§ Order of the Day for the Second Reading read.
THE PARLIAMENTARY SECRETARY OF THE MINISTRY OF AGRICULTURE AND FISHERIES (THE EARL OF FEVERSHAM)
My Lords, the House will no doubt be aware of the difficulties which have led to the need for legislation dealing specially with the bacon industry, but I would like, if I may, to refresh your Lordships' memory by a few words of a historical character. Your Lordships will no doubt recall that until about ten years ago little or nothing was done to stimulate pig production for the home market. In 1930 the output of bacon in Great Britain was less than 1,500,000 cwts. and only one-seventh of the total demand. Broadly speaking, British producers concentrated on the pork market and left the expanding bacon market to their foreign competitors. In these other countries, particularly Denmark and Holland, the pig populations were increasing by enormous amounts, and the total imports into this country rose to a total of 12,000,000 cwts. in 1932—that is, more than twice the imports in the five-year period preceding the War. This pressure of foreign imports created a serious situation for the pig industry in this country equally with the industry abroad, and there was an all-round fall in prices. For example, the prices received by Danish producers fell by more than half between 1929 and 1933.
In this country a Reorganisation Commission was set up in 1932 under the Agricultural Marketing Act. The Commission was appointed to prepare a scheme for the marketing of pigs and pig products, and sat under the able Chairmanship of the noble Lord, Lord Bingley, who, I am sorry to say, has been prevented from being in his place to-day. On the basis of the Commission's recommendations marketing schemes were brought into operation. They were not, as your Lordships are aware, in any sense forced on the industry, but were established as the result of voluntary action by producers. The two main principles on which these schemes were founded were the regular supply of bacon from all sources, and the orderly supply of home-produced pigs suitable for conversion into bacon. The first objective 685 was secured by quantitative regulation of imports under the Agricultural Marketing Act, 1933, and the second was achieved through the system of annual contracts between producers and curers.
It may be said that the marketing schemes established a British bacon industry, producing a commercial product capable of competing in price and in quality with the finest imported. The pig population reached in 1936 a record figure of over 4,000,000, whereas in 1931, at 2,900,000, it had been almost the same in 1867. Similarly, the output of bacon in Great Britain was doubled between 1930 and 1936, when it amounted to 2,750,000 cwt. It is worth remarking that this increase took place mainly in Wiltshire-style tank cured bacon, which is similar to Danish bacon. These satisfactory results showed that the schemes had been on the right lines. Nevertheless there remained certain outstanding problems which led to the breakdown of the contract system in the autumn of 1936.
The first main problem is that of redundant bacon factories. There are today about 790 licensed curing establishments in Great Britain. These do not include small butchers and retailers producing very small quantities of bacon. But some 490 of the 790 establishments are small curing premises, so that there are only about 300 effective bacon factories, and these are capable of dealing with about 3,750,000 pigs per annum. The number of home-produced pigs available for curing in 1936 was about 2,250,000; if Irish pigs and imported frozen carcases are included, the total becomes about 2,600,000. Even allowing for a considerable increase in the home production of bacon pigs, it is obvious that there is a substantial surplus of curing capacity. Factories have been working at two-thirds capacity or even less during the past three years, and therefore overheads have been correspondingly heavy. It is understandable that anxiety to secure an economic through-put led the curers to insist upon the annual contract being conditional upon a minimum number of pigs. More pigs were taken for bacon than the total supply warranted, with the result of forcing up the prices in the pork market. The difficulty was increased by heavy "open market" buying by curers who were short of pigs. In 1936 open market purchases amounted to one-fifth of the number of pigs de- 686 livered under contract. The cumulative effect was that farmers who did not contract were able to secure higher prices than those who did, and necessarily then confidence in the contract system was seriously undermined.
