorley (Mr. Kenyon) to suggest that those who have an interest in pig production and who have put down an Amendment, know nothing about pigs. He himself said that what was wanted in the industry so far as sheep were concerned was stability. It is not unreasonable, therefore, that those of us who are concerned in one way or another with producing pigs should equally ask for stability. That is what the industry is not getting today.
I was the only Member of the Opposition to be present at a historic meeting in the town of Saffron Walden when the Minister, on his appointment to his distinguished office, made a speech outlining his policy. I went some 15 miles out of my way from my farm to listen to what the right hon. Gentleman had to say. When he spoke about pigs, I was reminded of the girl who sings on the radio—"I can't tell a waltz from a tango,"—because at that stage the Minister could not tell the difference between a pork pig and a bacon pig. The farmers who were present noted that fact and tried to impress upon the Minister that there is a great difference.
I am afraid that the right hon. Gentleman has not learned yet that if we are to be able to produce pigs, and to produce both the pork and the bacon which the nation needs, there must be stability in the industry if people are to remain in production. The Minister says that both he and his right hon. Friend the Chancellor of the Exchequer have, over the last few months, made it absolutely clear to farmers that the increase in the production of pigs cannot continue because it is too great a burden on the Exchequer. But what has been happening? The Fatstock Marketing Corporation, whose work, incidentally, deserves the praise and credit of every farmer who produces livestock—although I regret a certain anonymity about the corporation's birth; I wish it would come clean and tell the nation who really financed it—has raised the price of grade A bacon pigs over the last few weeks to 60s. per score.
What has been the result of that? The farming papers have been carrying 888 leaders saying that the future for pig production is really all right and that the previous depression touched a bottom such as we had never seen before. Because they believed that, people have gone in for the production of pigs. The Minister should have made a public statement that these statements were not to be taken as a sign that the Government could continue to support the ruling prices.
What has happened since is that on Monday last the price of grade A bacon pigs dropped from 60s. to 57s. per score, and on Monday next it is to drop to 55s. We now know that it will drop still further. In his speech this afternoon, the Minister would not make the situation crystal clear to the pig producer. The right hon. Gentleman said, "I am reducing the price of pigs by 2s. 6d. a score. I ought to be doing more than that, and we shall have to review the situation in the future."
Ought the Minister not to say to farmers that they must go further in the reduction of their herds of pigs than the 2s. 6d. reduction denotes? If the Minister does not say that, the pig producer will continue not knowing where he is. I am not referring to the fantastic gamblers, those absurd people who come into the market and pay £3,000 for unproved Landrace pigs—they are not farmers, but manipulators. I knew of a man who paid 200 guineas for a 12-week-old Landrace boar. Three months later, the inspector from the Ministry of Agriculture came and condemned it, and so the man sent it in as a rig pig and got £10 for it. It served him right. The industry cannot afford that kind of gambling on the part of people who have more money than sense.
What the industry is dependent upon is the honest attempts and endeavours on the part of the ordinary pig producer, who has listened to the requests of the Minister and his predecessor that we should increase the pig population and should improve the quality of pigs that we are producing. Have we not done that? The reward that the pig producer gets today for the work he has done is to be told that he must cut down his herds, and yet the Fatstock Marketing Corporation announced only a few days ago that in a very short time the percentage of Grade A pigs going into the 889 bacon factory had been increased from 50 to 60 per cent., which is a considerable increase.
Why did the Minister not say at Saffron Walden six months ago that he had no confidence in the future of the bacon or pork industries? Why did he not make it absolutely clear?
For the very good reason that I do not feel that lack of confidence in the future. If the hon. Member thinks back to my remarks at Saffron Walden, what I said was that we could not afford any more pigs than we had then. I also said that, in my opinion, we did not have too many pigs then, but I said that we could only visualise having more if at the same time we had higher quality and lower costs.
§ Sir L. Plummer
And now we are getting higher quality.
The Minister says that he does not suffer from lack of confidence in the future, but the pig producer does. He will continue to suffer a lack of confidence in the future if he does not know by what percentage his production is to be reduced. Are we to have, not 6 million pigs, but 5 million, or 4 million, or 2¾ million? What is the figure at which the Minister is aiming? If only he would give an indication of what it is that would help the pig producers to plan their future.
