§ 2.35 p.m.
§ VISCOUNT ALEXANDER OF HILLSBOROUGH rose to call attention to the condition and prospects of the agricultural industry, with special reference to the Annual Review and Determination of Guarantees, 1956 (Cmd. 9721); and to move for Papers. The noble Viscount said: My Lords, I beg to move the Motion which stands in my name on the Order Paper. I should hope not to have to go over every part of the case which I covered a few weeks ago in the House on this question of fixing agricultural prices and its relation to the general economy of the country, but if your Lordships find that in one or two instances, in making my case on this Paper, some arguments appear to be repetitive, I hope you will forgive me.
§ On this occasion, the Annual Review and Determination of Guarantees makes one thing tolerably certain from the manner in which it has been received. I do not think there can be any doubt that it has been met by the majority of those in the farming industry with disappointment, gloom and, in many cases, anger. I would not say that that applies to some of the larger and more prosperous farmers who regale us with their views on 960 the industry from time to time in the various farming journals, but certainly, taking the industry as a whole, having regard to the things that are said by the representatives of the three farmers' unions and bearing in mind the views expressed more particularly by the small farmers, who number about two-thirds of the whole of those who are engaged in farming in the country, what I say is true. It is most significant that, for the first time since the inception of these Annual Reviews the Government are prescribing decisions from which, after long discussions, conducted, as I think from reports, in an atmosphere of good will, the leaders of the industry have withheld agreement. They do not agree with the Government's policy. This is the first time that some form of agreement has not been achieved in dealing with this Annual Review and Determination of Guarantees.
§ The National Farmers' Union say (I am using a much shortened version, but it is as close as possible to what they actually said) that they sought a settlement which, taking account of the national economic situation, would yet give much-needed confidence to the industry as a whole and to what is always important in an industry like farming, the individual producers. The raising of the guarantees, they say, does not necessarily mean a rise in the cost of the subsidies or a rise of farm income. They back up that view by pointing out that, in spite of last year's award of £28 million, the subsidies are already £27 million less than they were a year ago. For, of course, these guarantees when they are made are often not drawn upon to the extent that it is estimated they would cost the Government and the taxpayer when the adjustment is made in the Annual Review.
§ They say that, although net income may show some increase from improved productivity, there is an outstanding balance of about £24 million of increased costs which they have never been able to meet up to now but which will have to be met out of next year's income, and therefore that £24 million has to be set against the present award which, by any stretch of manipulation of figures, I cannot make to be more than £25¼ million or £25½ million. Therefore, so far as the farmers are concerned, this Review gives them practically nothing at all. 961 Perhaps we shall know presently whether the Government meant that, in fact, to be their objective in going into this Review.
§ Moreover, that £24 million of outstanding costs makes no allowance whatsoever, at this time of general increase of costs right through the country, for any further costs which will have to be met in the year upon which we in the farming industry are now shortly about to enter. For increased costs which will come during that year there is nothing at all. I know that there is bound to be a lag in dealing with costs of this kind and I do not think the farmers would complain so much about the lag, in principle, so long as it was met. But, in fact, whilst everybody is lecturing the farmer about what he ought or ought not to do, and about how poor and inefficient he is, there is no industry in the country which has suffered so much lack of protection in the normal fiscal sense but which has produced the kind of increase in production or percentage of increased efficiency that has been achieved by the farmers in the country. Starting with their great efforts, for which we should never cease to thank them, in the great crisis of the war, or in the general task assigned to them in the state of bankruptcy in which the country had to meet the post-war situation, they have made a real contribution to the recovery of the general economic situation. I doubt whether they have ever yet been accorded full appreciation for what has been their achievement.
§ I do not for a moment suggest that that does not mean that there are not ways and means and opportunities for still further increasing the efficiency; but, as I shall try to show later on, a great deal more could be done in that direction if the Government would make up their minds what they want and would fix in the farmer's mind what is the contribution that he is to make to the future task of economic and industrial recovery in general in the country. The farmers say that to equip the industry, to obtain an even greater contribution towards the closing of the trade gap, it must be stressed that this year the total award should have been higher; and it will be for the Parliamentary Secretary, I hope, to justify presently to your Lordships the reason why it should not have been put higher. I think that that will be an 962 essential part of his task in dealing with the debate this afternoon. They also say that this is especially so in view of the steady decline in farm incomes for the past three years.
§ In the recent debate I endeavoured to show what a strange contrast there was in profits between the returns of industrial companies in the last three or four years, and especially in the year 1955, compared with 1954—and I may say that that is by no means at an end. I do not know whether any paper is more widely read in the community and in your Lordships' House than the Financial Times, and I am quite sure that most of your Lordships are familiar with that important and clearly edited paper. If any of your Lordships happened to read the Financial Times of last Saturday he would have seen that in 1956, for the first quarter of the year, in which 561 industrial companies reported their results, those 561 companies had increased their profits, compared with a year ago, by more than £50 million; and the payments they made to their shareholders were 15 per cent. up on the previous year's share-out. Is there any comparison between that kind of prosperity and the situation in the farming industry, taking it as a whole? Of course there is not.
§ I cannot for the life of me understand how Ministers have the effrontery to face, the country, and especially the farming industry, with their proposals on this matter, after giving lip service to their pledge to carry out the Agriculture Act, 1947. In the last three years they have been endeavouring most of the time to justify themselves by saying that, after all, there is a case for dealing with the agricultural industry by subsidy, because it is the only industry of its size in the country which is practically without fiscal protection. There is all this prosperity in the country among industries which are working, in the majority of instances, behind large and substantial tariffs, from 15 to 33½ per cent.; and the present Minister of Agriculture, Fisheries and Food and his predecessors have endeavoured again and again to justify to the community that the agricultural industry was quite entitled to look for aid by subsidy in place of the fiscal protection which was so widely and freely available to the rest of industry and which has become so profitable.963
The farmers further state that the unions are gravely concerned about the way in which the award is allocated amongst the various commodities. They say it is unsound and that it fails to make adequate allowance for the rapidly rising costs, particularly of producers of milk, pigs and eggs. It is not to be wondered at that they point out that these three commodities are the basic products of an enormous number of small farmers in the country, so that the worst impact of this prescribed Government award, without agreement, will be felt most by those least able to withstand it. The unions strongly condemn the abolition of the guaranteed individual price system for fatstock, and point to the corresponding risks in this sphere through the Government's new system of fixing guarantees. I want to ask some questions of the Parliamentary Secretary on that particular point. Finally, the Farmers' Union say:
when the country's economic position calls for vision and boldness the Government have missed the opportunity of laying a firm foundation for an economic increase in net output which would secure for the country the more certain relief to the balance of payments which they desire to seek.
It seems to me that the Farmers' Union have well stated, in a restrained and reasonable manner, a very strong case against the manner in which this award has been arrived at and decided upon.
§ Whatever some of your Lordships may think—and we are all entitled to our own opinions—there is no doubt at all in my mind that, as a direct consequence of the review, there is a still greater feeling of that lack of confidence in the industry to which I referred some months ago. I notice that the Fatstock Marketing Corporation area director in the North said the other day that the meat market is in a depressed state and is alarming the producer. I am quite sure that an area director of marketing in what has become a very large and important corporation in the country would not use language like that unless there were something in it; it would not suit his own business to do so. I noticed in a journal a fortnight ago, among comments from individual farmers on this award, that two Kent farmers expressed fear that the ending of the individual guarantees would knock the bottom out of beef production; and I dare say that if the Parliamentary Secretary were perfectly frank with us he would 964 be able to tell us of the strength of the feeling which has been represented to the Ministry by direct correspondence with the Ministry or through conversations with members of the staffs of county advisory committees.
§ One of them says that if the Government sincerely wish to encourage home production, two things are required: more incentive in prices and strict control of imports. Another pointed out that in their manipulation of the award the Government apparently are increasing the amount of the guarantee for beef production, but he says that, in view of the fact that imports from the Argentine are allowed to increase now at a rate which is quite unusual in post-war experience, the two policies will not run together. I do not think it is argued that Argentine beef should not be available, but there should certainly be some kind of plan and idea in the Government's mind so that the industry may know how much is wanted from producers or how soon they are to be completely shaken; whether all the capital and energy they have put into this postwar turnover to beef production is to be undermined and brought to ruin by the fact that Her Majesty's Government have no general long-term plan and no immediate plan for dealing with the question of the volume of beef to be allowed into the country.
Another of the comments very interesting to read in farming journals, as statements of people who live in areas in which Her Majesty's Government have usually relied for that nice marginal majority which they require in their politics, says:
When controls came off and beef started coming in, the position became ridiculous.
That comment is not far out as your Lordships will find if you pick up a copy of the Farmer's Weekly and turn to the "Editor's Diary," where matters of importance and note are picked out. Just after the issue of the Government White Paper this paragraph led the editor's notes, headed "Down again":
Auction prices for fat steers and heifers have dropped again this week, in some instances by more than 20s. per live hundredweight in one week. So far there has not been a corresponding drop in prices for the various cuts in the shops. This has led to some demands from housewives for cheaper chilled meat, supplies of which have been increasing and prices falling.
What is the policy of Her Majesty's Government in a situation like that? I fail to find any real indication of one.
I do not think it will hurt to cite one or two more instances of these views. I am not, by any means, taking all that have read, and the Parliamentary Secretary can satisfy himself if he thinks I have taken those which best suit my case, though I am quite sure he will do the same in the answer he makes to me. This statement is made by a West Riding, Yorkshire, farmer: He puts it very succinctly:
The Price Review is an insult to the industry. The large farmer is the one that has been looked after. It is to the small man that I extend my sympathy.
An East Riding farmer says that the Price Review must be regarded with grave concern by the small farmer; and from the county in which I am glad and proud to say I was born, one of the great counties—the county of Somerset—a farmer says:
The Government do not want small farmers. They are selling us out.
I can assure Her Majesty's Government that they created something of a feeling amongst farmers in this country by the kind of Review they brought to them this time. Take the opinion of a farmer from near Skipton, in North Yorkshire:
The Review is a smack in the eye for all those who have responded so well for increased production in the past, for more milk, pigs and eggs. Small farmers would have to revert, as they did in the 'thirties, to a lower standard of living.
Those of us who have carefully studied the history of the early' twenties, after the First Great War, see clearly that the first to suffer were farmers and farm workers, through a policy which aimed not merely at trying to restrict inflation and to keep control of the position but at actual deflation.
A Dorset dairy farmer says:
The Review, besides being unfair to the farmers, falls short of the spirit of the 1947 Act.
With that statement I most heartily agree. He continues:
Instead of giving us long-term confidence it gives us an annual attack of the jitters.
Then, quoting from his own figures, he says that, with costs of many milk products up by a 1¼d. a gallon, they are given ½d. a gallon extra, which means
a reduction of ¾d. a gallon in profitability, so that it would not now be possible to expand on the basis for which they had hoped. And with such an important representative of Devonshire on the Front Bench as the Government Chief Whip, I must not leave out the comment of a Devon farmer who says that
This is another nail in the coffin of the small farmer.
I hope that when the Government Chief Whip goes down to his county he will be able to explain that he is not going to he buried yet. Perhaps if he is able to tell of some little change of policy when he gets there, that might help him. If one turns to the paper which, in the old days, was so closely associated in our minds with the Prime Minister, the Yorkshire Post, one finds that that journal expresses regret that this situation should have arisen at the very time when it is so desirable to obtain the greatest possible measure of co-operation from this industry in dealing with the general economic situation.
But perhaps one of the most striking criticisms of the award comes from the Chairman of the Milk Marketing Board. This is certain: whatever the conditions were when the Milk Marketing Board was first introduced, the country as a whole now recognises the services which this organisation has rendered to the nation. The country recognised what the Board did in the war when it was not acting entirely for itself but as a highly efficient machine through which the Government exercised their control. Now the Board are engaged in post-war activities for still further improving not merely the returns but the general standard of efficiency of the constituent members of this great industry. Note the outspoken statement of the Chairman of the Board—it seems to me to be pretty conclusive evidence. This is the comment which is picked out in the headline of the report:
This Price Review is unfair to dairy farmers.
That is the view of the Chairman of the Milk Marketing Board. He says:
So far as milk producers are concerned. I have no hesitation in saying that they have not been fairly treated. It is a repetition of what has been going on for several years and I feel that the time has come to speak plainly and tell the Government that we art far from satisfied.
He goes on to point out that the costs of the dairy farmers, as ascertained through the Government statistics, have increased by about 9d. a gallon, and the total award in the Price Review for milk producers in this six years in which these increased costs have been incurred has been 6½d. a gallon.
§ Up to now people in the milk industry, like those in other branches of the farming industry, have been required to absorb increasing costs by increased efficiency. The Parliamentary Secretary will correct me if I am wrong when I say that in the whole of the period covered by the Price Guarantee Reviews the industry has had to absorb by increased efficiency something well over £100 million—some put the figure as high as £112 million. That amount has been absorbed in the face of these rising costs and general difficulties. It is just as well to take note of the point made by Mr. Peacock, the Chairman of the Milk Marketing Board, that whereas farmers' incomes as a whole are not increasing, the value of the incomes of the individual farmers, like those of everyone else who has to handle the pound in this country, has fallen very substantially until it is now only a little more than two-thirds of what it was in 1950. In these circumstances, it seems to us that people in the milk-producing industry ought to be fairly treated.
§ I consider it essential that we should have some specific pieces of information from the Government to-day. First of all, in view of the fact that I, perhaps, suffer from some lack of perception, compared with those in the Ministry who are daily engaged in running through long drafts and specific figures, I would ask whether the Government could kindly explain to the poor farmer, the sort of farmer I meet in the local beef market on Saturday, exactly how this new form of guarantee for the beef producer is going to work. The Government have removed the individual guarantee to the producer, and, as was pointed out in one place by an auctioneer, no longer shall we hear the cry: "It is all right; do not bother—the Ministry make it up." It is just as well, of course, that a cry of that sort should not be currently raised. But when one comes to ask farmers who are beef producers (I do not happen to be one), 968 "What are you going to do about it?", they all give the same answer. They say: "We have to face a risk we have never had to face before, and we do not know how we are going to get on."
§ It is not altogether clear to me, but, studying the White Paper to the best of my ability, I gather that the Government, in some way, working on fifty-two weeks a year as a basic average, will make monthly adjustments, according to marketing returns on the first three days of the week. So it would seem that men who wish to take their cattle for sale to the market where they usually sell them will very often (quite without notice, except three days in advance, of what is going on at the other markets) not know what is going to happen to their stock when it gets there. I think it is fundamental that the Parliamentary Secretary should be able to tell the House exactly on what basis the Ministry have worked this matter, and how they are going to secure, at the very time when it is so much to our interest that this branch of agricultural production should be stimulated and speeded up, that in every one of these transactions relating to the sale of cattle the seller will not be worse off than he is already. I can assure the Government that, from my conversations with these farmers, it is clear to me that the farmers have no confidence in them at all. It is just as well, if the aims of the Ministry's policy are to be achieved, that what the Government want to do should be made plain.
§ There is a further matter. One recognises that there may be some stimulus in the emphasis laid on the production of barley and oats; but it is a very small emphasis that is laid on the production of barley and oats in order to try to reduce imports of feeding-stuffs. The general comment which is made in my neighbourhood, when I speak about this matter to farmers, is: "We do not sell oats on the market, and we do not notice any change. We do not get any payment on oats." The Parliamentary Secretary seems surprised. I suggest to him that he finds out when his Department last paid an acreage payment to producers of oats to be used by themselves on the farm. I think he will find the answer rather surprising. I do not think there has been any such payment in respect of oats in this connection. There has been a small payment on barley; but not really 969 so much as would make it a stimulating factor in the changeover from one to another—unless the Parliamentary Secretary thinks that knocking 1s. 6d. off the wheat payment may turn some wheat growers into growers of barley and oats.
