THE AGRICULTURAL PRICE REVIEW

HL Deb 11 April 1962 vol 239 cc465-557

2.37 p.m.

LORD WILLIAMS OF BARNBURGH rose to call attention to the Annual Review and Determination of Guarantees, 1962 (Cmnd. 1658); and to move for Papers. The noble Lord said: My Lords, I think the first thing I ought to do is to congratulate the noble Earl who is to reply to the debate on the wonderful victory achieved by his son last Saturday; but I am afraid that that is the only thing on which I can congratulate him. I rise to move this Motion with rather mixed feelings, perhaps more in sorrow than in anger, for this is the second time in three years that the result of the Price Review has been an imposed settlement rather than an agreement. That, I think, is a great pity, and I have every sympathy with the farmers' leaders for refusing to agree with the Government's decision. I was, in fact, surprised at the moderation of their language at the end of all the discussions, since the Government had such a poor case for their decision and the Farmers' Union representatives had such a good case.

I feel that after the production of the December, 1960, White Paper (Cmnd 1249) the farming community had every reason to believe that they would receive better treatment this year than they have for the last year or two. I believe that a succession of imposed decisions similar to this one in 1962, cannot fail, in the long run, to endanger the system of support to agriculture which the Prime Minister, the Home Secretary, the Chancellor of the Exchequer and other Ministers have said is the best form of support that can be given to our farms in this country. It could be a tragedy if there were any danger to the present-day system, not only for the farming community itself but also for the nation, when viewed from the angle of our balance of payments.

What did the White Paper (Cmnd 1249) say? In paragraph 2 it states: The Government have always been concerned that the public should realise the value to the nation of a thriving agriculture. Paragraph 3 says: The livelihood of a large section of the community depends on a vigorous and prosperous agriculture. Then, it goes on to say in paragraph 4: Next, agriculture makes a valuable contribution to the country's balance of payments by making substantial savings of foreign exchange. The farms of this country grow almost one half of the nation's food, and of all that we eat that can be grown in temperate climates roughly two-thirds comes from British farms. Expansion of our home agriculture particularly helped us in the difficult balance of payments situation of the early postwar period. The food produced from our own soil by an efficient industry is a vital safeguard against the uncertainties of supplies from overseas; and home production plays an essential part in keeping down the cost of supplies, with a consequent beneficial effect on the nation's terms of trade. Then paragraph 12 says: A thriving agriculture is required in the national interest. Its well-being is as important as that of other vital industries, many of which also receive support from the nation, by tariffs or other means. The cost of their protection is therefore not generally reflected in the national Budget; but farming is supported in a way which inevitably means that every year, at Budget time, the cost is high-lighted. I need make only one quotation to justify the statement I made a moment ago, that the farming community were entitled to better treatment than they have received, and it is from paragraph 31 of the same White Paper. It is: The increasing efficiency of the industry must be an important factor in helping it to achieve the objective of greater independence of State support. At the same time, and these are the important words— the Government wish to assure the industry that they intend, taking one year with another, to leave farmers with a share of the gain from increasing efficiency. I think that before I resume my seat I shall be able to show that the farming community in ten years have got just nothing out of increased efficiency.

These imposed settlements are very unlikely to maintain a thriving industry. This year's Price Review, the White Paper (Cmnd. 1658), brings out the important fact that output, thanks to this system, has increased by approximately 80 per cent. since the war. We also know that the farming community since 1948 have invested more than £1,000 million in buildings, fixed and movable equipment, machinery and so forth, which has obviously been the basis of their new efficiency. But can this continue if the real—I repeat, "real"—income is a stationary or diminishing quantity? I do not think it can while the costs of the industry are constantly increasing.

The industry, so far as I can tell, both during, the past ten years and the previous few years, has responded to almost every request made upon it, and 1961–62 was no exception to the general rule. In the current farming year it has increased the production of beef and veal by 12 per cent., mutton and lamb by 10 per cent. and pig meat by 9 per cent. Milk sales are up by 100 million gallons, table poultry by 25 per cent., and egg production by 5 per cent. All these, except milk and eggs, cut down the need for imports and make a valuable contribution to our balance of payments, for which the farming community get little credit except in White Papers. I agree that in the case of milk and eggs they are, of course, in danger of "exceeding the speed limit ", which could mean that the more they produce in future, the less they are likely to secure for it—unless they can increase their sales. That is a warning the producers must face, and they ought to face it rather quickly. The Minister of Agriculture, in his own inimitable way, has done what he can by reducing the price of eggs by 1½d. per dozen.

It will be recalled that the 1947 Act promised us support for that portion of the nation's food as it is in the national interest to produce ". It may interest the noble Earl if I remind him that his Party voted to delete those words in the House of Commons, and that the present Attorney General described Clause 1 as a "fraudulent prospectus". At least I think we are entitled to an apology and a vote of thanks for putting the Government in the position they are in now.

But I am not altogether out of sympathy with the Minister of Agriculture himself, not because he had a good case for his settlement—far from it, as I shall try to show later—but because his Party deny him any defence against a number of contingencies, any one of which could completely upset the apple cart, as in fact it did in 1961—for example, the uncertainty of the auction mart. Then the absence of any control over timing of imports can result, year by year, as it did in 1961, in large imports at the wrong time; depressed prices: an outsize Supplementary Estimate, and then, quite unfairly I submit, another squeeze on the farmers. That, as I see it, is the explanation for the imposed settlement. The only weapon in the hands of the Minister was to give our own farmers another "wallop" to the extent of £30 or £31 million; to warn the Irish against sending too many cattle at the wrong time; to blame the Danes for having gone on strike and then unloading their surplus bacon on to our market, and then, of course, pleading with the Poles to go steady on eggs.

All these things can contribute to farming chaos. We have seen the wholesale price of meat go down while the retail prices moved very little; we have seen wheat prices go down and bread prices go up; we have seen the milk pail far too full, so the Government say, and eggs are becoming "two a penny". All these bewildering changes can, I think, be traced to bad judgment at Price Reviews, and, of course, to the falling incomes of many farmers where flexibility to change from one commodity to another is not so easy.

It may interest noble Lords if I quote from the Farmers' Accounts Scheme Sample for 1959–60, for this clearly indicates that farmers' incomes over a wide area are not nearly what some people would have us believe. Of the sample of 5,000 farms taken in 1959–60, 50 per cent. of the farmers earned less than £600 a year. In 1960–61 the proportion was 43.4 per cent., and of the 2,374 holdings between 51 and 150 acres, 44 per cent. earned less than £600. That is the income for the work of the farmer and his wife, and the interest on his capital investment. It would not be too heavy a task in mental arithmetic for noble Lords to look at the figures. If they do so they will find that if the capital invested in most of the farms were in municipal bonds or were invested at 6 per cent.—which is a rate they could have got all over the country for this last year or two—their income would be better and more stable; and, of course, they would not have to do any work for it at all.

That is the real situation over a very wide area of this country. It is difficult for me to believe that this is a reasonable interpretation of the words in Section 1 of the 1947 Act, where producers are supposed to be guaranteed adequate remuneration. No wonder there is widespread criticism in the countryside! I should not advise the Minister of Agriculture to go down to Devon, Caernarvon or Northampton for the next few months. Indeed, I wonder why anybody wants to be Minister of Agriculture in a Conservative Government when it is so easy to open a betting shop. I reached the conclusion many years ago that it was almost an act of cruelty to criticise a Conservative Minister of Agriculture, for there comes a time when whoever happens to be Minister, he must stand up for what he regards as a fair interpretation of the Act he is supposed to be administering, not only in terms of the estimated net income, but in the subdivision of commodity prices which can so easily unbalance the volume of production.

My Lords, it is not my intention to deal with individual commodities, incentives or disincentives; many of my noble friends will do this far better than I could hope to do. But what I do want to do is to go back to where I left off in the Price Review debate in 1961. On that occasion I said—and gave figures to sustain my argument, to which there was no reply—that the only conclusions we could reach from the facts and figures before us was that the Government were determined to keep the real net income of farmers at or near the 1948–51 level, however much they increased either output or efficiency. This year's imposed settlement seems to support the view I then took.

Noble Lords are fully aware of the Government's words in Section 1 of the 1947 Act, which are: To guarantee adequate remuneration for producers and a fair return on invested capital. I recognise that there is ample room for differences of opinion as to what is "adequate remuneration," but there is another element which has crept into the calculations this year through the 1957 Act, an Act which was thought by many, including some members of the Farmers' Union, to be a safeguard for farmers. I have always taken the view that it was a bit of a fraud imposed on farmers when, in that Act, the Government claimed the right in any year to reduce guarantees by any sum up to 2½ per cent. of the value of the previous year's farm sales—this year, for example, round about £34 million. But, as I see it, the Government were confronted with increased costs to farmers amounting to £19½ million. They forget, or ignore, their duty under Section 1 of the 1947 Act and proceed to exercise their statutory authority under the 1957 Act.

The Government not only under-recouped the farmers to the extent of that £191 million but they also reduced guaranteed prices by a further £11 million, leaving the farmers to carry a further burden of £31 million this year. Then the Government almost claim it as an act of generosity to increase the burdens of farmers by merely £31 million when they could have made it £34 million, and they expect a vote of thanks for it: all this regardless of their statutory obligation under the Act of 1947.

Moreover, it must be remembered that since the early years of the operation of the 1947 Act, during a long period of inflation, the farming community have already absorbed something like £200 million of increased costs and have been left with little or none of the value of increased efficiency. But noble Lords looking at the figures at Appendix II on page 14 of White Paper No. 1658—that is, this year's Price Review White Paper—may think that the figures are very formidable. Well, they are, until one investigates them a little more closely. If one looks at these figures the first thing that will be noticed is that the actual net income in terms of pound notes varied very little between 1951–52 and 1961–62, while the real value of the pound deteriorated throughout the period. Therefore, the real value of the net income was a diminishing quantity from 1951 to now.

But the net income for the last three years, including the forecast for 1961–62, seems to have risen rather steeply. The figures could, however, be very misleading and I am hoping that the noble Earl when he comes to reply is going to clear this matter up once and for all. The 1961–62 forecast is just a forecast; there are two months of the farm year yet to expire and there will be a revised Estimate, and then another revised Estimate; but if we assume that the forecast is correct to a penny, what is the real value of the 1961 forecast compared with the value in 1951–52? It is as well, I think, to let the Minister of Agriculture answer himself. In another place on April 2, in answering a Question, he stated [OFFICIAL REPORT, Commons, Vol. 657 (No. 88), col. 1]: The following figures show aggregate farming net income in the United Kingdom since 1950–51 adjusted for changes in the prices of consumer goods and services:". Here are the Minister's figures and the noble Earl will not, I am sure, contradict me about them. The net income in 1951–52 was £314 million. In the same calculation the Minister says that the net income for 1961–62 (this is the forecast) is £310 million. So, comparing the two years, the real value of the forecast for this year is slightly less than the real value of the net income ten years since.

That is a very remarkable fact, because in between those ten years efficiency has been increasing rapidly, and the Government—not members of the Opposition—estimate its value at £25 million a year, not one penny of which has gone into the pockets of the farmers. In the same ten years, according to White Paper No. 1658, output has increased by 34 per cent., for which the farmers have not received one penny piece. How does that square with the statement in paragraph 31 of the December, 1960 White Paper?— the increasing efficiency of the industry must be an important factor in helping it to achieve the objective of greater independence of State support. At the same time, the Government wish to assure the industry that they intend, taking one year with another, to leave farmers with a share of the gain from increasing efficiency. Towards the end of the same paragraph it is stated: Otherwise they intend that farmers should have a share of the benefit to their incomes resulting from increasing efficiency.

I have already shown, I think, that over the ten years the farmers have not received one single penny piece for increased efficiency, calculated by the Government to be worth £250 million. They have not received one penny extra for the 34 per cent. increase in productivity; and the simple truth is that there is no encouragement at all to preserve a thriving agriculture in this country so long as the farming community are to be treated as they have been treated again this year. The Government have grabbed all the £250 million worth of increased efficiency and they have given nothing for the increased output of 34 per cent. I wonder whether your Lordships can think of any other industry that would stand for this. No wonder, therefore, that the farmers are angry! And if I am wrong in any particular I hope the noble Earl will not hesitate to correct me. All I should like to see is that the truth be made known to all.

During 1961 and early in 1962, the newspapers were for weeks on end full of a certain Supplementary Estimate. But it is no use just leaving it there, because all the people ought to know all the truth, and I hope the noble Earl will tell us what the truth is later on. If I happen to be right, as I feel that I am because I have used only Government figures, I hope the noble Earl will graciously admit it and let all the people know the truth. After all, it is the Government's duty and responsibility to justify any decision they take. If the Price Review decision is their interpretation of adequate remuneration, let them be frank about it and nobody will complain. But I ask them to cease hiding behind bundles of figures that the general public really do not understand.

I am quite willing to admit that many farmers, large farmers on good land, are still reasonably prosperous. But I could not say that for scores of thousands of smaller farms where the land is perhaps not so good. On the contrary, their diminishing returns have brought smaller farmers, in particular, and intermediate farmers, disillusionment. They no longer feel they are the "pet darlings" of the Tory Party and their confidence, I am afraid, has been badly shaken.

On a more cheerful note, it is a pleasure to see the steady conversion of the Government to the virtues of agricultural marketing. Thirty years ago they voted solidly against the Agricultural Marketing Act. To-day they are offering £1½ million to encourage marketing schemes. They have learned, at long last, that marketing schemes are not Communism but plain common sense. We congratulate them on their belated conversion. I note that there are moves in other quarters of the Conservative Party. Last week, for instance, the Leader of the House in the other place said the Tory Party needs a new vision. How true! He called for a re-shaping and re-stating of the Tory faith in the terms of the year 1960—rather belated. The noble Viscount the Leader of this House said the other day, "You cannot lead the Conservative Party from behind." Well, he ought to know; he has been trying long enough. It seems to me that, one more Orpington and we shall be in danger of having a progressive Conservative Party—a contradiction in terms.

Before resuming my seat I should like to voice just one hope and expectation for the farmers. Both 1955 and 1959 were Election years; it might have been a coincidence, but in those years there were two very nice Price Reviews. 1963 is likely to be another Election year, so if they can bear their sorrows in patience until 1963 they can look forward to another good Price Review, expecting presents in galore. This, with the Schedule A promise, makes it seem to me that Election year has started already, which gives even more hope than I can express. But I hope, at all events, that the farmers will see through this political game. My Lords, I beg to move for Papers.

3.5 p.m.

LORD SWAYTHLING

My Lords, while I would say that I share with the noble Lord, Lord Williams of Barnburgh, his regrets about the not agreed determination of guarantees, I intend to address your Lordships for only a few moments about the egg subsidy, and I feel I ought to mention that we have a fair-sized poultry unit on my farm. Your Lordships may be well aware that there are three methods by which a farmer producer can normally sell his eggs. The first is to sell them to the Egg Marketing Board. The second is to sell them under a "B" licence to a retailer who sells direct to the public, and The third is 'to sell them direct to the consumer—what is called "over the farm gate." In the latter case the public are well-content to come and pay a price well over the price at which they can obtain eggs which have passed through the Egg Marketing Board to the grocers' and other shops. By this means they obtain what they want, a fresh egg, and pay a reasonable price which they are quite prepared to pay.

The second method which I have mentioned is to sell eggs under a "B" Licence to a retailer. The regulations lay down that such eggs must be stamped with a rubber stamp. For one reason or another the public, the consumer, does not like to purchase eggs marked with a stamp. I am not referring merely to the little lion as used by the Egg Marketing Board, but any rubber stamp whatsoever; it is well known that retailers who have experienced this very strong sales resistance now refuse to buy eggs that have a rubber stamp on them, and I am sorry to say that I understand that quite a number of unstamped eggs are sold illegally to retailers.

