AGRICULTURE AND HORTICULTURE

HL Deb 17 November 1959 vol 219 cc617-90

3.38 p.m.

LORD WISE rose to call attention to the position of the agricultural and horticultural industries; 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. Your Lordships will probably have noticed that although there was the usual paragraph in the gracious Speech concerning agriculture, only one reference, to my knowledge, was made to it in our subsequent discussions. That reference, a short one, occurred in the able speech of the noble Lord, Lord Aberdare, in seconding the loyal Address to Her Majesty. So far as we on this side of the House were concerned, we already had in mind the tabling of today's Motion. We were not impressed by the well-worn allusion on the part of the Government to their solicitude for the prosperity and wellbeing of the agricultural community. Such, we were told, will apparently remain one of the first cares of the Government. I hope that there will be no lack of activity in endeavouring to strengthen the position of agriculture and to remove the uncertainties and worries which still overshadow the industry in some respects.

The Motion is in two parts. The two later speakers on this side will, I understand, deal with the pig industry and also with horticulture, both of which subjects are very topical at the present moment. I wish to focus some attention this afternoon on what appears to me to be of importance in the financial and economic set-up of the agriculture industry, coupled with a reasonable request to the Government that we should now be thinking of the future. They may already be doing this, but I have no knowledge on what lines, if any, they may now be thinking. Let me say at once that I still have a feeling that the interpretation and implementation of guaranteed prices still leaves the producer in a position of uncertainty as to whether he has received a fair market value and fair subsidies for his products, or whether someone else has scooped some of his legitimate profits and so lessened his income. If Government aid is given to any industry it should be received by those for whom it is intended. The taxpayer should not unduly suffer and the consumer should be safeguarded.

I have made many speeches in this House and elsewhere upon agriculture and allied matters, and in each and every one of them I have striven to make a contribution towards ensuring farming prosperity and a fair reward for their labour for all who play a part as primary producers in the production of home-grown food. I shall do the same this afternoon and, in doing so, I shall not in any way whatever detract from their great merits and services to the nation, nor minimise the obligation of the rest of the nation to see that their livelihood in normal conditions should be assured.

For over fifty years my professional and practical connections have been wrapped up with farming and land problems. I have seen and farmed in good times and in bad, and have come to the conclusion that, in some substantial respects, all is not well with our industry at the moment. Perhaps the Minister and some noble Lords may, on first thoughts, not agree with me, but when I have given facts and figures to support my point, I hope they will accept that there is need for some consideration of our present position. I do not want to be thought to be tiresome or hostile in what I have to say, but we must face facts and realise their effects. We can all express our own views. I will give as concisely as I can some figures which may astonish some noble Lords. This will show the extent of the industry's present reliance for survival under existing conditions upon Government action and support. The magnitude of such reliance suggests that, without such support, our farming industry would be in a very unhealthy financial state. Grants, subsidies and deficiency payments find their way by devious methods into the industry from the national Exchequer. I will not in any way deny the need for these at the moment; the industry could not carry on as one of national importance without them. I think the political Parties are agreed on this.

I want to suggest to the Government that as at some time in the future these benefits may have to cease, perhaps the time has now arrived when we should seriously explore the methods and scope of these adjustments of agricultural income. Certainly, alterations could not come at once, but in a few years' time we may be glad that we are now beginning to bring our minds to bear upon what may then be a pressing problem. I am aware that other industries attract State aid or protection in different degrees and manner, but I should be happier with the knowledge that our agricultural producers were obtaining fair financial acknowledgment of the services they render in our economy and society direct from inquiring purchasers and not from the State. Means must be found whereby we, as producers, can stand more on our own feet and establish our own incomes and prosperity. If subsidies and the conflicts of February Price Reviews have come to stay, then it would seem to me that all subsidies and grants due to the farmer should be paid direct to him and not be wrapped up by others in the price he receives for his products. It is essential that the costs he has to bear should be controlled in relation to his receipts.

The present financial structure of the industry can be clarified by a few simple arithmetical calculations that I have made. I think the basis of these is correct. I am afraid that for my purpose I must refer to the last February Review. In that Review the farmers' actual income was estimated for 1958–59 at £327 million. I understand that there are approximately 400,000 farmers. Dividing the income by this number, the average annual income of each farmer, large or small, amounts to £820, the large farmers naturally receiving more and the smaller farmers very much less. The figure of £327 million apparently includes grants and subsidies of approximately £250 million, excluding grants of a capital nature. This leaves a figure of only £77 million as the farmers' income, excluding subsidies. On the same basis on which I have arrived at the figure of £820, the average annual income per farmer from grants and subsidies amounts to about £600. As I said a moment ago, many grants are much less than this amount, and they depend upon the characteristics and productive capabilities of the farm and the farmer in question. Assuming, as may be the case, that all subsidies do not find their way into the farmers' pockets, this last figure of £77 million might reasonably be increased to £100 million. This, averaged out among 400,000 farmers, gives each an annual income, excluding subsidies, of the small figure of £250. These figures show that about two-thirds—it may possibly be more—of the farmer's income is received in the form of Government aid. That does not appear to me to be a sign of a very healthy industry.

Again, let us look at another disquieting figure. The actual income of £327 million for 1958–59 is worth now no more to the farmer than the income of £191 million in 1946–47, and is in fact worth £52 million less than the income of £323½ million in 1951–52. Thus, in spite of higher production, more and more mechanisation and greater efficiency, we are really worse off than we were seven years ago. Production and improvement grants have been of great influence and benefit; they have promoted production, experiment and efficiency. Commodity subsidies and deficiency payments, however, warrant closer examination. These sums—£94 million for fatstock and £38 million for cereals—are heavy by reason of the low prices which are often paid by the initial purchaser to the producer. All too often we meet fluctuating and unstable markets, and we are thus compelled to sell products at less than the cost of production—a most unsatisfactory and annoying state of affairs.

Her Majesty's Government, in consultation with farming organisations, fix a fair and seasonable standard price, but low market prices thus throw heavier burdens upon the taxpayer, and the consumer does not always appear to gain. Here are two examples of such high subsidies. The recent wheat deficiency payment was, I believe, something in the nature of £7 per ton; and in the fifth period of last year it amounted to no less than £10 16s. per ton, or about half the price the farmer received from the merchant. I have known the sheep deficiency payments by the Government to approximate—and I believe in one case to exceed—the initial payment per lb. paid for the animal by the purchaser. Deficiency payments for fatstocks, of course, show a fluctuating element.

I am sure the time must come when the British farmer can receive a fair price for his products from the initial purchaser, be that purchaser merchant, miller, butcher, processer or the State, through purchasing agencies. The price could be fixed by the Government according to quality and costs of production. In this connection I may be told that the prices of our products are governed by world markets, but we have faced up to that fact before, and provided the British farmer with sustenance and security, and we can do so again. Even now, there is, I believe, an Australian Government meat agreement in operation, and British purchases abroad provide acceptable outlets for foreign products. Our trade abroad is worth having and could be discussed and dealt with at Government level. Other home industries have accepted the challenge of overseas competition and seem to flourish. It seems ironical that countrymen who spend long hours of labour throughout the whole year producing our home foods belong to the only industry, apparently, which is unable to decide the price that should be paid for its own product. We are subject to option biddings and merchants', millers' and brewers' offers. These people seem to be able to buy cheaply, to process economically and to sell at fixed and profitable prices—a nice comfortable position in which to find one's self. They seem to be doing very well.

I think that I have already called your Lordships' attention to the point that the profits of one milling firm for last year amounted to the whole of the income, including subsidies, of the farmers of one normal agricultural county. I am now able to say that, according to my information, the profits of three similar concerns last year amounted to £17½ million, a figure which equalled the income, including subsidies, of over 20,000 farmers whose invested capital in their industry amounted to no mean figure. There seems to be something wrong somewhere in our appreciation of service to the community when selling manufactured goods over the counter or by agents produces incomes far in excess of agricultural incomes.

I could refer also to the profits of other industries which are mainly concerned with processing the produce of the land, or to firms whose main customers for their manufactured products are farmers. One has only to look at any of the farming papers to see their numbers and attractive advertisements. They seem to survive, and to become richer and richer. But is that the case with the majority of farmers? In the last six years, bankruptcies in agriculture have averaged 150 a year. One in every 14 bankruptcies was an agricultural one. This proportion was exceeded only in one industry. The financial health of the industry can also be judged by its wages structure and negotiations, and by the number of workers who leave farming on their own initiative to enter higher-paid industries with better prospects of advancement.

My Lords, I have said sufficient, I think, to establish once again my great desire that our farming industry should prosper. I know its difficulties: the hard and oft-times solitary and irksome labour involved, in rain, snow and sunshine, to produce our food; and I know the skill of our farmers and workers. I want to arrive at the time when they will be given proper rewards, rewards comparable with those received in other, perhaps not so important, industries. National subsidisation is only a means to an end: it is not an end in itself, and it may be bad economics. That end, in my view, can be achieved only by recasting our national agricultural policies, by thinking of new solutions to our problems and by amending our agricultural, financial and economic structure. I beg to move for Papers.

3.58 p.m.

LORD AMHERST OF HACKNEY

My Lords, I am sure that we welcome this Motion which has been so ably moved by the noble Lord, Lord Wise. I do not intend to compete with him over the figures: I have not an electronic brain beside me. For the last six weeks I have been in the perhaps fortunate position of looking at British agriculture from 14,000 miles away—from Australia; and I must say that, in discussing our system of guarantees with Australians (and they seemed extremely interested in them), one noticed a certain feeling of envy that, while selling on a world market, the British farmer has a considerable measure of security.

I believe that if one looks at the whole situation it is not quite so gloomy as one might sometimes be led to believe. We have had (and we have to be thankful for it) an exceptionally good harvest, with record yields of wheat; though, of course, when it comes to barley prices I am sure that the noble Lord, Lord Wise, and myself are equally disappointed that the price we are getting, particularly for malting barley, is not a very high one. But at the same time we have to remember that in the past, when we grew malting barley, we had to grow special varieties which had a rather lower yield; now we grow very much higher yielding varieties. So I do not think that at the moment the position of the grower is serious, or is a very hard one.

If we look at cattle, the prices at the moment are good, although production last year was down by about 350,000 compared with the year before. More than half of this, of course, was due to the fall in the imports of steers from Ireland. When one looks at the number of cattle in this country which are under one year old—I think the figure is 2,737,000, which so far as I can see is a record—I think we must feel that the signs for beef production are, to say the least of it, encouraging. The number of sheep under one year old is nearly 12,500,000, which also is a record; and the number of ewes is increasing. With lambs, however, there have been some very low prices, which have caused great concern not only in this country but in many other parts of the world.

The Position in regard to pigs is rather different. Although we have a large number of pigs in this country (the total is just under 6 million) we have at the same time a shortage, and it is a very complex problem. We have somewhere about one-third going for bacon and the other two-thirds going for pork and manufacture. I sometimes wonder whether we do not concentrate a little too much on the bacon pigs, which, after all, are only one-third of the total and which at the moment, in this time of shortage, are getting rather over 35 per cent. of the market. When we talk of the bacon pig, we are usually talking about the pig for the Wiltshire cure, a long, lean pig, with definite back measurements: a pig very much a type, for the production of which special incentives are given at the moment. We should remember that this is not the only type of pig that can be made into bacon. There are factories which are making bacon from a number of other types of pigs—and making it extremely successfully. I sometimes wonder whether, in concentrating so much on the pig for the Wiltshire cure, we are not making increased difficulties for ourselves in the pig industry. The important thing, it seems to me, is to produce a large number of pigs and to restore confidence in the industry, so that when we perhaps have to meet even more serious competition from the Danish bacon we shall not lose the market by default, because we have not enough pigs to produce the bacon. I hope, and I am sure, that that matter will be taken into consideration during the forthcoming price reviews; because although there has been an increase in the imports of Danish bacon, a considerable amount of that increase has not been at the expense of the British pig producer but has been at the expense of other importers

There is one other thing I think we should look at to see what is the general state of the industry, and that is the schemes which we have for small farmers and for farm improvements. It is encouraging to find (I understand that these figures are correct) that at the end of October of this year there were over 21,000 applications in England and Wales under the Small Farmers' Scheme, and that 14,500 farmers had submitted farm business plans, of which nearly 11,000 had been approved. I believe that, on the whole, that has been done without the bogging down of the Advisory Service which many of us feared would happen. I think that the scheme has, on the whole, worked very smoothly.

When we turn to the Farm Improvements Scheme, which came into effect on September 1, 1957, we find that up to October 31, 1959, there had been 82,300 applications, of which 51,600 had been approved; and the total schemes approved for grant had amounted to £36½ million and the total schemes on which grants had been given amounted to over £16 million. I feel that this shows that there is an underlying feeling of confidence in the industry, because, after all, particularly in the grants for the Farm Improvements Scheme, the farmer has to find two-thirds of the money, so he is investing his money in the industry. One should also welcome the Agricultural Credit Corporation, set up, as your Lordships know, by the National Farmers' Unions, which guarantee the banks against loss in cases where farmers wish to borrow money against schemes that have been officially inspected. I believe that the setting up of the Corporation will mean an increase of farming efficiency and help in the farm management. The farmer will get help in his management by advice; and will also be obtaining credit. It is a good example of the industry helping itself.

I should like also to welcome the steps which are being taken for the horticultural industry. Even if they are not overdue, one cannot help feeling that the industry has had a difficult time over a number of years.

Therefore I think that these steps, and particularly the improvement grants, will be extremely welcome. There is great scope for the Horticultural Marketing Corporation, however it may ultimately be financed, because I feel that a tremendous amount can be done on the marketing side of horticulture. There have been tremendous improvements in the presentation of a number of our products, and I think that in the case of the better growers the marketing is of a very high standard. There are, however, a number of growers who do not reach that high standard, and they are apt to act as a drag on the market. I feel much more can be done, too, in the way of advertising. We have been very successfully told to drink more milk, to eat more eggs, and to eat more bread; and there is no reason why we should not be encouraged to eat more fruit and vegetables. I do not know whether there is any limit to the number of things that we can be encouraged to eat; whether the capacity is infinite, or whether, as one eats more of one thing, one has to eat less of another.

Another important matter is the improvement to Covent Garden. That is long overdue. I think that anybody who has had anything to do with marketing vegetables, and who has gone to see his produce marketed at Covent Garden, cannot but have been almost amazed at the congestion and the appearance of disorganisation in that market. Whenever one has sent goods and they have been delivered late, and therefore fetched a low price, it has been almost impossible to track down where the cause was, with these lorries circulating slowly around the market. I think that the improvement of the market is long overdue, and most welcome.

