HL Deb 08 May 1961 vol 231 cc6-12

2.44 p.m.

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

My Lords, the purpose of this Order is to provide machinery for greater flexibility in determining the rate of guarantee payment on pigs. Your Lordships will recall that in the debate on agriculture last March we discussed the need to minimise the fluctuations in the pig cycle. What measures are open to Her Majesty's Government to help in this direction? Obviously, the Price Review is the main occasion, and price regulation is the main instrument; but experience in the past has shown that if price changes are made only annually, the effect may be too much or too little, and it is almost certainly too late. Under the new Price Review arrangements, we shall have a regulator which will operate automatically when a new turn in the pig cycle is foreseen, and this regulator can be operated every three months. This arrangement has the advantage of real flexibility. It acts as a kind of thermostat on the pig population, and I think we all agree that this will be a most useful change in the guarantee procedure.

The Order before your Lordships is purely a procedural one, which will enable the arrangements for this more flexible guarantee to be put into operation. In this respect it supplements the main Order which was made last year. Perhaps I should say a very brief word about these new arrangements. Under the new arrangements, the basic guaranteed price for pigs is related to a basic annual level of pig certifications—by which I mean the number of pigs certified for guarantee payment—to be determined after the Annual Review. For the current year this basic figure is to be between 10.3 million and 10.8 million pigs. The price will be adjusted, if necessary, at quarterly intervals, if the annual rate of certifications is then forecast to fall below or to rise above this basic level. We shall be making these quarterly forecasts in mid-May, mid-August, mid-November and mid-February. The amount of adjustment will range from 6d. to 1s. 6d. per score, depending on the size of the estimated short-fall or excess; and, as the present forecast of the level of certifications for 1961–62 is somewhat less than 10.3 million pigs, the immediate effect of the new arrangements has been to raise the guaranteed price by 6d. a score as from March 27, the date of the Order. This increase is, of course, additional to the increase of 3d. a score awarded after the last Review, which brings the basic guaranteed price of pigs to 43s. 7d. a score. My Lords, the concept of a flexible guarantee has received general support, and I commend this operative, procedural Order to your Lordships. I beg to move.

Moved, That the Fatstock (Guarantee Payments) (Amendment) Order, 1961, be approved.—(Earl Waldegrave.)

2.48 p.m.

LORD WISE

My Lords, on behalf of my friends on this side, I thank the Minister for the explanation which he has given of an Order which I think is extremely difficult for a layman or a pig producer to understand. It amends and improves, I think, the marketing and the sale of pigs, and for that reason we are prepared to support it. The Minister said that in the past the fluctuation in the price of pigs was drastic; and, looking at the Price Review, I think there is one expression there which is as true as any other in the Price Review, and that is where the Government say, the fluctuations which have bedevilled this branch of farming for so long". If this particular Order improves conditions in that respect, then it is all for the good of the industry.

The Minister said that the alterations in the guaranteed price have in the past been annual, and in the future, according to this Order and to the Price Review, they will quarterly, but there will be adjustments week by week in the amounts which are added to the guarantee. It seems to me that these weekly calculations which have to be made, not only of the numbers of stock but of the price of feeding stuffs, will necessitate on the Part of somebody or other, or some Department, pretty excessive work. If the guarantee falls to be altered quarterly, I am wondering whether it would not be better and simpler if the other prices were dealt with more or less on the same lines—perhaps monthly rather than weekly.

That is all I want to say, except for one thing in conclusion. Would it not be possible to draft these Orders in rather simpler language than this particular one? I think it would be better for those who have to carry them out and those who have to study them. May I suggest that, in all humility, to the Minister?

2.51 p.m.

LORD SILKIN

My Lords, before the noble Earl replies, I should like, first of all, to express my support for everything that my noble friend has just said. I would ask whether it would not be possible to let the pig producers have an idea, and pretty quickly, as to what the subsidy is going to be. These quarterly adjustments will make it rather more difficult for those who are engaged in pig production to know where they stand, to know whether there is going to be a fall or an increase in the amount of the subsidy. One advantage of having a yearly subsidy is that you do know where you stand for that year. While I appreciate that this quarterly variation may work out to the advantage of the pig producer, it may, on the other band, work the other way. If it were at least possible to let the producer know as quickly as possible where he stands, and if the noble Earl could also say when they will come into operation after the respective periods, in May, and so on, it would be a great help.

THE EARL OF NORTHESK

My Lords, might I say to the noble Earl that I think it would be of great assistance to those of us who produce pigs it we could have a longer-term policy. I agree with the fact that we are getting subsidies—it is now suggested week by week—but what we want to know is, what do the Government want us to do over a period of years? I should like to press that point.

2.53 p.m.

EARL WALDEGRAVE

My Lords, I am glad there is general welcome for this Order in your Lordships' House. One or two good points have been made, and I should like to answer them. The noble Lord, Lord Wise, referred to the fact that we deplored the past fluctuations, noted in the White Paper. Indeed, we have, but I would emphasise that what we were really deploring were the fluctuations in the numbers of pigs, not necessarily the fluctuations in price. It is the pig cycle, whereby the farmers say that pigs are "either muck or money", that we want to try to minimise, if we can.

