HL Deb 26 January 1955 vol 190 cc724-43

2.43 p.m.

VISCOUNT ALEXANDER OF HILLSBOROUGH rose to call attention to the agricultural policy of Her Majesty's Government; and to move for Papers. The noble Viscount said: My Lords, I beg to move the Motion that stands in my name on the Order Paper. We are going to discuss again the general prospect of the agricultural industry and to find, if we can, an explanation of the policy, or lack of it, of Her Majesty's Government in connection with this industry. I feel it incumbent upon me to say at once that I speak with a certain amount of prejudice, because I have an interest in farming, and it is essential that I should lay that fact before the House. But that, I believe, is a common possession of a great number of your Lordships, and I do not think it will prevent anyone from giving unbiased consideration to the matters which we are debating.

First of all, in view of the agitation which has been going on for the last twelve months, this seems to me to be the time to say a few words in favour of the achievements of the agricultural industry. I am sure that if we are to maintain the kind of good will between town and country populations which is essential in such a joint economy as we must maintain in this country, the organisation, work, production and general achievements of the agricultural industry must be clearly understood in the industrial areas. It would have to be acknowledged by any Party in the State that, in the difficult economic circumstances with which this country has been faced, at the end of the most expensive war of all times, and realising how important is the position occupied by the agricultural industry within that situation, we ought all as a country to be more than grateful to that industry for what they have achieved. It is a magnificent story, and it has got to be understood. I want to plead that those people who have done such work shall, in the words of the Chancellor of the Exchequer last night (and I will say something about his speech presently), never be let down.

What has happened is this. In face of a decreasing number of workers available in the industry—the size of the decrease has varied each year: one year it was by 13,000, and last year, I think, we lost 10,000–there has been a steady increase in efficiency and production, not in terms of value but in volume of production. Compared to the years before the war, when British-produced food represented about 35 per cent. (I forget the actual figure) of the total food consumed by the nation, there has been a substantial increase. We have been producing around 50 per cent., or more, of the requirements of this country in regard to the actual food that we consume, and generally the proportion has been rather more than 50 per cent. The actual increase in terms of production I believe (though I have not checked this figure) has reached as much as 56 per cent. above the pre-war level—and that with a much smaller number of workers.

I contrast that with the days between the wars, when I confess to the House that up and down the country in our Labour campaigns we often had to refer to the situation of British agriculture as capable of being typified only by Goldsmith's words III fares the land, to hastening ills a prey, Where wealth accumulates, and men decay. That was the situation in which private, competitive, free enterprise left the British agricultural industry, with wages at an astonishingly low level, as was quite rightly referred to by the noble Earl, Lard Halifax, in this House on November 11. This situation of different standards of prosperity, different outlook for the workers in the industry, and different contributions to the national economy, has been achieved in spite of all the difficulties of the war and in spite of all the various pressures, economic and otherwise, that have been brought upon the farming community since. They felt extremely encouraged that in 1947 there was passed the Agriculture Act, which aimed at preserving the general basis of guaranteed markets to the farmers of this country, and at increasing mere and more the volume of food production, not only for the sake of the prosperity of the farming industry but because it was becoming so important a factor in our trade balance in relation to the level of our exchange rates.

Sir James Turner, in the course of a speech of some length, which I feel was inadequately reported in the Press on Tuesday, referred once again—as he did at Exeter a fortnight ago—to figures which had been worked out; namely, that the actual increase in the volume of production in the agricultural industry has been responsible for saving per annum £400 million of dollar and other foreign exchange. That is a tremendous saving. Having regard to the struggle that we have had to maintain our exchange position in difficult circumstances, faced with enormously high expenditure on defence, I think that, whenever we come to consider what guarantees are necessary for the agricultural industry, those general facts must be noted. That is particularly so in the very insecure world in which we are living at the present time, with fears and rumours of war and clashes. We are all glad that we have had no major war in the last year or so, and we like to think that that has been largely contributed to by the operations of the British Government supported by the British people. But if one looks at Washington, Pekin and Moscow to-day, the amount of day-to-day security does not seem to be very great. Therefore this great increase in production and the general achievement of the agricultural industry is one of the most vital factors in our defence.

