HL Deb 30 November 1927 vol 69 cc385-404

LORD PARMOOR, who had given Notice that he would call attention to the suggestions on agriculture in the Final Report of the World Economic Conference and move for Papers, said: My Lords, it has been indicated to me that the Papers which I hoped might be laid could not in ordinary practice be laid, and therefore I will say no more on that part of my Notice. I ascertained this fact after consultation with the noble Lord, Lord Bledisloe, and I must assent to his view. I have, as is, I think, right in these cases, indicated to Lord Bledisloe, the representative of the Ministry of Agriculture of the present Government in this House, the points to which I want to call attention as arising from the Report of the World Economic Conference—a wonderful Report, the wide-reaching importance of which can be appreciated from a summary made by the President, M. Theunis, a former Prime Minister of Belgium, and which puts forward a wide view of agriculture which, I think, has not hitherto been sufficiently considered.

I would say at the outset that I hope that there will be little controversial matter in the points that I intend to raise, and that I have no intention of going back to the discussion on agriculture in this House in May of this year, which raised the question of land tenure, which is always a matter for discussion and difficulty. I only say that I have not altered the view which I then expressed supporting the opinions so often put forward by professor Orwin, of the Institute for Research in Agricultural Economics of the University of Oxford. I will try to summarise the points, which are quite clear upon the Report, and when answering, if the noble Lord asks me, I will give him the references; but I think the matter can be stated quite clearly and easily in a series of statements. The first statement is that the Report recognises the general depression in the agricultural industry. That is not only in this country but in other countries, and your Lordships will recollect that this is an international document, though I intend to apply it especially to the conditions in this country. One may say, I think, in connection with that, that there was a statement in The Times of yesterday from Captain Hutchinson, late Treasurer and Bursar for Christ Church, Oxford. His summary of the condition of agriculture in this country was on the same basis. He said that the conditions were bad, and that they were probably growing worse rather than better. My experience, I am sorry to say, coincides with that view, and Captain Hutchinson has exceptional opportunities of making observations, for he has been managing the Christ Church estate, and before he went to Christ Church he and I were co-workers, on matters of this kind, in the Duchy of Cornwall offices. So I know that he has had large experience in these matters.

The first matter which the Report states in reference to general depression is this. It says that depression is caused, or increased by want of understanding of the interdependency of commerce, industry and agriculture. I regard that as a most important statement, and one which must be kept in mind if any advance is really to be made to get rid of the agricultural depression from which we are suffering in this country, and it would be well, I think, upon this subject, which is so important and goes so deeply into the matter, to quote one or two words from the summary, which is on page 12 of my copy of the Report. It is to be found under the heading of "Agriculture," and it says— For the first time, at this Conference, agriculture has been represented side by side with commerce and industry in such a way that it can take its place in a general review of the economic situation of the world.

Then this statement is made, which I consider of the utmost importance, if we are to escape from this depression in agriculture and its many economic consequences

The Report goes on, to this effect:— From the documents available at the Conference, it is evident that the dislocation of the prices of agricultural in relation to those of manufactured products is causing a widespread depression in agriculture, which, if some improvement is not achieved, may result in a diminution in agricultural production.

I think that that is profoundly true. It is the dislocation of prices as between agricultural and manufactured products that is largely responsible for the prevailing depression, and perhaps in a particular way in agriculture in this country. Then, when we come to the summary on the general subject of agriculture, this will be found:— The economic depression in agriculture is characterised by the disequilibrium which has arisen between the prices of agricultural products and those of manufactured products; as a result agriculturists in a great number of countries no longer receive a sufficient return for their labour and on their capital.

I should lay it down, and it is laid down in several places in this Report, that it is not only a question, as Captain Hutchinson put it, merely of the cost of production on one side and of prices on the other—although, of course, in a larger sense that may be true—but you have to look beyond that, and see why there is this disproportion, and what are the causes which have led to this disequilibrium, which is emphasised in the passage to which I have referred.

