AGRICULTURE (FERTILISERS) (Hansard, 14 May 1962)

The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. W. M. F. Vane)
I beg to move, That the Fertilisers (United Kingdom) Scheme, 1962, a draft of which was laid before this House on 3rd May, be approved. This draft Scheme is in the same form as that of last year and continues for a further year the subsidy which is paid on farmers' purchases of nitrogenous and phosphatic fertilisers. It will come into force on 1st July. The new rates are set out in the Schedule, and the general effect is a reduction of about 8 per cent., which reflects the Price Review determination.
It is estimated that the overall effect of these changes at last year's consumption levels will be a reduction of about £2½ million, but this would be less if consumption trends, which have been upward, continued to rise. The details of these changes have been agreed between the Department and the National Farmers' Union.
A further small difference between this Scheme and that of last year is that the arrangements for varying the rates for superphosphate in accordance with the nutrient content have been extended to sulphate of ammonia where the nitrogen content is less than the normal 21 per cent. and this, I am sure, will be agreed as fair. The fertiliser subsidy has been going in its present form since 1951, and it is heartening to see what has been achieved in the last eleven years to raise the fertiliser usage in this country. I claim that this subsidy has justified itself many times over. In fact, taking the three kinds of fertilisers together, there has been an increase in usage of 65 per cent. since 1952, and I think that we can say that the striking advances in crop yields which we have seen during this period can largely be attributed to this rise.
Even so, the experts will probably say that many farmers are still not using as much fertiliser or perhaps the right balance—because it is not just a question of quantity—of the different nutrients as economic considerations suggest that they should. The Minister's advisory 1066 service is aware of this and is constantly emphasising the value of increased and more scientific use of fertilisers in its advice to farmers particularly in the use of fertilisers on grassland. Research is continuing into this, and the experimental husbandry farms are useful in this effect. I am sure that the subsidy has helped enormously and is helping, and I believe that it will continue to do so.
Last year and the year before the subsidy was reduced—by about £1½ million at the 1960 review and £2½ million at the 1961 review. In the last two years, therefore, there have been reductions in the subsidy, but these have been offset by reductions in manufacturers' prices, and the net cost of fertilisers to farmers is less now than it was in 1959. It is too early to say whether manufacturers will be making further reductions in their prices for the 1962–63 season, but we all hope that this downward trend in price will continue, and I do not see why there should not be something more in that direction.
The total cost of the subsidy is about £32 million. The value of the fertiliser subsidy lies in encouraging good husbandry and in keeping down the unit costs of production. I think that it is recognised by all.

§ Mr. Charles Loughlin (Gloucestershire, West)
I understand that the cost is £32 million and that it is 8 per cent. less than last year. Is that right?

Mr. Vane
I said that on average the rates are about 8 per cent. less and that the cost of the subsidy is about £32 million. If the trend of fertiliser usage continues to increase, as it probably will by a small amount, and as it has done over the last two years, it is not possible to say exactly what the cost will be. It is estimated that if the usage were on exactly the same scale as last year there might be a saving of £2½million. The chances are that the usage will increase and therefore the saving to the Exchequer by direct subsidy will be less, but I think that it will be to the advantage of the industry that some more fertiliser should be used wisely.
In conclusion, I feel sure that the House will agree that, large though this sum is, it is justified and has had good 1067 effect. I therefore hope that the House will approve the Scheme, as it has approved the previous Schemes, so that it may be extended for one more year.

