OVERSEAS RESOURCES DEVELOPMENT BILL

HL Deb 16 November 1954 vol 189 cc1513-50

Order of the Day for the Second Reading read.

LORD LLOYD

My Lords, this is by no means the first time that the affairs of the Overseas Food Corporation have engaged the attention of your Lordships. The groundnuts scheme, as it became generally known, has in the past been the subject of much discussion in your Lordships' House and there have been considerable differences of opinion on the subject between noble Lords on these Benches and noble Lords opposite. Whatever past differences there may have been, in my opinion it would be most regrettable if such controversy were to be revived this afternoon. Apart from any lessons that may be learnt from it, we are no longer concerned with the past. Our concern is the future, and it is for the future of this scheme in Tanganyika that this Bill seeks to provide.

Nevertheless, although it is with the future that I wish primarily to deal, I must, in order to present the Bill to your Lordships, make a brief excursion into past history. Your Lordships will recall that in 1951 there was published by the late Government Command Paper No. 8125. This Paper contained proposals for a revised policy in respect of the groundnuts project, and these proposals were implemented later in the same year by the late Government's Overseas Resources Development Act. The late Government decided at that time that the commercial production of groundnuts should finally be abandoned and that the Overseas Food Corporation's future activities should be confined to a scheme of large-scale experimental development, in order to establish the economics of clearing and of mechanised, or partially mechanised, agriculture under tropical conditions. It was also decided that responsibility for that scheme should be transferred from the Ministry of Food to the Colonial Office; and finally, as an indication of the new turn of events, the then Secretary of State took the opportunity to appoint a representative of the Tanganyika Government to the Corporation.

At that time the Corporation's activities were confined to three areas, Kongwa, Nachingwea and Urambo—all of which are in Tanganyika. The Command Paper set out the various proposals for each of these areas. Moreover, it was laid down at that time that the Corporation's experiments in mechanised agriculture were to be continued up till September, 1957, and that Her Majesty's Government should make available £6 million by Annual Votes to cover the Corporation's net expenses and the annual net loss on the Southern Province port and railway. The inevitable result of the decisions taken in 1951 (and I am sure that they were wise decisions) was a large-scale reduction in the scale of the whole enterprise. Certain of the fixed assets were taken over by the Government of Tanganyika. At Kongwa, for example, much of the township, including the hospital, the school, the airstrip and twenty-five miles of road were taken over by the Tanganyika Government. At Nachingwea the majority of the buildings and all the electricity and water stations remained with the Corporation, but the airstrip and the roads were taken over and the hospital was rented from the Corporation. At Urambo only the airstrip was taken over.

But, of course, a number of other assets, apart from these fixed assets, were rendered superfluous by this reduction in the size of the scheme, and the disposal of these surplus assets has been carried on steadily through the machinery of the East African Disposal Board. As your Lordships will realise, the task of disposing of these vast quantities of material has not been an easy one. In the first place, a proportion of the surplus plant, machinery and vehicles was in poor condition and had, in fact, to be sold as scrap. Moreover, the disposal of these assets was not simplified by the fact that it overlapped the disposal of considerable military surpluses of many competitive goods in East Africa. There were, for example, so many vehicles available that the East African market could not absorb them all at remunerative prices. Finally, it should be remembered that many of the buildings and installations were situated in remote areas, populated only by members of the Overseas Food Corporation and, as a result, had little or no realisable value.

The book value of all the assets declared surplus by the Corporation since 1951 comes to a little over £7 million, of which £2,100,000 represents buildings and installations. Up to the 31st March this year, £1,665,000 had been paid by the Corporation to the Exchequer in respect of the saleable material. Since that date another £410,000 has been realised, and it looks as if there ought to be about another £100,000 gross still to come in. On this basis, the Exchequer should receive something over £2 million. This is undoubtedly a heavy loss, but such a loss was unavoidable in the very nature of the winding up of the scheme.

On the personnel side there have been large-scale reductions in staff. Between 1st April, 1951, and the 31st March this year the number of Europeans employed by the Overseas Food Corporation has fallen from 1,276 to 193. The number of Asians employed has dropped from 174 to 14, and the number of Africans from 18,000 to 4,000. I am glad to say, however, that I understand that the large majority of Europeans originally employed have, in fact, settled down and made their homes in Africa. In view of the crying need for experienced and active people in East Africa, this is one of the happier features of the run-down and a very satisfactory development which will, in my opinion be of enduring value to Africa. It is a definite asset gained to be set against the losses which we have incurred.

After the late Government's Act, to which I have already referred, the next event was the setting up of a Working Party, prompted by the very energetic Governor of Tanganyika, with the full support of my noble friend Lord Chandos. The function of this Working Party was to study the possibility of closer collaboration in the field between the Overseas Food Corporation and the Tanganyika Government. It reported in January, 1953, and, with minor modifications, both Her Majesty's Government and the Tanganyika Government have accepted the Report. It is this Report that forms the basis of the new arrangements set out in Command Paper 9158 and of the Bill which is before your Lordships this afternoon. So much for the past history. Let me turn now to what the Bill does.

First, a new Tanganyika Agricultural Corporation will be set up to take over responsibility for carrying out the experimental works authorised under the Act of 1951. The Government of Tanganyika have already passed their enabling legislation, and the text of their Ordinance was published as Command Paper 9198. Originally, we hoped that the date of transfer to the Tanganyika Agricultural Corporation would be October 1 of this year. Circumstances have made that impossible, and therefore, with the full agreement of the Overseas Food Corporation and the Government of Tanganyika, the date of transfer will now be April 1, 1955. On that date it is proposed that the Government of Tanganyika will appoint Mr. Gillett, the present Chairman of the Overseas Food Corporation, as Chairman of the Tanganyika Agricultural Corporation.

Secondly, in order to equip the Tanganyika Agricultural Corporation for the task, all the assets of the Overseas Food Corporation will be vested in it, naturally, with the liabilities that go with them. Thirdly, in order to give recognition to the experimental nature of the Corporation's work, the opportunity is to be taken to turn it into a Colonial Development and Welfare scheme. The balance of the £6 million earmarked for it for the period from 1951 up to 1957, less a sum of £1¼ million earmarked in 1951 for the railway guarantee (and I will deal in a moment with the financial arrangements for the railway) will therefore be made available to the Tanganyika Corporation through Colonial Development and Welfare machinery. The balance at the 31st March, 1955, when the transfer is to take place, will be of the order of £1,300,000. Your Lordships may be slightly confused by this figure, because it is less than the figure we originally estimated and put in the Bill. The reason for that is that the date of transfer has been postponed to April 1, 1955, instead of October this year. The main feature to which I should like to draw your Lordships' attention is the fact that these arrangements will not entail any new money being voted beyond what was foreseen in 1951.

So far as future agricultural development is concerned, it is proposed to develop the three centres of operation in the following way. First of all, Kongwa There, as your Lordships may be aware, the very uncertain rainfall has destroyed any hopes that we originally had about the possibility of developing arable agriculture on a large scale in this particular area. One small arable farm will be, retained, but apart from this it has been decided to concentrate entirely upon ranching, the improvement of cattle strains and research into improvement of pasture. At Nachingwea, where there is better soil than at Urambo, and better rainfall than at Kongwa, efforts will continue on the present lines and scale, with some 20,000 cleared acres. Increasing attention, however, will be paid to African tenant farms. Besides these there are three types of farms here: productive, farms, where the aim is to establish the more efficient method of farming and the most successful crops to grow, including the development of crops new to the district; costing farms, where the operations are carefully costed and timed; and, finally, one or two farms where, at Corporation expense, selected employees, acting in the rôle of pioneer farmers, clear the land and establish themselves as quasi-independent settlers. In this latter case, the object is to find out what it costs a new farmer to establish himself on his own. Here again, there will be very careful costing.

