§ 2.12 a.m.
§ Mr. Hector Monro (Dumfries)
I am glad to see the Under-Secretary of State for Scotland here at this hour to take part in the debate on the agricultural support Estimates of about £12.7 million, which give us the opportunity of a pretty wide debate on agriculture in Scotland. The Estimate covers nearly every facet of Scottish agriculture, from the guarantee scheme through production grants, calf subsidy, beef cow subsidy, hill cattle and hill sheep subsidies, improvement grants, crofter grants, winter keep, the Farm and Horticulture Development Scheme, and drainage to farm structure and even the EEC's European Agricultural Guidance and Guarantee Fund.
I shall not touch on all the items in that frightening list. The comprehensiveness of the Estimate shows how right it is to have a general discussion on agriculture and put the whole situation in perspective. I shall naturally concentrate on the damage done by the Minister of Agriculture and the Secretary of State for Scotland to the beef industry. I welcomed last month's statements on the beef sector, but my theme, which was very much the theme of the last debate, is that what was given was much too little and much too late. At present prices the variable premium, the new initiative of the Minister of Agriculture, may be worth a small increment per hundredweight, perhaps as low as 2p. It does not take the price of beef far towards the £22 or £23 a hundredweight that every reputable authority considers to be the economic minimum.
However, the important point is that the Minister has accepted the complete failure of his policies and has reversed them. But how we wish he had done that last spring. His prejudice against intervention destroyed the market and effectively removed the guarantee. The guarantee of intervention replaced the old deficiency payment guarantee. In August 1973 the exact terms of our guarantee were made clear to the agricultural industry. We began to operate it in February this year.
I hope we shall hear no nonsense from the hon. Gentleman tonight, when he replies to the debate, that we removed the floor from the market, because the Gov- 1762 ernment did that. We had no fear of intervention, although it is only part of a system to which we shall probably settle down in the future. We should always recognise that a country like New Zealand is prepared to have 50,000 tons of lamb in intervention in the frozen store at any one time. There is no reason to be afraid that putting beef into intervention will necessarily cause long-term problems in the future.
However, had the present Government operated intervention from March 1974, when they came into office, the minimum would now be about £20 to £21 per cwt. rather than the £18 per cwt. which the Minister is striving to obtain at present. Our criticism of this move in March, and each step since, has indeed proved to be right. That is why today's recovery operation has become a rescue operation.
I have said that problems existed when the Government took office. I am in no way trying to hide that fact. But the actions of this Government in March turned this farming year into a disaster.
On 20th November 1974 the President of the National Farmers' Union of Scotland, following the most recent announcement from the Minister of Agriculture, subsequent to his return from Brussels, said:As far as the level is concerned, this is not enough to repair the damage done to the industry over the past nine months, and we deplore the fact that the Government have not been able to make retrospective payment to help those who have already suffered.The blame for the exceptionally serious damage to many sectors of the industry lies firmly at the Government's door. The many speeches the Minister of Agriculture in the spring, summer and autumn, recorded in the OFFICIAL REPORT, will for ever remind him and the Secretary of State that it would have been far better to have listened to the advice of farmers, whether on food production or on taxation, than that of the Left-wing politicians. No hon. Member of this House has ever had to eat so many words—which, in view of the short period of time in which they were uttered, must be indigestible—as have the Minister of Agriculture and the Secretary of State. I dread to think what must have been flitting between him and the Minister of Agriculture. It must have been singularly unpalatable food. It is particularly sad that so many 1763 unfulfilled assurances have been given and so many hopes raised.
Every beef farmer knows how disastrously the policies of the present Government have failed. The tragedy is that so many farmers have suffered under this incompentence and will suffer for a long time to come. As the President of the National Farmers' Union of Scotland said, one sector has faced the worst of it, namely hill and upland farming. Despite the fact that the hill and upland farmer has been forced to sell his suckled calves and store cattle before the onset of winter, he has received no bonus and no retrospective payment. He had no alternative but to go to the market in October. This is the most important point. I hope the Minister will be able to offer some hope or encouragement to the farmers in this sector. There has been an element of help provided by the increase in the calf subsidy. But it is a pittance compared with the drop in the market which has been caused by Socialist muddle and loss of confidence.
The extra £10 calf subsidy sounds attractive, but producers have lost between £50 and £70 a head on suckled calves. They averaged £40 this year, compared with more than £100 last year. There has been a drop of between 60 per cent. and 70 per cent., and we must not forget that this is one of the main sources of income for any hill farm.