The Minister is prepared to give stability—and I give him credit for this—to the arable farmer. I know now exactly what I am going to do in forthcoming crop years about barley and oats and wheat. I know what the situation is about milk, and what the situation is about the production of potatoes, sugar-beet and eggs. I am very grateful to the Minister also for so arranging things that I shall get another £150 for milk as a result of the money he is giving. But what the position is about pigs I do not know. No pig producer knows—except that he knows the situation is a dim one. The Minister will not give an indication of what he wants.
There has been a great deal of propaganda, and the Minister is at fault in not countering it, on the basis that the British housewife does not want British bacon, and that what she wants is Danish bacon. There is, therefore, being bred in 890 the mind of the English housewife—apart from her disgust at the price of bacon—the view that there is something essentially superior in Danish bacon as compared with English bacon. That, of course, is not true.
The truth is that the Danes have a standard cure designed to satisfy the British public's taste, and the British curers have not that standard. If I go to one of the four or five bacon factories that, within 50 miles, ring my farm, I shall be offered four or five different sorts of cure of the carcasses I send in. At one of them they will say to me, "What sort of curing do you want? Heavy salt cure or sweet Suffolk cure?" Nobody who goes to a Danish bacon factory is asked whether he wants a heavy salt cure or, say, a sweet Copenhagen cure. There is only one cure. The Danes have investigated the situation, and they see to it that, having produced the best possible pigs they can, they are cured to the taste of the customer.
I know the importance of the progeny tests, and of the work that the Minister is doing in improving breeding, but what is absolutely vital is that, his committee on reorganisation should be asked to inquire into the possibility of producing a standard cure in each area of the county. For instance, we know that in the Midlands they want salt bacon, and that in the South of England they want Danish-type bacon.
We have no planning in the industry so far as curing is concerned; no planning at all. It is an outrage to suggest that the British farmer is responsible for the fact that the British housewife prefers Danish bacon to English bacon. What she prefers is the Danish cure to the British cure, and I say that the Minister should concentrate his attention on the importance of doing something about that.
I have a final word to say. When I was on the "Evening Standard" some years ago, that great, unique and magnificent character, Mr. David Low, drew a cartoon which we published because Lord Beaverbrook always liked to publish cartoons which twitted the Tory Party. It showed the present Prime Minister dressed as a bill-poster sticking a notice on a wall and reading "The weather will be dreadful under Socialism." Everybody laughed at that. However, we have now arrived at a 891 situation in which the weather is simply horrible under the Tories. The three and a half years of Tory Government have resulted in the worst summer, the worst autumn, the worst winter, and what will apparently be the worst spring in living memory. Had we on this side been in the Government in these conditions, such a remark would have been uttered deadpan and seriously by hon. Gentlemen opposite.
However, what I want to put to the right hon. Gentleman is this. Is he spending enough money on the Agricultural Research Council and on the publication of the results of its work? Sometimes I find myself in this difficulty as a farmer. A new variety of seed is introduced, and I learn of it from the catalogue of a seed merchant. I know that the original work on the new seed was largely done by the Agricultural Research Council. I know that the Council is tireless in its efforts to stamp out disease.
I wish the right hon. Gentleman would spend more money in letting farmers know what the results of its works are. It is not good enough just to say that I can ring up the N.A.A.S. officer in the district and find out. We really need a proper method of communication of the information that is at the disposal of the Council. The working farmer is becoming more and more accustomed to deal with his crop in a scientific way. He is beginning to understand scientific symbols and he wants to learn more.
The "stick and dog" farmer has died out. The farmer recognises that he must be a mechanic, a scientist, an agriculturist, a financier, a tractor driver, and a whole lot of other things rolled into one. The amount of money which the Minister is quite rightly spending on agricultural research would produce much better results if he spent a portion of it in ensuring that the farmer, in one way or another, was receiving infinitely more information about the findings and recommendations of the Council.
§ 3.11 p.m.