Lastly, my Lords, I want to mention the question of the violent fluctuations that we have in the prices of primary products. A year ago, butter was practically given away: now it is almost worth its weight in gold. A few years ago, wool was sky high: now it is fairly low. I feel that this is a matter that must be gone into very seriously indeed. I know that the Government are aware of the problem, and I know that it was discussed in great detail at the Commonwealth Conference in Montreal. I know that we are members of the Wheat Agreement, and of the Sugar Agreement, and that we have the Meat Agreement with Australia by which we buy all their first and second grade meat. That Agreement has had a good effect on encouraging the production of meat in Australia; and I think that at the moment we are rather fortunate to have it, because I gather that the third-grade meat (the old bulls and elderly cows), which they do not sell to us, goes at almost fabulous prices to America, where it is made into hamburgers, at far higher prices than the first and second quality meat which comes to our market. So there is value to us in these Agreements. I hope that the Government will do what they can in this sphere: because these fluctuations in price do no good to either side, and can be disastrous, particularly to the under-developed countries. Where the economy of a country is based on one product, a disastrous fall in price can upset the whole of any development plans that they have got.

In conclusion, my Lords, I would say that I hope that the next Price Review will not be based entirely on the rather favourable season that we have just had, and that due weight will be given to normal conditions of weather. If this is done, I cannot see why agriculture should not continue to play, as it is doing, its full part in the national economy.

4.16 p.m.

THE MARQUESS OF AILSA

My Lords, it is on the second part of the Motion set down by the noble Lord, Lord Wise, that I wish to speak—the horticultural industries. Before going on to do so at any length, I feel I have to declare an interest, being both a producer and a retailer of these products. The noble Lord, Lord Wise, mentioned the experience he had as a farmer of receiving a low price for a product and then seeing it again across the counter at a greatly enhanced price. Fundamentally, that was why I became a retailer as well as a producer; because I wished to get it at both ends. But it also opened one's eyes very much to the difficulties that the retailers, and to a certain extent the wholesalers, undergo in trying to cater for the public's needs. The phrase, "The customer is always right", is a very true one. The person who decides the true value or worth of your goods is the customer. He may sometimes be prepared to pay more than an item is worth, and will do it once or maybe twice, but he will not do it a third time. If you want to keep your business, you have to give the man or woman their money's worth—and they are exceedingly good at finding it out.

There is, of course, constant competition between the home-produced item—in my own case my own, but all other home produced items as well—and the imported item. From my own experience I can certainly state that where the home-produced item can be put on the counter at a similar price as the imported, it will always sell. There is no doubt about it. If it is known to be home-produced, a consumer will take it in preference to imported, provided the price is similar—I do not say necessarily the same. But all too often we find that the home producer has tended to overprice his item. I know of a case which occurred, not to myself but in the same district, during this last spring, in the early tomato market. When the first Scots-grown tomatoes came on the market to us, they were retailing at 6s. a pound. At the same time, the imported, the Dutch, were retailing at 4s. 6d. a pound. But if you bought the Dutch ones you got, on an average five or sometimes six tomatoes: if you bought the Scots homegrown ones you got four tomatoes. Can you blame any housewife for buying the cheaper? I remember speaking to several of the producers and saying: "Why don't you reduce your price?" They said: "Oh, no, we want to get it all." I said: "If you bring your price down to even, say, 5s., people will then buy your goods in preference to the imported. That is a very expensive meal—6s. for four tomatoes."

The other point that strikes me is the delay which takes place for fluctuations in price to the producer to get through to the consumer. This autumn we had the case of the potatoes. The farmers were getting around £10 a ton for potatoes and the average retail price was about £17 or £18 a ton. It took four weeks for that price to drop in the shops to £12 a ton. One begins to wonder, because someone appears to be making something out of it. This brings me to the view that one of the major drawbacks of the agricultural industry is that far too many people are trying to make a living out of one item. The number of times an item has to go through someone's hands before it gets to the shop is fantastic. To produce and wholesale one's own supplies, as I do, is one thing, but if you have to go to the market, your produce has to go through two or three hands. Every one of these persons is putting on at least 5 per cent., and sometimes a lot more, so that after the retailer has put on his share, the customer wonders why things are so costly when they hear that the market prices are so low.

It is my experience of wholesalers that they are very reluctant to pass back to the producers any improvement in prices. I think that many of your Lordships will have had the galling experience of going to a wholesaler to sell your farm produce and hearing him tell you the "old, old story" that nobody wants it and that it is really a great favour to you if he takes it from you. Then you pass a shop and see an item sitting in the window at a price a long way different from that offered to you. It too often happens that agricultural produce is marketed not at a fair margin of profit, but at an exceedingly unfair one.

I wish to turn for a second to the horticultural policy which has been brought out by the Government. I welcome it, but there are one or two little points on which I should like to ask for some explanation. The first one is on paragraph 10, in Part II, which deals with improvement grants. It says: To qualify under the scheme, a horticultural production business must embrace at least four acres of open land or its equivalent, which for a period of at least two years immediately preceding the application for grant has been used for the commercial production of horticultural crops (i.e., fruit, vegetables, mushrooms, flowers, herbs, seeds, bulbs, trees and shrubs—but not hops, maincrop potatoes or peas for seed or processing). I should like to query the exception of maincrop potatoes. I know that it is likely that horticulturalists will produce hops or peas for processing, but I doubt whether this applies to potatoes. It is well within the bounds of possibility that horticulturalists will produce maincrop potatoes. I know that it has been argued that early potatoes are their province and maincrop is the province of farmers, but in the district in which I live it is very much the opposite. Our farmers get high prices for early potatoes and virtually no main crop are grown at all. Those that are grown are for their own consumption and not for sale. May I suggest, with all temerity, that a limit should be put on the acreage of main-crop potatoes and not on the crop itself?

While on this paragraph, I see that it says "trees and shrubs", and I suppose that anyone having a forestry nursery would be eligible. My last comment is on paragraph 11, which deals with grants towards plant and equipment for use in connection with preparing horticultural produce for market (which will include washing, grading and packing the produce, but not preserving or processing it). In many cases, it is difficult to prepare a crop for market and not include the other. For instance, a great deal of food has to be kept in cold storage before going to the market, and is thus preserved by being frozen. Again, cleaning potatoes and putting them in plastic bags is a very popular method of marketing in some places. So that many items are processed or preserved for the market. May I again suggest, with all temerity, a careful definition of what is processing and preserving because this is exceedingly complicated, and most ways of storing horticultural crops actually contain either processing or preserving in some way or another. I should like to know where the line is drawn.

4.28 p.m.

LORD STRATHEDEN AND CAMPBELL

My Lords, like many other noble Lords I am grateful to the noble Lord, Lord Wise, for having initiated this comprehensive debate, but I do not entirely agree with all the statements he made. I feel that the agricultural industry as a whole—excluding certain important parts of it, such as pig production, poultry and horticulture, to which I will come later—is in a state of reasonable certainty and confidence. And that, in my opinion, is due to a factor which the noble Lord did not mention—the long-term guarantees. These are having a great effect on the general stability of agriculture.

Both the noble Lord, Lord Wise, and my noble friend Lord Amherst of Hackney mentioned the deficiency payments, especially as regards sheep. This year has been an unusual one. In the early part of the season of lamb sales, there was a serious shortage of grass. Lambs were being killed, instead of being brought on where they should have been. As a result, prices fell calamitously, and there were high demands on the deficiency payments. That situation has now changed; the prices of lambs have risen considerably and are now reasonably stable, and there are smaller calls on the deficiency payments. I think it is probable that at the end of the year, the Exchequer profit and loss on the deficiency payments will be just about normal. As regards cattle, they have made practically no calls at all on the deficiency payments, as has already been said.

That situation is what all people in the farming industry want. The most certain way of producing alarm and uncertainty in the industry, I should have thought, is to hint, as the noble Lord, Lord Wise, did, unless I took him wrongly, that in the unlikely event (as we think) of noble Lords' opposite coming into power, there would be a drastic change and an almost complete removal of the various agricultural subsidies. I only hope that noble Lords opposite will think again on that and see the advantages of having a long-term guarantee policy, as was initiated by the present Chancellor of the Exchequer.

There is one aspect of the cattle problem which I should like to put to my noble friend—namely, the calf subsidy. I know that there are rules governing the eligibility of animals for this subsidy, but it is known that those rules are not always enforced as strictly as they should be, and that there is a danger of more lower-grade animals coming on to the market as beef animals, especially under systems of multiple rearing, than should be the case. That, I should have thought, would lead in the end to a higher demand on the guarantee price, because it would mean producing an inferior animal which inevitably will fetch too low a price. I have mentioned it several times before, but I would again refer to the question of grants on marginal land. I am sorry that my noble friend the Minister of State, who was here earlier this afternoon, has not been able to remain in his place, but I understand that discussions on this difficult and important subject are still continuing. I hope that in the end the Government will be able to produce a satisfactory solution to a problem which is of the greatest importance in Scotland.

I now turn to the matter of horticulture, which, owing to the heavy losses that growers have suffered, is not in good shape. The White Paper covers all aspects of it and everything in the Bill, which has not yet officially come to our notice—and one avoids making anything approaching a Second Reading speech. But all the points that I am going to mention are included in the White Paper. The first is the question of improvements grant. The grant of one-third is perfectly all right for the large grower, the man with capital behind him who can afford an expensive scheme. But it is not of much use to the small man. I know that this question was argued at length before the White Paper was published, but there is still a strong case for giving the small man a 50 per cent. grant.

The reasons for this are that in the case of a fairly small scheme, by the time the architects' fees are added, plus, as often happens, the heavy additional expense necessary to conform to the rules laid down for improvement schemes, the small man may find himself faced with a scheme which is much more extravagant than he really requires. He finds that he can carry out an equivalent scheme, with his own labour and buying his own materials, at a cheaper price than by going for the big scheme and getting a grant. So that, in fact, although his ultimate scheme is cheaper, he has received no assistance, whereas obviously the whole point of the system is to grant him assistance. I should have thought that it should be possible to work out a formula to define a man on a sufficiently small scale to deserve a 50 per cent. grant. There is a detailed formula in paragraph 10 on page 5 of what qualifies for improvement grant—the various sizes and areas—and I should have thought that something on those lines could be adapted to define a small man.

I come now to the Marketing Council; and here I rather thought my noble friend Lord Amherst of Hackney approached it—I will not say lightly, but he did not seem to make it appear as difficult as I think it is. My noble friend will forgive me if I quote the noble Earl, Lord Woolton, when he was food controller during the war. He then said, I am told, that he had the measure of every food market, but was very nearly baffled by the vegetable market, which had an incredible aptitude for disappearing completely at intervals and, on other occasions, for producing a vast surplus of produce. This is an extremely complicated problem. The main items which this Marketing Council have to deal with are supply, demand and prices, as mentioned on page 7. Any advice which they can give on supply, demand and prices must be of a very general nature. The grower has to work out his market, what his prices will be, where to send his produce, and arrange all the organisation for sending it out by seven o'clock each day, so that any advice coming down from the Council is not likely to be of great advantage to him.

Grading is most important, but in this country there are considerable difficulties in that respect. The produce we get imported from abroad is confined entirely to top quality: all the lower grades are sold in their own markets. So the produce here, which must inevitably consist of all qualities, however they be graded, is competing with produce of entirely top quality from other countries. It has been found, even by growers on a large scale, that the additional prices they get for really highly graded produce do not cover the costs of this grading. There is one aspect of the foreign exporters' methods which I think is worth taking note of, and that is that foreign growers nearly always sell to a merchant who is entirely responsible for grading and packaging. I wonder whether something on those lines would be possible in this country. I know that at first sight it appears to be inserting yet another cog into the machine, and so, possibly, additional expense. But if it leads to real efficiency, it might be worth while.

I make that suggestion partly because in that branch of the poultry industry known as the production of broilers it has been found that, except on the very largest scale, in order to make the production economic it is essential that these two aspects of the industry should be completely separate. One man rears and produces the chickens; he then kills them, and sends them to another agency, which plucks, dresses and packages them. By keeping the overheads of those two aspects quite separate, great economies are made; and the whole production is much more economic. It seems possible that in the horticultural industry something on the same lines might be done.

There are other difficulties which face the grower who is concerned mainly with vegetables. Not long ago seasonal and weather conditions caused periodic shortages of supplies, and in those periods prices rose a certain amount and so gave a better economic shape to the industry. To-day, the shortage of those periods is filled from deep-freeze plants, where large stocks are kept. As a result, the market is continually filled with a steady level amount of produce, some of it (I am not going to enter into argument on this aspect), possibly, not of such high quality as the other, partly fresh, partly from deep-freeze, and a steady, not very high and certainly quite uneconomic price is maintained over the year.

The remarks made by my noble friend Lord Ailsa about prices are absolutely correct, and I think, with the greatest respect to my noble friend Lord Runciman of Doxford, that the Committee of which he was Chairman has something to do with this situation. The Report of that Committee left the retailer in an odour of sanctity which I am not sure he always deserves. That Committee, as is quoted at the beginning of the White Paper, said that retail prices, by and large, were not too high. That Report was published some three years ago, and to-day, in my opinion, prices are sometimes much too high. Among many of the other most common vegetables we found the cabbage sold by the retailer for four times the price which the grower receives. That, surely, is more than it should be. We are not in a position to take any action about retailers, and it would be quite wrong that we should. But I think the Marketing Council should read—and I hope my noble friend will read—paragraph 511 on page 128 of the Summary of the Report of the Committee under the Chairmanship of the noble Viscount, Lord Runciman of Doxford. The Marketing Council undoubtedly is in a position to do great good to the industry, but it will have to take the greatest care to look at the whole industry objectively and as a whole, and not to allow itself to be swayed by sectional interests.

4.45 p.m.

EARL FERRERS

My Lords, like the noble Lord who has just sat down, I am also grateful to the noble Lord, Lord Wise, for introducing this debate and enabling us once more to consider the great industry of agriculture. When thinking of agriculture and those who earn their livings by it, one tends to think of the farmers and farm workers; but the number and variety of people whose livings depend on the prosperity of agriculture is far greater and far more diverse than those whose job it is directly to till the soil. One merely has to consider the makers of tractors and implements, the importers and compounders of feeding-stuffs, the maltsters and brewers, the people whose job it is to transport both agricultural produce and the wherewithal that farmers use to produce it, to mention but a few of them, to realise how great is the quantity and how large is the number of people whose prosperity is directly connected with agriculture. It would be an interesting statistic to know, were it possible—and it might be a good question to ask the noble Earl—how many people are occupied in agriculture, and how many people's occupations are dependent on agriculture. One would find that the latter figure was very much greater than the former. It is a vital and essential part of the economy of the country, and it is imperative that the Government should see that agriculture and those connected with it prosper.

But were it again possible to produce yet another statistic, one would find that those whose jobs were not strictly agricultural but benefited directly as a result of agriculture, such as those I have mentioned, were enjoying a considerably greater prosperity than those whose job is the actual tilling of the soil. One reads of the prosperity which surrounds this country at the moment, and of the "Year of Opportunity", as the Chancellor of the Exchequer called it. One reads of record exports and Government surpluses, and the farmer justly asks himself: "How can I fit into all this? Is my business more prosperous than it has been? Can I look forward to the future with the confidence that a greater properity lies ahead?"