This catastrophe has occurred not only to hill farms. Black and white heifers and bullocks have been running at about £50 or £60 for 7 cwt. beasts, and in the breeding side of the industry blue-grey heifers, which are most important in the hill and upland farmlands, have dropped perhaps 50 per cent. in 12 months, from £250 to about £120, at recent markets.
The Minister knows that the hill farmer cannot retain any extra stock. He has no extra winter keep for the purpose. The cattle have had to go. Much of this has been confirmed by the report of the Highlands and Islands Development Board on fodder available in Scotland. I hope that the hon. Gentleman will be able to say a little about the hint that was given—indeed, it was more than a hint—by his colleague the Minister of State for Agriculture that something 1764 might be done about forage in the very near future.
The problems of the hills have to be coupled with a 60 per cent. drop in the value of cast ewes, lamb prices which in many cases have dropped by 50 per cent., transport costs which have doubled, and costs generally which have gone up by 25 per cent. The one welcome feature, although it has been a difficult commitment for farmers, has been the increase in agricultural wages, which have gone up substantially during the past year.
We all join in welcoming the additional provisions for safety for farm workers, and this House will always give that priority at any time. But, following the disastrous drop in fat cattle prices which I have mentioned, naturally we had a fall in store prices which is just as catastrophic.
It has been a rough time for stock rearing farmers. I know that the hill cow subsidy for 1975 will be paid in January or February of the coming year instead of in December 1975, but am I right in thinking that this is purely an accelerated payment and not an additional payment? Farmers are concerned about what the position will be this time next year when, for all they know, they may be in similar financial difficulty.
We appreciate that the situation is different in the case of the hill ewe subsidy and the additional payment, to which I give a very warm welcome. But how quickly does the Minister hope to pay out the new hill cow and beef cow subsidies? We have received the forms already. I got mine this morning, and they appear as usual to be frighteningly complicated. They have arrived before my 1974 payment, so I hope that both payments will come as rapidly as possible.
All farmers greatly appreciate the work of the officials of the Department of Agriculture and Fisheries. The livestock officers and veterinary officers do splendid work on the ground throughout Scotland. I do not believe that any delay is on their account because they do their work as expeditiously as possible.
Sometimes I wonder whether it is the famous Scottish Office computer, which gives us so much trouble with education grants, which holds up the grants for livestock subsidies. I am thinking particularly of the calf subsidy. I have firsthand evidence that it is sometimes several 1765 months after ear punching before the calf subsidy is paid. I hope that the Minister will do everything possible to speed up the administrative side of the payment whenever he has an opportunity to do so.
I turn briefly to grading standards relating to the headage payment and the variable premium. I am in no way blaming the graders who work in the markets. I ask the Minister to think about the regulations. I understand that he is trying to enforce the old deficiency payments standard of the FGS—the fatstock guarantee scheme. This is causing serious concern in the dairying areas of Scotland —namely, Ayrshire, Dumfries and Galloway.
Naturally the farmers in those areas responded to the call for as much extra beef from the dairy herd as possible. They are now finding that the steers and heifers coming forward from the dairy herd are not all of a conformation to pass the grading standards as laid down in the regulations. Will the Minister reconsider the regulations or even permit a half payment of the premium subsidy to animals of the type that I have mentioned? I know that the Minister is trying to be helpful about headage payments and I think that that might be a way out.
I have first-hand evidence, as I expect he has, from Smithfield after talking to butchers and farmers in the beef trade, that frequently the difference is as little as a penny a pound between sides that have had the headage premium and have passed the grade and those that have not. The sides that have not been graded have lost the full premium. That is a serious matter. I hope that we shall have a little more flexibility on the grading of stock from the dairy herd.
I shall not ask the Minister about the recent changes in slaughterhouse regulations and export to the EEC. It is half-past two in the morning and it is a complicated matter.
I ask the Minister to tell us a little more about how matters are likely to go in future. In the debates last month the Minister could not commit himself further than the end of February. We are now moving into a new farming year and it is desperately important that confidence returns to the industry. I hope that the Minister will at least say that there will be a floor in the market after February.
1766 I hope that the Minister will be able to say more about what the headage premium or the variable amount will be after February. That affects not only fat cattle but the store trade.
