AGRICULTURE

HL Deb 29 March 1961 vol 230 cc146-220

4.21 p.m.

Debate resumed.

LORD WILLIAMS OF BARNBURGH

My Lords, although I served a modest apprenticeship in another place I have no hesitation in craving your Lordships' indulgence during my first intervention in your debates. I am reminded of the cricketer who said: It is easy enough to play cricket at the Oval, but when you go to Lords…! I need not waste time apologising for my deficiencies; I am afraid that your Lordships will discover them all far too soon. Agriculture is a very old subject, but we are approaching it to-day in more or less a new setting, at least compared with the dark, dreary, depressing days of pre-war years; and with so many agricultural experts in your Lordships' House I enter this field with great trepidation.

Fortunately, however, I can recall having read and listened to many Conservative Ministers of Agriculture in another place, several of whom were hailed as potential Prime Ministers, only to see them, two or three years later, relegated to the category of ex-potential Prime Ministers, because the problems that the Ministers set out to solve were still there at that time. That taught me the danger of over-confidence when discussing the question of agriculture. It taught me that the only constant thing in agriculture was its inconstancy.

I have said that to-day we are dealing with an old subject in a new setting. Tremendous changes have taken place during the past fifteen years. For instance, the problem of mildly fluctuating prices has been largely eliminated. The British farmer is no longer dependent only upon world prices, whether the goods are subsidised, dumped, or sold at well below the cost in the country of origin. And, of course, we have an Agriculture Act to which we all refer, called the 1947 Act, which, in Section 1 at all events, makes it a statutory obligation on the part of any Government, to maintain a stable agricultural industry and to provide decent remuneration and living conditions for both farmer and farm worker. But the Act was also designed to provide a tranquillising influence where prices are concerned, by stabilising them over long periods so as to encourage producers to plan their breeding and cultivation operations well ahead and with confidence. In other words, guaranteed prices, assured markets, stability, continuity and efficiency were, and should be still, the agricultural policy of this country.

That was a most momentous break with the past, particularly the past referred to by the late lamented Earl, Lord Halifax, when he wrote in his autobiography that he was Minister of Agriculture in the 1924–25 Parliament; that it was all futility and frustration, and that the only advice he or anyone could give to any farmer was to get out of his head any notion of high production, lay his land down to grass, reduce his labour bill and farm with the traditional dog and the stick". Eight years after that statement I remember another Minister of Agriculture saying in his first speech in that office that he never remembered a Minister of Agriculture whose popularity lasted more than six weeks. Of course he meant Conservative Ministers of Agriculture. But six years later still, another Conservative Minister of Agriculture, Sir Reginald Dorman Smith, said in another place when replying to a debate: The honourable Member must know as well as me that there are thousands of farmers in this country who are not making £2 per week year in and year out. Well, my Lords, those were the jolly old days of pre-war, and I am sure that noble Lords opposite and in all parts of the House will be glad to be able to forget that kind of history—except, of course, that we must all remember it in case we might slip back to those dark and dreary days.

The present policy may not be a perfect one; it may not be complete—no policy ever is. But this we can claim; that it has stimulated a minor revolution in our agricultural industry, in efficiency, in value of output, in prosperity and in its economic contribution to the life of this nation. One of the useful features of this policy is the Annual Price Review which provides your Lordships with an opportunity to examine the whole agricultural hemisphere, both forwards and backwards, and to ascertain whether the Minister in charge at the moment is holding the balance even between consumer, producer and taxpayer, and, perhaps of equal importance, holding the confidence of the industry. That is our privilege today, and I propose to look backwards as well as forward.

First, however, I should like to compliment the Minister upon producing the two White Papers, Nos. 1249 and 1311, for they contain all the facts, figures and arguments to enable one to get a clear, comprehensive picture of the situation. It is most comforting, for example, to read in the White Paper Cmnd. 1249 the categorical statement that the well-tried system of Government support to agriculture is the best for this country; that agriculture makes a valuable contribution to our balance of payments problem; that the 70 per cent. increase in production is an essential part of keeping down the cost of supplies, with a consequent beneficial effect on the nation's terms of trade.

Reference is also made in Cmnd. 1249 to the development, production and export of agricultural machinery. This is almost a fairy story that ought to be broadcast throughout the nation. I do not know how many of your Lordships will remember that in 1938–39 the value of agricultural machinery produced was £2½ million, and the value of the machinery exported £1.4 million. In 1960, production of agricultural machinery is fast approaching £130 million; in fact, at this moment we are exporting more than all other exporting countries put together. All this is thanks to a revitalised agricultural industry. And this also goes to prove, as few things can, the case for the absolute interdependence of town and country. Who, then, except highly trained, synthetic economists would deny that Government assistance to agriculture has been a really sound investment?

With regard to the Price Review, we are all delighted to learn that it was an agreed settlement, although I am bound to suggest, very tamely, that it was almost a deathbed repentance. Indeed, I doubt whether this Government 'Could have survived another edition of the 1960 variety, and I shall give later, I hope, reasons for that comment. But I want to warn the right honourable gentleman the Minister that although he has got over his first Price Review very nicely, he had better remember that this is the Minister's "honeymoon". For all Conservative Governments are very generous to their Ministers of Agriculture for the first weeks, months or years, after which the hurdles begin to rise: Becher's Brook; Valentines Brook; the Water Jump—and over they go, and out. We wish the right honourable gentleman better luck than many of his predecessors have had.

On price determination, one need say little, particularly after my noble friend Lord Alexander of Hillsborough has deal in detail with many of those matters. I think, with him, that milk is the knotty problem that will have to be solved some time. I like the approach to the pig problem, too. In other words, we welcome generally the Minister's interest in improving marketing schemes, research and development, and any extension we can get of machinery syndicates, and particularly the stabilising formula provided for pigs. We hope that a satisfactory solution can be found for the very complex problem of milk. It would certainly be a tragedy if we had to resort to restricting production because we found no means of selling, at an economic price, the quantity of milk that could be produced. I would suggest to Her Majesty's Government that they might well think of the possibility, or practicability, as part of our help to backward nations, of exporting large quantities of dried milk so that the pool price generally would not be reduced, to the detriment of the average farmer, if the volume of milk production increased.

My Lords, I want now to take a look backwards without dealing further with the details, commodity by commodity, since they either have been, or will be, dealt with by other noble Lords. I would challenge a statement in the White Paper, Cmnd. 1249, in paragraph 15, where the Government state that: They have stood and stand by all their obligations under the Agriculture Act, 1947. Over the last several years I have heard or read almost every reassuring statement on agriculture by the Prime Minister, the Leader of the House in another place and several Ministers of Agriculture. But I must confess that their actions have been very inconsistent with their words—or at least so they seemed to me; and I shall try to demonstrate that there is sonic truth in that statement.

Your Lordships will remember what happened after the 1960 Price Review. After several years on the financial slippery slope, the farmers thought that this must be their final indignity. Certainly, the countryside was seething with discontent. Resolutions of protest were pouring into the farmers' unions from almost every county in the country. Responsible farming journals wrote of the farmers' disgust, frustration, anxiety and shattered confidence. Having met a few farmers in my time, I can readily confess that there are possibilities of exaggeration; and I could agree, also, that no Minister could always concede the maximum demands of the Farmers' Unions. But they could not all have been wrong on that occasion; and your Lordships will remember that most farmers are more loyal to the Conservative Party than they are to themselves. I have said on many occasions that they are perhaps the best political suicide club in the country.

What are the real facts of the situation? If we accept the Government's own figures the net income of farmers, in terms of real value, had fallen by 10 per cent. between 1951–52 and 1960—a period when output actually increased by 23 per cent. And what was the Government's explanation for this situation? Replying to the noble Lord, Lord Netherthorpe, on television in 1960, the former Minister of Agriculture said: I think you will have to admit that the farming industry did better during the war and in the immediate years after the war than most other industries in the country. Therefore, I think you have got to realise that there have got to be some readjustments. Well, my Lords, that statement had a very cheerful reception in the countryside! While incomes over the country as a whole had been increasing by about 40 per cent., and the farmers' real income had fallen in the same period by about 10 per cent., there still had to be further adjustments to the disadvantage of the farming community—hardly what one would describe as holding the balance even ! One would imagine, also, that general industry received little or no assistance through Government action. While I will not quote it, I would commend to your Lordships paragraph 12 of the White Paper (Cmnd. 1249) which deals with that problem. Little wonder, therefore, that confidence was shattered, and that farmers did just not know what to expect next!

Perhaps it would be as well if we examined what I believe were the reasons for this indignation in the countryside. The facts and figures are all available to us in the White Paper (Cmnd. 1311), but first let me remind your Lordships that after the war food prices were controlled, producers' prices were fixed and the deficit was met by the Treasury. These were clearly consumer subsidies. The object of this exercise was to keep the cost of living as steady as possible and to give general industry, and the export trades in particular, an opportunity to rehabilitate themselves for peace-time purposes. By 1949 that deficit had grown to some £480 million. Last year the estimate was about £260 million; but in terms of 1949 values last year's deficit would be much less than £200 million.

It is an interesting but little known fact that in eleven years the cost of assisting agriculture has been reduced by two-thirds. This is all to the good, of course; and efficiency is playing its part. But there is grave danger in pushing this barrow too hard and too fast. Let us look a little closer and see what the farmers have got out of all this over the last nine years. After each Price Review, as many noble Lords who served in another place will remember, one could hear in the corridors there, and elsewhere, such comments as, "Another £14, £16 or £21 million to the farmers." That is just an illusion, and an illusion that ought to be explained away as soon as possible.

The annual net income is given on page 14 of the Annual Price Review White Paper (Cmnd. 1311). There is something fascinating about these figures, especially in view of what was said by the right honourable gentleman the Minister last year about adjustments. Unless my calculations are utterly incorrect—and I do not think they are—adjustments to the disadvantage of farmers have been taking place continuously since 1951–52. It is not for me to say that farmers have ever had too much or too little. I am interested only in the truth, for only when we rely upon the truth shall we hold the balance even between consumer, producer and taxpayer. But instead of a feather bed, it seems to me to have been more like a bed of thistles and thorns throughout the last nine years; and I think the truth should be told.

For the year 1951–52 net income was £329½ million. For the last nine years the average net income was £338½ million, or £9 million more than in 1951–52. There have, of course, over the period been wide variations, as much as from £362 million down to £302 million, but the average is up by £9 million per year. There have been nine years of accumulated efficiency, valued by the noble Viscount, Lord Amory, at £25 million per year; and yet the farmers received only £9 million per year. If you distribute that £9 million among 300,000 farmers it would buy them 3 packets of cigarettes per week for the whole nine years, for the farmer and his wife, for their manual and managerial labour as well as their capital investment—3 packets of 20 cigarettes each week for the last nine years. Net income is defined as the reward for manual and managerial labour of the farmer and his wife and for the use of the occupiers' investment. It does not seem to me that there is much encouragement there for further capital investment.

But, my Lords, two other things which are very important have happened over the last nine years. Output has, I repeat, increased by no less than 23 per cent. and the pound has depreciated in value to 15s., so that farmers have got little or nothing for increased production and, worse still, the net income forecast for 1960–61., £359 million, is worth about £270 'million in 1951 values. These are the Government figures, not my own production. Yet the Government say—and the noble Lord who preceded me in this debate, who was very clear and whose speech I appreciated very much, repeated these words—that the Government have stood, and stand, by all their obligations under the 1947 Act. How can the noble Lord make that statement unless an interpretation that can be based upon what the Government mean is repeated and approved of later in the debate?

If the figures I have quoted represent the Government's interpretation of "proper remuneration and living conditions "—and the 'patterns from 1951 to 1961 seem crystal clear—then we can reach only one conclusion, which is a conclusion contrary to that of the noble Lord. It can mean only that, regardless of increased production, efficiency or capital investment, the Government are determined to peg the 'farmer's net income back to about the 1950 level. I wonder whether the noble Lord agrees with that.

LORD HASTINGS

No.

LORD WILLIAMS OF BARNBURGH

Will the noble Lord, or the noble Earl who will reply, tell your Lordships what is meant, despite the ups and downs over the nine years, by just keeping the net income at an average of £9 million above the figure for 1951–52 for the whole nine years, regardless of increased production and of the depreciation of the currency? Will a policy of that description promote and maintain a stable, thriving industry, encourage greater efficiency and more capital investment, generate more confidence among the farming community, and bring comfort to the million people who depend upon the industry for their livelihood?

Many farmers I have met describe this policy as one of sheer futility and frustration, if the more food the farmers produce the less they are going to get for it, or if their net income, whatever the production and however high it may rise, is going always to be pegged down to the 1950 level. I find it very difficult to disagree with the farming community on this theme, and sincerely hope, for the sake not only of the industry itself but of the nation, too, because of the wonderful economic contribution that has been rendered to the national life, that the Government will reconsider their attitude to agriculture and thereby safeguard not only our present but our future food supplies.

I should like to ask the noble Earl who will reply one simple question. Was it a pure coincidence that in 1954, the year before the Election. underrecoupment was £26½ million; in 1955, the year of the Election, under-recoupment was £5½ million; in 1958, the year before the Election, under-recoupment was £30 million; and in 1959, the year of the Election, it was £8½ million? But far be it from me to suggest there might have been any politics in it, and I shall not press the noble Earl too hard to reply, since he did not happen to be responsible during any of those years. I should like to say, my Lords, how much I appreciate your kind and generous hearing.

4.48 p.m.

LORD AMHERST OF HACKNEY

My Lords, it falls on my unworthy shoulders to congratulate the noble Lord, Lord Williams of Barnburgh, on his maiden speech in this House. A cat may look at a king, and I would not, of course, venture to criticise what he said. But I am sure that your Lordships will all agree that we have listened to a most interesting speech, delivered with great authority from the noble Lord. Contrary to the forecast about staying six years in the Ministry, he spent, I think I am right in saying, five years there as Under-Secretary and six-and-a-half years as Minister—and was, if I may say so, a most popular Minister. Therefore, I know that your Lordships would like me to say that we shall look forward to his contributions to our debates on agriculture in the future and hope he may speak many times. He has just made a very fine speech. I have heard maiden speeches which might be called less controversial. However, it was an extremely interesting speech, all the same.

I am sure also that we are most indebted to the noble Viscount, Lord Alexander of Hillsborough, for putting down this Motion on agriculture. As the noble Lord, Lord Williams of Barn-burgh, said, we are dealing with a revitalised industry. One thing which he said that I would quarrel with is this. He said that we had looked on a minor revolution in agriculture. I should have thought that that was a great understatement. There has obviously been a major revolution in agriculture.

VISCOUNT ALEXANDER OF HILLSBOROUGH

We are always modest.

LORD AMHERST OF HACKNEY

I think one side of it is that we have this figure of 172 per cent. increased production since 1939, and nearly 30 per cent. since 1949. Between 1949 and the present day there has been a reduction of 200,000 in the number of workers employed in agriculture. That means that, out of every four men working in agriculture in 1949, one has left the industry; and still, in spite of that, production has gone up by 40 per cent. I think that is a tremendous example of the increase in productivity, and shows that the farmers have invested enormous sums, as we all know they have, in machinery and in developing the efficiency of the industry.

