§ Order for Second Reading read.
§ 3.36 p.m.
The Minister of Agriculture, Fisheries and Food (Mr. Derick Heathcoat Amory)
I beg to move, That the Bill be now read a Second time.
In recent times, at intervals of exactly ten years, it has fallen to the lot of Ministers of Agriculture to introduce a Bill with this title. As the expectation of life of a Minister of Agriculture is rather shorter than that period, I count myself fortunate in having this duty to perform.
I welcome the duty for two other reasons. The first is that it is a Measure which will, I am confident, prove a milestone in the industry's progress towards still higher productivity. In the main, it has been the fruits of some very hard thinking over the past two years, and of intensive discussions with the farmers' unions.
The second reason is that the provisions which we announced in the two White Papers last November—the long-term assurances for agriculture, and the White Paper called "the Pig Industry," have been supported by leaders of the industry and, I believe, have found favour with hon. Members on both sides of the House and, in fact, with most knowledgeable people outside it.
The object of the Bill is to promote the long-term economic efficiency and competitiveness of the industry. It is not a Measure to enable less-successful farmers to stay in business; far less is it a Measure to perpetuate the existing pattern of production. What we want to do, on the contrary, is to encourage sound economic trends and changes and to help the smaller farmer to become economically stronger. So it is with particular confidence that I commend the Bill to the House.
On a rather similar occasion, in 1947, the right hon. Gentleman the Member for Don Valley (Mr. T. Williams) summed up the provisions of the Agriculture Act, 1947, in two words, "stability" and "efficiency." One could apply the same words to the present Bill, which represents the greatest stride forward since the 1947 Act. Part I strengthens and 808 develops, in the light of experience, the measures provided for in Part I of the 1947 Act. The object of those provisions was to provide stability. Incidentally, the fact that we are doing this is surely an effective answer to the claims of some who doubted our declared support for that Measure. Parts II and III of the Bill help the industry to further its steadily improving efficiency. I believe that a reasonable degree of stability is a prerequisite for advances in efficiency.
I now turn to a rather closer look at the provisions of the Bill. The main purpose of Part I is to provide new long-term assurances. It also puts the guarantee arrangements on a permanent basis in place of the temporary provisions of Section 4 of the 1947 Act. In effect, it provides powers which are necessary to support the arrangements in place of the Defence Regulations and wartime legislation which we have been using. It also rewrites Sections 3 to 7 of the Agriculture Act incorporating various amendments and additions to them.
I emphasise that these changes do not weaken, but, on the contrary, strengthen that Act. Hon. Members will recall that in the White Paper which we issued after the Annual Review a year ago we said that each annual review, by its very nature, could not provide assurances for more than a relatively short term and that, if longer-term assurances which would be effective could be devised, that would help the industry in its long-term forward planning. So we discussed possibilities with the leaders of the farmers' unions and the proposals which were evolved as a result of those discussions are now set forth in the Bill.
Clause 2 provides that the guaranteed prices for each commodity shall be maintained at not less than 96 per cent. of the value of that guarantee for the previous year. I want to make it clear that that applies both to crops and livestock and livestock products. For the latter, that is to say, livestock and livestock products, the reductions must not exceed a total of 9 per cent. over any three years. These arrangements replace the forward minimum prices provided for under the 1947 Act, under Section 5 of that Act, which minimum prices applied only to livestock and livestock products. The great advantage of these 809 new assurances is that they will automatically be kept up-to-date, because they relate year by year to the levels prevailing the year before.
Since, under these proposals, farmers will receive effective forward minimum guarantees for crops, it is proposed that the guarantees for crops should be fixed for the next harvest immediately following the annual price review, instead of for the year following that again, as has been the case to date. That will enable us, in fixing these prices, to take account of the latest changes in costs and other factors right up to six or eight months before the harvest to which they will apply. Clause 1 enables that change to be made.
The second assurance we are giving is one applied to the total value of the guarantees and production grants. Clause 3 deals with that and provides that the award following an annual review must maintain the total value of the guarantees and production grants at not less than 97½ per cent. of the value of the preceding year, plus or minus the total of any relevant cost changes, either increases or decreases as the case may be, which have occurred since the preceding annual review. That is an entirely new assurance and will not only reduce the uncertainty which, in a way, is bound to be associated with an annual review, but, in effect, will limit the extent of reductions which can be made for a number of individual products in any one review.
The actual percentages which we have fixed have, of course, their critics. Some have said that they are too big and others that they are too small. This rather confirms my belief that we have got it just about right. In my job as Minister of Agriculture and Food I find that if I get about an equal number of blows from either side, my policy is probably just about right. When one is fixing limits like these, as the farmers' representatives themselves have recognised, there must be scope to enable the Government to take proper account of factors such as production and market requirements, Exchequer liability, increasing efficiency and the trend of net income.
On the other hand, assurances would be worthless if there was no protection against sharp reductions in the guarantees for individual products, or in the total value. So it has been a question 810 of striking the right balance, and I believe—and I shall be interested to know what hon. Members think—that this has just about been done.
Hon. Members will notice that in Clause 8 the Bill provides that the percentages can be varied if, in the light of experience, variation is desirable. Our intention, as we said in the White Paper, is, in consultation with the farmers' unions, to reconsider after the annual review of 1960, whether changes are required. If they are, then the new percentages then decided will not take effect before 1962–63, by which time I expect to be just about getting my second wind.
Clauses 5, 6 and 7 provide powers to support the guarantee arrangements for the protection of the Exchequer. I mentioned that we are still making use of Defence Regulations and wartime legislation and it seems desirable to dispense with those and to base these powers on a permanent Act.
I want briefly to refer to Clause 10. By putting these arrangements on a permanent basis, we pave the way for the repeal of several earlier Acts, and so we are bringing to art end the Livestock Industry Act, 1937, Parts I to III of the Agricultural Development Act, 1939, which was brought in just before the war, but which hardly, if at all, came into effect, and the Wheat Acts, 1932 to 1940.
I want now to turn to Part II of the Bill, dealing with the farm improvement scheme, which is a rather stimulating project. Our intentions have been made known in the White Paper and in subsequent statements. During the past ten years a revolution in agricultural techniques has spread over the industry. During that period, resulting from that process I think, net output has increased 28 per cent., with a reduced labour force. There have been tremendous advances in both fundamental knowledge and technical methods. I believe that those improvements have been considerably helped forward by the Government's production grants which we have paid to the industry, which have more than doubled over the past five years and which are now running at over £70 million a year.
There have been some grants for long-term improvements, but no general incentive, such as we are providing here, for the modernisation of fixed equipment to 811 match the modernisation of methods which has taken place. We are now trying to carry out twentieth century farming with nineteenth or eighteenth, or, in some cases, seventeenth century fixed equipment. I do not suggest that there is any shortage of fixed equipment in the industry, but there are tens of thousands of farms which are laid out and equipped to meet conditions which have long since passed away. Today, agriculture is a modern, technical industry and it needs up-to-date equipment and modern tools if it is to make the best of its job.
The larger owner is helped by tax allowances on the capital improvements he makes, but these are not very helpful to the small owners. The direct grants we are now proposing should he particularly helpful to this category. There are many owners in that category who, with the best will in the world, are unable, without some special help, to provide the improved equipment which ought to be provided. Without that equipment the farmer is seriously handicapped today in achieving the greater efficiency and reduction in working costs which are needed.
The taxpayer is concerned here because the modernised equipment will, in the long term, affect the support the industry needs through price guarantees. These grants should be a good investment for the taxpayer as well as being a good thing for the owners and occupiers.
I wish that replanning farm boundaries were as straightforward an improvement as putting up new buildings; but here we are helping as far as we can through the provisions of Clauses 16 and 17, to which I shall refer in a few moments. The actual list showing the kind of improvements we want to help with is given in the Second Schedule and includes the main permanent items which are not covered by other schemes.
The definition of "agriculture" here includes horticulture, and many horticultural buildings will qualify for grant. For example, we shall hope to assist with general buildings on horticultural holdings like stores and packing sheds comparable to the kind of buildings on agricultural units generally; but we cannot see our way to assisting specialised horticultural equipment such as glasshouses, heating equipment and things like 812 that, or apart from the shell of buildings in which they are housed, gas or cold stores.
I will explain very briefly the general limitations on the power of approval for applications which are mentioned in Clause 12. These are very important. First, the farms must be equipped units which either are economic or can become economic as the result of the improvement proposed. As we do in the Livestock Rearing Acts, we must exclude units which cannot be made economic. All our sympathies will be with the owners and occupiers of those units, but it would, I am sure, be thoroughly wrong to perpetuate units by providing new permanent equipment for them, when, at the end of the day, they will remain uneconomic. We have certain proposals to help uneconomic units on the positive side, which I shall come to shortly.
Secondly, the improvements must give a reasonable return on the cost and be the kind of improvements which a prudent landlord, having regard to the cost of them, would be willing to make. We must remember that this scheme is a long-term measure to assist improvements which ought to be of lasting value and, therefore, must be irrespective of any changes in the occupation of a holding.
On the question of the actual administrative arrangements for England and Wales, there are but two things which I ought to mention here. I have asked the industry and the professions to be good enough to nominate members to an advisory committee to help me in working out the details of the scheme. My noble Friend, Lord St. Aldwyn, the Joint Parliamentary Secretary, will be chairman of that committee, which will, I am sure, give us much practical help and useful guidance. Locally, the operation of the scheme will fall on the divisional executive offices, advised by the Agricultural Land Service and the National Agricultural Advisory Service in the handling of applications; and they will be assisted by the advice of the county agricultural executive committees.
The Bill provides that application may be received within ten years from the date when the Act becomes operative, which, we hope, will be 1st September; or by Order, and with the approval of Parliament, that ten-year period can be extended to twelve years. I have been 813 pressed very hard during the last month or two to make the grants retrospective. I do not underestimate the difficulties which the deferment of this work for a few months will cause some small country builders, but on looking at it very carefully—and I have looked into it very carefully indeed—I am convinced that retrospection, in a major Measure of this kind, is not right. There was some criticism when I asked the House some months ago to agree to a measure of retrospection in the Agriculture (Silo Subsidies) Bill, but that was a relatively small Measure involving a relatively small sum.
To ensure that the scheme shall get off to a good start, we are proposing that from 1st May, probably, we shall invite provisional proposals. We shall then be able to have those proposals inspected and discussed from the technical standpoint, and record the particulars. Then, if the Royal Assent is given to the Bill before the Summer Recess, from 1st September we shall he able to approve those formal applications very quickly indeed. I am very anxious that we should get the scheme going with the absolute minimum of delay, but it is very important, with a long-term scheme like this, that we should start off on the right foot.
Clause 13 states that the grant will be normally at a flat rate at one-third of the reasonable cost. It has been represented that the small owner, in some cases, will have difficulty in raising the other two-thirds, and I have no doubt that that will be so in some cases. I am glad to say that the Agricultural Mortgage Corporation and the Lands Improvement Company, with whom we have been in touch, have assured us that they will be ready and keen to give all the help they can, and that they are going to streamline and simplify their procedure as far as they can. I may be asked why we do not restrict the improvement grants to those with limited financial means. The answer, in brief, is that the prime object of these grants is to promote the really economic improvements, and encourage efficiency, not primarily in the interests of any particular section, but in those of the nation as a whole.
I have already said that we cannot give grants to farms that are not economic units, but we do want to encourage the 814 regrouping into a smaller number of economic holdings of farms which are really themselves too small to be economic, and Clause 16 provides some practical help there. Individual owners, I hope, will seek this remedy themselves in appropriate cases, and we are certainly taking no power whatever to compel amalgamation in any form. By grants of one-third of what I may describe as special ancillary costs, including legal and surveying fees, compensation for disturbance and things like that, we propose to encourage and help forward amalgamation in appropriate cases.
Clause 18 is the financial Clause, and states that the grants will be 33⅓ per cent. We estimate the cost at about £50 million for ten years. For constitutional reasons, we thought it desirable to put this figure in the Bill, though it is necessarily a very speculative figure. We worked it out rather like this. We estimate that, without any grants, the work of the kind covered by these schemes is running at about £8 million a year at present, excluding work of a kind already aided under other schemes. We believe that with a stimulus of this sort, the flow might be doubled, say, £15 million, of which £5 million would represent the cost of the grant.
We are now asking Parliament to authorise an expenditure up to £50 million for ten years, and to give us the power to increase that sum to £55 million, if the estimates prove too low. If the expenditure seems likely to exceed that figure, we shall have to look at the question afresh when the time comes. If, on the other hand, the volume of work is less than we estimate, we are taking power to extend the period from ten to twelve years.
I cannot give a definite undertaking as far as ten years ahead that never, in any circumstances, will there have to be a limitation of this expenditure. The Government must retain freedom of action there, but I hope that we shall avoid any form of limitation and be able to allow the scheme free play and permit grant-aided improvements to go forward without restraint.
§ Mr. Frederic Peart (Workington)
I should like to ask the Minister a question, though this may be a Committee point. Will the amalgamation aspect which the right hon. Gentleman has mentioned in 815 any way prejudice the operation of Section 87 of the 1947 Act, which gives the Minister power to take the initiative to amalgamate farms and make them into economic units?
It will not affect the statutory powers. As I think the hon. Gentleman knows, we are making very little use of that particular section at the moment, but it will remain in the Act.
May I now mention briefly Part III of this Bill? I apologise for having to go through it in rather humdrum fashion, but we are really dealing in it with three or four entirely different subjects. Part III deals with the development of the pig industry, and it gives effect to the policy which we announced last November as the result of two Reports on pigs—the Report of the Advisory Committee on the Development of Pig Production and that of the Re-organisation Commission for Pigs and Bacon. It gives effect to the recommendations of the Commission for setting up a Pig Industry Development Authority. Its responsibilities will cover technical developments in the whole field of pig production, processing and distribution, and I am assured that all sections of the industry approve of this proposal. I hope that the House will also give it its undivided support.
The constitution of the Authority differs a little from the recommendation of the Commission. One of the two seats for agricultural workers we have allotted to the workers in the processing and distributive trades, and to the pedigree breeders we have given two seats instead of one. The membership of the Authority will be 17. Anything bigger than that, I think, would have been too large and cumbersome.
The 17 members will consist of 14 farming and trade members, appointed after consultation with various sections of the industry, and three independent members who will come from other industries or other walks of life and will hold the ring, as it were, where the interests of different sections of the industry might clash, and will also, I am sure, introduce some fresh ideas and techniques of their own.
I should make it clear that the Authority will not be financed from public 816 funds. Clauses 25 and 26 of the Bill enable the industry to draw up a scheme for imposing a charge on persons working in the industry. The scheme will require the approval of the Secretary of State for Scotland and myself, and will be laid before Parliament. We decided that it will be better to proceed in that way rather than write the actual levy scheme into the Bill itself. It will enable the Authority, which will have to work the scheme, to have a major say in its preparation, and, secondly, allow more time for consultation with the industry as to the precise form which it will take.
The Authority will be given a good deal of latitude in drawing up the scheme, but I think it will follow the Commission's recommendation—that the levy should be imposed at the point of slaughter. That seems to be the only practicable method. The industry may want an income of £500,000 a year, and that would represent a levy of 1s. per pig slaughtered.
The Authority is to be empowered to develop an artificial insemination service for pigs, but it would be uneconomic to duplicate the existing network of centres for the artificial insemination of cattle. Most of these are operated by the Milk Marketing Boards, which have at present no power to operate a service for pigs, and so Clause 29 gives the Boards that power.
Clause 30 deals with the dissolution of the old Pigs and Bacon Marketing Boards and the Bacon Development Board, and repeals pre-war legislation on pig marketing. I should like to take this opportunity of paying a tribute to the public-spirited way in which the members of these Boards have served the pig industry during a memorable period in its development.
Lastly, I ought to refer to Part IV of the Bill. I think that there is only one point here, and it is that Clause 32 provides for the payment of an annual grant to Northern Ireland. When Government purchases of foodstuffs ended, three years ago, the Government recognised the peculiar disadvantage of farmers of Northern Ireland in finding themselves in difficulties due to their remoteness from the main market in Great Britain. As partial compensation for that, special grants were made available to Northern Ireland through a financial adjustment between 817 the two Governments, and these grants, for the last three years, have averaged just over £1 million a year.
Now, we are proposing to fix these grants for a period ahead, and to include them on the Vote of my Department. This will enable the Minister of Agriculture in Northern Ireland to introduce schemes under this arrangement in confidence that the money will be available for some years. And so for the next five years we are providing for grants which will average £1 million a year and we are making provision so that the arrangements can be extended by Order at any specified rate for further periods of up to five years at a time. The Government of Northern Ireland have cordially agreed these new proposals.
I hope that in this outline I have been able to present a sufficiently clear picture of the purposes we have had in mind in bringing forward the Bill and the means by which we aim to achieve those ideas. I stress again that our proposals will be no departure whatever from established policy but, on the contrary, will buttress and expand that policy.
We are seeking, through the Bill, to improve the guarantee arrangements so that farmers will be able to plan ahead in confidence and to assist the industry to reduce its working costs through modernisation of farm buildings and fixed equipment, and to encourage through the establishment of the Authority the technical development of the pig industry.
I believe that the Bill is a bold, forward-looking and imaginative Measure which reflects the confidence that the Government feel in the long-term future of British agriculture. These provisions are a logical development of the Agriculture Act, 1947, which, with the support of all parties, has for the last ten years been the statutory instrument through which the national support for agriculture has been provided. It reinforces the original principles of that Act and ensures that they shall be applied in tune with the times.
Which way has agriculture now to go from here? I have constantly said, and probably shall constantly say it again, because I really believe it to be true, that agricultural development must concentrate on ever-improved efficiency and reducing unit costs of production. We 818 have got to exploit by every possible means the improved techniques that every day are coming to our assistance. To enable them to do that, farmers must have two things: confidence and capital. It is because I believe that the Bill will make a practical and decisive contribution to both those needs that I confidently ask the House to support it.
§ 4.13 p.m.
§ Mr. Thomas Williams (Don Valley)
It may ease the mind of the Minister if I say straight away that this is the sort of Bill that we should find it extremely difficult to oppose, especially if it is likely to achieve what the right hon. Gentleman claims for it—greater confidence based on long-term guarantees, improved farm equipment and greater efficiency in pig production.
It is, indeed, a refreshing change to find a Conservative Government dealing with one or two long-term, basic agricultural problems—and I speak with some little experience. Whether it is the result of a belated realisation of the value of agriculture in our national economy, a deluge of votes of no confidence last year, or Bournemouth badgering or "by-electionitis," anybody's guess is as good as mine. The new approach is, however, none the less welcome.
Despite all their protestations over the past five and a half years, the Government have never been too sure about their agricultural policy. They have contented themselves with "setting the people free," the exploiter and exploited alike, restoring their beloved law of supply and demand and imposing duties on imported food. They have had their rock 'n' roll escapade and they have extended a series of production grants and Acts of Parliament which were thought out and applied before the Conservative Party came into office, except in the case of silos and a few other odds and ends. Basically, there has been nothing new on a long-term basis or fundamentally until this Bill, so I am prepared almost to congratulate the right hon. Gentleman on making a start after five and a half years.
That is not surprising, because the Conservative Government have been torn with the tantalising conflict between their own doctrinaire theories and the new approach to agriculture as represented by 819 the 1947 Act. In the midst of their doubts and anxieties, they have repeatedly upset the confidence of the industry and, on occasions, they have helped to upset the balance, from which both the industry and the Treasury today are suffering. I need mention only milk, eggs and pigs.
Instead of concentrating on long and short-term economic production, far too many farmers, in what they thought was a world of uncertainty, have sought security in milk and eggs, which are now proving a great embarrassment to both the Treasury and to representatives of the industry. It is all too reminiscent of the 'twenties and thirties—except when you were Minister, Mr. Speaker. We have had quite a good deal of piecemeal legislation but no central theme around which long-term planning could be the central theme. There is, however, the difference that lurking in the background since the war was the 1947 Act, which could not be wholly ignored.
If anyone doubts what I have just been saying, he should look at the Fourth Schedule to the Bill. There, it will be found that most of the agricultural legislation passed during the fifteen years of Conservative Government between 1922 and 1940 are to be repealed as either obsolete or useless in modern circumstances.
However, if the Government have been slow to learn, that is no reason why we should not welcome their advance and particularly their belated realisation that after two world wars the situation here, in particular, has changed dramatically and that what was good enough for their grandparents is no longer good enough for this or, indeed, future generations. I certainly agree with the right hon. Gentleman that the need for a virile, well-balanced and efficient agriculture was never greater than it is today. The Chancellor of the Exchequer would be the first to testify to that. If the Bill is a contribution to that end—and I think it could be—so much the better. We are willing to give it a trial.
Before dealing with Parts I, II and III, I should like to say a word or two about the Sections which are to be repealed and about Section 1 of the 1947 Act, which is to be retained. This is very interesting, if only to me. Not only 820 the eggs, but the chickens, seem to have come home to roost good and proper. This denotes a complete somersault on the part of the Conservative Party, who, in Standing Committee, voted solidly against Clause 1 of the 1947 Bill. To a man, they were against any limitation of production of any sort or kind. I could quote many hon. Members opposite. I exclude the Minister from all this, since he was not in the House. He is, therefore, utterly blameless, as usual. [HON. MEMBERS: "He was in the House."] If he was, he was not a Member of the Standing Committee, so he is blameless all the same.
I shall content myself with just one quotation. I quote the hon. Member for Newbury (Mr. Hurd), who led the band and who is, of course, Chairman of the Conservative Party Agricultural Committee. During the course of his speech on Clause 1, he said, among other things:It is with real regret … that I shall have to vote against this Clause … it is … a mere snare and delusion ….—[OFFICIAL REPORT, Standing Committee A. 13th February, 1947; c. 69–70.]What a snare and a delusion!
Hon. Members heard the Minister say, last Thursday, that we do not want any more milk, eggs, pigs or wheat. So now the Government want limitation of output, and to get it they retain the Clause of the 1947 Bill that they voted against. I am not blaming them. I am only reminding them that despite the snare and delusion, output, which was about £600 million worth in 1947, had increased by 1956 to £1,300 million worth. Yet it has taken right hon. and hon. Gentlemen opposite ten years to come to the penitents' form, and even now they have only crept there on hands and knees.
I should like to say "Thank you" to the Minister for the very clear, lucid White Paper, Cmd. 23. Whether one agrees with the proposals or not, one can do no less than express appreciation for the clarity of that document. What could have been a highly complicated mathematical Chinese puzzle to the man in the street or on the farm has been simplified by the examples given. It helps hon. Gentlemen to understand the Bill so much more easily, and we are very grateful for that.
821 The Title of the Bill says that the Bill isTo make further provision for guaranteed prices and assured markets for producers of agricultural produce in the United Kingdom …Clause 1 (1), however, reads:The Minister may by order make such provision as appears to him to be expedient for providing guaranteed prices or assured markets for producers of produce described in the First Schedule to this Act.The Minister "may" make an Order providing for guaranteed prices or assured markets. My knowledge of the English language is purely fragmentary and it is so easy for me to go wrong, but in my village innocence I always thought that the word "may" meant may and was permissive; and that "shall" meant shall and was mandatory. The Minister himself seems to be in some doubt about this. If "may" means what I think it means the Minister can either bring in Orders to provide for assured markets and guaranteed prices or refrain from doing so, and that would be the end of assured markets and guaranteed prices.
The Bill adds weight to my fears. In Clause 1 (3), in Clause 2 (1), (2) and (3), and in Clause 9 (1) and (2) the word "shall" predominates. If the word "shall" is so important in all those subsections, why is the word "shall" not used in Clause 1 (1), where it would be the most important "shall" of all?
Instead, we have this very English word "may" which looks to me like Ministerial discretion. Probably we shall be told that the word "may" means "shall" but "shall" does not mean "may". It is all very confusing to those of us who have not delved into language so deeply. Perhaps the right hon. Gentleman or the Joint Parliamentary Secretary will tell us whether the word "may" means "shall" or "may" and whether we are here or there, or just where we are.
