SCOTLAND (HELL AND UPLAND FARMERS) (Hansard, 25 October 1966)

§ Mr. Hector Monro (Dumfries)
If the Government had listened to or acted upon the speeches by hon. Members on both sides of the House during the past 18 months, expressing grave concern over the problems of hill and upland farmers, this debate would not have been necessary. The number of hon. Members who are showing a keen interest in this debate indicates how important we all feel it is, and I wish that time allowed them to join in and make constituency points.
The crisis which I am about to relate is due entirely to the stubborn refusal of the Government to listen to warnings and take action. Instead, they maintain an infuriating complacency. The Minister of Agriculture, Fisheries and Food, writing to my right hon. Friend the Member for Grantham (Mr. Godber) on 12th September, said that he was not unduly alarmed. How out of touch can one get?
Hon. Members brought this developing crisis to the notice of the Government last year, at the election in March and during the Second Reading of the Agriculture Bill in May, when I called for a crash programme for the hills.
In the debate on 6th July, when my hon. Friend the Member for Edinburgh, West (Mr. Stodart) moved a Motion deploring the failure of the Government's 981 hill sheep policy, I said in my opening remarks: What I found so extraordinary in the speech of the Minister of State was that there was no recognition of the fact that the plight in the hills is serious and that if much more drastic action is not taken on behalf of the hill fanners many of them will go to the wall and go out of business". I concluded my speech by saying: I implore the Minister"— and I am glad that he is here to listen again to what I said— to take immediate action to help this most important branch of farming, particularly in Scotland, where, if the autumn store sales do not show a very considerable improvement in prices, many hill farmers will be bankrupt by next winter."—[OFFICIAL REPORT, 6th July, 1966; Vol. 731, c. 622–24.] I think that, unfortunately, that may prove to be true. The Government therefore had no lack of warning, but they have not taken any remedial action.
I emphasise that I am speaking tonight about stock rearing, but the Minister must not think that the position of other branches of farming is satisfactory. All branches of the industry—from dairying to grain and potatoes—are suffering severely, and not only in Scotland. Hon. Members are equally concerned about the position in Cumberland, in Northumberland and Westmorland.
The Government must remember, too, that the store market on which the hill farmer depends for his main income is, in turn, lifted or lowered by the fortunes of the purchasing power of the feeding farmer on the arable lowlands, and there is, therefore, a direct connection between the prices of such commodities as barley and potatoes and hill sheep farming interests.
Throughout the Recess all of us, except perhaps the Minister, have received first-hand evidence of the alarming fall in the prices of store sheep and cattle. I shall not go into great detail, but the enormity of the drop must be brought home to the Government. I have figures covering tens of thousands of lambs and ewes of all classes for most of the auction marts in Scotland, and this debate has invoked a large correspondence from the farmers.
I shall not exaggerate the figures, nor will time allow me to give them all. Hill lambs and draft ewes have dropped on average—and it is difficult to strike a 982 mean—of about £1. Gimmers—and the Minister perhaps knows that they are the foundation breeding stock—have dropped by between £2 and £3, sometimes more. Smaller blackfaces have fared even worse, and heavier sheep like North Country Cheviots are down by £2. One large, well-managed farm in the North, selling thousands of lambs, was down 22s. a head for these lambs, and no less than 54s. 9d. down for his draft ewes, from 108s. 6d. to 53s. 9d. Another mart selling 18,000 ewe lambs was down no less than 39s. 5d.
My figures also show that 15,000 wedder lambs were down 22s., and 10,000 draft halfbreeds were 40s. down. That is a large number, and a fair average, and the Minister must accept that they are typical of the serious problem in Scotland at the moment.
All these prices are substantially below the prices ruling 10 years ago, despite the enormous rise in costs. The drop for lambs is fully 40 per cent. and in draft ewes 50 per cent. over this period.
I think that the position was fairly summed up by Mr. Morgan Milne, Convener of the Livestock Committee of the Scottish N.F.U., when he said last week: There has been an intolerable reduction in the sheep industry's income". I am sure there is hardly a farm without a very much reduced wool cheque this season. There has been, I know, a serious fall in lambing percentages due to the bad weather. This is not the Minister's fault, but it is his fault that he will not recognise the facts. The farms and marts which I have sampled come from all over Scotland—Hawick, Reston, Annan, Wester Ross, Argyll, Inverness, Granton, Perth, Stirling, Angus, and so on.
The position at Lairg was quite devastating with a 48 per cent. drop in lamb prices and a 47 per cent. drop in draft ewes. At Rogart, there was a 53 per cent. drop in turnover on ewes and a 28s. 8d. drop on the second sale for lambs. At Dingwall, there was a 50 per cent. drop in turnover in lamb sales. This includes, I know, the drop in total numbers, but it shows a very serious position indeed.
The Minister must recognise that the ewes form a substantial part of the hill farmer's capital and that all farmers have 983 suffered this heavy capital loss this season. For instance, on 1,000 ewes and their lambs, which is not an unusual quantity for a hill farm, taking into account the drop in the gimmers, the hoggs and the tups, the loss could well be about £5,000. This is very important in relation to farmers who may be forced out of business, because their valuations will be affected under the Hill Farming Act through the drop in prices.
I am a dairy farmer, so that I am not putting forward a case for my own financial improvidence at the moment, but I am speaking on behalf of the hill farmers and upland farmers of Scotland generally—and there are many hill farmers here tonight. Hill farmers know that there will be an occasional poor lambing, as lowland farmers accept barley shake. Although shake has provided a disastrous loss this year of £4 million in Scotland—a figure produced by the National Farmers' Union of Scotland. This can be overcome if the agricultural economy is buoyant and confident enough to look after a temporary setback. But in the present conditions created by the Government this situation has been one of acceleration from despair into disaster, and it has been extremely rapid. Confidence and morale have seldom, if ever, been worse than they are at the moment.
The effect on hill sheep is bad enough, but look at the suckled calf situation. I expect that the Minister knows that in recent years the cattle enterprises have been carrying the losses on the sheep enterprises. When I talk of suckled calves I mean the genuine hill calf which has never seen good land and which needs a long period of better keep for fattening. These typical hill calves have suffered a drop of from £10 to £15 this autumn, and with heifer calves it has often been £20—that is, if a buyer could be found at all. It is a tragic situation. Yet they must be sold because they cannot be wintered at home. I have heard of farmers losing up to £1,000 or more on their calves this autumn compared with last year. Coupled with the catastrophic fall in lamb prices, this means that incomes have been very nearly halved.
