HC Deb 24 July 1963 vol 681 cc1710-9

4.23 a.m.

Mr. J. M. L. Prior (Lowestoft)

Paragraph 28 of Cmnd. 1968, "Annual Review and Determination of Guarantees, 1963," states that The trend of market prices for home grown wheat and barley has been generally downward Prices for the 1962 crop have been particularly low, and the estimated cost of Exchequer support in the financial year 1963–4 is £83 million compared with £64 million in 1962–63. The next paragraph reads: The Government have therefore decided to reduce the guaranteed prices of wheat by 5d. per cwt. and of barley by 11d. per cwt. The guaranteed prices for other cereals remain unchanged This short debate has two objects. The first is to try to help save some Government expenditure and taxpayers' money on cereal payments for the coming year. The second is to prevent the sort of situation where if these payments get unduly high the Government feel that they must cut the subsidy to the farmer in the following year.

Now that we are approaching very close to the 1963 harvest, I believe that we can take certain steps to bring this about. First, we have to examine the likely size of the 1963 harvest. The acreage of barley is likely to be over 4 million acres, compared with under 4 million acres last year. The wheat acreage is expected to be down by nearly 500,000 acres. With a bit of luck and some sunshine during the next 10 days we look like having a bumper harvest. It is estimated that the amount of grain harvested from British farms will touch the 10 million ton mark, made up, roughly, of 6¼ million tons of barley, 3 million tons of wheat, and the balance in oats.

To help the farmer to obtain a decent price, a working party has been set up this year, to give advice not only on barley but on wheat prices. The working party has published what it considers to be the indicated values for grain during July and August. The indicated value is an indication of what the grain is worth in relation to imported supplies, and is the price a grower can expect to receive, and a purchaser can expect to pay, if supply and demand for home-grown grains are reasonably balanced, and it is important that home producers should make a real effort to obtain this price.

I have heard disturbing reports that farmers are not obtaining the working party prices. I was in Sussex yesterday and heard a farmer say that, having been round to various merchants, the best price that he could obtain for barley was £2 10s. less than the price stated by the working party. I have today taken up this matter with persons from the working party. I am told that the right action for farmers to take, if they are unable to obtain the working party price, is to get in touch with the local branch of the National Farmers' Union. That branch will then get in touch with headquarters, who will in turn get in touch with other millers or merchants who are prepared to pay the proper price.

This depends on the market not becoming too flooded, and therefore farmers obviously have an obligation not to overload it. But there is no reason to suppose that, provided we have reasonably orderly marketing this harvest, the working party guide prices will not be reached, and any farmer who sells below the guide price is a fool, and should be told so quite plainly.

The Government can do two things to help. The first concerns something that I heard about only this evening. Each year we are told that the reason why we cannot get proper prices in the farming industry is that France or some other country is busy exporting grain to us at a lower price. This evening I heard that the French are offering barley at a lower price, landed, than the working party's guide price. This will result in the British price being knocked down by another £1 or £2, and immediately the whole basis of the guide price will be undermined.

I am grateful to my hon. Friend for coming down to answer this debate, because I know what this means to him. I hope that he will check on what I have just said, because this is of great importance. The amount involved may be comparatively small, but at a time when we are trying to stabilise our prices I think that it would be wrong to let the French come into our market and knock down the price. It would be most unwise of the importers to accept this. If they are going to play about with the British market in this way they will burn their fingers badly before long, because they are asking for a marketing board to be set up to take their place. They would be on dangerous ground.

But my hon. Friend could use his persuasion—I know that it cannot be more—to keep out this grain at harvest time, and to state categorically, when he has had a chance to look at the problem, that there is still no need for the guide price to be lowered.

The other thing that his Ministry could do to help would be to improve its information services on the question of the forward supplies of grain. Last year, even with all the grain that we had—and we had plenty on British farms—we ran out before the end. The millers and foodstuffs manufacturers had to go to France to get grain towards the end of the season. If we could plan our programme of grain sales throughout the year, having better information to guide us, we could keep the price a little higher than it has been in the last year or two.