I hope that the Minister is concerned about the large increase in calf slaughterings. He knows as well as I do that in 18 months, if we continue at the present rate, there will be little prime beef for the housewife. The latest figures from the Ministry show that beween the end of October and the middle of November 1973, 15,000 calves were slaughtered. Between the same period this year 65,200 calves were slaughtered, four times as many as over the same period the previous year. That conflicts with what the Minister's right hon. Friend the Minister of Agriculture, Fisheries and Food said on 7th November—namely:The additional £100 million recently awarded to the dairy sector will also help to ensure a continuing supply of calves for beef production,"—[OFFICIAL REPORT, 7th November 1974; Vol. 880, c. 1216.]That is not what is happening and that must cause concern, as does the serious drop in artificial insemination of 11 per cent. in October, which shows just how the stocking rate in this country will fall under the present Government's policies.
I know that it is no use asking the hon. Gentleman when we shall debate the O'Brien Report, because it is not his responsibility. I am sure that he is as anxious as are many hon. Members present tonight that we should have the debate as soon as possible.
Many hon. Members may raise other points. I should have loved to talk of the problems in regard to pigs, poultry and sheep, and the serious problems in horticulture, as the date for the end of the fuel oil subsidy is known.
The action taken in the February price review by the Conservatives and the action taken in September by the Minister of Agriculture have gone a long way to meet the difficulties with milk. There may still be a shortage, but I think that we have turned the corner, although a number of manufacturing plants still feel concern.
I must not talk about the criminal taxation which agriculture is facing in the near future, or about forestry, which may reach a very serious position later this year.
1767 This farming year has set the industry back a very long way indeed. Many able men will go to the wall. It is no fault of those men. It is solely due to the incompetence of the present Government and the wrong decisions made by them since March. We have had expedient after expedient, failure after failure, and a stubborn refusal to listen to sound advice. I have just heard some rubbish from hon. Members of the Scottish National Party over my left shoulder. That is only because they fail to attend debates and hear the details which I and my hon. Friends have explained from the Opposition Front Bench about the situation over the last 12 months and the reason why that situation built up. That was caused by the world grain crisis and the cost of oil last winter. All of this could have been resolved by the right decisions last spring. Hon. Members of the Scottish National Party may make their speeches later.
The issue is that farming is a long-term business. I hope that the Minister of Agriculture accepts the invitation extended by my right hon. Friend the Member for Cambridgeshire (Mr. Pym) to set up a round-table conference to strive for long-term agreement and a united approach to long-term stability, always linked with a fair return and fair profitability in the interests of farming and of the housewife. That must be our aim. But tonight, the Government stand condemned for their short-term incompetence.
§ 2.32 a.m.
§ Mr. John Corrie (Bute and North Ayrshire)
I must declare an interest. As a Scotsman, I find that there is a great choice of debates this morning on this Bill, all of great importance. However, I attended an agricultural dinner a few hours ago. It became quite clear to me as each farmer spoke that the Government's policy of successive injections of capital into the industry is not helping the crisis situation in the slightest way in relation to the hill farmers. This applies to Scotland, England, Wales and Northern Ireland.
Not only that, but it seemed that there was complete confusion about what was announced last week by the Minister with regard to the beef cow and hill cow subsidies. Farmers still seem to think that the payment they will get in January is 1768 next year's payment and that no payment will be made thereafter. I believe that we shall be getting three payments within 15 months—perhaps the Minister will correct me if I am wrong. There will be the payment that has just been made, a payment in January and a payment in the following January. If that is so, very few farmers realise it. Can we not have more direction from the Ministry on points such as these? At the dinner which I attended tonight, it was obvious that there was tremendous confusion about these points in the minds of farmers.
Could the Minister explain the new form which has been sent out for the hill cattle subsidy? How will the numbers of cattle qualify for payment be decided? Will it be on 4th December returns? If so, will in-calf heifers qualify?
Will farmers who have increased their herd since 4th June be paid on their higher numbers and will they get the brucellosis premium? Will those in the process of changing from milk to beef under the scheme qualify, and from which date? Will the Government consider stopping the scheme, with the tremendous shortage of milk at present? These are questions to which farmers want to know answers.
I have been checking prices last week and this week, and again there was a disastrous drop in store cattle prices in Scotland on Monday and Tuesday. There are far too many young cattle in Britain today, and many will die this winter from lack of fodder. Concentrates are up £10 a ton and hay has risen £20 a ton since Monday. I wonder whether, if given a choice, cattle would rather die here or be exported. Like my hon. Friend the Member for Dumfries (Mr. Monro), I hope that in the very near future we shall hear something about the O'Brien Report.
