HL Deb 14 April 1954 vol 186 cc1293-320

6.28 p.m.

Debate resumed.


My Lords, despite the fact that my name is on the list of speakers, I had not intended to speak in this debate to-day, but I am inspired, perhaps I should say, to get on my feet for a brief moment by the loud and repeated blasts blown on what I might call a black and white trumpet, by the noble Viscount, Lord Bledisloe, who I am sorry is not in his place at the moment. I note that the noble Viscount, Lord Hudson, who we are informed has assumed Presidential office over the Society of the British Friesians, is here, and no doubt I shall be "seen off" by him in due course. My purpose is to draw your Lordships' attention to the fact that there are breeds of milking cow in this country 'other than British Friesians. These, despite the improvements, remain the breed with the lowest butter fat average. Take the Guernsey breed, for instance, the breed which I know best. It is authoritatively considered that it is possible to keep five Guernseys on the amount of feeding-stuffs required for three and a half Friesians. If these Figures are related to the national milk production averages of the two breeds, there can be no doubt at all which is the mere efficient producer. I submit that the trumpet blast might better have been a small toot on a small flute.

6.30 p.m.


My Lords, far be it from me, as temporary President, at all events, of the largest dairy breed society in the country, to indulge in any recrimination with owners of other breeds. I think the noble Viscount, Lord Bledisloe, was wrong in the figures he quoted when he compared our lactation yields in this country with overseas, possibly with Denmark. If he had read the Annual Report on Production for 1953 of the Milk Marketing Board, he would have learnt that over the last ten years the average increase in yield per lactation is no less than 140 gallons in this country, which I venture to think is a remarkable tribute to the efficiency of British cow-keepers as a whole. It is quite true that rumour has it that the Friesian breed is perhaps not as popular as it might be with the Milk Marketing Board, because there is no doubt that, were it not for the large number of Friesians and for their remarkable annual production of milk, there would be no problem of surplus milk production in this country. But, having said that, I venture to disagree with the Government and to support the Milk Marketing Board in this question of milk production.

Frankly, I do not believe that there is any need to reduce production of milk in this country. The real problem before us is to increase its consumption. I am bold enough to prophesy that, provided we can institute a really effective milk publicity campaign, not only for the consumption of full milk but also, following the American example, for the production of a large number of milk by-products, we shall be able to sell the whole of the milk production of this country without having substantially to pay any rebates for the manufacture of milk into products such as dried milk powder. One of the main difficulties with which we, as a milk industry, are faced to-day, is the fact that, for reasons into which I need not go—and I do not propose to apportion blame—the Ministry of Food have accumulated stocks of many tens of thousands of tons of dried milk powder for which, at the moment, there is no market at all. That is hanging over the whole milk industry and is providing certain portions of the manufacturing part of the dairy industry with an excuse for saying that the residue of the production of cream has virtually no value at all.

As undoubtedly your Lordships know, skimmed milk happens to contain the whole of the nutrients of milk with the exception of fat. I have every reason to believe that, if we follow the American practice, where they have developed a market in what they call "cottage cheese," we can produce at home a rather better and better-keeping article than they have. Cottage cheese is probably the cheapest article of food, from the nutritional value point of view, that exists in the country and it ought to be possible to sell it at prices well below that of margarine. I suggest that your Lordships consider the value to the industrial portion of the inhabitants of the country—that is to say, to people in Liverpool, in the East End of London or in parts of Birmingham—if the housewife can be provided with a spread that is both attractive to eat, and, above all, of extreme nutrition. Therefore. I believe that the future of milk depends largely on the invention by our scientists and our creamery proprietors of a whole series of milk by-products, as one may call them, and on getting them eaten and drunk by the population as a whole. If we can do that, I am certain that it will be unnecessary to give any rebates for milk for manufacture. I do not say it is going to happen to-morrow, because obviously there is unfortunately, a great prejudice at present against skimmed milk. But of its nutritional value there is no doubt at all.


Would the noble Viscount agree that skimmed milk is of great value, at a price, in pig feeding and that, if the price could be related to what the, pig feeder could pay, it could be of immense value?


Yes; but surely, from a national point of view, with the present high cost of living to an enormous number of the human inhabitants of this country, it is fantastic, if I may use the word, to give pigs a product of extreme nutritional value. I produce pigs and I agree that I could use skimmed milk for improving their quality, but I would much sooner feed skimmed milk to Members of Parliament in another place. But I am literally stopped from doing that by their prejudice. It is unbelievable.

Now may I turn to the debate as a whole. The noble Earl, Lord Listowel, has asked a number of questions of my noble friend on this Bench, but it struck me, if I may say so without offence, that the right thing would be for us to ask him questions, to ask him what his remedy and the remedy of his Party is for the existing state of affairs. We heard from the two noble Lords behind him who have now left, Lord Wise and Lord Archibald, a destructive criticism from a purely Party point of view, as I thought, of the Government White Paper. I should like to ask the noble Earl—and I hope he will not be too shy to answer—what his policy and the policy of his Party is. He talked about the spending of national money. If his Party were in power, or if they ever come back into power, are they going to spend more money or less?

The noble Lord, Lord Archibald, said he was in favour of limiting the imports of food, but have we heard the last of the "Cheap food" cry from the Party opposite? That is what it involves. The noble Lord, Lord Wise, in a speech which I can only describe as an apologia beforehand for every poor farmer in this country so that he can be provided with excuses for not producing the maximum of which he is capable, suggested a number of changes. Are they approved? He criticised what we are doing. Does it mean that he approves of the opposite? I hope the noble Earl is not going to be too shy to answer, because I am sure that we, and the country at large. should in the light of all these criticisms know what the alternative policy is.