Those of us who are interested in agriculture, and, indeed, the Government, must honestly ask ourselves this question, and must honestly answer it. I am not thinking so much in terms of what one might call agricultural politics, but in the way the individual farmer looks at the future and, indeed, at the present. I do not minimise for one minute the excellence of the measures which Her Majesty's Government have introduced during the last four or five years to bring stability and confidence to the industry. To a very large extent they have succeeded, and I hope we shall see more of them. But those must be generally classified as agricultural politics. What I believe is clear is that the farmers and farm workers are not sharing as greatly as they should in the general prosperity which the nation is at present enjoying. I am not blaming the Government specifically for that; I am merely stating it as a fact.

The average farmer nowadays has to invest far more money per acre on his farm than he did five or six years ago, and he does so with the prospect of a smaller return. The amount of capital required to run a farm is considerably greater nowadays and the yield from it considerably smaller. I am sure the noble Earl who is to reply has figures at his finger tips with which to disprove my argument, but I am not so much concerned with the economist's cold figures of national agricultural income or national agricultural output; I am concerned with the prospect that the individual farmer has for the future. It is essential that the Government should look at it from his point of view, as well as collectively, for agriculture, of all industries, consists of a lot of small, highly-diversified enterprises, and does not react to the economist's yardstick of work study production graphs so easily as do other industries.

Two things are essential: first, the farmer must receive a good return for his capital investment; and secondly, he must have confidence in the future to invest and reinvest his money. I do not think the farmer is receiving an adequate return on his capital or even a omparative return with other industries. If that is so, then the second essential is automatically hit. If the farmer is not receiving an adequate return at present for the money he has invested, however many Government Bills may be introduced, and however much they may promise the farmer in the future, he will not, and cannot, possess that confidence. I hope the Government will not sweep this matter aside with a torrent of statistics. If they do they will be deliberately evading facts as seen by the individual; and, after all, the individual counts a great deal. The collective confidence of individuals breeds the confidence of the industry as a whole, and the confidence of the industry as a whole can only be obtained by stimulating and securing the confidence of the individual, and not by preaching the doctrine of confidence from above.

Of all branches of farming at present needing the serious consideration of the Government, the most important is the pig industry, and I hope the noble Earl who is to reply will be able to assure us that something will be done. Since the war the bacon industry has improved itself beyond all recognition, and if that improvement is to be maintained and continued it is essential that price fluctuations should be eliminated as far as possible. I do not believe that the proposed reduction of tariff on imported bacon is going to affect the home bacon producer to any great extent. The danger lies if that reduction coincides with a fall in the market prices of bacon in this country and people consider the two to be related. If that is so, some farmers may think that bacon will be unprofitable and give up producing it. If that happens we shall be unable to meet the demand for home-produced bacon. The demand will be met by imported Danish bacon, and farmers will accuse the Government of allowing excessive imports of foreign bacon.

It is essential, therefore, that this most specialised of industries should not be subject to price fluctuations so far as they can be avoided. I hope the Minister will devote serious consideration to giving a separate guarantee for the bacon pig industry as opposed to the other types of pig. This is not in order to secure a greater pig subsidy—although that, indeed, would be welcome—but it is to avoid the specialised bacon industry's being messed about by the unspecialised pork industry and the fluctuations that derive from it.

My Lords, in essence the subsidy paid is the difference between the market price of the pig and the guaranteed price. If the price of pork on the open market is high, then the subsidy paid is correspondingly small. The producer of bacon normally sends his pig not to the open market but to a bacon factory, and he therefore receives only a small subsidy This gives him a low gross return, which he may stand for a while, and then eventually he decides to sell his bacon pigs not to the factory but to the open market. This causes confusion to the bacon curers and the marketing organisations. Eventually, when it is done by a number of other farmers, the price on the open market drops. Therefore the subsidy is increased, and the farmers who have sent their bacon to the bacon factories then receive a bigger gross return. This is obviously an unsatisfactory state of affairs and it should be cleared up, and I would suggest that it is the Minister's duty—but perhaps I should not put it quite as strongly. I hope, at any rate, that the Minister will see that something is done to reinforce the stability and give back the confidence to the bacon industry which it is so necessary for it to have in order to meet the competition which is going to come to it in the future.

One of the branches of agriculture which has developed very considerably over the last few years was mentioned by the noble Lord, Lord Stratheden and Campbell. Five years ago about one million broilers were produced; this year there are about seventy million. That is a colossal expansion and it has produced in its wake serious troubles. Chicken has now become an established national dish, no longer, as it used to be before the war and since the war, a luxury. It is now a very commonplace thing. These young table chickens are reared very intensively in large houses and their houses have become the scene of bitter disputes. Some people consider them so hideous that they should require planning permission. Others consider them so large that they should be rated. It is concerning that matter that I should like, with your Lordships' permission, to say a few words, but before I do so I must declare an interest, because I have some broiler houses.

The other day I was informed by someone that my broiler houses were also to be rated. I do not raise this subject in order to ventilate my own affairs, but to draw your Lordships' attention to a state of affairs which, though it happens to affect me, affects many other people throughout the country, and, what is more, will do so in the future very much more because the intensification of enterprise is bound to increase. I will endeavour to put the two arguments as fairly as possible. On the one hand, the local authorities are claiming that broiler houses are not agricultural buildings in the rateable sense of the term, as their erection does not assist or improve the land in any way. They claim that the chicks and the food are brought into the farm and the finished products sold away from it; the broiler house bears no relation to the farm. They claim that broilers can be carried out in back gardens. That is a perfectly true statement with which I find no fault. Their argument is also enhanced by the fact that a deep-freeze enterprise has erected some twenty-five of these houses near Yarmouth in order to provide itself with birds to process.

On the other hand, many farmers are growing these broilers as a separate enterprise on their farm and regard them as distinctly agriculture as are deep-litter hens, battery-hens, or pigs reared in a modern piggery. They are an asset to the land, for the muck which they produce is put on the land, and it is interesting to note that a ton of this manure that comes out of these houses is three times as strong as one ton of ordinary farmland manure. The Act which de-rated agricultural buildings, which I believe was in 1929, came into force at a time when intensified systems of managements were not considered. But these methods have now come into being, and during the years to come will be seen on a much higher scale, not only with chickens and pigs but also with beef and possibly sheep. It is therefore ridiculous to say that if a farmer is up to date and efficient in modernising his holding by intensifying his production, he is rendering himself liable for the local authority's rating axe. Either all agricultural buildings should be rated or they should be derated, and it must be made perfectly clear which they are to be.

If broiler houses and deep litter houses are to be classed as agricultural buildings for income tax purposes, it seems illogical to suggest that they may not be regarded as agricultural buildings for the purposes of rates. It is interesting to remember that this particular facet of agricultural production is being carried out efficiently and without any form of Government subsidy whatever. Therefore, before I close I should like to ask the noble Earl who is to reply whether he can throw any light on this confused situation, and, if not, whether he will take steps to see that this problem, which is going to become more marked in the future as the intensification of enterprises increases, is clarified to prevent the unpleasant and undignified spectacle of cases being hammered out in court on their own individual merits.

5.2 p.m.

LORD SILKIN

My Lords, I hope that I may be forgiven for digressing to a slight extent, to the extent the noble Earl, Lord Ferrers, did, from the general run of this debate. I do not propose to speak about agriculture generally, and the noble Earl, Lord Waldegrave, will not be surprised to hear that I propose to speak about one aspect of it—namely, bacon. When I last spoke in this House on the bacon situation I described the position as desperate, and I was taken to task by the noble Earl. He said that I was creating in the bacon industry (I am using my own words) alarm and despondency, which was a very improper thing to do, and that the Government, by declaring their policy of extending the guarantee into next year and giving an assurance that it would not be reduced, were helping the industry, and that we all ought to be very happy indeed. Well, the position to-day is far worse than it was in July. To-day, I think it will not be disputed that the prices which are being paid to bacon producers are not sufficient to enable them to cover their expenses. This has been going on for some months, and it looks as if there is little hope that the position will improve.

I believe that these are facts. A considerable number of bacon producers are going out of business, particularly those who are specialising in this one branch, with the result that, unless something is done, there will come a time when we shall be entirely dependent upon imports from other countries. It may well be that the Government are prepared for this and are desirous of its happening. It is conceivable, because in my view the policy of abolishing the tariff so far as Danish bacon is concerned—they would be the largest exporters to this country—is designed to give Danish bacon a greater market in this country than it had before. The Danish producer is urging, as the price of their coming into the Outer Seven common market, that this tariff should be abolished; and his only reason can be that he wants to increase his market in this country. Therefore, it would not be surprising if the time were coming—in fact it is rapidly coming—when there will be virtually no home bacon production in this country. It may well be that the Government regard bacon production in this country as expendable. If that is so, that must be accepted. But certain consequences must follow, and I should like to draw the attention of the noble Earl to some of those consequences.

Not all bacon producers are large producers: a good many of them are small producers. But they have invested a considerable amount of capital in the bacon industry, which is, as I have said, highly specialised and highly skilled. It takes a good many years for any bacon producer to get to the point when he is producing the kind of bacon required on the British market at the present time. There is the question of getting the right kind of breed. I think it has been accepted that the Landrace crossed Large White is probably the best kind of breed to produce the bacon that is wanted. That is a long bacon, which is lean at two points, the loin and the shoulder. But it requires not only breeding, but also the right kind of housing—housing of the right temperature and ventilation. It requires the right kind of feeding. It really is a science to develop the exact type of feeding best calculated to produce the pig that is wanted. Of course, management plays a great part, too.

This skill has been developed over the years by a relatively small number of specialised bacon producers in this country, who have invested a considerable amount of capital in their buildings and stock, and so on. The position to-day is, and has been for a good many months now, that the amounts they are realising for their pigs are not sufficient to cover the cost of production and their overheads. I am not going to try to prove that statement this afternoon with actual figures, but if I am challenged I am in a position to prove what I am saying by quoting figures of a good many producers who are producing scientifically and skilfully with good technical results—that is, farmers who are getting perhaps 80 or 85 per cent. of "AA" grade pigs, and therefore getting the best possible prices for the pigs they are producing. I believe the noble Earl, Lord Waldegrave, is familiar with this problem because it has been ventilated in the farming Press, in another place, and I think even by a number of farmers who paid a visit to this House and to another place in the last few days, with a view to telling the Minister and the noble Earl exactly what they think of them.

But with all the discussions that we have had, and in spite of all the talking, we still have not found the solution to this problem. If the bacon industry is regarded as expendable—and one can well understand that it may be—then Her Majesty's Government ought to compensate those whose livelihood has been removed as a result of Government policy for the loss they have sustained. There is nothing unusual in that. Surely Her Majesty's Government cannot disregard entirely the consequences of their action. For instance, the buildings that have been erected for the purpose of producing baconers are of very little value in any other industry or for any other type of farming. It is just conceivable that they might be of some use for egg production, but I am sure that the noble Earl, in his private capacity, would not recommend anybody to go in for egg production to-day; for that would seem almost to be jumping from the frying-pan into the fire.

EARL WALDEGRAVE

My Lords, perhaps I may interrupt the noble Lord for a moment, as this matter is very important. Is he suggesting that if these buildings are not usable for bacon production they are unsuitable for all other forms of pig production?

LORD SILKIN

My Lords, such buildings could be adapted to a certain extent to manufacturing; or for the production of pork. But if one has to carry out one's specialisation to the extent that one is aiming deliberately at this special type of baconer that I have indicated, it is going to be very difficult to adapt such buildings to either of those two forms of pig production. I do not want to bother the House by going into technicalities, but I am sure that I could satisfy the noble Earl that it is extremely difficult to go from one to the other. But I will say this. Taking the alternative of manufacture, the Government are really saying: "Send your pigs to Wall's: they are the only people who can take the manufacturing pig on any scale to-day." But Wall's fix their prices in relation to the price that is paid for baconers, so that if one cannot make bacon pay, one will not be able to make the other pay—unless Wall's have a change of heart. It is surely undesirable, however, that one should put all one's eggs into one basket and switch over to manufacturing, placing oneself entirely in the hands of one individual firm. The noble Earl shakes his head, but it is no good denying what are clearly facts, what one knows to be true.

EARL WALDEGRAVE

My Lords, I do not want to interrupt the noble Lord, but is it clearly true that Messrs. Wall are the only firm to have diversified their pig killing industry?

LORD SILKIN

My Lords, I would not say that nobody else will buy a heavy hog, but I say that if one is producing these pigs, week in and week out, Wall's are the only people who will guarantee to take them. When a pig has reached the requisite weight one cannot hold it back and wait. One cannot hawk it round, waiting for the market. One has to have a ready market, and the only people who will guarantee to take them, week in week out, so far as I know, are Wall's. If the noble Earl knows of anybody else who will undertake to do so, I shall be delighted to hear of them. Wall's are, in fact, the only people I know who will guarantee to do so, and to state their prices. But their prices relate to, and at the present time closely follow, the prices paid for baconers; and if the one price is not adequate, then neither is the other. I readily admit, of course, that if Wall's found they were not getting their pigs at the right price they might be compelled to pay more in order to encourage people to produce for them.

As for the pork market, is there not again a danger that when everybody goes over to pork we shall get a superfluity of pork, with the same thing happening as regards prices? Even at the present time pork prices are, in my view, insufficient to produce a livelihood for the specialist in pork production; but it seems a pity that farmers who have been trained, and who are skilled and experienced in the production of this particular type of bacon, should have to go out of business or do something which may create difficulties in the market hereafter.

I believe that the noble Earl and Her Majesty's Government are sufficiently acquainted with the problem. The question is: what is the solution? I must confess that the only solution that has been put forward so far is to separate the guarantees for pork and bacon. I am not sure that that is altogether satisfactory. It may meet the problem at the present moment, but I am not certain that the position of the pork market may not decline, and then, presumably, they will have to participate in any subsidy that is going. At present the pork market does not require a subsidy, but if it did, again it would not be very helpful to the bacon industry. The fundamental mistake, perhaps, was to give the assurance to the Danes as to the reduction of the tariff. Probably it is too late to alter that now, but until that time there was, I think, a certain amount of confidence in the bacon industry, and it was more or less on its feet. I believe that the threat of this happening has already driven a good many people out of the industry, with the result that curers are not getting the throughput they need and consequently are unable to pay the price that is necessary to keep the baconer in production. It is a vicious circle.

My Lords, I had not intended to speak at any length on this subject, but one gets carried away. I am afraid that I have not been very fruitful in producing a solution, but, after all, it is Her Majesty's Government who have created the problem, and it is for them to put forward some solution which will keep the baconer in production; or, at any rate, if they decide that he is expendable, to see that he is adequately compensated.

5.19 p.m.

