THE AGRICULTURAL INDUSTRY

HL Deb 15 February 1956 vol 195 cc996-1038

4.27 p.m.

Debate resumed.

THE EARL OF DUNDEE

My Lords, I am sure your Lordships are all grateful to the noble Viscount, Lord Alexander of Hillsborough, who is himself a keen farmer, for the great interest which he always takes in this subject and also for the great vigour and clarity with which he always expresses himself when he speaks about it. The noble Viscount's Motion refers to the present uncertainty and anxiety in the agricultural industry, and it is certainly a good thing that we should discuss it. I did not, however, see any signs either of uncertainty or of anxiety at the Aberdeen Angus bull sales in Perth last week. The champion bull was sold for 16,000 guineas, which I hope may at least have temporarily relieved the seller from his own uncertainty and anxiety. Another bull went for 17,000 guineas, and even the most humble purchasers like myself, who belong to the very bottom class in bull-buyers, could hardly get anything we wanted at much less than 300 guineas—and that for a type of animal for which I was paying only seventy or eighty guineas a few years ago. Yesterday, at the shorthorn sales in Perth, prices were so high that I could not afford to buy even one bull, and I might just as well have come here and attended your Lordships' House. Voting on the Copyright Bill, which I believe your Lordships were considering yesterday, might have been at least as useful as not buying a bull.

When the Government restored the free market in meat two years ago they may have been acting wisely or they may have been making a mistake; but they certainly succeeded in putting a high premium on the best breeds of British beef cattle. The Ministry of Food, when it was the sole buyer of meat in this country, could only pay the farmer according to weight, without making the same allowance for quality that the butcher who has to satisfy his customers is obliged to give in a free market. And now all concerned are trying to increase their beef herds as rapidly as possible at the same time. Perhaps that is particularly so in Highland areas, where we are helped very greatly indeed by the Government's hill cattle subsidy, and by other measures of special assistance. Indeed, our hill farming policy at the moment is so successful that a good many farmers cannot get enough tuberculin-tested cows of the right breed to stock their hill farms.

The high prices now prevailing for breeding cattle of the best-known varieties are not due merely to inflation, although, as the noble Viscount pointed out, inflation is having a marked effect on our agricultural economy as a whole. They are due mainly to the farmers' belief that people who are fully employed and who are earning high wages will always be willing to pay a good price for the best meat. I think that the real cause for anxiety in agriculture at the present moment is not the fear that farming will be let down by any Government or by any political Party, but the possibility that there may be a slump in world trade, which might put an end to full employment and so reduce the buying power of the public. If that were to happen, then it might well become economically and politically impossible for any Government to guarantee farm prices at anything like their present level.

It must be a slightly uncomfortable thought for all of us that there is now enough wheat stored up in Canada and the United States to feed the whole population of the world for several years, which cannot be sold at economic prices. A free market for meat in Great Britain may or may not be a good thing—personally, I think it is a very good thing—but a free world market for wheat at the present moment would be the greatest imaginable disaster to Western civilisation. It would not only ruin all farmers in Britain and North America, but it would hit the industrial workers of both Continents with equal severity. Great Britain is the largest importer of wheat in the world, and any British Government might have a very difficult decision to make if asked to co-operate in any plan for stabilising international prices.

Two years ago, the present Government refused to adhere to the International Wheat Agreement. I am not criticising them for doing that, because I think it possible that Canada and America may have been asking a bit too much, and we have to think of the terms of trade, which are extremely important to this country—the relation between what we buy and what we sell. But it is better for us that the terms of trade should be a little more adverse than we should like them to be, than that we should take the risk of a world trade depression which would at the same time deprive our foreign customers of the ability to buy our exports, our own Government of the ability to guarantee British farm prices, and our own population of the ability to buy British food. I do net agree with the noble Viscount, Lord Alexander of Hillsborough, in saying that the Government ought to have signed the International Wheat Agreement at that time, because I think it might have been that the price was too high and we had to think of those gold and dollar reserves, about which the noble Viscount also spoke. I think it would be a good thing if we could have a new agreement at a price which would be fair to us. It certainly would be a great advantage to us if we could assist the Canadians, Americans and Australians to dispose of these vast surpluses of wheat without undue loss to themselves.

In my view, we are often inclined to consider agricultural policies rather too much in terms of the actual amount of money which we are supposed to be giving to the farmers. It is seldom realised that until about two years ago the annual prices for wheat, barley and oats. which were agreed in February of each year, were usually less than the world prices for these cereal products. I remember that at one time the Ministry of Food were buying imported barley from Mesopotamia at 140s. a quarter when the guaranteed price to the British farmer was 90s. a quarter. If 90s. was a fair price, as I think it was, that is all right; but it is wrong to say that the farmer is being subsidised in these circumstances—he is not. It would be more true to say that the farmer was subsidising the consumer. If we do not object to paying the farmer a lower price at a time when world prices are high, then equally we ought not to object to paying a fair price when world prices are low. The figures representing the total amount which we are paying on guaranteed agriculture prices are a fairly small sum in relation to the great fluctuations which are taking place from time to time in the terms of trade, and it is to our advantage that at least we should try to keep home farm prices stable, at a cost which is very much less than we may have to pay at any moment for a change in the terms of trade in our disfavour.

If we like to compare these figures with the assistance given to other industries, we find that many trades, like the motor car trade, have protective duties amounting to 33⅓ per cent. That is a much greater ratio of assistance than the farmer is getting in relation to the amount of food which he is producing. I think we have been restoring British farming fairly cheaply, from the taxpayer's point of view, and I think the farming industry has made pretty good use of the money that has been spent on it. Our gross output has increased since 1938 by 50 per cent., and our output per man by nearly as much. If we compare that with some of the other more important industries, like the building trade, in which I am told £4,000 million has been spent, we find that the output per man is only half of what it was before the war, compared with the 50 per cent. increase in agriculture. If we take coal mining, on which we have spent I do not know how much money in capital investment and to cover losses, we are still not getting as big an output as we had before the war. But in agriculture, which on the whole has received very modest subventions from the country, we have this huge output of increasing value to our general economy.

The noble Viscount, Lord Alexander of Hillsborough, has brought forward a number of criticisms of the Government, with some of which I do not agree but to all of which I have listened with much pleasure. I am going to deny myself the still further pleasure of entering into any controversy with the noble Viscount, not because it happens to be Ash Wednesday, which is the beginning of the season of self-denial, but because it happens to be February 15, when the Annual Price Review is just beginning. I feel that in the middle of February it is a good thing that all these agricultural grievances and complaints should be expressed without undue discouragement from anybody else. I do not think that any of the criticisms of the noble Viscount really affected the broad general agreement, in principle, which subsists between all political Parties on our agricultural policy. The purpose of that policy is to save foreign currency by producing more food, possibly with fewer men but with higher wages for those who are employed. And if there have to be fewer men as a result of higher wages and mechanisation, that does not mean that there will not be more men employed in other occupations, some of which we hope may be in the country. No industry can ever be free from uncertainty and anxiety—indeed, it would be a bad thing if any industry were entirely free from either. But I certainly could not say that the policy of the present Government has increased anxiety in agriculture beyond what is warranted by the general economic difficulties of our country at the present time.

4.42 p.m.

EARL FERRERS

My Lords, it is not without a certain feeling of temerity that I rise to crave your Lordships' indulgence on the first occasion of giving voice to my feelings in your Lordships' House. I do so because I am particularly interested in agriculture—indeed, it is my livelihood. I confess that I do not feel quite the deepening depression that, according to the text of this Motion, I should feel; but, by the same token, I believe that the future agricultural prosperity does lie in that rather hackneyed word "efficiency." I feel sure also that no Government in the near future can, will or would even dare to allow agriculture to wilt. And that for five good reasons.

First, as the noble Viscount, Lord Alexander of Hillsborough said, it saves us £400 million a year on our balance of payments. Secondly, for strategic reasons we cannot afford to allow our agriculture to slump. We have found in the last two wars what a vitally important weapon a virile agriculture is; and for that reason alone we cannot let it fall into the doldrums that it was in during the 'thirties. Thirdly, there are 730,000 people involved in the work of the soil, and we cannot disregard their interests. Fourthly, a huge and immense empire of industry has grown up around agriculture: all the machinery manufacturers, the canned foodstuffs firms and the deep-freeze firms are fundamentally dependent for their own prosperity on a prosperous agriculture. Fifthly, agriculture is the premier industry of this island: it occupies the largest area of any industry in this country, and therefore must command a certain degree of importance.

As your Lordships know, for various reasons Britain cannot produce her food as cheaply as other countries can; and if you agree with what are, to my mind, the important points that I have mentioned which must safeguard agriculture, then you must also agree that agriculture must be protected. It is on the form of protection that I should like, with your Lordships' indulgence, to say a few words. There are virtually two ways in an open market in which we can protect our agriculture. One is by tariff, and the other is by lowering the cost of British food to the consumer, by means of subsidies and grants. If we put on tariffs, such as many other industries enjoy, what will be the result? The cost of imported food will rise to be on a level with the British home-produced food; but that will immediately put up the cost of living and so curtail demand. It was for that reason that these agricultural subsidies were produced. These subsidies have become valuable political ammunition for urban politicians.