Nachingwea was the last of the three areas to be opened up, and while subsistence crops such as maize have done well, no economic crop of high value, such as tobacco at Urambo, has yet emerged there. Experiments with flue-cured tobacco are going on, and cashew, a tree crop, may be a valuable stand-by. On the whole, the prospects are encouraging, particularly for the African tenant farming scheme. In addition to that, cattle have been introduced gradually on the farms and have fared well so far. At Urambo, where tobacco growing has been a marked success over the past three or four seasons, the intention is to consolidate the area through settlement farming, with both large-and small-scale units and the long-term objective is to create conditions favourable to large-scale African farming. The intention is to develop up to thirty-eight large-scale farms of about 2,000 acres each. Running concurrently with this scheme will be an African tenant scheme whereby it is hoped to provide 320 tenant holdings occupying about 12,000 acres.

The importance of these plans lies in this fact. Both Urambo and Nachingwea are typical of extensive areas of East Africa, and the results of the experiments that are going on there can be of great importance in the future. The African farming schemes are of the first importance, and it is good to note that they have excited favourable comment from the local Africans, who see in them the way to rise beyond the bondage and penury of the peasant farm of four acres and a hoe.

So much, my Lords, for the agricultural projects. Let me turn now to the proposals for port and railway development. It is a commonplace that pioneer railways in Africa generally have a turbulent beginning, and the port and railway constructed for the original groundnut scheme in the Southern Province of Tanganyika is no exception. As your Lordships will remember, the reason why Her Majesty's Government decided to build a new port and a railway in that area is that the original plan foresaw an export of more than 400,000 tons of groundnuts from the Southern Province by 1952; and at the time there was no railway, and only a very limited port, in that part of Tanganyika. The construction contracts were let by the managing agents, and when the Overseas Food Corporation took over in 1948 it made arrangements with the East African Railways and Harbours Administration, who were the obvious people to do it, to supervise the construction on the basis of capital advances from the Corporation. It was further agreed that the Railways and Harbours should buy out the Corporation when the work was finished, as soon as they were in a position to find the money. In return, the Overseas Food Corporation, on behalf of the British Government, undertook to guarantee interest and sinking fund on the capital cost to the extent that these were not covered by revenue on local traffic. Naturally, no one expected in those days that the guarantee was likely to be invoked or that, if invoked, it would amount to very much for very long. This guarantee was later extended to cover operating losses.

In 1951, when the then Government decided to abandon the scheme, it was agreed with the East African authorities that, in view of the work already done, and Tanganyika's new development plans for the Southern Province, the port and railway should be completed. The financial arrangements then arrived at, which were incorporated in the tripartite agreement of March 10, 1952, provided for the sharing of the guarantee between Her Majesty's Government and the Tanganyika Government in the proportions of 4 to 1. The guarantee was to cover the net annual operating deficits and, except that it was to be reviewed in ten years, there was no term to it.

When we came to work out with the Tanganyika Government the arrangements for transferring the Overseas Food Corporation to the Tanganyika Corporation, we learned to our dismay from the Railways and Harbours Administration that the capital cost of the port and railway was going to be about £6 million—that is, nearly £1½ million more than the original estimate. The financial arrangements for the port and railway, after the transfer of the Overseas Food Corporation, were already a matter of acute concern; but clearly this increased cost emphasised the serious over-capitalisation of the project and the very heavy nature of the burden with which the Corporation were saddled under the guarantee arrangements. A conference was held in London, and it ended in agreement that the best way out would be for Her Majesty's Government to waive recovery of so much of the advances by the Overseas Food Corporation to the Railways and Harbours Administration as would reduce the capitalisation to a reasonable figure—that is, to something in the region of £2½ million. In return for this the British Government would be relieved of the liability to advance more money to complete the port and railway (the latter is still not properly finished) and, more important, of its guarantee of the annual operating deficits.

A new tripartite agreement has been prepared, but cannot, of course, be signed until this Bill becomes law. This agreement revokes the 1952 agreement and places on the Railways and Harbours Administration the onus of finding from their own resources the balance of the money required for the port and railway, and it places on the Tanganyika Government responsibility for meeting 100 per cent. of the net operating deficits, including interest and sinking fund, on the revised capitalisation. There is only one thing more that I need say about that matter. I would emphasise that these arrangements were freely negotiated with the East African representatives and have been readily accepted in East Africa, and I think everybody is quite happy about them. Clause 4 has therefore been inserted in the Bill to secure Parliament's approval for the waiver involved, which is the last step required before the new tripartite agreement can be signed.

So far, I have dealt exclusively with proposals relating to development in Tanganyika. I must now leave Tanganyika in order to deal with one clause of the Bill which has nothing whatsoever to do with the Overseas Food Corporation and which in fact concerns the financial affairs of the Colonial Development Corporation. In 1952, when the affairs of the Colonial Development Corporation were being discussed, the noble Lord, Lord Ogmore, urged that the Corporation should be relieved of the financial burdens which had been imposed upon them by schemes which had had to be abandoned. The noble Lord suggested not only that the interest on the capital involved should be waived but that the capital losses themselves should be written off. At that time my noble friend Lord Munster agreed that it was unreasonable that the new administration of the Colonial Development Corporation should be required to pay interest for forty years on Exchequer advances lost on schemes which had been initiated by their predecessors, and which had had to be abandoned either by them or by the present administration of the Colonial Development Corporation. My noble friend on that occasion was, however, a little more cautious on the question of the writing off of the capital involved.

Since that date, various things have happened. First of all, my noble friend Lord Chandos discussed the whole of this matter with the noble Lord, Lord Reith, and agreement was reached between them on the question of the waiver of interest on Exchequer advances on abandoned schemes. Quite apart, however, from the question of interest, my noble friend Lord Chandos hoped at that time to be able to go further than this and to use the present Bill to write off the capital as well as the interest on some of the earlier schemes; and accordingly Lord Reith was told in August, 1952, that the Government would legislate at the same time not merely for the waiver of the interest but also for the once-for-all writing down of the capital lost on any scheme which had been inherited from the previous administration, and which it had already been (and I emphasise the words "had already been") decided to close down. Later, the closing date was fixed as December 31, 1953, on which date the sum involved would have been in the region of £4 million.

Unfortunately, Lord Reith and the Colonial Development Corporation did not feel that this went far enough. They wished also to write off the losses on some schemes which they felt were over-capitalised and also on some other schemes that had not been abandoned with approval by December 31, 1953. This would have meant, in effect, the writing off of a total amount of some £8 million, as opposed to the £4 million. Their argument was quite understandable. They said that the public would feel that any writing off of capital would mean that the Corporation were starting with a clean slate, whilst in their view this would not be in accordance with the facts. For our part, we did not feel that we could make this further concession. In our view, the losses on schemes still in operation must be a matter of speculation, and, in the interests of the taxpayer we do not feel that such a step would be justified. At this point I should like to remind the House that the Act does not lay down that the Corporation must meet their capital charges on every individual scheme, but that, taking one year with another, they must meet the service charges on their capital from the whole of their revenue. In other words, the Act envisaged that the unsuccessful schemes should be paid for by the successful schemes. The Government and Lord Reith, therefore, have had to agree to differ on that point but, as a result, Lord Reith and the Corporation declined our proposal to write down the capital by about £4 million and the only action we can therefore take is to remit the interest. That is what Clause 5 does.