VISCOUNT STONEHAVEN

My Lords, I should like to start by congratulating my noble friend Lord Wise on bringing this Motion before the House and on the very clear and, I thought, uncontroversial speech that he made; and I can go a great deal of the way with him—though not all the way. On the other hand, my noble friend Lord Amherst of Hackney took the other view. So while one says that everything could not be better and the other says that everything could not be worse, I ought to be able to get through the middle. At any rate, I am going to try. The little grouse I have with my noble friend Lord Wise is this. I believe it was Mr. Disraeli (though it may have been some other eminent person) who said: "There are lies, damned lies and statistics." Somebody else, equally wisely, said, "Beware of averages." Those two things apply very greatly to agriculture, and that really prevents my going further with my noble friend Lord Wise than I otherwise would.

Now, with your Lordships' indulgence for a few minutes, I want to go on to that far distant country where the noble Earl, who I believe is going to reply, goes to do his shooting, stalking and suchlike things and where we actually carry on agriculture; that is, Scotland, I believe there are no Scotsmen here. I should like to talk briefly and in only a limited way on how Scotland is affected by the current pig muddle and the tomato growers' problems, and, much the most important from our point of view, on the future of marginal land and semi-marginal land in Scotland.

I must, of course, declare an interest, being a semi-marginal land farmer myself. Thank goodness I am doing nothing in the horticultural business! However, I am concerned with pigs, and I will go on to deal with the subject of pigs right away. As to the perspective of the pig industry in Scotland, which I think it is rather important to realise, I would say this. The total population of pigs in Scotland amounts to only 7½ per cent. of the overall number of pigs in the United Kingdom, which is very small. Nevertheless, we account for between 10 and 12 per cent. of the total bacon supply of the two countries. Whereas in England somewhere about two-thirds of the number of pigs go for pork and for manufacture, sausages and so on, and one-third for bacon, it is the reverse in Scotland.

On a sample of 270 farms in the north-east of Scotland, the income from the pig enterprises amounted to 13 per cent. of the total income of enterprises on those farms. As I have said, averages are jolly dangerous, but the farms are relatively comparable and I do not think there is an enormous fluctuation. They are nearly all side-line producers. In Scotland a good deal of the market, of course, is local, and Scotsmen do not like pork. That is why we cannot sell it or we can sell it in only small quantities. The problem, as I see it, is this. There is a very reasonable basic pig price; but, as has been pointed out, the subsidy payable to the farmer is the difference between the standard price of the pig and the price one actually gets. At the moment, owing to the shortage of beef there is a very high price for pork, and if all the pork pigs at the price realised and the bacon pigs at the price realised are put in the pot together, the difference—again one of these beastly averages—or the amount of the subsidy (which is the difference between that darned average price and the perfectly reasonable guaranteed price for the pig) is very small indeed.

The position in Scotland is worse than ever because the overall market in England is far greater and largely consists of pork. Therefore, the difference which is applied to our pigs, which are nearly all bacon pigs, or preponderantly bacon pigs, is a good deal smaller than it would be, as it is affected by the English pork prices. That was a snag that was not foreseen by any of us farmers, any more than it was by the Government; and I rather disagree with the noble Lord, Lord Silkin, who said that the Government are to blame and, "This is your muddle. You brought it about." I do not think that that is just. They did not foresee it; neither did I, nor did the rest of us.

LORD SILKIN

My Lords, I was not criticising the Government on account of the subsidy, or, indeed, on account of anything else. I said that they brought this trouble upon themselves by reason of the threatened abolition of the duty, which is quite a different thing.

VISCOUNT STONEHAVEN

My Lords, I am grateful to the noble Lord. I do not agree with him about the duty business, but I took it that he was talking about the other matter. In any case, that is a rather small point.

But if the pork price rises much more, and the subsidy and the quality payments were dropped altogether, it would be very serious for Scotland. Nearly all the pigs sold in. Scotland qualify for one or other of the premium grants. There are not so many types of pigs, and the Scotch chaps who feed these pigs are pretty good judges and make a good job of it. If a guaranteed price were applied to a bacon pig, plus the quality payments, and a totally different price—or the same price, if you like—to a pork pig, the price difference for the pork pig would govern the deficiency payment for the pork pig, and the independent price difference for the bacon pig would govern the bacon deficiency payment. If the price of pork dropped, the guaranteed price of a pork pig under this scheme would stay the same, and the deficiency payment would protect the pork producer. The position is not as I understood the noble Lord to say. The price of the bacon pig would be entirely independent of the price of the pork pig, and the calculation would be the difference between what the farmer actually got and the price of the standard pig. That, to my mind, would produce stability in the two markets, without confusing one with the other, and would give adequate protection to both sides. And I believe that in the long run it would cost the Exchequer no more than the cost at the moment. I am sorry to have taken so long over that point, but I think it is a rather important point.

My Lords, there are then the difficulties of the tomato growers to be considered. The tomato growers in Scotland are, of course, owing to the climatic conditions, three weeks to a month behind the growers in England, and more than that compared to the growers in the Channel Islands and various places like that. The early part of the market occurs when the high prices are current; the later part of the market occurs when the price drops anyway, because everyone has tomatoes. Therefore, we in Scotland start off with a disadvantage in that respect. In 1957 the total of imports into the country from Holland was 10,500 tons; in 1958, 12,500 tons; and in 1959, 17,750 tons. That is the competition one is faced with. The duty of 4d. per lb. was introduced in 1954. It is probably now worth about 2d. because of the fall in the value of money, and one thing and another. As to the wholesale prices—which are averages; and again I say beware of averages—in 1957, the May price was 2s. per lb; in 1958, the May price was 2s. 11d. per lb., and in 1959, the May price, due to the influx of foreign tomatoes, fell to 2s. per lb. again; and the corresponding June prices were 1s. 9½d., 1s. 9d., and 1s. 5d.

LORD STONHAM

My Lords, would the noble Viscount say whether they were retail or wholesale prices?

VISCOUNT STONEHAVEN

Wholesale prices. I am afraid that they were average wholesale prices, and we must take averages with a very good deal of judgment. We do not know about the increases in the cost of production, but I think it is reasonable to admit that costs must have risen considerably, as everything else has. What is known is that the cost of labour and fuel to the Scottish tomato growers accounts for 70 per cent. of the cost of growing tomatoes.

Now I would draw the noble Earl's attention to the fact that when you are dealing with heat and when you are dealing with labour, the one is very amenable to scientific investigation and an examination of the other from the work-study point of view brings great rewards. I would say that the horticultural industry is one where work-study could be applied with great advantage, because there are so many movements one keeps on doing, and so much repetition work. Merely knocking a hole in a wall instead of walking round it will save a man's wages for a month, or something of that sort. Countless opportunities like that exist. On the question of work-study, to my mind (I may be wrong) the answer is not to produce a lot of work-study experts to go round and charge a fee, but to endeavour to instil the simple, first principles of work-study in the average farmer and in the average horticulturist. If you can draw something on a piece of paper so that the farmer can see that he is walking on that scale for ten minutes which he could save on the other scale, and so on, you can get work-study over to the farmer more easily than by getting the expert to try to convince the farmer. You cannot convince a farmer, but you can get a farmer to convince an expert. I think that there one ought to have a try.

On the fuel side, I will quote now, if I may, from the Fifth Report of the National Industrial Fuel Efficiency Service. May I read this short paragraph as I think it has a bearing? They say: The numbers of boilers of different types which have been the subject of full tests of efficiency by N.I.F.E.S. are set out in Table 6. It will be seen that the total number is over 1,900 and that the amount of fuel consumed in them annually exceeds 3 million tons of coal or its equivalent in fuel oil. It is based on so wide a cross-section—one in twenty of the boilers in daily use has now been tested by N.I.F.E.S.—that there can be little doubt that it is reasonably representative of conditions in the country as a whole". Then the Report continues—and this is the point: This means that, unless an industrialist has the strong evidence of a recent test to the contrary, it is an even chance that he is wasting one ton in every eight tons of coal …". Now the cross-section of horticulture covered by these people showed a mean saving of 20 per cent. There were 91 cases which were investigated between 1954 and 1959. Whether or not that is a representative cross-section of that industry, I do not know; but it does give one food for thought. My Lords, that is all I have to say on that subject.

Then we come to the problem of marginal land and grants to farming in Scotland. A certain amount of odium was earned by Her Majesty's Government in their handling of M.A.P. last year, and they have wisely now given us a breathing period of three more seasons. There is here a fundamental problem which I think is peculiar to Scotland, so perhaps it is worth a little thought. There are all kinds of aids—production grants, and so on; for which we are grateful—just as there are in England. There are one or two slightly different, but not many. But I should like just to illustrate how these things affect some of the farms. I have a friend farming on good land in Perthshire, and I should like to compare the results per acre of a crop of lea oats on his land to a crop of lea oats on my land. His land is good; mine is marginal, or semi-marginal. The yield of oats in Perthshire this year was 11 quarters to the acre. The lime applied to that land was none; and the amount of combined fertilisers applied to that land, it being a lea crop, was none. The deficiency payment my friend will receive per acre is exactly the same as that which I shall receive. It so happens that, as it is good land, it requires no drainage, so there is no expense there at all.

I took some advice from the advisory people, the North-East Scotland College of Agriculture, to check up on the treatment of my own land, and I followed out their recommendations—this was in Kincardineshire. My yield was a very good yield indeed for me: it was 6 quarters to the acre. In order to get that yield, I had to apply 2 torts of lime; 4 cwt. of combined fertiliser; and I had to expend the equivalent of five shillings an acre on cleaning ditches. Labour, and other things common to both, I have not discussed. Merely on those items alone, allowing for subsidies, my return was 300 shillings per acre, and my friend's return was 660 shillings per acre. When he comes to plough he gets £7 to the acre, exactly the same as I get.

The point I want to try to make is this: that if you apply the same grants—production and commodity, I think we call them—to the good farm as you do to the poor farm it is wasting a great deal of money on the good farm and starving the poor farm. Her Majesty's Government are entitled, if they wish, to drive the small, difficult farm out of production. They have given us assurances time and again that that is not their object, and that they would not think of doing it. But either they are going to feather the nest of the good farm—not the good farmer, but the good farm—and starve the poor farm, or they will have to do something about grading the farms. What I would suggest as something to think about—nothing more—is this. I maintain that marginality of land is 90 per cent. physical and geographical, and only 10 per cent. due to fertility. One must get away from the idea that marginal land can be turned into highly productive land by use of a bit of fertiliser towards which a generous Government gives a large subsidy. I am very grateful for that subsidy, but the idea that the application of that fertiliser will turn marginal land into highly productive land is entirely in error.

I would therefore make this suggestion to the Government as something to think about—they have three years in which to do it, and have a great number of people to assist them. I would grade the farms in Scotland—possibly England; I do not know—and I would send a circular around to the farmers. So many circulars and forms to fill in come round now that one more would not hurt. I would require to know the height; the distance from the market; the natural drainage—whether there are many ditches, and so on; the measurements on the farm; and the length of road from the main road, which grossly affects transport costs and charges, and which in any case has to be kept up. Then I would ask the size of walled fields. I have a number of walled fields, and I have in the past been asked: "Why do you not turn them into decent-sized fields?" The answer is: "Because there are ditches on three sides, and there is a stone wall, 7 feet wide at the bottom and 3 feet wide at the top on the other, and it is not worth doing".

Those are some of the difficulties one is up against. Other factors which have a very great effect are the earliness of the season—how soon grass grows in the spring—and the normal duration of snow and frost on the ground, which varies between six weeks and two months, normally, in our part of Scotland. Then I would ask about the natural fertility of the land. Another important point is the average rent paid over the last ten years, because, whether one thinks the rents are right or not, they are all commensurate. A farmer will rent a farm in the Howe of the Mearns at £3 an acre, but he would not pay anything like that for marginal land in my part of the country, where the average rent is about £1 per acre. Another important point is the hilliness of the fields. People talk about mechanisation and combines as though they were the cure-all for agriculture; but it is one thing to use a combine on level fields and another if one were virtually to use it in your Lordships' House—and that is the type of field that marginal farmers have to put up with. We have to produce beef in fields like these, and that is why we want more help than the prairie farmer, who has everything in his favour and is getting the same grants, and so on.

I would suggest that marginal farms be classified as, say, 100 per cent., 75 per cent. and 50 per cent. marginal. In the first instance, standard but lower production and commodity grants, as arrived at and adjusted at the Price Review, would be paid, then the farmer could send his receipts back to the Ministry and say whether he was 100 per cent. marginal or not, according to his rating. He would be entitled to a maximum bonus payment on the grant receipts if his farm were 100 per cent. marginal, and smaller bonuses according to whatever rating has been arrived at. In this way, the all-over total of grants could be the same, from the taxpayers' point of view, but the largest grants would go to the men who really earn and deserve them and not to the men who could well do with less.

5.42 p.m.

THE EARL OF LONSDALE

My Lords, like other noble Lords who are interested in agriculture, I should like to thank the noble Lord opposite, Lord Wise, for bringing forward this Motion this afternoon. I think it is timely, but certainly for a different reason from that of the noble Lord. I feel that the agriculture industry is on the threshold of a new and great leap forward. The foundation has been laid by the Government's 1958 Act, coupled with the Farm Improvement Schemes and the Small Farmers' Act, to name a few of them. All these are beginning to give the countryside a new, more productive look. Many of us who are concerned intimately with the industry, especially with livestock, feel that we are entering a new and exciting time when new and sometimes brilliant technological advances will be applied to give great increases in production.

We feel also that farming prosperity lies in the field of the production of livestock for an ever-growing consuming market and in the production of livestock from grass, which is the cheapest feed by far, even in winter, if conserved as silage. We have heard both from the noble Lord, Lord Wise, and even from this side of the House that farming is considered in some sense a depressed industry. Incomes are not what they should be. I live in the North of England where our economy is based largely on livestock. I farm a great area, I am interested in the supply and distribution sides of the industry and I am the personal friend of a great number of farmers and others in the industry. On top of that, I have been able to look at the costings produced from sample farms by King's College University. I do not believe that farmers, certainly in the North, have a poor income; I think they have a very reasonable income. The costings I have seen, even after allowing for a return on the farmer's own labour, show minimum returns on capital of from 15 to 20 per cent. Even though there is a certain amount of risk in farming, I think that that could be called a very reasonable return.

To underline what I have said, I should like to occupy your Lordships' time for a few moments in considering one aspect of agriculture in particular— that is, the production of beef. The nation is certainly eating more meat, year after year. This is due, perhaps, to rising standards of living, of health and of education, and many people prefer to eat fresh meat as opposed to preserved meat. Secondly, I feel that the agriculture industry is contributing to this increased consumption by being much more ready and able to adapt itself rapidly to changes in taste and the needs of the consumer. Recently we have seen some marked changes. Although the sheep trade has got into difficulties because of the unusual summer, there are also difficulties because of the growing reluctance of British housewives to buy lamb and mutton. This is having an effect on the price guarantees. Last week payment was 1s. 3½d. a lb. guaranteed, and the approximate average price to the grower was 3s. 3d. a lb. The guaranteed price system strikes me as being the salvation of the industry, because if there is a sharp and remarkable change in consumer taste, the grower is insulated against disaster during the period in which he can adapt himself to meet the new demands of the consumer. After all, I think that this is the prime consideration for the industry—to provide the consumer with what he asks for.