On that point I must say that I am a little anxious about the way the Government turn from side to side in their arguments from time to time. No doubt they have a specific sense of the direction in which they are going—I hope they have—and whether we want to reach X target, Y target or Z target in our general planning of agricultural production. I understood that our target was to be at least a 60 per cent. increase. When the resignation of the previous Minister of Agriculture came about, it then transpired that although it was still important to have food production, it was not so urgent as it had been in the few years that had preceded it. I must say that neither I nor, I think, any of my colleagues take that view of the situation. Not only do we require production to be urgently pressed, but this statement was made on behalf of the Government only a very few months ago—it was by the Prime Minister himself. Sir James Turner at the Farmers' Union Conference on Monday quoted the Prime Minister and used these words: There is no question of choosing between food production and exports. We must have both at the highest level driven forward with the fiercest energy. There was the Grand Old Man—outside politics a friend of mine for many years—who was in his best form in stating what was the real need of the situation. Yet only a few months after we are told by the Government that production is not so urgent as it was.

Since then there has been a campaign in the Press throughout the country drawing attention to the fact that many of the consumer subsidies have gone, but that there is this overbearing burden upon the Exchequer of this great subsidy to British agriculture. Let us look at that statement. The subsidy was reckoned to be running at about £200 million per annum. It is confined to certain parts only of the farmers' general range of products. There seems to be (until recent speeches by the Minister of Agriculture, for which I give him full credit in dealing with this point) a misunderstanding in the minds of many of the people in the country, who think that the subsidy is a large sum paid out to secure high guaranteed prices to the farmer and from which nobody else receives any benefit.

The Minister of Agriculture has stated, and quite rightly, that, from his point of view, the subsidy is necessary and should be given as an alternative policy to pursuing protection of the industry either by tariffs or by quotas based upon a general management of the quantity of food to be imported from abroad. There is, therefore, no greater sin to be laid at the door of the farmer in receiving a subsidy of £200 million or £200 million-plus on his commodity, than there is to be levied against nearly all the manufacturing industries of the country upon whom have been showered the benefit of tariffs and, in some cases, very high tariffs. The Farmers' Union at their conference last year demanded as their main protection for the future—and do not let your Lordships forget what they were after, because it makes what is happening now very interesting—an assurance of regulation of foreign imports of food as against the protection of their own production here, especially in order to reduce the burden upon the Exchequer of the subsidy for agricultural products. That was the unanimous request at the Farmers' Union conference last year.

Having admitted that that is the opinion of the Minister upon the difference between the outside view and the proper view of the subsidy on agriculture, let us see what has been the result of the subsidy. First of all, it has let in a good deal of capital from savings or profits which has been used for the re-equipment of the industry, in order to make it more efficient for the future. That capital would not have been forthcoming without the subsidy. It has a remarkable record in that connection. And do not let us forget that the British farmer has become one of the largest purchasers of home-manufactured machinery in the country. A census of machinery on farms to-day would show that it has gone up enormously, both in quantity and in value, in the last few years. It would show where much of the money accumulated as a result of the industry being made profitable by guaranteed prices or by a subsidy where necessary has gone. Has the farmer the sole benefit of the subsidy? Take the engineering industry, which has a high tariff against any foreign imports: it receives specially earmarked purchases and so gets the benefit both of the tariff and of the special trade afforded by reason of a prosperous agricultural industry. That is a statement which I do not think can possibly be controverted.

The annual report of the National Farmers' Union was published last week, and I hope all Members of your Lordships' House will get it and read it, because it is very interesting. I would draw your attention to only one page because all the rest deal with Committee reports. Paragraph 3 of the report says: Neither clarification of Government policy nor provision of facilities for the industry to market its products by schemes under the Agricultural Marketing Acts 1931–1949 have kept pace with the speed of decontrol. In the case of meat the full consequences were only avoided, and to some extent masked"— and that is a very good word coming from those who know what has happened— by the birth and development in a matter of eleven weeks of the Fatstock Marketing Corporation. If your Lordships look at the second part of paragraph 5 you will see that it says: Over practically the whole remaining commodity range import regulation is becoming progressively less effective as a matter of Government policy, while pressure to reduce the current cost to the Exchequer of the price guarantees continues.