I have dealt with the main provisions of the Bill and there is little more that I need say. I hope and believe that the new proposals will provide a sounder foundation for future development in Tanganyika. I am quite certain that the fact that these experiments will be run in future from Tanganyika, rather than from London, will be an advantage. In particular, the new arrangement will make it possible for the new Corporation's work to be co-ordinated much more closely with Tanganyika's own agricultural development projects. The provisions of this Bill, for example, will make it possible for the Tanganyika Government to employ the present field organisation of the Overseas Food Corporation on its own development projects and, by giving it a local status, will enable the Tanganyika Government to make direct use of its services. It will make it possible, also, for the Tanganyika Government to perpetuate the present experiments of the Overseas Food Corporation, if it so desires, beyond 1957.

On the other hand—and on this note I should like to end—the fact that there is to be this new Corporation will not mean that we shall lose the services of those who have gained such invaluable experience in these matters over the past years. I feel sure that no one could feel anything but confidence in the chairmanship of Mr. Gillett and those who are working with him in Tanganyika in the big enterprise in which they have faced extraordinarily difficult conditions. The loyalty which they have found in their staff, and their general courage and imagination, are all assets which will remain with us in the future; and of course the new railway and port will play an increasingly important part in the general development of the Southern Province of Tanganyika.

With these assets, and with what I believe is a sound scheme, I feel sure that those who are engaged on this great work can go forward with the feeling that they are now firmly established in a vital enterprise, based on careful planning; and we, for our part, can look forward to a steady increase in the development and prosperity of the territory. I beg to move that the Bill be now read a second time.

Moved, that the Bill be now read 2^a.—(Lord Lloyd.)

4.17 p.m.

LORD OGMORE

My Lords, as this is the first occasion on which the noble Lord, Lord Lloyd, has addressed us in his present office, I should like to congratulate him on his transfer to his most interesting Department. I hope he will be as happy in it as I am sure the noble Earl, Lord Munster, was, and as indeed I was. I had a good deal to do with the noble Lord, Lord Lloyd, over Welsh affairs, and, as always, found him, as he has shown himself to-day in the speech he has made, clear and honest—and one cannot expect more than that from anyone. He is now following in the Department in which his distinguished father took such a keen interest. Again, as this is the first Colonial debate we have had since the Ministerial change, I should also like to congratulate the noble Earl, Lord Munster, on his promotion, which in our opinion was very well deserved. He was always co-operative and he has considerable Parliamentary skill, as we often had occasion to observe, especially when he was presenting a weak case which had need of bolstering and pinioning up to make it look respectable.

This Bill, as the noble Lord has just told us, is in two parts, and the two parts have really nothing whatever to do with one another except that they rub shoulders in the same measure. They are perhaps strange bedfellows to find together. The Bill deals with the broad terms of overseas resources, and it is for that reason, I presume, that they are together. Therefore, in a sense, what one has to say on one part is not completely different but is in a different context from what one has to say on the other. One has almost to make two speeches on a Bill of this kind.

As to the part dealing with overseas food, the change in the provisions regarding the duties performed previously by the Overseas Food Corporation and now to be performed by the Tanganyika Corporation, I would remark that we are here dealing with one of the great problems of our age. It is obvious that the traditional peasant agriculture, whether in Africa or in the Far East, with its lack of incentives or opportunity to raise the farmers' standard of living, when combined with Western health measures, cannot do more than it has done already—namely, to increase enormously the population without any corresponding increase in the growth of food to feed the hungry mouths thus produced. It means rural indebtedness; it means a lack of proteins in the diet; it means a constant drift from the country to the towns; it means famine in bad years and bare subsistence in good; it means, in the words of a poem once given to me by cultivators in the new Territories of Hong Kong: In the midday we hoe the soil, There is no ending to our fated toil. The people must therefore be helped to break out of their vicious circle. We have been trying to help them for years past. That was one of the objects of the original Overseas Food Corporation; it is the only object of the Colonial Development Corporation, and it will be the object of the Tanganyika Corporation.

What are the steps to be taken to this end? I would say that they must include the introduction of mixed farming, of mechanised farming in certain areas, of inland fish farms, of scientifically based sea fishing, of co-operative marketing societies and land banks, of State farms with satellite co-operative and private holdings, of modern methods of forestry, of a non-profit-making corporation to try out pilot schemes in agriculture, forestry and fisheries, of the encouragement of rural industries and, finally, of the precursor and handmaid of all these proposals—research. To-day, we have before us the Government's proposals with regard to the three areas which were opened up in Tanganyika, and, listening to the noble Lord who, as I say, stated the case very clearly, it was obvious that they had some of the objectives which I have just stated clearly in mind. We learn that in Nachingwea there is to be farming. I was not absolutely certain whether they were going to be very large farms, but presumably they are going to be comparatively small farms. I mention this because when he came to Urambo, the noble Lord said that they were going to be large-scale farms; so presumably in Nachingwea they are going to be comparatively small ones. If this is so, then I strongly suggest to the noble Lord that, both in Nachingwea and in Urambo, he will need a State corporation to provide services for the satellite or small African farmers who will be unable to provide them.

As your Lordships well know, for many years past in this country the services the farmers need have been provided by a number of authorities or private individuals. There are the landowners, the county agricultural committees, the county councils and, throughout the last century or more, a number of authorities who have provided services for farmers. A number of agricultural shows are held, where the farmer can see better methods of agriculture. In Africa there is little of all this, and I feel certain that unless there is in each of these centres a Government demonstration farm, so to speak, where the farmer can see how improved methods of agriculture can be applied to his holdings, from which he can obtain seeds and the services of good stock animals, and which will provide marketing arrangements, then in all probability these farming schemes will fail, or at all events will not be the success that they might have been. If we are going to set up a new system of farming somewhere we must have demonstration farms, and a scheme of marketing and the like, to make the proposal a success. The noble Lord will find that that is so.

On more than one occasion I visited these Colonial territories and spoke to the farmers there. In some places, such as West Africa, there were existing farms with a considerable tradition; and when I suggested that they should introduce new crops or new methods of growing old crops, the answer was always, "You try it first, and if you make a success of it we will have a go. It is no use your coming here and telling us that we can do this, that and the other and then walking away; you do it first." I am perfectly certain that the Corporation will come up against that problem, and I hope that they will establish a central or State farm in each area for that purpose. I do not mean a State farm competing with the farmers, but a farm supplying them with the assistance that they need. Then we are told by the noble Lord that there is to be at Kongwa a ranching scheme. I am not sure whether it will be organised by Africans or by Europeans.

LORD LLOYD

Both. I will explain it in greater detail. It will be organised by both. But one of the most important points here is that there must be the European farming alongside the African, otherwise much of what the noble Lord recommends falls to the ground. The idea is to have European tenants next door to African tenants, and they will develop together, side by side.

LORD OGMORE

At all events. I understand that there are to be farmers. What they are going to be and who they are going to be seems a little uncertain at the moment. What I am getting at is that it is not going to be a State ranching scheme; it is going to be African or European, as the case may be. In that case, I think that the Government have to be most careful about the water level in the area covered by the new Tanganyika Corporation. When I had some responsibility for passing these schemes, I always took a good deal of care to find out what the water level was in the particular area concerned, because though a patch of country may look perfectly sound for grass growing, if the water table is too low beneath the surface, that is to say the calcrete layer is too low beneath the surface for the grass roots to get down into it, then when, the scrub is dug up all that is left is desert. That happened in Kongwa. All you will get is desert, because the grass roots are not nearly so long as the scrub roots; they will not get down into the water, and the grass plants will die. That is a very important point. Another important feature in Africa is transport. I would strongly advise this Corporation to establish its first ranches along or near the railways and not to push them right into the bush with, as a consequence, the need to establish new and expensive transport.

