HL Deb 14 February 1929 vol 72 cc944-58

LORD HARRIS had given Notice to ask His Majesty's Government whether they are aware that wheat is being imported into England from Germany, on which the grower has in effect received a bonus on exportation; and whether they do not consider that the British grower should be safeguarded against such dumping. The noble Lord said: My Lords, before putting this Question I will take the liberty of describing to your Lordships what is happening. The custom in Germany, so I understand, and on very good authority, is to sell wheat and some other grain by the thousand kilos., and the price is supposed to include the full duty of 50 marks a ton. The wheat when exported from Germany to any foreign country gets a certificate of the Customs authority that that quantity of wheat has been shipped, on which the duty of 50 marks a ton is refunded. I cannot imagine that the actual exporter is the only person who benefits by this 50 marks a ton. Same of it must filter down to the producer, who is thereby able either to put something in his pocket, or pay a lower wage, or in some other way produce the wheat a good deal cheaper than the British farmer can.

I hope that my noble friend [Lord Stradbroke] is not going to treat this as a small or insignificant matter that can be ignored. It is by no means a small or insignificant matter to the unfortunate farmers in the neighbourhood of the port where I know this is happening—it may be happening at a number of other ports, for all that I know. Those farmers have to take two or three shillings a quarter less than the normal price, or the price at which wheat would be sold there if it was not for this subsidised wheat that is coming in. This is an additional burden laid upon the unfortunate farmer. It is not merely that he has to compete with an Act which compels him to farm at certain hours of the day which do not suit him; it is not enough that he has to give a wage which, on, I should think, quite two-thirds of the land in England, it is quite impossible for the land to afford; it is not enough that he has to compete against the production of all the world; but he has actually to compete now against a subsidy paid by a foreign Government. I am rather interested to know whether noble Lords opposite on the front Bench above the gangway regard that as Free Trade—subsidised produce coming into this country. It certainly is not fair trade from our point of view. I am rather interested to know whether they think the British farmer is being fairly treated in having to compete against subsidised production.

I thought I was justified in putting the second part of my Question, because I studied the Prime Minister's speech at Newcastle very carefully. He said something there about Safeguarding. First of all he repeated the pledge that he gave in 1924, that he would put no tax on foodstuffs, and then he proceeded to say something about Safeguarding:— I will say a word about another way in which we can help industry"— I suppose agriculture is an industry— and that is by Safeguarding. Nothing has given me greater satisfaction than to notice how gradually that process of Safeguarding, which has been tried with such successful remits in certain limited spheres in this country, is really passing from the political arena, and is being considered—as it should be alone considered—from the economic and business standpoints. Well, that is rather encouraging for agriculture, as long as it applies to agriculture, but there is not a word through all that speech about safeguarding agriculture. There is Safeguarding for industries but there is no specific reference to agriculture. I hope my noble friend Lord Stradbroke will be able to give me sonic encouragement.

By way of contrast I should like to read something else. It is from a speech delivered by a Mr. Wise. I do not know Mr. Wise, but I am told he is one of the economic experts of the Independent Labour Party. He, in a speech made, I think, about the same time, said that he realised that a Labour Government could hardly stand idly by whilst the steel industry, whether nationalised or not, was disorganised by the import of subsidised continental steel. And he added:— Nor is there any advantage to the country in sporadic dumping of foreign agricultural produce here. I should be very much interested, if they thought it worthy of their attention, any noble Lord on the front Opposition Bench would tell us what they think of Mr. Wise's opinions. They give us some encouragement, you know—we who are suffering, and we are suffering terribly. The nobly Earl below me [Lord Stradbroke] knows quite well that many, many farmers in this country are next door to bankruptcy, struggling ineffectually against prices and against the cost of labour. They had a splendid harvest last year, nobody could complain, but it was absolutely of no avail because of the cost of labour and because of world prices. Are we going to have any encouragement from the Government at all? I know what will be said: "Oh, yes, we are doing a great deal; there is the derating scheme, there is the loan scheme." They are not going to save a single farmer between now and Christmas from bankruptcy. That is the danger—that in many parts of the country we know that our neighbours are next door to bankruptcy, and will probably be bankrupt before Christmas; and we do not get one syllable of real encouragement as regards what is the real factor, and that is price.

I was not surprised—I was disappointed, but I was not surprised—when the Farmers' Union the other day criticised the Government and declined to join a conference. I was disappointed, because I do not see what they are going to get out of it, unless the Labour Party are going to act upon Mr. Wise's advice and safeguard us against subsidised foreign importation. I am not surprised that the Farmers' Union decline to join any more conferences after all the talk that has gone on for the last four years. This is a specific fact: subsidised corn coming into this country. It may not be a very large amount at present, but there is nothing to prevent its growing into a big trade, and I am extremely anxious to hear what the Government have to say about it.