If the regulations were altered and eggs sold under "B" licence to a retailer could legally be sold unstamped, many more would be sold that way and three things would arise in consequence. First, the consumer would be obtaining eggs that he wants at a reasonable price that he is willing to pay. Secondly, the producer would be selling a larger number of his eggs at a reasonable price; and thirdly—most important from a national point of view—the Treasury, or should I say the Chancellor of the Exchequer, would be delighted with all the extra eggs that would be sold under a "B" licence as no subsidy would have to be paid on them. I feel sure that if this were permitted the egg subsidy, instead of being £22½ million as it was last year, would be considerably less. I believe the anticipated figure for the egg subsidy this year is £15½ million. In fact it might be that so many fewer eggs would be sold on which the subsidy was payable that at the next Price Review, instead of the eggs subsidy per dozen eggs sold falling rapidly, as it has during the last Reviews, it might be possible to raise it to a more reasonable level. I trust that Her Majesty's Government will consider the point I have made and see that the regulations are altered in the manner that I have suggested—namely, that the compulsory stamping of eggs sold under a "B" licence be no longer required.

3.8 p.m.

LORD HASTINGS

My Lords, this time last year, when we had our annual debate on the Price Review, the noble Lord, Lord Williams of Barnburgh, did not open on that occasion because he was making his maiden speech; that is to say, of course, in this House. And also this time last year I was, in a manner of speaking, making a maiden speech in that I was speaking for the first time from this Box. Now I am delighted to have the opportunity to welcome Lord Williams of Barnburgh, as it were, to his first time in opening a debate on this very important Annual Review. It is always a pleasure to listen to him; we all enjoy that, even when we do not agree with him. There is no doubt about that at all. We also treat what he has to say with great respect, and of course what he says carries weight in the country because of his past record at the Ministry of Agriculture. On the other hand, I do not think the House will expect me to answer his main argument. That falls rather in the province of my noble friend—

VISCOUNT ALEXANDER OF HILLS-BOROUGH

Why not? Have a go.

LORD HASTINGS

—who will be winding up the debate. Nevertheless, following the exhortation of the noble Viscount who leads the Opposition, without getting involved in a long economic discussion such as was started by the noble Lord, Lord Williams of Barnburgh, a year ago and continued even more two months ago, I cannot refrain from reminding him that much of what he quoted from the 1960 Talks White Paper he will find in my own speech a year ago, when the noble Viscount was moving a Motion which embraced the contents of that Paper as well as the Annual Determination of Guarantees.

I was interested in particular, when he quoted extensively from paragraph 31, which talks about The increasing efficiency of the industry and the Government wish to assure the industry that they intend, taking one year with another, to leave farmers with a share of the gain from increasing efficiency. He stopped at that point. The next sentence reads: The Government must naturally reserve the right, in exceptional circumstances, to reduce the value of the guarantees to the extent permitted by the Agriculture Act, 1957. I think that it would have been rather more just if the noble Lord had included that sentence at the end of his quotation. Turning to the question of real income, I am going to leave that much longer argument to my noble friend, because otherwise I should not be making the speech which it is my duty to make, and I shall be well behind schedule.

LORD WILLIAMS OF BARNBURGH

My Lords, the noble Lord may forgive me for having missed that part of the paragraph; but he will realise, of course (this is my apology), that I was dealing with a ten-year period and not just one year.

LORD HASTINGS

However that may be, the noble Lord did refer, as also indeed did the noble Lord, Lord Swaythling, to the fact that this is not an agreed Review. They thought that was a pity, and it is worth perhaps saying one word on that aspect. We all know that this year we have had what is usually called a disagreed Review. What this means is that the Farmers' Unions have not been able to agree with the Government's determinations made in the light of the Review. Under the Annual Review system it is the Government's responsibility to determine the guarantees. It is not a negotiation. The Government are naturally glad when the Farmers' Unions indicate that they can positively support the decisions. But in the last resort it is for the Government to make the determination they believe to be right in the interests of the farmers and the country. I am sure that noble Lords will not disagree with that, although they may well disagree with the determination made by the Government.

The fact that the Government's determinations have not been acceptable to the unions is not a criticism of the Annual Review system. There has, as always, been a very full examination of the economic condition and, prospects of the industry, and although the Government and the unions may differ in their assessments of the situation there is very great value in the fact that this stocktaking takes place. There is free and frank discussion and it is important to realise that the discussions take place on the basis of facts and figures which are not themselves in dispute. The usual economic data—net income, output, cost changes—have been agreed. They are recorded in Appendices 1 to 4 of the White Paper. I will summarise them briefly.

First, output—and in spite of what the noble Lord has said, this continues to go up. On the up-to-date index introduced two years ago, the forecast is 122 for 1961–62, compared with revised figures of 119 for 1960–61 and 112 for 1959–60.

Secondly, income. We have all been glad to see that this year's figure confirmed the trend of a continuing and substantial rise in income. The forecast for the year to May 31, 1962, is £431½ million, compared with the revised estimate for 1960–61 of £389½ million. That is an increase of £43 million. On the basis of normal weather conditions the forecast is £413½ million, which is £26½ million more than last year's record figure. Before I move on, I think it might be helpful to add a few words of explanation about those figures. I mentioned a revised figure of £389½ million for actual net income in 1960–61. Noble Lords who have referred to the 1961 Annual Review White Paper will have observed that actual net income for 1960–61 was then forecast to be £359 million. How does this difference arise?

There are two reasons. First, the farming year which is taken both for net income and for other purposes is a year ending on 31st May. The Annual Review White Paper is published in mid-March, and the economic data have been compiled some weeks previously. Thus the figure given for current net income is based on actual experience of only a little more than half the year, which still has some five months to run, and the White Paper figure is a forecast. It is the best forecast we can make, but it is inevitably a provisional figure, which has to be adjusted when we know the facts about production and prices for the rest of the year. This accounts for the greater part of the difference between the original forecast and the revised estimate for 1960–61.

Secondly, we are always striving after greater accuracy in our assessments. We have to try to keep pace with new developments such as the rapid expansion of broiler production, and we are constantly improving the scope and sources of our information. So nearly every year we have to adjust our figures in the light of improved information. Whenever we do this we must, of course, adjust the figures for earlier years so that they are on the same footing and continue to be comparable. This accounts for the remainder of the adjustment for 1960–61 and for the adjustments to earlier years. I thought perhaps noble Lords would like that explanation, because I know that I myself have been confused on reading earlier White Papers and on finding a difference in the figures.

LORD WILLIAMS OF BARNBURGH

My Lords, the noble Lord will appreciate that we do not disagree with the figures at all: we accept them. Both sides must accept the figures provided for them, otherwise they could not carry on at all. What we do complain of, if it is a complaint, is the use of the figure £431 million as the forecast net income, leaving out any mention of the values, since we think that 1950 or 1551 is perhaps the real starting point in true value. But since there has been diminishing real income over the whole of the ten years the figure of £431 million seems to be fictitious.

LORD HASTINGS

Of course a change of values affects everything else. But that is the main gist, the whole weight, of the noble Lord's argument, which must necessarily be dealt with at the end of this debate by my noble friend, for I must confine myself to consideration of the White Paper as it is. The figures I have given are necessarily estimates, but the estimates are the best that can be made, and they are accepted, as the noble Lord has pointed out, by the Farmers' Unions. Moreover, it is the trend of net income, rather than its absolute level, to which we attach importance, and at any given Annual Review the trend can be discerned, because all the figures used at that Review are on a comparable basis. And, as I mentioned a few moments ago, the trend is strongly upward.

Now a word as to farmers' costs. These are estimated to have risen by about the same amount as in the previous year; that is, by about £.19½ million. This is mainly attributable to increases in labour costs and in rents, which together account for £14½ million. On the other side of the picture, the industry's efficiency continues to increase. One cannot be too precise about this, but there is no doubt that there is a substantial annual gain from increasing efficiency to which the noble Lord has referred, and the best estimate that can be made is that it is worth about £25 million for Review commodities, taking one year with another.

To complete this brief survey of the general background to the Review determinations I must say a word about the cost of Exchequer support. Exchequer support is certainly one of the things we have to take into account at any Annual Review, and we were bound to give it special attention when it had risen to £351 million and was forecast to be not much less—£339 million—in 1962–63. But it would be quite wrong to believe that the Exchequer cost was the most important factor and that the results of the Review were dictated solely by that consideration.

The emphasis of this Review was in fact determined by something very different. Our main objective was but the logical extension of the policy pursued at previous Reviews; and that was to draw attention to individual commodities, and to help solve the problems arising now, and likely to arise in the near future, in respect of individual commodities. I think it is worth while to remind your Lordships what was agreed between the Government and the Farmers' Unions and clearly set out in the White Paper, Command 25, Long-Term Assurances for Agriculture, in November, 1956. On the opening page of that White Paper it is written: … any satisfactory arrangements "— that refers to the Annual Review— must provide for account to be taken of many changing factors before determinations can be made that are fair both to the industry and to the nation. The most important of such factors are production trends in relation to consumption requirements, the trend of the industry's net income, Exchequer liability, cost changes, world market prospects and increasing efficiency. Not only do these factors themselves vary from year to year, but their relative importance may also vary. That was written in the White Paper. I have said that it was, and is, my right honourable friend's wish to direct attention to the special problems of individual commodities. Therefore, I would ask your Lordships to bear with me while I refer to the more urgent problems in detail.

My Lords, we all know the advertisement "Drinka Pinta Milka Day" It is good news that the Milk Marketing Boards and their partners in the dairy industry have increased sales of liquid milk by over 24 million gallons in the last year, and by 21 million gallons the year before that. But in the same period milk production increased by over 100 million gallons in each year—in other words, four times as fast as sales increased. This problem was highlighted in last year's Annual Review, and it was suggested that the industry might institute some sort of two-tier system. Meanwhile, the pool price (this was before last year's Review) had fallen by 1¾d. per gallon, due to over-production; and recognising the difficulties of the small farmer my right honourable friend raised the guaranteed price by 0.8d. and there was, in addition the 0.2,d. increase due to the larger standard quantity allowed.

My Lords, in view of the clear warning given last year, it was hardly to be expected that the Government would take no action in the present circumstances. Even so, last year's increase in the guarantee has only been halved—namely by 0.4d. per gallon. Against this, however, we must take account of the fact that the increase in the standard quantity by 24 million gallons in this Price Review is worth about ¼d. per gallon, so that the net effect of this year's Review is a decrease of only 0.15d. per gallon. If, as is said, there is likely to be a fall of at least ld. per gallon received by the farmer from the Milk Marketing Boards, nearly the whole of that fall will be due to over-production and not to the decrease in the guaranteed price.

VISCOUNT ALEXANDER OF HILLS-BOROUGH

My Lords, does that mean the Government are going to carry on a policy which involves this country in being a net importer of many things which could be produced here? I think that the Government should take a look at that point. Do they want to stultify the agricultural industry by including some of these important commodities in our net imports?

LORD HASTINGS

We are a net importer, it is true, of milk products in general, but I do not think that makes very much difference to the actual price received by farmers from the Milk Marketing Board.

The same problem of over-production faces the egg producer. Last year, production accounted for about 97 per cent. of the total demand for shell eggs. At the time of the Review the signs were that production would rise still further in the coming year. Indeed, the Chairman of the Egg Board himself spoke of a possible rise in production of a further 5 per cent. The prospect, therefore, was production at a level which could be disposed of only at extremely low prices. It is for this reason that the guaranteed price has been dropped by 1½d. per dozen.

I think that here I will deal with the question of imports, anyhow in so far as it relates to eggs. We must see this matter in perspective. Egg prices have been at a low level for some weeks now, but by comparison with home production imports have been negligible. Trade estimates show imports for the first three months of this year as 181,000 boxes. During the same period, our packing stations handled well over 5½ million boxes, and probably about half as much again was sold outside packing stations. It is quite clear that the factor which really decides market prices is home production. Anti-dumping legislation is available and has been used in the case of butter and barley. An application from the producers in respect of eggs for an anti-dumping order is now under consideration by the President of the Board of Trade, but it relates to possible higher imports later this year, when the President of the Board of Trade would be in a position to take immediate action and not to import at the present level.

As I am dealing now with the question of eggs I do not know that I can go into great detail about what the noble Lord, Lord Swaythling, said as to the operation of the Egg Marketing Board. But I understand that the vast bulk of eggs are sold with this rubber stamp on them, and it is essential for consumer protection that that should be done, and also in order that the farmer may receive his guarantee. If there are any further details that can be given on that problem I know that my noble friend will supply them when he winds up the debate; but that is the brief answer to the noble Lord's speech.

It has been argued that the small farmer depends for his living on the production of eggs and milk, and that it does not make sense to extend the Small Farmer Scheme to include another 13,000 farms if, by so doing, we merely increase the quantity of products already in excess supply, thereby reducing the market price even further. I believe that the noble Lord, Lord Williams of Barn-burgh, made some reference to that possibility. That argument really misses the point of the Small Farmer Scheme. Every farmer assisted under that Scheme receives a grant only after a farm business plan has been most carefully drawn up and agreed with the Ministry. The objective of these plans which last three to five years—and, indeed, the results are beginning to bear this out—is to run the farm economically and to improve the rate of profit, so that the farmer may become truly competitive and able to meet the challenge of a buyer's market. So that even if he does increase his production under his farm plan, he is able to do so economically; and that is what really matters to the individual farmer.

The next market I want to talk about is that for meat. The sheep farmer increased his production very considerably last year. He had a record lamb crop and the prices were lower than usual. Similar conditions may well recur in view of a yet further increase in the breeding flock. The subsidy paid last year was a very high proportion of the market price—no less than 60 per cent. In all the circumstances my right honourable friend decided to reduce the guaranteed price by ld. per lb. dressed carcase weight. At the same time, in the interests of quality production the maximum weights on which subsidy will be paid have been reduced by 5 lb. and the stabilising limits widened by 1d. either side of the weekly standard price.

Turning to beef, the guaranteed price was increased last year by 10s. per live cwt., and an undertaking was given not to reduce that figure at the next Annual Review unless there was a significant change in circumstances. There were, of course, exceptional circumstances which led to a collapse in the meat market and a large Supplementary Estimate, and which have been the subject of many questions in this House. Nevertheless, beef production is a long-term business. We wanted an increase in quantity and, having got that increase, we believe that production will level off after this year. The guaranteed price has therefore been left unchanged, but it was felt that something could be done to improve the prospects of the future by concentrating attention on the needs of the market and the problem of quality.

In order to achieve this, my right honourable friend has raised the minimum standards for certification of fat cattle, with the intention of eliminating unfinished beasts; he has widened the stabilising limits from 7s. to 10s. on either side, restricted the guarantee payment to certain maximum weights, and introduced a new standard for young animals which may be classed as baby beef.

VISCOUNT ALEXANDER OF HILLS-BOROUGH

My Lords, could the Minister tell me the actual date of the change of standards, under which the subsidy is to be awarded? Is it in the new farming year from June 1, or is it at once?

LORD HASTINGS

My Lords, it is at once on the grading standards. I think that the noble Lord, will find it in Appendix VI of Cmnd. 1658 in the notes: With effect from 26th March. 1962, the following standards of eligibility will apply: These are the revised grading standards for fatstock, and also the new standard for young animals of special conformation. Then it gives maximum weights from March 26 to July 1. There is a slight variation or lowering of that after July 2 this year. I hope that that answers the noble Viscount's question.

VISCOUNT ALEXANDER OF HILLS-BOROUGH

My Lords, I mentioned it, because some of the farmers are complaining that they have not had sufficient notice. Many of them would not now have gone on keeping calves which are not pure-bred beef calves, but are half-bred from dairy herds. They feel that not sufficient notice has been given.

LORD HASTINGS

My Lords, I think that the only beasts which will be caught are really the ones which were not properly finished last year; they will have to be kept longer. I know that there has been criticism about the type of beast which may be ineligible, but I do not think it is justifiable to say that very many animals—in particular those which are half-bred beef from dairy cows—will fail to conform. There is really no reason why they should not achieve the higher minimum standard. In some cases last year, of course, cattle lacked finish, and the estimate is that about 75,000 beasts will be excluded by the new standard. There is really no reason why dairy crosses should not conform to this new minimum standard.

I was just going to finish that part about beef, when the noble Viscount interrupted. I was about to say that the net effect of these changes should be to boost the demand for beef and the price which the producer gets paid for it in the market.

VISCOUNT ALEXANDER OF HILLS-BOROUGH

There has not been a market lately.

