HL Deb 04 May 1955 vol 192 cc717-37

2.35 p.m.

THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE, FISHERIES AND FOOD (EARL ST. ALDWYN) rose to move, That the Draft Potato Marketing Scheme, 1955, reported from the Special Orders Committee on Wednesday, the 27th of April last, be approved. The noble Earl said: My Lords, this Draft Scheme for the marketing of potatoes is in substitution for the Scheme which operated from 1934 to 1939, which was suspended under Defence Regulations at the outbreak of war and has remained in suspense ever since.

Your Lordships will appreciate that the main problem in potato marketing is that the output of potatoes varies greatly from year to year, whereas the demand is inelastic and surplus potatoes cannot be kept from one season to another. The pre-war Board's method of tackling this problem was by determining the description—including the size—of potatoes which could be sold and by determining the channels of sale and terms of sale. The Board also had powers to trade in potatoes which were surplus to those required for human consumption. Broadly speaking, this new Scheme proposes to employ the same methods, but there are one or two new factors in the situation which have made it necessary to produce a new Scheme rather than to amend the old.

Nowadays potato growers have the benefit of a guarantee of price under the Agriculture Act, 1947. From this year on the guarantee will take the form of what is known as a support price. The intention is that normally the market should determine the price which the grower receives, but at each Annual Review a guarantee is fixed, and if any grower is unable to sell his potatoes in the open market at or above the guaranteed level then the Board will take his potatoes at the guaranteed price. Her Majesty's Government stated over a year ago that they were prepared to see the support price system operated through a marketing board, and the Scheme which is now before your Lordships equips the Potato Marketing Board with the necessary additional powers for this purpose, including the power to enter into an agreement with the Ministers concerned about the terms and conditions on which the Board should operate the arrangements for the guarantee.

Another reason why a new Scheme is needed is that the Agricultural Marketing Acts of 1933 and 1949 provided that marketing boards might be given certain powers which were not available to them under the 1931 Act, and also that schemes should incorporate extra safeguards against the misuse of the Boards' powers. In addition, since the original Potato Marketing Scheme was introduced we have had considerable experience of Schemes of this sort and there are certain additional matters for which, in the light of this experience, we think schemes should now provide.

This substitutional Potato Marketing Scheme has, of course, been through the quite elaborate procedure which must be completed before any such Scheme under the Agricultural Marketing Acts reaches your Lordships' House. All the registered producers of potatoes have had an opportunity to ask that a poll should be held on the question of whether or not the Scheme should be submitted to Ministers—that is, to my right honourable friends the Minister of Agriculture, Fisheries and Food and the Secretary of State for Scotland. Only thirty-two such requests were made and that is nowhere near enough to require a poll to be held. After the Scheme had been submitted, an opportunity for objections was given and a number were made. A public inquiry was held, the results of which have been very carefully studied by the Ministers. In the light of this inquiry, and of the objections, certain modifications were made before the Scheme was laid before Parliament in its present form.

Your Lordships will wish to know what are the principal powers which the Board is to have under this new Scheme. I will deal first with certain powers which were in the pre-war Scheme but which in the new Scheme are extended or otherwise changed. The levy and quota arrangements are somewhat altered. Under the original Scheme each registered producer had a basic acreage which could be increased on payment of a special levy of £5 an acre. Under the new Scheme each registered producer will have a basic acreage, which will be the average of his plantings in the three years ending on 31st December, 1953, and the Board will be able to prescribe additional annual quotas expressed as a percentage of basic quotas. A grower who plants more than his annual quota will be liable to a special levy of up to £10 an acre, and this will not increase his basic acreage. In certain circumstances the Board will be able to grant, free of levy, new or additional basic acreage.

Another provision of the earlier Scheme which has been altered is concerned with the licensing of merchants and agents. A provision on these lines is customary in marketing schemes, and it is designed to enable the Board to protect producers from merchants who are, for instance, not credit-worthy or have inadequate facilities for carrying on their work. However, as a result of a modification to the Scheme as it was submitted to Ministers all existing or prospective merchants will have the same right of a hearing by the Board and an appeal to arbitration if the Board proposes to refuse or revoke a licence.

