§ 2.40 p.m.
§ THE EARL OF KINNOULL
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, in view of the recent Government White Paper on milk quotas in the Price Review they are taking steps to make the grants under the Farm Improvement Scheme unavailable to new dairy units on farms that hitherto were not producing milk.]
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE, FISHERIES AND FOOD (EARL WALDEGRAVE)
My Lords, Section 12 of the Agriculture Act, 1957, which provides the statutory basis for the Farm Improvement Scheme, lays down that these grants may be paid only for improvements such as a prudent landlord would be willing to make. When this Act was under consideration in another place the suggestion was made then that grant should not be allowed for converting into a dairy farm a holding which had not been accustomed to sell milk. Her Majesty's Government felt then that few prudent landlords would in fact be prepared to put up buildings for that purpose, but that if in some individual case there were compelling reasons for the change it was right that it should take place.
My Lords, the prudent landlord will no doubt be even more careful in present circumstances in considering proposals for dairy buildings; but Her Majesty's Government still consider it right that such proposals should be scrutinised for 963 grant purposes on the merits of the specific case. The object of the Farm Improvement Scheme is to make longterm improvements to agricultural land in the interests of efficiency. The test in this case must remain whether a prudent landlord, having taken into account all the circumstances including any possible two-tier price system for milk, would in fact make the improvement concerned.
§ THE EARL OF KINNOULL
My Lords, is the Minister aware that it appears that the Ministry have a conflict within themselves, with one arm being the "Dutch uncle" making grants for improvements to provide new dairies, and with the other arm tightening their grasp to prevent future production with, one suspects, an eye on a European trade pact or Commonwealth Agreements?
My Lords, I cannot admit that there is conflict here. In the White Paper on the Annual Review, which was published last month, it was stated that the Farmers' Unions, with the Milk Boards, would attempt to work out before July 31 of this year a new method of payment for milk which would bring home to the individual producer the fact that additional output could find an outlet only at manufacturing prices. I do not think the objects of this proposal, as outlined in the White Paper, are inconsistent with some element of movement into and out of the industry, and Her Majesty's Government have as yet no indication of the recommendations that may come forward from the Unions and the Boards.
§ LORD WILLIAMS OF BARNBURGH
My Lords, may I ask the noble Earl how this very elusive character, the "prudent landlord" comes into the case of an applicant who feels that he can never make his small farm economic without its being partially dairy? Would the attitude of the applicant surmount that of this elusive customer, who may be a landlord in Northumberland dealing with an application in Cornwall?
My Lords, if I follow the noble Lord's question aright, the hypothetical "prudent landlord"—
—who is laid down in the Act, must consider each question on its specific merits, That is in the Statute, and we cannot depart from the Statute to control production policy on the side. The case put up by the hypothetical tenant to the hypothetical landlord would be examined and judged on is merits.
§ LORD STONHAM
My Lords, is the noble Earl aware that the conflict which he was unable to see is between the highly praiseworthy decision to make grants available to facilitate increased production, and the fact that, when you have got the increased production you do not want it, and therefore reduce the price to the farmer? That is the inevitable conflict which arises out of the Government's price support policy.
My Lords, I cannot wholly agree with the noble Lord that this conflict exists. As to the question that was asked, this Scheme will continue to be administered as it is laid down in the terms of the Act.
My Lords, the owner-occupier becomes both a hypothetical prudent landlord and a hypothetical prudent tenant for the purposes of administering the Act.
§ LORD WALSTON
My Lords, would the noble Earl agree that the prudence of the landlord, which is to-day going to prevent him from investing money in new equipment in the milk production field or from modernising his buildings in that field, will in fact prevent milk from being produced more cheaply in the future, and will continue to force us to produce milk in uneconomic buildings at a high cost?
No, my Lords. I do not think that any proper administration of this Act—and I can assure the noble Lord, Lord Walston, that this Act will continue to be properly administered by this Government—will have the undesirable effects he suggests.
VISCOUNT ALEXANDER OF HILLS-BOROUGH
My Lords, this "prudent" insertion into statutory provisions—at least by regulation—is very interesting. As we have the learned Church here this afternoon, I wonder whether the Ministry would consider issuing an extract from Cicero extolling prudence and putting it above almost all the other virtues? Do you think landlords are generally made up of that stuff?
§ LORD WILLIAMS OF BARNBURGH
My Lords, may I ask the noble Earl whether up to the present moment any grant has been refused because the applicant desired to become a dairy farmer?
My Lords, I should imagine that on many occasions when specific proposals have been put forward, they have been refused. We know that there have been a large number of refusals. In some cases, the proposals put forward may have been related to milk and will have been refused. But they will not have been refused merely because they involved milk.