LORD HASTINGS

My Lords, I think what I have said bears out my contention that the main purpose of this year's Annual Review is to relate production trends to consumption requirements—the first factor mentioned in the 1956 White Paper I referred to, which was "Long-Term Assurances for Agriculture"—in other words, to persuade the farmer to study the needs or the market, which in an age of plenty is becoming of ever more vital importance. In furtherance of this policy my right honourable friend has been able to come to an agreement with the Farmers' Unions to implement the ideas on market research and development adumbrated in last year's Annual Review. £1½ million will be set aside by the Government over the next three years for the purpose of giving grants varying between 25 and 75 per cent. for projects recommended by an executive committee to be set up by the Unions themselves and approved—I mean the recommendations approved—by the Minister. The purposes for which a grant may be paid are set out in paragraph 24 of the White Paper, and I believe noble Lords will realise the enormous potential benefits which can flow from the efficient use of this money.

My Lords, whether the future market for the British farmer is confined to our own population or is extended to include the peoples of Western Europe, there is no doubt that British agriculture must be thoroughly competitive. The Government are determined to play their part in helping our farmers to achieve this aim and they have no intention whatever of departing from their promises to stand by all their obligations under the Agriculture Act, 1947—promises which were repeated in the talks with the Farmers' Unions and published in a White Paper, which has been referred to by the noble Lord, Lord Williams of Barnburgh, little more than a year ago.

VISCOUNT ALEXANDER OF HILLS-BOROUGH

And not carried out.

3.38 p.m.

VISCOUNT STONEHAVEN

My Lords, I rather wish we had a Price Review about once a week, because we should then have the pleasure of listening to my noble friend, Lord Williams of Barnburgh at a frequency of once a week, which would be none too often. As regards this Price Determination, it seems to me—and I must first declare my interests, which most noble Lords know—that it has a great similarity to the curate's egg: good in parts. While I realise the difficulties of Her Majesty's Government, I cannot help feeling that they have themselves demonstrated that a great many of their troubles could have been alleviated had they taken reasonable action to control the other side of the equation sooner. After all, they were very successful over barley, after a considerable amount of prodding and after very unfortunate price conditions earlier on. But they were successful, and, having succeeded once, there is nothing like trying it again. I therefore commend their action there, and point out that a very good way of controlling this type of thing is to have a minimum import price—which does not, as far as I know, upset G.A.T.T. or those other things which are always thrown at one—and if any man wants to import below that price, he has to pay the difference into a fund which is then used for subsidising home production. A system of that sort which, I may say, is advocated for the Common Market under the Treaty of Rome, is well worth considering.

I cannot help feeling that the real trouble with the 1947 Act, in which we all place great faith, is that, if you analyse it, it is a matter of opinion. What does it really mean? We are guaranteed nothing except that in the opinion of the then Government the remuneration shall be adequate. Is it? I do not know exactly how many farmers are involved (in spite of all the statistics, in which I am not going to get involved, for I can not understand them) but there are a very large number of full-time farmers taking great risks with their capital and getting only £600 a year, or less, in return; and, as we know, the average wage of an industrial worker, who takes no risk whatever, is considerable higher than that. That is a thing I can hardly reconcile with the spirit of Section 1 of that Act. I am quite prepared to be convinced, but I am not at the moment. I know, of course, as we all do, that we have been going through difficult periods and that we have had the pay pause ", but if a farmworker is granted the equivalent to a 2½ per cent. pay rise, I should have thought that it was reasonable to allow the farmer himself to retain the equivalent of 2½ per cent. of his increased efficiency. I do not think it should be more, perhaps, in the circumstances; but a gesture of that sort would have gone a long way towards satisfying some critics.

However, I feel the time is rapidly approaching when the farmers and Her Majesty's Government must get together and not only consider small, circumspect conditions in this country alone, but relate agricultural policy to what is happening in the rest of the world. Now I am informed—and I am supposed to be reliably informed—that by 1970 there will be a world surplus of food, and that there will certainly be a surplus of food in the Western hemisphere. That means that we have all got to think pretty hard. Certainly, from my own observations, if France were to become universally, or anyway to a large extent, as efficient as her most efficient farms are to-day, the surpluses which would be produced by them alone would be fantastic. That I can say from my own observation, apart from these figures here, which I believe to be authentic and which I believe come from world food organisations.

Another point is that the Common Market may or may not affect us directly, but even if we do not join it we shall be affected indirectly by these world surpluses. We must, I submit, take that into account, and it is none too early to do that—in fact, I should think it is rather too late already; we ought to be doing a good deal about it now.

VISCOUNT ALEXANDER OF HILLS-BOROUGH

My Lords, may I ask the noble Viscount—I am always interested in what he says—what he thinks of that supposed surplus in 1970 when it is compared with the present world organisation estimate that two-thirds of the population are living below the standard of the rest of the world?

VISCOUNT STONEHAVEN

I am afraid I did not catch the last part of the noble Viscount's question.

VISCOUNT ALEXANDER OF HILLS-BOROUGH

How does the noble Viscount relate what he has just been telling us about surplus production of food to the fact, which is reported, that about two-thirds of the world's population are living below the proper level?

VISCOUNT STONEHAVEN

I was referring to the Western hemisphere. Perhaps 1 should have cut it down and said Europe. I probably should; but those figures are, I think, authentic. The other point, which is rather leading me astray, is this: the idea that you can sell an agricultural surplus is, I think, ill-founded. You can give it away and it can serve a useful purpose in relieving famine, but I do not think you can sell it, because usually the people on the receiving end have nothing with which to pay for it. Therefore, I think that is a myth.

I now come to the question of the implementation of the 1947 Act. My Lords, I believe that when you have difficult and unpopular things, it is no good not facing up to them or discussing them, even though you may not be able to solve them. I believe it is virtually impossible truly to implement the 1947 Act, Section 1, on a very small farm. After all, a man must produce an adequate living and an adequate return for his investment, and if he is working on a small area, very often of poor land and of less than 50 acres, it is not physically possible to do it. That raises very great difficulties, I agree; nevertheless, I think we should face up to that fact and be honest about it. I really do not think we have been. We have been slowly starving the wretched man out; we have been pandering to him with the Small Farmer Scheme, which is really prolonging the agony, and we have not faced up to the fact that we must do something about the small, impossible farm.

Then I come to those questions which are more closely connected with the actual Price Review. I welcome the Committee that has been recently appointed to go into the costs of distribution and the marketing of meat, but I hope that, by their terms of reference, they will be able to take into account the very large number of culled cows from the dairy herds which are eaten. The volume of beef produced in that manner is very substantial indeed. The rise and fall of the meat market controls the price, largely, and the time you cull these beasts, and decides whether, on the other hand, you hope for the best and carry on and try for a more favourable time.

Another good part of this "curate's egg" which is only partially good, to my particular mind, is the setting up of a research institute on beef and meat. I understand that this is to be set up at Bristol, and I should like forcefully to put forward the claims of Aberdeen. Aberdeen has an extremely good train service with London; it has a reasonable air service; it has three renowned research institutions; it has a very old foundation indeed in the Aberdeen University—the Marischal College and the King's College combined; and it is the centre of the meat-producing industry. It is also in a developed area. I should have thought it had far greater claims than Bristol.

VISCOUNT ALEXANDER OF HILLS-BOROUGH

Well!

VISCOUNT STONEHAVEN

I could not help making that remark, at any rate. I should add, of course, that we are on the telephone, too.

I was not convinced by the remarks of my noble friend about the Small Farmer Scheme. By the very nature of a small farm, if you increase your business efficiency (which I entirely agree is the whole point of the thing), what are you going to do, if you are already a small dairyman, except produce more milk off your holding? If you want to do anything else, you might add a poultry unit—that is quite possible—or add a pig unit: but what else can you do? And all those commodities are over-produced.

It is true that if you produce enough you can afford to accept a smaller profit margin; but what is the normal reaction, as we have seen it time and again, in particular in the case of barley, if the Government cut the support? The reaction of the unfortunate farmer, who has to try to maintain his income, is not that he gives up barley but that he plants more of it. Therefore, these methods of prohibition, or whatever one likes to call them, often have the opposite effect to that which is intended. I know, because I was in our local branch of the farmers' union in Scotland. In the milk business in Aberdeen, already our price is 4d. below the full pool price, because we are over-producing, in any case.

The farmers there came to the conclusion (I do not produce milk myself, but I was there) that an efficient producer of milk was far better off producing more milk at a lower price than he was mucking about with a two-tier system which was very difficult to organise. Three schemes were produced; they were gone into very carefully indeed and turned down on that score: the efficient producer was still much better off producing more and accepting a lower price. Nevertheless, I think there is a point which should be thoroughly investigated, and that is an integrated policy of producing pigs, skimmed milk, and manufactured cheese. It is no good taking one of those items in isolation; I think you should take the three together. That accounts for the basic success of some of the activities of the Danes. I think there is an opportunity there which we are missing and I think we should go into it.

I feel that the cut in fertilisers will have no effect. If your Lordships have looked, as I did to-day, at the brilliant company report issued by I.C.I., which indicated wonderful results, I think you will agree that the subsidy could easily be given up. They have been getting the benefit of it, not us; at least, it appears that way. Up to date every time the subsidy has been cut, it has been absorbed. I hope it will be the same again, and I think it will be. The sliding scale which was produced last year for the pig scheme is now working, but I think we have come to the point where we are getting a reduction of 6d. a score, and I feel that this fact should be advertised hot and strong so as to try to stop people from saying they did not realise the position. I must admit that I produce a few score pigs and I did not realise to what extent we had been overproducing. I feel that, in order to make it work, the scheme should have a good deal more publicity than it has had as to the point it has reached.

I welcome the question of efficient marketing very much indeed. I should like to suggest that the American system of grading corn might be looked into very carefully. In 1960, in the part of the world where I live, I had the experience of selling half a stack of oats, which I had stopped threshing because of the weather, to merchants, all of whom are inter-connected, for 50s. a quarter, and I was told it was just a lot of muck. Six weeks later I sold the remaining half of that same stack to the same merchants; I obtained 64s. a quarter and I was told it was an excellent sample of seed. That is the sort of thing the farmer finds hopeless to combat. Therefore, I welcome an organised system of marketing. I do not know whether any other noble Lord had the chance to see the American exhibition which was held the other day in St. James's Street—obviously the Minister will have done so. I think that something on those lines would be a very useful innovation.

VISCOUNT ALEXANDER OF HILLS-BOROUGH

My Lords, I am most interested in this, but am I to gather that the noble Viscount thinks that the working party system, which fixes in advance of the stuff coming into the market, is not working to the benefit of the farmers?

VISCOUNT STONEHAVEN

My Lords, I could not concede that completely, but so far as the farmer's end of it is concerned, the individual farmer must sell to a merchant, because he has no one else he can sell to. He must accept the price that the merchant gives him or else he must find another merchant, if he can, who does not have a reciprocal arrangement. In point of fact, that is what is actually happening to the farmers, and it is my own particular experience. It is an extreme case I agree, but that is the kind of thing which is happening.

Another point raised in the Price Review is this. I welcome very much indeed the remarks on the Winter Keep Scheme. I wish it were a little more detailed, but I think that is a very sound move indeed. I hope very much that in Scotland this Scheme will not be cluttered up with local rules imposed by the Scottish Office in Edinburgh. Local rules have had some unfortunate effects on some people under the Farm Improvements Scheme, and, I think, the Farm Roads Act. The effect has been this. I had a case where two roads qualified under the Act, and they were each side of a main road. In the one case there were two farms which I myself occupied, although they were occupied, of course, by two families who worked there. Because those two farms were under one ownership they did not qualify. On the other side of the road the first and nearest farm was under my own occupation, but the further farm of the two was occupied by a tenant. The road to that farm qualified.

All that happened was that the road was completed as far as my boundary, because after that only one farm was involved; so my wretched tenant, although he got a road through my farm, did not get the road going up to his own farm and to the end of the farm buildings. I think that unfortunate things like that which occur through local rules, which one cannot find anywhere in the Act, are deplorable, and I hope that that kind of thing is not contemplated under this Winter Keep Scheme. If it works just like the ploughing subsidy and things like that it will be excellent.

I should like to raise just one other point. The special remoteness grant (or whatever it is called) to Northern Ireland has been increased by half a million pounds. Northern Ireland is nothing like as remote as are the Highlands of Scotland; nor are its transport difficulties anything like as great. I should like, in fairness, to put forward for consideration the claim of the inaccessible and difficult farming areas which are re: mote from the market in the Highlands and certain other parts of Scotland.

3.58 p.m.

LORD ALLERTON

My Lords, I join with my noble friend Lord Stonehaven in saying how much I enjoyed the speech of the noble Lord, Lord Williams of Barnburgh. I fear that I am not competent to follow him into the realm of higher mathematics with regard to this Annual Review, but I enjoyed his speech very much indeed. I am sure it is the wish of all Members of your Lordships' House that agriculture should be both prosperous and productive, but it can never be a precise science. It is only natural that our ideas as to how best to achieve prosperity and productivity must vary. It was made even more difficult to frame an overall plan for the industry when it was realised, as all practical farmers realised, that what is good for one area or for one trade is not necessarily good for another. For instance, if I were to live in East Anglia, it may be that I should hope for a wet season;. but as I live in Leicestershire, on heavy land, I am far better served by a very dry season, as last year. A high level of Government support for beef is not much help to the man who gets his living from milk. I make these remarks, platitudinous though they may be, in order to stress the difficulties under which any Minister of Agriculture must labour. It is impossible for him to please everyone, but I feel that in this Review he has got as close to doing so as he is likely to do.

The Annual Review makes it clear that this year's Review has not been influenced by Britain's negotiations with the Common Market. It has been made in the context of existing arrangements for support prices in keeping with the Agriculture Act, 1957, and, as I understand it, the Government are pledged to maintain these arrangements during the lifetime of the present Parliament. When the pledge expires and as the arrangements leave the Government with an undefined liability, owing to the fact that the amount of subsidy depends on the state of the market, some changes may have to be made at some future date. I think it has been said already that it is clearly desirable to start examining what changes should be made, with the view of negotiations with the Common Market. I am in full agreement with this, and I sincerely hope that the matter is being examined at the present time. Speaking as a farmer. I would say that I, for one, am grateful to the Government for having carried the burden of this undefined liability for so long.

The usual imponderable difficulties arose last year. Not the least was the heavy support price for meat. Last year an early spring and an unexpectedly early flush of grass brought fat cattle on the market very much earlier than it could have reasonably been expected. This resulted in a sharp fall in price and a consequent rise in the amount of subsidy payable. I well realise how hard it is, under present arrangements, to make an accurate forecast of the amount required for this subsidy, but the additional amount which was involved was very considerable indeed. Completely different conditions are operating this year. Spring does not seem to have arrived and there is virtually no grass at all. What the result of this will be I should hesitate to forecast, although, if I did, I should expect a lot of "unfinished" animals to be left on the farmers' hands at the end of the grazing season, and that the cost of producing milk and lambs will increase.

Some farmers think that the alteration of grades and weights in the Review came upon them rather too quickly. I think that was mentioned by the noble Viscount, Lord Alexander of Hills-borough. I think it is fair to say that all new regulations cause some confusion to start with, because it takes some time for them to percolate through into the minds of farmers, who have become accustomed to a set of regulations over a period of time. I well believe that when they came out—I think it was on March 26—there was a certain amount of argument about the grades. Indeed, I believe that some animals were even withdrawn and taken home again. I feel sure this will sort itself out, and as it is no doubt right that the accent should be on quality, the new arrangements in the Review are probably about right. As I understand it, this is something up to what used to be the A-plus standard in the days of the Ministry of Food.

What I am not happy about is that last year there was no appreciable fall in the price of meat to the consumer during the period of very low market prices and large subsidy payments. The marked difference between these two prices must have gone somewhere. It certainly did not go to the consumer, who, after all, is the goose who lays the golden egg of subsidy. It may be that the new scheme for grants for research and development in marketing will evolve a scheme which will ensure that the subsidy goes where it rightly belongs—namely, to the benefit of both the farmer and the consumer. We must learn not only to produce but also to sell. This new research is very welcome and I am sure will be of the greatest possible benefit. Some farmers have been quite successful in marketing their own produce in retail, but these have mostly been big farmers, who have bought up butchers' shops or something of that sort. No doubt the scheme which will be evolved will be much more far-reaching than that.

