§ 10.41 p.m.
§ The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. G. R. H. Nugent)
I beg to move,That the Draft Ploughing Grants Scheme, 1956, a copy of which was laid before this House on 17th May, be approved.By leave of the House, I propose to use the United Kingdom figures, and perhaps, with your permission, Mr. Deputy-Speaker, the two Schemes on the Order Paper can be put separately. In that way it will avoid the confusion which we sometimes get into, when dealing with these schemes, of discussing figures for either England and Wales or for the United Kingdom. The scheme before us relates to England, Wales and Northern Ireland, and the other one to Scotland.
These two Ploughing Grants Schemes propose that the Schemes shall be continued in exactly the same form as in the past year. They provide two rates of grant—£7 per acre for three-year leys and £12 per acre for grassland which has been down since pre-war.
The tillage acreage figures will be relevant, and the House will wish to have them. When we started these Ploughing Grants Schemes at the beginning of 1952, we secured an increase over 1951, from 1951 to 1952 and again to 1953; altogether we had an increase of just under 200,000 acres. We then had a very considerable decrease from 1953 to 1954 and to 1955. Over those two years we dropped from 12.3 million acres to 11.3 million acres in 1955.
We have not yet received the 4th June returns for this year and it is therefore not possible for me to give an accurate picture of the tillage acreage today, but I can give the House a general indication, which shows that the decrease in tillage acreage which had been going on at such a pace in 1953-54-55 has been checked and that there is some upward trend. The best figures which I can give are still those of the March returns, which my right hon. Friend gave recently in the House, but those figures show the forecasts of an extra 100,000 acres for England and Wales. As the hon. Mem- 1190 ber for Hamilton (Mr. T. Fraser) knows. there are no forecast Scottish March returns.
We also have an indication of the applications for ploughing grants. For the 1954–55 Scheme the applications were for 79,000 acres and for the 1955–56 Scheme—that which is now ending—179,000 acres; in other words, there was an increase of 100,000 in the acreage covered by applications. Similarly, there was a small increase in the acreage covered by applications under the £12-an-acre scheme, rising from the 1954–55 figure of 42,400 acres to 44,900 acres in the 1955 scheme. There is thus a reliable indication of a small upward trend in the tillage acreage, and at any rate the downward trend has been checked.
The cost of the 1955–56 scheme—the scheme now ending—is estimated to be £8.5 million, including £420,000 on the £12-an-acre scheme. These figures are necessarily still in estimate form, because we have not yet received all the returns. The estimate for the 1956–57 year—the scheme now before the House—is approximately the same, about £8.5 million.
The Government's policy on tillage remains the same. It is to secure the highest economic acreage of tillage that we can. We set out to do that by the two means of a guaranteed level of prices for the cereal and root crops, which will give farmers a fair return, and, secondly, the ploughing-up grants.
We believe that so long as we provide the farmer with an effective commercial incentive there will be the maximum pressure on him to make the best use of the fields on his farm, to avoid keeping in grass land of which he cannot make use, and to plough up any land where he can do so economically in order to grow crops, thereby benefiting himself by getting greater production from the farm and benefiting the national economy by reducing the need for imports.
In this context, the ploughing subsidy is really a most valuable element. I have always believed in its value. I am certain that it makes a special appeal to the small farmer. I think that all farmers regard it very much as an advance payment. Indeed, if we did not give a 1191 ploughing-up subsidy we should undoubtedly give a higher end price for the crop concerned. But for the small farmer, in particular, who never has an undue amount of money, it is a great help to get £7 an acre more or less at the beginning of the process and perhaps a year or more before he receives the profit from the crop. If he has to employ a contractor, it probably pays most of the contractor's fees, and generally is a big help to him.
I think that the figures which I have given show that we have overcome the downward trend. My own feeling is that the increased rate of subsidy last year of an extra £2 an acre has had quite a material effect in bringing that about and in giving us a small upward trend in tillage acreage. I am reasonably confident that when we get the 4th June returns we shall see that this trend will be confirmed—that we have achieved some increase in tillage acreage. That, I think, will be confirmation to the House that these ploughing subsidy schemes are good value to the national economy and are fulfilling the intention that Parliament originally had in passing the parent Act. Therefore, I ask the House to approve the scheme.