§ I want to put some particularly pertinent questions to the Minister and would ask him to answer them. I did not think it necessary to give the noble Earl notice because, from his speech last Friday, obviously he is "cribbed" up to the tips of his fingers on the general idea that lies behind Government policy. First, do the Government want a reduction in the volume of the production of milk? Secondly, do they want a reduction in the volume of the production of wheat? Thirdly, do they want a reduction in the volume of the production of eggs? Incidentally, everybody pokes fun at the poultry farmers but, so far as I can understand the figures, they have raised their production of eggs from less than 50 per cent, of the consumption of the country before the war to more than 90 per cent. of what the country uses now. They are entitled to a good deal of thanks and appreciation for such an achievement as that. What do the Government want? Do they want the poultry farmers to go increasing production, or are they to mark time? Let us have an answer.
§ In regard to pigs, some questions are being asked. It is not so long ago that we listened to the representative of the Government on the Front Bench appealing for an increase of one million in the number of pigs. When we got them, this Government of free enterprise—"Let every man fend for himself, so far as possible"—had nothing to do or say about how to absorb the extra million pigs that had been faithfully produced by the farmers. Are the farmers to make a reduction of pigs this time? How many pigs do you want them to produce? Do you want to give the farmers a chance to do the right thing? Why do you not tell them? Let us know to-day: do you want a reduction in the volume of the production of pigs or do you not? I think that is a fair question to ask.
§ I have spoken rather longer than I intended, but before I sit down I wish to touch on two other points. One appreciates the general economic position in this country and the need, the sore need, in the interests of all classes in the com- 970 munity, to avoid inflation. There mast be a reasonably steady recovery in our gold and dollar reserves position if we are to remain the banker for the sterling area—that is vital to the condition and prosperity of all classes of the community. But here is a cutting back in the hopes and desires of the farmers for more production which would be likely to assist in that problem. The last time I addressed your Lordships on the agricultural position I said that farmers played a most important part in the prosperity of the engineering and other productive industries. They spend about £600 million a year on machinery and materials. However much it may be said that that is part of the home market, in fact the exporters of agricultural machinery and other farm requirements would never have been able so to reduce their overhead costs on export commodities had it not been for the volume of farmers' purchases. That is a fact. Six hundred million pounds—it could be a great deal more.
§ When we take the general position of the import problem we have to find how to get imports down to something like equity with exports, or at least, after allowing for invisible exports, to bridge the trade gap with actual physical commodities. Is not the position still that we must have such a long-term policy for the farmer that he can give us a volume of goods for consumption in this country that will save us from importing large quantities of foodstuffs? It is clear from the returns that the increased volume of agricultural produce since before the war is saving us at present-day prices £400 million worth of food imports; if we were back on the old basis of 1939 agricultural production, we should now be having to pay that money for imports. As I have said before, if we gave the proper incentives the farmers of this country could raise that figure of £400 million by another £100 million without much trouble. But I notice a change in the attitude of the Government—and the farmers notice it. That is what made the man I quoted say that it is not in accordance with the policy of the 1947 Act.
Down in my part of the country the Parliamentary Secretary has become front page news, and when Parliamentary Secretaries, speaking on Government
policy, occupy the front pages it is because the papers in the farming areas are taking full notice and want their farmers to know what is going on. I have read with great care this probably abridged report. One has always to be fair to Ministers because we know how often a newspaper report is not complete, and I must allow him to fill in any gaps. What the noble Earl says is that we must look to the agricultural industry to go on reducing the need for support. At the annual meeting of the Northumberland County Land Owners Association, the noble Earl said (and this is what I want to stress) that the Government had concluded that national requirements could best be met by intensifying the policy of decontrol which they had started to develop four years ago. He said:
Decontrol has not in any way detracted from the industry's general prosperity or from the service it gives to its customers.
Is the noble Earl guilty? The noble Earl accepts those words. Well, that is a fine thing to say at this stage! According to the Parliamentary Secretary, the cost is now too high to the country for those subsidies which he and his Minister, and his Minister's predecessors, have constantly justified as being the reasonable set-off to the farmers for their lack of the fiscal protection that all these other profitable industries get. They have abandoned that, according to this statement. Yes, the noble Earl has. I know you want to do it slowly and steadily, as you go along; but in principle you have abandoned it.
You say you cannot afford it. I tell you that you cannot afford to do without a prosperous agriculture. That is the real position of the country. In the near future you will have to face—and this is as certain as I stand at this Box—a demand from the farmworkers for proper wages, a demand for what, in the opinion of many of us, is overdue. The farm-workers have not been met fully this last time. The appointed members of the Wages Board on this occasion were acting in accordance with what they no doubt thought was the Government policy: "If you want to rest the prices, let us have a rest on wages." The position, in my view, is most serious. I shall leave it to my noble friend Lord Listowel to deal in more detail with the position of the
workers and the general drift from the land. That drift is going on steadily. One can never quote too often Oliver Goldsmith in The Deserted Village:
III fares the land, to hastening ills a prey, Where wealth accumulates, and men decay.
§ 3.20 p.m.
§ VISCOUNT BLEDISLOE
My Lords, I cannot help admiring the extreme vigour with which the noble Viscount, Lord Alexander of Hillsborough, has presented his Motion in your Lordships' House this afternoon. In view of possible economic troubles that the industry may have to face in the years to come, it is to me, at any rate, as an old farmer, a source of comfort to realise that so important a Member of your Lordships' House as the Leader of the Opposition is such an ardent champion of agriculture and the agricultural industry of this country, and will be prepared to stand up for the reasonable claims of our greatest and most vital industry.
I realise that in certain things I shall say this afternoon I shall not receive the entire and enthusiastic support of every Member of your Lordships' House. When the noble Viscount emphasises the lack of confidence that is evinced by the agricultural community in this country at the present time, it is, in my opinion, not due so much, or mainly, to this particular Review of agricultural prices as to the fact that year after year the whole of the economic position of the industry comes to be overhauled by the Government, in consultation with the Farmers' Union. The perpetual differences in the economic policy of the Government for the time being in themselves create an unstable atmosphere in the industry in which we are all, I hope, predominantly interested. Why must there be an Annual Review of price levels? Surely, there would be a greater feeling of security and confidence among the agricultural community if these Reviews took place at longer intervals. I should prefer them to take place every five years; or, if that is impossible, every three years—always, I suppose, taking into account such variations in the minimum agricultural workers' wage as may have some influence upon the prices it may be desirable for the Government to fix.
I want to say this, because I feel strongly about it. I absolutely deplore 973 the explosive, almost revolutionary, language in regard to this particular scale of agricultural prices that has been used by many responsible people, some of them chairmen of local branches of the National Farmers' Union. In the first place, I regard it as inconsistent with the dignity and prestige of this great industry. When I look back upon the past history of the agricultural industry of this country, and remember such leaders of progressive opinion and practice as old Jethro Tull, "Turnip" Townshend, Coke of Norfolk, Sir John Bennet Lawes, and others, I am sure they would deprecate such excessive verbiage and revolutionary language by responsible farmers in expressing criticisms of such variations as have been made in this Price Review.
The noble Viscount opposite has quoted certain relatively moderate statements, though no doubt somewhat vigorously expressed; but there are other statements that have found their way into the agricultural and popular Press, such as:We propose, if this is Government policy, to pour our milk down the drains";We strongly advocate 'go slow' tactics in agricultural production";and,We advocate discontinuance of service on the part of farmers on county agricultural committees.That is language which I deplore as unworthy of the leaders of this great industry, and certainly language which the pioneers of old would have strongly deprecated.
I notice that the noble Viscount, although proving himself to be a vigorous champion of the agricultural industry, has made no reference whatever to the particular movement, at any rate in industrial and commercial circles, with which he has been mainly associaed—namely, co-operation. This afternoon I am going to venture to say that if only, when we talk about small-scale husbandry, we could emphasise a great deal more the enormous importance of agricultural cooperation—such as is found in every other civilised country where small farmers have to make a living, and which, after all, in their cases is the best substitute for adequate capital—more than half the troubles afflicting the small husbandman in this country would either disappear or be largely solved. I should 974 like to hear far more emphasis placed upon this matter of agricultural cooperation than, as a rule, is put upon it in this highly individualistic country; and there is no man more capable of emphasising its importance than the noble Viscount who has moved this Motion.
The larger farmers in this country cannot be accused of making a poor living out of their calling to-day. On the whole, they are doing fairly well. The best farmers in Britain are among the best farmers in the world. If I have a criticism at all to make about the farmers of Great Britain, it is that there is still plenty of scope for improvement by the average farmer, just as there is plenty of scope for improvement in the average livestock of this country. But turning to the small husbandman, I should like seriously to suggest to your Lordships that to too great an extent he apes the larger farmer; and Governments of different complexions appear to support him in that process of economic imitation. In my humble judgment, there is far more scope for intensive cultivation, intensive land management in this country, than obtains here to-day, including market gardening, pigs and poultry if you like; the raising of store cattle, particularly in hilly areas; and the more it is possible to associate part-time employment with forestry operations, as happens in so many cases, the better. But I venture to say that if the small husbandman is going to rely for his economic salvation—and often without the invaluable factor of co-operative methods—upon the practices of the larger farmer in this country, and if the Government are prepared to support him, then it will be a poor look-out for him in years to come.
I live in an area where there is enormous scope for the development of market gardening and other forms of intensive husbandry at a good margin of profit. But when we find the small farmer depending far his living very largely upon dairy cattle producing no more than, say, 500 to 530 gallons of milk, and very often purchasing overseas feeding-stuffs in order to produce his milk, and being provided with the subsidy the Government provides, all I can say is that it is a poor bargain for the taxpayers of this country. Bearing in mind that the average production of what I 975 may call a well-behaved cow or heifer in the other civilised countries of the world is 700 gallons, and that we are subsidising the small dairy farmer out of the public purse when he keeps cattle which can yield no more than 500 or 520 gallons a year, I say that it is bad for the small farmer and very bad for the taxpayers of this country. I give that as an instance of what I have in mind.
Let me take as my contrast that remarkable little country, Denmark. The farmers of Denmark are not Government-controlled: they are self-controlled, or, as I prefer to call it, mutually controlled. They control themselves and each other without any pressure on the part of the Government; and they succeed through sheer hard work, enterprise and cooperation—and in Denmark, after all, co-operation has been reduced to a fine art. Can we not learn something from a country like that? There is a good old Latin phrase fas est et ab hoste doceri, which I prefer to interpret as, "It is right and proper to take lessons even from a competitor." I am not quite sure whether the literal meaning of "hostis" might be included, because I believe there is a great deal we can learn from our potential enemy, Russia, in regard to scientific methods and in regard to economic co-operation.
I do not wish to stress this matter unduly, but I do want most earnestly—because I am sure it is going to come in this country—to urge the small husbandman in this country (I am not talking about the family farmer, who depends for his living on the activities of himself and his family, but about the man who has to employ workers, many of whom are now financially far better off than himself, and with far fewer responsibilities) that the methods that are adopted by so many of the smaller husbandmen in other civilised countries are worthy of adoption here and will come to be adopted here in due course; but always backed, and emphatically backed, by economic cooperation. For my part, I strongly advocate that the Government should give no support out of the public purse to anyone engaged in small-scale husbandry, unless he belongs to a properly administered, well-conducted, co-operative society, such as obtains in every other civilised country in the world where small farmers make a good living—even, if I may say so, with 976 full knowledge of conditions, in New Zealand, which I know perhaps at least as well as I know this country and where, without co-operation, in the North Island it would be quite impossible for the smaller man (and most of them are small men) to make a reasonable living.
I have, unfortunately, to catch a train to my somewhat distant home this afternoon, but I should like to add this comment. I am an old man, in my eighty-ninth year, and I have spent my life both vocationally and in a Parliamentary sense predominantly in the pursuit in one way or another of the greatest and most vital industry of this country. I cannot keep silent on an occasion like this without urging the present Government and future Governments to consider much more carefully, so far as the small husbandman is concerned, the methods adopted in other countries and whether the lot of these people cannot be made far more tolerable and profitable than it is under existing conditions here to-day.
§ 3.40 p.m.
§ LORD WALPOLE
My Lords, since this is the first occasion upon which I have had the honour to address your Lordships, I trust that you will extend to me your usual patience and long-suffering which is normally conceded on such an occasion and will forgive my shortcomings, which will no doubt make themselves more apparent as my speech proceeds. As I am myself a farmer it is perhaps fitting that I should launch forth on this subject, and I hope that I may be able to make some slight contribution to this debate this afternoon.
The Motion before us draws attention, amongst other things, to the conditions in the agricultural industry. I think that perhaps this may be summed up in five words—"as usual, in the doldrums". For some time now I have been of the opinion that the agricultural industry would operate on a far more prosperous footing if it could be completely independent of the political field and treated like other industries with protective tariffs and the operation of free markets. However, I do not see any immediate prospect of the Government giving up this political "baby", for they have a chosen method of pegging food prices which otherwise must be very considerably increased. It is closely bound up with our economic situation generally but is, I believe, to the detriment of the industry 977 and is apt to cause very serious disagreements and misunderstandings between the agricultural community and those who live in the towns and cities.
If agriculture is to be a prosperous industry, which I am sure is the hope and desire of the whole country, then I earnestly implore the Government to change their methods and embark upon a really long-term policy. Why should a farmer bear the continual anxiety of wondering what is going to happen at the next Price Review and where the axe is going to fall? Agriculture needs long-term planning. One cannot just press a button and turn from the production of one article to the production of another. In this connection, may I put forward the suggestion that, in framing this long-term policy, the Government should invite the co-operation of all the political Parties, so that if at any time there should be a change of Government it will not automatically follow that there will be a change of policy as well. I can see no reason why this course could not be adopted and the agricultural industry put on the firm, long-term basis which it so richly deserves.
I should now like to turn for a moment to the Price Review. To my mind, this is most disappointing and, as the noble Viscount who opened this debate said, it is a little disturbing that, for the first time in history, agreement could not he reached between the Government and the National Farmers' Union. If the Government are going to continue their control of agriculture, then they must reimburse the farmer adequately for the rise in costs and wages. We cannot pass on that increase as other industries do. As I see it, the Government are trying to have the best of both worlds. We are told to increase our efficiency and at the same time have our incomes cut by inadequate recoupment—to say nothing of the credit squeeze and its effect on capital improvements, which is bound to have a crippling effect on the industry.
With regard to milk, which has been mentioned here this afternoon, I too am not quite clear in my own mind whether the Government want us to go on producing milk or not. We were given every encouragement to do so a few years ago, but it appears that the Government have now changed their minds and want us to concentrate on beef. Will the Minister, I 978 wonder, again change his mind next February and ask us to concentrate on some other commodity? To offset these rising costs of milk production, we are offered a halfpenny a gallon which, as has already been stated, is totally inadequate and is neither one thing nor the other. It neither covers the increased cost which the industry has to bear nor gives any incentive. Milk production is a specialised subject and a long-term business. Some people are sometimes apt to forget that it is a seven-days-a-week job; and in these days men are not easily attracted to working seven days a week. I have touched only on the fringe of this large and complex subject. There are many and various aspects which will no doubt be brought up this afternoon, but I feel that if Her Majesty's Government could produce a really long-term policy it would give much-needed encouragement to the farmers of this country and would stimulate an industry which is suffering from such a feeling of frustration and insecurity.
§ 3.48 p.m.
§ THE EARL OF HALIFAX
My Lords, it has been a happy coincidence of juxtaposition that your Lordships have had an opportunity this afternoon of listening, in succession, to one of the oldest of our Members, the noble Viscount, Lord Bledisloe, and then to one whom this House has not had the pleasure of hearing before. I have no doubt that the noble Lord who has just sat down, in the admirable speech to which we have listened, has felt himself stimulated by the secret of perpetual youth of which the noble Viscount, Lord Bledisloe, is so eloquent a master, judging by the speech which he made to us a few minutes ago. Your Lordships will be happy at having had the opportunity of hearing both of them and will hope that we may often have a similar opportunity in the future.