The other main difficulty which arose was the rise in feeding costs from 1936 onwards; the amount of this increase was as much as 40 per cent. This upward swing in production costs was not accompanied by any corresponding rise in bacon prices which would have enabled the curers to offer higher prices for pigs. The contract for 1937 was, therefore, put before producers at a very difficult time. The curers demanded 2,200,000 pigs; the producers offered 1,900,000 and the contract accordingly failed. After the breakdown of the contract system, curers reverted to buying in the open market. Despite the fact that prices rose well over those provided for in the contract, curers could not even obtain the 1,900,000 pigs which had been offered on the annual contract. Moreover the pig censuses of June and December, 1937, and March, 1938, indicated that a decline in the pig population had set in. I am glad to say there are, however, hopeful signs of a recovery in the pig population which may well be due to returning confidence among pig producers in anticipation of the effect of the proposals in this Bill.
The views of the Government were announced in July last. While recognising the difficulties of the industry, which I have endeavoured to enumerate, the Government stated their belief that if the industry were founded on a smaller number of efficient factories provided with regular and adequate supplies of pigs of good quality and conformation, sufficient economies could be secured to enable the industry to be maintained during periods of high feeding costs. Nevertheless the bacon industry could not be expected to achieve rationalisation in face of a falling output, especially in view of the current high level of feeding stuffs prices. In the Government's view, therefore, a measure of financial assistance is necessary over a temporary period while reorganisation is being effected.
I now come after that historical explanation to the provisions of the Bill itself. Part I is concerned with organisation. Experience has shown that the co-ordinating body, the Development Board, lacked necessary powers to effect 687 reforms. The Bill therefore establishes a new Bacon Development Board with wider powers of control and with five instead of three independent members. This new Board derives its authority from the Act, and is not brought to an end by the revocation of one or other of the marketing schemes, which might have happened to the old Development Board. In Clause 2 the Development Board is given authority over the two Marketing Boards in those matters regarding which there is no express direction that the Marketing Boards shall act independently of the Development Board. These powers of control include all major issues of policy.
Part II of the Bill deals with the problem of redundant manufacturing capacity. The machinery for dealing with this problem is a factory rationalisation scheme prepared and submitted by the industry, and, if Parliament approved, brought into operation in much the same way as an agricultural marketing scheme is to-day. The purpose of a factory rationalisation scheme is to increase the efficiency of the industry by regulating the extent of the facilities for producing bacon. A scheme can enable the Development Board to exercise a power which it cannot exercise otherwise—namely, the power to revoke licences on payment of compensation. This is the direct method of attacking the redundancy problem. I should add that small curers are not subject to a rationalisation scheme. It will be found that throughout the Bill there are provisions for the withdrawal of certain powers in the event of a rationalisation scheme not being in force within two years of the passing of the Act, or within such shorter period as the Minister may determine. If a rationalisation scheme is not in force within this time limit, the internal protection which curers will enjoy under the Act will be withdrawn. This indicates the importance which the Government place on an effective scheme of rationalisation being carried through.
Part III is devoted to licences, and it redrafts the power of the Development Board to license factories. By Clause 8 various small curing concerns—those not producing more than forty hundred-weights in eight consecutive weeks—are excluded from such licences. Part IV 688 relates to the re-establishment of the contract system and to financial assistance. Experience has shown that a hundred per cent, contract system is almost impracticable. A more fluid and workable system is therefore introduced. The principal method of contracting will be the "long contract," which means for a period of twelve months. The Pigs Board will be responsible under the directions of the Development Board for the distribution among curers of all pigs offered on contract. This distribution of pigs by a central authority will mean that all curers get a fair share of the available supply. If a producer wishes to sell pigs under the prescribed contracts, he is given certain options. He may sell on "open offer," that is to say, he does not nominate any curer as the person to whom he wishes his pigs to be sold. The pigs accordingly become immediately available for allocation by the Pigs Board. For this valuable service which the producer renders, he is given an addition to the price which is termed an "allocation premium" of an amount previously fixed. Alternatively a producer may nominate a curer as the person to whom he wishes the pigs to be sold. This choice will be complied with unless the Board exercises its right to transfer the pigs to another curer. For every pig so transferred a premium of 1s. per pig is payable, 6d. of which goes to the producer and 6d. to the nominated curer in consideration of the expense to which he presumably has been put in obtaining the nomination.