That is the more important for this reason, that in more than one passage of the Report emphasis is laid on the statement that you must guarantee, as far as legislation can, that the social conditions of the agricultural labourer are equal to those of the town worker. Indeed, almost a little further than that, because it indicates that a certain disproportion between the social legislative protection which now exists in the two cases is not advantageous either to the agricultural industry or to the position of the workers in agriculture, and as a result of what is called the disequilibrium of prices—and this appears to me to be one of the foundation factors in this important matter—it goes on to say that the effect is to bring about an instability of prices which tells directly against agriculture.

So far as I know, these matters have not been brought to the front in agricultural discussions in this country heretofore. I do not mean that they have not been mentioned, but they have not been mentioned as primary and substantial causes of the depression from which agriculture suffers in this country, and therefore as matters which must be mended, and the importance of which must be realised before we can expect to have any substantial improvement. The importance of agriculture itself, meanwhile, is very fully realised. The document goes so far as to say that the interdependence of commerce, industry and agriculture is such that it is unwise for commerce and industry not to face the facts and deal with this special depression in agriculture. That statement is profoundly true, but it is not sufficiently recognised, particularly in a country like this, where the industrial interests are prima facie so much larger than the interests of agriculture itself. But really that makes it more, not less, important that the true basis of the depression in this country should be realised.

Then the Report makes this statement in confirmation of the principle which I have stated, and it is a very important statement:— The diminution in the purchasing power of the agricultural population has reacted upon industrial production, and is consequently one of the causes of unemployment, which in its turn reduces the outlets for agricultural products.

And it also says:— Unless practical measures are taken to restore the price equilibrium it is feared that sooner or later there will be a diminution in agricultural production detrimental to the welfare of mankind.

No statement could be clearer or more important. It is the other side of the inter-dependency of commerce, industry, and agriculture. It is not only that agriculture suffers from its present depressed condition, but that as a result of that there is a smaller market for manufactures, and they attribute to this fact the unemployment which is one of the greatest curses of all industrial life. The problem as they state it may be restated thus: How can we ensure to agriculture, both as regards capital and labour, a normal return, and a normal status and reward? And further, if you go down to the ultimate analysis, which is done in very great detail in the Report, the market for the produce of manufactures is ultimately limited by the output of agriculture in the various countries. In other words, you cannot get a healthy demand for a progressive industrial system unless at the same time you encourage agriculture, because that not only provides the real market, but it is the ultimate test of what market you can obtain.

The Report at the end invites all Governments to consider the principles involved and to develop, if they can, appropriate remedies. On the nature of the remedies I am going to say a word or two, but I do want to ask the noble Lord this: Has his Department had the opportunity of studying, not only the Report, but also the evidence upon which it has been founded? I know that he is not likely to differ from the Report, because it was assented to by an Assistant Secretary of his own Department.

THE PARLIAMENTARY SECRETARY OF THE MINISTRY OF AGRICULTURE AND FISHERIES (LORD BLEDISLOE)

Mr. Enfield, head of the economic branch.

LORD PARMOOR

Yes, the very subject with which this conference was concerned being economic, they had the assistance of the head of the economic branch of the Ministry of Agriculture. I do not suppose, therefore, that there will be any difference between myself and the Minister as to the principles laid down in the Report. The first remedy—and this is perhaps one of the most important points—is stability and regularity of prices, so that those engaged in agriculture should be able to reckon on a legitimate return, equivalent to that accorded to other producers, without the element of speculation. At present the farmers, particularly those who have a large stock, are very much under the speculative element as regards prices, and it is the best farmers who have suffered most from the want of stability of prices in recent times. It does not matter to the farmer upon what that depends. It probably depends most directly in most cases on the appreciation of gold, over which he has no control whatever. But what is of importance, and a matter in which he deserves full consideration, is that any measures should be taken which are possible, such as are indicated in the Report, but only in outline, to ensure what is called rationalisation, or at any rate stability of price.

