HC Deb 27 May 1957 vol 571 cc109-55

Amendments made: In page 26, line 22, after "production", insert "marketing".

In line 23, after "manufacture", insert "marketing".—[Mr. Amory.]

7.21 p.m.

Mr. Amory

I beg to move. That the Bill be now read the Third time.

The objects of the Bill and its main provisions have received a wide measure of support from both sides of the House and I shall not take up the time of the House by advocating them afresh. In his speech on Second Reading, the right hon. Member for Don Valley (Mr. T'. Williams) said that he and his hon. Friends would seek to improve the Bill in Committee, and he guaranteed that they would make no attempt to delay its passage. The right hon. Gentleman has faithfully kept that promise.

I am grateful to all right hon. and hon. Gentlemen for the helpful and constructive suggestions that they have made from both sides of the House during the passage of the Bill, so far. As a result, we have found it possible to make a number of improvements, and the discussions we have had will help us considerably when we come to administer the Bill.

I am conscious that the Bill is not perfect in the eyes of all hon. Members. It would be surprising if a Measure as bold and as far-reaching, as I believe this Bill to be, did not encounter criticism. Nevertheless, I think that all will agree that the Bill will make a practical. and I think a decisive, contribution to meeting the fundamental needs of the industry, which I described on Second Reading as "confidence" and "capital".

Confidence for forward planning is the purpose of the long-term assurances, provisions for which are contained in the Bill. One or two hon. Members, I was surprised to hear, saw the long-term assurances as a threat to the industry. I could not follow that argument, nor I think did the Committee as a whole. The effect is exactly the opposite. Under the 1947 Act, which we on this side of the House supported, hon. Gentlemen opposite empowered the Government to reduce the guaranteed prices by any amount they thought fit after any particular annual review.

Under the Bill, the Government will only be able to do that within quite strict limits. It really cannot be seriously contended that a Measure that imposes upon the Government such an important limitation of their discretion in reducing the guaranteed prices can be designed or intended as a means of withdrawing support for agriculture. I doubt whether hon. Gentlemen who put that view forward convinced even themselves that it was so.

"Capital" is the theme of Part II which provides grants for farm improvements and amalgamations. The scheme rests on the realistic basis of an economic unit, that is, a farm which provides the occupier with a decent livelihood. If the farm is already economic, the improvement grants are intended to bring a better return to the occupier for his efforts and from his capital. If the farm is an uneconomic unit at present, the grants will be approved, if the schemes are of the right type and if they will have the effect of turning that holding into an economic one. In the last resort, the grants will assist to create economic holdings by amalgamation. By opening the way to more economic and efficient production the grants should, in the long term. reduce the necessity for such a high level of subsidy support and therefore should be of benefit to the taxpayer.

I know there has been criticism that the Bill does not go further than that to help the uneconomic holding. I am thinking now of the case that was quoted of the essentially uneconomic farms or part-time holdings which are often, and probably generally, farmed by very hard-working men who, financially, are having an uphill task. One is. of course, sympathetic to these cases, but it would be wrong to allow public money to be injected for the improvement of holdings which, after the expenditure of public money, still could not be made paying propositions. We have to remember that the object of the scheme is to create self-sufficient and well-equipped farm holdings.

I have referred to the administration of the scheme. I think we are all aware that it will be by no means a simple matter. We are breaking new ground, and we have to be prepared to experiment a certain amount because of that. I would warn hon. Gentlemen that in some cases we shall have to take a stern view and that we shall no doubt disappoint some applicants. On the other hand, I hope that we shall be able to satisfy many more. In solving this administrative problem we shall lean heavily on the committee to which I have referred and of which Lord St. Aldwyn is chairman. That committee is holding its second meeting this week.

We shall also rely, most properly, on the advice of our county agricultural executive committees, which consist of practical men who know as well as anybody can know the needs of the industry. I am sure that the farm improvement grants will prove of real assistance to owners and occupiers who want to improve the permanent equipment of their holdings and who do not find it easy at present to meet the whole cost of doing so.

Now I would say a word about Part III. I am glad to find that there is general agreement that the provisions for the Pig Industry Development Authority are sensible. They are almost entirely the recommendations put forward by the Re-organisation Commission. The only point on which we have not been able to agree completely, is about the detailed composition and constitution of the Authority. As I have said, I am anxious that the Authority should not be too large. I am particularly anxious that it should be set up as soon as possible. It will have a challenging task; to make the British pig industry as efficient as that of any of our oversea competitors. In some ways we have here about twenty years' leeway to make up.

The Bill greatly strengthens the foundations for a stable and efficient agricultural industry. It is based on, and a development of, the Agriculture Act, 1947. I am sure that all sides of the House share the desire to see British agriculture a virile and progressive industry. That is what I believe it is today; an industry ready and able to apply new technical skills and new equipment in line with the advances in knowledge which are now at its disposal. It is because I am confident that this Bill will contribute practically to that end that I commend it with confidence to the House.

7.30 p.m.

Mr. T. Williams

I do not intend to detain the House for more than a few moments to share in the hymn of praise of the right hon. Gentleman for this Measure. There have, and always will be, different points of view about a Measure like this. This one consists of three parts. The first part is supposed to deal with long-term guarantees. The right hon. Gentleman said, quite rightly, that he could not understand how anybody could think that the guarantees in this Measure are not stronger than those contained in the 1947 Act. I will not argue the point at this late stage, except to repeat what I said on Second Reading.

Under the 1947 Act, in about nine years the average under-recoupment for increased costs of production ranged between£12 million and£13 million per annum. By the new long-term arrangements it would be permissible—whether or not it is probable is quite another thing —within the meaning of Clauses 2 and 3, with the proper percentages, to under-recoup by about£29 million or£30 million per annum, and still rigidly observe the letter of the law.

I shall not attempt to destroy the confidence that I tried to build up in the years between 1945 and 1951. Instead, I say as I said on Second Reading; if the farming community is happy with the new long-term guarantees, I am happy, too. I hope that its confidence will be renewed and maintained, and that it will continue with its campaign for increased efficiency and greater competitive powers as the years go on. So much for Part I.

I think it is perfectly true to say that those of us who watched, in particular in the 'twenties and 'thirties, the slow decay of agriculture in every conceivable respect from buildings downwards, will always welcome a Measure that is calculated to bring new life, new movement and modernity to an industry neglected for so many decades. Part II will go some way towards that. I know that£50 million sounds a lot of money, but ten years is a long time, and unless—as the right hon. Gentleman appears to have said at Norwich, and as the Lord Privy Seal said in his own constituency of Saffron Waldron the other day—the grants are to be confined to small and medium farms, even£5 million per annum will not go very far for improvement schemes of the kind referred to in the Second Schedule.

Nevertheless, it is a start, just as the Hill Farming Act of 1946 was a start. That Act has been extended twice already, and I think that it has justified its existence completely. I therefore wish well of Part II of the Bill. I hope that Lord St. Aldwyn and his Committee will devise ways and means of seeing that the administration of it is sound and solid, that little or no part of this£5 million a year is wasted, and that the maximum part goes to those small farms that are in urgent need of it.

All I can say of Part III is that it is a pity that we did not have a Pig Development Authority a quarter of a century ago. But those were the years when, of course, we had not any Labour Governments, so we could not expect a development authority twenty-five years ago. I compliment the Minister on having set up the Commission, on having approved its major recommendation, and on having finally embodied that recommendation in this Bill. I agree that it ought to bring about a profound improvement in the breeding, the feeding, and the marketing of our pigs. Does the right hon. Gentleman wish me to give way?

Mr. Amory

I apologise for interrupting the right hon. Gentleman—I did not really mean to do so—but I have been doing a mathematical calculation, and I believe that there have been two Labour Governments in the last quarter of a century.

Mr. Williams

The right hon. Gentleman is quite right. In 1924 we had a Labour Government which consisted of 192 Members out of 600-odd. Did he expect us to perform miracles with such a minority Government, when any day of the week the Conservative and Liberal Parties could have bowled us out, as they did after about nine months? We had another minority Government from 1929 to 1931 which could have been bowled out as and when it suited our opponents, and they bowled us out when it did suit them. The only majority Government that we ever had was in 1945, and we set the pace, particularly in agriculture, where we rebuilt, or saw the rebirth of a confidence which agri- culture had not known in a century of Conservative and Liberal Government. However, that is off the mark.

We welcome the Bill, we wish it well, and if our enthusiasm for Part I is not equivalent to that of some, that is only because we are willing to wait and to hope for the best. If it works out as the right hon. Gentleman thinks and hopes it will, we shall be as happy as he. That is why, from the first moment, we have never had any desire other than to see the Bill on to the Statute Book as soon as possible.

7.38 p.m.

Mr. Baldwin

I must congratulate my right hon. Friend on his strength in having convinced the Government that the continuation of our agriculture at its present high level is necessary. I know that the right hon. Gentleman the Member for Don Valley (Mr. T. Williams) will admit that conditions from 1945 to 1950 were completely different from those of 1950 onwards. In a time of world shortages it was easy to give guaranteed prices and so on, but when there are world surpluses piling up it says a great deal for my right hon. Friend that he was able to convince the Government that a prosperous agriculture industry is necessary for our economic health.

I am sure that the Government will realise in future that although there is cheap food to be bought from abroad, it still has to be paid for, and that if we go back to that system of buying cheap food from abroad the more will we increase our balance of payments difficulties. My right hon. Friend knows that I have sometimes been somewhat critical, but I hope that he will accept my congratulations, knowing that I do not offer them unless I really mean them.

7.40 p.m.

