HC Deb 29 November 1967 vol 755 cc428-9
30. Mr. James Davidson

asked the Minister of Agriculture, Fisheries and Food if he will consider seeking to establish a Land Bank to give fixed-interest loans for both farming and forestry on the lines of the French Credit Agricole which lends at 3 per cent., details of which have been sent to him.

Mr. Hoy

No, Sir. I do not think that an institution on these lines would be appropriate in view of our present arrangements for supporting and financing agriculture and forestry.

Mr. Davidson

Are the Government aware that the present Bank Rate is a crippling burden on the agricultural industry and that if the industry were permitted to invest a higher proportion of borrowed capital it would be able to reduce its liabilities more rapidly than it can at present?

Mr. Hoy

Yes. We appreciate what the interest rates are, but the House as a whole will appreciate the arrangements that we have made through the agriculture corporations for the lending of money to British agriculture. Interest rates cannot be taken alone when considering the position of agriculture. We have also to consider the support price and guaranteed prices in our system.

Mr. Emrys Hughes

Why does my hon. Friend give such a conservative answer? Is not he aware that many farmers who have overdrafts at the bank complain bitterly about the high rate of interest? Does not he think that some new initiative would help to relieve them from the pressure of high interest rates?

Mr. Hoy

Yes—and the Government have made provision in this respect. For certain lending institutions we provide a certain sum of money free of interest. As hon. Members opposite will remember, I had to defend this in Committee on the last Agriculture Bill.

Mr. Godber

Will not the hon. Gentleman acknowledge that if he is defending existing interest rates as being necessary for farmers it adds importance to the claims made to his right hon. Friend for an early decision on increased prices to help the farmers?

Mr. Hoy

My right hon. Friend has never sought to deny what they were. He will also be aware that the Government guarantee money and provide money which keeps these long-term loans down to the lowest possible figure. I am not seeking to use this as an excuse, but many people in other industries would be grateful if they could get loans on the same terms as are granted to agriculture.