I feel sure that most of your Lordships would agree with me when I say that the problems regarding what looked like being a disastrous glut of barley last year were dealt with with great skill and ingenuity. Owing to the dreadful winter of 1960–61, the amount of winter corn sown was very small, with the result that there was a vast increase in the amount of barley sown. Barley had not been a very good trade during the previous year and most farmers expected that prices would fall to a ridiculous level. Indeed, many of us expected that the cost of support would be enormous. But Her Majesty's Government dealt with the crop very successfully and the cost of support was not excessive. Possibly more on similar lines may be done in the case of other crops should the necessity arise, and it may arise because, owing to the very favourable autumn, a considerably larger acreage of wheat has been sown than is normal. We may again have fears that this large acreage will result in a calamitous fall in price, but if Her Majesty's Government were able to deal effectively with the abnormally heavy barley crop, I feel sure that we need have no fears with regard to the price of wheat after this harvest.

Earlier in my speech I referred to the imponderable factors of weather. We live in a scientific age, in which many wonderful and remarkable things are done, and for this reason I am always surprised that so little progress has been made in the ability to forecast weather for more than a few hours ahead. I am informed that forecasting will be much easier when more information regarding the upper atmosphere can be obtained from satellites put in orbit around the earth; and that day cannot be very far away. I trust that sufficient money is being made available for research in this direction. It would even be worth a slight reduction in farming subsidies if we were to know with certainty a few months ahead what the weather was going to be, although, as a farmer, I would not suggest for one moment that the money should be obtained from this source.

I do not wish to give the impression that I am dissatisfied with the admirable weather service given on television and the B.B.C. sound programmes. These are extremely accurate in the short term, and are of great value. I am glad that the television weather map is now shown at 6.20 p.m., which is a far more reasonable hour for farmers than 11.10 p.m., which it was until fairly recently. But short-range forecasts, however valuable they may be, should one day be supplanted by long-range forecasts; and I would put in a plea for adequate research in this respect.

There is a mass of statistics to show that farm incomes have risen and that production has gone up. No doubt the important information which is now available to the Ministry contributes capably to this knowledge. I do not propose to weary your Lordships with the figures, because they are there for us all to see. But many farmers to whom I have spoken, who in most cases are satisfied with the Price Review and think they are being fairly treated, seem more interested in the bottom figure on their own bank statements than they are in the statistics from the Ministry.

Production may well be up, but costs have also risen quite sharply. Repairs of all sorts are now very expensive, and especially those relating to machinery and buildings. The result is that more and more capital has to be invested in running a farm, and the percentage yields on this capital, I should have thought, have tended to fall. I do not know whether there are now available figures comparing the yields with the capital invested, but if there are, I, for one, should be interested to see them. It becomes more and more difficult for a young man to start farming on his own account, owing to these very high capital costs; and this is a situation which is to be deprecated. There is no easy solution to the problem of how to reduce farming costs, but I would suggest that the duty on diesel oil should be lower and that the prices of farm implements (and in that I include spares) are much too high. It is always a matter of surprise to me that it is possible to buy quite a good motor car for £500 or £600, whereas a rather indifferently built hay-turner costs about £150. I find it difficult to relate the values of the two.

I am certain that, owing to the very high cost of repairs and maintenance of buildings, it is cheaper to rent a farm than to own one. If incomes are up, it may well be because of the favourable warm weather last summer and unusually cheap conditions for harvesting. But it may be several seasons before we are so fortunate again. The reduction of £11 million which this year's Price Review imposes is, in my view, trivial in comparison with the increase in last year's support costs above the amount originally estimated. I feel that, by and large, the farmers have had a pretty good deal.

4.16 p.m.

LORD WISE

My Lords, I find myself this afternoon half-way between two well-known fighters on behalf of agriculture, both of whom have spent many years in advocating changes of policy and benefit in the agricultural industry. The noble Lord, Lord Williams of Barn-burgh, has given the Minister certain points to reply to, and I am sure my noble Leader, when he speaks later on, will enjoy his usual rough-and-tumble with the noble Earl who is to reply. I felt sorry for the noble Lord, Lord Hastings (I do not know whether he wants my sympathy or not) in a most difficult task, and 1 hope that, as time goes on these difficult jobs will not be passed on to him, and that he will be given easier ones. I was interested in the usual Scottish "titbits" from the noble Viscount, Lord Stonehaven. I assure him that we enjoy hearing his practical ideas from his experience, about which he always tells us in these agricultural debates.

Year by year we consider the impact of the Price Review on the agricultural industry. Whether or not our discussions have any impact on the Minister (and when I say "the Minister" I refer to the senior Minister in agriculture) or his officials, I cannot tell. Hope, however, remains that after this discussion we shall see some fruits from it in the future. Year by year the industry is congratulated by the Minister upon its increasing efficiency, but annually the fruits of that efficiency, in the way of monetary profits, cannot be retained in the industry: for it is almost certain that the following year they will be taken into consideration by the Minister in arriving at the subsidies and grant which should be paid. Unfortunately, deductions inevitably follow; and there, is no doubt, in these circumstances, as to the impact on the industry. I cannot think (and this was mentioned by the noble Lord, Lord Williams of Barn-burgh) of other important national industries which do not profit by their rising efficiency. It is easy for them to put certain increases away as reserves; but who can say what possible reserves agriculture can accumulate.

I do not think that at this stage of the consideration of the Price Review, it is necessary to discuss individual items or figures. It is obvious that we cannot amend them, though we can in a general way refer to matters which are the result of the Price Review. This must have some effect upon the course of farming and its success, or otherwise, in the year which lies ahead. We must, I think, take note this year of the unexampled distrust of the Government by the farming community. It has now reached a stage when the resignation of the Minister has been demanded. That is something new in agriculture. It never happened when the noble Lord who now sits on the Front Bench in front of me was at the Ministry; and it was never likely to happen.

It is, however, of some significance, and undoubtedly arises from the non-agreement by the National Farmers' Union as to the fairness and adequacy of the Price Review. In recent years we have heard of the National Farmers' Union's dissatisfaction or disappointment with the annual alterations, but never before has that dissatisfaction reached the present proportions. It is not for me to tell the Government to "think again" as to their future agricultural policy and actions. I have already done so on many occasions. and what I have said in the past stands good to-day in these times of uncertainty and anxiety in the farming world.

I am not at all worried about sustaining the life of the present Government, but I am deeply concerned that those who live on the countryside should prosper and be provided with adequate means as a necessary encouragement for the production of sufficient homegrown food. We can deplore the tinkering with the egg and milk products upon which the small farmer must rely if he is to survive, and even then to receive only a very meagre and inappropriate remuneration, as indeed he does to-day. I was happy to hear the noble Viscount, Lord Stonehaven, plead the case of the small farmer, although it makes one wonder whether it is the Government's desire to cast the small farmer into oblivion and to add his acres to those of neighbours with greater financial resources. I am old-fashioned enough to think that that would not be in the best interests of British agriculture. If and when that day of disaster should come, and if present overseas negotiations should hasten it, as indeed they may, there would be many who would regret the departure from agricultural activities of those who in the past have always been known as the steady yeomen of England and, indeed, of Britain.

We have been told that the Price Review contains some advantages to the small farmer under the Small Farmer Scheme Extension. But I must say that the amendments are only trivial. I do not know if the Minister could give us any indication whether those small farmers who have already received grants under that Scheme have survived and are still farming. The scheme has not been going on for long, but it may be that some have already fallen by the way. It may be thought that the alteration in the grading and weight of fat-stock might have been timed with more practical knowledge of the difficulties of producing and feeding such stock. The noble Lord, Lord Hastings, has referred to this matter in his speech, but I want to say that it is hoped that this alteration will attract the good sense and good will of those responsible for its operation. Alterations in stock farming practices cannot take place overnight.

The proposed lowering of the subsidy for fertilisers may cause some apprehension among those users who consider that fertilisers have a definite place in productive farming, and we shall see if prices in the future show any further drop. The noble Lord opposite referred to the question of the price of fertilisers. We need not, however, shed any tears for the manufacturers of such products. Their profits will no doubt still continue at a high level, and will not be subjected to any controlling restriction. The pay pause will probably have ceased by that time, unless circumstances compel the Government to reintroduce it. I hope that it will never return.

It may be thought that the matters to which I have referred are of small importance in the set-up of an industry of such a wide range as agriculture, but these small individual items are prone to have a cumulative effect. The Price Review is mainly made up of small alterations—a small advantage here, and a disadvantage there. These show the poverty of the Government's agricultural policy. It is a piecemeal affair of bits and pieces. The only points of annual uniformity are the certainty that the Government will trade upon the annual increase in the so-called efficiency of the industry, and will also reduce the subsidies by the stipulated percentage as allowed, or by something approaching that figure. It is small wonder, therefore that those who seek a living with practical knowledge and experience on the land are frustrated and disgruntled as never before. It is obvious that something is wrong in a system which creates such misgivings and arguments for or against year by year, and disrupts the smooth workings of such a vital industry as agriculture.

The farmer, on his own or through his organisation, cannot alter or amend something which is under Government control, and to correct which only the Government have the power. Has not the time come when we can jointly consider how we can secure to the producer, the consumer and the taxpayer some means whereby each can benefit according to his special place in our national life and economy? To do this should not be difficult, and we might then be able to obviate these annual upheavals. The high price which had to be paid recently by the taxpayer for a disastrous episode in the fatstock branch of the industry, and for which the Government were alone responsible and accountable, clearly shows the need for more thinking and for some measure of control over the marketing and sale of agricultural products. Some body of persons must have made handsome profits as a result of their operations.

Farmers and consumers can be left out of that category. Under present conditions, the same could happen again this year. Will the Government and the Minister stand idly by and take no steps to avoid repetition? I am not advocating the cessation or drastic curtailment of subsidies, for without these, under present conditions, farming could not survive and the country areas would become derelict.

To realise the benefit of subsidies and grants to agriculture, one has only to compare the annual amount of such with the farmers' net income. Without these subsidies, the collection of schedule D tax in the agricultural industry would be inequitable and not worth while. But I am thinking in terms of tightening up our marketing system and customs in respect of those agricultural products which have not yet been covered by the working and control of marketing boards. Cereals and livestock present to the Government marvellous opportunities to save millions of pounds of subsidies by their arranging and organising, marketing and product pricing in the interests of the nation as a whole. I have spoken often of the loopholes which existed for ill-gotten gains in these branches of agriculture, and I can only repeat that they still exist and steps should be taken to wipe them out, once and for all.

Farmers are tired of having to face, day by day, conflicting markets, uncertain prices and, oft-times, hard and immoral bargaining when their products are ready for distribution to the consumer. Are the Government strong enough to apply the necessary remedy, or are they timid and afraid? They have the power, but have they the will? I wonder.

VISCOUNT STONEHAVEN

My Lords, I did not want to interrupt the noble Lord in the middle of his speech, but may I now ask him a question? Would he say that a proportion of the increased efficiency can be attributed to the wonderful advisory services and research—which I do not think is accounted for anywhere else—of the Government Departments? I am very grateful indeed for the help I have received myself, and I should like to get his agreement on that point, because he is always fair-minded in these things.

LORD WISE

All I want to say is one word: undoubtedly.

32 p.m.

LORD STRATHEDEN AND CAMPBELL

My Lords, like other noble Lords, I am grateful to the noble Lord, Lord Williams of Barnburgh, for initiating this debate, and, while I enjoyed listening to his speech I really cannot agree with him that the Price Review is absolutely and unequivocably bad. In an industry with the tremendous variations that exist it is Obviously impossible to satisfy everybody, but, by and large, I think the Review does strike a fair balance of reasonable cuts and gifts throughout the industry. I have to declare an overall interest as a farmer, and I should like to draw attention to one or two points in the White Paper.

As regards cattle, I am not in a position to know how justified are the complaints of the dairy cattle-beef producers, but I do not think I can entirely agree with my noble friend Lord Hastings in saying that it is purely a question of finishing to get these cross-dairy cattle up to the proper standard. I thought it was generally known that there are some dairy breeds which make it extremely difficult to produce a worthwhile beef animal, and that was, I thought, one of the reasons, if not the only reason, for the importation of the Charollais bulls; but so far as the beef breeders are concerned, I think it is wholly good that the standard should be increased, for a higher quality can do nothing but good.

Like my noble friend Lord Stone-haven, I was also interested to see the formation of an Animal Research Institute, although I admit I rather wondered why it had been sited at Bristol; but, as the Chairman of the Board of one such type of organisation, I can assure my noble friend that the location of the headquarters of these organisations has nothing whatever to do with the scope of the work that they carry out.

The reduction of a penny per pound on the guaranteed price of sheep is quite a large one, but again I think that the greater number of ewes, with the resulting greater number of lambs, that are kept because of improved pastures, and also the greater number of lambs that survive owing to the greater knowledge of serums and other injections—though I must say I sometimes wonder how much profit there is left in a lamb after it has had a number of these very expensive things pumped into it—and that consequently come on to the market, offset any small reduction in price: though under the Price Review it is not a small but a quite considerable reduction in price.

There is one matter I should like to bring to the attention of my noble friend the Minister, and that is the inherent disadvantage in this system of guaranteed price. There is a maximum price weight of 50 lb., which means that everybody, from economic and perfectly natural reasons, brings his lambs on to the market as early as possible; and the result of this guaranteed price is to concentrate the number brought into the market into the shortest possible time, with the inevitable result of depressing prices. It is a difficult problem to solve, but I think it is one that ought to be mentioned, as it is an inherent disadvantage. While talking of sheep, I think one ought to spare at least a thought for what is now happening to the hill farmers and their sheep. The long-drawn-out winter, with less and less food, must, I am afraid, have a very serious effect on the stamina of the ewes when they come to lamb in about a month's time. But I see that the noble Baroness, Lady Elliot of Harwood, is in her seat, and she, I hope, will be able to say something about that.

I should now like to turn to paragraph 22 of the Price Review, "Winter Keep and Grassland Renovation", and here I have no direct interest to declare because my area has been ruled a non-stockrearing area. I realise that legislation may well be required to bring this paragraph into operation, and I imagine, therefore, that the schemes are in a fairly early stage of discussion. Therefore it is perhaps worth while saying something about what one hopes may happen, and I hope your Lordships will forgive me if I have to go into a certain amount of detail on these points.

I hope I am right in seeing in this paragraph 22 the sign that Her Majesty's Government now realise that there was more merit in the M.A.P. (Marginal Agricultural Production) grants than seems to have been realised three years ago. At that time I, in company with other noble Lords, argued against their removal. The Government showed slight signs of sympathy, and perhaps this is a real and earnest sign of their realisation that those grants were in fact worth something. Of course, help towards winter keep was, I will not actually say started, but certainly given, in the introduction of the grant towards the building of silos, and here I should like to suggest to my noble friend that action should be taken to encourage the use of silage effluent as a fertiliser. At present it is considered merely as a noxious, poisonous fluid, which indeed it is when concentrated, and it has to be disposed of in the same way as any other poisonous trade effluent.

What I want to suggest is that as part of the schemes for grassland renovation a grant should be payable for the construction of storage space, pumping and piping to spray this fluid back on to the land, not as a scheme for disposal of a waste, but as an active fertiliser which, when sprayed properly, it is. It might possibly be a mandatory part of the giving of the grant that the construction of a silo for something of this nature should be done. There are two reasons for this, which have come into my life from various directions. The disposal of the concentrated silage waste creates a very real problem, while its use as a fertiliser is known. It is rather expensive to install the equipment, but, once done, it provides a perfectly useful method of helping the fertilisation of grassland.

VISCOUNT ALEXANDER OF HILLS-BOROUGH

My Lords, does the noble Lord intend to suggest that the grant should be given for improving tankage for storing ordinary farmyard effluent and also for pumping on to the land?

