HL Deb 21 February 1928 vol 70 cc190-203

LORD STRACHIE rose to ask His Majesty's Government whether it is the case that sugar beet pulp is being exported abroad thereby preventing the British farmer having the benefit of this valuable feeding stuff; and to move for a Return showing the amount of sugar beet pulp exported in each of the last three years, the price per ton received f.o.b. on exportation and the countries to which the pulp was exported. The noble Lord said: My Lords, my attention was first called to this question of the exportation of sugar beet pulp at a meeting of the council of the Dairy Farmers' Association, at which it was urged that this exportation was to the detriment of this country. I regret to see that the noble Lord who presided at the meeting, Lord Desborough, is not in his place at the moment, because he suggested that as nothing could be done without definite knowledge a Question should be put in another place. That Question was put, but, as your Lordships are aware, it is very easy for a Minister when answering a Question in another place to evade the point and not to answer directly. Therefore I thought it desirable to raise the matter in your Lordships' House, where a Minister can be asked to give reasons for doing a certain thing or for saying he is not prepared to do it.

Mr. Guinness, in another place, did not answer one way or the other, which I think is unfortunate. It is stated that in 1927 the production of sugar beet pulp was 87,658 tons and the amount exported 20,745 tons. There is, I am told, great difficulty in the matter of making contracts for sugar beet pulp. I have been told of the case of a man who made a contract for 50 tons of pulp, but, although a contract had been made, the company with whom it was made refused to carry it out and said there was not sufficient pulp. That meant, I suppose, that they had exported it abroad. I notice that the price of sugar beet pulp to the producers is £4 5s. a ton, and that it is sold by agents at £5 5s. a ton. The export price to America is £5 per ton f.o.b. Unless something is done to stop this exportation it is probable that it will grow, because it is very much easier for a company to export the pulp in large quantities than have the trouble of peddling it out to small individual farmers. Looked at from the point of view of the sugar beet company and its shareholders it is better to export in bulk when they can get such a good price as £5 per ton. But what is the result of that? It is simply encouraging competition from abroad. This pulp, when taken abroad, is used for the purpose of feeding animals to be exported here in the form of meat, or for the purpose of feeding dairy cattle in order that milk may be sent over here to compete with the home products.

I was much interested to see in The Times of February 13—no doubt your Lordships often read the very interesting articles by the agricultural correspondent of The Times—an article in which the view was taken that foreign competition is encouraged. The agricultural correspondent of The Times wrote: The country, in common with the farming industry, must in the end be seriously affected by any considerable prolongation of the present state of things in animal husbandry—milk as well as meat. Foreign competition is encouraged in ways that are vitally detrimental to home production. The Home Office recently issued a pamphlet on foreign condensed separated tinned milk, extolling the sanitary conditions under which it was produced.… The same sort of thing is going to happen if you encourage sugar beet pulp exportation. To my mind what you ought to do is rather to prohibit the exportation of sugar beet pulp from this country. Though I say that, I think it would be quite wrong to prohibit the exportation of offals, because offals are not subsidised by the Government. Sugar beet pulp has been very heavily subsidised and it is estimated that next year £2,000,000 will be spent upon subsidising sugar beet factories. I am not taking objection to that, but I am taking objection to the subsidy being used in a way which has the effect of encouraging competition from abroad by exporting useful food stuffs to our competitors there and enabling them to produce more cheaply things which are competing with our own produce.

I am sure the noble Earl, the Parliamentary Secretary of the Ministry of Agriculture, will agree with me that in many parts of the country the farming industry to-day is in a very parlous condition. The present Government have declared that they will not put on protective duties. I agree with that, but I entirely disagree with the idea that the foreigner should be able to get goods cheaply at the expense of this country, owing to the subsidies. Not only is this product useful for feeding cows but it is also useful for feeding stock and producing meat. This is a very strong argument for taking some action. It is not as if we should be doing any harm to these great sugar beet companies, because it was stated the other day that in some instances, owing to this too large subsidy, they have been able to pay the whole of their capital and now they have the whole of their plant and machinery at no cost. That is very nice for the shareholders, but it will not do them any harm if the companies are forced to keep the pulp in this country and to sell it at a lower price. It is argued that so far the farmers have not been inclined to take all the pulp that the companies had, so that a certain amount was left upon their hands and they had to get rid of it. I agree, but, considering the enormous profits that these companies are making in some cases, I do not think that it would do any harm if they were obliged to scrap it.