Now I found myself in agreement with the noble Viscount, Lord Alexander of Hillsborough, and I think a lot of people would also agree, when he said that, although productivity has increased, incomes have not increased in step with that productivity. According to the N.F.U. Account Scheme, which covered some 5,000 farms and gave a general cross-section of the industry, nearly half had a net profit of less than £600 a year, which does not leave much for management, for interest on the capital invested in the industry and for the new capital which is so necessary to the industry. This Review, which I welcome, as have all the other noble Lords who have spoken, goes some way to meet this position, and it allows the industry to retain a considerable part of the benefit resulting from the increase in efficiency—more than has been allowed in any of the recent Reviews. It also, I think, faces up squarely to the problems which are confronting the industry at the moment, particularly in milk, pigs and in marketing generally. I think the Review has been generally well received, though there are differences of opinion on certain of its provisions. There were a few fast balls which were bowled at the Review, one or two of which, perhaps, got through the defences; but I think it shows that the Government are determined to face the necessity of maintaining a prosperous agriculture, and to face the many problems involved.

I welcome the increase in the price of beef, which will be a great help to the producer. We all know that we want to do what we can to persuade people to move from milk to beef; and, to do that, obviously we must make beef production more remunerative. I think the noble Viscount, Lord Alexander of Hillsborough, was a little less than fair as to the increase in the price of meat and to where it would go. He said that the person who carried on the whole way through would possibly get it, but otherwise probably not. I think I am right in that. I believe one must assume that the end price of the product is bound to have an effect on the price at which animals change hands throughout their life. He also criticised marketing through the markets, but the fact is that farmers have alternative ways of marketing their beef, such as the F.M.C.; but. on the whole, a very large number of farmers prefer to market their animals through the market. Whether they are right or wrong, that is what they prefer to do; and, evidently, if they do that, they think that that way is more satisfactory to them than through the F.M.C.

VISCOUNT ALEXANDER OF HILLSBOROUGH

My Lords, I think that if we followed the wonderful example that was shown on the television the other day, of the experience of Merioneth—where the county farmers, through a cooperative society, obtained control for the farmers of every auction mart in the county—then perhaps the results which the noble Lord desires would accrue; but under the present system that is not what is happening. A standard price is always paid, of course, in accordance with the White Paper, but the price the consumer is paying has no relation to the net price at which the buyer in the market gets the meat.

LORD AMHERST OF HACKNEY

I am afraid I do not know about the marketing experiences of Merioneth, and I unfortunately did not have the benefit of watching the television programme to which the noble Viscount has referred.

There are one or two things in the Review which I should like in particular to mention. The first of those relates to milk. I believe I am right in saying that the production of milk represents something like a quarter of the total agricultural product and one-third of the production of Review commodities. Certainly the N.F.U. Account Scheme and the Farm Management Survey showed that the income for farmers in the 51 to 150 acres group was very low indeed, and that about half were earning less than the wages of an agricultural worker. So I think that, on this ground alone, there was probably a case for an increase in the price of milk. A penny a gallon on milk would work out at something like £4 per cow. I do not suppose the smaller farmer will put down a deposit on a Rover, but it is still a very welcome increase indeed. But we are faced with the vicious circle which has been mentioned—reduction in price, greater productivity per cow, more milk, and then lower prices again—and I welcome the fact that the Government are facing up to this problem.

I would be the last to encourage a flood of unwanted milk on to the community; but what is the extent of the problem? Here there seems to be a difference of opinion between the Government and the Milk Marketing Board. I think I am right in saying that, according to the Government's figures, they estimate that the increase in gallons will be something like 300 million in four years, making an increase of about 75 million a year, whereas the Milk Marketing Board's forecast is something like 30 million for England and Wales and 40 million for the whole country.

During the past three years, the Milk Marketing Board has increased the sale of liquid milk and cream by about 75 million gallons. Therefore, it is not for me to say which of those figures is the correct one, but it makes a considerable difference to the extent of the problem with which we are faced. It really is a difference between whether one is faced with an increase of something in the neighbourhood of 15 million gallons a year, or an increase of 50 million gallons a year. If the figure is anything like 15 million gallons, then, for that amount of milk, is it worth introducing a two-tier system, with all the difficulties which are attached to that system? In the Farmers Weekly for March 24 there is an article headed "No—ten times no", and it goes on to give a list of the main points, really, which the Milk Marketing Board make, not so much against the scheme but illustrating the difficulties which would have to be settled before the scheme could be worked.

For example, how would the initial quota be fixed? How could producers with no previous records be dealt with? How should appeals against quota alterations be handled? What would be the position of special groups of producers—presumably that means producers of Channel Islands milk, and that sort of thing. Then there would be difficulties about farm transfers. Would the quota go with the man or with the farm? That would result in rigidities. There would be the problem of farms which are producing below their quota. And would the scheme involve increasing the penalties? I am not saying, for one moment, that those are problems which could not be solved, but I think, before they are faced, we have to be quite certain that the scheme is necessary.

Also, there is the effect of the Farm Improvements Scheme. I think a large proportion of farm improvements have gone into improving buildings for dairy herds. I would ask whether the noble Earl has any figures showing how much has gone in that direction, as opposed to other improvements? Obviously, in many schemes a small increase in production may be necessary if greater efficiency is to be achieved, and we are all in favour of producing milk as efficiently as possible. I am also in favour of a conference of the National Farmers' Union and the Milk Marketing Board with the Ministry to try to sort out this problem, because there is a real problem here. However, I hope that this conference would not come too much under the threat of the withdrawal of the 0.8d. per gallon increase. The subsidy on milk at the moment runs to £10.9 million. If milk plays such a large part in the production—something like onethird—that is not a very high subsidy. On the other hand, one does not want the vicious circle to continue; therefore. if it is found absolutely necessary that there should be a two-tier system, I would support it, but I am not at all convinced at the moment.

The only other point I would mention concerns barley. I should like to welcome the efforts which have been made to effect the more orderly marketing of barley. I am sure that later on the noble Lord, Lord Wise will mention barley; I shall be rather surprised if he does not. Our position is that we have been encouraged for some years to increase production of coarse grains, although there was possibly a danger signal last year, when there was a reduction in the price of barley of 3d. What has happened, so far as I can see, is that the wheat and oats acreages have remained more or less constant, but there has been this great increase in the barley acreage, partly, presumably, because the average yield is higher, and secondly, because the price has been better. On the other hand, if we want to produce more coarse grains, to grow barley is probably the best way to do so. This cut on barley is quite a serious one. I must here declare an interest, in that I am a producer of barley, whereas I have never declared an interest in milk production. But here we have a cut of 1s. 2d., and the statistics reckon that the average yield on barley is something like 25 cwt. to the acre. That means it is really a cut of something like 30s. an acre. In the Eastern Counties many of the farmers last year also suffered a cut of 2s. 6d. on sugar beet, representing some £2 an acre on the beet crop. All these cuts are against rising costs, and one hopes that these cuts are not the forerunners of further cuts to come.

I think the chief reason for the large subsidy on barley, which I believe is forecast to be something like £35 million this year, is that the marketing of this crop, at least in the last year or two and particularly last year, has been extremely difficult. It has been extremely difficult to get a reasonable price for barley; and even when you sold it, you practically had to go down on bended knees to get anybody to take it away. As I say, I think more orderly marketing is to be encouraged. After all, with wheat, you have a higher price later in the season, and if you hold it you can be sure that you will get the higher price, but with barley there is no reason at all to think that if you hold on to it you will get a better price. Therefore, provided the amount of barley is held back and—what I think is also important —we do not at the same time get a flood of imports round about harvest time, it should help to increase the price of barley which the consumer pays, and therefore, as we all want, reduce the Exchequer liability. It is very difficult to forecast whether imports will be coming in, and if one were to suggest that there should be any control of imports one would open up an enormous and highly controversial field. Apart from these two suggestions, I believe that this Review will do much to restore confidence in the industry. I think it is imaginative and forward looking and will do a great deal for agriculture.

5.11 p.m.

LORD TERRINGTON

My Lords, I should like to speak for a few minutes this afternoon on a particular aspect of agriculture that I feel is of some importance. As an owner-occupier of a modest acreage I am aware of some of the problems of the small farmers in my district, and more particularly, I should say, of the would-be small farmers, for whom one cannot help having the greatest sympathy in their search for land. I find that the rising price of agricultural land and the extreme shortage of farm tenancies are making it increasingly difficult for the young man of skill and enterprise, but with limited capital, to enlarge his acreage; and this applies equally to the newcomer, who is having the greatest difficulty in entering the industry for the first time on his own account.

In view of this situation, which I belive to be fairly countrywide, I hope that I shall not be considered controversial if I also make a short reference to the two-tier milk price plan proposed in the 1961 Price Review. From recent conversations that I have had in my district, I believe that existing and would-be small farmers are extremely alarmed by these proposals. The reason for their alarm is perhaps understandable when one realises the extent to which small farmers are dependent upon milk production for their prosperity. If milk production is going to be seriously restricted, I fear that some distress may follow for the small farmers, because it is difficult for them, I believe, on a small grass acreage, to turn over to beef production on a really worthwhile scale.

As a recent producer of milk. I am keenly aware of the problems of excess production, although I am also very conscious of the increasing efficiency of production generally through new methods and increased use of grassland, apart from the considerable expenditure on new buildings, plant and machinery. I find it difficult to discuss these problems in any detail this afternoon, as I know that the Whole system is under active consideration in order to produce a scheme. But I should be most grateful to receive some assurance that the final scheme will not embrace any sort of quota arrangement, along the lines of the potato or hop quota, which I believe attaches to individual farms. If individual quotas are to be applied to milk production in the same way, I cannot help feeling that this is going to be hard on the small farmers, particularly in view of the considerable encouragement which the Government have given to them to expand in a number of directions, including milk, to which the noble Lord, Lord Amherst of Hackney referred in connection with the small farmers' schemes.

I also have a rather uneasy feeling that a quota scheme attaching to an individual farm will make it still more difficult for the would-be farmer to enter the industry. I see the possibility of a danger arising out of all this of something perhaps in the form of a "closed shop", and possibly of special premiums attaching to individual farms which have been worked up to the position of high milk quotas. I feel that this must operate strongly against the new entrant.

I hope that what I have said will not be construed as controversial, because that is certainly not my intention, and I very much welcome the greater part of the Price Review which has been presented. I am a tremendous believer in the existence of the farming ladder. I do not think that any industry can really be progressive without a reasonable proportion of new entrants with new ideas, which they are prepared to try out if they are given their chance. I conclude by sincerely hoping that the position of the small farmer, and particularly that of the would-be small farmer, will be given special consideration when the framing of this two-tier price system begins in the near future; for I think that a great deal of their future depends upon it.

5.18 p.m.

THE EARL OF MALMESBURY

My Lords, it falls to me to congratulate the 'noble Lord, Lord Terrington, on his maiden speech. He has certainly contributed something to this debate. He is a farmer, as he told your Lordships, and he is a farmer who has thought not only about his own farming difficulties and problems, but also of the difficulties of others, and in particular those of the small farmer. I hope that he will contribute in future a great deal to these debates and I should like to congratulate him on a most interesting speech.

I would also add my congratulations to the Minister of Agriculture upon his Price Review, because to my mind he has achieved something great. He has invited the agricultural industry to take up a new look, to put on a rather attractive thinking cap. It must be obvious to everyone that one of the weakest links in the agricultural industry is the lack of well-organised marketing; and it is the smaller man, who forms the greater part of the industry, who suffers most from this. Without organised marketing, he must find himself at the mercy of the market, since most of his goods are perishable and do not improve in quality by keeping. The Government were indeed right to encourage organised marketing by their offer of £500,000 a year for an experimental period of three years.

As the noble Lord, Lord Hastings, said, we have to learn a great deal about marketing and exactly what is required; we have to learn how to present it; and we have to learn the quality that the housewife is looking for. I am certain in my own mind that the housewife is prepared to pay more for quality, because obviously it is the best purchase. I would emphasise that many farmers need guidance on what to produce, and it is only by studying the marketing that they can learn this. There are few farmers who can afford the time to go looking for this market; it is not their job. Their job is that of production, and they require somebody else to search out the best market for the goods they are producing. Market research and development is a "must" in the industry.

I must say that, like many others, I am rather surprised that the Farmers' Union did not take up this offer at once, because, obviously, for every week, month or year that this offer of £500,000 a year is delayed, the gross return to the industry must be considerably decreased. It would be true to say, I think, that the Dutch farmer's costs of production are very similar to those of the English farmer, but he has the measure of us because he has an organised market which will deal with his goods. It is up to the agricultural industry to look after its market; it is not the duty of the Government, though the Government have given us assistance on this matter and have asked us to think.

On the question of milk, the Government have certainly thrown something into the pool; and it has caused a very large splash. The liquid milk consumption, as we have heard, is 1,600 million gallons a year. Obviously, the English dairy farmer, with this liquid milk market at his door, is the envy of dairy farmers all over the world. Yet this gift—and I emphasise the word "gift" —of this huge liquid milk market is being abused by thoughtless and unplanned overproduction. It is well known that we in this country find it almost impossible to compete with the New Zealand dairy farmer and his low cost of production, due to his perfect climate for growing grass. It is also well known that to live and trade and buy goods from us the New Zealander must export his dairy products to us, who are essentially a trading nation. Some scheme must be devised whereby a dairy farmer can take full advantage of this gigantic liquid milk market. It may be a two-tier scheme; I do not know—nobody knows yet. But I should like to suggest that, to save and simplify a great deal of administrative work, the production of up to 600 gallons a month —that is, roughly two churns a day—should qualify automatically for the liquid milk price.

On pigs, I should like to congratulate the Government. To me, this seems only common sense, and I rather wonder why this scheme has not been thought of before. Here again, getting back to marketing, I think the average pig producer would do much better if he worked to a contract. The Fat Stock Marketing Corporation is there to be used and encouraged, and at times, possibly, to be guided. It should not be abused unconstructively, as I am sure your Lordships' have often heard it abused; I certainly have, and it has always seemed to me that the industry is giving itself a kick. The Fat Stock Marketing Corporation is still a young Corporation. Its personnel have to learn, and I think the young personnel who come into it can be helped a great deal by the older and more knowledgeable farmer. When they have learnt their job they in their turn can help the younger man who has contracted for his pigs or his beef, to sell them in the best place with the least fuss and worry. Undoubtedly, if the Fat Stock Marketing Corporation is used properly, the animal husbandry farmer, who now has the incentive of beef, can have much of the worry taken off his shoulders in an organised market.

I am sure that the average individual farmer can benefit a great deal from full farm management and from the knowledge derived from costings. Costings, as your Lordships all know, will assist in showing up the weak link in a chain of production, or a weak department, or a weak enterprise. I am extremely glad to know that the Agricultural Advisory Services are putting more and more emphasis on this particular service. The essential thing in all costings is that the recording on the farm is kept as simple as possible. I am assured by a number of farmers who started costings and then gave them up that they did so because the system they were trying to follow was too complicated.

My Lords, I believe that the standard of a young man in farming at the moment is impressively high. He is thinking hard, and he is prepared to work hard. He is not only there to get a living off the land. I am sure that he is well able to make use of the seeds sown in this last Price Review. With the better organisation of the industry within itself, and the improved marketing of its production, the agricultural industry must go ahead, assured of a future.

5.28 p.m.

BARONESS ELLIOT OF HARWOOD

My Lords, in rising to take part in this debate I think I am the first voice from Scotland, although the noble Viscount, Lord Stonehaven, will follow in a moment or two and no doubt will also speak about the industry in Scotland. I must declare my interest in this subject, since I am a farmer, a producer of beef and mutton. Like most farmers, I wait anxiously for the Price Review every year, and my reactions to that Review, I am afraid, are governed largely by whether it has any particular interest for my own type of farming. It is for that reason that the current Price Review seems to me to be the most satisfactory for some years. As a rearer of stock, I must say that the "headaches" of the milk producer and the barley grower are not mine.

