§ 2.58 p.m.
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE, FISHERIES AND FOOD (EARL. WALDEGRAVE)
My Lords, I beg to move that the Potatoes (Guaranteed Prices) (Amendment) Order, 1961 (Statutory Instrument 1961 No. 1119) dated June 16, 1961, a copy of which was laid before this House on June 21, be approved. The purpose of the Order is 79 to make a minor adjustment in the guarantee arrangements for potatoes to implement a decision arising from the 1961 Annual Review. The present arrangements provide that in any crop year in which the average price received by producers for potatoes sold for human consumption in the United Kingdom falls below the guaranteed price determined at the Annual Review, any deficiency monies may be paid to the Potato Marketing Board for the benefit of producers in Great Britain and to the Minister of Agriculture for Northern Ireland for the benefit of producers there.
The principal Order—The Potatoes (Guaranteed Prices) Order, 1959, Statutory Instrument No. 983—sets out the method by which Ministers shall estimate the quantity of potatoes to which the guarantee will apply. As this Order now stands, account may be taken of potatoes sold through approved channels by producers registered either with the Potato Marketing Board in Great Britain or with the Ministry of Agriculture for Northern Ireland.
In the course of the 1961 Annual Review, it was represented to the Government by the producers' organisations that these arrangements would result in an under-statement of the total sales for the purpose of the guarantee to the extent that they excluded potatoes sold through the recognised channels by certain producers in Great Britain who need not be registered under the Potato Marketing Scheme. Primarily, these are producers who grow less than one acre of potatoes, and others in certain Scottish islands and the Isles of Scilly. There is no Potato Marketing Scheme in Northern Ireland and accordingly the question of exemption does not arise there.
The Government agreed that it was reasonable that these sales should be taken into account and the Order we are discussing to-day (No. 1119 of 1961) makes the necessary amending provision. Your Lordships will see the three changes set out as (a), (b) and (c) of paragraph 2 of this Order. I think I can explain their effect quite simply. First, amendment (a) simplifies the definition of "producer" in paragraph 2 (1) of the 1959 Order, which as it now stands makes 80 "producer" mean a registered producer only. As amended, the 1959 Order will now read "'producer' means a producer of potatoes".
Secondly, paragraph 4 of the 1959 Order lays on Ministers the duty of making an estimate (for guarantee purposes) of the quantity of potatoes sold in the United Kingdom for human consumption through recognised channels. Amendment (b) in paragraph 2 of this Order (1119) makes it clear that only potatoes sold through recognised channels will be counted in this estimate. The types of sale recognised are set out in paragraph 4 (1) of the 1959 Order; in effect, they are sales through the wholesale trade, or other sales licensed by the Board. Amendment (c) adds another recognised channel—by producers to the Board and subsequently sold or to be by the Board for human consumption"—and slightly rewords paragraph 4 (1) (a) (iii).
The adjustment in the guarantee arrangements is a minor one, the quantity of potatoes involved is marginal and there is no alteration in the basic principles of the guarantee. The Order is intended to come into force as from the beginning of the next crop year, which is 1st August, 1961, and does not therefore affect the arrangements for the 1960 crop. My Lords, I beg to move.
§ Moved, That the Potatoes (Guaranteed Prices) (Amendment) Order, 1961, be approved.—(Earl Waldegrave.)
§ 3.0 p.m.
§ LORD WISE
My Lords, the noble Earl the Minister who has introduced this Order has described the amendments as being minor, but there are one or two points about the Order which I believe should be raised. The original Order has now been in operation for two years, since June, 1959, when we discussed it, to some extent, in your Lordships' House. I feel, therefore, that this particular Order should not be passed without some consideration of what has happened in the meantime. Naturally the Order is based on what was contained in the Price Review which we discussed a few months ago.