§ Mr. Williams
If "may", in Clause 1, is equivalent to "may" we shall still be in very grave doubt.
I am pleased to see that Section 2 of the 1947 Act remains. The hon. Gentleman the Member for East Aberdeenshire 822 (Sir R. Boothby), questioning the Minister on Thursday of last week, invited the right hon. Gentleman to get away, if possible, from what he called… annual bouts of horse trading between his Department and the National Farmers' Unions…."—[OFFCIAL REPORT, 21st March, 1957 Vol. 567, c. 562.]I see that The Times used the same language on Friday in its leader, with some inaccuracies of which The Times ought not to be guilty. I should like to know what The Times and the hon. Member for East Aberdeenshire really want if they want to dispose of what they call these "annual bouts of horse trading." Would they like to go back to weekly horse trading in markets all over the country for 200,000 or 300,000 farmers?
It is not my intention to dwell upon the various guarantees dealt with in Clauses 2 and 3, or, indeed, upon the percentages which replace the guarantees of Section 5 of the 1947 Act as regards cereals, livestock and livestock products. We have noted the enthusiastic reception that these new proposals have received from producers. Of course, that always makes a very good start. If we do not share their enthusiasm to the full it is because we prefer to wait and see how the new guarantees are administered, for experience alone will determine whether these new guarantees are more solid and sound than their predecessors, under which prices have had to be fixed from two to four years ahead.
I am sure that they have to some extent been unrealistic, and the reason is not far to seek. Both Governments, I make that concession readily, made the mistake of anticipating a fall in the price of feedingstuffs and in other costs as we got farther from the end of the war. That has not materialised, and every reasonable calculation has been falsified as a result. As I understand, thanks to increased costs year by year farmers have been under-recouped by an average of between £12 million and £13 million per annum between 1949 and 1956. Under the new guarantees for producers they escape with a modest £24 million or £25 million, and the Treasury must carry another £14 million.
I assume that the right hon. Gentleman's figure of £25 million for the value of increased efficiency includes increased 823 production. I should hardly think that exclusively on the basis of increased efficiency the value would reach £25 million a year. I hope it does, but I doubt it. I think that over a period we have thought in terms of increased efficiency plus increased productivity. If that is the case, since we do not want any more milk, eggs, pigs, or wheat, unless some other production increases very materially there will be a genuine problem next February and March.
That reminds me of something I mentioned on Thursday. With the exception of 1954 there has been an increase in costs, varying from £16 million to £75 million, every year since 1949. We can all readily understand why wages have had to go up and why rents have had to go up in many cases, but I think that the time has now come when other increases, all of them, should be carefully and thoroughly examined, for some of us cannot resist the thought that somebody somewhere is doing well out of both the industry and the Treasury.
I want to touch on Clause 8, to which the right hon. Gentleman referred. Subsection (2) says:The Ministers may by order amend any one or more of the following enactments, that is to say subsection (1) and subsection (2) of section two and subsection (I) of section three of this Act, by substituting for the percentage specified in that enactment such other percentage as may be specified in the order.It seems to me an extraordinary procedure to give long-term guarantees in Clauses 2 and 3 and then to take power in the same Bill to vary them without notice or consultation. I know that this is referred to in paragraph 18 of Cmd. 23, "Long-Term Assurances for Agriculture." The right hon. Gentleman's intention is certainly made clear there, but a White Paper is not an Act of Parliament and there is no reference to a year's notice in the Bill. There is no reference to 1960 or 1962. Therefore, as the Bill stands, despite the White Paper, a variation could be made in 1958 or 1959.
Nobody doubts the right hon. Gentleman's good intentions. Certainly, I do not, but the Minister may not be in office in 1958 or 1959, or his Government may not be in office. It would be a scandal if they were, anyhow. But we know that Sections 3 to 7 of the Agriculture Act, 1947, will have gone when the Bill is 824 passed and the long-term guarantees can be varied by an Order and not by a Bill which calls for a Second Reading, Commitee, Report and Third Reading. This would leave the producers high and dry.
It seems extraordinary that the right hon. Gentleman should rely entirely on paragraph 18 of the White Paper without having made it clear in the Bill that these variations could not take place until 1960, and only after a year's notice has been given, which would provide any Government or Minister with time to consult with producers about the percentage rate. I hope that between now and the committee stage of the Bill the right hon. Gentleman will consider what all this means. I cannot believe that he would desire to leave the Bill as it is when a variation could take place either in 1958 or 1959 if the wrong Minister or the wrong Government, whichever Government that happened to be, were in office.
As to Part II—" Grants for Farm Improvements and Amalgamations "—we on this side of the House welcome the scheme. I would remind the doubting Thomases that the industry has just been called upon to carry £24 million to £25 million a year extra costs because of alleged increased efficiency. If there had not been a right approach to agriculture in 1947, through the Hill Farming Act and the Livestock Rearing Acts, the industry would not have been able to carry extra loads of that description. Those Acts have been immensely successful and I see no reason why the provision in this part of the Bill should not be equally popular.
Many farm buildings and layouts are out-of-date and hopelessly inadequate for modern requirements. This is thanks to the long period of depression between the 1920s and the 1930s and the lack of building during the war, for reasons which we all understand. Therefore, to talk about efficiency on such farms where buildings are still hopelessly inadequate is just the result of wishful thinking.
I suppose that success or failure will be determined by two factors—the ability or willingness of the owner or tenant, or both, to find the 66⅔ per cent. of the cost of improvements and of administration. The tragedy is that the Government's dear money policy means that, with a 33⅓ per cent. grant and paying double the rate of interest on the 825 remainder, the owner or tenant will be no better off than if he had paid the lot years ago, when interest rates were lower. Now the chief beneficiary will be the money lender.
I hope that those who are in charge of administration will use their inffuence to secure amalgamations and revisions of farm boundaries although, if past experience is any guide, I am not very optimistic. Power was taken in the 1947 Act to promote three experimental schemes for adjusting farm boundaries, exclusively to help farmers. I regret to say that we received no support from the farmers, the owners or, indeed, the National Farmers' Union. I hope that this will be borne in mind by those who are charged with the administration of the grants. While we are all in favour of helping farmers to become more efficient and competitive, which is paying dividends, we are unwilling to subsidise gross inefficiency on farms that are fragmented all over the place. I entirely agree with the conditions in Clause 13 (3).
As to Part I think that we all welcome wholeheartedly the setting up of a Pig Industry Development Authority. It is a pity that it could not have been set up twenty-five years ago. There can be no doubt about the need of such a body today and I hope that no time will be lost in setting up the Authority once the Bill has been passed. if all the functions outlined in Schedule 3 and Clause 29 are tackled, it should be only a question of time before we can compete with the best on the Continent in pig production, and the Minister will qualify as public enemy No. 1 with every sow and gilt in the country. But I am still of the opinion that something will have to be done about marketing if we are to achieve anything like stability in this important field. In spite of the Commission's conclusions, I hope that the National Farmers' Union will take up the challenge and proceed to complete the job.
In conclusion, I should like to recall the broadcast I heard on Saturday night by the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke), whom I am sorry not to see in his place. Quite properly, he extolled the virtues of the Minister of Agriculture, and I entirely agree with him, but he then went on to 826 lay claim to wonderful achievements in agricultuure by the Conservative Administration. It prompts me to repeat what I said on a previous occasion in the House, although I can never hope to catch up with this wireless talk. I said then that no Government ever inherited a more comprehensive agricultural policy than did the Conservative Government of 1951. Six major Measures were on the Statute Book, all basic and fundamental, including Acts dealing with drainage, agricultural marketing, hill farming, and livestock rearing, and the Agriculture Act, 1947, not one of which was passed by a Conservative Government. All were passed by Labour Governments and all were necessary if we were to make the best use of our limited acres and achieve maximum efficiency in production and distribution.
How could any Government prevent increased production with that foundation so well and truly laid by a party other than the Government themselves? They could not have failed in terms of production. As the right hon. Gentleman said today, we have made enormous progress over the past ten years. Of course we have— because the right policy and the right approach was made by the then Government. I regard this Bill as a supplementary but basic and useful Measure, and, subject to my comments on Clauses 1 and 8, even if we seek to improve the Bill in Committee, I can guarantee to the Minister that there will not be any attempt to delay its passage.
§ 4.40 p.m.
§ Mr. Marcus Kimball (Gainsborough)
It is some thirty-two years since the Member for the Gainsborough Division of Lincolnshire has had to crave the indulgence of this House. Certainly my noble and gallant predecessor never sought any concessions in debate, as hon. Gentlemen opposite may well remember. Yet he did once ask indulgence, as I must now ask the House again to be tolerant if the arguments in a maiden speech are not quite as lucid as I should like them to be.
In considering any Bill connected with the agricultural industry we must take great care that we in this generation do not call upon ourselves the verdict which that great historian, the Master of Trinity, Professor Trevelyan, was forced to pass 827 on our Victorian predecessors. He said they were… men of theory who failed to perceive that agriculture was not merely one industry among many but a way of life—unique and irreplaceable in its human and spiritual values.I am privileged to represent in this House one division of the foremost agricultural county in the Kingdom. My division is made up not only of the great arable farms which are normally associated with the cornlands of Lincolnshire, but also of some very small farms, some still on the open field system. They are on the rich fenland that was stolen from the marshes at the mouth of the River Trent. The division stretches away eastward until it comes to the Lincolnshire Wolds which run from the Humber right down to the Wash. On the Wolds are some of the largest farms to be found in this Kingdom. Throughout the division there is that very excellent balance between the interests of town and country which is so essential. The principal industry in the town of Gainsborough is the manufacture of agricultural machinery, which is thriving on the ready market that it has found in the fields at the factory doorstep.
Many hon. Members of this House are worried about the plight of the small farmer, but I think we must take great care to ensure that our concern for the small farmer does not blind us to the tremendously important part played by the really large farmers. They are the people who are able to farm beyond the bounds of keeping ordinary commercial cattle and who can keep alive our breeding of pedigree stock, which is so important to our export trade as well as being so important to the husbandry of the small men. The really large farmers are still able to give a great deal of employment throughout the whole of the countryside. On some of the very big farms the housing and the conditions of work are far better than anything which can be found elsewhere in the country, and they are a model for the rest of the industry.
In country life today the big farmers now share the burden that was once borne by the squire and the landlord. But if the lot of the yeomen farmers is today the envy of people who are less well-placed, let us always remember that 828 they have not failed to shoulder the responsibilities of their new position.
There has been in the Press and elsewhere a certain unfounded criticism of the second Clause of this Bill which provides the one-third grant towards the cost of repairs and new equipment on a farm. It has been said that this benefits the small man rather than the big man. Anybody who is familiar with farm accounts will realise that under Section 314 of the recent Income Tax Act the big farmer is able to write off his capital improvements against any tax on his profits over a period of ten years, but hardship has arisen for the small man whose profit has not been enough to allow him to benefit from this concession.
The grant goes a long way towards helping to solve this problem because the farmer will draw one-third of the cost, being left with only two-thirds to write off over a period of ten years. In this grant, there is the very welcome addition, through the very ingenious device of my right hon. Friend, which will be welcomed by many small farmers, by which their own labour can, in some cases, count towards the total cost, which will then be assessed for the grant.
This grant also goes a long way towards meeting the demand for new capital within the industry, of which we are all aware, and it does so in the way most economical to the taxpayer, since it will be paid only on the receipted account. Therefore, if the farmer has to pay the bill first out of his own pocket that will dispose of any possible tendency on the part of the building contractor to add the grant to the estimated cost.
I am sorry that the grant is not linked, as in the case of the Hill Farming and Livestock Rearing Acts, to a fully comprehensive scheme and the necessity to prove increased production, but only to the question of whether the farm is economic. I should like to believe that it is owing to the great success of those Acts that my right hon. Friend has been able to dispense with the hill sheep subsidy this year, because of the increase in productivity in our marginal and hill farms. We must never forget that the ultimate aim of all capital grants is to increase the productivity of our farms and to help to reduce the annual subsidy bill.
We have heard a lot already in this debate about the need for ever-increasing 829 efficiency within the industry, and I am sorry that somebody has not linked that with mention of the problem of agricultural wages. We shall not get increased efficiency and increased productivity unless we can produce a still better technical education for our farmers and farm-workers. Here I want to pay tribute to the great work that is being done by the farm institutes and technical colleges and, to a certain degree, by the agricultural apprenticeship schemes for farm-workers, but this in itself is not good enough. We have to work into the agricultural wages structure some real incentive to young people to attend these colleges and then go on into the industry.
I am not advocating a system of differential wages. What I am advocating is to write into the agricultural wages structure a starting wage for a young man who has qualified at one of these colleges which will be well above the present minimum wage which is laid down for the industry. I think we ought to be honest and admit that the present wage structure is a trifle out of date because I believe that the only way to get increased productivity is to have really well-educated, highly skilled farm-workers, who can make the best use of the wonderful agricultural machinery now being made available to farmers.
We have just had a realistic and fair Price Review based on the principles laid down in the Bill. It is realistic because, in view of the national economic problem with which we are now faced, the industry has to carry an extra £25 million of production costs. Many hon. Members will have welcomed the sound and responsible letter in The Times this morning from the President of the National Farmers' Union. I hope that the same good sense displayed in that letter will be passed on to all the county branches of the N.F.U. since that would go a long way towards giving us far better publicity for the farming industry.
It is a fair Price Review, particularly when we look at it against the background of international affairs. There is a great tendency to forget the "old unhappy far off things and battles long ago," and the time when one ounce of food from an English shire was worth a ton imported from abroad. Yet that is still true today, provided that it is not produced by the lavish use of imported feedingstuffs.
830 We have a battle today not with the U-boats but of the £ sterling, and the contest will go on not just for my generation but for the generation that will follow this one. It is essentially an economic battle in which uneconomic production has no part to play. So I feel that we must look to the future of British farming in the high classical tradition of British agriculture, namely, the best quality product from the most suitable land.
The Bill lays down a basis for long-term forward planning within the industry. It is the charter for hope, prosperity and happiness for the generations that are to come in the countryside. The Bill lays down a policy which, in the words of the motto of the principal town which lends its name to my division, is:For the gain of all.
§ 4.50 p.m.
§ Mr. E. G. Gooch (Norfolk, North)
It is my pleasure, first, to offer—I think that I am expressing the feeling of all hon. Members present—the congratulations of the House to the hon. Member for Gainsborough (Mr. Kimball) upon his maiden speech. There was much in his speech with which I agreed, although when it comes to the question of a wages structure for the agricultural industry perhaps he and I had better get together and think it over a little further. He comes from a great agricultural county, not as great as mine, but, still, a great county. The hon. Member's interest in farming has been revealed by his speech and I hope that he will make many more useful contributions to our debates.
In considering a Bill of this kind there is a tendency to apply two tests. The first is, "Will it serve the best interests of the industry?" The second is, "Will it make a contribution to the welfare of the State?" My connection with the organised farm workers over a period of years is well known, and I make no apology for applying a third test, which may appear to be a selfish one. The third test that I have to apply to the Bill is, "Will it prove of assistance to workers in the industry?"
I recall the many days hon. Members devoted in Committee to the Agriculture Act, 1947, when a most valuable Measure emerged. There has been a good deal of undermining of the 1947 Act in recent 831 years, and it has in itself resulted in a lack of confidence in the future of the industry. In my opinion, the blame for this rests fairly and squarely on the shoulders of the present Government. To the extent to which the Bill will restore confidence and serve the best interests of British farming, support for it will not be lacking, but it would be quite wrong to assume that the Bill meets with the full approval of all hon. Members or of all those who are engaged in the farming industry.
I wish to make a few general observations on certain aspects of the Bill. In the working out of the farm improvement scheme, those who will benefit most would appear to be the large owner-occupiers, and I doubt whether the small men in farming will reap any great advantage.
The idea is entertained of merging and regrouping uneconomic holdings. Linked with this at one time was the writing off of part-time small holders. We have tried this before, and it did not work, and I do not think that it will work in the future. An earlier attempt was made to stop the creation of further part-time holdings—in other words, to aim at the grouping of holdings—but it failed because of the hostility of those who had made a success of their holdings.
It is clearly the intention of the Government gradually to reduce State support for the industry, and, in the long run, British farmers will be expected to compete with low farm prices abroad. I suggest that if the Government reduce the total value of the guarantees by 2½ per cent., as the new assurances allow, the incomes of farmers could be reduced by £29 million in the next 12 months.
I see that the National Farmers' Union has generously conceded the point that the recent Price Review represents more than the Government's minimum commitment under the long-term assurances, but it is pointed out, at the same time, that out of their own pockets farmers will still have to meet on the Review commodities about £25 million in increased costs which the Review award of £14½ million does not cover. I know that the argument is advanced that farmers will make up for these losses by increased efficiency. Generally speaking, British agriculture is not inefficient, but if farmers are to suffer 832 the maximum reductions permitted under the Bill, all I can say is that this is a very strange way of encouraging efficiency.
§ The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. J. B. Godber)
The hon. Gentleman says that the Bill is worse than the 1947 Act. He says that there is a maximum drop of 2½ per cent., and that this is thoroughly bad. Will he tell us what would have been the maximum drop under the 1947 Act had the Government chosen to take such action?
§ Mr. Gooch
I am talking about the Bill before the House and arguing that if the guarantees come down to the permitted extent farmers can lose, next year. a total of £29 million.
I was referring just now to the question of efficiency in the industry. The Minister has rightly spoken about the increased production on our farms. The White Paper on the Annual Price Review reveals that production has increased by a further 3 per cent., and this further increase in production was achieved with nearly 30,000 fewer workers on the farms.
How will the farm workers fare under the Bill? Will the working out of the provisions of the Bill encourage the men to believe that they can press their claims for wages and working conditions comparable with those of the industrial workers, or will they be fighting a losing battle in future because the farmers will also be fighting a losing battle with the Minister?
When I have mentioned the possibility, if the guarantees go down as they can do, of the farmers endeavouring to recoup themselves at the expense of the workers, I have been reminded, perhaps rightly so, that the workers have a national minimum wage determined by the Agricultural Wages Board. That is true, but the Board does not work on sentiment, and the case for the men has to be argued on facts. I should like to feel certain that the case for the farm worker will be strengthened when the provisions of the Bill begin to operate, but there is a big doubt in my 833 mind, and it has not been dispelled by anything that I have heard about the Bill so far.
While the Bill contains some useful provisions which I trust, will achieve the desired objectives, I hope that the Minister will urge upon the Government that they should resist pressure which is certainly to be brought to bear on this country by other countries to include agriculture and horticulture in the proposed European Free Trade Area, for that way, in my opinion, lies disaster for our own agriculture.
I now turn to the question of the Pig Industry Development Authority. It is said that history repeats itself, and in this connection it certainly does. When the Agriculture Act, 1947, was before the House, I raised objectio[...] the proposed constitution of the co[...]y agricultural committees. That Act provided for the appointment of one representative of the workers, and I urged that there should be at least two such representatives. My right hon. Friend the then Minister of Agriculture would not agree.
During the Committee stage I again made my plea and moved that there should be two representatives instead of one, but my right hon. Friend stood his ground and told the Committee to turn me down, which it promptly did. It was not long after that, that we soon discovered that two workers' representatives were appearing on some of the county agricultural committees. I hope the present Minister will heed my plea and will give way with a good grace. I do not want history to repeat itself to the extent of the present Minister turning me down. I am making the same plea as I made in 1947, and I hope that the Minister will heed it. I should like him to follow my right hon. Friend's example in some matters, but in this respect I hope that he will ignore my right hon. Friend's attitude in 1947.
It is provided that on the proposed new Authority one shall be a person appointed as capable of representing the interests of persons employed in agriculture. The Minister will he aware that the Bosanquet Report on the Reorganisation of the Pigs and Bacon Industry recommended that the new Authority should be composed of three independent members, seven from the producers' side, including two agricultural workers, 834 and six from the trade side of the industry.
I hope that the Minister will again look at this question of representation. He will be fully aware of the attitude of the National Union of Agricultural Workers towards this matter, and it is not too late for him to change his mind and give the workers in agriculture two seats on the Development Authority. We should regard the worker in the industry not only as an essential part of the industry when there is work to be done on the farms, but also as one who can make a contribution towards the running of this industry.
I know the Minister will not mind me reminding him of the praise he bestowed upon the skilled agricultural workers in my hearing at the Norfolk Stockmen's Club dinner the other night. They are, of course, skilled men, but they do not get a skilled man's wage. I hope that that will come one day. Those Norfolk stockmen faced the quiz, which followed the Minister's speech, in a way which would have made agricultural scientists and veterinaries scratch their heads.
I am sure that the Minister will agree that we can produce two farm workers eminently fitted to serve on this Authority, and I hope that he will be prepared to give us what we are asking for, because such recognition of skilled farm workers will not be lost upon the men, and it will encourage them to know that they are considered by the Minister himself to be a vital part of the agricultural industry.
§ 5.3 p.m.
§ Mr. John M. Temple (City of Chester)
It is with real pleasure that I follow the hon. Member for Norfolk, North (Mr. Gooch) as I know that he is a most respected leader of the respected farm workers of this country. I should like at the outset to pay a real tribute to that loyal body of men, the farm workers.
I rise with a degree of diffidence to address the House in this, my maiden speech, but I am fortified in the belief that there is very general agreement on the provisions of this Bill between right hon. Members on both sides of the House. I have heard it said as I have walked around my county that it would be a good thing to take agriculture out of politics, and I believe that is exactly what the Bill aims to do. With the good 835 will of this House, I believe it will achieve that objective.
I am fortified also by the fact that I have the honour to represent a constituency which is both a market centre and the centre of an agricultural county. My constituency has at its centre a city which has been established for nearly 2,000 years. During that long period, conquerors have come and wars have been fought outside our city walls. Many different kinds of activity have been carried on within those city walls, but there has been one continuing activity which has been for the benefit of the economy of Chester; throughout those twenty centuries, Chester has been a market place and a centre where the agricultural products of that happy hinterland could be exchanged. Throughout that period this has been the basis of the economy of our city.
I believe that the Minister sounded the right note today when he said that the two main provisions of the Bill are stability and efficiency. In a changing world where so much emphasis is placed on mass production and turnover, the Bill sets out to achieve for agriculture that degree of stability which we cannot achieve by velocity of circulation. Agriculture's velocity of circulation is governed by nature's seasons. It is possible for us in agriculture to increase the size and improve the quality of our crops, but we cannot increase the velocity of circulation which must take place according to nature's calendar.
I would go further and say that I welcome the retention in Clause 1 of the Annual Price Review. I certainly agree with the right hon. Member for Don Valley (Mr. T. Williams) in his disagreement with my hon. Friend the Member for Aberdeenshire, East (Sir R. Boothby) who made that unfortunate remark on Thursday last about the Annual Price Review. I think it is entirely right that prices should be reviewed each year, but strictly within the structure of these long-term provisions.
It is just within this structure that I think there will be a degree of flexibility given by that annual survey, but which will mean that it will be possible for the farming calendar to be guided by a three- or four- or more course rotation. In agriculture if one is to improve one's 836 land, one must plan rotation over a period of years, and that is why this stability over a period of years will produce the best advantages for agriculturists out of their own acres.
The livestock guarantees provide that over a period of three years there can be a maximum drop of only 9 per cent. I think that is right, because when one is planning a livestock programme it is necessary to look ahead. One cannot make a steer fit for Smithfield in the course of a year. It must be a three-year project. Therefore, I welcome this longer term guarantee, tied as it is to a minimum drop of 9 per cent.
There is a feature in the Bill on which my right hon., Friend did not comment and which L[...]d as important. That is the question standard quantity. We who have been associated with the milk industry—and here I must confess my personal interest as a milk producer for many years and as a member of Milk Marketing Board committees—have come up against this question of standard quantity. It is right that the Minister should include in the Bill provision for standard quantity because I do not think that any Government can hold prices indefinitely against the law of supply and demand when supply very much exceeds demand.
Looking across the Atlantic to the great wheat belts of the North American Continent, or to the cotton belt, one realises that that country, with vast financial resources, has been fighting against over-production. I believe that a salient factor in the great slump which occurred in 1929 was this question of vast farm surpluses 'building up and overhanging the market. I do not suggest that there is any parallel between that and the milk industry.
