§ 3.4 p.m.
§ THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE AND FISHERIES (EARL ST. ALDWYN) rose to move, That the Fatstock (Guarantee Payments) Order, 1955, reported from the Special Orders Committee on Wednesday, the 16th instant, be approved. The noble Earl said: My Lords, this order, which is laid before your Lordships under Section 4 of the Agriculture Act, 1947, is the first of a number which will be introduced in the near future as the existing guarantee arrangements for agricultural produce fall due for renewal during the coming year. The purpose of the order is to provide a framework into which the Government's decisions as to the nature and level of the fatstock guarantees can be fitted after each Annual Review. The broad arrangements set out in the order are intended to continue from year to year, subject to amendment if necessary at any time.
§ As the order is entirely procedural and technical, it does not state the price guarantees for the current year nor does it define the classes of fatstock which they cover. These matters are determined, as they have been in the past, in accordance with the Agriculture Act: first of all, in the Minimum Prices Orders which provide minimum guarantees for up to four years ahead, and then each year for the year immediately ahead in the White Paper which is presented to Parliament after each Annual Review. Your Lordships will remember that the White Paper for the current year was presented early this month and details of grade descriptions and weight ranges were published on March 14. This order, by filling the need for a formal structure of arrangements for paying fatstock guarantees, completes the pattern for the determination 144 and administration of fatstock guarantees.
§ Perhaps it would be convenient to your Lordships if I dealt briefly with the main articles of the order. Article 3 deals with the classes of cattle, sheep and pigs to which the order shall apply. These will be specified by the Government in the light of their conclusions after a review under the Agriculture Act. The general intention is to cover those classes of stock which are reared and fattened with the main object of producing meat, and to exclude breeding stock. These detailed determinations, which in general follow the practice of previous years, have been published in the White Paper and in the Press announcement after the Annual Review. The House will by now be familiar with the system of collective and individual guarantees by which the prices for fatstock are supported. These are dealt with in Articles 4, 6 and 7 of the order. I do not think I need deal with them in detail since those of your Lordships who are interested will have made it your business to understand them when they first came into operation after the derationing of meat last July.
§ Article 8 provides for the making of deadweight guarantee payments (based on the average of individual guarantee payments under Articles 6 and 7) for carcases of cattle and sheep certified under approved grade and deadweight schemes, and for pigs certified at bacon factories and deadweight certification centres. This guarantee is intended to equalise trading conditions between the live and deadweight systems of sale so that neither has an advantage over the other merely because of guaranteed payments. Article 9 provides that quality premiums for pigs may be paid out of the funds available for implementing the guarantee. Article 11 enables different arrangements to be made for England and Wales, Scotland and Northern Ireland, though, in point of fact, apart from minor technical differences between Northern Ireland and Great Britain, we do not at present intend to introduce any variations in the different countries. I beg to move.
§ Moved, That the Fatstock (Guarantee Payments) Order, 1955, reported from the Special Orders Committee on Wednesday, the 16th instant, be approved.—(Earl St. Aldwyn.)
145§ 3.8 p.m.
§ THE EARL OF LISTOWELMy Lords, this order is of some importance, and I am sure that I and my friends on these Benches need no more excuse to make some comments than the noble Earl needed to explain it at some, length. I do not propose myself to make any comments on the merits of the policy of private trading in fatstock. As the noble Earl rightly pointed out, the purpose of this order is to provide the machinery for making payments for guaranteed prices to producers under the policy of private trading to which the Government have reverted. I would only say, because it directly relates to the order, that the permanence of this order, when it has been approved by your Lordships and by another place, will depend upon the permanence of the marketing policy it purports to carry out. As your Lordships are aware, we on this side of the House believe in a policy of State trading in livestock. We believe that such a policy is preferable to private trading, and that is our marketing policy. It follows that the life of this order is tied up with the political lives of noble Lords opposite, and whether they continue to occupy their present position in your Lordships' House for a longer or shorter period of time will depend upon the good sense of the electorate.
But I welcome this order because it is inspired by an intention to last longer than previous orders that have been made for the same purpose. It is obviously desirable—and everyone would agree with this—that ten years after the war these arrangements should no longer be made, as they have been made up to now, under Defence Regulations. Again, orders which have to be renewed by Parliament at short intervals, like previous orders on this subject, have the additional disadvantage of taking up a good deal of Parliamentary time and, of course, of aggravating uncertainty in industry, because there always must be an element of uncertainty so long as an order is continuously subject to approval by your Lordships and by another place.