The noble Lord, Lord Jeffreys, criticised the 1947 Act for giving excessive security to the poor farmer. As I have indicated before, the real gravamen against the 1947 Act, whatever its authors may have wished it to do, is that over the years that it was in operation it led both sides of the industry to believe that it did not matter what costs were incurred or how inefficient the industry was; they would always be met and made good in the subsequent Price Review. Despite that incentive to less efficiency, one of the interesting problems that we are met with today, certainly in the white countries of the world—I hope to develop this point later when, on April 28, we debate world problems in this connection—is the quite unprecedented or, at all events unforeseen improvement in production, in productivity and in efficiency that has taken place both in this country and in the United States. I was in the United States in October of last year, and it is really astonishing to see the progress that agriculture has made there since the days when I used to know it in the First World War and between the wars.

I do not think there is any doubt but that one of the reasons for the apparent surplus which is overhanging the world to-day is that the farmers of this country, and for that matter of Europe and of the United States, have made progress in efficiency and production away beyond anything that we thought possible. Therefore I believe that the problem is really one of consumption. I think that over a comparatively short period, as time goes on we shall find that the increase of population will take care of a great deal of this increased production. I do not know whether your Lordships have, as I have, always thought that India presented the classical case of a very rapidly increasing population outstripping the food supplies that could be cultivated. I was very astonished last October in New York to be told by a member of the Food and Agriculture Organisation who happened to be there that the population of the United States per thousand is increasing appreciably faster than that of India, and that the population of Canada, quite apart from immigration, is increasing over twice as fast. I have forgotten the exact figures, but they were of the order of 13 per thousand annually for India, 17 per thousand for the United States, and no fewer than 28 per thousand for Canada. Therefore, in face of increases in demand of that kind, and provided that there is a rise in the standard of living, I personally am not afraid that the problem of surplus will become unmanageable. Certainly so far as this country is concerned, in regard to milk, I believe that we ought to be able to solve the problem without too much difficulty.


My Lords, I should like to know, in connection with that conversation in the United States, whether those comparative figures, which are most interesting, relate to birth rates, or to the increase of population including immigration?


So far as India and the United Slates are concerned, the figures are net increases per thousand. So far as Canada is concerned, they are net increases per thousand apart from immigration, which makes it really an impressive figure indeed—28 compared to 13, apart from immigration. I ventured to suggest just now that, whatever the authors had intended, the 1947 Act—and I must accept some responsibility for it, as one of the earlier authors—as it has been administered has resulted in a decrease of incentive to efficiency, because everyone knew that, however large the costs were, they would be more or less covered. Therefore, I think that one of the most hopeful things that has happened for agriculture has been that, for the first time, in the 1954 Review prices have been reduced.

I do not in the least agree with the Jeremiad of Lord Wise, in saying that, because prices have been decreased, the ordinary farmer is not going to work hard and increase his production. On the contrary, in my opinion, broadly speaking, we divide farmers into two classes. There are the good ones, who, as I have said previously, farm because they love it and want to do their farming really well; and there are also those (I should hesitate to say their numbers or proportion) in this country, as in other countries, who have adapted themselves to a comparatively low standard of living. An increase in price does not, in the case of these people, increase production; it does not increase their incentive. On the contrary, if the price they get for their products is increased, in my view it makes it easier for them to live at the low standard to which they are accustomed. I believe that in many of these cases the biggest incentive to increased production would be the reduction of prices, because then they must either improve their methods and increase production or go bankrupt. I think the recent reductions in price that were announced in the last Review will not affect the good farmer and may well have some effect in trying to stir up the poor farmer.

The noble Lord, Lord Wise, quoted a case which illustrates, if I may say so without offence, the appalling innate suspicion of members of the Party opposite. He talked about the £120,000 less that a bacon factory somewhere was going to give for the pigs that the farmer produced; and he assumed—goodness knows why, unless it is because of his native suspicion—that that £120,000 was going into the pockets of the shareholders of the factory. I am not at all sure that he is as naïve as all that. Of course, what will happen is that that money will go into the pockets of the taxpayer, because the Chancellor of the Exchequer will be able to reduce the subsidy which he would otherwise have to pay. I do not know whether Lord Wise realises that at the present moment the annual subsidy on British bacon is of the order of £25 million sterling. That seems to me to be an excessively high subsidy. I hope that everyone agrees with me on that. By bringing prices down, and by cutting out the indifferent bacon pig producer, improving efficiency to the extent that we are going to cut down the money given to the pig producer and still leave the efficient producer with an adequate return, we are saving money for the Exchequer and the taxpayer. Perhaps the noble Earl, Lord Listowel, will tell me whether he disapproves of that. It would be interesting to know, because the assumption underlying Lord Wise's statement was that on behalf of the farmer he disapproved of this reduction in the price that he was getting for his pigs.

My Lords, I think I have dealt with Lord Bledisloe's observations. My final word would be this. The unfortunate Minister of Agriculture, Sir Thomas Dugdale, has been widely criticised and abused over the last year or so. Perhaps even the noble Lord, Lord Carrington, has suffered in his turn. But I think that Sir Thomas Dugdale now deserves a word of praise from us all. In very difficult circumstances he has produced a White Paper which has met with general acceptance from the farming community. The contents of the Paper have met, or they should have met, with considerable praise from the taxpayer via the Chancellor of the Exchequer, and, quite frankly, I think that the reception that the Minister has had so far has been rather mean. I have not seen any word of praise for him, and I think we might well conclude this debate by giving him a word of praise for his activities, for the way he has behaved and for the success that he has had so far.