In the milk industry we have a perishable commodity and therefore the question is not quite so apposite. I suggest that these words, "standard quantity", will very soon become self-evident in their relation to the egg. I should like to see the proposed Egg Marketing Board become a very successful institution. I hope that it will be born. I believe that it will have a very real chance of expanding egg consumption in this country; because I believe that the ubiquitous egg can be handled with almost equal facility, as 837 regards its presentation for table, by the humble male as well as by the female. When the advertising gets going I think that the egg will be consumed in increasing quantities.
I wish to stress the importance of Clause 3 which contains the tremendous twin stabilisers of the 97½ per cent., of which we have heard, and—what I consider of even more importance—the fact that we in agriculture are to be guaranteed—I would say insulated against—either inflation or deflation. I may be wrong, but that is the way I see it. We are to have a guarantee, so that ascertainable alterations in costs will be made good in the Annual Price Review. I congratulate the Minister on getting this accepted by the Treasury. I consider it a tremendous step forward. I believe that this is the first time a feature of that nature has been accepted by his right hon. Friend the Chancellor.
I wish now to address myself to Part II of the Bill and the Second Schedule that goes with it. In his maiden speech, my hon. Friend the Member for Gains-borough (Mr. Kimball) referred to that part of the Bill. I wish to endorse his remarks, and to go a little further and say that I hope that many of the schemes envisaged as coming into operation under the provisions of the Bill will benefit those farms which are either small or remote, or both.
Another aspect which my right hon. Friend did not stress—I do not think he actually mentioned it—is that under these provisions I believe that be is making allowance for the possibility of fixing standard prices for a certain amount of work, in the same way as he fixed standard prices in the Agriculture (Silo Subsidies) Act, I urge my right hon. Friend to employ a very real degree of flexibility in fixing those prices. Anyone who knows our countryside knows that the terrain varies between county and county, between farm and farm and even between field and field; and unless there is a real degree of flexibility in those prices, I feel that they will not achieve that measure of success for which we all hope.
I realise that it is not possible for the farmer's own work to count towards a grant, but I hope that provision will be made for farm and estate labour to be included in some way or other. Were 838 this provision applied to industry, were it the case of a vast vertical combine in industry, the work could be carried out by a subsidiary company or even a sub-subsidiary company. We realise that in agriculture we are smaller units, but exactly the same type of provision, the same outlook, may apply, and I ask my right hon. Friend to bear in mind what I have said on this matter.
Regarding Part III of the Bill, I welcome the emphasis on breeding in the pig industry and I feel that it represents a great forward step. I welcome also the provision whereby the nation-wide network of the Milk Marketing Board in the matter of artificial insemination will be made full use of. Frequently in agriculture a network which has been built up over the whole country is used for only one purpose, and it represents an important step forward that this network made available through the Milk Marketing Board will be used for more than one purpose. In that way we shall take advantage of the opportunity to decrease overhead expenses.
I regard the Bill as the natural concommitant of the 1947 Act and I am sure that it will provide lasting benefits to agriculture. The fears about agricultural workers expressed by the hon. Member for Norfolk, North will, in my opinion, be dissipated. I believe that an efficient, healthy industry will always find a place for the agricultural worker. A healthy agricultural industry will bring good customers to our country towns and I believe that our retail trades will benefit, and that the expenditure of public money will prove to be of the greatest advantage to our country's economy.
As I have said, I consider that the reliance on the Annual Price Review is entirely right. These long-term assurances, plus improvement grants, will mean that evolution and progress will move hand-in-hand with just that balance which nature knows so well. In the same way that the 1947 Act has become known throughout the countryside to the everlasting credit of the right hon. Member for Don Valley, so I believe will this Bill, when it becomes an Act, be known throughout the country to the everlasting credit of my right hon. Friend the present Minister.
§ 5.17 p.m.
§ Mr. R. T. Paget (Northampton)
It gives me great pleasure to congratulate the hon. Member for the City of Chester (Mr. Temple) on his maiden speech. He chose a subject about which he has knowledge, and this House is always happy to listen to people who talk about a matter of which they have had experience. We were very fond of the hon. Gentleman's predecessor and we hope that we shall often have an opportunity to hear the hon. Member in the future.
I wish to take up one point which the hon. Member for the City of Chester made. If he really believes that the Bill insulates the farmers against the dangers of inflation, he must think again. There is nothing in this Measure which insulates farmers against the results of inflation which takes place after prices have been fixed. Throughout the years that has been a critical matter. A lot of kind things have been said about the Bill and 1 am afraid that I am in the minority in heartily disliking it. I consider it a thoroughly bad Bill and I propose to tell the House why.
When the Bill is described as an "advance" and "a great stride forward," I consider that it is a "stride" only in the sense that each wave in a receding tide gives the appearance of an advance in what is really a retreat. Under this Government the agriculture industry has retreated and it is still on the retreat. Any relief which may be given by the provisions of the Bill is something like the relief experienced by the lunatic who banged his head against the wall because it was such a comfort when he stopped. If the Bill gives anything to agriculture, it is some assurance of a modification of the misbehaviour of the Government in recent years.
I wish to refer generally to what I feel are the principles involved. Agricultural production depends on two things, the cost of labour and the cost of land. Where land is cheap and labour expensive, the production per acre is small and the production per man is great. Where the cost of land is high and the cost of labour cheap, as in the peasant countries, there is high production per acre and low production per man. We rest somewhere between the peasants and the prairie. In England, land is not very expensive—I often think it is far too cheap—while the 840 cost of labour is fairly high, although not high compared with the Americas.
If we allowed economic forces to work their natural will, our production per acre, and therefore our total production, would be far lower than it is today. The natural level of our economic production would not be above half what it is now. It is retained at its level because we require a higher production than the operation of our economic forces would give us. So let us not talk, as the Minister did, about wanting an ever-improving efficiency. If efficiency is to be measured by the maximum earning capacity of each capital unit engaged, ever-increasing efficiency would involve a vast reduction in total production.
We want an agriculture which gives us a healthy countryside, for defence reasons, health reasons, and biological reasons. We do not want our country to be over-urbanised or too reliant upon food from across the seas. We want a proportion of our people living in country conditions and prosperous country conditions. We are prepared to pay for these things at the cost of economic efficiency. In other words, we want from agriculture not merely an industry but a public service.
That was the essential conception of the 1947 Act. The Bill has been described as a logical development of that Act. It is nothing of the sort. The 1947 Act was the charter of a developing countryside and of an increased prodution. The Bill is the sentence of a declining industry.—[HON. MEMBERS: "No."]—Certainly. Moreover, its decline is contemplated and regulated. The downhill road is to be made more gentle, but a downhill road is what is contemplated. Look at the Bill. It provides that prices shall not be fixed before the crop is sown or the animal is bred but afterwards, and that is now acceptable to the farmer only because he has the habit of six years of fraud. It is acceptable because, when the price was promised to him before he grew his crop, by the time that price came to be paid he was paid in bad money that had depreciated. Regularly, year after year, he has had costs imposed upon him but he has not been recouped.
After the bargain had been made—the bargain of the country—to produce what the country desired of him, Conservative 841 Governments, year after year, defaulted on it. That is why the farmer is prepared—it is the only reason—to accept this very much worse proposition than the proposition he received in 1947. His compensation is, he is told, that his prices will not go down more than 9 per cent. in any three years. It seems a little bit hard that a Government which promised the nation to double its standard of living in twenty-five years should take half that of agriculture's away in much less time.
Is all industry becoming less efficient? We are told that it is becoming more efficient. Nevertheless, its prices go up. We are told that if we are to have full employment prices must go up, and that we must choose between inflation and full employment. If we have full employment we must have a moderate level of inflation, and prices will go up, but not for agriculture. It has to absorb its increases of cost. What about oil prices? Every time, so many pennies on petrol. The oil industry, with its vast reserves, has established that its costs have gone up this much, and therefore the increase must be reflected in the price; but for the farmer—oh dear, no. He must absorb his increased costs.
The basis of the Bill is a contemplation of a retracting and receding agriculture. I tell the Minister and those agriculturists who support him that they will see a receding agriculture under the Bill. Look at Part II. The Government offer a one-third grant for capital improvements, but that is giving back only a part of the 50 per cent. which they have taken away by increased interest rates in favour of the financiers, the more favoured section. They are asking for consolidation of farms without providing for the operation of the 1947 Sections which did enable the Government to deal with the landlord situation and provided that this very thing could and should be done. Those Sections have remained a dead letter.
The Government are introducing the pig and bacon boards without the marketing facilities. Really, it shows how depressed the Government have got the mood of agriculture that farmers are prepared to accept this. Think of the explosion there would have been if the Government had offered the Bill when they first came into power in 1951. Think of the indignation there would have been. 842 The Government have depressed the farmers to the point where they find these things acceptable.
I will give Government supporters one word of warning. They are pursuing a policy which will be politically disastrous to them. They are pursuing a Liberal policy and this is a Liberal Bill. The one thing the masses will not stand is Liberalism. Bismarck gave the vote to the masses in order to destroy Liberalism in Germany, and he did it. We have seen it destroyed here, and we shall see it destroyed on the Government benches. The masses will not stand Liberalism because they know that it is the rule of the middle class for the middle class. That is what they will not stand. Toryism has very often been acceptable. It is a complicated and a difficult and a subtle political philosophy.
It involves Government by a king and by a governing class not involved in the main activities of the country seeking the support of the masses to control and discipline a middle class whose activities otherwise would be intolerable. The only trouble with it is that that class, which by definition has got to be divorced from the main activities of the nation and cannot be selected on the basis of its intelligence or understanding, has so rarely had the brains to understand what its own policy was.
Occasionally a Disraeli emerges. One might have emerged the other day. The Home Secretary was capable of providing genuine Tory leadership, but instead they chose a lost man, a middle-of-the-road man who has first to find someone to define the edges of the road before he can discover where he is standing. They put Liberals at the Exchequer, at the Board of Trade and—oddly enough, of all fields —at the Ministry of Agriculture. So we are getting——
§ Mr. Paget
You are entirely right, Mr. Deputy-Speaker. I was pointing out, as I believe I am entitled to on Second Reading, the principles underlying the Bill. I am saying that these are principles which are totally unacceptable to the masses of this country, and always will be. We have had the Rent Bill; we have had on the social services and all round, Bills 843 directed to one purpose and one purpose only—the advantage of the middle class at the expense of the masses. Here, once again, for that industrial middle class agriculture is to be sacrificed, as it always has been sacrified. There has not yet been a Conservative Government which has not ended by sacrificing agriculture to industry.
Here we are seeing those steps again. It is disguised but it is real. That is what is going to happen. I appeal to some of the hon. Members on the back benches opposite who really care for agriculture to see what is happening and to see the mess they are going to stand for. The Bill is entirely acceptable to the hon. Member for Kidderminster (Mr. Nabarro). It is right up his street, but rule by the hon. Member for Kidderminster and for the hon. Member for Kidderminster is not acceptable to this country.
§ Mr. Gerald Nabarro (Kidderminster)
Before the hon. and learned Member sits down, may I ask whether he is trying to prophesy the results of the next General Election, which, if the policy of the hon. Member for Kidderminster were adopted, would result in sweeping success for the Tory Party?
§ 5.34 p.m.
§ Mr. William Whitelaw (Penrith and The Border)
Far be it from me to enter into some private discussions between the hon. and learned Member for Northampton (Mr. Paget) and my hon. Friend the Member for Kidderminster (Mr. Nabarro). I am rather afraid that the dreams of the hon. and learned Member for Northampton about peasants, prairies. Bismarck and the Tory Party have led him far from reality. Indeed, although it is not for me to say so, they have led him far from the Bill.
In his departure from reality the hon. and learned Member suggested that at present the agricultural industry was declining. How does he square that with the significant increases in production which were announced by my right hon. Friend last week? He suggested that the mood of the agricultural industry had been gravely depressed by this Government. How does he square that with the very considerable prices that all farms go for in the market at present? If there were 844 all this depression there would not be so many people keen to take farms in our countryside.
§ Mr. Whitelaw
Yes, indeed they do. If the hon. and learned Gentleman thinks they do not, I suggest that he goes to some farm sales and endeavours to buy one. Then he would find exactly where he stands.
§ Mr. Whitelaw
I can only say that perhaps the functions of the hon. and learned Member as a landlord are as far removed from reality as his speech was at various times this afternoon.
However, perhaps it would be wise for us to depart from that particular line. I want to return to the Bill and to the question of agricultural production today. I think we all appreciate that in recent years—I give credit where it is due—owing to the policy of the 1947 Act, brought in by the right hon. Member for Don Valley (Mr. T. Williams), we have seen agricultural production increased primarily through the use of modern scientific methods and up-to-date machinery in which farmers have invested a great deal of money. Perhaps they might not have invested all that money if their mood was so terribly depressed.
In all this there has been one serious omission in agriculture. Little has been done to modernise old-fashioned buildings and other fixed equipment on farms. As a result, much unnecessary work is carried out and that adds to the costs of production. I feel certain that a time and motion study would reveal considerable waste of labour on most farms. I believe there are two reasons for this failure to modernise farm buildings. First, such work is costly and there is a serious lack of capital in the industry, as there always has been. Secondly, landowners and farmers are naturally loath to embark on expensive schemes unless they have some confidence about the future.
The Bill is a wise investment of public money because it recognises this main requirement. It appreciates the difficulties and sets out to overcome them. The 845 assurances given in Part I are designed to give farmers confidence in the future. This, inevitably, is a most difficult problem. On the one hand, it must be faced that in the countryside fears and prejudices die hard. Older farmers cannot forget the days of agricultural depression so they are always inclined to think that such depression is just round the next corner. On the other hand, it must be accepted that it is absolutely impossible in life to remove all uncertainty about the future.
I believe that the Bill goes as far as any Government could, and in my opinion further than most would, in an effort to overcome natural doubts in the countryside. Nor must the urban population imagine it guarantees easy prosperity to farmers. Indeed, the accounts of farmers on smaller and more marginal farms show that they receive a low return on the capital invested, despite a great deal of hard work on their own farms. Yet these longer-term assurances surely give progressive farmers encouragement to plan ahead and to improve their holdings.
Now they know, whatever the hon. and learned Member for Northampton may say, that the Government support cannot be suddenly withdrawn from agriculture nor can there be substantial changes in emphasis between particular commodities from one year to another. That surely represents a considerable step forward in agricultural policy and I believe that it is widely recognised as such. At any rate, it should go a long way to overcoming the psychological obstacle to increased agricultural investment, but it still leaves the physical obstacle— shortage of capital resources.
Part II of the Bill tackles this problem by offering improvement grants to assist farmers in modernising buildings and fixed equipment. I am convinced that these will give the nation first-class value for money. Modern, well laid-out buildings prevent unnecessary labour and improve the conditions of those who work in them. The former can represent an important saving in the cost of production and the latter will undoubtedly help to retain good men on the land. These are surely two of the most important requirements in our industry today.
Of course, much will depend on the administration, and on this aspect I want 846 to put some considerations before my right hon. Friend. The experience of similar legislation has emphasised the difficulty of helping smaller farmers who need assistance most. In this case, as usual, their difficulty will lie in raising their share of the cost. In this connection, I was glad to hear my right hon. Friend's assurances about credit facilities. I am glad, too, that he has done his best to help these smaller farmers in another important matter. As one who has consistently pressed that a farmer should be allowed to charge for his own work in grant-aided schemes, I welcome the fact that the Minister has taken power by regulation to fix standard charges for specific improvements. Obviously, I appreciate his difficulties in this, but I hope that he may find it possible to use the method as widely as he can in the administration of the scheme.
When considering the problems of small farmers, I also support the principle of grants towards the costs of amalgamation. The problem of the economic unit, however difficult it is to define, must be faced in our agricultural industry. Here I agree with the hon. Member for Norfolk, North (Mr. Gooch): it is essential that this problem of amalgamation should be tackled with care and sympathy by the agricultural executive committees and by landowners, with due regard to the particular circumstances in each individual case. We must not forget that the whole process of amalgamation, even when it is necessary, will be prejudiced if local resentment is aroused at the start.
Next, I turn to the important Schedule listing the improvements eligible for grant. I appreciate that their scope must be restricted if the work is to be concentrated where it is most needed, and I believe for this reason that it will be necessary from time to time to vary the list. I am therefore glad that the Minister is given power to do so. As for the present list, I regret that more assistance has not been given to the horticultural and forestry industries.
I accept that it may be impossible to give grants in respect of greenhouses, but I feel that market gardeners should be encouraged to modernise heating equipment. Increases in fuel prices have placed a heavy burden on tomato growers, particularly in the North, where the season is later, as tomato prices have 847 certainly not increased in proportion to the other increases in costs. Considerable fuel saving is possible through the installation of modern equipment, and I therefore hope that it may be possible to make such schemes eligible for grants, if not now possibly at some future date.
On the other hand, I am glad that the provision of electrical power and light is included. In the remote areas of my constituency many farmers are still without electricity, although the electricity board's rural schemes have been going ahead with considerable speed. Meanwhile, I am left in no doubt by the farmers who are still waiting for a supply about the value of electricity on farms.
Much work is also still needed in rural housing and I regret that improvements to farm cottages have been excluded from the Bill, as I believe we should get on much better if rural housing improvements were administered by my right hon. Friend and the Ministry rather than by the local authorities. It would lead to far more uniform treatment of these grants. I accept that there are two views on this matter, but that is my personal view.
§ Mr. Whitelaw
I agree that rural councils in many areas are doing good work. The rural district council in my constituency which the hon. Member has mentioned is one of them. Many of these councils do an exceedingly good job in this respect, but there are others in some parts of the country who are most unsympathetic towards rural housing. It is a great pity that people in those areas should not get on well, whereas others are doing very well in this respect. I am grateful to the hon. Member for calling attention to the fact that my local authorities are doing so well; I readily acknowledge it. As the same time, I think it is much better to have a more uniform scheme than to have some local authorities doing their best and others doing nothing at all.
If we cannot have the improvements to farm workers' cottages included in the Bill, would not it be possible to include the building of new farm workers' 848 cottages? At the present time, the rate of grant for them is £10 per annum for forty years, and I do not consider that that is much encouragement. In fact, I believe that the building of new farm workers' cottages is given less help than almost any other scheme on our farms, and they are surely of the utmost importance in retaining good men on the land.
Finally, I want to say a word about the timing of the scheme. I appreciate the difficulties about approving grants before legislation is passed, but it is unfortunate that the grants cannot be given for work commenced before 1st September. Although I welcome what my right hon. Friend said about preparing schemes in advance, nevertheless this will clearly interrupt building work and will certainly cause delays after that date owing to the backlog of work to be taken up.
There is also the difficulty about buildings required for the 1957 harvest. Perhaps I might mention an exceptional case in my constituency. A farmer had a Dutch barn blown down in the recent gales, which were very severe in the North. He is surely a little unlucky in that he cannot get a grant if he decides to replace it in time for this year's harvest, when obviously it will be greatly needed. I do not suggest that an exceptional case of this kind would justify changing the timing, but I feel that, in general terms, it would help if there were some modification of this provision.
Nevertheless, despite these few points I want to add my welcome to the Bill and my congratulations to my right hon. Friend. He has been most farsighted in recognising the paramount need of modernising the fixed equipment on our farms. I am convinced that he has provided the basic conditions which are required before this work will be carried out, and therefore I believe that the Bill will be of great value to our agricultural industry and that the consequent investment of public money will yield a good return to the nation in increased productivity.
§ 5.51 p.m.
§ Mr. Sydney Dye (Norfolk, South-West)
There is one thing in the speech of the hon. Member for Penrith and The Border (Mr. Whitelaw) with which I 849 agree, and that is that the off-farms, those away from the villages, should be treated for grant purposes as a unit and that any grant made for taking electricity to those farms should include the supply of electricity to the cottages as well as to the farms. The farm cottages should be considered as an essential part of the farm. It would be utterly wrong for the farmer to be able to modernise his buildings and install electricity in them while the cottages remained unmodernised and their inhabitants remained without the advantages of electricity. I think that that is one small flaw in the Bill.
I am not enamoured with the Bill and I will tell the House why. I think that it has come at least five years too late. The recent Price Review has revealed a critical dilemma for both the agricultural industry and the Government. For the first time, production in three commodities has exceeded home requirements, and we are now subsidising the export of surplus commodities from this country. That was never the intention of the Agriculture Act, 1947.
The purpose of that Act was to enable the farming community of this country to produce that proportion of the food which it was deemed desirable that we should produce. But now we have a surplus of milk, for two reasons. One is that the price has been raised and consumption has gone down—the consumption of liquid milk was lower in 1956 than it was in 1954—and the other is that we are having to levy the producers to get rid of the growing surplus; and we are getting rid of it by exporting it. This country has become the third largest exporter of canned milk in the world.
How is that hitting the farmers? The hon. and gallant Member for Knutsford (Lieut.-Colonel Bromley-Davenport), who lives in a milk producing area, will no doubt be greatly interested. I have ascertained the conditions in Norfolk. There, the producers suffered a reduction of 8d. per gallon in the three winter months. For one small farmer whom I know quite well, his milk cheque for the three months December, January and February, although he produced as much milk as he did in the same period 12 months earlier, was £100 less. That, of course, is a big reduction.
Mr. W. M. F. Vane (Westmorland)
Does the hon. Gentleman mean that Norfolk was treated exceptionally by the Milk Board in the 8d. per gallon per month reduction?
§ Mr. Dye
I am not at the moment dealing with any other part of the country but Norfolk, because Norfolk producers have been good winter producers. They have had a big surplus, and because of the very high winter production they are suffering more than others.
I will quote the case of another larger farmer. In January of this year, he produced 200 gallons more milk than in January the previous year, but his income for that month was £200 less. The Bill does not attempt to deal with that problem. Is it not ridiculous to bring in a Bill to give grants to enable farmers to produce more milk of which we cannot find a means of disposing?
That is the dilemma and the Government have not faced up to it. That is why I say that if the Bill had been brought in five years earlier there might have been something to have been said for it. The whole farming community is now faced with this problem. We are told that there is too much milk, too many eggs, too much pigmeat and too much exporting of fat cattle and cows to the Continent under conditions which a great many people in this country will not tolerate. If the production of milk is to be made profitable—and it ought to be profitable—we have to limit it to those farms which can best produce it. It is not a question of creating conditions in which farmers can have more cows and more farmers can go in for cow-keeping and receive the Government grant for doing so. That is the dilemma which the Government have not faced.
§ Mr. Archer Baldwin (Leominster)
Is the hon. Gentleman suggesting that so many producers should be put out of business completely because they are not economic producers?
§ Mr. Dye
The hon. Member will probably put that solution forward in the speech which he will make if he can catch your eye, Mr. Deputy-Speaker, but it may well be that he has not the courage to make that speech today. If that is so, it is all the more reason why someone else should do so.
851 The Government have set up an Egg Marketing Board and have stimulated the production of eggs to such an extent that we are now exporting them to Germany, in competition with the Danes. We are able to export eggs to Germany only because of the subsidy. How much longer are we to ask the British taxpayer to subsidise the export of milk, eggs and fat cattle to other countries? The Government are not prepared to face that problem and, therefore, are not meeting the situation in this country today.
The hon. Member for Gainsborough (Mr. Kimball), in a charming maiden speech, said that grants should be linked with the need to prove increased production, and no doubt many hon. Members opposite will repeat that phrase in one form or another. Which commodity do we want to increase now? The farmers have wheat in the stack and will be threshing it next week. Who wants wheat? There are already seven countries offering to sell us cheap wheat. The cost of grains has come down £4 per ton in recent weeks. Is not that an indication that there is an abundance of grain in the world, and that we are about to move into an era of cheap grains? If so, is it intended to stimulate the production of still greater quantities of barley and oats when we might, as the hon. Member for Leominster (Mr. Baldwin) would say, be able to buy it more cheaply abroad? Thus, those in the West Country would be able to pursue their time-honoured policy of watching it rain, seeing the grass grow, and keeping on buying imported feeding stuffs with which to turn out more milk and beef.