The existence of this option should maintain existing links between producers and curers so far as is consistent with the wider and very important interest of securing a fair distribution of contract pigs among the factories. Another option, which is contained in Clause 22 and is intended specially for the small producer, is the "group" option through which he can join with other small producers, so that collectively they will be able to maintain regular contract deliveries. These group contracts, like the open contracts, will be immediately available for allocation, and accordingly the same allocation premium will be earned. The Pigs Marketing Board has the right, independently of the Development Board, to prescribe the contract terms not later than fourteen weeks before the beginning of the contract, or with the consent of the Bacon 689 Marketing Board not later than ten weeks before the contract is due to begin. If at that time the terms have not been issued, the right to prescribe passes to the Development Board.
Subsidy provisions are contained in Clauses 26 to 28. For a period of three years bacon curers will be required to pay a standard price for a standard pig, and this price is related for the first time to a feeding-stuffs price of 8s. 6d. per cwt. If the cost of a standard feeding-stuffs ration exceeds 8s. 6d. the curer pays to the producer and recovers from the Exchequer 10.3d. per score for every 1s. per cwt. rise in the cost of the ration. When the cost of the ration falls below 8s. 6d. there is a payment back to the Exchequer. In order to enable curers to pay the standard price it is assumed that they will require to realise a certain price for their bacon. If bacon prices are below a standard level the Exchequer makes up the difference; if they are above, there is a payment back to the Exchequer.
The initial pig price of 12s. 6d. per score is coupled with a bacon price of 94s. 9d. per cwt., but provision is made for a "taper" in these standard prices over the proposed three year period of Exchequer assistance, the standard pig price of 12S. 6d. per score being reduced by 1d. in the second year and a further 2d. in the third year, while the bacon price of 94s. 9d. in the first year will be reduced by 1s. in the second year and a further 2s. in the third year. These "taper" provisions are a practical indication that the industry is expected to achieve that improved efficiency which will enable both pig producers and bacon curers to effect economies in their costs of production. Subsidy is only payable on pigs sold on annual contract and in respect of bacon made from such pigs, and the number of pigs eligible for subsidy will be limited to 2,100,000 in the first year, 2,400,000 in the second year and 2,500,000 in the third year. These maximum figures will permit a substantial increase in home production in the three years. Such an expansion is not only desirable in the interests of home agriculture but it is necessary if the bacon curers are to have a fair chance of tackling the problem of redundant factory capacity in relation to the number of pigs available.
Part V deals with the fixing of selling quotas of curers. Part VI contains 690 general provisions. An important feature of the Bill, which should be specially mentioned to your Lordships' House, is the power of the Development Board to undertake comprehensive schemes of research and education. The relevant provision will be found in Clause 41. There is, I think, wide scope here for highly important work for the betterment of the industry by improvement of quality and reduction of costs.
The provisions of the Bill, although extremely complicated, do not involve any new departure of policy. The proposals have been worked out in close consultation with the industry and the general plan has been agreed by both parties. The machinery of the Marketing Boards has been retained, with certain adaptations and modifications, and full use has been made of the public safeguards provided in the Agricultural Marketing Acts where they apply. It is unnecessary for me to say in this House that the value of the pig industry amply justifies the aim of establishing that industry upon a sound basis. Pig production is not only admirably suited to our soil and climate, but it is a valuable store of fats, and is an important factor in the fertility of the land. Therefore it is well worth attempting, in the light of the experience that we have gained, to provide conditions both of security and stability in which the producer and the curer may co-operate; in the elimination of waste and in the elimination of inefficiency in every stage of the production of the pig. I beg to move that this Bill be read a second time,
§ Moved, That the Bill be now read 2a.—(The Earl of Feversham.)