Mr. R. T. Paget (Northampton)

I wish that I could agree with the hon. Member for Leominster (Mr. Baldwin) that this Bill is a charter which will, in fact, provide us with a high level of agricultural production. I do not think that. I believe that its operation will be pretty disastrous to British agriculture, and I will say why.

In agriculture, production moves or varies with two costs. If the cost of land is high and the cost of labour is low we get a high production per acre and a low production per man. That is peasant agriculture. Where the cost of land is low and the cost of labour is high we get a small production per acre and a very large production per man. That is prairie agriculture. We are somewhat between those two extremes. The cost of labour in this country is pretty high. It is not quite as high as in the Americas. but it is on the very high side. The cost of land is cheap; in my view, it is far too cheap, relatively speaking.

If we were to leave the natural forces to play—if, in fact, we opened our frontiers to the free importation of food, I believe that our agricultural production under the free play of economic forces would work out at about half or less than half of what it stands at present. I do not believe it is right to do that, because I think for social, health and defence reasons it is extremely important that we should have a healthy and prosperous countryside. Agriculture from England's point of view is a public service as much as an industry.

Therefore, for reasons which are not economic, it is highly important that we should maintain a level of production in agriculture which is not an economic level. I do not think we are doing this. Monetary guarantees are worth only what money is worth, and if the value of money is continually declining, it is not even necessary to provide in the Bill a percentage cut in prices which can be applied each year. Automatically we are applying in addition the cut that comes from depreciating money.

Since the war we and many other nations have chosen full employment, and we have found that full employment involves rising prices. Ten years ago I said that full employment inevitably would involve rising prices and that so long as we had full employment we would have rising prices. I can only say that I said that in this House ten years ago, and everywhere in the world I have been proved right. I still believe that to be so. If we are having rising prices—and agriculture here depends upon support other than economic support—the support which we pretend to provide is not a support at all.

The Germans, for instance, have found this to be true. They have linked their social insurance figures not to a monetary sum but to a proportion of the national wealth. That, to my mind, is the only form of guarantee that really matters. is agriculture to retain its share of the national cake? Is it to retain its slice, or is that slice to be taken away from it? I think we ought to see what has been happening. I quoted these figures in Committee, but I think they will bear quoting again because they are important. In 1948 agriculture's slice of the national income was 2.9 per cent. Up till 1952 it remained stable at 2.9 per cent. In 1952 the last labour price fixing began to work itself out. From 1952 the size of agriculture's slice was falling every year. In 1953 it was 2.8 per cent., in 1954 2.4 per cent., in 1955 2.3 per cent. and in 1956 2.3 per cent.

In four years since we have had the Conservative Party in charge of agriculture, agriculture has lost one-quarter of its slice. Is that because it has not been doing its share in terms of productivity? Has it done less than its share to increase the national productivity? That is indeed quite the opposite to the truth. The figures are these. If we take 1948 as 100, agriculture in 1952, which was the point at which its slice began to dwindle, was 120, and in 1956 productivity had gone up to 140; whereas if we take industry as a whole, in 1952 the figure was 109 and in 1956 the figure was 120 and actually declining. Therefore, in terms of increased productivity, agriculture during this period has done about twice as well as industry as a whole. Yet during that time its slice of the national cake has been reduced by a quarter.

Surely those are very ominous figures which should provide us with some sort of warning as to what has happened, a warning of a real state of affairs which has been disguised by monetary figures that have been going up, expressed in money which has been worth less and less. Let us think for a moment how that has happened. Of course, the first reason is inflation. In the light of Government policy, does anybody imagine that is going to be less this year? We have seen a run of wage increases provoked by Government policy, and we have seen a Budget which, whatever else it is designed to do, is certainly not designed to reduce prices. I do not think that any reasonable man can have any doubt but that prices are going up faster this year than they did last year.

What happens? The idea here is that agriculture's increase in efficiency should go to the consumer in terms of reduced prices. That, of course, is the Liberal idea, the laissez-faire idea, the basis of the free trade philosophy. I myself think that it is an extremely bad idea. This is, of course, controversial, but my own view about this has always been that results of increased efficiency in industry should go in increased wages and increased profits, as high a proportion as possible of which should be retained as the means of recapitalising the industry, and that if, in fact, one disposes of one's increased efficiency by distributing it to the consumers, the system will go into unemployment. That is a proposition of economics on which there could be much debate.

There are, however, two propositions which, I venture to suggest, cannot be subject to very much dispute. First, industry as a whole has not applied the laissez-faire, theoretical idea. in fact, in industry, taken as a whole, wages and profits have increased at a much faster rate than efficiency has increased, with the result that prices have gone up; prices have gone up to pay higher wages and to pay higher profits. I am not complaining in the least about profits in this context, because they are the savings of industry for new capitalisation. The process has, in fact, been in reverse; the increased efficiency and more has not been passed on to the consumer but has been consumed by the industry.

My second proposition is that if we condemn one industry to pass its increased efficiency on to the consumer in terms of lower prices, while leaving the rest of industry to absorb within itself its increased efficiency, we condemn the first industry, agriculture, to decline. We condemn it to decline because it would be less profitable than the industries which retain their increases in efficiency. It will have to pay wages lower than those paid by industries which use their increased efficiency to pay higher wages. This is precisely what we see happening. The level of employment in agriculture has fallen. Since this Government have been in, it has fallen by about 100,000. That is a loss to agriculture, and that in spite of the fact that conscription has been used, to a very considerable extent, as a method for keeping people in agriculture. The deferment system has been used for that up to now, and, as conscription goes, so we shall lose men from agriculture even faster and our industry will decline even faster.

Capital has not been available for agriculture. This is recognised in the Bill, Part II of which does no more really than provide for an artifically low interest rate for farm capital—that is what it really boils down to—because it is necessary to try to attract more capital to a declining industry. I do not think that it will be successful. I believe that the capitalisation of the industry, whilst this method may help, will not occur, simply because agriculture has become a much less attractive investment than other industry. In the main, one will get large accretions of capital to agriculture only when agriculture is being used as a by-product of tax evasion, such as we have, indeed, seen for some time already.

I am very anxious about the future. I have been brought up in the countryside, and I love it. It will be a tragedy if we see a declining countryside, but we are already in the first phase. Milk is again being poured away. Potatoes are rotting. As for eggs, I am not sure what is happening to them, but I think that they are rotting too, not because people cannot eat them, but because people cannot afford them. Do farmers really not remember the last time?

The essential lesson here is that we cannot plan and have a free market. The decline of agriculture from 1952 has gone with the effort to introduce a free market. It is not a real free market. It is a bogus free market. The losses are concealed by inflationary prices. The thing drifts into a worse and worse position, which eventually becomes recognisable as bankruptcy.

I was a member of a Lucas Committee on Agricultural Marketing. I believe that we can have a planned level of agricultural production in England only on the contract basis. Let us remember that if we are to have anything like the present level, it must be a planned level; it cannot be the economic level, since that is only about half the present level. It must be a planned level, based on the contract system. We must have agricultural disposal boards which will purchase the product which we as a country are in fact financing, which will provide a proper marketing system to take both the home product and purchase what is necessary to make up the national requirement from abroad and no more than is necessary, and average the price to the consumer. Upon that basis, we can succeed.

On this sort of basis of compromise between a free market and a planned market, with guarantees which have the appearance of guarantees but, in an inflationary situation, are not real guarantees, agriculture has gone a good way down the road to disaster. After all, the loss of one quarter of its share of the national cake in four years is ominous. If the process is allowed to continue, it will go on and on until agriculture finds itself much as it was between the wars.

7.59 p.m.

Mr. J. E. B. Hill

I find it difficult to follow the hon. and learned Member for Northampton (Mr. Paget), because the more engaging his delivery the less convincing his economics. There was so much in his speech that it would need a wiser mind than mine to answer it and much longer time than I can afford.

The hon. and learned Member might find some of the answers to his questions in the F.A.O. publication, "Agriculture in the World Economy," which has some interesting conclusions on the relationship between the population working in agriculture and income. I visited Germany last summer and my impression in talking to the Germans was that they rather envied our agricultural policy and thought it well suited to our economy. I met Germans who were particularly interested in the methods of support that we used. The thesis that there is a necessary link between the percentage of agriculture's share and the total national income is really a false one. The hon. and learned Member's argument depends largely upon that and I do not regard it as a valid hypothesis.

The purpose of the Bill is to make a three-pronged advance towards maximum economic food production, for which there is great scope. We have heard a lot about under-recoupment. My impression is that too much use has been made of that word and insufficient attention paid to the possibilities of the saving of cost in food production.

Some simple statistics are available. if one hour were saved daily on every farm of under 100 acres, the value of the saving would be about£12 million a year. If a farmer could so rearrange the labour on a larger farm that he could save the services of a whole man, he would be saving£400 a year at the very least—it would be nearer£500 a year—and he would be getting into a capital saving of£8,000 to£10,000. These are big potential figures and I believe that by the combination of work study, which was mentioned often enough in Standing Committee, allied to well-thought-out improvements, a great deal of saving in those directions can be made.

If we had 100 per cent. cost-plus farming, which some hon. Members opposite have been advocating, I believe that we would remove all the incentive to have a progressive and efficient industry. I think that the road to 100 per cent. cost-plus is a road straight to disaster. I am fortified in that belief by the astonishing economies that the pressure of urgency forces one to discover. I know plenty of farms on which, as a result of things like work study, one suddenly sees—generally on a neighbour's farm and rarely on one's own—that a saving can be made. At a glance, a gentleman who visited my farm last week, during my absence, made a suggestion by which, I think, we can save one whole set of wages. I am sure that there is great scope in this direction.