§ Mr. A. J. Champion (Derbyshire, South-East)
I join with those who have congratulated the hon. Member for Morecambe and Lonsdale (Sir I. Fraser) on his choice of subject. I certainly congratulate him on his timing of the debate.
§ Mr. Amory indicated assent.
§ Mr. Champion
That timing has certainly added interest to the debate. I agreed with the hon. Member for Newbury (Mr. Hurd) when he said that we could not regard this as a day to debate the Price Review, which has certain elements about it that deserve very careful study indeed and a whole day's debate in the House. I was sincerely hoping that no hon. Member on either side would regard this Private Members' day as a substitute for a proper full-dress debate on the Price Review and its consequences to the agricultural industry.
I had intended to answer the party references made by the hon. Member for Morecambe and Lonsdale, but they were answered in such a masterly fashion by my hon. Friend the Member for Chorley (Mr. Kenyon) that I should be wasting my time and that of the House in attempting to reply further to them now. There is something which I feel I must say to my hon. Friend the Member for Wednesbury (Mr. S. N. Evans). It seems inevitable that whenever I appear at this Box I have to say something to him as well as to hon. and right hon. Members opposite.
I should hate setting up a Royal Commission if that meant that we should have my hon. Friend's contributions to our agricultural debates removed from the House. He certainly brings facts to our discussion which are inclined to shake any complacency in our thinking on this subject. The House and the public owe my hon. Friend a great debt of gratitude for that reason, but I do not regard the Royal Commission which he suggests as something which should be applied to the agricultural industry at the present time.
A Royal Commission is, for the most part, a device to enable the House to put out its thinking and examination. That is desirable sometimes, but not in a case of this kind. The 1947 Act was a deliberate act of Parliament which, in its main principles, carried the assent of both great political parties. I believe that it carried that assent because it followed the experience of the inter-war years and the disaster that came to agriculture during that period. It was born of a desire not to see such a disaster repeated in our time.
893 I assert here, and would assert it anywhere, that the very fact that this country and America have by deliberate action maintained good standards of remuneration for the primary producers has been largely responsible for the fact that we have not had a big slump in the post-Second World War days. That is the main feature that marks the difference between the immediate post-1914–18 war period and the period following the 1939–45 war. The Act has had seven clear years to work, and I think it has worked, all things considered, fairly well. It was devised by man and cannot be a perfect instrument, but I think that in seven years of operation it has stood up well to criticism both inside and outside the House.
In these circumstances, it would only be folly for the Opposition to join with my hon. Friend in pressing the idea of a Royal Commission. If I look at this from the party angle, I am bound to say that the Act was an Act of a Labour Government and it would be generally misunderstood if we now joined in the pressure initiated by my hon. Friend for the setting up of a Royal Commission to examine it. We might be told, and with some force, too, "These people in opposition run away from the consequences of their acts as a Government." I do not want to fall for that, but I must add that this House must never relax its examination of the workings of the Act.
In my opinion, there is much in the Act which is far from perfect. I agree with those who have spoken about the scheme of payments. We are bound to ask whether that system now in operation of keeping the marginal producer in production through end-prices is the best system that we can device, having regard to the fact that it means an unnecessarily high price being paid to the farmer on high quality land who is living and working in exceptional circumstances, but who quite often is paying a rent which bears little relationship to the value of his land. We have got to consider whether, in fact, we are doing the right thing here.
I would agree with those of my hon. Friends who spoke about hill farming. When I first spoke from the Government Front Bench on the subject of farming I made reference to the fact that I had tried hill farming 1,000 feet above sea 894 level in South Wales and had failed. I failed because of circumstances and conditions about which farmers in Norfolk and other places know nothing. My hon. Friend the Member for Wednesbury referred to Denmark. I know it fairly well as I have been there a number of times. But I have seen nothing in Denmark to compare with the conditions which exist 1,000 feet above sea level in South Wales, or in Scotland or elsewhere. So we cannot compare the figures. But we have got to examine the workings of the 1947 Act, and it is time we got down to it and to this system of paying a price which may be high for certain farmers but which may be too low for certain others.