If my hon. Friend's Department could put out information stating how much grain it thought was on the farms, and how much was needed, and if it could produce figures of imports brought forward by importers and put out advice generally as to the price that farmers should be getting, in order to try to substantiate the guide price that had been issued, we could go a long way towards lifting the price from the bottom. If we could lift the price in that way we might be able to save up to £15 million or £20 million. This is quite within the realms of possibility. If we can save that sum of money this exercise will have been well worth while.

It is up to the farmers to try to stick rigidly to the guidance system for this harvest. I hope that my hon. Friend will be able to give this short debate his support and that his Ministry in the coming weeks and months will do all it can to see that the guide price is maintained.

4.33 a.m.

Colonel Sir Harwood Harrison (Eye)

I want to add my support to what my neighbour, my hon. Friend the Member for Lowestoft (Mr. Prior), has said. This is a most important subject. I am also glad to see on the Front Bench, in addition to the Parliamentary Secretary, my other neighbour, the hon. Member for Norfolk South (Mr. J. E. B. Hill), who, in his position in the Government and the great office he holds, will have great influence in this matter. This is a question of great concern to at least 1,500 farmers who are constituents of mine. I endorse what my hon. Friend has said, but I want to draw attention to a Motion that I moved exactly eight weeks ago—on 29th May—and which was accepted by the House, for the greater control of imports of winter foodstuffs that come in.

What I said then has been underlined by what my hon. Friend has said today. This is at the heart of the whole matter, in the price that our farmers get, particularly for their grain. As my hon. Friend said, many farmers felt very disappointed when, at the last Price Review, the support price was reduced. In replying to the debate on 29th May my right hon. Friend the President of the Board of Trade said that he could not make long-term arrangements, but he hoped that he would be able to introduce ad hoc arrangements to meet the different situations that might arise.

Eight weeks having gone by, I again asked my hon. Friend whether we were to get any legislation before the Summer Recess, but he could not provide any time. I appreciate that it is difficult to come to these arrangements, but it is disappointing, after the Minister of Agriculture's statement that there was a change in Government policy, and that we were to have control of imports, to know that nothing can be done before the harvest of our crops this July, August and September.

It is disappointing for our farmers, who welcomed the Minister's statement, and were very grateful to him for what he said. Therefore, if there is something which does not need Parliamentary procedure that the Minister can do during the Recess to improve the situation, I hope that he will do it.

I want to put one practical suggestion to him, which has been hinted at in another way by my hon. Friend the Member for Lowestoft and which I mentioned eight weeks ago. With the very big barley crop we shall have this year, could not some arrangement of a voluntary nature be made with the big importers and compounders who use a great deal of maize in this country? We have heard it sail that maize and barley can be interchanged for food for cattle, pigs and so on. I know from trade returns that imports of maize are down this year because of the high production of barley last year. Here is something in which the Minister could use his powers of persuasion on importers of maize to bring in very little, or none at all, during the harvest when we shall be in recess.

I hope that in ways like this we can improve the situation for the farmers on whom we so much depend. In their view, and that of many of those who represent them here, they have not been helped financially as much as many other sections of the population in recent years. Once again there is no one on the Liberal benches taking the slightest interest in this great subject of agriculture. That is not surprising because we know that they are not interested in returns to farmers, in support prices or in any form of import control.

I ask my hon. Friend to consult the Minister to see whether something more on the lines we have suggested tonight can be done to see that the price does not drop catastrophically for farmers and throw a heavier burden on the country.

4.37 a.m.

The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. James Scott-Hopkins)

The short debate we have had on this subject has been extremely useful. I am grateful to my hon. Friend the Member for Lowestoft (Mr. Prior) for raising it, even at this rather later hour in the morning than usual.