This was a delightful kind of farming. They never liked changing from it, and they will get back to it as soon as they can, in spite of whatever the Chancellor of the Exchequer or anyone else may say. That is their traditional method of farming. It is not used in the Eastern Counties. There, we have been more tied up with hard work in producing the crops from the cultivated land. If provision had been made for the surplus milk to be sold more cheaply to old-age pensioners, or to the younger generation, there would have been something to say for it, but to go on subsidising the export of milk seems to be a very queer kind of national policy.
852 Part I of the Bill is a step backwards. When the intention is to change from giving guaranteed prices for cereals for two years ahead to giving them merely for the current year then, in the case of autumn-sown wheat, we are fixing the price long after the crop has been sown, and, in the case of most of the spring-sown cereals, now that the Annual Price Review takes place later each year, we are fixing it after the sowing has gone. Therefore, it is a step backwards. The farmers are asked to do all the work—to pay the increased charges for manures, wages and everything else—and then to rely upon a sliding-scale of fixed prices after the crops have been sown.
§ Mr. Brian Harrison (Maldon)
Would not the hon. Gentleman admit, though, that the Bill guarantees the price well forward and not just for one year? It guarantees it forward from when the crop is sown, but underwrites it for a matter of five years ahead.
§ Mr. Dye
It does that, but not on a basis of profitability. That is the weakness. We are living in a period of inflation, and there is no indication from Her Majesty's Ministers that we shall depart from it. With constant rises in the costs of production, to put on a sliding scale by which the price of wheat can fall by 9 per cent. in three years, and again in the next three years, is no indication that in future it will be profitable to grow any crop on which the guarantee is given.
Is not the purpose of the Government just to squeeze out from agriculture, through the bankruptcy court, a proportion of farmers, and then amalgamate the farms after that process has taken place? That is what is behind this Bill. The purpose is to squeeze out, through the bankruptcy court, those who are either too old to adapt themselves to new methods or are too weak financially to make the necessary changes.
This part of the Bill is a step backwards, but, according to the Government, it is necessary, because they do not want to have to say too soon what the price will be. They want to watch the world's markets, and fix the price as late as possible. There is no guarantee that the prices will be announced on the first day of spring next year. They might be announced on All Fools' Day, or even later. There has not been 853 written into the Bill a guarantee that in future the prices for farm produce will be announced on any particular date. But we are not all fools—not even in the agricultural industry.
I have already mentioned that Part II aims at giving grants for various purposes. To a certain extent, I agree with grants, but if they are to be given indiscriminately to whosoever applies, regardless of conditions on the farm, it seems to be most unwise. It would be very unwise to give a grant to an inefficient farmer. He would only get further in the mire. As I have said, it would be unwise to give grants to certain types of farming. Why give grants to foster the production of more eggs? By this Bill, hundreds more battery cages and poultry houses will be established and the flood of eggs will go on only to give to the Egg Marketing Board and to the Chancellor of the Exchequer the problem of finding greater subsidies.
There are alternatives to Part II which can dispose of the system of grants here envisaged. There would be no need for it if our farmers could get credit at a reasonable rate. The grants system becomes necessary only because the interest rates are so high. It is of no advantage to the farmers. If farmers could get credit at 4 per cent. instead of 6 per cent., the grants would not be necessary. If we instituted a system of cheap agricultural credit at about 4 per cent. over many years the Government would have to subsidise it only when interest rates were high. When they came down to a reasonable 4 per cent. it would not be necessary.
By this Bill, if there is a fall in the interest rate in the next five or six years we will go on paying the grants, although they will not really be necessary. There is a case for giving assistance when interest rates are so high, but not a case for these individual grants if credit becomes plentiful and cheap. Therefore, I say that the alternative to Part II is either to set up an agricultural bank or let the banks set up a system whereby over many years agriculturists, particularly the small ones, can get their credit without having to pay these inflated interest rates. That, with further rebates in Income Tax, would solve this problem. It would encourage the farmers to plough back their profits into the farms; and then they would not need to have an army of officials—the people from Whitehall who 854 think that they know best—going to the farms, vetting every scheme, and telling the farmers how to do it. All that could be cut out if we had on the farms men who knew their jobs and who, if they worked hard, could sell their crops at a profit and, ploughing back the profit, could build up their farms and their financial stability.
§ Major H. Legge-Bourke (Isle of Ely)
Is the hon. Gentleman, in these observations, making any distinction between the small farmer who is an owner-occupier and a small farmer who is a tenant? Would he not agree that, so far as the tenant is concerned, the landlord has a part to play? If we could get farm rents at a more reasonable and up-to-date level, that might be part of the solution to the problem.
§ Mr. Dye
The hon. and gallant Member is now advancing the argument that the grants which are given to the landlord would enable him to charge a higher rent to his tenant than he otherwise would get. I am not going to say that in some cases rents are not too low, and that in all cases the landlord gets a fair return on his outlay, but I was dealing with the owner-occupier, which is a different basis from the basis of landlord and tenant. I believe that owner-occupation is a sound basis for a prosperous agriculture. The old-fashioned system of landlord and tenant ïs no longer sound, and I do not want the Government to give grants to maintain something which is out of date.
I am a member of my county council and of the smallholdings committee, and I help to administer a very large estate of 32,000 acres in Norfolk. I know what we have to do and have done to maintain and improve our estate for the benefit of the tenants. But none of them will get any advantage from Part II of the Bill. It has nothing to do with them. It relates entirely to the private landlord and the owner-occupier. I believe that the real strength of British agriculture is in the farmer's knowledge, his men's skill and their ability to work and make use of modern amenities. Individual enterprise and initiative on the farm are what really count, and should be aided in every way possible. Therefore, the proper solution to this problem will be found in cutting out Part II of the Bill and giving those people credit, not grants, at a reasonable rate of interest.
855 I am sorry to speak for so long, but so many hon. Members opposite have been interested in my remarks and have interrupted me. I now come to Part III of the Bill. This part is already out-dated. Had it been introduced five or six years ago and had we got on with the development of the pig industry, there would have been something to be said for it. This part of the Bill does not seem to me to guide the pig producing industry on a right and sound lines.
There is only one sound relationship between the producer and the consumer, and that is that the producer of pigs for bacon should have a direct and a continuing interest in the bacon factory. That is the basis of the success of pig producing in Denmark, which is an outstanding example. Every pig producer in that country is a member, a part owner, a shareholder in the bacon factory, and every one of them knows that what he produces must make good bacon. He has organised his breeding and feeding policies to that end. Those in charge of the bacon factory send back to the farms a continual flow of information to help the farmers to keep up to date, including, in the early years of development, ample credit facilities.
I do not look upon Part III of the Bill as being any great advantage. It is out of date. If we are to have the highest quantity and quality of bacon and pork, the relationship must be upon a contractual basis built up over many years, to produce the right type of pig, feeding it in the right way, and, so far as progeny testing stations will assist that work in later years, all well and good. People in this country years ago knew how to breed good pigs which would make good bacon, but we allowed the war conditions to destroy all that, and we have not got the industry back on to the right lines.
I do not give a great welcome to the Bill. As I have said, it is out-dated, and I fear that by this time next year hon. Members opposite, if they are still in power, will find bigger problems in agriculture at next year's Annual Review than they have had this year.
§ 6.16 p.m.
§ Captain F. V. Corfield (Gloucestershire, South)
I hope that the hon. Member for Norfolk, South-West (Mr. Dye) will forgive me if I do not follow 856 his remarks completely. I should like to comment on one or two of his remarks, and particularly his statement that he regards cottages as an essential part of the farm. I very much hope that he will bear that in mind next time the question of the tied cottage comes up before the Labour Party Conference.
§ Captain Corfield: Yes, I have.
§ Captain Corfield
The hon. Member accuses me of being out of date, but he does not go on to refer to the financial burdens which that policy would add to the farmer-owner of those cottages.
The hon. Member went on to criticise the policy of the present Government over the last two or three years in cutting back the price of milk. Indeed, he went so far as to say that if they had cut it back further the problem of the overproduction of milk would not have occurred. Yet if we cast our minds back to the debate which took place on 30th April last year, most of us who attended that debate will recall that the main point of the Opposition attack on my right hon. Friend was exactly that we had cut back the price of milk to the detriment of the small farmer.
The hon. Member also criticised the new schemes for fixing the price of cereal crops in the current year instead of a year ahead, but he seemed to neglect the fact that by doing that we should be bringing into account by the Price Review the costs of the actual operations that went into the production of the crops, instead of some purely fictitious costs as is the case under the present system. If the hon. Gentleman regards that as a retrograde step, I can only say that I fundamentally disagree with him.
The hon. Gentleman suggested, further, that Part II of the Bill was designed indiscriminately to give grants irrespective of whether the product to be produced in the buildings concerned was in the interests of the national economy. If he reads the Bill and puts a reasonable interpretation on the words "economical 857 production", he must agree that there cannot be any question of encouraging products which are already in oversupply.
Finally, as regards Part III of the Bill, the hon. Gentleman made a comparison with conditions in Denmark, saying that farmers there had positions on the boards of bacon factories and were part owners of them. There is, of course, nothing whatever to prevent farmers in this country combining to do exactly that if they wish.
I must admit that when my right hon. Friend, during the debate last year, expressed his wish and determination to find longer term assurances, I was not very optimistic of the outcome. It seemed to me that the economic changes, particularly of the post-war world, were so unpredictable that, to a large extent, the farmer's need for long term planning was largely irreconcilable with the Treasury's need in the national interest to preserve flexibility. With that in mind, I feel that the provisions of Part I of the Bill represent a very considerable achievement on the part of my right hon. Friend, and I should like to add my congratulations to him and to those within his Ministry and of the National Farmers' Union who have contributed to that result.
The price review, of course, remains, and probably must continue to remain, as an essential factor in any Government support system for agriculture on anything like the present lines; but I feel confident that the present provisions will modify to considerable effect the disruptive effect it has on confidence in the farming industry year after year as each price review period draws nigh.
It was very encouraging to read this morning in The Times the letter from Sir James Turner, to which my hon. Friend the Member for Gainsborough (Mr. Kimball) referred in his excellent maiden speech, pointing out how already, even in the recent price negotiations, this new approach by my right hon. Friend had produced a very much better atmosphere, in which the really basic problems could be tackled without too much attention being drawn away by the other overall problems which existed before these provisions came into being.
858 As a general proposition, most people would agree, I think, that the annual intrusion of politics into the economy of farming is undesirable from the farmers' point of view but quite inseparable from the present form of support. Because I have believed for a very long time that the key to the eventual removal of both is the judicious injection of capital into the industry, I very particularly welcome Part II of the Bill and shall confine most of my remarks to that part.
It has seemed to me that, in framing their farming policies, successive Governments have paid all too little attention to the background against which the British farmer has been striving to increase his efficiency in competition with foreign suppliers and producers. In the interwar depression, fixed equipment, particularly buildings, fences, drainage and the like, fell into decay. During the war and in the immediate post war period the demands on the economy as a whole were such that there was very little scope for repair and replacement. Furthermore, the years since the war have coincided with a period of, probably, the greatest technological advance in agriculture in our history, and, incidentally, a period of the most expensive technological development that we have ever witnessed.
In this context, with, at the same time, a return to foreign competition, rising costs, and, in some cases, a shortage of labour, the crying need for agriculture since the war has, in my view, been the need for capital: capital to repair and replace as well as to modernise; capital to keep pace with modern developments, and, in many cases, to buy the holding itself as the agricultural estates have broken up. The hon. Gentleman the Member for Norfolk, South-West believes that the landlord system is out of date. I would remind him that if it were to disappear suddenly, the extra strain upon the 50 per cent. or more of farmers who are tenants would do a crippling injury to their financial ability to continue farming operations.
In the inception of the price review procedure under the 1947 Act, it may have been the intention that it should provide not only a reasonable income but also the ability to accumulate sufficient capital for reinvestment and development; but the very nature of the system was such that it could not really make 859 provision for these arrears of the past, nor could it allow for the very diversified conditions under which agriculture in this country is carried on.
To refer again to the remarks of the hon. Member for Norfolk, South-West, it is interesting to consider the figures for farm income. It is true that when one has made reasonable allowance for the number of small part-time holdings the average farm income works out at about £1,000 a year; but when one goes further into the problem, one finds that about two-thirds of the farmers have an average income of about £500 a year, and, incidentally, they are in receipt of about one-third of the total subsidies.
If the hon. Member for Norfolk, South-West really imagines that the great majority of farmers, with an income of that sort, have scope to put aside the sort of amounts of capital necessary to meet modern developments, all I can say is that he envisages a far lower standard of living for farmers than hon. Members on this side would contemplate for one moment.
There is, as all who know the countryside are aware, a very large gap between the costs of production of the most efficient producer and those of the least efficient producer. The tragedy is, perhaps, that that gap it likely to become wider, for the very simple reason that the high-cost producer is almost certainly to be found in the lower income group, the one group which has the least chance of accumulating capital with which to follow more modern techniques and improve his efficiency.
Overall, in the last five or six years, there has been a tendency also to shift the emphasis in farm production, to use the old phrase, from corn to hoof. This, again, has aggravated the problem, because, as my right hon. Friend himself has said, in comparison with arable farming, the buildings and equipment associated with livestock production are much more expensive to keep up along modern lines. The investment devoted to that end tends to show a very much slower return than a similar investment in arable farming. Moreover, because livestock farming is largely localised in the western and northern parts of England, those conditions tend to be 860 found more on the smaller farms with correspondingly smaller resources.
Under Part II of the Bill, the administration of these grants opens up an enormous opportunity to use selectivity in the application of money for the support of farmers, and this is something which is absent under the price review system. I believe that that selectivity is absolutely essential if public money is to be channelled where the need is greatest and where it can be used to the greatest possible economic advantage.
It would be ungenerous, in welcoming these new proposals, not to pay tribute to the contributions that have been made already in the hill farming and marginal land schemes. I am particularly gratified to find that investments in these schemes have been increasing enormously while my right hon. Friend has been at the Ministry of Agriculture, but, of course, they have a very grave limitation. Socially, there is a very great deal to be said for spending the available money where the resources of nature are most unkind to local farmers, but, economically, there is certainly every bit as much to be said for trying to develop the land where nature will be kinder and which can be expected to give a more encouraging reward.
That is what this Bill does. It opens the road to that type of investment and that type of support with public money. It is rather interesting to work out the total investment programme that would be involved if all these grants that are available at the moment were taken up, including the contribution by the farmers themselves. It comes to about £300 million over the next ten years, and it is interesting to note that in a recent survey of British farming, two members of the Imperial Chemical Industries' research team came to the conclusion that it was just about that sum which was the prerequisite for putting farming on a footing from which it could advance to complete independence of Government support.
Although the position in that respect is now satisfactorily dealt with in this Bill, particularly in view of the general economic position and the very great pressures which we all know are being exerted at this time of the year on my right hon. Friend the Chancellor of the Exchequer, I should like to ask my right 861 hon. Friend to direct his mind for a little while to consider to what extent the grants provided in this Bill have been necessitated by other acts of Government policy, not only of this Government, but more particularly the last one.
The Bill in itself admits the need for capital, and I think that most hon. Members here would also agree that the economic tendency in farming today is towards larger and more highly capitalised units. When we look at the figures for Estate Duty over the post-war years and compare them with those for the pre-war years, we find that whereas, before the war, 10 per cent. of people dying every year had enough capital to stock a 300-acre farm, today's figure is down to below 2 per cent. and we have to look with some apprehension as to where the farmers are to come from in future to continue to farm these bigger and much more highly capitalised units.
§ Mr. T. Williams
Will the hon. and gallant Gentleman be good enough to develop a little further what he said about the Socialist Government having done something injurious to farmers or landowners?
§ Captain Corfield
The point I was trying to make is that the high level of taxation has made it virtually impossible to save that amount of money by the time the man dies: that, during his lifetime, he will not have been able to save enough to stock a farm.
There are far fewer people in the country today who are able to stock what most people would regard as a reasonably-sized middle holding—one of 300 acres—than there were before the war. If that tendency continues, it may very well nullify to a large extent the achievement of the farming industry, which has been made in response to the declared intentions and wishes of all parties in this House.
I suppose the right hon. Gentleman interrupted me to try to protest that his own party was not responsible for this state of affairs. I very much hope that is the case, because I hope that when he comes to take the very active part which he does take in his party and studies its policy pamphlet entitled "Towards Equality", he will bear that in mind when his party tries to interpret this rather generalised pamphlet in terms of a practical policy.
§ Mr. Williams
Will the hon. and gallant Gentleman allow me to intervene a second time? I promise him that there will not be a third. I am not concerned with what any pamphlet happens to contain. I do remember, however, that from 1947 and for the next three years—that is, four consecutive years—the then Government gave £40 million per annum, on top of economic prices, to enable farmers to develop their farms.
§ Captain Corfield
I think the right hon. Gentleman would agree with me that I did pay tribute to the hill farming and marginal land schemes, to which I think he is now referring. Is not that right?
§ Mr. Williams indicated assent.
§ Captain Corfield
I am rather disturbed to hear that the right hon. Gentleman is not concerned with the pamphlets, because if people of his calibre are not concerned with them they may get into less responsible hands.
Moreover, because there is this high and increasing degree of capitalisation in agriculture today, I believe, in complete contradiction to the view of the hon. Member for Norfolk, South-West, that there has never been a time in our history when there has been a greater need for sharing the capital burden between landlord and tenant. I suggest to my right hon. Friend that if, in the past, a really earnest effort had been made to preserve that ancient system, which has served the industry very well in the past— a system for which I think there exists today very great scope for serving the industry in the future— perhaps some of the rather expensive provisions of the Bill which we are discussing today might not have been necessary, for the high degree of taxation and Estate Duty, and, indeed, the present system of complete security of tenure, whereby there is an irresistible urge to sell vacant farms rather than let them, is very rapidly killing the whole system of landlord and tenant.
If I may refer to Clause 12, as several hon. Members have done, in regard to economic investment in any particular project in which a grant is sought, I hope that my right hon. Friend will take as his criterion not only the economic return as regards the holding, but will also take into account the quality of the farmer, and, where the farmer is a tenant, will 863 pay attention to what is in the interests of good estate management as a whole.
On Clause 16, unlike the hon. Member for Norfolk, South-West, I do not think there can be any question of forcing people into the bankruptcy courts in order to try to amalgamate their holdings. On the contrary, I think that the existence of these grants will have the very opposite effect, for they will preserve a reasonable market for these holdings and an incentive for farmers in uneconomic holdings, particularly if they are owner-occupiers, to face the fact and sell out before they are forced to do so by the hard necessity of complete insolvency.
I hope it will not necessarily be assumed that it is only among the very small farms where the economic conditions are such as to make the farm incapable of producing a decent living. One of the most striking lessons of our agricultural history is the astonishing toughness and viability of the family farm, and I believe that today there is a great deal of evidence that it is the medium-sized farm that is feeling the pressure of the cold economic winds rather more severely than the smaller farm and certainly than the larger one. If we are to help these farms, we have to face the fact that one of the causes of their difficulties is that the very high price of imported feeding-stuffs has largely counteracted the old advantage which they had in specialisation, as compared with their larger mixed farm neighbours or the arable farmers.
I suggest to my right hon. Friend that perhaps the time has come to reconsider whether we are wise to subsidise oats and barley on the basis of acreage, with the emphasis on encouraging the production of these cereals for home consumption, rather than trying to encourage production of them by the arable farmer, with the facilities and resources to produce grain crops at low cost, so that he may sell them for the benefit of his smaller farming neighbour, whose real place in the agricultural world is that of the specialist. Whether we contribute very much to the foreign exchange position by getting these comparatively small farmers to keep the paraphernalia of arable farming to grow a few acres of oats and barley is very doubtful.
I end by welcoming the Bill and congratulating my right hon. Friend very 864 much indeed upon it. In so far as the difficulties which it seeks to put right are the result of a taxation policy more suitable to right hon. and hon. Members opposite, I hope that he will persevere in his efforts with his right hon. Friend the Chancellor of the Exchequer and that the measures that we are about to implement will not be inhibited by an out-of-date system of taxation.
§ 6.42 p.m.
§ Mr. E. L. Mallalieu (Brigg)
This rather sickly infant whose birth we are now witnessing has had a good deal of pre-natal publicity. It had a White Paper setting forth its prospective charms, so it is not very surprising that we should have a succession of hon. Members opposite, including the hon. and gallant Member for Gloucestershire, South (Captain Corfield), who have been singing its praises rather loudly.
Those hon. Members have reminded me a little of those promitive African tribes who, when they had to perform an operation upon their young men, stood round and shouted at the top of their voices so that the cries of the victim might not be heard. When someone has something to hide, it is not a bad thing for him to make a large noise and to try to drown what he is doing. It seems to me that something of the sort must have crossed the minds of hon. Members opposite in singing the praises of this Bill quite so loudly.
What is it that has been happening in the last few years and which, up to now, hon. Members opposite have wished to hide? Surely, it is that they have been nibbling away gradually at the security given to farmers by the 1947 Act which was introduced by my right hon. Friend the Member for Don Valley (Mr. T. Williams). The party opposite has been nibbling away at the solid basis of agricultural security which my right hon. Friend, on behalf of his party, then established. This has gone on to such a pitch that now it is rather important that the Government should make some kind of a show at least to demonstrate to the farming community that they really are the authentic successors and inheritors of the tradition of the Tory Party, which used to care for agriculture.
In the last few years, a great many uncomfortable things have been said in 865 the countryside. County branches of the National Farmers' Union have become most entertaining meetings and their reports very good reading for the vigour with which farmers have put in their criticism of the Government's recent behaviour. Naturally, these meetings have been the forums for the farmers' criticisms of what has been going on. Even the unspoken threat, which always has hung over the countryside—the threat of ostracism if, by any chance, one should not toe the complete Tory line in the matter of agriculture—has recently been not altogether successful in damping down the criticisms. However odd it may appear to some people, this is still a real threat, more serious in scattered areas where the population is small than where there is the large population of the big towns.
Obviously, the loneliness of the farmer's wife, if it is thought that those who, socially speaking, manipulate the countryside can render it an icy isolation, will be a serious threat indeed to the farmer who cares about his family. And, of course, there was always the ultimate threat of not being invited to the hunt ball, which has always exercised a very great power, I have no doubt, in certain parts of the countryside. Thank heaven, things have been changing to a large degree recently in these matters: but very much remains to be done before these insidious influences are altogether swept away.
I submit that the change began way back in 1931, when it became more widely realised to what extent the party opposite was under the domination of the big urban industrialists and the financiers. Then it was, that under pressure of their paymasters from Birmingham and elsewhere, the party opposite set an iron tariff fence around our country with the object, I have no doubt, of enriching their friends and of keeping out the foreigner and keeping the country fairly well under control. So, from that time onwards, the farmers have been compelled to pay 30 per cent. on their tyres and barbed wire, 20 per cent. on some of their fertilisers, and 15 to 20 per cent. on their tractors and implements.
Twenty-five years of this sort of protection have had their effect upon making the farmer wonder whether the protection which he got from the party 866 opposite was really the sort of protection he wanted. For instance, at present, cheap American sulphate of ammonia has been driving deep dents into the prices of that commodity on the Continent; but our farmers have not been able to benefit from this. On the contrary, they have to pay £4 a ton more than their Continental competitors.
Under the 1947 Act, farmers were just beginning to have some sort of a deal comparable in fairness with that of the urban industrialists; and the whole outlook of the countryside was changed. Now, since once again the big industrialists and the financiers have their Government in power, the whole outlook for the countryside has been declining. Undoubtedly, the outcry has been considerable.
The Tories have realised at last that something really must be done. I was not surprised that the Minister, in his opening speech, should say that the Bill was the fruit of very hard thinking on the part of the Government over the last two years. In their own interests, the Government really need to do a little hard thinking in this matter, because the rot will not stop easily once it has begun and they might find themselves swept out of their traditional areas of support in the countryside.