What is the case? These subsidies keep the cost of British food to the consumer at an artificially low leve1—there is no question about that. The alternative, as I say, is to impose tariffs that will keep imported food on a plane with home-produced food. These subsidies keep the price of food to the British consumer low, and the British consumer is therefore receiving a subsidised product. That surely must come under the heading of a consumer subsidy. I am not suggesting for a moment that agriculture is not protected, because it is; but I believe that these so-called agricultural subsidies are, in their essence, consumer subsidies. I feel that there is in the Press an extremely unpleasant "smear" campaign against the farmer. Because the farmer is the recipient of a cheque for the subsidy, it is said that he is living on the charity of other people's taxes and is fostering that historic but now rather rusty old piece of furniture, the feather bed. These "smear" campaigns are as unjustified in agriculture as they are in any other industry that is pro- tected by tariffs. Nevertheless, the aim and object must be gradually to increase the efficiency of our farms so that British food can be produced at a low cost, while at the same time ensuring a fair and just return to the farmer and to the farm worker for the labour and risk involved. As the Government have said, I believe that they will study these subsidies to see whether any improvements can be made.

I should like to make three suggestions for the consideration of your Lordships: they will probably be quite useless, in which case they will no doubt find their way into the wastepaper basket, but I think they are worth mentioning. First, to start and run a farm takes a great deal of capital, which no young person possesses to-day. Again, the buildings on our farms are in need of tremendous capital expenditure. Just think, my Lords, that they were erected by our forefathers 200 and 300 years ago! We talk of efficiency, but look at the advances made in agriculture during the last 300 or 400 years, in electricity, machinery and fuel. All those things—and even cows and pigs—have changed their shape in the last 200 years. No one would think of using a plough or an implement that was 300 years old, and I feel there is great scope for improving the efficiency of our farms by spending money on capital buildings. Therefore, I wonder whether there is not a possibility of the Government paying, say, a grant of 2 per cent. of the 5 or 5½ per cent. required as interest on capital as a grant for the erection or modernisation of buildings. Alternatively, would they pay a direct lump sum for the erection or modernisation of buildings, rather as they do for the farm cottage? I want to make it quite clear that I am not asking Her Majesty's Government to foot a higher subsidy bill. On the other hand, I suggest that perhaps there is an area into which some of the money spent on subsidies and grants could be poured.

My second suggestion concerns grants for laying on water. It is generally agreed, I think, that the best way to get the most out of one's land is by the practice of ley farming. The greatest drawback to ley farming is the astronomical cost of laying on water. At the moment, a grant of 25 per cent. is paid for this work. I would humbly submit that that is rather a waste of money, because the grant is not large enough to make any difference to the person who must have water. If the cost is going to be £100, the fact that he will receive £25 is really not sufficient incentive. Despite the 25 per cent. grant, the cost will still be heavy. If it were possible, I should like to see that grant increased to 50 per cent.—again not as an extra, but as a switch-round. I feel that in both the instances that I have given the effects of the subsidies would be felt over a long period. They would be felt over the next five, ten, twenty or fifty years, and by increasing the efficiency of one's buildings, and by getting bigger crops from more fertile land, we should be reducing cost of production for each unit of food produced—and that, surely, ought to be our aim.

My third suggestion relates to our dear friend the pig. The noble Viscount, Lord Alexander of Hillsborough, touched upon this matter, and I wanted to emphasise a point that was not his main point. In the last eighteen months or two years there have been two minor slumps in pigs. I am not unduly concerned with that, because anybody who keeps pigs knows the old adage that "Pigs are either muck or money"; and anyone who goes into pig farming presumably does so with that saying in mind. A person said to me the other day. "Pigs are either copper or gold, but if you stay in them and do not go in and out, you will get the silver." There is a lot of truth in that view. The important point is that while during these two minor slumps the return to the farmers has substantially dropped, the cost to the consumer has remained materially the same. There seems to me to be tremendous scope for improvement there, because, however one can argue the merits of the agricultural subsidies, whether they were designed to subsidise the farmer or consumer, the person they were never intended to subsidise is the middle man. Yet in these cases it is he who has benefited.

In passing, I should like to say a word or two about electricity. One hears a great deal about rural electrification, and it is an excellent thing. But I would urge that, when rural areas have been electrified, they should be subsequently properly maintained. The electricity boards have wonderful ways of selling one equipment and then cutting off the power. That may be all right in a home, where one can produce candles and get on, but for a farmer who has chickens and incubators dependent upon a constant supply of heat, the effect of power cuts can be devastating. There is great scope for the use of electricity in farms now, and more so in the future; but it must be of a reliable nature. I liken the electricity boards to a "quack" treating a sick man: he will prescribe plenty of medicine; he will sell the patient plenty of expensive tablets; but he will also cut off the supply of drink, without which the patient cannot exist. I have been the victim of this particular game on more occasions than one. The most recent was last week, when I lost 30 per cent. of my birds owing to a power cut. If I had been operating a hatchery with 2,000 eggs in incubators, the loss would not have been 30 per cent. but 100 per cent. And when one rings up the electricity board and says, "Look what you have done"—as I did in a very irate fashion—all they say is: "We are sorry, but we are not responsible." I suggest that the boards should be responsible.

I apologise for having detained your Lordships for far too long. What I have said constitutes only my own most humble and modest impressions of the agricultural industry as it is at the moment. I am afraid that I have not punctuated what I have said with the customary facts, figures and statistics that one so often hears. Perhaps that is because I was once told by an eminent Parliamentarian (and here I am standing on rather tender ground) that some politicians used statistics rather like a drunken man uses a lamp post—more for support than illumination.

4.57 p.m.

LORD WISE

My Lords, my first pleasant opening is to congratulate the noble Earl who has just resumed his seat upon his maiden speech. He certainly punctuated it with much useful practical information, and it was obvious from the manner of his approach to the subject that he is very interested in agriculture. I know that we shall be pleased to hear from him on any occasion on which he wishes to address your Lordships. There is another point of congratulation, and it is this. I notice that the noble Earl comes from Suffolk, and anyone who comes from the Eastern Counties is, so far as I am concerned, particularly welcome when we are dealing with agriculture. There is another point which may interest only the noble Earl, which is that yesterday I sent a card from this House to Staunton Harold.

EARL FERRERS

Thank you very much.

LORD WISE

There is little more I can say than what the noble Viscount said in opening. I think we should all agree that it was a speech full of information and facts, and was a telling indictment of the policy of the Government as we find it at the present time. Those of us who are concerned with farming can all deal with practical examples of troubles through which we have been passing for the many years during which we have been connected with the industry. I think that the present is a time when we can quietly discuss the position of the industry as it is. It has been said that now, just before a new February Review of Prices, is not an appropriate time to talk about agriculture in your Lordships House; but I do not hold that opinion. I think it may be useful for the Government to hear not only what we on these Benches have to say but also the practical experience of those Members of your Lordships' House sitting on the other Benches, who, I am glad to see, will take part in this discussion before it concludes.

I want to deal quietly with one or two points because I am deeply interested in the industry. I have had practical experience of quite fifty years in dealing with farming matters and other matters appertaining to the land. I am perturbed at the volume of opinion which is being expressed in the country about the present conditions under which farming is carried out. One has only to look at the agricultural papers, to read the reports of the National Farmers' Union meetings, or even to look at the local papers to see what the farming correspondents are thinking about the position. It is obvious that the industry is, at the present time, sick. Either there is a cure or there is likely to be a further decline. I want the Government, who 'have the means within their power to look at the conditions, to consider the unrest and anxiety which now prevail, and to come forward, as they can come forward if they have a mind to, with a long-term policy which will, I hope, help to bring about a revival of agriculture.

I cannot follow the noble Earl, Lord Dundee, in his suggestion that, owing to the high prices of pedigree bulls at recent sales, it must be welt, with the agricultural industry and the production of livestock. I am pleased if somebody did make a high price for his bulls and I am further pleased to think that one of those bulls was the means of bringing dollars to this country, for I believe that that particular bull was exported. I am glad to hear from the noble Earl that there is a certain prosperity in hill farming, because I well remember, in days not so long ago when I was in another place, that we were particularly keen upon setting the hill farmers in a better position than that in which we found them at that particular time. We took steps in that direction. I want to suggest to the Government—this suggestion has come up before and has been refuted on the other side—that they should fully implement Part T of the Agriculture Act. The conception of the Government is different from the conception we had, when we brought that Act into operation, of what was meant by "guaranteed prices" and "assured markets." The noble Viscount who opened this discussion gave us figures which clearly pointed out that, at the present time, we have no guarantee of prices except low prices, minimum prices. Until the farming industry can be more certain not only of it; marketing, with an assurance of a sure market, but also of a fair price based on the costs of production, there will be a certain amount of chaos and disquiet within the industry.