It is true that there is a record barley crop. We expect this year probably over 6 million tons, an increase of about ¼ million tons over last year's harvest. It is a very big jump, as my hon. Friend pointed out, but it is not quite so big an increase as that of last year over the year before. The 1962 harvest gave us over 1 million tons more wheat than in 1961 and over ¾ million tons more barley—1.8 million tons more grain altogether. My hon. Friend was not quite right about the total crop, which was 11,313,000 tons. It was amazing that we managed to clear this unprecedentedly large crop during the past season, although prices were not always too good, especially the wheat price, which was below that for barley for a long period.

The marketing of the cereal crop went reasonably smoothly and there was no panic selling of grain. Compounders did their best to keep things moving smoothly. Tribute should be paid to the co-operation of the compounders and merchants and for the way in which they managed to move the very large crop without any dislocation in the process. They were helped in moving the crop last year by the incentive schemes which were introduced in 1961, and in the coming year these will be exactly the same. I was asked what are the prospects for the coming year. We must look at the cereal crop as a whole, because it is dominated by the compounding industry, where there is a considerable degree of interchange, as my hon. and gallant Friend the Member for Eye (Sir H. Harrison) pointed out, between the various coarse grains and between wheat and the coarse grains. What happens in one affects what happens in another.

As far as can be seen, it seems that we shall have less wheat than last year because of the smaller acreage and the difficulties of the winter wheat in the very hard winter. We shall have more barley than we have had before, but it looks as though we shall have a little less total cereals than last year—we cannot tell—but even so this will present a formidable problem to us in the coming harvest. We are by no means complacent about it. The barley crop alone will be difficult to move. But the season should get off to a reasonably good start. Compounders and millers have given their normal undertakings, which they have given before—the millers that they will aim to use 1¼ million tons of home wheat in the grist, and the compounders that they will take home barley in preference to imported if it is of good quality and competitive in price.

I am grateful to my hon. Friend the Member for Lowestoft (Mr. Prior) for what he said about the working party price, which has been extended to cover wheat. The prices have already been given out. For wheat the price is £20 a ton and for barley £19 10s. a ton ex-farm August delivery. I should like to echo what he said about farmers and merchants; I hope that they will stick as closely as possible to these guide prices. This is a joint venture between the trade and the N.F.U.; we are not directly involved, although it was set up on the initiative of my right hon. Friend who was then Minister of Agriculture, Lord Amory. My right hon. Friend has the greatest hope that growers will take the advice of the working party, which has been extended. But it is important to remember what these prices are and what their point is. They are not prices at which buyer or seller undertakes to buy or sell. They could not be enforceable in any way. But they are an indication of what the home crop's value should be if supply and demand is in reasonable balance, taking into account the price of imports.

My hon. Friend's advice to the farmer he met in Sussex is wise and sound advice—that he should consult his local N.F.U. branch if he finds, from the producer's point of view, that it is difficult to reach the guide price. But if, as in autumn, 1961, so much grain is pressed on to the market that the merchant or user has to store the grain, if it is all pushed on to the market at the same time, this is bound to have an effect on the price, by lowering it considerably because of the cost of storage.

In this context, now that the working party has decided to extend its field of action to cover wheat too, I think that it will be particularly useful, because it is important to remember the interrelation of prices. One main difficulty last year was the fact that the price of wheat was below that of barley, and this had a depressing effect on the entire market.

My hon. and gallant Friend the Member for Eye talked about the merits of the new policy which my right hon. Friend announced on 22nd May. This contemplates import restrictions. Since then my right hon. Friend has referred to the probable mechanism of minimum prices. It was always impossible to introduce these measures for this harvest. My right hon. Friend took great care to emphasise this fact more than once. One has to negotiate with our traditional suppliers. We have to discuss matters here at home with producers' organisations. It takes time to bring all these negotiations to a satisfactory conclusion. I can assure my hon. Friend that we are not letting matters slide.

