THE AGRICULTURAL PRICE REVIEW

HL Deb 22 April 1959 vol 215 cc844-905

2.50 p.m.

LORD WISE rose to call attention to the Annual Review and Determination of Guarantees, 1959 (Cmnd. 696); and to move for Papers. The noble Lord said: My Lords, I beg to move the Motion standing in my name on the Order Paper. Year by year the Annual Review and Determination of Guarantees, which we describe for brevity as "The February Review", as set out in a Government White Paper is considered in your Lordships' House. It is good that we should set aside a day for this discussion as it affords an opportunity for many noble Lords who have agricultural interests to express themselves personally and freely upon the merits or shortcomings of the Government's proposals. It has always been clear that, whatever views we may hold in any quarter of the House on any other matters, or whether or not the contents of the Review are likely to be beneficial to the farming community and the nation as a whole, we are sincere in our desire to further the wellbeing and to assure the future prosperity of those engaged on the land. Our agricultural discussions are, therefore, invariably models of freedom from animosity or bitterness and without any desire to score any debating point.

Last week we considered the Budget proposals and the economic situation, but only the noble Lord, Lord Amwell, referred at length to the position of agriculture in the national economy. He emphasised the need for an expanding home production in an aim to arrive at national self-sufficiency. Although agriculture must play an important, and perhaps an increasingly important, part in our economy, no reply at all on behalf of the Government was given to his speech. I think the Economic Survey and the Review of Prices are related, and it will not, therefore, be inappropriate for me to touch at any rate upon one or two points which seem to me to be common to both. Naturally, I cannot deal in full with the Review—there will be other speakers from both sides of the House who, no doubt, will take up points which I do not touch upon.

In introducing the Review in this House as well as in another place, both the noble Earl who will reply to this discussion and the Minister of Agriculture, apparently reading from the same brief, made great play upon the part of the weather in arriving at the results of last year's farming activities. I think they over-emphasised the point, and therefore it did not sound convincing and really became somewhat wearisome. Uncertain weather conditions in this country are customary occurrences in the life of a farmer. He grumbles, but he accepts the risks involved and generally carries on. On balance, nature is really not our enemy but our friend, and wet weather may be detrimental to one farm but beneficial to another in a different part of the country. In the end, things generally work out as well as can be expected under the uncertain conditions.

Let me renew the point about home production. Paragraph 9 of the Review states: On present prospects no further expansion of gross output is required". Paragraph 38 of the Economic Survey says much the same, but it comes down definitely on the side of greater efficiency rather than an increase in total output. I can find nothing in the Survey suggesting to any other industry that more efficiency and no greater production is required. Why single out agriculture? From time to time we have been commended on the fact that our output has risen substantially year by year, and that our products reach the market in a better condition. We are getting a little tired of these off-repeated exhortations to become more efficient. According to the Review, our rising efficiency is assessed as being equal to £25 million a year. I do not know whether that figure is correct or not; I have no knowledge of the basis upon which it is founded. But it is a figure which is contained in the Government White Paper. Efficiency in a fac- tory, with workers under one roof, is more easily obtainable than in the open fields, with men scattered over the farm, often in isolation or alone with nature. The yardstick of efficiency in agriculture is not only sound farm management but good production as well, and to me it seems logical to argue that if you aim at higher efficiency, greater production must automatically follow. A stagnant production cannot make for increased efficiency. I hope that efficiency in stagnation is not to become the watchword of the Government.

The limitation of home production assumes other very important aspects. We now provide from agriculture about one-half of our national food requirements. But every additional quarter of corn which individual farmers can produce, or each head of livestock which can be reared, should assist in lowering our food imports and helping in the provision of wholesome and acceptable food for our people. There is still room for improvement in our import position. The Minister has called attention to it with regard to animal feeding-stuffs, but it is no less a matter of concern so far as human needs arise. There is still room for improvement in our general standard of living. I need not refer to starvation overseas, and how welcome would be surplus food from this or any other country.

Paragraph 33 of the Review refers to the Small Farmers Scheme, mentioning the financial assistance which will be given to small farmers to enable them to start a plan for improving the profitability of their farming business. Paragraph 39 of the Economic Survey harps once again on that magic word "efficiency". The small farmer's turnover is such that he has day-to-day struggles to improve his financial strength. It is often a hard and worrying struggle, and he can succeed only by increased production, even though some of it may be by way of poultry and eggs, which apparently do net find undue favour in the Government's order of things to come. In connection with eggs, since I have been in your Lordships' House this afternoon I have received a letter from a small Kentish farmer who complains seriously about the price of eggs and the difficulties under which the small farmer has to make ends meet. In the course of his letter he said that small farmers have to work like slaves and receive less than slaves. Whether or not that is true, I do not know; at any rate that is the information which he passes on. Is it the policy of the Government that the total output from our small farms, including those which do not benefit by grants under the Small Farmers Scheme, should remain at present level? If so, "greater profitability" are mere idle words.

As a final word on this stress upon efficiency in agriculture I am tempted to remind members of Her Majesty's Government of the well-known biblical story of the mote and the beam, and to suggest to them that in home and foreign affairs during the last few years efficiency has not been their strong point. I should not like the noble Earl, Lord Waldegrave, to think that I include him in that criticism, for I certainly do not. He is one of the "new boys" in the school, and I hope that he will not fall into the uncertain ways of his sixth form.

It will be noted that in the Review the guaranteed price for wheat will be reduced by 6d. per cwt. I assume that this has been done for two reasons: first, so that the total deficiency payment should be lowered, and secondly, so that less British wheat should be grown on our farms in the future. The first reason would be a valid one if we could be assured that the price paid by the merchants and millers to the producers of our wheats will not be reduced in the corn exchanges by 6d. per cwt. If this reduction is made—as I have a feeling it will be—then the taxpayer will still have to face a deficiency payment as heavy as he has suffered during the last year. I expect that this will be in the region of £25 million to £30 million.

Deficiency payments for the present period seem to be running at £8 or £9 a ton—a very high figure indeed. Apparently Her Majesty's Government are not entirely averse to some measure of control, where it is necessary in the national interest, and I should like to see them introduce such control over the cereals. I believe that under existing marketing conditions the merchants and millers are buying home-grown wheat at prices too low in relation to the guaranteed price. As I have already pointed out, this may mean in the future, as in the past, a heavy balancing payment by the Government on behalf of the taxpayer. It is possible to avoid this by controlling prices and, if necessary, throwing upon the first pur- chaser of our wheats the liability of reimbursing the Government the appropriate amounts of the deficiency payments.

I believe that a scheme to relieve the taxpayer in this way could be operated. It may be argued that it would raise the price of bread, flour and feeding-stuffs. But who now reaps the benefit of low wheat prices?—not the consumer; not the baker or the farmer. If necessary a marketing board might be effective. I will give an example of buying and selling of farming products which will interest your Lordships, and after hearing it you may agree with me that it appears that agricultural products are being bought cheaply, processed and then sold to the consumer, to the material advantage of the processer. A reputable milling firm have made public their results from last year's trading. In round figures, profits for the year increased by £800,000—a pretty goodly sum—to no less than £4,610,000. If my rough calculations are correct, this works out to show that this one firm (there may, of course, be some small subsidiaries involved) last year made as much profit as 5,000 British farmers—probably all the farmers in one average-size county, many of whom may have had to work or be available seven days a week the whole year round.

The point I am making is significant and somewhat startling. I have referred to only one concern. There may be others with similar prosperity. We repeatedly speak of incentives but where is the incentive for agriculturists when they become aware that those who process our primary products can reap such bountiful harvests? Is not it time for us to realise that some alteration in the system of deficiency payments could be devised to the national advantage, so that those who gain should pay their proper dues?

A few days ago the Minister of Agriculture expressed the view that we should reduce production of wheat in favour of barley. So far as present conditions are concerned, at any rate, this advice was a little late, as the wheats and barleys are generally up and doing well. The right honourable gentleman may have intended the advice to be in advance for next season, but in any case I am afraid I must join issue with him on one point and possibly on others. We can consume all the wheat that we can grow, as, apart from flour and similar wheat products, wheat offals can form a substantial basis for our animal feeding-stuffs; and as with barley and oats, the more home-grown feeding-stuffs we can produce and consume, the less we shall have to import. The restriction or limitation of some production of wheat on our well-known wheat lands is a policy of negation and has no interest for me. It is of no permanent value to agriculture to import a lot of cheap foreign wheats. I prefer the home-grown article every time.

Whilst on this question of crops I would say a word about sugar beet. Norfolk is a great sugar beet-growing county, as indeed are the neighbouring counties of East Anglia; but last season difficulties arose over the absorption of our crop by the factories which, in consequence, had to keep open for a longer period. The present factories, working to capacity in a good sugar beet season, may find it impossible to process our full crop. In the past, requests have been made for an additional factory in Norfolk and the allocation of additional acreage, but these requests have been refused. Would it not now be sound national economics for us to increase our home-grown sugar production, as we can do, if given the opportunity?

I want to refer briefly to sheep, among the livestock. I am sorry to see that the price of wool is reduced, and that the desire of the Government appears to be for smaller sheep. Unless the price per pound is subsequently increased, as is envisaged in paragraph 27 of the Review, then the farmers' turnover on sheep will be doubly affected: by a lower price for his smaller animals and a lighter wool clip for which he receives less money. I think the greatest possible encouragement should be given to sheep-rearing and feeding. There are not enough sheep about, taking the country all through, and beneficial root penning is almost a thing of the past.

Sheep marketing still shows the same fluctuations to which I have referred before in your Lordships' House, and it often happens that fat sheep of more or less equal weight and quality may suffer a reduction of nearly 10s. a head between weekly markets. That particularly hits the small farmer who cannot market his stock week by week. He loses, and the consumer does not gain. Some time, somewhere, someone will realise the tragedy of our hazardous agricultural marketing systems. I have in the past done my best to awaken farming and Government opinion to wisdom before it is too late and the experiences of the 1930's repeat themselves.

Finally, my Lords, I make reference to the tables in the Review. Those in Appendix I speak for themselves; but Tables A and B in Appendix II, on page 12, appear to me to he very unrealistic affairs. In Table A the figures shown "Adjusted to normal weather conditions" seem to serve no purpose whatever except as window-dressers. This part could be omitted without tears. The actual departmental figures have been arrived at, and it is anybody's guess as to what they might have been under different weather conditions. Much the same can be said of Table B, which is built up on figures obtained from about 1 per cent. of the farms of the United Kingdom. These figures, therefore, are not by any means conclusive; they prove nothing and may, indeed, mislead us into false assumptions.

I think that in future, in preparing particulars for the Review, the Government might set out in column form the value of the actual income in terms of the value of the pound at that time. That would be interesting, instructive and realistic. What is the present value of the £327 million estimated net income for 1958–59 as shown in Table A? I will leave your Lordships to work it out for yourselves. You may be surprised at the result. My rough calculation makes the difference between the figures the equivalent of the profits of 80,000 farmers. I beg to move for Papers.

3.14 p.m.

LORD AMHERST OF HACKNEY

My Lords, I am sure we all welcome this Motion which has been moved by the noble Lord, Lord Wise, and also the moderate way he has moved it, though I think he has perhaps been inclined to dwell on the less bright side of the Price Review. I may be doing him an injustice, but I do not remember his saying that this Review had been agreed by the leaders of the farming industry. I think that one can say that the three main points about this Review are, first, that it has been agreed as fair by the leaders of the farming industry, the National Farmers' Union; secondly, that it has proved the value of the 1957 Act, that it is a floor, and not a ceiling; and, thirdly, that it makes no violent changes in the pattern of production.

I do not say that the farmers have obtained everything they asked for. I have heard of no wild orgies of milk-drinking at Agriculture House. But I think that the Review has been generally accepted as fair. I should like to read just one thing from the British Farmer, a paper which I am sure the noble Lord, Lord Wise, reads, because it is the paper of the National Farmers' Union. One of the columns is headed "Questions you may be asking". The first question is, "Is this a fair review settlement?" The answer is, "We think the results are reasonable and acceptable to the industry as a whole". And on the whole, I feel that all the farmers I have spoken to have been reasonably satisfied with the Review. I must admit that I have not spoken to a large number of large egg producers, who would probably give me a different answer.

I think it is an unfortunate thing that every year we have to have this annual battle over the prices for the agricultural industry, which determine the pattern for the next twelve months. It seems unfortunate that this great industry should go under the microscope every single year, and that teams from the National Farmers' Union should set out with the cries of "Full recoupment" ringing in their ears to slay the dragons at the Ministry. I exclude the noble Earl, Lord Waldegrave, who is no dragon. Then there is a veil which comes over the proceedings; various rumours emerge, and then, eventually, a Price Review comes out, which in most cases is an agreed settlement. I feel that perhaps this wrangle could take place less often, perhaps every other year or something like that possibly with a procedure for making minor adjustments in the meantime. I am sure I am butting my head against a brick wall; nevertheless, it seems to me that once a year is too frequent.