Have any steps been taken to enquire into this difficult problem at the Ministry of Agriculture? You have here a Report from the largest body of experts that the world could bring together, and they point out that the want of stability of price is in their opinion a potent cause of agricultural depression. I do not think anyone would doubt that. What I have to ask the noble Lord is whether that has so far been taken into consideration by the Ministry of Agriculture and, if so, whether the noble Lord can tell us what are the conclusions at which they have arrived.

LORD BLEDISLOE

Will the noble and learned Lord say whether, in asking that, he refers to the stabilisation of prices as the result of Government action? I mean, does he contemplate the Government taking any action with a view to stabilisation?

LORD PARMOOR

I doubt whether you can have stabilisation without some Government action when the difficulties are pointed out. The position of the farmers is such that it is almost impossible for them to organise themselves in the same way as other industries by means of trusts and so on in order to obtain stability of prices and the rationalisation of their enterprise. This Report emphasises what any Report would emphasise—that agriculturists must look out for themselves.

LORD BLEDISLOE

Yes.

LORD PARMOOR

Of course, we all agree upon that. But the Report undoubtedly suggests, as I read it, that on matters of this kind and on one or two other points to which I shall refer, the agriculturist cannot do it all himself. I believe he cannot at the present time and that it is at any rate a matter into which Governments, if I may use that expression, should enquire as accurately as possible. Whether as the result of that inquiry a scheme can be suggested or not, it is not for me to say. All I can do is to point out the principle and to ask the noble Lord whether any steps have been taken, including Government assistance, and, if so, to what extent they have been carried. The second point mentioned is the very important one of marketing, which I need hardly emphasise. The cost of distribution is a very important matter to the agricultural producer. At the present time, at any rate in the country as I know it, marketing facilities are almost entirely inadequate.

LORD BLEDISLOE

Inadequate?

LORD PARMOOR

Yes. I want to know whether the Government have made inquiries under that head, as I believe they have, and what conclusions they have reached? I do not want to throw down a bone of contention, as the noble Lord knows, but if a Report of this kind is to be carried to a satisfactory conclusion it must be followed, as the Report itself points out, by practical application on the part of the Governments concerned. Has that been done in regard to marketing? I will not go into matters which I raised on a former occasion, but the possibility of such application is shown in the expenditure on behalf of what I think is called Imperial markets, for the marketing of goods coming to this country from our Dominions. That is an extremely important point. It is rather hard on the farmers of this country that they should contribute towards the cost of an inquiry of that kind without at the same time having the advantage of an inquiry in their own case. The noble Lord has said once or twice that some money has been devoted to a marketing inquiry in respect of our own farmers. But after all it is only a small proportion, and it is a matter of first-rate importance to put the marketing of the farmers in some of our agricultural districts on an adequate basis, and it cannot be postponed. Agriculture has suffered very much indeed during the past few years, badly as Captain Hutchinson says, growing worse and not better. This is no time for delay. The period of discussion ought really to have gone by and the period of the practical application of remedies ought to have arrived.

A point very much insisted upon in this Final Report is co-operation in farming in the widest sense—co-operation bringing about direct commercial relations between producers and consumers, and between associations of producers and consumers, eliminating superfluous intermediaries, and, when those relations are sufficiently widespread, resulting in the establishment of prices which are advantageous to both parties. I do not deny that it is very difficult to start the co-operative spirit among the farmers in this country. Our farming is equal, I think, to that of any country; but our farmers are not generally in favour of co-operation. They are in need of education in the matter. Co-operation must be expounded and must be understood. But neither co-operation nor any other thing of the sort is in itself a solvent of all these difficulties; but that it is a very important factor has been found, as the noble Lord knows, in Denmark. Denmark, of course, has its periods of depression like other places; but anyone who has read the history of co-operation as an agricultural factor in Denmark and has visited the farmers there, as I know the noble Lord has done, will fully understand the importance placed in this Report upon the general institution of co-operative action among agriculturists.