In the few remarks that I wish to make I shall, perforce, as I reach them, deal with one or two of the points which my noble friend who spoke last made with great force, but I should like to approach them from a somewhat different angle. I was not able to be in your Lordships' House on what I suppose was the last occasion when the noble Viscount opposite introduced a debate on this matter of agriculture. I had the opportunity of reading what passed, but I was not my- 979 self present. I remember an earlier debate, also introduced, I think, by the noble Viscount, in which he laid considerable stress upon the lack of confidence which he then alleged existed in the farming community. At that time I ventured to differ from him and to express the feeling that that assertion of lack of confidence was exaggerated and did not really reflect any substantial condition in the mind of the ordinary farmer. To-day I would take a different view and would go a long way with the noble Viscount who introduced the debate and with others who have spoken in feeling that, rightly or wrongly—I am not arguing that for the moment—there is to-day a considerable lack of confidence in the agricultural mind, due to causes with which we are all sufficiently familiar, but which are bound to exercise a damaging effect upon agricultural production unless Her Majesty's Government can put them right.
In anything that I say I would ask my noble friend who speaks for agriculture in this House not to judge me to be critical in the sense of not appreciating how extreme are the difficulties with which Her Majesty's Government have to deal. I do not think anybody ought to begin to have an opinion about farming or agriculture to-day unless he realises the extreme difficulties in which those who have responsibility for dealing with the industry are placed. The other point which I think it is important to remember is that although no doubt there are cases to-day of farmers who are still doing extremely well—large and small farmers—I do not think it is an answer to a debate of this sort to produce this or that instance of a farmer who is doing well because it is at the broad average of the industry that one has to look. I do not believe it would be true to say that the industry as a whole was either so prosperous or so confident of its prosperity as to be able to put its best into production in present conditions.
My Lords, it is quite true, as the noble Viscount said, that farmers are most dissatisfied with the Price Review. The thinking farmers that I have met are inclined to feel that the Price Review and the Government's attitude to it have been dictated by consideration of world prices as they are to-day rather than by the 980 words laid down in the 1947 Act in regard to proper remuneration, adequate return and so on. As the noble Viscount and others have pointed out, the farmers' ground for dissatisfaction goes back to the several Price Reviews of the last few years in each of which farmers think that they have "dropped" so many millions of money—I use the colloquial short phrase—in spite of the rising cost of living and of their £ not being worth any more than anybody else's £. They have been told that they have to meet and absorb all that by increased efficiency, which presumably means the use of more technical methods and more and more capital equipment. No doubt there is room for more technical methods, but it is not so easy to expand capital equipment on a shrinking income and, as the noble Lord who spoke last reminded us, with the restriction of credit. Therefore, the farmer is left with a feeling that he is being rather let down and he does not quite know where he stands.
It sounds a hard thing to say, but I do not think that he would have felt so aggrieved, as many farmers do feel to-day, if he had been told definitely by the Government, flat out from the start: "We do not think that home-grown food is quite as important as we did in the war. For various reasons we want to import more. We have got to free the markets, and therefore all farmers had better get it into their minds that farming is not going to be quite so prosperous as it has been in the last few years." But, of course, that was not what the Government did say. The Government began by asking the farmer to produce more, with special emphasis on meat. Then followed, fairly soon, what I may term, for short, the great pig muddle. That did not do the Government any good—it may not have been their fault, but it certainly did them no good. Now has come the news and the knowledge of greatly increased imports from the Argentine, to which again the noble Viscount drew attention, all of which leads the thinking farmer to fear that beef, on which great emphasis was laid, is going to have a difficult time.
That is the background against which the farmer reads that his Union and the Government have for the first time failed to agree. In my judgment, the noble Lord who spoke last is perfectly right in 981 saying that that in itself is a most important event in agricultural history—that they should have failed to agree. I do not develop the point, but I think it is quite true that the small man feels that what has happened in regard to milk, eggs and pigs together add up to a pretty raw deal for him. But the thing that upset farmers more than anything else was, I would suppose, the abolition of the individual guarantee. I shall be interested to hear what my noble friend may say about that. If he can explain to me, in the short limits of a speech from the Front Bench, how the new guarantee works, I shall respect him even more than I do to-day. I, and I imagine most of your Lordships who are interested, have sat down and been over the thing time and again. It is most difficult to understand how it is going to work.
It is all very well to say, as is true, that it must work, and that the price will be adjusted on the average of the markets for the first three days. But the ordinary farmer who has a few fat cattle to sell does not know how to begin doing that; all he can do is to make up his mind roughly what price he thinks he ought to get, send his cattle to the market, and, if they do not get somewhere near that price, bring them back again. That is what farmers are doing. A week or two ago, when I happened to meet two quite large farmers in my part of the world, they said substantially the same thing. At this time of the year they had been in the habit of buying store cattle to feed off their grass, and they had always known fairly well what they were going to get for the weight of cattle when they sold them. Now they do not know. They cannot make a rough guess, and therefore they have both said the same thing—namely, "It is too much of a venture or gamble and we are doubtful whether we shall do it." They are not unique men; they are just farming men, and if they feel like that, others are going to feel the same. What effect is that going to have on a person like any one of your Lordships who may breed to sell store cattle? We are going to look down our noses and wonder whether it is a good thing for us to put into breeding as much money as we thought right before.
That would do the very thing that the Government do not want to do—namely, introduce uncertainty into that field of 982 agricultural production, meat, where they wanted to create the greatest degree of certainty. I think that is unfortunate. Beef production is a very long business. Compare the agricultural job with the ordinary work of a manufacturer. When a manufacturer begins to manufacture something he has a fairly good idea of what it is going to sell for when he has made it. The farmer is manufacturing beef, and when he starts producing his cows he ought to have a fairly good idea of what the fat beast will sell for in three years' time. That is asking a lot, of course, but he does not even get near it to-day, because, as I see it, it is a pure gamble until he knows what is the Government's mind on the main questions.
That brings me to the last thing I want to say. I was delighted to hear the noble Lord who spoke last, following the line taken by the noble Viscount, lay the emphasis he did on the importance and desirability for Her Majesty's Government, if they can do so, to declare their long-term intentions. I think that in the Price Review there were no words more calculated to relieve discouragement than the suggestion that the Government were willing to discuss long-term policy. What exactly do we mean by that phrase when we use it? I certainly would suppose that it was obviously out of the question for any Government to offer what might be called a rigid or inflexible price structure. That cannot be done. Sit long-term policy can stand for something different, and I should have thought that, by agreement between the parties, which should not be too difficult to achieve, Her Majesty's Government might be able to say: "For the next ten years we want to produce in this country X-million tons of meat, X-million gallons of milk" and so on, having that as an agreed policy between the parties, with a guarantee for those stated quantities and a price based on production costs with a reasonable profit margin.
It is obvious that if something of that kind were said, imports would have to be so arranged as to dovetail into that agricultural policy. I recognise that, with the freeing of markets, Government control would obviously be more difficult, but I am also convinced that some such measure of control will be essential if any long-term policy worthy of the name (and 983 that is the only thing which will achieve what agriculture needs) is to be workable. There is no need, and I am not sure that it would not be out of place in this debate, to develop how deeply all the argument we are having this afternoon cuts into the whole economics of the agricultural industry. Over and over again in this House, and again in the speech which has been quoted this afternoon, we have reminded ourselves of how difficult it is for one of the partners in the agricultural industry to maintain on farms capital equipment, and so on, unless he can get a reasonable reward and return on his capital. The only way he can get that is by increased rents from the farmer, and many have secured those increased rents; but if the foundation of security is to be withdrawn from the farmer the whole structure falls away as one, like a pack of cards. That is why it is of such essential importance for Her Majesty's Government to apply their best minds and judgment, in consultation with those most closely concerned, to the devising of a real, long-term policy that will give security to those who, by their enterprise and efficiency, may be judged to deserve it.
§ 4.5 p.m.
§ THE MARQUESS OF LANSDOWNE
My Lords, I ask your Lordships' indulgence for venturing to intervene, in a maiden speech, in a debate upon a subject so complex and difficult. I notice that many of the experts in your Lordships' House on the subject of agriculture are apparently not to take part in this debate to-day. That I should be speaking when they are to remain silent is certainly the measure of my inexperience. I have studied the Government's Annual Review for 1956 with careful attention and have read with great interest the reactions to it as interpreted by the farmers' unions. In the few observations which, with your Lordships' indulgence, I propose to make I should perhaps make it clear that I shall be speaking primarily as a domiciled Scotsman, although I have agricultural interests in England also.
As your Lordships are well aware, the 1956 Price Review has not met with a favourable reception from the spokesmen of the National Farmers' Union for Scotland. The spirited and courageously blunt defence of Government policy made 984 by my honourable friend the Under-Secretary of State for Scotland, speaking in Glasgow last month, was attacked by a battery of questions and criticisms by N.F.U. leaders. I must confess that I was disappointed that the questions were not more imaginative and the criticisms more constructive. I think that, basically, the farmers are simply fighting for a reasonable degree of stability, and they are not really attracted by the prospect of the industry being allowed to become more competitive and less dependent upon the Exchequer.
I find it impossible not to have sympathy with the farmers' anxiety and apparent lack of courage. As your Lordships know full well, there are many active farmers alive to-day who remember the lean years preceding the 1914 war, who remember clearly the Government aid given to them during that war, who remember the clamour for cheap food—"Your bread will cost you more" and other such phrases during the slump years. They remember their vital rôle and rich rewards in the Second World War and they look back with keen nostalgia to the happy days of peace-time cosseting. Now, in the words of a member of the Perth branch of the National Farmers' Union (my own home market town), many of them seriously wonderwhether the Government will regard overproduction at home as being the precise moment at which cheaper commodities from overseas become available.Your Lordships know that these fears are groundless, but they are deep, and it will take more to uproot them than earnest repetitions of Government spokesmen that it is the determined policy of Her Majesty's Government that so long as Britain prospers, so long shall farming flourish.
No part of this Review has been met with more enthusiasm than the undertaking embodied in its last paragraph—the undertaking to consider whether any practicable methods can be found of providing longer-term assurances than obtain under the present system. It is my belief that only when such methods have been found and clearly stated will British agriculture be able to reach maximum efficiency, for only then will careful, forward planning be possible. Now, alas! there is, I believe, general agreement that there are 985 the greatest difficulties in the way of finding a long-term policy for agriculture that can be made sufficiently adaptable to meet the changes of our economic and strategic position in the world. None the less, I am convinced that, given good will all round, such methods can be found; and I do most earnestly beg the Government to give this matter their determined consideration.
My own personal experience of active farming has been mainly in the dairying business—and that only since the war; but I have learnt from some bitter experiences what a highly complicated and chancy business it is. It takes years to build up a first-class herd, for it takes years for mistakes or successes in breeding policy to become apparent. A bull is proven only after six long, anxious years. Imagine the complications if it took as long to be able to assess the qualities of a high business executive or (with great respect) a Cabinet Minister! No, my Lords, despite the high state of the mechanisation of the industry, despite our outrageous successes in interfering with the normal processes of nature—poor old hens cooped up in batteries, not even knowing whether it is night or clay; cows deprived of their proper mates, and serving only as incubators—despite such progress, the operation of farming continues to be a slow and long-term business, and only through long-term planning can it be successfully carried out.
It appears, from a study of the Review, that a certain degree of the emphasis on milk production has been switched to beef. It is, of course, understood that under the Agriculture Act as it stands the Government must fix guarantees at such a level as will encourage products in short supply and discourage the increased production of those of which there is a sufficiency. In a free economy, the ordinary laws of supply and demand would gradually achieve this, bat in a controlled economy with guaranteed prices (and British agriculture cannot stand without guaranteed prices) the effect of the manipulation of the price mechanism tends to be harsh and sudden. So we now have farmers who were lured into the dairying business by the attraction of high prices and the monthly milk cheque (it may well be that some of them should never have gone into the dairying business at all) suddenly feeling 986 the cold breeze of unprofitability. They have sunk capital in dairying equipment, and they have spent money in bringing their buildings up to the standards very properly required of them. My Lords, if switch to beef they must, they will not thank the Government for the profits they were able to make out of milk; they will only blame them for their loss in capital equipment. I do not pretend that I can see the solution to this difficulty, but I cannot pretend to myself either that the present system may not cause hardship.
I welcome the emphasis that is being placed upon home-grown feeding-stuffs, and particularly upon grass. The introduction of grants up to a total of £200,000 for the construction of silos will be a great help to the industry. I only wish that my noble friend the noble Earl who is to reply to this debate could give me an assurance that this grant will be retrospective, for only three years ago I installed at one of my own dairies, at a cost of £600, three permanent silos. I have not regretted a penny of the money spent, but I should naturally feel a little jealous of the Government aid for the hindermost. Your Lordships will not need to be reminded that in premyxomatosis days it was the soft underbelly of the rabbit that ran away with, or fouled, much of our corn crops and our precious grazing. I do most sincerely hope that, as an earnest of their will to help farmers carry out their exhortations, the Government will take an ear].y opportunity of giving effect to my noble friend Lord Merthyr's Rabbits Bill.
Finally—and I apologise for having spoken at such length—may I say a few words about rents? Already the noble Earl who spoke before me has touched on this subject. The Under-Secretary of State for Scotland, at the meeting in Glasgow to which I have already alluded, called attention to the decrease in investment in the improvement of land and buildings. He pointed out that this is principally due to the fact that the farm rents received by landlords have not increased sufficiently to enable landlords to be able to carry out their responsibilities. From figures which I think are reliable, I find that the total rise in rents in Scotland since 1940 is only just over 15½ per cent., a small figure indeed when one considers that increased build- 987 ing costs must be about 400 per cent. over the 1939 figure. Farming under the landlord and tenant system is a partnership, and unless the landlord, as well as the tenant, receives a fair return on his investment, that partnership will break down.
§ 4.20 p.m.
§ LORD ARCHIBALD
My Lords, it again falls to be my very pleasant duty in an agricultural debate to congratulate a noble Lord on an outstanding maiden speech. I am sure that the charming, witty and extremely well-informed speech to which we have just listened has been heard with pleasure in all parts of the House, and we shall all look forward to hearing the noble Lord speak many times in the future on this and other subjects.
I am in the not uncommon position, when it comes to about the middle of a debate, of finding that some of my best points have already been made—more effectively, of course, than I could make them—and there are a number of holes in my speech which I shall have to try to jump over as best I may. I do not want, if I can avoid it, to go over a lot of the ground that has already been covered, but I think that we must go back to the point made by my noble leader in his vigorous and very thorough coverage of the ground: that this year's under-recoupment of £12 million is only part of a process that has been going on for years, and that under-recoupment over the last eight years is estimated conservatively to be of the order of £100 million. I am not going to suggest that that would necessarily have been a bad thing in all circumstances. If, from increased efficiency, the industry had been able to absorb that £100 million of under-recouped extra costs without farm income falling, then it would have been something of which the industry might have been proud and the country generally would have received the economic advantage. But if we look at the graph of total income in this country over that period, we see that it is a steadily rising line, while the graph of farm income goes up, at the beginning of the period, then flattens off, and in the last few years has been going down. In other words, the under-recoupment of £100 million has been more than the industry could properly carry.
988 We have to look at the fall in farm income and see what its effect is on the different parts of farming economy in general. I am not concerned with those to whom some reference has been made this afternoon, the big and prosperous farmers, because generally they will be in the position to make such changes in policy as will keep their heads above water. Reference has been made to the fact that this Price Review bears with particular hardship on the small man. I should like to submit to your Lordships two sets of figures which have recently been issued and which I think illustrate the point. The first set of figures is from the Agricultural Departments and shows that the net income in 1954–55 of the average 30-acre dairy holding was estimated at £530, before allowing anything for the labour of the farmer and his wife—that is to say, the return on capital and the labour of the farmer and his wife was less than the average earnings of the industrial worker. I think that it is on that type of small dairy holding that the under-recoupment in this Review in regard to milk will fall most severely.
The other set of figures, covering a rather different range, was produced by the economists of the Farmers' Union. Although some might say that they are prejudiced parties, I do not think that their economists are likely to produce unreliable figures. Their sample accounts show that the net income of 318 mainly dairying holdings of under 50 acres averages only £7 a week, about 5s. more than the statutory minimum wage of the agricultural workers. In my opinion, these are the people who are particularly hit by this Price Review. That is the first effect, on the smallholders.