Nevertheless, I should like to say one or two things in connection with Scottish agriculture. We are very glad to have the encouragement for beef production. I think I can fairly say that our beef, from Aberdeen down to the Border, can compare in quality with any beef produced anywhere else in the world. Paragraph 8 of the Price Review which has been mentioned to-day, is an interesting one, because producers of the fat animal—not the producers of store animals—are to be allowed the additional Ws. which is to be carried forward to 1962. As I know of old, that has a great effect upon the breeder of the store animal, who also gets the benefit from this rise in prices.

The sheep position has not been altered; nor has the wool price been increased in the current Review. I think that must be viewed in the light of two fairly bad years for the breeders of sheep. The very dry year in 1959 had the effect of a heavy drop in the sales of store lambs from hill flocks, because the farmers from the richer inby land who buy our lambs in the markets had little grass and foggage on which to feed the animals, and so prices fell more steeply that year. We all know that 1960 was one of the wettest years on record, and we went to the other extreme. The lambs and the crops of lambs were not so good, due to the bad weather at lambing time and after. This, coupled with the shocking harvest last year made things exceedingly difficult for farmers—not only those who had rich crops like sugar beet and potatoes, some of which were never lifted at all, but also the ordinary cropping of a marginal farm. In view of those two bad years, perhaps the Minister could consider something in the nature of some assistance for hill farmers. However, if that cannot be done directly, there are other ways in which grants or assistance for hill farming and marginal land can be considered.

In Scotland, three-quarters of the land is either hill or marginal land. One is apt to think of the rich lands of the East Coast, from East Lothian up to Aberdeenshire, as being typical of Scotland. In fact, three-quarters of the land is marginal and hill land. It is the hills and the marginal land where the farms produce the sheep and cattle which are sold in the markets to be fattened on the rich land. Every year since 1958 the assistance given to farmers on marginal land has been decreased. I found some figures (which I understand have not been published, so perhaps I should not give them to the House) of the decrease that has gone on ever since 1958 in the grants that have been given for marginal land. I feel that at this moment this is an unfortunate policy, because the grants that were given for the production and cultivation of the marginal land were of tremendous value to this class of land. It meant that more stock could be kept on the land. It meant that, for not a large amount of money, the Government could get a return from the farmer, since in order to qualify for a grant the farmer had to work his land and increase its fertility and production.

Marginal land, as I am sure farmers here know, is on the whole expensive to cultivate, since it is either stony, rough or steep. It has sometimes to be ploughed one way, and it is apt, to break machinery. At best, it produces only half the return produced on good land. So those marginal grants were of enormous value, both with regard to the possibility of production on that type of land, and also for the production of stock as a result. That has been whittled away at the present time, and I should like to suggest to the Secretary of State, and to the Minister, that they might well look at this particular assistance again in view of its importance, and in view of the fact that farmers on this type of land have had two or three very lean years.

Then there is the point of efficiency which has been stressed—and with which I go all the way with the Minister, in his desire to increase the efficiency of the agricultural industry. But there are certain types of farming in which, with all the good will in the world, efficiency is only a small part of production. Again, I refer to stock-rearing. However efficient a hill farmer is, he cannot speed up the production of lambs or calves, since the timetable for this production is not the subject of alteration. In arable farming, men can be replaced by machines; but no machine yet invented will walk the hills twice a day—and at lambing time three times a day—and look after the sheep. The risks of cutting down the number of shepherds and losing many lambs would be the very opposite of efficiency although, of course, it would be considerably cheaper—at any rate, in wages. So efficiency as a yardstick of good husbandry cannot be applied, I believe, indiscriminately.

I ask, therefore, that in determining prices and assistance to farmers, particularly in Scotland, the special conditions of stock-rearing should not be forgotten. And I would point out that, while the White Paper deals in outline with total figures, there are sections of the industry which have not received much benefit in recent years from Price Reviews. This might be borne in mind by the Minister in future years. As I came into the House this afternoon, I found the Agricultural Report for Scotland, 1960. On page 25 there is a paragraph on hill sheep subsidy. It says: The purpose of this subsidy is to maintain the income of hill sheep farmers at a reasonable level in order to encourage the maintenance of foundation flocks of hardy hill sheep. The rate of payment, if any, is decided each year after consultation with hill sheep interests. Provision is made by the present scheme to pay subsidy, if it is considered necessary, in any year until 1963. I should like humbly to suggest to the Minister, and to the Secretary of State, that they might consider the hill sheep and the store cattle industry in the light of that paragraph in the Report published to-day.

I do not want to end on a critical note or, indeed, to be too critical in my speech at all, because there are many aspects of the White Paper which I think are of tremendous help to the industry. I should like, for instance, to say how great a help the schemes for capital development have been to the industry—schemes like farm buildings, drainage, cottages and other essential buildings. All those have been helped tremendously by the different schemes which the Government have put forward. I am glad that all these schemes are to continue. I would add that, in my experience in working a hill farming scheme on quite a large scale, the advice I have received from the officials of the Department of Agriculture for Scotland has been most helpful, and in working out these schemes all those officials are both efficient and helpful in every way.

My Lords, no farmer is ever satisfied. If it is not the weather, it is something else, and I do not wish to appear too ungrateful to the Minister and the unions for what has been done in the Price Review. It is, in fact, the most encouraging we have had for many years. I should like also to back up the delightful and picturesque description which the noble Lord, Lord Williams of Barnburgh, gave to the House just now, in a speech which I, and I am sure everybody else, enjoyed enormously, when he said that he had seen Ministers of Agriculture unable to stay the pace either over Bechers or Valentines, and were out after the first round. I hope very much that the fate of the present Minister will not be like that of past Ministers and that he will continue successfully round the course for many years to come.

5.40 p.m.

LORD STONHAM

My Lords, I particularly welcome the intervention of the noble Baroness in an agricultural debate because it lends some countenance to my recent interventions in Scottish debates. We on this side of the House support strongly what the noble Lady said about marginal grants. Indeed, the Labour Party both here and in another place fought strenuously against the reductions made by the Government in marginal grants, and it is a great pity that the noble Lady was not able to support us on that occasion.

This afternoon we have had (and I think I am the first speaker from this side of the House since then) two firstclass maiden speeches, alike in excellence although quite unalike in their other characteristics. The noble Lord, Lord Terrington, made a lucid and concise and, I think, telling appeal on behalf of the small producers and the ladder of production, and I am sure that we should all like to hear him again and to hear him at greater length. My noble friend Lord Williams of Barnburgh made his eagerly anticipated maiden speech. It seems extraordinary that one should refer to his speech as a maiden speech after something like thirty continuous years of speeches at Westminster. But even though I have heard him on many occasions, both in Parliament and out. the old magic persists, and I hope we shall hear him on many more agricultural occasions.

If I may say so, I think he addressed to the noble Earl, Lord Waldegrave, one pointed question which will not receive an answer. That was when my noble friend raised the question of the remarkable fact of the very heavy under-coupment in 1954 and the very small undercoupment in 1955, and a similar coincidence in 1958 and 1959. I am sure that coincidence will not be explained, although the noble Earl might say whether he agrees that it is an example of the Minister's new policy of flexible rigidity. It is the only example of that remarkable policy that I have been able to think of. When my noble friend referred to the pre-war years and then to what he called the minor revolution—it is certainly a major revolution—in agriculture in the post-war years, I felt that they recalled what I regard as the proud and happy days of British agriculture, those years, first of all, of the all-out war effort. and then of the no less all-out effort of the succeeding six years: proud and happy days when farmers were encouraged and helped to increase the production of food the nation needed, when they knew in advance the prices they would be paid and knew also that those prices would ensure a fair livelihood; when by means of consumer subsidies totalling some £400 million or more the housewife, paying less than the farmer received, bought the cheapest food in Europe.

To-day, owing to what I regard as the Government's mistaken policies—and I think they are demonstrably so—none of those things apply. No farmer knows what price he will get, except that in most cases it will be less than he got last year and very considerably less than he got ten years ago. As my noble friend, Lord Williams of Barnburgh, mentioned, 'the farmer's net income, although in paper pounds a trifle more than it was in 1951—about three packets of cigarettes a week—is in terms of what it will buy considerably more than 10 per cent. less; and yet our farmers have the embarrassment of knowing that out of every £1 of their net income 14s. 10d. is provided by the taxpayer. And to the taxpayer, increasing production is an embarrassment and a good harvest a disaster. Yet the taxpayers are paying £106 million in farming grants for the sole purpose of increasing food production.

I fully support what the noble Lady said about marginal grants and helping the small farmer, but the logical outcome of all that under the present system is that we get the increased production, and when we get the increased production the farmer's market price drops and the support price subsidy increases. In fact, the White Paper says as much. It has to say it because it is true. It is a completely daft and crazy system, because the consumer does not benefit; the prices do not drop. The 10s. a hundredweight which is going on meat will not mean a 'corresponding fall in the prices in the shop. On the contrary, many prices continue to rise. The difference compared with the days of my noble friend is that whereas ten years ago almost all the £400 million was spent on reducing the prices of the food he ate, the taxpayer does not get one penny benefit out of the £266 million he is now paying in farm subsidies. On the contrary, his wife is paying 1s. for the bread 'Which cost 6d. in 1951; she is paying 4s. 8d. a pound for the bacon which cost 3s.; she is paying 5s. a pound for the pork which cost 2s. 6d. There are many other instances where the increase is almost as great.

I have raised this question on several occasions and have pressed it, but have never received anything like an explanation. I should like to ask the noble Earl a question in as simple a form as I can, which I hope he will answer, although I have to say, very much to my regret, that owing to a long-standing previous engagement I shall not be able to stay and hear the reply myself. The question I want to put to him is this: since, compared with 1951, prices received by the farmer, including subsidies, have gone down and prices paid by the housewife have gone up enormously, who benefits from the subsidy of £266 million paid by the taxpayer? That is a fair enough question in which I am comparing like with like and in which the premises are incontrovertible. It is no use the noble Earl saying, as he did on a previous occasion, "The farmer gets the benefit." The fact is that, including the subsidies, he is getting a lower price now than he received under the previous system. His net income in paper pounds is as near as makes no odds the same as it was nine years ago, and in terms of what his money will buy it is far less. So do not let us accept that the farmer gets the benefit.

If the noble Earl cannot give an answer, I submit that there is the strongest possible case for asking the Minister of Agriculture to institute an Inquiry to find out how the subsidies are absorbed into agriculture, who benefits from them, how they affect farm and retail prices, what effect they have on farm rents and what effect they have on the profit margins of merchants and distributors. And if such an inquiry is refused, it will confirm what I have long believed to be the case: that the Government are aware, but afraid of revealing, that their support price method of subsidising agriculture is an abject failure and is the direct cause of this impossible situation—that the more effectively you increase the farmer's efficiency at the cost of the taxpayer, the worse off the farmer becomes, and the worst disaster the farmer can have is a really good harvest. I affirm this in full knowledge of the statement in the White Paper, Cmnd. 1249, that: the Government and the Unions agreed that the British system of agricultural support is the one best suited to the interests of the country". Such a statement is possible only if you are completely and deliberately blind to the facts. Does anyone really believe that it is best for the country or for British agriculture to accept a permanent charge of something like £275 million a year from which the taxpayer gets no percept- ible benefit whatsoever? Does anyone really believe that the best system for the country or for British agriculture is one which, strictly adhered to, will make it impossible for this country to become part of a larger European Free Trade Area, in association with the Common Market countries? We cannot associate with them without a much closer approach to a common agricultural policy—and it is we who must change, because there is not the slightest chance that Common Market countries will adopt our colossally expensive, and stupid deficiency payments system.

I am wholly in favour of the British taxpayer supporting the British farmer to no less an extent than he does now—to a greater extent, if necessary. I am a member of the National Farmers' Union, and in a very small way a farmer myself, but I want to see the taxpayers' money directly benefiting the farmer and not as it were "going away in the sands" —I suspect, going in fat pickings to the people who stand between the farmer and the housewife. I want to end this system which, because it fines the taxpayer whenever there is a good harvest, carries the seeds of its own destruction.

If anyone doubts that, then just consider the barley situation. I am not going to grumble about the drop in the price of barley in the Price Review. There was nothing else the Government could do in the circumstances. But, looking at the barley situation as it is, we see that the support price for barley in the last Review was 28s. 9d.; currently, the best malting samples make 26s. But that is only a comparatively small part of the total. What matters is the feed price, which is 17s. 6d. So the "ascertained average" price this year is going to be less than it was last year, when it was 20s. 6d. a cwt. It is probably going to be less than £1 a cwt. This is so, even with a subsidy of £10 an acre, and I think, based on the last harvest, that that is what it is going to work out at finally. Few farmers will realise any close approach to the standard price, despite the fact that the taxpayer will be contributing £40 million—half the total amount received by our farmers for their barley.

It is quite impossible and intolerable, and it is going to be much worse this coming year. Owing to the weather, comparatively little winter wheat went in; there are limits to what spring wheat can be sown, and farmers are bound to put a bigger acreage under barley. What else can they do? There may be anything up to 3¾ million acres sown to barley, and perhaps a crop of 4¾ million tons. Two things are certain in that situation: a very low "feed" price for barley, and a record bill for the taxpayer. And, given favourable growing and harvesting conditions, there is the possibility that the flood of unwanted barley may be so great as to destroy, once and for all, the illusion under which the Government, and apparently the N.F.U. also, suffer, that the present system of support prices is the one best suited to British agriculture. I believe that the pressure of events will compel them both to face the facts and to abandon this untenable position: it is only a question of when and how.

I know that, for some years now, on this subject I have been a voice crying in the wilderness. But I believe that the time has come—not merely a wind of change, such as has blown the noble Lord, Lord Hastings on to the Front Bench and we are glad to see him there —for the Government to make a change in their policy, although it may be a far more gradual one than I should like to see. They have always said that it is impossible (the noble Earl, Lord Waldegrave, has often said this) to return to controls and fixed prices. He has even raised in defence on this issue the bogy of rationing. But to-day, in view of the current level of supplies, the argument of rationing cannot be raised, because it would be nonsense. The present Price Review says as much. It suggests that the fixed price for milk should be related to a standard quota for individual farms. I do not mean that it says so in so many words. I have read the script of the television broadcast, and I know that the right honourable gentleman, the Minister of Agriculture, said it does not necessarily mean a quota for individual farmers. But we all know that there must be something of that kind: the Government's intention cannot really be carried out in any other way. But we all know the disadvantages of it.

The noble Lord, Lord Hastings, read out the obligation under the 1947 Act to maintain a stable and efficient agriculture capable of producing "such part of the nation's food and other agricultural products", and so on. I had those words in my mind because when I was a member of the Standing Committee dealing with the 1947 Bill we had them referred to so often in regard to Clause 1. The Government's proposals for milk recommend the pure milk of the doctrine of the 1947 Act— such part of the nation's food as is required". Therefore I think I am justified in suggesting that a ray of light has pierced the Conservative intelligence, and in another ten years perhaps, if they last that long, they will be completely in agreement with me.

Then again, I would say that their proposals for pigs, which we on this side welcome, are moving along the same path. There is no individual quota and I do not possibly see how Lord Malmeshury's point of a contract for all pig producers could be worked out. I know that they would like it very much if the price was right, but I do not see how it could be worked out. But the Government have decided that the price of pigs shall be tied to the quantity—loosely tied, but the overall figure is going to depend on the quantity. So there again we have the same idea of the price being tied to quantity. There is no reason at all why the methods recommended for milk should not be applied to cereals, provided, of course, that the margins for processers and distributors are also fixed.

