WOOL MARKETING SCHEME

HC Deb 19 May 1966 vol 728 cc1717-28

10.28 p.m.

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

I beg to move, That the Amendment of the British Wool Marketing Scheme 1950, as amended, a draft of which was laid before this House on 21st April, be approved. This amendment of the British Wool Marketing Scheme is needed to make good a defect in the arrangements which the Scheme provides for appeals by producers against the valuation of their wool.

I think that I should, first, explain very briefly how the marketing arrangements under the Scheme work. Practically all producers of wool are required to be registered with the British Wool Marketing Board and must sell their wool to it. The Board arranges for the wool to be assembled, graded and prepared for sale by merchants who are appointed as the Board's agents; the Board then sells the wool at public auctions. Producers are paid by the Board by grades, the price of each grade being related to the overall guaranteed price determined by the Government at the Annual Price Review. The producer hears from the Board, normally within a week after grading, the total valuation of all his wool, and is entitled to appeal, within 10 days of receiving the valuation notice, to the appeal tribunal, which has the task of considering the valuation and may direct it to be altered. These, very briefly, are the arrangements provided for at present under the Scheme.

I should now like to deal with the change that we are proposing. The defect in the Scheme as it stands is that it does not give the producer a formal right to require that his wool should be available for inspection by the appeal tribunal; this, clearly, is important, as in the absence of the wool which is the subject of an appeal, the appeal clearly has less value than it might have. The purpose of the Amendment is to remedy this defect.

There is, however, a difficulty here which follows from the conditions of operation at the Board's grading depots. What happens is that a producer's clip is handled very rapidly by expert graders, each fleece being graded and thrown into a skep or basket for a particular grade. There are usually a number of grades in each clip, sometimes as many as 30. As the skeps are filled, they are emptied into bins or piles, where the wool becomes mixed with other producers' wool of the same grade.

This is necessary to save space and permit the bulking of the graded wool without congestion of the premises. All this means that it would be quite impracticable to try to solve the problem I have described by requiring that each producer's wool be kept separate by grades for two or three weeks until his right of appeal against his valuation has expired.

The solution we propose is that producers should be given the formal right on request to have their wool kept separate at the grading stage. This would formalise the current practice of the Wool Board, which has recognised this difficulty for some time and has been prepared to grant this as a concession to producers.

The Amendment is based on a proposal which the Board submitted to Ministers, but which has been modified in certain respects with the Board's consent as the result of a public inquiry into an objection made by a producer. The effect of the Amendment is that a producer has a right to have his wool kept separate after grading, under certain conditions. In the first place he must attend the grading in person, or through a representative, and the Board is required, if the producer so requests, to give him a reasonable opportunity to attend.

Secondly, the producer must request the grader, during or immediately after the grading process and before the wool is dispersed to bins or piles, to have the wool kept separate. This means that any producer who is not prepared to rely on the grading carried out by the Board's agent, and wants to make sure of being able to get a second expert opinion, will be entitled, as soon as the grading begins, to demand the segregation of all or part of his wool. Unless he cancels his request, the wool will then be kept separate until the time limit for an appeal against the Board's valuation has expired—that is, until 10 days after he has received notice of the valuation, or until his appeal, if he decided to make one, has been heard.

Finally, the Amendment provides that if a producer does not take advantage of this right and subsequently appeals against the Board's valuation, the appeal tribunal may decide the value of his wool upon such evidence as it may deem proper.

This proposed arrangement seems to be fair. There have been very few appeals against valuations—the average has been less than six per year for the last ten years—but I am sure that this Amendment will bring about an improvement in the appeal arrangements. As I have said, it gives every producer a definite right to have his wool kept separate, provided he is prepared to fulfil certain quite reasonable conditions.

10.34 p.m.

Mr. Anthony Stodart (Edinburgh, West)

If I understand it aright—and perhaps the Minister will confirm this—the producer has always been able to appeal if he gave notice within 10 days of receiving his valuation, no matter whether or not he attended the grading. I think that that has been a statutory right. What has not been statutory, but which has been practised in recent years, has been that a producer who attended the grading could ask for his wool to be kept separate pending an appeal, and this was done.

It is this which has now become statutory. It is quite obviously right that producers should be able to appeal if they think that their grading has not been done to their satisfaction. On the other hand, it is apparent that any appeal would lack much of its substance unless the wool was available, on its own, for separate inspection by the appeal panel. It is here, as the hon. Gentleman has rightly said, that one runs up against severe physical difficulties, because wool is extremely bulky stuff and there is not the space to keep it in any wool-brokers' establishment without creating a very large pile-up. If ever there was a case for a compromise this is it, and the hon. Gentleman has spelled out a pretty fair case for the compromise.