The next paragraph is a paragraph which has perhaps led up somewhat to the speech made by the Chancellor of the Exchequer last night. In some ways I wish that we had had the opportunity of having a verbatim report of the speech, but we have not. The Report says: The Minister himself has made the point that efficiency in marketing is as important as efficiency in production. This has been confirmed by everything that has happened since we were plunged into the new freedom. But to demand efficient production and the reduction of costs, and at the same time to deny facilities for efficient marketing which makes so large a contribution the same end, is both inconsistent and unreasonable. The extent to which these outstanding and urgent problems are resolved in the year ahead will be the real test of political sincerity. That was, I thought, a very good comment, from my point of view, upon the happenings of the last twelve months. What has been happening to this industry as a result of Government policy? It is perfectly true that in most fields production so far has kept up tolerably well, but it would be useless to deny that in the last two and a half years there has been a steady growth of doubt, fear and, especially, uncertainty as to the future in the agricultural industry. Whatever attempts we may have made to get statements which were reassuring. I must say that, so far, I have failed to get anything which would prove to me that it is the intention of the Government to implement fully Section 1 of the Act of 1947.

Your Lordships will remember that we debated this subject on November 11, 1953, and that we tried for some time to keep that debate as near to a bipartisan basis as we could. During the course of the debate, however, a fierce attack was made upon Mr. Tom Williams, a former Minister of Agriculture, by the noble Viscount, Lord Hudson, who I am sorry to see is not in his place to-day. What emerged so clearly from the intervention of the noble Viscount, Lord Hudson, was that all the main provision; of the Act of 1947 were agreed upon in the war-time Coalition of Parties. That is true. The only complaint that the noble Viscount, Lord Hudson, could bring against my colleague, the former Minister, was that he had gone too far in one direction, guarantees of tenure and the like, and had played for popularity in that direction; but the main marketing guarantees, and all similar provisions, were agreed as a joint scheme by all Parties in the war-time Coalition.

In the Conservative Charter for the Election of 1951 the promises to the farmers were repeated. Therefore, we must now look for a moment or two at what has happened, to see how far the promises have been kept and how far the industry has suffered, in some cases in actual setbacks, and generally in a loss of confidence in the future. Anybody who suggested to-day that there is not lack of confidence in the industry would fail to convince most people. If the members had understood the position a practically unanimous vote of "No confidence" in the Government would have been passed at the annual conference of the National Farmers' Union yesterday. But there was the intervention of the chairman at the end who, in spite of his great attack in his speech on Monday last, begged the members not to pass the resolution but to wait and hear what the Chancellor of the Exchequer had to say at their farmers' dinner last night. The lack of confidence was there until last night. Last night a great pronouncement was made, they thought, and this morning it is understood that the great Sir James Turner, who on Monday and Tuesday, had marched his men "up to the top of the hill," and made one of the great speeches of his life against the Government, "marched them down again." Shades of the Duke of York! There never was such a Duke of York. They have now accepted the position because last night the Chancellor of the Exchequer staked his political reputation and future upon the promises he then made.

But the promises he then made have not given the farmers their policy. The promises made by the Chancellor of the Exchequer last night did not add to, or subtract from, one of the details of the situation as it was before he went to the dinner. All he says is: "You cannot have tariffs." The farmers knew that before. He made no promise of revising the Government's policy on the regulation of imports; but they knew that before. He said: "Of course, I shall stand by this" —that is to say, that subsidies will be the answer. I have already justified the policy of subsidies in what I said earlier this afternoon, and I know also how they are finally arrived at. The size of the subsidies to-day is not altogether the fault of the farmer; it is due to the lack of foresight and lack of decision shown by the Government in dealing with the situation, which they alone created, of hastening de-control. The size of the subsidies this year will depend to a considerable extent upon the mistakes the Government have made in this direction.

I will try to prove my case. Noble Lords on the Front Bench opposite will have ample time this afternoon to try to prove that I am wrong. With regard to the fixing of these subsidies, everything depends first upon how the Government balance imports. We understand that there is to be complete freedom of trade in these matters. Outside horticulture—which is granted—there are to be no tariffs. There will be a growing tendency to release from control by quota imports of food. This was perfectly obvious to those of us who spoke in this way back in 1951 and 1952, when the Government made it clear that they were not going to sign the International Wheat Agreement.

