§ 3.32 p.m.
§ Mr. Frederick Willey (Sunderland, North)
The Committee will appreciate that I am too mild-mannered to emulate the virulence with which the agricultural industry has reacted to the Price Review award. Accustomed as they are, or, perhaps, hypnotised, to being let down by a Tory Government, the farmers have been awakened to the dangers of the present Government, with their substantial Tory majority. Certainly, in its last issue—that is, nine weeks after the Review was announced—the editor of the Farmer and Stock-breeder, whose journal nobody would suspect of being a Socialist clarion, still talks of the "disgust, frustration and anxiety" that has swept the countryside. He tells us that the National Farmers' Union Councilwas confronted with a staggering array of protests, in fact, eleven foolscap sheets packed with spontaneous resolutions from 48 county branches, indicting Government policy.
§ Mr. Willey
Last Tuesday. Naturally, there is a clamour for the Minister's resignation. I do not join it. In any case, it would only strengthen the right hon. Gentleman's position if I did.
This, however, is not a matter which is personal to the right hon. Gentleman. The plain fact is that, inevitably, a Tory Government are in difficulty in discharging two of their responsibilities, defence and agriculture. In defence, the Tory Government sit in front of a bunch of brigadiers who are nobbled by generals. In agriculture, we all know that Lord Woolton's political fund came largely from the middlemen. In both these matters, there is necessarily a measure of planning, but the backwoodsmen on the back benches opposite are allergic to planning. As I have mentioned defence, I would add that some of the Government's mistakes in agricultural policy make the cost of Blue Streak more like chicken feed.
The trouble about the right hon. Gentleman is only that he is, in these circumstances, not big enough for his job. Looking along the Government benches, however, I would hesitate to pick out his successor. To be fair to the right hon. Gentleman, I doubt very much whether he has the instrument to carry out his job. The Ministry of Agriculture has very different functions from what it had before the war. If we compare it with the former Ministry of Food, we must remember that within that former Ministry were some of the most distinguished and experienced people in the food trades and industries.
The Government—I do not complain of this—are always ready to review the administration and structure of public corporations. As the right hon. Gentleman's Department is responsible each year for the expenditure of about £250 million in the agricultural industry, the Government might review their own administration and see that their own house is in order. What is inescapable, however, is the direct responsibility of the Government for the state of the agricultural industry. This is the measure both of Government responsibility and of Government failure. That is why the Price Review has been the last straw.
926 The agriculture and food industries include farmers, farm-workers, landlords, processors and distributors. Let us see how they fare. First, the farmers. They say that their normal income is 5 per cent. less than in 1948 in terms of the real value of money and that during that period they have increased their net output by 24 per cent., while in the same period the community as a whole has increased its income by 30 per cent. The National Farmers' Union, in its choice of base year, is anxious to avoid any political implications. I am not so anxious.
May I add to those figures, therefore, the figures given by the Joint Parliamentary-Secretary when I asked him a Question a few weeks ago. The hon. Gentleman's figures, which I fully accept, show that if we take 1951–52—that is, the last year for which a Labour Government were responsible—as the base year, farmers' incomes have fallen by between 10 and 11 per cent. under Conservative Governments. The reconciliation of the two figures is that during the time of the Labour Governments, farmers' incomes increased by about the same rate that they have decreased under Conservative Governments. Obviously, the farmers have a dispensation from the Prime Minister's blessing that they have "never had it so good". This change is obviously deliberate Government policy.
This is what the Minister himself said on television to the president of the National Farmers' Union:I think you will have to admit that the farming industry did better during the war and in the immediate years after the war than most other industries in this country. Therefore, I think you have got to realise that there has got to be some adjustment.That is the argument. The Government are saying to farmers that in spite of the deliberate slashing of their incomes by rather more than 10 per cent., they are still having it "too good" and it is Government policy to make it worse.
Of course, the farming industry did better during the war and during the immediate post-war years than most other industries. It was the deliberate policy of both the Coalition and the Labour Governments to ensure that, relatively, farming did better. We know why. We are comparing farming with agriculture, which, before the war, was 927 miserably neglected and a slum-depressed industry. We redressed the balance which was against the farmer and agriculture because we believed that it was in the national interest to have a prosperous agriculture.
I remember that when we were debating the 1958 Bill I had the somewhat unusual pleasure of calling in aid the Financial Times. That newspaper then said that the decisions of the Government had beenslowly eroding the foundations on which agricultural prosperity rests.It seems now that, having got the General Election out of the way, the right hon. Gentleman intends to accelerate the process, leaving the farmers, as the Financial Times then said,aloft on a precarious structure of subsidies.This is bad not only for the farmer, but the farm worker. Not surprisingly under Tory administration, there has been a rather massive drift away from the land; 22,000 farm workers have left the land in the last twelve months. Of course, like the miner, and for the very same reasons, the farm worker has improved his position compared with what it was in the 1930s, but he has not been helped by this Government. In fact, he has been prejudiced, and, in particular, he has been prejudiced by the fact that the impact of Government policy has largely been borne by the small farmer.
It is against this background that the Small Farmer Scheme is no more than a temporary alleviation, a dole to some sorely pressed farmers who are particularly hit by the present Price Review. I am not pretending that the small farmers' problem is an easy one; it is very difficult; it demands a far more fundamental approach. The result of Government policy is that today there are thousands and thousands of farmers whose income is lower than the farm workers', so low, indeed, as to be a constant threat and embarrassment to decent conditions for farm workers.
As I have said, like the farmer, the farm worker gets some consolation in the fact that his conditions are undoubtedly better than before the war, but he cannot console himself with the fact that, although he has increased his personal productivity by 80 per cent. since 1947, 928 working five hours a week longer he earns £4 a week less than the worker in industry. Neither can he console himself with the fact that the differential between the agricultural worker and the industrial worker has widened over the past few years.
As the National Union of Agricultural Workers says in its statement on the Price Review:It is high time that the industry and the nation faced up to their responsibility to the agricultural workers.The present policy of the Government is an abnegation of that responsibility.
Now for the landlords. Even here the Government can gain no consolation, because the Country Landowners' Association has stigmatised the award as "unduly harsh". Within the total farm income, undoubtedly the landowner, under the changed conditions, lost ground to the farmer and to the farmworker in his share of that income, but, of course, the position of the landlord and the whole structure of the agriculture industry has changed. If the position of the landlord was to be considered it could be properly considered only in a review in these completely changed circumstances, this completely changed structure of the industry. Instead, going further than the landlords themselves had suggested, without waiting for the Cambridge Report, we had the 1958 Act deliberately designed, in spite of all that the Government said at the time, to put up rents.
It is now argued that this will encourage the landlords towards more capital investment in the industry, but in the year before, in 1957, the Government had expressly provided £50 million of public moneys for that purpose. It seems to me that the landlords can have it both ways. They can have £50 million of public moneys towards capital investment, and then, as they begin to take advantage of that, the Government immediately enable them to put up their rents. However we look at this, it is clear enough that there is a striking difference between the attitude of the Government towards the landlords and towards the farmers and farm workers. At the same time that the farmer sees the Government endeavouring further to reduce net income to him, and he hears the Government exhorting him to reduce costs, the Government put up rents.
929 We have the Cambridge Report now. We know why we got legislation before the Report. We know that very shortly there will be an overall increase in agricultural rents of sitting tenants of at least 15 per cent. We also know, incidentally, that the rents of the small farmers are much higher than those of the larger farmers.
Finally, there are the distributors. We now enter a field where there is a traditional scope for influence on Tory policy. What a contrast with agriculture. We find that under the Tories, especially since 1954, there has been an extraordinary rise in distribution costs. We findthe trend of the margin still strongly and steadily upwards.Experts reveal the sudden and dangerous increase in the real costs of distribution.
There can be only two explanations: a great fall in the efficiency, or a great increase in the profits of the distributors. The Government cannot properly disregard either consideration. It is no good the Government expecting the agricultural industry to go on increasing its own efficiency at the rate of £25 million a year, to be largely absorbed by increasing costs without recoupment, unless the Government insist on equal efficiency in marketing and distribution. It is no good the Government expecting the farmers to face declining incomes if the contemporary purpose of Government support appears to be to support increasing rents and a dramatic increase in the costs of distribution. It is no good the Government expecting the taxpayer cheerfully to continue to bear the burden of supporting the agricultural industry to the tune of £250 million a year if the Government continue to be almost completely indifferent to the retail prices which the taxpayer's wife has to pay as consumer.
As I have said scores of times, there is a burden even on this middlemen's Government to satisfy us that the subsidies are, in fact, being used to aid the producer and also, by depressing the level of market prices, to aid the consumer, and not being used to gloss over Government ineptitude and the cost of Government policy or, for that matter, lost in distributive channels.
On the Supplementary Estimates I dealt with wheat, the guaranteed price 930 for which has been cut again by the present Review. For each of the last three years there has been a reduction in the producer's price for wheat, a reduction which, without taking into account the present reduction, amounts to 2s. 2d. a cwt. In those Estimates, we were considering an increase in the subsidy—the total subsidy being about £20 million, and we were considering an increase in the subsidy because there was a fall in market prices.
May I repeat the question which I asked then? I hope that this time we may receive some sort of an answer. What I cannot understand—and this obviously affects the taxpayers who provide the money—is why these continuing decreases have not reflected themselves in the retail prices of flour and confectionery. As I have often said, and it is admitted, there is a fairly well-known conversion factor, and, all things being equal, the price of a 1¾ lb. loaf ought to be l½d. less than it was three years ago.
In the same debate, I raised the same question about eggs. Of course, I know the difficulties of the Government, because the Government abolished the egg subsidy. Viscount Tenby, then Minister of Agriculture, was so pleased with himself that he broadcast to everybody; but almost before he had stopped speaking the subsidy was not abolished, but doubled. I mention this because no one has been able to explain what is the policy of the Government. Just as with wheat, so with eggs. Before the reduction in the guarantees at this year's Price Review, there have been three successive reductions in producers' prices. There was an increase in the subsidy in the Supplementary Estimate last year of £4 million, and there is an increase in the subsidy of a further £4 million this year. We have this subsidy running at the fantastic rate of £41 million a year; that is, at the rate of a couple of Blue Streaks.
Again, there has been no corresponding comparable advantage to the consumer. The consumer has not benefited by the reduction in producer prices or the increased rate of subsidy. We know that the consumer as I said in our last debate, enjoyed some advantage in the second half of last year, but we also know that that was exceptional. We know that average retail prices in 1958–59 were higher than they were in 1957–58. We 931 know that if the Egg Marketing Board succeeds, for this is its intention, retail prices will be higher this year than last year, and at the moment the Board is succeeding.
In our last debate, the right hon. Gentleman spoke of the "very considerable, almost revolutionary, increase in technical efficiency" in egg production, but he still continues to use his best endeavours to prevent that being passed on to the consumer. We know something about distributors' margins for eggs, because the distributors have not escaped the attention of the Public Accounts Committee. Time after time, the right hon. Gentleman's Department has been stigmatised by the Comptroller and Auditor General, but they are as insensitive as a rhinoceros. We have got no response at all. No offence to the rhinoceros. I think that it was on the last occasion that the Comptroller and Auditor General called our attention to the fact that "egg packers' margins had been some four times as great as intended."
If the right hon. Gentleman will tell us nothing else, will he tell us why, with a subsidy running at this rate, the Egg Marketing Board should have acquired palatial new premises on one of the best sites in the West End of London? Will he explain why it is now carrying half-page advertisements in the national Press, advertising not eggs, but the Egg Marketing Board, giving us the quaint information that "eggs are not made in a factory, but are laid by hens"? We have a public interest in this because of the amount of the subsidy. We also have a public interest in the price structure from the producer to the consumer. I may say, in parenthesis, that it is a very different price structure from that for milk under the Milk Marketing Board.
There is an even worse story about lamb prices. Last year, the subsidy was more than doubled. The White Paper tells us:… over the year as a whole the unit rate of subsidy will average about half the market price.At times, in fact, the farmer was receiving more by way of subsidy than he was receiving from the market. This year the subsidy will be, or it is estimated to be, £23 million, compared with the £12 million which it was in 1958–59.
932 I ask the Committee, have retail prices been halved? Not a bit of it. All this has had merely a fractional effect on retail prices. During the time when fat lambs were almost being given away at 1s. 3d. per 1b. dressed carcase weight, the prices to the housewife were 3s. 6d. and 3s. 9d. All this adds up to a fraud on the public, and it is equally unfair to the farmer. Surely, over the past few years, it has been bad enough working 2 per cent. harder to be 1 per cent. worse off, but the farmer, exposed aloft on a precarious and soaring structure of subsidies, is the principal victim of the Government's failure to produce either a comprehensive or comprehensible policy.
I have said that we know the root of the trouble. Any policy in favour of this support for agriculture demands some measure of planning, and the right hon. Gentleman's difficulties sit behind him. The Tory Party Central Office election confusion about Conservative agricultural policy has cleared—[Interruption.] It has lifted; I am being generous, and saying that the confusion has lifted—to reveal this colossally expensive failure of the policy. The real trouble is that the farmer is a realist, and that is why the present Price Review has caused this—to the Government—unexpected wave of dismay that has swept through the countryside.
§ Mr. Willey
It is no good the Minister and the Joint Parliamentary Secretary scurrying backwards and forwards over the countryside saying that their bark is worse than their bite, and, on every conceivable occasion, that they could have done worse. The fact is that it is not so much the amount of the cuts in the guarantees that is important as the nature of the cuts. No one could escape the conclusion, and the farmers have certainly so concluded, that these cuts are deliberately calculated to be a general disincentive. Farmers are discouraged 933 from producing more milk. At the same time, facing increased costs and a decline in profitability, there is no encouragement to produce more beef. That is in spite of the Government's beef policy, which has been a failure. We do not hear much about "red meat" at the moment.
§ Mr. Cyril Osborne (Louth)
May I ask the hon. Member a serious question? Is he really advocating that we should encourage farmers to produce more milk which nobody wants to buy, irrespective of cost?
§ Mr. Willey
That is an interesting and simple question, but who says that no one wants to buy it? There are two factors about milk production. I have raised this matter repeatedly in the House of Commons over the years of Tory administration. There were Government disincentives against the consumption of liquid milk. At the same time, I pay tribute to the work of the Milk Marketing Board.
There is also another point. Although the Government say that they have no interest at the moment in milk used for manufacturing purposes, we have an interest in it because we know quite well that this is a market in which prices can move suddenly and dramatically against us and it is a reasonable insurance to have an element of manufacture from milk in Britain as well.
After thoroughly depressing the pig industry, the Government now offer a minimal incentive inadequate to repair the damage that has been done. During 1959, the Danish pig population increased by over 1 million and the forecast is still greater production. In England and Wales during the same period the pig population had fallen by ¾ million and there is no sign of restored confidence. No wonder our Minister of Agriculture has earned the title of being the best Minister that the Danes have ever had.
For the fourth successive year we have had a reduction in the guarantees for eggs, and to be absolutely sure that there is a disincentive we have now a reduction for both sheep and wool and, finally, the niggling reductions for cereals. We are told repeatedly that we should lessen our dependence on imported feedingstuffs and should have 934 a greater reliance on home-grown feed. All this is blandly put on one side in the present Price Review and we are told that "world supplies of cereals are ample". There is not a word about balance-of-payments difficulties.
I have referred to these matters only to establish the one point that all this has been devised as a general disincentive to production, and it all adds up to false pretences. In the first place, the Minister said unobtrusively in last year's Price Review that there was to be "no further expansion of the gross output". He now talks about economic production. Incidentally, I wonder whether he has considered sufficiently the implications of the new patterns of production which are developing in the pig and poultry industries. We now have virtually industrial production, divorced from the land providing the feedingstuffs, with a short production cycle.
§ Mr. Willey
And this is reasonably susceptible to price flexibility. What thought has been given to this new element? Further, the Minister has to reconcile this development with the importance of pig and egg prices to the ordinary mixed farmer. What thought has the right hon. Gentleman given to this? All we now have are the perpetual crises in both pig and egg production, but by economic production, presumably, the right hon. Gentleman means the selective expansion of the production of particular commodities. This is why I refer to the Review.
The Review gives no incentive, and no selective expansion is called for. It is merely a general overall disincentive. In fact, it has left no room for selective expansion. In the Price Reviews over the past few years, with their erratic inconsistencies, it is impossible to discern any production policy emerging from the Government.
In the second place, and now more consistently, the Minister says that what he wants is more efficient production, but, again, is he discharging his own responsibility? He speaks in the White Paper of the unduly large and erratic fluctuations in producers' prices for eggs 935 during the last few years. He admits his own responsibility. This has been the result of Government policy. The same is true of fluctuations in pig prices. We have had greater and more violent fluctuations in pig prices under this Government than we had before the war.
We have had fluctuations from Price Review to Price Review—and the Price Review is the expression of Government policy. Practically nothing has been done about marketing, but if we are talking about efficiency, everyone knows that the first prerequisite to farming efficiency is price stability and the farmers' belief in the continuity of security. Without these factors it is impossible to secure the utmost efficiency from the agricultural industry. Nevertheless, as we all know, the farmer has increased his efficiency, but, over the past few years, unlike anyone else, he has been penalised for that efficiency. The £25 million which the Government estimate is the sum that the farmer has contributed to the efficiency of the industry year by year has largely been taken away from him at each Price Review.
This is an extraordinary approach to the incentive to increase efficiency.
§ Major H. Legge-Bourke (Isle of Ely)
Is the hon. Member not overlooking the fact that, certainly in the Estimates for the coming year, at least £7 million are being provided from the Exchequer to sponsor various forms of scientific advice and research, the benefit of which must surely be derived by the farming community itself?
§ Mr. Willey
I am obliged to the hon. and gallant Member. Research is certainly relevant to efficiency, but after paying tribute to the quality of the research, we must surely agree that the amount of research done in the agricultural industry is far too small.
I was about to say that "Increase your efficiency, reduce your costs, but do not produce any more" is the wise counsel given by the Minister to the farming industry. About 60 per cent. of the farmer's costs are outside his control. In fact, they are outside farming. If farmers' rents are increased they have to produce more to pay those rents or otherwise be worse off. In any event, in farming, increased efficiency almost 936 invariably goes with increased output. Indeed, over the past years the industry's efficiency has increased markedly as its output has increased markedly.
The other day we were discussing the Caine Report on Grassland Utilisation. I ask the Minister to look at it again. The Government agree with the Caine Committee that we should make much better use of grass, but the Committee says that one cannot make better use of grass unless there is greater agricultural output. The two go hand in hand. I know that, in theory, to the Whitehall farmer one can devise a scheme which will obtain more efficiency but no more output, but in practice one cannot increase the efficiency of this industry unless one also increases its output.
If one wants to increase efficiency, reduce unit costs, justify the considerable capital investment which has recently been made—backed by public funds— and justify the present policy of the Government, providing by way of production grants £100 million a year as aid to the industry, then there must be room for expanding production. But what is the present Price Review more than a bundle of disincentives?
§ Mr. Nabarro
Perhaps the hon. Gentleman will permit one question. So far we have had 35 minutes of general belly-aching about the Government's agricultural policy. I would ask the hon. Gentleman to respond to one fundamental point. This year's Price Review results in support for agriculture by the Government of £259 million. How much does the hon. Gentleman want it to cost? Does he want it to cost more than that or less than that Will he answer that point?
§ Mr. Willey
I am not going to answer that point at all. [HON. MEMBERS: "Oh."] No. The hon. Gentleman is deliberately—I do not know, perhaps, but he is intelligent enough to do it deliberately—doing a disservice to the agricultural industry. That is why I called in the Financial Times as a warning.
What we are concerned about is that, if there is a substantial measure of public support, running to £250 million, it serves the purpose for which it is intended, that we get value for money and that the Government discharge their responsibility, having put in £250 million of 937 public money, by ensuring that it goes where it is needed to sustain production, that they carry their policy further forward to ensure that we get the appropriate retail prices I did not wish to discuss this; I did not think it was in issue between the hon. Gentleman and myself—we accept the general purposes which have justified subsidies over the past years.
§ Mr. Nabarro rose—
§ Mr. Willey
I cannot continue giving way. The hon. Gentleman will have an opportunity to intervene later.
What I am trying to demonstrate to the Committee and the right hon. Gentleman is that the British farmer today is facing this dilemma and that he has no confidence about the Government rescuing him from it. I have not said anything about European trade, but one thing which is at the back of our minds all the time is the question of European trade. My complaint about the Danish agreement is not so much the agreement itself but that there was no consultation and no confrontation. I thought confrontation was at the heart of these arrangements. My complaint is the action of the Government in depressing the pig industry while this agreement was being reached.
§ Mr. Willey
That is why I gave the figures of the parallel developments in Denmark and in this country, which are greatly to the prejudice of the British pig producers.
I hope that I shall carry the hon. Member for Kidderminster (Mr. Nabarro) with me at least in this—
§ Mr. Willey
Then I do not. I was about to pay a tribute to British agriculture for its achievements since 1939 and to say that I should have thought that we could all recognise the technical achievements of British agriculture, for I think that they are comparable with any agriculture anywhere in the world.
The issue which is facing the farmer today is whether he will get a square deal. It is because the farmer cannot be certain of this that we have had this dismay running through the countryside, and if this uncertainty goes much further 938 —this is the important point—it will undermine the efficiency which we have established in British agriculture.
The hon. Member for Kidderminster wants to know what we ought to do. I will tell him quite simply. We ought to return to the simple thesis that a vigorous, efficient British agriculture is essential to British prosperity.
§ Mr. Nabarro
Before the hon. Gentleman sits down—he has just replied to my earlier intervention—I would ask him how he can say that British agriculture today is not vigorous and expansive when output last year at 68 per cent. above the pre-war figure—compared with 42 per cent. above the pre-war figure when the hon. Gentleman left office in 1951—was the highest in our history? How can he say that that is not a magnificent achievement and the result of Government policy? Will he please answer that?
§ Mr. Willey
The hon. Gentleman is only apologising for the mistake that he made earlier. If we want to compare the condition of agriculture we can compare its condition in the years immediately after the war and its condition now. On the technical side it is efficient, but it is disturbed; and it is disturbed because it believes, rightly or wrongly—I hope that this belief can be dispelled— that it will not get a fair deal from the present Government.
§ 4.16 p.m.
§ The Minister of Agriculture, Fisheries and Food (Mr. John Hare)
I did not wish to be guilty of any discourtesy to the hon. Member for Sunderland, North (Mr. Willey). I did not rise when he sat down just now, because I thought that he still had something to say.
§ Mr. Hare
I was hoping to listen to the obvious side of his speech, which I think all hon. Members on this side of the Committee would have liked to hear. I thought that we should, naturally, after the hon. Gentleman had gone through all the political manoeuvres of criticising the Government for this and that, be told how the Labour Party, if it got into power, would support our farmers Unfortunately, we have heard nothing about that at all.
§ Mr. Hare
I had hoped that by now the hon. Gentleman would do better than that document.
We have listened to a speech which I thought was mild. It was one long list of complaints about the ineffectiveness of the Government in dealing with support for the agricultural industry. However, I think that hon. Members on both sides of the Committee will surely be grateful to the hon. Member for Sunderland, North and his hon. Friends for one thing —for giving us this opportunity to discuss the situation of home agriculture. It is important—I am sure that all hon. Members will agree that this is so—from time to time to examine the state of agriculture, because farming is one of our major industries. It provides the direct livelihood of nearly 1 million people and contributes half of all the food we eat. More important still, if we consider only the kinds of food that can be produced in this country, our farmers produce two-thirds of what we consume.
I, for one, certainly welcome the opportunity of dealing with the rather woolly criticisms of the Government's agricultural policy which have been made since the announcement of this year's Annual Review. The hon. Member for Sunderland, North contends—this is his whole thesis—that we have been letting the industry down, that what we did at the Annual Review was wrong and, worse still, that we have gone out of our way to make farmers worried about the future.
I think, also, that I should not be doing the hon. Gentleman too much of a discourtesy if I said that I was not at all impressed by his attempts to draw what was really, if one had taken him seriously, a hopelessly gloomy picture of the farming situation. I suspect that he has been told to do this as a political duty, because other subjects like foreign policy, defence and nationalisation are subjects which the Opposition do not wish to be discussed at this time.
The hon. Member also went out of his way to say that we on this side of the Committee were "Whitehall farmers", and that he was of a different sort. I suggest that he should go out into the 940 countryside to see what is really happening, instead of getting lost in all the Blue Books, cuttings from the more extreme farming Press, and what-not, which he has done while "mugging up" his speech. The result is that he has got very little in perspective.
§ Mr. Willey
Does the right hon. Gentleman want to stick to what he said? In fairness to myself on this, the only quotation I made was from the Farmer and Stock-breeder.
§ Mr. Hare
The hon. Gentleman did not read a list of quotations, but he studied the cuttings extremely carefully. He should go out and have a look for himself.
The hon. Member has devoted too much time to the figures and has not appreciated the dangers of comparing figures for different periods and for different sections of the community. That has happened in comparing the position today with that of 1948 and of the immediately following years. In those years the industry's net income was put up by a deliberate capital injection of £40 million a year. This is clearly explained in an interesting document, the Annual Price Review of 1951. These are the words of Mr. Tom Williams' last White Paper:During the last few years farmers' aggregate incomes have included £40 million per annum injected mainly by additions to farm prices, in order to provide, by a quite exceptional method, a part of the large amount of new capital required in the initial period of the agricultural expansion programme launched in August 1947.If we discount this special injection— to use Mr. Williams' own word—for capital purposes, farmers' incomes today are, in real terms, up by 12 per cent. on 1948. That shows how one can use figures, but I would like to get away from too much of this equalisation of figures to prove arguments.
The hon. Member is flying in the face of the facts. He has tried to show, and has failed, that farming in recent years has been in a gradually worsening position. If this were so, would we, as several of my hon. Friends rightly pointed out in interruptions, continue to see every sign of expanding production and keenness to develop rather than to contract? In England and Wales more wheat and barley has been grown this year. We can 941 expect to have a larger total acreage under cereals and potatoes, with the acreage for sugar beet again fully taken up. There are more cattle and poultry, and I am sure that the fillip that we have given to pig production at the Review will, before very long, bring about the increase in pig numbers which we all want to see.
Farmers are not drawing in their horns and taking refuge in restricting their commitments. They are investing more capital in their holdings. The response to both the Farm Improvement Scheme—in which the landlords also share—and the Small Farmer Scheme continues to be extremely encouraging. There is—as I am sure the hon. Gentleman knows—an overwhelming demand for any farm that becomes available for letting or sale. It is not an unusual thing for there to be a hundred or more applicants when a farm is to let, and everybody knows the high prices which farms for sale are fetching.
These are facts. They result from a very different background from what the hon. Gentleman has been painting. They result from a background of continuing and substantial improvement in the condition of the industry. Farmers have not been slow to take advantage, for example, of the new varieties of cereals which have been made available by the efforts of agricultural scientists. As a result, there have been spectacular increases in yields. What was regarded as exceptional at the end of the war is now regarded as commonplace.
I wonder whether the Committee realise that the average yields of wheat have increased by nearly one-third over the past ten years. The same is true of barley. There have been similar developments in all directions. It would, of course, be wrong to confuse technical with economic improvements. We cannot ignore costs, or the need to sell additional produce at a remunerative price. But these remarkable technical achievements are a sure reflection of the strength and confidence of the industry.
