HC Deb 14 March 1974 vol 870 cc511-20

10.0 p.m.

Colonel Sir Harwood Harrison (Eye)

I make no apology for raising the subject of the pig industry in East Anglia, although it has been mentioned a good deal in the debate on the Address this afternoon. I congratulate the Parliamentary Secretary who is to reply on rising to his present post. I believe that it will be his maiden speech from the Dispatch Box, and perhaps he will not think too badly of me for causing it.

I was glad to hear my right hon. Friend during the debate today say that he realised that it was vital to have a fair price for those who produce our food, and that is what I ask for in this Adjournment debate. I am glad that he is aware, too, of the problems of pig producers, but I am not sure that he realises the urgency—which I want to prove—of the present crisis. I was glad that it was mentioned in the Gracious Speech.

I represent one of four county constituencies in Suffolk. Perhaps not every hon. Member appreciates that Suffolk is the biggest pig-producing county in the country. However, what I have to say applies equally to our neighbouring counties—Norfolk, Cambridgeshire, Essex—and to pig producers in other counties.

The problem has arisen solely because of the steep rise in the price of feeding stuffs to an unthought-of level.

There is another factor in the pig industry that possibly not all Members appreciate, namely, that there is now the specialist pig producer—the man who does nothing else but specialise in the production and fattening of pigs. He has no other interest in farming. This has been an avenue for the young entrant into agriculture. He may not have the resources or capital to rent or own a farm but this offers an opportunity to make a good start in the agriculture industry.

I first saw constituents of mine about this problem in August last year. They were mainly specialists. I wrote to the then Minister and, after we reassembled in October, we discussed the whole situation. Possibly in the autumn prices did improve for the pig producer and the situation was not quite so bad. But since the beginning of December it has become catastrophic.

I suppose that the industry was awaiting the Price Review, which was scheduled to appear earlier than usual. In the review pig producers received only an extra 3.4p per score. That was nothing like what was done for the dairy farmers in respect of the rising price of feedingstuffs.

That was disappointing for pig producers, most of whom, I think, did not realise that the then Minister was going to Brussels and he could not circumvent the EEC regulations more than that amount for the pig producer. He was to go to Brussels, where there was to be negotiation with the other Agriculture Ministers early in March. That meeting would probably have taken place a week ago. As we know, the fate of the polls resulted in my party not forming the Government, and my right hon. Friend the Member for Grantham (Mr. Godber) did not go last week to Brussels.

I know that the present Minister is to go to Brussels next week. Is he going there hoping to conclude negotiations that will result in a rise in price of the end product for pig producers through all the nine member States? Or is he, as is rumoured in the Press, embarking on a policy of a waiting period of six months, so that nothing will happen in Brussels? If that is to be so what will he do here? What will he be able to do here for the pig producers? They want to know what the Minister intends.

The specialist pig producers do not take up much of our land—possibly one, two, or at most 10 acres. They are efficient and able, but they have no outside resources to help them. They do not grow anything else. If anything goes wrong with the pigs, they are nearly on their beam ends. With the losses they are sustaining at the moment, bankruptcy faces them in the near future, or they will have to get out of the business before they are bankrupt. We should then lose all these good qualified men from our agriculture.

Since December I have spoken to many farmers, and I met more during the election campaign in my constituency. They know that I have always taken an interest in agriculture, and I promised that if I were elected I would pursue whichever Minister was in office as hard as I could until we were satisfied that their position was thoroughly understood, and this source of food which we need so badly was properly catered for.

I have in my hands the cases of five pig producers in my constituency. I do not want to weary the House with many figures, but I will give just one—the estimated cost to a farmer of producing a pig. The feeding costs amount to £28, the labour costs £3.50; and the overheads are about £2.75, making an overall cost of £34. At the moment he receives only £30.75 for a pig, a considerable loss of £3.50.

I shall not burden the House with the other four cases that I have here, except to say that the losses are £3 a pig in one case, £4 in another—that is for every pig—£4.50 in the third and £5 in the last one. The House will realise that the loss is considerable, and it is not just in one section but applies as a whole.

The NFU maintains that the loss by its members generally is even higher. It may be that my farmers are more efficient than those in other parts of the country. Nevertheless, they are suffering a big loss. The NFU suggests that there should be a large cash injection, and it estimates that the expansion that had been going on in the pig industry in the early part of 1973 had been wiped out by December 1973. It computes that this year there will be a loss of 2¼ million pigs, which means 140,000 tons of pig meat. If that had to be replaced by other food that we had to import, there would be an addition of £80 million to our import bill. Hon. Members will realise that this a serious problem. The Minister wants to see a fair return to the producer, and one can say that money has to be put into the industry.

I make no party point about this. Within the last few days, a great deal of money has been paid to the miners. Why not ensure that this far smaller number of men are in a position to get an equally fair living in return for the food that they produce? I say this with some experience. If we do not have food, we die; but we can survive—although it is not pleasant—without heat. The production of food in this country is of vital importance.