In the White Paper, the Government and the National Farmers' Union say, at the end of paragraph 37: Moreover, they have pointed out that a system such as that as proposed for the Community"— that is, the European Economic Community— would mean that food prices in this country would rise with adverse effects on consumption. My Lords, there is no reason at all why food prices should rise. There is an enormous amount of unexplained slack between the price at which the farmer sells in the market and the price that the housewife pays in the shops, and there is no need for these retail prices to rise at all. Indeed, if the Government were sufficiently determined, varying methods for paying fixed prices could be devised for all Review commodities. Farmers could be paid better prices, at less cost to the taxpayer; and at the same time prices to the consumer could even be reduced. But we should have to control the level of imports either directly by quotation, or indirectly by tariffs and levies, as they do on the Continent.

The great difference between the Continental system and ours is that although in both cases the consumer pays, in our case the levies are added not by the Government but by the importers after importation; and they go not to the Treasury but into the pockets of private individuals and firms. For example, German farmers are supported to the extent of £137 million in the current year, but £110 million of that comes from tariffs and levies on imports, and does not cost the taxpayer, as a taxpayer, anything. And the Germans import only about one-quarter of the food they consume, compared with our imports of roughly one-half. On the same basis, we could get most of the money we need for farm support without troubling the taxpayer at all. At the same time we should be reducing the disparity between the world prices of some commodities and the prices we think it necessary to pay our farmers in order to assure them a reasonable living. I believe that it would also help us towards enjoyment of the same steady rise in farm incomes as has occurred in Germany over the last ten years.

Perhaps of the greatest importance to the country as a whole, however, that would remove what is at present an insuperable barrier to our participation in European Free Trade. While we are tied to this disastrous support price policy, the National Farmers' Union are obviously obliged to say to the Government, "You will dispense with the present system of price support only over our dead body."; and because members of Her Majesty's Government, as I think, fear the loss of rural constituencies they have to acquiesce in what they know is indefensible. I believe that if we remove this barrier and convince the farmers that their share in the home market is secure, and at better prices; if we break this deadlock, all kinds of things will become possible.

I hope that this will be the last of what I regard as a series of stupid Price Reviews designed to cover a policy failure which can no longer be concealed. I hope that the Government will think clearly and decisively before the next Review. If they do not, it will be disastrous to British agriculture, because urban taxpayers will not go on paying these large sums for nothing. We must face the fact that a breakdown of the present system, with nothing in its place, could well mean complete free trade in land and in agricultural production. This would not necessarily mean less production but it would mean production from different people—from the big farmers. I prefer, and have always preferred, the present system where we openly use subsidies to keep a large number of small producers in agriculture, because it keeps a certain type of man and his family on the countryside —a man who makes a contribution to the social order.

I approve the fact that our agricultural policy is geared to the requirements of the countryside and not to the town and the requirements of townspeople who, in the main, pay the subsidies and consume the food that is produced. But this has been possible only because, basically, most townsfolk have much love for the land and an appreciation of the efforts of those who work on it. But a basically urban society will not go on finding hundreds of millions of pounds each year to finance a faulty system from which the farmers do not benefit and which channels our taxes into the pockets of the middleman. I urge Her Majesty's Government, before it is too late, to go on considering ways and means of substituting fixed prices for support prices; to control profit margins and to raise from import tariffs and levies the bulk of the money needed for agricultural support. In so doing they will not only ease the lot of the overburdened taxpayer, but ensure the future prosperity of the countryside and of those who work on it.

6.5 p.m.

VISCOUNT STONEHAVEN

My Lords, I should like, if I may, to begin by congratulating the noble Lord, Lord Williams of Barnburgh, on a magnificent, pleasant and very amusing maiden speech. If I may also say so, I have always regarded him as the best Minister of Agriculture we have ever had—and that is from this side of the House. Then we had another very fine maiden speech, that from the noble Lord, Lord Terrington, whom I hope we shall hear many times again.

In this debate I should start by declaring an interest, being myself a farmer and I do so now. It seemed to me that there was in this Price Review, and after what I regarded as last year's disastrous Review, at last a slight indication of recognition, though possibly grudgingly, of agriculture as a worthwhile industry which could not be fooled about with and bullied for ever. We had a bit of a "dig" last year, and I think the Government took the hint. On the other hand, it must be remembered that agriculture is only part of the national economy. There is sometimes a feeling that we are fortunate in having in the Farmers' Unions people who are such statesmen that they may consider the national economy even to the extent of not pushing quite so hard as they might in certain sections of the industry. That may not be true; but it is a feeling which arises from the very statesmanship of those leaders. The Government, however, must not overdo the flogging of the willing horse.

The farmer is, of course, a man of extreme patriotism. He grumbles, but he is apt to "take it". The figures given by the noble Lord, Lord Williams of Barnburgh, were a very clear illustration of how long that has been going on and I feel that, in fairness to the farmers (and perhaps we have in this Price Review a sign of the fact that the Government are beginning to consider this), it is high time that we started remunerating the farmer as well as the farm labourer. The farm labourer earns all he gets; but in Scotland, anyway, in the last year the farm labourer has had about £1 a week rise while the farmer has had a reduction. These things must be considered.

So far as I personally am affected by this Price Review, I have got back 3d. per cwt. on oats and have lost an unspecified subsidy on fertilisers. Those are the only commodities affected with which I am concerned. Nevertheless, for the first time in history I have got 90 per cent. of my cereal crop in. I am afraid that the barley went in before the price cut was announced, and if many other farmers did the same that may make the price cut less effective than if it had come earlier, before the sowing took place; but that is a freak of the year.

In regard to milk, I commend Her Majesty's Government for placing the predicament fairly and squarely before the milk producers and for suggesting that it is up to them to produce the answers. I think that is fair enough. I believe the best answer to the problem will come from the milk producers. In any case, if they have not produced a solution they cannot grumble at the Government for imposing one upon them. On the other hand, I sympathise with the very large number of milk producers who have taken the Government grants and spent a great deal of capital on modernising their dairies, and so on, with a view, at least in a very large number of cases, to increasing the number of the cows they are able to keep and feed and, naturally enough, to producing an increased quantity of milk. I think it is a little tough on them and I therefore sympathise with them. There will he a very great noise made by the milk producers. But I am not a milk producer arid I think one can well leave them to look after themselves.

On the question of the potato increase, the price of potatoes in Scotland is, on average, £1 per ton less than the price in the South of England. If the Scottish farmers can produce potatoes economically at £1 per ton less, why does a producer in the South of England, who is getting £1 per ton more, require 5s.? The problem that will not be faced by anybody is the problem of transport, and also the problem of geography. Until we get them down to that and get an answer to that problem—I have said it before—we shall be paying the rich farmer, with prosperous conditions, more than he really needs in grants while starving the poor chap in poor districts, who is in an unfavourable place regarding climate and geography, of what he requires to make a reasonable living. 'That is an inescapable problem that ought to be faced.

There is the question of the exports of agricultural machinery, which have gone up in a very satisfactory manner and by great leaps and bounds. Nevertheless, there is a small thing I think we could do there. This spring I came down from Scotland and attended a demonstration of ditching machinery in Sussex—a magnificent demonstration. There were dozens of machines of various sorts working there, and the demonstration was very well run and staged. But it would have cost very little to take a film of each implement working, and of the general conditions, and to prepare a commentary (I think it is called "dubbing") for that film in the language of the people to whom it is hoped to sell these machines. I am quite sure that a small action of that sort would assist very largely in increasing our exports and in increasing benefits to the general industry in question. If only one firm were allowed to do it, it would mean that one firm would take advantage of another. But if it were done in a central way, so that all firms were represented, the foreigner not only would have a far greater variety to choose from, but would see things working in conditions which, generally speaking, he is not able to do. I throw that suggestion into this debate just as something that might be thought about.

I am not quite sure whether, when we come to controlling the number of pigs and the quantities of milk, and so on, we are making quite enough use of the very fine organisation of the Farmers' Union. But I must admit that, contrary to general belief, there are a very large number of farmers, certainly in Scotland. who do not belong to the Union; and I think that is the sort of thing that might be looked at while people are looking at all these matters.

May I now come to a particular point in this White Paper, Cmnd. 1311, on page 15? It is something which I do not understand. In Table C, expenditure on labour on the "national farm" for 1959–60 is given as £312½ million, and for 1960–61 the expenditure on labour is also given as £312½ million. If we turn over the page to Appendix III we see that labour costs are said to have risen for all products by £17–25 million, and for Review products by £13–16 million. I have already pointed out that there have been two rises of wages in the last year which we have had to pay in Scotland. Therefore I cannot understand how the figure of £312½ million in 1959–60 can remain the same in 1960–61. I did not give the noble Lord, Lord Craigton, warning of this question, so I do not ask him to answer that point. But, while I am on the subject, I should like to thank the noble Lord for being here. In past years I have taken part in the debate on agriculture, and the noble Earl, Lord Waldegrave, has had to shrug his shoulders and say, "Thank goodness I do not answer for these Scotsmen!", and it has always been rather unsatisfactory.

There is one other point that I should like to raise while talking about actual incomes and figures of incomes. On page 15 the White Paper shows—and rightly so, of course—an increase in the value of farm stocks and work in hand of £42 million. When you want to buy a packet of cigarettes you cannot sell your cow which has increased in value. I agree that the value is there, but so far as the farmer is concerned it is merely something that makes him pay more tax; nothing else. So when one is considering the matter in an unheated atmosphere, I feel that that is a point to remember: the farmer is really worse off than he is shown to be.

Then there is the question of marketing. Marketing, of course, is a very great problem, but one of the problems which must also be investigated is the problem of getting produce to the market. That is not really a marketing problem; it is a transport problem. Nevertheless, it is one of the things which has a very great effect, if you live a long way away as some of us do, on the final results.

The noble Baroness, Lady Elliot of Harwood, has remarked on the cuts in the M.A.P. grants—I hope she will correct me if I misrepresent what she said. A great many of those cuts were accomplished, not by a cut in the actual grant but by am arbitrary stroke of the blue pencil. The attitude is, "You do not get it this year."—no reason is given— "There is not enough money in the kitty." On this awkward question of marginal grants, which is to be reviewed, the policy appears to be, "For Heaven's sake! get everybody that we can off marginal grants now, so that when we finally review the problem this year or next year there will only be half a dozen left". That may not be what is behind it, but that is the effect; and I do not think it is very good because, to my mind, it is not producing the right answer, or a fair one. I should say that I had the blue pencil used for myself, though in my case I had a rather satisfactory arrangement applied. Therefore, although I have had the blue pencil used, I am not holding that against the Department because they compensated me in other ways which were quite satisfactory. Nevertheless, I am stating that as a fact for many people in Scotland.

I often find in an agricultural debate —at arty rate, it is so in this one to-day—that it is difficult to agree with almost any speech that has been made. I cannot go all the way with the noble Lord, Lord Stottham, because when I was on the Council of Europe I was for two years Vice-Chairman of the Agricultural Committee, and, within the ability of my languages (which is pretty poor) I was given to understand—and the interpreters said so—that our support price system was the envy of most of the nations represented at the Council of Europe. That does not quite tie up with what the noble Lord, Lord Stonham, said. I am sorry he has gone, and I hope he will not mind my saying that when he is not here. The noble Lord, Lord Wise, will be able to reply to it if he wishes.

Then I must, I think, refer briefly to the barley question. A support price, of course, is called upon if the normal price received by the producer falls well below the guaranteed price—it has then to be supported. That is a sort of basic principle; and that, I think, we all understand. But some of the chief buyers of barley and cereals are the compound food compounders. If we allow Russian barley into this country at 17s. per cwt., it appears to me that that will force down the price of our own barley; and if we also allow in at that figure American maize, which has a far higher starch equivalent and is most useful to compound producers, then it will be necessary to pay a bigger support price. I think one should not be doctrinaire about this problem. There are parts of the policy of control, dues or quotas, which I think could benefit the taxpayer very greatly, because he would not then be called upon to pay such a big difference.

Coming to the question of fertilisers, we had a out in the fertiliser subsidy last year. That was virtually absorbed by the manufacturers. I have no doubt that it will again be absorbed by the manufacturers—and, if you look at the percentage profits of I.C.I. you will see that they can well afford to do so. It is a hard fact that today you can buy 23 per cent. nitrogen, Nitro-Shell, which is manufactured in Holland—and that is still one of the cheapest forms of nitrogen that you can get in this country. That is very difficult to understand, and it requires looking into. I believe that this industry should be looked at section by section. Not to look into the position of the middlemen and the industrialists, and not to look at their profits, is, I think, a mistake: and it means throwing the burden on the farmer, Where I do not think it should be. I think that all these things should be considered in a very wide scheme of inquiry, because they all have their effect. I must agree with the noble Lord, Lord Stan-ham (and it is very difficult not to sympathise with him in what he has said) that, in the end, the fact is that the price of food has risen and the price to the farmers has dropped. You cannot get away from that, though you may not like what the noble Lord says ought to be done about it. But I am not talking about that; I am talking about these facts which are true and are there for anybody to see. I think it is high time that Her Majesty's Government investigated the matter and took whatever action they considered appropriate. That is all I am asking; but I do feel that that is the type of thing that should be done. One should not merely say, "The farmers are getting so much more support", and so on, and blame the farmers, as a lot of townspeople do, I think rather unjustly.

6.25 p.m.

THE MINISTER OF STATE, SCOTTISH OFFICE (LORD CRAIGTON)

My Lords, I hope you will allow me to intervene shortly, since my two noble friends from Scotland have raised points which I think are best answered by a Scottish Minister. I am grateful to my noble friend Lord Stonehaven for a helpful and constructive speech, which we shall study most carefully. He spoke of the problem of potatoes as a problem of geography; and he struck a chord in my mind, because this problem of geography is one of Scotland's permanent, major problems in all our activities. How much I agree with him, and how much I wish that the problem applied only to potatoes!

He asked me a question about the Annual Review, and very kindly said that I need not answer it. But I think I have the answer. He was concerned that the figure of £312½ million should appear in 1960 and 1961 as the figure for labour. I am advised that this is simply by chance. It is the same figure, but it refers to fewer workers.

VISCOUNT STONEHAVEN

I see. Thank you.

LORD CRAIGTON

Now the noble Baroness, Lady Elliot of Harwood, welcomed the encouragement for beef; and I think that if she had added, "for oats, too" she would have found a similar welcome among many of our farmers, because this is a substantial double incentive, especially for many of our farmers in Scotland. She was concerned about the hill sheep subsidy, and made a specific reference to this subject. The Government agree that after a very good year in 1957, and a pretty good one in 1958, the hill sheep farmers' position in 1959 was adversely affected by the sharp drop in lamb prices, due, in part, to the influence of the weather. The Government therefore made a hill sheep payment in respect of the 1959 lamb crop, as she will know, of 3s. per ewe. The Government are considering at the moment the whole question of what payment should be made for the 1960 lamb crop year, and I am able to tell her that an announcement will be made very shortly.

