§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Mac Arthur.]
§ 11.28 p.m.
§ Mr. John Brewis (Galloway)
I am grateful for the opportunity to raise the subject of imports of early potatoes, which is of great concern to a number of people in the potato-growing areas, and I am particularly glad that my hon. Friend the Joint Parliamentary Secretary is replying to this debate because, representing as he does a Cornish constituency, the matter must be one of great moment to him.
Over the last few years the Government and the Potato Marketing Board have developed an excellent system for the orderly marketing of main crop potatoes. The elements of the system, as is well known, include a total prohibition of imports of ware potatoes unless there is fear of a shortage. At the same time, the acreage quota plus price-support buying ensures that potatoes make an overall average price near to the guaranteed price of £13 15s. per ton.
Even with these powers, regulating the market is no easy task for the Board as there are many variable factors. For example, potatoes can suffer great wastage in the clamps through the winter, and the public may decide to eat far more or far less potatoes in any one month than might be predicted. The supply position of earlies and second earlies also has a significant effect on the main crop position, and the price of earlies at the beginning of their season is affected by the hang-over of ware potatoes stored from the previous year.
Yet our present system is to treat the early crop in an entirely different way from the main crop. In contrast with the careful statistical evidence collected in connection with the main crop, and the complete prohibition of imports, the Government have no idea what quantities of earlies will be imported between May and August and only a sketchy idea of how many acres are to be harvested as earlies in this country. Therefore, if home supplies are short or foreign supplies are affected by Colorado beetle or other plant health troubles, prices may soar to £80 a ton or more. Equally,
606 the opposite may happen and home-grown potatoes may become virtually unsaleable, as is the case this year. This situation is obviously quite unsatisfactory to consumer and grower alike.
I do not want to waste much of my time in describing this year's early crop. The facts about the glut are well-known. At the annual sale at Girvan, on 2nd July, prices were so low that all but three lots were unsold. In Cornwall, prices are as low as £8 a ton and in Pembroke even lower. One experienced potato merchant told me that he could not remember such a bad year for over thirty years. At the prices I have quoted growers are suffering great losses. Five to six tons an acre is a good yield for earlies dug in June, but the costs of digging and growing are about £125 an acre or even higher. Even today the Cornish crop is not all dug up—a month later than usual.
My hon. Friend will know the effect of this on the next crop, such as broccoli, which is usually grown in this area. In Ayrshire, little more than 50 per cent. of the potato crop has been dug so far. The early potato fields in this area are light land and the fertility will not stand the heavy crops now being dug. Heavy infestation by eel worm is also to be feared and, therefore, many farmers will not be able to grow early potatoes again for four years or more. Yet Cornwall, Pembroke and Wigtownshire are extremity areas, critical areas of depopulation, and any blow to their prosperity should be of as great concern to the Government as the decline of shipbuilding on the Clyde and the Tyne.
I welcome the decision announced this afternoon by the Potato Marketing Board that it will commence support buying of earlies tomorrow, using its own funds. Will my hon. Friend tell the House that the Board will receive Governmental financial support when it has to start support buying? The effect of this buying on the following main crop supplies will be to limit the guarantee payments which will be needed from the Government later in the year.
The main cause of the collapse of the early potato market this year is seasonal. There has not been the fortuitous phasing out of the crop, starting in Jersey in May and ending with Lincolnshire and Kent in July. The crop has been late and there 607 has not been the usual frost early in May. There is, however, one contributory factor over which the Government have control. In Spring, 1962, there was a shortage of ware potatoes and prices went very high. In January this year the Government feared another shortage and authorised imports of ware potatoes under open individual licence up to 30th June. When the shortage did not materialise the Government did not recall the licences.
As a result, there was too much ware imported and over-hanging the market, and the earlies never got a proper start. In future, when it is necessary to import ware potatoes from abroad, it should be a condition of granting an import licence that it can be recalled at short notice. This is how the French treat our lamb exporters, and there is no reason why we should not treat them in the same way. Apart from that, it is ridiculous to be importing old ware potatoes at the end of June. I hope that my hon. Friend will explain why it has been necessary to import a record 31,068 tons of old potatoes in June of this year.
There have not been so many imports of early potatoes this year as last, but the Government can claim no credit for that; the price has been too low to tempt the French and Belgians, while the Plant Health Regulations have kept out the crop of large areas of Italy and Spain which are affected by Colorado beetle. Even so, in this highly volatile trade, a small increase in supplies can break the market. We saw this in 1960, when the acreage quota for main crop was exceeded. A total of £213,000 was collected in acreage penalties, but the excess crop cost the industry as a whole £3½ million in lower prices. Into the witch's cauldron which was the early potato market in June this year, the importers cast an estimated extra 60,000 tons of unwanted and unneeded early potatoes from abroad.