The second point is that this Review has proved that the 1957 Act is definitely a floor and in no way a ceiling, and that in the negotiations the only party which has its hands at all tied is the Government, in that there is a net below which prices cannot fall. In my view it is a good thing that this year the Government have taken into consideration the weather conditions As the noble Lord, Lord Wise, has said, farmers expect to have adverse weather, which is one of the normal hazards; but I think he will agree that over the last few years it has been rather abnormal. As he rightly points out, the income which interests the farmer is the income that he actually gets, not the income which he would have got had weather conditions been different. I myself have never found somebody who would make up my actual profits to the profits that they would have been had there been fine weather, and I should be delighted to be introduced to such a person.

I am glad to see that this year the farmers are being allowed to keep some part of this figure of £25 million—the figure which we hear so much about, which is the annual increase in efficiency. I agree that one cannot expect to keep it all. I do not think that in any business one could expect to keep as profit all that is earned by every increase in efficiency. A considerable amount must go to offsetting rising costs, unless one has a business which is in a very sheltered or monopolistic field. Nevertheless, I think that many people are worried about this figure of £25 million. It seems a rather vague figure which is carried on from year to year; and I wonder whether the noble Earl who is to reply to this debate could, in broad terms, say how the figure is arrived at. What are the constituent parts of it? Obviously, he cannot go into it in any great detail, but perhaps he could tell us generally. How much is management; how much is improvement in quality cereals; and so on.

On the question that the Review makes no major changes in the pattern of production, I suppose it is a justification for the policy of the last White Paper, which was not a very popular one. It certainly seems, on the whole, that the trends of production are going the right way; and we are also assured—and I have no reason to doubt it—that, but for the adverse weather, the net profit of the industry would also have been higher this year than last year by about £5 million, in spite of the cut of £19 million in the guarantees.

One must obviously regret the necessity for the reduction in the price of eggs; and also of wool. In the case of eggs, I suppose the main thing is to try to increase the demand. The other evening I saw on television an admirable programme encouraging one to use eggs in almost every sort or form of cooking; and if the demand can be increased then presumably the price will rise and the amount of the subsidy will consequently fall. In the case of wheat, which the noble Lord, Lord Wise, mentioned, I myself do not think that the reduction of 6d. per cwt. will make very much difference. It cannot, as he said, make much difference to the amount of wheat this year, because that was drilled a long time ago. I should not have thought that it would discourage the growing of wheat, certainly on the sort of land which the noble Lord, Lord Wise, refers to—that around him in Norfolk, the proper wheat-growing land. I should not have thought that would have had very much effect.

I welcome the increase of 7 million gallons in the amount of liquid milk to be included in the full price subsidy, and I think the Milk Marketing Board is to be congratulated on the efforts, and the success of the efforts, which it has made to increase the consumption of milk. I think one must welcome also the efforts to stabilise the price of pigs, because pigs, above all other animals, have to be marketed the moment they are ready; and the farmer is more at the mercy of the market as regards pigs than anything else. Above all, one must welcome the increase in the subsidies for calves and for hill cows, because, obviously, the greatest scope for expansion is in cattle, particularly in beef. There is the likelihood of shortage of supplies from the Argentine, and I feel that this increase in the subsidies will help. Whether the subsidy is being given at the right end, I am a little more doubtful. It always seems to me that the person who raises the calves and sells the stores has the better end of the stick. The store price, as it seems to me, is usually extremely high, leaving a rather small margin for the fattener. Still, anything that will increase the amount of beef is to be welcomed.

My Lords, I think that, on the whole, we can say that this is a very fair Review which is good for the industry: and, from all the comments which have been made in the papers, I think it is generally accepted as fair to the nation as well. Therefore, I think it is a very good Review.

3.27 p.m.

LORD LOVAT

My Lords, I should like to congratulate the noble Lord, Lord Wise, upon raising this debate. It is with a sense of satisfaction, I think, that we can speak first on this very important subject, the February Price Review, before it is gone into in greater detail in another place. The danger in a debate of this kind is perhaps to generalise too much; and almost every subject under review has been covered by the last two speakers. I shall concentrate on one thing, and one thing only—that is, how the Review affects the beef industry in Great Britain, with particular reference to Scotland. Many of your Lordships who are taking part in this debate are farmers, but those who are not farmers and who are listening for the good of their minds are undoubtedly meat-eaters; and beef, I think, comes first in all kinds of meat. I think that both sides of the House are fully agreed that we want to get rid of such unfortunate words in our vocabulary as "Spam" and "Snoek"; and, with the prosperity which British farming is enjoying at the present, that looks like happening in the not too far distant future.

However, my Lords, I would sound a note of warning: and I hope the noble Earl, Lord Waldegrave, will listen with rapt attention to what I have to say, because I do consider myself a specialist in this one very small aspect of agriculture—that is, the raising and breeding of beef cattle (and pedigree cattle, for that matter) for the markets of the world. There is a world meat shortage at the present time. I think that goes hand in hand with the increased standard of living throughout the cattle-raising countries of the Empire and of the world. The noble Lord, Lord Amherst of Hackney, has already touched on the likelihood of shortage of supplies from the Argentine. which has not only suffered revolutions and drought but also enjoys a higher standard of living. In that country, which not so long ago exported half its cattle to the United Kingdom, they are now having meatless days. That is not with the objectives of fasting and abstinence, but because they have not the cattle with which to provide this country. Much the same conditions apply in the United States and Canada. Australia is undergoing drought, and what few surplus cattle they have available are being shipped to the Philippines and for canning in the United States, who are themselves desperately short of meat to-day. That is a general picture of our prospects in finding our beef. And with all due respect to the Government, that position has not been improved by their recent decision to reduce the marginal grants, which are of immense importance in Scotland, where we do raise the right kind of beef for the London market.

Hand in hand with that, we have the desire, which is soon to be realised, of having our herds fully attested. As your Lordships know, in the past England has been more concerned with milk production than with beef production, and those of your Lordships who live in the South—I say it advisedly—have had to turn to Ireland for store cattle. Over 300,000 cattle of the beef type have been imported from Eire in the last fifty years. Personally, I am disappointed that this source of supply should continue. We are running a grave risk in letting in cattle which very often flinch at the needle when they come from Eire. I have known seven or eight beasts in ten truckloads of cattle from Ireland which have been attested and considered immune in the first test yet react by going down when re-examined sixty days later by a Scottish veterinary surgeon.

That is the background, together with the Government's policy, which has never dared to stretch its neck out further than five years as regards prices for hill cattle calves. I am not going to go into the private life of the cow; it is sufficient to say that before a farmer launches into a full-blooded programme of breeding cattle in the Highland hills he must have some confidence that a policy will be continued that will make his investment worth while. I entirely agree with what my noble friend Lord Amherst of Hackney said: that too many subsidies, coming too often, are inclined to disconcert, just as the Annual Price Reviews, while dangling a carrot and very encouraging, do not meet the situation. Before a cow produces her first calf she has to be three years old if lying out; and before the calf is fit for beef she is five years old, so that if things are done in penny packets, or even in five-year plans, it is not sufficient. I think I shall be supported by noble Lords on all sides of the House when I say that it is not enough to encourage farmers to start breeding beef in the way we can in the Scottish hills, which is the reservoir from which that kind of beef can come. That is the preamble to the further short remark that I should like to make with regard to the February Price Review.

Your Lordships will see on Page 4 that objective three of the commodity objectives is: production of more beef of the quality wanted by the market; If we turn one page further, to the actual grants, we see that the calf subsidy is to be increased by 15s. in respect of steer calves born on or after April 1. Again going back to straight farming, all who breed cattle are well aware that the objective of good farmers is to have calves born early in the season. That applies particularly in the hills, where grass does not come until May, because calves are not ready to eat grass until they are 2½ to 3 months old. If the Government give bonuses and increased payments on bad farming, in Scotland, at any rate, they are on the road to nowhere. This is the February Price Review. If the farmer produces early calves and lets them grow with the season, they will be good calves when they are weaned in October. But the good farmers have been penalised. With all respect to the farming community, there will be a great many calves born after April 1, or that will have birthdays after April 1. It is very wrong. It is encouraging a system which suits only the Treasury. The good calves are born in February or March every year, and the good cow can keep on breeding, if weaned in time to take the bull, and can carry on every year with a 100 per cent. production. But now, if a cow calves in May or June, not only does the calf not grow, but it will eventually come that the cow will be run down in her state of health and will run single in a year and miss a calf altogether.

I think that there is a method whereby we can put this right without any retrospective legislation. If there are good reasons, both in principle and in practical administration, against making the Price Review retrospective, there is another method which should be considered—namely, that any calf not less than three months of age which has not already drawn the increased calf subsidy should be eligible for the increase. I hope that the Treasury will consider this suggestion, because I think that it gets over this difficulty. The Government may argue that calves born next year, after January 1. 1960, are eligible to get this increase which is to be paid; but this is a Price Review for 1959, and I hope that they will hear this in mind.

I remember a similar case which caused a certain amount of amusement during the war when the ploughing up of grassland was compulsory and every farmer had to supply his quota of tillage. There was a Yorkshire farmer who had a good stock of ewes and kept off ploughing up his grassland. Eventually the county agricultural executive committee reported him to the higher authority for not ploughing up the grassland, and his explanation was that he could not do it until his lambing was over; to which the reply carne from Whitehall, "Postpone lambing. Get, on with the farming". I think that that story has some application to my argument. I hope that the Government will consider this point, because we want to breed the right kind of beef steer that grows during the season. There are no politics in this question, at any rate on the Back Benches, but I would say that if difficulty is raised over this suggestion, the price of beef is bound to go up. From what I have seen lately, I believe that the Government are quite unaware of the fact that they are making the production of beef more expensive, which in turn reflects on the prices to the housewife.

3.37 p.m.

EARL FERRERS

My Lords, like other noble Lords who have already spoken, I feel indebted to the noble Lord, Lord Wise, for initiating this debate. In the language of your Lordships' House, he has "drawn attention" to the February Price Review. I feel that that is a very apt description, because in fact this Review more than any other over the past few years has slipped by practically unnoticed. I think that one of the reasons why that was so is that it has been a fair Price Review, fairly balanced.

There are a number of items which deserve mention. To my mind, the most important one is thatof the proposed reduction in the price of eggs. Under the Price Review the guaranteed price of eggs is to be reduced by 1d. each, while the Board's exected realisation price is to be increased by 1d. As your Lordships know, the subsidy paid on eggs is the difference between the guaranteed price and what the Board are expected to realise. Therefore, if the guaranteed price is reduced by 1d. and the Board's expected realisation increased by 1d., the reduction is in the neighbourhood of 2d. That, on eggs, is a very large amount. As always when there is a reduction in the price of any commodity, particularly one that is intensively produced, it is the small producer who suffers most, by virtue of the fact that the larger producer, because of his size, is able to cut his costs more.

I am aware of the argument put forward by the Government that the consumption of home-produced eggs has nearly reached saturation point and therefore some damper must be put on production. That is a perfectly legitimate argument with which I wish to pick no quarrel. But there are two complaints levelled at the moment by egg producers which are worthy of consideration. One is that over 50 per cent. of liquid eggs used are imported; and the other is that some 10,000 cases of Polish eggs are supposed to be imported eaoh week, which represents some 3½ million eggs, and apparently there is a threat that the figure will go up to 20,000 cases, representing something like 7 million eggs. As to the first criticism, personally I do not think that the argument levelled by egg producers holds much water, for the simple reason that the price of liquid eggs is about 2s. and it is absolutely impossible for anyone to consider producing eggs at anything approaching that price. Therefore, in that respect, it may be economical to import liquid eggs. But I do think that the egg producers have some cause for complaint if at a time when the price to them is being cut the Government are importing some 3½ million eggs a week, which might rise to about 7 million a week. I am told also that Poland is anxious to get sterling and is prepared to sell eggs at almost any price. It is strange to think that eggs subsidised by another Government are being imported, while apparently the demand for the home-produced egg has reached saturation point.

While on the subject of purchasing, I should like to ask the noble Earl, Lord Waldegrave, who is to reply, whether he can tell me how much canned chicken was imported from China during the last three months as compared with twelve months ago, and what percentage increase it represents. I do not share the deep interest of the noble Viscount, Lord Elibank, in the import of commodities from China, but I confess that in this respect I have an interest, because I am a producer of table chicken, and I gather that imports of Chinese chicken have grown to astronomical proportions as compared with what they were some twelve months ago. I have given notice of this question to the noble Earl. I do not ask him to take any action, but perhaps his Ministry will watch the position, because it would be a pity if there should be any threat to a particular section of the agricultural industry which is flourishing, and without any form of support, even the 33½ per cent. farm improvements grant for erecting the houses in which the chickens are reared.