§ LORD ADDISON
My Lords, the charming speech to which we have just listened from the noble Earl would not, I am sure, lead any uninformed person to suspect that this Bill is in fact a presentation of a new set of proposals because the Government have made an unexampled muddle of the administration of the Marketing Act of 1931. That is what is really behind it, and I shall not have any difficulty at all in displaying that that is so. I am glad the noble Earl emphasized the importance of this industry. Perhaps many noble Lords are not aware of the size of it, or perhaps they may take it for granted that the Government are always right, otherwise we might have had more 691 noble Lords present to examine these proposals to-day. Let me direct your Lordships' attention to the purposes of the Marketing Act of 1931 and to an examination of how they were frustrated and how the muddle that has arisen on their frustration has necessitated the production of this complicated Bill.
The purpose of the 1931 Act so far as bacon is concerned was to equip the producers—that is, the farmers—with facilities for selling their bacon advantageously. The destiny of the ordinary bacon that you buy in the shop is to pass through a curing establishment. Therefore it would have been necessary, if the scheme had been properly designed and worked out, for the producers and the Board, either to come to an agreement with the curing industry or themselves to create factory facilities for dealing with their product so that the producers themselves might receive the full advantage of their own labours. That is what the Act was intended to enable them to attain, but what in fact happened was something quite different. What in fact happened was that two Boards were brought into existence. No hint of this emerged from the noble Earl's speech. I do not blame him for concealing it. It is a lamentable fact, but unfortunately it has been, shall I say, further entrenched in some of the provisions of this Bill.
There were two Boards, one was the Pigs Board, which the farmers set up to enable them to sell their pigs. That is right. But coincidently with this another Board was brought into existence which was not interested in the well-being of the farmers at all. That was called the Bacon Board. The Bacon Board was a Board of curers. Well, of course, the business of a curer of bacon is to obtain pigs as cheaply as he can—I am not blaming him, that is his job—and to sell his produce at as high a price as he can get. That necessarily is the business of a curer, and I am not blaming him. But that is not identical with the interests of the farmer. The farmer wants a reliable price for his produce. The result of the creation and the coincident operation of these two Boards was chaos, for this reason. The purpose and intention of the Bacon Board representing the curing interest was, naturally, to get pigs for as 692 low a price as possible, while the farmer wanted as good a price as possible. The result was that the farmers more and more began to find that they could not get a good price from the Bacon Board and they began to sell their pigs as pork.
There is another strange feature attaching to these schemes. It is almost incredible, but it is a fact, and it is perpetuated by this Bill. When a pig weighs 160 lbs. it needs a Board, but if it only weighs 155 lbs. it does not. That is an extraordinary fact. You have a Board to deal with pigs that have attained a weight of eight score or upwards, but when those pigs are called pork they take their luck. That position is going to be perpetuated under this Bill. Of course, the rational thing would be to have an organised system of marketing appropriate for all pigs. The result was that between 1934 and 1936, with the curers in control of the Bacon Board and naturally wishing to get their pigs for as little as possible, there was great dissatisfaction among farmers who began to find that they did better by selling their pigs as pork. The result was that factories, as the noble Earl well and truly said, found themselves short of supplies. The reason why they were short of supplies was that there were two Boards with different interests—one Board out quite properly to promote the interests of the producer, while the interest of the other Board, the Bacon Board, was to get pigs for as little as possible because then they made a better profit. I happen to know, because I was responsible for the Act of 1931, that it would have been possible with proper management to have achieved a quite workable scheme, with the goodwill of the curing industry, which would have been worked for the purpose of promoting the well-being of the farming industry, which was the intention of the Act. But, as I said some time ago, it has been frustrated by this double-bar-relled arrangement which was allowed to come into existence.
Now let me call your Lordships' attention to another circumstance. The result of setting up a Board representing purely the curing side of the business was that lots of people rushed into it. That is why you have these 790 establishments, over 490 of which are so small that they have to be cleaned up somehow or other. They have come into existence because of this. It is not in the interest of agriculture at 693 all. It was because an organisation was brought into being that could take advantage of this business which was originally designed to help the farmer but which in fact operated to keep down the price he got for his pigs. Now we have at long last this proposal whereby somebody has to pay compensation to wipe out this plethora of establishments which ought never to have been created. We should never have been landed in the position of having 790 different curing establishments, even the best of which are only working at about 60 per cent, of their capacity, and of having to buy out somehow or other some 490 of them because they are redundant. It is true that they are redundant and we are having to pay for allowing this redundancy to spring up. That is what is the matter.