Pork consumption has increased, according to the figures I have, by about double since pre-war. In 1938 it was 216,000 tons and a few years ago it was 415,000 tons. Pork is taking up two-thirds of the pigs available for slaughter. Again it is a question of what the consumer wants. At the present moment the consumer does not appear to want more bacon. According to figures I read the other day, the consumption of bacon has remained static for long enough now, but the figures for pork consumption are rising continually. If the British housewife wants more pork and less bacon, the industry must adapt itself to meet that demand. I am not saying that because I am not a pig farmer, because I do keep a considerable number of pigs, and I am prepared to adapt my production to what the consumer wants and adapt the necessary buildings.

Poultry is another aspect of meat production, but I will not touch on that. I should like to speak in some detail on beef and veal production. The consumption of beef and veal has been increasing. In 1938 we imported 350,000 tons of meat from the Argentine and consumed altogether about 700,000 tons. This year it is estimated that we shall consume around 1 million tons, but we are importing only about 200,000 tons from the Argentine, because the Argentine population is rising and consumption per head in the Argentine has risen to nearly 2 cwt. a year, which seems to me an enormous amount of meat to eat. The Argentine Government has done its best to encourage production and export to this country. There was a small rise in 1958 to 280,000 tons, but we are back to 200,000 tons this year.

Australia and New Zealand and, to a minute extent, the Rhodesias, provide about 140,000 tons a year of our total imports of about 350,000 tons. But—and this is a really remarkable feature—while the consumption of the nation has gone up from '700,000 tons pre-war to 1 million tons now, whereas about 50 per cent., or 350,000 tons, was produced at home before the war, that has risen to the quite remarkable figure of 600,000 tons now produced at home. However, this, due to the increased demand and the consumption at home, is still only two-thirds of the total. Nevertheless, the 70 per cent. increase on pre-war is a notable achievement of the industry.

As the demand continues to increase—and I think it will, and consumers will tend towards good, small cuts of beef—I feel that there is little prospect of further supplies from abroad. The Commonwealth countries have their difficulties, which I will not go into; and even if supplies were available from the Argentine, Argentine chilled meat is not so popular or so cheap as to commend itself to the housewife. The consumer preference for British and United Kingdom beef is a new feature. The taste and quality are undoubtedly the best, and the price is only fractionally higher than best Argentine beef. Perhaps it is that the housewife now has more to spend and can afford to be more selective. This trend can be seen in the fact that the price of Argentine meat in the wholesale markets fluctuates considerably as shiploads do or do not arrive; but the price of United Kingdom beef in the wholesale markets has remained remarkably steady now almost for years. Indeed, during the last few months, at any rate, the price has been so firm that the Exchequer has not had to find any support for the guaranteed prices.

There is obviously a great gap between home production and consumption, amounting to above 350,000 tons. I believe that this can and must be filled, if only to suit the consumer, because the consumer is increasingly showing preference for United Kingdom beef. I read the other day that the head of the Fatstock Marketing Corporation, Livestock Division, expressed somewhat similar sentiments. The question that really arises is how to fill this gap. There are grave difficulties. First, without going into any detail, due to attestation difficulties there is a decline in imports of live store cattle from the Irish Republic: this amounted to 231,000 in the first half of last year and 145,000 in the first half of this year. However, the Irish Government are taking as energetic steps as they feel able to take, and attested store cattle will become available in greater numbers as the years go on: in fact, I have seen estimates that up to 400,000 might be available by 1961.

Another great difficulty, which many people advocate could be solved, is that of providing more beef from the dairy industry. The dairy industry already makes a great contribution, but I think it could make a bigger one. Artificial twinning is being experimented with and could be the means of the dairy industry producing considerably more beef cattle. I read the article written by the agricultural correspondent of the Observer last Sunday, which was headed: Artificial twinning may hold the key to more beef. I feel, however, that a note of warning must be sounded in regard to looking for more beef from dairy herds. I am not saying that a lot of it is not very good quality, but it is not of uniform quality; and I think a great deal of research and advice is necessary as to which beef-breed bulls should be used, and which dairy breeds, and particularly that there should be some progeny testing of the bulls used. I feel also that too much emphasis ought not to be placed on the dairy industry as a source of beef, because it could lead to a short age of dairy heifers, as, indeed, it has from time to time in the past, with a consequent disturbance of the milk industry.

To my mind, the real source of a substantial increase of beef is from the hills. The problems are tremendous—my noble friend, Lord Stonehaven, has pointed out many of them to your Lordships—but they are problems which I am sure with attention and real interest can be solved. The best type of beef, which makes the joints and the cuts that the housewife really wants, is bred on the hills. The scope is enormous. We had a debate some time ago on the Zuckerman Report, and paragraph 44 of that Report gives some startling figures. It says that with only a moderate increase in hill productivity there could be an extra 400,000 store cattle a year, capable of providing 100,000 tons to 130,000 tons of beef a year, or about one-third of our imports. Knowing that, and knowing how productive the hills could become and that they could produce the sort of beef needed, we are presented with a solution to a large part of the problem and, indeed, a challenge, as to how to get more beef from the hills.

Here I feel that the Government can give a great lead. Without going into any detail of the numbers of cattle on the hills and the acreages that they cover, suffice it to say that in my own county we have only about one hill cow for every thirty-three acres of upland grazing; and two-thirds of the county is upland grazing. It is interesting to note that there has been a threefold increase in the number of hill cattle in Westmorland in the last five years; but, none the less, the low rate of stocking is still deplorable.

Hill farming to some extent was set on its feet in England and Wales by the Hill Farming Act, 1946, which was amended by the Livestock Rearing Act, 1951. We did, however, have a later amending Act in 1956, the Hill Farming Act, which provided the impetus. Before and since the passing of this latter Act a great deal of improvement, now largely complete, has been done to the fixed equipment on the hill farms. By that I mean houses, buildings, cottages, roads and so forth. But not a great deal has yet been done to the land. That, of course, is a long-term business, and it is no good improving the land if there are not the cattle to go on it. That is where the chief problem lies—getting enough cattle on to the hills reasonably quickly. A natural rate of increase might be 15 per cent. on the hills, giving the producer a reasonable return. For that reason, the Livestock Rearing Act, which expires in 1963 so far as its provisions for the improvement of land are concerned, and also so far as provisions for the payment of hill cow subsidy are concerned, ought at this stage to be looked at, because the arguments that produced the 1956 Act, which gave the guarantee of a hill cow subsidy for seven years, are again being heard. There are only three or four years to go before, under the present Act, it will no longer be possible to pay the hill cow subsidy.

Hill farmers are wondering what the long-term future of hill farming is, and I think the noble Earl who is to reply would be doing a great service if he could give a guide by saying what is in the minds of Her Majesty's Government for the future of the Livestock Rearing Act when the provisions expire in 1963. I think your Lordships will agree that the bills can make a tremendous contribution, and I sincerely hope that Her Majesty's Government will look seriously and energetically for the supply of more beef which could go a long way to meet the gap between consumption and home production.

There are two small problems which I should like to mention, upon which Her Majesty's Government might be able to do something in order to have an immediate effect. The first is that of bracken control. We all know what vast areas in this country are covered in bracken, particularly the upland grazing. In my own county of Westmorland we estimate that perhaps one-fifth of the upland areas of the county are covered in bracken. Bracken grows on the better soil, and if those areas could be cleared of bracken there would be more parts of the hill available for grazing. Chemical treatment has been possible, and has been used, but there are a great many areas where it cannot be applied. New chemicals have recently been developed which can give a chemical control. Tractors cannot get at most of the areas, but new developments in aerial crop-spraying by fixed-wing aircraft and helicopters give rise for believing that practical work could be done to eradicate bracken in vast areas. I believe that half a million acres was done experimentally as a field trial by a private firm of manufacturers last year, and it proved successful. The cost, however, is high—perhaps up to £8 an acre—and this is where I think the Government could well help, either by giving grant aid for limited areas of bracken, by making it an eligible improvement under the Livestock Rearing Act, or by producing a scheme, for which a fresh Act might be necessary, to cover other parts of the country as well—lowland areas, where often a great deal of bracken can be found. But I think that in chemical control we have found the method of dealing with bracken.

The final point I would make—and its adoption would ease the minds of many people who farm in the hills—is that more research could be done and more information could be made available on various deficiency diseases that are appearing on the hills, particularly the disease known as hypomagnesæmia, which deters many people from putting cattle on the hill and from improving the hill, because it is, a commonly held belief that improvements to the land produce this disease. I believe that information and more research would be of great assistance in overcoming this belief. To conclude. I sincerely hope that the Government will give keen attention to the more assiduous encouragement of production of beef from the hills, which could do more than merely fill the gap between home production and consumption, and would provide prosperity again on the hills and rehabilitate farming to a greater extent than has been done.

6.7 p.m.

LORD STONHAM

My Lords, I join with other noble Lords on both sides of the House in thanking my noble friend who introduced this debate. In particular, I would thank him for the way he illustrated that the average farm income is some £800, and the average amount going to farmers by way of subsidies is some £600, and for the conclusions he drew from that, with which I hope the noble Earl who is to reply will deal. I must confess that I was somewhat surprised when I heard the noble Earl, Lord Lonsdale, say that he felt we were about to make a great step forward, because almost everyone who has taken part in the debate seemed to express fears either that we have already taken, or are about to take, several steps back. Indeed, when I heard the criticisms from various parts of the House, I was reinforced in my view that the position of the noble Earl, Lord Waldegrave, is somewhat like that of the wrongdoer on the television programme, No Place to Hide. I should explain that in that programme the wrongdoer always gets located and dealt with. At the same time, of course, the noble Earl is by no means a wrongdoer—he always appears to be in the guise of the innocent bystander. But I hope that on this occasion he will deal with the specific points that have been raised.

I intend to speak in the main about horticulture, but I have three questions on general topics that I should like to put to the noble Earl. The first is that under the Labour Government we had food subsidies running at some £400 million, almost every penny of which was used in reducing retail food prices. To-day, when we have farm subsidies running at a level of almost 70 per cent. of subsidies which the taxpayer paid under a Labour Government, we have the position that prices are the highest ever. They have gone up fantastically, while many of the farmers, especially pig producers, are virtually in despair. According to the figures put forward by my noble friend, the farmers are getting no benefit. I should like the noble Earl to deal with the point that those taxpayers' subsidies are going only to distributors in increased profits at various stages.

The second specific point with which I should like the noble Earl to deal is this. I should like him to explain how it is that under a Labour Government, when farmers got £23 to £24 for a top-grade pig, the retail price of bacon was 3s. 8d. per pound. To-day, when the farmer gets £16 or £17 for a top-grade pig, the housewife has to pay 6s. 8d. to 7s. a pound for bacon. It seems to me extraordinary that that extremely significant fact has not created a great deal of attention; it is not featured in the Press. Why is it that when pigs were so much dearer bacon was cheaper, and now that pigs are cheaper, bacon is double the price? It sems to me that only a miracle of mis-management could bring about a situation of that kind. I hope that the noble Earl will give us an explanation for it; otherwise he must admit the truth of the charge that Government policy in this matter has abjectly failed. I know that the Minister has consulted almost everybody on this subject, but no solution has yet been put forward, and I am sure that anyone who listened to the explanation or suggestion made by the noble Viscount, Lord Stonehaven, from his immense knowledge of this subject, will realise that there is in fact no solution on the basis of the present arrangements.

The third question I want to address to the Minister is about the price of butter. Eighteen months ago it was about 2s. 4d. a lb. Now I think the price is between 5s, and 6s. a lb. Everybody allows the Government to ride off on the alibi that it is due to the dry summer, but that is not by any means the whole explanation. A great deal of the explanation is that the Minister of Agriculture, in the Price Review of 1958 and again this year, deliberately discouraged milk production. Farmers had built up a considerable by-product industry out of surplus milk, and I put it to the noble Earl that a large part of the present difficulty arises from the fact that milk production has been curtailed and as a partial consequence at least cheese prices have doubled and butter prices nearly trebled. Can he say that that point will be given consideration in the next Price Review, so that we do not have these high prices arising out of artificially created scarcity?

I should like to deal in some little detail with the horticultural part of the industry. We all know that it is the most neglected part of agriculture, and both Parties have neglected it. My own Party promised in 1947 to give stability to the industry, and that promise was broken. Successive Conservative Governments have made, and broken, similar promises. I know that it is impossible to have a minimum guaranteed price for a commodity where frost or rain, or the lack of it, will in one year mean that the crop is more than double what it is in another year. But that is no reason why the disparity in money yields per acre should be so much more than the difference in the crop yield, because low prices from abundance and the higher prices which should come from scarcity ought to even up that difference.

The fact that these things are not evened out is entirely due to the extremely bad system of horticultural marketing which places an impossible burden on all but the wealthiest growers. One of my honourable friends in another place a week ago complained that the housewife was paying 3¾d. a lb. for potatoes which a week before he had sold for l¼d.—almost 200 per cent. to the middle man; but at least he did get back his production costs. Hundreds of horticulturists this year, after working very hard for months to produce their crops, have got nothing back at all. I know of a good many of them who have actually received debit notes. That is not just on one consignment. Some of them have been sending perhaps every day to market, and for three or four weeks have not had a penny back. Many of them have been ploughing in valuable crops for which high prices were still being demanded in the shops.

The noble Lord, Lord Stratheden and Campbell, mentioned cabbage selling at four times the price that the grower received for it, but there are far worse cases than that. This year, when lettuce were 1s. 6d. each in the shops, the growers thought themselves lucky to get 4d. Many times they were 1s. in the shops when the grower would get 1d. Another example comes from the area of my noble friend in the Terrington district of Norfolk, where the strawberry growers ploughed in their crops this year. They normally grow them for jam-makers, but there was no demand this year because the Government had permitted a large increase in the imports of strawberry pulp from Bulgaria and Poland at prices far below the cost of production. These small people were unable to dispose of their crops because it was impossible to do business at economic prices. Of course the proposals in the White Paper might encourage the setting up of a co-operative which would help these people, but the only real help they could have would be a reduction in the imports of strawberry pulp.

This position, and the immense disparity between the prices the housewife pays and the grower gets, is bigger and fluctuates more violently than in any other kind of industry. It would never be tolerated in any other industry: the outcry would be too great. But for all these years the Government have not done a thing about it. Now, of course, they have taken the challenge, and announced that they propose to spend some £7½1 to £8 million for the benefit of horticulture. I find the White Paper a profoundly disappointing document. To me it indicates that the Government are still not aware of the fundamental trouble in the horticultural industry. If growers can find the other two-thirds of the cost of improvements, that will be a good thing; they will be able to spend money on building and plant to improve and cheapen the cost of grading and packing. But reducing their costs will not help, and improving their product will not help, if it is then to be surrendered to precisely the same inefficient system of distribution as we have now. So the scheme will be no good at all unless we have a system which will ensure that the growers get a higher proportion than they get now of the price the housewife eventually pays.