Another matter I would mention in regard to the Price Review is the 6d. cut in the guaranteed price of wheat and rye. I am not so much concerned with the cut in the price of wheat, although I grow it myself, as with the cut in the price of rye, which I do not grow. There are areas in Norfolk and Suffolk where it is almost impossible to grow anything other than rye. In those areas with a crop like rye one does not get nearly the return in sacks per acre as one does for wheat, and there is not nearly the financial return per cwt. of rye as there is per cwt. of wheat. Your Lordships will therefore see that anyone who grows rye has a gross return far below that of someone growing wheat. When I say that the guaranteed price of wheat is 27s. 7d. per cwt. and the guaranteed price of rye 21s. 7d. per cwt., your Lordships will appreciate that there is a considerable difference in the return to the various producers.

Anyone who has motored down the Norwich to Newmarket road on a windy spring day and has seen the air and the roads covered with dust, which is nothing other than the top soil of the seed beds of the farmers in the area, might well be forgiven for thinking that he has been momentarily transported into the prairies of Canada; and he will appreciate that the farmers have difficulty not only in growing their crops, but also in keeping them in the ground. I feel that some farmers will be fairly hard hit by a reduction of 6d. a cwt. in the price of rye. One has to remember that one does not grow rye if one can possibly grow anything else.

Those are my criticisms—and criticisms are always easy to make—but, generally speaking, I think the Price Review has been well accepted. It might appear that the estimated cost on farms has gone up by £15 million (like my noble friend Lord Amherst of Hackney, I am always fascinated as to how these figures are arrived at), and as the Small Farmers Scheme costs £6 million, this makes a total of £21 million to be recouped. It might be said that the Government are a trifle ungenerous if they are going to help only to the tune of £3 million. But, on the whole, I feel that the Price Review has been fairly made and is one that has been well received.

There is in some areas one point of satisfaction with which I must say I entirely disagree—namely, that the Price Review might have been much worse, because under the 1957 Act the Government could have made a reduction of £19 million. To my mind, that would be a disaster, and it is up to the Government to prevent such a thing from happening and, indeed, to prevent the feeling from spreading in the agricultural community that they expect a full or partial cut each year because of that Act. There has not been a cut this year. The whole purpose of the 1957 Act was to give confidence by letting the farmers realise that their prices could not be lowered more than a certain amount, and I think it would be a great pity if they were allowed to expect them to be lowered to the full or partially. Therefore I do not join in any jubilation on the ground that the Price Review might have been much worse; I prefer to accept it on its own merits. It has, indeed, given the agricultural community the confidence to carry on for the next twelve months in the belief that they can expect reasonable returns. I would emphasise that the confidence of the agricultural community is possibly the most important thing, because without it they will suffer; and not only that, but, what is almost more important in this industrial age, all the many and varied industries whose success depends entirely on the prosperity of agriculture will suffer, too.

3.49 p.m.

VISCOUNT ALEXANDER OF HILLSBOROUGH

My Lords, I would say at the outset how grateful I am, as was the noble Lord, Lord Lovat, to my noble friend Lord Wise for putting this Motion down, and, speaking more from a Party point of view, how grateful I am to him for the way in which he introduced the debate. I thought he covered the ground of the White Paper, with the background of the general position of agriculture, in an admirable manner. The speeches that we have heard since seem to go almost to form. The noble Lord, Lord Amherst of Hackney, is popular on all sides of the House, and I suppose it is partly because of his kind of approach to matters like agriculture when he always appears to us to be the eternal optimist. Whether he will continue to be the eternal optimist on agriculture when a Labour Government is in office I am not so sure. But certainly it makes him generally popular on all sides of the House and we are always glad to hear him speak.

One reads in the leading columns or special editorial paragraphs of the farming Prcss—the noble Lord quoted the official paper of the Farmers' Union; there are also the Farmers Weekly and the Farmer and Stockbreeder—of how fair the White Paper has been, but one finds that they have been unable to suppress altogether letters from individual farming correspondents who do not seem to hold quite the same view. Therefore the comments made by the noble Lord, Lord Lovat, and the noble Earl, Lord Ferrers, are to be understood and sympathised with.

What surprises me about the White Paper was brought out by the last speaker in a few sentences which I think he based upon paragraph 14, which gives the details regarding the long-term assurances. After the addition of the relevant cost increase of £11½ million, it would still have been normal—at least, that is what is implied in the paragraph—to consider a reduction of £19 million in the guarantees. That does not look like keeping in view the £25 million rate of increased efficiency which has been referred to to-day. It means £11½ million additional cost, plus £19 million to be considered for a reduction in guaranteed prices. I make that over £30 million, and I would suggest that, taking the debates of the last eight or nine years, in fact we have been hovering around a figure far nearer £30 million than £25 million in respect of which the farming industry is supposed to be able to increase its production, improve its own position, and accept reduced Government subsidies, and for each individual farmer still to be better off.

Believe me, I do not know anyone who owns 400 acres who feels that his income as a farmer is going up. He may be doing fairly well, and the man with a great deal of capital may have reached the maximum of every kind of modern machinery to an extent in which he can organise in a way to save individual men's labour—one, two, three, four and perhaps five on a large farming estate—and therefore be able to show a bigger net profit. But in respect of other farms, which are often over-machined, overburdened in capital cost, at any rate in regard to the acreage which they cover, the result is far different. I suggest that the general results of the farmers one meets seem to prove that point.

What strikes me forcibly, thinking of these arguments, is that we seem to have had a change of attitude from the Front Bench opposite since the present Chancellor of the Exchequer left the Ministry of Agriculture, Fisheries and Food. There is one thing for which I pay tribute to Mr. Heathcoat Amory, and that is that, as Minister of Agriculture, he continuously defended the rightness of the subsidy paid by the State to the British agricultural industry. He said it was absolutely justified because, he said, "Look at the rest of the British industry". Other industries are not required to produce the same evidence of efficiency, industry by industry, year by year, under a Financial Review. It is the British taxpayer who, through import duties that are passed on in price to the user, is paying a far higher sum to the other industries than is paid to the farming industry. Among those who pay it are the farmers themselves, who have to pay enhanced prices for the large increase of mechanisation upon the farm, all subject to a different rate of price compared with the prices ruling years ago when there was no such thing as protection for these industries.

As a matter of fact, I have long since changed the views I had as a young politician on the question of taxes upon commodities. I had to learn that through the hard and difficult days of the long-drawn-out periods of unemployment. Anybody looking back upon those periods of unemployment can see the difference in the returns of our industrial production and prosperity. Our economy worked under great stress, and never would have worked if we had not afforded a large measure of protection to our industrial production and, by giving it such a price in the home market, enabling it to cover its overheads sufficiently to reduce its costs and to compete in the markets of the world. That is the fact. However much I may regret that I have had to cast away some of my early views upon the pure, fundamental argument of Free Trade on the Adam Smith basis and the world division of labour, I am bound to say that, looking back over the years, I cannot deny the fact that protection has been of enormous benefit to our manufacturing industries in this country. You will not find in the programme of theLabour Party anything which says, "Let us have free trade all round"—not likely!

But when we come to deal with the agricultural industry, what we cannot persuade anybody in the country to do is to come out in favour of a tax on imported food—that is, prime food for the population or imported cattle food. Nobody wants a tax on that. Then how are you going to put the British agricultural industry into a comparable position of competition in the labour market, in the general industrial market, of this country unless you give them something which will set off their position as citizens as against the actual import duties freely allowed to almost every other important industry in the country?

What is now held out by the present Government's policy with regard to agriculture? It is that, leaving aside those arguments which were so well expressed over and over again by the present Chancellor of the Exchequer when he was Minister of Agriculture, there is what is called a long-term policy of confidence, which was so well expressed by the noble Earl, Lord Ferrers. Under the 1957 Act you are aiming (and this is quite clear from the White Paper) to reduce the guaranteed prices to farmers by 2½ per cent. overall in any one year, and by not more than 4 per cent. upon any specific commodity included in it. We have seen that policy put into practice in the 1957–58 Review. In the case of the present White Paper, we are not getting the kind of cut that was made in 1957–58; that is agreed. But I think fantastic claims are being made in this White Paper as to the real effect upon the industry. It is portrayed as an increase to the farmer of £3 million in the guaranteed prices, but in fact the £3 million comes as an afterthought of the Government, after the first consideration of their proposals on aid to small farmers, when it was agreed to bring into those small farmers' aid schemes the hill farmer who might have been disqualified because of other grants he had been receiving. There is nothing additional to add on except that £3 million.

Moreover, included in all the figures on which the assessment of the Government has been made is the grant of £6 million a year to be paid to the small farmer under the Small Farmers Scheme. But in the end that £6 million is not going to be paid by the Government at all, as is clear from this Review. It is to be paid by all the rest of the farming industry which is not included in the small farmers who actually receive the grant. So that in fact, on the actual presentation of Government aid to the farming industry, I am bound to say that there is some justification for the criticism of those people who brought their case to the notice of the noble Earl, Lord Ferrers; that it is a rather poor show, not exactly the kind of thing which is likely to bring confidence to the industry as a whole in the future.

I do not know what the National Farmers' Union said in the course of the discussions; I do not want to criticise on details of which I have no knowledge. But I am bound to say that if we look between the lines we see the red light in places. According to a report that I saw in the Farmer's Weekly of April 10, commenting on this general principle which has been dealt with to-day (I need not weary the House by reading out big chunks of the White Paper upon the policy expressed of the need for not producing too much milk), the Chairman of the Milk Marketing Board, Mr. Treherne, has said: It is impossible to have an efficient industry if the size of the job it is asked to do is being continually changed. Such action interferes with all natural laws and results of development within industry". Obviously the Milk Marketing Board, whatever the Farmers' Union may say, do not look with much favour upon the idea that the Government should now suggest the need to restrict the production of milk.

Nor do I think the Government have given a great inducement to the farming industry to be quiet with the Ministry about this matter when they refer to the 7 million gallons to be added to the liquid milk standard price range. Has any noble Lord considered how trivial that is? Have noble Lords considered the figures? Let us look at the actual production of milk. In the United Kingdom, in 1958 liquid consumption was 1,518 million gallons; for all other consumption, by way of manufacture and the like, the figure was 624 million gallons. That is a total of 2,142 million gallons. So the 7 million gallons now graciously added to the area to be covered by liquid consumption is to be equal to rather less than 1½ days' production of milk in the year. That is what it amounts to. How much added is that? I join with the noble Lord, Lord Amherst of Hackney, in his eternal optimism in congratulating the Milk Marketing Board upon having got the Government to add even the 7 million gallons; but it is completely trivial in relation to an Annual Review of prices connected with such an enormous industry as the agricultural industry, and I hope that we shall not make too much of it.

I agree, of course, with my noble friend Lord Wise that it is the farmer's lot to be bedevilled and plagued by weather conditions with which he has to contend. I am bound to say that the year 1958 was pretty bad for many areas in the country. When I look at some of the optimistic forecasts of grain production I just marvel, speaking as one coming from Essex. Essex is perhaps not quite so prominent a wheat grower—although it is pretty important in wheat-growing—as Norfolk and Suffolk, but certainly it has something similar in conditions. The noble Earl, Lord Ferrers, spoke about rye still standing, never having been harvested.

EARL FERRERS

With respect to the noble Viscount, I did not say so.

VISCOUNT ALEXANDER OF HILLS-BOROUGH

Then I do not know what the noble Earl meant by what he said. Nevertheless, let me say this: that I imply from his remarks that in this particular year, after the experience they have had of land which can grow nothing but rye (I think that is what he meant), they will have a very poor result anyway, and to impose a cut in the guaranteed price at this time is not a very good thing to do. There I put myself, at least broadly speaking, in harmony with the views which the noble Earl expressed.

I know this much; that in the case of oats, which are often harvested earlier than some of the other grain crops, there were fields which either were not harvested at all or where, when it was possible to get on to the land with heavy machinery to harvest them, it was found that a great deal of the crop had already fallen out and within a few weeks was growing green all over. Down in my county of Essex some of the farmers were bringing in as late as February, 1959, what was left of crops of barley and wheat. The weather had been so terrible that they could not get an earlier opportunity of getting heavy machinery on to the land to get the crop off. If anybody doubts it, he need not take my word; let him just look up the reports En the Essex County Gazette, and the East Anglian Daily Times. At any rate, if I may speak for my own small farm, our last lot of wheat was carted in Essex on November 29 last year, and none of that land has yet become fit to plough. Therefore, it is not only that last year has had to be covered in losses of that kind; in many of the areas a shorter crop must be faced this year, because it has not been possible to have the amount of cultivation and the proper exposure of the ploughed land that one would have in a normal season.

Having seen the optimistic figures given in one of these official returns, that the estimated crops of wheat and rye in 1958 are expected to be 2,731,000 tons, I shall be careful to try to find the revised figure when it is given—because I think that the position of that crop is going to turn out very much worse than the original forecast. When we consider the condition in which much of that wheat and rye was actually sold, after various processes of drying, or how much extra it cost the farmer to have his crop dried more than once before he could market it at all—a cost, according to whether it was home-done, of £2 to £3 a ton, sometimes more—we see something of the condition in which farming was carried on in 1958–59. I know perfectly well that the Government cannot go back and revise that situation; but I do not think that in the handling of the prices all round, they have been as considerate to the farmer carrying these losses as they might have been. I cannot see the real need for taking 6d. off wheat. I hope that the Parliamentary Secretary to the Ministry, when he comes to reply, will give us the true reason for reducing the subsidy on wheat. What is the true reason? I do not know, and I should like to know.