Then there is the important question of what is likely to be the effect on increased production in general, assuming that the Government still want that increase to 160 per cent. of which they spoke a year or two ago. Increased production on any side of farming means, first of all, increased expenditure, whether it be the question of using more fertilisers (in which case the fertilisers have to be paid for a long time before the returns come in from the crops) or a question of feeding a few more bullocks for three years to meet the Government's request for more beef, in which case the feeding-stuffs have to be bought during those three years. Whatever type of enhanced production 989 the farmer may aim at, it means finding more money out of a falling farm income and, as someone has already said, with the credit squeeze to contend with in addition.
Moreover, as everyone in farming knows, one of the most urgent needs of agriculture is the provision of either new or modernised buildings. Most of the farm buildings in this country to-day were built a hundred years or more ago and are hopelessly out-of-date. Improvisation after improvisation has taken place, but I would still say that unsuitable farm buildings are more wasteful of labour than any other single thing on the farm. While field work has been highly mechanised, farm buildings are still responsible for a vast amount of unnecessary, heavy, individual, manual labour. But where is the money to come from to provide improved or, better still, new farm buildings, if the fall in farm incomes which has been taking place over recent years is to be continued, and possibly accentuated as a result of the Government policy indicated in this White Paper?
Arising from the question of farm buildings, may I point out that the whole question of fixed investment in agriculture wants some consideration. If noble Lords will look at the Economic Survey for 1955, they will see an important table on page 8 which gives gross fixed investment for industry for the period from 1951 to 1955. The figures are all converted to 1948 prices, so that we do not have to be concerned about changes in the value of money: it is a strict comparison. We find that between 1951 and 1955 the total for all industries has gone up from £1,500 million to £2,000 million, an increase of about 33⅓ per cent., but for agriculture, forestry and fishing, the amount has gone down from £74 million, in 1951, to £72 million, in 1955, having been as low as £61 million in one of the years between. It is unfortunate that agriculture, forestry and fishing should be grouped together. I hope that in future years these figures can be given separately in the Economic Survey, because one cannot see exactly whether the fall is mainly in agriculture, in fishing or in forestry, and we must assume that it applies to all three industries that are grouped together. The outstanding point is that when the gross fixed investment of industry at a whole is increasing steadily, it should be 990 falling in that group. I cannot see how it could be otherwise, when farm income is falling in roughly the same period.
So far this afternoon little has been said on the details of the Price Review with regard to a subject on which I have bored your Lordships on more than one occasion—namely, pigs. I am not on this occasion going to make much of a point about the 6d. a score reduction in the price of pigs. The pig producers who have been able to survive the cuts in price of the last two years will no doubt also manage to survive this much smaller cut. However, I should like your Lordships to look at what has happened on pig prices over the past six years. In 1951 the price went up 5s. a score; in 1952 it went up 1s. 6d. a score, and in 1953 by 8d. a score—that is, up 7s. 2d. a score on three years. Then the tide turned. In 1954 there was a 3s. a score reduction; in 1955, a 2s. 6d. a score reduction; and in 1956, 6d. a score reduction—that is to say, a total reduction of 6s. a score. If one takes into account the fall in the value of the £ during the period, it will be seen that, so far as price is concerned, the pig producer is now back to where he started in 1951. I can only say that to call that a policy is somewhat absurd.
The main point I want to make about pigs, however, concerns paragraph 20 of the White Paper, which says:Moreover, in accordance with their policy of encouraging the production of carcases of the quality required by the market, the Government intend to introduce a more rigorous specification. A minimum carcase length measurement will be introduced with effect from 25th March, 1957, or at an earlier date, subject to six months' notice, and the other specifications may be modified, subject to six months' notice.I should like to ask the noble Earl who is to reply: what are the Government doing in order to help pig producers to get the higher quality of animal that is required to give this carcase that will satisfy the more rigorous specification? The answer may be:, "We are going to have progeny testing stations." Let me remind the House of the history of that matter. In the White Paper on the Price Review in 1954 the Government lint referred to these progeny testing stations and said:In order to assist producers in improving the quality of their stock … the Government are considering proposals for the introduction 991 of a Pig Recording Scheme and for the extension of the arrangements for progeny testing at present conducted by the National Pig Breeders' Association.That was in 1954. What happened? In the debate on that Price Review I made a plea for urgency in setting up these progeny testing stations, pointing out that there was really no need (to use the words of the White Paper) for consideration of the matter; that everything that could be known about the subject was known, and that what was wanted was a decision to go on and build them.
In our debate on agriculture in January, 1955, I again asked for speed. Fifteen months have past, and unless something has happened recently which I have overlooked, I think I am right in saying that not one station has yet been opened, although in January, 1955, the Parliamentary Secretary assured the House [OFFICIAL REPORT, VOl. 190, col. 789]:… we are also making good progress with the scheme for establishing five stations in Great Britain for the progeny testing of boars, at a capital cost of about £400,000.As I say, it is fifteen months since we were told that good progress was being made, but, so far as I know, we have not a single progeny testing station in operation yet. Before I continue, I should like to ask the noble Earl this question, in parenthesis. When these stations are finally built, who will own them? The capital cost is being financed by deduction of 1d. a score from the price paid to the pig producers, and that is to be continued until the new increased estimate of the capital cost has been recovered. Will the progeny testing stations then belong to the pig producers, whose 1d. a score has paid for them, or will they continue to belong to the Government?
Leaving that point aside, I venture to suggest that with such a dilatory approach to this all-important question of progeny testing stations, it is (to put it colloquially) "rather a nerve" on the part of the Government to talk about introducing "a more rigorous specification" at six months' notice. I think they have got their priorities wrong here; they have, in fact, put the cart before the horse. Here again, it is the small man who is going to suffer. The big breeder can have his own records of litter testing, 992 can do his own culling and so gradually work up to a better quality. But the small man, who is unable to do that, is at the mercy of the market; and at the moment, without progeny testing records available, he is in the position, to use the old phrase, of having to buy a pig in a poke.
I should like to ask the noble Earl two questions, both of which may be naïve. I can assure him that they are not loaded questions, but are quite simple ones. First of all, would he explain, in view of the decrease in the guaranteed price for wheat and the increase for coarse grains, how the balance of payments is going to be helped if we have to import more wheat instead of importing coarse grains? If, in fact, a farmer grows a ton less wheat and a ton more coarse grains, and we therefore import a ton more wheat and a ton less of coarse grains, how exactly will the balance of payments problem be helped? The second question, which is purely on a point of explanation, is this. In the White Paper there is a reference to the increased calf subsidy for steer calves, but unfortunately the wording appears to some of my farmer friends to be a little ambiguous. It says:In accordance with the policy of encouraging beef production, the rate of calf subsidy will be increased to £8 10s. 0d. in respect of steer calves born on or aftera certain date. I gather that some people read that to mean that the rate of subsidy will be increased, and will in future be confined to steer calves, while others read it as meaning that the rate will be increased in respect of steer calves but will remain at the former level so far as heifer calves are concerned. I think it will be agreed that the wording is a little ambiguous and may be read one way or the other, and an explanation on that would be most useful.
I have one final point in regard to what I would call, not long-term policy but long-term intentions. None of us would suggest that it is possible to guarantee farmers high prices for all time for everything they want to produce. A balance must be held between what is in the agricultural interest and what is in the national interest, although, broadly speaking, I do not think that anything which is good for agriculture will be bad for the national economy. But there must be a balance, and I think it should not be difficult to indicate the extent of increased 993 production which is desired from agriculture as long as we have a balance of payments problem—and we are likely to have that as far ahead as anyone can see. I would ask the Government to remember in office what they said during the passage of the Agriculture Act when they were in Opposition. It was best summed up by Sir Thomas Dugdale, who was then speaking from the Conservative Front Opposition Bench, and who subsequently became Minister of Agriculture. If I may paraphrase what he said, he asked the Labour Government to give an undertaking that, no matter what pressure there was in years to come upon our markets to absorb export surpluses from overseas countries, British agriculture would be adequately protected. That was the Conservative view at that time. Does it remain the view of Her Majesty's Government at the present time?
§ 4.42 p.m.
§ LORD AMHERST OF HACKNEY
My Lords, I am sure we are all grateful to the noble Viscount, Lord Alexander of Hillsborough, for introducing this most important subject. After all, in dealing with agriculture we are dealing with probably the greatest of our basic industries and an industry upon whose prosperity the whole countryside depends. But, unfortunately, it is, I think, as so many of your Lordships have said to-day, the only industry which annually is put under a microscope and examined, which has all its faults and virtues pointed out to it, and for which eventually a policy is produced for the next year. I feel that that has the most unsettling effect on the industry. Therefore I welcome the paragraph in the Price Review which encourages us to think that the Government, with the help, we hope, of the farmers' leaders, will really get down to producing a long-term policy for agriculture. One realises the enormous difficulties. It is incredibly difficult to forecast the future, but I feel it is essential that something should be done on these lines, because this Annual Review is a most upsetting policy. Unfortunately, that is the position at the moment—we have this Review, and this afternoon it is our duty to examine it.
I am perhaps one of the few people to-day who, in talking to quite a number of farmers, have not found them quite so shaken by this Review as some of your Lordships to whom we have listened this 994 afternoon have found them. I have not found any farmer who said, "What a marvellous Review! I never expected anything so wonderful as this." A number of farmers have thought that, in the circumstances, taking the whole situation, the Review was as good as they could reasonably expect. What is the position in the industry? As has been pointed out, at the moment it is producing as much as it has ever produced before-155 per cent. of the pre-war production—and it is increasing in efficiency at the rate of some £30 million a year. This is a fine record, and one must congratulate the industry on its tremendous achievement. But had the basic policy over the last few years been unsound I do not think we should have reached that position to-day.
What must be the object of this Review? I think the main object must be to ensure the steady progress of the industry, to enable it to play its maximum part in our balance of payments difficulties, and to ensure a reasonable livelihood for those engaged in it. So far as production is concerned, the position at the moment is that we are, I think, producing mere corn than ever before, but on a reduced acreage. On the other hand, we have more grass than we have animals to eat it. At the same time, we are producing rather too much milk. If one takes the January figures, at the time of the highest cost of production there were 34 million gallons of milk to go to manufacture. In fact, the production of milk far exceeds the market at the moment. We are producing a large number of pigs and a large number of eggs. Would it be right to encourage the increase of production in those three commodities? In the Review a halfpenny a gallon has been put on milk, but I agree that that does not meet the full extra cost of production. But, apart from that, we must not forget that we have also an increase in the fertiliser subsidy, and there is no doubt that fertilisers, particularly the nitrogenous ones, play an extremely high part in the production of milk. There is also the grant for silos, which again will help us make the fullest use of the grass and our own home-produced feedingstuffs in the production of milk, and try so far as possible to avoid using the high-cost imported feedingstuffs.
As my noble friend Lord Bledisloe so rightly said, at the moment the average 995 production is far too low. It is in the neighbourhood of 520 gallons a cow, and, surely, there must be some scope for the milk industry to cut its costs by increased efficiency Then we have the pigs. I have spoken to a number of producers of pigs, and I do not believe that at the moment the efficient producer is very worried. I do not think the efficient producer of pigs is necessarily the large producer; there are a number of small producers who are extremely efficient. I believe that over the last few years the pig producer has had an extremely raw deal, because it has been difficult to follow what the policy is. One moment one is asked to produce more pigs, as the noble Lord, Lord Archibald, so rightly said; the next moment one is obviously supposed not to have so many pigs.
With the position as it is at the moment, I think it would be wrong to give any encouragement to people to come into pig-breeding from outside, and if there were any increase in price it would tend to do that, as we have seen in the past. Every time there has been an increase in the price of pigs, the increase in the number of pigs has been astronomical and extremely rapid. The moment the producer sees the green light with the pig, his numbers can be increased in a very short time. There comes a time in the life of every lady pig when it has to be decided whether she becomes a mother or bacon. If it is decided that she shall become a mother, within a very short time she will produce a large litter of pigs, and one's number of pigs will rise rapidly. So, in the pig industry, the first thing on which we must concentrate is increasing efficiency. There I am entirely with the noble Lord, Lord Archibald, that we must encourage particularly the progeny-testing stations and every other means of increasing efficiency. Another product about which there is a certain amount of dissatisfaction is eggs. I am not an egg producer, and I find it remarkable, if producing eggs is so unprofitable, how the number of poultry generally over the last year has increased—and not only the number of poultry but the production. If it is so unprofitable, those figures seem to be rather astonishing.
996 Surely the right thing to do, and what the Price Review is encouraging, is to increase the production of beef, to make the fullest use of our surplus grassland. There I have my first real criticism of the present system. I do not quarrel with the price—I think the guaranteed price is satisfactory and reasonable—but the administration of the guarantees at the moment is unsatisfactory. It is not really inherent in this Price Review but springs from the last Price Review. There is the question of the rolling average, which means that the price is based on the average of prices for the last twelve months. That seems to me to be too lone a period. It means that the person who is selling cattle now is getting a low price and a low subsidy because somebody else sold cattle at a high price a year ago. Although these average prices are all very well, we must try to see that the subsidy goes to the person who really needs it. If the price of cattle is low now and high in six months' time and I sell in six months' time, I shall get not only a better price but also an increased subsidy. I cannot feel that that is right. But, on the whole, it seems to me that the Price Review is the logical outcome of the diagnosis of the condition of the industry at the moment. There has been a considerable amount of support for it in a number of the more responsible papers. We should not at the moment criticise it too harshly, but should hope that during the next year the increase in the prosperity of the industry will continue.
§ 4.57 p.m.
§ LORD LUKE
My Lords, we have had an interesting debate so far. I should like to pay a tribute to the noble Lords who have taken part, more especially to the two noble Lords, Lord Walpole and Lord Lansdowne, who made their maiden speeches, and to the noble Earl, Lord Halifax, for I feel that it is one of the tenets of your Lordships' House that on each subject that is debated we bring together Peers who have practical experience of the subject in hand. Your Lordships will be glad to know that at this stage of the debate, about half-way through, a great number of things can be left out of my speech, which I therefore hope will be commendably short. But I do not think we have yet heard anything about the condition of the country as a whole. I suggest—I may be wrong—that 997 this Price Review is possibly meant to be farming's contribution to the "squeeze" campaign. We have established, presumably, that there is a gap between the rise in the subsidies and the rise in the costs of farming production. Other industries have not had price reviews but they are all being asked to keep prices down. Here, agriculture has been offered a rise in price though we know full well that it does not cover the costs. However, if this is a process of mopping up money for disinflationary purposes, agriculture as a whole will not be averse to making its contribution.
I want to deal with only two points this afternoon. The first is the fear of greater imports of beef from the Argentine; and the second relates to capital for agriculture. On the first subject, concerning how much beef will be coming from the Argentine, I, in common with others, look at this question with considerable fear for the cattle breeders of the United Kingdom, because if we are to see a return to the sort of imports of chilled beef that we knew between the wars, without restriction, then obviously, unless the Government adopt other measures, we shall notice a considerable change in the price that our own farmers can get for beef; and with a narrowing margin I think there is no question of costs remaining stable or falling; they will probably rise all the time.
Apart from that, I am wondering whether we cannot turn our thoughts a little more towards what can be done with scientific feeding. In this regard I am glad to see that there is Government encouragement for more home grown feedingstuffs. I think that we in the farming community must try to learn what research can teach us; for what is it we need to do? We know, as the noble Earl, Lord Halifax, has already said, that this is a long-term business, and I suppose that breeding cattle is the longest-term business in agriculture. We need to turn our minds to earlier maturity so that we can bring the cattle to market earlier and thereby shorten the whole process. As cattle raising is a long-term business, it obviously needs long-term security. I make no apology for repeating that. I think every noble Lord has already said it, and I hope that every 998 other noble Lord will continue to say it throughout this debate.
This production is unlike production in other spheres of our economy. As the noble Earl has said, any other production can be switched off quickly, and so can cattle breeding be switched off quickly; but you can quickly switch on machine production and get the process going again, with a quick return. That is something that you cannot do with cattle raising. I say this to Her Majesty's Government: that if we help the Argentine trade by taking imports of meat, then there should be the quid pro quo of greater exports to the Argentine, so helping our whole export position, not excluding our export of breeding cattle.