From that moment onwards all those of us who have studied these things for years knew perfectly well that the aim of the Government was deflation. Their view was that once they could get down the cost of the primary product, it would provide the way—the only way, in their view—finally to reduce the cost of living. Therefore, the attack was to be always on the primary producer. That is exactly what happened to the primary producer from 1920 onwards. Why did the Government not sign the International Wheat Agreement? Because they thought they could do better by buying more cheaply outside. Then why do the Government sign the International Sugar Agreement? They do it to protect their Colonial product of sugar, as well as their homegrown beet sugar. Yet they will not do the same for their home-grown wheat. That is a fact. Ever since then, the progress of the Government's policy, or the lack of it, has been in the same direction.

With regard to the size of the subsidies, again so much depends upon the Annual Review of Prices. I fully accept the view which was taken by both sides of Parliament, that with an Act like the Act of 1947 it should be incumbent upon the industry which receives guarantees from the Government steadily to improve its efficiency; and, in fixing prices, that the general margin allowed to the industry should depend upon the extent to which efficiency is improving. I have not gone back over all the years since the war, but I have gone back to five years ago, and I estimate that as between the increased costs proved before the inquiry on the Price Review and the amount allowed within the financial settlement for recoupment of the increased costs, there is, if one includes the last settlement in 1954, a margin to be made up by the industry in efficiency of over £80 million.

The industry has not really grumbled very much about that, although it has often, I believe, knocked at the door of the Ministry of Agriculture and said, "We think we ought to have complete recoupment if we prove our costs." I think it has done that; but in the main it has not grumbled. Inefficient farmers have been squeezed out—some of them fairly, some I think unfairly. In the year 1954 there were 140 bankruptcies, which represented 7 per cent. of the total number of bankruptcies in the country. In only one industry last year was the number of bankruptcies higher than in the farming industry, and that was in the building industry. I know that these are curious figures, but we have obtained them from the Revenue returns. Although not very much larger, the number of bankruptcies in the farming industry was larger in 1954 than in 1953. Last year, in the one year, there was a minus quantity to be met of £334¼ million. In the face of that, when the justified claim of the agricultural worker for increased wages arose earlier in 1954, it was turned down because it was believed that the farming industry, in face of the additional burden of £331¼ million placed upon it by the Government, could not meet the workers' claim. Later in the year the increase was granted and it came into operation on Monday last.

I have seen the wage of the agricultural worker go up quite rightly, in its basic figure, by 33s. per week, since the middle of 1950 to Monday last. I estimate that in cumulative effect that costs the agricultural industry £60 million more per annum in wages than in 1950. When taking the costs of the agricultural industry in that respect, we have also to remember that the other part of the Government's deflationary policy—or what they intended to be deflationary, but it has not been wholly deflationary—the removal of consumer subsidies, has been one of the biggest components of this increased and unfair burden placed upon the farming industry.

The noble Viscount, Lord Woolton, who has, I think, a more persuasive manner than any other Minister who sits upon the Government Front Bench here, made use of his popularity with the public in the last General Election to persuade them that they would have cheaper food. Of course that has not come about. But the fact that there has not been cheaper food cannot be laid at the door of the British farmer; it is because the subsidy has been removed by the Government, and there has been no real relief in the general height of food prices in the world. That has meant an increase in the cost of living; it has meant a widespread and urgent demand by the workers in all industries for increased wages. Those increased wages have been brought into the costs of every industry supplying the agricultural industry with its requirements. That is the fact. It does not matter how one looks at the matter—there is an increase in the cost of fuel, transport, seeds, machinery, electrical power, and all the other things. Never yet in any of these agricultural reviews have the farmers been given full recoupment for them. That has been something of a tragedy in 1954, when farmers have been faced with a £33¼ million deficiency to be made up and, at the same time, a very bad harvest, with, in some parts, very grave conditions indeed.