The Government have it within their power to come forward with a policy based on a long term. But if there are not the means within the Government to tackle the problem and tie up all the loose ends of agriculture, I suggest that some sort of commission be brought into operation to tender advice to the Government or have some power to act, so that, when something goes wrong in one direction or another, the attention of the Government can be drawn to it and it can be put right at once and within our present means, without waiting until we have a world slump.

The Prime Minister a few days ago, I believe in a letter to a candidate in one of the by-elections, assured the electors that the Government proposed to bring happiness and efficiency into the industry. There is no end of happiness at present in the industry on the production side, in the use of something, in the tending of something, in seeing our crops grow and mature. But there is something else which makes for happiness, and that is a full reward for our efforts. If we can get that, then agriculture, with its prominence in our economic life and its desire to serve the community, will play its part. The Prime Minister referred to efficiency. This should be said: that the time has come when anything which is detrimental to the industry, in the nature of the slur of inefficiency, should be combated. There is no record in our economic and trade history of the last few years which can hold a candle to the efficiency and progress of the agricultural industry. We have done remarkably well and, within our means, have delivered what we were asked to. The time has come when we can decide that the agricultural industry is as efficient as any of our other basic industries.

I want to make two or three suggestions to the Government on matters which may help the recovery of agriculture to prosperity. First and foremost is the fixing of our prices according to our productive costs. It is a tragedy, as so many of us know, to produce things and then to have to sell them in the open market at a loss, at a price lower than the cost of production. I think some measure of control should be exercised in regard to the costs under which we have to work. Such things as feedingstuffs, artificial manures, machinery and repairs have a habit of mounting against us, and, so far as we agriculturists are concerned, we cannot in any way stop it. The only people who can stop it are the Government, and I think it would be a tremendous boon to agriculture if some kind of control were imposed. I am absolutely unrepentant so far as control is concerned. I am quite convinced that a fair measure of control would be of benefit to the industry. We in agriculture were never more prosperous than at the time when we were controlled.

I suggest that there should be a review of marketing conditions, which are not entirely satisfactory, whether in the open market or through the Fatstock Marketing Corporation. Whether our cereals are efficiently and properly marketed is a moot point. I suggest to the Government that some better control should he under- taken in regard to imports, which at many times of the year come into this country for one purpose or another, to the detriment of the home producer of agricultural foods. If I may tread on ground which is present to all our minds at the moment, I wish to encourage some sort of better system of credit facilities. I am sure that the present credit squeeze is having a detrimental effect upon the agricultural industry—at least as much as upon every other industry. If we can reduce the cost not only of products which we have to buy, but also of the finance which we have to use, then I think we shall be conferring some benefit and helping the industry. My Lords, I wish to say no more at this time. I hope that others of your Lordships will have some contribution to make which will enable the Government to consider the present position, and that when we again come to discuss agriculture in your Lordships' House we shall not have quite such a gloomy picture to portray.

5.14 p.m.

EARL BATHURST

My Lords, on behalf of noble Lords on this side of the House, it is my pleasure to congratulate the noble Earl, Lord Ferrers, on his excellent maiden speech. I am certain that your Lordships will look forward to hearing the noble Earl speak on many occasions in the future. I also feel that many noble Lords on the other side of the House and the Party that they represent must feel most sympathetic towards the ideas which the noble Earl, Lord Ferrers, put forward. Should those ideas find sympathy with the noble Earl who will be replying, there will be a great deal of support up and down the country for any such measures that can be put forward.

I feel that the lack of confidence to which the noble Viscount, Lord Alexander of Hillsborough, referred in his far-reaching and excellent survey in opening this debate, must in some ways be due to the gradual breakdown of the landlord and tenant system. Whatever else has happened since 1939, it is certain that for a potential tenant to-day there are fewer farms to rent, and that there are fewer estates with as many farms as they had in 1939 for a tenant farmer. The landlord and tenant system is a policy of farming which may be right or wrong, but, whatever else it may be, it produces farms at a price which the average young person wishing to farm in these expensive times of inflation can afford. As a result of policy, whether right or wrong, since 1939, and as a result of tragic deaths in the Second World War, estates have been broken up. The result is that more and more farms have been bought up, either by the sitting tenant at a low price or by outside buyers at a high price if there was vacant possession. Every time that happens it means that some young man who may be at an agricultural college or who has acquired agricultural learning as a farmer's son is not able to take over a farm of his own.

We have heard the price that has been suggested for capital to start a farm. A fairly modest farm of, say, 100 acres could take certainly £16,000, and it would not be a very ambitious type of farm to manage and run. That has been much publicised in the Farmer and Stockbreeder, where they are experimenting to see how little capital can be used. It is suggested that £3 for an average acre would not be too exorbitant a rent for a landlord to ask. It is shown in the latest figures that somewhere in the region of 30s. is in fact the average country rent. Whether that includes such places as those spoken of by the noble Earl, Lord Dundee, I cannot ascertain but 30s. as an average rent in the country must surely be very low indeed. No one would complain at having to pay 5 per cent. for money that they wish to borrow, and if to-day agricultural land on an average (excluding, if I may, Lord Dundee's part of the world), is worth something like £80 an acre, I feel that tenants, who still form the majority of farmers in this country, must be receiving a substantial subsidy out of the very land in which they have security of tenure.

If there is this lack of confidence to which the noble Viscount has referred—and there is no doubt that up and down the country at N.F.U. meetings one can hear of it—would such people as the noble Viscount and the noble Lord, Lord Wise, be willing either to sell their farms or to let them to such a young farmer as I have suggested? I do net believe that the words of the noble Viscount will really have shaken the confidence that exists in regard to the waiting lists of young farmers wishing to take up farms. I do not by any means believe that the lists will shorten when we return home after this most valuable debate in your Lordships' House. Rather I think that the confidence is such that there will he more and more people wishing to take over farms as tenants, even though the rent can amount—and often does—to £5 an acre, because of the overwhelming confidence that young men have in the land and in the future of farming, for one reason alone: the enormous technical advances, which any person can understand, can master and can, after a little practice, apply to the land, can bring back a solid return in a foreseeable time, say, within only a year of taking over a holding.

But can any young man obtain a holding which he can afford in these times? I hope that on a future occasion the noble Earl may be able to put forward any ideas Her Majesty's Government may have on the anomaly whereby there is complete security of tenure in a farm, even though the tenant may not be, as under the Act, liable for acts of grossly bad husbandry. Nevertheless, because of that security of tenure, many young men are unable to go into the industry. Credit is one of the major worries which has been somewhat soft pedalled by farmers. I agree with the noble Earl, Lord Ferrers, that if same of the money from these subsidies could be channelled into the land rather than into the farmer's pocket or bank book there would be much more sympathy from the taxpayer and from industry in this country, for that would be a direct subsidy put into the land, and could not possibly be lost by Her Majesty's Government or the Chancellor of the Exchequer. If large scale water schemes were carried out, then the value of the land would automatically go up. No doubt the noble Earl will be able to think of methods whereby the Chancellor of the Exchequer could recoup such subsidies as he would pay out. I believe the same suggestion would hold in regard to electricity power extensions, and so on.

We have heard teat the landlord is due for a break. I am sure he is ready for it and I believe he deserves one at this time. We have heard about the efficiency of agricultural machinery and the men employed in agriculture. The landlord has suffered exactly the same increases in cost but has been unable to obtain such remarkable increases in output, because it takes almost as long to put up a barn in 1956 as it took in 1939. It takes equally long to lay on water, to lay roads and do other work. Such operations have not been speeded up to any great degree. If it is possible, it seems fair to divert some of these subsidy payments to the land, through the landlord. There would be no worry over repayment because tenants are willing to pay upwards of 8 per cent. and more. That is not an unreasonable figure for the country to pay for improvements which will gain such greater efficiency and increased output.

When the taxpayer feels that agriculture is taking too much of the resources which he pays to the Chancellor, it would be well for him to remember the enormous amount of goods which the agricultural industry is buying from the industrial side of our country. It seems hard to believe that in the period 1952–56 it should have been necessary to buy, for example, an extra 120,000 milking machines. One would have thought that anybody milking cows in 1952 must have had milking machines to make anything of a livelihood. Nevertheless, despite the apparent lack of confidence which the agricultural industry is feeling, that number of machines was bought in that period. Much money has been spent on capital equipment. Since 1952 12,000 combines have been bought. I do not believe any farmer would lay out an average of £1,000 and more if he had no confidence in the industry. Furthermore, with wages at £6 13s. a week farmers will have to keep on buying machinery in order to maintain output at a price at which the housewife will buy.

Finally, I would ask Her Majesty's Government to consider means whereby the home-produced article can be "put over" and advertised to the housewife. In a free market it is the housewife who produces the long-term policy; if she buys the produce, then agriculture will be prosperous. If she does not like and buy the produce, then agriculture cannot prosper. There are new advertising media, such as television and films. Little has yet been done to advertise the quality of our agricultural products or to make comparisons with imported foods. Even the Milk Marketing Board finds it necessary to spend £650,000 in advertising such an everyday commodity as milk. Could not some of the subsidy be used, possibly by the National Farmers' Union or other bodies connected with agriculture, to bring before the public the benefits of supporting agriculture by selecting and buying home-produced products, so long as those are competitive and comparable with imported products—as usually they are?