In saying this, I am not being complacent. I am fully aware of the anxieties about the future which many farmers feel and I shall deal with these in a moment. I have been trying to put these facts into perspective. There is nothing in the present situation to 942 warrant the hon. Member's gloom. When I made my statement on the Annual Review on 10th March, I told the House that the Government considered that the Review decisions were a fair and balanced answer to a two-fold problem— on the one hand, of enabling agriculture to maintain its prosperity, and, on the other, of protecting the taxpayer from an increasing burden.
That is still the Government's view, and, of course, we have not ignored the criticisms that have come from many National Farmers' Union brandies and the farming Press. I am convinced, however, that the anxiety of farmers is due less to the actual Review decisions and to concern at the present situation than to fear of what those decisions may imply for the future. Although I believe that there is no basis for fears of this kind, it is understandable that they should creep into farmers' minds. Many of them recall the dark days for farming between the wars.
There is no danger, as long as this Government are in power, of that happening again. But for those who still harbour doubts, I want to make the position crystal clear, and to show that the industry's anxieties about the future are in no way justified. There is nothing in our general policy or in the Review decisions to prevent agriculture from continuing to be the healthy and prosperous industry which, with Government support, it has become.
Some farmers are anxious, as the hon. Gentleman said, because of the movement towards economic integration in Europe. There is too much alarmist talk about "Sixes and Sevens" and of agriculture being offered as a sacrifice. The care which the Government have taken in connection with the European Free Trade Association to safeguard the interests of OUT own farmers should reassure them. May I remind the Committee that when my right hon. Friend the Chancellor of the Exchequer announced, last July, the terms of the Anglo Danish Agreement, he emphasised thatThe proposed arrangements do not detract in any way from the Government's obligation to the farmer by which we are bound and will continue to be bound."—[OFFICIAL REPORT. 9th July, 1959; Vol. 608, c. 1571.]These are not idle words. The Agreement did not prevent the Government 943 from increasing the value of the guarantee for pigs at this Annual Review. If any further evidence is needed of our firm intention to safeguard the interests of our producers, I would remind the Committee that to give tomato growers the extra protection which they need against imports in the earlier part of the season we decided, only a few days ago, to increase the tariff. So much for the general anxieties which have been expressed.
I should now like to turn to the Annual Review, on which the hon. Member spent some time. This is the main subject of the debate. I must emphasise that this Review merely continues the policy which the Government have been following since 1954. All this time the stress has been on the importance of the market and the need to make production more economic. There is nothing new in what we have done this year or in the policy statements in the White Paper, yet the hon. Member said that the Government's policy is restrictive. He called it "a bundle of restrictions". Why is it that an intelligent man like the hon. Member, as well as others, hold this view? He knows perfectly well that the Government do not tell the farmer what he may or may not produce.
The farmer is a free agent. He is not subject to directions or control in the way in which he runs his farm. He can decide for himself what and how much he can produce most profitably.
§ Mr. Harold Davies
The right hon. Gentleman is not quite right. He says that he does not tell the farmer what he should not produce, but on page 5 of the Annual Review appear the words:… the output of eggs should be reduced.
§ Mr. Hare
I am grateful to the hon. Member for that intervention. That statement does not tell the egg producer whether he should or should not reduce his output of eggs. Some producers are far better equipped to produce eggs than others. All we are saying is that there are too many eggs for the shell egg market. That is quite different from what the hon. Member for Sunderland, North said about restriction.
I imagine that what the hon. Member had in mind is that, in his opinion, the 944 Government are restricting farmers' incomes, but that is not true, either. The Government fix the guaranteed prices for the principal commodities, but that does not restrict what the farmer— this deals with the point made by the hon. Member for Leek (Mr. Harold Davies)—can earn by his own efforts. The deficiency payments are based on the average market price and, as we know, the enterprising farmer who sells his produce to better effect than the average gets the full reward of his skill.
Some other critics see an element of restriction in the fact that at the Annual Review the Government took into account an estimate of £25 million as the industry's annual gain from increasing efficiency. This, too, was mentioned by the hon. Member for Sunderland, North. These arguments—and there are others who use them, too—take various forms. It is suggested by some that the industry should receive full recoupment for increases in costs and that increasing efficiency should not be taken into account. Others do not go as far as that. They admit that efficiency is a factor to be taken into account, but they say that the figure of £25 million which we have used is too high.
It would be quite wrong to ignore that increasing efficiency is a powerful offset to increases in costs. This figure of £25 million amounts to about 2 per cent. of the value of gross output of the Review commodities. Its validity has been borne out by experience over the years. It has been published in White Papers from 1955 onwards and has never been seriously challenged by the farmers' Unions or anybody else until this year. [HON. MEMBERS: "No."] It was not challenged until this year. It is in line, too, with experience in industry generally.
Other industries have to absorb increases in costs and operate under competitive conditions which oblige their members to keep pace with the most efficient. When the cost of protecting the farmer against changes in market prices is borne by the Exchequer, surely the taxpayer must have strong claims to a share of the benefits gained by increasing efficiency.
§ Mr. John Morris (Aberavon)
Would the Minister kindly explain how he has arrived at the figure of £25 million?
§ Mr. Willey rose—
§ Mr. Hare
I did not interrupt the horn. Member during his speech. I wish to continue to give reasons why I do not consider that this is an unreasonable figure to take. If I wish to give way to the hon. Member in a moment I will do so.
My hon. and gallant Friend the Member for Isle of Ely (Major Legge-Bourke) raised a very important point. He admitted the principle—by saying that money has been spent on research —that it would be utterly wrong to overlook the Government's further contribution to expenditure, as he put it, on agricultural research and education, the National Agricultural Advisory Service, and the capital grants schemes such as the Farm Improvement Scheme, all of which are outside—I repeat, outside— the scope of the Annual Review. The Committee may not realise that this expenditure has been increasing each year. Five years ago it was only £19 million, but last year it was over £31 million. This is money outside the Price Review.
In these circumstances, it would be an insult to the industry and a matter of deep concern to all who have the interests of agriculture at heart if efficiency did not increase. Surely it is only reasonable that the Government should decide each year in the light of the Review what constitutes a fair share of the gain from efficiency as between the taxpayer and the producer. The record shows quite clearly that we have never left the industry, year in and year out, with no reward.
I would say that one culprit in all this talk of restriction is that section of the White Paper which urges the farmer to examine afresh the various ways of reducing costs and to consider the possibility of adapting his production and selling so as to increase his income from the market. There is nothing new or revolutionary here. We are not telling the farmer that he should not produce more if he profitably can. Obviously, 946 he should and must. I should be the last to say that increasing output is not often a good way of getting costs down and increasing the farmer's net income.
But this is certainly not the only way, and it is by no means necessarily always the best way. Costs can be reduced directly, without any increase in overall output, by new methods and the adoption of new techniques. It is not my job nor, in my submission, that of anybody else in the House of Commons, to tell farmers how to farm. But there are many very good farmers who have built their success on good management. These men have been ruthless in cutting out the weakest lines and are ready to change to new ways. I would say that every farmer can profit from the ideas and experience of the most successful. We can all afford to learn from their example. We all know that the wide range of costs and returns on farms of the same broad type shows that there is plenty of scope for changes on those below the average.
I hope that no one thinks that this means that we are interested only in the bigger farms. There are social values as well as economic values to be taken into account. There is a permanent place in our agricultural life for the small farms which can be made to yield a satisfactory living. The very success— and this replies to the hon. Member for Leek—of our Small Farmer Scheme demonstrates our belief in this. It was not worthy of the hon. Member for Sunderland, North when he talked about the Small Farmer Scheme being a dole to the small farmer. It is not. It is an injection of capital and advice into a group of farms which, with that capital and advice, can give a decent living to those who occupy those farms.
I am delighted that one of our leading farming papers has realised the importance of this and has taken over two small farms of widely differing character to show what can be done to make a small unit provide a decent livelihood.
§ Mr. Hare
The Farmers' Weekly.
I have shown that the Government's policy does not restrict the farmer in what he can produce or limit his ability to earn more now by his own efforts. I 947 should like, as the hon. Gentleman did, to look more closely at the White Paper.
We have said that we would like more pigs and beef produced. This, in turn, will increase the demand for feeding-stuffs. The better use of grass will obviously help. Home-grown grain, also, is obviously needed on a large scale for use as feedingstuffs. The president of the Compounders' National Association recently said that his members attach a great deal of importance to regular supplies and are anxious to continue to expand the use of home-grown grains in their compounds. All this hardly sounds restrictive. The reductions that we have made in cereal prices are most moderate in relation to the continuing and substantial increases in yields.
We can already see some benefit to pig producers from the changes that we have made in the pig guarantees. As I hoped, both farmers and curers are taking advantage of these changes by entering into long-term contracts. These should give both sides the stability which they say they want. I should like the hon. Gentleman to listen to this. It now seems likely that more than half the pigs going to bacon factories in Great Britain will soon be sent there under contracts of this kind. This is an astonishingly rapid answer to the critics who have mocked the idea of long-term contracts.
§ Mr. Willey
Surely the right hon. Gentleman will remember that I put forward the view that we should encourage long-term contracts. What does the right hon. Gentleman propose to do to aid these long-term contracts? He knows the technical difficulties. Will he take action to assist them?
§ Mr. Hare
The hon. Gentleman knows perfectly well that the arrangements that I made in the Price Review have made long-term contracts possible. That is why more than 50 per cent. of the pigs will go to bacon factories under long- 948 term contracts. Nobody can do more than that.
Again, the critics say that in cutting guaranteed prices the Government have made it quite clear that they do not want the industry to produce more of some products. That, they say, must mean restriction. I do not accept that. It is a complete misunderstanding of what we are seeking to do. What we say is that there are dangers in producing more of everything irrespective of what the market wants. Surely this is plain common sense and no one would disagree. In the White Paper we try to give general guidance on the needs of the market and on where the dangers of overloading the market arise. We are not telling fanners to restrict production, but to make sure that they can increase their market before they press further supplies on it.
I do not think that hon. Members opposite can expect me to apologise for advising farmers to take that into account. They should remember what they themselves said in the 1951 White Paper. The White Paper of that year called fora damping down of the present rate of expansionof milk in the light of the estimated requirements for liquid and manufacturing use and the heavy cost in subsidies. It is an interesting document. It also spoke of the imperative need to discourage egg production during certain periods of the year. It also imposed cuts in the target acreages of wheat and sugar beet.
§ Mr. Thomas Fraser (Hamilton)
The right hon. Gentleman has quoted extensively from the 1951 White Paper. Will he tell the Committee what was the attitude of Her Majesty's then Opposition to that White Paper?
§ Mr. Hare
I understand that the hon. Member for Hamilton (Mr. T. Fraser) will wind up the debate. He can make a good point of this. Instead of trying to develop his speech now he should develop it later.
When the Socialist Government did that in 1951 it was at a time when food was extremely scarce, when production was at a much lower level than it is now, and when that Government were still maintaining a whole paraphernalia of controls. Since then we have gone 949 on to expand production and enlarge the market. If hon. Members opposite thought it necessary to draw attention to the needs of the market in those days, when much of our food was still rationed, it surely is hypocritical of them to complain that our policy today is restrictive and to imply that market considerations can be ignored.
The need to expand the market is of particular importance in relation to eggs, milk and lamb. The expansion of home production of eggs as the result of improved methods and Exchequer support has given the home producer virtually the whole of the share of the market for shell eggs. But we are producing so many eggs that some have to be diverted for manufacture at a very poor return. The challenge to the industry now is to get its eggs to the shops as fresh as possible, and attractively packed and marketed so as to encourage the housewife to use more eggs at a fair price. If the industry can do that the Government will certainly not complain.
It is the same story with lamb. The Government say that it is no use continuing expanding production if the lambs can only be sold to the butcher at give-away prices. We are competing here with unsubsidised New Zealand lamb on a market which is on our own doorstep. I am sure that the housewife will buy more English, Scotch and Welsh lamb and pay a reasonable price for it if the butcher can supply the kinds and quality of joints she wants.
Now, milk. What is the problem here? It is simply to get more milk drunk. We do not, of course, produce at home all the liquid milk we consume. The trouble at the present is that any extra milk we produce has to go into butter, cheese, and other manufactured products, where it is worth, on average, only about 1s. 6d. a gallon to the Milk Marketing Boards and reduces the average price paid to the producer. For butter, the return is as low as 1s. a gallon.
There are some who say that we are wrong to reduce the retail price of milk by a ½d. a pint for six months in the year, but this saves the housewife £13 million. I am sure that the Milk Marketing Boards are taking the only sensible course in persuading the public to drink more milk at the retail price which will give a return of nearly 3s. 6d. a gallon.
950 The Government have shown that they are ready to back the industry's efforts in this direction by undertaking to increase the standard quantity on which the guarantee is paid to the full extent of any increase in liquid sales. This year, that has meant an addition of over 19 million gallons to the total standard quantity for the United Kingdom. We shall continue to give encouragement to liquid milk sales in this way.
I do not accept the charge of restriction. Certainly, we do not wish to give encouragement to high-cost production or inefficient marketing, but for the farmer who is prepared to lower his costs and market his produce to the best advantage there is no restriction. Here is a great challenge to the industry, but it does not come from the Government; it comes from the market.
Why do I say that? Again, for a perfectly simple and completely common-sense reason. It is, in fact, the housewife who calls the tune. She wants food of reliable quality, attractively presented, easy to handle, and, what is more, she is prepared to pay for these things. The response cannot come from the individual producer alone, but from groups of producers co-operating to organise supplies and marketing, and from the industry as a whole. We are moving into the age of self-service and chain stores, and, in general, of smaller groups of buyers who make their purchases in huge quantities. I believe that this fact is already recognised in many quarters, and the industry, through the marketing boards and other producer organisations, is already preparing to meet the demand. When announcing the results of the Review, I said that if the challenge of the market is met, the ceiling is as high as the industry can push it.
Whatever has been or may be said in this debate, I am convinced that our system of deficiency payments is the one best suited to meet the needs of the country. Some hon. Members opposite, probably not all, would like to replace it by fixed prices, by bulk buying, and all the rest of the rigmarole of control. But so far, hon. Members opposite, including the hon. Member for Sunderland, North, have been silent about what alternative policy they would pursue. The reason why they hesitate is that they realise how strongly the winds of change and freedom 951 have blown since their party was in power.
If they go abroad they find that the important economic advantages of our system of support are acknowledged and, indeed, envied in other countries. I must remind the Committee briefly what those advantages are. For the consumer, the system, associated as it is with a liberal import policy, makes supplies available from all sources at world market prices. In fact, we eat better and cheaper than practically any other country in the world.
It keeps down the cost of living, which is an immense help to us as an industrial nation living by our exports. For the farming community it provides an assured return. There is protection from the full effects of any fall in world prices, and at the same time the individual farmer has the opportunity to use his skill and enterprise to get a better return than the average; and built into the system as a safeguard for the future are the long-term assurances of the 1957 Agriculture Act.
There are those who say that farmers would be better off under protective tariffs. They should think carefully before they seek to abandon a system which gives the assurance that, happen what may to world prices, the cut in the total of support cannot exceed 2½ per cent. in any one year. Other industries are finding that tariffs provide a much less durable assurance.
This afternoon my aim has been to reassure the industry about the future. I think that I have put the Annual Review in proper perspective. Naturally, issues arise at these Reviews which appear to divide the Government and the industry. But in truth there is, and there must continue to be, the closest partnership between us. I shall always be grateful for the warm personal relations with the leaders of the industry that I have enjoyed since I held office. I hold the clearest possible belief that it is in the interest of the nation as a whole that there should be a stable, efficient, and prosperous agriculture.
Quite apart from the value to our society of farming and the rural way of life, there are the strongest economic reasons which justify the support we give to agriculture. Supplies which can be produced from our own soil by an effi- 952 cient industry are an important safeguard against the uncertainties of supplies from overseas and they provide a protection for the country's balance of payments. From the point of view of the consumer and of the taxpayer, the agricultural subsidies are money very well spent.
Looking to the future, all can have every confidence in the enterprise and adaptability of our farmers. In recent years, by their own effort and initiative, they have quite changed the face of agriculture. They have readily adopted and developed new methods, new machinery and new equipment. In all this they have been helped by the Government providing the solid foundation of the guaranteed prices, production grants, research, assistance in capital improvements, and so on. This Government are pledged to maintain a prosperous agriculture. We shall continue to play our part in providing this base on which the industry can rely and from which the immense opportunities of the future can be grasped and turned to good account.
The clock does not stand still in agriculture just because it is the oldest of human occupations. We are moving into a new age which will inevitably bring new challenges and new rewards for farmers as for other members of the community. With the solid support pledged by the Government, and in the knowledge of its own great achievements in recent years, the industry can look with confidence to the future.
§ 4.55 p.m.
§ Mr. John Mackie (Enfield, East)
Last month a Motion appeared on the Order Paper appealing—if that be the right expression to use—to occupants of the Front Bench not to take more than thirty minutes for their speeches and to back bench speakers not to speak for more than fifteen minutes. On other occasions when I have spoken I have paid attention to the spirit of that Motion. Perhaps today I may be excused if I exceed the fifteen-minute period because of my more than passing interest in this subject, and also because of the bad example set me by the speakers from both Front Benches.
I find it difficult to comment on everything which has been mentioned by the Minister, who covered a very wide field. I agree with certain things he has said, but I do not agree with his statement 953 that farmers are not worried about the present situation. I have three sons to put into the industry and lately I have been looking for a farm for my eldest son. After the last Price Review, I stopped searching. Now I am prepared to take my son into my own business and try to increase production there, which I think is the only way to cover increased costs. I have spoken to many farmers, with farms large and small, and I find that, although they are not unduly worried about the extent of the cuts, they are concerned about the spirit of the action which has been taken, and they feel that they are in an industry which is gradually being retarded.
Towards the end of his speech the right hon. Gentleman referred to the good relations he had enjoyed with the leaders of the industry during his period of office. I think that now those relations are getting a little shaky, and if the right hon. Gentleman goes about the country and listens to what farmers are saying, he will realise that. Incidentally, I never agreed with anything said from this side of the Committee in 1951 about reducing production and I am on record to that effect.
§ Mr. Mackie
Whenever the spending of public money is discussed in Parliament there are hon. Members on both sides who invariably point to the farmers. They are always at the top of the list of those criticised for getting public money, and it is sometimes a little hard to endure the cracks about large cars and expensive wives, and so on. I have a fairly large car, but, fortunately, I have a very thrifty wife.
I wish to say to those hon. Members, particularly to my hon. Friend the Member for Hammersmith, North (Mr. Tomney) who appears to have taken on the mantle of Mr. Stanley Evans, and to my hon. Friend the Member for Blackburn (Mrs. Castle), who is not present in the Chamber just now, that farming is an industry which must be carried on in public, and it is impossible to hide either inefficiency or prosperity. It is possible for a person to be connected with an inefficient factory and no one need be the wiser. He can drive about in his Rolls Royce car and no one knows whether he has a factory or whether he is a doctor or anything else. 954 But when a farmer goes to market in his car he is recognised as a farmer.
I find it curious that people seem to think that farming is open to the examination of everyone, and in that connection I should like to tell a story of my own experience. One day a prominent Glasgow shipbuilder who was holidaying in the neighbourhood asked if he could come to see me. He appeared, with his brother and their wives, and told me that he had bought a farm and he wished to be shown round my farm in order to see how to farm. I was flattered and delighted and my wife and I gave them tea. But, as he was leaving, I could not resist the temptation to say to him, "What would you think if I bought a large shed on the Clyde and suddenly appeared at your door and said to you, 'I have bought this large shed and now I want to know how to build ships'?" I think that the man appreciated the point.
Farmers from 1945, at the end of the war, to 1951 accepted controlled prices. If those prices had been world prices, we would have had far larger prices and the public would have had to pay more for food. We accepted controlled prices on condition that if world prices came down farming prices would be supported.
It is a pity that the main primary producer should be put to the bottom of the income scale all the time. We must have some protection in a complex economy such as we have today. I think both sides of the Committee will agree with that. There are 600,000 farm workers who rely on a living from the industry and who are not overpaid. Before I leave this subject, I wish to quote the protection given to industry through tariffs, which was mentioned by the Minister. In the Library I looked up the various tariffs given to industry. I found that on no product of agriculture is there a higher tariff than 10 per cent., and many are free. Yet, in many other industries, particularly the motor industry, the tariff is up to 30 per cent. For cameras it is 50 per cent. and for knives, spoons and forks it is 15 per cent. to 25 per cent. For clocks, watches, etc., it is 33⅓ per cent., and for musical instruments it is 35 per cent. and more.
§ Mr. George Darling (Sheffield, Hillsborough)
Will my hon. Friend say what is the Purchase Tax on cutlery?
§ Mr. Mackie
On the brush industry it is 33⅓ per cent. On the toy industry it is 20 per cent. to 25 per cent. and in the chemical industry it is 20 per cent. to 33⅓ per cent. If we had a 25 per cent. tariff on our goods we should be able to do away with any of the subsidies. I am not advocating that in any shape or form, but simply putting forward the argument that agriculture should be supported. Here I agree with the Minister.
I wish to quote from a letter in The Times today from the chairman of the Fruit Importers Association, which points out what tariffs do to the price of food. That letter says:As for hardship to the consumer it is time the inflationary effect of this tariff was more widely appreciated. Last year, during the season of this tariff, imports accounted for one-sixth of the supply and the Exchequer netted £1 million duty. It is estimated that this added £1,500,000 to the retail price of these tomatoes. As home grown (including Channel Islands) tomatoes generally sell at the same price as imported (which then come almost entirely from Holland) we may reckon the remaining five-sixths of the supply were equally inflated and so the total added cost to the consumer was in the region of £9 million.That is what tariffs do to the price of food. I appeal to hon. Members on both sides of the Committee who do not like the kind of support given to agriculture to think again before they advocate a tariff policy.
§ Mr. J. A. Stodart (Edinburgh, West)
Would not the hon. Member agree that the support system provides a flexibility which a tariff system would not? For example, last autumn the support price when lambs were put on the market in a flood amounted to 50 per cent. off the price they realised. That is not an altogether inapposite comparison.
§ Mr. Mackie
I think that supports my argument. I come to the Government's policy, which is making farmers lose confidence. The Government are simply giving no lead in the matter. That is my main argument against the policy. Let us have a look at their own figures. On page 17 of the White Paper one sees the profitability of various sizes of farms. I know that averages are dangerous, but if 956 this is worked out it shows an average profit of £9 an acre on a variety of different sizes and kinds of farms. I leave out Northern Ireland, not through any disrespect but simply because their case there is slightly different. If we take 50 million acres of agricultural land, including rough land, we have an income figure of £350 million and that is £7 per acre net income. So we can take the net income between the two and say that about £8 per acre is a fair figure.
I do not know whether the Committee can be bothered with figures, but I want to point out that there are 176,000 holdings of under 50 acres each. That leaves out all the holdings of under 5 acres, which do not come into this picture. So 176,000 farmers are earning less than £8 a week, if one agrees with my first figure, and I do not think anyone can refute it. That is not a hard-and-fast figure, for many in the next bracket, of 50 to 100 acres, are also earning less than £8 a week because they are farming on marginal and light land. I know many 50-acre holdings in my county where there is first-class land from which a good living can be earned, but I give this as a general picture of what the income must be for about 176,000 farmers.
I turn to page 5 of the White Paper and this is where I completely disagree with the Minister. Paragraph 14 deals with commodity objectives. I cannot understand why he thinks that farmers reading this—and they have read it very closely—would not think that the paragraph is a disincentive to producers. Sub-paragraph (i) calls for the better production and use of grass. The only things which can be produced from grass are milk or meat, whether it be beef or mutton. On the next sub-paragraph, a small holding cannot compete with a 500-acre holding complete with combines, dryers and so on, in growing cereals. Sub-paragraph (iii) asks for production of milk to be gearedto a level more closely in line with requirements for liquid consumption, including the necessary reservebut we are told that mik production is to a maximum, so farmers can do nothing more in producing milk.
We are told that the output of eggs should be reduced. A man with a 50-acre farm cannot produce any more eggs. As to beef, I advise anyone to try to make 957 a profit producing beef on a 50-acre farm. We know how many acres it takes to produce a fat animal. It is all very well for gentlemen like Lord Lovatt, with huge areas of land, but I doubt whether on a 50-acre farm a living could be made. We are told that we must reduce production of mutton and lamb, so the farmer can do nothing about that item (vi). The seventh item is pigs and we are told that the aim should be to secure "a moderate increase". What would a moderate increase be for each of these 176,000 farmers? It could not be less than a sow per holding. I imagine that that figure on a total of 560,000 would be far more than moderate. This would make the Minister "have kittens", not to mention the Chancellor of the Exchequer.
On not one of these items in the White Paper can the 50-acre man with any confidence go in for an increase in his earning of about £8 a week. I should like the Committee to think about that very closely. What are these farmers to do? There is the Small Farmers Scheme, but more than 100,000 of these farmers are not eligible for that scheme. That is often forgotten. The rest can put forward schemes to produce things which the Government do not want produced. What are the Government to do to help this tremendous number—two-thirds of our farmers—who are in this position?
§ Hon. Members: What should they do?
§ Mr. Mackie
Perhaps my hon. Friend will leave this to me. Are they going gradually to squeeze them out economically? That seems to be the thing. I think that I should quote what the Economist said last year about what the Government had done.Admittedly, many of the least efficient farmers would be much better off out of fanning, and one of the proper (though often unspoken) objects of the 1957 policy is to push them out. But in practice strong family traditions, a high average age, and a strong attachment to their land and locality render the farmers in question singularly immobile. Moreover, they have a workable alternative in the shape of cutting costs and risks to the bone, farming at a low but leisurely level and living partly off their capital and land. Many farmers did this in the nineteen-thirties, and some are already doing it today. It is important to repeat that these possibilities do not concern just a few marginal farmers, but 958 some two-thirds of the total number. Thus an unadulterated price squeeze may precipitate not merely a social problem but also an economic and strategic hazard—for a widespread deterioration of the land's capital and equipment is one thing which ought not to be allowed.I cannot put it better than that. I am quoting from the Economist after last year's Price Review.
Hon. Members opposite ask what I would do. I am not here to tell the Government their policy. Much of what I would do would be completely unacceptable to hon. Members opposite.
§ Mr. Mackie
They have stolen our foreign policy and our colonial policy. They tried to steal our pensions policy and made a bonny mess of it. I have given the Government the problem and it is a very big one. They can work out their policies and solve it themselves.
§ Hon. Members: The hon. Gentleman does not know.
§ Mr. Mackie
I do know. But I have still some hon. Members on my own Front Bench to persuade before I start trying to persuade hon. Members opposite.
§ Mr. Nabarro
The hon. Gentleman comes to this Committee with the reputation of being a large farmer and therefore a very experienced person. We listened to 40 minutes of belly-aching from his Front Bench. He has added another 20 minutes of belly-aching. Will he not call on his unique professional experience and advise my right hon. Friend as to what his proper policy should be in the circumstances, instead of belly-aching?
§ Hon. Members: Why does not the hon. Gentleman answer?
§ Mr. Mackie
One-quarter of our farmers are farming three-quarters of the land. They should be in a position—and this may help hon. Members if they will listen—subject to certain safeguards, to do with less assistance. That is something for hon. Members opposite to think about. Three-quarters of our farmers farm only one-quarter of the 959 land. That is not, of course, a fine definition, but, in general, by the nature of the size of the farms, the main body of farmers must be high-cost producers.