As I have said, I do not want to go back upon what I said before, but let me take the case of Carterton, which is not far from Oxford, and which is known to the noble Lord. That has been a great success owing to co-operation, although without it the experiment made on a number of small holdings seemed likely to fail. The real author is of course Bishop Gunnelburg, the great author of the adult schools in Denmark. It has had a wonderful effect; but the great drawback is that our agriculturists are not educated up to it and are not taught the advantage of co-operation, which is advantageous in many industries but vital, I think, in the agricultural industry.

There are two other points in the Report which are old friends and the importance of which cannot be overrated. One is an effective credit for agriculturists. I have heard the noble Lord indicate more than once, I think as long ago as the White Paper, the advantages of credit; but I want to ask whether any advance has been made in giving credit which will be of value to agriculturists. Any rich man can, of course, obtain credit. That is not the point. Credit is wanted in agriculture very often at a time when the farmer is not in possession of industrial securities. If he has them credit, is easy enough to obtain. The Report points out that where there are no credit facilities the Government might be asked to assist in the matter, and that so far as the credit itself is concerned it would be made very much more easy by the intervention and assistance of co-operative societies using for the purpose the capital at their command. I know that the noble Lord appreciates the advantage of credit, but what advance has been made in if? So far as this Report is concerned one might almost say they think it is hopeless—at the present time I should think it is particularly hopeless in this country—for agriculture to prosper without a sufficient credit system organised by the Government. They say "organised if necessary, by the Government," but so far as this country is concerned I do not believe they will get it in any other way.

LORD BLEDISLOE

I think I am right in saying that in the Report the noble Lord is referring to there is no suggestion that the respective Governments should themselves organise agricultural credit.

LORD PARMOOR

No, the suggestion is a different one. As I pointed out, the suggestion is that they should help and support organisations. I think that is the wiser form in which the matter should be put. In the words that I have before me the Report says that the first condition for surmounting this depreciation is to organise suitable credit institutions in those countries where they do not yet exist and that the best form of institution appears to be the co-operative credit society. Then it goes on to say "with the assistance, if necessary, of the public authority."

I am sorry to have kept the House so long, but there is one other point, and it is an important one, that I wish to touch upon. The Report emphasises very much the effect of the burden of charges on agriculture and entirely puts on one side the doctrine of Protection. There I entirely agree. On the other hand it says that if you give no protection and more particularly if you give protection to other industries, you must be careful that no undue charge is thrown on agriculture. What is the case here? How many years is it since the Rates Commission, so often referred to, declared that it was essential that you should have a differentiation of the classes of expenditure as between the rates and the central authority—that is, the National Exchequer. It is no use, in my opinion, merely to give "doles," although considerable "doles" have been given. I want to take one illustration. Why should a farmer be, called on to contribute either to the cost of making or the upkeep of those great arterial motor roads used by the travelling public? Not only that, but why should he be called upon to pay the cost of policing them? The worst of it is that the ratepayer is never really represented in Parliament, heavy burdens are from time to time placed on the local authorities, and adequate provision is never made for corresponding payments to them.

Those are the points which I want to raise. To my mind it is essential that the wider view expressed in this Report should be followed and, if it is followed, agriculture, instead of being a secondary interest in economics, will take its proper place with other industries and commerce. Then I think the disadvantages to which the Report refers can be grappled with, but I do not believe they can be grappled with on any less wide basis.

LORD BLEDISLOE

My Lords, I greatly welcome the initiation of this debate by the noble and learned Lord who has just sat down, because I have to admit that the Report of the so-called World Economic Conference, which took place last May and which was attended by representatives of more than fifty different countries in the world, is a remarkable document and, if I may venture to say so, a document which I earnestly hope our own urban population, in particular, will study meticulously, bearing in mind that it does point out, as my noble friend has emphasised, the essential interdependence in all countries between the agriculture industry and commerce. This interdependence is, I admit, not fully recognised in this country, mainly because in the past so large a portion of the trade of the country has been represented by manufactured goods passing out of this country in exchange for the agricultural products of other countries. I think perhaps at this stage I ought to tell the noble Lord that Mr. Enfield, who is the head of the economic branch of the Ministry of Agriculture here, was not present at this Conference in any official capacity, seeing that it was not an official conference, but was simply present as an adviser to one of the delegates, Mr. Layton, and, therefore, he cannot be regarded as having spoken with an official voice.