Imports come from many sources. During the last eight years we have imported from 26 different countries. Far the most important of the Commonwealth producers is Cyprus, and Belgium, Spain and Morocco are extensive foreign sources. Let us look for a moment at how imports have crept up over the last few years. In 1955, Cyprus sent 26,000 tons, in 1960, 51,000 tons, and 608 in 1962. 70,000 tons. Belgium sent 19,000 tons in 1955, and sent 42,000 tons in 1961. In 1955, Spain sent 22,000 tons, and 73,000 in 1961. Morocco sent 1,000 tons in 1955 and 7,000 in 1961, and 24,000 tons in 1962. Of course, some countries have dropped off, but the total tonnage of imports has a rising tendency—195,000 tons in 1955, 270,000 tons by 1959, 360,000 tons in 1962, and even in this year of unparalleled glut, an estimated 265,801 tons, which is nearly the highest total ever.
Can the home producer increase his output and his share of the market like the Cypriots? He cannot. He is tied to an acreage quota, and must pay a penalty of £10 for each extra acre—and next year it may well be £25. No such quota affects the Cyprus grower. This year he bought 50 per cent. more seed potatoes than he did last year and, as a Commonwealth member he enjoys the privilege of tariff-free entry into the British market. I must say to my hon. Friend that a system in which our home producer has his hands tied by quota restrictions while the Cyprus grower can increase his exports to this country to an unlimited extent as he pleases cannot be justified in logic or allowed to continue in practice.
Cyprus has a considerable climatic advantage as a Mediterranean country. If, in a normal year, Jersey can send the bulk of her supplies in May, Cyprus can do so even earlier if necessary. My hon. Friend and the President of the Board of Trade must inform the Cyprus Government that we can provide a market for their crop if they dig early in April and May, but that the heavy consignments sent in June in recent years must stop, because it is neither in their interest nor ours to glut the market.
We should seek to establish an imports consultative council like that which controls the marketing of bacon imports, with representatives of Cyprus and other Commonwealth growers such as Eire and Malta, and the E.F.T.A. countries. If common sense does not prevail, my hon. Friend's inspectors should read very carefully the definition of an early potato before allowing Cyprus potatoes to be landed in June and July, because they are by then nearly mature ware potatoes.
Having said that, I think that we must be prepared to give priority to the 609 interests of our Commonwealth trading partners, and Cyprus is a good customer of ours. But I see no reason why we should be so tender with highly developed foreign countries like France. The potential competition for the Jersey and Cornish growers from Brittany is enormous. There may well be as much as 30,000 acres of land there suitable for early potato crops. The French will soon be able to circumvent the Plant Health Regulations by installing washing machines and rebagging potatoes from areas at present affected by Colorado beetle and tuber moth. In any case, these regulations were never intended as quantitative import controls.
The present tariff from 1st to 16th May is only equivalent to 1/10th of 1d. per lb. and is quite negligible to protect our growers. If the tariff is not bound by G.A.T.T. it should be raised substantially, and also as an incentive to Cyprus who enjoys free entry to send her potatoes when we want them. I think that the tariff of £9 6s. 8d. a ton from 16th May to 1st July is reasonable. Although it is only equal to 1d. a lb., in the interests of the housewife it should not be increased. Unless potatoes are "dumped", 1d. a lb. should be ample for our growers.
At 1st July the tariff drops to £2, or less than ¼d. a lb., and once again there is a standing invitation to foreign exporters to glut our market, just when our potato lifting is in full swing. This tariff has not been raised for about thirty years and should now go up to about £7 to reflect the falling value of money over the period. I understand that this is in no way contrary to G.A.T.T.
While I cannot pretend that these suggestions are a complete substitute for import control, they should help producer and consumer while in no way being impractical or distorting the present system. There are several minor ways in which the Government can help the hard-pressed industry. Money should be available through the Board to assist in research into marketing and presentation. Both the Ayrshire growers in their area and the Pembroke growers with their "Pepgal" brand name have made a promising start. The use of a 1¼ in. riddle should be strictly enforced and outlets such as potato silage and pig feeding should be sought for the brock.
610 Lastly, many growers this year have been prevented from digging by 15th July when the Board's levy goes up from £1 to £3. The Board should be encouraged to postpone this extra payment from early producers to at least 1st August, as circumstances outside their control have made it impossible to harvest the crop at the usual date.
§ 11.43 p.m.
§ The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. James Scott-Hopkins)
I am very grateful to my hon. Friend the Member for Galloway (Mr. Brewis) for raising this subject tonight. There is no doubt whatsoever that this has been a very difficult season for our first early growers, as he pointed out. At the same time, there has been a great deal of misunderstanding about the reasons for the situation, and I am glad to have this opportunity not only of dealing with the specific points which my hon. Friend has raised, but of giving some facts about the general background of the situation. I am sure that my hon. Friend will agree that it is better to treat the matter on a national basis rather than on that of a particular region or a particular part of the country.