I would also draw your Lordships' attention to the fact that the trading powers of the Board are being extended. Under the earlier Scheme the Board could trade only in potatoes surplus to requirements for human consumption, but the new Scheme will give the Board full trading powers which are necessary for the operation of the support price arrangements. The Scheme does not, however, give the Board power to require producers to sell only to them. The Board's powers to prescribe the terms on which potatoes may be sold have been modified in one respect. The Ministers have modified the Scheme so as to prevent the Board from fixing re-sale prices except in very limited circumstances. This has been done because we consider that competitive market forces should normally be left to govern the prices charged from the point of first sale by producers.

I will now deal briefly with certain provisions of this Scheme which did not feature at all in the earlier one. The Board are being given power to determine minimum prices for sales of potatoes by registered producers. The purpose of this is to allow the Board to act on behalf of producers generally to prevent a few producers from under-cutting prices in years of heavy yield and thus depressing the market. We are sure that this is a proper power for the Board to have, but as a precaution they will be required to inform Ministers in advance of any intention to use it. Misuse can thus be prevented under the Agricultural Marketing Act of 1949. The new Scheme also gives the Board power to produce certain specified commodities from potatoes. The lack of this power in the old Scheme was felt before the war, and the Board were, in fact, seeking an appropriate amendment when war broke out.

Another new power is the general power to provide services for producers. This derives from the 1949 Act, and it was the subject of a number of objections. In the form in which it now appears in the Scheme we are sure that it will help to enable the Board to raise the standards of efficiency in the production and marketing of potatoes, and that it is, therefore, a proper power for them to exercise. In the Scheme as it was submitted, however, power was also sought for the Board to manufacture anything required for the production and marketing of potatoes. It became clear that the need for this power was at least very limited, and after careful consideration we decided that it had better be left out of the Scheme.

Your Lordships will know that the Acts under which marketing schemes are made provide for elaborate safeguards against misuse of the powers given to Boards. This Scheme incorporates a number of new safeguards which are now a common feature of marketing schemes. There is a provision for the appointment of Ministers' members to the Board, as required by the Act of 1949. There will be four such members, and we hope to announce their names shortly. There is also a provision for the appointment of a number of advisory committees, of which perhaps the most important is the Joint Consultative Committee, on which the distributive interests will be fully represented and which the Board will be required to consult before making any substantial change of policy. There will also be a Seeds Advisory Committee which will give special attention to the problems involved in the production and marketing of seed potatoes, which were outside the scope of the old Scheme.

Another safeguard, which I have already mentioned, requires the Board to give Ministers notice of their intention to use certain of their main marketing powers. The powers concerned are those the use of which Ministers can prevent under the 1949 Act if the action proposed appears to them to be contrary to the public interest.

Your Lordships will know that it is the policy of Her Majesty's Government to consider sympathetically proposals for agricultural marketing schemes and, in appropriate cases, to make use of producers' marketing boards in the administration of Part I of the Agriculture Act. The Scheme which is now before your Lordships is completely in accord with this policy and has been subjected to a most thorough and detailed scrutiny before being submitted to Parliament. All whose interests are affected by it have had ample opportunity to make their views known. I am quite sure that the Scheme in the form in which it has now emerged from this rigorous examination will enable the new Potato Marketing Board to make a real contribution to the more efficient production and marketing of potatoes. I therefore commend this Scheme with confidence to your Lordships and beg to move its approval.

Moved, That the Draft Potato Marketing Scheme, 1955, reported from the Special Orders Committee on Wednesday, the 27th of April last, be approved.—(Earl St. Aldwyn.)

2.47 p.m.

THE EARL OF LISTOWEL

My Lords, I am sure we are all grateful to the noble Earl for his extremely clear explanation of this peculiarly voluminous and complicated Scheme which runs almost to the length of a short novel. The noble Earl would, I am sure, agree that the effectiveness of the Scheme will entirely depend on the support which it receives from the potato growers. I was glad to hear, therefore, that this new Scheme has the support of the National Farmers' Unions in England and Wales and in Scotland, and has been agreed between them and the Board. No poll of producers was taken because, of course, there was an insufficient number of objections; I believe there were fewer than fifty. Notwithstanding that small number, a public inquiry was held and, as the noble Earl pointed out, various alterations have been made in the Scheme as a result of the report that was made after the inquiry. We should not have any agricultural marketing scheme of any kind, whether for hops, wool or potatoes, if it were a requirement that every producer should agree to the terms of the scheme; clearly that would be an entirely unreasonable and impracticable requirement. It is a tribute to the soundness of this Scheme that so few producers appear to take exception to it.