Secondly—and here I agree with some of the things my hon. Friend has said—we have got to examine the 1947 Act to see whether the method devised to clear the inefficient farmer out of his holding has not failed in its purpose. Has it failed? I rather think in some ways it has, perhaps as a result of the intervention of the courts, and, indeed, in a lot of cases through pressure by back bench Members on the Government side of the House. This has destroyed some of the effectiveness of a sanction which was put in there at the same time as the Government of the day said, "We will give the farmers the chance to make a decent living." But two things ran together. We gave him a chance to make a decent living, and we gave him reasonable prices with guarantees and stability, but at the same time the House said, "We must demand from the farmer as a return for the money that he gets reasonable efficiency in the use of the land which happens to be in his ownership or possession at the time." So here are two things which justify examination.
It is inevitable that this debate takes place against the background of yesterday's price announcements, but it is not enough to go through that Price Review item by item. Rather should we put the Price Review against the background of the industry and economy of the nation, as a number of hon. Members have tried to do today.
Our aims since the end of the war for the farmer have been a reasonable standard of prosperity, having as its basis and support a guarantee of market and an assurance of a reasonable price. For 895 the nation our aims have been the maximum of production from our land to save the cost of food imports. Everyone must realise, however, that this must not be attained at the cost of foreign currency quite out of proportion to the value of the production from the land, so this has to be considered carefully. Secondly, we say that there ought to be not the maximum of support by way of subsidy which the Government of the day think they can give, but the minimum of support for the industry which will keep it in a reasonably prosperous state.
I repeat that the working of the 1947 Act has secured a guarantee of market and a reasonable price for the farmer. I believe this is true even under the present Government, despite the fact that some of the methods adopted to give effect to Part I of the Act have been clumsy and expensive. These have been expensive because I believe that quite a lot of the taxpayers' money now being paid out in subsidy finds its way into hands for which it was never intended. That is because of the system devised by the Government for paying out these subsidies.
Broadly speaking, the guarantees for farmers are still operating, although I agree with the hon. Member for Deptford (Sir L. Plummer) that the recent experiences of pig farmers and breeders have shaken their belief in the stability of price and the guarantee of market.
What about the other angle, that of the nation? As I understand it, the support of the industry by the cost of welfare food will be running at £250 million for the current year 1954 to 1955 as against the estimate given in the Price Review of last year of £200 million. So their estimating is out by one-quarter. In its White Paper last year the Ministry stated:The present cost to the taxpayer of the support given to British agriculture is very high—of the order of £200 million.Now, however, it is running at £50 million per annum more than what we were told last year was a very high cost to the taxpayer.
Where has that £50 million gone? Has this so-called freedom cost the nation that much? Has it gone into the pockets of the farmers or, as I have just suggested, has much of it gone into the pockets of 896 the merchants, millers, middlemen and the like?
What is the Minister's estimate of the cost of the subsidy for this year? He did not give us any indication this morning. I thought he was rather coy. He told us what the guarantees involved in additional cost and so on, and what he thought would be the additional cost, but he did not know how much he would have to pay in conditions in which he could not control the market. Does he think it will be £250 million, or more, or less? I hope the Joint Parliamentary Secretary will answer that question.
The cost to the nation is estimated to be up on that amount by nearly £50 million in 1954–55. At the same time, production is down by 2 per cent. I join the hon. Member for Morecambe and Lonsdale in the tribute that he paid to the workers and farmers who have struggled with the weather conditions of the last year. However, the White Paper says that production would have been very much less had it not been for the increase in livestock output.
In looking at the industry, the nation has to remember that much of the increase was purchased at very heavy cost, that of two million tons more a year mainly of imported foodstuffs, at an additional cost of £55 million. We have to remember what a great factor this is in the matter of the balance of trade and how important it is in the present situation when the Chancellor is telling us that we must do something to reverse the present trends in our balance of trade position.
The frightening factor in British agriculture at the moment is the continuing decline in the tillage acreage despite the ploughing grants and production subsidies which were introduced to stop it. Production is down to 53 per cent. above pre-war, but it would not be a very pleasing picture even if it were up to the 60 per cent. above pre-war at which the Government say they are aiming if the 60 per cent. was obtained by means of an uneconomical expenditure on imported foodstuffs and an inefficient use of our own raw material, the land.