As I was saying to your Lordships on the occasion of the debate on the general economic position the other day, I hope that we are not losing sight of the fact that, in the changing circumstances ahead, we cannot hope to go on trying to live on the basis of driving down the prices of primary producers all over the world in order that we may get a cheaper cost of living here, or to reduce the wages of producers in this country in order to reduce generally the costs incurred in our production for export. You have to keep those principles always in mind. If you are going to have a steady and continuous market, you must see to it that you are getting supplies from abroad at a price which is going to give the producer of those supplies enough to be able to absorb our exports in return. As I see it, that is absolutely fundamental in this modern and changing world.

What is the relationship of the reduction in the subsidy on wheat here to the decision of the Government to rejoin the International Wheat Agreement? Is there any connection or is there not? I do not know. I have not been into it in detailed discussion. I do not know whether there is any need for it at all. I believe that if at any time the millers of this country were forced to use a larger percentage of home wheat because they could not get what they wanted from abroad, they would make use of what they received from the British producer—and a very good product it is!

I have had a little experience of the milling side of the industry. There is no doubt that there are those who prefer a purely white bread, or bread of a very white colour; but with modern machinery the bakers also want to make a product per sack of something like 96 to 100 quarterns—more than that now with the 14 1b. loaf. They like to buy the flour from the hardest wheat they can get anywhere in the world, because it takes a larger percentage of water in the breadmaking: there is a greater moisture content. But, believe me, there is no real difference in the quality of the bread that can be produced if the making is handled appropriately to the supplies available. I am looking at the noble Earl, Lord Woolton. I would say that there is no doubt about his experiences of trying to make as much as possible from the amount available to him in war time. With hard wheat generally you get more, and in war time you could get more loaves per sack because the baker would be able to use more water in the bread. But the noble Earl also knows that if it had not been for the supply of flour from British wheat he could never have pulled the nation through its wartime difficulties.

THE EARL OF WOOLTON

I agree.

VISCOUNT ALEXANDER OF HILLS-BOROUGH

Therefore, why should not there be some return to the British farmer? Surely, with a not-too-difficult Chancellor of the Exchequer to persuade upon his pet subject, the Minister of Agriculture ought to be able to bring pressure to bear to see that these matters are handled in a way that will, to use words which came from the opposite Bench, encourage the farmer in his industry and which is likely to bring prosperity to the whole country as well as to the industry.

I do not propose to take any longer on this question this afternoon, but I am particularly anxious that the agricultural industry shall get a fair crack of the whip. I am not saying that we have not had more unfair Reviews than this one: certainly we have had some very unfair ones in the last few years. But if I were asked whether the Government could do a great deal more for agriculture, I should say that they could. And I should have thought that, with so many representatives on the opposite Benches and in another place who are interested in agriculture, they could use their influence more upon the Government of the day in order to ensure that agriculture is soon in a better position. As to the building of the fibre, the resilience and the general power of the population, the maintenance of an adequate rural population seems to be absolutely essential.

The only question that I have not really dealt with, but which I should deal with, is a matter raised by Lord Lovat with regard to the breeding side of the cattle industry. I have no experience of this: I wish I could afford the capital properly to go into breeding. I am not sure how long the big prices that used to be obtained for pedigree bulls will continue, now that there is such a useful and widespread system of artificial insemination. My own experience of providing a little beef has so far been exceedingly limited, because I produce milk from Ayrshires. It must have been my lack of experience. but my efforts to produce beef animals have not been too successful.

I would emphasise most strongly what the noble Lord said about the risks in the next five years with the continued import of cattle from Eire. I want to have good relationships with the people of Eire upon this matter, because I think it stands to reason that, up to the present at any rate, and with the failure of the Argentine supply, we have not had sufficient beef production in this country entirely from our own breeding to be able to cover the next five years. I feel certain that the Government had to do something about it. I have a great deal of sympathy with the people who think that at any time in that period of five years, when, apparently, cattle will be treated as ready to come, with only one test on the other side, it means running a risk of reactors being accommodated on our land and in our herds, and that it is a very big risk to take. I hope that the Government will watch that point most carefully, because once it begins to come down to marketing and all the rest of it, it begins to affect not only the beef cattle but all the cattle that go to the markets.

I hope that the Government will not think that we have been too critical. I do not think we have been too hard on them. I do not want them to believe that we are entirely satisfied with this White Paper—we are not. In all the circumstances, we feel that they could have done better for the farmer, and we hope that by the time we come to consider this matter again next year, either we shall have such a change in the weather as to give us a real chance to overhaul the agricultural losses that occurred in many districts in the last twelve months, or that the Government will have had another thought about the guarantees under the 1957 Act and will see to it that they treat the farmers as justly by subsidy as they are already treating the industrial manufacturers by tariff.

4.20 p.m.

VISCOUNT STONEHAVEN

My Lords, I would first of all pay my tribute to the noble Lord, Lord Wise, for bringing this debate before your Lordships' House to-day. This Review is a national one. My views, and its effect upon me, are local matters and it is very difficult to regard the Review entirely from a national point of view. I might be more critical than I am had it not been for the fact that I have benefited from it on every score with the exception of the reduction in the wool price. That reduction has been very small and my ewes have co-operated magnificently and have produced more twin lambs than I have ever known, so that I am personally quite satisfied. I believe the overall judgment of the farming community on the Price Review can be gauged by the fact that they have virtually ignored it. No farmer will ever say anything when something is given to him, but he will be very quick to grumble when anything is taken away. On the whole, therefore, the Review must be satisfactory to most people.

The noble Lord, Lord Lovat, is a pedigree breeder and is in a little different position from myself, as I am breeding purely commercial store cattle. The question of calves is one of great cogency. If I possibly can, I like to have my calves born in January. What is the point of all this talk of efficiency when, by the Price Review, we then subsidise inefficiency? I cannot see that the two things go together; and that is a point which should definitely be considered. If there is some reason for that provision I should like that reason assigned to it, in an endeavour to satisfy us. I am quite sure I am speaking for practically all farmers engaged in breeding when I say that we are not quite sure of the reason—as the noble Lord, Lord Lovat, himself said. I apologise for repeating his point, but it is so important that I know your Lordships will not hold that against me.

There is another thing which, again, does not affect me directly but which, I feel, requires a little explanation. Surely the reduction of the premium on quality must be detrimental to farmers who are producing quality beef, so that the man who is producing a somewhat inferior article is again being encouraged—which again works against efficiency rather than for it. I feel that some explanation might be forthcoming on that matter, and I hope that we may have one. Another point I would make on the changes in the subsidy is that there is an increased subsidy on steer calves of (I believe) 15s. I cannot see the reason for that. If a beef calf is produced the animal is eaten. Why the differential in the sex? It costs just as much to produce and rear one calf as the other, and short of getting the right honourable gentleman, the Minister, to come and talk to our cows in a fatherly way, I do not see how that can be altered.

I have heard a rumour (which may be quite untrue) that the reason for this was that so many dairy farmers are using a beef bull and producing a beef calf. If that calf, through the lottery of life, happens to be a heifer, the farmer can draw the beef subsidy provided he gets the animal punched; but that animal could find its way into the dairy herd later on and be used as a dairy cow. If that is the argument, then I do not think it holds water; because I believe I am right in saying that in 1961 the whole country will be attested. In my part of the country we are virtually all attested now. If, at six or eight months, a calf is ear-punched as a beef animal, or rejected as the case may be, and has the needle and is tested and tagged with a number, the hole punched in the ear shows that there is a subsidy on it and it has a number, and that animal cannot be moved from the farm to any other farm or to the market without the written permission of the Ministry. It might have been true to say, five or six years ago, that a check could not be made to see that none of those animals illicitly got into a dairy herd, but I do not think that that argument holds to-day. That may not be the argument, and I should like to hear the answer if the noble Earl can give it when he replies.

Then there is the question of cereals. I am concerned with oats, as that is about the only crop that we can grow; and we have the acreage deficiency payment. Something has gone wrong this year. One cannot sell oats at the present time, and I would say that in my part of Scotland one-third of the crop is now stacked on the land, unthreshed. If your Lordships want to know the reason for that I will tell you. I was offered 54s. a quarter and, of course, I am not selling. Eventually I shall have to sell, but at the moment I am hoping for a rise. But I am told that there is a large quantity of cheap American maize coming in and being used by the food compounders. If they can buy maize they will not buy oats, which has a lot of husk. That is why nobody wants our oats. We shall not be badly off because in the near future we shall plump a large quantity of oats on the market. I should not he at all surprised to see the price drop to about 50s. If that happens, the Government have to "ante up" which is all fair and square so far as we are concerned; but if we have something in our left hand which is controlled, while the right hand is doing something else without co-ordination, the farmer "carries the can". It seems to me that the food compounders, those who make up manures and charge an enormous margin, and the millers, are the people to whom we ought to look when insisting on efficiency, rather than bullying the wretched farmer who, on the whole, is more efficient than the majority. I feel that that is something which would be borne in mind.

Next year an enormous quantity of wheat will come from Canada down the St. Lawrence Seaway. The cost of getting it here is estimated to be about 6d. per cwt. less than it is this year. Is the farmer to be knocked down another 6d.? I do not know, but there again is something at which we must look, for that is the kind of thing we want to know. A matter in Scotland which is not quite so directly covered by the Price Review, nevertheless it is connected. is the question of marginal production grants which we discussed some time ago. When the Small Farmers Scheme was produced it was decided to abolish, without question, the M.A.P. grants and there was a very involved and meticulous Report produced by the Department of Agriculture in Scotland. So far as I know, that has never left the pigeonhole where it had been put; nor has it even been considered. I should like to know whether I am correct in believing that, and to know also whether someone cannot now take it out, blow the dust off it and have a good look at it; because it is quite a good Report by the Department. In any case I should like to know its fate if what I have stated is incorrect. I cannot help feeling a little disappointed that in a debate of this kind which closely affects Scotland the noble Lord, Lord Forbes, the Minister of State, is not in his place to answer the questions which I now have to ask the noble Earl, Lord Waldegrave. That is not really fair, as they do not, in fact, concern him. If he does not like to answer, well and good.

There is one other point about this docking of £25 million or £30 million (or whatever the figure may be) annually in the Price Review. This matter, I take it, is based on an average. The trouble about an average is this. The man who has got virtually to maximum efficiency, or near to it, cannot go on increasing his efficiency beyond a certain length of time. If you are raising store cattle your ground will support a certain number of animals. Before you are eligible for the hill-cattle subsidy your land is assessed or classified as being hill ground, and the number of cattle you can keep on that ground is assessed also by the Ministry as the number of cattle that ground will support. If you wart to increase your efficiency, and the only thing you are producing is single calves, apparently you have to talk to the cow and say, "I want twins next year". One comes to a limit. The idea that everybody can, every year, automatically, by mechanisation—that wonderful word to cure all ills—increase production may have only a remote connection with the facts. It is not a be-all and end-all for everybody's problems.

I believe that this underlying business of a set figure for increased efficiency every year to be carried by the hill ground industry is a matter that should be reconsidered; and more consideration should be given to large districts, such as Scotland, where all the agriculture is based on more or less the same principle. There are large stock-rearing areas in Scotland which have no bearing whatever on, say, the grain-growing areas in England. By working on sweeping averages it seems to me that we are running into the danger of getting considerable hardship, with people having to throw in their hand, increasing unemployment and that sort of thing, which is not what is wanted. It is a danger which is run into by not going into the matter in sufficient detail in respect of large districts and the farming which is carried on there. Marginality is 10 per cent. fertility and 90 per cent. geography. We cannot alter geography; we can alter fertility. Nearly the whole basis of what we receive or do not receive is based on considerations which we cannot alter.

I should like to ask the Minister about the possibility of one other matter. We have in the Price Review the figures of the totals of agricultural production, and so on. The breakdowns of these figures are not published, and may therefore not be used, although they are known, until about nine months after the event. The statistics are then produced in a publication, the name of which I cannot remember. I would put in a plea that as those figures are known they should be produced at the time of the White Paper; I should like the detailed breakdown, which now appears later on, to be published and available at the time of the White Paper.

4.34 p.m.

VISCOUNT MASSEREENE AND FERRARD

My Lords, I also should like to add my thanks to the noble Lord, Lord Wise, for putting down this Motion. I shall confine myself to speaking extremely briefly about milk, mutton and beef. We have seen that milk production fell last year by 5 per cent., chiefly owing to the effect of the weather and partly owing to the reduction of milk herds. I personally agree with Her Majesty's Government that they are right not to increase the guaranteed price for milk. I myself have a dairy herd, but I feel that we are producing far too much milk. It is quite uneconomic to produce milk for manufactured products in this country. The noble Viscount, Lord Alexander of Hillsborough, thought, I believe, that it was very hard luck on the dairy farmer if the Government did not encourage him to produce even more milk. Surely it would be far better to try to make the dairy farmer put his efforts into other ways of agriculture, which would produce something that the country wants.