The point made by my hon. Friend the Member for Lowestoft about French barley was very important. I can give him a certain amount of reassurance on this. I am aware that very recently French barley has been offered on our market at £17 5s. a ton or £17 10s. a ton c.i.f. In point of fact, in the past few weeks we have approached our six principal overseas suppliers—Australia, Canada, the United States, the Argentine, France and Russia. We have drawn their attention not only to my right hon. Friend's new outline proposals for imports and for cereals but also to the damage that could be done to our market and to their prices by injudicious exports to this country. No formal undertaking was sought, but representatives of these overseas suppliers were specifically asked to bring our request to the notice of their Government. Since then, French barley has again been offered at £17 5s. as far ahead as October next. Such prices cannot fail to have a depressing effect on the market here in the United Kingdom, both for imported cereals and for domestic cereals. Urgent representations have again been made to the French authorities. Discussions are still proceeding. I want to tell the House clearly that it is in the interests of everybody—the exporters and us at home—that these discussions should be brought to a mutually satisfactory conclusion as soon as possible.

Growers have another solution. If they feel that there is a case for antidumping action, it is up to them—perhaps through their own organisation, the N.F.U.—to put in an application to my right hon. Friend the President of the Board of Trade, who would consider it very quickly. The House will know full well what the conditions are: first, that the imports should be really dumped or subsidised; secondly, that they should be causing or threatening material injury; thirdly, that it should be in the national interest for my right hon. Friend to take action. The House will remember that we acted quickly in mid-1961 when French and Russian barley was being dumped here.

The last point made by my hon. Friend was about the market informaion service. Perhaps I can bring the House a little further up to date on this service. We are having discussions with the trade about this. I agree with my hon. Friend that it is extremely important, and I think that it will be of great service not only to the merchants and compounders but also to producers. What we are hoping to provide periodically, perhaps per month, perhaps per quarter, are our estimated yearly requirements, the total home crop, and the amount of requirements already supplied—first, by imports, secondly, by home crop fed on farms, and thirdly, by home crop sold off farms.

Having done that, we should be able to balance the home crop remaining to be sold or to be fed on the farm and the anticipated imports against the remainder of the requirements. The estimated yearly requirements will easily be ascertained. If this information can be got out separately, I am sure that this will be of great advantage, not only to the trade but also to producers. They will be able to see the market more clearly; its requirements—what remains to be filled up from home supplies and what must be brought in from overseas to fill the demand. This will be of advantage to all concerned.

There are undoubtedly difficulties ahead, but I hope that we will be able to find satisfactory methods whereby this year's crop will be smoothly marketed at reasonable prices for the producers, and that the trade will be able to handle the crop with ease. I hope that the information I have given will show that we are by no means complacent and that we are doing our utmost to see that the arrangements work well.

Mr. David Renton (Huntingdonshire)

Did I understand my hon. Friend to say that the millers' grist for the coming season was already fixed from the point of view of home-grown wheat? Is that so, or is there a possibility that the proportion of home-grown wheat going into the grist may be found to be exceptionally large?

Mr. Scott-Hopkins

The millers have agreed to aim at using 1¼ million tons in the grist. As my right hon. and learned Friend knows, last year they took considerably more, about 1¾ million tons, a considerable increase on previous years. The first figure I gave is the minimum the milling trade has felt itself able to take. However, if the wheat is of good quality and if the price is right, I am sure that the millers will, as they have done in the past, endeavour to increase the amount they can take from the home market.

Mr. John Farr (Harborough)

Is my hon. Friend aware that it would have the overwhelming support of the House if his right hon. Friend were to inform the would-be overseas suppliers that they must supply corn to this country at not less than our guide prices? If he took that step it would also save the Exchequermany millions of pounds this year.

Mr. Scott-Hopkins

We have drawn the attention of our overseas suppliers to our existing arrangements. There is no method whereby the working party's prices can be enforced under the existing arrangements, but we have emphasised the fact that it is in their interests not to send a lot of grain onto this market at prices which are low—I mentioned the French prices earlier—and certainly not in our interests.