But that is not anything like the whole story. The Reorganisation Commission—and I regret as much as the noble Earl that the Chairman is not able to be present to-day—recommended that there should be some corporation which would gradually absorb the whole curing trade. That was our intention in 1931, that there should be a corporation dealing with the curing side, operating in the interest of the farriers for the purpose of stabilising prices and giving them security, and gradually developing the industry, as it has been developed, I am told, in Denmark and in other countries and could be developed here. As late as 1936 the Food Council reported to the President of the Board of Trade on this matter in these words:We consider that the present situation emphasizes the need for control by a more independent body who can ensure that contract prices for bacon pigs are as high as the curing industry can afford and that such prices offer to producers in general a stronger inducement than do open market dealings.That is the finding of the Food Council, which is not affected by the heresies with which I and my friends are charged. It is quite right that we should have an independent body not serving sectional or trade interests but working in the interests of the producing community on the one side and the consumers on the other. That was the kind of development which the Act of 1931 was designed to promote, but this other arrangement was allowed to grow up, and in order to fortify it the Government have been 694 responsible for another set of actions which has had very deplorable results.
In our view—I am speaking now for my political friends—prices should be managed quite differently. We would manage prices deliberately so that the producers were assured of a fair price, not leaving it to an interested Bacon Board to force them down until they refused to sell their pigs. We would have a deliberate scheme of management. But the Government have set out to bolster up prices by inducing scarcity, and the result is this scheme of what is called quantitative regulation. Everybody recognises that you must have proper management of market supplies, but the system is liable to become discredited by what has happened. It was started in November, 1932, when there was a voluntary reduction of Danish imports of 15 per cent. In February, 1933, there was a further cut of 2½ per cent, and in November, 1933, another reduction of 16 per cent. The idea of these reductions was to keep the price up for the British farmer. What actually happened was something quite different. At the end of that twelve months the British farmer was getting as near as may be a penny per lb. more for his bacon but the consumer was paying 2½d. per lb. more.
This business of restricting supplies in the hope of maintaining the price of the producer has now gone to this extent: that while the consumption of bacon in 1932 was 20,500,000 cwt., imported and home, it has fallen to something below 18,000,000 cwt. The consumption per head has diminished by 12.6 per cent. But when I refer your Lordships to the story of retail prices, you will then see what the case is. Bear in mind that this breakdown of the scheme is because the farmers were dissatisfied with the prices they were receiving. Quite right; they were entitled to be dissatisfied. But, while they were so dissatisfied, this is what has been happening to the consumers. Take the prices which the Ministry of Agriculture quote for streaky bacon in November of each year: in 1932, 10d. per lb., in 1933, 11d., in 1934, 1s. 1¾d., in 1935, 1s. 1¾d., in 1936, is 2¼d., in 1937, is. 3½d. The rise in retail prices, in other words, during this period has been 5½d. a lb. There is no wonder that they have diminished the consumption of bacon. The result of 695 these blundering operations has been to restrict supplies while doing nothing to control or to manage prices in the interests of the farmers on the one side or of the consumers on the other. The result has been that you have had this upheaval and the necessity for this Bill.
This Bill proceeded at long last to set up a disinterested Board to deal with the curing of bacon, making proper terms, which I know they could have made, anyhow, with the curing industry, to operate in the interests of the producer, We should have been glad that the Government at long last were seeing the error of their ways. But what they are actually doing is something quite different, and it did not emerge from what the noble Earl said. A scheme may be prepared under this Bill for eliminating surplus bacon factories—now that they have been allowed to grow up like mushrooms during the past five or six years. But neither the Development Commission, the strengthening of which we all welcome, nor the Minister can decide what that scheme is going to do, because, if your Lordships will refer to Clause 6, you will find this amazing provision. Although a scheme may be got together for the amalgamation of these factories—we hope, in the interests of the farmers—the scheme may be proposed either by the Development Board or by the Bacon Board; you notice, not by the Pigs Board, not by the farmers. Then, if the Development Board are preparing a scheme and the Bacon Board are also, the Development Board must mark time; their scheme goes into cold storage while the Bacon Board, the interested curers' Board, all the time proceed with this scheme.