To take one important question which the noble Lord has addressed to me, the one where he asks whether we have noticed and are prepared to act upon the concluding paragraph of the Report, in which an appeal is made to Governments generally to consider the contents of the Report and act accordingly, I want to say quite frankly that His Majesty's Government do not intend to turn a deaf ear to the Report or to this important appeal at the end of it. The noble Lord has referred to certain suggested remedies some of which, he will agree, we have discussed in this House not infrequently on previous occasions and, therefore, I do not intend to take up the time of the House at any great length in referring to them.

As regards the stabilisation of the prices of agricultural products, the noble Lord asks what the Government have done in this matter. The Government have been immensely attracted by the idea of stabilising the prices, at any rate of the more essential food products, if it is possible without providing an apparent remedy which is worse than the disease; but we do feel that in such matters the interposition of the Government may do more harm than good. We had illustrations of this during the War, when we sought as a Government to control the price of wheat on the one hand and of sugar on the other. If I may venture to say so without egotism, I have reason to know, as I acted in the capacity of what was then called Sugar Controller, the danger of any Government, and particularly our own, going into the world's markets and competing for the possibly limited supplies of such essential commodities as wheat or sugar. It is quite impossible to conceal the fact that the British Government is in the market and the tendency is to raise prices abnormally as against the consumers in this country. The noble Lord will agree that that is a very dangerous thing to do.

But, on the other side, I should like to press once more upon the noble Lord the possible effects of co-operation on the part of the producers themselves, not only in this country but in all countries, in stabilising prices and preventing the unfortunate, and to the agricultural community detrimental, effect of speculation and of what is sometimes called horizontal middle-man's profit. We have the best illustration of all perhaps in Canada, where, as the result of the wheat pool organised by the farmers of the Prairie Provinces, no less than 80 per cent, of the total wheat output of those Provinces, representing the greatest exportable wheat surplus of the world, is being dealt with by the pool this year and is having the effect of maintaining wheat prices at a more stable level than was ever the case in the past before this pool existed. Perhaps I may refer to another case which has a longer history—the extraordinary effect that the co-operative effort of the Californian fruit growers has in stabilising the prices of fruit while at the same time ensuring a reasonable margin of profit to producers throughout the United States of America. I quite agree with the noble Lord that any attempt to stabilise the price of wheat, for instance, in this country, remembering what a very small proportion of the whole of our consumers' requirements is raised in this country, is a practical impossibility, but if we can benefit, as we are indeed benefiting, by the co-operative activities of a much larger group of wheat producers such as is to be found in Canada, that is a strong argument in favour of doing all we can to promote agricultural co-operation throughout the Empire from hich our own farmers may derive considerable benefit.

The noble Lord asked again what has been done in providing marketing facilities. I agree with the noble Lord when he says that the condition of agricultural marketing in this country has been, and to some extent still is, deplorable, but a great deal has been done, and more will be done in the future, on the initiative of His Majesty's Government and the Department which I represent in this House. The noble Lord has not forgotten, I hope, that we have during the last two years issued what are called Orange-books which are intended to be helpful, and are acknowledged by farmers to be helpful to them, in the marketing of the various kinds of produce to which those documents refer. I may also tell the noble Lord that apart from the fact that these Orange-books will continue to be issued for the benefit of farmers we propose, following the advice contained in the Report which is under discussion here to-day, to improve the accuracy and accelerate the announcement of market information for the benefit of farmers and smallholders in this country.