5.28 p.m.

LORD KENSWOOD

My Lords, my sole qualification for taking part in this debate is that I am neither a landowner nor a farmer. I am, however, a citizen, a taxpayer, and a consumer. In the speeches that have just been delivered the ordinary citizen has been given far too little prominence. The noble Earl, Lord Bathurst, certainly touched upon the importance of enlightening the ordinary consumer as to the need for an agricultural industry. I believe that only 4 per cent. of our working population is engaged in agriculture. Though that is a very small percentage it does not mean that it is an unimportant mass of people; but it does mean that comparatively few really know the needs of this industry. There have been references in this debate to questions being asked about why farmers should be subsidised. We have already heard of the importance of this industry as a buffer for our gold and dollar reserve and as a means of lessening the impact of inflation. We have also heard of the importance of the agricultural community as purchasers of manufactured goods and machinery. There are two aspects that 1, as an ordinary member of the population, wish to stress.

We may ask what loss there would be to Great Britain, to the community, if agriculture, like so many other great industries in the past, were to go to the wall. Other industries have declined and have been superseded by new ones. I believe that there are several cogent answers. First, there are some agricultural products that can be brought to the consumer in far better condition if they are produced at home. Certainly many housewives think that home-grown vegetables and home-produced meat are better than the imported commodities. On the other hand, there are many workers who ask why they should pay more for produce from our own farms when subsidised wheat and meat are obtainable from abroad. We know—it is a matter which has been stressed in this debate—that workers are leaving the agricultural industry and flocking into the towns. It may well be that they earn very much more money in the towns. But we have to give some reason why we should keep them on the land and why we should subsidise them. I have already mentioned the question of quality.

One very important consideration, to my mind, is that agriculture is a vital factor in defence. We are spending fantastic sums on armaments; on the Army, the Navy and the Air Force, and on producing very expensive defensive and offensive weapons. Yet many of us remember the threat of starvation with which we were faced during the First World War. We know of the straits through which we had to pass during the Second World War, and how, because of the tremendous efforts which were made on the farms, we managed to survive. I also remember, as will many other noble Lords, that between the wars agriculture declined. It was heartbreaking to see farms derelict and land waterlogged. All this had to be made good during the war. Does it not make much more sense to keep the farming industry prosperous and up to concert pitch now, in order to be prepared for the next world war—if there is to be a next world war; and the mere fact that we are prepared to spend such a large amount of the money raised by taxation on armaments means that we are envisaging such a possibility. It stands to reason, therefore, I submit, that whatever we can do to make farming prosperous—even if it means subsidising it or, by one means or another, encouraging farmers to expand—will be well worth while.

We have heard about the difficulties of young men starting new farms. I know something of that from my own experience. My son had to find a tremendous amount of money in order to start his own farm. I think that the State should do a great deal to encourage young and enthusiastic men and women to go into farming, instead of into other industries. We should benefit in the long run—in fact, we should benefit immediately. We should not follow a course which may result in the stamping out of the great enthusiasm which certainly exists in this connection. On these grounds, I should like to support my noble friend and leader and the other noble Lords who have spoken in the House to-day advocate- ing greater consideration for the farmers—both employers and employed—and the provision of capital at a very much lower rate than that at which it is provided at present.

5.34 p.m.

LORD MOYNE

My Lords, I have only a comparatively small point to raise in relation to the general scope of this debate. I should begin, I think, by declaring an interest in dairy farming. I am, however, disinterested in what I am going to say, to the extent that I have never had any difficulty in disposing of my milk, thanks to the good offices of the Milk Marketing Board, and to the district in which I live. But I do believe that the more milk that can be sold and produced in this country as milk, or cream, the better it will be for both the farmer and the consumer. I think that that view will be generally acceptable to the House, and it brings me to the rather unseasonable topic on which I wish to speak—namely, the lack of any real cream in much of the ice cream which is sold in this country.

What ice creams do contain I have no means of knowing; some say it is whale fat, and others (whom I disbelieve) say that mashed potatoes sometimes enter into their composition. Both such ingredients are, I admit, products of agriculture or fisheries; and both are no doubt perfectly wholesome. I am saying nothing against iced whale fat or iced potatoes, but I am objecting to the use of the word "cream" to describe them. I have been told that a distinction is observed between "ice cream" and "cream ices," but such trade niceties are too subtle to protect the public, who naturally suppose that "cream" means cream. The Food Standards Ice Cream Order, 1953, has gone some way towards giving protection by specifying that ice cream shall contain 5 per cent. of fat; but it does not specify butter fat. If butter fat were to be specified, since such fat is the basis of cream, and since 7½ per cent. milk solids other than fat are also specified, I should feel that some kind of piecemeal approximation to accuracy had been achieved. But I would suggest that such ices should be described as "rich milk ices," since they would contain only 2 per cent. of butter fat above the bare legal minimum for milk. They would, in fact, contain only the same percentage of butter fat as may be expected from the milk of the Channel Island breeds.

I should like to see the word "cream" reserved for ices containing a proportion of actual cream that has not been, as it were, taken apart and reassembled in somewhat unbalanced proportions. It is also perhaps not irrelevant to mention that in many of the United States of America it has been found perfectly practicable to forbid the use of the word "cream" unless cream is actually present. I realise that the noble Earl who is to reply for Her Majesty's Government is not likely at this moment, in the middle of a Price Review, to announce changes of policy on more important issues, but I hope he may be able to agree to such a comparatively minor proposal as I have made for the protection both of the dairy farmer and of the public.

5.38 p.m.

LORD HUNGARTON

My Lords, may I add my thanks to all those that have already been expressed to my noble friend Lord Alexander of Hillsborough. It has been said, and it seems to be thought, by some noble Lords who have spoken that everything is all right with agriculture. I wish that it were. If I thought so I should not be speaking here to-day. But I am bound to agree with my noble friend who brought this topic to our notice again. The few remarks which I have to make may sound a little critical, but whatever I have to say I want noble Lords to realise that my criticism is intended to be helpful criticism; and I hope that it will be regarded in that way.

What has caused anxiety and uncertainty in the agricultural industry at the moment? The first thing I have found, in going about amongst my farming friends, is that they agree with me in saying that there is no Government policy. The Government, they declare, have not a policy. I am bound to agree. And they go a step further. We who live on the land all know to-day that agriculture is in the hands of the Government. It does not matter what Government come to power, agriculture is in the hands of that Government. The farmers realise this. They also realise that at the present time the Government are facing a great deal of difficulty so far as the economy of the country is concerned, and they are wondering just how far agriculture will come under the axe.

We realise that the subsidies paid to agriculture are large, amounting to some £300 million a year, but we find that our net returns come to about the same figure, and we know that if there is a cut we shall be very much worse off. So far as I am concerned—and I wish all farmers could look at it in the same way—my country comes first. The cost of living has to be brought more into line by some means, and someone is going to suffer in the very near future. That is one of the reasons why we farmers are concerned about the future. We are also concerned about the subsidised food, such as French wheat, that is brought into this country. French farmers are getting something like £37 a ton for wheat that is sold in this country at £24 or £25 a ton. That is done by the Government buying maize abroad, selling it to our farmers at a profit and using the profit to subsidise corn coming into this country to be sold. Farmers do not mind competing on level terms with farmers in any part of the world, but when it comes to competing with Governments—well, we just cannot do it. That is why I say that we are in the hands of any Government and why we should have Government protection from anything of that kind.

At the present moment, unfortunately, there is no planning in agriculture. Because there is no planning by the Government, our industry has been drifting like a rudderless ship and farmers are afraid that we shall end up on the rocks. Agriculture is too important to be treated in that way. As has already been said by my noble friend Lord Alexander of Hillsborough, agricultural production amounts to £1,200 million a year. That is a great deal of money, a much larger sum than is produced by any other industry, and it is worth looking after. I should like to pay tribute to our farmers and farm workers for the grand work they have done, not only during the war but since. We have not heard a whimper from them. I am very proud of our farmers and farm workers, particularly the farm workers. I am glad that they have had a little rise. They are looking forward to another—though whether we can afford to give it to them will depend largely on what happens during the next few weeks.

I think the Government can be justly blamed for the present high level of the cost of living—I say that without fear or favour. It is one thing for which I blame this Government. If they had kept the cost of living at what it was four years ago, we should not be in the trouble we are in at the present time. But we are in trouble and we have to get out of it. This so-called freedom, which we have had for several years, has completely failed: let us be honest with one another about that. From the top to the bottom, from the highest to the lowest, it has failed. The man in big business has been begged and cajoled by the Government to cut down his dividends; yet they are still rising. When we go right down the line until we come to the workers, they say they want a little of these dividends, and it is difficult to blame them. I say that there ought to have been some means by which these good men could have been told exactly "where to get off." I beg the Government to give agriculture a lead by adopting a long-term policy. To me that is all-important. I come back to that point, and I shall continue to come back to it, until this Government, or some other, adopts such a policy and puts it on record. Once we have a long-term policy, it will be up to the farmers to put their house in order. And, goodness knows! there is a good deal of spring cleaning to be done in the farmers' house.