On the other hand, Parliament has a special responsibility to see that minorities get a fair deal from the Executive, and it would be interesting for your Lordships to hear, if the noble Earl can mention it in the course of his reply, why some of the objections that were made were resisted by the Minister, and whether the reason for resisting them was that they would have taken the vitals out of this Scheme. I am particularly glad to note one important difference between this and the pre-war potato marketing scheme. The old marketing board was a producers' board. Its members were chosen by the growers. A board of this type, however fairly it may use its powers, is bound to be suspected of controlling prices in the interests of the producers, and for this reason, in the 1949 Marketing Act, passed by the late Labour Government, the Minister was given powers to appoint representatives on marketing boards. As the noble Earl pointed out, this power has been exercised, and the Minister will appoint four representatives on the new Potato Marketing Board. I am very glad of this, and I am sure that their presence will be a useful safeguard for the consumers and will give the appearance, as well as the substance, of justice.

I am glad about another feature of this Scheme, which is that the Board will have important powers for improving the efficiency of the industry. I am sure that this is desirable and that it would have been a mistake to limit the powers of the Board to matters relating to the administration of the price guarantee. The efficiency of the industry will clearly depend upon such things as standards of grading and packing; upon co-operation between the small producers; upon close co-operation and mutual aid between small farmers, and very much indeed upon research and propaganda, which can be undertaken effectively only by the Board. As we all realise when we look back, the Milk Marketing Board applied similar powers in a very effective way in the improvement of the efficiency of the dairy farming industry. I very much hope that these powers for improving the efficiency of the potato industry will be used by the Board with similar advantage to that industry. I should like to ask the noble Earl—if he will be kind enough to reply to the question at the end of the debate—whether the Board is going to exercise these powers in relation to promoting efficiency from the start of its operations? If so, how is it going to get the money to undertake research and propaganda? I do not see anything in the Scheme—that may be my fault, of course—indicating how the money is going to be provided.

I should also like to know whether the Board is expected to use the powers it is given under Schedule C to produce a number of commodities from potatoes—to can potatoes, to make potato crisps and all the rest of it. Though these powers may be necessary, I do not imagine that they will be required except in exceptional circumstances. I am wondering in what sort of circumstances the Government envisage their use. Finally, I would say only this. I know that there are some people who object in principle to legal restrictions on production and price control. I venture to think that that is a rather old-fashioned and doctrinaire point of view. Restriction on production and control of prices are a means to an end. If they secure the end, it seems to me they are fully justified. In this case the end is a steady supply of potatoes for the consumer and stability for the producer, which will be given by an assured market and cannot be given in any other way. Because I think this Scheme is calculated to achieve this end and is in the interests of both producers and consumers it seems to me that these restrictions and controls are entirely justified.

2.53 p.m.

LORD GRANTCHESTER

My Lords, I do not wish to refer to any technical considerations of good husbandry which the agricultural experts in your Lordships' House are more qualified to put before your Lordships, and which my noble friend Lord Nunburnholme, who is to follow me, will refer to, but I do wish to raise certain matters of principle which are of general interest. First, there is the method of bringing into operation a Scheme of this complexity. It is really a Bill in itself, and merits the full discussion given to a Bill involving important questions of policy and principle. Secondly, this is only one of such schemes regulating marketing under the Agricultural Marketing Acts. The cumulative effects of a number of such schemes are far-reaching and bring production, marketing and, in many cases, the manufacture of agricultural products under a monopolistic authority where the producers have control. Thirdly, an inquiry has been held and a report made to the Minister. We on these Benches believe that such reports made to the Minister should be made public.

The Order which is now before your Lordships reimposes statutory controls and restrictions—which appears completely at variance with the declared policy of Her Majesty's Government. The quota provisions of Paragraph 84 appear to be particularly objectionable and at variance with the elementary rights of a free farmer in a free economy. The powers of search and to impose penalties under Paragraphs 82 and 83 are the sort of regulations so rightly criticised in a recent study of the Rule of Law, produced by a group of Conservative lawyers, and I should have thought that this study might have been heeded by Her Majesty's Government, even if they ignored years of Liberal criticism of these practices.