Leaving that matter, I turn now to the proposals of the Southern Province Port and Railway to which the noble Lord has referred. Much of what he said is true. There has been considerable expense here, as indeed there has been with all railway systems in their beginnings. If one looks at the various proposals of "King Hudson" (as they called him) in this country about 100 years ago, and those of the other railway financiers and pioneers, one discovers that there was a considerable amount of money lost in the early development of the railways here. Far more money was lost on the early developments of the railways in America—British money at that. I was reading the other day the life of J. P. Morgan, the great financier, who was much alarmed at one time at the enormous amount of money which British investors had lost on the United States railways. So one may say that there is nothing novel in the fact that a great deal of money has been spent in developing a port and a railway in this completely new area in Tanganyika. I am quite sure it will help to develop the area and that both port and railway will themselves open up the interior by providing transport to and from it.

Finally, there are the Colonial Development Corporation and the proposals in the Bill affecting that Corporation. The noble Lord has dealt extremely honestly with this part of the Bill and has exactly explained the difference of opinion between Her Majesty's Government and the Colonial Development Corporation. I am on the side of the angels—or on the other side, depending on one's viewpoint. I take the side of the Development Corporation, because I consider it unrealistic to expect the Corporation ever to be able to repay, out of their earnings, large sums of capital, capital not on existing schemes but on schemes which have been abandoned, although abandoned since 1953. We may as well face the facts and write off the amount involved, which in any case will never be repaid to us, rather than keep these large sums of capital on the Corporation's books and expect them, like Sinbad with the Old Man of the Sea on his shoulders, to stagger through the financial columns of the City with this appalling load. It would be much better and clearer if they were relieved of the burden of these various financial obligations on schemes which have been abandoned. I agree that where schemes are still in existence the Corporation must stand the capital losses—or the gains—that may accrue; but where schemes have been written off and abandoned, even though since 1953, they should be allowed to write off the capital, and Her Majesty's Government should give them that authority.

It may be said (I am sure the noble Lord will not say it, for he is too wise in these matters) by those who have not really thought about it: why should a Corporation of this kind be allowed to abandon capital? If this Corporation can do so, why should not an ordinary limited liability company be allowed to do so? Why should this Corporation not have the same obligations as an ordinary company? The whole point about the Colonial Development Corporation is that they have been undertaking schemes which no limited liability company was prepared to undertake. The Corporation were pioneering in a new field. In different parts of the world they were trying developments which had never been tried before. We must recognise the particular responsibilities and peculiar duties of the Corporation in that respect.

We have to realise, also, when dealing with the Colonial Development Corporation, or the Tanganyika Corporation, that there is no easy road to the development of undeveloped areas, whether Colonial or otherwise. For some Colonies with valuable natural resources remaining to be developed, the pattern in Uganda might be considered. There is there a development corporation, the Uganda Development Corporation, which combines with private enterprises, and sometimes with the Colonial Development Corporation, to carry out schemes which it considers to be for the benefit of the people of Uganda. In various other Colonies and Protectorates there are a few corporations of the same kind. Noble Lords may see particulars of them in paragraphs 351–357 of the Colonial Report for 1953–54 (Command 9169).

In other Colonies, those which either have no large untapped resources, or, if they have them, lack the financial resources to develop them, I suggest that the pattern has not been found and that serious consideration should be given to the proposal which I made in a speech in your Lordships' House in 1952 on the Colonial Development Corporation. I then suggested that the Corporation should be used as agents by Her Majesty's Government in the United Kingdom, by Colonial Governments, municipalities, marketing boards and the like. I say this because I feel there is a tendency for Her Majesty's Government at present to treat the Corporation largely as a finance house set up to provide finance at comparatively low rates of interest to people who wish to develop the resources of the Colonies. But the Corporation was not intended to be merely a finance house at all. Its objectives are clearly laid down in the Act which brought it into being. If we treat it merely as a finance house, then much of its virtue will go out of it. It can be used in very important ways to provide the sort of managerial, administrative and technical skill which, just as much as finance, is so often required in undeveloped territories. I hope that Her Majesty's Government will consider that suggestion very seriously. The pattern will differ in various parts of the Colonial territories, but we must learn by our mistakes and not be discouraged by them. The search for success in this difficult but vitally important field mast be unceasing.

4.38 p.m.

LORD MILVERTON

My Lords, I find myself in the unusual position of having nothing to disagree with, or to criticise, in the speeches which have preceded mine in this debate. Indeed, the little that I have to say will largely consist of trying to underline some of the morals which I, from my past experience as an administrator, would draw from what has just been said by the noble Lord, Lord Ogmore. My intervention, therefore, will be brief. My reason for speaking at all is only to seize this opportunity of reiterating one or two principles which cannot be too often reiterated.

Looking back to January, 1948, it was on the Overseas Resources Development Bill (later the Act) of that year that I had the privilege of making my maiden speech in your Lordships' House. I welcomed that Bill then with certain reservations. I welcome this Bill to-day wholeheartedly, because it represents an acknowledgment that the reservations made by some of us in supporting the Bill in 1948 have been justified by experience. In debate which took place elsewhere on this Bill there seems in some minds to have been a certain amount of confusion as to whether they were taking part in a funeral or a christening. I propose to follow the lead of the noble Lord who opened this debate and to treat it as a christening. As has been said, let us take from the past nothing but its fire, leaving the ashes of dead dreams to rest in peace.

The true beginning of Colonial economic policy is to be found, I suggest, in the speeches of that great Secretary of State, Joseph Chamberlain. It is comforting to know that all of us to-day have accepted the policy envisaged by him. It was as long ago as August, 1895, that he said in one of his speeches: I regard many of our Colonies as being in, the condition of undeveloped estates, and estates which never can be developed without Imperial assistance … I shall be prepared to consider very carefully any case which may occur in which, by judicious investment of British money, those estates may be developed for the benefit of their population and for the benefit of the greater population which is outside. That was said nearly sixty years ago, and Mr. Chamberlain was then enunciating our most modern principles of Colonial development. We know now that to assure Colonial peoples of their right to self-determination is, in the economic sense, pure political "clap-trap." If one sees it, as I see it, in the economic sense, they have to become big enough and strong enough to fight their own economic battles, and the utmost we can do effectively is to help them to help themselves.

We have all learnt a lot since the first Overseas Resources Development Act. What is it that we are trying to achieve? I suppose it is a long-term continuity, a drawing-out—if I may use that term instead of the word "exploitation" which is sometimes misunderstood—of internal natural resources; the attraction of outside investment and so forth. The Colombo Plan method, probably, is the best that we have learnt; and that is to work with and through local governments (this was a point emphasised by the noble Lord, Lord Ogmore), the responsibility for the initiation and carrying out of the schemes being theirs. The provision of roads, railways, harbours, water and so on, is essentially a Government responsibility, but I suggest that the local government should exercise control over economic development in order to prevent the undesirable social consequences usually associated with rapid economic change. That, of course, shows the illogicality of pressing on from outside political reforms and self-government too hastily, because if it outstrips economic and educational development the result must be disaster.

The nature, timing and methods of the development process must be in the hands of the local government. In itself, that is the best of training for them. In my opinion there is no hope whatever of successfully bringing to backward peoples the improved standards of living, the peace, prosperity and good government which all men crave for, unless it is recognised in practice that great speed in such a process is utterly impossible. Over the greater part of Asia and Africa, men multiply and land declines. Each year the dis-balance between land and people becomes more perilous. The idea that I want to emphasise is that true Colonial development consists as much in the conservation of resources—especially land—and in prevention of waste, as in new schemes. Food (and this again is a point made by the previous speaker), population and soil conservation are all bound up inextricably together. Study of what caused the downfall of once great countries shows that failure to conserve natural and renewable resources had much to do with their collapse. I know that there is not the same theatrical appeal in conservation of resources as there is in working schemes for miracles in a hurry; but in my opinion, without teaching the lessons of conservation all this Colonial development and expenditure is so much pouring of water into a sieve. The art of using, without using up, natural resources has yet to be learnt by the African. The triple problem which at present baffles the world, and especially the British Empire, is that of how food supplies can be produced for the rapidly growing population, and how soil conservation, requiring as it does the highest skill and public support, is to become as universal as the situation demands.