LORD STRATHEDEN AND CAMPBELL

I had not considered as far as that. Farmyard manure is, of course, always a perfectly good and excellent fertiliser. This fluid, when concentrated, is a dangerous poison, both to human beings and to fish in rivers, but when it is sprayed it is a perfectly reasonable fertiliser. And I am suggesting that with a number of silos being constructed it would be worth while considering this.

Winter keep should, I think, mean more than the actual production of suitable crops or grass for conservation. It ought to be thought of as including all sorts of problems which arise in the winter in hill farming: the bringing of stock down off the hill in the winter, a costly business, not entirely proved as to its worth; and also the effect on the grazing habits of animals of putting down feed on the hill itself. This would make a most enjoyable subject for an agricultural discussion in which I am sure many noble Lords, including the noble Lord, Lord Walston, would like to join; but this is not the time for that. I hope that in the discussions which I understand are taking place with the Farmers' Unions other people will be consulted, such as the colleges of agriculture in Scotland and other similar organisations in a position to give helpful advice. The point I want to make to my noble friends is that grants for these two purposes, winter keep and conservation of grassland, in paragraph 22, must be flexible, so that they can cover all sorts of things which, hitherto, have been non-grant bearing, such as direct re-seeding, improvement of drainage, and various other practices which are of great value in these stock-rearing areas.

4.45 p.m.

VISCOUNT MASSEREENE AND FERRARD

My Lords, I also should like to thank the noble Lord, Lord Williams of Barnburgh, for initiating this debate and to apologise that I arrived rather late for the major part of his speech. The end of his speech, which I heard, seemed to be rather unkind to Her Majesty's Government—

VISCOUNT ALEXANDER OF HILLSBOROUGH

Why not?

VISCOUNT MASSEREENE AND FERRARD

—but of course that is the noble Lord's job, as the noble Viscount says. I also think that the National Farmers' Union have been a little unkind to the Government, because, after all, under the 1947 Act, the Government could have reduced the guarantees by £14 million and they have reduced them only by £11 million. I would also point out that we ought to remember that Her Majesty's Government gave an undertaking to the international monetary authorities to limit to not more than 2½ per cent., in real terms, any increased Government expenditure for the coming year. One can hardly expect Her Majesty's Government to abuse that undertaking. In the forecast of Exchequer support for 1962–63 the £339 million is an increase of £66 million over the original estimate of 1961–62. In view of Her Majesty's Government's undertaking to the international authorities, I think that, on the whole, they have been quite generous with the farmers; and I am a farmer in Scotland and England.

I agree that, from the farmers' point of view, the drop of £11 million in the guarantees is not quite the whole story. We have had the increase in cost of the Review commodities of almost £20 million, through increase in wages, machinery, increase in general costs, so the farmers are, on paper, out of pocket to the extent of about £30 million. But, of course, it can be argued again that we have an increase in efficiency of £25 million—it should be about that. There again, of course, the farmers have to draw on their capital resources, and they have had a rather bad time with the heavy overdraft interest they have had to pay to have this increased efficiency.

I should like to say that I personally have got rather tired of the remark, which is often heard in public places, about "feather-bedding" the farmer; and also over the question of subsidies. The public read that the farmers are to receive £330 million, and they appear to think that it is a sort of national charity for the farmers. What the public forget is that we have no import duty on foodstuffs, and they do not realise the vast hidden subsidies that our manufacturing industries, particularly our motor industry, receive through heavy import duties.

As it is rarely heard (I have never heard it in public) I should like to make this statement in public. The Government, by law, require the farmer to pay high agricultural wages—a minimum of £10 a week. You can hardly expect the farmer to compete with grain or cattle from South America, where the native peon is paid only 10s. a week. Either we have high import duties on food or we have Exchequer support. The other point is that farmers do not strike, and, on the whole, I think deserve little criticism. We must also remember that this payment to farmers is a completely internal movement in currency from the Exchequer, and that if the Exchequer did not support the farmers our balance of payments would suffer greatly, because farmers would not be able to provide the high standard of efficiency that they do.

Perhaps I might turn for a moment to one or two items in the Review—for instance, to milk. We are having the retail price increased, I think, to 8½d. a pint for six or seven months; but farmers are going to have an approximate reduction in their price in the pool of 1d. a gallon. To a certain extent, this is partly their fault, because the Government advised them to try to work out a two-tier system, and they have been unable to do so. We have this soaring production. I think it was 100 million gallons extra last year, and it will probably be the same again this year. I read in one newspaper that the Government were planning to throw 200 million gallons of skimmed milk down a mine. If there is that tremendous overproduction it is economic madness for a Government to encourage further production by a heavier subsidy; it would be completely wrong.

When we come to meat, particularly to fat cattle, I am extremely pleased that the Government have decided to raise the general standard of grade 1 beasts. We have had far too many raw-boned and unfinished animals coming into the market and getting grade 1 payment. The other scheme for young cattle of correct conformation is, I think, excellent. If we have this over-production we must have the accent on quality and not on quantity. I think some noble Lords opposite criticise the fact that it is happening too quickly. This new standard came in on March 26. Perhaps it is rather hard on some farmers who have been breeding with a beef bull on dairy cows. But the farmers have to expect some risks in this industry; they cannot expect to be completely protected from all the ups and downs of the market.

I agree that the Government cannot be blamed for reducing the price of mutton by nearly a ld. per lb., and I also think the scheme to reduce the weights on which the guarantee is based is sensible, especially if there is this over-production, when the accent must be on quality. I sincerely hope that in 1962 and 1963 we shall not have a repetition of the past year in the fatstock marketing abnormalities, because it is really disgraceful when we recall that the Government had to pay an extra £60 million for the guarantee. The public appear to think that farmers got away with the benefit of this; but of course they got away with nothing at all—all the farmers got was the guaranteed price.

Those who did benefit to a great extent, of course, were the butchers. I often send cattle to market and sometimes put cattle into the ring myself, and, if you watch the bidding, it is obvious in almost any cattle market in this country that the fatstock market is concentrated in the hands of a few men. There is not any doubt about it, they operate a ring. Personally, I am extremely fed up with this, as I think are a great number of farmers. Last summer I sent some two-year-old steers to the fatstock market at Canterbury, and the average price which they fetched in the market was about £57 to £58, but of course with the Government guarantee it brought the figure up to over £80 for me. The iniquitous thing is that the butchers sell that meat to the public as if they paid £80, and I feel that this is disgraceful.

LORD SHEPHERD

My Lords, would the noble Viscount agree that it applies not only to fatstock prices but also in equal measure to-day to fish prices; that fish is being bought at our ports at ridiculously low prices and is being sold to the public at ridiculously high prices?

VISCOUNT MASSEREENE AND FERRARD

That may be so, my Lords, but I do not really know the position as regards fish, apart from sea trout and salmon.

I was extremely pleased to see that in another place on February 12 the Minister of Agriculture stated that he is to set up a committee to inquire into the fatstock marketing industry in this country, and I really hope that it can find some solution to this problem. The problem has not been helped by the uncontrolled importation of beef. For instance, a great deal of dumped beef came through Yugoslavia last summer. Well, it is quite obvious that it did not come from Yugoslavia as it is not that type of country; it obviously came from Russia. That had the effect of upsetting, the beef market. And there was also a great influx from the South of Ireland. What is unfair is that on this Price Review the farmers suffer because the Government are not able to tell what quantity of meat or mutton is to be dumped in this country during the year, Because the anti-dumping laws are quite out of date, it is really impossible to forecast the average market price with any degree of certainty. The legal definition of "dumping" is, I think, when you have a product dumped in this country under the cost of production in the country of origin. It is extremely hard to tell the cost of producing something when it has come through a satellite of Russia. And even if you know the cost of production in that country, by the time the Board of Trade has got busy with the anti-dumping legislation the offending country has had about six months to dump everything it wants to and the damage is done. I should really like to see the anti-dumping law streamlined; I think it is essential that that should be done.

At the beginning of every year the N.F.U. have a meeting with the Minister of Agriculture. If only the two parties could agree on a minimum price, a price under which no food would be allowed to be imported into the United Kingdom, we could forecast the average market price with equanimity throughout the year. I think the farmers would then be quite happy, and so would everyone else. I cannot see any harm in that at all; it seems perfectly feasible. It is extremely perplexing for farmers to be told, as we have been told over the past eight or ten years, "You must produce more milk". It is produced, and then they do not want it. The next thing they are told is, "You must produce more mutton". Again, it is produced, and again they are told they have produced too much. The same applies to eggs. They are always being told that they are producing too much.

On the other hand, we are told that we produce only half our food. I feel that the Government will have to try to take steps to set up some international body to consider the disposal of food surpluses. We have just heard from my noble friend Lord Stonehaven that in a few years the Western hemisphere is going to have a huge surplus of agricultural produce, and that if we do not do something about it internationally it is going to be almost impossible for the Government to help the farmers without a huge subsidy. I understand that there is going to be some such organisation, under the U.N./F.A.O. multilateral scheme, which the United States of America has proposed. I hope that we can support that in order to try to dispose of these surpluses to the underdeveloped countries. That is a very important point, because otherwise, as I say, it is just going to mean further and further Exchequer support.

I began by saying that the Government have been rather criticised, but I have ended up by rather criticising them myself. However, the point is that, in their present position, with cheap imports and world surpluses generally, there is really very little else they could have done regarding the guarantees. If in the international and world sphere the nations go in for more disposal of the surpluses we shall not have these ups and downs in the guarantees.

5.12 p.m.

LORD WALSTON

My Lords, the noble Viscount, Lord Massereene and Ferrard, said that he himself was critical of the Government, and I certainly should not wish to criticise him for what he has said. On one rather minor matter of fact, however, I would take issue with him; that is when he spoke of the importation of Yugoslavian meat, which he said could come only from Russia, since Yugoslavia has nothing but rocks. Well, my Lords, in fact, Yugoslavia, has some of the most fertile land in Europe, hundreds of thousands of acres of land which yield over two tons per acre of wheat, and twenty tons per acre of sugar beet; and there are some extremely efficient large-scale units producing beef. Whether it is good beef, whether it is the beef which comes here, I do not know; and I certainly hope that it will not come in as dumped beef, whatever happens—on that I am entirely in agreement with the noble Viscount. But I think it would be unfortunate, if any of your Lordships were to get the impression that Yugoslavia was merely a matter of Dalmatian rocks, and that all the meat must automatically come from Russia, which I do not think has very much surplus meat to send to us in any case.

VISCOUNT MASSEREENE AND FERRARD

My Lords, the noble Lord is quite correct; Yugoslavia has some extremely fertile land. It is, however, a very small area of the whole, and I am surprised that Yugoslavia is able to export beef at extremely low prices, when the average Yugoslavian, Serbian, or whatever he is, rarely eats beef. It is extremely seldom that he has the opportunity. I think it is highly immoral of a country to export beef here, if their own people do not have a high standard of living.

LORD WALSTON

My Lords, I will not pursue that argument very much further, but I do not think the noble Viscount would suggest that it was highly immoral of Scotland to export whisky, when there are people in Scotland who do not have enough whisky to drink.

To come to rather more germane matters, it has been my impression in this debate—and I think it is a great tribute to the wisdom of my noble friend Lord Williams of Barnburgh in having initiated it—that, although we had a debate not much more than two months ago on the general subject of agriculture, we have had to-day many noble Lords taking part and we have covered practically none of the ground that was covered in the earlier debate. I am afraid that I shall be an exception to that rather good rule, and I shall go back to one particular point which I made on that occasion and to which, in passing, my noble friend Lord Wise did refer. That is, the question of the ever growing disparity between the price the producer receives for his product and the price the consumer has to pay.

In the last debate, I quoted a certain number of figures, and I certainly shall not weary your Lordships by quoting them again. But I should like just to refer to one set of figures—the only set of figures the accuracy of which has been challenged—and they are the figures relating to flour and to bread. On that occasion I pointed out to your Lordships that in the last ten years the price to the grower of English wheat had dropped by 4 per cent., and the price of imported wheat had dropped by 10 per cent.; but the price of flour had risen by 64 per cent. and the price of bread by 145 per cent. For that statement I was taken to task by the bakers, through their official organisation, and also in another place, in a Question to the Minister of Agriculture.

The Minister did not deny the figures concerning the drop in the price of wheat, so I think we can assume that those are correct. He did, however, say that my figures concerning the increase in the price of flour were wrong. I said that the price had gone up by 64 per cent., but, in point of fact, the Minister of Agriculture said that the increase in price had been 84 per cent., and not 64 per cent. So I stand corrected there. Also, I said that the increase in the price of bread was 145 per cent., and there he corrected me in the other direction, saying that it was only 100 per cent., though the bakers, in their official publication, said that it was 108 per cent.

I am not going to pursue that matter any further. Whether the price of bread in 1951 was 5½d. and has risen to ls. l½d. in certain places at the present time—as I believe to be true—or whether, in fact, it has risen from 6d. to 1s. 0½d., is not, I think, very relevant to this particular argument. The relevant point is that all the figures, including those for flour and for bread, show that the gap has widened out of all recognition. As I say, whether the gap is 64 per cent. or 84 per cent., 100 per cent., or 140 per cent., does not alter the bones of the matter. I do not think, my Lords, that that is something which we should not forget. I would agree very much with the honourable Member in another place who, having asked this question, finished up by saying: I am very grateful to my right honourable friend for the reply "— and then he went on to draw attention to the figures given by myself, which have been widely quoted, and which, he said: have, therefore, caused a great deal of dismay to the farming industry and others. I shall be grateful if prominence can be given to the correct figures. For the life of me, I cannot see why any less dismay will be caused by a figure which is 84 per cent. instead of 64 per cent. Be that as it may, I do hope that prominence will be given to these figures, because I think that they are extremely important.

My Lords, I want to make it quite I clear that my attack, in quoting those figures, and in re-quoting them to-day, is in no way an attack upon the trade, upon the processors or the distributors. I do not think they have anything of which to be ashamed. They are in their job for profit, and we are constantly assured by noble Lords on the opposite side—and I think that probably most of the bakers and the millers and the rest are political supporters of theirs—that the profit motive is an admirable and honourable thing. Therefore they have nothing whatever to be ashamed about if they operate the profit motive in a way which is extremely advantageous to themselves, and I for one do not blame them for playing the rules of the game as laid down by the Government and for doing jolly well at it—and undoubtedly, my Lords, they do jolly well at it. Because take a look at the accounts of some of the big millers and bakers, and such like, over the last ten years. I will quote only three to your Lordships. One particular company, which in 1951 had a profit of £4 million, by 1961 was able to increase that to £12 million. One rather puny little affair, which had a profit of only £900,000, has got into rather bigger money by putting it up to £3¾ million in ten years. Another one, half-way between the two with a profit of £2 million, now has a profit of £7½ million. That is not bad going, my Lords.

LORD LINDGREN

Pay pause!

LORD WALSTON

Precisely: Price Review every year, increased efficiency, and all the rest of it. As I say, I am not blaming them. My complaint is not against them in any way at all: it is quite firmly against the Government and the Ministry of Agriculture, Fisheries and Food. Because let us not forget that it is also the Ministry of Food which should concern itself not merely with the affairs of farmers and of fishermen but also with the affairs of the consumer. It is pretty clear from these figures, I think, that in the last ten years the consumers have not benefited from the policies of the present Government, because their prices have gone up out of all recognition. The farmer has not benefited because, as my noble friend Lord Williams of Barnburgh has pointed out, taking into account the ever-declining purchasing value of the pound, his posi- tion to-day is very much where it was ten years ago.

Here, I should like, not to digress but to underline that point just a little more when we talk about the profitability of farming. My noble friend gave some very interesting figures about the farm with an average income of £600. Let us just look a little further, at a slightly different type of farm. In Appendix IV of this Annual Review White Paper, from the University Agricultural Economists' data—a good and objective source—we see the figures for a dairying farm, average size 116 acres. I think that any of your Lordships with experience of a dairy farm of that kind would agree that a tenant's capital of something like £100 per acre is not unreasonable for a farm of that size. Let us put it a little lower and in round figures, and say that £10,000 tenant's capital would be required from some source or another. I do not know what is considered a reasonable return on capital these days in a risky undertaking such as agriculture. I know that some of my City friends consider 20 per cent. the right sort of return to get before they chance their or their clients' money on some risky undertaking. Undoubtedly, 6 per cent. or 6½ per cent. from gilt-edged securities at the present high interest rates is not unreasonable. If you are modest, therefore, and say 10 per cent., as a return on the capital of £10,000 you would expect £1,000.

