AGRICULTURE (LIME SUBSIDY) (Hansard, 2 July 1959)

§ The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. J. B. Godber)
I beg to move, That the Agricultural Lime Schemes (Extension of Period) Order, 1959, a draft of which was laid before this House on 14th May, be approved. The Order applies to the whole of the United Kingdom and extends the lime subsidy scheme for the next five years.
The lime subsidy enables the farmer to get a refund of 60 per cent. of his liming costs—in recent years increased in the summer months to 70 per cent.—to encourage farmers to lime hill, grassland and marshy and other land on which summer liming is practicable. The cost of the subsidy for the whole of the United Kingdom is between £9 million and £10 million per annum.
There is still some way to go before we can say that the lime status of United Kingdom soils is satisfactory. The latest estimate of the soil chemists of the National Agricultural Advisory Service is that we are short of that target by some 15 million tons of calcium oxide, equivalent to about 30 million tons of lime product. We are losing by leaching, extraction by crops and stock and so on, close to a further 2 million tons of calcium oxide a year. Some 9 million tons of liming materials—4½ million tons calcium oxide—a year would have to be applied to the soils of the United Kingdom to get the position right over, say, the next six years, nearly half of this quantity being required to replace our annual lime losses.
The current rate of consumption is close to the practical limit of agricultural lime production under average conditions. Average consumption for the last four years has been 6½ million tons of lime product for the United Kingdom. This year has started well and if weather conditions continue to be favourable for liming, consumption in 1959 should be well up to this average.
We regard the lime subsidy as one of the most useful of the farm production grants making, as it does, a positive contribution 748 to improvement in the fertility of our land. I believe that this Order for its further extension will commend itself to the House.

§ Mr. Frederick Willey (Sunderland, North)
We do not oppose this Order. These schemes have obviously been a great success, but there is a considerable sum involved—£10 million—and we must remember that the subsidy was only £2½ million in 1946–47. The subsidy has absorbed the rising transport costs and rising prices. Nevertheless, because it is substantial we must look at it twice.
This Order illustrates the dilemma of the production grant. It is an old scheme, first effective in 1939. Obviously the scheme has proved itself, because whereas the consumption was 500,000 tons in 1939 it is now 6 million to 7 million tons. The dilemma is whether such a production grant in effect becomes permanent. I concede at once that it would be a serious disadvantage if the subsidy were reduced at this stage. Indeed, the Joint Parliamentary Secretary has indicated that it will be required for six or seven years, a view confirmed by the Caine Committee, which said that the subsidy should continue at the present rate and should so continue for seven years.
Parliament clearly considers this as temporary aid, because the Government have to seek extension powers, but it means that we have a distortion of the economy. This has some disadvantages. Unlike the fertilisers subsidy, we have some costings in this case, but the mere fact that we have costings does not mean that we can avoid all the difficulties of such a price structure. The difficulty about the lime prices, as the Comptroller and Auditor General pointed out, is that there are no savings in the production costs due to improved efficiency and new techniques. For a subsidy which has continued over twenty years, this is a deplorable result.
We have no drive within the price structure to ensure that there are keen competitive prices. When this was raised, the Comptroller and Auditor General in his Report said that the Ministry were of the opinion that the industry was not obtaining any significant benefit from uncosted productivity gains 749 which might otherwise, in whole or in part, accrue to the Exchequer and they doubted whether any good purpose would be served by instituting a study of individual producer-costs and prices. This is not altogether satisfactory. The Ministry apparently conceded that some benefit might be obtained. At any rate, it leaves the suspicion that there is some laxity in controlling the prices.
Moreover, we have been driving an industry the whole time in order to bring about maximum output. This means that the price is certainly affected by the price of marginal production. This has gone on for 20 years and, as we are dealing with an extension Order, I had hoped that the Government would say that, since they envisage using the subsidy for a further seven years, we should have some businesslike inquiry to see that the prices are as competitive as possible. I recognise the dilemma and the difficulty of changing the rates of the production grant when we still have to make the maximum use of all lime available.
We cannot escape from that dilemma, but we can escape from the fiction that this is a temporary measure. We have to recognise that this Order has endured for twenty years and will certainly endure for seven years more; and that in seven years' time the then Parliamentary Secretary will probably say that it is needed for a further period. Because of this, the Government should face more seriously their obligations to satisfy both the House and the farmer—who, in the last resort, pays for the subsidy—that it is not a cloak for any inefficiency, and is not a device for avoiding the ordinary forces of competitive prices.
I do not think that the rather complacent reply of the Ministry to the Comptroller and Auditor General was satisfactory, and I hope that during the period of this extension the Government will show a lively concern, and will not merely to be content with the costings inquiry and review but will make the fullest use of it.