The size of some of these subsidies might have been reduced if there had been more foresight. Once the Government had decided to decontrol—however much I disagreed with them in that—they should have made adequate provision so that the farmers and the general community did not suffer thereby. But what a travesty was made of the situation! The chairman of the National Farmers' Union has said that there was an unbelievably short time allowed over the question of livestock—they had eleven weeks. Between November, 1953, and July, l954, there had been plenty of time for the Government to get on with some scheme. They could have got right on with a compulsory agricultural marketing scheme for livestock. I questioned the noble Earl, Lord De La Warr, in the debate on November 11, 1953, as to whether the marketing scheme of which he had spoken was to be compulsory or not. He evaded the issue very nicely, saying that he had not said that it should be compulsory; so in 1954 no provision was made, and it has only been by the superhuman efforts of the farmers and some collaborators in the fatstock wholesale business, who set up a corporation, which saved the thing from complete disaster. But how much has gone by the way meanwhile?

I am anxious to get chapter and verse right, but I am quite sure that many of my noble friends behind me who are interested in farming will, if I miss a point, make it for me, so I can rely upon them. Take the question of pigs. Such chaos was caused in the pig industry that although the Fatstock Corporation worked hard and did their best, they could not possibly take the number of pigs offered to them for bacon. If people sold on the outside market in consequence, there was a fall in price, as there usually is in the kind of "funny business" that goes on. Of course, on that fall in price, every bit of the amount had to be met in the recommendation to the Treasury by the Minister of Agriculture, and was included in the subsidy. It was a Very high cost indeed; there cannot be any question about it. There resulted such a lack of confidence in the whole business that in September and October there were sales of pedigree pigs, stock into the production of which people had put their skill and capital, but not one-third of them could be sold. Producers had to turn those pigs into feeding herds and take a chance on what they got later on. A great friend of mine in Hertford-shire had a beautiful pedigree herd for sale to those breeding for the future; only sixteen of the herd were sold and all the rest had to be sent to be specially fed for market at whatever price could be obtained.

What is the situation now? Chaos is succeeded by cut-throat competition between the two sides of the industry. Now porker fights baconer. Look at a Farmers' Weekly report last week. It says: Just now the fight for pig supplies between the bacon-curing industry and the pork trade is in full swing. Only three months ago pigs that were surplus to bacon factory requirements were being taken up reluctantly by the pork trade at as low as 10s. per score. I do not know whether the noble Earl representing Her Majesty's Government will be able to tell me that there was a sharp fall in pork prices to the public in consequence. The report continues: Now the same buyers freely bid nearly three times as much, and bacon pig prices have also been raised. Why? Because now bacon factories which could not accept the pigs offered them under the first rush in the haste of de-control, when no proper arrangements were made, cannot get enough bacon pigs fully to occupy their factories. These are the facts. What has Her Majesty's Government to say? If it has an answer, where is that answer? It was your decision to de-control and not to give sufficient time. It was your decision which put up the amount of subsidy to be paid this year.

To illustrate the way in which Her Majesty's Government has acted, look at the general situation now. The policy of the Chancellor of the Exchequer, as announced last night, really means no change. He does not propose to allow tariffs or to regulate imports but he will grant subsidies. Of course, he gave a warning that there must be a decrease of the subsidy charge upon the Exchequer; but that is nothing new. Here is a report of a statement by Mr. Nugent, the Joint Parliamentary Secretary to the Ministry of Agriculture. It was made at Wisbech about twelve days ago, and this report is taken from the Farmers' Weekly. He said that the Government wished to make farmers independent of the Exchequer. The nation was prepared to accept the responsibility of giving farmers price levels which would ensure a reasonable return providing there was a prospect of reducing the subsidies.

Where did the statement by the Chancellor of the Exchequer last night take him? If he is going to allow subsidies in view of the other two policies which have been rejected, if farm costs are still to rise and be dealt with fairly by the Annual Price Review, what is the prospect of reducing subsidies? Is this staking of his political future and sincerity so sure and so firm that farmers will on no account suffer injustice from not getting adequate subsidies? We should have an answer on that question. Can the Parliamentary Secretary tell us how subsidies are to be maintained at ceilings no higher than at present? Are agricultural costs not going to increase? Workers in the industry are basing their demands for wage increases on the argument that they are still not paid up to the level of workers in other industries. There is still another claim coming in. Is there to be a continuous rise in the volume of Government subsidies?