You might also expect, for the wages of the farmer himself, who must be a skilled man and who works pretty hard, something in the neighbourhood of £15 a week; plus another £5 for his wife, who is not idle and who probably keeps the books and does some of the returns required by the Ministry of Agriculture and the Milk Marketing Board. That makes another £1,000, producing a total of £2,000 as a return. But, in fact, this average farm has an average income of only £1,196, or very little more than half. In other words, you can say that the profitability of dairy farming to-day is such that a farm can afford either to pay quite a good wage to the farmer and his wife but no interest whatsoever on capital or a reasonable return on capital but no wage to the farmer or his wife; it cannot do both. I think we should bear that in mind also when we are thinking about agriculture in general, its profitability and the success or otherwise of the Government's policies judged over the past ten years. Of course, we must not forget the position of the farm-worker either, who, although he is to-day getting something like 75 per cent. more in wages than he was ten years ago, is still among the lowest paid, though far from being the lowest skilled, of any workers in this country to-day. I therefore do not think that any section of the agricultural industry, any more than any section of the consuming public, can look with satisfaction upon the present state of agriculture.

As for the taxpayer, we all know that in 1951 agricultural subsidies were running very high indeed. It was largely for that reason that the system of fixed guaranteed prices was removed and the present system was brought in instead. At that time the total cost of the agricultural subsidies, which included many consumer subsidies, too, was £410 million. In the year which has just finished, the total cost was approximately £350 million. If you add to that the welfare milk subsidies—and I think one is justified in adding them—the total comes to £380 million. So, in fact, the taxpayer has not benefited so very greatly from this change. And let me remind your Lordships that when we talk about the taxpayer it is not simply the income taxpayer; it is also the man who buys his twenty cigarettes or has his half-pint of beer, because in this country, through indirect taxation, taxes are spread over pretty well everybody—and now, of course, it will include the children buying their bulls-eyes and their ice cream.

"Ah, well", they say, "it is perfectly true that this has happened, but at least we can still pride ourselves on having the cheapest food in Europe." Now that is a remark many people make, and I have heard it said often. I have tried to find out what in fact are the comparable prices of food in shops in Europe. It is a curiously difficult thing to do. The I.L.O. has some figures, but for some reason this country is extremely shy about collecting any such figures. I hope that its bashfulness will disappear, and that in future debates we shall have some actual, authoritative, comparative figures of retail prices. The best I was able to do, in a very amateurish way, was simply to write last week to six friends of mine living in Paris, Antwerp, The Hague, Bonn, Geneva and Italy, and to ask them how much they were paying for milk, butter, sugar, good beef, bad beef and a few other things. I do not pretend that these figures are in any way an accurate, statistical sample, but I think they at any rate cast doubts upon our boast that in this country we at least have the cheapest food in Europe, whatever other shortcomings we may have in our system of agricultural support.

Switzerland has the cheapest price for milk, with France coming second or third, at 6d. a pint; and the dearest is the United Kingdom. With regard to bread, France has the cheapest price, 5d. a lb.; Switzerland has the most expensive, at 11d. a lb.; and this country is half way between the two, at about 7d. With regard to eggs, France, Holland and Germany are equally the cheapest; the dearest country is, once more, Switzerland. This country is rather nearer the cheaper than the more expensive.

The cheapest best beef, curiously enough, is in Italy; but I do not think that what the Italians would call best beef would necessarily qualify as best beef in this country, so I do not stress that point too much. But even if we rule out the Italian best beef, Germany is cheaper than this country; Holland is cheaper than this country; and only France and Switzerland are more expensive. When we come to cheap beef, we find that France is the cheapest country, and Belgium the dearest; and this country is the second dearest for the cheaper cuts.

With regard to potatoes—this point is is perhaps a little unfair, because we are undergoing a potato famine, but Europe is having a difficult time too—we are the most expensive country; France, Belgium and Holland are the cheapest. With regard to butter, we are far and away the cheapest country; we really win on that commodity, at 2s. 11½d. a lb. Italy is the most expensive, and all the other countries are fairly expensive. With regard to sugar, where I certainly thought that we were going to be the cheapest, it appears that in fact Switzerland is; Holland is second, and we are equal third with France; Italy is the most expensive. As I say, my Lords, I do not put those figures forward as being completely accurate or statistically reliable, but I think that anybody who in future says that this country has the cheapest food in Europe should think again, and should find out from proper sources just what the figures are.

May I examine more closely the Price Review itself? Here, perhaps, I speak as what has been described in some place and at some time as a "barley baron". I was surprised and pleased to see that the Government had decided not to reduce the price of cereals, and I thank them for their generosity to the hard-pressed section of farmers who come from East Anglia. But where they have made cuts, as your Lordships will know, is on milk and on eggs. In other words, they have singled out, for reasons which I shall come to, reasons which we have already been told, just those commodities which the small farmer happens to produce.

I hope your Lordships will bear with me if I spend a little time talking in some detail about milk. I think it is right to look at milk carefully, because not only is it the mainstay of a very large number of small farmers and of marginal farmers—and there is a difference, as your Lordships will know, between the two—but it is in fact the biggest single commodity produced by agriculture in this country: it accounts for 23.6 per cent. of total farm income, so it is far from being a negligible crop. Since 1950–51 (and these figures are taken from those published by the Milk Marketing Board) bought feeding stuffs, which account for 33 per cent. of the total cost of producing milk, have risen by over 20 per cent., or something like 1½d. Cost of labour, which accounts for 23 per cent. of production costs, has risen, as I said earlier, by 75 per cent.; that is for the basic wage rates. The total net farm costs have gone up by 3d. per gallon, and the total returns for milk have gone down by ½d. per gallon. In other words, here we have the biggest single section of the agricultural industry, where costs have risen, by 33 per cent. in the case of food and 75 per cent. in the case of labour, and the price paid, which has been fixed by the Government, has dropped by ½d., in spite of the agreed costs having gone up by 3d. in fact, in 1960–61, according to the survey of the Milk Marketing Board, 14 per cent. of the farmers were actually operating at a loss.

That was the position until the Price Review of this year. But as your Lordships know and have heard from the noble Lord, Lord Hastings, this year the guaranteed price has been reduced—as the Government warned; I give them credit for that—by 0.4 of a penny. The noble Lord said that that was not as bad as it sounded because the standard quantity had been increased. That is perfectly true. But not only has the standard quantity been increased, but the retail price to the consumer also has been increased; and the inevitable result of that will be that less liquid milk will be consumed, and more milk will have to go to manufacture and the pool price will thereby suffer. What the balance between those two will be, none of us knows. Calculations have been made. But, however it works out, there is no getting away from the fact that this decline in the price paid for milk under the Price Review is continuing—whether by 0.4 of a penny or whether by rather more or by rather less, we do not know. While costs continue to rise the prices of imported feeding stuffs continue to go up. Prices of home-grown feeding stuffs have rocketed up in the last few months, and in the last month wages also have gone up still further.

Let us now just compare that with what has happened to the actual retailers of milk, because I think there is some significance there. It would take far too long to go into the great complexities of the matter, although possibly the noble Earl, in his reply, will do so.

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

My Lords, may I interrupt the noble Lord for a moment? I have not interrupted him before. Is he trying to explain that costs in milk production have gone up so seriously, and the price has fallen so badly, that farmers will produce less milk, and people will cease milk production? Because my estimate is that milk production is likely to rise.

LORD WALSTON

My Lords, I will, if I may, come to that point in a moment or two; it is a very relevant point. But at this stage I should like to continue with the comparison between what has happened to the distributor of milk and what has happened to the actual producer.

The distributor has, broadly speaking, a fixed margin agreed with the Ministry giving him a calculated profit of 2d. a gallon, which is far more than the "calculated" or "actual" profit—and in some cases loss—of the producer. Over the last ten years, say, we have seen the producer, with his guaranteed price, his 1947 Agriculture Act security, and all the rest of it, being squeezed and squeezed; while the distributor, with no guaranteed price, with no 1947 Act, with no ostensible guarantee of security, has been keeping his fixed 2d. margin all the way through. I think that that is also of significance when we are discussing agriculture.

A further factor coming into this matter is that, although the total consumption of liquid milk has risen over the last ten years, the per capita consumption of liquid milk has in fact fallen. According to the Annual Abstract of Statistics, which I imagine is accurate in this matter, and, indeed, in all others, it has fallen from 347 pints per head in the earlier year to 323 pints in 1960.

The noble Earl, Lord Waldegrave, asked: What does this in fact mean? Was I suggesting that less milk will be produced as a result of what has happened? I think he asked what would be the effect of the Government's policy. As one noble Lord rightly pointed out, the immediate reaction of farmers to a reduction of price is to increase production, and even economists are beginning to realise this at the present. Farmers have to keep up their incomes. If ten cows give them enough profit, they will stick to ten, but if the profit margin is too low from ten cows, then they will keep twelve. Of course, they do not always make a profit, because they are not always accurate in costing, but the tendency is to produce more when the profit margin is being squeezed.

I do not say that that is the long-term result. Eventually, after five or ten years of considerable pain and considerable loss of national assets by erosion, some people will go bankrupt and the good, old-fashioned drift from the land, buildings falling down, hedges becoming overgrown and all the things that many noble Lords, particularly in the Midlands and West Country, have seen with their own eyes, will take place again. That will happen eventually, but it is not the immediate result of a reduction of price. It is certainly not going to result in the production of less milk, if, at the same time as squeezing the milk producer, the Government come along with a Small Farmer Scheme, which as the noble Viscount, Lord Stonehaven, pointed out, encourages farmers who are eligible actually to produce more. They cannot produce sugar beet or barley or wheat, but only more livestock, and, in particular, milk and eggs, the commodities which are already in surplus supply.

So, we are faced with a problem which is very difficulty and which I am not for a moment minimising. I am not saying to the Government, "Here you have a single straight-forward problem. You are just closing your eyes and are not doing the obviously right thing ". Because I do not believe that the right thing is obvious. But I would suggest that a study of the figures, such as I have quoted now, and many others, will make it obvious that what the Government are doing to-day is not the right thing.

If we are faced with a surplus of production, actual or anticipated, there are various things which we can do. We must plan production and, in my view, we must plan our imports and must be prepared, if necessary, to control imports to prevent meat, butter or any other product from coming in, whether it is from Yugoslavia or Russia, at certain times. We must retain the right to control imports. Without that, the planning of our whole production is absolutely valueless.

Secondly, we must do our best to see that consumer prices are made cheaper rather than dearer. As I have suggested to your Lordships, the present tendency is for consumer prices to become ever dearer. Under the present Review, milk will become dearer just at the time when we are threatened with a surplus. We must be prepared to use consumer subsidies where necessary in order to encourage the consumption of foods which are valuable for health, when there is a surplus of them. Without that power and without the preparedness to use that power, we shall not be able to have that orderly, planned agricultural programme.

Thirdly, I hope that something can be done to help satisfy a hungry world. This is a wonderful idea. It is something in which this country should take a very serious interest, and I am delighted to hear that the Oxford Famine Relief Organisation, with the Milk Marketing Board, are making plans to do something about it, albeit on a modest scale. But one point must be remembered in this regard. If we are going to give away surplus food, we have to say who it is who is going to pay for it. In the final analysis, it must be the British taxpayer. So that many of us who talk about this, as I do, must be honest and say who is going to provide the money. It is not the farmer who is going to give the food away. It is not the processor of milk who is going to dry the milk for nothing. It is not the transporter who is going to transport it for nothing. All these people require payment for their jobs. It must be either organised charity or the Government acting in charity who will undertake this.

These are the three ways in which some progress could be made towards solving this problem of surpluses, but they will not solve it in the next few years, while these things are facing us. We must figure out some other way still of doing it. Once more I would return to what I said in a previous debate, but I will not labour it; that is, that we must try to work out some scheme which will encourage the marginal farmer—and I say marginal and not small, because there is a great difference between them—if he so wishes, to leave the land on a pension and thereby make it available either for other people or for public parks, recreation, afforestation or some non-food producing use.

I would make one minor suggestion in this matter. The Small Farmer Scheme works only by enabling existing small farmers to produce more of those commodities which are already in surplus. As it happens, many of the farmers particularly affected live in the most beautiful areas of England—in the Lake District, in the Peak District and in Dartmoor or close to Dartmoor—places where holiday-makers like to go. Would it not be possible, instead of having a subsidy to enable these farmers to produce more milk, which we do not want, to have what one might call a "bed-and-breakfast subsidy," to enable them to improve their accommodation. so that people coming from London or the Midlands on holiday could live there and bring in valuable revenue to these people, thereby enabling them to maintain and improve their standard of life and to go on living in the places where they wish to live?

VISCOUNT MASSEREENE AND FERRARD

My Lords, we have this in Scotland under the Crofters Acts.

LORD WALSTON

I thank the noble Viscount. I hope it works well there and that possibly the Southern part of the United Kingdom may benefit from the experience of what goes on up in the far North. At this stage, I cannot go into detail in all these matters, but I strongly urge the Government to consider the solution of this problem of overproduction on these lines, rather than on the lines on which they have been thinking, with such conspicuous lack of success, over the last ten years. A piecemeal approach to agriculture does no good at all. It simply leaves us wallowing deeper and deeper in the morass. It is perfectly true that a good farmer should have mud on his boots, but that is no reason for a good small farmer sinking so deep into the morass that he actually drowns himself in the mud.

5.50 p.m.

EARL FERRERS

My Lords, like most of your Lordships, I am sorry to find that this Price Review was an imposed settlement. It always seems to me a tragic circumstance when the two sides at the bargaining table spend a long time trying to argue out the points and come to no agreed conclusion in the end. I should like to take my noble friend Lord Massereene and Ferrard to task over one point. He said, in defence of this White Paper, that the agricultural industry was lucky because the cuts might have been in the region of £14 million instead of being only £11 million. I must confess, with the greatest respect, that I always find that the least praiseworthy of all arguments. There are no doubt many sound arguments why the agricultural Price Review should be reduced by £11 million, but to say that it could have been reduced by £14 million is, to my mind, a most unsatisfactory form of argument. I remember well that Bill going through, and I supported it wholeheartedly because I felt it was giving some kind of guarantee and help to agriculture. But I did not support it as giving the Government carte blanche every year to remove 2½ per cent., and for the industry to be told if they did not that it was lucky.

Having said that, I must confess that I was greatly amazed—I say this quite seriously—by the fact that the Government have succeeded in reducing their liability by £11 million with remarkably little pain attached to it; I was surprised that such a sum could be removed with so little damage being done. I find it difficult to disagree with many of the major individual cuts which the Government have seen fit to impose. Nobody likes cuts, of course, but I find it difficult to reproach the Government over the cuts in the milk subsidy. The fact is, as we all know, that more milk is being produced each year, which, of course, is partially caused by this endless chase to reduce the cost of each unit of production, even if that means overproduction. The Government last year gave an increase of 0.8d. and, at the same time, gave a perfectly fair warning that if the industry did not find a way out of this trouble of over-producing milk they would have to look at the situation again at this Price Review. That, of course, is what they have done.

We all know of the rows and arguments that continued all the way through last year when the industry tried to find a way of producing either a two-tier system or a quota system, and of the troubles that ensued. But the Government were perfectly fair and open about their intentions, and the fact is that the industry, whatever the reasons may be, have not found an answer to the problem. More milk is being produced, and the only thing which farmers really take note of is penalisation in their returns. I find it difficult, when the Government have reduced the sum by only half the amount they increased it by last year, to consider that that is unfair or unjustified, though I am perfectly prepared to concede that it may be unpopular.

The same applies to eggs. There the market is near saturation point, with 97 per cent. of the home demand being supplied by home-produced eggs. Yet the production of eggs is increasing. I can see little serious economic argument against reducing the guaranteed price. Of course, the small producer, as always, will be hit first. But, for better or for worse, that relates to the economic age in which we live, and, unfortunately, neither the Government nor the unions are apparently prepared to recognise it. It is true that some small farmers with limited capital make a success of a limited acreage, and will continue to do so; but they are the exception rather than the rule, and, in my judgment, this fact will become even more apparent in the future. The Government have at least given some small farmers slight encouragement by widening the bounds of the Small Farmer Scheme. I do not know whether this will have a dynamic effect, or even a noticeable one, but for some people it may be an encouragement.