A great deal of nonsense is talked, and has always been talked, about the wide open spaces of Africa. The greatest disservice to Colonial development, as I see it, is to spread the idea that political progress and recklessly profuse expenditure of money can solve all problems. It can do nothing of the sort. The human element is the very foundation of every conservation programme, just as it is also the reason for it. And in Africa an almost malignant nature has to be humoured, and the lesson of working with it learned. However, I appreciate that this is not the occasion for a general discussion of Colonial development policy. I welcome this Bill, with its now limited objective and its principle of placing the local Government in charge of developments. In conclusion, may I say that I welcome, too, the measure of relief from interest on capital which has been lost which is given, by Clause 5 of the Bill, to the Colonial Development Corporation. It is not all that they or their sympathisers in this House would wish, but it is a desirable release from some of the intolerable financial burden of early schemes which have failed. My Lords, I support this Bill.

4.48 p.m.

THE EARL OF LUCAN

My Lords, I had intended to intervene only with a few words on the port and railway aspect of this Bill, but one or two things which the noble Lord, Lord Lloyd, said in his speech should, I think, be elaborated. He mentioned—twice I think—that it was desirable to have European farms alongside African farms, on the ground that, without the example of the European farmer, the African would never learn farming methods. That, I think, was the argument. That seems to me a most surprising doctrine, and, if I may say so with respect, it seems to differ from a great deal of the Colonial Office policy. Why, if that is so, is so much attention being paid in so many of the Colonies to community development? This tremendous effort that is being put into improving African agriculture is being made on the assumption that the African, if he is taught farming methods, will practise them. I should like the noble Lord to say whether that is accepted Colonial Office policy.

LORD LLOYD

My Lords, may I intervene to say that I think the noble Earl has slightly misunderstood me? I did not in the least intend to convey that it was assumed that Africans could never do anything by themselves. I tried to convey that, if there was a European farmer next door, he would often help the African, and that the two would help each other. There is no cardinal principle laid down that we must always have European farmers; but it has always been accepted that a system in which they work alongside African tenant farmers works very well.

THE EARL OF LUCAN

I think that doctrine is a very questionable one. It is news to me that it has ever been accepted in Colonial Office circles. It is true that the noble Lord mentioned that in the Urambo scheme there would be European tenants. Can he tell the House exactly what form of tenure he envisages for this scheme? It would be too long to go into a discussion of the land tenure system in Tanganyika and of the extent of the African trust lands and the conditions under which the Government can or would alienate land to Europeans on anything other than a short lease; but I think we should like to be assured that, when the noble Lord speaks of Europeans being allotted land, it is on a short lease and that there is no question of the allotment of freehold land to Europeans.

The noble Lord was very right when he said that a new port and railway could bring enormous and increasing impetus to the development of the Southern part of Tanganyika. I would go further and say that possibly there is no scheme in the eastern half of Africa that offers such possibilities of development in the interior as well as near the coast. Only a few weeks ago I was looking across Lake Nyasa at the mountains where the Colonial Development Corporation have a large coalfield. Tanganyika coalfields have 200 million tons of good coal proved, and the possibilities are that the coalfield contains double that quantity. Africa is deficient in fuels to a disastrous extent. One has only to travel anywhere away from the coast to see the appalling expense of importing oil fuel for railways and factories far from the sea, or to see wood-cutting on an enormous scale, whereby most vegetation is destroyed in order to find fuel for mines, industry and transport. If the railway ever gets to that coalfield—and I think there is no doubt that it must get there in time—it will make an enormous difference, not only to the southern part of Tanganyika but to the northern parts of Nyasaland and of Northern Rhodesia and all the country between Tanganyika and Northern Rhodesia. There is also the other Colonial Development Corporation scheme, the investigation of forestry development on the Nyika plateau, which was vividly described in the book by Colonel Lawrence van der Post. So far as investigations have gone, the possibility is that soft woods, conifers, can be grown on a large scale for eventual use as pulp for paper. The success of that would depend on ample supplies of fuel being easily obtainable.

There would be other advantages in the opening up of that coalfield. In any part of Africa where there is close settlement there is a land problem. The available land cannot be enlarged, but the population goes on growing at an increased rate. The land cannot be parcelled out among the increasing population indefinitely; therefore, the ultimate solution of overcrowding on the land is development of industries. A start has been made in many Colonial Office territories with light industries, particularly in Kenya, and if fuel and the means of communication were available, there would be opportunity and scope for processing of raw materials and light industries in one of the most undeveloped parts of an undeveloped Continent. I hope the Government realise that this railway and development is one of the things that will not pay, that cannot pay, but that it is essential if we are to make the fullest use of, and offer the fullest opportunities to the inhabitants of, the countries in Central Africa.

4.58 p.m.

THE EARL OF MANSFIELD

My Lords, in introducing this admirable measure this afternoon, the noble Lord, Lord Lloyd, said that as a necessary prelude he must go a little into past history. I agree with him, but I assure your Lordships that I am not going to start my remarks by flogging a dead and odiferous horse through any pleasure in so doing, but simply because it will act as a necessary introduction to the main theme of my speech, which I shall not reach for some little time. The noble Lord, Lord Ogmore, in a sensible speech, if he will permit me to say so, warned of the necessity of various precautions before embarking on large-scale schemes. I could not help reflecting that those observations might have been applied with much greater justification to his own Government at the time of the passing of the original Act in 1948, because that Act, although admirable in its expressed intention of developing the hitherto untapped resources of Equatorial Africa, could have been, and should have been, even more strongly attacked, for two reasons. The first reason is that it was one of the most ill-conceived measures that has ever been brought before Parliament, inasmuch as it violated practically every tenet of good agriculture, and all those of tropical agriculture.

The noble Lord, Lord Ogmore, spoke of the necessity for an improved system of transport. How right he is! Is it not unfortunate that his own Government did not think it better to enlarge the railway system of West Africa to remove hundreds of thousands of tons of groundnuts that were rotting at the railheads for lack of transport, rather than grow groundnuts in an area in which the soil was not particularly suitable, the climatic conditions, as the noble Lord, Lord Milverton, has said, almost malignant, and the local population not adept in the growing of them? That scheme, however admirably intended, was an example of Socialist planning at its most extravagant, its most inefficient and its most disastrous.

But there is a second angle from which an attack was also justified. The figure of 400,000 tons of exported groundnuts was dangled before us as a bait. I, having no personal knowledge of African conditions, consulted a considerable number of friends and acquaintances who had, and they were all agreed that such a figure could be considered only as a moonbeam from the larger lunancy. But they were also agreed that, even were such exports possible, it would be morally wrong to take anything like that amount away from Africa, in view of the clamant need for a rise in the standard of living, and particularly in the standard of nutrition of the people there. Although I have no personal experience of the African in Africa, I have some considerable experience of him in the West Indies. I have watched him work, and I have listened to the usual complaints that he is idle. Careful observation has convinced me of the fact that the so-called idleness in nine cases out of ten is a combination of two things: first, the climate; and secondly, and much more important, the effects of malnutrition and undernourishment. There is, unfortunately, I fear, no reason to suppose that the conditions among the Africans in Africa are very different.

When one considers the great successes that have been achieved by African athletes, be they Jamaicans, citizens of the United States, or indigenous Africans, when they are provided with adequate diet, one can conclude only that the fact, which I believe has been proved, that even in Africa the African soldiers have only about two-thirds of the manual power of the white soldiers, is a sure proof that what is wrong is inadequacy of diet. Such inadequacy may be, and sometimes is, a lack of the actual necessary amount of food, but more often it is a question of the kind of food. In both Africa and the West Indies the main diet of the African is, I believe, of a carbohydrate nature, and he receives nothing like enough protein to give him a balanced diet and to provide the necessary energy. Therefore, the first thing that any development scheme should do is to try to raise the standard of living and the standard of nutrition. That is why I hope that our present Government will, when the time comes, insist on the Tanganyika Government not only continuing but intensifying their experiments, along, of course, sound lines, such sound lines being experimental power schemes, which were so sadly lacking in the original project.