Farm incomes have been going down fairly regularly in the last few years, and the small farmer, when he looked at this year's Price Review, cannot have received any great comfort. There is, however, one respect in which I think the Bill has made a slight improvement upon the Agriculture Act, 1947, and I am happy to pay a small tribute to it. That is the respect in which it has limited the amount of change of the guarantee.
That seems to me to be an additional element in security, which is a good idea. I could have congratulated the Government wholeheartedly upon this had it not been for Clause 8 (2), which appears to give the Government power—I do not know what explanation we will have of this later—to undo even that little element of good which it has incorporated in the Bill.
The Government have only to place an Order before the House, apparently, to alter this limit of change, and it is an Order which will come before the 867 House late at night, to be debated in the manner which we know, with no possibility of any alteration, upon a take-it-or-leave-it basis. With their large majority the Government can have little difficulty in forcing the Order through and in gaining a victory, and their friends in big industry in the cities may rest quite secure that they will be able, when they desire, to withdraw this small element of protection from the farming community, although they are giving it very loud heralding at the present.
As to Part II of the Bill, it seems a little odd to have a scheme of capital grants for the production of more food of a type which we do not at present need. If they were discriminatory there would be a very good case for them. I myself have long urged that there should be just such capital grants for increased production of certain foods; but to give capital grants for an increase in the production of something of which the Government say we have too much seems a little topsy turvy, and I do not know what the Government are thinking about in doing that.
On balance, it would be fair to say the Government are trying to make some amends for the immense harm which they have done to the farmers, the small farmers in particular, through the Government's raising of interest rates. They are doing it by these capital grants and, apparently, by the limiting of the amount of change of the guarantee from year to year; but that, as I have pointed out, may be completely illusory. And they are, at one and the same time, in introducing this Bill, completely failing to relieve the taxpayer of his burden in having to make up the difference between the price guaranteed to the farmer and the price which the farmer receives on the so-called free market.
Though the middleman is receiving the benefit for the most part, and not the farmers, they are leaving the farmers with the odium of consumer subsidies to as great an extent as ever before; and I submit that this is really not a substitute for a long-term policy. It is wool—rather transparent wool, at that—pulled across the farmer's eye in an attempt to make him believe that he really is safe with his interest in the keeping of the present Government.
868 However, I believe the farmers are more sensible than to believe that sort of thing. I believe they know that the the best Minister of Agriculture they ever had was my right hon. Friend the Member for Don Valley, and that the policy which he implemented ton behalf of Labour was not only the best policy for agriculture but by far the best for Britain, too.
§ 6.53 p.m.
§ Lieut.-Colonel W. H. Bromley-Davenport (Knutsford)
No matter in what part of the House hon. Members may sit, I am sure they will all agree in praising the farmers for their tremendous achievement. The output of the industry as forecast for this year is 59 per cent. above the pre-war level, compared with 56 per cent. in the previous year. Indeed, it is the highest level of output ever recorded.
I think we should like to pay tribute, with great respect, to my right hon. Friend for coming to an agreement with the National Farmers' Union. That indicates his skill as a negotiator and it indicates his tact. I think it also points to the very strong sense of responsibility which the farmers possess in that they have agreed to this Price Review.
Let us face it, that the farmers in Cheshire, and in the dairy industry generally, will have to suffer under this Price Review the severest penalties they have yet had to face.
§ Mr. Dye: Hear, hear.
§ Lieut.-Colonel Bromley-Davenport
I hope the hon. Member will continue to say that.
Although the Price Review is in the national interest—we are all agreed on that, anyway on this side of the House—there is no mistake about it that the dairy farmer has been bit very hard indeed. For the first time since the 1947 Act was passed it is now the Government's declared policy to reduce the output of a commodity, the output of milk, in the national interest. The smallness of the rise which the dairy farmers are to receive is a severe setback to them, because milk is the most expensive commodity of all in labour costs.
It is no good saying, as some people do, that as half the total milk in this country is produced by herds numbering 869 twenty-five or less, and that as it is produced by the family of the farmer, therefore, they will suffer less than others. The members of a family deserve the full pay and proper reward for their labour, as do any other workers, and the plain, simple fact remains that the small rise in price this year does not begin to meet the extra cost for the milk producer.
We know, and it has been said several times already during the debate, that the White Paper stresses that the production of milk has increased too rapidly; indeed, that there is no parallel increase in liquid consumption. On top of all that we know that every gallon of milk produced costs about 1s. in foreign exchange. It is in the national interest to stop over-production. Indeed, in the long run it is in the interest of the efficient dairy farmer that this should be done; in other words, that some disincentive should be applied to stop overproduction. This policy is in the interest of the farmers themselves, because the more milk that is produced the less the overall price they receive. Therefore, it is in the interest of the country and of the dairy farmers and, indeed, of the uneconomic producers, that this disincentive be created.
Last weekend in my constituency a representative of the National Farmers' Union spoke of what we in this House know, the kind of uneconomic production going on. Last year in the great natural dairy regions such as Cheshire, milk production increased by 3 per cent., but in other areas it increased by 19 per cent. and it is in the other areas that the uneconomic producers exist. They spoil the market. They are the type who produce half a churn here and a full churn there, eight gallons here, and so on. There are very heavy transport charges for collecting these small quantities of milk from the back of beyond. Long distances have to be travelled up narrow lanes to fetch them, and the cost is spread over the whole industry, and so it is the economic producers who are now subsidising the badly placed and uneconomic producers.
My constituents say that some of these uneconomic producers in the milk industry are the hill farmers who, after all, do not cultivate much land. They depend to an overdue extent on imported feedingstuffs for winter feeding as they 870 cannot produce their own. If that is so, is not it in the interests of the whole industry that the hill farmers, or other farmers, who are uneconomic producers should be persuaded or encouraged by the Price Review to switch to something which, in their own interest and that of the country, is more economic? It would lead to saving in foreign exchange, less over-production of milk and better prices for the efficient producers.
How can we help the dairy farmer? I will suggest two ways. First of all, the dairy farmers in Cheshire feel that they deserve a larger share in the home market for milk products and that imports should be so phased that they do not coincide with the period when home produced manufactured products go on to the market in the greatest quantity. We know perfectly well that the White Paper states that there is not sufficient manufacturing capacity in the country to deal with large quantities of milk when they come on to the market at the peak period, but is there no way in which this can be overcome and should not our home producers come first?
There is another way in which the dairy farmers can be helped and that is in relation to imports from the Argentine. Cannot these imports be so varied that they do not knock the bottom out of the home market? Whilst imports of Argentine beef do not affect the prices received by farmers in this country for prime beef, they seriously affect the trade in cow beef and also in table poultry. A phasing of imports would help poultry keepers who have also been hard hit. We are now told that we are producing more eggs than we require. Are we importing eggs? If so, in what quantities and for how much longer are we gonig to do so? As for duck eggs, I do not know why anybody begins to attempt to produce them at present prices. We all know the old saying that the hen pecks at its food but the duck shovels it up. There is no doubt that there is a sales resistance to duck eggs on the part of the public due to the infinitesimal fear of salmonella poisoning. Is the Ministry's research department getting any further with devising means of ridding the danger of salmonella poisoning from duck eggs?
Farmers think that the annual deduction for increased efficiency is too much. I believe that in the last few years this 871 has amounted altogether to a total of about £100 million. One farmer said to me on Saturday that this deduction had only to go on increasing and farmers will end up by farming for nothing. The Minister will no doubt contradict that statement, but there is a feeling that some proportion of this huge sum which is deducted for increased efficiency should be retained in the industry. After all, new and improved methods of farming call for expensive equipment and the cost of this equipment is increasing every day. Farmers, therefore, think it reasonable to expect that this sum deducted for efficiency should be reduced substantially.
As to the improvement grant, my right hon. Friend has said today that it would not be possible to start its operation until September. What will be the result? I feel, and so do my constituents, that there will be a complete hold-up of new building and that between now and September a great many of the small country builders will go out of business and will not be able to get their tradesmen to come back into the industry. September is also the time when new buildings should be up, before the winter, because stock must be wintered indoors from October onwards. Furthermore, buildings will become more and more dilapidated and will cost more to improve. It is possible that the scheme itself will not really start to work properly until the spring of 1958. I know the difficulties and I know that my right hon. Friend would like to do it if he could, but I still hope that it will be possible to start earlier than the date which he forecast today.
I pay tribute once again to the dairy farmer. He is one of the hardest workers of all. He never stops working seven days a week and he has always responded to the call for increased production. Now, through no fault of his own, he will have a hard time. The County of Cheshire and my constituency are traditionally milk-producing areas and it is really impossible for farmers there to switch to any other form of production. The situation is indeed serious, but I am confident that they will survive and that the Government's policy is right. All I do is to ask my right hon. Friend to help the dairy industry as much as he possibly can.
§ Mr. E. L. Mallalieu
Will the hon. and gallant Member allow me to ask a question? He has been extremely eloquent and, if I may say so, sensible in his attitude towards the production of a certain commodity of which there is already too much. What is to happen under this Bill when a producer of that commodity, perhaps an inefficient one, asks for a capital grant for new milking plant? Is he to be given it, in spite of the hon. and gallant Member's opinion that production should be curtailed?
§ Lieut.-Colonel Bromley-Davenport
I thank the hon. and learned Member for that rather oily reference to the delivery of my speech, but that question should be asked of the Minister. Anyhow, the farmer concerned would not ask for an improvement grant to enable him to go into something for which he was not suited. In other words, he would switch to some other commodity. If the hon. and learned Member does not understand that, I am going into the Lobby shortly and I will draw a picture and explain it to him.
§ 7.10 p.m.
§ Mr. M. Philips Price (Gloucestershire, West)
This is the most useful Bill for agriculture which the Government have so far produced. Up to now, their agricultural policy has been one of whittling away that great charter for agriculture, the Agriculture Act, 1947, and of handing the industry over, lock stock and barrel, to the unrestricted law of supply and demand which very largely the farmers themselves have had to deal with, and, as far as meat goes, are most successfully dealing with, by the creation of the Fat-stock Marketing Corporation. That was one way in which the farmers succeeded in getting over the troubles and difficulties caused by the Government's policy of freeing the meat market in the way they did. However, the White Paper, Command 23, suggesting long-term help to agriculture, was the first sign of the turn of the tide.
My hon. and learned Friend the Member for Northampton (Mr. Paget) made a characteristic and witty speech in which he went into the history of the Conservative Party and its attitude towards agriculture. I agreed with a certain amount of what he said. There is no doubt that since the repeal of the corn laws in the 873 last century the Conservative Party has had bouts of being under the influence of industrialists and commercial interests and has neglected agriculture. The Liberals did the same and, of course, there was no Labour Party then.
Yet there were periodical moments when the Conservative Party retracted and saw things a little differently. The same is happening today. I remember the famous speech of the late Neville Chamberlain at Kettering just before the last war. It was an important speech, indicating the influences that were at work in the Conservative Party. We see them again today in articles in The Times and the Economist. That, of course, has been traditionally the case as regards the Economist.
Although I agree with the historical review made by my hon. and learned Friend the Member for Northampton, I do not agree with his peep into the future. I do not think that agriculture is retrogressing through neglect because I believe that all parties in the country, with the possible exception of the Liberals, have realised that agriculture must not be neglected in our new situation. Two world wars have imprinted their effects upon our economy to such an extent that we all realise there must be a basis of food production in this country. Last but not least, the balance of payments position makes it imperative to have a home agriculture, so that we need not buy abroad so much of certain things which could be produced here.
Part I of the Bill does no more than set up machinery whereby prices and efficiency payments can be ascertained and fluctuations reduced to a minimum: but I am sure that no farmers who look at this matter objectively will think that they should be guaranteed prices which do not vary. Conditions change, the balance of payments problem varies from year to year, production of one article may be too great, as in the case of milk and eggs. There must, therefore, be a switch from one to the other by discouraging one and encouraging another.
The amount of surplus milk is the most serious problem at the moment. I am not yet persuaded, however, that we are doing all we can to handle the surplus. I am certain that if facilities were afforded 874 to the Milk Marketing Board for making more cheese, in competition with produce from the Dominions and foreign countries, it would be possible for us to absorb the surplus milk. I hope that the Joint Parliamentary Secretary will indicate whether something cannot be done in this direction. British cheese is better than Dominion or any foreign cheese. I know that we are producing some, but we are not producing enough.
In a way, the present surplus is a tribute to the efficiency of our dairy farmers, and I believe that milk producers could very well put up with the increased cost of production, and even with lower prices in the future, because today there is far greater efficiency in the industry than ever before. For instance, the introduction of milking parlours, strip grazing—by which production can be increased by at least 30 per cent.—and the use of silos have all assisted.
I admit that it is easier for the farmer with capital behind him and that it is not so easy for the small man, and that is where Part II of the Bill is important. I know, however, that thanks to modern methods the cost of milk production is decreasing and could be reflected in lower prices to the consumer. I would point out that this is the only way by which more milk can be consumed. I suggest, therefore, that this should be done, because we arc still not consuming as much milk as the Scandinavian countries and America, which have always been great milk consuming countries.
§ Mr. Price
I stand corrected on America, but I believe that we could reach the standard of consumption of Scandinavia. That is why I regret so much the action of the Government in withdrawing the milk subsidy because, by their action, the Government have done something which will make it more difficult to increase consumption.
The Government have the right to discourage more production of milk by the old methods and to encourage its production by modern ones, and also to encourage more meat production. I am sure that many of our small farmers could very well return to livestock rearing because it is the small man who is the one par excellence to produce store cattle. 875 The eye of the master always sees more exactly the condition of his animal and so I believe that the small man is the best livestock producer. Therefore, anything which can be done to encourage him to produce store cattle, rather than to continue less efficiently the production of milk, would be a step in the right direction.
The meat market has been in some difficulties recently though it is rather better now. Last year, prices were poor. partly due to the increase of imports. Of course, we must trade with foreign countries if we are to export, and I do not say it was wrong to let in so much Argentine beef. I believe, however, that something should be done about timing these imports. I see that under Clause 6 of the Bill the Minister can take powers to regulate the time and place of imports. I should like further explanation of that provision if the Joint Parliamentary Secretary can give it to the House. I hope it means that the Minister will be able to ensure that on the eve of the Christmas market there is not a glut of Argentine beef here. If I am wrong, and Clause 6 does not give him that power, I think that it should be taken. I do not suggest that we should decrease global quantities of imports, but we should prevent seasonal gluts, which have done so much harm to the industry and which make it difficult for the revival of our meat production here.
One of the difficulties is one for which the Government are not responsible but which the farmers themselves will have to tackle, and that relates to quality. The public has become much more conscious of quality since the war when there was scarcity. There is a great deal of meat coming on the market from dual-purpose cattle, such as the Dairy Shorthorn and the Friesian, and even the Ayrshire, whereas it is the Scotch meat from the eastern counties of Scotland——
§ Mr. Philips Price
—and meat from the Aberdeen Angus the Herefords and some Welsh animals, which is wanted more than that from the dual-purpose animals. It is the business of farmers now to ensure that the best quality is produced. I believe they will then command better prices. Even dairy farmers can improve the quality of the meat 876 which they produce by having some of their cows served by beef bulls like the Hereford or Aberdeen Angus.
Part II is most important because it concerns the spending of public money on improvements and aims at greater efficiency in the industry. In the long run it could reduce, and perhaps ultimately do away with, subsidies. Farmers do not like subsidies. They do not like to be dependent on anyone. They would much sooner be independent, and I am sure that they are glad at the increased possibility of improving efficiency.
The larger farmers can, of course, do a greater deal in this matter themselves, though I do not take the view that they should, therefore, be shut out from this benefit. After all, the larger farmer gets a certain advantage in taxation. Through his maintenance claims, he obtains tax reductions for improvements. If he gets the subsidy under Part I, he will not get the other, and that is all it comes to. As it is very difficult administratively to draw a difference between a large farmer and a small farmer, I do not think there is anything wrong in applying Part II to all farmers.
We have also the problem of the small man and his unit and whether or not it is economic. I take the view that we cannot spend public money on agricultural units which are not economic. The Economics Department of the School of Agriculture at Cambridge, where many years ago I studied as an undergraduate —Cambridge is maintaining its reputation as a great scientific university—recently published a booklet on family farms, in which it came to some very interesting conclusions. It dealt mainly with the eastern counties. Nearly half the small farms whose finances it investigated do not provide a wage equal to that of a skilled agricultural labourer. The average is about £500 a year before paying interest on capital. It is clear that it will be very difficult to increase the efficiency of a great many of these farms.
On the other hand, there is a human problem involved. We cannot just push these people out by administrative means. They have been there all their lives, and their fathers and grandfathers were probably there. One has to leave it to gradual development. I believe that gentle pressure from the Ministry is called for.
877 I am glad to find foreshadowed in Part 11 a provision for meeting legal and other administrative expenses in connection with the amalgamation of holdings in the interests of establishing more economic units. All the same, it is right not to spend public money on units which are not economic. Small farms have certain tremendously important uses, and these uses should be particularly encouraged. We should encourage the breeding of store stock to go further east to the dairy farms of the West Midlands and the fattening pens of East Anglia. Some of these holdings provide a wonderful life. They have a social aspect that we cannot ignore. On the one hand, we must be careful not to give subsidies where the money of the taxpayers will be wasted. On the other hand, we must realise the human side of the matter.
I now want to say a word about Part III. Our pig industry is probably the most backward part of our agriculture. We are miles behind the Danes. Three years ago I spent a little time in Denmark. I came to the conclusion that they could learn from us about dairying—I did not find a single dairy farm in Denmark which would pass our milk and dairies regulations—but we are miles behind the Danes in pigs. One of my hon. Friends spoke about the Danish co-operatives. Every little Danish farmer can go to the Svinefursorgstelleto buy pigs. There are kept records of boars for generations back, and one can find out exactly how many progeny boars have produced, the rate at which they convert food into meat, and so on. Every Danish farmer can thus obtain first-class animals from a Svinefursorgstelle.
When a British farmer goes to the market, the kind of animal that he will obtain is a complete gamble. However, I must say that things are now becoming a little better. The breed societies have taken the matter up and have done something to obtain pig progeny testing stations, which are places for recording. I believe the time has now come when the whole thing should be taken over by the Pig Industry Development Authority. Although I cannot find any reference to this in Part III, the White Paper said it was necessary for the Authority to take over the national pig records and the progeny testing stations, and I hope that this will be done. It is absolutely vital. 878 The whole thing must be put under a proper authority, and then I think we really can at last begin to compete with the Danes.
The Government have shied at the idea of a marketing scheme for bacon and pork. I know the difficulties; the pork market is different from the bacon market, and so on. All the same, the Government will sooner or later have to look into this matter again. At the moment the Fatstock Marketing Corporation handles about 80 per cent. of our bacon pigs, which is an excellent thing. This is, in a sense, a private marketing scheme. The time may come when the Government will have to reconsider whether the whole thing cannot be brought under a marketing scheme. Farmers would not oppose it and it would be a further step in the right direction.
§ 7.31 p.m.
§ Mr. Anthony Hurd (Newbury)
We always enjoy the wise reflections on agricultural policy of the hon. Member for Gloucestershire, West (Mr. Philips Price). I wish that he and his colleagues did not feel so gloomy. There is no justification for their believing, or telling anybody else to believe, that the Government have been whittling away or nibbling away—two phrases used frequently—at the guarantees in the Agriculture Act, 1947. The facts do not justify that complaint. We have plenty to complain about in agriculture, about the weather, imports, and so on, and we always shall have. We do not need to manufacture synthetic complaints.
The right hon. Member for Don Valley (Mr. T. Williams) was good enough to remind the House and me of a speech that I made during the Committee stage of the Agriculture Bill, 1947, so I Went to the Library and had a look at it. It was a jolly good speech. I do not make such good speeches today. In seeking to amend Clause 1 our aim was to make provision for a fully productive, efficient and economical agriculture. The Clause as it stood, and as it became law, merely covered such part of the nation's food as it was desirable to produce in the United Kingdom.
If the Socialists had been able to carry through their policy of regimentation, what kind of agriculture should we have had? That was the question that I 879 asked. I further said that there was nothing in that part of the Bill to induce farmers and landowners to make those improvements to their farms which were essential for an efficient and economical 'agriculture. I have, unhappily, been proved right, and that is why we have to 'have this Bill.
In view of the hon. Member's reaffirmation of the principles behind the Amendment he moved to Part I of the 1947 Bill, would he be prepared to move a similar type of Amendment in Committee on this Bill?
§ Mr. Hurd
It is not necessary. We are making provision in a different way for long-term assurances. As a matter of practical policy we are now doing what we sought to do in the Committee on the 1947 Bill.
There has been a 59 per cent. increase over pre-war in the net output in agriculture, in what our land is really producing as distinct from imported feeding stuffs and fertilisers. There has been a very good jump in the past year. I remember the gloomy things that we were told from the Opposition Front Bench, such as that output from British agriculture would go down under a Tory Government. It has not gone down, and it will go up more economically. That progress needs to be continued in peace time. If, unhappily, war should come, the progress of British agriculture will be even more necessary as an asset for the survival of our country. We only have to think of the record number of Russian submarines that are being built to recognise the threat to us and to our food supplies. I need say no more. I 'am convinced that the action taken since 1947 by Labour and Conservative Governments has been a sound investment for the country.
Part I of the Bill is welcome, for the stabilising effect it is having upon farm prices. The hon. Member for Norfolk, North (Mr. Gooch) tried to make the farmers' and our flesh creep about what might happen and how prices might be reduced. Let me remind him that the worst never happens; but it could happen. Thank heavens we have got these further assurances, not merely for one or two years ahead but a continuing assurance. That was something that the 880 right hon. Member for Don Valley sought to include in the 1947 Act. He provided for minimum-price guarantees, but, in practice, they did not work, either under a Labour Government or under a Conservative Government.
The Treasury never would commit itself four years ahead on what the minimum prices should be. Those minimum prices were ludicrously low and had no influence on farmers' minds except an unsettling one. That was not what the right hon. Gentleman intended. I hope that he recognises that Part I of our Bill is a great improvement and will do what he intended to do in 1947.
I pay my tribute to the good sense and sincerity of the Minister of Agriculture, Fisheries and Food and of the Chancellor of the Exchequer, in carrying through national agricultural policy to the stage where it is today. We could have had a breakdown in farmers' confidence a year or two ago and on the annual Price Review, which has just been concluded. But there has been good sense in the Ministry and in the Treasury, as well as at the headquarters of the National Farmers' Union. They have established a practical working basis for expansion in the right ways in British agriculture.
We cannot get away—I do not think that we ever shall—from an Annual Price Review, which is necessary to keep pace with the changes in outside supplies and with the circumstances of our own production. It would be wrong to attempt to fix absolute prices for five years ahead. It would be better to go on with the give-and-take partnership between the Government and the farming industry. It will give us the best and most economic results.
Part II of the Bill is valuable. It gives a grant on farm improvements of one-third of the value of those improvements that the Minister accepts. Will those grants be taken up by those who need them most because their costs are highest today? We have to apply the screw this time to milk, eggs and pigs, the three products which lose profitability and which are required to make still great advances in efficient, economical production. Can we make sure that this assistance by way of Government grants will go to those who need the assistance most? I am not happy when I read 881 of large farmers holding up projects for improving their holdings because they are waiting until the new grant scheme becomes adequate. If they work it out I think that they would find that they will not gain very much. If they are substantial taxpayers today they would be foolish to hold up their scheme.
I am concerned that this grant scheme should be made as simple as possible for the small landowner and small farmer. The officers of the Ministry should have a fairly good idea, through the Agricultural Land Service, what a particular man ought to be doing, how he ought to be spending his money and how one-third of the Government grant money can most usefully help him. Otherwise, there might be a great waste of money.
We must see that all these schemes for modernisation and improved lay-out of buildings are properly vetted and investigated, so that they will give economies in the use of labour and a greater measure of efficiency throughout. It will not necessarily benefit people if they are allowed to splash the money about in extravagant farm buildings. The country has enough monuments of that kind already.