LORD ERNLE

My Lords, I should like to support the noble Lord in the appeal which he has made. This German wheat comes in under very peculiar circumstances, as the noble Lord has said. There is an Import Duty in Germany of 2s. 6d. a cwt. (I translate it into English money), which works out at something like 11s. 3d. the quarter on foreign wheat. If a German producer exports home produce he receives from the Customs authorities a certificate, entitling him to import into the country a corresponding quantity of foreign wheat duty free; so that after you allow a certain profit for those who have speculated in certificates, he gets a bonus of l0s. a quarter. This wheat began to come into this country in the last quarter of the present cereal year. It came in small quantities, in small vessels, along the coast, and it was offered in London in November at 43s. or 44s. Up to that time English wheat had sold freely and in fair quantities at 47s. and 48s. The German wheat brought it down to 43s. or 44s.

I am not saying that the quantity is very large, but I would appeal to the Ministry of Agriculture to consider this particular case. They may say, they probably will say, that when you are importing into this country upwards of 28,000,000 quarters it does not particularly matter if there is a small quantity coming in from still another country. May I point out that this is not enough from the agricultural point of view. In the first place, there is an enormous ploughed area in Germany which at present grows rye. If the producers of those rye harvests are tempted by a bounty of 10s. a quarter to grow wheat they will grow it, and though this import of German wheat may be a trickle to-day, how can you tell that it will not be a flood to-morrow? To-day, I believe, the total amount that is coming in is approximately 330,000 quarters—no great figure, I admit. Still, that £700,000 paid to foreign farmers for wheat would have gone to the English farmers.

I say advisedly "would have gone to the English farmers," for this is the point to which I venture to direct the special attention of the Minister of Agriculture. The ordinary wheat that we import into this country from North and South America, including Canada, is mostly hard wheat. Our wheats, which are soft wheats, are considered by our millers to make a good mixture with those hard wheats. That is partly why we get a sale for our soft wheats mixed with the hard wheats from foreign countries. Also, our soft wheats are mainly used in the manufacture of biscuits. The wheats from Northern Europe are soft wheats, like our own. The constituents are the same in the two sorts of wheat. And into the tiny corner of agriculture where our farmers have some sort of pull over the foreign producer comes this German rival with his bounty of 10s. a quarter and drives the unfortunate farmer pretty well to desperation.

If I may venture to say so, arable farming in this country, from Dorset-shire right round to the eastern coast and northwards, is in a very difficult position. Numbers of farmers are on the verge of breaking. Those who have tried to help them have been urging them to pool their wheat so that they may obtain a capital loan on the amount of the wheat in the pool at once and save themselves a ruinous discount, and also gain the advantage of the better prices which prevail in the summer. How can you hope to go to the farmer and tell him to pool his wheat, when the answer is: "I sold mine at once, and I got 48s. You tell me to keep it until December when I only get 43s." Will they ever join a pool? Is it not hopeless? As long as you have these sporadic imports from unknown countries—we know where the rest is coming from and can prepare for it—it is impossible to do anything to organise the wheat trade of this country. I should like very strongly to appeal to the Ministry to look into this question—it is not settled, as I have said, by urging that It is only 330,000 quarters out of 28,000,000—otherwise, the very thing for which we have a sale at present in the English wheat market will be cut into and that cut may rise to enormous proportions in the years to come.

All I would say further is that if the arable land of this country goes into grass you will depopulate a great number of our villages. Moreover, I should like to warn you of this—that not only are many farmers, as I believe, on the verge of bankruptcy, but poverty of the acute kind is already reappearing in our English villages. Therefore, I venture to appeal to the Ministry of Agriculture to do something in this question and to do it not merely with regard to German wheat but on a large scale in regard to wheat-growing altogether.

THE LORD BISHOP OF NORWICH

My Lords, may I take up the word "desperation" from the speech of the noble Lord who has just sat down. The matter itself may seem to be a small one but at the same time I believe that a gesture of encouragement from the Government, even in a small way, would hearten our farmers very considerably. Many of them are on the verge of bankruptcy. Many of them have gone bankrupt. Alas, only the day before yesterday I heard that two or three in their despair had committed suicide. I come from the great corn-growing area of England. Norfolk, as your Lordships are aware, grows more barley than wheat, but the whole of East Anglia is occupied, I think, with the growth of cereals.