As my hon. Friend knows, the prime cause of the present state of the market is due to the circumstances of the season. I have studied the available facts on production and on imports and it is quite clear, as he says, that the present low prices are due to our home supplies coming on to the market from the different early potato growing districts all at once instead of arriving in succession.
The result has been high prices for the greater part of June when too few of our home supplies were available and very low prices now because there are too many. On average, we would expect our home first early crop to produce about 150,000 tons in June—sometimes more, sometimes less. And our minimum requirements of potatoes of all kinds in that month—home grown earlies, imported and maincrop—amount to about 300,000 tons.
My hon. Friend will understand, of course, that much depends on quality, rate of consumption, and so on, but, given fairly normal circumstances, this is a reasonable minimum requirement. 611 This year, marketings from our home early crop amounted to only about 50,000 tons in June. We had, of course, more available from Jersey this year in June—35,000 tons—because their crop, too, was late. Normally, it is earlier than this. Nevertheless, in the first half of this month we had to depend almost entirely on imports for our early potato requirements.
Even in the last week of June, when we would expect home supplies to be quite heavy, total availabilities from the home and the Jersey crops combined were less than they were even in the last week of June, 1962, when there was a shortage, and about a third below availabilities in the last week of June, 1961, when, although supplies were plentiful, prices were not exceptionally low.
What, then, was the position over June? This is important. Although my hon. Friend took the whole position, this month is extremely important. Supplies consisted of 35,000 tons from Jersey, about 50,000 tons of new potatoes from the rest of the country, together with about 75,000 tons representing the residue of the main British crop. Total home supplies were thus about 160,000 tons. Given that we normally need around about a minimum of 300,000 tons of potatoes of all kinds in June, if we are to have reasonable supplies, this leaves about 140,000 tons to be covered by imports from various sources.
Imports of earlies in June this year were much less than in June, 1962, but still they were quite heavy, and it is also true that imports of main crop potatoes were free to come in until the end of the month because of the shortfall in supplies from the 1962 main crop. About 78,000 tons of earlies came in during June, and about 37,000 tons of main crop potatoes, making about 115,000 tons altogether.
Thus, roughly speaking, total supplies were 115,000 tons of imports plus 160,000 tons from the home and Jersey crops, making about 275,000 tons altogether against a normal requirement figure of 300,000 tons. I hope that I carry my hon. Friend and the House with me. I looked into this very carefully. We have the position of a gap between normal requirements and the actual amount available.
612 As for prices, the main wholesale price range for what little of our first early crop was available in the first half of the month was from £60 to £90 a ton, and even in the second half it was from £24 to £60 a ton. These are high prices for June—no comfort, as I am fully aware, to our growers who missed the very early market through no fault of their own but because of the season and the weather, but a clear demonstration that the imports which we had were needed if we were not to have sky-high prices for the housewife. My hon. Friend will agree that we did not want that.
The situation has changed drastically this month. Because of the lateness of the season, liftings recently have been well above normal with a consequent collapse in prices. In the last week of this month, for example, liftings were probably about twice the amount lifted in the last week of July, 1962, and more than 25 per cent. higher than in the last week of July, 1961. But here again, I cannot see that imports have had any appreciable effect, because from all that I have been able to ascertain they have been very small indeed in July, partly perhaps because of the price factor.
My hon. Friend mentioned one or two specific points, and I will try to deal with them. I fear that he has underestimated the difficulties in forecasting the avail ability of early potatoes. Essentially, this crop is lifted and marketed at once. It is not, as in the case of main crop, stored for use in the remainder of the season. Therefore, however good our information about the acreage of first earlies, it can rarely be much of a guide to the quantity of earlies which will be available in May, June and July. Although one knows the acreage, it is difficult to forecast with any accuracy the quantity or the time when they will come on the market.
In the years 1955 to 1962, marketings from the first early home crop before the end of July varied between 320,000 tons and 500,000, which is a very wide variation indeed. It is this uncertainty about the quantity of new potatoes which will be available in the early season, combined with the fact that the season is of limited duration, which is the basic cause of the uncertainty in any forecasts which one can make. This is something which simply canot be controlled by the Government, and it cannot be laid at our door that we have not done better.
613 Now, the question of total imports. I think that my hon. Friend estimated that total imports this year would be about 260,000 tons. Of course, I cannot say exactly how many new potatoes will be imported in the year as a whole. So far, up to the end of June, 208,000 tons have come into this country, which is appreciably lower than imports in the first half of 1959, 1960 and 1962, and only a little above the level in the first half of 1961.