Finally, I would ask, what real protection for the consumer is there in the Scheme? Under Paragraph 70, the Minister has to be advised of the imposition of minimum prices. What can he do, or what is he likely to be able to do, against the authority of the body which he has created? The noble Earl said he could avoid "misuse". If the price is too high, would that be "misuse"? He referred to consultations with the Advisory Committee. But if there is disagreement between the Board and the Advisory Committee, who is to decide between them? We on these Benches have no objection to vountary schemes for co-operation which can be carried through by the exchange of information. We have no objection to orderly marketing through voluntary schemes. But we do protest most strongly against a Scheme which brings in every producer, even if he objects, and then subjects him to dictation without any right of appeal to the courts.

2.57 p.m.

LORD NUNBURNHOLME

My Lords, after that very eloquent speech by a member of my Party there is little left for me to say. But there is one point which I should like to bring to the notice of your Lordships. It may seem a small point, but in my opinion, speaking as a producer with some interest in potatoes, it is the crux of the whole Scheme. Schedule D (5) states: On any application in that behalf the Board may, in any case of hardship or unusual circumstances or for the purposes of good husbandry, allot for the current and all subsequent years until the next general reallotment such basic acreage as they may think proper and may undertake to allow such acreage to the future occupier of any particular holding as and when he becomes a registered producer. Your Lordships will note that it is there stated that the Board "may." For that word "may" I should like to substitute the word "will." It seems a reasonable clause. I know that in Parliamentary procedure the word "may" is interpreted as "will"; but the Minister of Agriculture is handing over the controlling of potatoes to the new Potato Marketing Board, and the Marketing Board may not have the same interpretation of the word "may."

Another point which I should like to stress is that I think that the Minister should have allowed himself some power of veto over the Board. So far as I can see, this Board will consist entirely of large producers, the majority coming from Lincolnshire, who have quotas, and there seems to be no appeal to anybody outside the Board. I think the Minister should have reserved to himself the right to hear appeals and the right of veto. There is one other point about the quota system that I should like to bring to your Lordships' attention. Where a tenant farmer takes over a farm with a definite quota and does not maintain that quota, the value of his land, from the landlord's point of view, goes down by roughly 25 per cent. I refer your Lordships to the article by Blyth in The Farmer and Stockbreeder of this week. May I ask that the Order be withdrawn and reintroduced to-morrow with the word "may" replaced by "will."

3.1 p.m.

EARL, JOWITT

My Lords, I think this is a case where we really ought to consider where we are going. I say at once that I am in favour of this Scheme and that if the Liberal Party are going to ask for a Division (because it seems to me that they are entirely opposed to the Scheme), I shall vote in favour of it. That is plain enough. But I must call attention to what was said yesterday in another place by the Minister of Agriculture. He was contrasting the Socialist agricultural policy with the Government's agricultural policy, and he said (OFFICIAL REPORT, Commons, Vol. 540 (No. 81), col. 1545): As I was saying."— he was talking about the Socialist policy— the emphasis is once again on orders and directions, on planning from the centre, and huge Government-sponsored organisations. That is most certainly not the road that is going to lead to a healthy, strong and progressive agricultural industry. No doubt some of the noble Lords opposite will agree with these sentiments—I see welcoming smiles and nods from the other side of the House. But these were merely empty words. When the main debate was over, and "the captains and the kings" had departed, the Under-Secretary was called upon to introduce the Potato Marketing Scheme. As I shall show in a moment, if ever there was a Scheme not in accord with the dictum, "Set the people free!"—let the people grow what they want; let every man manage his own business—we find it here. It is entirely opposed to any such dictum for which the Liberal Party stand.

This Potato Marketing Board is made an absolute fiihrer on the matter of potatoes. Let me ask your Lordships to consider what is involved in this Scheme and see how far it is consistent with "setting the people free" and doing away with "huge Government-sponsored organisations." In the first place, no one may sell any potatoes at all unless he is registered; then if he is registered the Board may lay down the terms on which he may sell potatoes to anybody other than the Board, and they may lay down a minimum price. They may lay down the description of potatoes which may be sold and—observe this—they may dictate the manner in which potatoes are to be graded, and may even dictate the manner in which the potatoes are to be marked, packed, stored, adapted for sale, insured, advertised or transported. The grower must not transport them in his own vehicle unless he has the approval of the Board.