I will give one example. Most farmers who have about 50 acres run a car. We know that it costs about £200 a year to run a car. They have to sell their produce in the old-fashioned way by going to market once a week. It costs about the same to sell 20 quarters of barley as it does to sell 50 quarters. On the other hand, the market expenses are about the same. If we take a 150-acre farm the car costs the same and the market expenses cost the same. So £300 a year has to be divided by the number of acres, £6 per acre on a 50-acre farm and £2 per acre on a 150-acre farm. The problem of high overheads on small farms is not easy to solve. It is a very big problem that has to be tackled. Maintaining a profit of £8 to £9 per acre on a quarter of our land while three-quarters of our land could do with less would show a substantial saving. That is something for the hon. Member for Kidderminster (Mr. Nabarro) and the Minister to think about.
§ The Temporary Chairman (Sir Godfrey Nicholson)
I was not aware that I had opened my mouth, far from making any noise.
§ Mr. Mackie
The noise the hon. Member for Kidderminster makes leads me to believe that he is more important than he is. A substantial saving would be shown with a policy like that. It is not easy to do, but the Government are not facing the problem.
As to the high cost of distribution, we produce about £1,400 million worth of food.
§ Mr. Gough (Horsham)
On a point of order, Sir Godfrey. I gather that the hon. Member for Leek (Mr. Harold Davies) called a point of order but did not stand up to refer to my hon. Friend the Member for Kidderminster as a 960 moron. Surely that is not a correct method of addressing or referring to an hon. Member of this Committee.
§ The Temporary Chairman
I think that episode had better be passed over. The hon. Member for Kidderminster did not seem to object to the allegation.
§ Mr. Nabarro
My quiescence should not be interpreted as agreement with the observations made by the hon. Gentleman opposite. I have been called things far worse than a moron, so I took it as a compliment.
§ Mr. Mackie
Perhaps I may be allowed to proceed and leave it to hon. Members to conduct this private argument across the Floor.
The high cost of distribution of food is another problem which should be tackled. Its solution could save the farming community and the consumers a tremendous amount of money. The £1,400 million worth of food that we produce is almost trebled in price, if not more, before it reaches the housewife's table. I am perfectly certain that considerable saving could be made there. I have spoken about this in the House of Commons before. Even if only £100 million were saved in that respect and shared among farmers it would go a long way to help in the general situation. On the subject of more production, surely, there is scope for this.
A Beaverbrook newspaper, the Farming Express, gave some very interesting figures about the production situation of food in this country. I presume that the figures are reasonably exact. They show that there is a tremendous scope. If the hon. Member for Louth (Mr. C. Osborne) wants to know what we would do with more milk, I will give him some interesting figures. I advise the hon. Gentleman to read this newspaper which says that 2,766 million gallons of milk or the equivalent are imported. A share of that would help British farmers—that there is scope for the production of almost 7 million cwt. of beef, 7 million cwt. of bacon, 7 million cwt. of lamb and mutton, and nearly 3 million cwt. of tomatoes. That shows the scope for greater production in this country.
§ Major Legge-Bourke
Will the hon. Gentleman agree with another extract in 961 the Daily Express this morning which says for those who have birthdays today:It is a bright year. The talented and ambitious meet with few obstacles. More contented souls can count on maintaining present circumstances if no more.Does not the hon. Gentleman agree that agriculture comes in that category?
§ Mr. Mackie
I am not sure that I understand the meaning of that intervention.
I am certain that, given a share of the market which I have mentioned, there are many efficient farmers who would be prepared to take lower prices. But those lower prices would be acceptable only if there were a guaranteed market. In many ways, a guaranteed market is more important than guaranteed prices.
It would be quite simple to evolve a scheme in which, as more was produced over and above a given quota and the whole marketed through a marketing board, a reduction in price would be taken, but that price and the increase in quantity would make the following year's price and quota. That is not difficult and I give that thought to the hon. Member for Kidderminster.
It seems ridiculous not to produce all we can economically on our own land. I ask those who come from industrial constituencies to think of the huge markets for industrial products which they would have on their doorsteps. British farmers and farm workers could buy industrial goods as easily as the Danes, the Dutch and the Germans and would provide a much closer market.
We cannot lose sight of the tremendous scope for increased production. The hon. and gallant Member for the Isle of Ely (Major Legge-Bourke) spoke of technical and scientific help, but I point out that that help is available to our competitors in the Colonies, the Commonwealth and other countries, so that it is not as great a help as it would appear to be—not that I grudge scientific advice given to agriculture.
§ Mr. Mackie
No, but all the scientific knowledge goes overseas.
I pay tribute to those scientists who help agriculture, and particularly to plant breeders. The right hon. Gentleman gave 962 some figures of increased production. Today a yield of 50 cwt. of wheat per acre is becoming quite common and not many years ago it was only 24 to 30 cwt. We are indebted to the plant breeders, to the scientists and engineers for all that they have done for us. They are going ahead and are giving us better plants, better machines, better everything. Three days ago, I saw an experiment in which potatoes were planted on the surface and covered with black plastic in which there were holes to let the haulms through. Last year's experiment showed that the yield could be increased by half as much again.
We must take advantage of all that work, and it is the Government's duty to see that farmers are given the opportunity of taking such advantage. The seven points of the White Paper will only depress farmers' hopes about how they will be treated in future.
§ 5.23 p.m.
§ Mr. Timothy Kitson (Richmond, Yorks)
I hope that the Committee will be kind enough to exercise its tolerance for a speech from a Member rising to address the Committee for the first time. I realise that there are many hon. Members on both sides of the Committee who wish to speak, so I intend to be very brief.
However, I am very pleased to have an opportunity to speak in this debate. The constituency which I represent is a great farming area, with the exception of its north-eastern end where some of my electorate work in the chemical and the steel industries. Most of the people in my constituency are directly or indirectly connected with agriculture. Richmond is the largest constituency in England, covering over 600,000 acres, or nearly 1,000 square miles, and I have one voter for every 10 acres. It is a very lovely part of England and has the beautiful dales of Wensleydale, Swaledale and Teesdale, and the ancient and lovely Borough of Richmond.
My noble and gallant predecessor, who gave great service to the House of Commons as the Member for Richmond for more than thirty years, was once the Minister of Agriculture. I think that I will always remember one of my first election meetings in the dales when an old farmer came to me and said, "Young man, if tha' gets in and looks after us half 963 as well as Captain Dugdale did, tha'll not do so bad."
As a farmer myself, I shall try to be no more controversial than any farmer when referring to the Annual Price Review. However, there are one or two comments on my right hon. Friend's speech which I have to make. I am afraid that I do not altogether agree with any of the three speeches which have already been made, but I do not wish to be controversial and I will try to avoid controversy as much as possible.
For many years, successive Ministers of Agriculture have called for increased production and efficiency, and no industry could have responded better to those requests. Agriculture has been very alive to the problems of increased production, but I believe that there is still a great deal of room for expansion within the industry. Let us take as an example the improvement in yields of grain which the hon. Member for Enfield. East (Mr. Mackie) mentioned and the ever-increasing productivity in and standard and quality of both pedigree and commercial cattle.
In 1957, my right hon. Friend the Chancellor of the Exchequer, then Minister of Agriculture, moving the Second Reading of the 1957 Agriculture Measure, welcomed the opportunity to introduce the Bill, for two reasons, and said:The first is that it is a Measure which will, I am confident, prove a milestone in the industry's progress towards still higher produotivity."—[OFFICIAL REPORT. 25th March, 1957; Vol. 567, c. 807.]Now, three years later, it appears from the February Price Review that the Government consider that with some commodities we have reached a situation in which further expansion is not to be encouraged.
While I agree with a great deal of what my right hon. Friend has said, it is not easy quickly to cut down costs, expansion and production. It can be done, but it takes time. I believe that we would have had much more severe criticism from the farming community about the Price Review but for the fact that it follows a year when the weather was extremely kind and helped the industry and when there was a good harvest and increased production generally. If this year is not so favour- 964 able, we shall be confronted with a much more serious state of affairs than some hon. Members expect.
There are many small farmers in my constituency and I know that the Small Farmer Scheme has been of great help in many cases. However, one of the ways in which farming has tried to meet rising costs has been by reducing its labour force. Often, where he has only one or two men, the small farmer cannot do that. It is worth remembering that if he cuts down his labour force, he might find himself unable to claim a grant because of the reduction of man-hours on his holding.
I am particularly worried about the future of small farmers. We all know that the job of the farm worker is becoming more complicated all the time and that, compared with the man in the town, he is badly paid for what he does. I am sure that nearly all of us in farming would like the farm labourer's wage to be improved, but it is becoming increasingly difficult to absorb additional labour costs.
In the 1947 and 1957 Agriculture Acts, both parties pledged themselves to help agriculture, but one of the Government's duties is to see that subsidies are used to the taxpayers' best possible advantage. We must carefully study some aspects of subsidies. I may not be too popular for saying that the subsidies paid for oats and barley are sometimes money badly spent. Some of the land which attracts those subsidies should not be under the plough for cereal growing.
Also, when the price of beef, pork and lamb drops in the markets and subsidies have to be increased to maintain the guaranteed price, this benefit is not always passed on to the housewife. Very often a larger slice is taken by the middle-men. It is our duty to try to encourage the farming community to improve some of its marketing systems, as we are attempting to do with the horticulture industry. I should like my right hon. Friend to give this very serious consideration over the next few months.
I am not in favour of the introduction of quotas to limit production, because it so often cramps the style of the man trying to get on. It would be dangerous if marketing boards, feeling that we have reached the stage of maximum production, were to try to operate on these 965 lines. It has been suggested that the Milk Marketing Board, owing to the increased quantity of milk that has to be sent for manufacturing, should introduce a quota system. I am sure that this would be wrong. I cannot agree with my right hon. Friend that it is a good thing that the Board has had to bring down the retail price of milk by ½d. through the summer months. If the Board had been allowed to maintain a steady price of 8d. throughout the year, it would have been able to get over some of its difficulties. I know that it represents a saving of £13 million to the housewife, but subsidies on milk last year were only £8 million.
Already we are exporting cheeses in small quantities to Europe and to Canada. I am certain that to enable dairy farming to continue to expand we shall have to look to the export field and sell some of our dairy products overseas, and in all probability in the next few years do away with the very small subsidy which is paid on milk to the dairy farmer.
I am pleased that we have increased the guaranteed price for pigs. It was, indeed, a pity that the breeding herd was so drastically reduced. I am also very pleased to hear from my right hon. Friend that so much interest is being taken in long-term contracts. This will put some stability back into the industry. The bacon factories must have a steady throughput if they are to get anywhere. I am certain that long-term contracts will enable them to do this.
I would, however, take up just one thing with my right hon. Friend, who I am sorry is not present at the moment. It would be very wrong if he thought that, because of the high level of rents, all was well in agriculture. It is true that most farmers, when they want to put their sons on a farm nowadays, have to pay premiums to get them there. I do not think that high rents are any reflection on the present state of the industry.
Finally, while I accept the Price Review on this occasion, I could not support a policy which, over the next few years, is to limit further expansion. So often over the last year I have heard the expression, " You've never had it so good ", but I do not think that we should claim that this is a fair slogan for the agricultural industry today.
§ 5.33 p.m.
§ Mr. William Baxter (West Stirlingshire)
It is a very great privilege to be able to compliment a new Member upon making his first speech in this assembly. I compliment the hon. Member for Richmond, Yorks (Mr. Kitson) very sincerely on talking on a question which is of the utmost importance to us all— agriculture. He chose his words with such care and deliberation as to convey to the Committee very clearly and concisely the fact that he has a very intimate knowledge of this very important subject, and, while he was not very controversial, he at least sowed some seeds of thought in the mind of the Minister. I hope that they will germinate and become quite profitable ideas in the years ahead. I congratulate the hon. Gentleman sincerely on participating in this very important debate.
We are debating today one of our most important industries. It is very regrettable indeed that when we come to the House of Commons as new Members we hear about the motor car industry, the steel industry, and the shipbuilding industry, but rarely have the opportunity and privilege of discussing this very important major industry.
We should remember that the agricultural industry is one and a half times more important than the shipbuilding and motor car industries combined. We should bear in mind, also, that its productivity exceeds that of I.C.I. three times over. We will then realise that the small farmers and the farm labourers that we very often besmirch, smile at and give little consideration to, while they are individually small people, are, on the whole, a very important section of our community. They are so important that we should pay very great heed to the opinions they express about this so-called Price Review.
I have heard many Ministers of the Crown refer to the past and try to gain some confidence from supposed mistakes of previous Governments. I am mindful of the fact that rarely do they go back further than the last war. Rarely do they give any consideration to what has been happening since the beginning of the century. The whole world and the development of Britain did not start with the Labour Government in 1945. In agriculture, why not compare like with 967 like? That is not a bad basis of comparison.
I suggest that before the Minister responsible for agriculture casts aspersions upon the previous Labour Government he should reflect upon what happened after the 1914–18 War, when all the great safeguards of agriculture were swept away in 1922. He should reflect for a moment on the great discomfort of the people engaged in agriculture. He should remember that only one Government beween the two wars held out a ray of hope to this great industry. The Minister should give credit where credit is due and acknowledge that the ray of hope held out to the industry was given by the 1931 Labour Government when they introduced and placed upon the Statute Book the Act relating to marketing schemes.
§ Commander J. W. Maitland (Horncastle)
The hon. Gentleman means the Labour Government which came to power in 1929.
§ Mr. Baxter
It was the 1929 Government, but the Act was passed in 1931. If it had not been for that Act, the Milk Marketing Board, as we know it today, would never have existed.
§ Commander Maitland
As we are being historical, may I ask the hon. Gentleman to cast his mind back to the first thing he mentioned, which was the Corn Production Act? Does he realise that all the Socialist Members voted against it?
§ Mr. Baxter
We have not been averse to changing our thoughts and opinions. The great tragedy of the Conservative Party is that it takes it a long time to change its mind and come round to more radical processes of thought. I have indicated the historical events in agriculture between the wars, and we all knew them well. There can be no doubt that agriculture then was in the doldrums of the depression.
I come now to the 1947 Act, with all its implications. Was it reasonable to introduce the Act? Was it reasonable to introduce guaranteed prices? Would it not have been better if a tariff had been introduced, as many today advocate? What were the complications which faced the Labour Government when they con- 968 sidered whether to introduce the tariff principle, or to introduce guaranteed prices?
By means of guaranteed prices we got some degree of control of the cost of our foodstuffs. Had a tariff been imposed, the cost of foodstuffs would have risen very considerably. That was the factor that led the Labour Government to introduce, instead of tariffs, the guarantee system but, with that system, they also envisaged a great principle that has never been operated—proper marketing schemes. Without proper marketing schemes, agriculture will never be what it ought to be. Not only did the Labour Government provide in the 1947 Act for proper market schemes, but they put a great deal of faith on the farming community by means of the agricultural executive committees. That has been nullified. Proper marketing schemes have never come into being because of the changed policy in the 1958 Act.
We now have a yearly review—a yearly haggle. An unsightly scene is set every year, when one would think that it was the farmers who were going cap in hand to the Minister asking for a few extra pounds. It is a most degrading spectacle, and the quicker a new method is introduced the better it will be for all concerned. The present system brings to the industry not the respect it needs, but the greatest possible disrespect. I say quite clearly that I shall be happy to see a new method introduced in place of this annual Review, with its unsightly and unseemly methods of approach—
§ Mr. C. Osborne
But surely the annual Price Review was introduced by the 1947 Act, which was introduced by the hon. Member's own party. We were not responsible for it.
§ Mr. Baxter
The hon. Gentleman is quite correct, but it does not necessarily follow that because something is introduced because of the circumstances of the times one should cling to it when the circumstances of the day and generation have altered radically. It is the height of stupidity to legislate for a period that has passed. We legislate, and seek new ideas for future expansion and development. Let us not be hidebound to the past. If we on this side have made mistakes, do not let the party 969 opposite continue them. Let us be reasonable administrators, and work out a scheme that will benefit the community as a whole.
Let us consider the implications of this great subsidy that we, the farmers —and I farm—receive from the Government. My hon. Friend the Member for Enfield, East (Mr. Mackie) spoke of the average paid out in subsidy as being £8 per acre, but we in Scotland, Sir William —and you should know this better than anyone else—do not receive that subsidy of £8 per acre. I do not know what they get in England or Wales, but we certainly do not get it.
What happens to the subsidy? I have taken out some figures—
§ Mr. Stodart
My impression was that the £8 per acre quoted by the hon. Member for Enfield, East (Mr. Mackie) was the profit made by the average farmer, and not the amount received in subsidies.
§ Mr. Baxter
The total subsidy paid to the industry in relation to the total acreage works out at almost £8 per acre of subsidy. Whether or not my hon. Friend used that figure, I use it. The fact remains that we, as farmers, do not receive £8 an acre. Otherwise, we would be very well off. It is true that £266 million represents 5 per cent. of the national expenditure. It also represents the price of a packet of 10 cigarettes per head. It amounts to 2s. for every man-jack in the country, and that would not be too high a price to pay if the subsidy gave what it was intended to give—cheap food.
I have tried to find out where the subsidy goes, and will take wheat as my first example. At the moment, I receive £17 per ton of wheat, and the import price is in the region of £26 a ton. If I get a subsidy to bring my price up to the import price, it is not I who get the subsidy but the man who has bought my wheat. Does any hon. Member disagree with that? I get only the import price for wheat; the man who buys the wheat gets the subsidy. But what do we pay for a loaf? A 1 lb. loaf costs 1s. to buy. What does the farmer get for his lb. of wheat? He gets less than 2d. Goodness me, where is he making the great profits?
Let me quote corn as another example. For corn, I get £17 a ton— 970 the same price as for wheat. I am better off feeding it to my stock. In 1954, we were getting 110s. for barley; today, one is lucky to get 82s. 6d. It does not necessarily follow that the man who drinks beer gets the benefit of the cheap barley that I sell. Who gets the subsidy? No one gets the cheap beer, and the farmer does not get the subsidy. Therefore, we should inquire where the subsidy goes.
Just before the new year I sold three fat cattle—beautiful Aberdeen Angus bullocks. The subsidy was 10s. or 11s. a cwt. For those three beautiful bullocks I got an average of £8 10s. a cwt. I had three coming on very well, and I fed them. It cost me a bit to feed them. I sold them three weeks ago. What average did I get? I got £8 per cwt. on the average, but the subsidy had gone up to 22s. 6d. In point of fact, I got the same price. But who got the benefit of the 10s. less? It was not I because, at the end of the day, it was more costly to winter those three bullocks. Who gets the benefit when we buy our butcher meat? Let hon. Members ask their wives whether the price of butcher's meat has gone up. They will find that it has gone up very considerably.
I listened with a great deal of interest to the debate in the House the other night about the ploughing grants. As one who has tried to bring into cultivation a considerable amount of exceptionally bad land—and it has cost me quite a bit to do it—I believe the ploughing grant to be one of the best and most useful grants that the farmer gets. The farmer gets it for himself for doing a job of work, and does not have to pay it to someone else, unless he brings in a contractor. I got £12 an acre for cleaning fields. It cost me more, but I am bringing into cultivation at least a few acres of ground that posterity, if not this generation, may think that it was wise of me to do.
The subject of pigs is one that has been bandied about in the House from time to time, and I took out the figures for 1951. What was the farmer then getting for his good bacon pig? He was getting £23, on average. The housewife was buying the best bacon at 3s. 1d. per lb. Today, what does the farmer get for good bacon pigs—never mind the ballyhoo about long-term agreements, and so on? He gets £17 per pig on 971 average. The housewife now pays 4s. 8d. and 5s. per 1b. The farmer, is not getting any subsidy, because the subsidy in 1951 was much the same as it is now. The farmer gets less for his pig today than he did in 1951, but the housewife pays more for her bacon. Where does the subsidy go? The answer should be forthcoming from the Minister, or he is not doing his work properly.
I need not talk about potatoes or lambs. I have reared sheep and lambs, and I have sold them. I do not get the subsidy. I could say a lot about where it goes, but time does not permit. The farmer does not get this great subsidy. He gets a partial benefit. The housewife gets a partial benefit. The greatest benefit goes to the manufacturing industry. In my opinion, this is one of the greatest swindles that has been worked in this day and generation.
Let me consider some other facts. Let us take the latest figures which I have obtained for the periods 1951–52 and 1957–58. I find that the cost of feedingstuffs to the farming community in 1951–52 was £180 million per year and that in 1957–58 it had jumped to £328 million per year. Machinery, in 1951–52, was £127½ million a year and, in 1957–58, £212½ million. Rent and interest were £63 million in 1951–52 and £97½ million in 1957–58; fertilisers were £59½ million compared with £93½ million; other expenses, £152 million and £179½ million; labour costs, £255 million and £304½ million.
For the first time in the history of agriculture the cost of feedingstuffs on the farms is more than the cost of labour that is employed to run the farms. What a tragedy. The hon. Member for Richmond, Yorks was quite correct in drawing attention to low wages and poor conditions experienced by the farm labourers. The Minister should pay careful attention to the long faces that are prevalent in the farming industry when feedingstuffs are much more expensive than the labour costs which are paid for looking after the animals. I could say how that situation comes about, but time does not permit.
Another fact which ought to be considered is that in 1948 for every 1 lb of food that the farmer produced he 972 got £1 in return, but today he produces 25s. worth of food and in return he gets 19s. His income has gone down, and, as my hon. Friend the Member for Sunderland, North (Mr. Willey) pointed out, the industry's production has expanded by approximately 24 per cent. Yet the income that the industry is receiving has been reduced by 5 per cent. Is that sensible? Can anyone applaud that state of affairs? These are facts that cannot be denied. The profitability of industry as a whole has increased by 85 per cent. during the same period. The income and the standard of living of our people have risen by approximately 30 per cent. in the same period.
We should reflect upon the fact that since 1954 over 4,000 small farmers have ceased to register as dairy farmers. But it does not necessarily follow that the number of cattle has been considerably reduced. It means that the number of dairy cattle is much the same, but it is concentrated on the larger farms, and the small man has been gradually pressed to the wall and has had to eat up his capital ox go to the bank for loans.
Industry should be an expanding force in our national economy Let the Government's actions not upset or damage this industry irreparably, for that would be a great tragedy and would undermine not only the farming industry but engineering, shopkeepers, millers and many others who are dependent upon the sums of money that the farmers circulate. It has been calculated that farmers are responsible for circulating £800 million in engineering alone.
I have been asked, " What would you do? You know the problem. You have described to us the problem which we all know as well as you." I do not deny that, but it seems to be the custom in the House of Commons, as in another place, to express points of view of which everyone else is aware. We find the greatest degree of repetition which has ever occurred in the history of man. In fact, I might say that it shows the stupidity of the Parliamentary system of Government—
§ The Deputy-Chairman (Major Sir William Anstruther-Gray)
Order. The hon. Member would be quite out of order if he were to proceed with that subject.
§ Mr. Baxter
I appreciate that, Sir William. Some day I may place on the Order Paper a Motion relating to that subject for consideration, but on this occasion, as you say, I would not be in order in discussing it.
I have some suggestions for the consideration of the Minister, and they are as follows. Let the dead past bury its dead. Do not let us go back and argue about what we did or what the other man did. Today, when the Government recognise —or they should recognise—the uncertainty that there is in the industry, let us set up an impartial committee of inquiry. There should be a complete review of the subsidy and its method of payment, as one of the first remits. We should devise better and more assured marketing schemes. We cannot get away from the fact that it is imperative to have sensible marketing schemes. I would suggest that the Minister should study the methods which have been adopted in Germany and in Scandinavian countries.
The Government should support and encourage the establishment of more co-operation in the industry, so as to create new factories, in order that this nation may do as we have been taught at school—"to eat what we can, and can what we can't." There is no reason why we should not be able to produce much more than we are producing at the moment. We should encourage the expansion of the cannery businesses and see whether it is possible to develop the production of such things as dried potatoes, dried eggs and tinned pork. I see no reason at all why this should not be done.
Let us send our surpluses to the starving nations of the world. While we have an over-production of pork the man in China, one of whose staple foods is pork, probably eats pork only once a month. There is no reason at all why we should not give support to our farmers to produce all the pork they can produce and then, as I say, "Let us eat what we can, and can what we can't", making an agreement with China to send the surplus there.
I suggest that an export and import control board should be set up to regulate the importation of foodstuffs into these islands. In this way, we could at least ensure that we do not have a repetition of what happened a few 974 months ago, when the price of cheese rose very steeply because there was a scarcity of the home product. These things could be regulated and worked to better advantage. The establishment of an import board is, I think, very important and a great deal could be done in that way.
Last but not least, I want the Minister to ensure that agriculture will be an ever-expanding force, so that our people are never dependent upon any foreign country for the means of their very existence.
While I have directed my remarks to the general picture in Great Britain, I conclude by reminding the Secretary of State for Scotland that there are special circumstances across the Border. I do not come here belly-aching and asking for special consideration for a small and unimportant country. I demand that better consideration be given to Scotland, that great nation, and that special attention be paid to the difficulties of farming there. The whole basis of the Government's method of paying the subsidy today means that the man with a big acreage of good land in England receives the full benefit. In the first place, he receives the full benefit of the higher price when he is selling his goods immediately, whereas our goods are always sold at a lower price. Then, when the subsidy is paid, the man who has had the big price receives the same subsidy as the man in Scotland, who obtains the small price.
Therefore, it is not an appeal I make for Scotland; it is a demand that justice shall be done and that our nation shall have its fair share in the production and life of this industry.
§ 6.3 p.m.
§ Mr. R. H. Turton (Thirsk and Malton)
Like the hon. Member for West Stirlingshire (Mr. W. Baxter), I congratulate my hon. Friend the Member for Richmond, Yorks (Mr. Kitson), who is my neighbour and constituent, on a very excellent maiden speech. My hon. Friend's constituent truly said that his predecessor, Lord Crathorne, was a very great friend of agriculture. Judging by the wisdom of some of his remarks, my hon. Friend shows promise of being a very worthy successor and an equal friend.
975 I find one aspect of this debate rather extraordinary. I understood that this was the occasion for a three-line Whip on the Socialist side and a great attack on the Price Review was to be mounted. Never during the course of the debate so far have I seen more than 10 or 12 right hon. and hon. Members of the Opposition in the Chamber. I listened to the speech made from the Opposition Front Bench, but I heard no criticism of the prices in the Price Review.
With a part of the speech of the hon. Member for West Stirlingshire I find myself in agreement. The hon. Gentleman did not like the price wrangle. But the 1957 Act in giving a long-term basis to the Price Review, was designed to eliminate the price wrangle. I believe that we should try to go further. The Minister should consider whether, in respect of certain products, we might try, subject to Treasury approval, which will not be easy to obtain—to establish a longer term basis for prices in order to give farmers a feeling of continuity.
Everybody agrees, I think, that the prices in this Price Review, although harsh, were in the economic climate of the Budget, about right, with one possible exception to which I shall come later. However, I want my right hon. Friend to realise that my farming constituents and people in agriculture generally are worried, not because of the prices which he has imposed, but because, unlike the Budget, his White Paper contained no clear policy and no reassurance for the future.
I ask the Committee to consider for a moment Table A in Appendix II of the White Paper and compare 1957 with last year. Last year, certainly for the arable farmer, was the easiest farming year I have ever known; but the aggregate net farming income last year was nearly ½ per cent. lower than it was in 1957. On the other hand, if one turns to the Economic Survey and compares those two years, the income from self-employment had gone up by 8 per cent. and wages and salaries had gone up by 6½ per cent. in the same period. This is why farmers lack assurance. The self-employed generally, traders, wage and salary earners and those receiving dividends on shares are all receiving a much greater share of the gross national product than is the farmer. This is why in 976 some quarters a reduction of output is advised, although such a reduction would have disastrous consequences for both the farmer and the farm owner.