If we are going to get that peaceful and successful development of Africa which we must all desire, we must realise that there are two factors which will imperil it. First, there is the continuance and, indeed, the expansion of the damnable doctrine of Apartheid. Secondly, there is the belief of the African that continued association with, and partial dominance by, the white man means that he can never hope for a genuine rise in his standard of living, but that the products of his country are going to be for all time coming exported for the benefit of those overseas. I was delighted to hear the noble Lord, Lord Lloyd, say that the schemes—the, more or less, pilot schemes—contemplated include cattle-rearing, which is most necessary. Those of your Lordships who have done big game hunting in Africa, or who have read books about it, will know of the apparently inordinate desire of the African for meat when the hunters make it available. There have been many somewhat humorous descriptions of their craving for it. Few, if any, of the authors have realised that such a craving is not due to actual greed, but to a biological urge for meat which they all too seldom receive. Therefore, if we are going to raise the standard of living and the standard of nutrition, we have to educate the Africans to the growing of crops and the raising of stock which will improve their diet.

It is, of course, true, as the noble Lord, Lord Milverton, said, that the conservation of existing agriculture is at least as important as the development of new areas. But I think the noble Lord will agree with me that the existing areas cannot for long—if, indeed, they do at present—provide adequate nourishment for the ever-increasing population of Africa, the credit for which increase is almost entirely due to the white man, inasmuch as he has prevented inter-tribal wars and has introduced schemes of medical assistance and hygiene. But we are faced there, as in other parts of our Empire, with the tremendous problem of an ever-expanding population, and resources which up to the present have diminished rather than expanded equally. So the proposals under this Bill should not be considered merely as something that ought to be continued, and possibly slightly extended. I hope that Her Majesty's Government have resolved that there will be a considerable extension of these pilot schemes at an early date, so that we can see, within a measurable distance of time, a proper conservation of the existing known resources of Africa and a great development of those that remain still to be tackled, because only by so doing shall we bring about that progress that we all desire and show ourselves worthy of our trusteeship.

5.8 p.m.

THE EARL OF LISTOWEL

I am sure we are all grateful to the noble Lord, Lord Lloyd, for his extremely clear explanation of the Bill and of the Government's reasons for it. His explanation does him special credit, because he has been only a few weeks in his new Department. This debate has been remarkable for one thing. Apart from the first part of the speech to which we have just listened—which, if I may say so, I thought was slightly out of tune with the rest of the debate—we have had a fairly long discussion of the operation of the Overseas Food Corporation in Africa without any "cracks" from either side about groundnuts. I am sure that we all agree with what the noble Lord, Lord Lloyd, said at the beginning of his remarks; that this is a stale controversy which should now be written off. For my part, I want to deal only with one matter in this Bill, and I should like to discuss it rather more fully than it has been discussed hitherto, though not at great length. I refer to the policy of the Government in regard to the financial liabilities of the Colonial Development Corporation. The intentions of the Government, which were clearly explained by the noble Lord, are set out in Clause 5 of the Bill, which remits payment of interest on undertakings which the Corporation have decided to abandon.

I am sure that the noble Lord, Lord Lloyd, will agree that the attitude of the Government to the liabilities of the Corporation is a matter of the first importance because (and this is obviously the main reason) the work which the Corporation is able to do depends largely upon its financial position. At the moment it is heavily in debt to the Treasury. The obligation to repay these debts in full has prevented it for the last three years from doing the work which it was set up by Parliament to do. If the Government wish it to go on with this work, the promotion of undertakings of marginal profitability in the Colonies, they must start by removing the burden of debt accumulated in the earlier years of the Corporation's existence. This is not the occasion—and I certainly will not treat it as an occasion—to discuss the future of the Corporation, or even new methods of financing its business. I hope that we shall have an opportunity of discussing these matters of broad policy at an early and convenient date, possibly soon after the next Annual Report of the Corporation has been published.

This Bill has given the Government a chance of reducing the Corporation's indebtedness, and I am not at all satisfied that the Government have taken full advantage of this limited opportunity. Let us see what the Government have done, and how it compares with what they might have done. It was stated in another place—and I think the noble Lord, Lord Lloyd, repeated the statement this afternoon—that the amount of interest to be remitted will be in the neighbourhood of £200,000 a year. I am not sure whether the noble Lord mentioned that figure, or whether he merely said that it was the interest on the capital sum of about £4 million. But he will agree that the amount will be in that neighbourhood.

LORD LLOYD

I should like to put the noble Earl straight on that point. I said the capital sum. We were talking of two separate things. There was a waiver of interest, and I did not mention any figure for that. I then said that, in addition to that, the noble Viscount, Lord Chandos, hoped to write off a certain amount of capital involved in schemes that had been abandoned before a certain date, and £4 million was the figure for that.

THE EARL OF LISTOWEL

I am obliged to the noble Lord for making his own position absolutely clear, and I apologise for having, quite unintentionally, misrepresented him. At the same time, I am sure he will find, if he studies the. Ministerial statements which were made in another place, that the figure of approximately £200,000 as the amount of interest was mentioned. Of course, I do not expect him to reply to that proposition until he has had time to look up the debate in another place.

The Government propose to waive the interest on this capital sum of about £4 million advanced by the Treasury, and the noble Lord admitted that this was not what the Corporation had, in the first instance, asked for. The noble Lord, and the Secretary of State before him, made it perfectly plain that the Corporation had hoped to be released from a much heavier obligation. It had asked first to have a capital loss of about £8 million written off. This sum, of course, included losses on over-capitalised schemes which are still going concerns and which may be remunerative later on, as well as losses on projects that have been wound up and abandoned. The Government, as the noble Lord has pointed out, would agree to write off only the interest due on the total failures. This offer would have written off only half the capital sum from which the Corporation needed release, and was not a very generous compromise; and I am not at all surprised that it was turned down by the Corporation. The Corporation does not want to give a false impression of being able to go on from here with a clean slate, and the noble Lord fairly stated the reason why the Corporation had not accepted the Government's offer. This is a perfectly understandable attitude on the part of the Corporation, but I am not at all sure that it is wise. It means that the capital lost in the total failures will still have to be repaid at a later date. I hope the Corporation will think again, if it is not too late.

I should like to ask the Government a question on this point. It would, of course, be too late for the Corporation to think again if the Government were unwilling to re-open this matter with them. I should like to ask the noble Lord now—and perhaps he will be able to answer me when he replies to the debate—whether, if the Corporation so desires, the Government would agree to further discussions about the remission of capital in schemes that have been finally wound up and abandoned. This difficulty would not have arisen at all if the Government had been a little more generous at the start. I cannot understand why they were not more helpful about the partial failures. The whole of the capital invested in these schemes—which are admittedly partial failures—will never be recovered, even if they continue to operate and eventually start earning.

In this respect, the Corporation is at a great disadvantage as compared with the private limited liability company. If the Corporation had been a private company it would have written down its ordinary shares by the amount of the capital depreciation. But it cannot do this with public money. Its rigid capital structure puts it at a considerable disadvantage as compared with private enterprise. I cannot see how the Corporation can ever hope to pay its way unless the Government enable it to do what commercial companies are able to do in the normal course of business—that is, to get rid of dead capital. The Government have not done this in the Bill. The Corporation will continue to carry at least £8 million of capital debt, plus the annual interest on half of this sum, for only half has been written off under the terms of the Bill.