Under paragraph 73 the Board may prescribe the form or forms in which contracts are to be made, and may then declare that the grower must not sell any potatoes except to a buyer who has been licensed by them. They may from time to time, in any way they think proper, alter the terms of the licence of that buyer. Then they have the right to send round from time to time a questionnaire, and the unfortunate grower has to answer these questions. They may send round what used to be called a "snooper" when we introduced schemes of this sort, to see exactly what is being done; and he may enter any premises which he thinks he ought to enter. Then there is a disciplinary committee of this Board, and if the grower does not behave, he may be fined smartly £200, or £100, as the case may be. It is true that he has the right to go to arbitration, but he is not allowed to go to the courts, something for which the Party opposite have been agitating so strongly.

That, my Lords, is this Scheme, and I say that the words of the Minister, that the Party opposite do not believe in "huge Government-sponsored organisations" or in "planning from the centre" are merely empty words: they reproduce a completely Victorian outlook, which is shared by the Liberals at the present time. I agree that this is the way to do things. We must have this Potato Scheme and a Pig Scheme and Schemes for growing fruit and vegetables. It is by this ordered marketing, and only by this ordered marketing, that we can keep our heads above water at the present time. But I beg your Lordships to remember this: that if you are going to have Schemes of this sort—and I consider it is the right Scheme—for goodness sake do not pat yourselves on the back and say that you believe in "setting the people free" and doing away with all these controls, because you are doing exactly the opposite of what you are saying.

3.10 p.m.

LORD DOUGLAS OF BARLOCH

My Lords, the noble Earl who moved this Motion told us that only a small number of growers of potatoes are opposed to this Scheme. That is hardly surprising. It is not quite correct to describe it as a Potato Marketing Scheme: it is a Scheme for restricting the growing of potatoes and thereby raising their price. I do not see any earthly reason why the growers of potatoes should not support it. From their point of view this is an excellent Scheme, but, in spite of what the noble Earl has said, I am not satisfied that there is any safeguard whatsoever for the consumer in the Scheme. It is true that the Minister is given power to appoint four members of the Board in addition to the twenty-four who are elected by the growers themselves. I do not know what a minority of four out of twenty-eight members is going to be able to do upon any body which controls the affairs of any organisation. They are in a permanent minority, and they are given no powers of any kind whatsoever, except to record four dissentient votes, if they so please.

This Scheme is based upon confining the growing of potatoes to those persons or those fields which were growing potatoes in the three years ended on December 31, 1953. Nobody else is allowed to grow any potatoes unless he pays a fine of £10 a year for each acre to the Potato Marketing Board—and that figure quite clearly has been determined upon the basis that it will be a prohibitive figure and will make it impossible for anybody else to enter this closed field of agriculture. But, more than that, the Board are given power to increase, as the noble Earl said in his opening speech, and also—and this he did not say—to decrease, the acreage of potatoes which may be grown, by any percentage by which they consider it ought to be decreased; and in that power they have a powerful instrument for restricting the supply of potatoes and for raising the price of them to any figure which will be agreeable to the majority of the constituents—namely, the potato growers—whom they represent. There again, there does not seem to be any safeguard of any kind for the consumer.

It is said that the Board are going to have power to grade potatoes and to regulate the quality of them. That might be a desirable thing if it were, in fact, done, because I believe everybody knows that the quality of potatoes which can now be bought in the average greengrocer's shop in the principal urban areas is most deplorable: they are full of green spots or black spots; they will not keep; when they are cooked they turn black; they have very little taste—in fact, as I say, the quality is altogether deplorable. After all, these potatoes are being produced now by the potato growers, and I wonder whether the creation of this Board is going to effect a revolution in the quality of the potatoes grown and lead to the consumer of potatoes in this country getting a better quality than he has got in the past.

I have drawn the attention of the noble Earl's predecessor in the office which he holds to the question of the quality of potatoes. I do not know what all the causes of poor quality may be. Some are due no doubt to growing inferior qualities because they are heavy croppers and give the farmer a greater quantity of potatoes to sell for the same outlay of labour; and some of the deterioration is probably due to other conditions which affect the growing of potatoes. In addition, it has become common to treat potatoes with various chemical compounds, generically known as anti-sprouting agents, which also affect the quality. But are we really to believe that when these practices have become widespread and are being adopted by the people who elect the Potato Marketing Board, they are going to take the steps necessary to protect the consumer and ensure that he will get a better quality of potatoes at a reasonable price? I cannot see anything in this Scheme that is going to effect that.

