§ 2.35 p.m.
§ LORD STONHAM
My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
§ [The Question was as follows:
§ To ask Her Majesty's Government whether they are aware that although, according to their assessment of a 2 per cent. annual increase in farming efficiency, the gross output of Review commodities is £200 million, or 18 per cent., higher than in 1951, farming net income (at constant prices) is £32½ million, or 10 per cent. lower, and whether in their view this is the kind of incentive best calculated to encourage farmers' efforts towards still more efficiency.]
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE, FISHERIES AND FOOD (EARL WALDEGRAVE)
My Lords, I am afraid that the noble Lord, Lord Stonham, is not comparing like with like. He expresses the increase in efficiency in current money values, whereas he gives the change in net income in terms of 1951–52 money values. Taking the noble Lord's figures as they stand, however, the fall in the level of net income leaves entirely out of account the large sums which the industry had to plough back from net income to re-equip itself after the war and expand production. The amounts required for reinvestment in recent years have declined. I cannot accept the inference that the industry has been deprived of all the benefits of increasing efficiency. The taxpayer, however, also has a strong claim to a share of those benefits. I am confident that the continuing high level of Government support, including their expenditure on research, education, advisory services and 294 capital grants schemes will substantially help the industry to increase its efficiency in the future.
§ LORD STONHAM
My Lords, is the noble Earl aware that, comparing like with like, the figures prove that every year farmers work 2 per cent. better to become 1 per cent. worse off? Would he say, therefore, whether it is part of the Government's long-term policy of agriculture to ensure that farmers have only to work hard enough to become bankrupt?
§ LORD STONHAM
My Lords, is the noble Earl aware that a great deal of the ploughing back which he mentioned ended in 1951, and that these figures refer only to the last 10 years; and will he say whether Her Majesty's Government believe that a declining income is the proper incentive to give to British farmers?
My Lords, the question of whether a declining income is a proper incentive to give to British farmers, and matters of efficiency, incentive and income, do not arise out of the Question. I would remind noble Lords that the prices for agricultural guarantees are settled in February of each year and in most cases those guaranteed prices are agreed with the industry.
§ LORD STONHAM
My Lords, the noble Earl still has not answered the Question. Is he aware that at constant prices—that is, comparing like with like—farmers today are producing 24s. worth of produce for every £1 worth they produced in 1951, and getting 18s. for it? My question is: is that the incentive calculated to produce the best efforts from British farmers? It is a straight question.
My Lords, I do not accept the basis of these calculations. The comparison here is between levels of real income—what we call actual income adjusted to normal weather conditions, and the result of the comparison depends upon what date is taken as the base line. If, for example, we take as the base line 1946–47—just after the war—then the actual farming 295 income adjusted to normal weather conditions is today not lower but higher than it was in 1946–47.
§ VISCOUNT ALEXANDER OF HILLSBOROUGH
My Lords, does it not seem fairly clear that, while at the Price Review the figures of the right honourable gentleman the Minister have, apparently, always to be accepted by the farmers as being correct and substantial, when we apply the direct result of those figures, as in this Question, there seems to be no answer at all forthcoming from Her Majesty's Government? The farmers' net income is down, and the Government are now, apparently, executing every year a tax upon efficiency?
§ LORD FRASER OF LONSDALE
My Lords, is my noble friend aware that when I was a Member of Parliament for a farming district, one of my farmer constituents said to me, "I made a loss of £100 last year." I asked him, "Did you really?", and he said, "Yes, I made only £1,100, instead of £1,200."