It is desirable that more people should see their clip graded because if they did it is possible that the quality of presentation might improve as a result of seeing the faults in the grading. That might serve to offset that quite disgraceful cut which the Government imposed upon sheep breeders in the recent Price Review. It might go some way to providing a solution to that. If the consequence of more attendances at the wool brokers meant more appeals, which would mean the setting aside of all these individual clips, then this could be extremely awkward, because the brokers to whom I send my wool grade 2½ million lbs. every year and 80 per cent. of that is graded during the months of July and August. Into this wool brokerage comes wool from half-bred, black-face, and Cheviot flocks, all at that time. In wool grading there are 19 grades of blackface, 17 grades of Cheviot and 23 of half-bred, making 59 in all, to be handled at any one time.

As the hon. Gentleman has said, each fleece takes only seconds to grade and even a very modest number of appeals could cause considerable havoc. It is interesting and significant that this firm of brokers has never yet been asked to put any wool aside by way of appeal. This seems to be in line with the figures given by the hon. Gentleman, that there are six appeals per annum from over 130,000 producers. One does not, therefore, need to be too gloomy about the physical difficulties that may be encountered.

As far as I can make out, the general procedure is that the first stage is that the wool leaves the farms and goes to the brokers. They send an acknowledgment to the farmer which gives the gross weight of each bale and a total net weight. The brokers grade the wool, I imagine within the next few days. This is important. They then send a sheet to the headquarters of the Wool Board, in Bradford, giving the grades and the weights in each grade and the deductions which have been made for various faults. The Board inserts on this sheet, or an identical one, the price per 1b. and the gross value of each grade and posts that to the producer, with a cheque. I notice that last year I received my acknowledgment from the brokers for the receipt of my wool on 26th July, and that my valuation and cheque arrived on 12th August, 16 days later.

I have just one reservation. Presumably, the broker keeps a duplicate of what he sends to the Board—that is, the grades and the weights and the deductions. I wonder whether it might be to the general satisfaction if the broker were to keep a third copy and post that to the producer. I wonder whether or not that figure which the hon. Gentleman quoted of six days is really a true one, and whether the producer does get his cheque within six days of the grading being done. Perhaps he will confirm that. I have a suspicion that it could be a matter of 10 days or a fortnight. I wonder if it might not be a good plan if the producer could get his duplicate immediately of the grades, the weights and the deductions, and he could then, if he wished, look at the Schedule and work out the valuation and thus anticipate the notice which comes from the Wool Board, possibly 10 days later.

That is the only reservation I have. In general, I welcome this, and I repeat, if people can be induced to make sure of their clips being graded it may well do the industry a lot of good, in that people will tend to take more trouble about their actual presentation.

10.42 p.m.

Mr. Peter Mills (Torrington)

I welcome this Amendment of the Wool Marketing Scheme not only because I think it a good move, but because it will be of great benefit to many producers, particularly in the South-West—and, after all, the South-West has one of the largest sheep populations in the country. I welcome it because it is designed to improve arrangements for appeals by producers against valuations of their wool.

I believe that this is an improvement, and that it is only right and proper that we should be constantly seeking to improve our marketing schemes and methods of marketing. No marketing board must stand still. Every endeavour must be made to facilitate the marketing of wool. Producers, wool buyers, and, indeed, the Wool Board itself, must be on the alert these days, when the wool industry races great competition. I believe that this Amendment will help in the marketing and smooth functioning of this most important industry.

It is not only an improvement, but it is a safeguard to the producer, I believe. Surely that is always necessary. Marketing boards, because of their size and strength, can, if they wish, wield the big stick. I do not believe that they usually do in practice, but it is right, surely, that every safeguard to the producer should be put into practice. It is not only a safeguard, but, of course, it is a little encouragement, too, to the sheep farmer these days. Goodness knows, he has had little encouragement lately, especially in the last two Price Reviews, when he has had 2d. a 1b. cut off his wool. This will at least help him obtain the best price he can get.

The effect of the Amendment will be that the farmer, and the tribunal hearing his appeal, and, of course, the Board, will be very careful that they leave nothing to chance and that a fair and right solution is found. I hope that producers will take advantage of these facilities, and, indeed, inspect their wool as it is graded. We do not want the wool sheds cluttered with farmers inspecting all the time, but I am certain that the fact they can watch the wool being graded will be of great benefit to them. Surely, as my hon. Friend said, this is the way to learn and to try to improve the quality of the clip. One should listen to the grader as he points out the various factors which down-grade the quality of wool.

