BRITISH SUGAR INDUSTRY (ASSISTANCE) BILL. (Hansard, 22 July 1931)

THE PARLIAMENTARY SECRETARY OF THE MINISTRY OF AGRICULTURE AND FISHERIES (EARL RE LA WARR)
My Lords, this is a Bill to deal with an emergency that occurred in the beet sugar industry last year owing to the fact that the drop in the price of sugar from 11s. 7d., I think, in 1928 to 9s. 2d. in 1929 and then to 6s. 6d. in 1930, coincided with the halving of the beet sugar subsidy, that is, a reduction from 13s. to 6s. 6d. These two reductions, coming together, created a situation 1054 which the industry was unable to meet. The Government, therefore, decided that it would be necessary to alleviate to some extent the situation thereby brought about. It was decided to do so by increasing the new smaller subsidy—that is, the subsidy of 6s. 6d.—by 1s. 3d. per cwt. Very stringent conditions are attached to that increase. Firstly, the extra subsidy is not payable at all in so far as sugar prices rise above 7s. 9d.—that means a rise in price of 1s. 3d. above what the price is now. Every penny that the world price of sugar rises conies out of this scheme for increasing the subsidy.
Actually the cost of the scheme would be something over £200,000, but for every penny that the price of sugar rises between now and the initiation of this scheme we save £15,000. Not only that, but if the price of sugar rises sufficiently next year to justify us in so doing, this extra subsidy will be recoverable out of the next year's payment of subsidy to the factories. The factories have undertaken in return to see that every penny of the extra subsidy goes to the growers. They have undertaken that they will pay no dividend and make no provision for depreciation while they are in receipt of this extra subsidy. Not only have the factories made this sacrifice in order to keep the industry going—because most certainly the industry could not have been kept going unless some such step had been taken—but the growers themselves have also had to meet a very heavy reduction in price. Whereas last year they were receiving 52s. 4d. for beets containing 17½ per cent. sugar content, next year they are to receive only 43s. Whereas last year they received 46s. for beets containing 15½ per cent. sugar content, this year they are only to receive 38s.
Let me make it quite clear that this Bill does not in any sense raise the general question of whether the beet sugar industry should or should not be assisted. That was settled some years ago—I think in 1925—when the original Bill was introduced. We are simply discussing now whether an industry that was set up by Act of Parliament, and on the development of which this country has already spent vast sums, should be-allowed to go under because of one particular year in which this disastrous fall 1055 in prices coincided with an equally large fall in the subsidy. At any rate, if any noble Lord is anxious to raise the general principle, I would point out that this proposal of ours only suggests an increase for one year. The subsidy is only one-third of the original subsidy. It is steadily declining, and three years hence, in 1934, it will run out completely. It satisfactory to be able to tell your Lordships' House that as a result of this emergency measure there has been a decrease of only 18 per cent. in acreage under sugar beet cultivation—that is, of the growers who supply the twelve factories which accepted our offer. There are, unfortunately, six factories which did not accept our offer. They are not to receive the increased subsidy and there has been a reduction in their acreage of 44 per cent. I think it is most satisfactory to realise that in spite of this enormous reduction in price to the growers there has only been this very small reduction in acreage. It shows how our growers, in the last few years, have been putting their hacks into it and improving the efficiency by which they produce their crops.

§ THE MARQUESS OF LONDONDERRY
I am sorry to interrupt the noble Earl, but does he mean there has been no decrease in the acreage?

§ EARL DE LA WARR
There has been an 18 per cent. drop.

§ THE MARQUESS OF LONDONDERRY
That is not the whole drop.

§ EARL DE LA WARR
That applies to the twelve factories, compared with a 44 per cent. drop for those growers who supply the six factories.

§ THE MARQUESS OF LONDONDERRY
I misunderstood the noble Earl.

§ EARL DE LA WARR
I think I have given the main outline of the scheme. If any questions arise I will do my best to answer them. I beg to move.