With the world's deserts growing and useable agricultural land shrinking daily, those countries which can do so should be producing maximum output to feed the starving millions. Someone has to pay for production, and if the consumer is not going to pay a production price for food, a subsidy on the end product is the only answer. If the man fattening cattle gets the right price, he will create a competitive market for store cattle and thus give confidence to the whole industry and improve the lot of hill farmers 1769 who are staving off their bank managers, hoping that things will improve.
Many who are hill farmers tonight will not be hill farmers next spring if confidence and a further cash injection are not given soon. This could be done by a headage payment on the number of cattle between six months and one year old they had on their 4th June returns. That would mean that farmers who sold out at a heavy loss could be singled out and given a cash payment.
I hope that the Minister will look at the serious situation developing in the artificial fertiliser section of the industry. Output depends entirely on these fertilisers, and the more intensive the unit, the more nitrogen is required. Many firms are not even quoting a price in their spring catalogues for nitrogenous fertilisers. In the spring there will be none around and without them, production in the whole industry will slump.
Finally, will the Minister say something about milk prices next April when the present 7.7 pence per gallon will be halved? Can that price not be built into the board price? Will there be an automatic rise from the EEC in the price of milk?
It may be the farmer who suffers at present, but in a very short time it will be the consumer whose food will be rationed by price or by shortage.
§ 2.40 a.m.
§ Mr. Iain MacCormick (Argyll)
It is a pleasure to follow the hon. Member for Bute and North Ayrshire (Mr. Corrie). What I have to say is closely allied to what he said. While we owe this discussion to the luck of the hon. Member for Dumfries (Mr. Monro) in drawing the right to raise a subject, I do not think that his party can take a great deal of credit for what has happened in the last three years in agriculture in the Highlands.
I am, or was, dissatisfied with the progress they made, or rather did not make in the matter of entry to the Common Market and the unwinding of the system of agricultural support. The hon. Member for Dumfries and his compatriot on the Front Bench may think that I am unkind and cruel, but I despair at his Front Bench. I regard what they did as 1770 being the product of a policy of "too late and too little." They have neglected the problems facing the hill farmers in Scotland.
§ Mr. Alick Buchanan-Smith (North Angus and Mearns)
Did not the hon. Gentleman recognise in Argyll between 1970 and 1973 a considerable increase in the cattle population? Was that just chance? Did he not also notice in the Common Market negotiations the preservation of production grants for hill and upland areas, which was welcomed by hill farmers, including those in Argyll? Did not the hon. Gentleman notice those two occurrences?
§ Mr. MacCormick
Indeed I did. But people were being encouraged to do that. However, they then found themselves with nothing to fall back on. That is part of the trouble which faces them.
The main reason why I wish to speak is to say something about the position of the hill farmers in Argyll and indeed in the Highlands and Islands generally. It is probably not well enough understood by many hon. Members who represent big cities and the areas of the United Kingdom in which there is no agriculture that there are many sides to farming. I have met many farmers in the last few days who have been at Smithfield this week who are doing very well, to some extent at least at the expense of farmers who live in my part of the country.
It is essential that the Government should understand that farmers in the upland areas of the Highlands and specially in the Islands face special problems which nothing they have done has helped. For example, the recent announcement about guaranteed prices has come too late, because farmers in Argyll, and in the Highlands and Islands generally, have already sold their animals. They will not benefit from higher prices or guaranteed prices.
On Islay there are about 500 calves more than there would normally be at this time of year which the farmers could not get rid of. They will have to be fed over the winter or they will die in the most horrible circumstances, and that we must not contemplate. We need something far in advance of the extra payment or the advanced payment of the hill cow subsidy. We want an immediate cash 1771 injection in this area of agriculture in Scotland.
I have always believed that agriculture must be an integrated industry and, therefore, that agriculture in the Highlands and Islands is an important part of the whole. If this part of agriculture is to flourish, we must take special care to ensure that it continues to flourish in the Highlands and Islands. If it is to do that, the Government must make up their mind. I hope that the Minister will say that he will give a substantial cash injection in the next two or three weeks to the fanners in the areas I have mentioned. The situation is as urgent as that.
§ 2.45 a.m.
§ Sir John Gilmour (Fife, East)
What the hon. Member for Argyll (Mr. Mac-Cormick) said underlines what I have felt for some time and feel needs to be said again. The whole of the livestock industry is bound up with the price of the cereal crop. The world cereal crop price is determined in the autumn, and both last year and this year farmers had to wait too long after the high prices of cereals became apparent to get recoupment.