As a matter of fact, we know that they would do the same as anybody else who has something that is difficult to sell: they would reduce the price and, instead of sending it abroad at £5 a ton, they would sell to British farmers at £2 or £3 a ton. I think that most of your Lordships will agree that there will be no harm in giving the British farmer an opportunity to buy cheap foodstuffs under present conditions. I cannot see any argument against this plan. I wish to ask the noble Earl if he will give me a definite answer whether the Ministry of Agriculture are prepared to consider forbidding the export of sugar-beet pulp from this country. In order to secure information on the subject, I have also asked for a Return showing the exact amount that has been exported, the price received, and the countries to which the pulp has gone. I think it necessary to know this in order the better to judge to what extent this pulp is being used by those who compete with us and are able to buy very cheap materials at the expense of this country.


My Lords, I do not know whether your Lordships will allow me to intervene for one moment, as an old and unrepentant Free Trader, just to call attention to the somewhat remarkable propositions, as they seem to me, that were laid down from that Bench. I understood Lord Strachie to complain, in the first place, that these sugar-beet people should export their pulp at all. I do not pretend to be a financial authority, but I have been told by those who are that it is all to our benefit that we should be able to export something in order to pay our debts and that this was what we had to look to in order to pay our debts. This, indeed, is a very small factor, but even this may be useful. This is only a very small portion of the whole question, into which I do not propose to enter now. The noble Lord referred to other aspects which may have to be raised at some other time. But he went on to say, and to complain, as it seemed to me, that this sugar-beet pulp, when exported, was useful to the people who bought it for feeding their animals to compete with us. It is a very curious commercial doctrine that you should sell to foreigners only something that is of no use to them. I should have thought that the object should be to satisfy your customer as well as yourself. I do not understand why the noble Lord complained that the pulp was useful to the people who bought it. He said that it enabled them to compete with our animals. I suppose that everything that you sell to foreigners in one sense enables them—


May I interrupt the noble Earl for one moment? I emphasised the fact that this is an article subsidised by the Government.


I was coming to that later. It is perfectly true that the noble Lord later an drew a distinction between subsidised and non-subsidised articles, but I think he will find, if he will look at the OFFICIAL REPORT to-morrow, that in the earlier part of his speech he complained without qualification of the fact that we were selling something useful. That seems to me a very remarkable proposition. To take the point regarding the subsidy which the noble Lord has mentioned, I do not quite know why, because an industry is subsidised—rightly or wrongly; I am not going into that—you should compel the people who carry on the industry to carry it on in an uneconomical way. He even suggested that they might scrap some of their sugar beet pulp. Surely, it cannot be right, in the interests of economy and in the interests of making money on which, after all, Income Tax is paid, that these people should not be allowed, like anybody else, to sell their product in the best market they can find. I do not suppose that they sell to the foreigner from any particular desire to do so. Probably it is because they are unable to find a market at home. Like other people, they probably seek their market where it can be found. I do not wish to enter into the controversy itself, but I did think that these were such remarkable Free Trade principles to hear expounded from that Bench that I could not resist intervening for a moment to call your Lordships' attention to them.