§ THE EARL OF DENBIGH
My Lords, I do not wish to take up the time of the House, especially as I have no criticism to offer with regard to the Bill, but I am very much interested in this question, and I should like to take the opportunity of saying a few words, if the House will 1056 bear with me for a short time. It is just about twenty-five years since I first introduced this question in the House, and I am not at all certain that it was not the first time that the sugar beet industry had ever been mentioned in your Lordships' House. I spoke at some length, called attention to what could be done end asked the Liberal Government of the day to give some assistance. It was withheld because it infringed the strict rules of Free Trade. However, we went on, and I am glad to say that the Conservative Government, I think in 1923, remitted the Excise Duties and gave a great impetus to the industry for the moment. It was not possible, however, to attract any further capital, because that protection was immediately seized upon as a political question and the situation was felt to be too uncertain. Accordingly I have nothing but congratulations to offer to His Majesty's Government, both now and then, for having the vision to realise what really could be done in regard to this important industry in this country, and I may be pardoned for feeling particularly satisfied to realise that everything that I brought forward as an argument in favour of adopting the industry as a national one has been overwhelmingly proved during all the years of this great experiment.
All I want to say now is in regard to what I consider the narrow-minded, carping criticisms that have been uttered against any further money being expended on the industry. We have seen it represented that some £30,000,000 has been practically thrown away, that nothing has been gained and that the further money now provided is simply throwing good money after bad. There never was a greater mistake than to assume that. The whole thing must be regarded as a great educational experiment which has been wonderfully successful. It has been abundantly proved that the cultivation of sugar beet enormously improves the fertility of the land and increases the subsequent crop, and I think that is one of the most important points in its favour. The interesting report issued only the other day quoted the report of the manager of the Kelham Estate, in which he points out that for the first three years, when he took over the estate, wheat and barley averaged three quarters per acre. After the first beet crop there was a 1057 marked improvement, and for the last four years wheat far the whole farm has never been less than five quarters per acre, and has averaged five quarters and a half. The same result has been noted and is well known in regard to other crops, in which there has been a large increase.
I am not going to enlarge upon all the details, because I think they are becoming pretty well known now, but it is important to realise that the whole future of the industry depends on the question of costs. It is all-important to reduce costs so far as possible, and we can only reduce costs by improving efficiency, not only in practical management but also on the farm, in cultivation, in transport and in every possible way in which expense comes in in handling these roots. That efficiency is certainly improving, and costs have been reduced very largely. There is one manner in which costs can be still further reduced, and that is by increasing the average production per acre, which at present is not satisfactory. The general average is not yet up to the Continental standard, which is round about ten or eleven tons per acre, although about 40 per cent. of the crops have been equal to that, and in many cases a great deal larger. One reason is that in this country our horse hoes have not made possible the Continental practice of standing the rows close enough together, because the plants get trodden on by the horses and destroyed. The result is that what is called plant population, the number of roots per acre, and the sugar produced have not been equal to the Continental standard, taking it all round.
But all that is being improved and is capable of being improved. I was reading only last week an account of a motor hoe which can be used for the purpose of weeding, saving a good deal of labour. If that can be developed—and great ingenuity has been brought to bear upon the implements that have been evolved for the purposes of this industry—it may have a very considerable effect in increasing the production of sugar per acre. It is all a question of efficiency and 1058 reduction of costs, and I contend that, having regard to the difficulty which has been suddenly sprung upon us through this abnormal fall in the price of sugar and the impossibility of the factories running at a profit if they have to pay adequate prices to the farmers, the Government have shown great wisdom in combating what I call the short-sighted objections that have been raised, and introducing this Bill for the purpose of continuing some financial help.
We earnestly hope that it may be possible to put the industry on a footing where it will not be necessary to ask for financial help. But, even if that cannot be arrived at, if it be necessary to ask for some small protective duty which will not hurt anybody for the purpose of keeping this industry going in some way—for every Continental country that has adopted sugar beet would do anything rather than see their industry go down—if it is necessary to do that, I contend very strongly that the money will be extremely well spent. Therefore I cordially welcome this Bill, and I congratulate His Majesty's Government on their action in the matter.

§ THE MARQUESS OF LONDONDERRY
My Lords, naturally I have no desire to offer any objection to this Bill. In fact, it is only following on the help which has already been accorded. There is only one question that I would venture to ask the noble Earl, and that is in regard to Clause 2 (2). I presume that repayments are a first charge on the property and come before any other charge.

§ EARL DE LA WARR
Repayments may be made by deduction from the subsidy.

§ THE MARQUESS OF LONDONDERRY
They are a first charge on the property?

§ EARL DE LA WARR
Yes.