6.49 p.m.


My Lords, I should be the last person to refrain from giving a word of praise to a Minister, of whatever Party he is, if he has been successful in regard to agriculture, one of the great industries of the country. It seems to me a little significant that the noble Viscount, Lord Hudson, has to get up on that side of the House and say that he has seen no word of praise, and that he is the first to give it. If he has found something to praise I should be the last to deny him the gratification of doing so. Probably what he means is that the White Paper is perhaps not quite so bad for farmers as the farmers expected it to be, because the Minister of Agriculture fought a great fight against other members of the Government who were intent upon pressing a more deflationary policy on him.


I hope the noble Viscount will answer the question that I put to him—namely, do the Labour Party approve or disapprove of the reduction in prices that have been given to the farmers?


I am very critical of the Review of prices which has taken place, not so much because of the individual items but because it is an indication of what the noble Viscount, Lord Bledisloe, referred to as "the thin edge of the wedge." I say that any fair reading of the White Paper would reveal that the whole gist of the Government's intention and policy is to be found in Paragraph 13, and I think that is perfectly plain. That paragraph says: Further consideration will be given to means of limiting the dependence of the industry on Exchequer assistance; for example, relating guarantees to levels of output of particular commodities as in the case of the new financial arrangements for milk. I would also criticise the Review from the point of view of the complete misconception which the Government evidently have about what farmers ere thinking. In Paragraph 11 they are trying to get away with the statement that: In future, home agriculture cannot be asked to produce a given amount of a particular commodity irrespective of cost. To do so in present circumstances would place an undue strain on the national economy and would handicap our competitive power in world markets.


I am most grateful to the noble Viscount. Presumably then, the opposite is true and the Labour Party are in favour of allowing agriculture to dip to an unlimited extent into the national till.


It is not the slightest use the noble Viscount trying to put words into my mouth. I shall make my own speech and argument, and I will reply to him in due course.

Let us take the last quotation I made; that really has been the main burden of the noble Viscount's speech. Taking his argument to its logical conclusion, it means the more prices to the farmer are reduced, the more production he will be persuaded to put before the country.


I hope the noble Viscount will persuade them of that in every rural constituency in the country.


That is confirming what is in the White Paper.


No, it is not.


Let us see if this view is confined to myself. Let us take a very fair umpire on it, the agricultural correspondent of the Conservative weekly, the Essex County Standard, the newspaper that has the largest circulation in my Parliamentary Division and the largest circulation in the constituency of the Chancellor of the Exchequer. What does that say? Under black type, with the heading "A False Implication" it says this: The White Paper says: In future, home agriculture cannot be asked to produce a given amount of the particular commodity, irrespective of cost.' The implication here it utterly false. Home agriculture has never been asked to do any such thing. What the Minister really means is: In future home agriculture cannot be asked to produce a given amount of a particular commodity, if we can get it cheaper somewhere else.' That is a notable continent to come from a Conservative weekly newspaper from the constituency of the Chancellor of the Exchequer. There is one other point I want to mention before I give a final answer to the noble Viscount's urgent question—that is, the way in which the difficulty is switched, concerning the money that is spent. It is no longer a consumer subsidy which has been reduced as far as possible: it is put down as a sort of grant in aid to the farmer. Two hundred million pounds is supposed to be a direct aid to the farmer. It is an unfair position and greatly resented by the National Farmers' Union.

Let us take another passage from the same Conservative source, the Essex County Standard. It says: The Ministry Press notice says that the cost of supporting home agriculture is now of the order of £200 million a year. This has been widely commented on, with varying degrees of understanding in the Press and on the air. There are several things which the amateur economists choose to ignore, if indeed they are aware of them. The noble Viscount, Lord Hudson, should especially listen to the next part, because it actually agrees with the policy which he instituted in 1940–45: The first is that though this support is costing £200 million a year now, last year was the first, and could possibly be the last, for this degree of support to be given. It was due largely to an exceptional harvest in this country, overshadowed by good harvests in most of the main grain exporting countries …. Then the writer goes on to point out that in fact most of the supporting money has been given for most of the period to farmers when, if they had been able to have a free sale in oar own country at world market prices, they would have been better off than with the support. That is the actual position; they were getting this money and control on top of it although they were not allowed to sell at the highest prices ruling in the world market.

The real position is that the Government are steadily running away from their published promise, as contained in the Act of 1947, to guarantee prices. They intended to begin, in my judgment and opinion, from the moment they refused to sign any longer the International Agreement on Wheat. That was one of the major Government actions in the beginning of this policy, and its effect upon confidence, as well as upon prices to British farmers, has been evident ever since then. The noble Lord, Lord Carrington, does not seem to want to hear this, but if noble Lords want to see how that was followed up they have only to look at the manner in which the winding up of food controls has led to the Minister of Food dumping stocks on to the market at the very time when farmers were trying to market their produce. And not only were quantities of their stocks marketed; the Government also granted more and more import licences for barley to be brought in from Iraq and all sorts of other odd places, in order to make it much more difficult for the farmer. If Ministers do not really understand the situation, let them go down to the districts in my part of Essex and talk to the farmers, who still have last season's corn stacked because they could not sell it.


I should not like that statement to go out uncontradicted. Any farmer can get his corn taken by the Ministry of Food within twenty-eight days of offering it.