My Lords, as one who has been interested in this question for a good many years, and being perhaps equally unrepentant, though in a contrary direction, as the noble Earl who has just spoken, I cannot help thinking that it is exactly the unrepentent Free Traders such as he who are very largely responsible for the position of agriculture to-day. That is a question, however, which we need not go into at this moment. With regard to the sale of this very useful cattle food, I quite admit, with the noble Lord who brought the matter forward, that the fact of the industry being subsidised does put it on a somewhat special footing. The industry was subsidised for the purpose of introducing a new and valuable activity about which very few people here knew anything at all. The farmers; the labourers, the manufacturers of machinery and everybody connected with the industry in one way or another had to be educated. All this took time. The farmers had to be educated more than anybody else, but they are undoubtedly beginning to appreciate the value of the industry and of the pulp as a cattle food. The British farmer, as your Lordships know, is a very conservative individual, and it takes a long time to get him to change his methods.

I am connected with one of these factories and I have seen with great regret the fact that a considerable amount of sugar beet has been sold abroad. I feel very strongly that, in the interests of better agriculture, it is unfortunate that such a product as sugar beet pulp should be sold out of the country. It may be that the farmers have been slow in coming forward to buy and also in making forward contracts and, when foreign dealers come and make forward contracts at the beginning of the season for the purpose of selling the product to people who appreciate its value, it is very difficult for a commercial company to refuse to sell, because they know well that they would not have the storage room for the whole amount, and it is incumbent on them to get rid of considerable quantities of pulp. In regard to the particular factory with which I am connected, during last season about 2,650 tons were sold to the growers and about 2,150 tons to various other people, making 4,800 tons, while 3,600 tons were sold to go abroad, mostly to the Continent, at a price of about £4 17s. a ton. Personally, I think that I should very much like to see some pressure brought by the Ministry of Agriculture upon all the sugar beet factories, because you cannot treat one differently from another, and I think we all want to see the country benefiting from the industry. I am certain that it would be to the benefit of agriculture if all the sugar beet pulp were consumed on the land, and it should be. I would welcome any action taken by the Ministry of Agriculture for the purpose of bring that about. It is a great pity that the British farmers do not seem to appreciate this pulp as much as the Continental farmers do. The latter know perfectly well what is its value, and are always ready to take wet pulp away from the factory when they bring their roots in. The English farmers are very slow to do that, and I believe that wet pulp is better as a cattle food than the dry pulp. The position, however, in that respect is improving, and I think that anyone who wants to see this industry a lasting and standing benefit to agriculture will welcome anything that the Ministry can do to bring about the consumption of the pulp on the land.


My Lord, I entirely concur in what was said by the noble Earl on the Front Opposition Bench as to the value of the principles of Free Trade, and I associate myself entirely with him in the view which he expressed. I think, however, he will agree with me that the principles of Free Trade have been somewhat undermined by the extremely extravagant subsidy given for the growth of sugar beet. Among agriculturists it is undoubtedly a matter of deep interest to be able to make a success of this new industry. I doubt whether they will be long in finding out the value of the pulp, wet or dry. It is becoming extremely popular as cattle food, and I am not one of those who think that the British farmer is very stupid or slow. In fact I am rather inclined to agree with Adam Smith, that there is no class of man who has such a variety of knowledge as the farmer and the farm labourer. I think that they will certainly pick up the value of the pulp as feeding stuff very quickly.

What is more difficult to pick up is the method of growing the crop. It is being grown in some parts of the country at enormous profit; and in other parts not at a profit but at a loss. I am alive to the interest represented by the noble Earl who has just spoken. The factories certainly derive great benefit from the crop, but the agriculturists in some parts have not done so, and it seems to me that the only way in which the factories can encourage the farmer to continue to grow sugar beet is to give him more advantages that he has hither-to been given out of the bounty. The bounty ought to have been given, if to anybody, to the farmer, rather than to the man who sets up the factories, or at any rate the farmer should have had his share of the swag. He has not got it and therefore he is discontented and would like to get a larger share of what the. British taxpayer is good enough to provide. I am against the bounty, but, the bounty being there, it would be well for the factory owners and others to give the British farmer every advantage they can, and giving him feeding stuffs cheap is one way of doing it. The Americans are buying at a larger price and if it pays the Americans I have no doubt it will pay our people, but if the British farmer can get it cheaper it will be some recompense to him for the loss which in many cases he has had to suffer. At any rate the result of this debate may be to induce those interested in the beet factories to give to the farmer a little more of that help which they so abundantly receive themselves.