The question of how the weekly standard guaranteed price is worked out is immensely complicated, and I should not like to weary your Lordships with it here. I do not think it would be possible to have our weekly calculations of payments reduced to monthly periods. It is true that, for purposes of any adjustment to the guaranteed price on account of changes in the level of production, we shall make estimates quarterly, but the Order cannot set out the procedure for calculating the rates of the guaranteed payment. These must be made weekly, because Article 6 of the main Order, Order No. 428 of 1960, requires that a standard price for pigs shall be ascertained each week, in accordance with the conditions of Article 7. Article 7, as amended in the present Order, provides that the appropriate adjustment, both of the feed and for trends in production, shall be made in respect of each week; and provided both factors are taken into account weekly, it is really immaterial whether the actual estimated trends in production are made quarterly or for any other period. It is quarterly that we now intend to produce them, but under the main Order we must use weekly calculations. I hope I have made that clear.

The other point which the noble Lord, Lord Wise, made was whether these Orders could be made more understandable to the layman. I am told by lawyers, "No" This is very much a legal document, but I tried, in moving this Order, to explain to your Lordships that this is merely the legal instrument which enables us to do something which is quite clear, and is set out in ordinary words understandable by ordinary farmers, in our White Paper of the Review.

The noble Lord, Lord Silkin, asked whether producers could know when these changes are going to take place. I appreciate that point, but it will be realised that we should not want to give the kind of warning which would encourage a flood of marketings, some of it perhaps premature, or a holding up of supplies with the object of making the most of an unexpected price change. We have to be careful here. On the other hand, there is a great deal of published information, and farmers will have a great deal of knowledge which they get from their own sources, as to what are the trends in production and conditions in the industry. If we are now agreeing to vary the guaranteed price every three months, which is a great advance on once a year—and farmers will think it is a great advance if the population figures warrant an increase, for instance—I think it is going too far that we should put ourselves in the position of giving warning when we are going to raise the price. Because just before the determination is made, we shall not know the price till we have worked out all the figures. I think three months is as short a time as we can manage.

The noble Lord, Lord Northesk, asked whether we could not have a longer-term policy. I never know what a "long-term policy" means, but at any rate this year we have promulgated a much longer-term policy, in fact double the length of time which we had before, because, as you know, the guaranteed price of pigs has been fixed for the next two years, not only for one.

2.58 p.m.

VISCOUNT ALEXANDER OF HILLS-BOROUGH

My Lords, I, for one, am greatly interested in the Parliamentary Secretary's statement about long-term policy. I thought the whole idea was of a long-term policy, although, in our view, the Government, by legislation and administrative action since, have cut the period shorter than they probably would have under the 1947 Act. May I ask a question about what the Government think will be the effect of the price change policy in this statutory Order? When we were debating the Review prices I made a fairly long speech. It does not follow that the House or the Parliamentary Secretary knew pretty well what I was going to say, but the Parliamentary Secretary did not give me any answers at the end of the debate. I looked carefully to see what the answers were, but my questions were simply fobbed off as being the opinions of a notable journalist.

I raised the question of the effect on the bacon industry of the price policy of the Government, or any other part of the policy of the Government on pigs. What is the situation now? Is it improving? I mentioned that there were factories in this country in danger of closing, and for a number of reasons: partly from the breeding and the production policy of some growers; partly from the removal of an import tax upon Danish bacon; and partly because of the extraordinary rigging of the market, so far as the market is free. The noble Earl said, in reply to my noble friend Lord Silkin, that there was a good deal of general information obtainable by producers. But my experience, before I gave up pigs in despair, was that information coming to me through trade quarters was often quite unreliable at the time I sent to market. Unless some more firm information can be made available, as my noble friend obviously desires, I do not think that the Government will secure the confidence of producers in the scheme. I should particularly like an answer about the present position of pig supplies from British producers to British bacon factories. Are they anything like near capacity, or are the factories still in danger of closing down?

EARL WALDEGRAVE

My Lords, if I have leave of the House to reply, I would apologise to the noble Viscount if I did not adequately answer his speech in the debate we had in March. He now asks me specifically: what is the position in the bacon-curing industry? This hardly arises out of this Order, and I have not figures in front of me; but I would say generally that the position in the bacon curing industry, and the bacon pig position generally, is much healthier. There is a good supply of pigs going to the curers at the present moment.

With regard to long-term policy, all I would say, in answer to my noble friend Lord Northesk, is that this is difficult to define. Some farmers would define a "long-term policy" as fixed prices for twenty years ahead, which is obviously impracticable. In regard to pigs, we have gone much farther to meet the demand of farmers for a long-term policy than before. I would quote the last two lines in paragraph 16 of the White Paper, which is about pigs; to give pig producers greater confidence in the future, the Government have undertaken not to reduce the new basic guaranteed price at the 1962 Annual Review". Surely that is going a long way to meet the demand for a long-term policy.

The noble Viscount picked up the point made by the noble Lord, Lord Silkin, about information. The estimate as to whether an adjustment to the guaranteed price is necessary or not is made on the basis of the future estimates of certifications of pigs. That estimate will be compiled from a great deal of information, which will have to be collated. I would point out to the noble Viscount that a great deal of this information is published information, and widely known. Though I admit that the Government, whose responsibility it is to determine this matter, have a great deal of machinery, both human and mechanical, to make this estimate, and though probably individual pig producers have not, the National Farmers' Union and the producers' organisations will be able to make a reasonable forecast of whether the estimate is going up or down.

VISCOUNT ALEXANDER OF HILLS-BOROUGH

My Lords, may I ask the noble Earl if he would get somebody in his Department to send me a comparative set of figures of British pigs sent to British bacon factories over the last few months or, alternatively, point me to where I can find these figures?

EARL WALDEGRAVE

My Lords, I want to be clear that what the noble Viscount is asking for are the figures of pigs going into British bacon factories over the last year. I can certainly produce those figures, and I will let the noble Viscount have them.