So grim is it in Inverness, in particular—and I am glad to see the hon. Member for Inverness (Mr. Russell 984 Johnston) here—and in Wester Ross that small farmers—often a crofting club—have been brought down to an income of about £4 a week. I have seen the accounts of a well-managed and well-costed farm in Wester Ross where there is only £181 left to live on until next autumn. This is a destitution rate. There is nothing else to turn to and no reserve resources, and there are hoggs to winter—and hogg wintering has gone up to £2 10s. this year. There is no income until next August, which means "10 months hard".
Today, there has been a meeting of the Inverness area of the National Farmers' Union of Scotland. Tonight, I had the opportunity of talking on the telephone to the chairman and the secretary. I was told that the farmers are "nothing else but damned angry" and that many are going bankrupt this winter.
Why has this happened? For far too long the hill an upland farmer and the feeder has had too little profit, if any at all. The guarantee for mutton and wool has remained outrageously low. I am certain that there will be an outcry at the meeting of the Wool Board in Edinburgh this week. Since 1954, the price of wool has dropped 9 per cent. to the producer while the costs have risen by no less than 68 per cent. Bank Rate at the moment is murder. Credit is hard to obtain and nobody can afford it. We want to modernise out of profit not on credit, but the profits just are not there.
I am not pressing the Government specifically on credit, as that is only part of the malaise. Had the Minister of Agriculture, Fisheries and Food made his Harper Adams speech in July rather than late in September, it might have been of some use, although it was significant that the biggest weekly drop in the price of ewe lambs occurred the week following the right hon. Gentleman's announcement. It was a speech full of small print and escape clauses and can be summed up by saying that the road to hell is indeed paved with good intentions.
Credit is more serious for the merchants and machinery suppliers, who are pressing the farmers. I pay tribute to the bank managers, who have been doing their best in difficult circumstances, without any instructions from the Government and with no release of special deposits. There is still no sign of the farm 985 improvement grant and no money for the Scottish Agricultural Securities Corporation. The Agriculture Bill drags on in Committee. The Government can get their prices and incomes legislation through in two weeks, but it may take two years to get the Agriculture Bill through, mainly because the Minister will not give the Committee which is considering it fair answers and information.
It is impossible to sell a farm because nobody can get the credit to buy it, not even sufficient money to reorganise to become more efficient. I need not more than mention the infamous S.E.T. loan which, the Minister will have noted from a Parliamentary Answer, has already taken £1¼ million out of agriculture since September. Nor need I mention the rise in transport charges due to the increased fuel tax.
On top of all that, the final straw is the Irish Trade Agreement. We appreciate the difficulties of Eire, but we must think of Scotland first. Under that Agreement we must accept 25,000 tons of beef and 9,000 tons of mutton in a full year and make deficiency payments to the Eire Government. In October, the Eire Government paid their exporters—not farmers—£4 10s., now rising to £5, for every bullock and store beast sent to Britain. Cattle have come flooding into this country and they cannot send them to the Common Market because of the tariff wall, which is now £3 4s. per live cwt.
Beef prices have slumped. In some markets last week the price was 120s. and some beasts were unsaleable. The guarantee is 184s., but with the deficiency payment at 25s., farmers are being completely ruined by the Government. The importation of Irish cattle has made complete nonsense of the Abatement Scheme, which was introduced to encourage orderly marketing, and now the abatement rate is 7s. 3d. per live cwt. The result of this action has been to knock the beef trade for six and this has had repercussions on store and suckled calf sales.
What action should the Government take in the short-term, for I am not tonight speaking of the long-term; about entering the Common Market, and so on? We want action at once for a special hill ewe subsidy. If the Minister of 986 Agriculture, Fisheries and Food could give forward information about pigs, as he did last month, he should certainly be able to do so for sheep now. We cannot wait until the Price Review which, of course, means waiting for payments until about this time next year. I remind the Minister that the Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food, the hon. Member for Edinburgh, Leith (Mr. Hoy), said in a debate in May, 1965, that if a disaster should occur in the future, he was sure that the Government would take special measures to meet it. Is this another promise that the Government have forgotten?
I give the Minister of State seven points on which to take immediate action. First, there should be a special interim hill ewe subsidy of £1—it should be £2 by next spring—which is the only way of immediately injecting money into the hill industry. Second, there should be a special subsidy for ewes on winter keep farms but which are not receiving the hill ewe subsidy; those on the eastern borders and up the east coast. A payment of 15s. per ewe would be welcomed now. We should, too, in view of the incredibly bad season, be prepared to consider a special subsidy for low-ground ewes in Scotland. Fourth, there should be a retrospective increase of 3d. on the price of wool to reimburse people for the losses they have had in wool this year.
Fifth, we should have an increase in the guaranteed price of mutton to help the feeders and to restore confidence. The Minister will be aware that we have lost the 2d. premium we used to have in Scotland. I would remind him that in paragraph 27 of the Price Review this year we read: The scale of abatements and supplements under the graduated deficiency payments scheme will be adjusted in the light of expected market conditions". What is he doing about that?
Sixth, we should have the extra head-age payment of £5, as in England, on hill and winter-keep cattle. The new beef cow subsidy has nothing to do with tonight's problem, and will not help it. We want, too, to retain the winter keep acreage payments, which are so valuable in Scotland. Seven, there must be urgent renegotiation of the Irish Agreement, with a Government promise to prevent 987 these imports as soon as possible. All this will cost a lot of money, but is it not well worth it to save hill and upland farming in Scotland? It is no use the Government offering money to the Highlands and letting the agricultural economy go to ruin.
Finally, I recall the Prime Minister saying a year ago: We shall not solve our economic problems without a vigorous import substitution policy through agricultural expansion". What a charade that has been.
When the Minister replies, I do not want to hear all about long-term prospects—integrating forestry, rural industries, university inquiries and commissions, and this and that—this is an urgent matter—although I would be interested to know what advice has been given by the Hill Farming Advisory Committee, set up recently. We want to know what immediate action the Government intend to take to rescue hill and upland farming from the economic crisis imposed by the Socialists. It is absolute madness to bankrupt a sheep industry prepared to play a part in the balance-of-payments struggle, so let us have from the Minister a straight answer tonight to the question: are we to have help this year or not?

