HC Deb 24 March 1965 vol 709 cc691-701

9.30 p.m.

The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. John Mackie)

I beg to move, That the Market Development Scheme (Extension of Period) Order 1965, a copy of which was laid before this House on 10th March 1965, be approved. As hon. Members will know, this scheme of grants is aimed at the promotion of efficient marketing of agricultural and horticultural produce. It was introduced after the 1962 Annual Review for an experimental period of three years, and £1½ million was made available for the purpose. The three-year period ends on 31st March, and grants so far approved total rather less than £700,000. The purpose of the Order is to extend the scheme for a further three years with a view to making use of the unallocated part of the £1½ million. This will give effect to an agreement reached, subject to parliamentary approval, with the National Farmers' Unions during the recent Review.

Although less use has been made of the scheme than was provided for, 160 projects have been approved and desirable marketing developments have been assisted in several spheres. The scheme has been ably administered by the Agricultural Market Development Executive Committee set up by the National Farmers' Unions under the chairmanship of the right hon. Member for Guildford (Sir R. Nugent). The success of the scheme has in no small measure been due to the interest stimulated in the industry by the Committee. I compliment the right hon. Member on the enthusiastic way in which he has carried out his duties as chairman.

During the recent review it was also agreed desirable to make provision for the payment of a higher rate of grant than at present for certain projects initiated by the Committee. An Order, subject to negative Resolution procedure, will shortly be laid before the House for this purpose. Grants at present vary from 25 per cent. to 75 per cent. of the cost of projects, depending upon the particular circumstances in each case. At present, applicants, naturally, confine themselves largely to projects which promise to give a financial return. The object of the higher rate of grant, which will be 90 per cent., is to enable the Committee to initiate desirable research in fields which otherwise would be neglected and which would not lead to significant financial gains to the applicants. However, as I have said, the object of the present Order is to extend the operation of the scheme for a further three years and I ask hon. Members to give that their approval.

9.33 p.m.

Sir Richard Nugent (Guildford)

May I thank the Joint Parliamentary Secretary for the kind remarks he made about the members of the Committee and myself in operating this scheme. I welcome the Order, which will prolong its existence for a further three years. I think that the scheme has been a considerable success in stimulating the improvement of marketing for farmers and growers generally.

As the hon. Gentleman said, the scheme started three years ago. In fact, it was mooted for four years ago, at the suggestion of my right hon. Friend the Member for Bedford (Mr. Soames), who was then Minister of Agriculture, Fisheries and Food. At that time there were considerable doubts whether it was workable to have a scheme of grants to stimulate this development, but, in the event, it was brought into line for 1962.

I join with the Parliamentary Secretary in congratulating the three farmers' unions of England, Scotland and Northern Ireland on the calibre of the membership of the Committee set up to perform this very difficult task. It is always very difficult to get a lay body to administer grants of public money and to work directly with a Government Department. This is what they have done. Making grants in this field of agriculture and horticulture marketing, which is a highly complex and diverse field, is a particularly difficult exercise. The fact that this has been done for three years without a single disagreement between the Committee and the Minister is a credit both to the Ministry's officials and to the Committee, and, indeed, to the officers of our Committee who have worked so well.

It has been, I believe, a very successful pump-priming exercise to stimulate farmers in this way. In this field, at present, very rapid changes are taking place. All of us who are interested in farming are most concerned to help and to stimulate farmers to catch up with the developments which are taking place, making the best of it in their own interests and for the good of the whole community. There are two major forces in agricultural marketing today. First, is the housewife's demand for standard quality, oven-ready food, which she can buy off the shelf at the supermarket and know that she will get good value, which she can cook without the work of preparation.

At the same time as this is happening in ever greater volume and ever greater spread, the big farmers are improving their techniques of production and marketing and so reducing their unit costs, their profit margins. These two factors are pressing very hard on the position of the small and medium-sized farmers. All farmers should be studying the changing tastes and demand of the consuming public, but the smaller farmer cannot set up a marketing organisation which will relate him directly to it.