Then the noble Lady went on to query the Government's policy for the hill and upland areas in general; and I must defend the Government's position here. There are many indications of my right honourable friend's interest and concern in the well-being of the hill and upland areas, which are so important a part of Scottish agriculture. This section of the industry obtains considerable help from a number of general grants and subsidies —the fertiliser grant, the lime grant, the ploughing grant, the calf subsidy and the land drainage grant; and, in addition, there are the capital grants for the re-habitation of the permanent equipment on the hill and upland farms, of which great advantage has been taken. Furthermore, there is the hill cattle subsidy; and, in the years when it is necessary, the hill sheep subsidy. As a result of these forms of assistance, many of them of special value to the hill and upland areas, cattle production in tfiese areas continues to expand at a very satisfactory rate, and our sheep population is at record level. That, I think, is a fairly good record.

Then the noble Lady was particularly concerned—and I think understandably —about M.A.P. grants. I will not argue on the merits of this matter, although she will know that exactly how the withdrawal of the grants is to be accomplished has been left to the discretion of the A.E.C.s. The position now is that my right honourable friend has undertaken That before the present M.A.P. scheme expires—that is, in the 1962 cropping season—a special review will be carried out by his Department and the A.E.C.s of those farms still receiving M.A.P. assistance, and that, following that review, the position of these holdings will be discussed width the Scottish N.F.U. My Department is already in touch with the A.E.C.s on this special review, the purpose of which is to provide an objective and statistical basis for the later assessment of the M.A.P. position.

As regards the talks with the Scottish N.F.U., which will start later in the year, while I cannot, of course, predict what the result will be, I can give an assurance that the Government's approach—and I am sure the approach of the Scottish N.F.U.—will be both realistic and constructive. We earnestly hope that the deliberations will lead to an effective, long-term solution. We are also grateful for, and I think will be helped very much by, the many constructive representations that we have received from so many individuals and responsible bodies which represent agricultural interests. Finally, my Lords, I am very grateful, as will be all my officials, for the tribute paid by the noble Lady to the officials of my Department. It is good to know that they carry out their hard task properly and to her satisfaction.

6.30 p.m.

EARL FERRERS

My Lords, we have had an interesting debate this afternoon, most of which was centred round the recent Price Review. I must say at the outset that I consider it to be a very good Review, and not because, as some newspapers have mistakenly stated, the Government have given agriculture £14 I believe it is a good Price Review primarily because it has restored to the industry a very large proportion of the confidence which the last Review destroyed; and if it has done that, it has done a lot. I believe it has been a good Review because it has been farseeing. One feels that the Government have tried to look further than the immediate year in question. I would say that this was almost unique. They have said that the 10s. increase on fat cattle will be continued to the next Price Review, and also the 3d. a score on pigs. Cynics may say that these are not great concessions, but I applaud the spirit, and the desire to be constructive.

Equally, I applaud the Government's offer of £500,000 to be spent on market research. As one gathers from reading between the lines of the White Paper, that offer in fact was made for this year, but was turned d!own by the Unions. If that is the case, I think it is most surprising. The marketing of vast proportions of our agricultural produce is entirely unto-ordinated, and it is high time that a concentrated effort is made to market produce more efficiently. I was therefore surprised to see that the Unions have, in the words of the White Paper, "noted the Government's proposals with considerable interest". I consider that it should have bean welcomed with open arms, more especially because, as it says in the White Paper, the initiative for this type of thing should come from within the industry.

There is also considerable interest in the decision to offer a one-third capital grant for machinery syndicates. I appreciate the reasons for this, although personally I doubt the practicability of these syndicates. One is, indeed, tempted to ask the question: Where are we going? Clearly the Government consider, as do many economists, that there is little point in, say, four 200-acre farms having their own tractors, ploughs, combines, precision drills, and so forth. How much better to have one large syndicate capable of having bigger and better machinery to cope with all 800 acres put together, thereby cutting the cost per acre! I have two doubts on this score. First, farmers, on the whole, are extremely unto-operative. They like to have their own machines to use as and when they like, and to use them how they like. They do not like lending —although they are not particularly averse to borrowing. Inevitably, everybody wants the same machine at the same time.

Economically, I think there is a lot to be said for co-operation in machinery. In practice, however, there are limitations, and these are caused by my second doubt. Why stop at machinery? If it is cheaper to run machinery for 800 acres in one block, rather than four separate units of 200 acres, cannot the same doctrine apply to other aspects of farming? Would it not be more economical to have one big herd of 100 cows rather than four small herds of 25 cows? The biggest question of all is: would it not be more economical for one man to manage 800 acres, and co-ordinate the interests of all those acres, than for four men each to manage 200 acres, with nothing in common except the desire to use the same machinery with the same syndicate at the same time? Does this, therefore, mean that the day for the big farmer is here, and the day for the small farmer is past? To my mind, unquestionably that is the trend. The same is happening in farming as is happening in every other industry in this country, and in every other civilised country in the world. It may be a sad thought, and, I know, a very unpopular one, but if economics are to be the sole criterion, that is unquestionably what is happening.

Let me say here that I am riot advocating the advance of the big farmer at the expense of the small farmer. I am merely saying that, in the light of my own experience, and in the light of pure common sense, in future it is going to become more and more difficult for the small farmer, in general, to be economically successful. I do not like that thought, but I do not see that that is any reason, therefore, not to contemplate it. Mercifully, economics are not the sole criterion in guiding the nation's agricultural policy. But I consider that the Government and the Unions should grasp this nettle with both hands, however unpopular it may be and however much they may not like it, and inform the industry frankly what they consider will be the future of the small farmer and how he will fit into the future of agriculture in this country.

That is just one example of the type of leadership which the agricultural industry seeks, and must have. Farmers, on the whole—and we must admit it—are frightened of the future. Each Price Review hangs over their heads like the sword of Damocles; and even if it is a good Review, they say: "Yes, but what happens next year?" The prospect of the European Free Trade Association and the Common Market alarms them. I realise that the Government have frequently pledged themselves to protect our home agriculture, but there is always the fear that the Government might find themselves pushed into an awkward situation and find it difficult to honour those pledges in full. An example of the type of thing which alarms farmers in this connection is that Dutch butter at this moment is coming into the country with a subsidy of 1s. 4d. per kilo. That was recently raised, on March 12, to 1s. 10d. per kilo. Yet the same Government supported the Danish protest to G.A.T.T. in 1957, when they complained that United Kingdom eggs were competing unfairly in European markets because they were produced under subsidy. This is the type of thing which worries farmers about the future, and I should be glad if the noble Earl could in any way allay those fears.

The future, with these vast areas of relatively free trade, is alarming, but it is also highly stimulating. It is a concept that is entirely new, not only to agriculture—and let us remember this, my Lords—but also to every other industry in this country; indeed, to every other industry in Europe. The future prosperity of agriculture, therefore, to a large extent depends on the leadership which it is given over the next few years in order that it can be moulded not only into the economy of the country but also into the economy of Europe. Prospects such as this will demand high qualities of statesmanship from our leaders; and by "our leaders", I mean the leaders of the Unions and the Government together. In addition, somehow there must be broken down this feeling that the Government is fighting the farmer and the farmer is fighting the Government. Instead, the farmer should be fighting with the Government, and the Government with the farmer. I should like to see, in general, more credit given to the Government where credit is due, in order that criticism will be the more respected when that criticism is due. The future of agriculture is too lightly balanced for us to be fighting within ourselves over domestic details. Instead, the leaders of the agricultural industry and the Government should be partners together in endeavouring to formulate policy and to fit our agriculture to the pattern of Europe with a more liberal trade.

The reaction of so many engaged in agriculture at the moment is that of the hedgehog when he finds himself frightened; he rolls himself into a ball, pushes out his prickles and says,"Nobody touch me!". I feel that that is very much the attitude that many farmers take on the proposal of freer trade. But what a wrong attitude it is! Freer trade will come, with or without the approval of agriculture, and I only hope that we shall not be found to have been sleeping. We should prepare for it and regard it as a challenge which should be met, faced and won. There is no reason why our agriculture, which is the most highly mechanised and efficient in the world, should not serve a useful and prosperous purpose, provided it is led into this future aright.

To turn for a little to the immediate Review, I would say that much has to be done to make the industry efficient and competitive, not the least part of which is to make some reasonable provision for the marketing of cereals, which must have changed little over the past 500 years. As I have said, the offer of Her Majesty's Government of £500,000 a year for research in marketing is an excellent encouragement. I sympathise also with Her Majesty's Government for saying that they will make some incentive for farmers to keep their barley after harvest. I know that in my own respect that hits me, because I like to get rid of my barley directly after harvest and let somebody else have the worry of looking after it, and every farmer tries to do this. Therefore, this makes a lot of sense.

I appreciate the Government's concern over the marketing of milk, though some people might consider that they have put a pistol to the head of the National Farmers' Union and the Milk Marketing Board. For several Reviews now the Government have warned against excessive production of milk, which can only go for manufacturing and is therefore uneconomic. I am nervous about the two-tier system or quota system, as it seems to me to set a premium on inefficiency and it will be difficult to initiate fairly. How do we give a quota? Do we say that a farmer may produce so many gallons per cow or per acre or take a percentage of the quantity he has produced over the last five years? Whichever system is adopted, it cannot help but penalise the efficient man who produces more milk. Again, how is a quota given to a new man starting in the industry? I wonder whether the Government have been completely justified in placing the ball so firmly in the court of the industry, by telling them that they must find a solution by July 31. I should have thought that a little co-operation over the matter would have been both helpful to the industry and less likely to cause ill-feeling. But this is not a new problem. We have had it over past years and these difficulties are not insuperable. They may be uncomfortable, irksome, but that does not mean that they should not be touched. There is no point in continuing to produce more and more milk which is not wanted and not drunk, and the industry must realise this and appreciate the Government's decision.

A lot of the trouble is due to this endless, and in sonic ways misguided, cry of "Efficiency!" What happens? A farmer has 25 cows, looked after by one man, and he is exhorted and almost bribed into becoming more efficient. He spends a lot of money on his buildings and then wanders around delighted with himself, saying that his man now looks after 45 cows, and isn't he an efficient farmer? But he fails to add that the last 20 cows are producing milk which nobody wants. Provided that no strictures are imposed upon him, the farmer does not mind; it is somebody else's business to sell his milk. In the last resort, if we are producing too much milk, the only remedy is some form of financial penalty. It is not efficiency to produce what is not wanted. Efficiency should mean the production of what is wanted at the cheapest price. It should not be, "Cut your staff, mechanise your farm and turn out as much as you can per man." Farmers make a great mistake in thinking that efficiency means replacement of labour with machines.

I believe that future efficiency lies far more with commodities such as feeding-stuffs, which account for 75 per cent. of the cost of producing milk, poultry, eggs and pigs, than with labour. More care, more trouble and more research could be spent, for instance, on the conservation of grass, which in turn might even mean an increase in labour charges but might also prove sufficiently better in quality to justify a reduction in purchased feeding-stuffs and thus lead to a reduced cost of the final article. There is a limit to the amount by which you can reduce your staff, but there is no limit to the amount by which you can reduce the cost of your commodity, given the right research and techniques.

The prosperity of agriculture would appear to me to be at the cross-roads. Given good leadership and statesmanship by the industry and the Government hand in hand together, there is every reason to think that agriculture should remain prosperous and play its part in the country's economy, and be the pride and joy of the nation; but, given indifferent leadership, with superfluous attention to relatively small domestic issues and harbouring petty bitterness and grievances, I blame no one for fearing the future.

6.48 p.m.

LORD NETHERTHORPE

My Lords, at this late hour it is neither my wish nor my intention to detain your Lordships long. First, I must declare my interest, not only as a farmer but also as a participator in the Review negotiations and as a director of a fertiliser company. I would join with those noble Lords who have paid tribute to the noble Lords who have made maiden speeches to-day. Perhaps one of the most exhilarating experiences one has in your Lordships' House is to hear the broad grasp of the subject of agriculture displayed in a debate like this, and because of that very reason it renders it unnecessary for me to pursue further the arguments that have been so ably portrayed from all sides of the House. If I could make a particular reference, I would refer to the noble Lord, Lord Williams of Barnburgh, whose presence in your Lordships' House I am sure everyone welcomes, particularly when the subject of agriculture is being debated. I would also like to say, in following the noble Earl, Lord Ferrers, that even if I had wanted to address your Lordships at any length, the broad and challenging speech that he has just made rendered that unnecessary.

One thing that has come out in this debate is the common consent on all sides of the House that the White Paper (Cmnd. 1249) really represents the basis of an agricultural policy to which all three Parties in the House can subscribe. Therefore I find it somewhat difficult to reconcile the speech of the noble Lord, Lord Stonham, with that of the noble Lord, Lord Williams of Barnburgh. Be that as it may, I think that we all subcribe to the broad objectives that were adumbrated by the noble Lord, Lord Hastings.

Of course, it is one thing to state the common objectives of agricultural policy; it is another thing altogether to apply them. Their application is revealed clearly in the White Paper (Crnnd. 1311), that has also been referred to considerably in this debate, which reveals the application or, indeed, the interpretation in practice of the principles inherent in the first White Paper. I am not going to delay your Lordships at all in examining in great detail any aspect of the outcome of that Review. I heard it described as a "reasonable Review"; and the noble Earl, Lord Ferrers, said that it was a very good Review. When I hear a Review described as "reasonable", I am put in mind of the farmer who said that he had had a reasonable harvest, and when someone asked him what he meant he said: "If there had been any less, it wouldn't have been worth getting and if there had been any more, I couldn't have got it." I think that is what happened at this Review, and that is where the meeting of minds took place. So, on that basis, I think I should go so far as to say that it is reasonable, but I could not go along with the noble Earl, Lord Ferrers, in saying that it is very good.

I would, however, bring your Lordships' attention to one aspect of the Review that I think is often lost sight of. When we are looking at the financial condition and prospects of the industry, we look at the net aggregate income or the industry, not necessarily in absolute terms, but in relation to the trend over the years. One is apt to look at those figures and think only in terms of their relationship to the commodities covered in the First Schedule of the Agriculture Act. It is true, as has been said here to-day, that £19 million is the increased cost for that section of the commodities covered by the First Schedule—indeed, we call them the Review commodities—and against the £14 million of recoupment there is £5 million to be faced by the industry out of the progressive efficiency that we can engender. But we are apt to forget that the total bill of costs for the industry is £26 million, and the other sectors of the industry have to carry that difference in their stride, as well. I think it is only fair to recall that, even though for the particular purpose I concede that we are dealing with Review commodities only.

It is true that the big factor of efficiency may be perhaps overplayed. Even so, at this Review, at any rate, there is recognition of the principle that was written into the White Paper following the discussions on policy—namely, that the farmers of this country should he entitled to, are entitled to and should be able to share in their own efficiency if we are to induce them to continue with that effort. It so happens that in other industries efficiency is shared usually between the shareholders and the consumers of the product. But in our industry we have three partners: the Exchequer, the consumer and the producer of the product. Therefore it is a little hard on the agriculturist, the farmer, if the Government take the view that the first charge against anything in the cash value of efficiency should be the indebtedness, or, should I say, the liability, of the Exchequer. This Review, at any rate, has given effect to the undertaking in the previous White Paper that the farmer should have a share in the efficiency of his own production.

I do not intend to make much comment on the commodities themselves except to say this about barley. The noble Viscount, Lord Alexander of Hillsborough, referred to what he called the Working Committee—it was a Working Party. That Working Party was designed deliberately to try to stabilise the barley market. If it has been slightly successful, it has been worth while; but I think it has done even more. What we hoped to do was to take that concept a stage further down the line. I personally have always felt it desirable to contemplate contracts between the users of barley, the compounders, and the producer in order to try to stabilise over the whole marketing year the off-take of barley and make it more even, and thereby relieve the pressure for harvest. The present proposals, which have not been completely worked out in detail, can make some contribution to that end but will not go so far as I believe we shall have to go in the ultimate if we are to create stability in the barley market.