There are just 23 main horticultural markets in the whole of the United Kingdom. Largely because of this, a high proportion of all horticultural produce—far more than we need to consume in the area—is sent to the six London markets, and especially to Covent Garden. The point is that at least one-third of the produce that comes to London is then re-consigned to other wholesalers, and, as the noble Marquess, Lord Ailsa, mentioned, it sometimes goes through two, three or four wholesalers, many, many hands every time. It is not merely the profit, as he said, that affects the price: it is also the further freight charge, the further porterage, further unloading, every time something getting stuck on. The noble Earl, Lord Waldegrave, will be aware from his own experience that when the broccoli trains come from Cornwall they go to London, and the supplies for the West Country go back from London to Bristol and then to Taunton and other towns—a perfectly mad scheme which no amount of protest in the last few years has altered, although the cost all comes out of the growers' pocket. The White Paper now promises development of Covent Garden, but the best way of relieving the congestion at Covent Garden would be to drain off the consignments, to try to increase consignments direct to the provincial markets by creating other markets in the provinces. If the Government have money to spend on markets, let them spend it in the provinces and not in London, where it will only make the congestion worse.

I would submit that it is beyond dispute that the essentials for cheap and efficient distribution of fruit and vegetables are, first, grading and packing stations in contact with a market intelligence service, so that you can avoid over-sending to some markets and under-sending to others, which is often the cause of uneven prices. That is the only essential service which the White Paper promises. The second thing, and the most important one, is the single wholesaling stage, so that there is only one profit, only one freight charge and one single unloading before the produce reaches the retailer. That is the most important point of all; but the Horticultural Council as proposed is expressly debarred from having any say about the manner of distribution. The third essential is the common container service. Every wholesaler at present sends off his own containers, and because of re-consignments, and so on, it is sometimes a year before he gets them back; so that the life of an expensive container is one of three or four trips. When we have a common container service it will reduce the cost to about one-third. Here, again, the proposed Horticultural Council cannot buy these because they are not to be allowed any trading powers.

I would submit to the noble Earl that they are the three essential minimum requisites for efficient distribution and are the only way by which we are going to end this scandal of high prices in the shoos and starvation prices for the growers. It means that we do not want merely an Advisory Council, but a horticultural marketing authority. I urge the Government to adopt those suggestions and meanwhile to defer any major decision regarding Covent Garden. I understand that there is a proposal to build a huge new empties warehouse at the corner of Old Street and City Road, right at the junction of two main arteries into the City and the West End. Quite apart from the immense cost of transporting empties from Covent Garden to such a place, think of adding to the congestion there. I wonder whether the Minister of Transport has been consulted about this stupid scheme. It is diametrically opposed to everything that we have recently been discussing about transport, and, above all, it is a way of encouraging more consignments into London when in fact we want them to go direct to the Provinces. If we can do that, drain them off, then the problem of Covent Garden will automatically become less acute.

There is one other matter which would help and that concerns the retailers. Noble Lords have mentioned the high profits which they make, the way they put the prices up, especially at weekends, and the way that prices never go down when there are greater quantities of produce available. As I see it, there is only one cure for that—namely, more selling points. The only way we shall get more selling points is through the development of pre-packing. Here there is a great opportunity. Five years ago pre-packaging of vegetables started with just 100,000 packs a year. That has gone up to 250 million. But that represents only 5 per cent. of all sales of ware potatoes and only 1 per cent. of other vegetables.

The Prepacking Association has carried through its work with very slender resources. I discussed this subject with the right honourable gentleman concerned last July, and he was most delighted with the progress that has been made. But when I suggested that the Prepackaging Association should be assisted with a small sum for further research, because they dare not enlarge into new fields without adequate research, so that they did not destroy the market, as it were, before it had begun, the Minister could not then see his way clear. As I foresaw then, this work has had to be curtailed. The Director of the Association has gone and the work has been partially closed down, all for the sake of perhaps £4,000 or £5,000 a year over five years. It could come from the Agricultural Research Organisation or from the £7½million. It could come from the Department of Scientific and Industrial Research. The whole point is that, for that trifling sum, this tremendous effort could in a few years alter the whole pattern of distribution and have a great effect on costs and the prices which are paid by housewives. I therefore ask the noble Earl if he will deal with that point, which will achieve results far beyond the cost and will in fact achieve the most efficient means of distribution, goods coming right from the producer to the retailer without going through al; these other channels.

My Lords, I have dealt as briefly as I can with the problems of horticulture. Now I should like to say a word or two about a problem which was raised by the noble Viscount, Lord Stonehaven—namely, the glasshouse tomato industry. I know that he was speaking for that industry in Scotland, but I hope he will forgive me if I speak about the problems of the industry as a whole, and the prices that I shall mention will be the national average and not those which he quoted locally for Scotland. I think we are all agreed that this is a highly efficient industry, and that those concerned produce fruit of unrivalled quality and flavour. It is also an industry which differs from the rest of horticulture in that there is no violent fluctuation from year to year. They have a marketing board. Greenhouses cost some £15,000 to £20,000 an acre, and there is a tremendous cost in fuel and labour. They have the highest capital and the highest turnover costs in agriculture.

Despite their highly specialised skill, despite the Tomato Marketing Board and its past efforts, their position at present is desperate—and that is not overdoing the term. Many of them have been forced to close down. Nurseries which have cost £15,000 an acre have changed hands at £2,000 an acre, and nearly 100 acres of heated glass has been abandoned or demolished in the last two years Many growers are switching to other glasshouse products which will soon be over-produced, because the tomato industry is the glasshouse industry—and if that goes, the whole of the horticultural glasshouse industry goes with it, and our consumers will be quite at the mercy of the foreign producer.

The reason for this state of affairs is simple. According to the careful researches that I have made, it costs something like 1s. 2d. a lb. to produce and market one pound of tomatoes, and the 1s. 2d. a lb. does not allow anything for office overheads, for management or, of course, for profit. Last season the net price wholesale was 11d. a lb. That is an enormous loss. Compared with 1957, prices dropped 16 per cent., and in this last season out of a larger tonnage growers got far less than they got the year before. This was due entirely to increased imports at a particular time of the year. In regard to tomato imports, as the noble Viscount said, the present duty is 4d. a lb. in the months from May to August, and 2d. a lb. in September. The noble Viscount also mentioned that the value of that duty has dropped considerably since December, 1953, when it was first imposed at that higher rate. But the point is that in 1954, the first full year at the higher rate of tariff, imports from May to September totalled 91,000 tons. This year, they amounted to 105,000 tons. That is an increase of more than 15 per cent. and, significantly, it exactly parallels the drop in price from the previous year.

These two facts make two things abundantly clear. The first is, that no industry can stand such a disastrous fall in prices at a time of rising costs. The second is that the 4d. a lb. tariff has not discouraged imports—they have risen substantially to a level where they almost equal home production; that is, 106,000 tons against 110,000 tons. Home growers find themselves in increasingly hopeless competition with the Dutch, who use our market when it suits them, at periods of favourable prices. This year, out of 26,000 tons of Dutch tomato imports, 24,000 tons came in in the period from May to July—the crucial period during which home growers look for better prices to enable them to pay their way during the year. Inevitably, with such concentration of imports, the market collapsed, and in. August tomatoes could be bought in retail shops at 6d. per lb. But even the Dutch got tired of paying 4d. a lb. duty and selling their tomatoes in the market at 3d. per lb., and import stopped, but by that time the damage was done and growers had sustained very heavy losses.

The urgency and importance of this matter arise in this: that the growers have been so hard hit that they will not start propagating plants next January for next season's growing unless the Government give immediate attention to the conditions governing imports and promise home producers a fair crack at the home market. Last year at this time the National Farmers' Union made an apparently unanswerable case for increased tariffs, but the Board of Trade turned it down. Growers were shocked. I have before me a report of the meeting last January of the Somerset Farmers' Union Executive, which I have no doubt the noble Earl saw and which I will not read because of the things which many of his friends said. Some of them expressed amazement. One of them said "It was a kick in the face." That, of course, was before they experienced this disastrous season. What they will say now, I do not know. But we are all aware of what was said at the meeting on October 28 of the Tomato Marketing Board, when, as The Times said, interruptions, points of order and shouting characterised the afternoon's business, and one gentleman persisted in swinging a football rattle at full blast underneath the Chairman's nose. I suggest that it would have been much more useful if he had swung his football rattle under the nose of the right honourable gentleman, the Minister of Agriculture, because the Tomato Marketing Board, with no control whatever over half the tomato supplies coming on the market, are quite helpless in the matter.

My own view—and I put this forward very seriously—is that the only efficient action that Her Majesty's Government could take to help tomato growers would be to put an embargo, or at least a partial embargo, on the import of those tomatoes for that crucial period of the year. I do not think that a mere tariff increase (which I feel sure will be given in any case) is going quite to fill the bill, as these foreign growers have had so much experience of ways and means of getting over these tariffs. I hope, therefore, that an embargo on foreign tomatoes from mid-June to the end of July will be seriously considered. If such a change in policy cannot be contemplated. I hope that Her Majesty's Government will announce at the earliest possible date an increase in the import duty.

I should like to remind the noble Earl of a speech he made in February this year when he said, in discussing tariffs: The Government must be satisfied not simply that costs have gone up, not even simply that profits have gone down; but this is the important point—that the reduction in profits has been caused by imports rather than by other causes. I do not think that there is any question whatsoever that the trouble in this last season has been caused by just that condition—by imports flooding in at a crucial period and crippling the market. This is an important and efficient industry, and I ask the noble Earl the Minister, when he comes to reply, to indicate that Her Majesty's Government will take this very seriously into consideration and consider a partial or total embargo for that crucial period.

The noble Earl will be aware that although I have no connection with the industry I speak with some experience in the matter. Noble Lords opposite, who will sit securely in their places as the Government of the country at least for some years to come, have the opportunity and responsibility of doing something effective for an industry which has not really been helped at all, either by the Party opposite or by my own Party. I most earnestly ask the noble Earl to consider the points I have put forward, with some knowledge and in all good faith, in the belief that they will do some real good if adopted.

6.36 p.m.

EARL WALDEGRAVE

My Lords, once again we are indebted to the noble Lord, Lord Wise, for providing an opportunity for this interesting debate on agriculture. It was on a Motion of the noble Lord that we debated, last April, the outcome of the Annual Review. If to-day we have often found ourselves again on ground covered in that debate, I for one do not complain.

Before turning to the specific points raised in great detail and number by various noble Lords, perhaps I might very briefly run over the state of the nation and give an interim report on how we see the state of agriculture to-day. This present year, as we know, has been in strong contrast with the year before—and that is certainly true of the weather. The corn harvest this year, unlike that of 1958, was exceptionally early, and perhaps the easiest for years; and although the acreage under cereals was down by a quarter of a million acres, the yields were excellent. We had our wheat up to 28 cwt. per acre, and more, and it now seems that our total cereal production will be something like ¾ million tons higher than a year ago. There was a record crop of barley—3½ to 4 million tons—which will help to lessen the increase in imported feeding-stuffs that would otherwise have been necessary. Our root and fodder crops have been poor on the whole, and though the hay crop was good it was very light and has had to be drawn on very much earlier than usual.

I want to thank my noble friend Lord Amherst of Hackney (who I believe has had to leave to catch a train) for the able way in which he reviewed the present prospects of the industry; and if he compiled all those statistics from 14,000 miles away, as he said, he must have a very good intelligence service, for I thought it was an admirable and up-to-date review of British agriculture. He referred to the potato crop, as I should now like to do. We believe that that crop, which is so very important from the point of view of the cost of living, is going to be adequate for our needs this year—probably about 6 million tons in England and Wales. The yield of sugar beet is also higher than seemed probable earlier in the year, and with the very high sugar content it has been yielding this year there is likely to be a heavy sugar production.

In livestock, we have had a big increase in calves retained for beef rearing, and the production of fat cattle is expected to continue to increase. I was distressed to hear my noble friend Lord Stratheden and Campbell say he thought certification of calves was not all that it should be in some parts of the country. I shall have to look into that matter, for I have not heard of the doubt myself. We were also very interested in what was said by my noble friend Lord Lonsdale, in his usual well-informed manner, about beef production. He agreed that beef production is increasing. Fat cattle are increasing, although we have had fewer store cattle this year imported from Ireland. The decline in our milk-producing herds seems to have come to an end, but, of course, production this year has been affected by the drought.

Sheep-breeding continues to expand, but owing to the exceptional lack of grass in the autumn, which meant that there was an excess marketing of sheep which should have gone on as store sheep in the lowlands, the price was badly disturbed. My noble friend Lord Lonsdale, speaking on this matter—for it affected hill farmers—paid tribute which was well deserved to the value of the guarantees in preventing the producer of lambs from corning to grief when, owing to a sudden flooding of the market—as happened this autumn—prices fall. The decline in the number of pigs in the breeding herd has probably at last stopped, but I should like to come back to pigs again later. There is one thing in this general review that I should like to state—it has not been raised in this debate, but I should like to take the opportunity of mentioning it. Though the number of fowls which have recently had to be slaughtered on account of fowl pest is serious, this fowl pest outbreak is not, as has been stated in some newspapers, likely to have any appreciable effect on the Christmas poultry market.

I think, therefore, there is no doubt that the industry is in a healthy and, indeed, flourishing stale, and there seems every prospect that net output this year will be higher than it was last year. I can assure noble Lords (the noble Earl, Lord Ferrers, in particular) that we are not dealing only with cold statistics. We do think of the small man and the individual farmer, and take a human view of this whole matter. And we believe—and I think we are justified in believing—that there is general confidence in the industry now, although there were difficulties, as of course there always will be difficulties in individual sections at individual moments of time.

I now come to the full and complete speech of the noble Lord, Lord Wise. He started by telling us that he was going to produce some astonishing figures. I think he did produce some astonishing figures. He produced figures from the White Paper of last year's Price Review and by a series of division sums, dividing one figure into another, arrived at some rather, perhaps, alarming results. But I am not quite sure, without due notice, that all his arithmetic was absolutely above suspicion.

LORD WISE

It was.

EARL WALDEGRAVE

The noble Lord says it was. He divided the total pounds by the total number of farmers. But he divided, I think, by 400,000, and I believe that the full-time farmers (which is what we are talking about and must be talking about in this case) number much nearer 300,000 than 400,000; but perhaps we could discuss some of those points of arithmetic afterwards. However, it is very relevant to what he was saying, because if you alter the divisor by that amount you will get a very different result.

LORD WISE

My Lords, may I just interrupt the noble Earl? It cuts both ways. If you divide at a lower figure you arrive at a higher profit and also a higher result from your subsidies.

EARL WALDEGRAVE

Indeed you do; but the main charge was that there was a very small amount to go round. But when the noble Lord used those examples what he was really coming to was that it would be very much better if the prices could be fixed by the Government; that we should then have a more egalitarian world, and all the money would not be lost to the middle man, which is always, if I may say so, the theme song of the noble Lord, Lord Wise. I should like to spend one or two moments, even at this late hour, on trying to demonstrate yet once again that the money does not all go to the middle man.