Having said this in favour of the wool producer, it is important to look at the other side of the picture. I want to pay a tribute to the wool merchants for all that they do for the farming community. I hope that the Amendment will not be abused by the producers, that they will act reasonably, that they will keep to the procedure, not delaying the inspection longer than is necessary, and that they will act promptly, because surely this is in their own interests. Delays mean loss of money and extra expense—and the expenses of the Board are constantly rising. I believe that there will be another 1d. knocked off the clip this year because of the increased costs. We want nothing more which would increase those costs because it is the farmer who suffers in the long run.

I hope that all concerned will co-operate to the full to make a success of this great industry because, unless we do, we may find ourselves in serious difficulties due to the very fierce competition which the wool industry is up against. I hope that there will be this co-operation, and I welcome the Amendment wholeheartedly.

10.47 p.m.

Mr. Joseph Hiley (Pudsey)

It is not often that the House hears the voice of a spinner of wool, but I do not think it necessary for me to declare an interest because I shall not be particularly critical about the Amendment.

I listened with envy to my hon. Friend the Member for Edinburgh, West (Mr. Stodart) explaining that the producer of wool usually received his cheque in about 16 days. Those of us who have to go to the great expense of financing purchases of wool would consider ourselves extremely lucky if we could get our money back in anything like that time.

Not only must the producers of wool improve the marketing of that very important product; at the same time, they should never lose sight of the fact that they should produce wool in a way which would cause us who manipulate the wool far fewer difficulties than we have at present.

I hope that the Board will not have too many people taking advantage of the provisions of the Amendment because if they do, then I fear that there may be many difficulties for the Board. But I am satisfied, particularly from the experience of recent years, that that is not likely to happen.

May I ask the Minister one question? Does the Board itself embark on any marketing activities either as a Board or through some other interest which it may have acquired? There is a feeling in some wool circles that that has happened and it is a source of great disquiet to the wool trade. I should be pleased to know from the Minister whether that is the position.

10.49 p.m.

Mr. Ian MacArthur (Perth and East Perthshire)

I join my hon. Friend the Member for Torrington (Mr. Peter Mills) in welcoming the Amendment, but I should like to sound a note of caution to the Joint Parliamentary Secretary. I agree with my hon. Friend who, in welcoming the Scheme, called attention to the importance which it might represent for the wool producer in terms of encouraging him in the presentation of his wool to the broker and thus perhaps obtain for him the possibility of a marginally better return.

I hope, however, that the welcome given to the Amendment will not be interpreted by the Parliamentary Secretary as being a mark of favour for his wool and other agricultural policies. In my constituency the wool producers are in a very bad way indeed. We have had a period of rising costs, falling returns, restricted credit and now, on top of all this, the requirement of the Government that hill farmers, as well as other farmers, should make an interest-free loan to the Government for a period of some months.

I welcome the Amendment as far as it goes, but I hope that the Minister recognises that very urgent action is required, particularly for hill farmers, if this great industry is to survive in future.

10.51 p.m.

Mr. Hector Monro (Dumfries)

I support the remarks of my hon. Friend the Member for Perth and East Perthshire (Mr. MacArthur). This is an important matter for Scotland and I am glad to see that the Minister of State has taken his seat on the Front Bench.

At no time in the history of farming this century have the farmers of Scotland felt more badly treated by any Government. I do not want to cast reflections on the Scheme because it is of great advantage to hill farmers. However, considering the activities of the wool brokers for many years, it is unfortunate that the producers should have been saddled with the cost of the inquiry, which, basically, was totally unnecessary. With those remarks, and with the strong wish that the Government will take some action to help the financial position of farmers, I support the Amendment.

10.52 p.m.

Mr. Marcus Kimball (Gainsborough)

As my hon. Friends have said, we are discussing the Amendment against the scandalous background of the reduction in the guaranteed prices of wool. This has covered a period during which we have suffered a disastrous reduction in the hill sheep subsidy. I know all about it having been guaranteed for five years, but it has been reduced by 5s. and, in some cases, by 7s.

We agree that the Amendment is a small step forward for the better presentation of our wool. We wool producers spend our whole lives reading before we can get the price schedule right. We have exhortation from the Wool Board to present our wool in a better manner. I am glad that the Minister of State is in his place, because one of the Department of Agriculture farms in Scotland is still using bloom dip. It is incredible that this should be happening in this day and age. The Government urge us to produce better wool and they are doing everything possible to make it more difficult for us to present our wool in a better manner.