3.16 p.m.

VISCOUNT BLEDISLOE

My Lords, I hardly like to remain silent when a subject of this sort is under discussion. I listened with great amusement and rejoicing when I heard the noble and learned Earl opposite coming out as a champion for freer economy. Indeed, I feel some hesitation in offering a few observations on the eve of a General Election, when any of us speaking from this side of the House might be quoted as in any way qualifying or criticising an Order of this sort, emanating from the Conservative Government. But I do venture to hope that the new and rather complicated and elaborate powers given to the Potato Marketing Board will be exercised with due discrimination and restraint. The noble Lord, Lord Douglas of Barloch, complained, and I think with some reason, about the quality of a large quantity of potatoes that are now being put upon the market. I endorse the opening observations of the noble Earl, Lord Listowel, when he appeared to favour this Scheme in the interests of the efficiency of the potato grower, but I should like to emphasise the fact that he omitted altogether the question of the proper clamping or pitting of potatoes. During the last two seasons, and particularly during the almost calamitous winter through which we have passed, owing to carelessness or insufficient protection of potatoes in their clamps or pits there has been, as a result of just the sort of deterioration to which the noble Lord, Lord Douglas of Barloch, has referred, a serious loss of potatoes which would have been available for the consumers of this country.

I believe there is great scope for improving the efficiency of the potato growers in this country, particularly in the matter of the proper preservation of their tubers on their farms. I hope that the Board will take full advantage of the salutary powers with which they will be invested under this Order, but I, for my part, should be entirely opposed to anything that savours of undue restriction of the efficient potato grower. If I understood my noble friend Lord St. Aldwyn aright, this Order gives power, under certain conditions, severely to restrict the acreage of an efficient potato-grower's crop. I cannot help thinking that there is considerable danger, unless that power is exercised with great caution. After all, one has to remember that potatoes are the chief source of starch in this country for certain purposes; they are the only alternative to our cereal crops in providing that essential element of food. That being so, if our cereal crops fail—as they are apt to fail in certain seasons in this country—we look to the potato crop to make up the shortage. Therefore, I view with some alarm the suggestion that, under certain conditions, the Potato Marketing Board shall have the power to restrict the acreage of potatoes where they can be properly grown—as they are, for instance, in the county of Lincoln—to the detriment of what I may call the starch consumers of this country.

I hesitate to say any more. In my day I have been one of the largest potato-growers in this country, and I regard potatoes, of all crops that can be grown in every part of the kingdom, as the great security crop of this country in times of emergency. Therefore, I hope that no undue restriction will be placed upon their production. I am rather interested to know what the noble Earl has in mind when he talks about potato products. For instance, would they include potato spirit? During the First World War, as I have reason to know, there was considerable discussion as to whether potatoes should be converted into spirit for various power requirements in this country, as they have been for many years in Germany. There is a good deal I am tempted to say on this subject, but at this rather anxious, critical time, when we are on the verge of a General Election, I am going to restrain any critical views that I might express on this subject.

A NOBLE LORD: Go on.

VISCOUNT BLEDISLOE

While acclaiming the championship on the part of the noble and learned Earl opposite of a free economy—

EARL JOWITT

What I championed was saying what one intended to do, and not saying one thing and doing another.

VISCOUNT BLEDISLOE

I feel perfectly confident that we on this side shall not be open to any very serious challenge on that score. I hope, in conclusion, that the powers of the Potato Marketing Board conferred by this Order will be exercised with due discretion and with a large measure of vision, in view of the importance of the potato as a source of starch.

3.25 p.m.

EARL ST. ALDWYN

My Lords, the noble Earl, Lord Listowel, asked me what objections there were to this Scheme which had not been met, and why they had not been met. These objections concerned a number of different provisions of the Scheme, and I will mention the principal ones. There were objections to the provisions for a levy on excess acreage and for acreage quotas. We are satisfied, however, that powers of this kind are essential to enable the Board to levy contributions which they require for the operation of the scheme. The Board's power to prescribe terms of sale and minimum prices was also criticised. The power to prescribe terms of sale was contained in the old Scheme, and is a normal provision in most marketing schemes. We are sure that the power to fix minimum prices is a proper power to enable the Board to prevent a few producers from under-cutting in years of high yield and thus depressing the market. There is a safeguard here, in that the Ministers must be told in advance if the Board intend to use this power, and if they do the Minister has the right to prevent them.