Finally the Minister may prepare a draft of the scheme, but your Lordships will find this provision in subsection (6) of Clause 6:Provided that before laying a draft of a scheme before Parliament the Minister shall communicate the draft to the Bacon Marketing Board and shall not lay the draft unless within twenty-eight days or such longer time as the Minister may allow that Board has by resolution approved the draft.In other words, the Minister of Agriculture cannot put the scheme before Parliament, the Development Board cannot prepare a scheme, until that scheme has received the blessing of the Bacon Board, the Board of the curing industry 696 —frankly an interested industry. I am not blaming them for that, but they are not representing the interests of agriculture. Even the Minister himself is estopped by the provisions of the Bill from submitting to Parliament a scheme for the improved organisation of this business unless the interested Board itself gives its blessing to the scheme. I confess that I hardly ever expected to live to see the day when I should see this capitulation of a British Minister to an interested trade body; because that is what it is, nothing less. The whole of Parliament is held up until these proceedings can receive the blessing of the Bacon Board.
We are also to perpetuate the system under which other pigs, which are so fortunate or so unfortunate, as the case may be, as not to weigh 160 lbs., are to be left to the mercies of Providence, or the market, or the dealers, or the jobbers, or what not. There is to be nothing at all, no organisation, in regard to them. It is not for us to advocate our policies in this House, and I do not suppose they would receive much sympathy if we did. But at the same time I am quite sure that you could give a stabilised price to the producers—for a good quality product, of course—without this grotesque inflation of retail prices and without depriving the people of a large amount of food they ought to be able to buy.
May I finally draw your Lordships' attention to one other significant fact? Not only is a Board competent to operate on behalf of the producers practically shut out from this Bill, but there is no mention in the Bill from the first word to the last of the people who buy the bacon. There is not a word in it to stop this atrocious rise in the retail price of bacon, which has gone on concomitantly with the dissatisfacton of the producer with the price he is getting. There is not a word about that in the Bill. One other thing. I had hoped, I remember, when I was responsible for the original Act that these Boards would operate on behalf of the farmers in helping them to obtain their supplies under more advantageous terms. I am glad to see those provisions of the Bill which have to a certain extent a sliding scale of prices as feeding-stuff costs vary. But it should have been the business of a Producers' I Board to help the farmers to obtain their 697 supplies with the advantages of big bulk contracts attached to them. As I happen to know in other ways, you certainly could obtain supplies, as, for instance, the Land Settlement Association does for its suppliers, at a substantial reduction per ton, certainly 10s., as compared with what most of the farmers have to pay now under their piecemeal method of purchase.
The only glint of hope in that connection is Clause 44. I would direct your Lordships' attention to that, and express the hope that perhaps we shall hear something more about it in Committee, because there is one thing that the Farmers' Board will be enabled to do. Under the Act of 1931, which is really re-enacted here, the Farmers' Board may do all sorts of things, if they want to do them. They may buy and sell pigs, they may produce bacon and other commodities from pigs or sell, grade, pack, store, and adapt for sale, pigs bought or commodities produced thereby, and lots of things which are all set out in Clause 44. In other words, the Farmers' Board is authorised to do the same thing as the Bacon Board is brought into existence to do. Whether the Board will ever do them I do not know, but it would be interesting to know why that power is put into the Bill. I guess that the real reason is that it is suspected that this business will break down, and I have not the shadow of doubt that it will, because the farmers will not continue to be satisfied with having to sell their produce to an organisation whose interest is not the benefit of agriculture, but the making of profit at the expense of agriculture.