§ Mr. Frederick Peart (Workington)
The Joint Parliamentary Secretary has explained the purpose of the Scheme. We in no way disagree with the principle of it. We expect that the better use of fertilisers will lead to higher crop yields. The Parliamentary Secretary has gone into detail. He has mentioned how the National Advisory Service has sought to encourage the better use of grassland through the better use of fertilisers.
I should like to know how much is spent on research. This question was raised two years ago by my hon. Friend the Member for Sunderland, North (Mr. Willey) who, whilst approving the Scheme in principle, criticised details. We then criticised fertiliser prices. Indeed, for a long time we on this side have accepted the main findings of the Monopolies Commission's Report on fertilisers and we have probed the Government about prices and have pointed out how farmers often have not benefited even from the subsidy given by the Government. Many hon. Members on both sides of the House have been rightly critical about this.
In view of the large subsidy, though we accept it, I am anxious to know how much is devoted to research into the use of fertilisers. I accept that great industrial concerns like Fisons and I.C.I., which are engaged in the production of fertilisers, have done a first-class job in providing information to farmers. How does our research compare with that done by I.C.I.?
It is accepted that this subsidy is to be reduced. Paragraphs 21 of the White Paper dealing with the Price Review, Cmnd. 1658, states: Over the past three years the effects of reductions in the fertiliser subsidy have been more than offset by lower prices, and the amount of fertiliser used continues to increase. It has been decided to reduce the rates of subsidy from 1st July next, thereby reducing the total annual subsidy by an estimated £2½ million. Although the Minister has given an assurance about prices, I should like to know whether he believes that they will 1068 continue to decrease. Can he give that assurance? This is a very important item in farmers' costs. This matter was considered in the Price Review. Another page of the White Paper contains details of how it affects farmers' costs. If there is to be a reduction in the subsidy by the Government, may we have an assurance that the fertiliser manufacturers, which have a virtual monopoly of this product, will reduce their prices?
We have had an unhappy episode here. I mentioned the Monopolies Commission. Not only my hon. Friend the Member for Sunderland, North, who often spoke so effectively on agricultural matters and constantly probed the Government, but many of us have on previous occasions drawn attention to the Report of the Monopolies Commission and to the fact that reduced prices were not passed on to the farmer. Often the farmers are paid subsidies but in the end they have not benefited.
Production grants are an important item of expenditure which have now been critically examined by people outside the farming world. Therefore, it is only right and proper that we should have the whole story. The fertiliser subsidy for 1960–61 was in the region of £32.2 million. In 1961–62 it was £33 million out of a total production grant of over £100 million.
These State grants to the industry are under critical review, not only by people in agriculture but by people outside the industry. I want to see that any expenditure in relation to production grants is properly administered and used and that the producer—the farmer—benefits. That is what we should examine tonight. Does this subsidy benefit not only agriculture generally but the farmer? Does he get a benefit from the point of view of costs and prices, or is it gobbled up by those outside the industry who are concerned with the manufacturing side?
There are hon. Members here tonight who participated in an extremely interesting debate on 21st March when we discussed the anti-dumping duty Order submitted by the Parliamentary Secretary to the Board of Trade which imposed an anti-dumping duty of £3 per ton on ammonium sulphate which originated in Eastern Germany. My 1069 right hon. Friend the Member for Battersea, North (Mr. Jay) was very critical of the Government, but we had no effective reply from Government spokesmen.

§ Mr. Percy Browne (Torrington)
Nonsense.

§ Mr. Peart
I will give way to the hon. Member if he wishes me to do so.

§ Mr. Browne
I can tell the hon. Member the answer. It is that he is speaking on behalf of farmers—

§ Mr. Peart
I was giving way only for an interjection. If the hon. Member wishes to make a speech he may catch Mr. Speaker's eye.

§ Mr. Browne
The hon. Member made a false statement which I wish to correct. If one is running a plant to capacity and has to run that plant down because of dumped products coming to this country and then those products stop coming in because they were marginal to that country, one cannot suddenly increase production here, and that is likely to put up the price in this country.

§ Mr. Peart
The hon. Member, who I think participated in the debate, will remember the main charge made by my right hon. Friend which is reported in the OFFICIAL REPORT for that date. He said: Will the Minister say whether it is true—because we should know this, and it is not easy for us as private persons to find out—that I.C.I. is now charging £18 2s. 6d. per ton or thereabouts in the United Kingdom market, and he is asking for a duty of £3 per ton because the East German imports are selling at £16 per ton, which I.C.I. says is gross under-pricing and quite unfair, whereas I.C.I. itself at the moment is selling in the Irish Republic at £12 10s. per ton"? In other words it is argued that we are selling fertiliser products from this country to farmers who eventually compete against British farmers. The hon. Member must have read the speech of his own colleague, the hon. Member for Louth (Sir C. Osborne), who had even stronger things to say than did my right hon. Friend. I shall quote what the hon. Member for Louth said.

§ Mr. Browne
Why should I believe him?

§ Mr. Peart
I know that the hon. Member cannot believe any Conserva- 1070 tive Member. He must always be cautious about what they say.

§ Mr. John Peyton (Yeovil)
rose—

§ Mr. Peart
I cannot give way again. I have been challenged by the hon. Member for Torrington (Mr. P. Browne). The hon. Member should not be so touchy. He always appears to be touchy when I speak. I do not know why that is; I must provoke him.

§ Mr. Peyton
The hon. Member for Workington (Mr. Peart) should not say that sort of thing.