I really do not know that it is necessary for me, on this occasion, to discuss at any length co-operation or credit. The noble Lord knows as well as I do that we are such an intensely individualistic nation—and no section of the nation is more intensely individualistic than the farming section—that we have not made any very substantial progress in the matter of agricultural co-operation in this country, although fully admitting the importance of it and the necessity of it if the fanner is to get anything like a reasonable proportion of the total value of his products. In this connection I may say that Napoleon may have been right when he described England as a nation of shopkeepers. It is that middleman's commercial instinct which unfortunately still continues to dominate the position, although in many districts, as the noble Lord himself pointed out, farmers are seeing the necessity of co-operation and are organising for their own benefit. When the noble Lord refers to credit, I am sure he must agree with me when I suggest, as indeed this Report suggests, that while credit is important and that nothing is more important for agriculture—it has been described as the life-blood of agricultural economy—such credit should, if possible, result from co-operative action amongst the farmers themselves and particularly the smallholders, rather than be an artificial effort on the part of the Government of the country. As the noble Lord knows, the Government are proposing to take some action in this matter, realising the importance of it, and a Bill will be introduced after Christmas, in the new Session, which will make some provision, we hope satisfactory to the farming community, both in regard to long-term and shortterm credit. On the subject of rates, upon which no-one in this country has a greater title to speak—I think that the noble Lord, if I remember aright, presided over the Royal Commission to which he referred—

LORD PARMOOR

No, I was a member of it.

LORD BLEDISLOE

He was a member of the Royal Commission. Of course I agree with him absolutely as to the unfairness of rates as levied to-day for various national services upon one class of property—namely, real property—in this country to the exclusion of others which may be far more profitable, and indeed are far more profitable, than they were in the time of Queen Elizabeth, when the system of rates was first established. I am not in a position to say what, the Government will be able to do in this matter, but they have it under their serious consideration, and it is particularly attractive to them in that if they are able to provide a further alleviation of the rate burden it has this merit, that it will be of general advantage to the whole farming community and will not be a partial or sectional benefit such as other remedies which the noble Lord is aware have bee a pressed from various quarters in this country. There is one expression which I was glad the noble Lord did not use, and that, is the description as a concession of any relief of the rate burden as it falls upon the farming community. Speaking for myself, nothing annoys me more than to hear such relief described as a concession, bearing in mind the considerations to which I have alluded as to the national benefit of the services which are thereby financed.

With regard to this Report, I want to ask the House to bear in mind that it is of a general character, dealing with the world's situation as a whole rather than with the particular difficulties of any individual country. It embodies what representatives of fifty nations, many of whom held and do hold divergent views, were able to agree upon. That means, of course, that there was a considerable amount of compromise in the course of arriving at agreement. It will be realised, therefore, that the diagnosis does not necessarily apply to Great Britain, and that the remedies which it suggests are not necessarily applicable to the ills from which British agriculture is now suffering. The noble Lord has not referred to what is in my judgment the most pregnant sentence in the whole of the published Report. I refer to the words used by the eminent President, M. Theunis, late Prime Minister of Belgium, in his concluding speech, which is to be found on page 12 of my copy of the Report. He said:— The eight years of post-War experience have demonstrated the outstanding fact that except in the actual fields of conflict the dislocation caused by war was immensely more serious than the actual destruction. Those are very significant words. He goes on to say:— The main trouble now is neither ant material shortage in the resources of nature nor any inadequacy in man's power to exploit them. It is all, in one form or another, a maladjustment—not an insufficient productive capacity, but a series of impediments to the full utilisation of that capacity. The main obstacles to economic revival have been the hindrances opposed to the free flow of labour, capital and goods. I am not going to enter upon such a controversial subject as the effect of tariff barriers between different countries which are specially characteristic of certain mid-European countries and which, of course, inspired the Conference, to demand as soon as possible the entire demolition of all these tariff walls. But each section of the Report confirms the view to which M. Theunis gave such eloquent expression. The Conference, in fact, sought to analyse the causes of maladjustment and to suggest remedies. Bearing this in mind, the significant part of the Report dealing with agriculture is the emphasis that it lays—the noble Lord also laid emphasis upon this—upon the essential interdependence of agriculture, industry and commerce. In the words of the Report, which appear on page 47:— It would be vain to hope that one class could enjoy lasting prosperity independently of the others. That is a very striking sentence. The noble Lord quoted that part of the Report which states:— The economic depression in agriculture is characterised by the disequilibrium"— a horrible word!— which has arisen between the prices of agricultural products and those of manufactured products; as a result agriculturists in a great number of countries no longer receive a sufficient return for their labour and on their capital. In other words, the general level of agricultural prices in many countries is low compared with the general level of industrial prices. Then it goes on to say that the agriculturist complains that he buys the manufactures that he needs at high prices but sells at low prices the products of the soil.

