§ 4.17 p.m.
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE, FISHERIES AND FOOD (EARL WALDEGRAVE)My Lords, with your Lordships' permission I should now like to make a statement similar to that which my right honourable friend has just made in another place about the guarantees to agriculture for the coming year.
The Government have now determined these in the light of the annual review of the economic condition and prospects of the industry. The details are set out in a White Paper which will be available in the Printed Paper Office when I sit down.
97 The weather in 1958 was, of course, appalling. I am sure that all those in the industry have had the sympathy of the House in their difficulties and disappointments. Great efforts have been made by farmers and farm workers to get in the harvest and to keep up milk yields as far as the bad conditions would allow.
Net output in 1958-59 is forecast at 61 per cent. above pre-war. This is just below the revised figure of 62 per cent. above pre-war for1957-58, which was a record. But had it not been for the effects of the weather, net output would probably have reached a new record level.
Similarly, actual net income is down from last year's record. It is forecast for 1958-59 at £327 million. This is a fall of £27½ million from the revised figure of £354½ million for 1957-58. But when adjusted to normal weather conditions, in accordance with the usual procedure for judging the trend of net income, it is forecast at £360 million, an increase over the revised figure of £355 million for 1957–58 and that of £339 million for 1956–57. Thus, despite the cut of £19 million in the total value of the guarantees last year, net income shows a satisfactory and rising trend, apart from the unfortunate effects of the weather. Costs have gone up by about £11 million in a full year on review commodities practically the same as a year ago. Efficiency continues to improve, though the effects this year have in part been masked by tile weather. Imports of feeding stuffs are forecast to increase from 5.4 million tons in 1957–58 to 6.1 million tons in 1958–59.
We have also taken account of the needs of the national economy, of our international trading position, especially in relation to the Commonwealth, and of the considerations affecting particular commodities. The cost to the Exchequer of support for agriculture has fallen by £36 million from £284 million in the financial year 1957–58 to £248 million in 1958–59. But it is still high. The situation on individual commodities, which must have a strong influence on the changes to be made in the guarantees from year to year, is rather better than it was a year ago. Less change in the guaranteed prices is therefore required this year on that account. This is, of course partly due to the changes in the guarantees we made a year ago.
98 Our general conclusion, as a result of considering all these factors, is that we should not reduce the total value of the guarantees this year, but equally that there is no need for any substantial increase.
The determinations we have made provide for a net increase of £3 million in the total value of the guarantees, after taking credit for the £6 million net cost of the Small Farmer Schemes. The guaranteed prices for milk, cattle, pigs, sheep, barley, oats, potatoes and sugar beet will be unchanged. The guaranteed prices for eggs, wheat, rye, and wool are to be reduced—hen eggs by 1 d. a dozen, wheat and rye each by 6d. a cwt. and wool by 2d. a lb. There will, however, be an increase of 15s. a head in the subsidy on steer calves, and of £2 a head in the hill cow subsidy, so as to encourage further the rearing of beef store cattle. There will also he an increase of 7 million gallons in the milk standard quantity for England and Wales. The new potato guarantee system will apply to the 1959 crop, and the support price is being adjusted to this change. Some alterations are also being made in the fatstock guarantee arrangements without affecting the value of the guarantees.
The determinations now made are, we think, fair to the industry and the nation.
§ THE EARL OF BUCKINGHAMSHIREMy Lords, perhaps, before noble Lords opposite raise any points. I may put a question. The answer may possibly help them in their questions. I should like to ask my noble friend whether these terms have been agreed with the National Farmers' Union.
EARL WALDEGRAVEMy Lords, I am glad to be able to say that the National Farmers' Union have agreed these determinations.
VISCOUNT ALEXANDER OF HILLS BOROUGHMy Lords, we are much obliged to the noble Earl for making in your Lordships' House the statement which has been made in another place. We defer any detailed comment until we have had an opportunity of reading the White Paper. I must say, however, that I was rather impressed by a passage more than halfway through the statement. It seems that a loss of income, owing to weather conditions, of about £23½million, an increase in farmers' costs of 99 about £11 million and the reduction of £6 million of grants to small farmers apparently show that there is no reason to increase the guarantees in general. I think that is a wonderful story. It is like Alice in Wonderland—jam yesterday, jam to-morrow, but no jam to-day.
§ LORD STONHAMMy Lords, the noble Earl will forgive me, but with a number of figures to assimilate all at once, without a copy of the statement, it is rather difficult to follow all he said. I should be glad if he could clear up my mind on two points. First, he mentioned £360 million as being the net farm income in a year of normal weather. In fact, the net farm income was £327 million. Can the noble Earl say whether the present level has been made on the assumed basis of average weather? Secondly, the noble Earl mentioned the rising trend in farm incomes, but is it not the case that the actual figures show a substantial fall, as compared with the previous year? And do I understand him as saying that the £3 million net increase in guarantees is the figure after taking into account the £6 million for the small farmer scheme. so that, in fact, that means a £3 million reduction?
EARL WALDEGRAVEMy Lords, perhaps I may answer the noble Lord's last question first. The £6 million which is the cost of the small farmer scheme is included in the guarantees balance sheet, as it was always said that it would be. The £3 million is an increase in the value of the guarantees; it is a net increase over and above last year. Compared with the cut of £19 million last year. there is this £3 million rise this year.
In regard to the noble Lord's question about the trend of income, it has always been recognised by farmers that these figures are adjusted to what we call a normal weather basis. If we take the normal weather basis, there has been a rising trend in income. But the noble Lord is perfectly right: owing to a number of factors, including the weather, the actual income has fallen by £27 million, as I said in my statement. But we must never forgot that the increase in efficiency of the agricultural industry goes on all the time, and that, for review purposes, that can be calculated at about £25 million. The effect of the determinations this year, as the noble Lord will see if 100 he studies the figures, is that a great deal of the result of this increased efficiency will be retained by the farmers; and we think this to be just.
§ LORD STONHAMMy Lords, I am grateful to the noble Earl for what he has said, but on the last point do I understand that £3 million more of Government money is being provided for farmers?
EARL WALDEGRAVEYes, my Lords, certainly. The determinations are £3 million-plus, as compared with £19 million-minus last year.