As the hon. Member for Enfield, East (Mr. Mackie) rightly reminded us, many of the farms in Britain are family farms or farms employing only one worker in addition. Any reduction of output on those farms would mean that the farmer and his family and the worker would have to accept a lower standard of income. This is the real problem which I want my right hon. Friend to face. I had hoped that he would give us some reassurance in his speech.
From the way it is framed, we all realise that the White Paper has been prepared with close regard for the subsidy bill. I agree that £259 million is a matter of great concern to the taxpayer. But let us remember also the import bill, which is at present £1,522 million a year and which, if we were not to maintain our agricultural industry, could be as high as £3,750 million a year. Also, there is the cost of the Agricultural Departments which, apart from the Vote we are now discussing, amounts at present to about £45 million a year for administering and advising the agricultural industry.
The subsidy bill of £259 million is divided, in the main, into two parts. There is £157 million which is paid to enable the consumer to buy food at prices below the cost of production in this country, and there is £94 million designed to encourage more production by production grants. The difficulty in this Price Review is that it asks farmers to shoulder £9 million of the extra £13 million increased costs and it has taken the whole of that £9 million out of the price guarantees, leaving the production grants intact. The effect of that, without the Minister's explanation today that it was not restrictionist, is to make the farmer say that on the one hand he is being asked to restrict production while on the other hand, with the production grants, he is being asked to increase production. That is, as I find going about the country, the general view of farmers on reading the Minister's speeches and the White Paper. Such a policy would be contradictory.
I wanted to speak today mainly because I believed strongly that the White 977 Paper and the Government's policy have a certain weakness in that they leave out of account the effect that imports can have on the subsidy bill. Let me give three examples. Paragraph 31 of the White Paper states:World supplies of cereals are ample; and the Commonwealth is an important producer of wheat. The subsidies on home-produced cereals are costly to the Exchequer and high in relation to market value for all three principal crops. There is little prospect of a reduclion in the Exchequer cost, save by reduction in the guaranteed prices.Is that right?
We produce 55 million cwt. of wheat. We import 85 million cwt. of wheat. Fifty-five million cwt. of what we import comes from the Commonwealth at an average price of 26s. 2d. a cwt. Of the rest, some is French wheat coming in at an average price last year of 23s. 1d. a cwt. Some is wheat grouped under " other foreign countries " that comes in at a price of 22s. 10d. a cwt. My point is that if it was only Commonwealth wheat which was coming in, which is hard wheat and does not actually compete with the British farmer, no subsidy would be required for wheat. In other words, we would be saving £20 million a year in subsidy. The trouble is, so far as it affects the subsidy bill, that this European wheat is being imported at prices well below the farmers' prices in the country of origin just at the time when farmers in this country are harvesting their grain and putting it on the market. The farm price of wheat in this country is the lowest in Europe, with the exception of Denmark and Holland. Neither of those countries exports any wheat to this country. That is the illustration I wanted to give on cereals.
Let me give another illustration, the classic example of pigs. After two years successive reductions in price, last autumn we did not have sufficient pigs to cater both for the pork market and for the bacon factories. As a result, Denmark filled the gap. At that time, the price of Danish bacon fell by about 30s. a cwt. compared with the previous year. Consequently, the subsidy bill last year was more than it was the year before, although there was a smaller quantity of pigmeat produced in this country. That is stated in the White Paper. The Minister has, very wisely, taken the step of increasing the guaranteed price for pigs. But what will happen to the imports? If 978 imports continue to increase as they have been lately, we should warn the Chancellor of the Exchequer and the Minister that the price of the pig subsidy will rise very steeply this year. In the first three months of this year, imports of bacon from Denmark went up by 20 per cent.
I now come to my third illustralion, and this is where I disagree with the Minister's Price Review. This is the fourth successive discouragement in the price of eggs. We are told that this is intended as a price disincentive to restrict production. The danger of successive price discouragements is that they eventually succeed in discouraging production and then produce results quite the reverse of that intended when they were given. In the first two months of this year the sale of day-old chicks went down by 15 per cent., and I think it is becoming clear that the effect of this fourth price discouragement will be: to drive many small specialist producers, not the general farmer, out of egg production, with very disastrous effects on country life generally and on the small man.
I wonder whether the Committee has considered the system of the egg subsidy? Last year, when, as the Minister said in his speech, we were virtually self-sufficient in eggs, we produced 773,000 tons of eggs, and the subsidy bill was £36£ million. The reason was that 10,000 tons of eggs were coming into this country at an average price of 2s. 3d. That seems to me to be very bad business. If we are self-sufficient in eggs, why should we depress the price of eggs and increase the subsidy bill by the importation of eggs at so much lower prices?
The Minister talks as though it is only British production of eggs that he must restrain and as though we are the only country increasing our egg production. Between 1955 and 1958, however, Dutch egg production rose by 25 per cent. In the first nine months of 1959 the Dutch exported 232,000 metric tons of eggs, over 100,000 more than they exported in the whole of 1955. That is the pattern, of the Continental egg trade, with its flush of eggs which may capture our market.
Let me give as an illustration the week ending 19th March this year. In that week the Egg Marketing Board took off the market 30,000 cases of eggs as surplus. Yet, in that week 32,000 cases of 979 eggs were imported. The March trade return shows that this year imports of Danish eggs have gone up ten times compared with March, 1959. Imports of eggs from "other foreign countries " have gone up ten times. The importation of liquid eggs has gone up four times. The lesson that I am trying to show is that, even if the production of eggs in this country is cut and the small man is driven out, if foreign eggs are imported, not one penny of the subsidy bill will be saved. In fact, the subsidy bill will be increased and we are merely putting the foreigner in the position once enjoyed by the British farmer. That is why I ask the Government to make a reappraisal of their agricultural policy.
I did some of the early work on the price guarantee scheme, with Sir Reginald Dorman-Smith before the war, so I know the history. It was designed to deal with a problem where the vast majority of the product is imported and Britain supplies only the minor part. In that way, we intended to give the consumer the lowest price in the world. It was an economical method for the taxpayer and satisfactory for the farmer. A price guarantee system of that nature does not work, however, when one is dealing with a product in which the country is either self-sufficient or virtually self-sufficient. Equally, such a policy does not contain any provision to deal with a commodity that is dumped in this country below the cost of production in the country of origin. Those are the two weaknesses in the guaranteed price system. Both political parties have adopted the system without making provision against those weaknesses.
We must therefore take effective steps to ensure that when we are self-sufficient, as with eggs, we hold our English market, provided that the price does not go unreasonably high. In other words, we would say that so long as the price of eggs in the shops was not more than 4d., no eggs should be imported. Directly the price went above 4d., eggs would be allowed to be imported until the price stabilised. By this means, we would save £36½ million a year on the egg subsidy. When talking about a ban on imports or exports, it must be remembered that we cannot export our eggs to the Continent. There is a ban on the export of English eggs to most 980 continental countries. Therefore, we should be entirely within our rights equally to apply a ban on foreign eggs coming into this country when the price of our own eggs in the shops is reasonable.
There is, however, another side to the question. We should look forward to trying to work out how we can export our surpluses. I should far rather see Britain subsidising exports to the underdeveloped countries than see her maintaining the price by means of the present expensive subsidy. When dealing with products in which we are self-sufficient, if we can impose control against imports, whether by tariff or by the harsher measure of prohibition or control, whichever way it is done, we must see whether we cannot get the surpluses away to where they are needed most.
There are many hungry people in the world. Even in this country, there are still people who could do with a little more. It should be our policy so to plan our agricultural production that we do not restrict output but expand it. We should send our products to where they are most needed, not to continental Europe, which has its own agricultural difficulties, but to the under-developed countries. We should see that our marketing boards promote expansion in this country.
I warn the Government that unless we adopt a policy of expanding production we shall continue to face the drift from the countryside, which has bad social repercussions. How can men be expected to stay in agriculture when they see that other industries are more favoured, when they see wages and salaries in other industries continuing to increase, but that because we are wedded to the guaranteed price system, the Chancellor of the Exchequer tells the Minister of Agriculture that he cannot spare any more money for the subsidy bill but that it must be cut down? That means that the Minister of Agriculture must trim the income of the small family farmer and, in consequence, the worker, who already receives a smaller wage than that paid in industry.
Let us imagine that the motor-car manufacturers were suddenly told that the Government were doing away with the 33⅓ per cent. tariff and giving them a guaranteed price for every car they 981 produced. They might also be given production grants, for example, a grant for every baby car which they produced, and subsidies would continue to be given to their competitors who were installing new plant to compete with them.
Suppose, however, that when the foreign cars came flooding in the Minister said that the subsidy bill was costing too much and the guaranteed prices for cars must be cut. Does anyone not think that the result of that kind of policy would 'be a drift away from Coventry and Birmingham and general dissatisfaction with the Government? That is a true parallel that too many people in the towns do not realise.
We must not have " Two Nations ", the countryside and the town. We must build the two equally in prosperity. I beg the Committee to think again on some of these problems of agriculture.
§ 6.27 p.m.
§ Mr. Harold Davies (Leek)
The Committee has enjoyed listening to a remarkable speech by the right hon. Member for Thirsk and Malton (Mr. Turton) and we are grateful for the constructive and non-partisan manner in which it was delivered. Whichever party is in power, the agricultural industry has to be given strength and virility. Both parties realise that it has to face many fundamental problems. It would be impertinent for me to try to make any cheap points from the speech of the right hon. Member for Thirsk and Malton and I do not propose to try. I simply say that both the right hon. Member and my hon. Friend the Member for West Stirlingshire (Mr. Baxter) have made excellent contributions to the debate and that their speeches are worthy of careful reading by the farming community.
When sound economic magazines and newspapers of international repute like the Financial Times ask what are to be the consequences of the Price Review, hon. Members on both sides should take note of the points that have been made. When the "Farming Notes" of the Financial Times asked the question,What does the 1960 Price Review mean?the agricultural correspondent of that newspaper said:In a sense, of course, it is the medicine as before, with a stronger dose for egg producers who refuse to take warning from their success.982 There follows the comment that for the first time in a Price Review we have had a warning to the agricultural industry about our relationships with the Commonwealth.
What has been brought out in the Financial Times and in the farming papers, and others, is the need which we in the hill districts urged upon the Labour Government, and have since then urged upon the party opposite, that a sufficiency should be paid to sheep farmers. I like the Minister and did not want to make a cheap debating point when he was speaking, but the White Paper tells us that there isneed to check expansion and to discourage the production of animals less acceptable to the market".That is in relation to mutton and lamb. Some of us want to know, has there been any agreement with the Commonwealth, with New Zealand, for instance, 96 per cent. of whose lamb we take, about importation of lamb? I want to know because there are hints in chat direction in the Financial Times. That newspaper says:The 1960 Review is a challenge calling for a constructive response.That is fair enough. We have to have a constructive response from all kinds of industry, and the nation has a right to expect a constructive response from the farming industry, but it can have that right to a constructive response only if the Government have a constructive, long-term policy for the farming industry, and not a policy by which at one moment the Government blow hot and at another moment blow cold. There must be an economic long-term plan.
So the Financial Times says that it is a challenge calling for a constructive response and it adds:Its effect is to give the producer notice that times may be changing but to give him time to change with them. There are so many ways in which he can help himself. Positive leadership can open the way for him to do so.The time has come for plain speaking, and no half-truths and muttering like that of so many wizards. The nation has to face a cut-back in the system of subsidies. In support of what my hon. Friend the Member for West Stirlingshire has said, I would suggest that the time has now 983 come to set up a Departmental committee to investigate the weighting of the subsidies. I shall not repeat what either the right hon. Gentleman the Member for Thirsk and Malton or my hon. Friend has said. The argument stands. The number of small farmers is great in comparison with the number of large farmers. The question is: are they having too big a share of the subsidies? Can we evolve a method by which we can keep the marginal, the small, farmer going, and give him a guarantee that he will get a fair share?
A great deal of the subsidy is not going to the farmer. Members on both sides of the Committee know the facts and I shall not weary the Committee by reciting them. They know of the increases in the prices and shares of the companies making fertilisers and agricultural machinery, and so on. Much money is going in that direction, yet there is the astounding fact that farmworkers are paid less than the cost of feeding stock. There is no likelihood of a General Election just now, and there is no need for any cheap propaganda or party politics about this. Therefore, would it not be worth while to have a constructive investigation into the weightage and methods of payment of the subsidies to agriculture? I think that it would. Let us see that the subsidy is doing what it was intended to do—what it was intended by both parties in this Committee to do.
It would be a tragedy if the small man were driven off the land. There are those, like myself, who, so long as we have got enough to live on in a certain amount of dignity, do not mind being £10 a week less well paid than other people, so long as we can do the things we want to do within the ambit of the law. We talk about the British way of life, and the British purpose. This is it.
The standard of the debate has been so very high that I should hate to slip in a cheap party point, but I would point out that at one time we on this side of the Committee were accused of wanting to nationalise the land. It was said that, if we did, the price of land would go up. I have been considering all these price questions for many months and going into the facts and figures. I will not give them all now, and weary the Committee, but they come 984 to this, that, as the Financial Times has pointed out, agricultural properties have been "active". That means they have gone up in price. There have been redevelopment prices, and so on. There should be an investigation into the working of the 1958 Act. I sometimes think that the Town and Country Planning Act has become a means of exploitation by solicitors and others going in for land deals. These things should be looked into.
There is one matter of which mention has not yet been made. The biggest slums in Britain today are probably the rural slums—the small man's farmhouse. Those of us who have agricultural constituencies know that in lovely Devon, in Wales, in North Staffordshire, some of the biggest slums are the little fanners' homes. If we could save that £36 million of which the right hon. Gentleman the Member for Thirsk and Malton spoke, perhaps it could be used in a campaign to gat water and electricity to the little farmhouses. Let us give the small farmer's wife a better and more dignified standard in her home, an escape from the drudgery of the last century.
It could be done. We do not need a five-year plan. It could be done in two years. Let us have a two-year scheme for the supplying of water and electricity to the farmhouses, and then we should have the efficiency we all want. I know from travelling the roads of my constituency that, although there have been some improvements to them, the wear and tear on farmers' machinery is a very serious matter.
I know that many other hon. Members wish to speak in the debate, so I come now to my last point. I will not waste the time of hon. Members by reiterating what has already been said, but there is one question that I must ask. What are we going to do for Che milk producer? A Question was asked in the House only last week, in reply to which we were told that last year our imports of milk increased 71 per cent. in volume and 80 per cent. in value. I sometimes wonder —and that is Che sort of thing which makes me wonder—whether the Government are quite sure whether or not they want increased production.
It may in some ways seem a consideration rather remote from this debate, but part of the tragedy of today is that 985 Europe is divided between the Outer Seven and the Inner Six. Believe it or not, this bedevils even agricultural policy in Britain. I assure the Minister— although I will leave it until I feel in a more obstreperous mood, because I feel very kindly towards him today, and it would be a pity to upset the atmosphere of the debate—that on another occasion I shall suggest to him that there is some little thing to do with the price Review that is linked in a remote fashion with speeches that have been made in Stockholm and elsewhere about the Outer Seven and the Common Market. This is one of the things which I find out as I go round the cattle markets in Leek. Let not hon. Members think that our farmers do not know all about the Outer Seven and the Common Market, because they know much more than Members of Parliament think they do, and they wonder what is to happen to agricultural policy as a result of it.
Therefore, I say that if we want to do something to improve the efficiency of agriculture which would be quickest and cheapest, it would be, first, to look into the Price Review, and, secondly, to get rid of the rural slums within the next two or three years by providing both water and electricity. By so doing, we should provide the beginnings of safeguards for the small man who wants to live in his creative dignity.
§ 6.41 p.m.
§ Mr. J. A. Stodart (Edinburgh, West)
I have been engaged in farming as my sole means of livelihood for the last twenty-eight years. Therefore, it will be no surprise to anyone that one who has been doing that should be slightly more proficient with a corn drill than in debate. One thing that I have noticed about what has been said this afternoon, which, I think, makes it very typical of the countryside, is the largely non-partisan note which has been struck. I have waited for some scorching heat to be generated from this attack on the Government, but I have found very little. Indeed, an almost benevolent glow radiated from Opposition benches. I hope that I too shall make a non-partisan speech, because I think that one thing that is common to all farmers is that they tend to be "agin" whatever Government happens to be in power.
986 It would be true to say that an extremely confused situation has arisen since the announcement of the Price Review. One has heard a great deal about a lack of confidence in the countryside, and I have read reports in farming journals that certain farmers in the West Country, if they were not actually going to march on London, intended to drive their tractors here. We have also been told that 48 branches of the National Farmers' Union have tabled motions of censure and yet the price of farmland continues to rise.
Even if it were the case, as I admit it could be, that this was caused by someone of 60 or 70 years of age feeling the approach of death and, therefore, paying more for an investment in agriculture, that certainly does not account for the fact that farmers are ready and willing to rent land at what seems to me the fantastic price of £14 per acre for grazing cattle or sheep during the summer. If that is supposed to show a lack of confidence in the farming industry, it seems to me to be a slightly peculiar way of doing so.
It is ironical that it is the success of agricultural policy that has been carried out during the recent years, and I do not confine that to the years since 1950, it is the very success of agricultural policy which has produced the rather disconsolate reaction to the recent Price Review. No farmer would deny the benefits which were conferred on the industry by the 1947 Act, in the shaping of which the hon. Member for Hamilton (Mr. T. Fraser) played no small part. I think that that Act was furthered in its effect by the Act of 1957, which gave a stability and security to the farming industry which placed it in a unique position, compared with all other industries in the country.
Side by side with this political success, we have had the tremendous contribution—and this has already been referred to—made by the engineers, the plant breeders, and the chemists, and also one which has not yet been mentioned this afternoon, and which I should like to underline. That is the quite incredible adaptability shown by the farm worker in handling the machines and the scientific gadgets that have been placed before him. This has impressed me more than I can say. To see a man who, for 987 the last thirty or forty years, has been driving teams of horses, get on a combine harvester and then give one the impression that he has been driving it since he began his working life, is quite remarkable.
As a result of the policies which have been carried out, and the contributions made by these various agencies since 1947, we have reached the situation which we are facing today. The production of every kind of livestock has increased since 1947, and all crop production, except rye, oats, mixed corn and potatoes. That is the national picture, and if I could give an example of the farm with which I have been closely associated for the last twenty-eight years, I may say that, between 1946 and 1950, 18 people used to be employed on that farm, where there are now eight. I do not altogether agree with the hon. Member for Sunderland, North (Mr. Willey), who suggested that a shortage of labour denoted an unhealthy agriculture, because today these eight people are producing three times the output per man that was produced thirteen years ago.
What we have now arrived at is a situation in which the overall production figures are embarrassing. It is unrealistic to expect the taxpayers to support regularly production which is beyond requirements. If we had reached a regular figure of potato production approaching that which we had two or three years ago, when there was a very heavy bill for the taxpayer to pay while many potatoes went wrong in the clamps during the month of July, I think that that would be a quite untenable situation. On the other hand, I do not think that it is in the least unreasonable for farmers to want to maintain their incomes, and make a noise if they see their incomes going down. Let us also face the fact, because there is no argument about it, that over the country as a whole farmers' incomes have not been rising during the last few years.
That leads me to ask whether subsidies or support prices provide the best way of maintaining the farmers' incomes. One thing that strikes me is the dependence of the agricultural industry on the support prices for a huge proportion of its income. It alarms me when I extract from my farm 988 accounts the proportion of subsidies of all kinds—the lime subsidy, the fertiliser subsidy, the wheat deficiency payments, and all the rest—and I find that in 1955 the total subsidies that I received came to half of the net profit that I made. In 1957, they were one-third of the net profit and in 1959 they had risen to four-fifths. This is a farm which, as I have said, is highly mechanised, with eight men doing the work oF the former 18 and with the output of grain rising from 28 cwt. at the end of the war to 38 cwt. per acre today. Yet that is the effect of the present agricultural subsidy system.
Obviously, until we start exporting— and I underline the importance of the industry thinking along those lines—an increase in the subsidy will accentuate what I consider to be the very uncertain foundations upon which the industry rests at the moment. On the other hand, to lower the subsidy means the perfectly natural reaction of a farmer who keeps sheep saying, " To keep my income up I had better keep more ewes and take a lower return on each lamb I sell ", and another saying, " If I grow barley I had better sow another 20 acres to keep my gross return up ".
Another facet of this confusing situation is that farmers as a whole dislike subsidies every bit as much as anybody else. For one thing, their removal would make entry into the export business possible. If only an alternative could be found to the subsidy system no one would be more happy than those who are engaged in the agricultural industry. I think that the substitute for subsidies and support prices lies in the realignment of the margin between the producers and those who distribute. After all, for every £1 that the housewife spends on food the farmer gets 7s. and the distributor 13s. If we give a slightly fairer share we can go a very long way towards giving the farmer an alternative to support prices and the subsidies which he gets today.
That must come together with the tackling of what can only be described as the Achilles heel of the farming industry, which is the marketing system, the presentation of our products, and organisation in general. That, I suggest, means an extension of marketing boards 989 to undertake a very much greater proportion of what the distributor does today. No longer can the farmer's interest be limited to his own farm gate. And what room there is, I am sure hon. Members would agree, for an improvement in farm management and business methods!
There has been for a long time a saying that the best manure for a farm is the farmer's boot, but I have been a heretic for many years now. I do not think that that is any longer true. The young man going into farming today should learn a tremendous lot about what it costs to produce various goods. He should keep an eye on the columns of his cash book. He should focus on the weaknesses and discard them and specialise on the lines in which he is doing best.
The particular policy on which I think the Price Review shows itself mistaken is to do with sheep. I cannot help thinking that the Government became frightened by the flood of sheep that were marketed last autumn, which sent the deficiency payments soaring. Yet that was entirely due to the lack of grass caused by a summer which very few farmers expect they will ever see again.
When we consider that only 40 per cent. of the mutton and lamb we eat is produced at home, it seems to me extraordinary that a White Paper should say that any extension of the sheep population should be checked. Mention of maintaining the sheep population brings me to a subject which is largely Scottish, and that is the question of the marginal agricultural production grant. It is a tragedy that that grant has been reduced. It seems to me to constitute virtually a breakdown in what I believe to be the sound principle that one gives help where help is really needed, and if help is badly needed anywhere it is on the hillsides in Wales, Scotland, and parts of England.
I believe that an expansion of the agricultural industry is still absolutely essential. I would remind the Committee that 4 per cent. to 5 per cent. of the total expenditure of the Government on producing good home-produced food is not a tremendous amount. Nor can I forget the words of the President of the United States, when he was in this country last autumn. He referred to the millions of people who, today, are living without sufficient food, and said that they would 990 not remain quiescent. That is why any impression, however slight it may be, that we are going in for any checking of food production is to be deplored and should be quickly erased. Bearing in mind the population trends as they will be for the rest of this century, we should realise that there is a long way to go before there is enough food for all the people of the world.
§ 6.59 p.m.
§ Mr. Frederick Peart (Workington)
My hon. Friend the Member for Leek (Mr. Harold Davies) said that in a debate on agriculture we should be as non-political as possible. I do not intend to be non-political. I shall be political. We are discussing the political responsibility of a Minister and the policies of a Government; and all hon. Members are here as politicians. No doubt many hon. Members have detailed experience of the farming world, but primarily they are in this Chamber as politicians to defend certain policies. Therefore, we should not be mealy-mouthed if we are to have some criticism in the course of a major debate on agriculture.
We are debating the Annual Price Review. I hope that hon. Members opposite who chided my hon. Friend the Member for Sunderland, North (Mr. Willey) for criticising the Review will have listened very carefully to the excellent speech of the right hon. Member for Thirsk and Malton (Mr. Turton). He said that farmers were worried, that there was no clear policy and no reassurance for the future. He went on to argue that there must be a reappraisal of policy. Is that not a criticism of Government policy from an outstanding right hon. Member? When he was in opposition before he was a Minister, I used to see him in the Standing Committee when we were discussing the main Act of 1947, and he played a most prominent part in the criticisms by the Conservative Party of the then Labour Government. His speech today was a formidable criticism of Government policy. Every hon. Member opposite knows in his heart that that criticism is sweeping throughout the farming community.
§ Mr. Peart
The hon. Member for South Angus (Sir J. Duncan) says " No ". He represents a Scottish constituency. The Farmer and Stock-breeder reported 991 on 29th March that the Scottish National Farmers' Union Council sent a protest telegram to the Minister. I will not quote it; the farming papers are full of such items. There is concern in the fanning world, and there is also concern among hon. Members. I am fairly certain that if we had a verbatim report of the private meetings of the Government committee which is concerned with agriculture we should find that there were many criticisms of Government policy.
§ Sir Richard Nugent (Guildford)
That is not so easy to get on the Government side as it is on the Opposition side.
§ Mr. Peart
That may be true. Hon. Members on this side are much less inhibited than hon. Members opposite; we are more spontaneous and say what we think. We are not as dead and monolithic as hon. Members opposite. There is, nevertheless, the noisy exception of the hon. Member for Kidderminster (Mr. Nabarro).
The Government argue that this year's decisions are fair, balanced and in the best interests of British agriculture. Therefore, we must take those standards. After all, the Price Review is an expression of agricultural policy, and, as has been stated today and as was stated in another place by the Parliamentary Secretary, it represents the line which the Government have been following since 1954. I quote the following words:The stress has all the time been on the improvement of the market and the need to make production more economic."—[OFFICIAL REPORT, House of Lords, 11th April, 1960; col. 852–6]That was the view of the Government, and it is the view of the Minister today. In other words, the fundamental policy of the Government in considering agriculture is, first, the market and, second, production being more economic.
That has always been the policy of right hon. Gentlemen opposite. That is why I disagree with their main policy, the desire to return to a free economy. That was the argument that hon. Members opposite used when they returned to power after the time of the Labour Government. Their argument was for a return to the price mechanism, a return to the auction market, the price ring and so on. The Price Review reflects that Government policy. Here we are really arguing fundamental political principles. 992 Hon. Members opposite have departed from the main principles of policy which were pursued by the Labour Government, a policy which was enshrined in the 1947 Act.
I have no doubt that the farmers prefer the planning of Mr. Tom Williams, who was the Minister of Agriculture in the Labour Government, to the policies of expediency and restriction which are pursued by the present Minister. I am certain that that is so. I admit that many farmers supported the right hon. Gentleman and his hon. Friends at the last General Election, but agriculture will pay a price for the political folly of those who believe that they have never had it so good. The Price Review is an example.
If we take the three tests which the Minister has put forward—they have been stated by other Government spokesmen—that the decisions are fair, balanced and in the best interests of agriculture, we have only to consider farming opinion. I will not give long quotations, though I have many. We have had the words of the president of the National Farmers' Union, a responsible man. He has stated that the industry is facing a critical point in its history. He argues against the Puke Review. That argument was repeated in a broadcast. The Press, too, have put forward strong criticisms of the Government and have reported resolutions passed by National Farmers' Union branches all over the country. Even the Liberal Guardian admits that the Price Review has a bad psychological effect. That is true of the Observer and also of the Beaverbrook papers, including the Farming Express. All farm opinion in this country is united against Government policy as expressed by the Price Review.