The Bill will give an impetus to that kind of development. Part I makes for stability. If one knows the likely trend for the next four to five years, one can make a plan and carry it through. Part II makes for much greater efficiency. The improvement grants should stimulate a long overdue capital investment, particularly in the smaller and less well off farms, where relatively little has been done since, I would say, as far back as 1870.

The crux of the matter is the question of what, in practice, will be an economic unit. That is a supremely important issue. In the long term, it will inevitably mean the amalgamation of a good many small, uneconomic holdings. That has sometimes been said to be inimical to the small farmer, but there is confusion here. I do not believe that in the long run the small farmer will be assisted in any way by the perpetuation of holdings which, in effect, will condemn him or his successors to a peasant servitude. The best way of protecting the small farmers will be to follow a policy which enables every holding to be economically viable.

The Cambridge University School of Agriculture has this year produced an interesting report, "The Family Farm". It points out, broadly speaking, that in so far as acreage or scale is any test at all, it rather seems that as a result of modern developments, what formerly sufficed on 40 acres now needs about half as much again—in other words, 60 acres —to produce an economic unit. This conclusion is, of course, general, because soils, sizes and the system of farming vary.

In 43 out of 143 cases investigated it was found that farms failed to reach an economic livelihood, which was considered to be£500, or a rather lower figure than other more recent advisers have suggested. It was pointed out that three-quarters of the failures come from inadequate output. Therefore, the problem that the Minister faces in implementing the Bill is how to increase output on small farms.

We know that, traditionally, it can be done on most farms by bringing in more raw materials in the shape of feeding stuffs and most small farms can expand their production in that way. As the Bill is implemented, the difficulty will be to strike the right balance as to the degree of reliance that can be placed upon feeding stuffs which are not grown on the farm. Within our coastline, it is traditional for the big farms which grow grain, and so on, not to consume it all on the farms but to sell the surplus which goes to supply their smaller neighbours.

The difficulty that we have to face is the ease and the danger of being able to import feeding stuffs and thereby swell our gross output of food excessively. That is one of the dangers that must be watched in the production of eggs or of any of the grain consuming animals. The keynote of our policy is to emphasise and to swing the balance in favour of home-grown feeding stuffs, and particularly grass; but that is always more difficult for the small farmer.

The Cambridge investigation said quite clearly that: Pigs and poultry provide an alternative means of raising output and have the advantage that they take up little room and not need reduce output from any other part of the farm but— The important point, however, is that: If widely adopted as a means of raising output and income on any large number of farms, this would result in a substantial increase in feeding stuff imports and of Exchequer grants to support the prices of fat pigs and eggs. That, clearly, is the danger that we face in implementing the Bill. One fundamental fact of agriculture is that it is not wise to call into production food which people will not eat. That is the danger and that is the trouble that has temporarily overtaken the hen. The hen has been laying more eggs than the British consumer wants to eat.

The answer to that, I would suggest, is to look more to the consumer and to stimulating he consumption of eggs, which is about four a head weekly on the average at the moment, but which, easily and very cheaply, could be increased to five. If we all ate slightly more eggs, no doubt that would soon remove the problem of surplus egg production.

Part III of the Bill, relating to the pig industry and to the products of the pig, emphasises the importance of marketing and of presenting the food in a way the consumer wants. I believe that in that there is great scope for expansion and advance. The industry as a whole will have to struggle keenly in the future to hold its share of the housewife's purchasing power, because a great many other products and industries are competing for it.

It has been said that not much will flow from this£50 million towards improvements over the next ten years. I believe that to be quite wrong, for the reasons I have indicated. I should like to contrast, as, indeed, we shall all have a chance of contrasting, the good that that will do compared with what I thought was a much larger expenditure without a corresponding benefit—the£100 million injected by the Price Review of the last Labour Government. in 1947. There was not always smooth progress with that. There was rather a panic in 1947. I can remember the urge to the farmers to grow more, and that£100 million was injected into the Price Review to encourage production. It went in on current account. I should have liked to have seen much of it go into capital account, as this Bill proposes that the£50 million shall.

Mr. Champion

Would the hon. Member not agree that the amount then deliberately injected found its way into mechanisation on the farms, and into the farmers' capital, and not necessarily the fixed capital, and that that brought about this great increase of production of which he is speaking? Surely that was immensely important.

Mr. Hill

I quite agree with the hon. Member, except that I would say it put the emphasis too much on machinery. My own view is that British farms are rather over-mechanised and ill-equipped and under-equipped with fixed equipment, the reason being that, broadly speaking, the occupier buys machinery.

The figures show that on the average through the years about£50 million annually has gone on machinery purchases and that on the average between only£22 million and£25 million annually has gone on buildings and equipment. I think that the emphasis has been rather too much on machinery and not sufficiently on layout, or what I call improving the workability of farms. If they are hard to work, then wages and other expenses are wastefully incurred.

I suspect that we shall find over the years that we shall get very good value from this£50 million. I have a special affection for this Bill, because it is in one respect an answer, if not to a prayer, at any rate to a maiden speech, because I suggested two years ago that we should reach a stage when there would have to be Government policy for improving farms by means of reconditioning grants, thereby helping to cheapen our production and to reduce our calls on the taxpayer by bringing our unit costs down nearer to those of some of our competitors overseas. I believe that this Bill will enable that to be done and that we shall succeed in making steady and, I would go so far as to hope, spectacular progress.

8.15 p.m.

Mr. Watkins

I am sure that the hon. Member for Norfolk, South (Mr. J. E. B. Hill) will forgive me if I do not follow him all the way of his speech. I am very glad that his prayer has been answered, and I wonder what advice he can give me, because I have made many prayers in this House, prayers which, I hope, will be answered by this Bill, which, I hope, will answer some of the problems which I propose to mention now.

I have had the privilege to work upon this Bill right from its beginning, and I have gained much knowledge as it has progressed, and I welcome the advice and guidance given to me when I moved Amendments to it, some of them by myself, by the Minister or the Joint Parliamentary Secretary, or by my hon. Friends. I think that, generally speaking, it is a good Bill, and I welcome Part II, which is the only part on which I shall speak, with enthusiasm because I represent a part of this country, Mid-Wales, which always welcomes any support given to getting goodness out of our soil.

A good deal has been done by previous Acts of Parliament for hill farming and livestock rearing. One must not think of Mid-Wales as having only upland farming, and parts of this Bill will apply to Mid-Wales, but I am rather dubious about the effects of some of the Clauses.

Clauses 12 and 13, dealing with grants, I welcome of course, but I am not so much taken with what has been said about uneconomic holdings. Uneconomic holdings are of different categories in different parts of the country, An uneconomic holding in Mid-Wales, I ask the Minister to remember, is uneconomic only because it is so far from any services which can be rendered to it. The basic services simply are not there. There is a good deal that can be done about that administratively, and the problem can be considered from the administrative standpoint.

Moreover, the standards of uneconomic holdings differ throughout the country. In my part of Wales farmers have not been able to plough back their earnings into buildings because they had to buy their farms when large estates were sold, and since buying them they have been paying back their mortgages and have been doing so for a very long time, so they could not plough capital back into their holdings. I hope that in cases of that kind, where it is found that a holding can become economic, it will be given support.

I am backed in that hope by an excellent Report by Professor Zucker-man's Committee, entitled "Forestry, Agriculture and Marginal Land", which has been recently issued. I have read several times with great interest the paragraphs dealing with the problem of uneconomic farms, particularly the paragraph headed "Subsidised improvements", which deals with hill farming improvements and livestock rearing. The same arguments which that great Committee used about those schemes can be applied to the schemes under this Bill. One of the things that the Committee said was: However, these provisions are difficult to administer because there is frequently a very wide range of doubt as to how much income a particular holding would be capable of producing if circumstances were altered by capital improvement. That is a very important statement, and in weighing it a number of things must be considered.

We had a good discussion in Standing Committee on part-time holdings and I emphasise again their importance in Mid-Wales in relation to forestry. All reports, whether Government White Papers, reports from the Council for Wales and Monmouthshire or reports by other experts all emphasise this point. I hope that the Minister will advise his Committee to encourage the development of part-time holdings in that area. The late Professor Ashby, in an excellent document on Welsh agriculture, published in 1934, said: Total wealth of a community or the average wealth or the income per head of population or per family are not the only tests of the material well-being. That is a very important point. It is not merely a question whether a farm is economic or uneconomic. The people living on the farm are as important to the community as the produce.

A great deal will be said in future about amalgamations. No doubt the Minister, in the goodness of his heart, encourages purely voluntary amalgamation, but I hope that he will keep a critical eye on amalgamations in general in Mid-Wales. I was glad to have the assurance from the Joint Parliamentary Secretary that a great deal of ranching will not take place. I hope that when the Minister scrutinises any scheme that is brought before him for his approval he will realise that this is not merely a question of adding one field to another. Schemes should be scrutinised from the point of view of their general merits and the general economy of future planning. It will be quite wrong if grants are given and amalgamations of some holdings take place only to leave a part-time worker to try to get a living on a holding which will receive no improvement grants at all. I am sure that the people of Mid-Wales agree that the emphasis should be on the grants and not so much on amalgamation itself.

The sum of£50 million for ten years that is provided by the Bill is generally welcomed and, as the Minister has said, there will no doubt be a deluge of applications by 1st September. Will there be an order of priority for these applications? The Minister said that there might be some urgent cases. If there are urgent cases at all, they will be those of people who may lose their milk licences because their buildings do not come up to certain standards.

There has been a tendency of late to allocate funds for marginal production schemes on a county basis. I am informed that when that allocation has been met no funds are available until the next financial year. I hope that that information is wrong and that the Minister will assure the House that that kind of county basis will not be operated under the Bill. After having said so much about Part II in Committee, in the course of watching the interests of people about whom I am very much concerned, and interests which both Front Benches recognise as very proper, I wish the Bill a speedy passage in another place. I hope that the Minister, after hearing the welcome given to the Bill on both sides of the House, will bring the date of implementation of the Bill forward from 1st September to a much earlier date.