I agree with the noble Lord, Lord Ernle, that we cannot possibly look on with equanimity while the cultivation of wheat is going out of practice. I know that there is one school among us which considers that the wheat-growing days of England are over; that we are, and always must be, dependent upon supplies from overseas and that as our own cultivation dwindles we shall import more and more. Such persons believe that the right thing is that all our land should go down to pasture or that we should turn it into dairy farms or orchards, and content ourselves with producing milk, fruit and so forth. But to my mind it is unthinkable that we should entirely, and with equanimity, abandon the cultivation of wheat. I am not thinking only of the necessities of war time which may be very far ahead and need not be taken closely into view. There are other circumstances besides war that might make it extremely important for us to produce sufficient home-grown wheat to last us for a short time. Think of what would happen in a long protracted shipping strike. Think, again, of other things that might for a time interrupt the safe incoming of our supplies from overseas. I believe it is imperative for us at least to cultivate so much land as will give us, in case of an emergency, enough wheat to tide us over the acuteness of any particular crisis.

There are others who say the whole salvation of the farmer lies in co-operation. As I have had occasion to say elsewhere, I never can see that the gifts for co-operation and marketing are necessarily to be found in the man who is an expert farmer. Much good may come from co-operation; but to tell farmers that their only hope lies in taking up a line of business for which they have not been trained, and where the expert knowledge that they have achieved from generation to generation, because it is in the blood, will not be effective, seems to me to be rather cold comfort and in some senses rather irrelevant. The noble Lord who has just, sat down has pointed out the difficulties in the way of the new proposal that there should be a pool of wheat preventing farmers having all to sell at the same time when they want cash, and, therefore, securing only a small sum for their crops; he has already shown to us some of the flaws that lie in that line of argument, and even if it be carried through successfully it will not touch the root of the matter.

Other critics of the farmers tell us they are averse from paying good wages. I do not for a moment believe that to be true. I believe there is no industry in the country in which the master and man are drawn more closely together than in the great industry of agriculture. The masters and men I believe to be friends. There are no trade secrets in the matter. They have been in constant association, working often side by side upon the land, and I believe the labourers friends are to be found among the masters above all other people. Of course they have to pay wages which, as the noble Lord, Lord Harris, pointed out, are not really justified by the profits of the industry, but even there I do not think the farmers are in an over-critical mood. What I think they would like to know is this—what principle is supposed to guide the actions of the Wages Board, whether the Board takes into consideration the general run of prices, the ups and downs of the prices of food, whether they consider the wages that the workers get at harvest time and so on, and their privileges, such as cottages, and many other things. I think if you asked the farmers they would tell you they would like to have it made rather plainer what principles are supposed to guide the Wages Board. I do not think you would find that the farmers were condemning either Party. I am certain the farmers themselves would be more pleased than anybody in the country if they were in a position to pay even higher wages than they are asked to pay at the present time.

I believe farmers would be greatly satisfied, if the Government would take a comprehensive view of this question of the imports of subsidised wheat, the facts concerning which have been so lucidly explained by the noble Lord, Lord Ernle. I think it would encourage them to go on and persist in the hope of better times to come. Those better times seem always to be rather far deferred, but some encouragement, I am inclined to think, would help them, and would have a value far beyond what may be the actual profit to be put into their pockets by any possible Government action in this matter. I very earnestly press that the Government may give a sympathetic reply to the Question of the noble Lord, Lord Harris.

EARL DE LA WARR

My Lords, I only rise for one moment because the noble Lord, Lord Harris, challenged this Bench as to what our policy was on this question. We probably approach the matter from a point of view quite different from that which he takes, but at the same time I think your Lordships will probably have gathered from the debate that we initiated some short time ago on wheat and meat prices and the establishment of wheat and meat import boards, that we do share in the very general dissatisfaction which is felt in all sections of the population who have anything to do with agriculture. We quite agree with the noble Lord that the dumping of another nation's surpluses do not the slightest good to this country. The consumer, as a rule, gains very little, while the producer does not gain very much out of shortages, because there is always the middleman sitting in between, and he generally manages to pocket the difference.