I would go further and argue that the Price Review is only the culmination of a long policy as a result of which faming confidence has been affected. The policy has gone on for a long period, and if we take specific industries we see the uncertainty. The Minister this afternoon praised himself for what he has done about pigs. But who created the crisis in the pig industry? We are now having a moderate increase in pig production—that is the aim of the Price Review, as has been stated in the Government's White Paper—but who created 993 the uncertainty in the pig industry? Responsible farming opinion in the pig industry—hon. Members know this only too well because representations have been made to them—has strongly criticised Government policy over the last two years on this issue. Hon. Members know that, and it is no good staying that we should not be political.
§ Major Legge-Bourke
With regard to the hon. Member's criticism about the pig industry, will he tell the Committee whether the Labour Party is or is not in favour of the Anglo-Danish trade agreement?
§ Mr. Peart
We have not committed ourselves on detailed policy. I would only say that I believe that the primary producer should come first. I have always said that. Secondly, I believe that the only future for the pig industry lies in combining it with a more efficient and effective marketing system. The hon. and gallant Member is really criticising the Anglo-Danish agreement. I am prepared to criticise it myself. The point that he is making is that the Danish agreement has been concluded in a period of uncertainty in which pig producers have faced muddle. He asks me what I would have done if I had been responsible for the industry. But the muddle was created by the Ministry which we are now indicting. The right hon. Member for Thirsk and Malton mentioned the uncertainty of Government policy in relation to their European approach.
Let us now go quickly to the Price Review. Here the main decision which has aroused the wrath of the farmers is undoubtedly the reduction of the price guarantee of £9 million. Ministers justify this. They argue, "After all, we have the 1957 Act, and that could have permitted a much larger cut." We argued at the time that the 1957 Act was legislation for declining incomes. We were criticised by hon. Members opposite for being political, but that is what is happening, and it was certainly the view of the Joint Parliamentary Secretary in another place.
Reference has been made to the fact that the total value of the guarantees is £1,270 million. It has been said that the production should be limited to 2½ per cent. of the total. Therefore, this year a 2½ per cent. formula would authorise a 994 reduction of £32 million less £13 million for increased costs of production such as wage increases. I am quoting what has been said by a Minister. In other words, the Government had authority to reduce by £19 million. The actual reduction was £9 million. The Government pride themselves that under this legislation they could have reduced income much more, but did so by only £9 million.
The farmers' case is that whilst costs have increased in the past year—£16 million for all commodities and approximately £13 million for Review commodities—they are certain that their own income has fallen considerably. Costs, wages, rents—all have increased. That was what we argued over and over again when we discussed previous legislation. Members opposite will remember the Government's instructions to arbitrators about rents. All this has added to inflation in the industry. The farmers undoubtedly feel that there has been a steady deterioration in their position in comparison with the rest of the country.
I have here figures which have been quoted on many occasions. They are official Government figures of actual farm incomes. In 1959–60, when adjusted to normal weather conditions, it was £288 million; in 1958–59 it was £294 million; so we could go on, back to 1951–52, when the figure, adjusted to normal weather conditions, was £320½ million. Actual farm incomes have decreased, and that is why there is uncertainty.
As was stated on another occasion in another debate, for every £1 of food produced in 1948 the farmer is now producing 25s. 5d. worth and has increased production by 24 per cent. Yet his real income has dropped by 5 per cent. This has happened under the party who, its members argue, has the best interests of the producer at heart.
§ Mr. John Hare
The hon. Gentleman surely did not intend to mislead the Committee. The figures he gave of income were adjusted to 1951 values, but the impression he gave was otherwise. I am sure that he will correct that. In my speech I gave figures to show that if we ignore the capital injection into the industry during the four years of which I was talking, the figure of a 5 per cent. decline is not true.
§ Mr. Peart
I accept that. But, even despite that, it is as I have stated—real farm incomes have declined. [HON. MEMBERS: " No."] I suggest that hon. Members consult the Farmers' Unions about it. I am certain that the Government would admit that real farm incomes have declined. Our main argument is that the Government have been following a restrictionist policy. That is one of the main charges and criticisms made by Members opposite. Farming opinion accepts it. If we consider the commodity objectives in the White Paper, we find that we are to have (1) less milk, (2) fewer eggs, (3) barley and oats in preference to wheat, (4) check in expansion of sugar beet, (5) check in expansion of sheep, (6) maintenance of present potato acreage, (7) limited expansion in the pig breeding herd, (8) maintenance of the current rate of expansion of cattle. One could not argue that that was an expansionist policy.
Agricultural opinion believes that the Government are following the policy of restriction. That is certainly true when we consider it from the point of view of gross production. One commodity has already been referred to—in milk we are to have restriction and not expansion, yet in this country we import 50 per cent. of our total consumption of dairy produce. Despite that, we are trying to restrict the amount of milk that is produced and diverted into milk products. Is this a policy of expansion? Can we really say that we are to have a selective expansion? The Government appeal for efficiency. The call for efficiency can only be met by some increase in the gross as well as the net output. Even the hon. Member for Kidderminster will accept that.
If we are to have increased efficiency we must have an increase in gross production. It is inevitable. But it is not the view of the Government. The country wants to know what the Government's intentions are. What are farmers to produce as alternative to those products whose output is to be restricted? This is 996 very important from the point of view of the small farmer, because he cannot easily switch production.
How can small farmers economically improve their production? It is not easy. It is one of our main criticisms of Government policy that the Review represents a restrictive outlook which has been condemned by the farming community. Do the Government wish to expand gross production? We should like a definite answer now. We take pride in the fact that our production has increased so that it is now 68 per cent. above pre-war. Official spokesmen of Members opposite have paid tribute to the legislation which has provided the machinery for this. When the hon. Member for Kidderminster chides my hon. Friend the Member for Sunder-land, North (Mr. Willey) about our policy, he should remember that we laid the basis for an agricultural revolution in 1947.
§ Mr. Geoffrey Wilson (Truro)
The hon. Member cannot get away with that. The policy of the 1947 Act has a much longer history. It goes back to Sir Reginald Dorman-Smith at the beginning of the war.
§ Mr. Peart
I suppose that was why Members opposite voted in Committee against Part I of the 1947 Act. That was a strange way of supporting the policy of the then Labour Minister. If the hon. Member will read the reports of the Committee which considered the 1947 Act, he will see the facts.
As my hon. Friend the Member for West Stirlingshire (Mr. W. Baxter) said, agriculture, under previous Tory Governments, as has been admitted by Members opposite today, suffered great uncertainties and depression in the inter-war years. I do not wish to discuss those days but only to go back to the 1947 Act, which was provided by a Labour Government, and was followed up with an Act in 1948. The Conservative Joint Parliamentary Secretary in another place indeed went further back and paid tribute to Lord Addison's Acts about marketing. This party has an admirable record in agriculture.
That is why there is great uncertainty in agriculture when hon. Members opposite are in power. Many farmers know only too well that in the changed international situation of today and with the 997 controversies about the Six and the-Seven, there is a danger that the Government will sell out the interests of British agriculture because of the Government's support of certain financial and industrial interests in this country. The Minister may smile, but that was the view clearly stated in the speech of the right hon. Member for Thirsk and Malton. We need an increase in home production in the national interest, and it is wrong for the Minister to have a restriotionist policy towards gross production and towards some of the commodities listed in the Price Review.
Right hon. Gentlemen opposite always used to chide us when we were in power and put three questions to us—and I hope the hon. and gallant Member for the Isle of Ely (Major Legge-Bourke) will put them to the Minister today. We were asked, first, whether we believed in home production; secondly, whether that should come first; and thirdly, whether we were concerned with the Commonwealth and, after the Commonwealth, with the rest of Europe and other parts of the world. Right hon. Gentlemen opposite put those questions to Labour Ministers after the war. We were asked whether the home producer or the foreigner came first. I hope that the hon. and gallant Member for the Isle of Ely will have the opportunity to put those questions to Tory Ministers. The farming community wants to know the answers, and we want to know them now.
Quickly to come to my last point, because I do not want to monopolise all the time, I want to deal with the efficiency of the industry. If we are to have increased efficiency, we must have increased production and an increase in gross production. Talk of efficiency without increased production is ludicrous, and in this connection I should like to know how the Minister based his argument on the figure of £25 million, which was mentioned by one of my hon. Friends. How has that figure been reached? Is it a Treasury guess imposed on the Minister and on the Secretary of State for Scotland? That is another question to which farmers want to know the answer.
I want increased efficiency, but I want it to be linked to a drive for gross output. We want planned expansion, as 998 the right hon. Member for Thirsk and Malton rightly said. That is our basic policy. We want planned expansion with efficiency, but the Government have a policy of restriction and, in the end, that can affect efficiency.
I should have liked to have developed a more positive argument on how to increase the efficiency. Small farmers obviously need more co-operation. Much has been done in this direction in my own area, and I congratulate the West Cumberland Farmers' Trading Society, to mention one example, which has extended its work and its development and provides a first-class service for small farmers. That state of affairs is repeated all over the country. Cooperation in agriculture must be increased. Secondly, we need improved marketing. Thirdly, we still need a greater application of science to farming.
We are still not spending enough on agricultural research. The Agricultural Research Council, which is mainly responsible for research in the public sector of agriculture, spent £4½ million in 1957–58. There is also the private sector, concerned mainly with research into fertilisers, veterinary drugs, pesticides. If we include weed killers, on the National Advisory Service approximately £9 million a year is spent. Set against a volume of agricultural production of £1,400 million a year, it can be seen that we are spending only 64 percent. of that amount on research. The Government need a bigger drive in this respect if efficiency is to be improved and if food production is to be expanded. I am not criticising the National Advisory Service, which has done a wonderful job, but we still have only one advisory entomologist for every 4,000 farms and only one plant pathologist for every 7,000 farms. We also need an improved service for farm management, a subject which has been mentioned by many farming journals. We still need a vigorous implementation of the De La Warr Report on agricultural education.
I could go on showing how we would tackle the job. We would lay emphasis on selected expansion and increased production and greater efficiency. We should not be criticised, as the hon. Member for Kidderminster criticised us today, for not putting forward an alternative policy when discussing the Price 999 Review. After all, the Minister is responsible.
§ Mr. Nabarro rose—
§ Mr. Nabarro rose—
§ Mr. Nabarro
If the hon. Member will let me ask a question, we should see whether he knew the answer.
§ Mr. Peart
The Government are responsible and the Price Review will affect Government policy. That policy has created uncertainty in farming, as has been admitted by many hon. Members opposite. There is great uncertainty and a growing lack of confidence. That is bad for this great industry, and that is why we criticise the Government and why this criticism is growing throughout the country.
§ 7.18 p.m.
§ Mr. Frederick Gough (Horsham)
I am very conscious of the fact that it is many months since I last addressed the Committee, through no fault of mine, and I feel like asking the Committee's indulgence. However, as I intend to "have a go" at the hon. Member for Workington (Mr. Peart), I do not propose to ask for that concession.
As a back bencher, much as I admire the hon. Members concerned, I take the greatest possible exception to the manoeuvrings in which the Front Bench opposite has indulged. First, we had 44 minutes of what was rightly described by my hon. Friend the Member for Kidderminster as "belly-aching" from the hon. Member for Sunderland, North (Mr. Willey). One of the after effects of the illness from which I suffered is a 1000 slight attack of deafness and, fortunately, I was unable to hear most of what the hon. Member said.
However, I was a little closer to the hon. Member for Workington and I heard a great deal of what he said. As he spoke it was obvious that this attack, which amounts almost to a Motion of censure, was flopping like a wet, cold fish. There were rarely more than half-a-dozen Members in the Chamber. Such was the hon. Member's eloquence, such was his power, that at one stage he managed to raise the equivalent of a rugby football XV, with the hon. Lady the Member for Carmarthen (Lady Megan Lloyd George) no doubt acting as referee and the two members of the Liberal Party who were present acting as linesmen. I am very pleased to see that one of them, the hon. Member for Devon, North (Mr. Thorpe) is still with us. Having said that, I should like to be a little more constructive.
I add my congratulations to the hon. Member for Richmond, Yorks (Mr. Kitson) on an admirable maiden speech which was well in the tradition of the former hon. Member for the constituency, Sir Thomas Dugdale, now Lord Crathorne, who is a very good friend of mine. My hon. Friend said that he represented the largest constituency in England. There are various ways of measuring constituencies, but I take him up on the point. My constituency covers about 800 square miles, but it has the difference that it is divided equally between an agricultural and an industrial community in that the new town of Crawley in it. When one adds those together, I think that my constituency is bigger than his, because I have no fewer than 78,000 constituents. The point that I want to make is that I have both ends of the stick. On the one hand I represent farmers, and on the other hand I represent consumers in the new town of Crawley. I am told that they have never had it better, but that is by the way.
I was immensely impressed by the speech of my right hon. Friend the Member for Thirsk and Malton (Mr. Turton), because I have been puzzled not about what is wrong with the Government or their policy, but with the Price Review, which I am quite prepared to accept was introduced by the party opposite. What 1001 is wrong with it? Practically every year round about February or March I get "absolute stink " from my fanners in Horsham. Hon. Members whose constituents are farmers trying to farm on difficult soil—and there is very little more difficult than the cold wet clay of the Sussex Weald—know that the Price Review does not help individual farmers where help is most needed. Is the machinery creaking too much, and, as has been suggested by hon. Members on both sides of the Committee, has not the time come for looking into it to see whether the whole system is up to date?
One thing to which the Price Review paid no attention and which is fundamental to farming is the type of soil. Soil differs not only in different parts of the country, but in different parts of a constituency. In the western part of my constituency in the Midhurst area there is excellent farming land, and I hear no grouses from there—I am generally invited as a guest of honour to the National Farmers' Union dinner—but only thirty miles further east one comes into this terrible Sussex Weald clay at Horsham where, in the main, there are smallish boulders and farming is very difficult.
The problem in those two areas in one constituency is fundamentally different. When I read the Minister's statement which he very kindly sent me, I confess that for a time I agreed with my farmers that the Government's policy looked like one of restrictionism, but, having listened to my right hon. Friend this afternoon, and also to my right hon. Friend the Member for Thirsk and Malton, I can see what is worrying the Minister, namely, that there must be restrictions if production in any one commodity gets out of hand.
What must be realised and remembered by my right hon. Friend, or indeed by any Government responsible for agriculture, is that the less we grow in this land the more problems we make for our balance of payments. That has not been mentioned in this debate, but it is very important.
§ Mr. Gough
The hon. Gentleman says it has been mentioned, but there is no harm in making the statement again.
1002 I would not, and could not, agree to or support a policy which was systematically one of restrictionism, but the Government's policy is not one of systematic restrictionism. It is one of getting on to a reasonable balance. It is one which, as its record shows, has increased farm production and which I believe will continue to do so.
I am at one with hon. Members on both sides of the Committee in asking my right hon. Friend and the Government to look into the question of how this subsidy is being used, and to consider whether an abnormal amount of it is being wasted. We have already heard the amount going to the middle man. I agree that it seems wrong that, out of every £ that the housewife pays, only 7s. goes to the farmer, but the middle man is not the only problem. Let us remember also the cumbersome machinery at the Ministry, and how much of this subsidy that in itself absorbs.
I promised that I would be very brief, and brief I shall be. This is the first opportunity I have had of speaking in this Chamber for some months, but, as has already been said, agriculture is the life-blood of this country. I have always believed, and despite the two speeches from the Front Bench opposite I still believe, that this subject is almost devoid of party politics. Whichever party is in power it has the difficult and serious problem of maintaining the high degree of efficiency which is found in our agriculture today. There are obviously serious problems. The Price Review shows that there are difficulties which may need further consideration. It is on that note that, while supporting my right hon. Friend, in conjunction with other right hon. and hon. Members who have spoken, I ask whether the time has not come for a clear and impartial investigation into the whole of this matter.
§ 7.37 p.m.
§ Mr. Jeremy Thorpe (Devon, North)
It has not been my privilege to hear the hon. Member for Horsham (Mr. Gough) before, but, having done so now, I am sure that I speak for every hon. Member of the Committee in expressing our pleasure that he has been restored to health and is back in his place. I hope that he will go from strength to strength, and will be able to eat more and more National Farmers' Union dinners.
1003 The Minister is correct in saying that the Price Review is well within the limits to which he could have resorted under the 1957 Act, but he would be deluding himself if he overlooked the fact that there is despondency and pessimism in the farming community today.
The farming community accepts that the basis of agricultural policy must be a reduction in unit costs, but where the lack of confidence is to be found is, first, in the directive which is clearly set out in the White Paper that there must be a marking of time in production in some cases, and an actual reduction in others. Another factor that worries the farmers is that the Government are not doing enough to help farmers to lower their costs of production. The order of the day is to reduce costs but not to increase production. But there is precious little help and guidance given to the farmers on how to reduce costs. Paragraph 11 of the White Paper provides an example of that.
May I suggest one or two ways in which the Government could help the farming community to lower costs? It is very easy for hon. Members on both sides of the Committee to try to say that they want more money. That is not the issue. The real issue is that within the existing framework we must help the farming community to lower its costs. First. I take the 1957 Act. Paragraph 6 of the White Paper hypothecates a continued reduction of 2 per cent. per annum, £25 million a year. The 1957 Act was an all-party Measure—
§ Mr. Thorpe
It was a Measure which received all-party support—put it that way—with no exceptions at all—
§ Mr. Willey
If the hon. Member, who was not a Member of the House at the time, will look at the Committee stage proceedings and the report of the Second 1004 Reading debate, he will see that objections were made. We forecast what would happen and what has happened over the years.
§ Mr. Thorpe
Obviously, Amendments were moved during the Committee stage. One would expect that to happen if the Opposition were doing their job. Of course, there would be Amendments and opposition to specified matters, but by and large there was no opposition to the 1957 Act.
§ Mr. Fraser
I Chink Chat if the hon. Gentleman looks at the report of the Committee stage proceedings, he will see that the Conservative Party opposed Part I of the 1947 Act—
§ Mr. Thorpe
The hon. Gentleman is ten years behind. I am now talking about the 1957 Act, not the 1947 Act which I have left in the realms of antiquity.
The first suggestion I wish to make is that now the time has come to look carefully at the 1957 Act as it operates at present. Farmers are disturbed because, whatever their increased efficiency as assessed by the Government, in effect they are not permitted to retain any substantial proportion of it, since any increased efficiency on their pact is automatically taken away.
An examination of the total figure of the amount they are to receive reveals that farmers are deprived of the incentive which they would have if they knew that there existed a fixed formula whereby an agreed percentage of their increased efficiency could be retained by them. The Government should, for example, make plain that every year the industry would be able to retain one-fifth, one-sixth or a quarter of its increased efficiency. That would give members of the farming community a tremendous incentive to lower costs. At the moment they feel that if costs are lowered, the financial benefit will be taken from them by an even bigger cut in the next Price Review.
The farming community today has to operate in a sort of Alice-in-Wonderland economy in that they have to compete under almost free trade conditions and 1005 yet farmers must buy the tools of their trade in a highly protected market. They have the worst of protection and of free trade.
I hope that the National Farmers' Union will be far more vocal than it has been in its efforts to tear down the tariffs which at the moment apply regarding the tools of trade which farmers have to buy—fertilisers, tractors, machinery and so forth. Not only would that reduce the costs of imported equipment, but by healthy competition the prices of home-manufactured goods would be forced down. One need only read the Report of the Monopolies Commission about the fertiliser industry to see the sort of thing which farmers have to put up with. The Minister will probably know the figure better than I, but it has been suggested that by moving towards a freer economy regarding the tools of trade of a farmer, something like £40 million a year could be saved on agricultural costs.
There is another way in which I think that efficiency could be improved, and it has been referred to by the hon. Member for Leek (Mr. Harold Davies). On both sides of the Committee there are hon. Members who represent agricultural constituencies in which there are villages without electricity, without water supplies or drainage or proper transport facilities. The inhabitants of many of our villages are beginning to despair about ever getting electricity. It is impossible to get a firm estimate from the electricity boards, because they are in the difficulty that each region has to balance its books and show a profit, or at any rate break even at the end of the year. Therefore, each region can afford only that amount of rural electrification which is related to the income which it can expect from the work of electrification carried out in urban areas, to offset the increased capital charges in the rural areas and the lower income Which may be expected from such investment.
If we are to stop the drift from the land, it may well prove necessary to have a direct Government subsidy for electrification in the rural areas, and that figure could be included in the global figure at the Annual Price Review. One would then know that the increased capital charge was, in a sense, being under- 1006 written by the Government. The conditions in the rural areas are the worst in the country. I will take one example from the constituency of the hon. Member for Torrington (Mr. P. Browne). I think the hon. Member will agree that a survey carried out by his predecessor has proved of very great value. It shows that of the 2,200 houses in the rural district of Torrington, 1,180 have no piped water supply; 95 have no kitchen sink; 825 have no lavatory and 1,460 no fixed bath. Those are the sort of conditions which still exist in some of our rural communities. When we are considering the possibility of varying the subsidy and the commodities which the Government are prepared to support, I should like to see a direct injection of capital for the specific purpose of accelerating the process of bringing electrical power to the rural areas.
§ Mr. Nabarro
I sympathise with the hon. Gentleman about the conditions in North Devon, but I am sure that he would not wish to paint a picture which would suggest that these conditions regarding rural electrification exist in other parts of the country. It is notorious that the south-western area is the most difficult in the country from the point of view of electrification because it has no large industrial community. But in my constituency, for example, in West Worcestershire where there is a similarly scattered community, the level of electrification is about 95 per cent.
§ Mr. Thorpe
The hon. Member is absolutely right and, therefore, it is the more easy to clear up the trouble spots. Take, for example, the Highlands of Scotland. There are hon. Members present who are qualified to give statis-tices about conditions there. Or the rural areas of Wales or the West Country. There conditions are still appalling—
§ Mr. Thorpe
If the hon. Member is satisfied with them, I leave it to him.
When one considers that in Switzerland and Luxembourg they had 100 per cent. electrification before the war, one realises that we have a long way to go to catch up.
Another way in which I think the Government can do very much more to help the farming community to lower its 1007 costs would be to make available cheap capital. It is estimated that in the next ten years £300 million to £400 million will need to be invested in the industry. For reasons which have been rehearsed by hon. Members on previous occasions, there are many farmers who are outside the scope of the Farm Improvements Scheme and the Small Farmer Scheme. If one considers the experience of some countries with whose systems I am familiar, one finds that in France, Denmark and America financial provisions for the farming industry are provided to an extent which makes a similar provision in this country appear to be still in its infancy. In America, it is possible to attract the investing public to invest in agriculture; and about £700 million a year from the investment market goes into the agricultural community.
I do not think this an occasion to go into the matter in great detail, but I suggest a possible transformation of the Agricultural Mortgage Corporation to increase its borrowing power up to £400 million to give cheap long-term credit with low rates of interest. The difference between the low rates of interest which would be charged to farmers and the rate at which the money would have to be secured would be underwritten in the Price Review. That has been estimated at about £15 million a year.
Another matter which we must consider vary carefully is the import policy of this country. I was pleased that this was mentioned by the right hon. Member for Thirsk and Malton (Mr. Turton) because, although I wished to mention it, I thought that in so doing I might be out of order. The real future of British agriculture will be affected by the creation of the Common Market. In this country we have been given an undeserved eleventh-hour opportunity to go into the Common Market. The Commonwealth communiqué has swept aside the last objection and excuse which has been consistently put forward by the Government.
I want to deal with the effect this will have on British agriculture. We are facing an area which at the moment is the largest importer of food in the world. One-third of all the world's food exports go to Common Market countries. At the moment they produce 87 per cent. of their own requirements and in five years they 1008 will step that up by 40 per cent. so that they will become virtually self-sufficient. They will also stabilise their farm prices, quite deliberately, above world prices. In six years they will have complete standardisation and stabilisation of prices. The effect of their policy will be to exclude imports from foreign countries by subjecting them to levies and quotas and other licences. That will mean that there will be huge surpluses kept out of the Common Market which will have to be directed somewhere else.
§ Mr. Thorpe
Yes, the surpluses will be exported by what is known as an equalisation payment, which in my view will be contrary to the General Agreement on Tariffs and Trade. It will mean a tremendous dislocation in supply of agricultural exports. At the moment Canada sends 30 per cent. of its wheat and Ghana 20 per cent. of its total exports of cocoa to the Common Market countries. What will that mean for the British agricultural community?
The Anglo-Danish agreement has been mentioned. We all know why that was entered into. It was the price we had to pay for going into the Outer Seven because we had failed to get into the Inner Six. We were trying to set up a substitute alternative, but I suggest that a organisation trying to create a super market for 165 million people, which is deliberately trying to harmonise production and stabilise prices and have an effective vast market for her goods, is the sort of organisation which British agriculture should go into. Our exclusion from the Common Market will be far greater in evil consequences to British agriculture than our inclusion. At the moment with the Common Market we will get the worst of both worlds: enormous agricultural surpluses from the rest of the world with our industries declining as a result of being shut out from the European market.
Therefore, I say to the Government, what the farming community needs is, first, help to cut our costs; by reducing tariffs on the tools of the trade, which are needed; by helping the agricultural community to get cheap capital; by helping to speed up electrification and provision of services in rural areas and 1009 —not least—by the right hon. Gentleman perhaps using his best efforts with his more isolationist colleagues in the coming months to allow British agriculture to enter into the Common Market.
§ 7.54 p.m.
§ Mr. Denys Bullard (King's Lynn)
I have followed this debate from the beginning. There have been some interesting contributions from both sides of the Committee on a very important topic. The hon. Member for West Stirlingshire (Mr. W. Baxter), the hon. Member for Leek (Mr. Harold Davies) and some others have suggested that there should be some sort of inquiry into the whole of agricultural policy. I always believe that that inquiry should be in the House. The function of these debates should be chiefly to elicit various points of view on the whole question of agricultural policy.
The hon. Member for Workington (Mr. Peart) has left the Chamber. I thought he was going to wind up for the Opposition on the English aspect of the subject. I am glad, however, that the debate is not yet to be brought to an end, as there are still some hon. Members from this side of the Border who wish to take part. The hon. Member said that we wanted planned expansion with efficiency. That is a very useful general phrase. I do not know what "planned expansion" means, but he said a lot about pigs. I could have told him how expansion can take place very sharply in pig production. When the Minister announces an increase in prices the farmer would have a word with his pig man, who may have sorted out some gilts to go to market the following week. He would say, "George, you have some nice gilts picked out to go to the market next week. Turn them into the yard where the old boar is, the whole lot of them. I believe there is going to be an increase in the pig price before very long." Many farmers might do that.
Although the hon. Member and his hon. Friend the Member for Sunderland, North (Mr. Willey) talked about planning increases in pig production, that is utterly impossible. One of the things we have to do in these agriculture debates is to have some semblance of actuality and to know how events are 1010 liable to operate in the agricultural world.
§ Mr. Geoffrey de Freitas (Lincoln)
My hon. Friend the Member for Workington (Mr. Peart) has left the Chamber through no discourtesy to hon. Members but simply because he wanted to increase consumption of pigs. He has gone to have a pork chop.
I have been rather disappointed about the way the debate has gone on. Whilst sitting here I have been trying to analyse exactly why I feel disappointed. I have come to the conclusion that it is because we are trying to do too much in this debate. We are trying to examine the Price Review with its minor trends of prices, important though they are. It is very important we should do that, but we have combined it with an examination of the whole question and I rather think we have fallen between the two. Therefore, we have not done our job so well as perhaps we ought to have done.