As I said, in both industry and commerce, the prizes go to the big battalions. When this scheme was set up, my right hon. Friend, and now hon. and right hon. Members opposite, were wise enough to see that something was needed here to give grants to encourage farmers to join in this development. We are enabled under this scheme to give grants to encourage farmers in market research, to find out what consumers want in improved grading, better presentation and, perhaps most important, in the formation of groups of farmers who can bring their produce together and so put themselves in the position of the big trader able to make contracts direct with the whole-salers.

There has been a great variety of schemes within the 160 which the Parliamentary Secretary mentioned, spectacular ones like grant-aiding the agricultural exhibit in the Moscow agricultural exhibition last year—which was a great success and has opened fresh markets for this country in Russia, as well as being of considerable value in improving relations with the Russians—and, at the other end of the scale, the clock auction scheme in the Gloucester market in the West Country. The most important work has been the encouragement of farmers to come together in groups for the improved marketing. Some have been in the form of companies, all in the general spirit of the Industrial and Provident Acts, some have been new co-operatives, and some have been old co-operatives making new developments. They cover the whole field of farm products.

We have taken particular trouble to try to encourage farmers in the fatstock field. I suppose that it would be true to say that we have had the most success there, and that a large number of weaner schemes have been started whereby the breeders sell their weaners to the fatteners, a number of breeders come together in a group and make contracts with the fatteners and make provision for a continuous supply of high quality weaners. This is of great benefit to both sides, because they get a continued supply of a guaranteed quality. I see that no less than two-fifths of the weaners sold off farms in Wales go to these groups, to the great benefit of both sides.

We have had some success with calf groups, but they have been up against the difficulty of markets with great fluctuations over the last two or three years, which have made contracts extremely difficult to keep. Some are going well now and those have brought the producers of calves together, mainly in the West of the country, to form groups to make contracts with the rearers of calves, sometimes in the West and sometimes in the Midlands, and finally to sell to the fatteners of the animals, who largely are tending to be in the Eastern Counties, where the large quantities of grain are grown.

We have this interesting pattern of specialisation developing, with these big beef operators in the Eastern Counties producing beef extremely efficiently and at a much younger age—at about 12 months rather than the traditional process of two-an-a-half years. In the process not a few calves coming from the dairy herds, sired by beef bulls in Cheshire and Derbyshire, find their way north of the Border to Scotland and, in due course, back again to England as prime Scotch beef. There is a good deal in the process of management and feeding which helps to put the quality on before the animals are finished. We have to help in the development of specialised vehicles, which are very important to the transport of these calves and weaners if they are to avoid stress and set-back in being moved from one farm to another.

We have been able to help a number of farmers in this way to come together in groups and to get regular contracts which have been of benefit to them, but, on the whole, farmers are reluctant to come together in groups like this and to accept the discipline of the market which is involved. They are slow to recognise the benefits which they will get from being able to guarantee a certain standard of quality in the end product, which will progressively win them a reputation and thereby, over the years, give them a better return. Particularly when we have fluctuating markets, it is extremely difficult to get farmers to maintain an even supply.

I believe that the reason why we have had less success at the marketing end, at the slaughtering end, with the larger fatstock is that it is necessary to have a pretty considerable volume of fatstock flowing through at the slaughtering end if it is to be possible to make contracts with the big wholesalers or the big stores for a regular supply of high-quality meat. So far we have not had much success at that end. But this, I think, will come. As well as in fatstock, we have similar schemes going in potatoes, eggs, vegetables and cereals.

I should be quite wrong if I left the picture that this is universal. It is true to say that we now have a number of good examples where these schemes are operating to the benefit of both producers and consumers. Because all schemes receive full publicity and reports of every scheme are published in the newspapers, they are beginning to make their impact on the rest of the farming community. The lesson which we are trying to put over is that good marketing is not concerned only with finding a good outlet for the finished product.

Good marketing is concerned with finding out what the housewife wants in the way of a joint, of vegetables or of potatoes, and then reflecting that information back to the producing end, and with fatstock to the breeding end, so that the right kind of product will eventually come right the way through to the consumer. That is good marketing, and it calls for a really good organisation at every stage. It has been possible under the scheme to make grants to help this step by step.