I cannot help feeling that the Government sometimes lack a proper sense of proportion about their capital expenditure. That is not the fault of the noble Lord opposite—it is the fault of other and senior members of the Government who take these decisions. It appears that the Government are willing to spend several million pounds on providing the public at home with the visual equivalent of "Housewives' choice" or "Workers' playtime," but at the same time refuse to spend the same amount of money to give steady employment and decent wages to our fellow citizens overseas. In this matter of priorities and the question of the right proportions in the expenditure of public money, the Government should surely give public opinion a lead. They could do this by saying that they put necessities for the Colonies in front of luxuries at home. I cannot see how, if they fail to take this course, we can hope to keep the Commonwealth together. This seems to me to raise a fundamental issue of Commonwealth and Colonial policy in which we must all (and I am not blaming the Government alone for this), to whatever Party we belong, carefully scrutinise our own consciences.

5.18 p.m.

VISCOUNT ASTOR

My Lords, the remarks of my noble friend Lord Mansfield on the necessity of animal products in the African diet emboldens, me to ask a few short questions of the Parliamentary Under-Secretary as to certain experiments which might be carried out by the Corporation in the introduction of new breeds of cattle to Africa, particularly those which have been developed in the desert part of America. In Texas, on lands where your Lordships would hesitate to pasture a camel, I saw the Santa Gertrudi breed, a breed which is three-eighths beef shorthorn and three-eighths Indian bramah. It is an extraordinary animal of vast size, good quality meat, tick-resistant, heat-resistant and which seems to live on absolutely nothing. That is a type which, if one could use it in Africa, would obviously revolutionise agriculture in certain areas. That type has been produced only because the King ranch out there has spent a generation of tremendous thought, time and money in producing the Santa Gertrudi true breeding type of cattle. When, under a former Government, I tried to bring these remarkable developments to the attention of the Colonial Office, the answer I received was: "We are doing very interesting experiments ourselves." But, of course, any of your Lordships who has indulged in animal breeding will know that, nature being what it is, it is impossible to set a new type of cattle to produce bulls which will breed true in under a generation. If we are going to make our own cross-breeds suitable for raising the standards of the cattle in Africa, we shall be delayed for a generation.

LORD OGMORE

May I ask the noble Viscount whether he is aware that at one place in Kenya there have been very successful experiments on the lines which he has indicated? The trouble there was that, when the animals Were passed out to the African farmer or smallholder, very often he did not look after them. The whole point of having the better type of animal was lost, because it readily became a prey to all sorts of troubles which were nothing to do with its breed but arose because it was not looked after in a proper manner.

VISCOUNT ASTOR

Of course I am well aware of those extremely interesting experiments, but the point I am making is that we can catch up with a generation of experiments if we are prepared to spend some dollars on introducing these new breeds and then go in for intensive in-breeding. You cannot distribute a few cattle among ignorant farmers and just hope for the best. If has to be done, in the early days, under expert, probably European, auspices. When I say that the type of land in the part of Texas to which I have referred is such that in bad years they spray the cactus with blowlamps to kill the prickles, and then the cattle eat what is left, your Lordships will see that they are breeding a very hardy type. I am venturing to ask your Lordships to bring this matter to the attention of the Colonial Office in the hope that we can save a generation in improving the type of African cattle by using the results of experiments with these Santa Gertrudi and other breeds. I may say that, while I was impressed by what I saw on the spot, I could hardly believe what I was told when I took the trouble of visiting the Department of Agriculture in Washington, the department dealing with animal husbandry: that the claims for these breeds were absolutely true and had been closely supervised by the department.

5.23 p.m.

LORD LLOYD

My Lords, I think the debate that we have had on this Bill, which has ranged rather wide, as debates in your Lordships' House usually do, has been valuable in a number of ways. In particular, it has shown an almost universal appreciation of the problems that have to be tackled. If we cannot be unanimous on anything else, it is at any rate something to have unanimity about the difficulties that we are up against, even if we cannot always agree on how they should be overcome. The noble Lord, Lord Ogmore, dealt with these problems in a great deal of his speech. If I may say so, I agreed with nearly everything he said, though not quite everything, for that would be rather unusual. I think he was fair enough to admit that a good deal of what he wants to see done in Africa, not nearly as much as he wants but quite a bit, is already being done.

He spoke of the farming schemes, and particularly the tenant farming schemes that are going on. He suggested that, for example, they were much smaller in Nachingwea than they were at Urambo. I should like to explain to the noble Lord as best I can what the policy is and what the problem is—I know, of course, that he appreciates the problem, but this is the policy. Obviously, the whole object of this scheme is to improve African farming by introducing Western methods. I entirely agree with him on the point he made, that it is no good trying to hand it over to the Africans. Perhaps that is the point that was made by the noble Viscount, Lord Astor. But my noble friend was on another point: that it is necessary to produce the cattle and train the Africans to look after them properly. The point made by the noble Lord, Lord Ogmore, if I understood him aright, is that it is essential to prove the methods first before we can hand over on any scale to the African people. I am sure that that is right. Even if it were not right, it would not be any use doing anything different, because the African will not take on anything unless it is something that is first proved, which he can carry on with.

The first stage was the groundnuts scheme and all that went with it—I hope noble Lords opposite will not mind my referring to that. The first stage was an attempt to solve the problem of what one could grow there, and to show that what one could grow there was not merely a subsistence crop but an economic crop which would bring prosperity to the African farmer. I do not pretend that that problem has been entirely solved, and even less that research is at an end, or that there is not an enormous field yet to be explored in plant research, grass research, cattle research and every kind of research to see whether we cannot produce, by cross-breeding and so on, crops that will grow better than the existing strains do. A certain amount has been achieved, in that we have discovered, for example, that we can grow tobacco for flue-curing, which has a considerable local market. If it can be developed, we hope that it will have an export market as well, though we have not got that yet.

The second stage is when a certain crop is introduced to the African, it having been proved that it will grow. Africans are shown how to grow it. Inevitably their holdings in the first place tend to be very small. I think the noble Lord opposite would like to have details of the sort of thing that is going on at the moment with these African tenant holdings. For example, in Nachingwea, where the O.F.C. is trying a Visiting Tenant Scheme, the tenants come for the agricultural season. They arrive after the rains and they see it through until the harvest. It started with thirty tenants on farms of between eight and sixteen acres of arable land. The number of holdings was later increased to sixty-one and some of the tenants in their second year were given double holdings of from twenty-five to thirty-seven acres. Twenty-five holdings made a profit on the first season and only five a loss.

LORD OGMORE

Is this tobacco only, or is the noble Lord speaking of other crops as well?

LORD LLOYD

No: I am speaking of Nachingwea, not of tobacco in Urambo. I will give the noble Lord, if he is interested, the actual figures of the profits and losses, but I will not weary your Lordships with all the figures in regard to Urambo. The pattern is a co-operative farming scheme in which the farmer and his family reside on the farm throughout the year. That is different from Nachingwea, because Nachingwea at the moment has a Visiting Tenant Scheme where tenants come only for the season. At Urambo the farmer and his family live there the whole year round. There, the scheme began with eleven farms, ranging in size from seventeen to sixty-seven acres of arable; and in the next season, when the size of farms was reduced to fifteen acres, twenty-seven farms were let. There again, the results show more profit than losses. However, all this is on a very small scale. Where I confused the noble Lord, or where perhaps the noble Lord confused himself, was when I was talking about the 2,000 acre farms at Urambo. But that is the ultimate objective; that is clearly in the future. I do not think it would be possible to expect Africans to take over farms on that scale until they have proved themselves on the smaller-scale farms. That is what is happening.