He can get it taken at a price, but farmers complain to me that they have offered grain again and again—


I do not want to interrupt the noble Viscount again, but I should not like it to go out that this is the correct situation, because it is not so. They get it taken at the correct price offered last year by the Ministry of Food. It was a fixed price, and all farmers who offered corn received the fixed price which was agreed at the Annual Review made the year before last. And all corn offered to the Ministry of Food was taken off the farms within twenty-eight days.


The noble Viscount might also explain how, if corn was still stacked, it could be offered to the Ministry of Food. That defeats me, as a farmer.


I should not think it is unusual in the case of many farmers who have been holding their grain to get the benefit of a seasonal change in the price. They offer it for a certain date, and arrange to get it threshed for that date. I have discussed this with many farmers. The noble Viscount probably did not hear the talk given on television the other night by a very reliable man, Alderman Cobbold of Suffolk. He explained how much grain he had still in his store because of the effect of the policy of the Government.


All I can say is that these people seem to have been very successful in pulling the noble Viscount's leg.


The farmers' legs have been pulled by promises to maintain the 1947 Act which the Government are certainly not doing. Let me add one other comment about the noble Viscount's attitude to this matter. It is not true to say that money has been paid out unnecessarily at any time in order to induce production. A responsibility has always been laid upon those in the farming industry to show that the prices they were asking were justified by their costs. Even under the Act as administered by the Labour Government, as the noble Viscount knows, they did not always get what they asked in that respect; it was based entirely on guarantees. I say that this kind of policy—though I hope that it will not prove so—may well be the thin edge of the wedge leading to a renewal of the policy of 1920–21.

The noble Viscount spoke rather slightingly of some farmers who, he said, would be squeezed out by reason of their own inefficiency and would become bankrupt. If you take note of the bankruptcies of farmers between 1921 and 1925 you will find that their number is legion. Farmers were squeezed out from the beginning, as a result of the process whereby the farming industry was the first to be attacked under the economy proposals of 1920–21. As the noble Viscount, Lord Bledisloe, pointed out, it is a fact that 88 per cent. of the farmers in this country are farming one hundred acres or less. When you make an attack upon those farmers' prices, you are making an attack virtually on their wages. Directly that becomes the case with the small farmer it begins to spread to the others.


A large proportion of the small farmers do not pay any wages. They depend entirely on their family labour to run their farms.


I should have thought that the noble Viscount would have understood the point I was making—that is, that when you attack the prices paid to these people you attack the actual wage which the small farmer has to spend on himself. Directly that becomes the case with regard to the small farmer the same attitude begins to spread to the workers employed on other farms. Let us look at how it worked in the period 1920–21. By 1919, after a lot of struggle, the agricultural labourer had got his wages raised to 46s. a week. When I went to the Board of Trade as Parliamentary Secretary in 1924, I found the agricultural worker's wage already down to 24s. a week. That had come about within three years. The noble Viscount knows that a policy of deflation proceeding at that rate is likely to affect the whole country. It immediately affects other industries, just as it did in 1920–21. We should be sufficiently intelligent to understand that. It was the agricultural worker who was first placed out of work in 1921, and this had its effect on the rest of the community.

Let me see what support there is for my argument. There is a gentleman with whom I do not very often agree, either as a broadcaster or in his rôle as correspondent of the Farmer's Weekly—Mr. A. G. Street. I see that in the issue of the Farmer's Weekly for April 2 he draws attention to a query he received as to the reason why British farmers' purchases of cement and other building materials have been diminishing since the last harvest and are still continuing so to do. He then writes: It seems to me that the answer is fairly obvious—it is because they are pursuing a policy of caution. I would put for "caution" there "because of lack of confidence." Mr. Street goes on: After farming for more than a dozen years on a certainty, being now faced with a question mark, that policy was Inevitable…One result of the loss of £30 million in farm income must be that farmers will spend approximately that much less in purchases from their town cousins, This kind of approach to a policy for agriculture is not going to get the country out of its difficulties. Just consider the extent to which machinery and better buildings have contributed to the improved efficiency and increased output of the farming industry, and have also, at the same time, contributed a large amount to the prosperity of industries generally in this country. In the last few years since the war, I think that something over £250 million has been spent by the farming industry in general in machinery alone. To hear the criticisms by economists and people who support this particular Conservative policy, anyone would think that all this money had gone into the pockets of the farmers. Nothing of the sort. It has been a part of the maintenance of the national economy of the country, and a very important one indeed during a period of difficulty. I suggest that what the Government need to do at the present time s to make it clear whether they are going to carry on the Agriculture Act, 1947, or not. The noble Viscount knows—the question put by my noble friend himself has made it clear—that he does not want the 1947 Act continued.

The Sunday newspaper, the Observer, made it perfectly clear on the first issue of this White Paper that it was decidedly pleased with the Government. Of course, it thinks the Government have not gone nearly far enough yet in the direction of deflation. There are a lot of people like the noble Viscount and the editor of the Observer who feel like that. But I can assure your Lordships that the agricultural worker does not feel that way at all. He, like the farmer, has no confidence in the future whilst this kind of policy is being pursued. As my noble friends have pointed out, there is every indication in the White Paper that this policy is going to be pursued, even in the current financial year, in further downward directions. That has also been indicated by the statement, which has already been quoted, in the speech of the Chancellor of the Exchequer. Appeals have been made to keep agriculture out of the arena of Party politics. I must say that, having listened to the noble Viscount, I did not see why I should specially keep it out of the realm of Party controversy. Certainly it is going to be controversial.