§ 10.48 p.m.
§ Mr. Thomas Fraser (Hamilton)
I must say that I was very glad to see the Joint Under-Secretary of State for Scotland come into the Chamber a minute ago. I was beginning to think that we should have to press the Scottish claim in his absence. A few days ago we had a debate in the Scottish Standing Committee on agriculture, and many hon. Members on the Government side protested very loudly about the inadequate opportunity that they had for discussing Scottish agriculture. One looks in vain for those hon. Members this evening when they have plenty of time—all night if necessary—in which to discuss a matter of great importance to Scottish agriculture. But they have seen fit to be elsewhere. As is not unusual, they prefer to have their complaints rather than take the opportunity available to them to discuss Scottish agriculture in this House.
The Joint Parliamentary Secretary has traced somewhat sketchily the history of the ploughing grants since 1952. He has 1192 shown the movement in the tillage acreage figure, how it went up and how, in the last two years, it has very rapidly come down again. I think that his figures show that we have lost more in the last two years than we gained in the first two years of the ploughing grants under the current Act. In the last two years we have lost over 1 million acres of tillage in the United Kingdom. We have had a drop of 4 per cent. each year.
I have argued on previous occasions that the tillage acreage was going down, that we were in fact losing tillage acreage in precisely those areas in which it was hoped that tillage would be increased under the provisions of the Act. On a previous occasion the Joint Parliamentary Secretary sought to quarrel with me and to say that those grants were of great advantage to the small man, and that the small man on the thin land was the man who was induced to plough more in consequence.
One gets more information about what is happening in Scotland than one gets from south of the border. In the Report of the Department of Agriculture for Scotland for 1955, Table 1, page 16, shows that in 1955 the tillage acreage fell by 64,000 acres, a drop of 4 per cent., which was similar to the drop south of the border. The same table shows that arable acreage has gone down by 32,000 acres and permanent grass acreage has increased by 33,000 acres. That shows that in 1955, compared with 1954, we in Scotland, instead of bringing into tillage permanent grass, as was intended under these grants, lost 33,000 acres of that land. It seems to be fairly clear that the tillage acreage that is being lost is the tillage acreage of the foothills, on the thin land which is the least productive, and that is the tillage acreage which the Government believed would be increased as a result of the grants.
Let us turn to what the then Minister of Agriculture, the right hon. Member for Richmond, Yorks (Sir T. Dugdale), said in 1952 in justification of the Act which makes provision for these grants. The Joint Parliamentary Secretary has given us reasons tonight why we should continue the grants. Let us examine the reasons given by the then Minister for instituting them in the first place. The right hon. Gentleman said: 1193The grant is intended to provide an extra incentive to plough up unproductive, permanent grassland or leys left down for four years or longer, and, therefore, past their peak of productivity, and the urgency of the whole problem will be apparent to hon. Members in all parts of the House who have studied the figures, not only of the fall in the tillage acreage in recent years, but also of the increased pig population during the past 12 months."—[OFFICIAL REPORT, 7th May, 1952; Vol. 500, c. 418.]The Minister was calling attention to the need to provide more coarse grains for animal feeding stuffs. Since then we have increased our imports of coarse grains. We have met with increasing balance of payments difficulties. We have become increasingly dependent upon supplies of animal feeding stuffs from the dollar area and increasingly short of the dollar with which to buy them; and, at the same time, we have seen many thousands of acres of land that could have been producing those coarse grains going back to permanent grass. Yet the Minister's purpose in introducing the scheme in the first place was to rescue for tillage land that was then under permanent grass.
We always find that when a subsidy like this is introduced it has an immediate effect. That happened in 1947, and after the subsidy had run for two years the effect wore off, the farmers disregarded it, and the tillage acreage went back. In 1952, when this subsidy was introduced, it encouraged some additional ploughing for two years, and then the farmers ignored the subsidy and the tillage acreage fell back very steeply. We lost 8 per cent. of our tillage acreage in the two years 1954 and 1955. Now the Minister increases the subsidy from £5 to £7 last year. He says he thinks that he will get an increase in consequence. Of course he will—for two years, and then the tillage acreage will fall back again. Will he then increase the grant from £7 to 10?