My Lords, the noble Lord asked for some figures regarding the quantity of dried pulp which has been exported during the last three years, and perhaps I had better give those figures at once. In 1925 the amount of dried pulp produced was 21,705 tons, and of that 4,657 tons were exported; in 1926 the amount produced was 62,800 torts, of which 36,760 tons were exported; in 1927 the amount produced was 87,658 tons, of which 20,745 tons were exported. Those figures show that last year about one quarter of the dried pulp was exported, as compared with more than half exported in the previous year. I might also add, for the information of the House, that in 1925 31,482 tons of wet pulp were turned out from the factories; in 1926, 26,137 tons; and in 1927, 17,693 tons. All the wet pulp was consumed in this country. I think that those figures show that during last year there was a far greater demand for dried sugar pulp than in previous years. It is, I think, well known to your Lordships that in the first instance the factories were left with large quantities of dried pulp on their hands, and did not know what to do with it, and therefore they looked abroad to sell what they could not sell in this country.

It may be that some people think that British farmers are put to hardship in this direction, and if the noble Lord will give special cases we shall be very glad to look into them. May I point out, with reference to this, that the growers of sugar beet have an option of taking back a weight of dried pulp equal to five per cent. of the total weight of their beet deliveries to the factory. The amount of dried pulp produced from the beet crop itself is six per cent., and therefore the grower has the option of taking back five per cent. of what he sends in, leaving one per cent. to the factories to deal with as they like, provided that the grower takes up the option before August 1. It may be thought by some that a longer time should be given for the farmer to make up his mind whether he will exercise his option or not, but while we are all naturally anxious to help the farmer and the agricultural interest, we must also remember that the factories are put in a difficult position in dealing with this dried pulp. It is very bulky stuff and has to be kept under shelter and perfectly dry. If it is kept dry it will keep for an indefinite time; if it gets damp it is very soon spoilt.

It may be thought that the factories are perhaps more anxious to sell abroad than they are to the farmers here. With regard to that, I will only point out that in 1927 the Anglo-Dutch and the Anglo-Scotch companies, which own and control eleven of the nineteen factories in this country, started an advertisement campaign urging the farmers to buy this dried pulp, and pointing out what good stuff it was to feed the cows and fat cattle on. Whether it was a result of that or whether the farmers had found out for themselves that dried pulp really is good feeding stuff for their cattle, there was a far greater demand for this dried pulp than there had been in previous years. This being the case, I have to state that the Ministry do not think it is in any way necessary, or indeed desirable, to prohibit the export of dried pulp from this country. They feel that, now that the farmers realise that this is a valuable feeding stuff, they will take all that the factories can put out, and there will be no need for the factories to send it abroad, as I do not really think they wish to do. It is much better for them to have a home market; besides that, I think it is obviously in the interests of the factories to be on good terms with the farmers and to meet them in every way they can in selling them the dried pulp, should the farmers be willing to take it.

There is one other question which the noble Lord asked, and that is about the average price per ton of dried pulp when exported. The exportation prices in 1927–28 f.o.b. ranged from about £5 to £5 15s.; in the previous year 1926–27 the price ranged from £5 4s. to £5 15s.; and in 1925–26 from £5 10s. to £6 per ton. The price in the factory would be from 10s. to 15s. per ton less. The countries to which dried pulp was exported were chiefly the United States and Holland, and, to a less extent, Canada, Germany, and Italy. I hope these are the figures which the noble Lord wished me to give him, and, with regard to the prohibition of the export of dried pulp, the Ministry do not see that it is in any way necessary to put that into force, as they consider that there will be a sufficient market in this country to absorb all the dried pulp produced, and that the farmers now will be very glad to buy it.