My Lords, I apologise for the length of time I have taken, but I am so full of this matter that I wished to speak exactly as I felt. The policy that ought to be followed by Her Majesty's Government is one which not only guarantees a price on the farm but has some reference to market prices because at once it comes back upon the farmers. How that can be done without control of imports I do not know. It is true that the Livestock Marketing Corporation are hoping to begin trading not only in British-produced cattle but also in cattle from outside the Empire; but I cannot see how that is to be achieved except by comprehensive national control. Other industries are allowed to regulate their own prices and to regulate them very well, behind a high tariff wall. They exercise a minimum selling price in their selling markets in this country and make people pay penalties for selling below those prices. Not so the farmer: he is bound hand and foot by free enterprise in this country. He has to take the best cut he can get. He is supposed to be not only a very fine producer of all the best qualities of a wide variety of foods from the land, but he has also to be a most expert examiner of markets which change from day to day from district to district, at different levels. If one picks up the agricultural papers any week one sees the variations. You will find before many years are gone by that either you will have to come as far as the Labour Party have come in this matter or else the farming industry will be dying, or you will be out. I beg to move for Papers.

3.28 p.m.

LORD AMHERST OF HACKNEY

My Lords, we are all grateful to the noble Viscount for introducing this Motion. Listening to him to-day, and also in previous debates on agriculture, I often feel that perhaps the night before the debate he reads two or three chapters of the great prophet Jeremiah to get himself in the mood to address this House.

VISCOUNT ALEXANDER OF HILLSBOROUGH

Thank you. I should love to quote Jeremiah at once to the noble Lord. It is the last two verses in the fifth chapter: A wonderful and horrible thing is committed in the land; the prophets prophesy falsely, and the priests bear rule by their means; and my people love to have it so; and what will ye do in the end thereof?

LORD AMHERST OF HACKNEY

My Lords, how right I was!

I should first like to associate myself with everything that the noble Viscount has said as to the tremendous contribution which the agricultural industry has made, both the farmers and the workers. After all, as the noble Viscount has emphasised, agriculture is our most important industry. The prosperity, of agriculture affects not only the farmers and farm workers but many other people—machinery manufacturers, everybody living in the countryside, the people in the local public-houses, the shopkeepers. The whole prosperity of our countryside depends upon the prosperity of agriculture, and therefore the noble Viscount can confidently rest assured that Her Majesty's Government have no intention whatsoever of letting agriculture down. And I feel that, to date, the Government's record is a good one.

When they came into power a slight recession in agriculture had started—the noble Viscount may not agree with me, but the figures tend to show that it is so—and this Government took immediate steps to put that right with ploughing grants, fertiliser subsidies, calf subsidies and their marginal land schemes. By 1953, they had increased the tillage acreage of this country by a quarter of a million acres, and at the same time had increased the numbers of livestock—cattle, pigs and sheep. Since then, there has been a slight drop in the tillage acreage, according to the Return dated June, 1954, but against that we have to remember, first, the extremely difficult season, and, secondly, the fact that cattle numbers are at an all-time record, while sheep are to be found in greater numbers than at any time since the war. Therefore, up to June, 1954, if there was any lack of confidence in the Government it certainly was not shown in the figures of production.

Since then, as the noble Viscount knows, we have had to face a completely new situation—abundant food everywhere, and the obvious necessity of doing away with rationing, because it would have been absolutely wrong and an injustice to the housewife to continue rationing one minute longer than was absolutely necessary. That situation had to be dealt with. Before we look at the Governments scheme, however, it might be as well just to look for one moment at the only other scheme which, so far as I know, holds the field; that is the scheme put forward by the Party opposite. I do not want to go into it deeply, but I am sure that if I am wrong in what I say I shall be corrected.