This is not the way to deal with this problem. This is no doubt a means of giving an advance payment to some small farmers with small incomes, who can do with a little extra money. But the bulk of this money goes, not to these small men on the thin land. but to the farmers on the best agricultural lands in this country—the men on the regular seven to eight-year rotation, three or four years in grass and three or four in crop. These 1194 are the people who are getting a regular income quite unnecessarily from these ploughing grants.
There is so much to be said in criticism of these grants, and those of us who dislike them would be well justified in voting against them. But we must bear in mind this Report of the Department of Agriculture, from which I quoted, and which has told us that the net income of farmers in Scotland last year fell by no less than 15 per cent. We cannot, therefore, refuse to give our assent to a Statutory Instrument which will at least provide some little income.
It is, however, a great pity that the Minister has not found a better way of encouraging farmers to increase their production. We must, therefore, accept the scheme which is before us, but we beg the Minister to think about this matter again, and to see whether he can find a better way of increasing our tillage acreage and increasing and expanding our agricultural production.
§ 10.59 p.m.
§ The Joint Under-Secretary of State for Scotland (Mr. Niall Macpherson)
I do not think the House would complain at the way in which the hon. Member for Hamilton (Mr. T. Fraser) has expressed his view in this matter. He has indicated his view that there is an initial stimulus there, and that, as my hon. Friend the Joint Parliamentary Secretary has said, the increase in the grant made last year will have an effect this year. That is. at all events, what the Government hope, and that is in line with their policy at the present time. It is not only on the ploughing grants that the Government are relying: they have also increased the grants for oats and barley last year, with effect from this year. So we would hope that with this conjoint effort we shall manage to pull back into tillage some of the land that might otherwise have gone out, and perhaps to get back some that has already gone out of tillage.
Referring to the Report of the Department of Agriculture the hon. Member for Hamilton said that the net income of the Scottish farming community fell last year by 15 per cent. I must correct that. He was referring to the fall in 1954–55. Last year, 1955–56, there was an increase in the net income of £14 million, so that the fall last year was not of the order of 1195 15 per cent., but of 8 per cent. in comparison with 1953–54. We recognise that there was that fall.
The hon. Gentleman's complaint is that the grants are going, not to those who need them most, but to those who would be ploughing up in any case. Of course, there is some truth in that. It is undeniable that some who would be ploughing up anyway will be getting the grant. But the hon. Gentleman contested the impact of the grant on small farmers. Small farmers on marginal land are among those in Scotland who work on a six or seven-year rotation, and all such farmers leave their grass down for three or four years. So we expect small farmers to be among those who would benefit. As my hon. Friend has said, the impact of a grant of this description is greater where the yield of the land is smaller. In other words, it would tend to benefit the marginal rather than the rich land, which will be producing crops of much greater yield per acre. If I may venture to differ from the hon. Gentleman, I would say that to that extent this kind of grant is of particular benefit to the marginal land farmer.
§ Mr. T. Fraser
If we are seeking to benefit the producer who farms marginal land, why do we not merely increase the grant under the marginal agricultural production schemes? We have the power to assist the people on marginal land. Surely, we do not have to give to the rich farmer with the lush land so that 1196 we may be able to do something for the farmer with poor land?
§ Mr. Macpherson
To some extent that meets my point regarding the small farmers, but not altogether. The hon. Gentleman cannot have it both ways. Either this scheme will benefit the small farmers to the extent we think or it will fail to benefit them, as he suggests. I say that it will benefit them to a considerably greater degree than the hon. Gentleman suggests. I would not dispute that it also benefits the farmer on richer land, but he also may allow his tillage to go out of production and down to permanent grass. We are seeking to avoid that happening in the interest of balance of payments above all this year. That is one of our main objectives, and I am glad that hon. Members opposite are not opposing this scheme.
We feel that it is absolutely vital to reverse the process to which the hon. Gentleman has called attention, and to expand the tillage acreage in the present year. For that reason I am glad that this scheme has the approval of the House.
That the Draft Ploughing Grants Scheme, 1956, a copy of which was laid before this House on 17th May, be approved.
§ Draft Agriculture (Ploughing Grants) (Scotland) Scheme, 1956, [copy laid before the House, 17th May], approved. —[Mr. N. Macpherson.]