This year the Government are increasing the liming subsidy and the nitrogen and phosphate subsidy, and ploughing grants are to go up by £2 per acre. I can only say in this connection that the 897 Minister told us at the time the ploughing grants were reintroduced that he thought it would stop the decline in the tillage acreage. However, the fact is that it has continued. I very much doubt whether the production grant that he is reintroducing or strengthening and the increases under the Price Review will reverse this very dangerous trend for the country. What does the Minister propose to do about it if it does not?
The nation must not go on pouring out the taxpayers' money in the form of agricultural subsidies unless we get full value for it in the maximum possible use of our land. Here I agree with my hon. Friend the Member for Wednesbury and other hon. Members who have spoken. If we pay a heavy figure we ought to get something for it.
There is another comment that I must make here, almost in parenthesis as it were. I feel that the Minister has embarked upon something which might be dangerous. I know that what I am going to say now is not a very popular thing to say. I believe that to guarantee to the industry an additional £28 million on the grounds of bad weather might be to create a dangerous precedent for an industry which must take the ups and downs of the climate of this country.
There is some justification for giving additional help to hill farmers, because of the recent weather conditions. But if there are to be additional guarantees following a bad weather farming year, there must be a balance downwards following a good farming year. One cannot view these things in isolation. Having embarked upon this, the Government will now have the task of deciding whether there has been a good farming year or a bad farming year and they will have to adjust accordingly. In settling these guaranteed prices we have to take one year with another. That was the phrase in the Nationalisation Acts of the last Government. Certainly I believe that it especially affects an industry such as this which is subject to these conditions.
I had intended to say a little about pigs, but as my hon. Friend the Member for Deptford dealt with it so well and made the position so clear, I shall not do so. When we look at agriculture as a whole, we must remember to praise those farmers who have achieved much 898 in increased production. Here I think that I can say to my hon. Friend the Member for Wednesbury that many of these farmers, farmers whom I know personally, have achieved standards of increase which far outstrip many of their opposite numbers, if they are opposite numbers, in the towns. They have increased their production by percentages which are worthy of praise.
But there are still far too many bad farmers wasting the precious asset which the land happens to be. Just imagine what would be the difference if we could bring those who are below average to the average of production. What a tremendous increase in production and saving in our balance of trade position if we could only bring the whole up to what is now the level of the best. We are paying this £250 million in subsidy to the industry, and I am bound to say that in far too many cases all we are getting for it is sloppy management, bad farming practice and poor methods. Of course, I am not speaking of everybody. As I said just now. Part II of the Agriculture Act, 1947, is failing to deal with bad farmers, while at the same time Part I is guaranteeing to these bad farmers a living which they do not deserve and do not earn.
I do not believe that a Royal Commission is the right way to attack the problem. We have to deal with it ourselves and we have to think again about this aspect of production on our land. Higher production is not only a matter of methods and improvements in farming practice. Too many good farmers are trying to achieve maximum production with out of date equipment, especially fixed capital equipment, buildings, farm layouts and the rest. Sixty per cent. of the holdings in this country are still farmed on the landlord-tenant system, and in the matter of buildings and the like there is, as everybody knows, a need for vast capital expenditure. I do not believe that expenditure is likely to be brought about unless special steps are taken by the Government to achieve it.
Table 13 of the 1954 Economic Survey tells us that in 1948 there was a gross fixed investment of £90 million on agriculture, forestry and fishing. In 1953 it was £87 million, which is less than 1948 in the figure itself. Of course, the actual investment was very much less, because in the meantime there had been a fall 899 in the value of the £. The blunt fact is that, in the main, landlords will not invest in buildings at the present standards of rent and rates of interest; and no one is helped by the present financial policy of the Government.