8.25 p.m.

Mr. du Cann

There can be no doubt that agricultural interests, including farm workers, farmers and those who supply machinery for the land, think the Bill excellent, and I should like to add my congratulations to those already received by my right hon. Friend on its introduction. It follows a White Paper published some time ago, and it reflects very great credit on the Minister, the Ministry and the negotiating unions that agreement was reached on these long-term assurances for agriculture.

There have been certain criticisms of detail, but I do not think that in the context of approval for the Bill as a whole they are of great importance. Some little time ago one heard a great deal from individual farmers about the need for a long-term agricultural policy, and criticism of what has been called in the House the annual "horse trading fair" at the time of the Annual Price Review. There is none of that now. Farmers and farm workers are looking to the future with a great deal of confidence.

There is one point which requires bearing in mind in the context of Part I. It was made in effect by the hon. and learned Member for Northampton (Mr. Paget), whom I am sorry is not now in the House, because I should have liked to have commented on some of his remarks. Farmers are realists. They understand and can cope with short-term fluctuations in market prices, but they demand long-term stability, and one is bound to wonder whether, for all their confidence, they have it in the Bill, because of the inflationary situation. We hope very much that the inflationary situation will not be with us for many more years, but I doubt whether any hon. Member would be prepared to bet money on that, whatever Government might be in power. This should not be a matter of party politics. It is one of great national concern.

Although a great deal of uncertainty has been removed from the farmers about the future, I agree with the hon. and learned Member for Northampton who said in effect that farming is certainly not an inflationary industry, unlike most other industries in the country, and farm workers are not getting their fair share of the national cake at present. The whole House recognises that they have done a magnificent job since 1939, and the whole House wishes to see agriculture continue to prosper. Whether it has had a fair share of prosperity in the context of inflation since 1939 is another matter.

As regards Part II, many hon. Members are delighted to see the principle of the Hill Farming Acts, as it were, coming down the hill which, as the hon. Gentle- man the Member for Norfolk, South (Mr. J. E. B. Hill) rightly said, is something we have wanted for a long time. This part of the Bill pleases me most. I hope we shall see a substantial number of amalgamations, bearing in mind the safeguards rightly asked for by the Welsh Members, whose point of view I understand. Clearly, it is necessary and right that there should be amalgamations. It is in the interests of the people who own, work on, and manage uneconomic holdings that they should amalgamate. I agree that amalgamation should not be compulsory, but I hope that amalgamations will take place in the interests of the people working on the farms.

On farm improvements generally, I must agree that the amount of£5 million per annum over ten years is a substantial sum of money, whatever may be said to the contrary by some hon. Members. My main point relates to the fact that we are voting large sums of the taxpayers' money to be spent on agriculture, and it relates to the use of that money. My right hon. Friend said rightly that it would be necessary to take a stern view of applications made under Part II of the Bill. It is also hoped that the need for subsidies will be reduced by the amount of money to be spent under this Part of the Bill, and that farms will become more and more efficient as time passes.

We are not self-sufficient in many commodities. For instance, we want more beef to be produced. I cannot help wondering, however, whether as a nation, as a Government, as a House, we are not in love with the idea of maximum production for its own sake. Let us consider what will happen in the County of Somerset, perhaps in my own constituency. Traditionally in Somerset, we are milk producers, and I know that many farmers will seek grants under this Bill for improving their holdings. This will mean, in effect, that they will produce more milk. Eggs have been mentioned and also pigs. We know that from time to time we produce too much pig-meat, and everyone is aware of the trouble over eggs. What will happen as a result of this Bill is that we shall have greater production of those commodities, and what shall we do with the surplus?

In that connection, I want to make a suggestion which I believe it is appropriate to make, because it has been said already this evening that skimmed milk is being thrown away in England. It is shocking that this should be done when one-third of the children in the world suffer from a lack of sufficient food. It is monstrous that we should be throwing away milk at such a time. The United Nations Children's Fund, which exists on voluntary contributions from Governments and individuals, in 1955 gave aid to some 32 million children in ninety countries. On looking up the records of that organisation's work this afternoon, I was horrified to discover that so much of the aid went to territories for which we in this country are responsible. They were territories in the British Empire and Commonwealth —the Dominions, the Colonies and some of the Trustee Territories.

Is it too much to hope that we should continue to encourage maximum production in this country to support British agriculture, to have the healthy and flourishing countryside we all want, and to use the surplus additional to our own needs to look after some of the children for whom we have a heavy responsibility in the Commonwealth and Empire and in other parts of the world? I hope this suggestion may find favour with the Government. since child nutrition is one of the objects of the United Nations Children's Fund.

To sum up, I think this is a good Bill in the context of British agricultural interests. I have some doubts about the inflationary future of this country, which made me have some doubts about the Bill. However, I congratulate my right hon. Friend upon it—indeed it is a matter for Parliamentary congratulation because it is an agreed Measure. Finally, I hope that my right hon. Friend will find an occasion to devote more thought to the disposal of our agricultural surplus, which must be worrying him very much.

8.34 p.m.

Mr. Grimond

There are two points I want to put briefly to the Minister. The first is on the working of Part II of the Bill. I hope that the right hon. Gentleman will reconsider the suggestions put by the hon. Gentleman the Member for Westmorland (Mr. Vane) and others, because in my experience it would be of immense benefit to farmers if the work done by themselves were eligible for grant.

There is the argument that it might lead to abuses, but it would save the country far more money than if the abuses were tolerated. There is a tendency today not only to cut off one's nose to spite one's face, but to cut off one's whole face to make certain that one's nose does not get out of hand. In areas like mine, for contractors to be brought in to do work is sometimes a fantastically expensive way of doing it on small farms and crofts where a great deal of the work could be done by the farmers themselves.

If Part II of the Bill is to be of assistance in the part of the country that I know best it is essential to encourage co-operation between the small farmers when it comes to things like grids and roads, and to make it easy for them to co-operate. I think the officials of the Department could be of great help, as, indeed, they usually are. It is a point very much to be borne in mind.

Then it is very important to get quick decisions. When a man puts up a scheme he gets very disgruntled unless he gets an answer to this application reasonably soon. In addition, we have a very short working season and we want to get the work done in the summer, if it is done at all. Lastly, if it can be arranged for any payment to be made on account this can be of great help in suitable cases. I do not know whether that was raised in Standing Committee. Unfortunately, I did not take part in the Committee.

I want to turn, secondly, to the question of amalgamations. I do not know the procedure on this Bill sufficiently well to say if it is possible, but if it were possible to strike the word "amalgamations" out of the heading of Part II of the Bill I think it would have an important psychological effect on farmers.

The grants that are being given to help amalgamation are to improve farms and make better economic units. In my part of the country, the word "amalgamation" will cause a good deal of concern. Already, there is anxiety about farms. being put down to grass—big ranches, as one hon. Member said. I would play down the idea of amalgamation. Surely the whole purpose of this part of the Bill —and a very important purpose—is to create more economic units in accordance with what is possible in the part of the country concerned.

The Parliamentary Secretary said that the Bill did not apply to crofts. I think that that was a slip on his part. It may be prefectly true that Clause 16 does not apply to crofts, but I think he will agree that the Bill does apply to crofts. The only argument may be that no croft can qualify for a grant because it can never come up to the standards laid down under Clause 12 (3), but surely the Minister would not want that impression to get about. It would be disastrous if it reached the crofting counties.

I take it that the Bill does apply to crofts, and if that is so I think that it is unfortunate that they should be excluded from Clause 16. The help which that Clause gives is not very big, but there are few more important things in the Highlands, than, not necessarily amalgamating the crofts, but trying to get them into suitable holdings, better laid out, trying to expand the very small crofts and, in general, making them all better economic units. I ask the Minister to look at this. I do not think that the impression should go out that he is explicitly excluding crofting land from the grants that are available to make a better economic unit.

One thing which prevents a great deal of crofting land from being properly used is that the incoming crofter who takes over a new croft has to pay compensation. There is power under Clause 16 (2) to make a contribution towards the compensation for disturbance payable under the Agricultural Holdings Act, 1948. Compensation from crofters is not under that Act, but would the Minister see whether it is possible to extend those provisions to general compensation on the crofts? I have always been very much in favour of inserting the thin end of a wedge. There is always a great deal of criticism about this, but we should never have got anywhere with our legislation if someone had not had the courage initially to insert the thin end of a wedge. I do not want to see the crofts going down to grass and the districts being de-populated, because the people are leaving the land. I know full well, however, that crofting land in many places will have to be redistributed if it is to yield anything like a decent livelihood. That applies not only to crofting land, but also to many small owner-occupied holdings.

The time has come when the Minister and the Secretary for Scotland should consider inserting perhaps only the very thin end of the wedge in dealing with this matter. He may say that it is dealt with in other legislation, but I do not think it is. The Land Court had certain powers, it is true, over the organisation of districts, but as far as I know there is no power to make a grant to help the better lay-out of crofting land.

I do not ask the Minister to go into this tonight, but he might consider it with his colleagues with respect not only to crofting land, but to all land in the North of Scotland. As he has so often said, this Clause in the Bill is permissive and is applicable only to voluntary agreements. I think it is an admirable start and, having made that start, I hope he will not exclude crofters entirely from his proposals.

8.41 p.m.