I support the broad principle of the Government's agricultural policy, the implementing of guaranteed prices by deficiency payments. I do not think we have paid half enough tribute in the debate to this method. It seems the only possible means of implementing guaranteed prices in present world circumstances. I could list several advantages of this system. First, it presents the minimum interference with overseas trade. Foreign countries may not like our home support policies for food production, but they do not present a tremendous barrier to our doing good business with other countries. I feel very strongly that what we need most if we are to have a virile agriculture policy is that the country as a whole should be prosperous. I think we do a disservice if we urge policies which would seriously hamper our trade in general with countries overseas.
That was why I was rather worried about the suggestion put forward by my right hon. Friend the Member for Thirsk and Malton (Mr. Turton), that we should not only have deficiency payments and guaranteed prices at home, but an import restriction policy as well. I think his idea of minimum price arrangements whereby no imports would be allowed when prices at home fall below a certain level is very well worth 1011 looking into, but I cannot believe that we shall be able to have both guaranteed prices with considerable Exchequer support behind them and a policy of import control on a wholesale scale.
I was also interested in my right hon. Friend's linking up home production with the possibility of supplying overseas countries, particularly under-developed countries. I wish it were possible to do something in that direction, but frankly, although I know some hon. Friends will not agree on this, I do not see this country as a great exporter of food. I look on our home market as the great market which we have to use, for we have 50 million people to feed from this small island. I want to see that market developed so that we can supply an increasing proportion of good fresh food to our people at home. That is only one reason why I support the Minister and the Government in this policy of deficiency payments. The system allows quality to be paid for. It allows the market to operate. It gives our home farmers the benefit of feedingstuffs at world prices, whereas they have a guaranteed price for their own output. This is an inestimable advantage of this system. I believe that it gives a very high degree of protection to the home producer as well.
We have heard comparison made with the protection given to some sections of industry. Our deficiency payment system gives a very high degree of protection to our home producer, and I should not like to see the system jeopardised in any way. On this matter of main agricultural policy, I give my full support to the system which has been built up over the years. I believe that it is the finest one, not perhaps in detail—it needs a lot of reform and changes as time goes on— but in principle and the most likely to give a satisfactory guarantee to the home producer.
It costs money and the Minister and the Chancellor of the Exchequer have to watch the total amount which is paid in guarantees, but it is a sum of money which produces very great benefit for the whole community, urban as well as rural. There is a huge market in the agricultural industry as a whole. I refer not only to farmers themselves, because although I am a farmer I should not like 1012 to be speaking here purely on behalf of farming interests, but I want to see a balance in the countryside and the two communities, rural and urban, working in with one another. The market in the country areas from the agricultural industry and from those who are dependent on it and work in it in the allied industries, like canning and farm machinery, is a very great one. Although £250 million is a vast sum, it still obtains a good bargain for the community as a whole.
I want to refer to one or two points in connection with the Review itself. Here I come to matters which are of considerably more detail. We ought to examine one or two of them because they have been the subject of widespread complaint to hon. Members by branches of the National Farmers' Union. It would be very wrong if we did not examine some of them in this debate.
First, as to the efficiency figure, I know that the Minister has said that over the years it is justifiable to allow that by further increases in efficiency farmers reduce their costs by about £25 million. Looking at the references to this figure in the past Annual Price Review determinations, I find that although there were noises made about increased efficiency in the earlier White Papers, it was not until 1955 that the figure of £25 million was placed on this item. That has been included in each Review, and a deduction of £25 million made from the guarantees every year up to the present year. I know very well, as do all farmers, that some allowance for this factor has to be made in the Price Review, but how much longer can this reduction of £25 million go on? Is it to go on continuously, because, if so, that will make the Price Review look rather funny in ten years' time.
This factor was probably very considerable in the years after the war, but one would have thought that there would be a tendency for this figure to tail off today. I would have thought that before the next time—I am looking ahead to the next Price Review—it would be a good thing to look into the details of this £25 million item, because it is the factor above all which has probably caused more concern in Farmers' Union discussions than any other.
1013 I will mention only two other items, and those very briefly, because I do not want to speak for long. The second matter to do with the Price Review is the question of falling net income. It is very hard to get the truth about this question of net farming income. I have watched the figures in the White Paper. I have studied very carefully the figures given by the Joint Parliamentary Secretary to the hon. Member for Sunderland, North expressed in 1951 terms, and I do not think that we have got to the bottom of this matter.
I have looked at the figures in the Blue Book on National Income and Expenditure, which show that the farming income has had an increase of about 50 per cent. since 1948. Some of the other trades and professions have shown a lower increase than that, but wages and salaries have shown a very much greater increase. Here, again, we are up against a factor which is cardinal to our troubles when the Price Review comes round, because there is a general feeling in the farming community that incomes are slipping and losing ground as compared with other sections, and I think that we should do something to allay those feelings.
This is a factor which has to be taken into consideration When there is a further Review. It is a complicated matter, because farming net income includes not only the personal income of the farmer but also items which he has to spend on capital and re-equipping his holding. If he wants a new tractor, unless he borrows it he has to provide for it out of his net income, and I would pay tribute to the Government for making that very much easier by restoring the initial allowances. In the dateline for our discussions on this matter there was no initial allowance. This has certainly been a help, but I believe that there is a feeling that in comparison with other sections the agricultural community is losing ground as regards the personal income figure.
My last point about the Review is one which has not been raised during the debate but which I should like to mention. That is the question of sugar beet prices. There has been a reduction of 2s. 6d. a ton, and I think it can genuinely be said that there has been a very considerable increase in efficiency 1014 in the sugar beet growing industry. I should be glad if the right hon. Gentleman could make clear exactly how this reduction fits into the Review question as a whole.
The arable farmers in the east of England contend that there is no subsidy upon sugar beet and that, therefore, a price reduction is not justifiable because it does not lead to any decrease in the subsidy. I should be glad to know if I am right in assuming that the position is that the sugar industry at home has a form of subsidy in that it is excused Excise Duty, and that this is relevant to the general cost of the guarantees. It is a point which has never fully been discussed during our debates on the Review. It was mentioned during a debate in another place, and it is a matter of great significance to arable farmers, at any rate, in the east of England. I should be glad if my right hon. Friend could refer to this matter when he winds up.
My final point relates to the general question of whether the Government are pursuing a restrictionist policy, as has been suggested by several hon. Members opposite, and I think by one or two hon. Members on this side of the Committee. I have examined the question whether the policy is restrictive, by reference to my own business. I ask myself on reading the White Paper, "Is this policy likely to restrict me?" I can honestly say that I have not come to the conclusion that it is restrictive. I find nothing which prevents me from growing anything or increasing my production. The only line in which I would be physically hampered in increasing my production would be sugar beet which, oddly enough, is one of the main fixed-price commodities.
I do not think any farmer need consider that the Government's policy is necessarily restrictive. If I decide to go in for a large increase in production in one line, or in all lines, and all my neighbours do the same, the Government may say in the end, "You are producing so much and you are doing so well that you will have to produce it at a slightly lower price." But I do not know that I would be aggrieved by that. If I went in for increased production all round, I would expect to do so at a lower general average price. It seems to me that that is exactly what the Government are doing—
§ Mr. F. H. Hayman (Falmouth and Camborne)
Will the hon. Gentleman say whether he feels that that ought to be the outlook of all the fanners in the country?
§ Mr. Bullard
It is a valid test, which it does not do any harm to apply to see how it affects ourselves. We deal with enough generalities in this House, and it should not do any harm to apply that test to a special case to ascertain how one is personally affected. I do not see anything in the White Paper which says that production is to be decreased or even kept stable.
§ Mr. Hayman
I think the hon. Member missed my point. He was saying that he would not mind a lower price in return for increased production on his part. Would he apply that to all the farmers in the country?
I do not know that it is an inevitable consequence that there would have to be a decrease. I said that I do not find any restriction in my output, but that if I and others go in for increased production we must not be surprised, knowing the operation of market factors, if there is over the years a slight decrease in price. I am, of course, assuming that wages and cost factors are similar. If they rise, allowance must be made for the fact. I should have thought that that was a fair deduction.
I do not think that my right hon. Friend's policy need be restrictive. After all, he is in a difficulty. If he says, "We want an increase in production in certain lines", -in due course we shall all say, "You said you wanted more. Now that we have produced more you must deal with it." It is a risky thing for a Minister of Agriculture to do. I think he is wise not to be drawn into stating targets and figures.
I do not think this is a good Review from the farmer's point of view; neither do I think it is a very bad one. However, this is over and done with. I want the Minister and the Committee to look forward to the next Review and to examine some of these trends, particularly the efficiency factor which I mentioned, so that we may be prepared over a longer term. The longer-term aspects are infinitely more important than criticisms, or "belly-aching". over this Review.
§ 8.16 p.m.
§ Mr. John Morris (Aberavon)
I shall be as brief as possible, as I understand that many more Members on this side of the Committee wish to speak. I have one advantage in this debate, in that I represent an industrial constituency. I am not like the Minister who is harried by a large number of resolutions from the National Farmers' Union. I understand that there are 48 resolutions on eleven closely-typed foolscap sheets of paper.
Coming from a long line of farmers, and being the first black sheep who has deserted the industry, I have some reason for participating in the debate. The criticism that I make of the Price Review is that the Government have no policy at all for agriculture. The small man has been completely squeezed under all the time. One only has to look at the figures for farm units in Wales to see that every year there is a decrease in the number of agricultural holdings. That is the result of the amalgamation that is taking place all the time because the small farmer is being squeezed under.
The Government's right hand does not know what its left hand does. We have heard the facts this afternoon. First, we have the policy of restriction in the Price Review. On the other hand, we have the Small Farmer Scheme, the improvement grants, the producer grants, fertiliser subsidies and the N.A.A.S.— all these things intended to improve and increase efficiency and production. The Minister, like some blind goddess of justice, is standing on this infernal seesaw and the farmer does not know which way to turn. At one moment there is a tilt towards increased production and the next there is a tilt towards a decrease.
Certainly the Price Review is restrictionist. Only with respect to two products can it be said that there is any suggestion for an increase in production. I refer first to pigs—and the Minister could do nothing else except encourage pig production after the shambles over the last two years. As to beef, there is some suggestion that there should be an increase in the amount produced. But, mainly, the Government admit that there has been an increase in the costs of production in the industry as a whole, and there is no provision at all for an 1017 increase in price. If one commodity forms part of the whole and the whole suffers from increase cost, float commodity should receive some advantage. At the moment there is no provision for an increase in the price of beef.
I will not mention all the other products. My hon. Friend the Member for Enfield, East (Mr. Mackie) has dealt in detail with the objects of the Price Review and has indicated how it can never be regarded as an expansionist Price Review. My case against the Government is that they do not know what they are doing. The Treasury has said, "You must cut subsidies and give less support to agriculture." A figure of £9 million has been mentioned. The Government have said, "We could have done more. The Act of 1957 permits us to decrease subsidies by £19 million." It was never the object when the 1957 Act was brought in, and there was never any suggestion that it was, that it gave a licence to the Government to decrease support in any one year by £19 million. It was a cushion, if any catastrophe occurred in the industry, so that support would not be cut by more than that figure. But now the Government say that they could have done worse. In my submission, any such suggestion is a complete misuse of the Agriculture Act, 1957.
What are the practical results of low profits for the farmer? He may specialise, but he cannot do that always. The small farmer cannot do it. He has invested a large amount of capital in the industry. He has "know-how" in a certain product and he cannot go to other products in that way. Cows do not calve to coincide with a Price Review and if there is a shortage of store cattle the farmer cannot ring up Whitehall and ask for more. The farmer cannot switch products like that.
The alternative is to produce more. When the farmer is faced with a decrease in the return he can obtain, his only alternative is to increase the amount of what he produces. We had a classic example of that in 1957 when there was a chaotic situation in the milk industry. From November to March, I think it was, the farmer suffered cuts of up to 5d. a gallon because of the shambles in which the Milk Marketing Board found itself, with a surplus of milk on its hands. The reason for that lay in the notoriously 1018 unprofitable beef industry. Farmers left that part of the industry and concentrated on milk, with consequent chaos caused by the amount of milk produced. The small farmers of Wales lost anything from £16 to £35 a month because of the cut in milk prices.
What was the result? The farmers of Cardigan went down to Carmarthen and bought an extra cow or two, squeezing them into the cowshed or an old stable, and, once again, we face chaos in the milk industry. Before the end of this year, there will be a surplus of milk, with farmers suffering cuts of 4d. or 5d. a gallon in the price they obtain.
There is no time now to go into all the other products, but I wish to put one specific point about fat sheep. We are to suffer a reduction in price, maximum weights are to be reduced, and the basis of the guarantee is to be modified. Then, at page 22 of the White Paper, we find that, because of certain proposals in regard to the specifications in respect of lambs, certain categories of lambs will be excluded. The paragraph says:… the carcase should be reasonably well finished but it must not have such an excess of external fat or carry such heavy kidney knobs as will depreciate seriously its value.That is an important criterion for the farmers of Wales. Many Welsh lambs will be covered by it. I put the specific question to the Government. How many lambs produced last year will be cut out of the guarantee subsidy as a result of the operation of this new proposal this year? It is a very serious proposal for Welsh farmers and it is even more important than the cut in price. I hope that the Minister will answer.
The Agriculture Act, 1947, lays down that we shall havea stable and efficient agricultural industry.Can anyone honestly say that we have stability or efficiency in the production of milk, eggs, or pigs? The Act goes on to say that the agricultural industry must be capable of producing the nation's foodat minimum prices consistently with proper remuneration and living conditions for farmers and workers in agriculture.We have heard from Mr. Woolley, the president of the National Farmers' Union, about how farmers in this country are being recouped compared with people in other industries. Mr. Woolley 1019 is to see the Prime Minister, for some reason or another, being forced to do so by his own county branches. I do not know what Mr. Woolley will bring back from the "summit talks", but of one thing I am quite certain—farmers in Britain are not today receiving proper remuneration in accordance with the 1947 Act. Farm workers are the lowest-paid workers in any industry and, quite definitely, no one can say that they are paid as they should be.
I doubt very much whether the system of subsidies as we understand it is working properly or at all. The taxpayer today pays for 73 per cent. of the farmers' net income. There is a subsidy of £259 million out of the total £355 million. In my submission, the system of subsidies should be altered to achieve the purpose it was intended to achieve, namely, the promotion of a progressive and prosperous agriculture, combined with reasonable prices for the consumer.
A Royal Commission or some inquiry should be set up to ascertain whether the present system of deficiency payments and production grants is working at all. Also, we should find out to whom the money goes. At the end of each year, we should look at the objects of each Price Review White Paper and see whether they are being achieved. Every subsidy should be analysed in order to ascertain to whom it goes. Many years ago, Lord Boothby said that two-thirds of the subsidies go to one-third of the people, and they are the ones who do not require them. Our provincial agricultural economists are today able to find out where the subsidies go. There should be before the House of Commons not this flimsy White Paper for us to debate but a complete and comprehensive annual survey of the nation's agricultural resources and what use is made of them.
Whatever has happened in the past, whatever debates there have been on agriculture in the House of Commons, when the Opposition go into the Division Lobby tonight they will have with them the majority of farmers in the country.
§ 8.26 p.m.
§ Sir James Duncan (South Angus)
The hon. Member for Aberavon (Mr. Morris) said that the Government do not know where they are going. I do not 1020 agree. The Government in this Price Review know where they are going. They have been carrying on a consistent policy ever since the Agriculture Act, 1957, was passed, namely, to maintain a rich and prosperous British agriculture. Generally speaking, agriculture today is rich and prosperous. My hon. Friend the Member for Edinburgh, West (Mr. Stodart) referred to places still being let in Scotland at £14 an acre for six months grazing. One has only to go to the store market to see the price one has to pay for store stock. Reference has been made already to the price of farms, particularly farms still with vacant possession.
The general picture of farming is quite different from the political picture of farming portrayed by hon. Members opposite. There are probably private reasons within union circles for that political picture being put across in the way it has been today. I recognised in the speeches of some hon. Members opposite references to a document sent to me and to several other hon. Members by the National Farmers' Union.
Although the Government are perfectly right in doing what they have done, I do not believe the effects of what they have done will be quite those which they expect. Originally, the Estimates in 1959 totalled £241 million. However, because production went up and prices in certain sections went down, with the Supplementary Estimates the out-turn was a bill of about £255 million which the taxpayer had to pay. This year the budget is £259 million. Who can say that the general effect will not be to increase the burden on the taxpayer in the coming months if there is increased production and lower prices than were anticipated? If the Chancellor of the Exchequer is the nigger in the woodpile, it may well be that he is much mistaken in pressing these disincentives.
If the Government create disincentives, in some way the farmers regard it as restriction, but I think that the farmers are wrong also. The reaction of my hon. Friend the Member for King's Lynn (Mr. Bullard) was that production will not be affected, but many other farmers will say that the only way to get the same net income is to increase production—go into the market and buy a few more ewes, rear a few more lambs, 1021 and put a little more fertiliser on the sugar beet in order to get an extra half a ton an acre. The total bill on the taxpayer at the end of the year may well be more than the Chancellor expects today if past experience means anything.
We are reaching a stage in agriculture when we ought to have another look at certain aspects of it. We are becoming self-supporting in potatoes, milk and eggs. We are reaching the self-supporting stage in certain other commodities. I do not want to go into too great detail, because I want to make only a short speech. If we are to continue with an expansionist policy—and, if it is healthy and prosperous, whatever the Government do, whether they introduce disincentives or give encouragement, agriculture will expand—we shall have more and more problems of surplus production.
What should we do about this? Are the Government to continue the pressure year after year and have minus symbols all down the Price Review appendices to try to restrict production to what is adequate, and no more than adequate, for the home market? What will be the effect of the Common Market and the Seven? Are we to remain inward-looking in Britain, or are we to pay far more attention to looking outwards?
Like many other hon. Members, such as the hon. Member for West Stirlingshire, (Mr. W. Baxter) and my right hon. Friend the Member for Thirsk and Malton (Mr. Turton), I want to think aloud. As my right hon. Friend the Member for Thirsk and Malton said, we are importing today £1,500 million worth of food and feeding-stuffs. We are exporting £43,750,000 worth of food and feedingstuffs of British origin. In spite of G.A.T.T. and the ban imposed by G.A.T.T. on the export of subsidised articles, there is an international trade, although admittedly an uneven trade, in the export and import of food. If we are to have surpluses on home production, cannot we devote some attention to dealing with those surpluses by exporting? I do not suppose there is very much chance of trading with Europe.
I disagree entirely with the hon. Member for Devon, North (Mr. Thorpe) when he suggests that we should go into the Common Market. I do not understand his free trade tradition. The whole idea of the Six is that they should be a highly 1022 protectionist organisation and should keep out the goods of the other countries of the world. The hon. Member's views do not seem to be in the great Gladstonian Liberal tradition.
§ Mr. Donald Wade (Huddersfield, West)
Surely there is to be a low tariff with gradually disappearing tariffs within a vast European market.
§ Sir J. Duncan
I do not think that the hon. Member quite understands the Common Market. It will be dominated by France, who will see to it, as the plan settles down, that within the Six there will be a lower tariff but outside the Six there will be a high tariff, and I believe, as the years go by, an even higher tariff, against the goods from other countries.
I now want to think aloud. The first thing we should do is to increase the share of the home market for home produce. I am inclined to disagree with my right hon. Friend in his White Paper in creating disincentives for certain articles which we produce and of which we could produce more. In the last Price Review, my right hon. Friend has hit hard at sheep, and particularly hill sheep. There has been the price reduction on wool and on mutton and lamb, offset, in the case of the hill sheep only, by the hill sheep subsidy which will be payable in due course. Last year we produced only about 40 per cent. of our own lamb. There is, therefore, scope for a great increase in our sheep production.
For the last two or three years, the Government have been talking about increasing production from and increasing the use of grassland. It is the cow and the plough, the sheep and the grass. If we produce more grass, we must have more sheep to eat it. It would be a mistake to have a disincentive simply because, for exceptional weather reasons last autumn, a large number of lambs came on to the market in a rush and the Government went into a panic in case it might happen again. I am fairly certain that it will not.
Then, there is the question of barley. We export £6 million worth of barley, but we import £22 million worth. Admittedly, they are different kinds of barley. The exports are mainly of seed and malting barley and the imports are mainly milling or feeding barley. Why 1023 should we not produce more of our own feeding barley? We have a balance of payments problem. Why should we have to pay £85 million for this imported barley?
This raises a slightly technical problem. Barley is now on an acreage basis. It is nearly all taken straight off the combine to the compounder. Very little is kept on the farm. The compounders say that they would like a regular supply of barley over the months to keep their mills supplied. At present, it all goes to them in a couple of months, after which there is nothing for them.
To meet the desires of the compounders, the farmers would have to erect grain dryers and storage. If they do this, however, the price differential between the October price and, say, the June price must be sufficient to induce them to do it. Again thinking aloud, I should like the Government to consider whether we should not go over to a tonnage basis for barley with a wide variation in price to encourage farmers to put up grain storage, so that the compounders could use the barley throughout the year and we would not have to pay £22 million to foreigners, largely Iraqis, Algerians and people like that, for imported barley. If we could do this—I do not have time to go into a number of other suggestions—we would thereby reduce imports, which would help us in what my right hon. Friend the Chancellor of the Exchequer describes as a difficulty concerning balance of payments.
The other side of the question is to increase exports. A few weeks ago, I got the figures for exports of British agricultural and horticultural produce, which add up to £42¾ million. The figures are in the Library and are available for hon. Members. It is a quite considerable sum, £33½ million in raw materials and £8¾ million in processed material.
I have time to discuss only one commodity, seed potatoes. We are exporting only £1 million worth of seed potatoes every year, yet we have the markets of the world open to us. If we can maintain the seed health of our potatoes the markets of the world are open to us, not only the Mediterranean littoral, but 1024 South America, India, South Africa, all now held by people like the Dutch, the Danes, the Swedes and other European peoples. Let us take another look at the export possibility of seed potatoes, in conjunction with the Potato Marketing Board, because we should have to alter the arrangements it makes, so that we can have a real drive to try to encourage exports.
Then we have live cattle. I do not want to go into details of the export of pedigree cattle. Suffice it to say that if we could have a little more publicity and a little more money for that we could at any rate maintain the reputation of Britain as the livestock farm of the world.
As for commercial cattle, we exported £5 million worth last year, and yet little Malta, which, I believe, takes 60,000 cattle a year, gets them all from Holland. Why? Why cannot we officially encourage, to our Colonies and other open countries, the further export of commercial cattle, mainly dairy cattle? Why cannot we do that?
Then we come to dairy produce. I believe there is a very big possibility of increasing the export of cheese, particularly luxury cheese, to America, cheese like Stilton, which would sell at very high prices. The snag is that there is a subsidy on milk. It is only £13 million. The Milk Boards, I understand, feel themselves hampered in exporting an article which may have an element of subsidy in it. If we could eliminate that subsidy—and I do not think that to eliminate it would have any effect on liquid consumption—the Milk Boards ought then to be free to develop the export market in cheese, in milk powder —not, I think, in butter—and in milk variously processed. We are exporting quite a lot at the moment. I have the figures here.
Exports in various forms add up to £4 million, but we are importing, if I remember aright, about £9 million worth. Surely this is the sort of thing with which we ought to be able to help the under-developed countries. Sweetened milk, processed milk ought to go to our Colonies where they are obviously short of milk. The milk could be liquified and used to great advantage to the health of those countries. Why cannot we think of that? Simply because we 1025 are handicapped so much by the subsidy element on milk. That wants thinking out.
Just a word or two on Europe. The Seven and the Six are at deadlock. We do not seem to be able to make any progress. Meanwhile the Common Market countries are threatening to get going with their scheme. If they do, that will hit our industrial trade and it is going to hit employment and so on in Britain. I am just wondering—and again, I think aloud: I have discussed this with very few—whether we could develop a European agricultural policy which could be the link between the Seven and the Six.
I am thinking on these lines. There might well be a commodity commission for each commodity, or group of commodities, whose duty it would be to fix the price level below which imports from one country to another would stop. I do not think that British agriculture need fear that, because the cost of food in Europe, broadly speaking, is higher than here. It think it will be found by those who travel round Europe that, though there may be isolated commodities, broadly speaking the cost of living in food in Europe is higher than it is here. Therefore. I do not see that it might not be in the interests of Britain to enter into a link with the thirteen European nations on the basis of some form of agreement to establish commodity commissions whose task would be to fix the prices below which imports of all kinds would stop until the price level rose again or a sort of minimum price level system was arranged.
I would not interfere with the 1947 or 1957 Acts. I would retain the guarantees for home agriculture, and, therefore, for the guaranteed commodities, I believe that there would be no danger to British farming at all. I should like the Minister to think about the commodities which are not guaranteed, particularly horticultural commodities, which may be the subject of difficulty, but far less with a minimum price level system than with a tariff system. Tomatoes are an example, which brings to my mind that, even with a very welcome rise in the tariff from 4d. to 6d. for a period of the year, I beg leave to doubt whether Chat might be enough in these modern times.
1026 The minimum price system might well work much better, and perhaps might lead in the end to an integrated European policy, which would have a vital effect on the economic situation in Europe and in uniting Europe, which is so badly needed today.
§ 8.47 p.m.
§ Mr. E. L. Mallalieu (Brigg)
I was very interested indeed to hear the wonderful exposition of a Socialist planning for Europe by the hon. Member for South Angus (Sir J. Duncan). Sensible planning of that order would certainly receive the support from this side of the Committee which we always give to our own Front Bench speakers when they advocate these matters.
Unlike the hon. Member for King's Lynn (Mr. Bullard), who seems to be disappointed with the way the debate has gone, I have been most interested in the way in which it has shown a remarkable unanimity on both sides to reflect the criticisms expressed so vividly in the fanning Press recently of the state into which the Government, by successive Price Reviews, culminating in this one, have brought our agriculture. The hon. Member for South Angus did not like the idea of restrictions, nor did the hon. Member for King's Lynn. He called them disincentives, and said that farming had received some pretty hard knocks. He said that sheep had been pretty hard hit. That is true, and a good many other things have received some pretty hard knocks from Government policy, and that is what we call restriction in less political terms.
I do not think there is any doubt in anyone's mind in spite of the noise which hon. Gentlemen opposite have had to make about the Government having done right and then going on to criticise them later on, that agriculture today is not in the buoyant state in comparison with other industry that it was ten years ago. It has, in fact, been growing steadily worse in the last five or ten years.
I believe that it is possible and is necessary for agriculture to make a greater contribution to the solution of our perpetually recurring balance-of-payments problem than it is doing at present. It should be capable of doing that. For the first five years after the war it made a substantial contribution to 1027 that end. I believe that it still can make it. The position today, however, is that we are not strong enough to fulfil the capital responsibilities we have overseas and we are not strong enough to help, as most of us would wish to help, the under-developed countries.
I was most interested to hear the suggestions made by the right hon. Member for Thirsk and Malton (Mr. Turton), echoed by the hon. Member for South Angus, to the effect that if we are to subsidise British agriculture there are few better ways of doing it in the circumstances of today than by supplying our surpluses to the under-developed countries which need them, rather than by restricting home production, which many of us in this Committee fear and the farmers almost universally fear is the policy of the present Government.