I do not think the remarks that have been made about the marketing fund concept are really fair to the industry as a whole. The noble Earl, Lord Ferrers, said that we have turned this down. That is wholly untrue. The real position was that the suggestion was sprung upon those responsible for negotiating without their knowing to the fullest possible extent what the implications were, or, indeed, what strings might be attached to any use of money from Government sources. Incidentally, it was not necessarily directly from the Government, because it was really money that was taken out of the global award which would have been coming to producers anyway; and, in any case, the balance had to be matched, pound for pound, by the producers, so that, in effect, they would be paying the whole.

What we do not want to do is to embark on a project which carries with it such strings as would create embarrassment, instead of doing what it originally intended to do, to which I fully subscribe—namely, effect a real drive into market research. Initiative has already been taken by the farming community by market research into apples and pears, the reports regarding which have been seen recently, and into meat marketing and the like. So it is wrong to say that we are not taking the initiative; and I believe that during the period between now and the next Review we can work out with the Government a basis for the proper appli- cation of this money without embarrassing the industry with strings that virtually render the achievement of the purpose impossible or, indeed, even dangerous.

If your Lordships want an example, I can give one. If, for instance, the producers, in their prudence, wanted a market research on a particular commodity, and in the process of that found that the marketing technique best suited to the marketing would prejudice the interests of other parties, then the fact that Government funds had contributed to the preparation of it would render it obligatory to publish such a report, which would arm one's adversaries with one's own thinking before, so to speak, one was ready to clinch the deal. I think it is from that point of view that second thoughts are necessary.

EARL FERRERS

My Lords, may I interrupt the noble Lord? The impression one got from reading the White Paper was that the Government had offered to go pound for pound with the marketing proposals and that the Union had said, "Not this year". Would it not have been possible for them to have accepted that suggestion, even if they did not use it until possibly the latter half of the year? It seems a pity to have turned it down, as it appeared to me, out of hand.

LORD NETHERTHORPE

I repeat that we did not, as such, turn it down. What we wanted to do was to have more time to make sure that the conditions attached to the acceptance of money were not such as would defeat the absolute objective, the purpose of the operation. If I were in a position (which I am not) to disclose the details of the discussion, I think I could easily convince your Lordships of the prudence of the farming community in not accepting that with open arms. We did not look a gift horse in the mouth. We had the good sense, I think, to realise that if there were snags in this and strings attached to it which would prejudice the objective, we were far better having the time at our disposal. I think the mention in the White Paper is that when we are ready, by the next Review, money can then perhaps be earmarked. I wish to remind your Lordships again that it is not a matter of the Government's giving money to the industry for this purpose. It is allocating out of a global award money that otherwise would come to the agricultural community for a specific purpose, for which we have to match pound for pound. So we are entitled to second thoughts, and it was not lack of initiative or responsibility. It was a determination to make sure that the right thing was done.

One final word on commodities, and that is with regard to milk. I would not have mentioned the milk situation, because it has been so well covered, had it not been for one remark made by the noble Viscount, Lord Alexander of Hillsborough, who contended that the Farmers' Union had virtually, in negotiation with the Minister, accepted the proposition submitted by the Minister with regard to the increment on the price per gallon of milk and the condition that we should, before July 31, have prepared a scheme that would achieve the objectives written into the White Paper; and that we had done this without any consultation with, or the knowledge of, the Milk Marketing Board. The truth of the position is actually this. Whilst the Board itself may not have known, the Chairman of the Board was most certainly consulted at the first opportunity—almost immediately after the suggestion was made—and he is the first to subscribe to that point. Since all our discussions on the Price Review are private and confidential, it is perfectly true that it was not disclosed to the Board, because it could not be disclosed on that particular point. But in fairness to the Chairman, I do not wish him to be misrepresented in any shape or form.

Broadly speaking, therefore, I think the Review was a reasonable Review. It was a Review which interpreted the spirit, if not the letter, of the White Paper of December, 1960. But I would also agree that we have to face the future with courage and statesmanship, and be able so to adjust ourselves to the changing circumstances—whatever they may be—in a sense of the objective, rather than hidebound and circumscribed feeling: none of the hedgehog, and more of the adventuring racehorse. I would therefore say to your Lordships that I welcome the opportunity that this debate has given for hearing a broadly based discussion such as we have all been able to enjoy from both sides of the House this afternoon.

7.3 p.m.

VISCOUNT BRIDGEMAN

My Lords, at this late hour I shall follow my noble friend Lord Netherthorpe only to the extent of endorsing the last words which he spoke, and of adding my humble tribute to the White Paper. I wish to say a few words about one aspect of the milk problem which has already been covered a good deal this afternoon. I do so as one who produces a good deal more milk than he consumes; and that, I realise, is embarrassing from the point of view of Her Majesty's Government. The milk problem has been fairly well covered by a number of noble Lords. It is a curious reflection that we have now reached a stage where, in the last ten or twelve years, there has been a 20 per cent. increase in the milk production of this country—and that, I think anybody may say, is due to the efficiency of the milk-producing part of the agricultural industry. It is due to a combined effort by the milk producers themselves, the breed societies (or at least most of them) and the Milk Marketing Board. Now we are told that the time has come to cut down, and something is to be introduced which is called in the White Paper a "basic allocation", though perhaps "quota" would be the more brutal word.

I would only say, at this time of night, that I sincerely hope that basic allocations or quotas, or whatever they may be called, will be applied only as a last resort. Quite apart from the general arguments against restrictive practices and bureaucracy and such things, there are the arguments that it will damage the more efficient part of the milk-producing industry—arguments which noble Lords like my noble friend Lord Ferrers have produced, and which I will not repeat again. I would say only one thing in the interests of landowners and owner-occupiers: if, in the event, some basic allocation is introduced, I hope that the period for which it is introduced will tie up to the periods when the improvements grants are promised to landowners and owner-occupiers, because the two things will, to a great extent, go together.

Behind the words in paragraphs 9 and 10 of the White Paper there lurks the problem of the small holder. I should like for a moment to say a word about him. Whatever anybody may say, and whatever my noble friend Lord Hastings may have to say (and I would say with what pleasure we heard him speak from the Front Bench), the least efficient section of the milk-producing industry is almost bound to be the smaller milk producer, certainly if we value the amount of work he or his wife does in terms of the agricultural wages rates. Whether or not it may be so, the smaller producer is certainly less efficient from the point of view of the Milk Marketing Board, because it is quite clear that the cost of collection from the smaller producers, and, therefore, the cost of his milk to the consumer, must be much greater than the cost of collection from the bigger producer.

So we reach a state of affairs where, if other things were equal, it would be the smaller milk producer who by and large would need to be put out of business. But, of course, other things are not equal, and in fact there are many other reasons for supporting the small man. Whatever those reasons may be, it will probably be the fact that the small man, who has to be kept in being for reasons other than purely economic reasons, is supported at the expense of the farming industry in the same way as a railway is supported by British Railways, not because they want to keep that line, but because they must. So I think the time has come when my right honourable friend the Minister of Agriculture and his advisers will need to give a good deal more attention than has been given recently to this problem of the small holder: What is his future in the farming industry, and what shall be done for his good and that of the industry?

Here I would say that a good deal of the unclear thinking on this problem comes from the use of the term "small holder". It is used to cover the bare land used as a market garden, an intensive pig or poultry undertaking, or the miniature farm. It seems—though the Ministry of Agriculture have never stated their views clearly on this—that their limit to the size of a small holding is 20 acres. Certainly in practice I have yet to hear of a farm improvement grant being applied to a farm below that acreage. Equally, if you get a sheep farm on the hills on the Welsh or Scottish borders, it is a great deal more than 20 acres, and yet produces only the value of the richer land of 20 acres. That is still classed as a small holding. We get into a muddle because we confuse the miniature farm, which comes in here as the milk producer, which the big farm and the market garden are not.

Are we tackling those problems? There is no real excuse for not having tackled them harder, because the noble Lord, Lord Ogmore—who I am glad to see has just come in—will remember that he initiated a debate some two or three years ago on that excellent Report on the marginal land in Central Wales. If anything pointed to the problem of the small holder—whether he could be kept going, and how—it was that debate and that White Paper. It has been pointed to again, as many noble Lords will know, by the reports that have appeared in the farming Press, and, I think, in the national Press, on the steps which have been taken by Sir Michael Duff to amalgamate his small holdings in the slate-quarrying country in Caernarvonshire. That, to my mind, must have been an extremely difficult enterprise. It must have meant a great deal of forethought, patience and fairness. But, by all the accounts I have, it has been a remarkable success and has been carried through with quite an astonishing amount of good will.

LORD OGMORE

My Lords, since the noble Viscount has been good enough to refer to me, may I ask him whether his attention has also been drawn to the proposed sale by the Government of the Glanllyn Estate, which is around Lake Bala, and the very great concern many of us feel about the point he is making; that is, the difficulty of the small farmer, or the small holder who will have to grapple with problems in that area if the land is sold by the Government?

VISCOUNT BRIDGEMAN

My Lords, I have read of the sale of the Glanllyn Estate to which the noble Lord refers. I know nothing about it, but I am confident that if the matter is tackled in the way suggested in that Blue Book, and in the way the matter was tackled in Caernarvonshire, the result will be like the best fairy tales and everyone will live happily ever after.

My Lords, that is all I want to say at this time of night. I feel that this problem of milk, which is a very real one, has highlighted the problem of small holdings. I feel that in the case of what I call the miniature farm (because I do not want to use the words "small holding" for it), the two problems go together, and I sincerely hope that, as a result of this White Paper and these words on milk which have been spoken in the House to-day, the problem of the small farm will be tackled sympathetically and seriously.

7.13 p.m.

LORD WISE

My Lords, first I have not only notes of congratulations to make but also notes of apology for absence at this late hour of some Members of your Lordships' House. First of all, my noble Leader, Lord Alexander of Hillsborough, has had to go; the noble Lord, Lord Williams of Barnburgh, has also had to leave, as well as the noble Lord, Lord Stonham. In their names I apologise both to the Minister and to the House for their absence. It is also my pleasure to congratulate the noble Lord, Lord Hastings, on his first speech from the Front Bench. I am glad to see him here, as a Norfolk friend, and I hope that we shall hear him many times from that Box.

Also, I want, naturally, although he has gone, to say how much we enjoyed the speech of the noble Lord, Lord Williams of Barnburgh. We on this side have known the noble Lord for many years, and he bears a reputation as a Minister of Agriculture unequalled, in this generation or in the generation before him. Ministers of Agriculture come and go, but I think the name of Tom Williams will live for ever, so far as agriculture is concerned. Also I want to congratulate the noble Lord, Lord Terrington, on his advocacy for the small farmer and the small holder: I thought what he said was excellent. And I congratulate him the more because, if I may say so in his presence, I knew his grandfather when he was a member of the Defence of the Realm Commission during the First World War. I had to give evidence many times before him. And his own father, I think, was the most friendly of noble Lords in this House while he was here, and acceptable to every one of us.

The question of barley has been referred to during the course of this debate. I want to be as brief as possible; I do not want to go over the whole gambit of the pros and cons of the Price Review; I am mainly concerned, as a Norfolk man, with the effect upon barley and sugar beet as shown in the Review. It has been referred to, and I am glad that the noble Lord, Lord Amherst of Hackney, referred to it. Once or twice when he was speaking about barley and sugar beet, I almost said to him: "Come over here; you are on the wrong side". I think that the arable farmers who are mainly concerned with production of barley and sugar beet, particularly in East Anglia, have grounds for complaint in regard to the measure of disability (if I may so call it) which has been meted out to them in the Review. In these days we in East Anglia arc essentially a barley area, except possibly for some heavy wheat land in Suffolk and Essex, and the Fen country, where wheat and fruit prevail. We can produce the finest barley in the country, and possibly in the world—and I am sure that the noble Lord, Lord Hastings, and the noble Lord, Lord Amherst of Hackney, will agree with me that the barley of Norfolk and Suffolk is unequalled. We have suitable land, a wealth of practical experience and generally a suitable climate.

I want to say this particularly—I think I am right in saying so. We can produce all the British maltsters and brewers require, without their going abroad for their supplies, or dabbling, as I understand they have done lately, in experiments in foreign products, to the disadvantage of our own home products. When a worthwhile product is produced, the growers should be encouraged and not subjected to the depressive actions of the Government's up-and-down policies; a little bit off this year, a little bit on next year, fewer stock this year, more stock next year. And that is how the policies have gone on from year to year. The East Anglian farmers have acquired efficiency in barley growing; and suffering, as they have done recently, from uncertain and diminishing prices (which I shall deal with in a moment or so), from having grain still unsold—because it is well known that there is still barley in the barns of East Anglia which was combined at the harvest and which it is impossible to move or sell—and from other rising costs, it is no consolation to them that small gains, if any, in other products or stock may affect them.

In accordance with ministerial exhortations year by year, we have increased the barley acreages in order that homegrown cereals may be used as coarse grain in agricultural feeding-stuffs, and thus we have been able to help to overcome our balance of trade deficiencies. We are now told in respect of barley that we must cut down our production. That is the up-and-down policy of the Government to which I referred a moment ago. The stubborn fact remains that the barley growers of East Anglia staid to lose nearly £2 million on the barley crop alone this year, the crop which has been sold before the Price Review ever came to public notice and is now coming through the ground. No plausible speeches from Ministers will persuade the arable farmers that such will not be the case. And in addition to that, as I mentioned a moment ago, barley growers have incurred recent losses on their last harvest by having to keep their corn unsold. I will deal with figures in a few moments.

I may be told that the National Farmers' Union had negotiating representatives from all parts of the country, but the last word in this Price Review obviously rests with the Government representatives. I want to quote one or two things because they are material. Let me quote what two Norfolk farmers, both of them known to Norfolk men on the other side and both members of the Council of the National Farmers' Union, recently said at meetings since the publication of the Price Review. The first farmer said—I quote the newspaper report in full: 'I think we have gained a substantial advantage from those talks in the summer and the White Paper which followed them. If barley had been the only thing to report on I doubt if I would have had the nerve to come here at all'."— that is, to a meeting of the Farmers' Union— 'Having produced barley to save the cost of imported feed, this is the sort of treatment we receive', he added, referring to the price reduction of 1s. 2d, a hundredweight. `I am as disgusted and probably more disappointed at the result as far as barley goes than anyone in this room'. Here is another newspaper quotation from the same meeting. This particular farmer said he thought that the barley scheme was extremely dangerous. It was a panic measure on the part of the Government to try and save itself some money. The scheme was missing the fundamental reason why so much barley came on the market immediately following harvest. Some farmers had to sell because they had to get some cash. It was credit more than anything else that caused the rush. The scheme would take from those who needed to sell and give to those who could afford to hold the barley. I do not want to weary your Lordships with quotations, but those two will show your Lordships the local reaction to the Government's policy in further depressing the price of barley.

Here is an extract from the editorial of the Farming World, a paper which is published in Norwich and circulated in Norfolk to all agriculturists. The heading in this particular issue is: East takes a knock". The text says this: But the Eastern Counties will receive the full impact of the maximum cut in the guarantee price for barley and, mainly as a result of this, some farmers are already estimating that they stand to gain nothing from the Review and may well be worse off. The barley grower who tries to play his part by keeping off the market at harvest—and has been the loser this year—will under the new scheme be assured of a higher average rate of acreage payment in the latter stage of the cereal year. But finances dictate the course of many who sell at harvest. I will not read more of that, although there is more in the same strain. These quotations are significant.