I particularly welcomed the Parliamentary Secretary's news that under the new scheme we will have 90 per cent. grants for special purposes. This will make it possible for the Committee itself to promote research that would not be interesting to groups of farmers, marketing boards and others. One piece of research I am anxious to get under way is the conducting of a survey of all the groups which are now working. We urgently need to know just what is a viable group. Nobody really knows at present.

I suspect that the right size group for production purposes is the wrong size for marketing purposes. A big group to get enough produce coming through in a continuous stream might be right for marketing purposes while small groups might be right for production purposes, small enough to obtain the right team spirit and to have the necessary discipline accepted by all producers.

Perhaps we should go in for a number of small production groups, brought together in one organisation and one marketing group to make an outlet for their produce at the end of the day. By having a 90 per cent. grant it means that we need to find a sponsor with only 10 per cent. to put up to get this under way. I am sure that this will be of great benefit to all concerned.

There was another activity in which we were able to take part. We have found since we started on this work that we in this country are woefully behind in the development of horticultural and agricultural marketing. I suppose that the proximity to markets is so easy that we have not given much thought to the matter. In America, for example, there is a university chair of horticultural and agricultural marketing in every State. In Britain, there was not one, but because we began to learn about the problems involved we realised that it was necessary, as soon as we possibly could, to get some fundamental research going in this sphere and to get chairs of agricultural and horticultural marketing set up. We need to obtain some basic thought and have critical material collected to obtain a sound development of agricultural and horticultural marketing in this country.

My right hon. Friend the Member for Bedford (Mr. Soames), when Minister, was good enough to assist in the establishment of the first chair of agricultural marketing in Newcastle and recently, with the help of the growers and others, we have obtained a second chair, in horticulture, at Wye College. Perhaps we might call ourselves the midwives of this process, which I am sure will be a valuable development for the whole farming world.

This is a sphere of activity which needs fostering and development. Probably some independent body will be needed to foster and develop it in future. It will need to grow and it will need carefully looking after if it is to meet this major problem of agricultural and horticultural marketing. We still have a long way to go and farmers and growers need a lot of help which at present they cannot be given because, first, we do not have the information and, secondly, because we do not have the people to give it to them.

We are at the beginning. We have something useful in this scheme and we have done a useful job. I am glad that the Minister wishes us to continue doing it for another three years. This is only the tiny start towards solving a big problem. We will need a lot of help from the Ministry and we look to the Minister with confidence to give us that help.

9.49 p.m.

Mr. Alasdair Mackenzie (Ross and Cromarty)

As the Joint Parliamentary Secretary pointed out, the object of the Order is to make grants available for the efficient marketing of agricultural and horticultural produce. Three years ago this was a new departure and I am pleased to hear that the scheme has worked so successfully. I congratulate the right hon. Gentleman the Member for Guildford (Sir R. Nugent) and his Committee for their efficient working of the scheme in its early stages.

Marketing has always been important, and never more so than now, because it appears that the margin left for the producers is gradually diminishing. The attitude of successive Governments towards the industry make it imperative that a better marketing system is set up. Year by year at the Price Review the industry has been asked by increased efficiency to absorb millions of £s of increased costs, and this is not a principle just introduced by the present Government at the recent Price Review.

The industry has proved conclusively over the years that it is capable of increasing its standards of efficiency, but the benefits of this increase are lost by bad marketing. The gap between the figure that the farmer gets at the farm gate and what the housewife pays over the counter appears to be ever widening. How are we to overcome this problem? Surely, it must be by a better marketing system.

This is equally true of the horticulturist, and particularly of the small man if he is to be able to carry on. The small man who is efficient can normally be relied upon to present his produce in a condition that will appeal to the customer, and it is probably in that respect that he can most effectively compete with the large producer. However, it must be remembered in his case, in particular, that no matter how efficient he may be, if a large influx of produce from foreign exporting countries arrives here the market can be undermined. This is particularly true of perishable goods.