We have to remember that our imports of feeding-stuffs increased last year from 5.4 million tons to 6.1 million tons, which cost £140 million; and a great deal of that, I presume, has gone for dairy cattle. My own feeling is that if only Her Majesty's Government could induce the Milk Marketing Board to pay more attention to quality milk, if only we could have more premiums for quality milk, the extra production of milk would fall, to the advantage of production figures generally; because, as your Lordships know, the cows that produce the best quality milk do not produce the greatest quantity.

Concerning the quality differential for fat cattle, it will, of course, be an added incentive for dairy farmers to cross their cows with beef bulls, and this ought to reduce the number of pure dairy heifers for the dairy herds, so it will presumably reduce dairy herds throughout the country. If one puts an Aberdeen Angus on a Jersey, it is not going to pay one to milk the heifer. I do not think it pays to milk dual-purpose cattle.

I am extremely pleased that we have had an increase of £2 in the hill cow subsidy—it is now £12—and an increase in the calf subsidy. I heartily agree with the noble Lord, Lord Lovat, that if we are going to produce beef calves we must have them born early. Having the subsidy paid on April 1 is, I think, all wrong. As I have previously pointed out in your Lordships' House, and as other noble Lords have done, the chief beef-exporting countries in the world are drying up as regards their exports of beef. It is chiefly owing to the fact that they have increased standards of living and increased population; and the time will come, I believe, when no country will be able to export beef to us. However, I cannot help thinking that in the hill-grazing areas we still have an opportunity to produce more beef, although we shall need better liaison between Highland and Lowland farmers.

The whole trouble, as several of your Lordships know, is that although on the hill grazings we have these vast areas of summer grazing, we cannot fully utilise them because we cannot grow the fodder to feed the cattle in the winter. I have therefore wondered whether there could be some scheme by which one could cheaply transport cattle from low grazings to the Highlands for six months during the summer. Then, of course, the lowland farmers, having the cattle off their grazings, could grow far more hay and fodder crops; and when their cattle returned they could fatten more. Such a scheme would, indirectly, increase the number of yard cattle. Also, my Lords, there is the cost of hay to hill farmers. If I buy hay for the Isle of Mull, it costs me about £23 to, £24 a ton, which is absolutely uneconomic. If only we could have cheap transport of hay and straw to the North, it would be a great boon.

When we come to the production of sheep, the Annual Review has rather disturbing words. Perhaps I may quote it: The trend of production of sheep is still upwards but any further expansion of production will need to be considered in the light of market prospects, including the expectation of more plentiful supplies from Australia and New Zealand". My Lords, what exactly does that mean? Is the greater production of mutton to be frowned upon? As I understand it, we produce in this country about three-quarters of our mutton. Should we strive to produce the other quarter, or is it to be kept for Dominion exporters? If we are told we must keep this quarter for New Zealand lamb, I personally shall not quarrel with that, but I think the sheep farmers should know where they stand. It is really rather odd, because a short time ago we had a debate in this House during which several speakers emphasised that the deer in Scotland should be reduced in order to increase sheep production. Now we are told that we really do not want increased sheep production. It does not seem to add up.

I cannot help being disappointed that the guaranteed price for wool has been decreased by 2d., though I quite understand the economic reasons for doing this. But, of course, on hill sheep farms it is going to make a considerable difference, and I wonder whether perhaps Her Majesty's Government could not make an exception for hill grazings. It will hardly make any difference to the mixed farmer who has sheep on the low ground, such as in England, but in the Highlands, and on the Welsh hills, too, I suppose, this reduction is going to hurt. Hill farming is quite a struggle even to-day. If we are to keep shepherds on the land, we cannot afford to allow hill sheep farming to run down.

Before I conclude, I should like to point out that during the past year there has been a considerable increase in the prices of goods and services for the farmer, particularly as regards wages. I am sure that no one begrudges the agricultural worker his increase in wages, because he certainly earns it. But to-day the trouble appears to be that even if we pay these good wages, and provide good houses, we cannot keep them on the land. What the answer is, I do not know—perhaps television will help. I think that we ought also to remember that the farmers have been expected to find £8½ million out of their resources to meet these rising costs of last year. However, on the whole, I should like to congratulate Her Majesty's Government on their overall policy with regard to the Price Review and Determination of Guarantees—bearing in mind, of course, the wider interest of the national economy and good trade relations with the Commonwealth.

4.48 p.m.

LORD STRATHEDEN AND CAMPBELL

My Lords, like all other noble Lords, I am most grateful to the noble Lord, Lord Wise, for having initiated this debate. Generally, I welcome the Annual Price Review, though, naturally, with one or two reservations. When I first read it, I was struck unfavourably by paragraphs 11 and 12, but these have been covered so completely by the noble Viscount, Lord Alexander of Hillsborough, that I will not go further into them, except to say that I think it is a great pity so much stress should have been laid on "the heavy burden on the taxpayer", and other phrases of that nature, of these grants and subsidies. These grants and subsidies are given partly to ensure that the consumer gets his food at a reasonable price, and partly to enable us to compete with the heavy subsidies paid overseas, which make so cheap our imported foodstuffs. That has to be counteracted by subsidies on this side. Taking them by and large, I think that the production grants and guarantee payments, considering that they have to cover the whole area of farming, with its completely different conditions, act as fairly as they can and are reasonably flexible.

Last year's harvest was as near disaster as any harvest could be, I think. Prices dropped—barley 7s. 9d., oats 6s.—below the standard prices, and the granting of advance payments was a very real help. It probably would be an advantage if cereal grants could be made more in line with production grants rather than guarantee payments, but obviously there are great difficulties in doing that. As regards the subsidy on lambs, the noble Lord, Lord Wise, was dissatisfied because the maximum weights of sheep are to be reduced. Over the last several years, farmers producing lambs have been aware that the market has been getting tighter and tighter as regards sheep that are too fat, and we have been trying to reduce the size.

As regards the Government's wish that there should be more efficiency in the production of mutton, I think it is only fair to the farmer, certainly in Scotland (I do not know about Great Britain), to say that the number of sheep is smaller than it was before the war. But although at the last census the number of breeding ewes was 0.5 of 1 per cent. less than in 1939, the total number of sheep was only 0.2 of 1 per cent. less, which clearly indicates that by improved management and better breeding the smaller number of ewes is producing a larger number of lambs; and that, I think, is the final test of economic and efficient production.

The hill cow subsidy has been discussed by several noble Lords, and I will say no more about it than that, although it is an excellent thing for the real cattle-producing hill land, there is a doubt about the extent to which one ought to increase the number of cattle on the hill sheep land. Here I must be careful, because two organisations of which I am chairman are at present dealing with research into this subject, and are not finally decided on it. But certainly there are indications that there is a definite limit to the number of cattle which can be economically kept on sheep land, largely because, as the noble Viscount, Lord Massereene and Ferrard, said, the hill farmers cannot produce the winter keep and therefore have to dispose of their stock. Indeed, they may even have to dispose of their breeding cows, which makes it a completely uneconomic operation. I have heard it said that the hill cow subsidy was intended in some way as a sop for the removal of the marginal grant to hill farms. I do not know if that is so—I think probably not—but as I took some part in the Second Reading debate on the Small Farmers Bill, I should like to say that I sincerely hope the Government are urgently continuing their investigations to make sure that their policy of M.A.P. grants as regards farms which are truly marginal does not lead to an actual reduction in the number of beef cattle.

I would mention one other point which, though not strictly concerned with the Annual Price Review, gives an indication of the boost given by Government grants. There was a silo subsidy which began to take effect in 1957. In Scotland, the silage made increased from 280,000 to 360,000 tons, apparently as a direct result of that grant. I think that that is another indication that these subsidies are not just gifts to the farmers but have a real effect in improving the standard of agriculture. Finally, I should like to acknowledge my debt to the Department of Agriculture in Scotland for the two excellent publications they issue each year, Agriculture in Scotland and Scottish Agricultural Economics, both of which I have used in the preparation of my speech. They are of great help in following the trends of all aspects of agriculture.

4.57 p.m.

LORD STONHAM

My Lords, I join with every noble Lord who has taken part in the debate in thanking my noble friend Lord Wise, not only for introducing the subject and giving us this opportunity, but also for the way in which he opened the debate. This is the third or fourth time that I have been the last speaker on this side of the House in a debate on agriculture, and I have therefore sat through several of our debates on the subject. I am beginning to think that they are achieving a sort of set pattern. If I were to talk in musical terms, I might be tempted, though I do not want to frighten the noble Earl, Lord Waldegrave, to think of that piece of music where various instrumentalists, having made their contribution, gradually steal away until there is only one left, and he puts out the candle and goes home. But I will stay with him whatever else happens.

Perhaps the truer analogy in musical terms is that of a suite for solo vocalist and three violinists—the three violinists being on this side of the House. My noble friend Lord Wise, with the sure touch of an experienced virtuoso, opens before our eyes the vistas we have to follow and perhaps achieves his best effects with the use of muted strings. My noble leader comes in with a weighty contribution. He concentrates, as it were, on the G string. I come in at the end of the day pizzicato, with the "twiddly bits". Of course, the solo vocalist is the noble Earl, Lord Waldegrave. He is always a pleasant performer, but somewhat handicapped because he has only one song—"Everything in the garden is lovely". Perhaps he has a further handicap in that, although the music to which he sings the song was composed by Mr. Tom Williams, the words are those of the present Minister of Agriculture—and the words do not fit the music. The result is not quite so good as it would otherwise be.

I should like to quote a few examples from the Annual Price Review we are now considering. When Mr. Tom Williams wrote both words and music, the words "determination of guarantees" meant that we determined the actual prices that the farmers would get and we guaranteed them. Under the present Minister of Agriculture these words mean no such thing, though they are precisely the same words. They mean now that the farmer will get just the price which his produce commands in the open market, which in wheat or barley may vary by as much as £10 a ton, according to when he sells or where he sells, and it is absolutely sheer luck in selling early or selling late. There are various other factors over which the farmer, however experienced he is, has no control. For the same quality in the same week there can be a variation of as much as £5 a ton in towns as close together as Salisbury and Dorchester. But I could quote many other things. It is true, of course—and I have no doubt that it will be pointed out—that the farmer receives the same additional sum in subsidy per ton or per acre, but this does not alter the fact that the present system is not a guarantee, but a lottery. I do not doubt, if he makes any reference to this point, that the noble Earl will skip nimbly round it, but he knows as well as I do that the words "Guaranteed Prices" at the head of Appendix 5 are just not true. He knows also that out of this present system springs the worst possible thing for British agriculture—namely, insecurity and uncertainty.

Another word that has a different meaning in these days is the word "subsidy". When we had guaranteed prices the subsidy was the amount by which prices to the housewife were reduced. In those clays subsidies cost £400 million and the taxpayer got full value for every penny. To-day subsidies cost in round terms about £250 million, and the taxpayer does not get one single penny benefit; nor does the farmer. My noble friend Lord Wise made some reference to the figures for net farm income, and I should like to quote two. In 1951 to 1952—that is, the first year of Conservative government—the farmers' net income is listed at £323½ million; this year it is £327 million, which is virtually the same figure. I think that even in terms of a depreciated pound I am correct in saying that that is proof that the £250 million which the taxpayer is paying is not going to the farmer.

But the situation is worse than that, because the pound in terms of 1951 is to-day worth only something like 15s., so that the income of farmers has really decreased by 25 per cent. There is no other industry in the country where anything like that has happened. I say that that, so far as agriculture is concerned, is a measure of the failure of the Government's policy of support prices, and in my view no amount of soft speeches can conceal this grim fact. But the point is that the taxpayer has provided the money; the housewife has not got the benefit in the shape of lower prices, and the farmer has not got the benefit either. There is no doubt, as my noble friend indicated, that the money is going in various ways, to all the intermediaries who have a finger in the pie. As always, the rewards are not going to those who work hardest, the producers, but to people who merely shift things from one place to another; and, in my view, that is quite wrong.

Another word which has a different meaning is the word "efficiency". In the, days of the Labour Government an efficient farmer was one who, in the opinion of his fellow farmers, farmed his land well, and because of guaranteed prices his bigger crops brought the automatic reward of larger profits. The bad or inefficient farmer could be put under supervision, and if he did not make good he could be turned out to make way for someone else. To-day the Government do not know whether a farmer is good or bad. There is no means of knowing that, and there is no criterion of efficiency of individual farmers. All that the Government do is to go on talking about farming efficiency increasing by something like £25 million a year. I was glad that the noble Lord, Lord Amherst of Hackney, asked the noble Earl, Lord Waldegrave, specifically whether he could give the figures and tell us how they were arrived at. I wonder whether, in arriving at this, any cognisance is taken of the kind of thing that the noble Earl, Lord Ferrers, mentioned, about somebody's topsoil blowing off on to the road, and whether that is taken as a debit when calculating increased efficiency. I should have thought that that was a most relevant factor when considering the true efficiency of farming.