If imported meat takes too great a share of the United Kingdom market, then I hope that Her Majesty's Government will not only watch the matter carefully but will take steps to support home production or at least to counter the threat. It is only fair, as I think was said by the noble Viscount who opened the debate, that if the Government are not prepared to do this they should say so and not allow the industry to draft into an unsatisfactory position. Might we not see another Government publication similar to the popular White Paper just published on the whole economic situation? That is most readable. I do not say that this Annual Review and Determination of Guarantees is not readable, but I think it could he made more readable to some of us who cannot quite get all its points. Even this afternoon noble Lords have been asking questions of detail about what some parts of it mean.
I would remind your Lordships that breeding beef in the Argentine—about which I have a certain amount of knowledge—is a rather easier matter than in this country. Beef production anywhere in the world is more costly than it used to be, but we have to remember that countries in the Southern Hemisphere have a great advantage over us in that winter feeding is not necessary. It is on just this particular differential, if I may so call it, that the Government ought to have their eye, and they should remember that it is not quite fair competition that our own agricultural industry is facing. May I also remind them that there is a difference in seasons. The best time for maturing and fattening cattle in the 999 Argentine is not the same as here, and if, in the negotiations which I understand are going on, that matter could be brought in, I think it would be helpful, so that the flush of imported meat does not occur at the same time as our own flush in this country.
My Lords, a word about capital. It is a truism to say that land itself is capital; but the return in production is slower, more long-term than in any other industry, and I would suggest that there is not much in the way of reserves. Again, as we have heard stressed this afternoon, this is especially so with small farmers. I was particularly struck by what was said by the noble Viscount, Lord Bledisloe, in his excellent speech, about co-operation among farmers. I hope that that will strike a note. I believe that there are some co-operative societies which work most satisfactorily, but I do not believe this to be a common matter.
In regard to the question of capital, whether large or small, for agriculture, I think it is generally agreed that this must come from outside, and of course it is not as readily available as it might be. We find that the best farming land is being farmed well; as such it is likely to attract capital for further development. Units then tend to grow bigger, and we find them reaching their most economic working size. The smaller farmer tends to be short of capital and, as we well know, the marginal farmer usually lacks capital altogether, even though he needs it most. This has rightly been the subject of Government assistance. Subsidies have been a form of capital assistance; without that assistance and in default of assured markets, farming obviously makes progress backwards. If farming had to do without Government assistance, it would have to get it from somewhere or else it could not exist. To a certain extent, farming is under-capitalised. There are critics who may say, perhaps not too loudly, "Well, let it die. Bring food in cheaply from overseas." I would remind your Lordships that it is not as cheap as it used to be.
There is none of us, I think, who would really wish to see agriculture in that position. But if the industry is to be kept efficient, and if it is to be kept prosperous, then it needs to attract capital and it needs to attract good 1000 men, and for this it needs a long-term view and long-term prospects. Compared with other industries it is not at all an easy matter for agriculture to raise capital. As has already been pointed out, other industries have profits and dividends to attract capital; not so the farmer. I conclude by saying that in agriculture capital is needed. There is the land itself; there is equipment—most necessary if farming is to become ever more efficient—and there is working capital. All of these rely on a sufficient return to make the whole work well. So, just as the industry must, in its very nature, take a long-term view, is it too much to ask Her Majesty's Government to take as long-term a view as farming itself?
§ 5.10 p.m.
§ LORD WISE
My Lords, in the first place I should like to extend my good wishes to the noble Lord, Lord Walpole, as coming from Norfolk, on his maiden speech. I do so the more warmly because his distinguished predecessor of over 200 years ago occupied in the other place the representative seat which I occupied a few years ago; so that I speak with some background.
This is possibly the most important agricultural debate that we have had in your Lordships' House for many a long day, and curiously enough it has shown, from both sides of the House, some consensus of opinion about the present position of the farming industry. As has been said, the Price Review has had an extraordinary reception in the country as a whole. I cannot remember a Review which has met with such opposition. Though I do not suppose it is possible at this time to amend it, I hope that in the months ahead we shall have from Her Majesty's Government a long-term policy under which agriculture will be assured of more consideration than it has received during the last two or three weeks.
The noble Lord who has just sat down referred, with a good deal of sympathy for British farming, to the difference between Argentine imported beef and the home product. I hope that Her Majesty's Government will carefully consider the points which he made and how the importation of Argentine beef is sometimes to the detriment of the home producer. The noble Lord also 1001 referred to the crisis. I hold the view that, if any interest should suffer as a result of the credit squeeze and the economic crisis which this country is experiencing at the present time, it should not be the farming industry. We in the farming industry are in no way responsible for the present economic and financial crisis. We are not an exporting industry. We have done our job and have produced the home products which were needed. We have suffered from, lack of capital. We are suffering now through the high rates of interest charged on the borrowing of capital. We are suffering very greatly from the action of the Government in this respect.
My noble leader referred to a speech which the noble Earl, Lord St. Aldwyn made a few days ago, of which I found a copy in another agricultural paper in another county. With all fairness and kindness I wish to refer to what the noble Earl said. My noble leader picked up the same point: that the Government had concluded that national requirements could best be met by intensifying the policy of decontrol which they had started to develop four years ago. That particular statement needs to be examined very closely. I do not know where that is at present leading the farming industry, and I feel that it is extremely dangerous to say to the farming industry now that in the years to come everything is to be decontrolled. If you say that, you pay lip service to Part I of the Agriculture Act, as my noble friend mentioned; but it will be impossible to implement Part I of the Act unless there is a fair measure of control. It is impossible to guarantee prices or assure markets, and if it is the intention of Her Majesty's Government, in years to come, once again to open agriculture as a free-for-all, then we in the industry have due cause to be very agitated about what the future may bring for us.
We well remember the days of free enterprise and free markets, and the iniquities which followed that particular method in our industry. Are we going to allow, under free markets and free systems, vested interests outside to fix our prices as they used to do? Are we to allow those London meetings which at the beginning of each week fixed agricultural prices in the markets for the whole of that week? We must have a measure of control, with the Government 1002 behind us, and I sincerely hope that what I read into the speech of the noble Earl is not, in fact, the definite intention of Her Majesty's Government; and I hope that he will be able, to explain that. In the years between the wars we went through chaotic and depressive conditions, and we certainly do not want those conditions to come again in the agricultural industry. I should rather like to hear the noble Earl speak from his practical experience on these matters, and not from his brief, and I should like him to tell me when, as a farmer, he was better off—under control or under a free marketing system. If he spoke as a farmer to a farmer I am certain we should agree as to when we were both better off.
I want to deal very briefly with the question of beef, which is very important. Lately, I have been alarmed at the drop in the price per live, cwt. for fat cattle. A few weeks ago they dropped to almost the lowest level, though now they are gradually rising. Perhaps I do not understand the finer arts in matters of this kind, but I cannot understand why we produce fat cattle of a certain grade in one year, as we did last year, and receive anything from 180s. to 190s. per live cwt. and this year go to tie markets and find the same cattle selling for 120s. or 130s. per live cwt. That does not happen in other industries. If people produce a motor car or some other mechanical device in one year, the price is a certain figure; and it is the same in the next year; but in agriculture we never know from market to market, or from day to day, what the prices are likely to be.
Listen to this example of stupidity. Two or three weeks ago, in a market it East Anglia which I know well, a fairly big farmer sent twenty-five fat cattle to market. He happened to pick on that particular day and lost £500; he lost £20 a head on twenty-five cattle, compared to the price he would have received if he had sold those cattle a month before or a month later. That stupidity is borne out by prices quoted in the Farmer's Weekly of March 23, which speaks of cattle prices going up everywhere with an increase of 33s. per live cwt. and similar such figures. That was a jump of nearly £20 per head on one weekly market. Can your Lordships imagine the feelings of a farmer who sent his cattle to the same market and received 33s. a live cwt. less 1003 than he would have received had he sent them seven days later? That is the kind of thing I want to overcome in our industry. But I warn the Government that they cannot accomplish that under a system of free enterprise or free markets. There must be control, as there was during the war. The Government are talking in terms of long-term policy. Have they envisaged that, if war came in the next two or three years, we in agriculture should have to go back to the policy which was adopted in the war years; that free markets and attachments of that sort would immediately have to be swept on one side? Full Government control would have to come in once again.
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE, FISHERIES AND FOOD (EARL ST. ALDWYN)
Of course it would. And there would be rationing at the other end.
§ LORD WISE
That may be. In war circumstances, we should need to have rationing. We should also meet once again the best customer that British agriculture ever had—the Ministry of Food; and we should be certain as to which way we were going.
I want now for a moment or two to speak on the subject of the smallholder. This afternoon, pigs, milk and poultry have all been mentioned, and my noble friend from Norfolk, in the last speech to which your Lordships listened, suggested that it would not much matter if we reduced the production of pigs, milk or eggs. But those particular commodities are the bread and butter of the small farmer: he has to produce them, and he has to be safeguarded. Where is the safeguard in the present Review of Prices? Mention has been made of 6d. per score off pig prices, and a halfpenny per gallon on milk—the last, incidentally, has been referred to as an insult to the dairy industry. An increase of a halfpenny on milk does not half meet the extra cost of production. And there is no change in the price of eggs. The small farmer is in a very precarious position at the present time. He has a few head of stock to send to market, and if he meets a bad market such as I have described, he can lose pretty well the whole of his capital in one deal.
1004 I have here a point which I wish to make and perhaps noble Lords will check me on it—it relates to the question of bankruptcies in agriculture and kindred trades. One can hardly ever pick up the weekly records of bankruptcies without finding one or two farmers in the list. And, strangely, in this morning's edition of The Times there is a list of the bankruptcies recorded during the last week. Ignoring the High Court cases, there are eighteen cases of bankruptcies in the Provinces, and seven of those eighteen are bankruptcies of farmers, smallholders, or other people concerned with the land. I do not say that "the writing is on the wall," but it is important to take stock of these matters when we are talking about a successful and prosperous agriculture. Of course men did go bankrupt in the past we know; but the fact remains that, week by week, we are now finding farmers in the bankruptcy courts, whereas two or three years ago such a thing was almost unheard of.
We have been told this afternoon about profits and losses. I have here details of a case which will show your Lordships the position of the small farmer to-day. If noble Lords who are engaged in the farming industry will make a mental note of the figures which I give, I think they will say that the man concerned ought to have made a decent living. The man concerned is a farmer. He has sixty acres; he runs 1,800 laying hens, forty-five sows and gilts, and 300 fattening pigs. He has ten acres of sugar beet. His books are all properly kept, but instead of showing a very decent living, as they should—for he is a man of intelligence, and works hard—his books last year showed a loss. It was not a paper loss but a definite loss of capital and profit. I am alarmed at this sort of thing happening in my own industry.
I wish to make a plea to the Government to take good stock of the position of the young man. What is the inducement at the present time to the young man to go into agriculture? He cannot borrow; he cannot buy; and prices are high and credit facilities limited. He has the greatest difficulty in getting a farm to rent—a farm of any standing at all—and he wonders what the future holds for him. Figures relating to the incomes of small farmers have been quoted by my noble friend Lord Archibald. As has 1005 been stated, those incomes are practically negligible and little, if at all, better than those of the ordinary agricultural worker. Where is the incentive, from the Government or anyone else, for the young man to go into the agricultural industry? He has seen his father farming fairly successfully during the war years, with everything controlled; he now sees losses being incurred in the industry and the whole business becoming very haphazard. The result is that he enters another industry where he is sure of getting a decent living in return for an honest day's work. I hope that we shall not let the industry further lapse, or allow it to revert to the state which we know it was in between the wars.
One final word. The noble Earl, Lord Halifax, referred to the question of control in a long-term policy. I think that is important—I mentioned it a moment ago in connection with the question of the war risk. I therefore suggest to the Government that, instead of being a little theoretical on the question of freeing the industry, they should look back and note what a great success was made of the industry during the period of the war years, and the years immediately following the war, when the industry was prosperous, when production was rising, and when we had control and good, steady, stable markets.
§ 5.30 p.m.
My Lords, I trust that what I have to say this afternoon will not take up a great deal of your Lordships' time. I want to touch on one aspect which I think has so far been by-passed. I have been surprised at the hostility shown by some farmers towards the Price Review. Although I seem to be rather a lone bird in this respect, I was surprised that the guarantees were put as high as they are. I should like to associate myself heartily with the noble Viscount, Lord Bledisloe, in his utter condemnation of the extreme and pugnacious verbosities which have fallen from some people who are supposed to be the leaders, or who, I rather fancy, would like to be the leaders, of the farming community. Whatever may be 'the justification, I feel that what they have said is completely divorced from the dignity which is expected of agriculture.
1006 In all the criticisms that have been made, I have not, I think, heard or read one criticism of the Price Review in which agriculture has not been the sole and only interest mentioned. I do not believe I have read or heard one criticism of the Price Review in which consideration of the present economic position of the country has been given as much weight as the interests of agriculture. It is about the economic position that I should like to say a few words. There is a feeling in this country to-day of "I want 10s. a week more. It does not matter if, because of my increase, the cost of living goes up 8s.; I shall still be 2s. better off." That feeling permeates every single union, nearly every single business, and, if we are honest, nearly every single individual. It is that attitude which is utterly ruining this country. The country is riddled with it, and it is that form of egotistical outlook which is destroying the confidence that many people would have in this country. People in all walks of life tend to think only of their own points of view, without thinking of their industry or business in relation to the economy of the country as a whole. I feel that that attitude is also prominent among the criticisms made of the Price Review.
I should welcome not only a guaranteed extra £25 million but a factual extra £50 million. Of course, it could he well employed; and the country and agriculture, farmers and farm workers alike, would all benefit from it. But, frankly, I do not believe that that would be the right course to take. I think that if an extra £50 million were given to the farmers, they would still come out with a tremendous criticism. I believe that if we gave them the earth, there would still be criticism, if not from the farmers then front the townsfolk. I sincerely support the Government because I feel that they have been as fair and as just as they reasonably could be. If we are going to criticise the Price Review, we must criticise it in the light of the whole economic situation, without bias; and if we do that, I am sure we shall agree that we could not expect the Government to have done much more.
It is said that there is anxiety in the agricultural industry. There is a degree of anxiety, and rightly so. In my estimation, there should be a degree of anxiety in every single industry at this present time, for if there are industries which are 1007 completely devoid of any tinge of anxiety, then those industries are doing nothing at all to help the country get back to its correct position. Unpleasant though it may be, the farming community is having to absorb some of its costs. The farmers should be proud of being asked to do that, of being given the chance of showing the way to other industries in adopting the principle that if the country is prosperous then the individual will be prosperous, as opposed to the misguided view that if the individual is prosperous then the country will be prosperous. I hope that agriculture will not be left on a pinnacle of its own in this respect, and that other industries also will endeavour to curtail their costs and thus keep their prices low. I can only think that, in present circumstances, the Government have given agriculture a fair, reasonable and just Price Review. But I would ask the Government to do one thing—and this is a reiteration of a sentiment I put forward in the last debate on agriculture in your Lordships' House. I would ask the Government to bear in mind most strongly the possibility in future of giving greater grants for capital expenditure, so that the effects will be felt over many years in lieu of some of the more limited forms of annual grants which last for one year and then gently lapse into oblivion.
§ 5.38 p.m.
My Lords on the whole the Government have been under rather severe fire this afternoon from all sides of your Lordships' House and I find myself probably in a minority, amongst those who welcome the Price Review and the statements of policy which are contained in the White Paper. I should like to echo the point made by the noble Earl, Lord Halifax, who said that the people responsible for dealing with the vexed problems of agricultural policy are in an extremely difficult position. I believe that those who give serious thought to the whole question of future production policy realise that it is not easy to make adjustments which will be both practicable to administer and carry out and which at the same time will be reasonably effective. My own feeling is that the Review has given the farmers a fair deal, taking all the circumstances into account, and they have 1008 not been asked to make such a great contribution by way of additional effort.
Much has been said about the increase of efficiency in the industry, and about how much has been absorbed by the farming community in additional costs, but I think that we should face the fact that there is still an enormous amount of inefficiency, judged purely on economic grounds, in many farming enterprises. Often comparisons are drawn between the cost of production in this country and in Denmark and Holland. In many instances, there is a great deal of inefficiency—I do not mean in the sense of people not working hard or not trying hard, but simply that we are continuing to pursue rather inefficient methods or out-of-date techniques. To go on simply adding to the prices and raising the subsidies when the costs of production rise each year can only perpetuate the existing inefficiencies in the system. It is mainly for this reason that I think the Government have been brave and reasonable in facing up to the principle of not recouping the whole of the additional cost at this time.