Then I come to marketing. There is a great deal of money wasted in the marketing of our produce, and that is one thing that must be looked into very closely. There is too big a gap between the producer and the consumer: that is where we have to look for saving a great deal. This can be done by better organisation. We think that we have made ourselves so efficient that we cannot improve our methods. Believe me, my Lords, we have not started to get down to real efficiency. In my opinion the 1947 Agriculture Act has been administered very badly. When this Act was introduced it was never envisaged that we should be marketing our produce in the present antiquated fashion—I use the word "antiquated," but it is really worse than that; that is a polite word for it. Go to any market you like and farmers can be seen selling their produce as they did fifty years ago. We have not advanced at all, with the exception of milk and wool marketing, which are looked after much better. We must put that matter right.

I am certain that if our industry had confidence put into it by the Government, then farmers would have the courage to reorganise production and marketing much more efficiently than at present. It would give us the incentive to go on. But the Government and the farmers have to work together. It is no good for the Government to say, "Well, there you are, my boys; you have your freedom. Go on." The Government and the farmers have to go hand in hand, and it is imperative for the wellbeing of this country that that should be done. And the sooner the better. Marketing boards should be set up for everything we produce, and farmers should make greater use of their own co-operative societies. I was the chairman of a co-operative society for seventeen years and watched its turnover grow from half a million pounds to £5 million a year. I am very proud of that. I think that farmers could do a great deal by co-operation, but they are slow to take things up even in their own interests. However, I commend that idea to them. Incidentally, these agricultural co-operative societies have an annual turnover of £100 million, a considerable amount of business. By making better use of the means I have mentioned, I firmly believe that farmers can produce food more cheaply. This will be a great help in lowering the cost of living, which is the main thing needed to help this country out of its present difficult position.

5.49 p.m.

LORD FORBES

My Lords, I should like to join other noble Lords in thanking the noble Viscount, Lord Alexander of Hillsborough, for introducing this Motion and giving us this opportunity of having a debate on agriculture, an industry of such great importance to us all. At the outset I must declare an interest, as I am a farmer farming in Scotland. Much ground has already been ably covered by other noble Lords and I do not want to repeat anything that has already been said, except to stress the great achievement in agriculture in raising production by over 50 per cent. since prewar days. This is a very remarkable achievement, one which is saving the country no less than £400 million worth of food imports annually. Owing to this, I think one can truthfully say that the agricultural industry is proving itself worthy of the nation's support by rowing a very fine race, in which everyone in the industry is pulling his or her weight.

The noble Viscount, Lord Alexander of Hillsborough, has referred to the uncertainty and anxiety in the industry. I do not want to take this matter too lightly, but I should like to point out that there has been uncertainty and anxiety in the agricultural industry ever since man first began to till the land, because the farmer cannot control the weather. Also, there is bound to be uncertainty and anxiety at this moment, when a Price Review is pending. For the farmer it is rather like being in the dentist's waiting room; he wonders in what sort of condition he is going to leave the dentist's chair, and he turns over in his mind the possibility of coming out without any teeth and feeling very sore, or with no change, or possibly coming out with his teeth filled with gold.

I have two points I wish to raise, and at the outset I must apologise because they are both rather technical points affecting grass. Grass, which is a protein-rich food, is universally accepted as being one of the cheapest, if not the cheapest, form of animal food, and, as such, it is now our most important crop. Our grass fields are to-day like gold in the nation's economy, because no longer can we afford to go on importing large quantities of feedingstuffs from abroad. Unfortunately, at a time when the phrase "balance of payments" haunts us daily, we find that during the last two years a further £55 million has had to be spent on importing feedingstuffs for animals. I maintain that much of this could have been supplied at home, at far less cost, by the use of grass. To achieve this it is essential that farmers should not only grow better grass, but should make better use of the grass they grow. A 10 per cent. saving on imported feeding-stuffs would be the equivalent of saving one million tons of imports a year. The easiest way the farmer has of raising production at lower cost, and at the same time improving the condition of the soil—which is an important factor in farming to-day—is by making better use of grass and by conserving grass.

The cheapest method of conserving grass is by making silage, which, with our present climatic conditions, is a far better form of grass conservation than by making hay. Also, it is a far better form of grassland husbandry. Many farmers have found that silage has cut their feeding-stuffs bill considerably. I believe the farmer who has gained most by silage is the dairy farmer, who has found that it is possible for a dairy cow to produce 800 gallons of milk a year on grass and grass silage alone. It is of paramount importance that we should make more silage in this country. When I was on an Inter-Parliamentary Union delegation to Denmark, I found that silage was being made on 50 per cent. of the farms in that country. Unfortunately, there is no official figure available for this country, but I believe it would be somewhere in the region of 10 per cent. In 1950 1¾ million tons of silage were made in the United Kingdom, and in 1954 2½ million tons were made. So there has been some increase, although the increase is not nearly fast enough.

VISCOUNT ALEXANDER OF HILLSBOROUGH

Is the 2½ million tons entirely grass silage?

LORD FORBES

It is entirely grass. What is wanted is a marked expansion in the making of silage, which would undoubtedly lead to a reduction in the cost of production of many of our more important livestock products. The Government White Paper on agriculture in March, 1955, drew our attention to the fact that more effective use of grass and grass products is one of the best ways in which the farmer can help the nation's economy. This being so, surely it is up to Her Majesty's Government to financially encourage farmers to make more silage. I am not for one moment suggesting that subsidies should be increased, but as the Minister has expressed the desire to channel as much Treasury help as possible into constructive and deserving production grants, surely here is a case for re-allotting some of the existing grants. I should like to suggest one grant which in my own mind I am quite certain would give a far better return than some of the existing grants. I would suggest that a grant should be given towards the construction of roofed silage pits, as is given in Northern Ireland, where I gather the grant is yielding a high return to both farmer and country. If a farmer already has a silage pit, then I suggest that this grant should be made available towards roofing that silage pit, as our agricultural authorities have proved quite conclusively that silage made without a roof, especially in a wet season, can lose a considerable amount of its feeding value.

I should now like to draw your Lordships' attention, quite briefly, to a scheme called "The National Scheme for Comprehensive Certification of Herbage Seeds." This scheme was introduced by the National Institute of Agricultural Botany in 1955. Briefly, the object of the scheme is to make available to the farmer certified home-produced grass and clover seeds of high quality and from approved strains. Farmers cannot expect the best results, and the country cannot expect the highest production, unless the best possible seed is sown. Agricultural authorities in Scandinavia are insistent that the energy they have expended on building up the strain quality of their seeds has resulted in an overall increased agricultural production of 20 per cent. They also maintain that a high percentage of this increase comes from better grass and clover seeds. The success of this scheme depends entirely upon the amount of support it receives, and I would ask the Minister to consider how much support he can give to this worthy scheme which, if successful, will be of great benefit, not only to the farmer but also to the country. The least that can be done is to give the fullest possible publicity to the scheme.

Finally, the Government can encourage the farmer; but only the farmer, by his sweat, his toil and, sometimes, his tears, can produce the food. As Swift so rightly said: Whoever makes two ears of corn or two blades of grass, to grow where only one grew before, deserves better of mankind and does more essential service to his country than the whole race of politicians put together.

6.1 p.m.

THE EARL OF LISTOWEL

My Lords, we have had a long and exceedingly well-informed debate, such as we are accustomed to have on the subject of agriculture. I shall detain your Lordships for only a little longer to draw the attention of the Government to two matters which I think are particularly urgent. I should like to ask the Government to give serious consideration to the drift from the land and, looking further ahead, as the Government should, to the disastrous effect that this drift will have on production unless it can be stopped in time. The facts are indisputable. In the past year 20,000 men have left the industry. These are net seasonal workers, but regular whole-time farm workers. The average lost in the last six years has been about 14,000 workers a year, and this shows that the number leaving the industry annually is not only not steady, much less not declining, but is actually increasing. It is surprising that, up to the present time, this annual drain of manpower has not had any appreciable effect upon output; but it undoubtedly will, if it is allowed to go on. It. is certainly one of the factors causing the farmers generally acute anxiety—that acute anxiety about the future to which my noble friend and Leader has properly drawn your Lordships' attention in his Motion, and for which he has adduced so much evidence, based upon his great practical farming experience.