The Government have done something to help the seller of fat cattle, but in this week's markets the price has gone down by about £1 a hundredweight. Price guarantees have come too late for people in the hill and upland areas. In our negotiations in Brussels we should press for a determination of prices at a time of the year when it becomes apparent what the price levels of feeding stuffs will be. In addition, our farmers need to make their forward planning for the next year's crops in the autumn. It is too late to make determinations in the spring.
At the Smithfield Show this week Scottish beef producers have demonstrated their prowess in the championships which they have won in all the major classes. They deserve to be congratulated by all who are interested. Many of the animals that achieved championships had a little Common Market blood in them. That clearly shows that the Scottish farmer moves with the times and makes certain that he uses the best animals available for breeding.
One London evening newspaper carries a report by one of our leading butchers 1772 underlining the fact that unless something is done to redress the balance of calf slaughterings, to which the hon. Member for Argyll drew attention, the housewife will suffer even more in future from the lack of cattle.
The livestock breeding section of the industry has seen the cereal crop producers receive the biggest rewards. Therefore, there will be a temptation for more people to plough up grass and to grow cereals. Yet the whole emphasis in our future policy ought to be on having a balanced industry so that we do not have people suddenly going from one form of production into another. People should not have all their eggs in one basket— I know that this is not a possibility in hill and upland areas, but it is possible in other parts of the country—but, as far as possible, the risk should be reasonably spread.
We still do not give sufficient attention to the difficulties of the poultry industry. Whereas cattle can be turned out to grass in the summer time, hens cannot be put out to grass in the same way. That matter still needs further investigation by the Minister.
I turn now to horticulture. The subsidy on oil ceases at the end of this year. The horticulture industry is grateful for the help that it has had this year. However, the sudden cutting off of help at the end of the year will lead to a difficult situation. The difficulties will be particularly acute in Scotland because, although we get plenty of sunshine in the summer, we get very little in the winter. We probably have lower mean temperatures than anywhere else in the United Kingdom. Therefore, the difficulties of the Scottish horticulture industry are greater than in any other part of the country. My hon. Friend has underlined the real difficulties not just for agriculture but for all consumers unless we get a reasoned agricultural policy which will give every section of the industry a proper return.
§ 2.50 a.m.
§ Mr. Russell Fairgrieve (Aberdeenshire, West)
My hon. Friend the Member for Dumfries (Mr. Monro) showed what a wide field we could be discussing. At this late hour, no doubt the House will welcome the fact that I intend to limit myself to three general points.
1773 First, we must always encourage the maximum amount of food to be grown within our own shores. The efforts of agriculture mean that we grow 60 to 70 per cent. of our own needs. But we can never grow too much of our own food, not only for strategic reasons but also because of the terrific aid that this is to our balance of payments.
Second, I hope that agriculture will not be a political football. As is the case with every other country, it is our basic and biggest industry. It is not just what happens on the land that counts but what goes with it, in food processing and in the production of agricultural vehicles and instruments and so on. That is why one should be careful about the effect on agriculture of political policies, especially in taxation.
§ Mr. MacCormick
Does the hon. Gentleman appreciate that, under the present tax laws, it is virtually impossible for a farmer with a good deal of money to pass it on to his son?
§ Mr. Fairgrieve
I was about to go on to point out that both the main parties over the last two decades have encouraged farms to grow bigger. That is why we have the most efficient agriculture in Western Europe. Suggested taxes will reverse this trend and cause farms to become smaller. Agriculture should not become a political football and taxation should not make it less efficient. This is particularly so in West Aberdeenshire, which is world famous for its production of quality beef cattle. The producers have been buffeted and made to lose money because they have been efficient.
Third, we must treat agriculture in a European context. We cannot isolate ourselves from world problems. The temperate zones of Western Europe must recognise their position vis-à-vis other parts of the world with other climates. It is amazing to hear anyone talk of "mountains" of food. A far better word is "buffers".
How is it possible in Western Europe to produce too much food when two-thirds of the world's population is under-nourished? We talk about giving a bare 1 per cent. of our gross national product to the under-developed world. Is it beyond the wit of man, or some form of organisation, if necessary, to reduce 1774 the 1 per cent. to 0.9 per cent. and give the rest away in kind, paying our producers the market price for such food?
To sum up, at all times we should encourage maximum food production from within our shores. Second, because agriculture is our main basic industry it should never be a political football. Third, we must look at our agricultural industry in its European context vis-à-vis the rest of the world.