Objections were also made to the Board's powers to produce commodities from potatoes, to license merchants, to render services on payment or otherwise to registered producers and other persons, and to prescribe descriptions of potatoes which may be sold and the manner in which they should be graded. All these powers, however, are very necessary for the success of this Scheme, and they are hedged about with a great many safeguards against their misuse, and special provisions to protect any who might otherwise suffer an injustice. For example, as I have already mentioned, anyone who applies for a licence, or for the renewal of a licence, will be given the same right of hearing by the Board and appeal to arbitration as an existing merchant whose licence is revoked by the Board within three years of issue. All these powers have been examined most carefully, and I am sure that the safeguards are adequate.

LORD STRABOLGI

May I ask the noble Earl whether the appeal is by arbitration to a court or merely to a tribunal?

EARL ST. ALDWYN

A straight-forward arbitration.

The noble Earl, Lord Listowel, asked where the Board would get the money to finance various activities. In the first place, they could get a short-term loan from the Agricultural Marketing Fund, under the 1931 Act, to cover their initial expenses. The scheme also provides that the Board may require producers to pay any contribution which may be necessary for the operation of the Scheme. There may be a general levy of up to £1 per acre and, in addition, a levy of up to £10 per acre for the excess acreage by which any producer exceeds his quota for the year. These contributions will provide the main source of regular income needed by the Board far its operations.

So far as capital is concerned, I should not like to say definitely at this stage how the Board would go about borrowing money if it wished to do so. In this respect it would be in the same position as other existing marketing boards, which have, of course, access to the banks. The financial arrangements for operating the guarantee—including the terms and conditions under which loans out of the Exchequer would be made to the Board—will be the subject of an agreement between the Government and the Board. I am afraid that I can give no details of this at present, except to say that the Government have undertaken to make good to the Board 95 per cent. of any loss arising from the purchase and disposal of eligible potatoes, including the operating costs. As an incentive to the Board to minimise the cost to the Exchequer, the Board would be required to bear the remaining 5 per cent. of any such loss. The noble Earl, And also my noble friend Lord Bledisloe, asked about the powers to manufacture. In the normal course of events, I do not anticipate that the Board will be using those powers, at any rate to start with. That would arise only in the event of a glut. After the requirements for human and far animal consumption have been met, if there is still a surplus, then obviously the Board would be right and justified in making what use they could of the remaining potatoes to reduce their cost as far as possible.

The noble Lord, Lord Grantchester, asked whether the commissioners' reports on the public inquiry were to be published. The answer is, quite definitely, "No." It has always been the practice for reports of commissioners appointed under the Agriculture Marketing Act to be confidential, and it is the firm intention of the Government that they should remain so. The noble Lord also asked me about the levy and quota provisions in the Scheme. To understand these, I think one must bear in mind the fundamental problem which this Scheme sets out to solve. It is, as I said earlier, that the amount of potatoes grown from year to year varies widely. Not only do the acreages planted vary but there are also wide fluctuations in yield. The amount of potatoes demanded does not vary nearly so much, and the result of this is very wide fluctuations in prices. Prices may differ so much from one year to another that farmers may realise considerably less in a year of high yield than they did when they had much fewer potatoes to sell in a year of low yield.

That is the problem, and I do not think anyone would wish to deny its existence. The best criticism of the method by which this Scheme sets out to solve the problem would be produce a better method, and I must say that I certainly have not come across one yet. Clearly, the Board must have some means of influencing the amount of production and the amount sold. Any quota system must, in the first place, be related to the acreage grown by producers in some recent period, and the present Scheme refers to the acreage grown between 1951 and 1953. But this does not by any means imply that a farmer who did not grow potatoes in those years but would like to start growing them now cannot do so.

LORD GRANTCHESTER

I do not want to interrupt the noble Earl, but, as he has challenged us to produce a better scheme, may I say that we believe that there is no better scheme than a free market in a competitive economy.

EARL ST. ALDWYN

It is still a free market under this Scheme.