I had hoped that hon. Gentlemen opposite would say something about the work of the Sheep Development Association. After all, one of the easiest things to do is to put a bit more wool on sheep. Some of the sheep owned by the Department of Agriculture in Scotland are bare on the belly and behind the ears. Half a pound of wool is worth quite a lot of money, even to the Government.

We have had a welcome opportunity tonight to air some of the difficulties facing wool producers. Those difficulties have not been made any easier this year. Although we have the right to argue about the grading of our wool, that does not alter the fact that we are being paid a great deal less for our wool and our sheep.

10.55 p.m.

Mr. John Mackie

With permission, I speak again in order to reply to the points which have been made. This is the old story. We bring forward these Motions and the opportunity is taken by the Opposition to use any stick to have a crack at us. The leniency with which you, Mr. Deputy Speaker, deal with them is to be commended when they tend so much to get out of order.

The hon. Member for Edinburgh, West (Mr. Stodart) said that there has always been this right of appeal, but that has not been so valuable because the wool could not be inspected. Having been mixed, it cannot be inspected and so the appeal is not so attractive. Farmers should sometimes inspect the wool. That would give them ideas on how to present it and to get a better price. I agree with the hon. Member for Torrington (Mr. Peter Mills) that we do not want to see wool sheds cluttered up with farmers hindering the business. The hon. Member for Edinburgh, West said that there were in all 59 different grades. If a farmer is changing his broker or had dissatisfaction a year before, that would be a good reason for him to attend. I would not advise him to go too often and have the wool separated.

The hon. Member questioned my figure when I said that within a week after grading the figures were sent. It is normal within a week and the farmer is entitled to appeal within 10 days, but that is not of great value if the wool is not kept separate. I will take note of the suggestion that a duplicate should be sent to the farmer straightaway. These procedures are carried out roughly within 16 to 18 days.

The hon. Member for Torrington welcomed the improvement in the marketing and the safeguard which these Amendments provide. He took the opportunity to suggest that sheep farmers had not been encouraged and that the very small cut in the wool was depressing. I return to the crack someone made about the begging bowl. People will not face the fact that sheep stocks in the country are increasing. People do not go on producing something which does not pay. The hon. Member for Edinburgh, West should face the facts. The same kind of thing happened over the annual general meeting of the N.F.U. in Scotland. It was said that cattle yards were empty all over the country, but returns came out in the next week showing that there was an increase in cattle stocks.

Mr. Stodart

rose—

Mr. Mackie

The hon. Member does not like his toes trodden on. I am making my points and I will not give way. The hon. Member should accept the points I am making.

The hon. Member for Torrington paid tribute to the merchants and brokers and that was well deserved. We were happy to hear the hon. Member for Pudsey (Mr. Hiley) put in his word as a spinner. He asked whether the Board had trading rights. It asked for trading rights on the basis that it could not do the job properly unless it had them and was in the business. The Board does its job well and for that reason it has trading rights. The hon. Member for Perth and East Perthshire (Mr. MacArthur) uttered a word of caution, but I am not sure whether it was caution on what I was saying or as a mark of favour. The Amendment is purely and simply for the purpose of improving the marketing scheme, which is not a reason for debating the whole agricultural policy. His caution must be taken as a mark of favour or not, as hon. Members wish.

The hon. Member referred to Perthshire farmers and the Selective Employment Tax but, as they are all self-employed, they will not have to pay the tax.

Mr. Stodart

rose—

Mr. MacArthur

rose—

Mr. Mackie

I said that I would not give way, and I stick to that.

Mr. MacArthur

Completely irresponsible.

Mr. Mackie

It is not irresponsible. A tremendous number of the farmers are self-employed and will not pay the tax. A number of them may have a shepherd, but a tremendous number are self-employed and will not have to pay the tax. As the hon. Member must know, most sheep farmers in Scotland are self-employed. They are in his area.

The hon. Member for Gainsborough (Mr. Kimball) said that we had cut the hill sheep subsidy, and he made a debating point of it. We have not cut it. The hon. Member cannot make that point, because we stabilised it in 1965 at a figure about 8s. or 9s. above the average of the previous five years, and we increased it by 1s. last March.

I have not given way, because this is not a debate on agricultural policy, although hon. Members opposite have tried to turn it into one. This is a debate on a Scheme relating to the Wool Board. I have simply replied to the points brought up by hon. Members opposite. I take it that the House will now accept the Amendment that the Wool Board wish.

Question put and agreed to.

Resolved, That the Amendment of the British Wool Marketing Scheme 1950, as amended, a draft of which was laid before this House on 21st April, be approved.