§ 2.56 a.m.
§ Mr. Nicholas Fairbairn (Kinross and West Perthshire)
I am obliged for the opportunity to speak on a subject which, above all others, is of importance to the future of this country, namely whether we shall be able to provide our own food within the near future. Any advanced nation, particularly if it is an importing nation, which does not have self-sufficiency in food production within the next 30 years, will not eat.
Agriculture is a subject which may in the past have been considered as unimportant. Now it is central to the whole life of the country. In the context of the Supplementary Estimates, £12 million is a small sum. There can be no question but at present those who work in the agricultural and horticultural industries of Scotland are anxious and unable to see their future within any of the sort of boundaries which they would have been able to forecast in the recent past. In the past three or four years the agricultural industry has made progress in all departments—be it beef, milk, pigs or eggs—towards self-sufficiency. The policy of the Government has, unintentionally, restricted that advance. I do not make a party political point when I say that it is essential that we continue our advance towards agricultural self-sufficiency in all commodities.
That involves what may be a conflict in an inflationary period. It is essential that such a conflict should be resolved. If we are to produce our own food it will have to be paid for by the consumer, either directly or through subsidies. While it may be attractive in the short term to seduce the consumer at the expense of the producer, this is a short-sighted policy because ultimately the consumer will suffer. We have a shortage of bread for industrial reasons and of sugar for political reasons. Many other 1775 commodities will fall short, and increasingly shorter, in the years to come, unless we have a broad and long-term strategy for agriculture, particularly in Scotland, where agricultural policy has been successful and agricultural attitudes have a deep tradition.
§ Mr, Iain MacCormick
Does not the hon. and learned Gentleman appreciate that the system of guaranteed prices we had in this country until recently helped not only the farmers but the consumers as well?
§ Mr. Fairbairn
I fully appreciate that. I am sure that the hon. Gentleman must be referring to beef, but it was essential, in order to go into the EEC, at some point to remove that form of beef guarantee and to substitute the intervention system, which the present Government refuse to implement. At the time it was done, it was not conceived that the price would ever come near to the bottom in the market as it has done. It may have been right or wrong but that was the case.
§ Mr. Andrew Welsh (South Angus)
Will the hon. and learned Gentleman explain how the intervention policy for beef under the common agricultural policy would help Scotland, with its limited—or no—cold storage facilities?
§ Mr. Fairbairn
It would help because the Scottish farmers producing the beef would be getting proper prices instead of what they are now getting in dribs and drabs. They could have been offered proper prices long ago had it not been for the absurd measures of the Minister of Agriculture. Those prices would have been available had the Minister not been patently compelled not to operate them since last March.
Whatever approach one has in party political terms, agriculture is a long-term matter. My hon. Friend the Member for Fife, East (Sir J. Gilmour) spoke about poultry. Beef production is a longer process. We are still operating— I do not comprehend why—a milk subsidy. It is quite extraordinary.
Farming is a long-term process. The most essential thing to it is not an annual review, far less the innumerable, tinkering schemes introduced by the Minister, however much they may have 1776 helped towards restoring confidence. Despite these measures, in my constituency as in others there are people who have no confidence to do what is their duty in the agricultural industry—to provide not just for their own future but for our salvation.
At the moment, we have a system whereby there is an announcement one week of a slaughter subsidy and the next week that two premiums will be paid in one, while the next month the Government announce that they will introduce some complex system whereby a sort of intervention is to be operated. No industry can operate on such a basis.
Supposing the Ford Motor Company had to sell its cars on the basis of having to accept whatever price it could get, even at a loss, while Mercedes-Benz got an £86 premium and Renault got an £84 premium on each of their cars, and every time Ford exported a car it had to pay £31 to do so. Would not such a system destroy our motor industry? It would, and that is what we are doing in agriculture. I am glad that Lord O'Brien honourably told us that several members of his committee reversed their view on hearing the evidence. Despite the fact that we are forbidding ourselves that market, we are allowing an import trade, particularly from Ireland and from unknown origins.
§ Mr. MacCormick
Is it not ridiculous that we are not allowed to export live cattle to the Continent? In my constituency, we can export live cattle from Islay and Tiree to the mainland, and that takes less time than the journey from England to France.
§ Mr. Fairbairn
I agree but, as I understand it, that is not the objection by those who object. I think that the Government have a duty, with the beef industry as it is, to ensure that the recommendations of the O'Brien Committee are fulfilled and that this country permits the export of live cattle, subject to full safeguards.