It is undoubtedly true that some good farmers are producing even better crops. My argument is that they are carrying those, of whom we could all quote examples, who get more from the subsidy than they get from their crop. That is gross inefficiency, and it is grossly unfair to the taxpayer, because the taxpayer carries them and the land suffers. Therefore I think it is wholly wrong for the Government to talk of increased efficiency in this way when they are unable to produce the facts. As I said before in regard to the other matter, the words do not fit the music.

I should like the noble Earl, Lord Waldegrave, when he deals with the question of efficiency, to make some comment on the anxiety which is felt by a number of farmers about what they allege to be a decline of soil fertility. The noble Earl will be familiar with the correspondence in The Times recently on this matter. I am notsaying—I do not know; I do not think the evidence exists—that there is such a decline, but I am bound to say that some of the arguments put forward are disturbing, such as in one letter, speaking for a good farmer, where it was said: We are living on the fat of our fathers and playing forfeits with the future.… With the aid of artificial fertilisers we can continue to take more from the soil than we put back—perhaps for many years—but it must eventually lead to soil bankruptcy. …Fertility—most difficult to define, is the farmer's essential capital: easy to spend and slow to accumulate". I know that there was a first-class answer in the same correspondence from another gentleman who pointed out that, since crops had been increasing in yield year after year, that in itself was proof that the soil could not be getting less fertile. That may well be the case, but I do not think we should make the easy assumption that, because of the use of more fertilisers, and perhaps improved methods in other directions, the soil is still as fertile as it was. I hope the noble Earl will deal with that point, because if we talk about increasing farming efficiency by an annual rate of some £25 million a year we have to be satisfied that we are not using up the capital which we have in the soil and calling that extra profit.

I want to make one or two observations or the paragraphs dealing with production and guarantee policies under the heading of "Commodity Objectives" on page 4 of the Annual Review. This subject has already been mentioned several times in the debate, but I do not think that these precise points have yet been made. My noble friend Lord Wise has drawn attention to the apparent contradictions between consecutive sentences in paragraph 9. Those consecutive sentences—and they are absolutely consecutive—read like this: …no further expansion of gross output is required. Any further expansion…must be achieved through reducing unit costs…". That appears to be an absurd contradiction. However, I am not so much concerned with the contradiction or its apparent absurdity, as with the fact that, to me, it is an unhappy revelation of the Government's true intentions, as I conceive them. I would ask the noble Earl quite seriously: Does not that paragraph mean that the Government are telling farmers, quite bluntly and in plain English: "However much, through improved methods and better management, you increase food production, you are not going to get any more money."? The global sum is not going to be increased.

I was interested in a remark made by the noble Lord, Lord Amherst of Hackney, about eggs. He referred to the amusing and pleasing television advertisements promoting the sale of eggs. He suggested that that would lead to the sale of more eggs, which would mean reduced prices and, therefore, reduced subsidies. Quite the contrary. Selling more eggs will mean increased production, with possibly the same price, but not a lower price, and more subsidy because there are more eggs. It would be distinctly unpopular with the Government.

LORD AMHERST OF HACKNEY

I referred to a higher price with a smaller subsidy. Increased demand would put up the price of eggs: that is what I meant.

LORD STONHAM

I am sorry if I misunderstood the noble Lord, but I think he will agree that if the producers sell more eggs it means that they produce more; and if there is a bigger quantity, obviously the total subsidy is going to be more. That is something which will not be popular with the Government. In fact, it is contrary to the policy for which they provide in the White Paper we are discussing.

That is what I think paragraph 9 means, and it is a very unhappy situation. I cannot conceive of any other interpretation of the words in that paragraph—perhaps the noble Earl, Lord Waldegrave, will explain if they mean something different. I do not think he can, however, because the truth of that interpretation is, in my view, proved by the next paragraph, "Commodity objectives", which clearly aims at a static agriculture. There is no doubt about it. In no case is it said that there must be more. It may say, "better quality", but in several paragraphs it says that there must be less produce—fewer eggs, less milk, and so on. Therefore, I think what the Government aim at is, at best, a static agriculture, which is an impossible objective, because nature does not stand still. It would mean that we should be going back.

The Government's aim is "less milk than is at present in prospect". But according to The Times report of the meeting of the Dairymen's Association last week, that Association is seriously concerned at the possibility of a milk shortage this year, because the supply will be insufficient to meet the demand for liquid consumption. They are experienced people, and a difference of 1 per cent. in total consumption could, under certain conditions, mean a shortage. I was surprised to hear the noble Viscount, Lord Massereene and Ferrard, as I understood him, express the belief that we appear to be having too much milk.

VISCOUNT MASSEREENE AND FERRARD

I was only quoting from the Annual Review. As I understand it, we have too much milk for liquid consumption.

LORD STONHAM

Of course, I do not share the noble Viscount's confidence in the Annual Review. Had I understood that he was quoting that, I should not have re-quoted. Obviously, if an association like the National Dairymen's Association is seriously perturbed that there will not be enough milk, I think we must take cognisance of it, and it casts doubt upon the wisdom of the Government in suggesting that we should produce less milk. In fact, the farmers' increased proficiency has produced more. The Milk Marketing Board, through advertising, has increased the demand for liquid milk, yet the Government, it seems to me, by this policy, are trying to ensure that they disappoint their customers. It is impossible to run a business in that way.

Then the Minister calls for continued reduction in costs of pigmeat and further efforts to satisfy market requirements". But pig-keepers have been doing that for years. Now many of them find that they cannot make it pay, so they are not breeding so many gilts; and before long there will be a lessening of supplies and prices to the housewife will go up. In the bad old days we used to say that pigs were "either muck or money". The Government seem to have decided that they are going to be muck again.

It is not good constantly to frustrate the farmers and disappoint them in this way. As has been mentioned by my noble friend, the Government want less wheat and more barley. The Minister of Agriculture told the corn merchants last week that home wheat-growers were being officially discouraged because wheat is in world surplus. My noble Leader asked what was the reason for this Government action, and that was one of the reasons the Minister gave last week. It now takes half our exports of manufactured goods to pay for our food imports, including animal feedingstuffs. So why increase our burdens by making it likely that we shall have to increase our imports of wheat? The Minister is rightly determined, if possible, to reduce imports of feedingstuffs below last year's £140million level. But why is he at the same time willing to allow wheat exports to be increased? It just does not make sense, unless it is that with wheat at a fair price there is an incentive to achieve high yields per acre. This again will endanger the Government's policy, as I see it, of keeping static the global sum available to agriculture.

In any case, my Lords, a combination of Government policy and weather conditions has already insured a record barley acreage, which is well away despite the Price Review and everything else. I would ask whether the Minister is giving any thought to handling the crop. Half the barley to he sold off farms—that is more than 1 million tons—will have to be cleared before the end of October, since there is no incentive to store and incur drying and handling charges, because it is anybody's guess whether the price will be better in October than in January. When are the Government going to think this one out and put an end to what The Times agricultural correspondent called, "this rather clumsy business"?

Is it any wonder that with this kind of policy—a policy of stop and start, of artificial ups and downs—the farming community have come to the conclusion that the right honourable gentleman the Minister of Agriculture should change his theme song from "Everything in the garden is lovely" to, "We don't know where we are"—and perhaps they add, "But we know where we are going". I think the farmers are going to follow the lead of the farmers of South-West Norfolk. They are concerned for the future of the land; they are concerned for their own future, and they are fed up with working harder and harder in order to stand still. I believe that as soon as the chance is afforded them they will work to return to power the Party that I represent, the Party which gave them the best farming policy and the best Minister of Agriculture they ever had.

5.20 p.m.

THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE, FISHERIES AND FOOD (EARL WALDEGRAVE)

My Lords, I think I may speak for all noble Lords, and I believe every speaker who has spoken this afternoon has done so, in paying tribute to the noble Lord, Lord Wise, not only for raising this debate at all but for the way in which he introduced the subject. I should not like to be the only one who did not join in that tribute, because I certainly appreciated the way in which he introduced the debate. It is fitting that we should have taken this opportunity of giving further consideration to this important White Paper(Cmnd. 696), and I do not think there need be any apology for this debate.

The noble Lord, Lord Wise, when he raised a similar debate last November—I do not know whether he remembers—suggested that I should take for my Christmas holiday task the task of working out a new agricultural policy. I cannot believe that he can have been very sanguine in hoping that I would accede to his suggestion, because in that debate I said, as I have said before and will say again, I do not think a new agricultural policy is needed, because I am a sincere—I would say an enthusiastic—supporter of this Government's existing agricultural policy. But I did promise that I would, in the Christmas holidays, as at all other times, think most carefully about our agricultural policy. I did so, and no new policy has turned up in my mind. I do not think the noble Lord will be very surprised. I know a good thing when I see it.

The noble Lord, Lord Stonham, has really in his speech emphasised what the noble Viscount, Lord Alexander of Hills-borough, and the noble Lord, Lord Wise, said: that the new policy they hoped I would dream up—I cannot think why they thought Iwould—was the old policy, the old policy of the Labour Party, of fixed prices and controls. The noble Lord, Lord Stonham, made no bones about that at all. He said that he hoped I would not skip nimbly round this subject. I certainly will not skip round this subject, nimbly or otherwise; I dislike nimbly skipping around. Appendix V of the White Paper to which he took exception is perfectly true. These are the guaranteed prices. The heading of Appendix V was what the noble Lord, Lord Stonham, did not like, and it says "Guaranteed Prices". I do not know what else you can call them; they are guaranteed prices. There is no nimbly skipping round about that. They are not fixed prices, but they are guaranteed prices.

LORD STONHAM

My Lords, perhaps I could make myself quite clear. The noble Earl means that they are guaranteed prices in the sense that they are paper prices, but they are prices which nobody gets.

EARL WALDEGRAVE

But they must get them. They are guaranteed. The difficulty and misconception that so often arises in this matter is that we are not necessarily guaranteeing the individual market payment to the individual farmer. We are taking this as a national farm and the national average, and we are guaranteeing that. Our policy is to provide a system of support for agriculture which will, at the same time, encourage the farmer to produce what the market wants, which must be right, and when it wants it. The noble Lord seems to think that the farmer should be kept out of touch with the market and that the agricultural industry can be healthy and prosperous only if Grandmother Whitehall is standing by to tell them exactly what to produce and how much they should receive for each item, and when, and all the rest of it.

I do not think noble Lords opposite can really believe that the system of controls which is necessary in a national emergency such as war could be reintroduced again to-day. There is no halfway house. The war-time system serves well enough—itis the only system—when overseas food is not available, when supplies are scarce at home, when manpower, money and everything has to be rigidly controlled. In those days it was not a case of guessing what the housewife wanted but of giving her what we could get hold of, and she would be thankful for having anything. That isa system you cannot compromise with. Either you do that all the way through and deprive farmers of any opportunity of dealing with the market and dealing with the housewife as a person who has freedom, or else you do not. I honestly do not believe it would be reasonable to suggest that anybody wants to reincarnate that vast panoply of controls of production, marketing, imports, the doctrine of "Take it or leave it" and "The man in Whitehall knows best". I simply do not believe that that is what the country would stand for to-day.

But we were left in no doubt, I think, that that is what noble Lords on the other side want. The noble Viscount, the Leader of the Opposition, used the phrase, if I took it right, when he was talking about millers, that we can "force the millers to make do". That is the philosophy with which we on this side will have nothing to do. We are not going to force the millers to make do with anything. We do not think that that applies at all to-day.

LORD STONHAM

My Lords, my noble Leader, as the noble Earl may not be aware, has had to leave and he hopes to be coming back. On that particular point I heard what my noble Leader said. He was referring to the level of wheat imports and he said that if we had a lower level of wheat imports that would force, if you like, the millers to take a bigger share of British grain; but it is not forcing in the sense of a control of the kind to which the noble Earl referred.

EARL WALDEGRAVE

I will accept that fully, but the words were used, and they are implied in all that philosophy that we should have to arrange what people do and not let the market play. The noble Lord, Lord Stonham, himself, talking about efficiency, said that the Government no longer knows what efficiency is. That seems to me to raise the whole point of how you are going to describe efficiency. Under the war-time system the Government officer or the member of the executive committee would go round and assess a farm and say, "You are A, B or C". It was like the difference between judging in a show ring and judging by your bank balance. We have had to learn, as practical farmers, that the show-ring judging is not always what the customer wants or what the bank manager wants. Judging by people going round the country and saying, "You are art A farmer and you are a C farmer" is one way of judging efficiency, which was perhaps the only way then. But our way is quite different, and that is that the business should judge whether it is efficient or not by the criterion of whether it survives, makes profits or fails. That is how we know efficiency, which we think is the better way.