What I really want to point out to the noble Lord and to the House is that, although this may be true and undoubtedly is true of several countries, it is not true of Great Britain. At any rate this so-called disequilibrium between agricultural and industrial prices has not been true of Great Britain until the last six months, and that document, as the noble Lord will observe, was issued at the end of May last. This disequilibrium is not the cause of the depression from which British agriculture has been suffering. I should like the noble Lord to see a very interesting diagram which has been drawn up in my office showing how curiously uniform during the last seven or eight years the undulations in the prices of manufactured commodities and of agricultural commodities have been in this country, unlike the countries to which this Report mainly refers. The noble Lord will see from that graph that during the last seven years both industrial prices and agricultural prices have fallen very rapidly, and that although there has been disequilibrium during the last few months it has been mainly due to the fall in the price of meat, which is itself supposed to be due to what is known as the Argentine meat war.

I should like, however, to point out to the noble Lord what are in our judgment the main factors that have produced the depression in agriculture in this country, as distinct from others. I think they may be summarised under three heads: (1), what I may call monetary causes, including particularly what the noble Lord described as the appreciation of gold or, putting it in another way, the reduced purchasing value of gold; (2), the Argentine meat war, which has produced a much greater effect than most people seem to imagine; and (3), what I may call regulated wages, which, of course, are the result of the wage board system now operative in this country. As regards the fall in values, which I place among the chief monetary factors, there was a great fall in values of all commodities between 1920 and 1923, and this was especially noticeable in regard to agricultural produce, owing to what the well-known economist Dr. Whetham, of Cambridge, described as the "economic lag"—by which, of course, he means the lapse of time between the sowing of a crop and the purchase of raw materials and the realisation of the produce. This fall has continued for no less than seven years, with a very short intermission at the end of 1924 and the beginning of 1925. During the last three years there has been a fall of no less than 22 per cent, in the average value of all agricultural products—that is to say, a fall in 1925 of 10 per cent., in 1926 of 7 per cent. and in the current year of 5 per cent.

I should like above all things to emphasise that, as regards the monetary factors, it is not low prices but falling prices which have occasioned and are always calculated to occasion serious agricultural depression. Exactly the same thing happened during the period from 1879 to 1896, which has been described as the period of the great depression in agriculture. No practical agricultural remedies, whether they be protective duties, subsidies or prohibitions could have prevented the fall in prices which has taken place. Low prices, as distinct from falling prices, are not necessarily an unfavourable factor, that is to say, if the costs of production are correspondingly low, especially if the demand for consumption is likely to be maintained or indeed increased. I will not refer to the second factor at any length—the Argentine meat war—except to express the hope and belief that this undercutting between the great firms who deal in meat across the Atlantic has now come to an end, and that if it has it will tend to stabilise or rationalise the values of meat in this country.

Now we come to what I call regulated wages. Regulated wages, as regulated under our system of wages boards, are not necessarily governed by ordinary economic laws, and it is not generally realised, perhaps, that this is an important factor when you come to consider the position of agriculture to-day. The cost of labour, reckoned per hour and having regard to the shorter hours, is estimated to be in most parts of the country no less than 100 per cent, above pre-War standard, and labour represents 25 to 50 per cent, of a farmer's total outgoings. The Government do not believe that there is any remedy to be found in interfering with the present conditions which determine agricultural wages, and have no intention of doing so. Although we cannot reduce wages we can, with the help of science and better organisation, increase the efficiency of labour, with no increase of physical effort. The real measure of economic efficiency of agriculture is its money yield and not its food yield. Farming will have to aim at a higher money output per man, even should it involve, as it might, a lower output of food per acre and lower total employment.