The farmers will not continue to be satisfied with that position which will be brought about under this Bill, and that is why it is that, as a sort of saving clause, Clause 44 is put in the Bill. It will in some dire circumstances, which I am certain will arise, enable the farmers to do something to help themselves, which is what the Act of 1931 was designed to do; but, I am afraid, that will be made much more difficult by the provisions of this Bill. The Bill does, anyhow, bring into existence one organisation, the Development Board, which will begin to have some powers, although nothing like enough; and because there is that beginning of a better organisation my friends and I do not propose at all to obstruct or object to the Bill. 698 We do, however, recognise that it is a poor and feeble compromise. It ought to go the whole way, and introduce a proper scheme of organisation, designed to build up and promote the interest of producers on the one side and consumers on the other, instead of putting in between a fortified body whose business in life it is to make as much profit as it can out of them both. That is where this Bill is wrong, but somehow or other, because of its other provisions, that wrong is more likely to be righted, and that is why we shall support the Bill.
THE EARL OF FEVERSHAM
My Lords, the burden of the argument of the noble Lord who has just sat down is that if the Government, when they came into power in succession to the Labour Government in 1931, had carried out the policy and intention of the Agricultural Marketing Act, 1931, it would have been unnecessary to have the provisions contained in this Bill. In the first place, what was that Act of 1931? It was essentially an Act to enable sections of the agricultural industry, producing a certain commodity, to organise themselves for marketing purposes. That is exactly what the Bacon and Pigs Marketing Boards succeeded in doing. The noble Lord would be the first to recognise, as a progenitor of the original Marketing Act, that it enabled sections of the industry, without compulsion, to reorganise themselves. But it was impossible for them to undertake this task until the Report of the Reorganisation Commission for pigs and pig products had been published in 1932—a Report which made a thorough analytical investigation of the conditions surrounding both the production of pigs and the curing of pigs for the home market. The scheme which was finally inaugurated followed the recommendations of the Lane-Fox Commission and so I cannot accept Lord Addison's contention that if the Labour Government had remained in power, by adhering to the provisions of that original Marketing Act, there would have been any greater likelihood of a continuing success of the bacon and pigs marketing schemes than has been the case during the course of the last few years.
With regard to the future, there can be no possible conflict of policy as between the two Marketing Boards, since each will now work under the direction of the 699 Development Board on major matters. And the Development Board, as the noble Lord has pointed out, has five independent members whereas previously, under the development scheme of 1935, it only had three independent members. The noble Lord next went on to refer to the fact that factory capacity in this country was such as to result in overhead charges which increased the final cost of bacon. The noble Lord, Lord Addison, assumed in putting forward that argument that, owing to the great and rapid developments of the bacon industry between 1930 and 1936, the numbers engaged in the curing industry had increased during that time to the figure of 790 at which they are now. I am informed that at the time when the noble Lord was himself Minister of Agriculture there were about the same number of curers as there are to-day. Therefore it is not strictly accurate to say that the problem of redundant factory capacity has arisen because of divergence of opinion between the Pigs Board and the Bacon Board.
The next point to which the noble Lord turned was the alleged restriction of supplies. In the past we have worked to an adjusted total of supplies of 10,800,000 cwt. per annum, which again was based upon the Lane-Fox Report. But in arriving at this figure the Commission took as their basis the supplies in the years 1925 to 1930, which were good years, when the purchasing power of the people was relatively high and when bacon prices were for the most part much higher than they are to-day. Your Lordships will be aware that imports are regulated according to the recommendations of the Market Supply Committee, which in turn is advised by the Bacon Supplies Consultative Committee. On this question of future supplies my right honourable friend has stated in another place that the regulation of bacon supplies will be continued so as to maintain reasonable prices in the general interest, but the Government do not regard themselves as restricted to any given total.
The noble Lord then referred to the Food Council's Report in respect of prices during those years when the marketing scheme has been in operation. The bacon marketing scheme came into operation in July, 1933. Since then the index numbers of general food have been substantially lower than for the cost of living as a 700 whole, and the index numbers of streaky bacon in particular have been several points lower than the general level of food prices. The noble Lord will remember that the Food Council, commenting on the position in 1936, said that since the initiation of the pigs and bacon marketing schemes bacon prices had been steadier. Prices to pig producers did not appear to have been excessive, and retail prices, while substantially higher than in the slump period 1931–32, did not seem unreasonable when compared with the average of the five years preceding the schemes and with other food prices.