While I am on this matter, may I deal with the point raised by the noble Earl, Lord Lucan, who seemed to think it was a revolutionary doctrine that any white or European farmer should be allowed near the farm of an African. I cannot understand the noble Earl's point there. He seemed to think that the Overseas Food Corporation was selling freeholds to European farmers. That is not so at all; they are purely leases. In point of fact, if it were not for European farmers, it would be almost impossible economically to carry on. As I have explained, most of the African farms must initially he very small, and it would be impossible to get the full area going unless there were European farms, because in Africa European farmers are able to take on a much greater acreage than the African farmers. There is no question of the European ousting the African; in point of fact, experience shows that the two work well together. The African likes to see what the European is doing, and I think it is essential economically that that should be so at this stage.

THE EARL OF LUCAN

Could the noble Lord say what the length of lease is?

LORD LLOYD

The Overseas Food Corporation lease the farms—incidentally, with the consent of the Tanganyika Government—for a period of ninety-nine years, reviewed at intervals of thirty-three years. I do not think that is unreasonable. One could not expect any person to take on a farm unless he had a definite length of tenure, especially in conditions like these. I hope that I have satisfied noble Lords as to the general character of these African tenant schemes. Of course they will differ in various areas, and they will, one hopes, expand as the Africans get more confidence in these small farms.

On the point that the noble Lord, Lord Ogmore, made, with which again I am in entire agreement, about having central facilities for ploughing, for fertilisers and so on, I may mention that such facilities already exist, both in Nachingwea and Urambo; it is the basis of the whole of the African tenant scheme. May I say a word about Kongwa? One noble Lord asked me, I think, whether the ranching at Kongwa was carried out entirely by Europeans. The answer is that at the moment it is carried out by the Corporation, the reason being that it is a new experiment and there is still a great deal to be discovered about pasture and things like that. But they are beginning now to try to get small tenant farms with the local tribe—some people called the Wagogo, who are cattle people—and gradually to introduce the tenant scheme for ranching as well. But that is in its infancy; it is just beginning. Hitherto, the whole of that area has been ranched by the Corporation.

LORD OGMORE

I am grateful for the most interesting and valuable statement that the Minister is making, because on the success of this sort of scheme our hopes depend. But, getting away from ranching, is there some organisation actually in being to provide the African tenant farmer with the sort of services which I suggested to the noble Lord? Can the noble Lord say anything about that?

LORD LLOYD

In Urambo the Corporation has its own farms and its own implements which can be, and are, let out to African tenants.

LORD OGMORE

Will that continue when the Tanganyika Corporation takes over? Will the sort of services which we understand have been supplied by the Overseas Food Corporation be continued by the Tanganyika Corporation?

LORD LLOYD

That is the intention, at any rate until 1957. Of course, the late Government's scheme was due to end in 1957. The new arrangements will enable the Tanganyika Government to continue the scheme if so desired. Whether or not they will so desire it, is not for me to say this afternoon. But certainly until 1957 this will carry on exactly as before.

Now perhaps I may turn to the question of the Colonial Development Corporation, about which both the noble Lord, Lord Ogmore, and the noble Earl, Lord Listowel, have had something to say. I thought the noble Earl, Lord Listowel, chastised us rather on this matter. I do not think that he has read the Act, because if he will look at that, he will see that his own Government imposed upon the Corporation the duty of making both ends meet, taking one year with another. The noble Earl may now say that he was entirely in error, but the fact remains that it was his Government which settled this financial structure and imposed this particular obligation on the Corporation. I know the views of the noble Lord, Lord Ogmore, on this matter. Both noble Lords are in agreement on the point that more money should be spent on schemes which, quite frankly, give very little chance of any financial return; and they both felt, I think, that the present financial structure is too rigid, and that it inhibits the Corporation too much from undertaking the sort of scheme which they believe it was set up to undertake.

As the noble Earl, Lord Listowel, said, perhaps this is hardly the occasion to go into what is the basic issue of payments in regard to the whole of the Colonial Development Corporation, but I am bound to say that in so far as the Colonial Development Corporation does go in for what people would call "finance house schemes," it does so in order to enable it to carry on a proportion of the sort of schemes which I think both noble Lords had in mind, namely, pioneer schemes of a highly speculative nature—it may be agricultural, industrial, or hotels. Those schemes could not be financed unless a proportion of the Corporation's money was invested in schemes which brought in a greater return, and it was, as I said earlier this afternoon, the intention of the noble Lord's own Act to see that the successful schemes should pay for the unsuccessful ones. If the noble Lord is saying that the whole policy of the Act should be amended and that there should be a change in the policy, that is a major issue and one which I personally should find it difficult on any account to agree with, because, after all, this is the taxpayers' money, and to give a complete and unlimited licence to the Corporation to lose as much money as they like without reference to anybody, seems to be a very broad mandate indeed. Certainly the Government did not take that view at the time, and I very much doubt whether we take a different view now.

THE EARL OF LISTOWEL

I do not know whether I can save the noble Lord a good deal of time and energy by saying that I do not suggest that the Act be radically altered. I should be much more content to leave these matters of broad policy to another occasion.

LORD LLOYD

Then I will say no more, except to remark that the noble Earl, Lord Listowel, suggested that we were providing luxury facilities in this country but were not doing enough for the Colonies. I may say that the provision of wigs and things like that under the Health Service was a luxury service, and very large sums have been expended. Suffice it to say that I, personally, regret that we are not writing off the £4 million. But, as has been said, one has to draw the line somewhere, otherwise it would be very difficult to say when a scheme was abandoned and when it was not. It would make it very easy for any corporation to say at any moment that they were going to abandon a scheme and were going to write off the capital.

LORD OGMORE

I agree that it is very difficult, but what I said was that if a scheme were abandoned the capital should be written off, whether that was before the date the noble Lord gave—which was in 1953—or not. That was my point.

LORD LLOYD

Our view is that unless you draw a line somewhere, it becomes almost impossible to establish a principle of that kind. Finally, I was personally very interested in what my noble friend said about cattle. As one who has taken some interest in breeding matters I know a little of what my noble friend was talking about. I am advised that the particular cattle breed to which he referred, Santa Gertrudi, are considered by experts to be still too exotic for conditions in Tanganyika. Whether or not that is true I do not know, but I am very interested and certainly intend to find out more about it, because if one can produce such a strain of cattle which one can ranch (and we have proved one can ranch in Kongwa) it may have remarkable results.

VISCOUNT ASTOR

Would the Lord say what he means by the word "exotic" in this connection?

LORD LLOYD

The cattle would not be tough enough to exist out there. But I have heard what the noble Lord has said about blow lamps and cacti.

THE EARL OF MANSFIELD

Is the noble Lord aware that Santa Gertrudi cattle have been introduced into Jamaica with satisfactory results?

LORD LLOYD

It is a question of standing up to disease. I do not pretend to be an expert on what they may have to stand up to in Tanganyika, but I will advise the noble Viscount, because I feel that he is raising something important in this matter.

THE EARL OF LISTOWEL

May I ask the noble Lord whether he can reply to the question I asked him about the willingness of the Colonial Office to reopen discussions with the Colonial Development Corporation concerning the writing off of capital loss in schemes completely abandoned? I did not give the noble Lord notice of this question. If he cannot answer it now, perhaps he will be good enough to let me have a reply in writing later on.

LORD LLOYD

Obviously the noble Earl could not expect me to give an undertaking about that this afternoon. I do not think he does. My own feeling is that it would perhaps be difficult to reopen the Colonial Development Corporation's demand for £8 million, although I think the £4 million demand is still open. That is my impression. I will certainly look into the matter and let the noble Earl have a reply as soon as I can. I will conclude by thanking all noble Lords who have taken part in this debate, and I hope they will now give the Bill a Second Reading.

On Question, Bill read 2^a, and committed to a Committee of the Whole House.