LORD GRANTCHESTER

No.

EARL ST. ALDWYN

Yes. There is a completely free market. You have your support price, but a producer is at full liberty to sell his potatoes to any merchant at whatever price he can get for them over and above that.

LORD GRANTCHESTER

Yes, but he is not in a position to produce some more potatoes and sell them without a fine of £10 an acre.

VISCOUNT ALEXANDER OF HILLSBOROUGH

Hear, hear!

EARL ST. ALDWYN

I would point out that it is not a fine of £10 an acre. The point really is this: that if more potatoes are produced than are required, then the Board have to take the surplus off the growers, and stand to lose a great deal of money. Surely, it is only right and fair that those who produce over and above their quota should pay more towards that additional expense than those who are producing within their quota. I would emphasise that it is not a fine and, quite possibly, they will not be charged the full £10. It depends on how much the Board are out of pocket. I come now to points made by the noble and learned Earl, Lord Jowitt. As I understand it, he looks upon a producers' marketing scheme as virtually the same thing as a centrally controlled commission. Is that right?

EARL JOWITT

Yes.

EARL ST. ALDWYN

There, frankly, we fundamentally disagree. In the first place, a centrally controlled commission is a Government operated thing, which we are against, as my right honourable friend the Minister said yesterday in another place. It is an entirely different thing from a producer-operated scheme, which is quite voluntary. They can stop it when they want to. If they do not like the Board, all they have to do is to have a poll and, provided that enough of the producers show that they do not like it, the Board is finished—which is an entirely different thing from a centrally controlled commission over which the producers would have no control at all.

EARL JOWITT

Is this Scheme Government sponsored?

EARL ST. ALDWYN

This Scheme was put forward by the producers and the National Farmers' Union.

EARL JOWITT

Yes, but is it Government sponsored?

EARL ST. ALDWYN

What does the noble and learned Earl mean exactly by "Government sponsored"?

EARL JOWITT

I mean what the Minister of Agriculture said yesterday when he said that he objected to any Government sponsored large organisation.

EARL ST. ALDWYN

If the noble and learned Earl means, have we given it our blessing, the answer is that we have given it our blessing. But that is not the same thing as setting up a control commission over which the producer has no control.

LORD DOUGLAS OF BARLOCH

Is not the real difference that this is a private monopoly and the other would be a public monopoly?

EARL ST. ALDWYN

This certainly is private in the sense that I think the noble Lord means.

VISCOUNT ALEXANDER OF HILLSBOROUGH

And a monopoly.

EARL ST. ALDWYN

A monopoly? No, it is not a monopoly. As I understand it, a monopoly is something which has complete control of the whole of the buying and the whole of the selling.

VISCOUNT ALEXANDER OF HILLSBOROUGH

This has control of all the producing.

EARL ST. ALDWYN

No, it is wrong to say it has control over the whole of the producing—the thing must be regulated. It must be regulated to the extent that, as I said earlier, potatoes are a particular crop in which there is a tremendous variation in yield. What has happened in the past, and what we hope to prevent in the future, is, when there is a year with bad yields and therefore good prices, farmers rushing in and saying; "Potatoes are fetching good prices; we must go in for potatoes," and so producing the next year a vast surplus which is of no benefit to anybody.

VISCOUNT ALEXANDER OF HILLSBOROUGH

We thought that that was the sort of action that a Conservative Government wanted in "setting the people free"; that they would not have to tell the farmers all the time what the crop should be. But if I want to grow five acres of potatoes to help clean my land, I must first get a licence. If I cannot get a licence I must pay a fine, because I become a criminal under the law. Yet the noble Earl criticised us for having schemes like that. They originated from our Act of 1931. And then you talk about "setting the people free." Let us understand where you are.

EARL ST. ALDWYN

Possibly we are getting to a situation where we are ceasing to talk about potatoes.

SEVERAL NOBLE LORDS

Hear, hear!

EARL ST. ALDWYN

We seem to be starting Election addresses a little prematurely. The noble Viscount, Lord Bledisloe, asked about the control of acreage. The sense in which acreage will be controlled is purely in the sense which I mentioned, so that we can avoid having vast acreages in one year after we have had a bad yield in the year before. It is purely in that sense. My Lords, I do not

Resolved in the affirmative, and Motion agreed to accordingly.

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