I particularly welcome the increase in the production grants for fertilisers, and also the new grant for silos, which I believe to be an enlightened move that should increase the production of feeding-stuffs from our own resources in this country. Probably the most important paragraph in the White Paper is that at the end, which leads us to hope that there may be longer-term assurances as a result of which we can have a little more forward planning. I am among the large number of your Lordships who have contributed to the debate this afternoon who believe that forward planning is necessary. I do not believe that a long-Wm policy which guarantees specific prices and specific markets for individual commodities is necessary or practicable. I cannot follow my noble friend Lord Luke, who said that it is essential in agriculture and not so essential in other industries. It is just as difficult in a manufacturing industry to lay down a big plant, to make plans for years ahead, to carry out research and often make pilot plant experiments. In a manufacturing industry one is often committed, if not so far ahead, almost as far ahead as is a farmer breeding beef cattle. I am unable to follow the argument which 1009 insists that agriculture needs something different, something more specific and far-reaching in long-term guarantees, from what is enjoyed by other industries.
I do not want to follow noble Lords who have dealt with many specific items in the Price Review, but I should like to make two suggestions in relation to "more forward planning", as it is called in the White Paper, which I feel the Government might consider. In the paragraph which deals with production policy the White Paper says:But even greater emphasis than before must be put on the substitution of homegrown products (mainly grass and other feeding-stuffs) for imports, and on economies in the use of imported materials.I think I am right in saying that words to that effect have appeared in practically every Economic Survey and every Price Review since 1952. The actual practical encouragement that has been given to people to make better use of home-produced materials, particularly grass, and to substitute them for imports, has never so far matched the urgency of the tone of the pronouncements on policy. I am of the opinion that the present proposals will not achieve anything worth while by way of results.
The silo grant is a move in the right direction; and the small increase in the price for coarse grains may have a little effect. But if one puts against these small incentives the fact that the Government have completely freed the import of feeding-stuffs—limitless dollars are provided for those people importing feeding-stuffs, an advantage which is granted to very few categories of importers in this country at the present time—and then subsidise the end livestock products in the chain of production, it means only that a much greater incentive is given to people to use the imported feeding-stuffs, since the prices which are fixed in the Review allow for the more or less limitless use of feeding-stuffs at the market prices. If the Government are really serious about their grassland policy, could we not have a grassland production subsidy? I do not mean merely a grant for putting up silos, but to bring grass among the crops which receive direct support. I know there would be great difficulty in arriving at a satisfactory system of measurement and in administering a subsidy of that sort, but I do not think the difficulty insuperable, and I 1010 believe that the actual results, in terms of increased production from our own farms, would make up for any slight inefficiencies or shortcomings in the subsidy scheme itself.
The Government themselves have pointed out in the White Paper that the increase in the area of grass has now out-stripped the number of grass-eating animals. And even before this trend developed, the O.E.E.C. Report which followed a survey of grassland production in North-West Europe put this country one from the bottom of all countries in North-West Europe—in fact the output, in terms of energy per acre, from our grassland was only about half that of Holland. That is a disturbing thought, when we enjoy a better climate and, on the whole, more favourable soil conditions than countries on the other side of the Channel. An immense amount could be done to increase our output and thereby save the import of feeding-stuffs. I think the most important point in this respect is that it has been shown by the most progressive and efficient grassland farmers that intensive production can be carried out at lower cost, and therefore with higher profits, than by relying to such a large extent on imported feeding-stuffs, or feeding-stuffs brought on to the farm.
I believe that the extent to which we are dependent at the present time on feeding-stuffs brought from abroad is little realised. The national dairy herd last year, which averaged only 700 gallons of milk per cow, consumed 3½ lb. of imported concentrates for every gallon of milk produced, which is practically all the energy required for the production of a gallon of milk. This means to say that the only contribution our farms made to the national dairy herd last year was simply to keep the cows alive. To me that is a most sobering thought, and I earnestly ask the Government whether they cannot devise some system of increasing the incentives for farmers to make the maximum use of their grassland which is now once again far and away the biggest acreage of all farm crops in this country.
We are sometimes asked why, if it is more profitable to farm grassland intensively, more farmers do not do it, and why it is necessary to provide an incentive. It is worth mentioning that such farming requires a great deal more effort on the 1011 part of the farmer. He has to lay down pedigree grass leys, use larger quantities of fertilisers, buy electric fences, learn new techniques and from every point of view make a greater effort and enter into more risks. So long as he can make a profit, or a reasonably good living, by buying most of what he requires to feed his animals out of the bag delivered to the farm, with guaranteed quality, there is little incentive for him to depart into unknown risks and to try to learn new systems of husbandry. It is for this reason that I feel there is a great deal to be said for trying to find some way of producing a positive incentive to get grassland production on to a more intensive system.
I do not wish to detain your Lordships unduly, but I should like to make one other point in relation to the future planning of commodity production, as I think it is referred to in the White Paper. The Government indicate in the paragraph under "Commodity Policy" the directions in which they would like to see production develop. However much one reads into that short statement, it amounts to little more than an increase in production of meat, everything else to go along more or less as it is, with perhaps a little more efficiency and a little more home production. Personally, I should have thought that, in the general economic circumstances in which this country finds itself at the moment, a rather disturbing statement of the Government's long-term view. Anyone who has studied the energy requirements of this country in about ten years' time knows well that, even if atomic energy makes the contribution we expect, we shall have to import an enormously increased amount of fuel to provide the electric and other power which it is forecast will be essential to keep industry going.
So far as one can see, the simple fact is that we shall not be able to do that and import food on the same scale or in the same proportion as we are doing at the present time. Of course there are many other factors to take into account, such as the import of raw materials and other things which we simply do not possess in this country. On the other hand, the one natural resource of which we are well endowed is our land. We 1012 have an ideal climate for growing food, second probably only to that of New Zealand. We have rich soil, ample knowledge and skill, and the possibilities of increasing our home production of food more cheaply and more efficiently would seem to be about the one direction in which we could make a real contribution to our balance of payments problem over the next few years.
Various estimates have been made of the additional import savings which could be made. I think the noble Viscount who opened the debate mentioned £100 million. I believe that in five or six years we could save, without much difficulty, about £200 million. That would need an increase in production in all commodities: wheat, from improved varieties which can be produced quite cheaply over most of the country; poultry; pig meat—in fact, the whole range of commodities. I should have thought that it would be disappointing to many people if the forward planning is to be based merely on getting more or less the same volume of production as we have at the moment. Much as one would welcome a forward plan, I hope that the Government will give serious thought as to whether, written into that plan, there is not a need for some indication that over the next few years we are going to set our sights a little higher and aim at saving at least £100 million worth of food imports in the next five years.
§ 5.56 p.m.
§ LORD FORBES
My Lords, may I at the outset apologise to the noble Viscount, Lord Alexander of Hillsborough, for not being here at the beginning of the debate? I excuse myself on the ground that I was attending the wedding of a Member of your Lordships' House. Taking a broad look at this Review, I think one can say that, owing to the country's economic situation, it is a fair Review, not only for the farmer but also for the country. Although profitability of farming has been falling during the last three years, farmers have once more been asked to tighten their belts. This is undoubtedly a great challenge which I am certain will be accepted by the farmers, provided—and "provided" is the key word—the Government themselves and all other industries tighten their belts, because we are all in this economic battle together.
1013 There is one statement in the Review that I am certain all farmers must welcome, and that is that consideration will be given as to whether longer-term assurances can be devised. If this means that the farmer will be able to plan with confidence in the future and that he will not have to undergo that agony every Spring of wondering whether the Government will put him out with a whiff of chloroform or give him a tonic, then I support the idea wholeheartedly. I wish to congratulate Her Majesty's Government on stating in paragraph 33 of the Review that they are to seek the necessary legislative powers to make grants towards the construction of silos. I welcome this particularly, as during the last debate on agriculture I advocated that such a step should be taken. There are no details in the White Paper as to the details of this grant towards silo construction, and I hope the noble Earl, when he replies for the Government, will be able to enlighten us further. I hope that the words "construction of silos" will be taken to include the roofing of this valuable feeding-stuff against rain and snow. It would be a retrograde step not to include roofing of this feeding-stuff which is already saving the country many tons of imports.
Roofing of silage was first of all carried out by agricultural research workers at Hillsborough in Northern Ireland. There it was found that silage with a roof over it had a far higher feeding value than silage without a roof. Soon farmers became interested in this, and the next step was the introduction in Northern Ireland of a 50 per cent. grant towards the construction of permanent roofed silage pits. The result of this was phenomenal, because in 1948 there were 59 silos in Northern Ireland, and in 1953 there were 1,500, of which 1,200 were roofed. Trials were also carried out by the Edinburgh and East of Scotland College of Agriculture. That college covers an area of only moderate rainfall. There it was found that up to 30 per cent. of the silage in a pit could loose the majority of its feeding value through seepage of rain and snow. This represents the loss of a very large amount of feeding-stuffs which would otherwise have to be made good by imports. This loss must not be allowed to go on; we just cannot afford it.
1014 In the debate last February the noble Earl, Lord St. Aldwyn, suggested that the cost of erecting; silos was relatively small. I find that to erect a silo to hold 150 tons and to put a permanent roof over it costs about £500. Today, when farmers have very little capital, I do not think one can call that a relatively small sum. Therefore I sincerely hope that Her Majesty's Government will obtain the necessary legislative powers. I advocate strongly that grants should be given towards the construction of permanent roofed silos and, where silos already exist, towards the permanent roofing of them.
Next, I should like to draw your Lordships' attention to a system of farming known as alternate husbandry. As your Lordships probably know, this system means that each field has a period of years under arable crops alternating with periods of grass. There is nothing rigid about this system in fact, flexibility of cropping is its great merit. The great feature of this system is that, while the field is in grass and is being properly grazed, it builds up fertility which is then cashed out by growing heavy cereal crops with much less fertiliser. The result is, more at less cost. Surely that is what Her Majesty's Government are asking the farmer to do: bring down the unit cost of production. More at less cost certainly seems to have a Scottish flavour about it, so it is not surprising that we find that alternate husbandry was probably practised by the Scottish monks in the fifteenth century and at any rate has been developed in Scotland since 1730.
Other advantages of this system include more productive grass, which means a better soil structure, and it is also an aid towards controlling animal disease and weeds. During the First World War it was estimated that production in Scotland per acre from crops and grass was 20 per cent. higher than in England, and as a result Scottish farmers were less dependent on imported feeding-stuffs and could carry more cattle per acre. This superiority in husbandry was undoubtedly due to the fact that a greater proportion of alternate husbandry was practised in Scotland than in England. Surely alternate husbandry should be practised wherever land can be economically ploughed, as it seems to be the answer to the Government's aim of more coarse 1015 grains, less imported feed and a reduction in the unit costs of production.
Ploughing grants are already encouraging alternate husbandry, as it gives the farmer an incentive to plough up grass; but does everyone realise the great benefit to be derived from ploughing up productive grass as opposed to old and unproductive grass? It is the productive grass ploughed down, and not the old unproductive grass, that gives the fertility build-up for the succeeding crops. I am not for one moment advocating organic farming. But I would say that, when sowing a cereal crop after productive grass, the farmer can save at least 2 cwt. of fertiliser per acre. That means a saving of about 45s. an acre, taking into consideration the fertiliser grant, or about 62s. 6d. without the fertiliser grant. It is also a saving to the country because less fertiliser has to be imported.
Bound up with this is the need for good grass seed to produce good grass. Your Lordships may recall that in the debate on agriculture in February I drew your Lordships' attention to a scheme called the National Scheme for Comprehensive Certification of Herbage Seeds. The noble Earl who replied for the Government stated that the Government supported this scheme most wholeheartedly and he did not know if it required any further support. I think this scheme will require further support. Initially, the cost of these very good seeds is bound to be high until farmers come to realise the great benefits to be derived from them. Then consumption will rise and the cost of production should come down. I hope that Her Majesty's Government will consider this point, as I feel that once the scheme is on its feet it will be absolutely self-supporting; but it may need some help to get it on its feet. The question is: do we know all there is to be known about grass and its fertility building abilities? I think the answer is "No". I therefore suggest to Her Majesty's Government that a committee should be set up to inquire into the abilities of grass to profit the national farming economy. It is imperative that the farmer and the nation should know all about grass and should be able to profit from its great qualities.
Now, with all humility, I should like to give a warning to Her Majesty's 1016 Government for the future. This Review will have the effect of reducing what has been a narrow margin of profit to the farmers to even narrower proportions. It will therefore kill any hope that the farmer has of making a surplus to plough back into his farm in the form of profits. I maintain that the Government's aim of reducing unit costs of production can be carried out to a certain extent by increasing yields, by better management, especially grassland management, and by alternate husbandry, but some day—and perhaps that day is not too far distant—increased production and a reduction in the unit cost of production will come only through increased capital so that we can rebuild our many antiquated and totally inadequate farm buildings. Most of our farm buildings are inefficient, because they waste not only manpower but also man hours. It is true to say that many of our buildings are more inefficient than we ourselves think.
It may interest your Lordships to know that last month an adviser from the British. Productivity Council carried out a time and motion study on a forty-cow dairy farm in the North-East of Scotland. The buildings of this farm were, if anything, above the average for the locality and were well above the national average. Yet it was found that the cowman on this farm had to walk no less than 3,000 miles in carrying out his duties during the year. Before we can plan the most suitable building there must be research into the construction of farm buildings. The Agricultural Research Council spend some £3 million a year on agricultural research. Why cannot some of this money be spent on research into farm buildings? The agricultural land services and the colleges in Scotland advise the farmer, but they have not the technical data to fall back on and they have not the facilities for research. I hope that Her Majesty's Government are fully conscious of this need for capital in the industry and that they will take the necessary steps before a crisis through lack of capital arises in the industry.
Finally I should like to draw the attention of Her Majesty's Government to the fact that, for the good of the nation, there must be a better understanding between the agricultural population and the urban population. The urban population have little conception as to what subsidies 1017 mean to them. How few housewives realise that agricultural subsidies, by increasing home food production, are directly in their interest? Other industries must also realise that agriculture is not a favoured industry. Other industries get their protection from the Government in the form of tariffs, but tariffs do not get the banner headlines that agricultural subsidies receive. It is up to the Government and the National Farmers' Union to make the Government's aim in granting agricultural subsidies crystal clear in the plainest possible language to everyone. The Government and the National Farmers' Union know the facts, but to the layman these facts are hidden in clouds of complicated figures and academic statements. The trouble is that to-day the nation knows too much about our diplomacy and too little about the facts that the people should understand and are entitled to know about. I submit most earnestly that there is a real need to-day for a fuller understanding in the countryside and in the towns of what is needed, what is being achieved, and what has to be achieved. It is essential for the wellbeing of the nation that Her Majesty's Government should put this matter right without delay.
§ 6.14 p.m.
§ THE EARL OF LISTOWEL
My Lords, in the course of the debate which was opened with such robust good sense by my noble friend and Leader we have already listened to twelve speeches from noble Lords all of whom have a personal and intimate knowledge of farming. I think I have heard pretty well everything that every noble Lord has said, and I have calculated that of all the speakers, most of whom sit on the Government Benches and Benches opposite, only three—the noble Earl, Lord Ferrers, the noble Lord, Lord Melchett (whose support was, I thought, considerably qualified) and the noble Lord, Lord Forbes, who has just spoken—did not say, or at least imply in what they said, that there is something radically wrong in the Government's agricultural policy.
This debate on the Price Review is an annual opportunity for scrutinising the Government's stewardship of agriculture; and, casting my mind back, I do not remember a single occasion in the last five years under successive Conservative Governments on which there has been 1018 so much criticism from noble Lords, on both sides of the House, of Government policy. This House is not a representative body, of course, but I think your Lordships would agree that it is more representative of farming opinion than of any other section of opinion in the country. For this reason alone, I hope that the Government will pay special attention to what has been said in the debate.