Finally, I should like to ask the noble Earl one question in relation to Article 11 of this order. This is something interesting and something quite new. Article 11 appears to be asking Parliament to give the Minister an important 146 new power, and I can assure your Lordships that it is not a power that we ever thought necessary or desirable while we were responsible. This is a power to vary the standard prices in the guaranteed individual prices for fatstock in different parts of the United Kingdom. For example, the Minister could presumably fix one price for England and Wales, quite a different price for Northern Ireland, and yet a third and entirely different price for Scotland. I am not saying that this power is unnecessary; I am far from being dogmatic about it. But I think the noble Earl should tell us why the Ministry are asking for this new power, because it is obviously undesirable for Parliament to give the Minister a new power unless it is shown by the relevant evidence that it is really necessary. The noble Earl said that there was no intention of using this power at the moment, but presumably the Government would not be asking for authority to use this power at any moment unless there were some reason why they wished Parliament to approve of it. I should be obliged if the noble Earl could answer that question when he winds up.
§ 3.11 p.m.
§ VISCOUNT ALEXANDER OF HILLSBOROUGHMy Lords, perhaps it will save time if I make one or two remarks before the noble Earl replies. Like my noble friend who has just spoken, I agree that it is desirable to have this greater permanence of policy by the passing of one order instead of the custom which has hitherto prevailed. In so far as that gives a sense of security to the farm producers of the country, that is all to the good.
I have nothing to add to what my noble friend said on the other point, which I regard as of considerable importance. I do not know whether my noble friend would agree that this assessment of the various localities apparently fits in again with the Government's private enterprise idea. It is perfectly true that the Milk Marketing Board, for example, have reverted to the practice, I think to some extent discontinued during the war, of having a slightly differential price for milk in the different milk regions. No doubt, there is something to be said at times, having regard to the climatic condition of a particular area, for fostering the production of the best agricultural commodity for that area. Nevertheless, 147 I think the Government should be careful, especially where they may want to stress the production of one particular article more than another, to see that they do not thereby induce undue production of one line by carrying the idea of specialised prices too far. Nor should those who have tried to fulfil a policy adumbrated by the Government find themselves, because of a serious variation in the other direction, left in a position which is unfair to them.
The only other thing I want to say upon this order is this. Apart from a general debate on the Agriculture Estimates, this is about the only opportunity one has to give vent to one or two grievances of the farmers themselves. This order covers, in a very wide sense, fatstock, including sheep and pigs. I must say that the reversion to private enterprise has been, at times, a fairly good thing for the farmers, especially in the short season, say from Christmas onwards, and very good prices have been obtained. On the other hand, very good prices have had to be paid by the consumer. About the only justification that I have heard for it yet on behalf of the Government is that it shows that the British consumer wants the best meat, is determined to have the best meat and will pay the best price for it. That is all very well for those people who have the money, but it does not secure all-round average prices for the best meat to the whole of the consumers in the country, which is the principle lying behind what my noble friend was saying in contrasting the private enterprise system with the State trading system in a commodity of such importance as this. Moreover, there is inherent in the minds of many farmers the feeling that, behind it all, there are tremendous loopholes in the scheme under private enterprise. Sometimes the farmer used to grumble about how these things worked under State trading. He used to think his products were not graded properly until the meat was sold on behalf of the Government. Then if there was too big a set-off it went to the ultimate benefit of the State. Now, the farmers talk in a very different way. I can prove some things by personal experience.