Our policy is this. We believe that the fluctuations in prices are of no use either to the producer or to the consumer, and that they had very much better be done away with by means of national organisation for national purchase. The noble Lord may say that he does not see how that is going to help him in this particular case. But let me consider it for a moment. He tells us the German Government is giving a subsidy, or what amounts to a subsidy, to the German growers of wheat so as to enable them to import wheat into this country at a lower price than we can produce it here. Suppose you had a national wheat import board which had control of all the importation of wheat into this country. The Germans would have to bring their wheat to the board. They would have received a subsidy, and, therefore, would be able to offer it to the board at a reduced price. The board would be only too pleased to take their wheat at the lowest price at which they could buy it, but they would not be under the least obligation to put that wheat on the market at a price which would be likely to destroy the general stability of their market. It would be entirely against the interest of the hoard to do so and against our interest to do so, because our interest as a nation is to keep the price of wheat stable. What, therefore, would happen? The board would buy the wheat cheap; it would sell it at the stabilised price; and, in fact, the German Government would be giving a subsidy to our national wheat commission which, I should think, it would very soon cease doing as soon as it realised what it was about.

There is another solution, one that has been put forward once or twice by the noble Lord, Lord Ernle, which really goes further than our proposal. In a debate in this House a month or two ago he told us that he felt that something useful might be done if you had an international board to deal with the commercial situation throughout the world; and on another occasion he said that there was nothing for it but to stabilise the world price by international agreement. That, of course, goes very much further than we have suggested, but if it was possible to work out a scheme on these lines it would undoubtedly gradually provide a solution for just such a problem as the noble Lord, Lord Harris, has put before your Lordships' House to-day.

I would appeal to the noble Earl who speaks for the Government to take this opportunity of reconsidering the Government's refusal to have a general inquiry into the conditions of the importation of wheat and other essential food stuffs into this country. On another occasion when we debated this subject there were one or two noble Lords, notably Lord Ernle and Lord Harris, who said they would have supported me in my plea for this inquiry if in the Motion I had not definitely made the statement that in this way we would be able to produce certain results. Now, without in any way asking the Government to commit themselves beforehand as to what the result of this inquiry would be, I would ask them—and I believe in this both Lord Ernie and Lord Harris will support me—to reconsider their decision in refusing an inquiry and to institute it at once. They have not been able to do very much for agriculture so far but this is a chance to do something. Just as on the question of drainage the other day I told them that we would be very glad to carry on the good work in June if they did not have time to do so, so we would be very glad to put into force any recommendations that such a Committee might make.

THE PARLIAMENTARY SECRETARY OF THE MINISTRY or AGRICULTURE AND FISHERIES (THE EARL OF STRADBROKE)

My Lords, the noble Lord who asked the Question, the noble Lord behind me and the noble Earl opposite all spoke of the great depression that hangs over certain branches of agriculture, and as I myself happen to live in the eastern part of the country I am naturally fully aware of the unfortunate position in which the arable farmers find themselves to-day. Therefore, your Lordships will realise that personally, as well as representing the Ministry of Agriculture, I feel the greatest sympathy for the condition of these farmers. The Government are fully aware that German wheat is being imported into this country and that complaints have been made by British farmers with regard to it. The noble Earl opposite has raised again the question which he raised the other day in this House, when I replied that the Government did not see their way to go into the question of a national purchase of wheat, because it has already been reported against and we did not think any good would come from having a Commission to enquire into the question again.

With regard to the Question asked by my noble friend Lord Harris, it has already been pointed out that wheat from Germany is exported under a licensing system. Your Lordships are doubtless aware that this system was adopted under the Customs Tariff Law of 1902. This licensing system was naturally suspended during the war period, but it was introduced again in 1925. Even before the War a considerable quantity of wheat and flour was imported into this country. For instance, in 1911 the imports (expressed in terms of wheat) were 22,000 tons. In 1912 they had gone up to 41,000 tons, and in 1913 to 54,000 tons. Then came the War. In 1925 the system was again introduced and the imports that year amounted to 106,000 tons. In 1926 the imports rose to 120,000 tons, in 1997 they dropped to 17,000 tons, and in 1928 they rose again to 79,000 tons. I should say with regard to the small quantity imported in 1927 that for three months of that year—during the months of May, June and July—the licensing system was suspended. On the other hand, as my noble friend Lord Ernie pointed out, the greater part of the wheat imported from Germany into this country is imported during the latter part of the year, during the months of November and December.