I hope that the Ministry will be quite "cagey" in approving schemes and will see that they really fit the needs of particular farms and help towards efficiency and economic production. That would be of benefit not only to farmers, but to men who work on the farms. I am constantly impressed by the better spirit and livelier action of men working on farms equipped in a modern way as against those which are out-of-date and where everything is rather a fumble. There is quite a different spirit on a modern farm. The men really enjoy working on a farm that is properly equipped.
I regard this as the most important part of the Bill. I hope that the schemes will be properly vetted, I hope that it will be made easier for small farmers and small landowners—of whom there are thousands—to take advantage of these grants. I hope the Agricultural Mortgage Corporation and the Lands Improvement Company will be able to approve for loans any scheme which passes the Agricultural Land Service.
§ Mr. J. T. Price (Westhoughton)
I am not hostile to the assistance to be given to effect these improvements on farms, but surely, as this process goes forward, the capital value of farms will be very considerably increased by the injection of public money. Ought we not to have some protection against the sale of farms at inflated values, which still goes on, when they carry a great injection of public money?
§ Mr. Hurd
The hon. Member is probably overlooking the fact that two-thirds of the cost of improvement is to be borne by the owner. I do not think that he need have any great anxiety about that. The tax gatherer is always good at putting an improved value on property.
This farm improvement scheme is all part of the long-term assurance to British agriculture. Long-term assurances are not only a matter of guaranteed prices, but are assurances which the farm community can recognise in practical terms. The country needs an efficient, well-equipped agriculture which will be an asset in our balance of payments problem, our defence problem, or from whatever angle we look at it. I am sure that this all ties up—the long-term assurances on prices and assurances linked to this farm improvement scheme.
It will be worth while for the public to put money into the modernisation of the least economic farms so that we get more efficient production and get what, from the point of view of the taxpayer, is very important, a continuing progressive reduction in the amount of price support by way of subsidy. I would not have been averse to seeing this farm improvement scheme brought in as part of the general price support programme; that is to say, if £5 million were provided by the Government for farm improvements in a particular year that could be taken into account in the Price Review for a year following, or for two years afterwards. I think it should fructify quickly, and that that, in practice, is the effect we shall see.
On Part III of the Bill, I welcome the setting up of the Pig Industry Development Authority. I am sure that it is sound and healthy for an industry to run its own technical service by way of research and advice. This is self-help and is to be self-financed. I think it will be 883 very helpful. I do not like agriculture or any other industry to be entirely dependent on Government technical advice. I should like to see all sections of agriculture—the dairy industry, the egg industry and the beef industry—providing their own technical services for the benefit of the producers in the industry. I welcome the setting up of this Authority.
This is a good Bill. I think that the present Minister is doing a first-rate job for farming and the country. I wish the Bill godspeed.
§ 7.45 p.m.
§ Mr. Tudor Watkins (Brecon and Radnor)
There are occasions in this House when an hon. Member has to decide whether to make a political speech or to be helpful in discussion of a very important Bill. I, therefore, shall not follow the hon. Member for Newbury (Mr. Hurd) on the political aspect, but merely say that the judgment of people in the rural constituencies has not so far been favourable to the present Government in its handling of agriculture. For the sake of the nation, I hope that will improve.
I welcome the Bill and also the way in which the Minister introduced its provisions. I was grateful to him for the further explanation he made of certain of its Clauses. I wish to deal with the grants to be made for farm improvement and the general application of the Bill to my constituency. I accept what the Minister said about grants for farm improvements, but I wish to know whether the grants will apply to farms which have already received grants for production from marginal land, to hill farming, and livestock rearing.
I wish to compliment the Government on the details of the Second Schedule. There may be improvements on those details which we could suggest in Committee. I was very glad to hear what the right hon. Gentleman had to say about credit facilities. What he did not say, however, was something about which people will be anxious. He did not mention the terms of interest which will be asked by the two bodies when they allow credit facilities. That is very important, because at the moment there is a reluctance on the part of the banks to give credit facilities to small farmers who have not a great deal of stock.
884 This debate provides an opportunity to ask whether or not grants could be made available to farmers who use their own labour. In the Bill we find that grants can be made for legal expenses towards any amalgamation. If one of those concerned in an amalgamation has an interest in the law and qualifies as a lawyer, he may prepare a scheme for amalgamation. As a farmer and a lawyer he can get a grant, whereas, if he is a farmer who uses a shovel instead of a pen he cannot get a grant. There may be a reluctance to make grants available in that way, but I suggest that the mid-Wales area could provide a very good pilot scheme to try out this suggestion and discover whether it is good or not. I know that is probably impossible, but I thought it worth suggesting it.
Dealing with the Second Schedule, hon. Members have suggested that farmhouses and cottages should have electricity provided under a farm improvement scheme. That is very important because of the enormous charges made by various area boards for bringing electricity to farm buildings and farmhouses. It would be ridiculous to have electricity supplied to a new pigsty, but not to the farmhouse. In Committee we ought to look at that question.
A very useful improvement is that for the reclamation of waste land. I suggest to the Minister that although that is useful in itself it would be of no use to some parts of Wales if the machinery services are done away with, by county agricultural committees. The tendency at present is to dissolve machinery services. One cannot reclaim waste land unless there is equipment to do so and to improve the tillage. It is no use doing this kind of work if the machinery depot is then closed down and the right machinery is not available from private contractors. We must bear in mind the need for caterpillar tractors and the problems of steep gradients, because individual farmers cannot keep this equipment, nor can private contractors.
The Minister was kind enough to say that provisional proposals can be looked at after 1st May. What opportunity will there be for farmers to know what to do with provisional proposals? Is it intended to issue a circular through the county agricultural committees? If not, 885 what other method will be used? It is very important.
I am particularly interested in Clause 12 (3, a) and 16 (5), where the Bill lays down principles concerning economic farming. The phrase used iscapable of yielding a sufficient livelihood ".The Minister knows about the district in mid-Wales and he knows that there has been great controversy whether the Mid-Wales Investigation Report was correct in its method of allocation of economic and uneconomic farms. Indeed, if that basis were applied throughout the country there would be a case for a great many amalgamations after the passage of the Bill. We must remember that there are various degrees of economic and uneconomic farms in the country.
I am glad the Minister said that he will have an advisory committee to advise him on this. In all agricultural legislation introduced by both Governments so far provision has been made to set up committees for Wales. Will there be any Welsh representation on this Committee? If not. can I be assured that places like Brecon and Radnor, where farming is difficult in some of the remote areas, will have special consideration when the Minister determines which are economic farms and which are uneconomic farms?
The amalgamation of farms is a very moot point in sonic parts of.the country and I am surprised that some of my hon. Friends were so keen to support it. There must be a different type of farming in their constituencies from that in my constituency. If amalgamations are required, there must be some method of warning people along such lines as saying, "This area will not be considered for certain improvement grants because it is uneconomic". We must have sonic method of doing this instead of pouncing on a particular farm and telling the farmer, "Your farm is uneconomic and you cannot have improvement grants".
I should also like to ask a question about people employed part-time in agriculture. If they are working part-time on forestry, linked with agriculture, will they be entitled to claim assistance? The Minister should remember that very often the yield per acre from part-time holdings is greater than from some of the bigger holdings. These part-time workers ought not, therefore, to be left out of the picture altogether.
886 I want to make a special plea for the farming community which I represent—the real hill farmers. If the hon. and gallant Member for Knutsford (Lieut.-Colonel Bromley-Davenport) were here I should comment on his suggestion that people on the hill farms should leave milk production and I would remind him that in Brecon the milk farmers have 100 per cent. T. T. licences, which is very different from the position in Cheshire, the county to which he belongs. To ask us to go out of milk production when we can produce such good milk as that is ridiculous. I am sorry that he is not here because I should have liked to hear his reply. I paid great attention to his speech because they say that "the wildest ponies make the best horses."
May I turn, next, to the question of the sheep farmer on the hills? He has cause for complaint at present. He has to see his lambs sold at uneconomic prices to the lowland farmer because he may not have the fertile land. Consequently, the sheep farmers do not get the average prices and are at a disadvantage. The price of wool has not been changed in the Price Review and that, too, is detrimental to the real hill farmers. I asked a Question last Tuesday to discover how much the loss of the hill sheep subsidy would affect Wales. and I was told that for the twelve months up to 31st March, 1956, a sum of £475,599 had been paid out in hill sheep subsidy in Wales. This year these farmers will not get the hill subsidy at all. Consequently they will get nothing out of this Price Review.
Does the House realise that many of these hill farmers do not have fertile land and that their sheep must go long distances "on tack," as we call it in Wales? The farmers pay as much as 30s. a head for sheep "on tack." With transport charges increasing and petrol prices rising, their difficulties are even greater. The very year that they want greater recoupment, in that sense, they get the worst end of the stick in the Price Review.
Does the hon. Member suggest that the sheep farmer will get a poorer price for lambs than he got last year?
§ Mr. Watkins
I do not suggest that, but I suggest that whenever the Government want to save money to put it on other farm subsidies they do it at the expense 887 of the sheep farmer. If there is any particular increased production required in this country,I suggest that the Government should axe the lowland farmer by 5 per cent. because of his excess profit and not come to the small hill farmer for any contribution.
May I explain the position about the hill sheep subsidy? It is paid on an assessment of the income of the hill sheep farmers from sheep farming. The reason it was paid the year before last was that the income level justified its being paid. This year it was not due because the income of the hill sheep farmer from sheep had risen. The point I want to make is that these farmers are not being robbed of anything they have obtained their incomes direct from the industry instead of from the subsidy.
§ Mr. Watkins
I am glad to have that explanation and it enables me to say on behalf of these farmers that it pays to be efficient. I accept that explanation.
The hon. and gallant Member for Knutsford has returned to the Chamber. I made some comments earlier on his references to milk supplies because in the rural areas which I represent a great deal has been done to improve milk production. What we do not like is that milk should be produced for good purposes but that village schools should have to depend on powdered milk. Even if we had to get the milk from Cheshire for our schools we should not mind, provided it came up to the standard of Brecon and Radnor milk, where it is 100 per cent. T. T.
Finally, I welcome the Bill and I hope that, good as it may be, in Committee we shall be able to make it an even better Bill.
§ The Second Clerk Assistant at the Table informed the House of the unavoidable absence ofMr. SPEAKER from the remainder of this day's Sitting.
§ WhereuponSir CHARLES MACANDREW, The CHAIRMAN OF WAYS AND MEANS, took the Chair as DEPUTY-SPEAKER, pursuant to the Standing Order.
§ 7.58 p.m.
Mr. W. M. F. Vane (Westmorland)
I am glad that the last two speakers from the other side of the House have assessed this Bill much more fairly than two other 888 hon. Members opposite who spoke earlier. I hope that the hon. Member for Brecon and Radnor (Mr. Watkins) now realises that the hill sheep subsidy is paid in accordance with estimated income and that last year the price of store lambs sold by hill farmers was generally high. Indeed, I feel very strongly about this because I had some lambs for sale in an auction mart today—I have not yet heard the price which they realised. They cost me a great deal of money last back-end and I doubt very much whether I shall get more than a few shillings profit on them at the end.
They are bigger than they were, but they are still lambs. I hope to get 4s. a 1b.
In general, I am sure that the countryside will welcome the Bill because it strengthens the earlier Sections of the 1947 Act in a way which will be agreed as fair to the producer, the consumer and the taxpayer.
Over the last few years, there has been a great deal of talk about long-term policies but not very much thought about it. Most of the thought has been about next year's prices, even if it was not only about next month's prices.
There was some excuse for that immediately after the war when the food supplies in the world were very short and when we had to think about current needs, this year's food and next year's food, but that habit, I am afraid, has continued and it has always irked me, perhaps because I have had a country surveyor's training and was taught to lay emphasis on the things that have a permanent value. I therefore deplore the short-term view. We in this Chamber have been bad about this as have many in the National Farmers' Union. The Bill takes us a step further. Whatever other features an agricultural policy may have, it will stand or fall on how we treat the land. Land, particularly grassland, is one of the most valuable raw materials that we have in this country.
I want to refer only to Part II of the Bill. The improvement of fixed equipment has become a pressing need. The flow of capital into the industry has tended on balance to run too much in the direction of machinery and not 889 enough in the direction of fixed equipment. Improved fixed equipment can now make a bigger contribution towards cutting down costs than any other form of expenditure. That is what we want if farming is to be properly competitive. It will also help the farmworker who I am sure will welcome it. It is more attractive to work on a farm with modern equipment than it is to work on a farm where the equipment and appliances are all becoming out of date, but this prob. tern is not just one of spending money, as sometimes I fear it has been spent, on machinery.
Our tradition is to build solidly to withstand the wind and the wet of this country. We have used such materials because we have had local stone and slate in many parts of the country. Lately we have become expert in patching and adapting buildings and doing this at relatively small cost, but what we have to do now is something on a bigger scale. Very little experimental work has been done on the design of completely new homesteads. In fact, very few completely new homesteads have been built in this country during our lifetime.
From some of the things which the hon. Gentleman said earlier in the debate, I am rather glad that I have not.
Very little research has been put into the use of new materials, as adapted for agricultural purposes, and new building techniques. Nor is this just a question of employing an architect. If hon. Members look at the front page of the evening papers tonight they will see a sorry story about one of the London County Council's most famous blocks of flats. They cannot deal with the problem of damp and I am told there is mustard and cress growing on the floors and even on the furniture. One is led to believe that it might qualify for grant as an horticultural building under Part II of this Bill.
But there is a reason why little experimental work has been done. It is that the capital invested in existing fixed equipment has yielded such a very poor return, and new money flows most readily where the existing money in any business can show a fair return.
890 What about the administrative costs? It seems to me that £400,000 a year, 8 per cent., is too high unless it also covers some research work and I hope that when my hon. Friend replies he can tell us something about that.
We in this country do not want tin sheds such as disfigure the countryside of the U.S.A., even if we develop their habit of pulling them down every few years and building others, but we may have to modify our older traditions and it is important that research should be done before it is too late. I should like to think that the technical members of the right hon. Gentleman's staff were tackling this job now and not waiting until two-thirds of this money had been spent.
I do not want to go on very long but I must criticise what I consider to be a very serious omission in Part II. Why does the Bill depart from the tradition that we have followed since the end of the war and not treat the investment of capital in fixed equipment in agriculture and forestry as being on the same basis? The Income Tax Act, 1945, was a milestone and since then we have tried to keep the two more or less in step. The Bill specifically excludes forestry, the poorest relation of the family of the industries of the countryside.
All the same arguments for helping the agricultural industry apply to forestry and to a much greater extent, because the return from growing timber in this country is, at its best, no more than 25 per cent. of the average agricultural return. If the right hon. Gentleman can include in the Schedule the limited permanent equipment which forestry needs, he will find that it makes a very small claim on the total sum.
At this very moment, the Government are threatening to take action to weaken the position of forestry in this country through not treating it in the same way as agriculture in the Common Market proposals. There is no annual review. There is just a steadily decreasing margin. I ask the right hon. Gentleman whether forestry has been omitted on purpose or whether it has just been forgotten. He is responsible for both. His advisers live in two different streets, one lot in Whitehall and the other in Savile Row and there is a tradition, unfortunately, of never telling one another 891 what they are thinking or doing. Successive Ministers have paid lip-service to the principle that the future prosperity of the upland areas depends on farming and forestry being developed together, and not on sheep alone.
Over the weekend I have seen reports in the daily Press of a technical committee which is described as the Forestry and Agricultural Land Natural Resources (Technical) Committee and the Report is published by the Stationery Office. The final sentence of this Report states:Neither the agricultural nor forestry potential of the hills is likely to be widely exploited unless the development of the two is closely co-ordinated.It seems a great pity that two or three days after that Report is published the right hon. Gentleman should come to this House and propose to do something that is entirely different. There will be plenty of opportunities during the passage of the Bill through this House and another place to rectify that omission, and I am sure that it can he done and ought to be done, and will be widely welcomed.
Except for that criticism, which is a serious one, I want to welcome the Bill. The farming industry will not follow the lead of the hon. Member for Norfolk, South-West (Mr. Dye), who put the most depressing possible face on the picture. Farmers will welcome the Bill because they see its value to their industry. They will support it and be grateful to my right hon. Friend for introducing it.
§ 8.10 p.m.
§ Mr. Frederick Peart (Workington)
The hon. Member for Westmorland (Mr. Vane) represents a neighbouring constituency to mine, and I have great sympathy with his main criticism of Part II. I certainly look at the matter from a point of Cumberland, but if I feel that forestry should be included I would be prepared to co-operate with him during the Committee stage. However, I would not commit myself beyond that. My right hon. Friend the Member for Don Valley (Mr. T. Williams) has said that in Committee we will look at the Bill carefully and, if necessary, will propose constructive Amendments, so possibly the hon. Gentleman and I may find ourselves in some agreement.
I agree with the hon. Member that it is essential that, in this period of British 892 agriculture, we should try to create a flow of capital into fixed equipment. He mentioned how, over the past ten years, the tendency has been towards investment in machinery, etc. I believe that has been the right policy, and that now, through this Bill, we should try to alter the bias and achieve an overall balance as between machinery and fixed equipment.
I certainly support Part II of the Bill. I was very glad that it was welcomed by my right hon. Friend the Member for Don Valley. It is no new thing that the State should provide improvement grants. Already, since the war, two major Acts have offered this kind of assistance—the Hill Farming Act and the Livestock Rearing Act, both of which have been mentioned by many hon. Members. I got a rather interesting reply to a Question this afternoon, when the Joint Parliamentary Secretary told me that in Cumberland, since 1947, 600 schemes under those two Acts have been approved at an estimated cost of £1,779,000, and that, of this sum, a grant amounting to £320,000 has been paid. I am sure that the Cumberland farmers have profited by this type of assistance, and I hope that this part of the Bill will apply to many hill farmers and owner-occupiers in the county—and not only in my own constituency, but in Westmorland and the northern upland areas.
I have read that administration of the scheme will cost £400,000 annually. That is a lot of money. and I now begin to realise what would have happened had my right hon. Friend the Member for Don Valley brought in such a scheme in the time of the Labour Government. We would have been accused of squandering money, and would have been bitterly attacked by hon. Members opposite. "Here we are", they would have said, "creating a host of new officials to run a scheme—bureaucrats." Indeed, I remember that at one Election the party opposite worded its propaganda in such a way as to be offensive to the civil servants in the Ministry of Agriculture. There was a cheap jibe about the "bureaucrats of Whitehall". I am glad that hon. Members opposite have now been converted. They must realise that for such a scheme, by which the State must necessarily give assistance to agriculture, there must inevitably be administration.
893 I understand that there will be approximately 20,000 applicants yearly. That will mean a lot of work, and I believe that it is to be carried out by the Agricultural Land Service. Does the Parliamentary Secretary visualise any expansion of staff in the Service to operate the scheme? I know that there has been a reorganisation and that we now have a kind of two-tier system in that Service in the interest of efficiency, but we should be told whether or not, to operate the scheme, we will need a large increase in staff. If it can be proved that that staff is essential, I would certainly approve of it. Nevertheless, it is interesting to note the change of opinion in the House.
I do not agree with the hon. Gentleman's political point, but I should have thought that, on technical grounds, 8 per cent. of the cost was too high.
§ Mr. F. H. Hayman (Falmouth and Camborne)
May I suggest that my hon. Friend should be rather careful in accepting the figures given by the hon. Member for Westmorland (Mr. Vane)? I should have thought that the amount would be rather under 3 per cent. of the £15 million cost.
§ Mr. Peart
The figure which has been laid down, and accepted, is £400,000. It is a large sum, and we should certainly scrutinise it carefully when we discuss the details of the Bill in Committee. We shall certainly be objective in this, unlike —I still make my political point—some of the propaganda experienced by my right hon. Friend when he brought in his 1947 Bill and sought to expand British agriculture.
The Bill raises a whole wider issue of capital investment. I read a recent debate in another place on the White Paper. I cannot refer to that debate, of course, but we do know that various figures have been put forward by responsible experts, and perhaps I may quote one of them. It is estimated that over the next ten years we shall require for fixed equipment in British agriculture a minimum of £350 million. Added to that, we have to take into consideration 894 £750 million for working capital. Under the Hill Farming Act, the livestock rearing scheme and the new farm improvements scheme we can, for that ten-year period, estimate also the spending of £100 million. That means that we have to find £250 million in long-term money and £750 million in short-term. Can our farmers and our landlords really achieve that?
§ Mr. Baldwin: No.
§ Mr. Peart
The hon. Member says "No." I do not know. I am merely saying that an expert has mentioned the figures I have just put forward.
Personally, I think that, despite the assistance which will be given under Part II of the Bill, the farmer and the owner-occupier will still find difficulty. The task of re-equipping our industry is tremendous, but it will have to be done if we are to achieve the efficiency we need. How are the farmer and the owner-occupier to get this capital? Even if they get direct assistance they still have to find two-thirds of the money. I know that the Agricultural Mortgage Corporation is available, but that body has an average yearly lending of only £1½ million, and charges a high rate of interest.
What is to happen? As my hon. Friends have emphasised, there will be difficulties, and despite the welcome the Bill has received we have to recognise that credit facilities are still a major problem. Here, I warn the hon. Member for Westmorland that I intend to be political. Over and over again, the party opposite, through its spokesmen and its pamphlets, promised cheap credit facilities for the farmers. Over and over again, we had assurances from Ministers and from a previous Chancellor of the Exchequer that the farming community had only to wait and a solution of its main problem of securing an adequate supply of credit would be forthcoming.
The problem is still there and, although we are giving direct assistance, many of the small farmers will still have to find that credit, they will still have to find capital, and, in view of the continual rise in costs which we still sec around us, the task may be too difficult for them.
I hope that if we are to fulfil the aims of Part II of the Bill, we shall very soon 895 have some statement on credit facilities. My hon. Friend the Member for Norfolk, South-West (Mr. Dye) mentioned the need for an agricultural bank. That suggestion has been made by many hon. Members at different times. We should have something positive in this direction, because 1 am sure that if Part II is to be implemented there will have to be new financial arrangements for the farming community.
I myself am not certain about the proposals in Part I. I feel that many of the details will have to be considered carefully, and particularly the wording of Clause 8, as was stressed by my right hon. Friend the Member for Don Valley. I recognise that these proposals in Part I represent an advance on what the Government have been doing during the past four or five years. It is a tragedy, however that ever since the passing of the 1947 Act, new conditions were created which frustrated the aims of that Act. I believe that the 1947 Act should have been protected, for it enabled the industry to achieve a rapid expansion in production.
It was interesting to hear the hon. Member for Newbury (Mr. Hurd) defending the speech he made when he sought to amend drastically the 1947 Act. That is why I challenged him, for although this Bill seeks to amend that Act, it keeps intact the provisions of Section I. I ask hon. Members opposite who supported the hon. Member for Newbury: will they seek to make further Amendments in Committee? Surely they must know that they cannot do so. They must face the realities of time. The 1947 Act has worked and, despite the gloomy prophecies of the hon. Member for Newbury and others, they know full well that the Act has worked.
Although there have been some modifications during the last four or five years as a result of the Government's failure to provide a long-term policy, the main provisions of the 1947 Act are kept intact. Broadly speaking, it is now admitted in all quarters that there should be no considerable departure from that Act. Indeed, any policy which is now suggested by hon. Members opposite is related to that Measure. Although there have been modifications, the main principles of the Measure still operate, and I hope that they will continue to do so, 896 so that we may seek to expand production according to our national needs.
We shall be discussing some of these Clauses in greater detail in Committee, when various Amendments will be moved. I would merely say that I am glad that the main part of the Act has not been jeopardised. While I may be doubtful about certain Clauses in the Bill when I compare it with the existing 1947 legislation, including the provision of capital which is mentioned in Part II, I feel that it is right that we should not oppose the Bill but that we should put forward some constructive Amendments in Committee.
I am sure that there is agreement in all quarters of the House that we must ensure that British agriculture is not neglected. I shall not repeat the old argument of the dangers of imports coming into our country, although my hon. Friend the Member for Norfolk, South-West, myself and others recently tabled a Motion stressing the need to exclude British agriculture from European trade arrangements because we feel that British agriculture is in a special position and should be protected from any cheap food imports from outside Europe as well as inside.
