§ VISCOUNT ALEXANDER OF HILLSBOROUGHMy Lords, is the House to have a statement on agriculture?
§ VISCOUNT HAILSHAMMy Lords, as your Lordships know, the practice in these matters is that we should have these statements after they have begun in another place. From what I apprehend is going on I believe that the necessary green signal has now been received.
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE, FISHERIES AND FOOD(EARL WALDEGRAVE): My Lords, I am now in a position, with your Lordships' permission, to make a statement, similar to that which my right honourable friend the Minister is making in another place, about the guarantees to agriculture for the coming year. Her Majesty's Government have now determined these in the light of the Annual Review. The statement is as follows:
Good weather last year helped our farmers. The net output of the industry increased substantially, and for 1959–60 is forecast at 68 per cent, above pre-war, the highest it has ever been. Actual net income for the year is forecast at £356½ million, which is £41 million up on the previous year. If we adjust the figures to normal weather conditions, the forecast for the year is £355½ million compared with £362 million for the previous year. Farming costs, particularly labour costs, continue to increase, and on Review commodities are up by nearly £13 million in the year. On the other hand, the industry is continuing to increase its efficiency. The cost of Exchequer support has gone up from £241 million to £259 million. This is a continuing heavy burden on the taxpayer. It also affects trade relations especially with the Commonwealth. Moreover, the cost of support may increase still further if production continues to expand more rapidly than demand. We have had to consider, therefore, how the industry can reduce its dependence on the Exchequer while maintaining its position in our market and increasing profitability.
Taking all these factors into account we have decided to make a net reduction of about £9 million in the total value 1024 of the guarantees. The maximum reduction we could have made was about £19 million. This means some reductions in the prices for the main cereals, and for sugar beet, eggs, sheep and wool; and also for milk—though in consideration of the Milk Marketing Boards' success in increasing sales for liquid consumption, we have increased the standard quantities by 19½ million gallons. We are also making a small reduction in subsidy rates for fertilisers from next July. There will be no change for fat cattle. There will be an increase for potatoes. For pigs we have increased the standard price by 3d. per score. We have also removed the cost of the quality premiums from the guarantees—an arrangement which in effect adds another 6d., making in all an increase of 9d. per score in the standard price—and we have adjusted the stabilising limits so as to reduce fluctuations in returns to pig producers and to facilitate long-term contracts. These changes should give the industry confidence to bring about that moderate increase in pig numbers which my right honourable friend has often said he would like to see. The full details are given in a White Paper which will be available in the Printed Paper Office when I sit down.
These determinations meet the requirements of national policy regarding the production of the guaranteed commodities. We consider that they provide a fair and balanced answer to the twofold problem of, on the one hand, enabling agriculture to maintain its prosperity and, on the other, protecting the taxpayer from an increasing burden.
§ 4.16 p.m.
§ VISCOUNT ALEXANDER OF HILLSBOROUGHMy Lords, whilst we are much obliged to the noble Earl the Minister for giving us the text of the statement made in another place, it is very urgent that it should be the subject of debate as early as possible; and I take it he accepts the point of view that in this instance it should be by Government Motion on the White Paper. Perhaps the noble Earl the Leader of the House will confirm that, and will make an early arrangement for Government Business to include a Motion on agriculture and the White Paper on the Annual Review. That would save a lot of questions now.
1025 For the purpose of clarity I should like to ask just two questions. First, does the statement mean that Her Majesty's Government not only have an estimate of increased production but can also give us an assurance that they are basing their Review upon increased net incomes to farmers? Secondly, I should like to know whether, in the case of milk, the increase of 19½ million gallons in the standard quantities is in addition to that which was made some months ago, or is the noble Earl referring merely to what has already been done?
EARL WALDEGRAVEMy Lords, I have my noble Leader's permission to say that a debate can certainly be arranged. In answer to the second question from the noble Viscount the Leader of the Opposition, the increase of in million gallons in the standard quantities is a new arrangement. An adjustment was made in last year's Price Review, but this present change comes under this year's Price Review. Would the noble Viscount kindly repeat his question about the increase in the level of income?
§ VISCOUNT ALEXANDER OF HILLSBOROUGHMy Lords, I believe the actual statement refers to the value of production. What I want to know is whether, in all the circumstances, Her Majesty's Government are basing their reduction of guarantee on the fact that farmers' incomes have increased. If we look at the majority of farmers, we see that, with increased costs, their net incomes have declined.
EARL WALDEGRAVEMy Lords, we have not said that farmers' net incomes, adjusted to a normal weather basis (which is always done), have increased this year. Their net income, on a normal weather basis, will be found to be slightly below that of last year, while still running at the high and profitable level of about £350 million a year.
§ VISCOUNT ALEXANDER OF HILLSBOROUGHMy Lords, perhaps by my question I have given notice that we shall be a little persistent on this point.