I should like to give one other set of figures to the Minister, on the most serious side of all, leaving aside the personal tragedy of these men. We sent a circular to 63 pig producers and breeders throughout Suffolk. One-third of them were small breeders, with 35 sows or gilts, one-third of them had 35 to 70 and the remainder were above that figure. They were asked to give their numbers of breeding stock as at 1st December 1973 and at 1st March of this year, only three months later. Sixty-one sent in a return. Of that 61, four had gone out of pig production during those three months. That is 6 per cent. The average reduction in breeding numbers over this period of three months was 20 per cent. That is why I am trying to show how urgent this matter is. What is more, the highest reduction in numbers, up to 30 per cent., is among the smaller herds owned by the specialist men to whom I have referred.

This is a most urgent problem if we are to save these herds. At this rate of run-down we would find that by the end of this year we had about one-quarter of our sow herds left. They would then take a long time to build up again. This is a very important source of protein food in this country. I know that it is a big problem. The rise in the cost of feeding stuffs is outside our control. I think that the Government will admit that, too. But if we do not tackle this problem we shall have to pay more for the product when it comes. The producers do not want an especially large profit.

It is an important source of home-produced food. Therefore, I beg the Minister to consult his right hon. Friend about the need for urgent action, either in Brussels if it can be solved partially or wholly there, or here, if the Government are to deal with it on a national basis, where it must be solved probably by some injection of cash.

10.14 p.m.

Mr. Paul Hawkins (Norfolk, South-West)

I should like to thank my hon. and gallant Friend the Member for Eye (Sir H. Harrison) for allowing me a couple of minutes in which I can break the vow of silence which I have had for the last three-and-a-half years. I must admit that my voice sounds most peculiar, as it probably does to everyone in the Chamber.

In this speech I am not doing anything more than trying to back up what my hon. and gallant Friend has just said. But I know a lot about this industry. I am not in any way attacking the Government. I should be presenting the case if the Conservative Party had been in Government just as strongly as I am putting the case now to the Minister. I should like to congratulate the Minister on taking his place on the Front Bench. I wish him a very happy but short tenure of office.

I have met many pig producers over the last few months, particularly during the election period. I have constantly had brought to my attention, because my son is a livestock auctioneer, the plight of pig producers. I should like to read a very short letter which I received on election day. It was written on 26th February. The letter said: I am enclosing price charts for pig sales as you requested. I had seen this gentleman the week before. He went on: As you will see, from early November till the 22nd February pigs … have dropped £1 a score and feed has gone up £20 a ton. I think that this gives one an idea of the situation facing pig farmers throughout the country.

Pig farmers are the smaller men of the industry. Many of them are first-class stockmen who have risen to taking small farms of their own. Others are stockmen's sons or farmworkers' sons. The first step in the ladder is to have a few sows. These people have been desperately hard hit because they have no other money coming in. They are good people prepared to work day and night throughout the whole week, and they deserve a proper deal. They cannot afford losses on this scale and they cannot afford to wait a long time.

The situation is urgent and I ask the Parliamentary Secretary to represent urgently to the Minister that what is needed is an immediate injection of capital, even if that is not a long-term solution, in order to prevent these people from going out of business, with the country thereby losing the good food they produce.

10.17 p.m.

The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Roland Moyle)

I thank the hon. and gallant Member for Eye (Sir H. Harrison) and the hon. Member for Norfolk, South-West (Mr. Hawkins) for the kind words they expressed upon my assumption of office. I can only hope that however long or short my tenure may be they will be as kindly disposed to me at the end as they obviously are at the beginning.

I congratulate the hon. and gallant Gentleman on the perspicacity he showed in selecting this topic for debate tonight, because its discussion is timely. I have listened with great interest to what has been said and have taken good note of the points raised. The debate was initiated to draw attention to the state of the pig-producing industry in East Anglia, but it is quite easy to widen it to deal with the pig-producing industry in the whole of the United Kingdom.

We have received many representations from all parts of the United Kingdom about the state of the industry, not least from Northern Ireland as well as from East Anglia. Nevertheless, the hon. and gallant Gentleman has drawn attention to East Anglia in particular. There is a large concentration of pig producers in his constituency, for whom he has made out a good case.

I agree that the pig-producing industry represents an opportunity for youngish men to break into the farming industry which many other sectors of farming do not give, in that, relatively speaking, it does not require a great deal of capital. But it does require that these new entrants concentrate on pig production, which renders them to some extent rather more vulnerable to the situation which has arisen than might have been the case if they were more general farmers.

There is no doubt that pig producers in East Anglia and the country generally are having considerable difficulties. There is, of course—one must get these matters into perspective—a tendency for cyclical ups and downs in pig production, and despite everyone's best endeavours to date no one has ever been able completely to eradicate this cycle, although we must all go on trying.

Perhaps largely because of the improved structure of the British industry, the cycle over the past two or three years has become less marked. This may be a source of worry, now that the improvements of recent years seem to be under threat. Any producer of pigmeat at the moment must be only too well aware of the cyclical ups and downs in the industry and the fact that they have not disappeared. Moreover, our pig producers' fortunes cannot be insulated either from movements in the other meat markets or developments in the pig industry overseas.