§ Mr. Peart
The hon. Member for Louth said: It has been established that I.C.I. is offering this sulphate of ammonia at £12 a ton. It is selling it in this country to the compounders at £18 2s. 6d., but charging the farmer £20 a ton. That is £8 difference between what I.C.I. is prepared to sell outside and what it is charging the farmer. If the farmer gets a subsidy of £8 15s. as he does at the moment, £8 goes to I.C.I. and only 15s. to the farmer."—[OFFICIAL REPORT, 21st March, 1962; Vol. 656, c. 471–2, 474.] That was in a speech from the hon. Member for Louth, a supporter of the Government. The Parliamentary Secretary did not answer that case.
Is the Parliamentary Secretary satisfied that the cost of fertilisers will go down? Have there been consultations? I should have expected to have every hon. Member representing farming constituencies supporting me in this matter. The farmers are worried. The charge always is that they receive large subsidies, whereas, as hon. Members know, very often much of the subsidy is not given to the farmer ultimately. It is gobbled up in costs which have risen.
The chairman of I.C.I., Mr. Paul Chambers, for whom I have a great respect, made a great attack at the Farmer's Club on farming subsidies and State aid to farming. I want to make quite sure tonight that this fertiliser agreement will bring benefits to the farmer, that it will not only help him to improve his husbandry and the quality of the land but will help him also in his costs. Mr. Chambers was an open critic of State support for the farmer. No doubt, he would be a critic of this Scheme. I should have expected hon. Members opposite to be enthusiastic in support of my criticisms of people 1071 who have vast monopoly control of an industry which in the end does not bring benefit to the producers of this country. I am probing to find out what assurances have been given.
I shall not quibble about the details of the Scheme. I want the Minister to say what assurances he has that prices of fertilisers will go down. We have had to probe into the conduct of the industry. The Monopolies Commission has investigated it. We have had to ask questions again and again over a long period. Will the Minister give the assurance for which I ask now? He has said that he hopes that prices will go down, but how does he know?
Will the Minister give us much more detail about the use of fertilisers? He said that for the three kinds there has been an increase of 65 per cent. since 1952. How is that figure arrived at? How can we compare our effort with the effort of other countries in Western Europe? Questions have been asked before about the comparison between our use of fertilisers and their use in Western Germany, for instance. The Minister must give us figures so that the matter may be put in proper balance.
I hope that some hon. Members who are so touchy will have the courage to speak in defence of the farmers, particularly the small farmers, against industrial monopolies in this country which so far have not brought them any benefits.

§ Mr. John Peyton (Yeovil)
The hon. Member for Workington (Mr. Peart) chided me for being touchy. I am prepared to pay him a gracious compliment and say that he is always consistent when he speaks. He takes a very long time to say very little. He always begins his speeches with a plea for more research, whatever the subject under discussion may be, and whether any research has or has not taken place does not seem to matter.
I shall not take up much time. What disturbs me is that I understand that there have been two reductions in the fertiliser subsidy and there have been three reductions in prices, but the reduction of prices has been greater overall than the reduction in the subsidy. 1072 This leads one to the conclusion that this rather artificial situation is dangerous and that it is nothing like so beneficial as is often suggested to the farmers. The farmer takes the can back every time. He is always being blamed as being the beneficiary of Government policies. He is always quoted as being a burden on the taxpayer, and all the rest of it. Is this really fair? I wonder what would have been the price of fertilisers if there had been no subsidy over these years? How much more would it have cost the farmer? Would it have cost him any more at all? It has certainly cost him something in odium and disrespect from the public.
The hon. Member for Workington was careful not to attack too strongly the interests—he called them the great monopolies—who are responsible for the production of fertilisers. I do not believe that there is any artificial means which can possibly be as efficient in measuring values as the direct relationship between a customer and a producer. I hope that the Government will have this consideration in mind. I should like to see the farmers get their fertilisers at as reasonable a price as possible, but I am anxious to be assured that the benefit does not go elsewhere.

§ Mr. Charles Loughlin (Gloucestershire, West)
I think that the time has come when most of us who have constituency interests in this matter have to raise with the Government the whole question of who is benefiting from the subsidies that we are giving to the farmers. I do not know what experience hon. Members opposite have had, but I know that my farmers are convinced that the whole benefit from the subsidies of the kind that we are discussing tonight goes to the manufacturers of fertilisers and not to themselves.
It is obvious that when we have debates on measures other than Schemes of this sort, such as the question of antidumping legislation, and when it is there disclosed that I.C.I., one of the monopolies which can sell—

§ Mr. R. J. Maxwell-Hyslop (Tiverton)
There cannot be more than one monopoly, by definition.