The noble Lord, Lord Stonham, in his speech, although it was chiefly about horticulture towards the end, also took this line: that subsidies were not going in the right direction; not to the farmer, but to the middle man, the distributer and so on. He prayed in aid the cost of bacon, and compared it with what was happening during the war. He must remember that the housewife then, at the times of which he was thinking, was rationed. She was rationed in certain commodities by value, and prices were controlled as everything else was controlled; and I do not believe it is a fair comparison to take the market prices of to-day and the value of money and exchange and everything else and compare them with controlled food prices during the war years.

LORD STONHAM

My Lords, the years I spoke about were post-war years, years of the Labour Government, and it does not matter really what the prices were or what have been the changes in value. There are to-day the same values for what the pig is sold at and the price of bacon as there were ten years ago in the same context, and it does not matter what the prices were. What I should like the noble Earl to tell us is this. Why is it that when pigs were very much dearer, bacon was half the price it is now, while to-day, when the pigs are down in price by at least a third, bacon is double the price? Will he explain that one?

EARL WALDEGRAVE

My Lords, I have tried to explain: the conditions are entirely different. There were great shortages in those days and the food prices were controlled. As to the price in the case of bacon to-day, as we know, there is a large amount of imported bacon at the moment, which has an effect on the price of bacon.

May I now continue with the points that the noble Lord, Lord Wise, made? I believe he said that there was only one relevant paragraph in the gracious Speech. But we emphasised in the gracious Speech that we are going on with this support of British agriculture, and we attach the greatest importance to the well-being of those who live by the land. The Government have adopted the present system of support, which encourages the farmer to produce what the market wants when it wants it; and that is really why I think such a substantial part of the total cost of the support—it is about £90 million out of the £240 million or £250 million of support—is in the form of production grants and subsidies directly designed to encourage good husbandry and improvements in productivity, which is surely very relevant.

I confess that I really cannot follow the noble Lord now into the realms of discussion of the fixed price and the controlled market. I thought it had been demonstrated that in 1959 this really is not a system which any country could adopt unless it were a totalitarian country in the very early days of rural development. It is certainly the general opinion in the world. We have only to read, for instance, a report such as the Haberler Report made to the G.A.T.T. on the trends in international trade, to appreciate that one of the chief merits they saw in our system was that it allowed the price charged to consumers to remain at world level while the Government were able to support the individual agriculture of the country. That is why it was made clear in the gracious Speech that this particular system was to be continued; and it is our policy to continue this system.

The noble Lord, Lord Wise, or Lord Stonham, who was speaking later on the same line, quoted the cost of butter, and I should like to say this upon butter in the context of speaking on fixed prices. The noble Lord, Lord Stonham, said that the heart of the trouble—I think I quote him correctly—about the price of butter was that we had reduced the price of milk in past Price Reviews and consequently enough milk was not being produced. But is the noble Lord, Lord Stonham, not aware—I am sure he is—that it takes approximately 2½ gallons of milk to produce one pound of butter, and therefore, if we are continuing to produce the milk at about 3s. a gallon, which is the price the farmer is paid in this country, it means that butter produced in this country at the guaranteed price of milk will cost about 7s. 6d. a lb; and if we add overheads, which are necessary in any case, it will work out at a price of about 10s. a lb.?

LORD STONHAM

My Lords, I am grateful to the noble Earl for giving way. Surely he is not being serious. I was talking about surplus milk over liquid milk requirements. Whatever the price was, it is beyond dispute that the farmers have built up a first-class business in traditional cheese and a first-class business in creameries and a fine English butter business which they have lost or are about to lose.

EARL WALDEGRAVE

I would deny that, and I am putting this forward absolutely seriously: that the only butter which can be produced in this country from the milk which is bought by the Milk Marketing Board at 3s. a gallon is extremely expensive. It is bound to be expensive if the milk is bought from the farmer at 3s. a gallon and it needs 2½ gallons to make a pound of butter. It is only a marginal production, and in our country it is the most unremunerative use of milk of all. We are extremely fortunate that, with our Commonwealth interests, we are able in normal times to get ample supplies of butter from our Dominion countries, who have no other outlet for all their milk, and it can therefore be very much cheaper than normal.

Then this year it is not true to say, as the noble Lord, Lord Stonham, suggested, that the shortage is not due to the drought. It is due to the drought which has occurred this year in this country; but also there has been a drought on the Continent of Europe, which means that many of the countries which normally export have been importing. Everybody has been after the same supplies. But, as your Lordships know, things are very much better now, and I can say that the latest information I have is that there are some 23,000 tons of butter in transit from New Zealand now (speaking as on November 14, the date I have) and about 8,000 tons in transit from Australia. That is a total of 31,000 tons of butter, and we very much hope that, with the seasonal flow of butter coming in, the prices will adjust themselves again. The Government have certainly done everything that they could to get in additional supplies of butter to combat this very high price, which is to no one's advantage, as everybody agrees, and which has really been caused by the drought.

I turn now to horticulture. This subject was covered fully by the noble Lord, Lord Stonham, by the noble Lord, Lord Stratheden and Campbell, and by the noble Lord, Lord Amherst of Hackney; and I am grateful that this industry was covered so fully. It is an extremely important part of our agricultural industry. The value of its output amounts to, perhaps, £130 million a year; and, as a part of our agricultural industry, it is entitled to a measure of support comparable to that given to agriculture generally—and we have always said so. I really think, though, that we should be unwise to go into too much detail—and perhaps it is not right for us to go into too much detail—on the measures which the Government have in mind for the horticultural industry, because, as noble Lords will be aware, the Government's Bill is being introduced in another place. The Second Reading of that Bill in another place is on Thursday next. Very shortly we shall have the time and the opportunity to discuss this Bill, and that will be the proper time to go into details. But it is well known that the White Paper provides, as it were, a three-pronged attack on horticulture. It provides for the Marketing Council; it provides for the grants to the producers; and it provides for an operation which is generally called "cleaning up Covent Garden." I think that that is as much as I will say about that at the moment.

There are one or two specific points raised by noble Lords which I think I must answer. The noble Marquess, Lord Ailsa, referring to the White Paper, asked about potatoes. I think the clear and simple answer to him is that new potatoes are, or will be, accepted as a horticultural crop within the meaning of the new Act, as set out in the White Paper: but main-crop potatoes have always been considered a farm crop—and, after all, they have the benefit of the support price for farm potatoes. I am sorry that the noble Lord, Lord Stratheden and Campbell, did not think that any of this was going to be of much use to the small man. I really do not know why he felt that, and I think he is wrong. I cannot agree with him on that at all. I think we shall have to wait until the Bill comes before us to discuss the reasons he put forward. There was one thing about which I think that perhaps he was wrong. He asked how this Horticultural Marketing Council would be able to carry out its work, because the market operated very early in the morning and the Council would have to get up very early in the morning—or words to that effect. I think the noble Lord was perhaps unaware that the Council is not in any way a regulatory or trading body, and it need not necessarily give its advice at 5 o'clock, 4 o'clock, or at any other time in the morning, but can do it perhaps at a more reasonable time of day.

The noble Marquess, Lord Ailsa, spoke also of the margins on horticultural produce. Many noble Lords have spoken about that matter. I do not think I can do better than quote the Runciman Committee on this point. I know that the noble Lord, Lord Stratheden and Campbell, does not approve and does not agree, but the Runciman Committee went into this question more thoroughly. I think, than probably anybody has been into this matter before; and I should like to give two quotations, because this matter has been raised to such an extent this evening. The first is in paragraph 136, in which they say: In our view, the existing system of marketing and distribution, though capable of improvement, is by no means so inefficient or so costly as is sometimes thought. My Lords, this is not a Report written in 1860, but a Report which was published in 1957. Then, in paragraph 87 they said: There is nothing in the census material to suggest that the total costs of distribution of vegetables, fruit, and flowers, or the general efficiency of the trade, as reflected in trading margins, compare unfavourably with those of other distributive trades. The Government, and I am sure your Lordships, really must accept these views as being authoritative; and it is not right, I think, that we should constantly raise this easy hare that all the money is going out to the middlemen, and that all would be well if we could have some vast bureaucratic State trading organisation to which, apparently, no money would go out in the middle.

The noble Lord, Lord Stonham, raised the question of strawberry pulp from Bulgaria. He specifically asked me to answer that question, and gave me notice. I have to say that it is the case that the United Kingdom imports fruit pulp from Bulgaria and other countries. In 1957 we imported 6,500 tons; in 1958 7,000 tons; and this year, up to the end of September, a little over 5,500 tons. These figures, though, must be looked at as against the home production of strawberries, which is something about 30,000 tons. From Western European countries there is no control of imports, and Holland is normally our biggest supplier. Imports from Eastern European countries, however, are limited by money quotas. I do not burke this issue. These imports, to the general advantage of international trade, do come in, but we think they come in at a reasonable and realistic amount: by quota from the Eastern countries, but not by quota from the others. But all are subject to a tariff of 15 per cent. which, as noble Lords will know, is the instrument which the Government use to protect the horticultural industry so far as they can. And, of course, if imports of this or any other commodity can be shown to be causing hardship to our home producers, the Government will always be prepared to consider a change in the tariff. Further, of course, there is the anti-dumping legislation, which can be prayed in aid if the case warrants it.

The noble Lord, Lord Stonham, again on horticulture, raised the question of pre-packaging, and I must agree with him that my right honourable friend did take the line—and I think he was justified in taking the line—that this trifling sum, as the noble Lord, Lord Stonham, said (I think £5,000 or £6,000) should be found by the commerical interests that would benefit from this pre-packaging. This is in every way a desirable and admirable development. But I do not think that it would be a proper expenditure of public funds that this should be provided by the Government.

LORD STONHAM

My Lords, is the noble Earl aware that the packaging material firms have already paid the entire cost of financing this research, but are unable to find sufficient? Since the noble Earl quoted the Runciman Report against me on another occasion, will he have in mind the fact that the Runciman Committee recommended that the Horticultural Council should provide money for research into packaging and packaging material? Is not that a proper subject for assistance?

EARL WALDEGRAVE

My Lords, I think that we are at cross-purposes. The actual point we are discussing is whether this firm, Pre-packaging Development Association Limited, would be a suitable vehicle through which the Government should spend what money there is on research, or whether it is a commercial enterprise which ought to work under its own steam.

The question of tomatoes has also been raised. This is a serious matter. There can be no doubt that tomato-growers have had two bad seasons, but I think it is also unfair not to remember that in August and September, during the period when prices were at their lowest, the supplies were almost wholly—I think wholly—from this country and the Channel Islands. Dutiable imports were negligible, because, as the noble Lord, Lord Stonham, mentioned, the duty of 4d. a lb. was decisive in keeping out imports. That is not to say that in other seasons of the year, when the tariff was not at that height, tomato-growers did not have a difficult time, both this year and the year before; but I think it is common knowledge—certainly the noble Lord and I know—that the National Farmers' Union are preparing a case for a fresh application on the tomato tariff. Of course, I can give no assurance whatever about what would be the outcome of that application, but I can give the assurance that any and all fresh applications will be examined on their merits and that the Government will give them their full consideration. The noble Lord used the word "embargo". That is a word I do not like, and I do not think that that is the way to proceed. An application for the alteration of the tariff is the correct way to put the matter forward, and I understand that that is being done.

I now come to the question of pigs, raised by the noble Lord, Lord Silkin. Rather significantly, the noble Lord did not preface his remarks by saying that he was going to talk about pigs; he said that he was going to talk about bacon. I think that here is where a good deal of the confusion arises. The noble Lord is a great expert on pigs and bacon and he is a very good advocate. He makes a good case, but he has not convinced me. I am sorry, but I remain unrepentant. I think that the vigour with which he put his case is unfortunate and will not help the industry, as I said in a previous debate.

The noble Lord asked me a specific question. Do the Government consider that the home bacon industry is expendable? Is the time coming when it will be no more? I can answer that clearly, emphatically and at once. Of course we do not consider it expendable. Neither do we think that this industry is going to come to an end. It may temporarily or permanently contract—I would not know—but certainly it is not going to come to an end, either by Government wish or by the forces of the market. In any case, are we speaking in these matters of the (producers or the curers? I was interested to see a comprehensive article in the Farmers Weekly of this week, written by the Economist Intelligence Unit, which brought out this interesting point, with which I agree I should like to make two small quotations from this article. The present headache is not primarily one for farmers. Prices are high, demand for pig-meat is strong and there is little difference between average receipts and the Government's guarantee". Again the article says: The strength of the market for pigs at home is more responsible for this"— the curer's difficulties— than any strong downward pressure of prices from abroad". I think that we have to keep these two facts in mind if we are to get this pigs-bacon complex clear, because it is being put to the country in ways that are far from clear. For instance, there was a programme on television last night which I do not think showed properly all sides of the question.

The noble Lord, Lord Silkin, kept on saying that the amount is not sufficient. That is a question for the Annual Review. At the Annual Review the Government lay down the guaranteed prices, after hearing all the facts that the Farmers' Unions want to make. The time to say that the price is not sufficient is at the Annual Review and not while the market is operating between Annual Reviews. When the deficiency payment system of guarantees is in operation over the whole of that period, but not in any one week, the fixed price is being returned to the producer of pigs. That is the general philosophy of our system of price support.

I was interested to hear the noble Lord, Lord Silkin, develop his case and to see what he was going to suggest as a solution to the undoubted difficulties that exist at this particular moment of time. It was disappointing when he said that he did not know what the solution was. He said, quite properly, that the Government must think that out; that they, not the Opposition, have the departments and statistics at their command. That is perfectly true. But after his masterly exposition of an aspect of the case, it is not particularly helpful when he says that he has no solution—perhaps it is separate guarantees, though he does not like them very much—and perhaps this admits of no solution. I could only think that he was pessimistic, I thought that he was being driven back to his own argument that perhaps this industry is expendable. I do not agree with that and I interrupted him—I hope courteously—to ask whether he was really saying that the pig producers cannot switch, as we feel they should switch, from one part of the market to another according to the consumers' needs. Is not that flexibility just what we desire? It is not something we should try to iron out. We all know what happened.

LORD SILKIN

My Lords, may I try to clear up this point? It may be that a producer can switch from bacon to pork, but he cannot do it in five minutes. If he does decide to switch from producing bacon to producing pork, then it is a firm decision, and he is committed to producing pork for a long time to come. It is not easy to go back from pork production or from heavy hogs to bacon. I do not want to elaborate it, but I hope that the noble Earl understands my point. It is not the sort of thing the producer can switch again as easily as all that.

EARL WALDEGRAVE

I perfectly understand the point the noble Lord is making, but I do not agree with it. I think it is rather easier than he is trying to make out. I believe that there is a certain amount of confusion in the mind of the public as to what this is all about, and at the risk of wearying your Lordships, I think it is right, in view of the controversy that exists in the country now, that I should go into this rather more fully than I should normally wish to do at this late hour.

