§ 4.39 p.m.
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE, FISHERIES AND FOOD (EARL ST. ALDWYN)My Lords, with your permission I should like to make a statement similar to one made by my right honourable friend in another place in reply to a Question. The statutory Annual Review of the economic condition and prospects of the agricultural industry has been concluded. The Government have made their determinations on the guarantees to the industry in the light of the review. These are set out in a White Paper which is now available. The White Paper also sets out the results of the Special Review which was held concurrently with the Annual Review.
The general production policy of the Government continues to be to foster the highest level of net output that can be achieved economically and efficiently, by encouraging, in particular, beef, mutton and lamb and the production and use of home-grown feeding-stuffs. Until markets can be extended or costs reduced, it is desirable to avoid stimulating further the production of milk, pigs or eggs.
The net output of the industry in 1955–56 is forecast at 55 per cent. above pre-war as against 51 per cent. for last year. Falls in the tillage area and in pig production have been offset by record yields of cereal crops, a better hay harvest and more milk and eggs. I am sure the House will agree that this reflects credit 481 on everyone concerned during the past year, following the adverse conditions of the previous year. The actual not income of the industry, which is forecast for 1955–56 at £299 million, out a gross income of about £1,400 million, is recovering only slowly from the setback of 1954–55 when it fell to £285, million. There has also been a substantial further increase in costs of about £37 million in a full year for Review commodities. I am confident that the industry will help itself to meet these costs by continuing to increase its efficiency, mainly through improvements in husbandry and farm management. This will also help the nation by keeping down the total subsidy bill and the volume of feeding-stuffs imports.
The Government's conclusion is that a further increase in the value of the price guarantees and production grants is necessary to ensure that the industry has the resources it needs in order to play its full part in meeting the requirements of the national economy. The determinations now made have the effect of increasing the total value of the guarantees in a full year by £25 million.
It has been decided to increase the price guarantees for fat cattle, fat sheep, and milk for 1956–57 and for oats, barley, potatoes and sugar beet for the 1957 harvest; to leave, unchanged the price guarantee for hen eggs; and to reduce by small amounts the price guarantees for pigs and wool for 1956–57 and by a more substantial amount the price guarantees for wheat and rye of the 1957 harvest. We have also decided to increase the fertiliser subsidies, the marginal production grants and the subsidy on steer calves; and to make provision for grants for silos for the conservation of silage. The Government have had particularly in mind the position of the smaller farmers in reaching the decision to increase the price guarantees for milk by ½d. a gallon, and oats by 1s. 6d. a cwt., and in making additional provision for production grants.
The Government have also given careful thought to the form of the fatstock guarantees. They have decided to discontinue the individual guarantees for all classes of fatstock. These were a feature of the Guarantee Scheme introduced in 1954 after the end of control, but the risks for individual producers in the restoration of the auction markets which these 482 arrangements were intended to meet no longer justify the complications and the elaborate machinery involved. This will not only enable the fatstock guarantee system to be simplified considerably but will also save about 300 staff. A single guarantee payment will be made in future for each group of fatstock. But to provide greater stability, this guarantee payment will be adjusted as and when necessary to ensure that the average total return to producers each week remains within a predetermined range on either side of the standard price.
I regret that on this occasion agreement has not been reached with the farmers' unions. I understand that while, in the prevailing circumstances, they would not have wished to dissent from the total increase in the guarantees, they feel unable to agree to the price determinations or to the changes to be made in the fatstock guarantee system. The Government are, however, satisfied that their determinations are fair and just and take a full and balanced view of the needs of the agricultural industry and of the national economy.
§ VISCOUNT ALEXANDER OF HILLSBOROUGHMy Lords, I am sure the House is grateful to the noble Earl for making the statement which has already been made in another place. I think the importance of the White Paper which has just come into my hands, as he promised, is such that I think the Leader of the House might consider giving us as early a day as possible to discuss it. It contains two outstanding features. The first is the point that brought regret from the noble Earl; that this statement was not an agreed statement between the Government and the industry. Secondly, I think that the removal of the individual guarantee is likely to be exceedingly harmful, at any rate to the small farmer. I therefore hope that we may have the earliest opportunity of a debate. This is the first time since the war, I think, that a statement of this kind has been made which has not been an agreed statement.
THE LORD PRESIDENT OF THE COUNCIL THE MARQUESS OF SALISBURY)My Lords, in answer to the question by the noble Leader of the Opposition we shall, of course, be delighted to discuss through the usual channels the matter of a debate.