Mr. Vane

I welcome the support of the Leader of the Liberal Party for my plea to the Minister not to belittle the importance of the farmer's own work in operating Part II of the Bill. Although I have thanked him—not, he may think, as generously as was due—for introducing a standard charges system, I should like to repeat my warning that it would be unwise to lay too much importance on the standard charge procedure to meet the very big need and satisfy the many small farmers who have reason for their grievance in that in this sort of work they are less well treated than their bigger neighbours, who always think in terms of putting out their work to contract.

In the main, the Bill gives agriculture a big opportunity to strengthen its weakest feature, which. at the moment, is probably investment in fixed equipment. The hon. Member for Derbyshire. South-East (Mr. Champion), who was agreeing with my last sentence, suggested earlier that the injection of capital ten years ago probably laid the foundation of the mechanisation of British agriculture. That is perfectly true, and it was probably correct in the difficult times immediately after the war to start the investment in British agriculture at that end, but I wish we had reached this Bill a little earlier, because there is a ten-year gap between the first capital investment of which he spoke and this second capital investment scheme; and that gap has been too wide.

This is not just an opportunity for the farmer and the land-owner, but is also an opportunity for the architect and the country builder, on whose skill will depend whether or not this money is well spent. Many country builders are rather antiquated in their outlook and are not as well versed in modern techniques or thinking enough about modern building materials as should be the case. As a result, they may be doing work which is too expensive for 1957.

In general, I hope that the result of this expenditure on fixed equipment will not be merely to cheapen work which would have been done in any case, but will also encourage those concerned to undertake new work which otherwise they would no have been able to consider. I hope that as a result we shall see a large number of farms not just repaired in various small ways but given, as it were, a complete new look and so changed that their production is made more efficient and cheaper.

It would be quite easy for this£50 million to be frittered away on odd jobs, all items just over£100, which my right hon. Friend mentioned as the minimum sum he would consider. It would be possible for the£50 million to be spent on fencing, and even then this country would not be well fenced. But in either case the country will get very poor value if that is allowed to happen. My right hon. Friend has said that he will be stern. I hope that he will be very stern and insist that the greater part of this large investment goes into work which otherwise could not be undertaken and which, as I say, will transform the working of a great many holdings.

In fairness to those who have to work in the field, my right hon. Friend must from the start give very clear instructions to the A.L.S. and other of his servants in contact with the farmers so that the hopes of people will not be raised and disappointed as their schemes are turned down. I hope that from the start they can be told what will be included and what will be excluded.

Following on what was said by my hon. Friend the Member for Taunton (Mr. du Cann), I hope that not too much of the money will be spent in increasing the milk supply of this country. My hon. Friend wondered what would happen to the increasing milk supplies in Somerset. I make one suggestion, that in Somerset they should drink a little more of their milk and a little less of their cider—that is a remedy which lies in their own hands. Joking apart, it would be a tragedy if too much of this money were spent simply in making the milk supplies of this country even greater.

I wish to refer to the interpretation Clauses. This Bill is liberally supplied with interpretation Clauses: in fact, there are three. But they omit to define what has been the favourite expression of speakers from the Front Bench, "economic unit." Perhaps during the passage of this Bill through another place we may have a definition of these mystic words inserted in the Measure.

I hope the Parliamentary Secretary will refer to another definition. He skated round and avoided the issue when I raised it during the Second Reading debate, and I hope that he will not do so again now.

In the definition of agriculture he refers to the "use of land as grazing land, meadow land, osier land, market gardens and nursery grounds and the use of land as woodlands where that use is ancillary to the farming of land for other agricultural purposes." That phrase was inserted in the 1947 Act, because, I believe, the right hon. Member for Don Valley (Mr. T. Williams) was looking for a short way of describing shelter belts. But these words certainly mean a good deal more than that.

If one consults the dictionary one finds that "ancillary" means "subservient", "subordinate" and "auxiliary". Taking the meaning "auxiliary" and looking at the pattern of the English countryside, we find that in many areas there are British woodlands scattered among several farms in the same ownership. The area of the wood is less than the area under crops and grass and the capital investment in the woodland is less than in agricultural land. I should have thought that could be described as auxiliary or subordinate. In these cases such services as roads often. serve both side of the industry.

Since 1947, this question of the developing of agriculture and forestry together in many areas has come much more to the fore, even before the Zuckerman Report. Since the publication of that Report, I should have thought that all doubts had been swept away. It is tragic that this Bill has not been more generous to forestry. There is this one mention of woodlands, and I think that before this Measure leaves the House the least we can expect is to be told from the Front Bench a little more about the extent of its application to woodlands. I do not think that that would be asking too much. If it is intended that all woods other than shelter belts shall be excluded, I hope that we may be told so and told at the same time that the Government intend to try to do something parallel.

Apart from that one criticism, I welcome the Bill. We have talked about a long-term policy for agriculture, but we have not done as much thinking about it as we have talked about it. Here is something which is really the fruits of proper and genuine thinking about long term policy, and I hope that it will have a speedy passage through its remaining stages and will bring the benefits it promises to this most important industry.

8.50 p.m.

Mr. Dye

The Bill is like the proverbial curate's egg—good in parts. Parts of it might be very good, and others not so good. I have been present during all the stages of the Bill—Second Reading; Committee; Report and Third Reading—and I have had a chance to listen to the various speeches. I have been waiting for a chance to be able to congratulate the Parliamentary Secretary on one good speech during the whole course of the Bill, but so far I have not had that pleasure.

Just over a week ago I had the pleasure of listening to him speaking at the Pig and Bacon Show at Elmswell, Suffolk. He made a very good speech. He happened to make it from the same side of the table as I was sitting, and I was unexpectedly called upon to propose a vote of thanks to him for having made his speech.

Mr. Godber

The hon. Member did very well, too.

Mr. Dye

I thank the hon. Member for that compliment. It was, indeed, a very nice occasion. It was the kind of occasion where those with expert knowledge in the industry met those who were engaged in producing bacon pigs, and where they could share their knowledge, both practical and academic. The show went off very well.

One of the failures of the Bill is that it is not so practical as it ought to be. It is plain that the Bill is a supplement to the 1947 Agriculture Act. The very first Section of that Act speaks of: the provision of guaranteed prices and assured markets for…such part of the nation's food and other agricultural produce as in the national interest it is desirable to produce in the United Kingdom… We have reached the stage when our production has gone beyond that point. The original Act was to guarantee prices for that portion of the nation's food which was produced at home. It was never the intention to subsidise in any way the production of food in this country for export to other countries.

This is the crucial difficulty in the present development of British agriculture about which the Bill does nothing at all; indeed, that part of the Bill which is designed to give grants to assist agriculture can make the situation worse. It was most noticeable that before we began the discussion of the Bill in Committee a meeting of the Farmers' Club was held at which Mr. Stephen Cheveley gave a paper entitled "Farm Capital Investment—How will the Government Proposals Work?" He raised this very question, and said: Will self-sufficiency influence a decision? "— to give grants to a particular farmer— This could be a very controversial subject but I think we ought to discuss it because, quite soon, it will emerge when applications for grants are being considered. Let me illustrate what I mean by taking the extreme case of a poultry farm, or a pig unit, where a farmer is applying for investment aid and his production comes from purchased foodstuffs. Is there justification for using taxpayers' money

  1. (a) to increase his efficiency at present levels of production, or
  2. (b) to increase his production? "
We have asked those same questions over and over again in Committee and have never got an answer.

Is this a Bill to make our agricultural problems more acute by greater production of the commodities of which we already have too many? The hon. Member for Taunton (Mr. du Cann) made probably the best speech from the Government benches, because he tried to face the problem and he asked the Minister to try to do so. We have been asking the Minister to do so all through the Committee, but he has not done so. He came forward with the suggestion that if there were greater production of food than we needed—milk, eggs, potatoes and other commodities—instead of selling them to other countries we should use them as our contribution to parts of the British Commonwealth where there are grave shortages of food. That problem exists most acutely in India. The Government have not faced that problem.

We made a suggestion when discussing an Amendment that it might be possible during the present period or a later period to enable old-age pensioners to have greater quantities of milk and eggs, free, if necessary, and for schoolchildren to have greater quantities of milk, eggs, bacon or potatoes, when these things are in great supply. The Government have no policy whatever for dealing with the greater production of these commodities which they are stimulating, and are stimulating at a greater cost to the taxpayer by way of subsidy than ever before.

When Government supporters came in they were going to reduce subsidies and taxation, but today, after six years of Tory Government, taxation for the purpose of supporting British agriculture is heavier and the subsidies are greater than ever they have been. Next year thy may be even greater. The indications arc that the price of cereals will be lower for 1957 than for 1956, and if it is, then the subsidy will be greater still. If there is a greater quantity of cheap cereals, British farmers will buy more and will produce more eggs, pork meat and such commodities. There is nothing in the Bill, or in any statement of Government policy so far, that shows that the Government are even aware of that situation, which is known to everybody in the country and is complained about even by our neighbours in Denmark, Holland and other countries who, in the past, have been dependent upon their exports of food for their living.

This is not a good Bill through and through, that is to say, if it is designed to meet the situation with which the country is now faced. I am not alone in that opinion. As has already been mentioned today, the Minister of Agriculture went to Norwich on Saturday to speak at what I think they call an "Eastern Counties Agricultural Advisory Body" of some description of the Conservative Party. So they had a little hole-and-corner meeting in Norwich, not for Norwich people but for representatives from the whole of the Eastern counties. There was a resolution congratulating the Government on its policy as outlined in this Bill, but there was also an amendment criticising it and, believe it or not, with sixty-four people present and voting the resolution was passed by a majority of only twelve—

Mr. Godber

The whips were not out.