§ Mr. Loughlin
I stand corrected. Let us say "one of the large combines." I 1073 am grateful to the hon. Gentleman for correcting my English, though I think it was rather superfluous on this occasion. If we find that one of the large combines can sell to other countries fertilisers at a price almost precisely equal to the amount of the subsidy, obviously the British farmer comes to the conclusion that the Government are paying the subsidy to the manufacturers of fertilisers, although the farmer is criticised for receiving the subsidy.
We have discussed subsidies on a number of occasions, and sometimes hon. Members opposite are very keen on ensuring that the expenditure of public money in the form of subsidies shall only be on the basis of the recipient proving need. It seems that in any debate concerning the recipients of a subsidy, hon. Gentlemen opposite almost queue up to condemn them—so long as they are not directly associated with industry.
When dealing with the farming industry it is difficult to deal with the question of subsidies on the basis of individual need. But when any doubt arises as to whether or not the subsidy is going to the farmers or to the big manufacturing combines, it is almost a public scandal that the Parliamentary Secretary can ask us to approve a Scheme without properly facing up to the issues involved. I am not criticising the Parliamentary Secretary, but merely pointing out that the Government are not considering the full implications of their subsidy policy.
If there is an element of doubt about the suggestion that the subsidy is not going to the farmers but is helping to swell the profits of I.C.I. and Fisons, the Government should be prepared to review the whole position. In this connection, the Parliamentary Secretary said that there have been two reductions in the price of fertiliser and that another reduction is possible within the next twelve months. My hon. Friends have asked for assurances about this, but the Government have been unable to give any. They cannot say with certainty that private enterprise, including I.C.I., will reduce its prices. It is, of course, a sin for them to think in terms of telling private enterprise to do anything and I doubt whether the Parliamentary Secretary, even with the moral support of 1074 the Leader of the House who is seated beside him, would be prepared to instruct private enterprise to reduce its prices within twelve months.
I am mainly concerned with the £32 million of the taxpayers' money that is, ostensibly, to be pushed across to the farmers but which will, it appears, be going to I.C.I., Fisons and other manufacturers. The Government must, if they wish to justify the Scheme, either refute or confirm the statements that have previously been made to the effect that I.C.I. is supplying farmers at £20 a ton and, at the same time, can sell the same fertiliser in the Republic of Ireland for £12 a ton.
If the Parliamentary Secretary cannot do that, he should think again about the Scheme, for the farmers would like to know once and for all just what is the position. If the Government, because they discovered that the money was going to the manufacturers, declared that they would not pay the subsidy, I.C.I. would immediately reduce its prices. I should like to make it clear that I am not disputing the farmers' right to this subsidy. I merely want to ensure that the money goes in the right direction and that it will result in a reduction of prices.
May we be given some information about what work is being done and how much is being spent on research? We must ensure that this £32 million is going to the farmer, and not to swell the profits of the large companies engaged in the manufacture of fertilisers. The sooner the Government do so, the better it will be for the benefit not only of the farming community but of the taxpayers.

§ Mr. Denys Bullard (King's Lynn)
I want to ask my hon. Friend a question, and also make a short point on the matter already dealt with by the hon. Member for Gloucestershire, West (Mr. Loughlin). I should like to know whether the Government have looked into the possibility of sharing the fertiliser subsidy among all the main plant nutrients, that is to say, not only nitrogen and phosphate but also potash. This is an old point, which has been thrashed out many times. I am not asking for more to be paid in total, because, although it is a very proper payment, it is a very considerable one. But I know that many growers of horticultural crops use potash 1075 in large quantities, and if the subsidy were shared among all the nutrients it would be of great benefit to them.
It is also recognised that potash fertilisers have been contributing to the quality of the crop products, and therefore, as the present emphasis is very much on quality, if this subsidy could have been shared among all the plant nutrients it would have been of benefit from that angle also.
I now come to the question whether the farmer or the fertiliser manufacturer gets the benefit of the subsidy. Far be it from me to rush to the assistance of the fertiliser manufacturer, but it should be borne in mind that in order to obtain the subsidy a farmer must himself make application. He makes it to the Ministry of Agriculture and in due course he receives a cheque from the Ministry for the amount of his subsidy. In other words, it is never handled by the manufacturers or the merchants. The payment is made directly to the farmer.
It may still be said that, on account of the fact that the farmer is to receive the payment, the manufacturer and merchant are able to fix their prices higher than they otherwise would. That was the hon. Member's contention. It has always struck me that although there is an element of monopoly practice within the fertiliser industry—or perhaps that is too strong a term, and I ought to say that there are arrangements within the industry—there is nevertheless a considerable degree of competition with sulphate of ammonia. Other nitrogenous fertilisers, many of which are imported, some from Holland and others from Italy, are competitive with sulphate of ammonia. Therefore, the home manufacturers of fertilisers have not got it completely their own way. I know that they have an opportunity to fix prices which many people in the farming industry would like for their products; at the same time, there is an element of competition which more or less ensures that this subsidy is directed into the right channels.
I hope that my hon. Friend will be able to give me some assurance on my question. I think that I should defend him from the charge that all this subsidy is going into the pockets of the fertiliser manufacturers.