In practice this system is used to compensate exporters in Eastern Germany, which is, of course, the chief grain-producing part of the country, for the difference between German and world grain prices, resulting from the fact that Germany is a protected market and that therefore German prices are higher than world prices. The main object of the system appears to be to provide an outlet for the surplus grain of Eastern Germany because the high cost of railway transport is said to restrict the movement of grain from the eastern to the western parts of Germany. It is therefore cheaper, they say, to import wheat into Western Germany from abroad than to transport it by rail from the Eastern provinces. Thus, a grain exporter in Eastern Germany, when he exports grain, receives an import licence authorising him to import grain, and this licence he can sell to a grain importer in Western Germany, who uses it to pay the duty on a corresponding quantity of foreign grain which he proposes to import. The essence of the system is this, that the German Government, having imposed a duty on imported cereals, remits that duty by means of import certificates in respect of a quantity equivalent to the quantity exported. The noble Lord refers to the system as being in effect a bonus on exported wheat, and I agree with him that the export licensing system does confer an advantage on the German wheat exporters, inasmuch as it enables them to sell abroad at a price below the price of the article at home owing to the sum which they receive from selling the licence certificates. But in this connection it is necessary to bear in mind that. Germany is a country with a protective tariff and that consequently the price of wheat in that country is higher than the world price and higher than it is in Great Britain.

It is a matter of regret to us from the point of view of the farmers that this trade, which is mainly limited to markets in the East of England—a part of England with which the noble Lord who asked the Question and myself as well as the right rev. Prelate are very closely connected—should enter into competition with home growers, but it is with very great regret that I must add that we cannot see that any action can be taken by the British Government. The only way of meeting this complaint that German exporters do in fact gain some advantage from this system, would either be by putting a differential duty on German wheat or by the prohibition of imports of German wheat. Your Lordships will realise that neither of these steps is practicable. Under the Anglo-German Treaty, the British Government are debarred from treating wheat of German production differently in any way from wheat of other origin. The provisions with regard to the duties to be levied on German goods are contained in the first paragraph of Article 8 of the Treaty, which is as follows:— Articles produced or manufactured in the territories of one of the two contracting parties, imported into the territories of the other, front whatever place arriving, shall not he subjected to other or higher duties or charges than those paid on the like articles produced or manufactured in any other foreign country. There is nothing in the Treaty which would entitle the British Government to regard wheat exported under the advantage of the export licensing system as not being a "like article" with wheat in general.

As regards prohibition of imports, the Treaty debars us from imposing any new prohibitions on the importation of German goods except prohibitions imposed no certain specified grounds, which are set out categorically in the Treaty. These exceptional grounds include, for example, sanitary grounds, as well as considerations of public safety, but they certainly do not afford any opportunity of imposing a prohibition for economic reasons. Furthermore, such prohibition would offend the Geneva Convention for the abolition of import and export prohibitions and restrictions, a Convention in which the British Government took the initiative. In any case, I am afraid it is impossible to go further, because a duty on or a prohibition of imported wheat, from whatever source, would be contrary to the Prime Minister's pledge not to tax foodstuffs, given before the last General Election and repeated in the Newcastle speech. I regret very much that I cannot hold out any hopes of assisting our arable farmers in this direction, but your Lordships will see from what I have said that, owing to the Convention and commercial Treaties in existence between this country and Germany, we cannot take any steps in this matter, though of course it is receiving our consideration and we shall do all that we can whenever opportunity arises to ameliorate the position of our arable farmers.

LORD HARRIS

I am not quite certain that I understood about the system of licensing. Is all wheat imported under a licence?

THE ERAL OF STRADBROKE

No. I am sorry if I did not express myself plainly. The German Government give a licence for any wheat that is exported.

LORD O'HAGAN

My Lords, I would venture in a very few words to say something in regard to this subject. It so happens, as I think many of your Lordships are aware, that it is proposed to hold a national conference on the subject of agriculture in London this month, and inevitably, as the result of the organisation necessary for bringing that conference together, one has been brought very closely into touch with all these sides of the agricultural question, and naturally the very subject which the noble Lord, Lord Harris, has brought up this afternoon has not been lost sight of. I am bound to say, being very much concerned with the organisation of this conference, that I am extremely disappointed with the reply that has been given by my noble friend upon the Front Bench. I can quite see the difficulties in which he is placed, but at the same time I had hoped that it would not have been beyond the wit of the Ministry of Agriculture to give in this matter some indication—I will not say of the difficulties of the farmer, for I am convinced that my noble friend is fully acquainted with them and that they have his sympathy, but some ray of hope in this matter towards those who are placed in such an unfortunate position at the present time

I do not wish b detain your Lordships to-night, but I hope that by a very thorough thinking out of these questions and of the problem of wheat growing in this country some solution may be found which may commend itself, not merely to one, but to all political Parties in the State, and may on able this basic industry to be in some measure restored to that activity upon which, as I think many of us feel, the real civilisation and wellbeing of the country as a whole largely depend.

House adjourned at a quarter past six o'clock.