I understand that, broadly speaking, the plan of the Party opposite is that all produce should be bought from the farmer at the farm gate, at a fixed price. There are certain slight exceptions to that. In connection with milk we have the Milk Marketing Board, but the Government would appoint one-third of the members of that Board, and then put a Commission on top to look after it. Also there is a slight variation with regard to eggs. But, broadly speaking, I think that, under the scheme, produce would cease to have any interest to the farmer at the farm gate, where, as I say, it would be sold at a fixed price, while the efficiency of the industry would be looked after by encouraging county agricultural executive committees to make free use of their powers. Then there would be a standard of production for each area, and if any farmer fell below his area target he would be put under supervision; and if he did not improve his production he would lose his farm. I think that that is, in outline, the policy—though there may be certain minor modifications.

Government policy, however, has been to take a completely different line. As I see it, that line is to give protection to the industry against low prices overseas; to give the people in the industry help to help themselves; and, at the same time, to allow consumer choice to be reflected back on to the farm—which is one of the matters of difficulty (we will not go into it now) that one foresees in the scheme of the Party opposite. To do this, as the noble Viscount rightly says, we can either put on tariffs or use subsidies. As he said, in horticulture we have used tariffs, but for all other main items we have used subsidies. I cannot see what is wrong with that, provided that the subsidies are run at a sufficiently high level to give that security which is so necessary to the farmer. But I feel that here there is a fundamental difference of approach to the status of the whole agricultural industry. It seems to me that the policy of the Party opposite, if I may say so, is a policy of despair.

A NOBLE LORD: Nonsense!

LORD AMHERST OF HACKNEY

Our policy, on the other hand, is a policy of hope and confidence. I feel that the policy of the Party opposite is rather a slur on the great agricultural industry, for it suggests that, possibly alone of the producing industries, it is considered incapable of organising its own marketing. That, I think, is inherent in the policy.

Considering the size of the problem, I feel that, on the whole, the Government policy has worked reasonably well. There have been considerable difficulties, and one of those difficulties has been that it was an extremely complicated policy to carry out. As a result, instructions had to be slightly complicated, and I do not think that everyone concerned was able to understand those instructions immediately. Moreover, there have been difficulties of other kinds—difficulties, for instance, with regard to cereals. There were the extremely low prices at harvest, due partly to the bad season and to a lot of wet grain having to be put on to the market, and partly to the enormous increase in the number of combines. Also—and one must face it—there is the difference between an average price and a fixed price. If one is operating, as I think rightly, under an average price system, it gives stability to the industry. But there must be some moments when the price is low and other times when the price is high; and if you are working under an average price system the only way you can be sure to get that average price is by marketing your product not all at once but methodically, which means, from the point of view of the sellers, that the essential thing is some form of storage on the farms. And that is definitely the responsibility of the farmers.

A great many of us fell into the trap of thinking that when we got a combine, that was where the business ended. Actually, that is where the business starts. If a farmer gets a combine, he must have something behind it. If he has the advantages of a cheap harvest, he is faced with the problem of either getting rid of the grain at once or of storing it to ensure that over the period of the year he can get an average price. Some farmers prefer to sell it at harvest. I know several who have told me that if they sell their grain at harvest they sell so much water with it that that more than compensates for any increase in price later on. But I think there is a case for grain drying to help the very small farmer, who probably has his fields combined by contract and who could not foresee the situation. I believe that there is a case for some help to get some form of sack drier, either by means of a grant or a loan; and I think that is a point which should be looked into.

As regards meat, the situation with regard to cattle has gone pretty well—perhaps one might say at the moment, almost too well. Prices are rather too high, and possibly that is drawing into the markets a number of cattle which could well wait a little longer. This is not entirely an agricultural matter, but I think it is a problem when there are large margins, even at the high prices obtaining, between the price paid to the producer and the price charged to the housewife. I feel that the remedy here is in the hands of the housewife. She is completely free to go from butcher to butcher, and there is a considerable amount of imported meat on the market.

With regard to pigs, which the noble Viscount so rightly mentioned, obviously there were considerable difficulties to start with. There were pigs which could not be sold in the last months before control ended, because the bacon factories were full, and there were the high prices of the Fatstock Marketing Corporation, which encouraged farmers to send for bacon pigs which might otherwise have gone for pork; and there were considerable losses. As a producer of pigs I shared in that loss. But it was a situation that fairly soon sorted itself out. There was a rapid and marked improvement in grading. I regard that as something greatly to the credit of the farmers. In a very short time the proportion of pigs grading at Grade 1 increased from 30-odd per cent. to something like 50-odd per cent., which is nearly as high—within about 5 per cent., I believe, though I do not vouch for that figure—as the proportion in Denmark. To help that, at the same time the Government put a subsidy on overweight pigs.