We all appreciate that there still exists a balance of payments problem and that, therefore, we need to develop feeding stuffs from our own resources and to accelerate food production still further. We still have our international commitments, having pledged ourselves to certain policies under the Food and Agricultural Organisation of the United Nations. We have also to think in terms of our own soil fertility, for we cannot afford to neglect our land.
If this new piece of legislation will achieve those objectives, I will give it my full support, but I am certain that the Bill will only achieve those objectives if it adheres to the principles of the 1947 Act and if there is no going back on the policy of setting agriculture free in the sense that the law of supply and demand operates in a free economy.
§ 8.28 p.m.
§ Mr. C. N. Thornton-Kemsley (North Angus and Mearns)
As have other hon. Members, I have been sitting in my place continuously for five hours today, and I am glad to have this opportunity towards the end of the debate to speak quite briefly. I shall be brief, because I know 897 that others of my hon. Friends want to speak, but I am particularly glad to be called, for two reasons. First, it is right that someone from Scotland should speak in a debate which is of such importance to Scottish agriculture. The second is a rather personal reason. This is, I think, the first occasion for about eighteen years when two maiden speeches have been made in an agricultural debate. The last time it happened was during the Second Reading debate on the Agriculture (Development) Bill, 1939, when my friend who is now Sir William McNair Snadden, then the hon. Member for Kinross and West Perthshire, and I both made our maiden speeches. On that occasion, as now, a Conservative Government were legislating to bring stability to our agricultural industry.
It is appropriate, at any rate from one point of view, that we should be speaking on 25th March, beause today is the day upon which the new Fatstock Scheme begins to operate. Today, at last, we bid "Goodbye" to the rolling average; the rolling average rolls off lamented by nobody, and we are at last to have a system having much greater regard for the realities of the trend of the market. We are to have a system which introduces the principle of seasonal guarantees——
§ Mr. Dye: No.
§ Mr. Thornton-Kemsley
A system which, if the hon. Gentleman the Member for Norfolk, South-West (Mr. Dye) prefers it, enshrines the policy of seasonal variations, which will certainly help winter beef production.
In the time at my disposal, I wish to speak about two aspects in particular of the improvement grants. I welcome the grants. The industry has in the past lacked capital resources, and I am glad that these grants will be made to agriculture in cases where they are needed. My hon. Friend the Member for Penrith and The Border (Mr. Whitelaw) and my hon. and gallant Friend the Member for Knutsford (Lieut.-Colonel Bromley-Davenport) made particular reference to the starting date. There is not the slightest doubt that there is at present a standstill in farm improvements, and there will be a standstill, unless something is done by the Government, right through the summer months.
This is very serious for the countryside, for the farms and for the small jobbing 898 builders in the country; he is ready to get on with the job, but, because the Government is refusing to introduce retrospective legislation in this matter, he cannot do it. We shall have a standstill until 1st September. I recognise the dangers and the undesirability of retrospective legislation, but it surely should be possible for something to be done on the lines of the silos subsidy, where grants were being permitted to date back to the day when the Bill was first printed. It seems to me that it would be worth trying to do that. Unless we do it, we shall have a great hold-up on the farms, and then a great rush of work at the very time when we are all concerned with getting in the harvest, so that much of the work will not be done until the winter, and, indeed, will be held over until next spring.
My second comment is in the form of a question about the eligibility of grain-drying plant under the scheme. The North of Scotland College of Agriculture has advised us against what is called the continuous flow system in grain drying plant. This kind of plant can be removed at the end of the lease. The College has strongly recommended the use of the ventilated bin system, a system under which the plant is tailor-made to the building and cannot be removed at the end of a tenancy. I hope very much that if this ventilated bin system of grain drying is installed, it will be eligible for grant.
In the interests of others I am deliberately jettisoning many of the points which I wished to make, and my final comment is a general one concerning the whole of the United Kingdom. We must make sure that the improvements really are desirable from the national point of view if they are to be paid for, in part, out of the national purse. My right hon. Friend has this afternoon said that the improvement grants are designed to promote and accelerate economic improvements. I am not quite sure whether he means improvements which would increase the economy of the particular farm concerned or whether the improvements have to be economic from the national point of view. There is an important distinction. I hold the view rather strongly that only in rare circumstances should public money be expended upon grants to people to increase, for instance, milk production.
899 We have been told again, as indeed we all know, that we have a surplus of liquid milk. We are getting near to a surplus production of certain other commodities, but I take liquid milk as an example. I can see that there may be a strong argument to be made out in individual cases for grants to improve existing dairies, and I think that in circumstances like that, grants might well be made; but I would think it utterly wrong if grants were to be made to convert buildings which have been hitherto used for fattening cattle for use for dairy production. I hope the Minister will look at this, because it would be wrong for public money to be used, except in unusual cases, for increasing the milk capacity of farms at a time when, admittedly, we have a surplus to our liquid milk requirements.
In conclusion, I would say that out-of-date buildings undoubtedly do hamper the efficient working of farms, and modernisation not only reduces working costs, but may also do much to keep young men on the land. It is not without significance that, at a time of great financial stringency, the Government have proclaimed their faith in the future of British farming.
§ 8.36 p.m.
§ Mr. Desmond Donnelly (Pembroke)
I should like to begin by saying that, at the end of this long day, the speech of my right hon. Friend the Member for Don Valley (Mr. T. Williams)—and I say this with no disrespect to others who have spoken—remains as the shrewdest and most far-sighted criticism of this Bill which has been presented so far. I very much agree with what my right hon. Friend had to say about Part I of the Bill, and how it might well have been done earlier. I also agree with the way in which he welcomed Part III of the Bill, and the provisions for the pig industry. I should like, therefore, in the limited time available, to devote my remarks to Part II.
Before I develop the argument which I hope to develop, I want to support what the hon. Member for North Angus (Mr. Thornton-Kemsley) said about the starting date in the Bill. I appreciate all the difficulties to which the Minister referred, but the right hon. Gentleman has got everybody excited about these 900 farming grants, and everybody is keen and ready to start. If he should wait for several months, we shall be into the winter, and not only will there be the administrative problem of finding the requisite number of masons and craftsmen required, but there will also be the difficulties of the weather, so that it may not be until early next year that much of the building will be able to be undertaken. Surely there is some administrative way in which, once schemes have started to be considered, the actual work can begin when the Bill receives the Royal Assent. Surely we can get over that administrative difficulty. On this, I wish to add my support to what the hon. Member for North Angus has just said.
I should now like to say something by way of background to the argument which I should like to address to the House. There have been four distinct phases in the recent history of the agricultural industry. First, there was the inter-war period, which was, in its way, the continuation of the great depression which began at the end of the last century. Then there was the war period, which was essentially a siege economy. We had to have the food, and the main consideration was not the cost of the food, although the farming community and the Government came to a mutually satisfactory arrangement. The great criterion was whether we could get the quantity, and it was quantity which mattered during that period of war.
After the war, we had the siege economy still continuing, and the threat then was not a military threat but an economic threat. We still had to have the home food production, because we lacked the foreign exchange with which to purchase food abroad, and because world food prices were high and the world food shortage at the end of the war was acute. It was during that period—and I do not say this in criticism of the 1947 Act—that the Agriculture Act, 1947, was passed. Then, two or three years after that, or perhaps a little bit more, we began to see a change in world food production conditions, and a change in world food prices and world food supplies.
During the immediately post-war period, a large amount of the money that was paid in the form of subsidies on food was mainly a subsidy for the consumer. 901 It was when the world conditions changed, world prices fell and circumstances changed altogether that the subsidies which were being paid to the industry began to be a producer subsidy. Then, when this change had come about, we had the fourth phase of the price support. We had had the inter-war period, the siege economy during the war and the siege economy after the war, and then we had the period of the price support to keep up home food production while the supplies of food from abroad became much more plentiful.
Now we are at the beginning of a new phase. The beginning of this new phase is the recognition that the indefinite continuation of price support is not enough. We have to have efficiency in the industry as well. While I am not saying that there has not been efficiency in the industry, the emphasis now changes to efficiency in the cost of production. In the concluding part of his speech in moving the Second Reading of the Bill, the Minister laid his finger on what is exactly the future problem of agriculture in this country.
One thing about which we must be clear in this new phase is the object of the money that is going into the industry. Is it merely to expand production, bearing in mind the limitations of the national requirements and the conditions of the world economy; secondly, is it to keep in business some farmers who would not be in business without that money going into the industry; or, thirdly, is it to produce the right commodities at the right price? By "right commodities at the right price" I mean the right quantity in the national interest and, as far as the consumer is concerned, a price which is commensurate with the prevailing world price. I am in favour of the third objective and that, I think, must be our long-term objective towards which we must constantly work.
In answering the question of how we arrive at that objective, we must remember that the industry has three aspects. In its way, it is a kind of microcosm of all industrial problems. There are, first, the people involved—the labour. Secondly, there is the capital—and idle capital does not mean anything, because money in the bank will not produce anything. It is capital translated into terms of tools that is important. Thirdly, there 902 are the techniques—in other words, how we use our wits. Capital and technique must inevitably go together; they cannot be separated. Our practical political problem is how to put the right tools into the right hands in the right way.
Let me say a word or two about capital and techniques as a beginning. The Minister referred to this in his speech and the hon. Member for Penrith and The Border (Mr. Whitelaw) mentioned the question of a time and motion study in the industry. We all acknowledge the remarkable work that the National Agricultural Advisory Service has done for the industry, but, at the same time, we must recognise its limitations as at present constituted.
Primarily, the N. A. A. S. is a laboratory service but is an extension of Rothamsted. It will tell a farmer what beetles are eating his potatoes, what pests are destroying his crops, and so on, and, therefore, primarily it is that kind of technical organisation with a laboratory background. We must substantially expand the activities of the N. A. A. S. if we are to get the kind of efficiency that we want in this industry.
Secondly, I want to say a word about the way in which the advice can be given, and that is on farm mechanisation. Here I must declare an interest. As some hon. Members know, I have an interest in the largest British-owned tractor manufacturing concern in this country. Our attitude to mechanisation must change. Our attitude to mechanisation ought to be the attitude of the business efficiency expert when installing any kind of plant. A tractor or a binder or a combine-harvester is a machine tool, and must be treated and costed on the basis on which any responsible industrialist considering buying a machine will consider it.
Suppose someone were considering buying an adding machine or a new filing system. He would consider the economics of it. He would have an expert explain it to him, and show how, in a given number of years, it would save a given amount of money and would, therefore, be economic for a given period. We have to approach the introduction of agricultural machinery in the same way and we have to do a great deal more thinking about the economic aspects of the introduction of farm machinery.
If we are to promote efficiency. we must also undertake some new thinking about 903 land and buildings and the lay-out of farms. One or two other hon. Members have referred to this matter, including the hon. Member for Westmorland (Mr. Vane). The fixed capital of British agricultural industry today is shocking and it needs to be radically improved if the cost of production is to be reduced and efficiency increased. We have not done nearly enough research into what one may call the science of the economics of farm lay-out and management. One or two enterprises are being conducted as experiments, but a great deal more must be done, and I suggest that one of the responsibilities of the Government should be to encourage research into this question. It would be one of the best investments we could have.
It is not merely a question of research into farm buildings or into farm lands. It includes the whole panorama of what I may call the science of estate management in the age of mechanisation. We must think anew of these things and look upon the whole design of the farms. At present, our buildings and roads are leftovers of the days of the horse and cart. This research is a function of the National Agricultural. Advisory Service. Our final aim should be to have a business consultant service at the farm gate.
That is only one small aspect of the matter. I have not time to develop it as I should like. I am mentioning only the most important things. So much, then, for the advisory aspects of the matter. I come now to physical action that we could take. I think we should see whether we cannot rejuvenate the Land Commission and get it to undertake a much more positive role. The Land Commission could take in as part of its orbit the Forestry Commission, because, as an hon. Gentleman opposite was saying, the two things go together.
I should like to see the Land Commission moving into the estate market. We must set behind us the fear of Crichel Down. Everyone who has any connection with publicly-owned land is terrified of the prospect of another Crichel Down. We have to forget about that for the moment and think of the needs of the agricultural industry. The Land Commission should be able to buy estates. It should have a team 904 of organisers, equipped with bulldozers, to re-lay farms, see to the hedging, and so on, and then to sell them, perhaps, or to let them—whether they should be sold or let is a matter of policy to be decided —on stringent terms. That is a way to improve agricultural production and make it economic. That is one positive way in which we can begin to solve the great problem of the rented farmland of the country.
As my hon. Friend the hon. Member for Norfolk, South-West (Mr. Dye) has said, in many cases farm rents are too low and in other cases the farm sizes are uneconomic. Fixed capital is the problem. That is the result partly of the long years of depression since the 'eighties and of the incidence of Death Duties, which has caused a revolution in the land tenancy system and in the way in which reinvestment in tenant farms has worked, and partly of the rigid conditions which inevitably prevailed in the circumstances following the Second World War. We must find a way in which we can do up the larger estates again and have them economically deployed and efficiently farmed. Use of the Land Commission may well be one of the means by which we can undertake this.
The second idea, and only a minor one relative to the one which I have just mentioned, is that we can do a great deal more about land reclamation than we have done. Here we have the example of Holland which, because of its geography, has to carry out constant dredging of water courses and rivers. In Britain, we tip all the silt that we dredge back into the sea and in time it is washed back again by the tides on to our shores. In Holland, a dredging contractor buys a plot of low-lying land and tips the silt on to it. When he has done that up to a certain level he sells the land off for agricultural production. Very often, dredgers make more money out of that than they do out of dredging. That is a common practice.
I know that conditions here are not comparable with those in Holland, but the possibility of the in-filling system to make agricultural land has not been tried in Britain. The Dutch have gone so far as to try it in other parts of the world as well. Here is one example of the kind of thing that we might undertake in this 905 country. Six million cubic yards of silt from the Mersey are tipped into the Irish Sea every year. If that were pumped in solution form across the Wirral to raise the level of the 4,000 acres of Deeside marshes it would make first-class land for several farms.
At this stage, I should like to say a co-ordinating word about the question of capital investment techniques. The same applies to agriculture as to other industries. Properly handled, more capital means higher wages for the men employed, a higher income for the farmer and more economical produce for the consumer. The problem of promoting such capital investment is one for the House of Commons whenever it considers agricultural policy.
After considering capital techniques, I come to people. I agree with my hon. Friend the Member for Norfolk, South-West that the people are extremely good. Agricultural colleges, universities and farm institutes, are all turning out first-class young men. But the great question that we have to ask ourselves is how many of these young men will be able to farm in their own right eventually. Practically all of them want to do that.
Reference has been made at different stages of our proceedings to the capital required to farm a small or medium sized farm. Before the war, it needed£2,000 to £3,000 for 100 acres. Now, probably £5,000 or £7,000 are needed. That is not such a small sum to save or to acquire in these days of heavy taxation. The result is that the young men going into the industry to farm in their own right are more and more the sons of farmers only. Yet, if the industry is to be rejuvenated and revitalised from time to time, it must have the young graduates from colleges and institutes as farmers in their own right.
There is a definite gap and this is a problem to which we must address our minds. There has been a suggestion that agricultural credits should be more readily available. I agree. There is a gap between what the Agricultural Mortgage Corporation does and what the joint stock banks can do. We must try to bridge that gap. There is a great deal of know-how and shrewd horse sense among the bank managers in the county towns. We might well use that and try to find 906 some co-operation between that and the national requirement to discover whether or not we could not start an agricultural credit organisation based not on the collateral security demanded but on the long-term farming prospects of the venture. By "long-term" I mean for five or six years, instead of from year to year, but not longer than that period.
There is a second thing that might be done. Here I come to a suggestion which I was interested to read in the papers of the I. C.I. Agricultural Conference that took place at Brighton last November. In the concluding part of his speech the editor of the Farmers' Weekly,Mr. Malcolm Messer, suggested something which is important and worth our consideration. On this problem of the young people coming from the institutes and colleges, he suggested that we should take a much more radical view, and here I quote:It could transform the climate of agricultural thought and practice. We invest up to £7 million a year for forestry. We might at least consider whether it would pay to put up, say, £1 million a year for ten years as a trust fund for helping approved young entrants to farm on their own account. Let us, in fact, invest in men. Such a trust fund, administered by a sort of national agricultural trust composed of representatives of farmers, the universities, landowners and the Government, could be of untold value.I agree that it could be, and it is an important and valuable suggestion to which we all ought to be addressing our minds. I say to the House that unless we face the problem of finding opportunities for the best trained young people coming out of the agricultural colleges, we are failing in our duty to the industry.
I have confined my remarks to the theme of efficiency because it is the keynote of the future. The trends show that, sooner or later, British agriculture will have to be a viable industry in terms of world competition. There is nothing we can do to evade that challenge. We have five or six years in which to get ready, and it is our duty to the industry to make possible conditions in which it can be ready to meet the challenge when it comes. I believe that this can be done, and I believe that the competence of the men in the industry will make it possible. Our function as politicians is to make it possible for them to do the job in the field.
§ 8.59 p.m.
§ Mr. Douglas Marshall (Bodmin)
I wish that I had more time at my disposal to follow the remarks of the hon. Gentleman the Member for Pembroke (Mr. Donnelly). Those of us who listened to his speech did so with interest. Not only was it intensely interesting; it was also constructive.
When we approach matters of farming finance we must remember that the expansion of credit in the last two and a half years has applied only to agriculture and to heavy capital equipment for the engineering industry. So farming has had an easier time than many other industries.
I want chiefly to speak about Part II of the Bill. First, I congratulate the Minister on the long-dated policy that he has brought forward, the agreement which he reached with the N. F. U. in respect of the Price Review, and this Bill. All who have the farming industry at heart are grateful that agreement has been reached between the Minister and the N. F. U, and we feel that we should thank my right hon. Friend for having been able to reach that point.
My only point of criticism about the Bill relates to the horticultural side. At the beginning of his speech, my right hon. Friend mentioned that under the Second Schedule horticulture came within the scope of the Bill, but I noticed that he was careful not to enlarge upon that. He spoke of help which could be given for the building of sheds for storing certain things, but there did not seem to me to be very much opportunity for horticulturists to take advantage of the Bill.
Hon. Members will agree that, although a great deal has rightly been done for agriculture as a whole, horticulture does not have much of the stability of the agriculture industry. Furthermore, by means of the Agriculture Act, 1947, and the Price Review a certain amount of protection is given to agriculture, but horticulture is again left out on a limb. It seems hard that when a Bill of this sort comes before the House a little more of the horticultural side could not have been brought in.
Paragraph 1 of the Second Schedule refers to theErection, alteration, enlargement or conditioning of permanent farm buildings…908 That could be very wide indeed. I see no reason why the provision should not apply to a certain number of glasshouses, existing as a permanent structure, which through alteration, enlargement and so on could become a more economic unit. Paragraph 4 refers to the:Provision or laying-on of electric light or power to farms for agricultural purposes.I see no reason why that provision should not refer equally to heating units for the horticultural industry.
I can appreciate the arguments which may well have taken place between the Minister and the Treasury. No doubt it was contended that what I have suggested would lead to the need for a far greater amount of money to be made available. No doubt it was also argued that the stability of the horticultural industry is not so vital as, or has not the consequences of, that of agriculture.
Be that as it may, the horticultural industry is not as large as the agricultural industry, and, consequently, to apply these provisions to the horticultural industry would not mean such a great imposition upon Treasury funds. I feel that this represents a battle between the Minister and the Treasury, and I hope that before the Third Reading the Minister will go into battle again with the object of giving horticulture a little of the help which is rightly given to agriculture.
I had hoped to have another ten minutes to say all I wanted to say, but, at all events, I am grateful for the short time which has been allowed me to put this point to the Minister.
§ 9.5 p.m.
§ Mr. A. J. Champion (Derbyshire, South-East)
I sympathise with the hon. Member for Bodmin (Mr. D. Marshall) in having to throw away perfectly good notes because of being squeezed in at the end of a debate. I have done that on many occasions myself. I am sure that the points he made will be considered by his right hon. and hon. Friends, and I imagine that he will return to those points in Committee.
This has certainly been a worth-while debate. We have had two maiden speeches, which reached a very high standard indeed. In both cases the hon. Members appeared to deliver themselves without apparently a single butterfly 909 beneath their belts. I must confess to a considerable number of butterflies when I made my maiden speech, and I am never wholly free from them now.
I liked the speech of the hon. Member for Gainsborough (Mr. Kimball) and the points he made about the application of new techniques and the development of a new type of employee on the farms that will have to be developed if we are to meet the changes of the future. We listened with great interest to the hon. Member for City of Chester (Mr. Temple). With his expert knowledge, he travelled the milky way without dropping a single egg in the process.
I congratulate the Minister of Agriculture, Fisheries and Food upon passing the average life for Ministers of Agriculture. We happen to have two Ministers in the House who have done that, my right hon. Friend the Member for Don Valley (Mr. T. Williams) and the right hon. Gentleman himself. It is well that they, having passed that age, should have introduced something worth while. There was that tremendous Act of Parliament, the Agriculture Act, 1947, introduced by my right hon. Friend. Its slight extension in the Bill now being debated is notable. I am not being derogatory to the Bill when I refer to it as a slight extension. We do not oppose the Bill. We shall subject it in Committee to a proper examination, but we shall certainly facilitate its passing as much as we can.
I am bound to introduce a note of criticism. Much of the Government's effort to give effect to Part I of the Act of 1947 has, up to now, been clumsy and needlessly expensive. Having created a certain amount of chaos in the marketing and selling of the produce of agriculture, the Government now want to take credit for trying to put right some of the chaos that they have created. Farmers' incomes have been talked about a lot today, as is inevitable with a Bill the first part of which deals with guarantees. Over the whole field of farmers' incomes, I have always been of the opinion that, in the period of the softest featherbed ever imagined by Mr. Stanley Evans, farmers did not get a farthing more than they ought to have got.
I am not pretending that the money was properly distributed. I do not feel happy about the distribution, but I have never been able to think of a way of 910 readjusting it without introducing the danger of bolstering up the most inefficient section of the industry. Therein lies the difficulty. Whatever we think about subsidies, the fact is that farmers, like M. P. s, are among the very few groups whose real incomes 'have suffered a decline in the past few years. The income of M. P. s certainly has.
The White Paper now before us estimates the farmers' net income for 1956–57 as £334 million. That is to be compared with £331 million for 1951–52, showing a net decline, because of the decreased value of money, of about £66 million, or approximately one-fifth of the farmers' net income. The fact is that to maintain the 1951–52 standard about £400 million net income would be required.
In those circumstances, it is no wonder that the figures show that many small farmers—as has been mentioned by some of my hon. Friends and some hon. Gentlemen opposite—are today living below the standard they could enjoy if they were employed as farm workers. They are not all the farmers who ought to be involved in amalgamation into bigger units. Quite recently the Minister said thatTo travel hopefully is better than to arrive.If farmers have now arrived in the Tory heaven for farmers, I can well imagine why so many of them might wish themselves back travelling hopefully. Certainly, the small farmers seem to have arrived at the point of no returns, or insufficient returns, for the job they have to do and are doing in their industry.
Having said all that, I welcome the fact that this Bill reinterprets Part I of the 1947 Act in the light of the changes that have been brought about by the Government since they came into power in 1951. We have seen a glut of milk and we cannot be happy about the way in which the Government are dealing with it. The obvious thing to do with a food of that quality when it is in glut is to put more of it into the mouths of the people. That would seem to be the sort of thing we ought to be doing, but what is being done? The Tory Party is raising the price not only to the general consumer, but also—and this is the meanest of all the things that they have 911 done in this connection—to the under-fives and expectant and nursing mothers. The effect is quite inevitable.
I noticed that the Farmers' Weeklylast week commented upon this, pointing out that liquid milk consumption in February was down by 2,580,000 gallons, allowing for the fact that this year February had 28 days as against 29 in February last year. It was explained by the writer in that journal that the mild weather had caused people to drink less milk in "nightcaps." I suppose the Minister is now drinking fewer than otherwise he would be doing, although he told us that he is sticking to milk.