Support for agriculture, if it is of the right kind and quantity, can make a considerable contribution to the solution of the balance-of-payments problem. As we have been told today, the support was about £260 million in the last year, but this support so commonly thought of as a gift to the farmer is nothing of the sort because, for one reason or another, almost every other country interferes with the normal price of its agricultural produce so that what comes in here at a price which we sometimes call the "world price" comes in at an artificial price, interfered with by the Government of the country from which the produce comes.
It can be said, therefore, that this immense sum which is devoted by the Government to agricultural support is only an evening-up of the situation caused by interference by practically every other Government. The United States Government very heavily interferes with the price of meat and wheat. Denmark has just interfered to a considerable tune with the price of butter on the home market, making the Danes pay a much bigger price at home than is charged when the butter is exported to foreign countries. This is why this enormous sum devoted to agricultural support cannot be in any sense described as a gift to the farmer.
I am not one of those who thinks that the farmer is not one who should be prosperous and should not go about in 1028 a large car and have an expensive wife, as has been suggested in the debate. Why should someone from Birmingham who keeps an industry indoors, not subject to pests and vagaries of weather, have a wife who is expensive and a large motor car and not the farmer? It is monstrous that anybody should have that idea in this day and age, but it happens.
It has not been disputed today that farmers are not receiving their full share of the increase in the country's prosperity. On the contrary, farmers are slipping back—and I am thinking of the whole farming community. The farm labourer is ridiculously paid in view of his skill. The town worker struts about thinking that he is a skilled man when he has only one skill whereas the farm labourer often has to have twenty. It is all wrong that the agricultural community should be dropping back in its share of prosperity as compared with those who are engaged in other industries.
Apparently 15 per cent. more is to be spent on food in this country in the next five years. The great thing will be to ensure that our agricultural industry gets its fair share of the increased expenditure. There is a very great deal that the farmers themselves can do in this regard. Marketing has already been referred to. The chaotic state of neglect by the farming community of the marketing system must be remedied, mainly by the industry itself. Attention must be paid to packing, presentation, storing, advertising and the provision of machinery. There must be increased cooperation and there must be more boards for commodities which are not yet covered and increased scope for those which already exist.
This is the sort of thing that the Government must get down to and help along its way. They must give up the idea of restriction, or whatever they care to term it, no matter how much they wag their heads when disincentives or restrictions are mentioned. It is not the view of any hon. Member opposite who is not the Front Bench that there are not disincentives which have been put into practice by the last few Price Reviews and particularly the last one. The Government must give up that idea, and the farming community must be enabled to take advantage of the increased expenditure on food which there will be along with the increased standard of living.
1029 The Government's deficiency payments system must be looked at again. It gives the Government an interest in low production. If there is more production, the chances are that prices will come down, and if prices come down more subsidy will have to be paid. It is wrong for the Government to have a vested interest in low production as they have under this system.
The Government ought not to have brought back the nonsense of the cattle markets and auctions. That is a frustrating and time-wasting thing which should never have been added to the burden of the farmers. It should be looked into again.
The debate has enabled the Government to see to what extent people are worried about the state of agriculture and its future, and I hope that will give the Government the necessary incentive to look into their agricultural policy again to ascertain whether something better can be done in future in respect of the matters which have been mentioned tonight. If we can encourage cooperation and increase the number of marketing boards rather than decrease them, there will be a real hope that British agriculture will go on, as it ought to be capable of doing once again, to make a significant contribution towards the solution of our balance of payments problem, a problem which even after nine years of Tory rule we still have very much with us.
§ 8.58 p.m.
§ Mr. Thomas Fraser (Hamilton)
In the course of the debate, a number of hon. Gentlemen opposite have expressed surprise that the Opposition should have wished to have a debate of this kind at all. However, in his opening speech, the Minister expressed gratitude to us for choosing this subject for debate on a Supply day, and I should have thought that all hon. Members who have contributed to or listened to the debate would agree that this is a subject of such high importance to the well-being of our country that we ought to devote at least one Parliamentary day a year to a discussion of it.
Before I say something which may be thought somewhat controversial, I should like to say something which will not be controversial. We listened to a very excellent maiden speech by the hon. 1030 Member for Richmond, Yorks (Mr. Kitson). He made a very thoughtful and constructive speech. However, I do not think that Ministers would take a great deal of comfort from it because it could hardly, as a maiden speech, have been more critical than it was. It was a speech of a Member who knew the subject and who felt deeply on behalf of the agricultural industry, and one that pointed several warnings to right hon. Gentlemen opposite and contained a number of constructive suggestions.
The only part of the Minister's speech in which he could be said to be seeking to reply to the many points made by my hon. Friend the Member for Sunderland, North (Mr. Willey) was when he referred to the 1951 White Paper. He said that it made clear that there had been an injection of £40 million per year for capital development in agriculture. I remember that being introduced in 1947. It was to enable the farmers to go forward with the capital development which the then Government believed to be essential to the expansion of production which the country needed.
The right hon. Gentleman said that as this sum was injected for purposes of capital development it was right to deduct it from net incomes before making comparison with today's figures. He said that if one then compared the 1948 incomes with this year's one would find that they had not suffered a net reduction of 5 per cent. but had increased, in real terms, by 12 per cent. This was very strange logic—indeed, no logic at all. Right hon. Gentlemen opposite still have subsidies and grants which are capital injections. They know that the Small Farmer Scheme is calculated to be a capital injection to enable the small farmer to make his holding more viable.
Will the Secretary of State for Scotland or the Minister deduct from the net incomes of this year or last year the capital injections contained in the Small Farmer Scheme and the Farm Improvement Scheme? If they deduct the capital injection given under the 1947 Act in order to arrive at what they regard as net income at that time, they must equally be willing to deduct the capital injection given under current subsidy schemes. If they add it, they will still find that farmers have suffered a reduction in net incomes. Will the Secretary 1031 of State say whether he accepts the figures that have been used so often in the course of today's debate?
I have been looking again at the 1951 White Paper, and have also been reading the speeches made then and of the reactions of the National Farmers' Union. The Union, at no time between 1945 and 1951, sought the resignation of Mr. Tom Williams.
§ The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. J. B. Godber)
There was no one to take his place.
§ Mr. Fraser
The Joint Parliamentary Secretary seems to be preening himself sotto voce. He says that there was no one to take Mr. Williams's place, but he seems to think that there is someone who can take the place of his right hon. Friend. It is the duty of the Secretary of State, in winding up this debate, to say whether Ministers agree that farm production has increased by 24 per cent. since 1948.
Do the Government agree that, in real terms and without making the deduction which the Minister made, farmers' incomes have declined by 5 per cent. since 1948? Have not other incomes generally risen by 30 per cent. since 1948? The Secretary of State should say whether those figures are acceptable and, if they are, whether the Government think that that is the way to develop a healthy and prosperous agriculture.
The right hon. Gentleman the Minister was most distressed that my hon. Friend the Member for Sunderland, North should have taken some of these statistics from Government publications. I thought that the whole purpose of publishing Government statistics was that Parliamentary debates would be more informed and that hon. Members would know precisely what was happening and, instead of having to speak about the farmer up the road, would be able to speak about farming nationally.
My hon. Friend the Member for West Stirlingshire (Mr. W. Baxter) said that a farmer now produced 25s. worth of food for every 20s. worth he produced in 1948—at 1948 prices—but was in fact getting only 19s. That is what the Farmers' Union says and that is what hon. Members have been saying during 1032 this debate. If that is true and if the farmer has increased his efficiency year by year, then he has not only not been rewarded for increasing his efficiency, but has been penalised.
I accept what the right hon. Gentleman said about the value of research institutes. With the expenditure of £30 million a year on research, an increase in efficiency is to be expected. However, £30 million is not enough. More should be spent, and my hon. Friend the Member for Workington (Mr. Peart) mentioned several useful ways. But, at the end of the day, it lies with the farmer to use the research and development work done in research institutes and thus increase efficiency and production. Is it not a little hard to expect farmers to be satisfied with incomes which in real terms are less than they were twelve years ago?
The workers' unions are bound to be distressed about the situation. They represent the poorest-paid workers in the country, a body of workers who can claim to be among the most highly skilled, and who are certainly the most adaptable and versatile, in the country. The unions feel that if the industry's income as a whole is curtailed, the chances of improving workers' conditions and wages at least to bring them into some kind of parity with those of urban workers is very remote. Those are matters to which the Secretary of State should give some attention.
Over the last ten or twelve years, food prices to the consumer have risen steeply. Perhaps the right hon. Gentleman will tell us whether the increase has been 50 per cent. or 60 per cent. Although in real terms the price of some items to the consumer has come down, the taxpayer has not benefited from the Government's agricultural policy, or from the withdrawal of food subsidies.
Farm subsidies on home-produced food are higher today than they ever were. This is sometimes ignored by hon. Members on the Government benches. I know that they have in mind the ceiling figure of £410 million in 1950–51, but that was the total on all the food that we had in this country. It was the subsidy on all the food we consumed, including imported food. The subsidy on home-produced food never exceeded by very much £200 million, as the 1033 Minister and the Secretary of State for Scotland must know.
Having removed the food subsidy, we find that the taxpayer has to meet a bigger bill than he did before for home-produced food. The consumer is paying more than ever before, and for some reason or other the farmer is getting less. Surely there is something wrong? Does the Minister agree with the figures that I have given, that the subsidy on home-produced food is higher than ever before?
We are entitled to ask what has gone wrong. Today we are discussing not only the Price Review but agriculture in general. We have criticised the Government's agricultural policies over the years because we believe that they have always been going in the wrong direction. The Government started with a flourish of trumpets. They boasted that they would wipe out food subsidies and relieve the taxpayer of this tremendous burden. They boasted that they would provide the housewife with a free market which would reduce the costs of distribution. That was the picture that was created for us eight or nine years ago.
The one or two figures that I have given, and those given by hon. Members on both sides of the Committee in the course of the debate, show that the costs of distribution have grown, and that the difference between what the producer gets and what the consumer pays has risen considerably over the past eight or nine years. What has gone wrong? Where have the Government slipped up? Distribution costs have soared. Has the increased efficiency in production been more than offset by increased inefficiency in marketing and distribution?
I know that there is an assumption that we are all getting more efficient at everything in this country, but, if one looks at the costs involved, marketing and distribution are very much more inefficient than they were ten years ago. They are now taking a bigger slice of what the housewife pays, and it seems to us that right hon. Gentlemen opposite have a responsibility to look into this matter. When my hon. Friends criticise the Government and ask questions, as my hon. Friend the Member for Sunderland, North did, it is not good 1034 enough to accuse them of belly-aching. If criticising the Government is bellyaching, I should have thought it was the responsibility and the duty of Her Majesty's Opposition to belly-ache. As I listened to the debate I found that there were as many belly-achers on the Government benches as there were on these benches.
Does the Secretary of State for Scotland accept the explanation I have given of the inefficiency of marketing and distribution? If he does, what does he propose to do about it? Will right hon. Gentlemen opposite give further thought to the cost of marketing and distributing the products of the farms of this country?
May I give one or two examples? Some of my hon. Friends mentioned wheat. Three years ago wheat was 30s. a cwt.; today the price is 26s. 11d. The price of wheat has gone down but not the price of bread. Wheat prices have gone down over the years while bread prices have gone up. In the last ten years when bread prices have doubled wheat prices have gone down. The millers and the middle-men have been doing very well in recent years—perhaps too well. That is where a lot of the taxpayers' money has gone.
Let us take bacon, for example. In 1951 a farmer got £23 for a good bacon pig, as the Committee have been told by my hon. Friend the Member for West Stirlingshire. Then the housewife paid 3s. 1d. a lb. for best bacon. Today, with the subsidy at about the same level as in 1951, the farmer receives £16 or £17 for his pig—quite a considerable reduction—but the housewife pays 4s. 8d. to 5s. a lb. for the same kind of bacon. If the housewife pays more and the producer gets less, there is something wrong. If the consumer is paying more as a consumer it would be reasonable to expect that as a taxpayer he should be paying less. It is up to the Government to tell us why these things have happened.
Now the Government wants increased efficiency without any increase in production. I know that the hon. Member for King's Lynn (Mr. Bullard) said that he did not read into this White Paper any instruction to him not to increase his production. But most hon. Members have read into the White Paper an 1035 injunction not to increase production. The aim is not to increase production—
§ Mr. Fraser
The right hon. Member for Thirsk and Malton (Mr. Turton) certainly regarded it as aiming at no expansion in production. I expect that paragraph 14 on page 5 of the White Paper is well known to the Minister and I should have thought he would read that as meaning that there is no desire on the part of the Government that farmers should increase production overall at this time.
During the speech of my hon. Friend the Member for Sunderland, North, the Minister seemed to support those of his hon. Friends who asked my hon. Friend where we should sell the produce if there were increased production. That was the question, what to do with the increased production, and the Minister approved of those questions being asked of my hon. Friend. If that does not indicate that the right hon. Gentleman does not want an increase in production but, in effect, wants a restrictionist policy, I do not know what it does mean.
We take the view that it is impossible to achieve a steady increase in efficiency without increased production. I know that the right hon. Gentleman may picture large farms where there might be a reduction in costs by means of a reduction in the labour force or by changing the character of some part of the farm. In that way it might be possible to increase efficiency without increasing production. That may be the case in respect of large farms, but it cannot apply to the smaller farms. Surely, it was the whole point of the Small Farmer Scheme that the small farmer, by means of capital injections, should be made more viable, not merely by reducing his costs but by increasing production. Generally speaking, small farmers do not employ labour and so 1036 cannot effect any saving by a reduction in their labour force.
The Secretary of State must tell us whether it is the desire of the Government that the Small Farmer Scheme shall be so operated as to increase production or whether it is the intention that small farmers shall reduce their costs and so make themselves more efficient but keep the level of production as it is. If prices remain stable and total production is not to go up, if in some cases prices are to come down, I do not believe the small farmer will be able to make any substantial contribution to the viability of his farm merely by reducing costs here and there. He must increase production. The example I shall quote to the Committee will show that the Minister does not know in which direction he is travelling at present.
§ Mr. Fraser
He keeps coming and going and cannot make up his mind in which direction he is going. I have before me a letter from the Cornwall county branch of the National Farmers' Union. It has been passed to me by my hon. Friend the Member for Falmouth and Camborne (Mr. Hayman). The letter is not very complimentary to the Government. It quotes a farmer as follows:In the same week that the Price Review told me I must restrict milk production and produce more economically by greater dependence in home grown feed, I received my contract under the Small Farmer Scheme. This directed me to increase my herd from 10 to 15 cows (on 20 acres) and that in order to do so I must give up any 'fetish' about self-sufficiency in feedingstuffs.Is this the advice that the Minister normally gives to small farmers who seek participation in the Small Farmer Scheme? Would he normally advise them to increase their production by-something like 50 per cent? It is to be assumed that the increase from this man's herd would be more than 50 per cent., because he has to increase the herd by 50 per cent.
§ Mr. Hare
I am sure the hon. Member does not want to misrepresent anything. I said absolutely clearly in my opening speech that we did not give instructions to farmers about what they should produce. I said that individual farmers 1037 should produce what suits their particular farms most. In some cases it suits them to produce more milk. The advice given in the instance quoted, I should think, was excellent advice to that farmer.
§ Mr. Fraser
I am not sure that the Minister has followed me properly. He said that he does not believe in giving directions to individual farmers. I will re-read a sentence from the letter:This directed me to increase ray herd from 10 to 15 cows.So the Minister does know best what is good for the individual farmer. He, or his servants, have given instructions to the farmer to increase his herd from ten to fifteen cows in order to get assistance under the Small Farmer Scheme. Ministers must make up their minds in which direction they are travelling.
They and hon. Members opposite have been asking what we are to do with increased production? I say at once we can consume more. Food surveys in respect of many old-age pensioners have shown deficiencies in their diet. If we gave them 10s. a week more they would consume more eggs, bacon, cheese and other commodities. Only a short time ago Ministers reduced the amount of milk available to school children. That could be increased. It would not be wasted, for the school children would consume it.
Are not we in this country and in this Committee pledged to help the 1,500 million under-nourished people in the world? There is no real surplus of food. Many hon. Members, on both sides of the Committee, have suggested ways and means by which we could make our surplus food available to hungry people in other parts of the world. Some of it would have to be preserved before it was sent overseas, but why not? Scientists could easily tell us how to preserve, pack and can it, and then get it out to the people who really need it. The truth is that there is no surplus of food at all.
It is quite nonsense that we should still import 50 per cent. of the food that we consume in this country. The Minister said that we produce two-thirds of all we eat. Why should we have to import the other one-third if we can produce more food at home? He says 1038 that one-third of the food that we eat is brought in from overseas. Why should we not increase our production to make an inroad into this one-third? Is there any reason in the world why we should not produce more and sell some of the food we produce at home to more needy people in other parts of the world?
We have a duty to the farmers and farm workers, and in particular to the farm workers, who have had very shabby treatment over the years. Conditions have never been given to agriculture by the present Government to enable the farm workers to get a decent return in wages for the contributions which they make to the well-being of the countryside.
The Minister complained, in the long and dreary speech he read to the Committee this afternoon, that my hon. Friend the Member for Sunderland, North had not been constructive in his speech. I think that my hon. Friend made a number of constructive suggestions. My hon. Friend the Member for Workington made a number of constructive suggestions and there were also constructive proposals made by many other hon. Members.
Surely the Minister, when replying to the debate, will concede that there is a need to look at the cost of marketing and distribution. He talked about long-term contracts. Ought there not to be more long-term contracts? Let us remember how hon. Members opposite, when they sat on this side of the Committee, complained about the long-term contracts favoured by the Labour Government. They wanted more freedom for the housewife and did not believe in long-term contracts. I believe that we need more marketing boards and I would not rule out the commodity commissions mentioned by the hon. Member for South Angus (Sir J. Duncan). We ought to have much more orderly marketing than at present. We ought to have more co-operative buying and selling in the interest of agriculture. The subsidies which the taxpayers have to find should be directed towards this end.
The Secretary of State for Scotland has been getting off lightly with the farmers of Scotland. I think that he should consider himself to have been slighted by many of the county branches 1039 of the N.F.U., because they have been passing resolutions demanding the resignation of the Minister of Agriculture, Fisheries and Food. The county branches seem not to be aware that their Minister of Agriculture is the Secretary of State for Scotland. I can hardly blame them because in recent years the Secretary of State and his predecessor have so slavishly followed the policies laid down by the Minister of Agriculture, Fisheries and Food.
This was never clearer than in the Agriculture (Small Farmers) Act when the right hon. Gentleman agreed to the discontinuance of the marginal agricultural production grants, which were of such value to farmers in Scotland. I shall not remind the right hon. Gentleman of all that I and my hon. Friends on this side of the Committee said about the withdrawal of the M.A.P. grants when the Bill was going through. I noticed in the newspapers at the weekend that a conference was held in Scotland on Friday at which the Joint Undersecretary made a speech to the Tory delegates trying to convince them that the withdrawal or reduction of the marginal agricultural production grants was justifiable.
Even the Tory Party in Scotland, according to the newspapers, by a large majority passed a resolution condemning the Secretary of State, despite the eloquence of the Joint Under-Secretary. Ministers have failed the consumers by not passing on reductions in the cost of home-produced food and imported food. They have failed our primary producers by not enabling them to share fairly in the expanding wealth of the nation. They have failed the taxpayers by not reducing dependence upon subsidies. They have failed the nation in not seeking new outlets for an expanding agriculture. It is for these failures that we on these benches feel that we would have done less than our duty if we had not initiated a debate of this kind and if we had not in the course of our speeches sought to censure Her Majesty's Ministers.
We have put forward some very constructive alternatives, but on this occasion it is the responsibilty of the Government to answer for the Administration when the Votes are before Parliament. I doubt if the right hon. 1040 Gentleman can give a satisfactory explanation, and I should think that hon. Members who have the well-being of British agriculture and of the British nation at heart will go into the Lobby gladly against the Government.
§ 9.31 p.m.
§ The Secretary of State for Scotland (Mr. John Maclay)
I should like straight away to say that I am certain the whole Committee was extremely interested in the maiden speech of my hon. Friend the Member for Richmond, Yorks (Mr. Kitson), and I should like to congratulate him. It was an admirable speech, if I may say so, in manner and delivery. Following the remark of the hon. Member for Hamilton (Mr. T. Fraser), that my hon. Friend's speech would bring no comfort to Ministers, I noticed that my hon. Friend said that he would not be more controversial than any other farmer. I have not met any farmer who is ever completely polite about any Minister. We look forward very much to further speeches from my hon. Friend. The fact that he spoke on this subject with such ability takes our minds back to his predecessor, who had a great many friends in the House and among the farmers.
I should like to refer to one or two points of detail which the hon. Gentleman raised. I have noted what he said. He said that the high level of rents does not necessarily mean that all is well with the industry. I agree that applied as an individual test his remark is probably correct; but, as I will develop later, if all this gloom which has been put around by hon. Members opposite is justifiable, why is it that farms that come on the market for sale or to rent, or individual fields, are commanding the very high prices they are, with a great many people anxious to get hold of them? One cannot ignore that fact.
This has been a very interesting and curious debate in some ways. I am inclined to agree with my hon. Friend the Member for King's Lynn (Mr. Bullard) that it has been rather disappointing because there has been no coherent theme running through it for a Minister to reply to. There have been a large number of individual questions, and I shall do my best to answer many of them in detail, but the most fascinating thing was the sudden appearance of the hon. Member 1041 for Workington (Mr. Peart). He accused us of saying that the debate ought not to be political. I did not hear any hon. Member on this side of the Committee say that. Certainly ray right hon. Friend did not. It was one or two hon. Members opposite who said, "Do not let us make the debate political". The reasons became pretty clear. We had a very interesting speech from the hon. Member for Enfield, East (Mr. Mackie), whose climax was that he could not get his own Front Bench to come in line with any part of it at all.
Then, without wishing to be condescending, we had another very interesting speech from the hon. Member for West Stirlingshire (Mr. W. Baxter). I have noted many of his points. He put forward some positive and interesting proposals, but can he say that his proposals are in line with the policy of the hon. Member for Hamilton or any other Member on his side of the Committee? One thing is plain straight away. The hon. Gentleman is not in line with his hon. Friend the Member for Hamilton because he was very much in favour of ploughing grants, whereas the hon. Member for Hamilton, from what I have heard him say, is not.
The hon. Member for Workington quite clearly made his intervention because he thought that the debate was becoming very quiet for a slashing attack on the Government's lamentable Price Review. It was so quiet that he thought he ought to inject some life into it. But he could not do so because there was no agreement on his side of the Committee about what is really wrong with our present policy. As my right hon. Friend said, hon. Members opposite have picked up some articles in various newspapers and, having read them, they have done their best to make speeches on them—except for the few practical farmers who have put forward some good points. There was, however, no sign of the political purpose for which the hon. Member for Workington was looking. He said that this was the place for politics, but he could not find any. [Interruption.] Whenever anything is said that hon. Members opposite do not like, they are always apt to make that kind of interjection, as I have noticed from long experience. I must not take up too much time with the preliminaries. [HON. 1042 MEMBERS: "Go on then."] That is the best tribute yet to what I have said. Hon. Members opposite may dislike it intensely, but they will hear more as I go on.
The hon. Member for Hamilton made a major point about relative incomes. Of course, there is scope for argument about the trend of net incomes. Different results can be obtained by adopting different bases, as he knows very well. I shall not go into the statistics of the £40 million. My right hon. Friend dealt with that in opening. But it is worth saying that it is not easy to make a sensible comparison with the increase in the total of all personal incomes because this is dominated by the rise in earnings from employment. The group which is, perhaps, most closely comparable with farmers is that which is, in the technical phrase, known as other sole traders and partnerships. On the whole, farmers have done better than this group.
It is, however, the actual state of the industry which is the real test, and there is really no sign of a lack of confidence. My hon. Friend the Member for South Angus (Sir J. Duncan) made that quite clear. Plenty of new capital is coming into the industry. The response to the Farm Improvement Scheme has been much greater than expected and, although a great deal of capital is needed to make a start in farming today, there is no shortage of young men seeking the opportunity. This really must be the ultimate test of whether farming in this country is in good heart.
I shall not go into detail about it, but anyone who goes about the country can see for himself. I am not a farming man, but I lived through the worst part of the 'thirties, the period between the wars, when farming was really down, in a county where farming is no easy matter. The difference between conditions then and conditions today is really tremendous. One can test it even by the difference between today and ten years ago. Any hon. Member as he goes about can see that even the difference between today and five years ago is very satisfactory. Hon. Members opposite want to run a particular theme and, I suppose, nothing will stop them, but I ask them to look carefully about them 1043 as they go through the country and see the real facts of fanning today.
The hon. Member for Hamilton mentioned retail prices and the cost of food. The simple answer, of course, is that our retail food prices have been stable for very nearly two years and, compared with other industrial countries, our retail food prices, although they may not actually be the cheapest, are among the cheapest in the world. I will, if I have time, come back to deal with what the hon. Gentleman said about the so-called middleman and distribution costs.
§ Mr. T. Fraser rose—
§ Mr. Fraser
Does not the right hon. Gentleman agree that even the White Paper admits that the housewife pays world market prices?
§ Mr. Maclay
No. I think the hon. Gentleman will find that my remark stands up to any examination when a comparison is made with other industrial countries.
My hon. Friend the Member for South Angus made several extremely interesting points, notably on the subject of barley. Together with my right hon. Friend the Minister of Agriculture, Fisheries and Food, I will study very carefully what he said. My hon. Friend stressed several matters which I shall take up as I go on with my speech.
My hon. Friend the Member for King's Lynn made an extremely useful and constructive speech. I am sorry that more hon. Members opposite did not hear his speech. His deduction from this Price Review was that it is not a restrictive Price Review. He is a practical farmer. [An HON. MEMBER: "So are members of the Scottish N.F.U."] There are many reasons why both the English and Scottish N.F.U. may say things which hon. Members in their individual capacities as farmers may not fully understand. [Interruption.] I was not doing sums. I merely said that I was sorry that more hon. Members opposite did not hear my hon. Friend's speech.
My hon. Friend also showed that in this debate we have had differences of view which cut across parties. My right hon. Friend the Member for Thirsk and 1044 Malton (Mr. Turton) made a very interesting speech, but it was in complete contradiction with the speech of my hon. Friend the Member for King's Lynn, Whenever my right hon. Friend speaks, I pay the greatest attention to him, and I should like to deal with one or two points which he raised. He suggested various ways in which the home market could be protected against imports and the prices for our own producers kept high without burdening the taxpayer. I think that my right hon. Friend has, however, to some extent, overlooked the need for us, as a great manufacturing country which lives by exporting, to maintain an appropriate trading policy. My right hon. Friend's ideas of import control would certainly not be consistent with that. I suggest that our deficiency payments system is the one best suited to the needs of our economy as a whole.
Apart from these considerations, I should like to say a word or two about some of the figures which my right hon. Friend gave. There has been, not only from him but from other hon. Members, a good deal of criticism of the egg subsidy. This has led to the suggestion that the egg producer would be better off if the subsidy on eggs were removed and some form of control over imports, either by tariff or otherwise, were substituted. I suggest that these difficulties must be viewed in perspective. So long as production continues to run at a level in excess of the requirements of the shell egg market, no support system, whether it be a minimum price arrangement or a tariff, can be expected to insulate the producer from the consequences of an over-supplied market. These are the simple facts of life.
It has been suggested from time to time that the Government's policy of continuing to allow the import of eggs is aggravating the home producer position. Here again, I think that we have to keep the matter in proper perspective. Last year, in spite of the rather dramatic figures which my right hon. Friend the Member for Thirsk and Malton gave, imported eggs amounted to less than 2 per cent. of available supplies, and only one-quarter of this amount came from Denmark, which was, until a very short time ago, our principal supplier of imported eggs. I do not think that this 2 per cent. could have had very much influence on the home market.