Again, with regard to pigs, we have the problem of the average price. Fortunately, the pig breeds a family every six months, so that, although the producer may have lost considerably on the previous litter, with the high prices prevailing at the moment many producers hope, as I do, to make on the spring roundabouts what they lost on the summer swings.

VISCOUNT ALEXANDER OF HILLSBOROUGH

My Lords, does the noble Lord think that the farmer always ought to be in a position of having to gamble like this? Ought he always to be in the position of dealing with his markets on the basis of gambling on what he is going to get?

LORD AMHERST OF HACKNEY

I do not see that it is entirely a gamble. In winter there is certain to be a greater demand for pig meat. The bacon demand is pretty well constant, but people eat more pork in winter than they do in summer; and if pigs breed every six months, as I have said, it should be possible for farmers to make it not quite a gamble. Anyhow, behind all these prices there is the individual guarantee, so that the farmer cannot lose absolutely. I do not believe that in the majority of cases, even though in the summer there was certainly a loss of profit, the farmer was seriously out on the actual cost of the production of the pigs. Certainly, as the noble Viscount said, some pedigree breeders had a serious time, but they are comparatively few. Obviously in the production of pigs efficiency is the keynote. What we want to produce is the type of pig which converts food into meat at the greatest possible rate. The Government have started this pig recording and litter testing scheme, which I believe is going well, and I should like to congratulate them.

Taken as a whole, I believe that the Government's policy in this journey into freedom has worked out a great deal better than a great many people thought it would—in fact, better than many people dared to hope. It is not perfect, but then perfection is an extremely rare thing, and this policy has had only a comparatively short trial. I believe that when we have had it for a little longer the farmers will have greater confidence in the scheme, and that that confidence will grow as the scheme goes on. But there is uneasiness about future prices. As the noble Viscount emphasised, farmers see prices rising, and they have all had an extremely difficult year. While I am sure that most people were quite confident that the full rising cost would be met, we all welcome the assurances that were given by the Chancellor of the Exchequer yesterday, although I do not think that anybody thought that the story would be any different.

VISCOUNT ALEXANDER OF HILLSBOROUGH

That is nothing new.

LORD AMHERST OF HACKNEY

The stability of the industry is being guaranteed. I do not know what alteration is required.

VISCOUNT ALEXANDER OF HILLSBOROUGH

But there is an important qualification in the statement, that there has to be stability with inflexibility. How the two go together, I have never been able to understand.

LORD AMHERST OF HACKNEY

I do not think I can possibly start to explain that to the noble Viscount. If he subscribes to the present Labour Party policy, then it would take much too long to attempt to do that.

There is one other point, and that is the question of future prices, which are announced for livestock and livestock produce up to three years ahead. I realise the difficulty, that it is a statutory duty under the Agriculture Act to announce these prices into the future with a view to giving confidence to the producer. Ever since the 1947 Act was introduced these prices have been quite unrealistic. At the moment the price for pigs in 1955–56 is 45s., and for 1957–58 it is 38s. Nobody who thought that he would get only those prices would dream of breeding pigs. But this is not a new thing; it has been going on for years. The figure given is the minimum price. Even so, as I say, it is a completely unrealistic one, and I feel that there might be some way in which that price could be brought more into line with the price that the person was likely to get for the animal when he sold it.

There are considerable difficulties, because the Treasury are committing themselves to a price a long time in the future, and there may be many factors which alter during that time. However, I feel that it may be possible to work out something by which the future price could be given in the present-day figure, as it were, with some formula like that in relation to feeding-stuffs for pigs, which allows increasing or decreasing costs to be taken into account in the future. Otherwise, I think that the present policy is on the right lines. If it is pursued, and if the small anomalies—and there are several—are ironed out, there is no reason, in my view, why the agricultural industry should not enjoy stability and prosperity for years to come.