The amendments which are described as minor bring in unregistered producers. While the potatoes produced by such 81 producers may be small in quantity, they may affect the tonnage which has to be taken into account in arriving at a deficiency payment, and may affect the deficiency payment itself. The alterations affect paragraphs 2 and 4 of the original Order but there are other paragraphs in that Order to which I think I should call your Lordships' attention and there are a few points of information which arise in that connection. The original paragraphs (in addition to paragraphs 2 and 4) provide for the determination of the guaranteed price, the payment of the deficiency payment to the Potato Marketing Board and the limitation of contributions towards the administrative expenses of the Board to 50 per cent. and to not more than £300,000 per annum at least in the first two years. I should like the noble Earl the Minister to say what is likely to be the position in regard to the contribution of 50 per cent. which the Exchequer is to make to the Potato Marketing Board in the future, and whether, in fact, the amount of £300,000 was paid to the Potato Marketing Board in the last two years.
Further, the original paragraphs provide for an advance to be made to the Board to meet the deficiency payments and administration expenses. Could the noble Earl tell us whether there is any portion of that advance, loan, or whatever it may be, still outstanding, or whether the whole of the advances made by the Exchequer for these particular purposes have been repaid by the Board? Also, I think we should be informed as to the position in regard to any future loans to the Board—whether they are likely to exceed £300,000, on the basis of 50 per cent. of the administration costs, or not.
There is another point which arises: the effect of the 5s. per ton increase in the deficiency payment to potato producers in the coming year. The producers have been lucky. Year by year there has been an increase in the amount of the guaranteed price. Two years ago when the Order was first brought into oneration the guaranteed price was £12 14s. per ton. It has now gone up to £13 5s. per ton—possibly not a very serious increase, but certainly an increase which farmers in that branch of agriculture are naturally pleased to have. In the original Order the amount of tonnage on which payment had to be made 82 was, I believe, about two-thirds of the total tonnage of potatoes produced. The difference was in the tonnage for seed, for feeding purposes, and, I expect, for export. I wonder whether in the future, or in this coming year under the new conditions, the tonnage on which deficiency payment will have to be made will be approximately two-thirds or some other fraction.
In our debate on agriculture a point was raised in regard to Scottish potatoes. I do not know whether I am capable of speaking on Scottish potatoes but I wish to ask this question: is there any increase in the deficiency payment made to farmers by reason of the fact that the price of Scottish potatoes for human consumption appears to be less than the price paid in other parts of the United Kingdom? I know, of course, that Scottish farmers gain on the rebound, because a considerable quantity of Scottish potatoes are sent to other parts of the country for seed purposes at seed prices, so what they lose on the sale of potatoes for human consumption undoubtedly they gain through the sale of potatoes for seed purposes.
There is a further point. In the Price Review there is a reference to the establishment of a Market Support Fund. That was mentioned in our discussion by the noble Lord, Lord Hastings, who suggested that the amount which would be paid by the Government would be £2 million per annum and by the Potato Marketing Board £1 million over a period of five years. Now the Price Review says:If it is not possible to complete arrangements for the establishment of a Market Support Fund in time for the 1961 crop, arrangements similar to those which applied to the 1959 and 1960 crops will be introduced if necessary.Well, they have been introduced today, but I should like to know if the Minister can give us any information on whether the amendments which are likely to be suggested by the Potato Marketing Board have been met and whether the scheme has progressed since we dealt with the Price Review. That is all I have to say in regard to this Order. I hope it will now be passed and that the potato producers in this country, possibly as a result of this Order and of better marketing conditions, will have a better future for their crops than, unfortunately they had on the last harvest.
§ 3.8 p.m.
My Lords, there are two points I would raise with my noble friend. First, is there any prospect of our being able to relate price to quality in potatoes in the future, rather than relating the straight difference in price to different strains or grades?—because consumers are grumbling more and more that potatoes boil black. Rightly or wrongly, they believe that that is due to overindulgence in artificial manures by the farmers who are able thus to secure very high yields. It is a difficult problem and I do not know whether it is possible of solution.