Mr. Dye

The whips were not out. What a brilliant idea that Tories, when they meet, should be looked after, shepherded by whips and not allowed free expression of opinion on agricultural matters in an agricultural area. We have the record in the Eastern Daily Press published today that when Conservatives meet to discuss this very Bill the congratulatory resolution is passed by only a narrow majority.

What were they concerned about? They were concerned about the first part of the Bill which continues, though in a restricted way, the guaranteed prices far agricultural products. These people are concerned that the Government's policy is one of what they call under-recoupments. Therefore, if I am a critic, I am not alone. There are twenty-six others to be gathered from the select of the Tory Party in the Eastern counties—and that after a really impressive speech by the Minister himself.

It is no wonder, therefore, that the benches opposite have been rather thin today—[Interruption.] The benches on this side, of course, are not full, but they have been fuller all day than the benches opposite. I wonder what any of the farmers' wives who have taken time off from the annual meeting of the Women's Institutes in another part of the city to listen to the debate here will think of the enthusiasm of the Tory Party for this Bill. They may well wonder why there are so few present when what is being claimed as the great charter for agriculture is being discussed.

This Bill is like the Tory Party. It is good only in parts, and one sometimes has a job to find the good parts. The Conservative Party claims: Through reduced costs of production the consumer and taxpayer will benefit, as well as the farmer. By how much will this Measure reduce prices to the consumer? By how much will it reduce taxation? By how much will it benefit the farmer when, in the guaranteed prices during an inflationary period, there is a sliding-scale downwards? That is the great difficulty which the farming community has to face. As the hon. Member for Leominster (Mr. Baldwin) said the other day, agriculture at present is a speculation. Hon. Members opposite may smile and sneer, but they cannot, of course, make a valid contribution to the discussion.

Therefore, although we have had a long discussion on this Bill, and although some of its aspects have received support on this side of the House, I hope that when it goes to another place its remaining defects may be rectified before it comes back to us.

9.6 p.m.

Mr. Bowen

I prefer the optimistic sentiments expressed by the Minister to the pessimism of my hon. and learned Friend the Member for Northampton (Mr. Paget). I must say, too, that I found the speech of my hon. Friend the Member for Norfolk, South-West (Mr. Dye) somewhat depressing.

I rise to underline and supplement some of the observations made by my hon. Friend the Member for Brecon and Radnor (Mr. Watkins). It is extremely important that the small farmer should be able to take advantage of Part II of the Bill and to carry out improvements particularly in relation to fixed equipment. It is important from his own point of view, and it is extremely important from the point of view of the industry and of the economy of the country. If the large farmer is to be able to take advantage of the Bill and the small farmer is not going to be able to do so, this will only aggravate the position which is already causing considerable anxiety.

If the small farmer is to be able to take full advantage of this Bill, and if he is going to have a fair share of the£50 million which this Bill involves, we shall have to look at two matters in particular—first, increased credit facilities, and second, the sympathetic administra- tion of Part II. If there is no improvement in credit facilities, many small farmers who would gladly take advantage of Part II will find themselves unable to put forward schemes under this Part of the Bill.

I was pleased when the Minister told us in Committee that the Agricultural Mortgage Corporation and the Lands Improvement Company are going to streamline and simplify their procedure. This may do something to help in the provision of long-term loans, because it is to these officially inspired loan corporations that we can look for help in the matter of long-term loans. We should remember at the same time that last year the Agricultural Mortgage Corporation lending amounted to only£1,500,000–1 believe that figure is correct—which, in proportion to what will be needed to implement Part II of the Bill, is a very modest sum indeed.

As for short-term loans, the joint stock banks can probably meet that need. The greatest need of all is in the field of medium-term loans. I was very pleased to learn that the farmers' unions have been looking into this question and that they hope to put forward a scheme to assist in this direction. I hope that in so far as they have the power, they will give every possible assistance to the farmers' unions in formulating a scheme of this kind, because it is through the medium of a scheme of this kind that the small farmer will be able to take advantage of the Bill.

I should like to say a few words on my second point, namely, the sympathetic administration of Part II. I think it will be the duty of the Agricultural Land Service to give every possible assistance in formulating schemes. It is important that this should be done to prevent waste of public money, and it will be particularly important to the small farmer if he is to be in a position to put forward worth-while schemes.

I should like to see preference being given at the start to schemes which will assist the farmer in danger of losing his milk licence; there are many in that category in this country just now. I should like to see some preference being given in the expedition of approval of schemes where proposals for electrification are made. One of the difficulties with regard to the extension of electricity schemes is that unless the farmer is able to take up a scheme when the board puts it forward, it may well be that the board will not return to his area for twelve or eighteen months, and valuable time will be lost. I hope, therefore, that, when the initial rush of applications is dealt with, those in the two categories I have mentioned will be given particularly sympathetic consideration.

The expression "economic units" has inevitably occurred several times in our discussions, and it has been emphasised that help to be given under Part II of the Bill is to be given to units which are economic or which can be made economic through reasonable assistance being given to them. The point has already been made by my hon. Friend the Member for Brecon and Radnor, that in the Mid-Wales Investigation Report there is a classification of farms within that area as either economic or uneconomic. That classification has caused considerable apprehension in Mid-Wales and in comparable areas.

I concede at once that some farms which have been put in the category of uneconomic are quite obviously correctly classified, but many described in the Report as uneconomic are, in the view of farmers in and around the area, economic or could certainly be made so by modest farm improvements being carried out. I hope that, when this scheme is administered, we shall not have anything like the rigid scheduling of farms into economic and uneconomic units as occurred in the Mid-Wales Investigation Report.

I hope also that when applications are considered, the social aspect of the matter will not be entirely overlooked in favour of the purely narrow agricultural interest. Neither the problem of the possible waste of social capital nor the possible aggravation of the trend towards rural depopulation should be overlooked. If these points which I have emphasised are borne in mind, Part II of the Bill can be of very considerable assistance in enabling the small farmer to play his part in producing unit costs of production.

9.14 p.m.

Sir L. Plummer

The hour is growing late, and I shall not traverse a great deal of the ground covered by the hon. and learned Member for Cardigan (Mr. Bowen). I wish we had had more thoughtful contributions from the Liberal Party during the Committee stage of the Bill.

Mr. Bowen

The reason for that was that I was the only Liberal Member on the Committee, and it clashed with a Departmental Committee on which I was serving, which I have been on for twelve months.

Sir L. Plummer

I did not want the hon. and learned Member to take offence at what I was saying. There are perfectly good reasons why hon. Members cannot attend Committees. For one thing, they have to earn their living. I was not complaining, but only saying that the hon. and learned Member's thoughtful contribution made me wish that it had been possible for him to attend. So long as Members are paid on a starvation level, it is difficult to find many with sufficient time to make a proper contribution to our discussions.

Mr. Bowen

The hon. Member does not appear to appreciate that my absence was not for the reason which he apparently suggests, but was because of my membership of another Committee.

Mr. Deputy-Speaker (Sir Gordon Touche)

Order. I am sorry to interrupt the hon. and learned Member, but we cannot pursue that point further. We are now on the Third Reading of the Bill.

Sir L. Plummer

I am sorry that that little propaganda which I was bringing into the debate in certain directions was misinterpreted and I apologise to the hon. and learned Member if I have said anything which is untoward or has upset him.

I wish now to make a few observations on the Bill, which has been an interesting one for us to debate as we have dealt with it over the last few weeks. I beg the Minister not to believe that the Bill by itself will clear away a good deal of the uncertainty and worry that exists in agriculture today. I think that it was the hon. Member for Taunton (Mr. du Cann), in a useful contribution on Report, who referred to the fact that the Bill had had the unqualified welcome of farmers and farmworkers alike. That obviously is true, because the hon. Member must have experience of that in the part of the country which he represents.

In that part of the country in which I live and where I practise farming, however, there is a great deal of concern about the future of agriculture, particularly in the next few years. I have not found overwhelming support for the Bill or, indeed, an indication on the part of farmers who are worried that they believe that by itself the Bill will relieve them of their worries and make their future clear and discernible.

Indeed, they have grounds for their worries. We discussed many times in Committee the fact that, despite the guarantees, the milk producer is finding that his price is falling below the normal guarantee figure which he expects. I know that the Government answer is that, unfortunately, we are producing a surplus of milk. The latest estimates are that we are now to have this year a surplus of about 200 million gallons. I beg the Minister to appreciate that this is an artificial surplus and one which has been created as a result of the Government's fiscal policy. We cannot have a surplus when there are people who are going without. The Government's determination to raise the price of milk to the consumer has caused this surplus for which the industry is now suffering.

I read the other day that the reason why skimmed milk is being poured into a ravine in the West of England is because it is not an economic proposition to sell it below 4d. a gallon in less than 400 gallon lots. Those were the price and the conditions that the Milk Marketing Board was quoting to farmers. Of course, there are farmers who want this milk. When we decide that it is the economic price which dictates what we are to do, we are repeating a formula produced by the Treasury which results in valuable pig food being thrown away and poured into a gravel pit or sandpit, or whatever it may be.

I do not believe that any hon. Member representing the average constituency can honestly and sincerely say that there are no people in his constituency who are not in need of milk. We have not yet reached the stage in this country where people are eating too much, or children are drinking too much milk. The fact is that dairy farmers are faced today with increases in costs and with a fall in the price per gallon, a position which has been created by the Government's own policy, and it is natural enough that the dairy farmer, who has no confidence in what he will get for his product next year, after the next Price Review, says that this Bill in itself is not sufficient to enable him to face the future with confidence.