My Lords, I am glad that it should fall to my lot to be the first to congratulate the noble Earl on his first appearance here in his new office. He has come back to this country after a successful term of office in the Dominions, and I am quite sure that he will carry out the duties of his office in this House and at the Ministry with the same success as he achieved in Victoria. I should like, if I could, to persuade him to add some more information to that which we already have in regard to the sugar beet factories, and, in the second place, I should like to call attention to the astonishing extravagance of the present subsidies, and I hope that I may enlist, if possible, the support of the noble Lord, Lord Banbury of Southam, who is always a supporter of economy in your Lordships' House, in trying to secure some reduction of these subsidies.

I hold in my hand Command Paper 110, not presented to your Lordships' House, but given to me in the Printed Paper Office with a celerity which almost amounted to a conjuring trick when I asked for it a little earlier this evening. I had not heard of it before, or I would have spoken of it to the noble Earl. I will take from it the returns given by the English Beet Sugar Corporation in regard to their Cantley factory, and I should be glad if the noble Earl could tell us more about it. Here is a company with a capital of £450,000. It has a general reserve, already accumulated in the course of two or three years, of no less than £299,000, that is to say that, owing to the subsidy paid by the taxpayers of this country, it has accumulated in that short time a sum equal to two-thirds of its capital. And that is not all. On the top of that it has put by an Income Tax reserve of no less than £71,000. Taking that at the rate of 4s. in the £ it looks as if in the one year it had made a profit of no less than £350,000 on a capital of £450,000. That may or may not be; at any rate it points to the fact that the subsidy which is being given is an extravagant subsidy, calculated upon lines which were totally unnecessary. I am bound to say that in view of this it is not very much to ask that more should be given to the farmer and more to the labourer for what they do in the production of beet.

Then there is the Kelham factory. That has an Income Tax reserve account of no less than £17,000 upon a capital of £250,000. In regard to all this I quite admit that it is difficult to say what may be the exact position until you know how many years these companies have been in existence. You do not expect these concerns to produce money at once, as the noble Earl, Lord Denbigh, would be the first person to admit. They cannot be expected to make a profit in the first year. I turn to another company, the Ely Factory Company, which, on a capital of £450,000, has a capital reserve of £30,000, a general reserve of £66,000 and an Income Tax reserve of £50,000. Really I do think we are entitled to ask for a little more information with regard to these vast sums of money. During the years 1924 to 1928 no less than £10,000,000 has been paid in the way of subsidies for sugar beet. I admit that I always regard with a certain amount of hesitation proposals made by the Front Bench opposite. When they are agreed to by the Front Bench on this side I feel almost certain that they need a double measure of vigilance. Here in this sugar beet subsidy we have a measure which was agreed to both by the Labour Government and the Conservative Government; indeed it was initiated by the Labour Government as one of their cures for unemployment, and in order to set agriculture on its feet. Now we find that the subsidy is of a fantastic character, that these factories not only get all their raw material free but, in addition, 10s. for every ton of beet sugar delivered at the factory.

Talk of this business being thriving! Of course it is thriving when money is poured out like water. An industry would be thriving at that rate if it grew tea in Hyde Park, or oranges in the Royal Gallery. Anyone could make a business thriving if the taxpayers' money was poured out in that way. Talk about the "dole" at West Ham and Poplarism! Why, this is putting sugar on the "dole" to an extent even greater than the amount of "dole" which has been spent at West Ham and Poplar. And it is the result of the two Front Benches putting their heads together and agreeing upon one common policy. And think of the reaction—the sugar refineries, where men are thrown out of work, the increase of unemployment at Greenock and places of that kind, the refineries where short time is being worked. For every one man who has been put into temporary employment it is calculated that two have been put out, and it has cost us £10,000,000 to do it—a magnificent result of this policy of subsidising sugar in this country!