I could engage in almost as great controversy with the noble Viscount on his pet subject of Friesians and other forms of dairy cattle, but I do not think there is time enough for that. I will say only that I felt a good deal of sympathy with Lord Chesham in his challenge to the noble Viscount on that point. What is needed especially is to give confidence to the farmers. The noble Viscount says that they accepted the White Paper last year. Did they? We have been waiting for a long-term policy on agriculture from the Government for more than two years. It is nearly two years since the Minister of Agriculture told an audience up North that he hoped to be able to publish it very shortly. We have not had it yet. There was a series of temporary measures forecast in the White Paper last November. I shall be interested to hear whether the answers the noble Lord, Lord Carrington, may give to my noble friend who opened the debate will confirm my impression, because they will be a pretty good answer to the question. Let me emphasise this point about British agriculture. I live and farm a little in a district in which the rainfall is not so much as in the area in which the noble Viscount, Lord Hudson, farms. Our rainfall last year was 16.7 inches. I expect that down in the area of the noble Earl, Lord Fortescue, the average rainfall is about 40.




When we are talking about agriculture, we must have some regard to the many different conditions of the various areas with which the Ministry of Agriculture has to deal. I am sure the noble Viscount has had experience of that. Rarely do we have two or three successive summers like last summer, followed by an autumn so mild that farmers were able to do many kinds of work they could not do in previous seasons. When we have to deal with areas which had little rainfall during the summer and then had rains in the autumn, we have an entirely different picture and an output altogether different. What we want to get from the Ministry is enough confidence for the farmer. We shall not get that by vague talk about support prices but by implementing, in fact, the 1947 Act, so that prices in the Review are fixed in accordance with the costs, leaving a margin of the price to be made up by increased efficiency. That would give confidence not only to farmers but also to the workers who at this moment are suffering from other decisions of the Government. Too often we overlook the fact that the removal of subsidies so quickly has such reverberations upon industry that the cost of nearly everything the farmer has to buy goes up. If the Government deal with actual costs in the Price Review, instead of letting people remain in a kind of Alice-in-Wonderland state of wondering what is going to turn up, they will have some chance of maintaining the great progress that has been made in the last fourteen years as the result of the policy of the Coalition Government and the Labour Government.

7.14 p.m.


My Lords, we have frequent debates on agriculture in your Lordships' House and, looking round the House, it may seem to some noble Lords that they are perhaps too frequent. Certainly I can say that in the sphere of home affairs the agricultural situation has been changing rapidly. I am grateful to the noble Earl, Lord Listowel, for raising his Motion this evening. If I may say so, he introduced it in his usual very agreeable way, and he was at his most courteous and most inquisitive. I hope that I shall be able to answer his questions, of which he has given me notice, as I go along. Having regard to the speech from the noble Viscount, Lord Alexander of Hillsborough, to which we have just listened, I am very glad I have this opportunity of once again making clear the Government's agricultural policy.

For some time past we have been in rather a difficult position. The industry has been undergoing changes which are of great importance and interest to farmers, but, while the changes were being made, and while the negotiations were going on with farmers and other interests concerned, we have been able to give the farmers very little definite information about the future. Most of the time, when questions have been asked we have been able to say little more in reply than that negotiations were proceeding and we promised that we would not let the industry down. The process of change is not yet complete but we have reached a significant stage, because I think your Lordships—with the exception of the noble Viscount, Lord Alexander of Hillsborough—will agree that the main pattern for the future has emerged. A change of the kind which the Government are making, a change from the rigidly controlled economy of war time and of the Socialist Government to the economics of free markets and free enterprise, cannot be accomplished all at once. Much hard work has had to be done to ensure that the new arrangements which would take the place of war-time controls would be both workable and acceptable to those who are most affected by them.

During the past two years the results of this work have been announced by degrees, and by now I think that enough information has been put out to enable your Lordships to see clearly the shape of things to come. Our policy is clear. It now remains for us to make sure that this policy is properly understood and vigorously applied by the farming community. Perhaps I may just remind your Lordships of the essential steps in the development of this policy and in this process of transition from scarcity to plenty, from controls to freedom. First of all, after the 1952 Annual Review, the Government announced an expansion programme which would raise net output to 60 per cent. above pre-war. This goal is now well in sight—we have reached 56 per cent. above pre-war. But this year we have re-defined the means of getting to the 60 per cent. under present conditions.

During 1953 we announced our proposals for ending war-time controls, State trading and rationing, and we outlined long-term guarantee arrangements and marketing structure. The noble Earl will recall the White Paper of November of last year. Now, in 1954, we have filled in the picture by setting out the redefined production policy, by linking this with decontrol, with marketing policy, with a progressive reduction in agricultural subsidies, and with a harder drive for higher quality and lower costs. We have fixed guarantees that are in line with this policy of adjustment to the new conditions but maintain the principles of the Agriculture Act, 1947. Our conclusions and our aims are set out in the 1954 White Paper on the Annual Review which we are discussing this evening. In general, they have been accepted by the leaders of the National Farmers' Unions.

These are the most important developments of policy which are set out in the White Paper. Most important of all, we have considered the future shape of farming in this country. We have again declared that it is possible—and not only possible but desirable—to raise net output to 60 per cent. above pre-war. But we have accepted some slowing down in the rate of expansion towards this objective. This is for two main reasons. First, on the production side, we must recognise that the rate of expansion in the tillage area and in beef production, to which the noble Earl, Lord Listowel, drew attention, is slower than we expected, and we do not now expect to see an increase in tillage of as much as a million acres—the tillage objective that we suggested in 1952. As I shall explain in a moment, we shall try to achieve the same thing in a different way.