I think that the other comment in the journal is more important:But consumption is likely to have been influenced far more by the increase in the 'welfare' milk price and the continued effect of the increase in retail prices ordered by the Government.This is a serious matter. The milk prices hit the small man more than anything else. I realise the difficulties and I know too well that the small farmer will cling as long as possible to his monthly milk cheque. That is understandable. The switchover to some other form of production may seem easy to the hon. and gallant Gentleman the Member for Knutsford (Lieut.-Colonel Bromley-Davenport). He suggested that the hill farms of Wales should get out of milk production and go in for something else. It is easier to say that than to achieve it, as anyone who knows anything about the industry appreciates full well. In any case, why should Cheshire be exempted from the change from milk production?
In all parts of the House today we have praised the farmers for the increase in production which has taken place. My right hon. Friend did it, rightly, and other hon. Members have done it. Incidentally, I should like to ask the Parliamentary Secretary how much of this increased production, this figure of 159, is a net improvement. I am thinking about the fact that in 1952–53 we were importing 2.8 million tons of feeding stuffs and that in 1956–57 that figure has risen to 5 million tons of feeding stuffs. This increased production, in those circumstances, may well be a drain upon our national economy.
912 I still feel that we are not doing enough to ensure that sufficient feeding stuffs come from our own soil, and I am still disturbed by the fact that our tillage figures are falling. The Minister has pointed to a slight check in the downward trend which has been showing itself for some time, but we have still to try to deal with this problem.
We have, rightly I think, praised good farmers and defended the subsidies paid to them, but in far too many cases the nation is getting for its money sloppy management, bad farming practice and an inefficient use of the soil. I am not tarring all the farming industry with this brush—of course not—but I feel that there are too many who are not using this precious raw material—and we have so few raw materials—in the way in which it ought to be used.
It seems to me that the Minister has permitted Part II of the 1947 Act to die of sheer neglect. This business of paying large sums of money from the taxpayer to the farming industry was, we said, the right thing to do, but in that action in 1947 and subsequently there was, I think, a bargain—not an explicit bargain, it is true, but an implicit bargain; and it was that in return for security and for the guarantees which were given to the farmer the farmer must give the country an efficient use of the soil. It is up to the Minister to insist on a reasonably high standard of farming and the disciplining of bad farmers.
I can understand the effect of the squeal which goes up over such cases as the Lady Garbett case and the fears which inevitably are instilled into the Minister's mind when his hon. Friends behind him and the newspapers press him on such matters, but the Government must make this part of the Act work or devise some other methods for disciplining bad farmers. That may not be a very popular thing to say, but I think it ought to be said and the Minister ought to be reminded of his duty.
Turning to the Pig Industry Development Authority, I must support the plea made by my hon. Friend the Member for Norfolk, North (Mr. Gooch) that the Minister should consider putting more workers on to the Authority. The Government as well as the Opposition are saying all the time that our democracy 913 Will never be complete as long as it remains only a political demoracy; it has to be extended to industry—indeed, this subject is talked about in industry and elsewhere—and that means the farming industry, too, to give to people employed in it an additional opportunity or a right to some say in the management of the industry. I press the Minister to look at this point and to consider sympathetically any Amendment that we put down between now and the Committee stage.
I turn, next, to the question of capital grants, farming improvements and amalgamation. Despite the fact that most farmers look first at Part I, I believe that Part II is the most important part of the Bill. Our imports of food are costing the country, I understand, no less than 40 per cent. of our total export earnings. We must continue to invest in such new ideas as nuclear energy, electronic equipment and antibiotics if we are to maintain our position in the struggle for world markets and to keep 50 million people alive in these islands.
Nevertheless, I believe that it would be madness to invest so much in those new industries that we completely and seriously neglected our older industries on which we shall have to continue so much to rely. We must develop the advantages which happen to be ours. We have advantages in this country, despite our lack of raw materials. We have the advantages of soil and climate, the advantages of the short haul in transport. Those are examples of what I mean, and we have to develop these things or at least use them to the full, because I believe that if we do that we can cut down some of the need for the great exports for which we have to be continually striving.
I admit that there is no advantage in paying for home produced food by a disproportionate amount of the product of our urban industries. A balance in this is essential, and we always said so> but I believe that more could be produced at home with advantage to our economy. Undoubtedly—and here I am again with the Minister in this—in agriculture we need higher production at a decreased unit cost. That is absolutely vital. Higher production is not only a matter of stimulation by end price, by eliminating out-of-date methods. by improving management and farming 914 Practice; it is also a matter of the tools for the job.
My hon. Friend the Member for Pembroke (Mr. Donnelly) in an excellent and thoughtful speech, rightly pointed to the great strides forward in the amount of tenants' capital now available for production. But we have to admit that the provision of fixed equipment is a sorry tale. It is a tale, as he rightly said, which stretches back over much of the last century and practically over the whole of this century for reasons which most of us understand. The fact is that too many of our good farmers are struggling with obsolete fixed equipment, with out-of-date buildings and wasteful lay-outs.
The elimination of superfluous motion is as necessary in farming as in any other industry. When thinking about what I was going to say about this over the weekend, I went back to a book which I read first in 1915, written by Jack London. It was called "The Jacket and in it he wrote of a man who was a professor in one of the agricultural colleges or institutes of America, the whole of whose thought and ideas was given to this job of the elimination of waste motion from agriculture. It is time that we did something about this.
It is true that waste movement did not matter very much when labour was at its 1926 price of 25s. a week, because one could afford to waste and use it in the sloppy way in which we have used much of the labour in this country in a number of industries; but I think that it now matters enormously and will continue to matter more as and when the agricultural worker gets his true position vis-é-vis his urban brother
This gap which still exists between the agricultural worker and the worker employed in industry is very much too big. It will have to be narrowed. We shall have to increase, as the hon. Member for Gainsborough said, certain aspects of his technical skill and pay him for that increased skill. Therefore, we shall have to use reasonably and well the labour which is available.
I am still a little worried about this Bill in its relationship to fixed capital. I believe that expenditure on the scale required can be forthcoming only if the Government take special steps to bring 915 it about. In 1951, the gross investment in fixed equipment for agriculture, forestry and fisheries was £74 million. In 1955, it was a little less—£72 million. That was taking place at a time when the total investment for the rest of our industries went up by 25 per cent. Here, I am talking in terms of prices equated to the 1948 level.
The question we have to ask is: will this Bill do what we ask of it? Will it secure the new capital which the industry wants? I think that the answer is bound to be that it will not. The total grants over the next ten years under the excellent existing schemes introduced by my right hon. Friend for hill farming and livestock rearing, together with schemes for silos, water supply and drainage, will amount to £45 million. There will be about £50 million under this Bill.
Therefore, during the next ten years we shall have a total of Government aid of some £95 million. The Government have estimated that over the next ten years the total of permanent fixed investment will be £320 million. It so happens that the increased interest on £320 million, over and above what it was when the right hon. Gentleman's Government came into power, is just about £96 million over this period.
The position, therefore, is that there will be only £50 million provided under the Bill, spread over ten years, and £96 million taken out of the industry by the moneylenders. That is really what it amounts to. A Government increase in grant of £50 million does seem a rather poor way to encourage a real capital injection into the industry, in the light of what has been happening over the past five years. Investment in agricultural fixed equipment, which was neglected over the years of which I have spoken, and limited by material shortages since the war, has, for the last five years, been discouraged by excessively high interest rates.
Although we welcome the Bill's proposals, I think that they really touch only the fringe of the problem. There must be some fresh thinking and some fresh work put in. Finally, I want the Government to look again at the cost of the scheme's administration. I must join those who have criticised this figure 916 of £400,000 to administer a scheme which is to disburse £5 million annually. It means that in the ten-year period we shall spend £4 million on administration.
Despite the fact that we have got to consider these schemes, to make sure that we are not wasting the money and that it is not going to the wrong people or to the wrong types of farm, I am bound to say that 8 per cent. seems to me to be too much to spend on administration when we want the money so badly on the farms. We could do with that £4 million in buildings and fixed equipment so that the farmers may efficiently do their jobs.
Having said all this, and having uttered a word or two of criticism, may I say that I welcome the Bill? Certainly, we shall do our best to improve it and facilitate its passage to the Statute Book.
§ 9.31 p.m.
§ The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. J. B. Godber)
We have had a most helpful debate. Before I deal with some of the points which have been raised I should like to echo what has already been said by several previous speakers and to extend my warmest congratulations to the two maiden speakers whom we have heard today. I know it is customary to pay glowing tributes to maiden speeches, but I really think that the two we have heard today were quite remarkable. They were exceptionally well informed, and I am sure that both my hon. Friends the Members for Gainsborough (Mr. Kimball) and for the City of Chester (Mr. Temple), who have thus launched themselves, will be a great asset to us in agricultural debates in the coming years. If I may say so, it is perhaps somewhat indicative of the virile and fresh new blood that is always coming forward in the Tory Party.
As I have said, we have had a very useful debate, and I believe that generally there has been a fairly warm welcome for the Bill. Some of it has perhaps been a little grudging from the other side of the House, but we understand that. Hon. Members opposite know that they could not have produced anything so good, and we do not mind if they feel a little grudging about it. [Interruption.] I agree that the 1947 Act was a good Act, but it was not so 917 good as this Bill, which strengthens and improves it very much, as I shall show in a few moments.
I should like to address my remarks to the various points that have been raised on the Parts of the Bill in turn, and I shall begin by dealing with the comments that have been made on Part I of the Bill. The right hon. Member for Don Valley (Mr. T. Williams) raised an important point on Clause 1 when he referred to the question of the word "may" which he seemed to think was not nearly strong enough. He said that we should have used the word "shall". That is an argument which we have heard in the House before on other occasions.
I would remind the right hon. Gentleman that this Clause replaces Sections 3 and 4 of the Agriculture Act, 1947: those Sections empower the Minister, but they do not oblige him, to determine guaranteed prices. If the right hon. Gentleman will refer to Section 4 (1) of the Act. he will see that it states:…the appropriate Minister…may by order provide…The point is that the word "may" is there, referring to the same matter as we are dealing with here. Clause 1 of the Bill follows a similar pattern. This point, therefore, is not of great significance because it would be virtually impossible in any case to remove the guarantee for any major product while we were keeping within the long-term assurances.
§ Mr. T. Williams
Section 4 is designed exclusively to allow the Minister sufficient latitude, so that if it is not possible to provide guaranteed prices or assured markets by one means, the Minister "may by order provide" alternative means.
§ Mr. Godber
That is quite true, but this is all enabling legislation. The right hon. Gentleman was referring to our Clause I and pointing out that we say "may"; but in fact it is dealing very roughly, if not entirely, with the same point.
§ Mr. Williams
This point is absolutely vita]. If the hon. Gentleman tells me that, for some reason or other of which I am not aware, "may" can mean "shall", I shall not say another word; but, if not, he must surely agree that if 918 the Minister has permissive powers either to do or to refrain from doing something, then there would not be any assured markets or guaranteed prices. That is the only point at issue; does "may" mean "shall", or does it not?
§ Mr. Godber
I accept absolutely, of course, that I am not in any way trying to tell the hon. Gentleman that "may" means "shall", and I do not think he was seriously trying to suggest that I was suggesting any such thing. In fact, this is permissive; but then the whole principle of it relies upon having an Annual Price Review anyway. There is no disputing the fact that we are having Annual Price Reviews. We do not question that at all.
§ Mr. Godber
We have had to have an affirmative Resolution every year to keep the 1947 Act in force, as the right hon. Gentleman knows.
§ Mr. Williams
I am sorry to interrupt again, but I think we can very well leave this to another stage.
§ Mr. Godber
I should be very happy to do that. We can follow it further then. I trust that the right hon. Gentleman will study what I have said. I am not trying to dodge the issue in any way, and I feel sure that the point can he cleared up.
The right hon. Gentleman referred also to the fact that under the 1947 Act there were forward prices for the second harvest following, whereas under these new guarantees we have brought in a system applying prices to the next harvest. I gathered that the right hon. Gentleman took the view that in some ways that was not quite so good, but it seems to me that it is in fact an advantage when taken in conjunction——
§ Mr. Williams indicated dissent.
§ Mr. Godber
I am sorry if I misunderstood, but I thought the right hon. Gentleman was a little critical. I apologise if he was not in this respect 919 criticising the Bill, It is important to make clear that the difference is made up by the fact that one cannot have a reduction of more than 4 per cent. in the ensuing year, and there is, therefore, no great risk for a crop which has been sown.
§ Mr. Godber
One of the right hon. Gentleman's hon. Friends, I think it was the hon. and learned Member for Northampton (Mr. Paget), said it, and i am perhaps quoting him instead of the right hon. Gentleman.
The right hon. Gentleman did raise a question regarding the varying of percentages under Clause 8 (2). This, again, is covered. Under Clause 9, an order under this subsection can be made only with the prior consent of the Treasury, and after consultation with the producers, and it will be subject to an affirmative Resolution in both Houses. That is a fairly good safeguard. There is no question, therefore, that we are weakening it to any considerable extent when these safeguards are present.
§ Mr. Williams rose—
§ Mr. T. Williams
I am sorry if the hon. and gallant Member for Knutsford (Lieut.-Colonel Bromley-Davenport) is not feeling very well, but I cannot help that. This is really important. I do not want to occupy the hon. Gentleman's time, and I would, perhaps, prefer to leave it to another stage of the Bill. We still regard this as absolutely vital, and there is nothing in Clause 9 which insists upon consultation with the producers, giving a year's notice or about the year 1960 or 1962. All these things are referred to in paragraph 18 of the White Paper, but they are not in the Bill.
§ Mr. Godber
Clause 9 (1) says—(1) Any power of the Minister or Ministers to make orders under section one or section eight of this Act shall be exercised with the consent of the Treasury and after consultation with producers.That is the point I was just making. This really does cover the point. We will discuss it further in Committee, but it is adequately covered. I really do not think that the right hon. Gentleman should be 920 quite so doubtful of our intentions in regard to this matter, but we will deal with it further in Committee.
The hon. Member for Norfolk, North (Mr. Gooch) asked if this Bill will, in fact, provide any help to the workers in the agricultural industry. We all hope and believe that it will, because certainly we cannot expect agriculture to flourish without the workers having a fair and just deal out of it. I believe that the more security we give to agriculture, the better should be the position of the workers.
The hon. Member went on, as did other hon. Members opposite, to talk about the possibility of slashing prices by £29 million a year, and he related that to depressing workers' earnings. I think that hon. Members opposite made very heavy weather of this point about the extent of these cuts. In actual fact, what we are doing is not taking away a right or a privilege, but inserting one, because there was no floor before in the 1947 Act, and what we have done now is to write one in. If it is said that we could cut the prices by £29 million, I would reply that they could have been cut by an unlimited figure before that Act was passed. I think that is a very important point for hon. Members to bear in mind.
The hon. and learned Member for Northampton talked of this declining industry. I could not quite see how he made out that it was declining. The hon. and learned Gentleman also talked about prices fixed after a crop is sown, and he seemed to think that it was a bad thing. That was the point to which I referred a moment ago, when I pointed out that, in fact, many farmers prefer that. They have complained about the time lag in the implementation of these prices, and I believe that they would prefer this system to the previous one. When it is tied to the fact that there is insurance and that there cannot be more than a particular cut, I think it is a very fair provision indeed, and one that will be welcomed far more than criticised by the farming industry.
The hon. Member for Norfolk, South-West (Mr. Dye) brought up roughly the same point, as did other hon. Members opposite, in regard to the sliding scale. He talked about a reduction of 9 per cent. in three years as being a very serious blow to the industry. The same argument applies that it could have been far 921 more before this Bill was introduced, so that we are introducing security rather than taking it away at present.
§ Mr. Pagetrose—
§ Mr. Godber
I have given way quite a lot to the right hon. Member for Don Valley, and I feel I must be allowed to make my speech. I shall be very happy to discuss the matter further in Committee.
The hon. and learned Member for Brigg (Mr. E. L. Mallalieu) seemed very perturbed and talked particularly of the tariffs on farmers' requirements. I was not at all clear whether he did not want to see all tariffs taken off and a return to the free trade system entirely. [HoN. MEMBERS: "Where is he?''] The hon. and learned Gentleman has probably gone to see about some tariffs. We believe that we give agriculture by these new methods a system of protection comparable to the tariff system, and that it is fair, therefore, to agriculture as to industry.
My hon. and gallant Friend the Member for Knutsford (Lieut.-Colonel Bromley-Davenport), in a most interesting speech, raised various points concerning milk producers. I realise the special needs of the farmers in his area in this vital matter. Milk production is, of course, very important in that area and the reduced profitability of milk will impinge on those farmers. I hope very much that some of them might be able—I will not suggest that they cut out milk production—to consider rearing one or two beef cattle in addition to their milk enterprises; and if they cut down slightly on their milk herds, it might help to solve the problem a little. Whether it is sacrilege to suggest that when speaking to the people of Cheshire, I do not know.
The hon. Member for Gloucestershire, West (Mr. Philips Price), who welcomed the Bill warmly, talked about surplus milk and the need to make more British cheese. I agree very much with the hon. Member, but we should not minimise what has been done. The cheese should, of course, be made from the summer surplus of milk. We do not want to be producing expensive winter milk for it.
Home production of cheese has, in fact, risen sharply in the last two years and some of it is very good cheese indeed. I understand that we are exporting even to 922 Denmark and Holland or are attempting to do so. Home production last year was roughly 100,000 tons, compared with some 65,000 tons in the previous year. This shows the measure of the large improvement which has come about.
The hon. Member referred also to Clause 6 and asked whether it referred to the control of imports; I think he was referring to Argentine beef. The answer is in the negative. This is purely a Clause to enable us to prevent smuggling of cattle, say, from Eire to Northern Ireland and that kind of thing. It will give us control in that way. There is no provision such as the hon. Member had in mind.
On Part II of the Bill, the grants have produced most comment and interest. That is undoubtedly a direction in which there are great opportunities. My hon. Friend the Member for Gainsborough made a useful point concerning the large farmer and the small farmer. In fact, the grant will help the small farmer a great deal more, because the large farmer is already substantially helped by Income Tax concessions. The grants will, therefore, be a real help to the small farmer, and I hope that he will make full use of them. We are most anxious that he should do so.
My hon. Friend the Member for Penrith and The Border (Mr. Whitelaw) spoke of horticulture. He will find in me a very sympathetic listener when he speaks about horticulture, but we should not minimise what we are doing, or are allowing to be done. for horticulture under this Part of the Bill. If I might mention one or two of the items that would be eligible and which would be of help to the horticultural industry, they include, for instance, storage buildings and barns, including stores for fertilisers, seeds, bulbs, fuel, and so on, implement sheds, machine shops, staff shelters, mess huts, roads, which are very important on a horticultural holding; gates, walls and grids, electricity supply, removal of hedges and banks and the filling in of ditches. All these things are equally applicable to horticulture as to agriculture. They will, I think. be of considerable benefit to the horticultural side of our industry.
My hon. Friend also raised the question of houses. I think we must leave housing with the local authorities. There is a clear-cut distinction and it would 923 be spreading our burden too widely if we were to accept housing in addition to all the other things we have taken on.
My hon. Friend referred to retrospection and to the ability to start the work before the Bill has passed through the House. A number of hon. Members raised the same point. I sympathise very much with the feeling of hon. Members. We have considered this matter most carefully, but I really do not think there is anything we can do about it. All I would say to hon. Members on both sides of the House is that the more assistance they give us to get the Bill through quickly the sooner it will reach the Statute Book and become effective.
The hon. Member for Norfolk, South-West spoke of the possibility of farmers being encouraged to plough their profits back, instead of being given grants. Just before that he had been talking about farmers being forced into the bankruptcy courts. I was not clear, therefore, where their profits were coming from. Many small farmers need the grants, and while we certainly want to see profits ploughed back we must help them with grants as well.
My hon. Friend the Member for Newbury (Mr. Hurd) raised the important matter of the need to keep a strict watch against extravagant applications. We want these provisions to be used to the utmost, but we do not wish or intend that they should be abused, and we shall keep a very strict watch, I can assure my hon. Friend, to see that no unreasonable applications are allowed to pass.
The hon. Member for Brecon and Radnor (Mr. Watkins), in a most helpful speech, referred to the Livestock Rearing Act and to the marginal production scheme. Where there is a livestock rearing improvement scheme it has to be comprehensive. Therefore, there would not be much scope there for these new provisions, but we can always consider a scheme on its merits. There is, perhaps, slightly more chance for a marginal improvement scheme. We do not rule that chance out, and I should like to consider that.
The hon. Member asked me about the Advisory Committee and whether there would be any Welsh representative on it. I am happy to assure him that indeed 924 there will. I know it will please him to learn that.
My hon. Friend the Member for Westmorland (Mr. Vane) and the hon. Member for Derbyshire, South-East (Mr. Champion) asked me about the cost of administration. I agree that on sight it does seem high, but it is not much higher than that of some of the other schemes, in which the grant has been higher and the amount of work in relation to the total less. In any case, we shall keep a most careful check on it. It is necessarily an estimate, but we believe it is a reasonable figure and that it is as near an estimate as we can make it. If we can improve on it, we shall, of course, do so.
So many matters have been raised in the debate that I shall not be able to deal with them all in the time left.
§ Mr. Vane: Forestry.
§ Mr. Godber
My hon. Friend asked me about forestry, I do not think I can tell him very much about it at this stage. We may have an opportunity of debating it later. Forestry is provided for in separate legislation, and it does not seem reasonable to introduce it into this Measure. If my hon. Friend wishes to develop the matter, no doubt we can talk about it later. I cannot hold out any special hope to him at this moment.
I would now touch on one or two matters arising under Part III. The hon. Member for Norfolk, North asked me about workers' representation. We have allowed for two workers' representatives on this body. One will be from the agricultural workers and one from the workers on the processing side. Therefore, we have to that extent followed the plan right through.
§ Mr. Gooch: No.
§ Mr. Godber
Yes. I realise that the hon. Member would prefer two from agriculture, but we had to cover the other workers as well We must not make the body too large, and we felt that this was the fair way to do it.
We have not had a very long discussion on Part III. It is not perhaps of so great interest as the rest of the Bill, but I commend it very strongly to the House because I believe that a great deal of benefit can flow from it if we set up the 925 proposed Authority. There is no doubt whatever that the pig industry will certainly benefit very largely from the activities of this body, and I am sure that we all wish the Authority well in the task upon which it will be starting.
There are many other matters with which I should have liked to deal but we shall be able to discuss points of detail more fully in Committee. We have had a very useful discussion on the Bill. It has been generally welcomed apart from the element of doubt from some hon. Members opposite. which I well understand. They would not wish to bless the Bill too fervently, but it makes a very big stride forward in agricultural policy and I believe carries great opportunities with it. Part I gives a measure of stability and security, which I believe fully meets the demands which we have heard for a number of years for a long-term policy.
Part II gives tremendous opportunities for modernising our farm buildings. Although hon. Members have regretted the delay in getting on with this work, we really cannot do anything until legislation has been passed. This delay could prove a blessing in disguise—I say that in all seriousness—if farmers will only use the intervening) period in planning in fullest detail the way to modernise their buildings and cut out waste effort for themselves and their employees. Several hon. Members have referred to time study, and in this respect the Bill offers a great opportunity. These buildings were designed for the era of the horse and cheap labour. If improvement schemes are to be a success they must take account of the revolution in motive power on the farm and the need to see that not a single man-hour is wasted by inefficient lay-out. There is a great opportunity for careful planning and the use of time-study methods. The use of the internal combustion engine as a source of power has revolutionised work in the fields. Improved breeding and the production of new strains, together with freer use of fertilisers has expanded output in those same fields. The Bill will help to eradicate the real bottleneck which so often still exists at the centre of the farm itself. I have the greatest pleasure in commending the Bill to the House and I am certain that 926 it will be a tremendous advantage to British agriculture.
§ Question put and agreed to.
§ Bill accordingly read a Second time.
§ Bill committed to a Standing Committee pursuant to Standing Order No. 38 (Committal of Bills).