There are two things that have sustained output, in spite of the dwindling labour force, but I am afraid that they will not continue to operate much longer. One is mechanisation. As we are all aware, in the last fifteen years there has been a technical revolution in agriculture. British farming is now the most highly mechanised in Europe. I do not say, of course, that we cannot go a little further in this direction, as several noble Lords have suggested, but we must be extremely careful not to waste money on too much mechanical equipment. The other thing that has saved labour recently is the changing pattern of farming since the war. Climatic conditions and our soil have made us a pastoral country, and it is only in war time that we plough up our grass and plant other crops. We are now gradually reverting to our pre-war pattern. In the last two years there has been a substantial decline in arable acreage and an increase in permanent grass. But this change from arable to grass—and I am sure the noble Earl opposite will agree—cannot go much further without upsetting the balance of production. We are therefore very near the limit beyond Which labour cannot be saved without a serious fall in output. Indeed, it is beyond dispute that if we go on losing manpower at the current rate of from 10,000 to 20,000 workers every year, there will be within a few years an acute labour shortage and a steep drop in the present far from satisfactory level of food production.

I need hardly stress the economic consequences of such a setback, because your Lordships are fully aware of them. It would undoubtedly aggravate our balance of payments difficulties. But no less unfortunate—and this, I think, is sometimes overlooked—would be the social effect of a further drain of population from the countryside. For the last twenty years we have been trying to disperse the population of our great cities to the best of our ability. Nobody wants our villages to become more and more deserted and derelict, and our towns more and more crowded with people coming in from the neighbouring countryside; but that is the way we are heading to-day. I should like to ask the noble Earl opposite whether he agrees that, if the drift from the land continues at its present pace, these economic and social consequences will inevitably follow. If he does agree—and I do not think he can do otherwise—perhaps he will tell us what the industry and the Government should do to stop it.

I think everyone realises the broad principle of the solution to this problem. The only way to save our countryside is to make life in the villages as attractive to young people, when they are planning their future, as life in the towns. I do not believe this can be done without an entirely new approach, both by the Government and by the farming community. Let us look at some of the things that militate against life in the country. It is a disturbing fact that the difference between average industrial and average agricultural earnings—although, of course, agriculture has now become just as skilled an occupation as work in factories or on the railways—is not only substantial but actually growing. It now amounts to £3 7s. 0d. a week, whereas in 1953, less than three years ago, it was only £2 13s. 5d. a week. Moreover, the working week in industry is shorter. A differential of this magnitude, if allowed to persist, will ruin agriculture. Agricultural wages must be made comparable to the wages of urban industry. Of course, we cannot expect the taxpayer to carry the whole of the extra cost that this would involve, but if farmers had the guarantee (which they have not at present) of a stable and satisfactory labour force, they would no doubt make a special effort to contribute to the cost by improving their own efficiency. Better wages are, therefore, closely linked to better farming.

In the meantime, further attention should be given to incentives. One hopes that both sides of the industry will see the advantage of a graduated wage scale that would give the new entrant something to look forward to as soon as he had the necessary qualifications. Even more important than this, I believe, in encouraging young workers to take up a career on the land, is a reasonable prospect for the beginner, for the man who is starting as a farm worker, to be able to get hold of a plot of land and farm on his own account. The best chance of this, under present conditions—of course, it is hopeless for a farm worker to imagine that he could ever afford to provide the working capital required for a farm—is the opportunity of renting a smallholding from a local authority. The demand for smallholdings, however, considerably exceeds the supply, and county councils have long waiting lists. I hope that the Government will look into the shortage of smallholdings and see what can be done to make them more easily available.

This growing disparity between the reward of the farm worker in the country and the town worker is only one of several factors in this exodus from the villages. Another is the lack of many of what we town dwellers regard as the basic requirements of a civilised life, which most of us are fortunate enough to have in our own homes. The younger villager choosing a career is bound to think of the sort of home he is likely to provide when he marries. It will be pointed out to him—and no doubt he will take the necessary steps to find out if it is not—that there are still something like 800,000 houses in this country, mainly in the villages, without a piped water supply; that many cottages, and even small farms, have no electricity for light or heating; that many others are ramshackle and wearing out, and need to be replaced by new buildings. The discouragement of new building by local authorities by the withdrawal of the subsidy for general housing needs, and the increased cost of borrowing, to which my noble friend Lord Alexander of Hillsborough rightly drew attention, could not have come at a worse moment. It will certainly not make living conditions in the countryside any better in future. I hope that the Government's restrictions on capital expenditure will not prevent the further electrification of farms, farm buildings and cottages.

I should be surprised, though pleasantly, if the noble Earl, Lord St. Aldwyn, were to tell us that the Government have a policy for stopping the drift from the land. There has certainly been no sign of it in recent years. This is just one aspect of the lack of a definite policy which is causing so much uncertainty in the agricultural industry. I do not believe that this lack of policy is a healthy tendency. The industry must continue to work in the closest possible partnership with the State. It shows that we have not yet found out how to strike a balance between the laissez faire (which nobody wants) of the years between the wars and the rigid State control (which we all want to avoid) that we had in war time. The proper relationship between the Government and the agricultural industry, under the normal economic conditions of peace time, which we are now experiencing and hope to experience for many years to come, is not something we can possibly know from our past experience; it is something we have to work out for ourselves in the next few years.

We are now entering an entirely new phase in the history of British agriculture. The common ground accepted by everyone is the broad principle of the guarantees in the 1947 Act. But differences between individuals and, what is more important, between the political Parties show up as soon as we ask haw these guarantees are to be implemented. There is no less divergence of opinion about the ways and means of improving the efficiency and prosperity of agriculture. Many of these opinions have been properly aired this afternoon, and they will, I hope, receive the serious consideration of the Government.

In view of these honest differences of I opinion, and the uncertainty they are bound to cause in the industry, this is surely the moment for an official inquiry, by the best experts we can find, into the basic, long-term requirements of agriculture. There are, of course, plenty of precedents for the appointment of a Royal Commission to make recommendations about one of our main industries. Your Lordships will remember the two Royal Commissions that sat on the coalmining industry between the wars. It is astonishing that there has been no official inquiry into the fundamentals of agriculture since the turn of the present century. The noble Lord, Lord Wise, said he wanted a Commission to advise the Government. That is exactly what I am asking for.

Whatever form such an inquiry might take—and it is for the Government to decide—it should clearly work within the framework of the 1947 Act. Its terms of reference should assume the broad outline of national policy as defined by the guarantees in the Act. What we want advice about, surely, is how best to fulfil these undertakings ender present economic conditions, and what the Government and the farming community should do to lower costs and improve efficiency. I give one or two outstanding examples. It is of paramount importance that we should know the permanent level of agricultural production which the country can afford now and can continue to afford. The Government, who have already changed their target from time to time, are now aiming at an increase of 60 per cent. above the level of pre-war output. I am sure I shall be pulled up if that is not so. My Party regard this as a somewhat conservative estimate, in the non-political sense of the epithet.

Everyone will agree that we cannot go on producing more food, regardless of cost. The normal level of production we now want to find, which nobody knows, will depend on the ability of farmers to lower their costs and use more skill, and on an appropriate measure of support from the State. It might be that a committee of inquiry would find that we can learn in this regard from other countries. For instance, it might well ask how Denmark, another pastoral country of small farmers, and therefore comparable with our own, can produce eggs, butter and milk at roughly half the price of farmers here, while paying higher wages to the farm workers. Perhaps such an inquiry would help us to overcome the disability presented by the very large number of small farms, usually of less than 100 acres in extent, which produce so large a proportion of our livestock and livestock products. It is into these broad basic matters that an inquiry would have to go if it were to produce something of really last- ing value from the point of view of agriculture.

Once we know the level of farm output, once we know the answer to that question, we can base ourselves firmly on an improved standard of efficiency, and we can estimate how large a labour force will be needed to sustain that standard. That will be a great advantage. Nobody can say at the moment what is the labour force required permanently for a reasonable level of output in agriculture. The noble Earl cannot answer that question, and I cannot think of anyone who can. It is a question that ought to be put and answered. If we knew exactly how much in quantity the land should produce, we should also be able to tell the farmers that we should need a certain quantity of each specific product, and we could tell them what the State would be willing to pay to maintain that level of output and that quantity of different farm products. This would provide the necessary data for what has been asked for by several noble Lords this afternoon, a long-term programme for agriculture, a programme to which every Party could subscribe. It is only a programme of this kind, a long-term programme which would not be altered in its essentials, that would remove the doubts and uncertainties that are in the minds of so many farmers at the present time.

Apart from the questions to which I have referred, arising from methods of production, an inquiry of this kind could deal with many unanswered questions in connection with the subsidies. I should like to mention one or two of these some of them have been mentioned already in the course of the debate. In the payment of guaranteed prices (this is a fresh point this afternoon) we have found no way of distinguishing between the high-cost marginal farmer and the farmer on good land who spends far less but gets the same return as a result of the guaranteed price. That is one question. Nobody has been able to answer it up to now. There may be no answer to it, but it ought to be looked into.