§ Mr. Clifford Kenyon (Chorley)
To safeguard myself, I must at once say that I support the Order, otherwise the hon. Member for Leominster (Sir A. Baldwin) will say that I opposed it. I 750 did not oppose the other Scheme, but supported it. One can support something even though one may criticise it.
I support this Order because I feel that if any subsidy schemes are doing good this, above all others, is absolutely essential. I was interested in the figures given by the Parliamentary Secretary, but they were averages for the country, and he will find that in the industrial areas and the rainfall areas—and especially where they coincide—the lime deficiency becomes very serious indeed.
At the Helmshore experimental farm in Rossendale it has been proved over the last few years that the leaching, together with the effect of acids from industrial smoke, removes from the soil half a ton of lime per acre annually. That is a terrible loss. Farmers in the area find that the cost of the additional lime necessary is very heavy, and I am afraid that in such areas we are not getting so much lime used as we should. Farmers just despair, and the land goes back to rushes very quickly if one does not keep up, year after year, with the liming.
Are periodical tests made by Ministry inspectors of the lime that is delivered to the farms—especially of limestone dust and ground limestone? Many farmers think that the quality is not what it was; that there is not the same care taken in the grinding or in the separation of the lime, or whatever the process may be. They feel that it is adulterated more than it should be. This does not occur with the burnt lime, but in the case of the limestone dust and the ground limestone there is certainly the possibility that this is taking place. Perhaps that can be looked into.
Facilities are much better for the spreading of the lime. The merchants have their spreading machines and they are getting on to the hills better than they did a few years ago. They can now use their crawler machines and their little crawler lorries and they can get into places that we used to regard as being inaccessible to anything but horses. Now they are making a good job of this work and there is no reason why the land, even on the hills, should not receive the lime that it now requires. Once again, I support the schemes.

§ Sir Archer Baldwin (Leominster)
I am glad that the hon. Member for Chorley (Mr. Kenyon) supports the schemes, because although I do not usually like production grants I agree that this is one of the best forms of production grant. I am sure that, without it, there would be nothing like the amount of lime used that should now be used.
I do not quite understand the criticism of the hon. Member for Sunderland, North (Mr. Willey) about production. The hon. Member for Chorley has rightly pointed out that the producers now distribute their lime in a first-class manner. I remember that in my young days it was hauled in the clod condition, put out in clumps on the field and spread with a shovel, which was not a very nice condition. Now, however, it can be distributed straight away.
My suggestion is that it would be as well if a test were made of the limestone when it is being applied. In the old days when the lime was slacked, there were stones left which we hauled off and put into the gateways. What becomes of the stones now? Are they ground up and applied to our land as lime? A little interest in the quality of the lime at the various limekilns would be useful.

§ Mr. Godber
Perhaps I may reply briefly to two points which have been made. The hon. Member for Sunderland, North (Mr. Willey) referred, understandably, to the comments of the Public Accounts Committee. I am sure that we shall all be interested to see the results of the survey. He raised also the question of relative prices. I was delighted to hear from the hon. Member's lips the claim that competition is a good thing. I hope that he and his colleagues will all think of that in other contexts.
I have been checking the price of lime, before subsidy, to the farmer shortly before the war and now. It is interesting that just before the war it was 24s. 6d. per ton. Now it is 43s. 10d. per ton. It has not, therefore, more than doubled in price, as most other commodities have done. That shows that there has been some reduction through the increased quantities which have come forward.
752 The hon. Member for Chorley (Mr. Kenyon), whose speech, as usual, interested us, asked a specific point about the sampling to make sure of quality. I assure him that samples are taken at frequent intervals. We keep as close a check as it is reasonably possible to do on the qualities of lime. As far as we can tell, there is not much wrong with the average sample.