§ Mr. A. Woodburn (Clackmannan and East Stirlingshire)
I should like to ask a question of the Parliamentary Secretary and also make a few comments on what has been said. I remember that before the war, John Morgan, a Member of the House, used to point out that when the beef subsidy was increased the price of feedingstuffs automatically went up and the beef subsidy never reached the farmer. It went automatically to the producer of the feedingstuffs. There is no doubt a danger that there is a channel by which subsidy reaches the wrong person in some cases.
In this connection I should like to raise the question of what control the Government exercise to ensure that the fertiliser is being properly used. It is true that there is the benefit of scientific advisers and that in Scotland the young farmers receive that advice. But sometimes people use fertiliser wastefully. It is possible, for example, to recover peat land without ploughing and wasting much fertiliser on it. This has been proved and the Scottish Office is now conducting experiments, but some enthusiastic farmer might put fertiliser on the ground simply because he was receiving a subsidy and thought it a good thing to do. Unless such farmers receive advice they may waste their own and the Government's money.
Fertilisers are raw materials which the farmer uses in his "factory". Raw materials are best used in efficient factories. I know that there is the question of marginal land, but there are "horses for courses" and when the Government are spending £32 million on subsidy they should be able to see to it that it goes where the maximum efficient use can be made of it. The hon. Member for Edinburgh, West (Mr. Stodart) is a farmer whom I would trust with any amount of fertiliser. I remember taking members of the Supreme Soviet to see his land. He was a marvellous farmer who knew about almost every ounce of fertiliser he used and the amount of labour employed. He knew everything about his farm. He will remember that there was only one question he could not answer. He did not know what profit he made.
A farmer of that kind knows what he is doing with fertiliser but I think that 1077 there is a considerable amount of waste because this help is not always directed through the proper channels. I am a great believer in subsidies being directional, that is, that they should have a purpose and that the purpose should be achieved. If the Government are to hand out this money it is their duty to see that the aim is achieved.
I should like to ask what steps the Parliamentary Secretary is taking to see that fertiliser is not wasted. Ground can be over-fertilised and more damage than good done in consequence. In my own small capacity as a grower of fruit trees I know that these things must be handled in the right way. Gas companies used to produce sulphate of ammonia and I bought it cheaply from them, but now with new developments the gas industry no longer produces it and there is therefore less competition. I do not know how far that has affected the price but undoubtedly the Government should see that if money is to be spent on fertiliser the maximum benefit is obtained by ensuring that it is supplied at a fair price and that the subsidy goes where it is desired that it should go.

§ Sir Anthony Hurd (Newbury)
I welcome the Government's decision this year and last to reduce by stages the cost of the fertiliser subsidy. I say that as farmer and as a director of Fisons Fertilisers Limited.
Over the years the subsidy has undoubtedly done a power of good in that it has induced the less forward-looking farmers to use fertilisers to a greater extent. We can see the benefit of this today. I have never seen the country looking greener in spring—both grass and grain—even though we have had a late spring. This is the effect, as all those who use their eyes and their common sense can see, of the fertiliser subsidy over the years.
Competition in the fertiliser trade is keen. Some big firms have been mentioned, and there are others at home. There are also substantial imports of fertilisers. No doubt if things develop in Europe as some hope they will, these imports will become more substantial and there will be more competition. I think that we can look forward to a continued reduction in the price of fertilisers to the farmer. It happened last 1078 year, and I have little doubt that it will happen this year, because competition is very keen, and I hope that the Government will be able to continue to reduce the cost to the taxpayer of the fertiliser subsidy without adversely affecting the use of fertilisers in this country.
The subsidy has done and is doing a good job, and in the years to come we can usefully and safely reduce the amount of the subsidy and still be sure that the farmers of this country will continue to make good and increasing use of fertilisers.