In the present situation, what the agriculture industry requires is not only cash. A lot of people are making losses and do not see any way out of bankruptcy, and even if they stay in the industry they cannot see a sustained, safe and sensible future for the job that they are doing so diligently.
1777 The threat of the destruction of farms by the Government's taxation policies should be removed immediately. The Government should move away from the policy that we have seen in the past few months of consistently attempting, under pressure, to come to the rescue of the bankrupt just before it is too late and give us a long-term policy that will bring confidence to the industry. Unless that is done, eventually those who did not provide for this nation to be self-sufficient in food will lose the votes of the farming industry. The people as a whole will suffer, and they will wreak vengeance on those who did not provide the proper policy at this stage.
§ 3.8 a.m.
§ The Under-Secretary of State for Scotland (Mr. Hugh D. Brown):
I congratulate the hon. Member for Dumfries (Mr. Monro) on being lucky in the ballot, and even though it is 3 o'clock in the morning I do not consider it unreasonable that we should be discussing this subject.
When I heard the hon. Gentleman threatening to tell me that all the subsidies were inadequate and promising to go into great detail, my first reaction was that I did not know the farmers received as much as in fact they do. However, the hon. Gentleman was lenient and confined his remarks to one or two main points and I shall attempt to reply to them.
I appreciated the hon. Gentleman's comments about the work done by officials of the Department, but I thought that he was a little ungenerous in talking about delays in making payments. If delays have been occurring, I must tell the hon. Gentleman that I am not aware of them. The fact is that the payments have been made at an earlier date than ever before. I assure the hon. Gentleman that not all the weaknesses—nor all the good points—have arisen since March of this year. The payments have been advanced more this year than ever before because we want to clear them out of the way before the next lot becomes due, and I shall refer to that later.
I did not have the advantage of being at the farmers' dinner. I do not know whether there was anything personal in that.
§ Mr. Brown
There is some discrimination here. I suspect that the longer it went on the more violent the attacks became on the Government.
Concern has been expressed about the O'Brien Report, and we in the Department appreciate the urgency of the matter. However, as hon. Members are aware, an assurance has been given that the House will have an opportunity to discuss it, and I do not think that I shall be putting my foot in it if I say that I would welcome the maximum pressure in that respect. I do not mean that pressure should be exerted only on my right hon. Friend the Lord President of the Council to arrange for an early debate. I mean that hon. Members opposite should do a bit of conversion among some of their own colleagues, and that applies to hon. Members on this side of the House, too. I assure hon. Members that we in the Department are seized of the urgency of the matter.
I realise that 1974 has not been an easy year for many sectors of Scottish agriculture. Costs have risen and output prices have not kept pace with them. However, one thing which has been impressed on me is that agriculture is a long-term industry. I think I see one hon. Member opposite shaking his head. The problems and difficulties did not start in March. Hon. Members cannot have it both ways. Of course, it is a long-term industry. It is desirable that there should be confidence in the industry so that people can plan ahead, but equally it is the wrong decisions or perhaps the miscalculations which were made a year or two years ago which are partly responsible for some of the difficulties which have been experienced this year.
Some of the difficulties which have been mentioned started before the present Government came into power. We have done quite a few things to correct the situation. Milk production was down by over 5 per cent. last year. There was a slide in store cattle prices. The pig breeding herd had fallen by 15 per cent. and feed prices were 50 per cent. higher than a year earlier. All these things were waiting for us. Hon. Members opposite are not doing a service to the farming community if they create the impression that all the problems have suddenly emerged with a wicked Socialist Government. I do not think anybody outside 1779 the House is infantile enough to believe that.
I do not wish to take up the time of the House by referring to all the money that has been put into the industry, but I should like to make one point which touches on what was said by the hon. Member for Fife, East (Sir J. Gilmour). I am now able to announce that provisional estimates indicate that wheat, barley and potato yields are substantially above previous record levels. The hon. Member was fair enough—perhaps he did not intend to be—to indicate that some sections of agriculture are doing reasonably well just now.
§ Mr. MacCormick
I think the hon. Gentleman is quite right, but there are other sectors of agriculture which have never been worse off, and these are concentrated in the hill farming areas. Will he not do something to help them?
§ Mr. Brown
I hope that hon. Members will give me a chance. I am leaving the most difficult part to the last. Hon. Member is in a most interruptive and talkative mood tonight. I do not know whether they have all hon. Members been to the farmers' dinner tonight.