A high Bank Rate is a discouragement to investment, as I understand it, and it is a discouragement to the investment that we badly need to increase our agricultural productivity. Is it not a clumsy method which discourages essential capital outlay at the same time as it discourages non-essential capital outlay? That has been the effect on the industry of the several rises in the Bank Rate since this Government came to power. I do not know the exact figure, but I know that bank advances to agriculture and fishing—with fishing accounting for about 5 per cent.—amount to £220 million. In 1951, the Bank Rate was 2 per cent.; now it is 4½ per cent. The additional charge on the industry, brought about as a result of the raising of the Bank Rate, has been £5million per annum. That amount has been taken out of the industry. The question, which should be answered by the Chancellor and everyone responsible, is: it has come out of an essential industry, where is it going? Is there any justification for it going into what must be the hands of the moneylenders?
What is the Agricultural Mortgage Corporation proposing to do? Will it raise its rates of interest and further stop the flow of capital essential to agricultural building? The falling off in mortgage loans has been from about £4£ million in 1952 to £2 million in 1953. We in this House who are reviewing this industry must not forget that it is an industry which has been starved of essential capital for at least half-a-century. In my opinion, to raise the Bank Rate against such an industry is an act of madness.
I had proposed to say something about marketing, but that was dealt with so well by my hon. Friend the Member for Sunderland, North (Mr. Willey). The fact is that the Price Review cannot be viewed in isolation. It must be viewed in the light of the whole of the Government's policy. What increase in production there may have been for 1954–55, had the weather been what the Minister referred to as "normal"—I do not know any more than the right hon. Gentleman 900 what is "normal" weather in this country—but had it been normal, would the increase have been purchased at the heavy cost of an additional £55 million per annum spent on imported feeding-stuffs, etc.? Or should we have been getting it off the land? I think this increased production, even up to 60 per cent. above the pre-war level, would have been at the cost of the £55 million spent outside the country and an increase in subsidy payments of £50 million.
I hope that the Parliamentary Secretary will forgive me if I do not stay to hear the end of his speech. I have explained my reasons to him, and I apologise for the fact. But I shall read carefully what he has to say in the 20 minutes which he said he wanted in which to reply. In this Price Review I see an admission of failure to increase the net production from the land which, in turn, leads to a failure to block a heavy drain upon hard earned foreign currency. This, in turn, leads to a higher Bank Rate which, in turn, leads to less capital expenditure within the industry. That seems to me to be a vicious circle, from which the Government appear to be doing nothing at all to escape.
§ 3.40 p.m.
§ The Joint Parliamentary Secretary to the Ministry of Agriculture and Fisheries (Mr. G. R. H. Nugent)
I begin by adding my congratulations to those already offered to my hon. Friend the Member for Morecambe and Lonsdale (Sir I. Fraser) upon his good fortune in securing a place in the Ballot and providing for the House a very interesting and worthwhile debate upon agriculture—and also for giving us the opportunity for mentioning some aspects of the Price Review.
A certain number of points have been raised which seem to call for an answer from someone on the Front Bench, and I have therefore taken the opportunity of rising now. I apologise to private Members for taking up part of their time. I start at the point where the hon. Member for Derbyshire, South-East (Mr. Champion) left off. He commented upon the Price Review, and charged us with a failure to meet the basic need of the nation at the present time. He alluded to the declining trend in tillage acreage to the accompaniment of an increased amount of imported feedingstuffs—amounting to some 2 million tons in 901 the last two years—at a cost of about £55 million.
We are naturally very anxious about this trend, and the Review is specifically directed to changing it. It has gone in the opposite direction from that which we had hoped, and we hope and believe that the award which we have now made will go a long way to stopping the trend, and may even reverse it. I should explain that the percentage output is a net figure. Therefore, output which includes the use of more purchased feedingstuffs from abroad would, before it is translated into our figure, have the value of the imported feedingstuffs deducted.
That does not alter the fact that we do not wish to see the importation of an excessive amount of feedingstuffs. In order to put the matter into perspective I should say that slightly over half the increased importation of feedingstuffs is due to the increased livestock population, especially pigs. We are still left with the problem that, last year, we had nearly half a million more acres of grassland at the same time as improving techniques of grass growing, and the livestock population of grass-eating animals was nothing like enough to eat the extra grass. We are driven to the inescapable conclusion referred to by the hon. Member for Chorley (Mr. Kenyon), that a good deal of that grass was not fully used. That is one of the main factors which my right hon. Friend has taken into account in the Review.