§ Mr. E. G. Willis (Edinburgh, East)
Hon. Members on both sides of the House agree about the necessity for encouraging the use of fertilisers by the farming community, and about trying to obtain the best results from the use of them, but it is time that we looked at some of these production grants. As my hon. Friend the Member for Workington (Mr. Peart) pointed out, this is one of the biggest—about £30 million—and it is surely time that we asked ourselves whether the method by which we seek to encourage the proper use of fertilisers is the best one.
The Joint Parliamentary Secretary told us that since 1952 we had increased the use of fertilisers by 65 per cent. That does not necessarily mean very much, but let us consider that statement. For every 100 tons used in 1952, 165 tons are used now. But to ensure the use of that extra 65 tons, we pay a subsidy on 165 tons. This is the first point to consider, that to bring about this increase in the use of fertilisers we pay a subsidy on more than double the increase. I think that we ought to ask ourselves whether this is the best way to achieve what we want to achieve.
The second thing about the production grants is that they are paid to rich and poor alike. The hon. Member for Edinburgh, West (Mr. Stodart) will appreciate this point. There are many farmers in East Lothian who do not need this subsidy, but they make the best use of it. They have the best soil in which to make the best use of it. They start by being better off than anybody else. We pay this subsidy to the wealthy as well as to the marginal farmer, and surely this is wrong?
1079 In the past year hon. Gentlemen opposite have conducted the most vigorous campaign against council house tenants being subsidised. In the Scottish Grand Committee the hon. Member for Edinburgh, West and the hon. Member for Perth and East Perthshire (Mr. MacArthur) have been vigorously campaigning against the subsidising of council house tenants who can afford to pay the full economic rent. Surely the same applies to farmers?

§ Mr. Maxwell-Hyslop
If a farmer makes a profit, he pays tax on it. If somebody occupies a house at a low rent, he does not have the saving in rent taken off him in taxation.

§ Mr. Willis
The hon. Gentleman would be wrong to enter upon a discussion of what a council house tenant gets. He pays the rates on his house. If he is shifted from a slum to a council house, he pays a bigger rate than formerly.

§ Mr. Speaker
Order. We really cannot discuss council house rents on a fertiliser scheme.

§ Mr. Willis
I am grateful to you, Mr. Speaker. I merely wanted to remind the hon. Gentleman that everyone knows that council housing estates have increased rateable values enormously. That argument does not apply. But hon. Gentlemen opposite have been pursuing their campaign with the greatest vigour. If they are convinced that is right, surely it is right in this connection. Why should the farmer who is very comfortably situated in a very good farming area—

§ Mr. P. Browne
How would the hon. Gentleman suggest it should be done—on an acreage basis, or what?

§ Mr. Willis
I am not the Government. I do not pretend to have the answers. I am posing the questions, and the Minister ought to be answering them.
Here we are spending £32 million of the taxpayers' money. Hon. Gentlemen below the Gangway opposite spend a great deal of their time in the House criticising Government expenditure, appealing for opportunities to discuss it and asking the Chancellor to reduce it. But the only one of them here tonight is the hon. Member for Yeovil (Mr. Peyton).
1080 All I am asking is whether this is the best way to achieve what we want to achieve. Surely we are entitled to ask whether the money is being spent in the most efficient manner. Are we protecting the taxpayers as we ought to be doing? I suggest that we ought to examine the method of paying the subsidy. This applies to other production grants. We shall be dealing with another after this, and I shall have some remarks to make about it. Last year we had a promise that it would be looked at, and I am awaiting the results of that tonight.
The time has come for the Government to look at these subsidies. This one is paid irrespective of the means of the recipient. Let us be honest and not try to deceive ourselves about it. Hon. Gentlemen opposite know that many farmers who receive subsidy do not really need it. The increase has been only 65 per cent. So there must have been a great deal of fertiliser used before ever a subsidy was paid. The good farmer who could afford it was using it. Not content with that, we are now paying him because he is being a good farmer. It is time the Government looked into this.
Much has been said about whether this has an effect on the price charged by the fertiliser companies. I should imagine that it has. Here is a great guaranteed home market. It is a funny sort of private enterprise which does not take advantage of that. I do not blame it, for that is the job of private enterprise, but I blame the House of Commons for allowing it to be done at the taxpayer's expense.
Those seem to be powerful arguments. We have not had assurances from the hon. Gentleman about this issue. We had a debate a short time ago which brought out some astonishing information. Hon. Members opposite say that there is some competition, but as soon as that competition becomes too severe, we get an anti-dumping order to stop it.