§ LORD ADDISON
I do not want to interrupt, but why does not the noble Earl quote the conclusion? I know it is too long a story. I gave the conclusion.
THE EARL OF FEVERSHAM
I would, with due respect, say to the noble Lord that it is a fair conclusion that they did not think the prices were unreasonable compared with the average price of the five years preceding the schemes and with other food prices. The noble Lord, Lord Addison, then turned to the question of the pork market and the production of pork pigs being left out of this Bill altogether. Again I can only refer back to the Reorganisation Commission which said in its Report that:Any bacon policy must … seek to eliminate the influence of the 'pig and feed' cycle upon the production of bacon pigs. It would be desirable to discourage these maleficent influences also in the case of bacon imports and home pork production, but in the latter case elimination would probably be impossible without a stringent regulation extending over every phase of pig production, which we are anxious to avoid.Further in that Report, in respect of including all pigs in a scheme of regulation, they say on page 63:Expansion of the home pig industry must take the form of increased bacon production, as the capacity of the pork market is limited. We therefore recommend that the pork pig and bacon pig markets should be segregated so far as possible, and we make no provision in our scheme for the regulation of the marketing of pork pigs.Apart from that careful recommendation of the Lane-Fox Report, as far as I am aware no practicable suggestion covering the inclusion of pork pigs in a general scheme has yet been made. However desirable it may appear on the face of it, it has seemed impossible to go to such lengths of regulation as would be needed to cover both sides of the industry.
701 The last point on which I would like to touch in reply to the noble Lord is in regard to the rationalisation scheme as provided for in this Bill. The Bacon Marketing Board's right of veto over the factory rationalisation scheme is based on the analogy of the Agricultural Marketing Acts, and is therefore a continuation of the policy which the noble Lord first inaugurated. Under the Agricultural Marketing Acts a scheme cannot come into operation unless it is approved by the registered producers voting at a poll. Moreover I believe there is an even closer parallel in Section 1 of the Marketing Act of 1931, which provides that before making any modification of a scheme the Minister shall give notice of the proposed modification to the promoters of the scheme, and unless within four weeks, or such longer period as the Minister may allow, more than half of them notify their assent, the Minister is unable to lay the scheme before Parliament. That was contained in the noble Lord's Act of I93r, and the same principle is applied in this Bill to a rationalisation scheme.
THE EARL OF FEVERSHAM
The noble Lord dissents from that, but I suggest it would be hard for him to prove that it is not the same principle. To take away the industry's last word would surely be a very undesirable departure from the principle of the Agricultural Marketing Acts on which this Bill is founded. If no rationalisation scheme is in operation within two years after the passing of this Bill (or if there is no prospect of the rationalisation scheme being in operation the Minister can if he so desires make it a shorter time), the consequences to the curing industry would be most serious, since all the internal protection given by this Bill would be withdrawn. It will be within the knowledge of the noble Lord that at the present time such a scheme is being prepared, and it is anticipated that that scheme will be submitted at an early date. It would be improper, on the principle of allowing the industry to propose plans for its own reorganisation, for the Development Board at the same time to prepare such a scheme. Therefore it is provided in the Bill that if the scheme of the representatives of the bacon curing industry breaks down or does not 702 materialise the Development Board should have the right to prepare such a scheme to submit to the Minister. For the reasons I have given the decision to veto the rationalisation scheme is not one which the Bacon Board will lightly assume.
The noble Lord has dealt with other features of this Bill, but I have already taken up the time of the House in replying to the main points which the noble Lord levelled against these provisions. I trust that at a later stage of the Bill it will be possible to pursue further the points which have not been dealt with at this stage.
§ On Question, Bill read 2a and committed to a Committee of the Whole House.