We feel that production grants constitute one of the best methods of encouraging farmers to practise the kind of husbandry which we believe to be in their and the national interest. That is why we increased the ploughing-up grant. It will provide an immediate incentive to the individual farmer who is contemplating whether or not to plough up a grassland field. If he knows that he will receive an extra £2 per acre for doing it, he will be more prepared to plough it up and grow either a cereal or root crop, which will be making better use of his land than only partially using it if it had remained in grass.
I should like to make clear to the House that our policy is not to tell the farmer specifically what he should do. All that we are trying to encourage him to do is to make the best use of his land. We can accept, as the hon. Member for 902 Chorley rightly said, that grass is our main crop and the principal wealth of our farm land, and that in many parts of the country grass will be grown more profitably and more economically than cereal crops.
All that we wish to ensure is that when the farmer is growing grass he can make full economic use of it by grazing it on the ground or by conserving it as hay, and more particularly—and let me emphasise this—as silage. We are doing everything in our power to encourage silage making, particularly by the small farmer, because in that way he can better conserve his grass, especially in bad weather, thereby saving a great deal of feedingstuffs, part of which would be imported.
I hope that the House will see that the general line that we have striven to define in the Review is exactly to meet the situation, the picture of which hon. Members have been presenting. At the same time as we have increased the ploughing-up grants, and the fertiliser grant, we have increased the price for cereals—the end price for barley and oats—once again, to give further incentives to farmers who are hesitating whether or not to grow extra cereal crops, and to give them the incentive to get better returns.
We have put further emphasis on the livestock products—cattle and sheer;—part on the end price and part on the calf subsidy, once again, to encourage the production of further grass-eating animals which in due course will produce carcass meat, which is obviously one of our most urgent needs. It is along these broad lines that we wish to see production still expanding. There is obviously scope for it there. World supplies of these particular commodities are limited, and it is along these lines that we can most economically continue to increase our production.
The hon. Member for Derbyshire, South-East made a comment about the Bank Rate. I think that I should remind the House that bank charges, like other costs on farming, are taken into account in the Price Review, and if there is a change in the Bank Rate that will niter the costs to the farmers which will be taken fully into account. I feel that I should make that comment.
A further important point made by the hon. Member for Derbyshire, South- 903 East was on the question of taking into account the bad weather. We fully recognise that it is a dangerous precedent, and that normally the weather is not a factor which is taken into account. The farmer takes the risk of one year with another, good or bad. But I feel that we can distinguish this year from other years.
We have had, in the past season, weather which has been the worst, from the farming point of view for 50 years, and the meteorologists conveniently record this for us. We have seen in the result that the net income of the farmers has fallen, from the previous year, 1953–54, to the year under review, by £40 million—from £320 million to £280 million. That is an enormous drop. What it means, apart altogether from considering the farmers' income, is that a great many farmers in the more difficult parts of the country have simply not sufficient resources to finance all their productive operations in the coming year.
We had to have regard to that, if we were to ensure that the farming community as a whole was to be able to go ahead and produce what we wanted. I believe that the House as a whole recognises that this is a reasonable and practical thing to do, and that we can differentiate our treatment of this year from the years in the future, when normally the weather will be disregarded from this point of view, as it has been before.
Before I finish my reference to the comments made by the hon. Gentleman, perhaps I should say one word also on his remark that Part II of the Act was simply not working at the present time. To some extent, I take that as being a reflection on the work being done by the county committees. The fact is that, although the disciplinary powers of my right hon. Friend and of the county committees are not being operated with the severity that they were in the war years and in the years of shortage, those powers are still there.
They are used in extreme cases, and I can assure the House that the general work of Part II of the Act, and the advisory work of the county committees, is being carried out really vigorously and efficiently. It is largely to that work that 904 we look for the continuing increase in technical progress and of productive efficiency in the industry. I can assure the House that that is in no way flagging.
I will now briefly refer to some of the other points that have been made during the debate. My hon. Friend the Member for North Angus and Mearns (Mr. Thornton-Kemsley) asked a question about a differential subsidy for dehorning. I cannot tell him the decision on that, and can only give him the assurance that no decision has yet been made. It is still under consideration, and we shall bear in mind the possible appearance of Highland cattle without horns.