§ Mr. Maxwell-Hyslop
Nonsense.

§ Mr. Willis
The hon. Gentleman says, "Nonsense," but that is precisely what we do. It may have been right in the circumstances, but the hon. Gentleman cannot deny that it has been done, so 1081 why argue about it? All I am saying is that if the competition becomes too severe, it is stopped.

§ Mr. P. Browne
The hon. Member must be reasonable about this and must refer to "unfair competition," which is what dumping is.

§ Mr. Willis
I am not always able to draw these fine lines. Is it unfair competition if the price is £2 less? Is it unfair at £2 5s., or at £2 10s.? I am not certain what it is.

§ Mr. Loughlin
If it is unfair for the foreign competitor to produce it here at a price lower than that offered by the home producer, is it not unfair if the British producer produces it in Southern Ireland at a lower price than the price there?

§ Mr. Maxwell-Hyslop
rose—

§ Mr. Speaker
It is insufferable, so experience shows, to have an intervention upon an intervention.

§ Mr. Willis
Once again, Mr. Speaker, I must thank you for your protection. My few humble remarks, offered to the Government in a spirit of humility, seem to have aroused a hornets' nest among hon. Members opposite. I am bound to say that I am rather pleased about that.
Surely in the light of all these facts the Government ought to examine this subsidy and the way in which it is paid, or should at least get somebody to inquire into it to see whether some cheaper and just as efficient method of subsidising farmers in respect of fertilisers can be found. Nobody questions the aim of the Scheme and we are not arguing about that. All we are arguing about is whether this is the best way, and there are very good reasons for saying that there is some doubt about that. There would be no harm in considering it. The Government should agree, as they did with the ploughing grants last year, to go into the matter to see whether something is possible, something which would achieve fairly substantial savings for the taxpayer.

Mr. Vane
I will try to answer as many questions as I can and in the course of fifty minutes they have amounted to a goodly number. Luckily, they fall into certain defined groups. 1082 First, the right hon. Member for Clackmannan and East Stirlingshire (Mr. Woodburn) asked what we were doing to ensure that the subsidy which came into the farmer's hands was not being wasted, because, if it was, some of the taxpayers' money was being wasted with it. Nobody can guarantee that no bag of fertiliser in the course of a year will not come to grief, but a large part of the cost is paid by the farmer himself and the cost is not cheap—although of course the fertiliser is very useful and important—and we can assume that a man who buys fertiliser will take reasonable trouble to put it to good use.
I have been asked about advice, research and demonstrations. There are a large number of research institutes concerning themselves with this question, including Rothamsted, university farms and the manufacturers' own research institutes. We have farm institutes in all the larger counties. I also mentioned the experimental husbandry farms, of which there is Great House, not far from where the hon. Member for Workington and I live, which has done much experimental work, particularly in connection with poor grassland going up the side of hills. If anyone is in doubt he must surely know that he can get help, freely and speedily, from the advisory services. He can get soil tests carried out. He can go to many institutions concerning themselves with research or attend one of the many demonstrations which take place all over the country all the time. We cannot be criticised on this score.
The hon. Member for Edinburgh, East (Mr. Willis) asked me about a means test and whether there would not be added economy and efficiency if we distinguished between those farmers who should qualify for subsidy and those who should not.

§ Mr. Willis
That is the obvious criticism, but the answer might lie, as an hon. Member opposite suggested some years ago, in the price obtained rather than in the production grant.

Mr. Vane
But, as has been pointed out, these grants and subsidies are based on the general economic situation of the industry. At the end of the day we all pay tax. If we tried to distinguish between one man and another we should 1083 run into great difficulties and unfairness. We have always felt, as hon. Members opposite felt when in office, that we should accept that the support for the farming industry was not based on distinctions between man and man.

§ Mr. Loughlin
What is the relevance to the argument of the statement that at the end of the day we all pay tax?

Mr. Vane
It was suggested by hon. Members opposite that men with large means were drawing subsidy when they could keep body and soul together without it. The relevance of my remark was, the greater the means the greater the amount of tax paid at the end of the day. This principle of support for agriculture was accepted by hon. Members opposite when they were in power and the difficulties which would be encountered by trying to make the distinction suggested by the hon. Member would be too great to overcome.

§ Mr. Woodburn
We found great difficulty in giving any subsidy to agriculture in general which did not benefit the efficient farmer far more than the inefficient. But we made a distinction in respect of marginal land and in helping backward land; people who had greater difficulties had grants in this respect.