I was asking myself whether there is any common factor in the dissatisfaction that has been expressed. I think there is, and it is that what most speakers found unsatisfactory about this year's Annual Price Review was its failure to put forward either a medium-term or a long-term policy for agriculture. A large number of noble Lords (I will not mention their names) emphasised the need for a long-term or medium-term policy for agriculture. I thought that the noble Earl, Lord Halifax, did us a special service by defining what is meant by a medium or a long term policy. Clearly, this is an extremely vague term, and I would subscribe to his definition when he said that what it meant was that the Government should express intentions which would be carried out over a period of something like ten years. After listening to the noble Earl, Lord Halifax, I felt strongly minded to tear up my notes and to tell your Lordships that my speech had already been made, but I resisted that inclination because I felt that I should be lacking in my duty to my noble friends who had asked me to wind up this debate on their behalf, although I feel that your Lordships may think otherwise. However, that may be, having listened for a long period of time to the speeches of the noble Earl both as a Cabinet Minister and as a Back Bencher, I think that never has any speech of his been more charged with wisdom than the one to which we have listened this afternoon.
My Lords, what is the position at the moment, looking at Government policy entirely from the angle of the time factor? Of course, the livestock farmer can look ahead for one year, while the arable farmer is rather better off in that he can look ahead for eighteen months until we come to next year's harvest. But after that short period of time no one knows what the policy of the Government is going to be. We cannot tell whether 1019 livestock or some other farm product—the Government have changed their minds frequently in the last few years—is going to be encouraged, or indeed to what extent, if we fail to stop the present movement of inflation, the rise in farm costs will have to be carried by the industry. Indeed, the Government themselves appear to acknowledge the inadequacy of the short-term policy set out in the Review and the need for assurances that Government support will continue for more than the period of two years.
I should like to quote what I think is a most important reference in the Review to the time factor in the policy. Paragraph 36 has, I think, been mentioned by the noble Lords, Lord Melchett and Lord Amherst of Hackney, and also by the noble Earl, Lord Halifax. This paragraph reads as follows:The Government recognise that each Annual Review by its nature can afford assurance for only a comparatively short time ahead and that, if longer-term assurances could be made more effective, this would help the industry in its forward planning. Accordingly they will consider whether any practicable methods of providing such assurances of support for the industry can he devised.This is, at any rate, as several noble Lords have said, a gleam of light, although it may be somewhat faint and remote. But why have the Government lost so much time in starting this vital consideration of the time factor, because they must have known for many years past that farmers are losing the measure of confidence they need to go in for forward planning? Surely the plain fact is that, so long as farmers can see no further than a year or two ahead, which is the furthest distance ahead they can see with the help of an Annual Price Review, then the general uncertainty and lack of confidence, which has never been more widespread in the industry than it is at the present time, will—greatly to the regret of all of us—continue.
What is lacking in Government policy, as Her Majesty's Government themselves seem to realise, is that for a healthy agriculture we require a long-term policy in the sense defined by the noble Earl, Lord Halifax, that will give farmers enough confidence to plan their operations over a period of years. Such a policy must, of course, be consistently and continuously carried out and, therefore, must be acceptable to all political Parties. I 1020 want here to make a suggestion which may or may not be a good one but I believe is worth considering. Although other noble Lords who have expressed their view about the need for a long-term policy have not also expressed this doubt, I am rather doubtful whether such a radical change of policy could be brought about without the assistance and advice of a Royal Commission on agriculture. I was glad to note that the agricultural correspondent of the Observer, in an article in that newspaper on the Price Review, supported the opinion which I had very tentatively ventured to express in our last agricultural debate: that a Royal Commission is really essential. I know that there are arguments against it—the factor of delay and so on and if the policy could be produced without the delay through appointing a Royal Commission no-one would be more delighted than I should be. But I should like to know what Her Majesty's Government think of this proposal. If there has to be an inquiry before a new policy can be devised., surely a Royal Commission would, at any rate, carry far more weight with the farming community and the political Parties than any other form of inquiry.
I should like to mention just three of the key problems which, if they cannot be dealt with in any other way and without an inquiry, should be submitted to a Royal Commission. They certainly will not be solved while Her Majesty's Government refuse to make up their mind about them and allow the industry to go on drifting as it is at the present time. Here is the first and, to my mind, key question: what level of agricultural production can we afford, in the long run, in this country in competition with food- stuffs sold at world prices? Her Majesty's Government tell us that they are aiming at a level of output 60 per cent. above the pre-war level, which is, of course, only 5 per cent. more than the total output forecast in the White Paper for the current year. I take it that this really means that Her Majesty's Government would like to stabilise home food production at very little above its present level. And I think that that was the interpretation put on the Government's policy by the noble Lord, Lord Melchett.
One thing is perfectly clear: if this is done, then agriculture will not be able to make to our balance of payments the 1021 contribution which it could make, particularly by saving imports of animal feedingstuffs—this could not be brought about unless production were expanded considerably above the present level. I believe that the noble Lord, Lord Melchett, would agree with that view. He said agriculture should enable us to save another £100 million in imports after a period of about five years. My Party believes that farm output could still be increased by about one-third, with a corresponding saving in imports. This is a very important divergence of view between responsible persons and Parties all of whom are anxious to promote the economic welfare of the country and the welfare of agriculture within that broader framework. That being so, surely we should have the best possible advice we can get on the economic merits of these different and opposite views.
Here again, I believe there is a case for an inquiry. If we knew the answer to this question, farmers would also have a rough idea of the long-term relationship between arable land and grass. At the moment, of course, our tillage acreage is still dwindling. We lost another half million acres last year which has to be added to the half million acres lost in the year before, so that, in all, we have lost in the last two years about one million tillage acres. Her Majesty's Government offer us no guidance at all about the point at which this very alarming shrinkage should stop and where the line should be drawn. What is the wretched farmer to do when the Government offer no guidance and change their minds constantly about the relationship of arable land to grass?
It was only three or four years ago, in 1952, that Her Majesty's Government were asking farmers for another one million tillage acres. The target has been dropped and now there is absolutely no word about the future. We are told in the White Paper that the Government want "a large arable area" (those are the words used), with the main emphasis on wheat crops to save imports. Everyone will agree with this aim, of course, but how large an area do the Government want? That is what farmers would like to know. That is the question they are asking, and the question which Her Majesty's Government have not answered. Moreover, if the Government want this large arable area, in spite of the reduc- 1022 tion which has taken place in the last few years, how are they going to induce farmers to retain this substantial area under the plough while their costs continue to soar? When a farmer has to face larger hills his obvious course is to resort to grass. These are questions which not only are not answered, but acre not even asked in the White Paper.
That brings me to the second really cardinal problem for agriculture, which has already been mentioned by several speakers in the course of the debate: that of finding cheap medium or long term credit, particularly for the small men, like tenant farmers or owner-occupiers, who cannot afford to borrow from the banks and in any case have little security to offer. The noble Lord, Lord Luke, among other speakers, referred to the need for capital especially for the small man, and this need is emphasised by the present credit position. Her Majesty's Government have, rightly, made a great effort to exempt farmers from the short-term restrictions of the credit squeeze; but however that may be, the difficulty of borrowing at present rates of interest is just as serious for farmers as for anyone else. What is needed is money for long-term improvements which must be made if we are to increase output and to lower costs. My noble friend Lord Archibald, in the course of his remarkable speech, referred to the alarming fact that the volume of fixed capital equipment in agriculture is now lower in real terms than it was in 1948. I will not mention figures because they were mentioned by my noble friend; but surely it is lack of confidence among farmers, combined with this lack of credit, that has prevented the making of long-term improvements on which the future of the industry will depend.
One very important aspect of capital investment is expenditure of landlords on their own property in keeping it in what they regard as reasonably good order. At the present time the biggest obstacle to good estate management, which every landlord wants, is the level of farm rent. The noble Marquess, Lord Lansdowne, gave us some exceedingly interesting figures about Scotland, and said that rents in Scotland had increased by only 15 per cent. since 1940. I have not the figure; for England, but they are equally striking, and I know that from his experience the noble Earl who is to reply must be very 1023 familiar with them. But they must be equally striking when we compare the rise of rent with the rise in farm incomes and the value of land. There is no doubt that it is the low level of rents which prevents many conscientious landowners from doing what they would like to do—that is, put their property in the best possible order. But the whole question of rent bristles with political difficulties, and it is therefore, I think, a question that could very suitably be referred to a body of impartial persons whose views would carry weight with all political Parties.
Finally, there is another key problem to which I should like very briefly to refer—I was asked particularly to do so by my noble friend the Leader of the Opposition—and that is the problem of the labour force in agriculture; how to stop the drift from the land. We are aware that 34,000 whole-time farm workers left the industry last year. That is the latest figure, based on the December returns. If we go on losing manpower at anything like this rate—or even at half this rate, 15,000 a year—there will very soon be an acute labour shortage and a steep drop in food production. Indeed. I am told that there are now very few branches of the industry that are not complaining of the difficulty of getting labour. This crisis in the industry can be prevented only if measures are taken by the Government and by the industry itself to make the countryside more attractive as a place to live and work in.
It cannot be too often repeated that the main difficulty is the disparity between earnings in agriculture and earnings in manufacturing industries. The gap between the average agricultural wage and the average industrial wage has risen to over £3 a week, and, of course, if pending wage claims in other industries are successful it will soon be even larger. Further consideration should, I think, be given not only to improving the basic wage on which about one quarter of all farm workers live but also to a graduated wage structure for the industry with a higher rate for jobs involving special responsibility and skill. That is just one aspect of the problem of making the countryside more attractive for the young men who grow up there. Surely what we need is an inquiry into the changes in social conditions—because, of course, life in the 1024 country is bound up with many other things than conditions in the industry—and alterations in conditions of work, or changes of this kind, which would be an inducement for young villagers to stay in their villages instead of going off to find better paid employment in the towns.
There is one other matter which I think ought to be looked at carefully. I was reminded of this by the speech of the noble Viscount, Lord Bledisloe, to which we all listened with special respect and interest. The noble Viscount said that one of the factors that may be causing anxiety and uncertainty in the industry is the fact that the whole price structure is reviewed every year, and he suggested that there might be a review every five years instead of an annual review. I should have thought that that was very much a matter that should be inquired into at the earliest possible moment. I earnestly hope that the Government will consider (if they have not already done so) the desirability of an inquiry—which might take the form of a Royal Commission or it might, of course, be done in some other way—into the key problems of agriculture, with a view to getting the best possible expert advice before any new long-term policy is worked out. If such a policy can be worked out without any preliminary inquiry, naturally we shall be more than delighted to see it.
§ 6.35 p.m.
EARL ST. ALDWYN
My Lords, I think we have had a debate on agriculture of a very high standard indeed. We have had three speeches which are of particular moment. First, there was the speech of my noble friend, Lord Bledisloe. As the noble Earl, Lord Listowel, said, we always listen to him with great respect, and although it is a good many years since he said he was speaking on agriculture in this House for the last time, we hope we shall continue for many years to come to hear him speaking at the very high standard at which he spoke to-day. I should also like to congratulate the two noble Lords who made their maiden speeches to-day. I hope we shall hear from them on many occasions in the future and that they will not confine their activities to agriculture only. When, shortly before the Recess, we had a general debate on agriculture—also on a Motion by the noble Viscount opposite—I stressed that these Reviews were not 1025 annual upheavals of policy, and that the Government would not be making any drastic cuts in the guarantees or changes in production policy. I think the White Paper makes it amply clear that we have not done any of these things but that we have developed our policy consistently and in accordance with the needs both of the nation and of the farming industry.
As was brought out by several speakers, and particularly, I thought, by the noble Earl, Lord Ferrers, this year's Review has been a difficult one. On the one hand we have had to take into consideration the inflationary pressure from which our economy has been suffering and the consequent need to ensure that every pound of Government spending can be justified up to the very hilt. If we had made any excessive increase in the amount of Government support we should have added to the inflationary pressure and possibly also have aggravated our balance of payments troubles by increasing the amount of imported feeding-stuffs. On the other hand we had our statutory duty to assure the industry a fair return, and we had to ensure that our determinations would not result in the nation having to spend more on food from abroad. We have tried to strike the right balance between these sometimes conflicting needs, and I am sure that the award of an increase of some £25 million in the value of the price guarantees and production grants is just and fair to the nation as well as to agriculture.
Our general objectives continue to be the highest production that can be achieved economically and efficiently in accordance with the needs of the market, and steadily increasing technical efficiency and lowering costs. It is often Laid in very general terms, and it has been hinted at this afternoon as well, that the more food we produce at home the less we need to import, and it is argued from this that any increase of agricultural production is bound to save foreign currency. In fact, it is not quite so simple as that. For any possible increase in production there are numbers of other factors to be considered besides the saving of direct imports of food. For instance, will it cost more in imported animal feeding-stuffs? Will it cost a lot in labour and materials and finance that might be better spent in expanding some other industry which might also save imports or increase 1026 exports? What imports should we save? Where do they come from and what part do they play in our general overseas trade? All these questions must be considered before we can decide whether or not it is desirable to encourage expansion in any particular direction.
Our conclusions have led us this year to reaffirm our general policy for agriculture and to put even greater stress on the need to substitute home-grown products, mainly grass and other feeding-stuffs, for imports and on the need for economy in the use of imported material. I am sure that there is great scope for development here. If we concentrate on this aspect, we shall be able to increase the industry's net output far more economically than by an indiscriminate expansion of end products, and we shall be able to make a sure contribution to the nation's balance of payments. Accordingly, we are doing all we can to encourage the maintenance of a large arable area, with the emphasis on feed crops and improved yields. The noble Earl, Lord Listowel, asked me to say what area we required. I cannot give it in terms of acres, but I emphasise that we want as large an arable area as we can reasonably get. We should also like the production of beef, mutton and lamb to be increased.
§ VISCOUNT ALEXANDER OF HILLSBOROUGH
My Lords, could the noble Earl be more specific? My noble friend pointed out that we have lost in two years a million acres of tillage. Three nears ago the Government were anxious to get even more land under tillage than then existed. I can find no hope or confidence in the agricultural industry in the statement just made by the noble Earl. Would he go so far as to say that the Government want more acres restored to tillage than were in tillage at the beginning?
EARL ST. ALDWYN
I certainly should not go so far as to say that we want that million acres restored to tillage. We do want a considerable arable area and, of course, a high percentage of that million acres has, in fact, remained arable.
THE EARL OF LTSTOWEL
My Lords, does the noble Earl want a larger acreage than he has at present, and is part of the 1027 5 per cent. expansion, which apparently he still wants, an expansion of the arable acreage?
EARL ST. ALDWYN
Yes; we could certainly do with that.
The noble Viscount, Lord Alexander of Hillsborough, said that we ought to tell the farmers what level of output we wanted for various commodities. He asked whether we wanted a reduction in the output of wheat, of milk and of pigs, and whether we wanted egg production to remain as it is now. We have stated our intention in these matters a great many times and, I think, in the clearest and simplest of language. The noble Viscount need only read the relevant paragraphs of the White Paper to which he has drawn the attention of the House. In the case of milk, we stated the production objective in the 1954 White Paper and, to show that our policy is consistent, we repeated it in the 1955 White Paper and again this year. We want the output to be established a little below the present level, so as to avoid an unmanageable amount of milk having to be sold for manufacturing purposes and to avoid a further increase in the subsidy.
§ VISCOUNT ALEXANDER OF HILLSBOROUGH
My Lords, may I ask whether that was the policy agreed between the Ministry and the Milk Marketing Board? Are we to understand that the dairy industry is to be stabilised at nothing more than the present amount of milk produce manufactured from milk?
EARL ST. ALDWYN
We feel that any expansion in milk consumption must be in the form of liquid milk. I do not think I can go into full details now, but the reason is that, unlike other countries which are much more suited for manufacturing from milk, because it fits in with their economy, it is not suitable for this country to do so on a large scale.
In the case of eggs, we think that the general output is sufficient and that any expansion must depend on a firmer market or on a reduction in cost. We originally said this in 1954, and again we have stuck to it. In the 1955 White Paper, we said that we could not afford any further expansion in the production of pigs, at least until the cost could be 1028 substantially reduced; and that still holds good. I think that that is clear from this year's White Paper.