What about the pig farmer? We now see quite clearly that with a little effort we could make this country self-supporting in pigs and bacon. It would not take much incentive to enable us to say of pigs and bacon what we can say about potatoes, except for early potatoes, that we need no imports at all. Is that to be the policy of the Government? Or are our pigs to be on a sliding scale all the time? We have had this year pigs at a low figure, pigs at a high figure. It looks as though for the next few months pigs will be worth a fair amount of money, but are we always to have this haphazard business with pigs?

It would have been better if the Government had leant in the direction of a marketing board. I should be out of order if I went on discussing that, because it is not in the Bill, but the pig farmer is not feeling any great confidence in what his future will be, because he does not know now whether pork and bacon will not follow the example set by milk, which, because of the Government, has been falling in price to such an extent.

The egg producer was startled by the Minister when, last Monday, he said: …it would be right to warn producers now that, unless there is some major change in circumstances"— he did not define what the change in circumstances might be— between now and next February, a further reduction in the level of the guarantee, within the long-term assurances, must be expected."—[OFFICIAL REPORT, 20th May, 1957; Vol. 570, c. 865.] So in three vital, essential parts of our agricultural production there are uncertainty, worry, no confidence in the future. It really will not be enough to say to the farmers, in the light of their experience in 1956 to 1957, and of what they will get in 1958 for milk and eggs alone, that the guarantee that prices will not fall below the figures specified in the Bill is sufficient encouragement for them.

I fear that the Bill will not offer the small farmers the hope that many of them thought was contained in the White Paper. The small farmer, generally speaking, has not the money today to put up the two-thirds for the schemes of improvement on his land. The hon. and learned Gentleman the Member for Cardigan mentioned that the right hon. Gentleman had talked about streamlining the Agricultural Mortgage Corporation. What we need is streamlining of the credit rates of the Agricultural Mortgage Corporation.

It is no wonder that the Corporation's lendings last year were only£1½ million, or some such figure. Its rates are too high. They are too high even for the big men, and as for the small men it is hopeless to believe either that a majority of the small farmers are in the financial position to find the necessary two-thirds to put down for improvements, or that they can command the two-thirds by getting it from their banks. They cannot. Too many of these small farmers who are working extremely hard earn a reward not much greater than that of the agricultural worker, and I know few agricultural workers who could find the sort of sums required under the Bill.

The credit squeeze operates harder on the small man in agriculture than it does on the small man in industry, because the small man has not been able to accumulate funds. The arable farmers, the men who are producing wheat, are worried sick about what will happen to wheat over the next few years. The Australians are worried about what will happen to their wheat crops. The United States could break the market completely overnight if it unshipped its year's backlog. The arable farmers in East Anglia feel now that, as some of their colleagues in the West Country have suffered considerably over eggs and milk, soon it will be their turn with cereals. The only hopeful sign for them today, taking it over a reasonably long term, is in sugar beet and potatoes.

I believe, therefore, that the Government must go further. They must pay attention to marketing and must make up their minds whether they want to increase production, on the one hand, by production grants while, at the same time, decreasing consumption by allowing the present steady and automatic increase in the cost of living to continue. I warn the Minister that it will be no use saying that something has gone wrong with the Bill if something goes wrong with agriculture in this country. The Bill will be neither an alibi nor a shield. If the Bill is a first instalment of a radical, bold, and progressive agricultural policy on the part of the Government, it will be useful, but if it is not it will be a monument to the failure of the Government's agricultural policy.

9.27 p.m.

Mr. Willey

As the Joint Parliamentary Secretary will have appreciated, we on this side of the House are not hostile to the Bill. Unlike the twenty-six gallant Conservative gentlemen in Norwich, we have no intention of voting against it, but we are very disturbed about the condition of British agriculture at present. It is because we believe that the Bill fails to take into sufficient account the causes of that disturbance that we give it only a very qualified welcome. But we appreciate that some improvements have been made in it as a result of our labours in Committee. We particularly appreciate the part played by the Joint Parliamentary Secretary in meeting many of the points raised there. In passing, I very much regret that the Government were not able to reconsider the composition of the Pig Industry Development Authority.

We give the Bill a very qualified welcome, because of the difficulties at present facing agriculture. As my hon. and learned Friend the Member for Northampton (Mr. Paget) graphically described, the position of agriculture has deteriorated very much over the past few years. As he showed, the share of the national income enjoyed by agriculture has declined over the past few years, and our only consolation is that, assuming that this disastrous state of affairs continues, the Bill regulates the rate of shrinkage in agriculture's share of the national cake. It does no more than that.

What really disturbs us is the failure of the Government to face their responsibility for the growing lack of confidence in British agriculture; to face their responsibility for the disturbance brought to the industry by the inept way in which they proceeded to decontrol, and inflicted agriculture with the direct consequences of their financial policy.

We discussed in Standing Committee the position of the farmers' incomes. It was not denied that, whether we speak in absolute or relative terms, their incomes have fallen over the past few years. It is little consolation to know that all the Government are proposing to do is to place a limit upon the rate of any further decline. We would have been more comforted if the Government had faced their responsibility for causing it.

Again, this Bill does not tackle some of the problems which have been raised during our discussion of it. Pigs have been mentioned. I ask the Government what their policy is on pigs. They must have a very limited approach because, in view of the crisis in pig production a few years ago, they are afraid to pursue a policy which would bring about again a substantially increased pig production.

The crisis in pigs has not been the only crisis facing the farmer. We have had crises in livestock. We have the present difficulties about milk. I point out to the hon. Member for Taunton (Mr. du Cann) this remarkable fact, that we are today the third largest exporter of condensed milk in the world. This is fantastic economics. This is another export which is subsidised by the British consumer. It is a marginal production of milk which depends, we can argue, upon imported feedingstuffs. Where is the logic of behaving like this? The case recently made out about the export of eggs applies not only to eggs. Here we have a Government apparently supporting this new developing subsidised export trade. Mention was made of the millions of gallons of milk which have been poured down quarries—

Mr. Amory

Skimmed milk.

Mr. Willey

Yes, but at the same time that this is happening we have a fall in the consumption of fresh milk due to the policy of the Government. There has been a fall in the consumption of full price milk and, of course, there will be a fall in the consumption of welfare milk. We cannot understand why the Government should act in this contradictory way. These factors are bound to disturb the confidence of the farmer.

My hon. Friend the Member for Deptford (Sir L. Plummer) mentioned Australian wheat. The farmers are well aware of the position of grain surpluses in the world and of the position of Australia. Yet the Government have destroyed the confidence which the farmer here could have as long as we had bulk purchase agreements with the Dominions. Whatever this Bill may do about prices, the inherent disturbance and uncertainty remains, because the cardinal fact is that we cannot effectively give guarantees upon a free market, and expect those guarantees to operate, whether that free market be a domestic or an international one.

I will mention another factor which has led to a good deal of disturbance in the farming industry, and understandably so. That is the question of the retail prices. If there had been a correlation between a fall in producer prices and a fall in retail prices this would have been understandable. The producer could have anticipated that at any rate the fall in producer prices was by way of reaction causing increased consumption through a fall in retail prices. That is just what has not happened.

We have had increasing retail prices, lowering the rate of consumption, against falling producer prices.

Mr. Amory


Mr. Willey

The right hon. Gentleman says that that is not so. What about bread? I will deal with other commodities if challenged, but I mention bread because that is the current one which we have been discussing recently in the House. The dramatic and drastic fall in grain prices has not reflected itself in a fall in the price of bread. I give the right hon. Gentleman this. If we look at all the commodities which I have mentioned where there has been a disastrous break in producer prices, on no occasion has that been reflected in retail prices.

Mr. Amory

It has in butter.

Mr. Willey

The right hon. Gentleman mentions butter. In the case of butter we depend almost entirely on imports. If he had mentioned cheese it would have been more relevant, because there is a large proportion of cheese that is domestically produced. In the case of cheese, unlike that of butter, we have had a maintenance of high retail prices. I am much obliged to the right hon. Gentleman for the illustration he has given. because.the fall in producer prices abroad has had a marked effect on retail prices in this country.

I will now deal with the Bill and its endeavour to provide some element of security. What does it do? It does no more in this atmosphere, in these circumstances, than to say to the farmer, "We will regulate the rate at which your share of the national income will decline." I concede at once that this safeguard is not in the original 1947 Act. It was not there for the simple reason that no one in 1947 anticipated these circumstances. But I would again say to the Government that this is no more than a palliative. We welcome it in a very restrained qualified way, but what is depressing is the cardinal underlying assumption that these circumstances will persist.

I accept the point made by my hon. Friend the Member for Taunton that over and above this we can assume that, at any rate for some foreseeable future, inflation will be with us which will aggravate the farmers' difficulties. What we wish to see is a recognition by the Government of their own responsibility, some recognition of their own ineptitude and a recognition at last of the fact that it is impossible to reconcile the guarantees which they are seeking to provide for the producers with an absolutely free market. In fact, if we give guarantees to the producers there must be some continuing responsibility for that commodity.

When we turn to the Part II of the Bill, we are up against the same essential, cardinal difficulty. The financial policy of the Government has had a particularly drastic impact upon agriculture. The Government say that if they are faced with difficult economic circumstances they will not resort to physical controls. They will not exercise any discrimination, they will not accept any responsibility and they will have a blanket overall control exercised by dear money.

The Bill does not tackle the essential difficulty; it gives us a palliative. We are to have a little repair work done in agriculture. The Government say, in respect of agriculture, "We will call upon the taxpayer to redress this balance in this instance and, through subvention, to provide that agriculture shall have interest rates lower than those obtaining generally." That is not unacceptable.