Another question that arose this afternoon on which opinions differ considerably—and the noble Lord expressed his own personal view about it—was whether we have struck the right balance, from the point of view of output, between production grants and guaranteed prices. One noble Lord opposite said that he thought we ought to spend more on production grants. That may be so. It may be the case that, by reducing the farmer's costs and increasing his earnings, we could save a lot in deficiency payments. We ought to know whether or not that is so. Concern has also been expressed—not this afternoon but I have heard it expressed on other occasions—as to whether the Annual Price Review is not in itself a cause of uncertainty. It might be better to review the guarantees at less frequent intervals than every year, with a provision for an emergency Review if we fail to stop the effects of inflation on prices.

These are all matters that are among the many fundamentals of policy that should be reconsidered, and reconsidered without delay. We need a long-term programme for agriculture, backed by an agreed measure of financial support and acceptable to all the political Parties. It is only a programme of this sort that will give both farmers and farm workers a renewed confidence in the future of the industry. That confidence is very largely lacking at the present time. I do not believe that it will be restored until we have the best advice we can get about the permanent pattern of British agriculture, and about the degree and the best method of its support by the State. A distinguished economist (not a person with any Party or other prejudice) wrote only the other day that the future of agriculture is in the balance. If nothing is done now, if there is no inquiry, if there is no desire for further positive action by the Government, the future of British agriculture will be decided by the present tendency of the Government to drift, to avoid difficult or unpopular decisions, and to leave the unfortunate farmers and farm workers to fend for themselves.

6.20 p.m.

EARL ST. ALDWYN

My Lords, as never fails to happen in a debate on agriculture in your Lordships' House, we have had many enlightening contributions to another full discussion on agricultural policy. I should first like to congratulate the noble Earl, Lord Ferrers, on his maiden speech, which, as such, I thought was a fine example and one that I hope we shall hear repeated often in the future. I only wish that I felt able to congratulate the noble Viscount, Lord Alexander of Hillsborough, on the timeliness of his Motion. The House is, of course, naturally at liberty to discuss these matters at ally time it feels inclined; but I cannot help feeling that this debate would have been more useful and constructive, and there would certainly have been more to talk about, had it taken place after the Annual Review. As it is, naturally I am limited in what I can say about the industry's immediate prospects.

VISCOUNT ALEXANDER of HILLS-BOROUGH

May I comment on that?

EARL ST. ALDWYN

Certainly.

VISCOUNT ALEXANDER OF HILLS-BOROUGH

I quite appreciate the difficulty for Ministers; but what is the use of our criticising the present situation after the Annual Review? In the inflationary situation that exists, meetings are going on between the Chancellor of the Exchequer and the Ministers, who are all looking forward to a terrible Budget. Parliament ought to give views to the Chancellor of the Exchequer, through the departmental Ministers, before a decision is reached. Why should we not do that?

EARL ST. ALDWYN

On that basis, I should have thought that this debate would have been better held immediately the House reassembled after Christmas, because the Review is in fact starting to-day, and it is therefore difficult to make any great changes as a result of anything that may have been said to-day.

VISCOUNT ALEXANDER OF, HILLS-BOROUGH

Unfortunately, the debates were hooked.

EARL ST. ALDWYN

My Lords, as I have said, naturally there is very little new which l can tell the House, but I think that really there is little new that has been said this afternoon by noble Lords opposite. For a long time now the main theme of their criticism has been that our policy is causing uncertainty and anxiety. It is easy enough to say that, and, indeed, if one goes on repeating it often and loud enough, there is some chance that uncertainty and anxiety may be caused—but not by our policy. In the world of productive enterprise, of which agriculture is such a vital part, confidence in the future is always a delicately balanced thing, and nothing but harm is done if the balance is upset. The industry's output may suffer and cer- tainly the farmers' pockets will not benefit. It is very easy to do damage and very hard to repair it, and I must say that such concrete suggestions as are occasionally put forward by noble Lords opposite for removing this alleged uncertainty never fail to cause the gravest anxiety and uncertainty in my own mind, and I believe in the minds of many who have the interests of our agriculture at heart.

Most noble Lords opposite have suggested, in various terms, that the industry is suffering from the lack of a long-term policy. Our answer to that is that our policy is long-term and that the alternative policy supported by noble Lords opposite makes no better promise of stability in the future. Our policy is that there should be a free market so that the wishes of the consumer from time to time can be reflected in market prices, but we moderate the effect of these market prices on the producer through our system of guarantees: in other words, we give as much stability as can be got in conditions of freedom. But any policy, no matter how long-term, must in the last analysis depend for its success on confidence in the Government in power. Policies can be changed, and even Acts of Parliament can be repealed or amended. The most that any Government can do is to provide, as we have done, the right conditions in which the industry can prosper, and undertake to keep it prosperous. We have throughout developed our policy with this aim in mind and we have set out our intentions clearly year by year in the White Papers which have followed each Annual Review. We have, moreover, carried out those Reviews faithfully and conscientiously in accordance with the rules laid down in the Agriculture Act, 1947.

But we do not want the industry to be run by the Government, nor do we want it lo be spoon-fed—and, in spite of what some noble Lords opposite may say, I am sure the farmers do not want that either. The Government's part is to go on providing reasonable guaranteed prices su7plemented by useful production grants, to pursue sound import policies and to help the industry to progress and increase its efficiency in every way possible by research and technical advice. I do not think that anyone has seriously suggested this afternoon that we have not done this in the past, and I suggest that there is no reason whatever for supposing that we will not go on supporting the industry. The firmest possible assurances on this point have been given again and again.

Broadly speaking, the alternative method which is put forward is, so far as I can understand it, that the Government should contract to buy the industry's output at fixed prices, or that the Government should instruct the industry on exactly what is should produce for years ahead. We do not think there is any sense in that in peace time. There is no point in producing what is not wanted, and the only truly effective way of finding out what is wanted and ensuring that it will be produced is to put the consumer in touch with the producer through the medium of a free market. I think we have demonstrated beyond any doubt that this can be done without risk to the industry's stability so long as the Government continues in the background to give as much stability as can be got in conditions of freedom and to protect the industry against excessive risks. On that basis, the industry can itself plan ahead.

I am afraid that there is not really time this afternoon for me to correct all the many wrong impressions which the noble Viscount gave in his opening speech. I can mention only two of the more important ones, as I see them. First, it is not true that we have been cutting the guaranteed prices against the background of rising costs. At the last Review we added no less than £28 million to the value of the guarantees, which represented an increase of nearly 10 per cent. on their net income. Secondly, it is not true that the output of the industry has been falling. Last year there was a small decrease owing to the exceptionally bad weather conditions, but the trend is now going steadily upwards.

Several noble Lords have voiced the feeling that farmers are not keen on being apparently so dependent on subsidies as such. They argue that bringing subsidies up for frequent review draws a disproportionate amount of attention to them in comparison with the help given to other industries in the form of tariffs which do not come up for review so often. I am sure we could all pick out particular industries which seem to have a high level of protection, just as in the agricultural world there are particular products on which the rate of subsidy is a good deal higher than on others. But, by and large, the protection we give our agriculture is no less than the counterpart of the protection which we give to our manufacturing industries. The essential point is that the way in which we are helping home agriculture is one which benefits consumers and the whole economy by interfering as little as possible with the free play of market forces in a competitive world. Also, the method which we use is adaptable to changed conditions, which makes it much easier for us to make adjustments to ensure, on the one hand, that the support is adequate, and, on the other, that it fits into our economy. For example, many farmers are worried about rises in the prices of things they have to buy. Although we must look to the industry itself to carry some part of this rise, through its own efficiency, we are in a much better position to help, where necessary, if we can adjust the level of support from time to time. Similarly, this flexibility is a safeguard for the taxpayer.

Several noble Lords, including the noble Viscount opposite and my noble friend, Lord Ferrers, talked about pigs. Much has been made—and was made today—about the recent fluctuations in the market prices of pigs. I believe those attempts are made to try to show that our method of implementing the guarantees does not work.

VISCOUNT ALEXANDER OF HILLSBOROUGH

Hear, hear!

EARL ST. ALDWYN

In fact, the market for pigs is about as good an example as one can get of the value of the guarantees and the sincerity of the Government's determination to go on backing up the industry. There is no escaping the fact that prices of pigs tend to fluctuate. They must do so, to some extent, if the consumer is to have freedom of choice. Sometimes it is the pork market which is strong, sometimes the bacon market. No human authority, be it a Government Department, commodity commission, marketing board or anything else, can possibly see far enough ahead.

VISCOUNT ALEXANDER OF HILLS-BOROUGH

The farmer sees well enough ahead by his treatment of the matter—until the last few weeks severely reducing the number of sows, sows in-pig and gilts in-pig, by a very large percentage—because he has no confidence in the scheme as it is worked. That is common experience in my neighbourhood and must he in many others.