Several Hon. Members
rose—

§ Mr. Deputy Speaker (Mr. Sydney Irving)
Mr. Willis.

§ Mr. William Baxter (West Stirlingshire)
On a point of order, Mr. Deputy Speaker. If an hon. Member does not rise, is it customary to call him?

§ Mr. Deputy Speaker
I must give the hon. Member the benefit of the doubt. I thought that he was rising.

§ Mr. Baxter
My eyes must have deceived me.

§ The Minister of State, Scottish Office (Mr. George Willis)
I congratulate the hon. Member for Dumfries (Mr. Monro) on having secured the Adjournment debate and on raising this question because, clearly, it is a matter of concern to both sides of the House. [HON. MEMBERS: "Hear, hear."] This is very understandable when one considers how important farming is to Scotland's economy. I make no apology for reminding the House 988 that not only is the Scottish hill farm by far the major part of the British hill farming industry, but problems affecting hill farmers tend to be felt earlier and more acutely in Scotland than elsewhere in the United Kingdom because of the altitude, latitude and remoteness.
This Government, from their very earliest days in office, have shown an appreciation of the needs of the hill farmers. [HON. MEMBERS: "Oh."] At our first Annual Price Review, in 1965, we increased the hill cattle subsidy and added 2s. per ewe to the winter-keep grant. We also put the hill sheep subsidy on a better and more secure basis at a rate nearly double that of the average of the preceding five years of Tory rule. I think that we should remember these things.