Secondly, on the marketing side, we must recognize—and this, I think, completely escaped the noble Viscount, Lord Alexander of Hillsborough—that we can do with more milk, pigs, and, possibly, eggs only if we can get down costs of production and widen our markets. So we cannot make up for the lack of tillage and beef by going out immediately for still more milk, pigs and eggs. Nevertheless, we shall expect to get our net output up to 60 per cent. above the pre-war figure by 1957 or 1958. We should then be producing in this country at least half the food that we consume, as compared with about one-third before the war. The directions in which we shall have to look for this are set out in Paragraph 42 of the White Paper. Perhaps f might reiterate them. They are: more beef, and perhaps more mutton and lamb—"perhaps," because the question of cost comes into it—a continued steady improvement in crop yields; and the saving of feed imports by more ley farming, by improved management and use of grass, and by skill and economy in the use of concentrated feeding stuffs. I need hardly say that to extend and increase ley farming means farming by the well-tried rotational principles, and not "dog and stick" farming.

The noble Earl, Lord Listowel, asked me what we thought about tillage, and what we thought the optimum tillage acreage should be. As we have said in the White Paper, the Government are not fixing targets. It would be wrong, and I think misleading, for us to attempt to do so under the freer conditions into which we have moved. We are merely suggesting the general lines on which we think production should develop. We do not want to see less, and we should certainly like to see more. We do not say that 60 per cent. above the pre-war level is the limit, but in present conditions it will take us all our time to reach this figure by 1957 or 1958; and after that further expansion must depend on reducing costs and improving quality. We certainly hope that our farmers will be able to achieve that reduction in costs and improvement in quality. This is facing up to the facts, and giving to the agricultural industry a challenge which we expect them to be ready to take up—which, it seems, is more than the noble Viscount expects. In the freer economy we cannot lay down the precise production targets that can be set by planners in a world of scarcities. Nevertheless, we have gone a long way in the White Paper to give general guidance about all the main commodities. We have given, commodity by commodity, the Government's views on market prospects.

However, it is up to each farmer to decide for himself what adjustments, if any, he should make to his farming system. We want him to go on observing the rules of good husbandry, but in so doing he will be free to produce what best suits his pocket and his farm. I might add that in carrying out this policy the county agricultural executive committees and their district committees have an important part to play in giving local leadership and guidance to their fellow-farmers and landowners. We hope that their help will be freely called on by the farming community in their areas, for they are in a position to suggest how methods of farming can be adapted so as to make full use of modern techniques and to secure the wise management of all available resources. I know that I am speaking for all your Lordships in saying how much we appreciate the valuable work which these committees have done in the past, and how we know we can rely on them to carry on in these new conditions. As I have said, we have given our appraisal of the outlook of the situation, commodity by commodity, and I do not intend to go through it again—it is all set out in the White Paper.

I should, however, like to say a few words on the subject of milk, because the noble Earl, Lord Listowel, asked me a question about what he thought was an apparent conflict of policy between the Government and the Milk Marketing Board. On milk, the main difference is that, instead of accepting the results of the increased yield per cow on top of the production we now have, we need to offset in some way these increased yields (which are desirable because they mean lower costs per gallon) so as not to increase the total output. The best way of doing this seems to be to reduce the total number of dairy cows a little, and that is the adjustment that we have suggested. We hope that it may be possible to combine this with the production of more beef. I know that the Milk Marketing Board hope to be able to push up consumption of liquid milk and to find the most profitable outlets for manufacturing milk; and they hope in this way to be able to get a good market for all the milk that is likely to be produced.

We expect that the restoration of marketing powers to the Milk Marketing Boards will help considerably with future marketing problems; but there are some very real and serious problems before them. Liquid milk consumption has been going down in the last two years at the rate of about 2 per cent. per annum, though there is some evidence that this trend may be levelling out. Milk for manufacture next year is likely to be well above even this year's gallonage and more than in any peak year before the war. At the same time, the manufacturing milk market for some products is not strong at present, owing to stocks that have been built up, and in other cases the possibilities of finding a remunerative outlet are limited. We know that a campaign is being launched by the Boards and the milk trades to stimulate consumption, but this will take time to have effect. We fully agree with the Milk Marketing Boards and the trades in wanting to see an expansion in the liquid milk market, though the first step will be to recover the 4 per cent. fall in consumption that has taken place over the last two years—and I am afraid that even this would not make a very big impression on the manufacturing milk supplies.

So it seems to us that, if the Milk Marketing Boards are to have a manage-able problem, it is desirable at least to stabilise milk output, and we cannot really afford to let it go on increasing, in the hope that the Milk Marketing Boards will be able to solve these problems very quickly. On the other hand the stabilisation, or slight reduction, that we have advised does not 'mean any drastic change when one considers that the total output is of the order of 2,000 million gallons a year.


I am rather disturbed by one thing, and I do not want to go away with a wrong impression, The noble Lord said that the Government could not afford to allow this to go on for a long time. Does that mean that they contemplate a further change in milk prices in the current financial year?


Of course it does not mean that we contemplate further changes in milk prices in the current financial year. As the noble Viscount knows, the milk price has been settled for next year in the Annual Review. What I am saying is that now that the Milk Marketing Board have been given back their powers, they are faced with a great problem. Liquid milk consumption has been going down, although, quite rightly, they are hoping to expand milk consumption. We felt that it would be wrong if we handed them a problem which seemed to us unmanageable. Therefore, we have taken the steps we have. The stabilisation, or the slight reduction, we have advised really does not mean any drastic change. I hope the noble Viscount will agree with that. That, as I have said, is our advice, though at the same time we wish success to the Milk Marketing Boards and the milk trades in their efforts to expand the liquid milk market. If the noble Viscount looks a t paragraph 35 of the White Paper, he will see that we say that any further expansion in output seems to us to depend on the extent to, which the market for liquid milk can be expanded.