Now I will give your Lordships a few figures which I think substantiate my plea for a better deal for the barley grower along the East Coast. According to the Price Review, the acreage of barley grown last year was estimated at 3,370,000 acres. Of this, the Norfolk acreage was 297,000 acres, Suffolk 238.000 acres, Lindsey division of Lincolnshire 181,000 acres, and Essex 150,000 acres—in all, 866,000 acres, or about one-quarter of the whole of the barley land of this country. Owing to the drilling of extra acreage of barley, it is estimated that the barley acreage for the 1961 harvest will be higher. This is accounted for by the wet autumn and the difficulties of sowing in autumn any autumn or spring wheat. I expect that the barley acreage this year for the four areas I have mentioned will extend to nearly one million acres—admittedly a large area for one crop for one stretch of country but it shows your Lordships how we must he interested in the welfare of the barley crop and its price in that particular area of Britain.

The reduction in the guaranteed price is 1s. 2d. per hundredweight, coming down from 28s. 9d. per hundredweight, which it is at the moment, to 27s. 7d. this coming year. That is equal to £1 3s. 4d. per ton or 4s. 8d. per quarter. On the basis of a yield of six quarters per acre—the noble Lord, Lord Amherst of Hackney, mentioned more or less that particular yield and that particular amount of money; the Price Review actually gives yields of about 1i tons per acre, which is between six and seven quarters—one million acres of average barley in our Eastern Counties would suffer a reduction in price through the Price Review of no less than £1,400,000.

I have kept the figures at a reasonably low level, but some figures have already been produced estimating a loss of 35s. an acre on the whole 4 to 5 million tons of barley which the 4 million acres of barley land is estimated to produce this year. The loss to all barley growers will amount, on my figures, to nearly £6 million. This is equivalent—this is important as being more or less related to the usual size of farm for barley growing—to a loss of £140 per 100 acres. Many farmers have already sown that acreage, and a good deal more. I ask, where, in the Price Review, are these farmers able to recoup that loss? The loss may not rest there, as we have no guarantee that the buyers of barley will pay even the low prices which are at present operating, or those generally in operation since the harvest of last year.

The last published Ministry returns showed the following figures for growers' sales for the week ending March 11: barley sold, 208,694 cwt. against 161,108 cwt. for the corresponding period last year, which I think shows that the barley which has had to be kept on the farms is now finding its way into the market. The price was 20s. per cwt. against 21s. 8d. last year—a drop of 1s. 8d. in the corresponding week. Prices in Norwich Market last week—and these have already been mentioned, more or less, this afternoon—were: malting barley 21s. 3d. a cwt.; medium barley 20s.; and feeding barley 18s. 6d., against the present standard price of 28s. 9d. Can any noble Lord grow barley profit- ably at a figure of 18s. 6d. per cwt.? I very much doubt it.

It may be that there will be in the minds of buyers the fact that the guaranteed price is at present 27s. 7d. per cwt., and that the Government will be under an obligation to make up the difference according to the period of the year in which the barley is sold, and that buyers will offer accordingly. The Government are helpless in the matter and have no control over the market; and whatever the merchants or others may see fit to pay is what the producer has to accept.

That was referred to, to some extent. by the noble Lord, Lord Netherthorpe, who was advocating, I hope with success, better marketing facilities, not only for barley but for other cereals as well. I hope he will go as far as I should like to go in relation to some measure of control over these markets. How long, I ask, as I have asked so many times before, is this stupid system of agricultural cereal marketing to be tolerated by people who are otherwise sensible human beings? The Government, the producer, and the consumer, as taxpayer, are in just the position some people would have them. In colloquial language, "These people have got them just where they want them." There is some hope expressed in that clause in the Review relating to marketing research, but time would he wasted on this unless the Government could introduce a measure which would assure payment of fair prices for agricultural products to the producer and to the consumer. Heavy subsidy payments by taxpayers at large could then be dispensed with.

On the figures I have quoted, it looks as if the subsidy might well approach 10s. per cwt., quite half the price the farmer receives from the merchant. It reimburses the grower and gives him a profit. The merchant has already had the good fortune to buy cheap grain; but what is shockingly had national economics is that we cannot devise some method whereby our greatest productive industry can receive direct rewards for its labour, experience and capital. The Government are talking of a deferred or differential payment for barley. It has been said, by the noble Lord, Lord Netherthorpe, among others, that the scheme has not yet been finalised. It is well to consider whether such a system will produce the desired result, or benefit anyone. Barley is a cash crop. It produces at Michaelmas the means of reducing bank overdrafts and paying off debts to merchants. The crop may be already mortgaged, or even actually sold, to merchants before it is harvested. The crop helps to meet rent liabilities. It is an easy crop to harvest and, given fine weather conditions and reasonable moisture content, should turn out to be a marketable commodity, although a low-priced one.

Barley has not proved to be a readily marketable commodity since the last harvest, but the weather conditions may have had some bearing upon that. I cannot imagine that the farmer with malting samples will be persuaded to keep these in store until a later date when the maltster's requirements may have been met. The higher price may not compensate the farmers for the interest they may have had to pay on borrowed money over the period. Barley is a crop which it has now become customary to combine-harvest, and with the greater scarcity of threshing tackle, farmers are unlikely to be willing to return to binders, stacking and threshing the crop, with the additional labour and expense involved. On most farms storage facilities are inadequate, and sack hire, when the corn has been weighed, runs away with money as an unnecessary expense. Depreciation and loss of weight become items for consideration. Barley straw, as stacked, is of little value. All these matters, and more, have to be meditated upon; and on balance it may be found advantageous to dispose of the crop as soon as possible after the harvest. The value of differential subsidy payments may be a ministerial illusion without the semblance of becoming of real value to the barley grower.

In conclusion, my Lords, I want to say a few words about sugar beet. There was a reduction in price of 2s. 6d. per ton last year. That meant a loss to the sugar beet growers of no less than £1 million; and most of that crop is grown in the Eastern Counties. The factories are there, and so are the land and experience. Where did that £1 million go? Who gained it? The producer did not. Did the consumer gain by lower sugar prices, or did the factory reap greater profits? Additional costs rose. It was the worst season ever for har- vesting sugar beet. I expect the additional costs rose by quite 50 per cent., to include additional labour over an extended period, and the heavy cost of transporting to the factories large quantities of dirt, which amounted, I understand, to up to 40 or 50 lb. per cwt. There was extra tonnage, but the sugar content was low. What was gained in one respect by the extra tonnage was probably lost in other ways. Yet sugar beet has not been touched in the present Price Review.

Potatoes were harvested under similarly difficult circumstances, and the potato grower is to receive a slightly increased price; but the deduction from the original price of sugar beet will still be 2s. 6d. per ton. Possibly another £1 million has been lost to the industry in respect of the coming year. The Government have been told from both sides of the House to-day how noble Lords look at the Price Review. The comments have not all been in favour of the Government; some have been adverse. As time passes, and the implications of the Price Review become more apparent, greater opposition may be voiced outside; and I have a feeling that when this financial year closes for the farming community, the results will have shown the error of the Government's judgment in depressing our greatest industry and creating difficulties which, in a properly planned agricultural economy, need not be.

7.40 p.m.

THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE, FISHERIES AND FOOD (EARL WALDEGRAVE)

My Lords, we have had an extremely interesting and long debate, and I am grateful, as I am sure your Lordships are, to the noble Viscount, Lord Alexander of Hillsborough, for raising it. I am sorry that he has had to leave us. I suppose I should begin, as practically everyone has this afternoon, by declaring an interest. Indeed, I am a farmer as well as, suppose, everybody is who has spoken this afternoon.

I think that all of us who have listened to this debate must go away with a general impression that this has been a good Price Review. The case that the noble Viscount who leads the Opposition put up was not, if I may say so in his absence—I am sure he will not mind my saying so—one of his strongest cases. I have often sat on this Bench and listened to the noble Viscount making a powerful speech which I have been glad I had not got to answer. I did not feel to-day, as I heard him making his speech, that he was quite so happy with the case he was making. H, made, of course, a great deal of play about what I can only term (a phrase that has been used before) "keeping up with the Joneses"; the farmers are not keeping their place in this rising economy.

But this matter has been gone over a great many times and, of course, it is a fact that the income of the agricultural industry is, and must be, a declining proportion of the total national income. It is true, whether one is considering aggregate farm incomes or incomes of the agricultural industry, which includes farm workers and the owners as well. But we should not assume from this that the industry are being un-fairly treated. It is inevitable in an expanding economy where there are high standards of living; it is inevitable that the farmers' relative share of that total national income should be a declining one and should not keep absolutely at the top of the league. The phenomenon is not, by any means, confined to this country. In fact, this country stands out extremely well compared with others, and it may surprise some people who use this argument to know that in a "league table" of this matter that has been published by the F.A.O. as recently as 1959, the United Kingdom stands third. The United Kingdom, an industrial country, as we are, with only 4 per cent. of our population engaged in agriculture, stands third.

I think these figures are worth quoting. The income per head in agriculture as a proportion of income per head generally in other industries is 140 per cent. in Australia, a pastoral country; 110 per cent. in New Zealand and Ceylon; 80 per cent.—number 3—in the United Kingdom, an equal third with Denmark. When we get to the United States it is 30 per cent. When we go to other Continental countries, such as Western Germany or the Netherlands, it is 70 per cent.; and when we go right down to South Africa and the Belgian Congo, 20 per cent. We stand very well in this "league table", and I think we really should not go on assuming that any system will enable an industrialised country to get as large a share of income into farmers' hands as into those of other sections of the community. But we stand very well.

There is one other figure in connection with that which I should like to quote, and that is this. In this country we have some 4 per cent. of the population engaged in agriculture; and—and this is a measure of the efficiency of the agricultural industry in this country—the share that that proportion of the population contributes to the gross national product is 4.4 per cent. That is the top of the league. If you take, for instance, the Netherlands, where 19 per cent. of the population is employed in agriculture or is active in agriculture, they produce only 11 per cent. of the wealth. I could take all these countries: Western Germany, 15 per cent. employed in agriculture, contributing only 8 per cent. of the wealth; France, 28 per cent. employed in agriculture—the corresponding figure I am given for output is "say 20 per cent." because the French figures are not very accurate. I think this should dispose of the argument once and for all either that we have an inefficient agriculture, which we most certainly have not, or that it is not properly treated.

VISCOUNT STONEHAVEN

My Lords, would the noble Earl forgive me for interrupting? Would he not admit that if we are at the top of the league for efficiency we should at least expect to be at the ton of the league for remuneration, not third or fourth, whatever the position may be?

EARL WALDEGRAVE

No, my Lords, I would not accept that at all. If he compares our conditions with those in the country of Australia, whose proportion of industry I did not quote because I have not got it here, he would find it would be a great deal less than the proportion of industry in this country.

The noble Viscount who opened this debate gave a very satisfactory "plug" to the television programme he had looked at, and seemed to confine his remarks very largely to that television programme. He quoted Mr. Clifford Selly, a journalist of one of the Sunday newspapers, very extensively. Mr. Selly came to that programme, no doubt, without a very great deal of preparation—the Review had only just been issued—and he took, I consider, a rather superficial view of this year's Price Review. I was disappointed indeed that practically the only criticisms that the noble Viscount attached importance to were those very criticisms that he had heard on the "telly" from this journalist. I think it was most ungenerous compared to what I think my right honourable friend deserves. My right honourable friend, surely, this year deserves congratulation, not only on a good Review but on a courageous and forward-thinking Review which has tackled problems which are so often, and have before so often been, ducked.

I would turn now to the delightful speech we heard, from the noble Lord, Lord Williams of Barnburgh. Of course, I have served under Lord Williams of Barnburgh. I was an A.E.C. member and then an A.E.C. chairman under him. Indeed, I was often somewhat embarrassed earlier in the evening because I found there are no fewer than three Ministers of Agriculture who sit in your Lordships' House under whom I have worked. At the moment none of that famous triumvirate of "Derry and Toms" is here, but I am glad that at least one was able to take cart in the debate to-day. The noble Lord, Lord Williams of Barnburgh, was particularly bothered about the tables in the Price Review White Paper. He made great play with Table A on page 14, which shows the aggregate farming net income. He also made great play of the gloom that he reminded your Lordships there had been in some quarters after last year's Price Review.

I would remind your Lordships as to what has happened. There were the most dreadfully gloomy tidings after my right honourable friend, who is now Minister of Labour, presented his Review last year: this was a terrible thing that he had done! What has been the result? We must turn, I think, to the very Appendix which the noble Lord was talking to, and see that income has risen. The 1960–61 forecast, adjusted to normal weather conditions, is that farmers' income will be at an all-time high. We must turn to a previous table, Table B, in Appendix I, and see what happened to that production which was so terribly sabotaged by my right honourable friend's Review last year. That also reached an all-time high—172 per cent. on the old index of a prewar average of 100 per cent.

Not only was that a rather dangerous card to play, but it was almost more dangerous, I thought, to use the figures in the way that the noble Lord did, because what really matters here is the trend of net income. It is not really very meaningful to choose one particular year and compare it with the average of the following nine years. For instance, if the noble Lord had taken 1950–51, which was the last year the Labour Government were in office, instead of the year he did take. 1951–52, the result of his comparisons would have been very different indeed. If comparisons are to he made, I took out these figures after the noble Lord had mentioned Table A, in Appendix II, and I find that if you compare the average for the years 1946–47 to 1950–51 (which is the period while Labour was in office) with the average of 1951–52 to 1960–61 (which is the period during which this Government have been in office) you will find that the average income was £259 million during the years the Labour Government were in office, whereas, during the ten years during which this Government have been in office, the average in a perfectly comparable period has been £337½ million. I think it is somewhat dangerous to take these figures at random, because they can, I think, boomerang.

The noble Lord, Lord Williams of Barnburgh, spoke of £9 million as being worth about three packets of cigarettes to each individual farmer. My Lords, that really is not the kind of argument your Lordships are accustomed to listen to. If we are going to turn things into packets of cigarettes, then, after all, £90 million would be only 30 packets of cigarettes per farmer. One can be derisory in terms of cigarettes, whatever the figure is. The fact is that this policy which we have been pursuing and which, in other parts of his speech, the noble Lord. Lord Williams of Barnburgh, quite rightly said we had developed from the all-Party policy when it was originally formed, does deliver the goods and has resulted in a stable and thriving industry in this country.

LORD WISE

My Lords, may I, on behalf of my noble friend, call the noble Earl's attention to some of those figures? If we take the year 1951–52, the actual income was £329½ million. The forecast for 1960–61 is £359 million. That means that the average actual income has increased by only £30 million over that particular period of ten years. There is another point that perhaps I may put to the noble Earl: figures adjusted to normal weather conditions serve no purpose now whatever, do they? We never get any normal weather conditions, and I suggest that they might easily be left out of the Review in future.

THE EARL OF BUCKINGHAMSHIRE

My Lords, before my noble friend replies, might I refer him to 1959, which was one of the best years we have ever had for harvesting?