There is something further I should like to know. People in this country are more and more exercised at the thought of British agriculture being, so to speak, held in check at a time when large areas of the world are suffering from famine and the like. Could my noble friend give me any account of what happens to the surplus potatoes when we get a heavy surplus, as is bound to happen with any crop when the climate happens to be favourable; because I believe it would be greatly in keeping with the general sentiment of the British people if they felt that the surpluses which undoubtedly our farmers could grow could be dehydrated and used for famine relief purposes in other parts of the world.
§ 3.10 p.m.
My Lords, I am grateful to your Lordships for supporting this Order which, as I endeavoured to point out, is a very limited one, although the remarks which have been made have extended widely over the general range of potato schemes. I will do my best to answer the points raised. First of all, there was the point made by the noble Lord, Lord Wise, about the administrative costs. The noble Lord will recall that the Government's obligation was to pay up to 50 per cent. of the administrative costs of the Potato Marketing Board, up to a maximum of £600,000 a year; and 50 per cent. of that, of course, would be £300,000 a year. In fact, those costs were incurred in the years 1959 and 1960: and £300,000 was in fact paid to the Potato Marketing Board in those two years, 1959 and 1960.
The noble Lord went on to ask what will be the position in the future. I 84 cannot say. I am not in a position to say what arrangements will be made in the future as a result of negotiations between the Board and the Government. The noble Lord then asked: What happens to the advances that have been made? I should like to make it quite clear that the advances which have been made to the Board are on account of deficiency payments or administrative expenses, and there is no question, of course, of the repayment or reimbursement of those. They were sums due to the Board which have been paid to the Board.
The noble Lord will know that there has been no deficiency payment as yet. The administrative costs having been in excess of £600,000, the Government have made the maximum £300,000 payment—it is not an advance—to the Board. The noble Lord will know that there was no deficiency payment last year, but it is anticipated that in this potato year there will be a substantial deficiency payment.
Another point the noble Lord made was about the difference in price of the Scottish potatoes. The deficiency payment will be worked out, under the terms of the Order, on the basis of the ascertained market price throughout the United Kingdom, and if prices are lower or higher in one part of the country or another it is all taken into account. I cannot give the noble Lord any information about what the new arrangements will be for the new scheme, which were discussed in the Price Review. They will probably be the subject of an Order which will be laid before your Lordships later on, and we are not yet ready with that.
The noble Lord, Lord Hawke, raised two questions, which I am pleased to be able to answer easily. The Potato Marketing Board are indeed concerned with quality, and are taking very active steps to see that the quality of potatoes is kept up; because, of course, that is one of the main weapons that they have to keep up the sales of this article of food. I should not like to express an opinion as to whether potatoes boil black because artificial fertilisers have been used, 85 but these things are being gone into by those who would know.
The noble Lord also raised the very interesting question of what happens to the surplus potatoes in these years of plenty, when the Potato Marketing Board are required, with Government aid, to start a support-buying programme and buy potatoes. A number of these potatoes are sold back again for human consumption. That is one of the purposes of the support-buying programme—that they can be taken off the market when there is a glut and put back on the market again later on when the market can absorb them. But a great quantity of these potatoes are, of course, sold for stock-feed, and not for human consumption. We will certainly give consideration to the thought that perhaps these potatoes could be used for famine relief in foreign countries. But, my Lords, that is a very difficult problem indeed. The potato is not a valuable article in itself; it is very heavy to transport, and whether or not it would ever prove practical to send shipments of surplus potatoes to distant countries overseas I should not like to guess. I should have thought that this might not be the most suitable article of food for such a purpose.
I beg my noble friend's pardon. Of course, that raises a different question; but the Potato Marketing Board would presumably sell these potatoes to commercial processors who, if they thought it was proper business, would no doubt dehydrate them and send them to any markets that they might have available. But the question of Government policy on dehydrating surplus potatoes and using them for famine relief is, I think, a wider question (of which I should want notice) than this really very minor amendment Order which we are now discussing.
§ On Question, Motion agreed to.