These adjustments on pigs and milk are examples of the modifications that must be expected from time to time. But whenever such changes are made, we shall, of course, give as much firm guidance as possible, and we will allow time for farmers to adjust themselves. I hope that every farmer will study carefully the guidance we have given, and will decide for himself the part that he and his farm can best play. The prices for next year have been clearly set out in the White Paper, and I do not intend to go through them. It is difficult to make any precise forecast of the elect of this settlement on farmers' incomes. The market will be the main determining factor. In the case of net income, much will also depend on movements in costs and improvements in efficiency. But it is possible that gross incomes may fall by about £30 million in a full year. But as regards net income, this may turn out to be lower next year than it has been this year. That is very uncertain, because it depends on a great many other factors, quite apart from the level of the guarantees. For instance, just to give one example, a rise in efficiency at the rate of recent years is worth about £20 million. Taking all these factors into account, we think that this is a fair and a just settlement and will ensure farmers a reasonable return. It has, as your Lordships know, the agreement of the three unions. The effect on the Exchequer liability will be a reduction of about £30 million in a full year.

We have also reached an important stage in the development of marketing arrangements to suit the new conditions. By 1955–56, only wool and sugar beet will be subject to fixed prices. The restoration of the Milk Marketing Board's powers is going smoothly, and I have already explained what the Board's objects will be. The Farmers' Union proposals for a voluntary Fatstock Marketing Board have now been formally submitted and will be put through the statutory examination as quickly as possible. We have also welcomed the Farmers' Union's enterprise in forming a marketing company in the meantime. if cannot give the noble Earl many details about this company because. of course, that is a matter for the National Farmers' Union, and not the Government. I think it is understood that the company will be ready to start operations as from the date of decontrol, and, so far as one can see, the operations will be widespread throughout the country.

The Government have put before the unions definite proposals for the way guarantees could be worked through an Egg Marketing Board. The way has been cleared at the Annual Review, ill agreement with the unions, for a Potato Marketing Board, and I understand that a scheme is likely to be put forward in the near future. The deficiency payments arrangements for cereals have been worked out and made public, and we shall be giving the fullest possible publicity throughout the countryside to the detailed arrangements, particularly for cereals and fatstock, so that farmers may have all the advice they need about the working of the new arrangements. My noble friend Lord Jeffreys said that many farmers were a little uncertain about the way in which this fatstock marketing scheme would work. We have already put out a certain amount of propaganda, but we intend to have another leaflet ready shortly with the full details clearly set out.

The noble Earl, Lord Listowel, asked me about the number of beef calves. It is impossible to separate from the June returns which are beef calves and which are dairy replacements, but I think it can be fairly assumed that any increases in numbers are increases in beef, because the dairy replacements, if anything, tend to go down rather than to go up. This is a bad time to ask this question, because we are just coming up to another June 4 return. The last full figures we have are for June 4. 1953, which is quite some time ago, but the figures are these. In the year ended June, 1952, we estimate that 2,141.000 calves were reared in the United Kingdom, and in the year ended June, 1953, the figure was 2,283.000, which is an increase of 142,000. As I say, I am afraid it is impossible to distinguish between beef and dairy calves, but it certainly looks as if we shall take a little longer than we thought to reach the extra 400,000 calves per annum which we originally said we wanted by the end of 1956. The noble Earl also asked me, and gave me notice of his ques- tion, about the progress of the Hill Farming and Livestock Rearing Acts. There are quite a few figures, and I do not know whether the noble Earl wants me to read them now or whether he will be satisfied if I send them to him.


I leave that to the noble Lord's judgment. If he feels that the House might find it rather burdensome to sit longer, I should be perfectly happy, for my part, to receive the information by post.


Could it not be done as it is done in the House of Commons—circulated in Hansard?


I think that can only be done in reply to a Question, but I may be wrong. I can assure the noble Earl that the schemes are going well and that we have approved a great many this year. May I give him just one figure? The estimated cost on March 31, 1953, was £18,400,000 and on March 31 this year, £23,300.000. I think that is fairly satisfactory. The noble Earl and other noble Lords have talked about the limitation of Exchequer liability. Perhaps I may be allowed to say a word about this. What the Chancellor of the Exchequer said in his speech on the Budget followed very closely the line which was taken by paragraph 13 of the White Paper. The new financial arrangements for milk provide an example of the way in which the effect of changes in market prices may be shared between the Government and producers. The milk arrangements, as the noble Earl knows, provide for a profit and loss sharing arrangement on a proportion of the milk sold off farms. This is part of the arrangements for limiting the amount of Exchequer help. How far it will be possible to apply similar arrangements to other commodities is a question which is now being studied, and there will, of course, be consultation with the farmers' representatives in due course. It will be desirable, as, indeed, the Chancellor of the Exchequer said, to reach some conclusions on this problem during the year.