The noble Lord asked me at that point to say whether I had any views on the possibility, or whether it was taken into consideration when we were judging efficiency, of whether the fertility of the soil was running out under the pressure of the farming to-day. I have no reason to believe that the fertility of the soil is running out, and I was inclined, as the noble Lord was, to agree with the second writer in that correspondence that the evidence seemed to be the other way. I would rather not go into that matter in detail, because it may form the subject of debate at another time. I will not say more about this general theory of the difference between controls and our system of the freedom of the market, other than just to refer to the example given by the noble Lord, Lord Wise, of the millers making a lot of money as big concerns and the farmers not making so much as small concerns. I do not think that the noble Lord, Lord Wise, wants me to pursue to its logical conclusions the argument about the difference between sizes of things and the rates of profit. I do not think it would be profitable to do so.

The noble Lord mentioned that in the debate which was held at a very high level last week, initiated by the noble Lord, Lord Pethick-Lawrence, concerning our financial policy, several agricultural matters were raised and no answer was forthcoming. I hope to try to put that right to-day. Thinking of that, I cannot help reminding myself that the noble Lord, Lord Pethick-Lawrence, then used an analogy which I think might be helpful to us this afternoon. He wondered whether we were driving too much on the horn and the brake. Your Lordships will recollect that my noble friend the Lord President of the Council was able to assure the noble Lord, Lord Pethick-Lawrence, that we did use the horn and the brake on appropriate occasions, and indeed the steering wheel and the accelerator; and in fact that the use of these instruments was obligatory to anybody who wished to keep within the Highway Code. I hope that to-day I may be permitted to carry this analogy into the rural roads of agriculture, where regard for the Highway Code is no less important.

The analogy is a good one. It is our aim that we should live in an expanding and prospering national and Commonwealth economy, and that all sections of the national economy should prosper, not one section at the expense of another. Agricultural policy in this country, which is predominantly industrial, must pay due regard to the other users of the economic highway. We do not propose to clear the highway of all home agricultural traffic. We wish to see, and we are seeing, an efficient home agriculture taking its legitimate place—and a large place—in the national scheme of things. We cannot per contra do what the noble Lords, Lord Wise and Lord Stonham asked us to do—namely, to allow agriculture to drive on this national economic highway with its foot on the accelerator, regardless of pedestrians or other traffic the whole time. That is simply not possible and cannot be allowed.

Perhaps the most constant demand from the farming industry all the time over the years is that agricultural policy should not proceed by a succession of violent stops and starts, for agriculture is a long-term business. In this connection I doubt whether the full significance of the 1957 Act, with its long-term assurances, is always fully appreciated. In my view, this measure, which was introduced by my right honourable friend the present Chancellor of the Exchequer, when he was Minister of Agriculture, is of very profound significance indeed, and its value to the industry cannot be over-emphasised.

The noble Viscount, Lord Alexander of Hillsborough, spoke of Mr. Amory, when he was Minister of Agriculture, as one who "continuously defended" the subsidisation of agriculture. I was very glad to hear that. But I was expecting the noble Viscount to go on to say that there had been some change—that subsequent Chancellors and subsequent Ministers of Agriculture were not continuously defending this policy. But they are. There has been no change at all. Have noble Lords opposite forgotten that we are still operating precisely the same policy as we were operating when Mr. Amory was Minister of Agriculture? This is his Act that we are operating—the long-term assurances. We are interpreting it in the way that he intended it to be interpreted and it is the noble Lords opposite who are giving it a false interpretation. Indeed, the noble Earl, Lord Ferrers, I am afraid, fell into this trap as well.

I apologise for having to refer so much to the noble Viscount the Leader of the Opposition who is not here, but who told me he could not be here. It is only courteous to him that I should deal with his points. If I may say so in his absence, he is one of the greatest sinners—or, perhaps I should say, takes that view more strongly than some others. He is always telling us that the purpose of this Act was to give a new stick to the Treasury to knock down the amount of guarantees that the farming community could have every year by 2½ per cent. overall or 4 per cent. on each individual commodity. He always takes that line—he took it again this afternoon. But that is not the intention of the Act. It was not the intention of my right honourable friend the Chancellor of the Exchequer, when he was Minister of Agriculture, and it is not now the intention that the Act should be used in that way. The intention was, and is, that even if the Annual Review shows that farmers' incomes have increased, by reason of increased efficiency, or by the trend of world markets, or by a combination of the two, the guarantees must not be reduced in any year by more than 2½ per cent. overall or 4 per cent. individually. That is a very different thing, and that is what is happening. Admittedly, in the year that has passed, 1957–58, some credence might have been given to that view of the operation of this Act in so far as that Review showed that guarantees ought to comedown. They were reduced, but even then not to the full 2½ per cent. That perhaps gave a little credence to that interpretation of the Act.

But this year the position is entirely changed. We started from the lower point in the guarantees that we fixed last year, but the production figure is healthier; the subsidy bill has fallen, and the farmers' incomes were down because of the difficult year. That is what we started with. It was clear from our review of all the factors, that we ought not to reduce the sums of guarantees at all; and in fact, after much consideration, we decided that the farmers should have a slight increase of £3 million. That surely must, once and for all (it has been raised about three times in this House in three consecutive debates in which I have taken part), remove any misconception that may linger, even in the most suspicious minds, that the 1957 Act was designed automatically to reduce year by year the amount of Exchequer subsidy to the farmer, regardless of what the Annual Review should show.

On that aspect I should like to take up the point raised by my noble friend Lord Amherst of Hackney, who thought it a pity that there had to be this bargaining or Annual Review every year. I hope he will not mind my disagreeing rather strongly with him about that. He must see the whole picture as one. We have these guarantees, and it is most important that price and production policy should not run on for too long a time, until it is stale, and then have to be suddenly altered. We have these long-term assurances in the 1957 Act which give us these limits of drop, if there are to be any drops at all, year by year. We could not, therefore, let this policy run on and not have a Review every year. I hope that the noble Lord, Lord Amherst of Hackney, does not look upon this Review every year as a sort of Eastern bargaining match, because it is nothing of the sort. The Government determine the prices in the guarantees and the production policy, but they consult the farmers' unions. There is no question here of a bargain. The farmers' unions, quite rightly, put forward all sorts of reasons which, in their view, should be taken into consideration by the Government; but the responsibility for the determination is that of the Government. We are only too delighted when, therefore, we can bear our responsibility conscientiously and fully and yet know that the farmers' unions can agree that what we are doing is right, as they did this year.

Now, if I may, I will turn to the industry's production achievements this year. The net output for 1958–59 is 61 per cent. above pre-war and only just below the record for 1957–58. These results testify to the strength and resilience of the industry, and effectively dispose of any pessimistic suggestion that the industry is waning. As we all expected, in 1958–59 the industry's net income, on an actual basis, fell by some £27½ million to £327 million. There is no attempt in the White Paper to hide that. But may I remind the noble Lord, Lord Stonham, that he prophesied that the net income would fall to less than £300 million, as he will see from the OFFICIAL REPORT, Vol. 212, column 814. I am very glad that his prophecy has not been fulfilled. But the fall in the actual net income was more than accounted for by the effects of the weather. It has been said in the debate that people are tired of considering the weather; but of course, we must consider the weather, for farming is an outdoor occupation and the weather must be taken into account.

What we have always said is that neither this nor any other Government can be asked to compensate farmers for the weather, so that these figures have to be turned every year from the actual—that is what happened with the weather, good, bad or indifferent—into a form adjusted to normal conditions. This has been agreed with the National Farmers' Union since this system was started; and it has been agreed with the farming industry that it is absolutely essential that it should be done in this way. When noble Lords say that Tables A and B of Appendix II are more or less completely hypothetical they should remember that those are adjusted to normal weather conditions. They are not meaningless.

Farmers want it done in this way. They do not want us to say, "You have had a very good harvest this year, and we will take the actual income and reduce the amount of grant from the Exchequer." We must put this on to a comparative basis. Table B never coincides exactly with Table A because it is arrived at by a different method—by taking a sample from the 3,600 farms dealt with in the universities' economic survey; but it does act as a useful check; and these two tables are intended only to show the trend. Table A is that of the national farm, and Table B is the sample raised from the 3,600 selected farms. They can do no more—and certainly no less—than to show the trend. The trend is there to see, and it is upwards.

LORD WISE

My Lords, the noble Earl is talking of these tables, but surely the only table which is of any use at all is Table A and the "Actual" figures in its first column.

EARL WALDEGRAVE

My Lords, I cannot think that that is the only table which is of any use at all. That is not so. That table shows the actual income this year—estimated for 1958–59 of course, as the year is not over at the time of the Review—taking account, so far as is possible, of what has actually happened with the weather; but in order to arrive at these price determination guarantees we must have the normal weather conditions. The farmers want it, and so do we. That has been done since the beginning of 1946–47, and we de not propose to change it now. To do that would be to get into deep water, for it would mean making yet another table of real income adjusted to the value of money to-day as compared with that at some other time, which is an exercise noble Lords can do for themselves. We feel that it would be too great a complication if we tried to translate all of these figures. My right honourable friend the Chancellor of the Exchequer does not do that with his Budget, and we do not feel that we should do it with ours.

I will now go back to my analogy of the highway. The engine seems to be in good running order, and we are on the right road—as I hope noble Lords will agree. It is when we come to the various Review commodities that we find it necessary to make selective use of our metaphorical brake and accelerator. Paragraph 7 of the White Paper, which deals with these things, shows that there has been no sudden change in the general objective. Paragraph 9 refers to the gross and net output, and there we get into another difficulty with which the noble Lord, Lord Stonham, was troubled: he professed to find it difficult to understand the difference between "gross" and "net". What we are saying in the White Paper is that we must be careful about the expansion of gross output. That means that we already have plentiful supplies of most things and must be particularly careful about producing, for example, more milk, bacon or eggs, especially if those are to be produced on imported feeding-stuffs. What we should be happy to see is an expansion of net output coming from a reduction in unit costs. This is not, perhaps, very easy to understand at first sight, and perhaps I may be permitted to go into this a little more deeply.

The term "gross output" is used because we import a large amount of agricultural produce. We import feeding-stuffs, seeds and livestock, from Ireland and other places. When these imported inputs—I must apologise for this jargon—are deducted from the gross output we arrive at what is meant by "net output"; and that is what we want to expand and what we can increase. This increase can be achieved particularly by increasing our production of barley and other feed crops, making better use of grassland (following out the recommendation of the Caine Report) and by producing still more of the store animals that we need. Now your Lordships will see how the policy as set out in the White Paper falls into that picture. Improvements in technical production and efficiency are not enough, however, and it is necessary to have regard to the needs of the market. No industry can go gaily along turning out its products without ensuring that quality and quantity are in line with what the customer wants and is prepared to pay for. The Government guarantee determinations reflect the market prospects for various commodities. They sort out the traffic into different streams, and indicate which routes are clear and which have danger spots; and the position for each Review commodity is set out in the White Paper.

The first to which I should like to refer is beef, which is dealt with in paragraph23 of the White Paper and on which the noble Lord, Lord Lovat, spoke so eloquently.I thought that his speech needed an answer in some detail, which I shall endeavour to give, because I was not entirely happy about some aspects of it. The noble Lord mentioned that he is an expert on cattle-breeding. I know that, and I should not dream of crossing swords with him on that technical subject. Nevertheless, I must cross swords with him on some of his actual statements, and first with regard to what he said about Irish cattle.

He said he was extremely disappointed that we should be letting in those cattle, and that it was a risk we ought not to take. He was anxious that we should not go on raising the price of beef too much and go on raising the price of stores too much to the feeder. Then he suggested we should not let in these Irish cattle. Three hundred thousand a year come in or have been doing so recently. I was in Northumberland yesterday at a big feeders' demonstration. I suppose there were 900 farmers there and they were telling me that there are over 80,000 Irish store cattle going into Northumberland a year.

We shall be fully attested in this country by 1961. The Irish are behind in this matter and are not yet fully attested; and there is no chance that they will be fully attested by 1961. When these very large amounts of cattle are coming in, it would have been a grave responsibility indeed for us to have said that, because we are going to be fully attested in 1961, we are going to ban the import of all Irish cattle as from that date, quite apart from the question of the Irish export trade with us. Where the feeders would have turned to I do not know. I was interested to find that that very large gathering of Northumberland farmers yesterday were unanimously of the opinion that the Government have come to the right decision in allowing these once-tested cattle in. The farmer who takes them will have to face the difficulty and tiresome bother of isolating them for sixty days and submitting them to test, and will be compensated if they fail at the end of it. The noble Lord will be interested to know that in recent years and months not more than about 2 to 2½ per cent. of such cattle from Ireland have gone down to the second test in this country; and that is a risk we must accept. I hope that on further consideration my noble friend Lord Lovat will think that we are doing the right thing here.

LORD LOVAT

My Lords, I was pointing out that it would be possible with a long-term policy, as opposed to a short-term policy, for people to breed cattle in Scotland which would largely replace unhealthy Irish cattle.