Where marketing boards would be an advantage, they should be set up, and I think that it will be readily agreed that this would be in the best interests of producers and consumers. We realise that there are many young men with the necessary experience and inclination who would like to take up agriculture and horticulture, but are unable to do so because of the high initial cost. Only a very limited amount of help could come to them through this scheme, but we hope that there may be other ways whereby they can be helped.

Apart from marketing boards, a great deal can be achieved through cooperative marketing. Here, we must give credit to the N.F.U. for having made considerable progress, in co-operation with various bodies, in promoting cooperative buying and selling. Where co-operative societies have had loyal support from producers they have proved a great success, but they must have active support, and, at the outset, there must be a good deal of voluntary work to get the societies working.

Producers who live near large consuming centres have a distinct advantage over those in remote areas. For those of us in the north of Scotland, transport is basic to the whole question. In this area we can produce the finest quality of farm produce procurable, but we do not reap the benefit because of our distance from consuming centres. Already A.M.D.E.C. is doing much in promoting better marketing in our areas, but there is a great deal more to be done.

I therefore hope that this Order will be approved for a further period, and that many more will avail themselves of its benefits. It is very interesting to know that the grants are to be increased. I hope that that fact will be made widely known, so that many more societies such as those I have referred to will be set up in various centres in order to help with this very important question of marketing.

9.55 p.m.

Mr. Peter Mills (Torrington)

I congratulate my right hon. Friend the Member for Guildford (Sir R. Nugent) on the work that he has done. The industry as a whole is indebted to him. I congratulate the N.F.U. on what it has done. Here, I think, there is a chance for me to congratulate the Government. I have not been able to do that in the last few days, but on this matter they have shown great wisdom by extending the period of this scheme. Perhaps this is the last time I shall be able to congratulate them for some time.

As a farmer and as a director of a co-operative movement, I am wholeheartedly in favour of co-operatives. This may sound strange coming from a Conservative, but I think that our future lies in organised marketing and in working together. There is no doubt that this is the sort of help we have received in the past and this is the sort of help we need in the future. Therefore, I welcome this scheme. It is another great step forward.

I do not believe that all the advantages are widely known. The Minister should have a publicity drive so that everyone knows the advantages of this scheme, because they are not well known in the South-West. I have slipped up. Having just started a pig group in the South-West, I did not realise that I could obtain some help through A.M.D.E.C. That shows that I must be slipping, but I will seek to remedy it in the future.

9.57 p.m.

Mr. John Mackie

On this occasion everyone has congratulated the Government on what they have done. This is certainly a change from what has been happening in the last few days. I welcome what the right hon. Member for Guildford (Sir R. Nugent) has said, particularly his point about the work the Committee did and the fact that in practically every case agreement was reached with the Ministry. There was no disagreement on what the Committee did.

The right hon. Gentleman mentioned a few of the schemes to show the interest which has been taken. He spoke of the survey he hoped to make into the number of groups in existence. He looked forward to having 90 per cent. and having to raise 10 per cent. to do this.

We are all interested in the question of chairs in agricultural marketing at the various universities. These are absolutely essential in this day and age. The right hon. Gentleman also made the point that the farmers are the people to encourage, particularly those in smaller schemes rather than those in bigger and more exotic schemes.

The right hon. Gentleman and the hon. Members for Torrington (Mr. Peter Mills) and Ross and Cromarty (Mr. Alasdair Mackenzie) spoke of the need to foster these schemes and to make them and the benefits arising from them widely known. I am sorry that the hon. Member for Torrington, because of his lack of knowledge, did not get a grant. However, that was not our fault. It was the fault of his colleagues, when they were the Government. I undertake that we will make these schemes as widely known as possible.

I am glad that the hon. Member for Ross and Cromarty appreciates the importance of absorbing costs by better marketing. I am sure that the hon. Gentleman has read the White Paper very carefully. He should know that his statement about what the Government are trying to do by means of the recent Price Review in relation to farmers absorbing costs was not correct.

That is all I have to say, except to hope that the House will accept the Order and to thank the hon. Member once again for his kind remarks.

Question put and agreed to.

Resolved, That the Market Development Scheme (Extension of Period) Order 1965, a copy of which was laid before this House on 10th March 1965, be approved.