I am glad to see, also, that the Government are going to tighten up slightly the fat cattle subsidy. I would here stress that, in my view, the Government should do something to improve and encourage the production of quality meat. At the moment, the one thing that concerns the farmer is getting his beast as fat as possible, and if it is very fat he considers he has a good quality beast, whereas that is not the case at all. I have had the advantage latterly of seeing over some of the carcases at Smithfield, and the wide variety of carcases that comes forward is extraordinary. What the butcher wants is a carcase with plenty of lean and very little fat. But the one thing that farmers like to do is to get their beast as heavy as possible, and that is defeating the object of the retailer. Unfortunately, the Government subsidy, while it does not exactly encourage the production of poor quality meat, does not discourage it sufficiently. I should like to see farmers discouraged more from producing cattle which are simply as fat as they can get them. I am glad to see that the Government are prepared to give £l½ million over three years for market research. That, I think, is a good point.

The noble Viscount, Lord Massereene and Ferrard. was worried about the import of Yugoslav carcases. It so happens that, whether one likes it or not, Yugoslav carcases are exactly What the butcher wants: they have a good proportion of meat to fat; they are of a reasonable size, and they always have the merit of being fairly cheap. To allay the fears of the noble Lord, Lord Walston, as to wheher they are reared on fertile alluvia plains or Dalmation rock, I would say I am informed that they are reared in houses, and whether the houses are on fertile alluvia plains or Dalmation rock would seem to be beside the point.

I find it difficult to blame the Government for the individual cuts they have made, but where my objection does come is in the wider field of agriculture as a whole. It is true that what are termed as the agricultural subsidies (to my mind incorrectly) have cost the Government £90 million more this year than last. That is a matter for grave concern, and I can well understand that the Government wish to curtail this expense. But it is equally true that a number of items which have gone to make up this figure are due to abnormal circumstances which are not likely to repeat themselves. What I feel is deceiving is the figure quoted each year of farming net income. We are told that this has risen and that this year it is up to £43½ million, which is an increase of £42 million; and the implication is, therefore, that farmers have more money to spend due mainly to the Government's generous support.

Let us study that for a moment. Many farmers, for one reason or another, have been forced to grow a wide variety of crops, which one might call unorthodox crops and which bear no relation to Review commodities—such crops as canning peas, deep freezing sprouts and beans and table poultry, and even, in our part of the world, daffodils for the propagating of bulbs. All these are grown as the return from more orthodox farming is insufficiently firm to render some form of high output farming desirable. If this results in farmers' incomes being increased it is, in my judgment, erroneous to quote the increased figures as an argument for reducing the Review commodities.

Secondly, the figure of aggregate net farming income is misleading, because its name implies that it refers to farmers' incomes, whereas in fact it does nothing of the sort. As the noble Lord, Lord Walston, pointed out, it is the gross return from the capital invested. I have far a long time felt that it is a wrong figure to be taken when dealing with agricultural economics. The real criterion of success in any business is not the profit that is being made, because that tells you nothing at all; it is the size of the profit in relation to the capital required to produce that profit—in other words, what is the return on one's money. In agriculture we have no idea whatever.

I consider, therefore, that it is grossly misleading for the income figure alone to be given and no indication as to the capital invested to obtain that figure. After all, many thousands of pounds have been invested in the last six years or so in agriculture. At one time machines costing £300 were used for gathering the harvest, but now combines costing ten times as much, that is, £3,000, are provided. Vast grain storage schemes have been put up, and some farmers have entered into enormous irrigating schemes, sometimes costing £5,000 or £6,000. They would expect an increased return for this investment: indeed, prudent business would demand it—otherwise why do it?

The figures in this White Paper take no account of the capital investment, and in my judgment from the figure of £431½ million should be removed a figure representing the salary for managing the national business, and the balance would be the return on the capital which had been invested. That is the important point, to my mind, to decide the prosperity of the industry. I have tried on occasion to obtain the figure of capital investment, and I have been told it would be impossible to get accurate figures. But I have seen fit to wonder whether that is so, because if your Lordships look at Appendix II, in Note (i) we are told: The estimates of aggregate farming net income in Tables A and B are arrived at after making provision for depreciation. If depreciation is allowed in these I figures, then, surely, the Ministry must have some figures which would give an indication of the capital invested from which these depreciation figures were taken.

The Economist regularly analyses a sample of over 2,000 companies. They show a net return of 20 per cent. on the capital invested. What I should like to know is what is the return on the capital invested in agriculture. Is it 20 per cent., 10 per cent. or 5 per cent.? I believe that in order to have a full and proper interpretation of the figures given in this White Paper and, indeed, to have a full and proper interpretation of the prosperity of agriculture, that is a very important point. Prosperous agriculture is essential to this country, just as much as a prosperous country is essential to agriculture. The two are deeply entwined, and that should never be forgotten.

I should like to think that, because they are both so involved with each other, agriculture would have shared equally over the past years with the rest of the country in the prosperity that has come about. I find it difficult to think that that is so. The noble Lord, Lord Williams of Barnburgh, produced some dynamic figures to support his argument that that has not been the case. I do not propose to comment on those figures, other than to say that I found them extremely interesting. It is a pity that the Government should have considered that this action of lowering their guaranteed prices to agriculture was necessary. But, they having decided that that was so, I find it possible to congratulate them for having done so in such a way and in such a manner as to make it as painless as indeed they have.

6.6 p.m.

BARONESS ELLIOT OF HARWOOD

My Lords, I rise for only a few moments at this stage of the debate. I should like first to apologise to the noble Lord, Lord Williams of Barnburgh. I told him last week that I might be unable to listen to his speech, as I should he returning from Berlin. In fact the aeroplane got in at about half past three. Having listened to the discussion between the noble Lord, Lord Walston, and the noble Viscount, Lord Massereene and Ferrard, I am sorry that I did not come back from Yugoslavia, which might have made a better contribution to the problems raised by both of them.

I should like to say to the Government, and to the Minister, that there are several proposals in this White Paper which are both original and, I think, helpful. The proposal to recognise two standards for beef production—for instance, to encourage the production of the small high-standard beef animal—is, I think, an admirable one. In Scotland, where we pride ourselves on our beef, this will be a help and an encouragement. I am not a small farmer. I am a large one, so I have no interest at all in the extension of the Small Farmer Scheme. All the same, I do not see why small farmers should not get some help towards their production, in the same way as those of us who farm on a larger scale benefit from other schemes of the Government.

The proposal in paragraph 22 to encourage the production of winter keep in livestock-rearing areas, and the encouragement of permanent grassland, will, I feel, be very helpful. In Scotland this should prove of great value. In the area where I farm, which is on the Borders, the policy of improving hill pasture and permanent grassland has been carried on for many years. It is an area where such crops as we do grow are grown mainly for feed for the animals, and also for producing a better grass for grazing. We are not alone in this in the Border area. For vast areas of Scotland and similar parts of the West of England and Wales this policy will be extremely helpful. It is from these areas that the store stock are bred and sold to the in-bye farmers for fattening. I shall be very interested to know how this scheme, which is only outlined in paragraph 22, will work. I hope that it will be of great value to us, and I hope, too, that the advice and help of farmers long accustomed to this type of land will be sought in working out these plans.

In paragraph 23, reference is made to market research and development. I should like to make a comment on this, but I must here declare an interest, since I am the chairman of a fairly large livestock auction market in the West of Scotland, one which has served the agricultural industry and community for over 60 years. I welcome any proposals for the more efficient and better marketing of livestock. I shall be interested in the results of any market research which may arise from this scheme. But I would beg your Lordships not to underestimate the value to the farming community of a first-class auction market to which they can bring their stock, knowing that it will be properly handled. It will attract buyers from all over the United Kingdom at certain periods of the year, as well as, of course, from abroad. It will provide, again at certain times, the centre for the production and sale of absolutely top-class stock, such as the famous Angus bull sales in Perth, the Shorthorn sale, the black-faced ram sales at Lanark, and the dairy stock sales at Ayr and other dairy centres. I mention those centres in Scotland because I know them best, but I am sure there are equally good centres which are of importance to the industry in England.

I know that it is said currently (it was said by one noble Lord to-day) that marketing of animals by auction is not the right way to do it. But in a properly conducted auction market it is the one certain way of getting the true market price. To-morrow morning at ten o'clock in St. Boswell's I shall be taking some fourteen or so cattle that have been out all the winter around the auction mart. There will be hundreds, possibly thousands, of cattle there to-morrow morning, and there will be hundreds of buyers; and I know perfectly well that the price I receive for my cattle will be the market price at the time. Whether, if I kept them longer, the price would be more or less I do not know; but at least it will be an accurate price on that morning. I believe that that is of very great importance to farmers and to the farming community.

It is, moreover, a great convenience to farmers, whether they are sellers or buyers. The auction mart is a centre of information as between one farmer and another, between one part of the country and another; and in the market of which I am the chairman we have an office of the West of Scotland College of Agriculture which can provide answers to many of the farmers' queries and problems. We endeavour in every possible way to serve the community and the public and I can say with absolute honesty that should any of the somewhat nefarious activities that have been described by my noble friend Lord Massereene and Ferrard take place in that auction market, those people would not be allowed to come and sell their goods and cattle there. However, I know that it is currently said that much improvement in the sale of livestock can be found, and I can only say that I am sure that the auction markets will welcome any proposals to improve the service which they render to the farming community and the public. In that respect, I shall watch with great interest what will come out of these discussions.

I should like just to comment on one or two other points. The question of reducing costs by greater efficiency can operate differently in different parts of the country and for different classes of farming. On arable farms—about which the noble Lord, Lord Walston, speaks with such authority—it is, I am sure, perfectly possible. Every attempt must be made, over and over again, to increase efficiency by mechanisation; by having larger units of production; by bulk buying and bulk distribution and so on. But when it comes to the areas where livestock is the chief interest, where ploughing is at a minimum, and where increased production is governed by the natural process of reproduction, no amount of efficiency is going to produce a lamb or a calf under the time which is required by nature for that process. It is very difficult to see how production can be increased. Furthermore, cutting down on shepherds, for instance, or on cattlemen, may lead to loss of efficiency, since, in bad weather such as we have experienced recently, the care of the flock by the shepherd is the only hope of a successful lambing. One cannot mechanise a shepherd; one cannot mechanise the care of animals in that way.

My Lords, in this current year (and this point has already been alluded to by the noble Lord, Lord Stratheden and Campbell) we have had the most appalling February, March and April that I can remember since 1947. At this moment there are being born, in the hills of Scotland and elsewhere, hundreds and thousands of lambs—and only a week ago we had an inch and a half of snow! That is not very encouraging, and it does not reduce costs. In fact, it is likely, unless the weather has changed in the week I have been away, to be a very disastrous lambing altogether. Therefore it is very hard to turn to the livestock farmers and ask them to reduce their costs, as has been suggested in the White Paper. Because our costs are often quite out of our control, due to the elements and to the nature of the farming in which we indulge.

I was a little sad, although perhaps one does not grind one's own axe, that ld. per lb. off mutton should have been decided upon, because there again that will no doubt rebound on us, the producers of the store lambs; we shall probably get a lower price this year, when undoubtedly, due to the appalling weather, our costs of production will be a good deal higher. I should like to say here that the ewe subsidy which has just been announced will be very helpful and I should like to thank the Government for recognising that this is a class of livestock which needs to be cared for, and this assistance will be of considerable help in relation to the rising costs.

I would only say (and the noble Earl, Lord Ferrers, has made a very good point about capital investment in agriculture) that it is a remarkable industry that can be expected, and indeed counted upon, to economise £25 million a year—and that in a primary producing industry, subject to weather conditions over which we have no control and to an occasional disaster, such as foot-and-mouth disease and other diseases which are hard to control. One wonders whether any other industry under similar conditions could do the same. I hope that the Minister will bear in mind and will not be too optimistic about this. I know that he is a farmer himself, so we can count on him to understand our problems. I feel that in the Review before us to-day the Government have put forward some encouraging new proposals, and I very much hope that they will be successful.

6.18 p.m.

VISCOUNT ALEXANDER OF HILLS-BOROUGH

My Lords, I am sure that the whole of the House must feel indebted to my noble friend Lord Williams of Barnburgh for the manner in which he introduced this Motion for discussion to-day. Personally, I feel very deeply indebted to him. Obviously he knows very much more about this subject than a good many people who engage in these debates. I have listened very carefully to a number of the speeches from the Government Benches and I really must say that, apart from some fairly level criticisms from the noble Viscount, Lord Stonehaven, who at least found some things to criticise in the position, I have heard no attempt from the Conservative Benches really to answer the main indictment of the noble Lord, Lord Williams of Barn-burgh, of the policy that lies behind this extraordinary White Paper.

Nor has there been any indication so far in this debate of the real feeling of farmers about it, although it will be interesting if the noble Earl who is to reply to the debate will give us some details of what his experiences were, for example, the other day in the West Country. Certainly, as regards the general attitude of farmers in the country, you may find one here and there—I found one—who will say, "I suppose we shall scrape along as usual"; but all the others are indignant, and because of this situation there is a widespread demand for the resignation of the Minister. I will tell your Lordships why that is. It is because they are all so exceedingly nervous as to the consequences of the approach to the matter as it is made in this White Paper, having regard to the fact that they fear still further depredations upon their possible incomes as a result of any entry into the Common Market. That, of course, leads to a very depressing effect. I will leave the main point Which my noble friend put in his speech; I will say another word about it towards the end of my speech, and then suggest to the Minister that he should do his best to answer it.

In the meantime, the other thing that I have been struck by this afternoon is that there have been short references to the farmers and one or two references to the National Farmers' Union, but no real attempt to put over the reasons why the National Farmers' Union have felt quite unable to accept the decisions in this White Paper without their protest. I appreciated very much the way the noble Earl, Lord Ferrers, opened his speech and took great care to make reference to that matter, as also, I think, did the noble Viscount, Lord Stonehaven. But there is not any doubt at all that they are against it. I think it would be just as well, for the purpose of keeping it in mind for the next debate upon a Review of this kind, to take the official explanation (without quoting it all, of course) of the National Farmers' Union as to why they felt as they did. After explaining what the system has been in the past, and that it is different from that Which applies to ordinary protected industries, they say: In respect of food, their policy "— that is, the Government's policy— has hitherto been quite different and they have chosen in general to allow food imports to flow in freely and let market prices find their own level. The deficiency payments system for agriculture flows naturally from this policy of cheap food for the consumer and maximum opportunity for the trader. Obviously the corollary to this is that the amount of Treasury money required to sustain a predetermined price level for producers will vary unpredictably according to the level of market prices thrown up by a haphazard supply situation operating against a relatively inelastic demand. It should be clearly understood that this has been Government policy and still apparently is, though there have been signs during the past year of greater readiness than before to use the machinery of the Anti-Dumping Act "— I think, only after very great pressure in some instances. There is, therefore, neither logic nor justice in their seeking to shift the effects of their policy on to the shoulders of the farming community. That is the main and the first basic case of the farmers; it has not been put in these terms, as the N.F.U. put it to individual members with whom they communicated, in your Lordships' House to-day until now.

Then I should like to take one or two other short paragraphs from this statement. It says: The Agricultural Estimates have gone up this year from just under 5 per cent. of central Government expenditure to approximately 5½ per cent. For some years it has been running at the equivalent of about 2s. per head of the population per week and this year it has risen to about 2s. 6d. This figure needs to be considered against the quantity, quality and price of food in our shops which compare favourably with any industrial country in the world; the value to our import-export balance of the increased volume of home produced food; and not least the tremendous market which British agriculture provides for British industry. And, undoubtedly, if one of the general effects of the policy of Government—successive Governments, both Labour and Conservative—of this measure of support to the farming industry has been some considerable advantage to the consumer and to our general balance of payments, it has also meant a very great fillip indeed;to the agricultural machinery industry, both the motor side and also the general machinery. You can trace the marked effects of the increasing support of the home agricultural machinery industry in the build-up and improvement of the export trade in those commodities to other countries. I think these things should be noted.

