§ 4.10 p.m.
EARL ST. ALDWYNMy Lords, with the permission of the House, I should like to make a statement on the statutory Annual Review of the economic condition and prospects of the agricultural industry which has now been concluded. The Government have made their determinations on the guarantees to the industry in the light of the Review and of the long-term assurances announced last November. The details are set out it a White Paper which is now available in the Printed Paper Office.
The general production policy of the Government continues to be to foster economic production, by encouraging the maintenance of a large arable acreage with the main emphasis on feed crops, the maintenance of a large livestock population with greater reliance on home-produced feedingstuffs, the production of more good quality beef, and lamb, but no more milk, eggs, pigmeat or wheat.
The net output of the industry in 1956–57 is forecast at 59 per cent. above prewar, as compared with the revised figure of 56 per cent. for last year, largely as a result of a rise in output of livestock products. This is the highest level of net output so far recorded. I am sure the House will agree that this reflects credit on everyone concerned, particularly when one recalls the difficulties of the last harvest. The actual net income of the industry, which is forecast for 1956–57 at £317 million, out of a gross income of nearly £1,500 million, is slightly below the revised figure of £325 million for 1955–56. The forecast of net income adjusted for normal weather conditions, on the other hand, at £334 million, is about equal to the highest previously recorded, in 1952–53.
There has been a substantial farther increase in costs, of about £38 million in a full year for Review commodities. Although there will be a considerable offset in continuing improvements in the efficiency of the industry, on balance the industry requires an increase in the value of the guarantees if it is to continue to make its proper contribution to the economy. On the other hand, the Exchequer cost of agricultural support is rising, and the national economic situation demands a strict view of the needs 715 or the industry. The new long-term assurances to which the Government have undertaken to give effect require this year an increase in the total value of the guarantees. The Government have considered all relevant factors, including these assurances, the cost to the taxpayer and the place of the industry in the national economy. They have decided that the essential needs of the industry can be met by an increase in the total value of the guarantees of some £14 million. This is some £6 million above the minimum required by the long-term assurances.
The determinations now made are for livestock products for the year April, 1957, to March, 1958, and for crops of the 1957 harvest. The most important aims of the determinations for individual commodities and production grants have had to be to reduce the profitability of egg and milk production, to maintain that of fat cattle and fat sheep production, to encourage continued stability in output of pigmeat, and to encourage production of home-grown feeding-stuffs. The determinations for livestock and livestock products accordingly comprise a substantial reduction in the price guarantees for eggs; an increase of no more than ¼d. a gallon in the guarantee for milk—which, in view of the increased costs, will mean a net reduction in profitability per gallon; no change in the price guarantees for pigs and wool; but increases in the price guarantees for fat cattle and fat sheep, including a higher rate of guarantee for the better quality cattle. The determinations for crops include and supersede those previously made after the 1956 Annual Review under previous procedure. They comprise reductions in the price guarantees for wheat and rye and increases in those for barley, oats, potatoes and sugar beet. It has also been decided to increase the subsidy on nitrogenous fertilisers, and to make minor extensions in the scope of the ploughing grants and the lime subsidy.
The Government are satisfied that the determinations now made will enable the industry to maintain its progress in improving efficiency and to secure a reasonable level of remuneration for economic production, and at the same time accord with the present stringent requirements of the national economy.
§ VISCOUNT ALEXANDER OF HILLSBOROUGHMy Lords, I am obliged to the noble Earl for giving us this Statement. The White Paper is now available in the Printed Paper Office, and we will study it with great care. I do not propose to say much this afternoon by way of question, because the Opposition have this morning put a Motion on the Order Paper for April 17, which is about the first available clear date, in order to debate the position of agriculture. We shall now make the Motion read to include the Annual Review as well.
At first sight it is difficult to under-' stand the whole of this statement made to-day, and we must give further study to the White Paper before we come to the debate. What does stand out is the statement that
The most important aims of the determinations for individual commodities and production grants have had to be to reduce the profitability of egg and milk production,and to maintain that of certain other things. In other parts of the statement the intention is clear that the reduction of profitability has been well to the fore in the minds of the Ministry by the determination, as the statement put it, which has been come to. I should like to ask whether, in formulating the new procedure—I can call it that since the publication of the long-term reviews—there were negotiations, as was promised, with the representatives of the industry. Have the industry agreed with the Government in the determinations, or is this a repetition of last year, when the Government imposed their particular determination of prices? I think it would be useful to have that information before we come to an interim study of the matter, and before we come to actual debate.I feel certain, however, that the first impression of the farmers in the country, on hearing the statement and reading the White Paper, will be one of dissatisfaction. They face enormously rising costs, in labour, in fertilisers (although it may turn out, when I come to the statement, that there may be some further help there) and in seeds—especially this season, when there has been a very heavy increase. Then there has been the almost disastrous fall to the milk farmer in his prices already, not only in respect of milk, but also, because of the fall in the price of milk, in the price of cows and heifers in calf or in milk immediately after calving.
717 The result of all this, as I say, is that there will be little but dissatisfaction with the statement so far as we have been able to study it. However, we shall return to that matter at some greater length on April 17. In the meanwhile, I should be glad to know whether there has been agreement with the farmers' national representatives, or whether this is an imposed determination of price.
EARL ST. ALDWYNThe answer to the noble Earl's question is, Yes. In the light of national considerations at the present time, the farmers' unions have agreed that the Government's determinations under the Agriculture Act give due weight to all the relevant factors of this Review, and are in full accord with the Government's long-term assurances.
§ VISCOUNT ALEXANDER OF HILLSBOROUGHMy Lords, it seems to me quite extraordinary that that should be so. If the Government are really concerned about the general economic position of the country, and if the policy is to so increase production that the Government can begin to save their general economic policy overseas by saving dollars and sterling expenditure on imports, then I do not understand the argument. But we will come to that subject again in more detail later.