§ Mr. Turton
The point I was making was exactly that. My right hon. Friend is merely repeating my point. Those 10,000 tons of eggs, imported at an average price of 2s. 3d., were the cause of the subsidy of £36½ million.
§ Mr. Maclay
I would have to examine that very carefully before I could possibly agree with my right hon. Friend. I do not think that it stands up to examination.
My right hon. Friend also spoke of wheat market prices. He compared the figure of £17 for home-grown wheat with, I think, £26 for North American wheat. These figures are somewhat misleading. My right hon. Friend is not comparing like with like. I think that he was comparing the price for high quality hard wheat with the price for soft wheat generally produced here. These two things are different and are not interchangeable. In giving the price for home-grown wheat, I think that my right hon. Friend must have disregarded the big seasonal differences in the price the producer receives.
My right hon. Friend gave the figure for the first of the five periods into which the year is divided for guarantee purposes. This, of course, is the period immediately after the harvest, when prices are at their lowest. In the subsequent periods, the prices were significantly higher. Although I must not for-cast, the price for the year may well be £3 or £4 higher than the figure mentioned by my right hon. Friend. I am sorry to go into such detail, but my right hon. Friend put some interesting figures and it is necessary to get them into perspective.
I want to deal in a little more detail with the view expressed throughout the debate that the Government's action at the last Review in reducing the total value of the guarantees, which amount to about £1,270 million, by £9 million reflects an important change in Government policy from one of expansion to restriction and, in effect, puts farming at the crossroads. I state as categorically as I can that there is no justification for this view.
The Government have never said that they wish to restrict farming output. What we have emphasised, not only in the recent White Paper, but in the preceding White Papers, is the importance 1046 of cutting down unit costs and producing what the housewife wants. In other words, if the industry is to increase its level of profitability—that is, what is known as aggregate net income—without at the same time increasing to an unreasonable extent the cost to the taxpayer of agricultural support, it must increasingly turn its attention to making better use of its resources and, where necessary, make small, gradual changes in the emphasis given to different products. That is what must happen in any industry.
The White Paper and this year's Annual Review indicate that the development of production on these lines is the most effective way in which the industry can equip itself to maintain its share in an expanding market and to increase its profitability while reducing dependence on financial support from the Exchequer. There is nothing unreasonable about this policy. It involves the sort of adjustment on both the production and marketing sides which any kind of business must make from time to time.
A good deal has been heard during the debate about the difficulties of producers in continuing to raise efficiency. I have been glad to hear tributes paid, both in the debate and also outside the House of Commons, to the industry's ability in this sphere. People have said, however, that efficiency cannot be raised unless production follows a perpetually upward curve. The Government recognise that this is one way of raising efficiency and it is natural that it is the way which most appeals to farmers. It is not, however, the only way.
We believe that there is much more scope for reducing unit costs, and particularly feed costs, without increasing output than most people seem willing to recognise. The evidence provided by the wide variations in total costs and in the amount of feed used to produce a dozen eggs, a lb. of pig meat or a gallon of milk, when comparing one farm with another, and the improvement of food conversion rates, would make possible big savings in feed expenditure.
The Committee will, I hope, be interested, because hon. Members have made a big point of this in the debate, in some figures which illustrate the point which I have extracted from a recent cost 1047 investigation carried out by the agricultural colleges. The figures show that the cost of producing a gallon of milk on one farm was as little as 1s. 6d. and on another farm as much as 3s. These are extremes. To put it another way, one farm made a profit of £55 per cow, whereas another made a loss of £5. These are the range of differences. That is why we say that there is room for great improvement in the industry without the curve of production going on necessarily all the time at the same upward rate, but not necessarily cutting off increased production. It is a question of the rate of expansion.
Cost comparisons of groups of most and least profitable pig-producing enterprises show that the less efficient places spent half as much again on food, nearly three times as much on labour, substantially more on other cost items and 60 per cent. more overall to produce the same value of output. I have not chosen these two examples because they suit my argument. Experience has shown that the same sort of trend runs through all farming activities. These figures, however, are the most recent results available, relating mainly to 1959. They show how attention to the practical aspects of farm management can result in substantial economies. The aim must be to increase the number of farmers who achieve the efficiency standards of the best, and, as we know, the best of our farmers are very good indeed.
There are many points raised in the debate which I should have liked to cover. I certainly cannot cover the lot, but I want to make very clear what broadly our policy is. I come now again to the question of what the White Paper really means.
Hon. Members opposite have picked up this document and have referred us particularly to paragraph 14. They have maintained that it is obviously restrictive. Let us look at it and examine it in detail. It says that there should be(i) continuing emphasis on the better production and use of grass as a means towards reducing costs of production. In general, this will call for the maintenance or increase of the area of rotation grass".That is what is says. Where is the restriction in that? I think it is a very 1048 clear indication of the need to improve production from our grassland.
The next sub-paragraph says:although barley and oats are, in general, to be preferred to wheat, the extent to which particular cereal crops are produced should depend on the economics of the individual farm".There is no restriction there. Where is this restriction hon. Members are talking about? The indication is that barley and oats are more valuable as a feeding-stuff. It is true—I give this to hon. Members—that we made some cut in the price of these commodities, but does anyone pretend that barley is not profitable, even with a reduction of 3d. a cwt.?
I hope that hon. Members who are holding that this paragraph is restrictive will pay attention to this:for milk the aim should be to gear production to a level more closely in line with requirements for liquid consumption, including the necessary reserve.Here we are only pointing out what is already well known, that production over and above what is required for liquid consumption, plus a generous reserve, can be only at the price of the return to the producer. There is nothing new in it. It has been in force through the years. Hon. Members opposite were saying, as my right hon. Friend pointed out, something very similar a good many years ago. What we have said, however, is that for every additional gallon which can be sold for liquid consumption we will increase the standard quantities accordingly, and there is a direct incentive to stimulate production. I can see nothing restrictive there. I have come to nothing restrictive yet.
The next paragraph says:the output of eggs should be reduced.Does the Committee find one single thing there which can be said to be restrictive at a time when we are producing not only enough eggs to supply the fresh market but very large numbers for manufacture, and at a time when the subsidy bill is running at £36½ million each year? On this one item can it be said that we are unreasonable in asking for some reduction till such time as the Egg Marketing Board can encourage increased consumption? Is there any single hon. Member opposite who would say that given this situation his party would virtually encourage increased production of eggs at this moment?
1049 I am going through the whole of this paragraph, which next says:for beef the aim at present should be to maintain the rate of expansion of production now in prospect, with continued emphasis on producing the quality wanted by the market and at reasonable prices".There is certainly no restriction there. We shall welcome increased production. The paragraph says:for mutton and lamb the need is to check expansion and to discourage production of animals less acceptable to the market".The hon. Member for Workington had something to say about this. It should be noted that the operative words are "to check expansion". [Laughter.] Yes, but we have got to get this clear, because this is really the foundation of a great deal of misunderstanding. It is quite reasonable that after a sharp increase in our flocks over the last few years we should consider that expansion can no longer go on at the same rate. We are not stopping it. We are suggesting a reduction in the rate. We are not suggesting a standstill. That is the great illusion of hon. Members opposite.
§ Mr. Harold Davies
Would the right hon. Gentleman explain the logic of this and the semantics of this? He says, "We are not checking expansion, we are not standing for a standstill." What does he mean?
§ Mr. Maclay
I am extremely grateful to the hon. Member, because what he says shows the profound failure to understand our objectives, and also I think the misunderstanding that has grown up in more than one part of the country as to the great difference between saying "Reduce production" or "Let production stand still" and saying "We should go on with the same rapid rate of expansion all the time." I do not believe that any hon. Member opposite will say that, regardless of price or of unit cost, of whether the commodity is what the housewife wants or the market will take, the rate of expansion should go on unchanged indefinitely. If hon. Members will read the paragraphs carefully—it may be that the wording could be plainer and easier to understand—[HON. MEMBERS: "Hear, hear."]—we only have to cater for the normal understanding—they will see in paragraph (v):for beef the aim at present should be to maintain the rate of expansion of production now in prospect1050 and in paragraph (vi):for mutton and iamb the need is to check expansionand so on. It might have been a bit easier to understand, but I think what it means is absolutely clear. It is consistent with our whole policy of making it absolutely clear that we should go on with the expansion of the production of the right commodity at the right price, and that it will get to the proper market. The remaining one is paragraph (vii) which says:for pigs the aim should be to secure a moderate increase in the breeding herd, but to avoid an increase to a level which would put an unreasonable burden on the taxpayer.There is no sign of restriction there— [Interruption.] No, there is not. The argument on pigs has been that our policy has been fluctuating from year to year. Hon. Members will remember that the whole object of the Price Review has been that the industry and the commodities are examined at regular intervals year by year, and that such adjustments are made to prices and guarantees as would make certain that we maintain the type of healthy industry which we need in the country.
Finally, if anybody is to argue that this Government have let agriculture down and that the farmers have something to fear, let them look at the record. The Government have shown by their actions genuine concern for the welfare of the farming community, as is shown by the record of the last four years. In 1957, the Agriculture Act gave the farmers long-term guarantees and farm improvement schemes. The 1958 Agriculture Act did away with the disciplinary powers and put the landlord-tenant relationship on a much better basis. [HON. MEMBERS: "No."] The 1959 Agriculture (Small Farmers) Act has proved a Godsend to many small farmers, and the 1960 Horticulture Act will help that particular section of the farming community. It is therefore quite impossible for hon. Members opposite to sustain any. real charge against this Government's agricultural policy. It has been obvious throughout the debate that they have had to struggle to work up enthusiasm for their case, and I invite the Committee to prevent any likelihood of reducing either my right hon. Friend's salary or my own salary by even as much as £5.
§ Mr. Willey
I beg to move, That Item Class VIII, Vote 1 (Ministry of Agriculture, Fisheries and Food), be reduced by £5.
§ Question put:—
§ The Committee divided: Ayes 216, Noes 290.1053
|Division No. 83.]||AYES||[9.S9 p.m.|
|Abse, Leo||Hamilton, William (West Fife)||Pentland, Norman|
|Ainsley, William||Hannan, William||Plummer, Sir Leslie|
|Albu, Austen||Hart, Mrs. Judith||Popplewell, Ernest|
|Allaun, Frank (Salford, E.)||Hayman, F. H.||Prentice, R. E.|
|Allen, Scholefield (Crewe)||Healey, Denis||Price, J. T. (Westhoughton)|
|Awbery, Stan||Henderson,Rt.Hn.Arthur(RwlyRegis)||Probert, Arthur|
|Bacon, Miss Alice||Hill, J. (Midlothian)||Proctor, W. T.|
|Baird, John||Holman, Percy||Pursey, Cmdr. Harry|
|Baxter, William (Stirlingshire, W.)||Houghton, Douglas||Rankin, John|
|Beaney, Alan||Howell, Charles A.||Redhead, E. C.|
|Bellenger, Rt. Hon. F. J.||Hughes, Cledwyn (Anglesey)||Reid, William|
|Bence, Cyril (Dunbartonshire, E.)||Hughes, Hector (Aberdeen, N.)||Reynolds, G. W.|
|Benn, Hn. A. Wedgwood (Brist'l, S.E.)||Hunter, A. E.||Rhodes, H.|
|Blackburn, F.||Hynd, H. (Acorington)||Robens, Rt. Hon. Alfred|
|Blyton, William||Hynd, John (Attercliffe)||Roberts, Albert (Normanton)|
|Boardman, H.||Irvine, A. J. (Edge Hill)||Robinson, Kenneth (St. Pancras, N.)|
|Bowden, Herbert W. (Leics, S.W.)||Irving, Sydney (Dartford)||Rots, William|
|Bowen, Roderic (Cardigan)||Janner, Barnett||Royle, Charles (Salford, West)|
|Bowles, Frank||Jay, Rt. Hon. Douglas||Shinwell, Rt. Hon. E.|
|Boyden, James||Jeger, George||Short, Edward|
|Braddock, Mrs. E. M.||Jenkins, Roy (Stechford)||Silverman, Julius (Aston)|
|Brockway, A. Fenner||Johnson, Carol (Lewisham, S.)||Silverman, Sydney (Nelson)|
|Broughton, Dr. A. D. D.||Jones, Dan (Burnley)||Skeffington, Arthur|
|Brown, Thomas (Ince)||Jones, Jack (Rotherham)||Slater, Mrs. Harriet (Stoke, N.)|
|Butler, Herbert (Hackney, C.)||Jones, J. Idwal (Wrexham)||Slater, Joseph (Sedgefield)|
|Butler, Mrs. Joyce (Wood Green)||Jones, T. w. (Merioneth)||Small, William|
|Callaghan, James||Kelley, Richard||Smith, Ellis (Stoke, S.)|
|Castle, Mrs. Barbara||Kenyon, Clifford||Snow, Julian|
|Chapman, Donald||Key, Rt. Hon. C. W.||Sorensen, R. W.|
|Chetwynd, George||Lawson, George||Spriggs, Leslie|
|Cliffe, Michael||Ledger, Ron||Steele, Thomas|
|Corbet, Mrs. Freda||Lee, Frederick (Newton)||Stewart, Michael (Fulham)|
|Craddock, George (Bradford, S.)||Lever, Harold (Cheetham)||Stonehouse, John|
|Cronin, John||Lewis, Arthur (West Ham, N.)||Stones, William|
|Crosland, Anthony||Lipton, Marcus||Strachey, Rt. Hon. John|
|Crossman, R. H. S.||Logan, David||Strauss, Rt. Hn. G. R. (Vauxhall)|
|Darling, George||Loughlin, Charles||Stross, Dr.Barnett (Stoke-on-Trent,C.)|
|Davies, Rt.Hn.Clement (Montgomery)||MacColl, James||Summerskill, Dr. Rt. Hon. Edith|
|Davies, G. Elfed (Rhondda, E.)||Mckay, John (Wallsend)||Swain, Thomas|
|Davies, Harold (Leek)||Mackie, John||Swingler, Stephen|
|Davies, Ifor (Gower)||McLeavy, Frank||Sylvester, George|
|Deer, George||Mahon, Simon||Symonds, J. B.|
|de Freitas, Geoffrey||Mallalieu, E. L. (Brigg)||Taylor, Bernard (Mansfield)|
|Delargy, Hugh||Mallalieu. J. P. W. (Huddersfield, E.)||Thomas, George (Cardiff, W.)|
|Dempsey, James||Manuel, A. C.||Thomas, Iorwerth (Rhondda, W.)|
|Diamond, John||Mapp, Charles||Thompson, Dr.Alan (Dunfermline)|
|Dodds, Norman||Marquand, Rt. Hon. H. A.|
|Driberg, Tom||Mansh, Richard||Thorpe, Jeremy|
|Dugdale, Rt. Hon. John||Mason, Roy||Tomney, Frank|
|Ede, Rt. Hon. Chuter||Mayhew, Christopher||Ungoed-Thomas, Sir Lynn|
|Edeiman, Maurice||Mellish, R. J.||Wade, Donald|
|Edwards, Rt. Hon. Ness (Caerphllly)||Mendelson, J. J.||Walnwright, Edwin|
|Edwards, Robert (Bilston)||Mitchison, G. R.||Warbey, William|
|Edwards, Walter (Stepney)||Monslow, Walter||Watkins, Tudor|
|Evans, Albert||Moody, A. S.||Weltzman, David|
|Fernyhough, E.||Morris, John||Wells, Percy (Faversham)|
|Fitch, Alan||Moyle, Arthur||Wheeldon, W. E.|
|Foot, Dingle||Mulley, Frederick||White, Mrs. Eirene|
|Forman, J. C.||Neal, Harold||Whitlock, William|
|Fraser, Thomas (Hamilton)||Noel-Baker, Francis (Swindon)||Wigg, George|
|Gaitskell, Rt. Hon. Hugh||Noel-Baker, Rt.Hn.Phillp(Derby,S.)||Wilcock, Group Capt. C. A. B.|
|George, Lady Megan Lloyd||Oram, A. E.||Wilkins, W. A.|
|Ginsburg, David||Owen, Will||Willey, Frederick|
|Gordon Walker, Rt. Hon. P. C.||Padley, W. E.||Williams, D. J. (Neath)|
|Gourlay, Harry||Paget, R. T.||Williams, Rev. LI. (Abertillery)|
|Greenwood, Anthony||Pannell, Charles (Leeds, w.)||Wilson, Rt. Hon. Harold (Huyton)|
|Grey, Charles||Pargiter, G. A.||Winterbottom, R. E.|
|Griffiths, David (Rother Valley)||Parker (John (Dagenham)||Woof, Robert|
|Griffiths, Rt. Hon. James (Llanelly)||Parkin, B. T. (Paddington, N.)||Wyatt, Woodrow|
|Griffiths, W. (Exchange)||Paton, John||Yates, Victor (Ladywood)|
|Gunter, Ray||Pavitt, Laurence||Zilliacus, K.|
|Hale, Leslie (Oldham, W.)||Pearson, Arthur (Pontypridd)|
|Hall, Rt. Hon. Glenvil (Colne Valley)||Peart, Frederick||TELLERS FOR THE AYES:|
|Mr. John Taylor and Mr. Rogers.|
|Agnew, Sir Peter||Forrest, George||McAdden, Stephen|
|Allan, Robert (Paddington, S.)||Fraser, Hn. Hugh (Stafford & Stone)||MacArthur, Ian|
|Allason, James||Fraser, Ian (Plymouth, Sutton)||McLaren, Martin|
|Amory,Rt.Hn.D.Heathcoat(Tlv'tn)||Freeth, Denzil||Maclay, Rt. Hon. John|
|Arbuthnot, John||Galbraith, Hon. T. G. D.||Macleod, Rt. Hn. Iain (Enfield, W.>|
|Ashton, Sir Hubert||Gammans, Lady||McMaster, Stanley R.|
|Atkins' Humphrey||Gardner, Edward||Macpherson, Niall (Dumfries)|
|Barber Anthony||Gibson-Watt, David||Maddan, Martin|
|Barlow, Sir John||Glover, Sir Douglas||Maitland, Cdr. J. W.|
|Barter ' John||Glyn, Dr. Alan (Clapham)||Manningham-Buller, Rt. Hn. Sir R.|
|Baxter, Sir Beverley (Southgate)||Glyn, Sir Richard (Dorset, N.)||Marshall, Douglas|
|Beamish, Col. Tufton||Godber, J. B.||Marten, Neil|
|Bell Ronald (S. Bucks)||Goodhart, Philip||Matthews, Gordon (Meriden)|
|Bennett, Dr. Reginald (Cos & Fhm)||Goodhew, Victor||Maudling, Rt. Hon. Reginald|
|Biggs-Davison, John||Gough, Frederick||Mawby, Ray|
|Bingham, R. M.||Cower, Raymond||Maydon, Lt.-Cmdr. S. L. C.|
|Birch, Rt. Hon. Nigel||Grant-Ferris, Wg Cdr. R. (Nantwich)||Mills, Stratton|
|Bishop F. P.||Green, Alan||Montgomery, Fergus|
|Black, Sir Cyril||Gresham Cooke, R.||Morgan, William|
|Bossom, Clive||Grimston, Sir Robert||Nabarro, Gerald|
|Bourne-Arton, A.||Grosvenor, Lt.-Col. R. G.||Neave, Airey|
|Box, Donald||Hall, John (Wycombe)||Nicholls, Harmar|
|Bovie, Sir Edward||Hamilton, Michael (Wellingborough)||Noble, Michael|
|Braine, Bernard||Hare, Rt. Hon. John||Nugent, Sir Richard|
|Brewis, John||Harris, Frederic (Croydon, N.W.)||Oakshott, Sir Hendrle|
|Bromley-Davenport, Lt.-Col.W.H.||Harris, Reader (Heston)||Ormsby-Gore, Rt. Hon. D.|
|Brooke,Rt.Hon.Henry||Harrison, Brian (MAldon)||Orr, Capt. L. P. S.|
|Brooman-White, R.||Harrison, Col. J. H. (Eye)||Orr-Ewing, C. Ian|
|Bullard, Denys.||Harvey, Sir Arthur Vere (Macclesf'd)||Osborn, John (Hallam)|
|Bullus, Wing Commander Eric||Harvey, John (Walthamstow, E.)||Osborne, Cyril (Louth)|
|Burden, F. A.||Hay, John||Page, A. J. (Harrow, West)|
|Butcher, Sir Herbert||Heald, Rt. Hon. Sir Lionel||Page, Graham|
|Butler, Rt.Hn.R.A.(Saffron Walden)||Heath, Rt. Hon. Edward||Pannell, Norman (Kirkdale)|
|Campbell, Sir David (Belfast, S.)||Henderson, John (Caathcart)||Partridge, E.|
|Hlcks Beach, Maj. W.|
|Campbell, Gordon (Moray & Nairn)||Hill, Dr. Rt. Hon. Charles (Luton)||Pearson, Frank (Clitheroe)|
|Carr, Compton (Barons Court)||Hill, Mrs. Eveline (Wythernshawe)||Peel, John|
|Carr, Robert (Mitcham)||Hill, J. E. B. (S. Norfolk)||Peyton, John|
|Cary, Sir Robert||Hinchingbrooke, Viscount||Pickthorn, Sir Kenneth|
|Channon, H.P.G.||Hirst, Geoffrey||Pike, Miss Mervyn|
|Chataway, Christopher||Hobson, John|
|Chichester-Clark, R.||Hocking, Philip N.||Pilkington, Capt. Richard|
|Clark, Henry (Antrim, N.)||Holland, Philip||Pitman, I. J.|
|Clark, William (Nottingham, S.)||Hollingworth, John||Pitt, Miss Edith|
|Clarke, Brig. Terence (Portsmth, W.)||Hopkins, Alan||Pott, Percivall|
|Cleaver, Leonard||Hornby, R. P.||Powell, J. Enoch|
|Cole, Norman||Hornsby-Smith, Rt. Hon. Patricia||Price, David (Eastleigh|
|Collard Richard||Howard, Gerald (Cambridgeshire)||Price, H. A. (Lewisham, W.)|
|Cooke, Robert||Howard Hon. G. R. (St. Ives)||Prior, J. M. L.|
|Cooper, A. E.||Howard, John (Southampton, Test)||Prior-Palmer, Brig. Sir Otho|
|Cooper-Key, Sir Neill||Hughes-Young, Michael||Profumo, Rt. Hon. John|
|Cordeaux, Lt.-Col. J. K.||Hulbert, Sir Norman||Proudfoot, Wilfred|
|Cordle, John||Iremonger T L.||Ramsden, James|
|Corfield, F. V.||Irvine, Bryant Godman (Rye)||Rawlinson, Peter|
|Costain, A. P.||Jackson, John||Redmayne, Rt. Hon. Martin|
|Coulson, J. M.||James, David||Rees, Hugh|
|Courtney, Cdr. Anthony||Jenkins, Robert (Dulwich)||Rees-Davies, W. R.|
|Craddock, Beresford (Spelthorne)||Jennings, J. c.||Renton, David|
|Critchley, Julian||Johnson, Eric (Blackley)||Ridley, hon. Nicholas|
|Crosthwalte-Eyre, Col. O. E.||Johnson Smith, Geoffrey||Ridsdale, Julian|
|Cunningham, Knox||Joseph, Sir Keith||Rippon, Geoffrey|
|Curran, Charles||Kaberry, Sir Donald||Roberts, Sir Peter (Heeley)|
|Currie, G. B. H.||Kerans Cdr. J. S.||Robinson, Sir Roland(Blackpool, S.)|
|Dance, James||Kerby, Capt. Henry||Robson Brown, Sir William|
|d'Avigdor-Goldsmid. Sir Henry||Kerr, Sir Hamilton||Roots, William|
|Deedes, W. F.||Kershaw, Anthony||Royle, Anthony (Richmond, Surrey)|
|de Ferranti, Basil||Kimball, Marcus||Russell, Ronald|
|Digby, Simon Wingfield||Kirk, Peter||Sandys, Rt. Hon. Duncan|
|Donaldson, Cmdr. C. E. M.||Kitson, Timothy||Scott-Hopkins, James|
|Doughty, Charles||Lagden, Godfrey||Sharples, Richard|
|Drayson, G. B.||Lambton, Viscount||Shaw, M.|
|du Cann, Edward||Lancaster, Col. C. G.||Shepherd, William|
|Dunoan, Sir James||Langford-Holt, J.||Simon, Sir Jocelyn|
|Eccles, Rt. Hon. Sir David||Leavey, J. A.||Skeet, T. H. H.|
|Elliott, R. W.||Leburn, Gilmour||Smith, Dudley(Br'ntf'rd & Chiswick)|
|Emery, Peter||Legge-Bourke, Maj. H.||Smithers, Peter|
|Emmet, Hon. Mrs. Evelyn||Lewis, Kenneth (Rutland)||Smyth, Brig. Sir John (Norwood)|
|Errington, Sir Eric||Lindsay, Martin||Soames, Rt. Hon. Christopher|
|Erroll, F. J.||Linstead, Sir Hugh||Spearman, Sir Alexander|
|Farr, John||Litchfield, Capt. John||Speir, Rupert|
|Fell, Anthony||Longden, Gilbert||Stanley, Hon. Richard|
|Finlay, Graeme||Low, Rt. Hon. Sir Toby||Stevens, Geoffrey|
|Fisher, Nigel||Lucas, Sir Jocelyn (Portsmouth, S.)||Steward, Harold (Stockport, S.)|
|Fletcher-Cooke, Charles||Lucas-Tooth, Sir Hugh||Stodart, J. A.|
|Stoddart-Scott, Col. Sir Malcolm||Tilney, John (Wavertree)||Williams, Paul (Sunderiand, S.)|
|Storey, Sir Samuel||Turner, Colin||Wills, Sir Gerald (Bridgwater)|
|Studholme, Sir Henry||Turton, Rt. Hon. R. H.||Wilson, Geoffrey (Truro)|
|Summers, Sir Spencer (Aylesbury)||Tweedsmulr, Lady||Wife, A. R.|
|Talbot, John E.||Vane, W. M. F.||Wolrige-Gordon, Patrick|
|Tapsell, Peter||Vickers, Miss Joan||Wood, Rt. Hon. Richard|
|Taylor, Sir Charles (Eastbourne)||Wakefield, Sir Wavell (St. M'lebone)||Woodnutt, Mark|
|Taylor, W. J. (Bradford, N.)||Walker-Smith, Rt. Hon. Derek||Woollam, John|
|Teeling, William||Wall, Patrick||Worsley, Marcus|
|Temple, John M.||Ward, Dame Irene (Tynemouth)||Yates, William (The Wrekin)|
|Thatcher, Mrs. Margaret||Watkinson, Rt. Hon. Harold|
|Thomas, Peter (Conway)||Watts, James||TELLERS FOR THE NOES:|
|Thompson, Kenneth (Walton)||Webster, David||Mr. Legh and|
|Thompson, Richard (Croydon, S.)||Wells, John (Maidstone)||Mr. Edward Wakefield.|
|Thornton-Kemsley, Sir Colin||Whitelaw, William|
§ Original Question again proposed.
§ Mr. Ray Mawby (Totnes) rose—
§ It being after Ten o'clock. The CHAIRMAN left the Chair to report Progress and ask leave to sit again.
§ Committee report Progress: to sit again Tomorrow.