§ VISCOUNT ALEXANDER OF HILLSBOROUGH
My Lords, I shall read the noble Earl's speech carefully to-morrow morning, and I want to get this clear. I pointed out the fact, which the noble Earl knows well, that the Government asked for an additional million pigs three or four years ago, but when the pigs were produced there was a muddle in handling them. I want to know now whether what the noble Earl says means that he does not want pig production to be above the amount it was when the Government asked for a million extra pigs, because the apparent policy of the Government is to deter even the maintenance of the present figure.
EARL ST. ALDWYN
I am afraid that I have not the exact figures with me, but I think I am right in saying that when pig production was at its peak it was considerably more than one million above the figure when we first started asking for an increase. The figure now is certainly very considerably more.
§ LORD ARCHIBALD
My Lords, does the noble Earl not recollect that 600,000 out of the million asked for had been achieved when the price was cut by 3s. a score?
§ LORD ARCHIBALD
I think that that figure has been given in the House before and has not been challenged.
EARL ST. ALDWYN
I should not like to argue with the noble Lord here and now, but I feel that he is wrong. I will certainly check that. In the case of wheat, we feel that there is no longer any case for a disproportionate amount of the subsidy for cereals to be paid on wheat. We want to maintain a large arable area, but emphasis should be on feed crops and improved yields.
I should like to take issue with the noble Viscount, Lord Alexander of Hillsborough, on one matter which he raised at the end of his speech, when he made what I felt was rather an improper suggestion. He said that when the Agricultural Wages Board made their recent decisions, the independent members were 1029 acting in accordance with Government policy. He implied that their function on the Board was as instruments of Government policy. It is the duty of the Board to have regard to the public interest, and that is what they do. If their decisions are in accordance with Government policy, that is because our policy is also directed towards the public interest and not because of any instructions from the Government. They do not get any such instructions; they never have had them, and I hope they never will.
VISCOUNT ALEXANDER or HILLSBOROUGH
I think that when the noble Earl reads Hansard to-morrow he will see that I never suggested that they had instructions from the Government. I said that no doubt they were trying to meet the situation from the point of view of the Government's general policy.
EARL ST. ALDWYN
With respect, I do not think that that was the general impression created on the House.
The noble Lord, Lord Archibald, asked me about progeny-testing stations. I know it has been a long time since they were first started, but, as I am sure the noble Lord will appreciate, there has had to be considerable consultation with various sections of the industry and, as he probably knows, it has not been easy to get agreement. However, that has all been settled now, and we hope that the first station will be operating by the beginning of next year.
The noble Viscount, Lord Alexander of Hillsborough, and various other noble Lords, asked if I could give a little more clarification about the fatstock guarantees. We shall, I hope, in a few days' time be publishing a small pamphlet which will be going to all farmers in the country explaining this matter in considerable detail, and, with your Lordships' permission, I would sooner leave it until that is in your hands rather than try to explain it this evening. The noble Lord, Lord Archibald, also asked what is going to happen if we get a reduced production of wheat in this country. First of all, about half of the production of wheat at the present time goes for use as feeding-stuffs. So that, although the acreage of wheat for feeding-stuffs may go down, an increase in the acreage of other corn suitable for feeding-stuffs may 1030 well replace it. In addition, there is available quite a lot of wheat in Australia at reasonable prices if we have to make up any reduced production in this country. The noble Lord asked, also, what exactly was the position of the calf subsidy. The position is that on heifer calves the subsidy is still £7 10s., and on steer calves the subsidy is £8 10s.
The noble Lord, Lord Forbes, made some kind remarks about silos. We have not yet actually settled the details of how we propose to work the grants on silos, but I agree with the noble Lord about the importance of a roof in the wetter areas, and we would propose that the expenditure on a roof should rank for grant under any scheme which is finally evolved. I am not sure that I can go all the way with the noble Lord in saying that a permanent roof is essential in all areas, but I will bear in mind what he has said. I also agree with him about the big advantages to be gained from a scheme for certified herbage seeds. My Department has supported this scheme throughout, and I think I can say that we have taken a prominent part in its development. Officers of the National Agricultural Advisory Service will inspect the growing crops and our county field officers will take independent samples of the final product for check testing. We hope that the assurance of quality which will attach to the new certification trade mark will help to sell the certified seed to a wider circle of farmers and that it will earn a high enough premium over commercial seed to justify the extra trouble taken in its production. This will depend to some extent on publicity, and we are helping on this, too. Our National Agricultural Advisory Service officers are recommending the improved strains to farmers at every opportunity. We shall watch the progress of the scheme with close attention and continue to help wherever we can. On the question of leys, I cannot really agree with the noble Lord that there are grounds for setting up a Commission to study the question.
The noble Viscount, Lord Alexander of Hillsborough, has expressed concern about the alteration in the guarantee arrangements, particularly the discontinuance of the individual guarantee for livestock. Your Lordships will remember that this particular device was brought in at the time of decontrol of 1031 fatstock, when many farmers doubted whether it would be possible to make the auction markets run smoothly. We intended to provide a safeguard against any serious imperfections there might have been in the auction markets. But experience has shown that the individual guarantees have had serious disadvantages. They have tended to distort the normal market influences and to weaken the tone of the market because they may remove some of the seller's incentive to get the best out of the market. They have also made the system complicated and have cost quite a lot in administrative charges. In fact, the auction markets are now working reasonably well, and the stage has been reached when the risks which these arrangements were intended to meet no longer justify the complications and the elaborate machinery involved. I will not try to pretend that some producers might not be adversely affected in the short term by the removal of this guarantee. But I am sure the vast majority will benefit from the simplification and from the removal of unpredictable and distorting elements in the marketing of fatstock.
The individual guarantees were never intended to provide a floor price for the industry as a whole. The main thing is the deficiency payment which makes up any deficiency between the average market price and the standard price. In future there will be only one deficiency payment for each group of fatstock. This will be the difference between the standard price and the average realised price for that group of fatstock. In the case of cattle and sheep, the standard prices are being increased substantially. In the case of pigs there is a small reduction. The new standard prices should, however, give substantial assurances to the producers. In addition, so as to provide even more stability, the single deficiency payment will be adjusted as and when necessary to ensure that the average total return to producers each week remains within a predetermined range on either side of the standard price.
I have outlined some of the decisions taken in the light of this year's Review, and I should now like to say a few things about their probable effects on the industry. Several noble Lords have been rather dogmatic about the effects of our 1032 determinations on the industry's income, so I feel that I must stress that under present conditions, when most of the produce is sold in a free market, we cannot possibly forecast accurately the effect of any particular determinations on the industry's net income. Producers' returns are influenced by market prices and the level of output, as well as by the level of the guarantees, and we cannot tell what the market prices or the precise output will be.
Returns are also influenced by the trend of costs. However, this £25 million increase in the value of the guarantees, when added to the benefit of increasing efficiency, which should be worth some £25 million for the Review commodities, will be substantially more than the total increase in cost since the last Review. This, as has already been mentioned, was some £37 million for Review commodities, and included some £12 million of costs which have already affected the net income of the industry during the current year. Put in another way, the broad effect is to leave at least a substantial part of the increase in efficiency of the industry available towards improving its net income and meeting any further increases in cost, though as the Government's measures against inflation take effect, we must, I think, all hope that this problem of increasing costs will become less serious; and in any case we shall again take due account of increased costs at the next Annual Review.
There has been a good deal of talk this afternoon—about so-called under-recoupment—which seems to suggest that the value of the guarantees ought almost automatically to be adjusted each year by the total amount of the change in costs. We cannot accept that suggestion. The effects of the annual determinations of the guarantees cannot be judged except by reference to the trend of net income, which is affected by other factors besides the value of the guarantees and the change in costs, and notably by increasing efficiency. If the trend of net income is satisfactory, as I frankly believe it is, then the under-recoupment must have been more apparent than real. It is true that the actual net income of the industry in the last two years has been lower than in the previous three years, but we have taken full account of that. As is well known, the fall in the actual income in 1033 1954–55 was largely the result of very bad weather, and although there has never been any suggestion that the Government should insulate the farmer in the ordinary way from weather effects, either bad or good, we did make some allowance for this at the 1955 Review, and at this year's Review we have again allowed for the fact that the recovery in 1955–56 has been a slow business and that there is still some way to go.
As regards the trend of net income, however, there was a big increase as a result of the 1947 expansion programme and the injection of finance that was made for that purpose. This brought the net income of the industry by 1949–50 up to a level nearly half as much again as it was before the expansion programme was launched. Since then, it can be said that it has been steady. When measured en a normal weather basis—that is, after allowing for special effects of weather, either good or bad—it has been fluctuating within the range of £290 million and £330 million. Even though other industries may have been going ahead, as compared with agriculture, during the last few years, the stable level of agricultural net income has not been unreasonable in the circumstances. Although I think there is no real foundation for any suggestion that home agriculture as a whole is doing badly, I am frankly far from complacent about the position of the industry. There are still many problems to be faced, and there is the need for the industry to bear its share of the stringencies that are required at present in the general national interest.
An attempt has been made to show that the net income has not been satisfactory by relating it to the gross output over a period of years. This comparison is rather misleading. The industry is not on a "cost-plus" basis—and I am sure the farmers would not wish it to be, although I think some noble Lords this afternoon would like to see it in that condition—and there is no necessary or desirable relationship between the net income and the value of gross output. For example, during the first five or six post-war years, some £80 million to £90 million of war-time feeding-stuffs and fertiliser subsidies were stopped, and The farmers were compensated for this by higher prices. The ratio of net income to gross output declined, and should 1034 naturally have declined, for that reason alone.
In some of the criticisms that have been made this afternoon and in other places, emphasis has been placed on a particular type or class of farmer. It is suggested, for instance, that for a particular commodity the increase in the guarantee is not equal to the increase in cost, and that this means that the income of the producers concerned has been cut by the amount of the difference. This line of criticism disregards all the other respects in which the farmer might be benefiting from the guarantees and the opportunities which might he open to him—and are, in fact, being taken by farmers all the time—to adapt their systems of farming to meet changing circumstances or to increase their efficiency.
In judging the case of the small milk producer, for example, it is not enough to look only at the increase in his costs as compared with the change in the value of the guarantee for milk: it should also be borne in mind that he will probably benefit from the increased guarantee for oats, the increases in the calf subsidy and in other production grants. He is unlikely to employ much labour and will therefore not be so much affected as the larger farmers by the recent wage increase which formed, after all, a substantial part of the increase in costs. Also, his efficiency should be increasing steadily as milk yields continue to go up and advantage is taken of farm management advice, as the production and use of grass is improved, and so on. All this will improve his net income. Similar considerations apply to the small egg producer and, I would add, to the small pig producer as well, except that it is more usual for a small pig unit to be run with a small milk or egg unit rather than as a separate business. In the case of both pigs and eggs, the cost increases have been comparatively small, and efficiency in production is, I am glad to say, advancing steadily.
This does not mean, however, that we are lacking in sympathy for the special needs of the small farmers—indeed, we had them very much in mind at this last Review. As has been mentioned by several noble Lords this afternoon, on the whole they are concerned mostly with the production of milk, pigs and eggs, though the very mixed character of our farming is such that no one product can be said 1035 to be primarily the small man's concern. The increase in the guarantee on milk is, in fact, rather more than would really seem to us to accord with our objectives—repeated consistently at each of the last three Annual Reviews—of an output somewhat lower than at present, and greater reliance on home-grown feed which should be cheaper than imported feed. But we have made the increase after taking into account the increased costs because we realise that milk production is a very important part of our agricultural economy, that it is faced with special difficulties, such as the seven-day week, and that there are many small dairy farmers who depend mainly on milk for their livelihood.
In the case of eggs and pigs, the trend towards increasing efficiency is stronger than for milk. The effect of the determinations on these products should be to leave average profitability much the same as it is at present. I do not think that that could, by any stretch of the imagination, be called harsh treatment. It is a sign both of our desire to provide stability and of our concern for the smaller producers. These determinations have been made notwithstanding our anxiety about the burden of imported feeding-stuffs on the balance of payments, the risks of over-production and the weight of the Exchequer liability on this group of products.
I know that there are some groups of farms (particularly dairy farms of small acreages and low incomes) which are having special difficulties, but we cannot hope to use the guarantees to solve all the special problems of a particular group. We shall always be ready to consider any new ideas, but I am afraid that any proposal for selective treatment, such as the use of the guarantees to ensure higher returns to some producers than to others for the same product, bristles with difficulties. We have therefore thought it the best policy to provide for similar treatment of all producers concerned with a particular product. But where it is practicable to help in a particular problem we shall continue to do so—for example, we are raising the maximum rate of grant under the marginal production schemes for work on marginal farms.
The point which most noble Lords have touched on this afternoon is the last para- 1036 graph of the White Paper. A great deal has been said about a long-term policy and, as I replied in the last debate we had on agriculture, in the last resort the farmers' confidence in the future depends not on Annual Reviews, or on statutory obligations, or on elaborate statements of policy, but on faith in the Government's sincerity when it promises not to withdraw its support. That is still my view. But we naturally had your Lordships' views much in mind during this Review and, as I have said, in the last paragraph of the White Paper we said we recognised that each Review, by its nature, could afford assurances for only a comparatively short time ahead, and that if longer-term assurances could be made more effective this would help the industry in its forward planning. Accordingly, we are considering whether any practical methods of providing such assurances of support can be devised.
§ THE EARL OF LISTOWEL
May I interrupt the noble Earl? I think that what he said just now is very important, because he was speaking in the present tense. The White Paper speaks in the future tense. So can I take it from what the noble Earl says that Ministers are at this moment considering the possibility of longer-term assurances for agriculture?
EARL ST. ALDWYN
I cannot say that at this moment there are consultations outside the Ministry, because obviously we have to formulate our own ideas before we can start talks.
EARL ST. ALDWYN
Yes. As I said, this will not be an easy task and it is no good my pretending that it will. If it were an easy task, it would obviously have been done before. For example, a fundamental difficulty about giving more specific assurances for the future, in the form, for instance, of firm price guarantees for a certain number of years ahead, is that conditions are bound to change, and what may appear to-day to be sensible price levels may in a few years' time be found to be out of line with changed costs or with changed market price levels or with some other vital factor. A workable solution to the problem will not be found without at least a great deal of careful thought; 1037 but we are undertaking a thorough examination of the possibilities, and if anything can be done in this direction we most certainly will do it. I must apologise for delaying your Lordships for so long. I am afraid I have not answered all the questions which have been put to me. Those I have not been able to deal with now I will deal with by writing to noble Lords.
§ 7.17 p.m.
§ VISCOUNT ALEXANDER OF HILLSBOROUGH
My Lords, we are greatly obliged to the noble Earl for his long and careful answer, even if he has not replied to all our points. The oats acreage payment is something about which I may perhaps hear from him, but I must say that we on this side of the House appreciate the way in which your Lordships as a whole have responded in this debate to the consideration of the question. As the noble Earl, Lord St. Aldwyn, has said, it has been a very good debate all through. If I have said anything at all likely to offend the Front Bench opposite by reason of any lack of proper courtesy, or anything of that kind, I willingly withdraw it.
We certainly have had an exceedingly good debate. I wonder what some of the agricultural community will think of this last statement about the long-term policy, because I have seen a long-term policy pressed for for the last five years at least—or almost five years, anyway. This is the first time that I have seen anything as solid as this promise in the last paragraph of the White Paper. The noble Earl's remark that if it had been easy it would have been done before, reminds me of a quotation. Was it not Bernard Shaw who said that 1038Christianity has been found difficult, so it has not been tried"?I do not think that is quite the basis upon which we should base our thoughts for progress in this or any other industry or sphere in the country. However, on this matter we naturally do not want to divide; we want to do the best we can for the industry all the way round. I shall look especially at the OFFICIAL REPORT to read what I said on the matter about which the noble Earl complained, and if there is anything to apologise for I will write to him with the greatest possible pleasure. I beg leave to withdraw my Motion.
§ Motion for Papers, by leave, withdrawn.