It might be useful at this stage if I went over the history of this problem as the Department sees it. These problems with which the industry is now faced are those which developed towards the end of last year, under the previous Government. It was clear in December that a serious situation was developing. It has to be accepted that the fact that we had an election removed an opportunity to act earlier.

Although during 1973 producers faced an alarming cost increase they also saw their market prices rise to record levels. There was a typical inflationary situation in the industry. At the beginning of 1973 the average market price for certified pigs was £3.36p per score. Apart from a dip in June and July the price rose fairly steadily until November, when it stood at £4.61p per score.

Despite the substantial feed cost increases which began to cause concern as early as last August it would be accepted that over the whole of last year producers' profitability was quite good. In East Anglia the Cambridge University Pig Management Survey found that on the farms covered, the 12 months to September 1973 had been the most profitable since 1950. Admittedly this performance was in part the result of higher valuations but on any basis the returns on capital of between 20 per cent. and 30 per cent. shown by the farms in the survey were very good.

Nevertheless, the rot, if that is the right word, had begun to show in the price of feeding stuffs as early as last August. It is partly because of the profitability to which I have referred, and the expansion in the herd which it stimulated, that market prices are now where they are. In particular, there was a spectacular rise the number of gilts in pig. This is a pretty good index of expansion in the industry.

Having said that, however, it is true that the situation which has faced pig producers since at least Christmas has been very worrying. Feed costs have continued their upward pressure and are now 40 per cent. higher than six months ago, on average. It may be that some hon. Members can produce individual cases where costs are higher. Pig prices have fallen, so that they are little higher than they were last summer. There is always a bit of a dip in pig prices at this stage in the post-Christmas period. That is normal, but the fact that it is normal does not make this erosion of profit margins in the industry any less comfortable for producers.

Sow slaughterings, which began to increase last September, have stayed at an exceptionally high level. After increasing by about 6 per cent. between June 1972 and June 1973 the United Kingdom breeding herd fell by 4 per cent. between September 1973 and last December.

We do not have the figures for the past two or three weeks, but everyone will accept that the decline is continuing. The logic of this situation is obvious. As the last Government must have seen, as long as producers' profitability goes on falling the breeding herd is also liable to continue to decline. That is where the worrying factor occurs, because that must, in turn, reduce home pigmeat production. Obviously, if sows are being slaughtered, the capacity of the herd to reproduce itself is reduced as time goes on. That, in turn, must lead later to reduce home pigmeat production. Either prices for consumers will then be higher than they otherwise would have been or we shall have to import a great deal more pig meat than we are planning to do. As a result of the fall in the breeding herd in the past few months pigmeat production, which at present is tending to increase, is likely later this year to fall back.

There may be a faint ray of sunshine on the horizon. I do not want what I am about to say to be taken in any way as an indication of complacency on my part or on the part of the Department. As I say, there are some faint signs which have appeared very recently that the pig market may be recovering. Last week the average market price for certified pigs showed an increase of 5p per score over the previous week. This week's price could show a further increase, thanks to firmer bacon pig and auction prices. There is no doubt—this must be admitted—that producers' returns are still a good way short of satisfactory.

There is little that has been said this evening which I want to criticise or to dispute. I basically accept the case which has been put forward. On taking office we must examine the problem urgently. I give hon. Members an undertaking that we shall do so.

It is necessary to take account of consumer as well as producer interests. I think that I have said enough to show that the solution to the problem lies in a correct balance between the two interests. We must also have regard to public expenditure and the balance of payments consideration. That must also be weighed.

The hon. and gallant Member for Eye also referred to the impact of the EEC. Such factors, and an appraisal of feed and pig price prospects, are being taken into account. I accept without demur that there have been substantial increases in feed costs as a result of factors operating overseas—for instance, the soya bean market and, more recently, the impact of increased transport costs on the import of cereals and other commodities. Such factors must be taken into account.

What has been said tonight will be borne in mind. I shall personally acquaint my right hon. Friend with the main points which have been made by the hon. and gallant Member for Eye and the hon. Member for Norfolk, South-West, who has so felicitously broken his three-and-a-half years' silence.

I emphasise that the Government well recognise the importance to Great Britain of a good pig industry. They regret the decline in the breeding herd which has been taking place over the past months. The pig producers slaughtering their sows are slaughtering the means of production which we shall undoubtedly want in the future.

I hope that those who stay in pig production, despite the present difficulties, will see a major improvement in their position in the months ahead.

Colonel Sir H. Harrison

It may be easier for the farmer with other interests to remain in business. I am particularly worried about specialist youngsters who have no other resources.

Mr. Moyle

We have that section of the industry very much in mind. We appreciate the need for urgency. We appreciate that that section's need is greater than that of many other sections and we hope to see a major improvement in the months ahead. I am sure that all hon. Members will appreciate why I cannot do more at this stage than take note of what has been said. The problem has been posed and the promise has been made that it will be taken thoroughly into account. I repeat my thanks to the hon. and gallant Gentleman for raising this important subject and enabling us to have an opportune if brief debate.

Question put and agreed to.

Adjourned accordingly at tweny-nine minutes past Ten o'clock.