I will take the opinion of Sir Leonard Lyle, chairman of Tate & Lyle, Ltd. He said: All that the subsidy has done is to make money for a few people without placing the industry on a permanent basis, and in the process it has hit an old-established and well-run industry, that of sugar refining, very seriously. We find one of these balance sheets to which I have already referred signed by Mr. Van Rossum, one of the many foreigners who have seen their opportunity of making money out of the people of this country by participating in these factories. There is one special figure which, I think, will interest noble Lords opposite. The Scottish companies issued a notice saying that the terms they were going to pay for labour were £2 18s. per week for a day of twelve hours with nothing extra for overtime or Sunday. That does not seem to me to be what you would call a very generous rate of wages to give to workpeople in this country, and I can only say that it is one of the results of the policy initiated by the Labour Government and carried on since then by noble Lords opposite when they took office.

I have not very much hope that we shall get much more information from the Ministry of Agriculture, though we should like, to have it. I should like to know exactly the profit which is made by each of these companies mentioned in Command Paper 110, and the amount of subsidy which is paid to each of them, the amount of beet sugar which they all of them produce, and the amount of beet sugar which is delivered by those companies. I venture to think that I have said enough to show to your Lordships that there is an immense waste of money going on with regard to this subsidy to sugar beet, and I hope that it may attract the attention of those among noble Lords opposite who are in favour of economy, because I believe that a great deal can be done in this direction without doing any harm to the amount of employment in the country.


My Lords, the noble Earl is always at his happiest when he has an opportunity of offering criticism, and I think it must have given him the maximum of delight when he was able to criticise not only the Government but the Opposition Front Bench. I think, however, that he rather overstated his case in regard to one matter. When the Labour Government was in office, it took a step towards starting a, new industry. That may or may not have been right, but I think it was right in the circumstances, and, so far as I can gather from the figures given by the noble Earl, the industry so started has been enormously prosperous. I suppose the Government are entirely responsible for the amount of the subsidy, and I do not think that the Opposition had anything to do with the amount; but I think I should agree with the noble Earl on the figures he has given, that, prima facie, the amount appears to be extravagant, though to say that definitely, of course, implies a knowledge of all the relevant conditions. Like the noble Lord who raised this question, I regret that this dried beet pulp should have been sent abroad, because the question as to whether it is absorbed by farmers at home (and I know this has been a question among farmers), is one of price, and although there has been an increasing consumption in this country, there was also an increasing price paid for the exported commodity. It went up, I think, from £4 to £6.


In 1925–26 it was £6.


What is it now?


5£ 4s.


Then it is less now than it has been, and I suppose one would draw the inference that as the price diminished, the demand for it in this country increased, as, of course, one would naturally expect. It does not seem reasonable that the price to farmers of a by-product of a subsidised industry of this kind (because it is a by-product) should be increased by foreign competition Farmers should be able to purchase it at a reasonable price, having regard to the conditions of the trade, and to the great advantage which, apparently, the trade is deriving from a subsidy. I do not desire to embark upon this question. I can only say from my own knowledge of the farmer that a commodity of this kind at something like £4 would pay him; but there is, then, all the difficulty of traffic, carriage and matters of that kind, unless the farmer is in immediate proximity to one of these beet factories. In conclusion, I should like to congratulate the noble Earl opposite upon representing the Ministry of Agriculture in this House, and upon the admirable way in which he has given his information this afternoon.


My Lords, as the noble Earl opposite has given me all the details I asked for, I shall not press for the Return. I should like, however, to remind the noble and learned Lord, Lord Parmoor, that the terms of the subsidy were actually proposed by Mr. Snowden on the excuse, it is alleged, that a by-election was imminent. I am very much disappointed at what has been said about prohibition. I had hoped that a more satisfactory answer would have been given in this House than was given in another place, where the Ministry of Agriculture refused to deal with it, although large quantities of beet pulp were being exported from this country. The Minister of Agriculture is always giving his sympathy to farmers, but he seems never to do anything practical. And now in this House the Parliamentary Secretary of the Ministry of Agriculture has refused to do anything to help farmers upon this question, although we all know how serious matters are, especially in East Anglia and other districts, and how important it is that farmers should be able to buy cheap pulp if they can. I ask the leave of your Lordships to withdraw my Motion.

Motion, by leave, withdrawn.