I had expected the hon. Member for Fife, East to raise the question of sugar beet, and I have to find some way of introducing the fact that other sectors are doing well.
§ Mr. Fairbairn
Will the Minister assure us that if, as he says, the potato yield is a record, there will be no question of a ban on exports?
§ Mr. Brown
I have a good Department but it is not geared to letting me know what is happening in Forfar every day of the week.
One hon. Member asked me how the new scheme was working. He should read the Scottish Farmer. Even I read it. It was explained there in great detail. Some of the farmers at the dinner tonight clearly do not read it. They could get the full information there. If there is any other means of publicity which would appear useful we shall certainly look into it. I do not think that the hon. Member has been talking to the best-informed farmers if they did not know that there will be three payments in 15 months.
The hon. Member for Dumfries raised specific points about beef market prices. There has been an increase in prices recently which, I suppose, is an encouraging feature. It is the intention of the additional premia to give the overall figure which, while not guaranteed, it was hoped would reach £18 per cwt. over the period. In his more charitable moments the hon. Member would give us credit whether it is for too little too late, for securing the reasonable prospect of fulfilling that promise by my right hon. Friend.
Fodder presents a serious problem, particularly in the Highlands and Islands and in certain parts of Aberdeenshire and Banffshire. We have the report of the survey done by the Highlands and Islands Development Board, and discussions are going on between the Department, the Board and the National Farmers' Union of Scotland. We are well aware of the situation. When I say that the problem is not urgent I mean that there is no animal starving as of today, but that does not indicate complacency. We are aware of the situation and hon. Members should wait so that we may give them some indication—it will not be tonight but in the near future—of what action may be taken to help.
The hon. Gentleman also raised the question of grading. I have written to him about it, and I have asked the Department's chief fatstock officer to take a further look, with the MLC, at the point that is causing concern. If the hon. Gentleman has specific points to raise, or wants a wider examination, I shall be only too willing to assist. I agree that we must be able to satisfy farmers throughout the country that there is a fair application of 1781 standards. It is difficult. If there are five judges at a cattle show there can be five different opinions. It is like the Miss World competition. It may be a bit more scientific, but it must be difficult to ensure equality of treatment in various markets. It is not like an insurance benefit, where the person who has paid 50 stamps receives the same rate, no matter where he claims it.
The hon. Member for Aberdeenshire, West (Mr. Fairgrieve) and the hon. and learned Member for Kincross and West Perthshire (Mr. Fairbairn) raised matters of great interest—the long-term supply of food and a possible contribution to the under-developed countries. I shall not go into them in detail, as they do not arise on the Supplementary Vote, but I accept the general promise that if there are difficulties, as there obviously are, they could lead to a shortage of food throughout the world. If the seed corn is not sown, nothing comes up.
My right hon. Friend the Minister has alrealy said that he will consider favourably the possibility of a Select Committee or, as someone said, a round table approach. We want to give stability and confidence to the industry. We are fully aware of the difficulties that have been faced by certain sectors of farming in Scotland, particularly the livestock sector. But the Opposition cannot disclaim responsibility for the difficulties. Farming is a long-term business, and the difficulties began last year, when the Conservatives were in power.
It is no use saying that the difficulties would have been resolved by full-scale intervention. They would not, and European farmers realise that. I do not say that on the basis of any ideological objection. I think that most people recognise that it is not the complete answer. We have already indicated that we are moving backwards in time—but really moving forwards—to something resembling more the kind of guaranteed price scheme that used to exist.
It does no service to farming to exaggerate the short-term problems and decry the industry's ability to overcome them. The industry is basically strong and efficient. In view of the help the Government have given and are giving, I am not at all despondent about the future.
1782 Since taking office in February, the Government have given a massive injection of additional capital to Scottish fanning of £45 million to £47 million. That is not chicken feed. [Interruption.] I know that the hon. Member for Glasgow, Cathcart (Mr. Taylor) is an expert on agriculture as well as education, but it is quite a considerable sum. It has gone into the rearing of beef calves, pig production, beef production, hill and upland farming for both cattle and sheep, milk production, glasshouse production and the maintenance of the land. It provides a clear and positive indication of our recognition of the short-term problems and of our determination to encourage the maximum economic production of food. It is a mark of our good faith in upholding an industry, employers and workers alike, which is so significant for the future wellbeing of Scotland. We shall continue to pay due regard to an industry that makes such an important contribution to the economy of this country.