EARL ST. ALDWYN

The noble Viscount is perfectly right: there has been some reduction in the number of sows and gilts in-pig. But at the last Price Review we said that we needed some reduction, and there we have it. We have not got more than we wanted and, as a noble Lord said, the tendency now is for the number of in-pig gilts to increase. The guarantee scheme is of particular value in demonstrating how the farmer benefits. Last year, for example, the market price for bacon pigs ranged from 26s. 4d. to 45s. 6d. per score, a swing of 19s. 2d. per score. On the other hand, producers returns only varied between 46s. 7d. and 55s. 3d. per score, a swing of 8s. 8d. a score. There was similar steadiness in the returns from the auction markets. Fluctuations nowadays are, in fact, smaller than in the regulated markets before the war. I am not suggesting that the guarantee arrangements are perfect. We are always on the lookout for ways in which they can be improved and have recently invited the National Farmers' Union to discuss improvements with us. The noble Viscount opposite produced what I understood were his own figures for production. He rather suggested that we might make an exchange of figures. That would be an excellent plan. If he will send me his, I shall be happy to send him mine; and if he can and more holes in mine than I can find in his, so much the better.

VISCOUNT ALEXANDER OF HILLS-BOROUGH

I shall be delighted to do so, but as this is a public debate and the Minister is answering I should like him to answer this question, for the benefit of farmers: does he think that in the present situation one can produce a bacon pig of good quality, round about 11-score live weight, for about £18 and show a real working profit to the farmer?

EARL ST. ALDWYN

I most certainly can and do.

VISCOUNT ALEXANDER OF HILLS-BOROUGH

Then it is a great pity that the consumers are paying so much for bacon and pork. I cannot understand that.

EARL ST. ALDWYN

My noble friend, Lord Ferrers, raised an old familiar cry about the profit which the middleman is making. Frankly, I cannot accept that. The argument always seems to be that people who buy from farmers tend to club together and offer low prices; and that the farmer does not mind because he gets the difference out of the Exchequer. That can be so only Where the buyers are sufficiently small in number to get together to do it. Our inquiries show that generally buyer; are competing very keenly among themselves for the produce of our farms. Nor have we been able to find any evidence that decontrol and the deficiency payment system have caused substantial increases in distributors' margins. Since decontrol, consumers have clearly demanded a much better service from distributors. This improvement naturally costs money, and we must expect to see that reflected in some increase in the traders' receipts. The noble Earl also mentioned the question of cheap credit and grants towards capital expenditure, and a 50 per cent. grant for water supplies. I was glad to have these constructive suggestions in a speech here to-day and will certainly bear those matters in mind.

The noble Lord, Lord Moyne, suggested that it would be of benefit to agriculture, as well as to the consumer, if we were to insist that anything described as ice cream should, in fact, contain some cream. The rules governing this are contained in the Food Standards (Ice-Cream) Order, which is at present being reviewed by the Food Standards Committee. They will make recommendations not only about the minimum amount of fat but also about the nature of the fat which should be present in the ice cream.

The noble Lord, Lord Forbes, spoke about the importance of grass. I certainly agree with him that there is a great deal of scope for farmers in this country to make more and better use of the rich grass which is such a valuable national asset to us. He mentioned silage-making, and we are very conscious of the importance of this as one method, among several, of using our grassland resources to better advantage than at present. I do not think it is possible to make a direct calculation to show that a given increase in the amount of silage made would mean a reduction of so many hundredweights of imported feeding-stuffs. But, obviously, an increase in silage-making would be one of the best ways of reducing the farmers' dependence on bought-in feed.

The noble Lord also mentioned silage pits. He suggested that they ought to be subsidised; that the cost of a silo or of a roofed silage pit should be contributed to. I think, really, the cost of this is relatively small, and, on the face of it, I am inclined to believe that shortage of money is probably not the main deterrent to the making of more silage. But, certainly, if we should find that there is evidence that a grant of the kind which the noble Lord suggests would be effective, I am sure that my right honourable friend would be glad to consider the suggestion. The noble Lord also talked about a certain home-grown grass seed scheme which was instituted by the N.I.A.B.

VISCOUNT ALEXANDER OF HILLS-BOROUGH

I am not sure that I know what that means.

EARL ST. ALDWYN

The National Institute of Agricultural Botany. We support this scheme most wholeheartedly. It is undoubtedly an excellent thing for grassland farmers. But I do not know that it needs any more support than we are giving it at the moment. The noble, Earl, Lord Listowel, raised the question of the drift from the land, and I must say that I find myself in agreement with much that he said. It is a great pity that agricultural workers are continuing to find industrial employment more attractive. But I also feel that the picture is not one of completely unrelieved gloom. Although the agricultural returns for June, 1955, showed that the regular labour force had fallen significantly below the pre-war level; net output has continued to rise. There is, of course, strong competition from other industries, and farm labour is becoming more expensive. That is why the emphasis in the future must be more and more on better farm management and cutting labour costs. I believe that farmers are becoming increasingly aware of this need, and our farm management advisory officers are helping them considerably to meet it.

Unfortunately, we cannot calculate how much of the fall in the number of workers is due to the farmers' increasing ability to manage with less, and how much represents vacancies which farmers would fill if, in fact, they could. But there is no evidence that, except perhaps very locally, shortage of labour is holding up the advance in output. It is sometimes said that shortage of labour is responsible for the decline in the area of tillage—the noble Earl, Lord Listowel, referred to that in his speech—but I do not think that this can be the only or even the main cause. I personally believe that the character of the land itself, and the tendency to revert to traditional methods of farming, are more important factors than reduced numbers of workers. Moreover, there does not seem to be any difficulty about part-time, casual and seasonal workers. The number of these in 1955 was 60 per cent, greater than in 1939, and only slightly smaller than in 1949. In 1954–55 there was actually an increase of some 12,000 in the number of casual labourers.

The noble Earl suggested that we should appoint a Royal Commission. I confess that I cannot see quite what use that would be. A Royal Commission could not determine policy. That surely must be a matter for Ministers in the Government of the day.

THE EARL OF LISTOWEL

My Lords, in case I did not make myself clear may I tell the noble Earl that I did not suggest that a Royal Commission should determine policy, but merely that it should advise about policy. That, as I am sure the noble Earl will agree, is something quite different.

EARL ST. ALDWYN

I am sorry; I rather misunderstood the noble Earl. I think I am right in saying that the noble Earl felt that a Commission could usefully inquire into the state of the industry.

THE EARL OF LISTOWEL

Yes, certainly.

EARL ST. ALDWYN

The only thing I can say upon that is that that is precisely what we do at the Annual Review, and in doing it we use data provided by the universities, whose objectivity is, I should have thought, beyond question. And we conduct the Review in consultation with the people who, I should have thought, are in the best possible position to know the state of the industry—namely, the farmers themselves.

I do not anticipate that I have been able to convince the noble Viscount who introduced the Motion that the future of the industry is as secure and as sound as I believe it to be. But if he had waited a little longer with his Motion I might have been able to tell him in rather more detail what that future holds in store. When all is said and done, however, the Annual Review is a regular event to which we should by now be used, and it ought to be looked at in its proper setting. That setting, I suggest, is the long history of this great industry and its achievements through many difficult years. I hope that this Government's record over the past four years has shown clearly that we are conscious of those achievements and of the importance of the industry to the nation's wellbeing. We have given the industry our support in generous measure, and I say again that we intend to go on doing so. Noble Lords opposite will, I know, agree about the achievements and the importance; we differ only about the ways n which Government support should be given. I hope that I have managed to show that our ways have proved successful so far, and are based on sound and tried principles.

6.50 p.m.

VISCOUNT ALEXANDER OF HILLS-BOROUGH

My Lords, I should like to thank the noble Earl for the courtesy of his reply. He has some doubts about me; I have some doubts about his answers. But we remain friendly, because agriculture is of common interest to us all. The general impression the noble Earl gives me is that, while farmers themselves recognise that unless they can get something of a corporate character in marketing boards—that is, actual collective control of their markets—they cannot succeed, the Government, although they support the marketing board policy, take the line that only a "free-for-all" is likely to bring general prosperity to the industry and the nation. The two things do not go together. However, I am grateful to the noble Earl for what he has said. I hope that the farmers' conference which took place a fortnight or more ago will have indicated to the Government something of the uncertainty and anxiety which I expressed in moving my Motion, because it is certainly there. The nice things the noble Earl has said about the results of the Government's policy did not seem to be reflected very much at that conference of representatives of the farming industry from all over the country. Nobody would be more pleased than I if the Government came out with a line of policy which would increase the success of the agricultural industry. I am very anxious that that should be so, but I do not believe that the Government are adopting the right policy to achieve that result.

Another thing I am most anxious about is that the agricultural industry should be put into its proper place in general Government policy for dealing with the most dangerous inflationary position. So far that does not yet seem to have been done. I am obliged for the courtesy of all noble Lords who have spoken, especially of noble Lords on the opposite Benches. At my age, it was most stimulating to hear such excellent speeches from three young noble Lords such as Lord Forbes. Lord Ferrers and Lord Bathurst. It speaks well for such a House as this, criticise it as I may from the constitutional point of view, that it can produce speakers who speak with so much attention to detail and such free and efficient explanation as these noble Lords do: they show themselves well qualified to help the general work of your Lordships' House. I beg leave to withdraw my Motion.

Motion for Papers, by leave, withdrawn.