Mr. Vane
To a large extent that is continuing. We have the small farmers' scheme and the hill and livestock rearing schemes. But the distinctions which we make must be broad.
The next group of questions concerned, in particular, the price of fertiliser and the differences in price between country and country. My right hon. Friend made it clear in the debate the other day that we are not opposed to having cheap fertilisers in this country. We are opposed to having it dumped. There is a distinction. It was put to me that if it were dumped when it was in this country, surely when I.C.I. sell raw material at the same sort of price in the Irish Republic it is dumping, too. It is dumping, but in Southern Ireland they have not a chemical industry to compare with ours, and therefore there is no question of damaging their interests. The decision in these things is for them and not for me, but I do not think it unfair to mention that distinction.

§ Mr. Edwin Wainwright (Dearne Valley)
This is a very important issue. If it is a question of cost of production being greater than the price charged in another country that is dumping, but are we assured that the cost of production by I.C.I. is greater than £12 per ton at which I C I sells in South Ireland?

Mr. Vane
Yes certainly, and so, I think, was the Monopolies Commission when it looked into the question several years ago.
Several hon. Members asked if we have close and continuing contact with manufacturers. I can assure them that we do. We appreciate the difficulties to which hon. Members have drawn attention. If we felt that this money was not put to good use I should not be here asking the House in the terms I have used to approve this Scheme.
Then there was the question several hon. Members raised about the farmer getting the full benefit of this whole Scheme, which is a costly Scheme for the country, and whether the use of fertilisers would have been increased even without these subventions from the taxpayer and the encouragement given in other ways. I do not want to read a lot of figures, but I have the figures of fertiliser consumption in this country before and after the introduction of the subsidy Scheme. Comparing with the early days when it was less than now and the higher rates of the last few years, it will be seen that the increase in fertiliser usage in this country has mounted very substantially. It would be difficult to say that that upward curve would have been anything like so steep if farmers had been asked to pay the entire cost.
I was asked if I could break down the figure I gave of 65 per cent. It is interesting to notice that nitrogen over that period had doubled, potash has doubled and the use of phosphates, which were used substantially on grassland, has increased by 28 per cent. To express that in a figure which shows the bulk of fertiliser used is to say that in 1952–53 there were 830,000 nutrient content tons—not the bulk of the fertiliser but the actual nourishment in it—whereas in 1961–62 the amount is 1,366,000 tons. That is a substantial increase. Figures are often given in tables 1085 of usage showing that this country is not so high in the European league table as some other countries. I think they are misleading because they are not generally comparing like with like. On arable land the amount of fertiliser we use often compares with the amount used in countries of intensive production not far away in North-West Europe. On the other hand, when working out averages we find that on a great deal of moderate grassland, if we leave out the hill land of which there is a high proportion in Scotland, they would pull our figure well below the similar average worked out in Holland, but, as I said in my opening speech, it is not the quantity of fertiliser that matters so much as the wise use of it. I think we have all learned to make full use of the advice which scientists can give us and not to waste the money of the industry or of the taxpayer.
In regard to the price of fertilisers generally, as has been mentioned by my hon. Friend the Member for Newbury (Sir A. Hurd), manufacturers' reductions started before this series of reductions in the subsidies and have amounted to more than the reductions in the amount of subsidy. I am glad that my hon. Friend also gave an indication, as I expected, that that reduction is likely to continue. I cannot give the House assurances about any price which business will charge for its commodities at any future date, but, as I said, we are in continuous contact with the bigger manufacturers, for the good reason that they are in a rather special position.
I was asked about potash, and whether it would be possible for us somehow to include potash in the subsidy structure. Potash has never been included for the very good reason that there is no home production; it is all imported, to a large extent by one large and one smaller group. I think it follows that, if we subsidised the use of potash, it would be extremely difficult to ensure the sort of things that hon. Members are anxious to ensure. The writ of our Monopolies Commission does not run abroad, and we should find ourselves very much in the hands of the foreign producers and those who are trading in their goods. On the other hand, most of the potash used in this country, though not all, is in compounds, and, of course, 1086 the compound has the benefit of the nitrogen and the phosphate subsidy appropriate to its content.
I do not complain that questions have been asked. This is a large sum of money, and we all want to ensure that the Scheme is administered fairly in order that there is no extravagance or waste. The Scheme follows very closely the lines of previous Schemes which the House has accepted, and I hope that it will receive approval tonight.