Take, for example, the grading of pigs, which is dealt with under Article 4 (3), mostly in sub-paragraphs (d) and 148 (e). In the case of pigs which are sent to the bacon factory in order to get this guarantee, the most extraordinary things go on. I should like to pay a tribute to the Fatstock Marketing Corporation for the successful way in which they overcame the Government's delays last year: they have really done a good overall job. But, as I say, I see some extraordinary things happen about pigs sent to bacon centres for grading. I had some fine specimens the other day, just the sort for bacon, and they were sent along for the Fatstock Marketing Corporation, from the other side of Colchester to Chippenham. They were all just about the same size when they went off, weighing out at a difference of about 6 or 7 lb. between the lightest and heaviest of the six. Three of them were graded; they got the guarantee. The other three were not graded at all. And whereas the three pigs that were graded brought a price, say, of about £19 a pig, the others brought about £11 a pig. The difference between the weight of the lightest of the graded pigs and the heaviest of the ungraded pigs was 2 lb. They had to be sent 150 miles. So the farmer gets 5s. or 7s. for what is called "shrinkage" for long distance, and he loses because those pigs are not graded. On a margin of 2 lb. he loses £6, £7 or £8. Therefore, in giving general approval to the Government's idea of having a longer basic period for the general powers sought here, I think it is time that that point was considered—because, believe me, those pigs of 6 score 14 lb. that were regarded as too light to be graded were all sold at the top price in the market. The farmer does not get the money. What has happened to it in between?
I should like to ask the noble Earl what is his information at the Ministry concerning how that works out. Does the bacon company then make the pigs into bacon and get the top price—the bacon being even more desirable to some members of the public, because they like it a shade leaner—or are they sent for pork? If so, if the farmer sent in pigs of 3, 6½ or 7 score for pork meat, he would get a guarantee; but he gets nothing out of this. That seems to me wholly inequitable. I do not expect the noble Earl to be able to say now: "I can see exactly this afternoon how that can be put right," but I hope that before the next agricultural 149 debate, he will have looked into it and brought to us a proper and progressive policy to put that matter right.
EARL ST. ALDWYNMy Lords, the noble Earl, Lord Listowel, was worried about Article 11. Perhaps I may give him an example of how that operates this year. As he knows, we have some progeny testing stations being set up. In order to finance them, a deduction is being made. In Northern Ireland there will be no progeny testing stations, and therefore the deductions will not be made from pigs reared in Northern Ireland. Therefore it is necessary to have this power to fix a differential price between Northern Ireland and this country.
§ THE EARL OF LISTOWELI am obliged to the noble Earl for explaining that point, but, potentially, the application is a good deal broader, is it not? Under the terms of this article there could be a different price for fat cattle, for instance, in Northern Ireland as compared with that in England and Wales. I wanted to know whether the Government had any reason for wishing to have the power for making different prices of that kind.
EARL ST. ALDWYNI can assure the noble Earl that certainly there is no intention of doing that at the moment. The noble Viscount, Lord Alexander of Hillsborough, seemed to be very worried about his pigs. First of all, the price which is paid by the Fatstock Marketing Corporation is not in any way controlled by the Government: it is entirely their affair. The Government do not enter into that at all.
§ VISCOUNT ALEXANDER OF HILLSBOROUGHPrivate trading.
EARL ST. ALDWYNI understood the noble Viscount to say that some of 150 his pigs did not get the guarantee. But all pigs get the guarantee. If he would let me have details of it, I will look into it and see that he does get his guarantee.
§ VISCOUNT ALEXANDER OF HILLSBOROUGHI am obliged to the noble Earl. I am not really worried about my own particular case. This has simply opened a vista to me, showing what is happening over a wide front to people who are sending their pigs to bacon factories. I want to know what happens to the difference between the £18 or £19 received under the guarantee by weight of a pig of 6 score 16 lb., and the price obtained for a pig of 6 score 14 lb.—a difference of only 2 lb. weight—for which he gets no guarantee and on which he may make a £7 or £8 loss. I want to know who is getting the difference. Is it the consumer? Who is making this prodigious profit?
EARL. ST. ALDWYNI must point out to the noble Viscount that it is the responsibility of the breeder to weigh his pigs accurately before he sends them to market. Frankly, that is half the trouble with a great many farmers; they simply look at a pig and say that it weighs so many scores, and they do not bother to put it on the scales.
§ VISCOUNT ALEXANDER OF HILLSBOROUGHHow on earth is a farmer, when he has weighed his pig and got his 6 score, 18 lb. as a sort of minimum, and then has to send it 150 miles by road, being restricted to a small arbitrary shrinkage allowance, to be protected against losing the whole of the balance of the guarantee, amounting to £6, £7 or £8?
EARL ST. ALDWYNI will certainly look into this matter, and I will communicate with the noble Viscount later.
§ On Question, Motion agreed to.