The figure of £200 million which the White Paper gives as a rough estimate of the total cost of agricultural subsidies is a very large figure indeed. It is obviously in the interests, not only of the taxpayers but of the industry, that the figure should be got down, and that when fixing guaranteed prices the Government should have a clear idea of what their implementation is going to cost during the coming year. This, I emphasise, does not necessarily mean that producers' incomes win have to be cut. My noble friend Lord Bledisloe asked whether the penny reduction on milk will be passed on to the consumers. The short answer to that is that there is a large consumer subsidy on milk—something in the region of £40 million—and the penny will be spent in reducing the Exchequer subsidy. I should like to join with other noble Lords in congratulating my noble friend Lord Hamilton of Dalzell on his maiden speech, to which I am sure your Lordships listened with interest. My noble friend Lord Jeffreys raised the large topic of the amendment of the 1947 Act. I do not suppose he would expect me to go into it this evening. All I can say is that the 1947 Act has not been working very long. It was an agreed measure between all Parties, and I think it true to say that, by and large, it is working very well. We should think carefully before we start making drastic amendments. Lastly—and I am afraid that he has just left—I come to the speech of the noble Viscount, Lord Alexander of Hillsborough.


Perhaps the noble Lord would allow me to say that my noble friend asked me to apologise for him as he has to catch a train to the country.


I really cannot let some of the things that the noble Viscount said go by unanswered. I wish he were here, because I wanted to say some fairly strong things about what he said. It seems to me—and I hope he will forgive me when he reads this in Hansard to-morrow—that his speech was singularly ill-informed about what is going on in the agricultural world. May I just pick up two points, and only two, since he is not here? He criticised paragraph 11 of the White Paper. He said that he could not understand what it means, and did not agree with the sentence: In future, home agriculture cannot be asked to produce a given amount of a particular commodity irrespective of cost. I cannot understand what the noble Viscount finds to disagree with in that. The only thing I can think of is that he believes it is right to ask agriculture to produce any amount of a commodity irrespective of the cost to the Exchequer.


I think my noble friend Lord Alexander expressly excluded that interpretation in what be said. What he did say was that the implication of this is that agriculture has in the past been asked to produce vast quantities, irrespective of cost, and he disagreed with that implication.


Really, the noble Viscount should not read implications into White Papers. What the Government mean is quite clearly stated. We mean what we say. It seems to me such an obvious and proper thing for a Government to say that nobody could conceivably object to it. The last thing the noble Viscount said, and he repeated it over and over again in his speech, was that the Government had broken their pledges and had let down the farmers by scrapping the principles of the Agriculture Act, 1947. I wish the noble Viscount were here, because I would challenge him to produce one single occasion on which the Government have broken their pledges or not adhered to the principles of the Agriculture Act, 1947. He cannot do it. There is no occasion on which we have not done everything which we said we would do. I am only sorry that he is not here to hear me challenge him in the remarks that he made.

I have spoken for too long, but I should like to sum up. I claim that the industry now has before it a sound and constructive long-term production, marketing and financial policy, which is suited to the freer economy that we are creating. So far as production is concerned, we say that in future the reduction of costs and the improvement of quality will be just as important as the expansion of physical output. By better production, better management and skilful marketing, farmers can help to reduce the calls on the Exchequer and increase the independence of their industry. At the same time, the Government undertake—and we have clearly shown by our actions that we mean to fulfil our undertaking—that the industry will continue to be given reasonable protection against sharp price changes, so as to allow it enough time to adjust farming practices to changing market conditions. The new price determinations make a beginning with the applications of these principles, and the new marketing arrangements are in keeping with them. We have reached this point with a very large measure of agreement amongst all those many interests concerned. This has taken time, but I am quite certain that the results have been worth the price we have paid.

Nothing that I have heard any noble Lord say in your Lordships' House this afternoon has made me feel that the Government's agricultural policy in the last two years has not been absolutely right. We have not heard in one single speech any constructive alternative to what we are doing. We have heard no real complaint as to the provisions we are making. We think that our policy is comprehensive, just and workable. It offers freedom and stability. It offers reasonable rewards and incentives to still greater efficiency, and a chance for the farmers to run their own marketing schemes in suitable cases. In the past fifteen years, the farmers have done a great job in expanding output and speeding up technical progress. The job in front of them now is to increase net output still more, through lower costs, higher quality, improved management and skilful marketing. We in the Government will do everything in our power to support them.

7.44 p.m.


My Lords, I should like to express my thanks to all the noble Lords who have taken part in this debate for their contributions which, I am quite certain, will be carefully weighed by the Government. They will show the farming community that their welfare is a matter of deep concern to your Lordships. At this late hour, I should like to make only one or two additional comments. We were all delighted to hear the noble Viscount, Lord Bledisloe. A debate on agriculture without him would be like Hamlet without the Prince of Denmark. We also enjoyed the maiden speech of the noble Lord, Lord Hamilton of Dalzell. I can remember the noble Lord's uncle speaking in your Lordships' House from the Liberal Benches. I believe that he was a colleague of the present Prime Minister in one of the Liberal associations before the war. It is nice to know that the noble Lord, Lord Hamilton of Dalzell, is carrying on the Parliamentary tradition of his family.

I certainly cannot omit a reference to a challenge made by the noble Viscount, Lord Hudson. He reproached me for not expounding Labour agricultural policy. I take the view that one of the advantages of your Lordships' House is that matters of agriculture can be discussed on their merits, and without reference to Party policy. Other noble Lords take a different view. Another of the merits of your Lordships' House is that noble Lords have independent minds. I am sure that the interventions of the noble Viscount, Lord Hudson, and of my noble colleague, are equally refreshing as a contrast to the contributions of other noble Lords in this debate. I should like to conclude by thanking the noble Lord, Lord Carrington, for the way in which he has submitted to an unusually long, and possibly painful, interrogation, for his willingness to give every scrap of information he could, and for the equal facility with which he explained the administrative intricacies of his Department in reply to points made by noble Lords in the course of the debate. I beg leave to withdraw my Motion.

Motion for Papers, by leave, withdrawn.