§ Mr. Michael Noble (Argyll)
Will the Minister allow me to remind him that this was done on a suggestion perhaps not entirely related to a year when the subsidy was considerably below the subsidy in 1964, which was a less bad year than this?

§ Mr. Willis
I have noticed that since the right hon. Gentleman has been in opposition he has developed a kind of mythology of his own about what the former Government did. I have not time tonight to destroy the myth he has created.
In our White Paper "The Development of Agriculture", in August, 1965, we foreshadowed measures now embodied in the Agriculture Bill to give continued assistance to hill farmers. I refer to the putting on a permanent basis the hill cattle and hill sheep schemes, the continuation of the winter keep scheme, and the proposed new hill land improvement scheme. All these are important to our hill farmers and I hope that hon. Members opposite will remember this in Committee. We shall be delighted to get the Bill as speedily as possible.

§ Mr. Anthony Stodart (Edinburgh, West)
If the hon. Member is anxious to get it as quickly as possible, will he encourage his hon. Friends to take a little more interest in answering the debates?

§ Mr. Willis
I have my own views about how the debates are answered and the performance of the Opposition and 989 the garrulity of some hon. Members. The hon. Member for Edinburgh, West (Mr. Stodart) burns a considerable amount of midnight oil thinking up suitable phrases with which to entertain us.
This year has shown that hill farmers are particularly vulnerable to adverse weather and other forces outwith their control. It is too early to fully assess the results of this year, since a lot of the information is not yet available. Work is continuing, but much more data has to be collected. I listened to the figures which the hon. Member gave and I would like to give some of our figures.
The hon. Member has something to say about lambing: the 4th June count showed a decrease of about 4½ per cent.

§ Mr. Noble
Does the Minister not know that in June not one farmer knows what the lambing position is? Is he totally ignorant of the facts of life?

§ Mr. Willis
I am not as ignorant as the right hon. Gentleman thinks. If he wants a reply to this debate he had better not interrupt so much.
I was going on to say that we are, however, aware that these returns may be inaccurate. The surviving ewes and lambs position cannot be accurately assessed until the present season is over and accurate figures cannot be quoted until the December figures are available. The number of ewes coming into the market has fallen because with the better weather farmers hold on to their stock in the hope of prices improving. Sales of ewes and lambs show no substantial drop, although one would expect this is a year of high ewe losses. Our provisional estimate is that ewe losses have been higher than usual but not abnormally high and lamb numbers are down by about 5 per cent.
The hill cattle herd has continued to expand, the 4th June figures being 6 per cent. up on 1965. Marketings of weaned calves since August are between 5 and 10 per cent. higher than last year. Winter during the past year started earlier and continued well into the spring. [Laughter.] According to the Scottish N.F.U., this is unusual. This is part of the case, I understand—that this inflated the feeding bill on hill farms. This is part of the case put to us and I accept it as true. I do not see anything funny about it. I thought it a serious matter; certainly 990 farmers have given me to understand that it is a serious matter, but hon. Members opposite seem to think there is something humorous about it.
The condition of lambs, particularly at early sales, was below normal. Rather better weather in late August and September led to an improvement in marketings. Lamb prices at the early sales were down by 10 per cent. on last year, but recent sales have shown an increase. Cast ewe prices have been lower.
Calf prices have been on average about £5, or 13 per cent., down. [An HON. MEMBER: "No."] These are the figures. I did not question the figures given by the hon. Member for Dumfries, but I am now giving the figures which we have. Hon. Members usually like to have these figures.

§ Mr. Paul Hawkins (Norfolk, South-West)
The Minister may be interested to learn that I have been selling cattle in my auction mart at a drop of £15 per head since April.

§ Mr. Willis
I did not know that Norfolk was in Scotland. We are discussing Scottish hill farming.
Buyers of all classes of stock have been ready to pay for good quality animals in strong condition, but poorer types and those requiring a longer keep have been at a very marked discount. Profit margins for feeders of sheep and cattle have been low for a number of years. And despite the increase in the guaranteed price for beef and mutton they have clearly made up their minds to pay less this year, particularly where the age, type and condition indicated a long finishing period. Other factors have been the level of imports after the shipping strike and the virtual ban since July on exports to Europe.
Clearly, this has not been a good year, particularly for the hill sheep fanner. After discussions with the Scottish N.F.U., we have embarked on a special joint survey to ascertain the out-turn of the 1966 lamb crop——