Salvation may, in my judgment, be found in, first of all, better organisation, both on the farms and on the commercial side of farm business, and, secondly, in more extensive, as distinct from intensive, arable farming, comparable with that in many countries which are our chief competitors; thirdly, a possible reduction in our arable area; and, fourthly, an improvement in grassland management, and possibly a transfer of what I may call intensity of cultivation from arable to grass. The noble Lord will realise that grassland, apart from rough gracing, constitutes no less than two-thirds of the whole of the cultivable area of Great Britain, and most of this is unfarmed, un managed, unfertilised, and undrained. There is an enormous scope for improvement in our agricultural economic position as the result of improvement in grassland farming. British agriculture, fortunately, has an almost unique scope for adaptation of method, because with the exception of liquid milk and vegetables it has a market at its door, which will absorb a largely increased output of almost every other important land product.

Cheap fertilisers, as distinct from other relatively expensive raw materials, are going to be large factors in improving the condition particularly of our grasslands. Feeding-stuffs are to-day, if I remember aright, in value about 35 per cent, above the pre-War level. As regards fertilisers, they are only 2 per cent., on the average, in value above pre-War level. Sulphate of ammonia and other nitrogenous fertilisers are lower than before the War, and, as the noble Lord will realise, as the result of synthetic production of nitrogen from the air, this relatively low cost of nitrogenous fertilisers is likely to become more marked in the future.

It would be wrong at this moment to discuss at length the question of draining, especially as the Report of the Royal Commission over which I have had the honour to preside will be presented to the Government and published next week, and the noble Lord will realise that whereas the results of agricultural research are of high economic value, and have materially improved the condition of agriculture in this country, it has been overweighted in the scales by certain adverse factors, none being more serious than the condition, in the matter of drainage, of our cultivated land. At least 7 per cent. of our land is in a water-logged condition. That has got steadily worse, and there is no doubt whatever that both as regards the farmers' own surface draining, and more extensive arterial drainage, a great deal more will have to be done if we want to have the full benefit from scientific research.

I only want to say one other word, in regard to the proposed remedies. The various sectional remedies which are widely advocated are not likely to be adopted, because what we have to realise is that, amongst agriculturists, what is sauce for the goose is not necessarily sauce for the gander, and that what may be an advantage to farmers in one locality—for instance, the proposed duty on imported malting barley—may be detrimental to agriculturists in other parts of the country. Finally, the noble Lord was good enough to say that he would not press for the publication of this Report as a White Paper, or rather the agricultural section of the Report. I am glad that he is not pressing for that, because there are very great objections to the adoption of that course, although personally I have considerable sympathy with it. The Report must be read as a whole, and it would be wrong to detach the agricultural section of it from the sections dealing with industry and commerce, and indeed from the general introduction. Moreover, the World's Economic Conference was not a conference of official delegates, representing Governments, and the Report, therefore, is not an official Report, and it would be misleading if it were published as a Government publication. I hope I have been able to satisfy the noble Lord by my reply.

LORD PARMOOR

My Lords, so far as the reply is concerned, I think I may say I am satisfied. The noble Lord has recognised the extreme importance of the document to which I have referred, and its immediate relevance to the question not only of general agricultural depression but also of the agricultural depression in this country. But, as regards the other matters he has dealt with, any opinion that I hold upon them must stand over to another time. It is obviously impossible to embark upon those general questions at the present time. But I would ask the noble Lord to recollect this (because I do not quite agree with all that he has said) that whatever has been done—and we have had a Government in power which is not averse from giving all possible assistance to agriculture, which I readily recognise—the considered judgment after some years of Capt. Hutchinson, who was Treasurer and Bursar of Christ Church, of the position of agriculture in this country is that it is bad, and not likely to get better, but possibly worse. I hope the noble Lord will consider what the practical effect of that judgment is, and that the Government will endeavour to do all that they can, not merely theoretically but practically, to put agriculture on a better footing. I thank the noble Lord for the answer which he gave to my question.