EARL WALDEGRAVE

My Lords, we must not get too involved in these figures. The noble Lord, Lord Wise, quotes 1951–52, for which the figure is £329½ million. He makes the comparison sound a bit better. But if he had taken the year before, 1950–51, that figure would be £273 million. Which year are you going to compare it with? It is conventional that we adjust these figures year by year to normal weather conditions: the figures are put side by side, and you can look at which you choose. The noble Lord, Lord Williams of Barnburgh, asked me a specific question, and if he had been here I should certainly have wished to answer it—and I must answer it in his own terms. As regards the Review determinations in certain years, which he specified (and I will quote his own words) he said, "Far be it from me to suggest that there was any politics in it". Now, my Lords, who am I to differ from my late chief, Lord Williams of Barnburgh? So my answer to him is, "Far be it from me to suggest that there was any politics in it".

The noble Lord, Lord Amherst of Hackney, was, I think, the first speaker who concentrated a great many of his remarks—and very wise remarks they were—on this milk problem which my right honourable friend has so courageously gripped (to use his own words) for the first time this year. The noble Lord, Lord Amherst of Hackney, welcomed the increase of 1d. that we have been able to give this year, and I thank him for the general support that he gave to the Review. He wondered whether the Government estimate of a 75-million-gallon increase in production, in the next year, or the Milk Marketing Board's estimate of a 40-million-gallon increase, was right; and he wondered whether, if it should be that the lower estimate was right, it was necessary at all to attack this problem. I think I quote him fairly in his contention. Now I am quite certain that, even if the figure that he quoted, of a 40 million gallons-a-year increase is the correct one (and our departmental estimation is that it will be much more than that; it is more likely to be between 50 and 75 million), it is not only right but absolutely essential that we should grip this problem and tackle it now.

Of course the Government are well aware of the difficulties that are involved in this whole problem. The Milk Marketing Boards, to their great credit are managing to expand the amount of milk which is used for liquid consumption every year. The figure in recent years has been 20 million gallons a year; and all credit to them. We give credit where credit is due, and the standard quantity on which the guarantee is payable is automatically adjusted every year by the amount that the liquid consumption rises. But even if the figure were 40 million gallons, that would be a 20 million-gallon net increase; and even that figure would have serious implications when we are already over-produced by 300 million gallons and more a year.

The idea of a standard quantity has been integral in our milk arrangements ever since 1954. Incidentally, we give a very generous standard quantity—2,000 million gallons for the United Kingdom; and the liquid consumption is only 1,600 million gallons. That provides more than 400 million gallons, largely as a reserve for the liquid market, but in fact, of course, available for the manufacture of cream, butter, cheese and processed milk. Now the Milk Marketing Board—and let us face this fact—get the full guaranteed price of 3s. 2d. a gallon on the whole of this standard quantity. Most of this, nearly 1,900 million gallons, is paid for by the consumers of liquid milk. Is there any good reason why either the consumers of liquid milk or the taxpayer should pay 3s. 2d. a gallon for yet more milk, which is to be sold for manufacture at only 1s. 6d. a gallon?

Of course, my Lords, there are difficulties in ways and means of devising a workable and satisfactory scheme to bring home to the farmer and to the public what the farmer is doing. But we must tackle this problem. We certainly do not want any rigid system of quotas which could not be flexible and which would put the efficient producer in a straitjacket. Equally, we should regard it, as other noble Lords have mentioned, as a serious weakness if any scheme were to prejudice the genuine and proper interests of landowners. We must have a reasonably flexible arrangement. There is no doubt that the unions and the Milk Marketing Boards, who are working on this matter, will produce a scheme, with the aid of our Department, which will be flexible; otherwise it will not he acceptable.

But, my Lords, let us not blind ourselves to the difficulties of working out the new scheme, because what we must keep constantly in front of us is the difficulties of the present scheme: the bleak (there is no other word I can use) prospect which will confront especially the small milk producer, whose eggs are all in one basket and who relies for his whole living on milk, if, by a constant process, he over-produces more milk than the market can absorb, the pool price steadily goes down and he gets less and less every year for producing more and more. That is the bleak prospect, and my right honourable friend must be right to have tackled it.

We were asked why this has not been discussed with the Milk Marketing Board. This matter comes forward in an Annual Review and Determination of Prices. There is much misconception as to what these Annual Reviews are. The Annual Reviews are a Government responsibility for determination of prices. They are a Government responsibility, after consultation with the industry. The recognised representatives of the industry who are consulted are the Farmers' Unions of the United Kingdom; and they are the proper channels for us to consult.

As has already been said in this debate by the noble Lord, Lord Netherthorpe—and I confirm that it is so—the Chairman of the Milk Marketing Board was indeed informed about this matter. But this was not a question of imposing a bright idea of the Minister's on the industry, without notice either to the Farmers' Unions or to the Milk Marketing Boards, or to anyone else. This was a tackling of the problem. This was a thought put out, and the industry were invited to grip this problem and to come forward with a different system of paying the individual milk producer, so that this problem could be tackled, and so that this war of attrition, this constant sliding-down of the whole price which would be disastrous in the long run for the small farmer, for whom so many noble Lords have spoken, should not come about. I have tried to make that matter a little clearer than it seems to have been to some noble Lords in the debate so far.

LORD NETHERTHORPE

My Lords, should I be correct in deducing from the noble Earl's remarks that what he is saying is that the industry is required to examine, this problem against the background, shall I say, of the maxim, not of "Why not?", but of "How can?". All of us, indeed, could give many reasons "Why not?".

EARL WALDEGRAVE

My Lords, I think the noble Lord, Lord Netherthorpe, with his usual command of language, has put the matter very clearly. It is indeed just that—"How can?". We must get a better system; otherwise, we shall not be in the soup, but all drowned in a flood of milk.

May I now turn to the speech of the noble Lord, Lord Terrington—a maiden speech such as we should all like to hear more often. It was the kind of speech I never make—it was brief. It was full of thought, and we thank him for it very much. He spoke with feeling, and with obvious knowledge and thought, about the difficulties that any new scheme of paying for milk would have. I can say that everything he has said both my right honourable friend and I will look at when we come to read the OFFICIAL REPORT. He was particularly anxious that the position of the small farmer should be safeguarded. But, in a way, something that he said rather contradicted a great deal of what was said from the Benches to his left, especially by the noble Lord, Lord Stonham, who painted this terrible picture of agriculture to-day. The noble Lord, Lord Terrington, said that so many people were wanting to get into agriculture that he hoped that this new scheme would not do anything to stop them. My Lords, do so many people want to get into this dismal, depressed, bankrupt industry? I do not know. It is not what I should have thought.

The noble Earl, Lord Malmesbury, spoke warmly of the Price Review, and I am grateful to him for doing so. He was interested particularly in marketing, and congratulated the Minister, as many others have done, on having made that offer, which unfortunately, as the noble Lord, Lord Netherthorpe, told us in his speech, was not acceptable this year.

The noble Lord, Lord Stonham, spoke next. I must say that the first time I heard that speech (I am sorry that he is not here, but I know him very well and I am sure he will not mind if I say this), which was about three years ago, it worried me. But I have heard it now so often, and I have provided the answer to it so often. The noble Lord, Lord Stonham, either will not or cannot understand the difference between scarcity and plenty. He will go on about the "proud and happy days". I ask you, my Lords! These were the post-war years. The "proud and happy days" was the phrase he used—years of scarcity. Does he remember going into the shops in those "proud and happy days" and drawing his rations, and being told what was coming to him? It really will not do, my Lords. So many of his figures were so inaccurate, and so much of his argument asked: When did you stop beating your wife? It is an argument that it is impossible to answer, and I will not weary your Lordships with it now. The noble Lord and I will continue this argument somewhere else.

One thing I must roundly say, however, because he challenged me, is that the policy we adopt to-day—and the noble Lord, Lord Williams of Barnburgh, paid such generous tribute to it—is not an abject failure. It simply does not do to pretend that the prices to farmers are going down, that prices to the housewives are going up—both things perfectly true—and, therefore, that the difference is going straight into the pockets of the middlemen. It is this difficulty which I want to try to get the noble Lord, Lord Stonham, to understand; that there is a difference between scarcity and plenty.

LORD WISE

My Lords, may I interrupt the noble Earl to suggest that he may not have understood what Lord Stonham was getting at?

EARL WALDEGRAVE

My Lords, I entirely agree with the noble Lord, Lord Wise.

The noble Earl, Lord Ferrers, gave us a most thoughtful speech which praised the Review, as it should, and he spoke about marketing. I was sorry, though, that he had doubts about our scheme of help to machinery syndicates. It may or may not be the day of the big farmer, but the very thing the syndicates do is to help the small farmer, the man who cannot afford all his machinery and big barns. I did not quite follow the noble Earl's argument, but in his plea for the small man as opposed to the big man, he criticised the syndicates as if they were going to make the big man even bigger. I think that is absolutely the opposite of what they will do; and certainly it is the opposite of what they are intended to do.

EARL FERRERS

My Lords, might I just interrupt to say that I never meant to give the impression that they would make the big man bigger. I said merely that I applauded the idea economically, but that I did not think it would work so well in practice. That was only my own view.

EARL WALDEGRAVE

The noble Earl went on to say that he was doubtful whether co-operation would ever work with farmers. But I do not think that farmers are quite so unregenerate as that.

LORD NETHERTHORPE

My Lords, would the noble Earl permit me to make one observation on machinery syndicates? I know the problem that is presented by the point of view of the noble Earl, Lord Ferrers; but machinery syndicates have been working. If I may put it as succinctly as I can, the dangerous alternative with the small man lies in this: that if he is technically efficient, he can he economically imprudent; if he is economically prudent, he can well he technically inefficient. In my view, the only answer to that is to try to meet the challenge of farmers wanting to use implements on the same day by the syndicate mechanism. In fact, it has worked here in our system. Therefore, because of the challenge which the alternative presents, it is something which should be encouraged, and this particular decision of Government—the communal qualifications for grant-aid up to a third—is an encouragement to building both storing and housing for machinery, which will help the syndicate to become more efficient.

LORD WISE

My Lords, can the noble Earl say if he has any idea of the size these syndicates are likely to be, and what area of land is likely to be covered by a syndicate?

EARL WALDEGRAVE

My Lords, speaking subject to correction, I do not think that there is any particular size for a syndicate. I am grateful to the noble Lord, Lord Netherthorpe. At least my past Presidents do come to my assistance, even if my past Ministers have gone to dinner, and I am grateful to the noble Lord for his intervention. As usual, his speech was masterly and I gathered, after some words, that he thinks that the Review is reasonable. As he took good care to define what he understands by reasonable, that is certainly good enough for me, and I am sure, also for my right honourable friend, when he comes to see in to-morrow's OFFICIAL REPORT how the noble Lord defined "reasonable". I was interested in the exchange between the noble Lord, Lord Netherthorpe, and the noble Earl, Lord Ferrers, on the question of consultation with the Marketing Boards, for I think that it cleared the air very considerably. My noble friend Lord Bridgeman spoke of small holdings, from his great knowledge of them, and I am grateful to him for his intervention. I will study carefully what he had to say.

The noble Lord, Lord Wise, was unhappy about barley. I do not think that there can be many people who are as unhappy as he is about barley. Let us look at what we have had to do about barley. We roust keep a balance between our three main cereal crops. That is the first thing we ought to do. Then, the Exchequer subsidy on barley has risen from £10 million on the 1956 crop to £35 million on the 1960 crop. Let us look at the proportion of the cost of subsidy to the market return. The proportion is 47½ per cent. at the moment, and that is quite out of proportion to the subsidy on other Review products. As a farmer, I do not think that barley is a wholly unremunerative crop to grow, even at 1s. 2d. a cwt. less than the guaranteed price was last year. But the interesting thing about our barley policy is not the reduced price; it is that, with this growing mass of barley coming on to the market, my right honourable friend has not dealt with it by the commonplace method of putting on a shilling here or there, but has tackled the whole problem. Here is a commodity which is beginning to come on to the market in greater quantities than perhaps we can absorb. Let us deal with that before it has gone too far. What is it that depresses the market at the early time of the year when the small man has to sell? At present, there is no system of differential in subsidy, according to whether a farmer has to sell in the early part of the year or later. There is in the case of wheat, but this is paid on a different basis: wheat is paid on tonnage and barley on acreage, so we cannot adopt the wheat system. We must bring in a system whereby the man who sells early must have a deduction and the man who sells later must have a plus, which will pay for the cost of holding and storage. It is intended that these minuses and pluses shall balance, and that we shall be able to anticipate the right amounts. The man who keeps his barley on his farm and uses it for his own consumption, of course, will not be affected at all. That must he the right way to tackle the problem, and we mast try to work out this system. That is the imaginative thing about barley in this year's Review.

It was said this afternoon that surely this is going to penalise the little man even more because he has to sell early in the year, because he has not gone in for a syndicate and greater storage—the noble Earl, Lord Ferrers, has nut him off that! Even if he has to sell early in the year, he is not penalised because if he sells after harvest, straight off the combines, the depression in the market price is even greater than the deduction from the basic price to pay for later storage.

I have not had time to do justice to the many points raised by noble Lords, and many I have not answered; but my right honourable friend and I will study in the OFFICIAL REPORT everything that has been said, and I shall follow up properly, privately or by letter any points that I have either omitted altogether or not answered.

The impression left with me after this long debate—and I hope it is the impression left with your Lordships, and with the country—is that the state of agriculture to-day is a healthy one. The Motion before us is drawn in wide terms. It calls attention to the state of agriculture and is not confined simply to the details of this year's Annual Review. We can look forward with confidence to the future. One of the most difficult problems that faces any Government in any country throughout the world is this complex of food and agriculture. The twin objectives must always be to see that there is abundant and cheap food for the people to eat and to see that the farmers who produce it must prosper. It is a confession of failure when one of those objectives is achieved only at the expense of the other; when bitterness and distrust develop between town and country; when we see the consumer prospering at the expense of beggaring the farmer, or we see the farmer prospering at the expense of holding the consumer to ransom.

I do not believe that in this country such a state of affairs even remotely exists, and I was delighted to hear the noble Lord, Lord Williams of Barn-burgh, say that in his speech. I agreed with him wholeheartedly when he said that bitterness does not exist in this country, because we have a stable food and agricultural policy. The quantity, quality and price of food available to the consumer in this country is a source of envy to many less favoured nations, and so is the health, vitality and prosperity of British agriculture.

I think we may truly say—and here again I agree with the noble Lord, Lord Williams of Barnburgh—without any feeling of complacency, but as a sober fact, that over the years we have evolved systems and policies for what I call this food and agriculture complex which have proved to be effective and achieve their object. Any such policy must in its execution involve a great mass of detail and complicated administration, and nobody would suggest for one moment that every item and every detail in that machinery is perfect. But the system is sound. It is a system which I can broadly sum up as free market prices for the consumer, with deficiency payments from the taxpayer for the farmer where the market falls below the agreed guaranteed price, coupled with what we term production grants to stimulate and modernise the industry. This is a system which has served us well and is serving us well, and it is the solid foundation on which we build.

This year, I am sure we have built a thoroughly good and sound Price Review; and I am certain that the general body of farmers will accept it as such, as their leaders have done, as an agreed Review. I am sure that with this year's price determinations and my right honourable friend's courageous and forward thinking, which is such a feature of this year's White Paper, farmers, consumers and taxpayers can look forward with confidence to the coming year.

8.22 p.m.

LORD WISE

My Lords, if I may speak again with the permission of the House, on behalf of my noble Leader I wish to thank all noble Lords who have taken part in the discussion to-day. Unfortunately, he has had to go, but I have no doubt that he will read with interest the report of the discussion, and perhaps learn something from it. On behalf of my noble Leader, I beg leave to withdraw the Motion.

Motion for Papers, by leave, withdrawn.