A point made by several hon. Members was about the need to find means of differentials in connection with production grants so as to direct them to the smaller farmer, who particularly needs them, and not to pay them to the big farmer, who does not need them. That is a subject to which an enormous amount of thought has been given and about which a great number of papers have been written, but as yet nobody has been able to discover a means of administering effectively a differential subsidy.
Nothing would please us better than to find some way of doing that either in regard to the price guarantee or to the production grants. Whatever form of subsidy is given, it must be simple in operation and clear. I am afraid that it has simply not been possible to devise a workable system on those lines.
The hon. Member for Chorley made a point about the need to encourage sheep production. It is our policy to continue to encourage sheep production, although we have had to make some qualification about price, because there is a difference between the price at which we can import lamb and mutton from New Zealand and the price of our own production, although the difference is not very big. However, the subsidy is there for carcass meat, and it is not, as the hon. Gentleman thought, entirely dependent on the wool subsidy. In the past year, the subsidy for carcass meat amounted to some £12 million.
While I am on the subject of the cost of the subsidy, I should like to pick up a point made by the hon. Member for Derbyshire, South-East when he took us to task about our reference last year to the current rate of subsidy as running at 905 £200 million, and to the fact that £250 million has been the current rate. The fact is that those figures were for different years. The reference in the White Paper last year was to 1953–54, and the reference to £250 million this year is to 1954–55, so that the apparent disparity does not exist.
The hon. Member for Sunderland, North (Mr. Willey) gave a brisk commentary on the subject of agricultural marketing. I have not time to deal with all that he said, much as I should like to. He asked what the subsidies were for, and laid a charge that they were clearly not for increasing production. The subsidies are to give stability to the industry and to assure a fair return for farmers and farm workers, in the terms of the 1947 Act. The hon. Member for Derbyshire, South-East confirmed that.
It is still the policy of the Government to look for increased production in certain lines, and particularly in meat and livestock production. We do not see scope for extra production elsewhere unless there can be reduction in costs of production and expansion in consumer demand. The prospect for increased production is still there, and that is one of the purposes of the subsidies. The aim of general policy, which the hon. Member defined as production and market efficiency, we would entirely concur in, although we did not concur in many other things that the hon. Gentleman said. In the past two years we have seen notable progress in both these directions, in very difficult circumstances.
He further charged us that we had no policy in regard to marketing, which had been completely haphazard. That is simply not true. As we have achieved sufficiency of supply in each commodity, both from home-produced and imported sources, we have carefully thought out the best method of marketing so as to rid the people of rationing, and give freedom of choice to the consumer, while 906 maintaining stability of price for the producer. It is a difficult and complicated task, but we have achieved a system that works. The hon. Member produced no idea of an alternative system with any prospect of working. His proposals this afternoon could not work. The experience of the Ministry of Food in meat allocation in the period of rationing has made it plain that it is not possible to have a single buyer for all meat, both home-produced and imported, as the hon. Gentleman's commodity commission would be, and then distribute it, while still giving consumer choice. We should be back again to allocation and rationing.
§ Mr. Willey
I apologise for interrupting the hon. Gentleman because I know the shortness of time remaining, but I must point out that I made no suggestion of taking over wholesaling or retailing.
§ Mr. Nugent
There is no time for us to go into details now. I assure the hon. Gentleman that he is completely wrong. His system could but end in rationing. and is unworkable.
I must bring my remarks to a conclusion. The debate has shown that the Price Review settlement meets the needs of the industry, and puts it in a position to maintain a high and expanding level of output, giving it the best prospect of meeting the national interest and giving full value to producer, consumer and taxpayer.
On behalf of the Government, I have great pleasure in accepting the Motion moved so ably by my hon. Friend the Member for Morecambe and Lonsdale, and seconded equally ably by my hon. Friend the Member for Newbury (Mr. Hurd).
§ Lieut-Colonel Marcus Lipton (Brixton)
Pig producers everywhere will remain profoundly dissatisfied after what the Minister has said—
§ It being Four o'clock, the debate stood adjourned.