As I have said in Standing Committee. it is recognition of the necessity of having some planning. But it does not tackle the cardinal difficulties, and it is an extraordinarily expensive way of setting about it. It is very expensive to the taxpayer. It has this further flaw, as my hon. Friend the Member for Derbyshire, South-East (Mr. Champion) said on Second Reading, that it does no more than restore for agriculture the position obtaining before the Government followed their present financial policy. At that time, agriculture was not receiving sufficient capital expenditure.

If we pay regard only to agriculture, the Bill is not unwelcome, but first it is very expensive to the taxpayer and secondly it does not face up to the cardinal problem. which is a problem not only for agriculture in this country but for agriculture in most countries in the world—the need to devise a proper system of credit and investment for agricultural production. The Government have not tackled that problem. They have provided an inadequate palliative.

Before I leave the importance of investment, I have some questions to put to the Joint Parliamentary Secretary. I apologise for asking them so late in the discussion. Will he assure the House that these capital grants will not be taken into account when it comes to rentals? Secondly, will he assure the House that there will be no opportunity for these grants to be used for the purpose of capital gains.

I have dealt with two major elements in the Bill. When we come to the third, dealing with pigs, the position is rather different. Here, the right hon. Gentleman has accepted the recommendations of the Reorganisation Commission, and he is in a very strong position. He can say that the Reorganisation Commission has carefully inquired into the pig industry and that he has accepted its recommendations with alacrity. While I would not stress this objection as I have stressed my objections to Parts I and II, I suggest that even here the right hon. Gentleman is open to some criticism, because this is not the first time we have had a Reorganisation Commission for the pig industry. We had a commission in the '30s. The Government accepted that Report-I make no complaint about that—but it was soon found that the Minority Report of Lord Haldane was nearer the mark. In the present Commission, there was a very strong combination against the Report—the combination of the N.F.U. and the Co-operative Union. They both argued, and still maintain, that there is a necessity to provide for the orderly, efficient marketing of pigs.

We are obliged to the right hon. Gentleman for making it quite clear that the Pig Industry Development Authority will have the review of marketing within the scope of its activities. While I appreciate that he is accepting the Reorganisation Commission's Report, I express some doubts whether it will be sufficient. I say at once that we welcome the Authority. I in no way want to detract from our warm welcome of this Authority, which should do a great deal for the industry. But at the same time we must have some fear that there will still remain the problem of marketing.

So we welcome this Bill with some serious qualifications. Our overriding concern is the absence of any policy for agriculture emerging from the Government Front Bench. The Minister seems amused. I am not pretending that this is easy; it is an extraordinarily difficult problem. But I wish to emphasise that we do not get much further nowadays by talking of the conditions of 1947. Then conditions were very different, and the 1947 Act fulfilled the demand made by those conditions. We must get some new thinking from the Government particularly because these are extraordinarily difficult problems. I will mention some of them.

We are not now merly concerned with getting an overall increase in production. We have to determine commodity priorities within that overall increase. This is difficult for a country which imports half of its foodstuffs. We have to keep our domestic prices related all the time to the prices of imported foodstuffs, which again is difficult. Under the present administration, it seems that we have not the controls we should have. As the National Farmers' Union have said, we cannot just consider our own domestic production in isolation. We have also to consider our import policy.

We must realise the importance of particular commodities within overall production. To give an example, we may easily increase the production of milk by decreasing the price. But we have to think of the importance of his milk cheque to the marginal producer. Within an increase of overall production we have to have an increased efficiency. We have to determine what are the measures of increased efficiency. We can get a measure of increased efficiency which will eliminate the marginal producer and so reduce overall production.

I do not wish to speak outside the scope of the Bill, but I mention these things to voice our dissatisfaction. We think this a Bill which provides understandable safeguards to the farmer in present circumstances, but we appeal to the Government to think more about the inherent difficulties facing agriculture today. Having obtained this Bill, I hope that then major matters affecting the industry will be discussed by the Government and a policy evolved for British agriculture.

9.48 p.m.

Mr. Godber

I think it fair to say that, apart from a good deal of criticism, we have had a measure of support and welcome for this Bill from almost every hon. Member, with the exception of the hon. and learned Member for Northampton (Mr. Paget). Undoubtedly, that welcome is reflected in the country, where the farming community as a whole welcomes this Bill and has good grounds for doing so.

The hon. Member for Sunderland, North (Mr. Willey) has spoken of what he calls the decline in agriculture and the lack of confidence in the industry. I find it very difficult to see agriculture in the same light as he does, when I remember that its output is now running at the highest rate ever—159 per cent. of the pre-war rate—and that the profitability of the industry last year, measured in normal terms, was about equal to its highest ever. I do not think that these figures tie up with the description that he gave.

The hon. Member also talked about surpluses, which do exist to a certain extent. He referred to the problem of milk. I would remind him that it is only in the case of skimmed milk that there has been wastage, and the reason for that is purely economic, namely, that we just cannot afford to transport it for very long distances because it is not worth the cost involved. The use of skimmed milk during the surplus period has been very much stepped up, and has risen from about 100,000 gallons to about 750,000 gallons a week, which is a considerable increase. I understand that steps are being taken to try to absorb larger quantities if such a surplus occurs again. The situation is by no means out of hand and it would be wrong if it were thought that it was.

What has interested me about the debate has been the illumination provided for my hon. Friends about the way in which hon. Members opposite are thinking of our problems today. The hon. Member for Sunderland, North was talking once more of bulk purchases, and he was not the only one who talked of that as a method of solving our agricultural problems. They seemed to have the idea of going back to bulk purchases and to some form of marketing commissions—which, I believe, was the phrase used by the hon. and learned Member for Northampton (Mr. Paget)—such as was envisaged in the Labour Party policy statement on marketing that came out in January, 1955.

Apparently I am to gather that the Opposition have no fresh thought on agricultural policy beyond that statement. I am sure that the farmers will be interested to learn that, because, as I remember, they did not think very much of it when it originated. The hon. and learned Member for Northampton reminded us that he was a member of the Lucas Committee. I well remember that Committee's Report being published. I know of no report in history which caused greater consternation and dismay among farmers. Their fears were relieved only when they knew that it was not to be implemented.

The hon. and learned Member's whole thinking was on the lines of that Report, with its rigidity which farmers were so scared of, and the fact that they were to be denied the right to have anything to do with their commodities once they had passed through the farm gates. They disliked it very much and I am sorry to think that the hon. and learned Member has gone no further since then.;

I have been asked one or two points of detail which I think I should try to deal with as best I can. The hon. Member for Brecon and Radnor (Mr. Watkins), who was kinder to the Bill than some other hon. Members opposite, asked specifically whether there would be any limitation on the expenditure in a particular county. I think not. These matters will be judged on their merits in the country as a whole, and there is certainly no intention to penalise one county if it has justification for larger expenditure.

The hon. Member for Orkney and Shetland (Mr. Grimond) went back to the question of the farmer's own labour and urged us to do more. I do not think that there is much that I can add to what I have said about this matter, but we hope that through the standard costs system we can do a considerable amount.

The hon. Member also spoke about cattle grids and roads, which are clear cases for co-operation. We have given an undertaking that in that sort of case we consider that an argument can be made out.

I am advised that although in theory the Bill could apply to crofts, in practice there is very little in Part II to cover the crofters of Scotland. I understand that they are covered by separate arrangements under Scottish legislation. I cannot take it very much further, because I do not pretend to understand Scottish legislation any more than I understand crofts. That is the best advice I have on that point.

My hon. Friend the Member for Westmorland (Mr. Vane) returned to his charge about woodlands and the definition of "ancillary" as applied to agriculture. I do not think that I can tell him much more about this. I fear that he will be disappointed. I know how strongly he feels on this question of woodlands. We have told him more than once that woodlands can only come in if they are ancillary, in the sense that they are needed as part of the farming programme of a particular farm. This is clearly a matter for definition by the St. Aldwyn Committee and it is better not to try to define it precisely now.

The hon. and learned Member for Cardigan (Mr. Bowen) asked us several questions about credit facilities. He was a little worried about the ability of the Agricultural Mortgage Corporation and the Lands Improvement Company to meet the demands for credit. We have made considerable inquiry on this, and we are assured that they will, in the main, be able to meet the demands that will be made upon them. I am glad that the hon. and learned Gentleman mentioned the medium-term credit system being sponsored by the N.F.U. I have not had a chance to look at it properly yet, but I think the N.F.U. is worthy of congratulation for its initiative in bringing forward this scheme, which, I hope. may prove a help.

The hon. and learned Member also referred to the Mid-Wales Report and the definition of economic and non-economic holdings. The definition of an economic holding as envisaged in the Bill is not the same as in the Mid-Wales Report, which is of considerably higher standard. I do not think that the hon. and learned Gentleman need have the fears which he expressed in regard to that matter.

The hon. Member for Deptford (Sir L. Plummer) asked me a number of questions relating to surpluses, about which he was scared. There is not much I can add to what I have already said on that score except to assure the hon. Gentleman that our main purpose is to encourage the economic production in this country—there are many commodities in which we are far from a surplus at this stage—of those commodities and to see, if possible, a switch from those where we have a slight over-production. The over-production which has occurred in one or two commodities during the past year or two is only slight and marginal.

I see no dangers such as hon. Gentlemen opposite have been trying to point out, but, if such dangers exist, how much more valuable is the Bill that it would otherwise be if, at the very time when, as hon. Members have been saying we have serious surpluses, we are underwriting the future very considerably indeed in Part I.

Hon. Gentlemen opposite have to make certain noises not altogether in favour of the Bill and I understand that; but, by and large, the Bill has had a good passage through the House. We are grateful to hon. Members for the assistance they have given. I believe that the Bill will be widely welcomed in the country as a further assurance of the Government's support for British agriculture in the years to come.

Question put and agreed to.

Bill accordingly read the Third time and passed.