§ Mr. Brewis
Will my hon. Friend say whether that includes the Cypriot figures? I have fairly official information that it was 213,000 tons plus 52,000 from Cyprus.
§ Mr. Scott-Hopkins
I am taking total imports up to the end of June. Perhaps my hon. Friend's figures are a little later. As he knows, imports of new potatoes during the rest of the year are, on the whole, very small indeed. It is all very well for the hon. Member for Kilmarnock (Mr. Ross) to smile, but he must know that imports are very small, and there is only a trickle of Mediterranean supplies before Christmas. If he thinks for a moment, he will understand why. Our main crop comes in and there are no imports available.
My hon. Friend is quite right when he says that imports from Cyprus have tended to increase over the years, but up to the end of June this year they were 45,000 tons compared with 66,000 tons up to the end of June last year. Up to the end of June, 1961, they were 45,000 tons and in 1960, the same period, they were 48,000 tons. There was, therefore, a drop from last year, and about the same as in the previous year. The Cypriot crop was late this year, too, and growers there have a considerable quantity left on their hands.
My hon. Friend made a point about the definition of early potatoes. I assure him that we have consulted all the interests concerned in the proper way, and I do not think that we can go much further. There would not be much purpose in setting up a committee. Cypriot growers have their own difficulties because they have been left with part of their crop on their hands. However, I note the points which my hon. Friend 614 made about this particular crop. I think that they have some relevance.
As my hon. Friend said, maincrop imports are only allowed in during years when they are needed. They were certainly needed, this year. I hope that I have shown the House that, up to the end of June, on the figures of total requirements and of the home crop, they were needed. I assure my hon. Friend that the situation was such that all concerned accepted that we were justified in continuing imports up to the end of June this year.
As regards French potatoes, I do not want to labour the point about the extension of the import period because, as the House knows, this has been explained by me at Question Time and on other occasions. The reason for the decision was based purely on plant health grounds, and the application was made by the French authorities. We are parties to the International Plant Protection Convention of 1951, and it is in our interests to see generally that it is observed.
We have undertaken not to restrict imports under the plant protection legislation unless it is necessary to do so on plant health grounds. We judge the period during which we can import potatoes safely from our past experience of imports from that country and our knowledge of the seasonal incidence of pests and the measures taken by that country to control them.
Therefore, we were bound to base our judgment on plant health grounds alone and we were bound to accede to the French request this year. No Colorado beetle has been found in potatoes imported from France during the past ten years. Our plant health regulations do not ban the importation of potatoes from all areas where Colorado beetle is found. What they do is to require that the exporting country should adopt certain safeguards, including washing, rebagging, and so on, to ensure that the Colorado beetle is not a danger to this country.
There is no reason for me to enlarge on that point, which has been covered previously. It will become obvious when I say that in the whole of June, French imports wore only 4,700 tons out of total imports of 115,000 tons. This illustrates their importance.
615 As my hon. Friend has said, an announcement of great importance was made by the Potato Marketing Board this afternoon, that it was entering upon a buying programme with its own funds from 1st August to 14th September in respect of first early potatoes. I understand that the Board will buy at £10 per ton. Neither the Government nor the Board, however, can possibly say at this early stage of the season whether there will be a surplus from the coming main crop season, but we are prepared to carry out the obligations under the terms of the agreement which was negotiated with the producer reptives. But the agreement does not provide for retrospective effect, and I certainly cannot give an assurance that any such arrangement would have retrospective effect. I cannot say more on that point.
I hope that I have made it clear to my hon. Friend that the peculiarities and difficulties of the early potato market this year had their root in the unusual seasonal circumstances and I am most sympathetic to those growers who have suffered from them. I am sure that the leaders of the industry fully recognise this. We appreciate that consequences have been serious to our own early growers. I should like 616 my hon. Friend to know that I have assured the industry that we are ready to discuss with them any views which they might want to put to us against this background.
I accept that this has been a difficult season; indeed, it still is. I am glad that the Potato Marketing Board is entering the market and trying to bring stability at this stage. I hope that what I have said will reassure my hon. Friend that we are alive and sympathetic to the position.
§ 11.57 p.m.
§ Mr. William Ross (Kilmarnock)
Whatever the Joint Parliamentary Secretary has said will not reassure my constituents in Ayrshire who grow early potatoes, or the constituents of my hon. Friend the Member for South Ayrshire (Mr. Emrys Hughes), who, had he been present, would have been putting the point forcibly—
§ The Question having been proposed after Ten o'clock and the debate having continued for half an hour, Mr. Speaker adjourned the House without Question put, pursuant to the Standing Order.
§ Adjourned at two minutes to Twelve o'clock