EARL WALDEGRAVE

My Lords, with that I entirely agree. That is why we have given the noble Lord another £2 on his hill cow subsidy. We want more stores in this country. But the Government must face the responsibility of dealing with the position in 1961 if the cattle are not there and the noble Lord has not bred them in sufficient quantity and people are asking, "Where can we get our cattle from?" We have taken the right decision until we have enough ourselves.

My noble friend Lord Lovat also mentioned the calf subsidies. We have, as your Lordships know, in the White Paper increased the steer calf subsidy by 15s. on steer calves born after April 1. The noble Lord made the suggestion that we should give that subsidy instead to calves (I think I noted this correctly) not more than three months old on April 1. I think his reason was that we were going to force farmers to do a bad thing; we were going to force them to calve their cows late so that they could go subsidy hunting, whereas they should calve early, which is good husbandry. I agree it is good husbandry that they should calve their cows early, and I suggest that the 15s. on a steer calf is not going to have this effect of driving farmers to wrench away from the whole of their good husbandry practice, with which they have been brought up from the days when they were children, and turn it into something wrong just to get 15s., which might, after all, be taken away in the next Price Review. I do not think we need worry about that.

I will certainly consider this question of paying the subsidy for a calf which is not more than three months old on April 1; but that would not produce any more calves this year. That matter has already been arranged by nature when the bull went to the cow last summer. What we are trying to do is to encourage farmers to breed calves for next spring, and if they are steer calves they will qualify for the subsidy next spring. We are not looking for a retrospective bonus (one noble Lord referred to a bonus); we are trying to encourage production of more stores next spring, and that is what we think will happen.

LORD STRATHEDEN AND CAMPBELL

My Lords, might I interject for one moment? I quite understand that the calf subsidy has to relate to April 1 this year, because the Review does not take effect until April 1. Is there any reason why next year it should not be a month or six weeks or even two months earlier?

EARL WALDEGRAVE

My Lords, we must wait to see what happens in the next Review and what the factors lead us to do. I have said—and I repeat it—that I will consider this suggestion of my noble friend Lord Lovat; and I think that that is perhaps as far as we should go into it.

LORD LOVAT

My Lords, may I intervene once again? I referred to all beef calves. I thought the reference to steers was a mistake. In view of the shortage of breeding cows, I included heifers. I thought the matter would be dangerous to enforce.

EARL WALDEGRAVE

My Lords, I tried to meet the noble Lord's point. Now as to the other point he made regarding heifer calves only (I believe my noble friend Lord Stonehaven raised it, too), it is the male calves that are being slaughtered much more than the heifer calves, and we do not think that many heifer calves, except obviously bad ones, are being slaughtered in that way. We do not think there is anything to be gained. We are not giving out bonuses, but trying to direct production into the channels where we want it. We do not think there is anything to be gained. We should simply be giving away taxpayers' money by giving this subsidy for heifers as well. I hope that my noble friend Lord Lovat will agree that I have tried to meet his point. We feel that more beef of the quality wanted by the market is what we must encourage, and we want to encourage the rearing of store cattle. That is why we have to step up those two subsidies.

May I now come to wheat? We feel that the cereal acreage is about right and, given the right conditions, the cereal crops are profitable at the present levels of guarantee. On the right land, wheat is normally a more attractive cereal crop to grow than any other. But wheat has a very high subsidy value in relation to the market value. World wheat surpluses are increasing and we must avoid encouraging over-production here unless we are willing to adopt all these controls, which I have rejected. That is why we made this small reduction in the guarantees for wheat and rye, because rye is a bread grain. This should have the effect of throwing more emphasis on barley and other feed crops and help us to reduce our very heavy bill for imports of feeding-stuffs. We want to encourage greater reliance on homegrown feed for livestock, and that includes grass and forage crops as well as coarse grains.

The noble Lord, Lord Wise, asked me about sugar beet. I have here the figures for sugar beet in Norfolk. I really wonder whether he feels he would be justified in pressing for an additional quota in that county. The guaranteed acreage for sugar beet at present is 400,000 acres. About a quarter, just under 100,000 acres, is in Norfolk already. Norfolk also has three (I believe it is three) sugar beet factories, and the British Sugar Corporation tell me that they are not aware of any particular problems in Norfolk. We therefore doubt whether we should be acting in equity or common sense if we were to increase the Norfolk acreage any further or were to give them another factory. They generally overbid their hand, I understand, and ask for more quota than they actually want, and that is perhaps what they were doing this afternoon; but I would not know about that.

I was sorry to hear from the noble Viscount, Lord Stonehaven, of the very poor price he has been receiving for his oats, but I can only say that, in our Price Review, we have emphasised again that we want him to grow oats, and we have said that we want—

VISCOUNT STONEHAVEN

May I interrupt? I did not say that I had been receiving it; I said that I had been refusing it. That is why I and my fellow farmers have not sold.

EARL WALDEGRAVE

That is a very good thing. If you go on refusing that very poor price, then perhaps the price will harden, and that, I am sure, would be a very good thing.

On sheep, the sheep breeding flock continues to increase; and we also expect more plentiful supplies from Australia and New Zealand. Any further expansion in home production of lamb must be related to market prospects. The important thing is to concentrate on getting down costs and meeting consumer needs. Both the noble Lord, Lord Wise, and the noble Viscount, Lord Massereene and Ferrard, were worried about this section of the price determination. Lord Massereene and Ferrard asked whether increased production was wanted. I hope he will understand now, from what I have endeavoured to say as to the difference between gross and net output, that increased net production is wanted but that increased gross production is always dangerous in this agricultural business. The important thing is to concentrate on getting down costs and on producing an article which is more what the consumer wants—and we know that the consumer wants the smaller sheep, the smaller joints, and not these big, heavy, wartime sheep. Wool has come down because it was never intended that the guaranteed price for wool should be so much above the world price, but we must resign ourselves to a sizeable Exchequer grant here. I do not think that any noble Lord has raised any question about pigs, so we must all be agreed about that.

On milk, the noble Viscount, Lord Alexander of Hillsborough, spoke with some emphasis; but I preferred the powerful sentiments that were voiced by the noble Viscount, Lord Massereene and Ferrard, on this subject. I do not wish to add anything to the arguments which he used. Provided that we can supply the milk that is needed for liquid requirements, with a reasonable balance over, that is as far as we should go. Last year, even though the gallonage of milk fell, we had an ample margin. We had 250 million gallons over and above our requirements for the liquid market, out of a total production of something like 2,500 million gallons. When you are running on a margin of 10 per cent., I think that must be considered a safe margin. Every drop of milk that goes beyond that pulls the pool price down and it has to be manufactured in competition with overseas suppliers, many of them Commonwealth suppliers; and we do not feel that we can continually view with equanimity this rise in production of milk.

Lord Alexander of Hillsborough thought that increasing the standard quantity by 7 million gallons was trivial (I think that was his word); but I do not think that that was really a justified criticism. The Milk Marketing Boards are doing their utmost to increase the sales of liquid milk, and in that we want to encourage them in every way. We have never reduced the standard quantity when their liquid milk sales have fallen; and so this year, although the England and Wales Board increased its liquid sales by something like 14 million gallons, we thought it was fair to increase the stan- dard quantity by 7 million gallons, which is not a trivial amount. We have also given them, and the farmers' unions, an undertaking that we will go into the whole question of the standard quantities with the Milk Marketing Boards of the United Kingdom and the farmers' unions.

The noble Earl, Lord Ferrers, said that he picked no quarrel with me about eggs, and that he picked no quarrel with the fact that 50 per cent. of liquid eggs were imported, though he was worried about Polish eggs and he was worried about canned chicken. I have the figures for canned chicken here, and they are rather interesting. The import of canned chicken from China, which is the subject of the question he asked me, from December, 1958, to February, 1959, was 2,200 cwt. Now the import from December, 1957, to December, 1958, was nil, so the percentage increase is considerable. There was no suggestion that this was an undesirable import: I think the noble Lord was simply asking for the facts, and those are the facts. There were 6,713 cwt. of canned chicken from China last year; but, my Lords, let us remember that there was something like 40,000 tons of homegrown broilers, so that is not a very big proportion.

EARL FERRERS

My Lords, while I am grateful to the noble Earl for having provided me with the information, perhaps he will also give us the assurance that he will keep his eye on the figure and see that it does not increase by 2,200 per cent. next year.

EARL WALDEGRAVE

I am very willing to keep my eye on it, but, as the noble Earl will know, the question of keeping things out is a matter as to which my Ministry has to work in conformity with general Government policy. The anti-dumping legislation is a matter which has to be most carefully handled, after due consideration, and I should not like to comment on what action could or should be taken under that legislation. A case will have to be put forward and made out to my right honourable friend the President of the Board of Trade, for either canned chicken or Polish eggs.

The overall picture then, my Lords, is that we have set the production traffic lights for the time being at green for beef and home-grown feed, including barley and oats; amber for lamb and pigs; red for wheat and milk; and rather a particularly bright red for eggs. But, as I have indicated, this does not add up to a new policy; it does not add up to a "stop and start" policy. It is plain from the industry's reaction that there were no shocks or surprises in all this. Indeed, it is clear that most thinking farmers could see these signals coming. Moreover, the lights are not fixed for all time. Changes may be necessary, and we may be able to alter the lights if the conditions alter. The industry knows that it is necessary to flash the red light sometimes by means of reductions in the guarantees, and that they will always have the safeguard of the long-term assurances of the 1957 Act.

After weighing up all these general conditions of the industry and the national economy, and the various commodity considerations. the Government decided this year on a determination which meant a small increase—£3 million—in the total value of the guarantees. This is some £22 million more than the minimum assured by the 1957 Act. The noble Viscount, Lord Alexander of Hillsborough, and the noble Lord, Lord Stonham, will remember that. After taking account of the cost increase, about £11½ million on the guaranteed commodities, this year's determination will leave the industry with a very substantial share of the benefit of its increased efficiency. Indeed, the White Paper might be entitled, An Assignment with Efficiency. We have made it clear that we propose to help the industry to continue the steady improvement in its productive efficiency, in its widest sense, and we have given the industry a chance to benefit from that improvement.

At the same time, we hold to the view that, while the subsidy bill is so high, the taxpayer must also share in the benefits of that increased efficiency. I am convinced, therefore, that the Annual Review settlement is fair all round. With the statesmanship we have come to expect from them, the farmers' unions agreed to it. We have mapped out our route for agriculture and we have overhauled the machine. The signals are plain to see, and we must be forgiven if we do not allow ourselves to be led into traffic jams, or even accidents, by noble Back Bench drivers.

LORD HASTINGS

My Lords, before the noble Earl sits down, I should like to put a question to him. I apologise to your Lordships, as I have not yet taken part in this debate, but the question arose in my mind in the course of the noble Earl's speech in connection with Table A and the difference between the actual net income and the adjustment to normal weather conditions. I have had time during the course of the noble Earl's speech to do a little sum, and I find that out of the thirteen years during which the scheme has been in operation, in six years the figures as adjusted exceeded the actual income; in six years the actual income exceeded the income as adjusted and in one year, if we ignore a mere half million pounds, they "broke even". In the six years it exceeded the adjusted figure, the farmer lost £134½ million, which I think the noble Earl has completely ignored in the Price Review. In the six other years, he gained £57 million, and I take it that this also has been ignored in the Price Review and that the farmer has at least had the benefit of that. But overall he has lost a total of £77½ million. I put it to the noble Earl that the Department, which is now striking an average over thirteen years, is weighting the scales against the farmer in making this adjustment, to the tune of about £6 million a year.

EARL WALDEGRAVE

My Lords, this is a very difficult argument to come at this late time of the evening. The figures on which we determine the Annual Review are adjusted to normal weather conditions of the year under review and do not go back to the years in which prices have been adjusted either up or down. We work on the year under review. That is the only answer I can give the noble Lord, who must draw what inferences he likes from that. He must not think that we are doing this on an average basis.

6.13 p.m.

LORD WISE

My Lords, in closing this debate, I want to thank all noble Lords who have taken part. I think that the discussion has been well worth while. I would also thank the noble Earl, Lord Waldegrave, for his remarks, in which he covered considerable ground. I think that he dealt fairly with the debate. I am glad to see that my noble Leader has returned to his place. If he had been here during the last twenty minutes, he would have enjoyed himself and I am sorry that he was not with us.

The noble Earl unwittingly made a point for me on the cost of wheat deficiency payments. He put forward a view which I hold and tried to express this afternoon—namely, that the payment by the taxpayer for wheat is far in excess of what it should be. Part of that payment should be passed on to the millers, to one of whom I referred this afternoon, and it should not be borne by the taxpayers. I should like to see the whole of the wheat deficiency payments done away with and the millers and merchants paying the piper. That may have some effect on the huge profits which I mentioned in connection with one firm. That may come about in the future. The noble Earl talked about motor cars on the highway. That reminded me of the fact that when I went to the station this morning, I found that I had a loose accelerator. That seems to me the position that the Government are in as regards their agricultural policy. With these few remarks, I beg leave to withdraw my Motion.

Motion for Papers, by leave, withdrawn.