We all know what happened. In 1958 the standard price was reduced by 2s. a score and the pig breeding herd fell. There has always been a pig cycle, and this reduction in price accentuated it slightly. Why was this done? It was done because the subsidy the taxpayer was paying at that time amounted to something in the nature of £40 million a year. That is why in the 1958 Review the standard price was reduced by 2s. It was not done in the 1959 Review, which was agreed with the National Farmers' Unions. Since June the reduced size of the breeding herd has naturally been reflected in the smaller number of pigs being marketed to-day. But even with the smaller number of pigs being marketed to-day, and in prospect, the thinking at the moment is that the subsidy may be going to run at £20 million a year.

I wonder whether all noble Lords understand how this support price for the home pig industry works. First of all, the deficiency payment in this case is available for individual producers, not, as in the case of potatoes and eggs, through a Marketing Board to the industry as a whole. Secondly, there is a standard price, which is per score of 20 lb. deadweight, and this is agreed at the February Price Review. This price—and this is the whole crux of the matter—is the "standard" for all pigs, whether they are sold as pork, for consumption as fresh meat, to curers for making into bacon, or to manufacturers for making into pies and sausages. The deficiency payment is paid when the average market price falls below this standard. Noble Lords who understand this subject will forgive me for going over it, but I think there are some who are not so familiar with it. The Government pay a quality premium for bacon pigs for certain standards of length, back fat and so on.

One of the difficulties that arises, therefore, as will be clearly seen from what I have said, is that the price in the market for fresh pork, and for what are called manufacturing pigs, may be above the average price, when the price the curers are willing to pay for pigs for the Wiltshire cure may be below. As the deficiency payment works for all pigs sold for slaughter, it can mean, as it means at this very moment, that the man who sells bacon pigs does not get a deficiency payment large enough to bring him up to the standard price at this particular moment of time—this because the pork market is strong. It is because of this that there is sometimes a request for two separate guarantees, one for pigs that go to the fresh meat trade and one for the pigs that go to the bacon curers' trade. But there are many who advance the strong argument that the farmer should produce what the free market and the free customer wants. There is logic in the contention—I will put it no stronger—that if the market for pork is strong the farmer should divert his pigs to that market, which will have the effect, of course, of lowering the price in the long run. It could be claimed that this is not speculation in the bad sense, but is the proper play of a free market in a free economy.

It must never be forgotten that the producers of pigs are operating within the safeguards of the deficiency payment system, which protects them against excessive fluctuations. Also—and this is most relevant here, although it is rather technical—they have the special protection of what is called the stabilising band or the stabilising limit. It is always open for those to be varied, but at the moment they are 3s. Under this system the pig producer should not get less than 3s. below the standard price, no matter what type of pig he produces or how strong the pull between the two alternative markets. If, for example, the average market price of bacon pigs, together with the provisional rate of subsidy, were to come out at 4s. below the standard price, then 1s. would be added to the bacon pig producer's guarantee in order to bring him up into the stabilising band. That sounds very complicated, but that is the sort of thing that is not said in some of the newspapers which are attacking the system, and it is time it was said.

With those facts in mind, my Lords, what is the position? All have felt the reduction in the amount of pigs available—butchers, curers and manufacturers alike. I would say here that not all curers are people who are making the Wiltshire cure: we have had a certain firm mentioned tonight, and there are a number of firms who diversify (as they call it) their business so that they can take the pigs. They say: Let the farmer produce the pig which it is suitable for him to produce"—I am not saying that this is the right or wrong system, but it certainly exists, and it is wrong to conceal it—"and we will turn it into bacon if it is suitable for bacon, or into pork, if it is suitable for pork, or into sausages, if it is suitable for sausages." There is a great deal to be said for that approach. It is true to say that the curers have, in fact, retained remarkably well their share of the reduced numbers of pigs. Taking the year as a whole—and surely we are entitled to look at the year as a whole and not just a few weeks—we estimate that during the present year (and this is most important) curers will put into cure 2,700,000 pigs, as compared with 2,900,000 in 1958 and 2,800,000 in 1957. There is only a divergence of 100,000 here. Moreover, if we look at the total slaughterings at bacon factories, we find that over the whole of the year so far the number of pigs slaughtered at bacon factories has been about the same as last year. And even in October, when the curers decided they could not afford to pay the full competitive price for pigs, the bacon factories have been obtaining the same proportion of the available pigs as they did last year.

LORD SILKIN

I do not know whether the noble Earl is drawing any inference from that, but I think he must face up to the fact that you begin to prepare a pig for bacon as soon as it is born, and you cannot divert from that. Normally, if you are doing well, you get your pig out in six months. Therefore, you would expect all the pigs for six months designated for bacon to be going through the factory. The real test will be in three or four months' time. It is no good giving figures now as to what was designed for bacon in the month of April or May.

EARL WALDEGRAVE

We must not carry out too detailed an argument on these points together—we will look at the figures in four months' time. We must also not beg the question that it is only the predestined bacon pig that gets made into bacon, because that is part of the argument I should be inclined to deny.

When we look at the question of what happens to the producer in all this, it must be admitted that the return to the bacon pig producer in the last few weeks has been less than it was earlier in the year—that is known. At the present time the return on bacon pigs, as I have said, is 42s. 3d. a score, and is 1s. 11d. below the standard price. I can well understand the disappointment of the specialist bacon pig producer at the moment, when he sees the higher prices his neighbour is getting in the relatively stronger pork pig market. But he should not forget—and nor should we—that not so long ago he was getting 2s. to 3s. above the standard price. If we are thinking of the specialist producer (that is, a producer who has geared his production inflexibly to the marketing of quality bacon pigs and is doing so regularly week in and week out) what matters is his return over a longer period, and not his return in individual weeks. The average return on bacon pigs since April has been a few pence above the standard price; and the specialist producer should have done even better than this because he would be likely to get more than the average share of the quality premiums. On this point, to remove any misconceptions, I should like to say that on no occasion so far has the price fallen so that the full quality premium has not been paid.

With those figures in mind, I am not looking at this industry as expendable or as one that is likely to close down altogether. My right honourable friend is not complacent about the problems of this industry, but I cannot feel that the facts, as I have tried to expound them, bear out the prophecies of imminent doom which have been made in some quarters. Farmers would be foolish to be scared out of pigs by such talk. Various proposals have been put forward to alleviate the difficulties of the bacon industry, and widely divergent views are held by everyone. My right honourable friend has been consulting representatives of all concerned, and he is giving earnest consideration to the matter. I am sure that he will consider carefully all the points raised in this debate this afternoon.

I am sorry that I have taken so long on that point, but it was an important matter. I should like now to turn briefly to one or two other points which noble Lords have raised and which I think deserve an answer. The noble Earl, Lord Ferrers, asked about planning and rating of broiler houses. Of course, planning is primarily a consideration for my right honourable friend the Minister of Housing and Local Government, and I cannot say anything about that. The matter is under consideration at the moment with my right honourable friend the Minister of Agriculture, but I cannot tell the noble Earl what the outcome will be. It would be improper for me to express any view at all on the question of rating appeals that are now sub judice. I am sorry that I cannot be more helpful to the noble Earl on those points.

The noble Viscount, Lord Stonehaven, raised a number of points on marginal production—M.A.P., as they call it in Scotland. Although, for my sins, I have to deal to a certain extent in this House with matters of housing and local government, I do not (I almost added "I am glad to say") have to deal with matters of Scottish agriculture. But I will certainly bring his points to the notice of my right honourable friend. Incidentally, I thought it was a little unfair when he told me that I go to Scotland only to shoot, because in fact I often used to go to Scotland to farm. But let that pass. There is this point which came out of the noble Viscount's remarks, and in so far as it applies to England and Wales I can reply to that. No one is going to deny the variation of values in the farmability—if that is not an unpleasant word—of land. But I think that in a free economy, and in the free economy in which we are proud to be living, that is a matter which must be regulated by the price of the land, or by the rent of the land, and not by some bureaucratic principle of assessing the degree of marginality and the amount of subsidy that land should get. This Government took the matter much more seriously than that. We have the Hill Farming Acts and the Small Farmers' Scheme dealing with special types of small farm businesses in hill farming land, but we cannot, I think, go round assessing everybody on his individual farm as to his degree of marginality. I do not think that could be so in England and Wales, although, of course, I am not speaking about Scotland.

I wish particularly to thank my noble friend Lord Lonsdale for a most helpful speech. It was remarkably well informed, and the sort of speech we have learned to expect from him. I fully agree with him on the value of hill farming, particularly in relation to beef production. I am sorry that I shall have to disappoint him slightly on one particular point he raised. I cannot add anything to the answer that was given in another place not long ago about bracken eradication. There are a number of chemical methods of eradicating bracken, and research is being carried out. We have promised to consider the question of grant-aid for these operations when the results of the research are known, but not before. The noble Earl also raised a point about how long the aid at present given under the Hill Farming and Livestock Rearing Acts will continue. I am afraid that I cannot tell him that at this moment of time. This is a question to which the Govern- ment will be giving careful consideration, because the present Acts run out in 1963.

Then the noble Earl raised a matter about which he had given me notice—it is one that is very close to me, because I have had a good deal of experience of it—that is, the question of research into this metabolic disorder known as hypomagnesxmia, which is a great scourge to livestock, not only to cattle but to sheep. I can assure him that workers at the Hannah Dairy Research Institute, the Rowett Research Institute, the National Institute for Research in Dairying, the Moredun Veterinary Research Institute and the three Scottish colleges of agriculture and our own veterinary laboratory at Weybridge are all working very hard at this intractable condition. The Agricultural Research Council are also keenly interested, but clearly there are limits as to what can be done, particularly bearing in mind that there are other animal diseases requiring at least as much study, money and time as this one, and they must have their share of the time of our veterinary scientists. The fact is that after more than thirty years of close observation of this particular condition we still have not been able to discover precisely what causes it. Control measures are, however, well known to the veterinary profession. I can assure the noble Earl that we shall not relax our efforts to find out more about this distressing condition.

My Lord, we have ranged widely in this debate, and I take no exception to that. But I must, in ending, join issue with the noble Lord, Lord Wise, who raised this Motion, because, underlying so much of what he said, he rejects the Government policy which exists now and harks back to another system of fixed prices and controls that were in force in previous years. The principles underlying the Government's policy for agricultural support and food marketing are quite clear, and I make no apology for briefly re-stating them. Government policy, in its support for agriculture, is implemented mainly by the system of deficiency payments and production grants. It is a system which it is generally admitted places the minimum burden on the consumer and interferes least with the working of the free market. Under this system of deficiency payments consumers have access to supplies from all sources. Therefore they can get them at the lowest prices from any source, and can thus afford to consume more. Farmers, as individuals, find that it pays to produce for the market and get the most out of it. The price mechanism remains free to signal back consumers' preferences from the shop to the factory and the farm. Business decisions can respond quickly to these ever-changing circumstances.

With regard to the question of middlemen, in a few respects the deficiency payment system may have helped the middleman, but only in so far as that is relative to the way it increases consumption. Obviously, if he is distributing more food the middleman is presumably getting more profit. Those merchants who are handling home-grown food will have benefited particularly from the big increase in home-grown food. But generally the deficiency payment system cannot give middlemen any extra power to exploit either the consumer or the taxpayer. If middlemen enjoy monopoly powers, they may use them; if they do not, they cannot. If they do not enjoy those monopoly powers, this deficiency payment system is not going to give it to them. Nothing in this system creates monopoly positions that would not otherwise have existed. On the contrary, experience from abroad shows that the alternative systems of agricultural support, particularly quotas, are far more likely to lead to monopolies or semi-monopolies because they reduce competition.

The forces of competition in the food trades are not to be underestimated. There is competition between alternative sources of supply; of one kind of food against another; of brand against brand. And, of course, competition between different systems of selling: between multiples and individual traders, self-service against counter service and so on. Moreover, there are about a quarter of a million competing retail outlets and scores of thousands of wholesalers. If and when you can find instances of semi-monopoly you remark upon them; but competition is too much taken for granted and it is often thought to be much less widespread than it really is. As a general result of this system there have been noteworthy improvements in the quality and variety of food, in its packing, pre-packing and presentation, and more service to the consumer. If the cost of all this (the cost, and not the profit) is high, that is for the most part because of our own choice. The public in this country demands a close-to-home service for the vast majority of millions of individual consumers, and this elaboration must necessarily put up the expense. It is one of the ways in which our standard of living expresses itself.

I firmly believe that there are only two or three lines of policy that any Government need have for the food trades. One is the obvious duty to protect the public against misleading descriptions or unwholesome food and produce. A second is to sustain and, if possible, sharpen the forces of competition. No less important is it to improve the physical organisation and functioning of the markets. Examples are the "cleaning up" of Covent Garden, improving the livestock markets and slaughterhouses, assisting the better grading and presentation of farm produce and encouraging such developments as the bulk handling of milk. Generally, I say that freedom and competition have worked well since decontrol, and this period has been one of development and innovation at an impressive pace, and has given us more food, more interesting food, of better quality and in a greater range of varieties, at prices, let it never be forgotten, among the lowest in the world. My Lords, I think that any Minister of Agriculture and Food—and our title is Agriculture and Food—and any Government with such a policy can, without complacency, be reasonably satisfied at such an account of its stewardship.

7.35 p.m.

LORD WISE

My Lords, in closing this long debate I want to extend my own thanks, and, I think, the thanks of the House, to the Minister for the extremely able reply which he has given us. It is a little difficult to follow as it is given in that way, but I am certain that not only will Members of your Lordships' House read this debate with keen interest but also many outside will wish to refer to the speech which he has made, particularly in regard to bacon pigs and horticulture. I propose to detain the House only for a moment or so in closing. There were one or two questions I wanted to ask speakers who have spoken in the debate, and in passing I thank them for their contributions from both sides of the House.

I want just to say this in regard to the question of the middleman. It may be possible from my point of view to put to the Minister at some time or another a question on the extent to which these deficiency payments do not go direct to the producer but go to the processers, and whether or not the full deficiency payment is passed on from the processer to the producer. I realise that the figures will be very difficult to ascertain, but it may be interesting, in view of what I have said, if some information could be given to the House as to exactly what happens.

I want to say "Thank you" to the noble Earl, Lord Ferrers, and the noble Lord, Lord Amherst of Hackney, for backing me in regard to fluctuation of market price. They have both gone, so I cannot thank them personally; but they bore out what I said, that we do suffer from fluctuating prices and markets. I also want to say to the noble Lord, Lord Stratheden and Campbell, that he must have misunderstood my reference to subsidies. There is no intention on this side of the House immediately to wipe out subsidies. We are prepared to operate the 1957 Act if it is still in force when we change sides, and there is no intention whatever of dealing with subsidies until such time as the industry can stand on its own feet without subsidy.

LORD STRATHEDEN AND CAMPBELL

I must apologise to the noble Lord. I must have misunderstood what he said. I quite understand it now.

LORD WISE

I think we have come to the end of a very interesting debate, well worth while, and I beg leave to withdraw my Motion.

Motion for Papers, by leave, withdrawn.

House adjourned at twenty-one minutes before eight o'clock.