The farmers go on to say in another paragraph: We recognised, clearly and responsibly, the problems of Britain's economic situation but with the best will in the world we could not accept terms which deny a fair recognition of the needs and achievements of the industry and leave us to carry a load which we regard as quite inequitable. Cutting at the farmer's income is no substitute for a constructive policy. I think that statement is absolutely justified. The only other thing I would say upon that particular matter is this. The farmers go on to say: Another matter on which we feel very strongly "— and I am quoting this because of my interruption of one noble Lord earlier in the debate— is the Government's insistence, despite all the argument we used to dissuade them, of introducing a new general minimum standard for cattle immediately. We, of course, recognise that there is no justification for animals which are not properly finished to the required standards drawing guarantee payments. However, to insist upon an adequate degree of finish is one thing; to exclude animals because they are not of the right conformation is quite another matter, bearing in mind that producers have been actively encouraged to breed bèef animals from the dairy herds. I think that is an important point to remember, and I feel myself, although I have not a great deal of experience of the scheme but have a small interest in it, that I probably would not have kept calves for up to five and six months and then bred beef from the dairy herd if I had known that this situation was Going to be imposed at this time. At least that is my personal view.

There is one other matter which is quite separate and outstanding. There cannot be any possible doubt that the very great increase in British agricultural production over the last twenty years has been greatly affected by the increase in use of artificial fertiliser, and I am quite sure that the farming industry, in general, has been reasonably happy about the way in which the subsidy has been administered. But I think that they are right when they say this through the Farmers' Union: Unfortunately, the reduction in the fertiliser subsidy hits both large and small farmers alike and has the added objection of adversely affecting horticulturists in one of the few aspects of the Price Review from which they derive any benefit. I must say that when one reads the Answers of the noble Earl who is going to reply to-night to Questions I have heard put in the House in regard to the difference in the prices charged by the chemical industry in this country and in, say, Eire; and when one remembers the granting to that industry at the same time of an effective anti-dumping subsidy against products of the German chemical industry coming into this country, it is very difficult to understand now why, on top of that, the subsidy to our own farmers here is cut. On the other hand, I feel in my heart—and I hope the Parliamentary Secretary will agree—that the Government do not want heavy reductions of British agricultural products. Without proper maintenance, and the supply and use of artificial fertilisers, it is most unlikely that this amount of production can be maintained. I hope that they will give further consideration to that matter.

I now come back to my notes, and should like to say a word or two about some of the speeches which have been made. The noble Lord, Lord Hastings, who, I thought, made with his usual courtesy to the House what the Government would regard as a satisfactory and quietly argumentative speech earlier this afternoon, nevertheless did not impress us greatly. However, we agree with him that the responsibility in this matter is the Government's; it has always been the Government's. The complaint made by my noble friends in general is that the Government have not properly accepted the responsibility if they are not fulfilling the provisions of Section 1 of the 1957 Act. That is what it amounts to. I will come back to that in a few moments. I am not complaining in any way, but it is not necessary for the noble Lord to tell us on this side about the merits of the system and where the responsibility lies. After all, we introduced it, and I think used it with pretty good success.

The other thing I felt unhappy about when I interrupted was the reference to the milk industry. In spite of the straight warnings to the industry last year, when Mr. Soames, the Minister, was obviously exceedingly anxious to force upon the industry a plan for a quota in which some people might be reduced below their present production and others would be allowed to increase it, according to the costs incurred and the like, the fact is that if producers are producing more milk than is required for liquid consumption and increasing the amount that can be manufactured here at a reasonable cost to the Milk Board, dealing with imports does not make much difference unless they are dealt with effectively. I should have thought that it was pretty plain that when this country joined the E.F.T.A., for example, in this and other commodities there was immediately the risk of a handicap to the British farming industry.

British farmers have had a pretty difficult job to try to satisfy the many conflicting views put to them as to what they ought to do and the different practices involved, in the way of producing a bacon pig. There was pressure from people like Walls to go in for the big heavy pig, and there were complaints from other people that they did not get the kind of animal which would satisfy them in regard to bacon and which would compete with the Danes. What the Government did was immediately to agree to a waiving of the 10 per cent. duty on imported Danish bacon. Since then the British industry has been exceedingly hampered. So I suppose that in bacon, as well as in milk, we are net importers. In regard to both these commodities there seems to be no reason at all why the British farmer should be confined to quality production. But there could be a proper arrangement, either by quota or something of that kind, with regard to imported bacon or milk, which would greatly assist the maintenance of the farming industry in this country.

I have forgotten which noble Lord on the other side talked about the need for every farmer to study the market. I suppose that most of us recognise how different are the circumstances in regard to personnel on almost every farm in the country. Some farmers do practically the whole of the labour on their small farm, with perhaps a little casual labour now and again—perhaps hoeing any arable crops they may have, or later when they come to harvesting. I do not know how it can be thought that every farmer in the country can make an intelligent study of the markets without going fairly frequently to market. I read the farming papers pretty carefully, and I suppose that I am awake on three mornings in the week in time to listen to the market details on the wireless at a quarter to seven. Apart from the different reports you read, it is a fact that often in regard to the area in which you live, week after week there are no reports appearing which effectively deal with the particular commodity or animal in which you are interested, because there is no market that week or the preceding week. There is little practical opening for the ordinary farmer, unless he has a great deal of leisure, and plenty of money to cover the expense of travelling, to study the market in the manner in which one noble Lord suggested this afternoon; and he cannot always get the advice passed on.

I thought that the speech of the noble Viscount, Lord Stonehaven, was not too bad at the start. He said that the White Paper was good in part; that there were one or two new proposals (some of which have been referred to just now by the noble Baroness, Lady Elliot of Harwood) that will do a little good. But there is nothing in the proposals in other directions that will undo the harm which has been engendered at this present time by the unjust reduction of £11 million in this White Paper. It is perfectly true that one section of the farming industry has been saved from disaster by the general maintenance scheme—I am not now thinking of the consumer, but of the agricultural worker. There is not the slightest doubt that the agricultural worker has benefited considerably by the regular negotiations which have taken place, and from the increases granted, which could never have been achieved without the support of the Government.

Thinking of some of the other ideas which have been suggested this afternoon, I am sure the good heart of Lord Stonehaven would have wondered at my first reaction to his summing up of the small farmers' position in Scotland. I think of the history of the crofters there over decades. Some of them disappeared; the land was given up, and there has been no production at all. I do not know whether the idea is that the small farmer should now be squeezed out, and that this matter is to be looked into. What is the object? Is it to close down from production these pieces of land? Is the land simply to go, at a larger rental, for a big sporting estate, or is it bringing us again to the charge in The Deserted Village: Ill fares the land, to hastening ills a prey, Where wealth accumulates, and men decay. As my noble friend Lord Wise said, the small farmer has to-day established himself on the land and has greatly strengthened his position, so far as this period of history is concerned. If that is not going to be maintained, and if he cannot be kept in that position, it seems to me that the Government are going to let the whole side down and we shall return to all the dangers we had in 1920. It will not take long, if they pursue for any length of time the kind of policy they are pursuing now.

In spite of the assurance read out to us this afternoon by Lord Hastings, it is perfectly clear that the Government are still threatening further depredations. Everybody is expecting further "dollops" to come off Government aid in the years to come, and without any certainty at all as to what is going to be the effect of entry into the Common Market. That does not need to go very far before people in the countryside will begin at last to remember the real deflation that the capitalist Governments imposed upon them: the repeal of the Corn Production Act, 1920; the squeezing and squeezing of wages down to 23s. a week in 1921 and 1922; the hopelessness of the outlook, and the near-starvation of agricultural workers under Toryism in modern times, including the men who served their country in the First Great War.

An entirely different situation was created by the Act of 1947—not abandoning, as the Tories did, the aid which had come about during the First Great War. I myself would say, on the general basis of the weak management of the country's affairs, that in the past the capitalist has usually tried, so far as he could, to start any deflation in the primary industries in order to make it the most effective. You found it in the iron and steel industry in Sheffield, where I went as a candidate in 1921; you found it in the coal industry and the squeeze up to the General Strike; you found it going on concurrently in the farming industry. There was no heart in the people who were governing the country: only pounds, shillings and pence, with no regard to 'the humanities of the situation. That is my view from actual experience.

And now? We are told that by 1970 it is reckoned that there will be a surplus of food. I think the noble Viscount, Lord Stonehaven, said there will be a surplus in the world, but he was rather inclined to think again and say that we had better confine ourselves to Europe.

VISCOUNT STONEHAVEN

My Lords, I should not have said the world. I should have said Western Europe and also a good deal of the Commonwealth.

VISCOUNT ALEXANDER OF HILLS-BOROUGH

I quite understand, but if we can deal in economics, finance and other matters on an international basis, I should have thought that it would be possible in some way to extend the operations of the United Nations Organisation Agency, the F.A.O., and many others to cover these problems. If that were done, it would not be necessary to have voluntary organisations throughout the country at this very moment collecting shillings and half-crowns in order to send a little food to camps abroad or gatherings of refugees in various countries, or to have special appeals for them every Sunday. There is a case for the whole world to accept its responsibilities for the underfed of the world, and not for it to test the providence of God by seeking to restrict the production of food in areas where at present it is prophesied that it will be overproduced. I appreciate that this is not a matter for the Parliamentary Secretary, but is a matter for the Foreign Office to submit to the international body.

I was interested in the speech of the noble Lord, Lord Stratheden and Campbell, who, speaking, I gather, as a farmer and a landlord, said that by and large the White Paper presented a fair balance—I hope I am not unfairly quoting him, but I think that is what he said. He was not too upset about the bringing in of new conditions in relation to subsidy for beef calves. I thought the answer to that point in the speech of the noble Lord, Lord Hastings, related rather more to the administration of the subsidy in regard to these beasts when they are finally presented for sale for slaughter. I myself was thinking primarily of the beef calves who, from eight to nine months old, will be submitted for the beef calves subsidy. I am not at all satisfied upon that.

With regard to the revision of the ploughing grants and Lord Stratheden and Campbell's remarks concerning the improvement of winter keep, I do not know what is intended there. Perhaps the Parliamentary Secretary may be able to tell the House what the Ministry have in mind in regard to the ploughing grants and the general drive to improve winter keep. A good deal has been done by way of improvement of winter keep, and there is a great tendency to produce the right kind of product on the grasslands by a greater use of chalk than occurred before the war. It is something to which we in Essex have turned our attention in the way of improving production. It is difficult to keep this up when you may have an average rainfall of not more than 20 inches—which, of course, is very different from the watershed supplies in Scotland, in the North of England and in North Wales. I should like to know exactly what is in the Government's mind on that matter.

The remarks of the noble Earl, Lord Ferrers, upon marketing lead me to say this. I have no complaint about his remarks in general—I thought he made a reasonable speech, though I did not like to hear him supporting the Government quite so strongly as he did to-day. He can sometimes be a very good critic, which we on this side of the House always welcome. When the noble Earl went on to deal with the quality of beef, I think he failed to have in mind a consideration that was in our mind—the culpability of the Government in what happened to force this very large increase in subsidy. I do not mean that the Government wanted to force a large increase in subsidy, but it was their policy which was responsible for it. It is so easily forgotten that it was the Government who asked the industry to produce in the period in question half a million additional animals. If there happened to be a little extra grass that spring it does not seem unnatural that the farmers would have larger supplies; but the larger supplies of cattle led to the heavy fall in the price. In some areas the price went down from 160s. to 100s. per cwt., and there was no general passing on of these exceedingly heavy falls in price to the butchers or their agents or to the consumer.

That brings me to a point which was so clearly made in the last debate on agriculture by my noble friend Lord Williams of Barnburgh. He said that one of the roots of the trouble is the Government's stupidity in continuing what the noble Baroness, Lady Elliot of Harwood, wants to see—the free auction markets. If you are spending public money in order to provide a level price for good quality food to the public at large, and at the same time to help your balance of payments, I do not believe there ought to be such a gap in regard to the price for the buyer, that for the slaughterer and distributor, and then what the public has to pay. In relation to those tremendous drops in price in the market, the reductions made in the butchers' shops were wholly inadequate to meet the situation. I do not think the trade can have it both ways. In my view, what you need to do is to go back to the system of controls that we have always advocated.

I am quite sure the noble Lady will forgive me if I say that my noble friend Lord Williams of Barnburgh and I were saying to each other that we have some idea that we have heard even her late husband talk about auction marts in somewhat the same way. He seemed to be as much convinced as she is about their being the most excellent way of doing this thing. I do not very often stand at the ring of an auction mart, but I am not at all satisfied—I am not dissatisfied with the auctioneer—because I know perfectly well how the trend of trade for the day can change, just by one or two other men arriving and carving out the general situation between them on the buyers' side. No, my Lords, this really ought to be brought back to the kind of controls we had for the opening of the scheme under the 1947 Act. The Government will then be saved a tremendous amount of criticism both from the consumer and from the farmer when he feels he is being unfairly charged and debited in these matters.

I must apologise for having spoken for rather a long time, but I did not want to miss many of the points that I have been interested in. I now want to put our case to the Parliamentary Secretary; it was the main case put by my noble friend Lord Williams of Barnburgh in such a striking way to-day. We had a quotation from the Hansard of another place which showed that in 1952–53—I go back one more, to 1951–52, the value of the subsidies was £314 million—

LORD WILLIAMS OF BARN-BURGH

It was net income.

VISCOUNT ALEXANDER OF HILLS-BOROUGH

Net income; I beg your Lordships' pardon. Then we come on to the forecast for 1961–62, which is £400 million odd. Whether you take the £431 million gross, or the £310 million which might be a revised figure, it is comparable to the £314 million. With the cost of living changing as it has done over the ten years, where has the farmer benefited in income or purchasing power as a result of the scheme? What has become of him? That is the case which must somehow be explained to the farmers, and I hope that the Parliamentary Secretary will be able to do that in some detail. We shall be grateful for whatever efforts he can make, but he may rest assured that we shall be using what he says, and what the Minister may say in another place, when we are talking to the farmers and farm workers. I am very greatly obliged to all who have taken part in the debate.

6.54 p.m.

EARL WALDEGRAVE

My Lords, we have had a useful and often highly technical debate, and I am very grateful to noble Lords on all sides of the House who have contributed to it. I have listened carefully to practically every word of this debate, except part of the speech of the noble Viscount, Lord Massereene and Ferrard. I hope that he will forgive me, but I had to go out somewhere to find a copy of Hansard in order to answer the questions which both the noble Viscount who leads the Opposition and the noble Lord, Lord Williams of Barnburgh, who opened the debate, asked me.

My Lords, as I have said, I have listened to this debate, but I have not heard a word which has made me change my view, that the determinations in this year's Annual Review were just, were necessary, and, I would say, were inevitable. The determinations have been made, as stated in paragraph 28 of the White Paper, in the context of our existing arrangements and in conformity with our existing system of price support; and have not been influenced by the fact that negotiations are in progress between this country and the six countries of the European Economic Community. An integral part of our existing system is that there should be a review of the national farm as a whole and the economic and supply position of the various agricultural commodities that the national farm produces.

We believe—and I know that the farmers believe—that that system is a good one. I think that the noble Lord, Lord Wise, was one of the few people I have heard recently who seemed to cast some doubt on the value of this Annual Review system. He thought that it was disruptive. But such a review, if it is realistic, will inevitably indicate from time to time that the support (by whatever means the support is given) should sometimes be reduced for some commodities or in certain directions, as well as being increased for another commodity or in another direction. As my noble friend Lord Hastings has reminded your Lordships, there is no dispute about the economic data in the Review, and I submit that the facts disclosed by the data lead inevitably to determinations of the nature made by the Government at this time.

I think that we should welcome the growing recognition among farmers that we must look to the state of the market for each commodity. I should like to quote one short paragraph from a farm- ing newspaper. There was a leading article recently in the Farmer and Stockbreeder—I am not going to quote from a Treasury Bulletin—which said: What is certain is that it is no good producing so much that prices slump and then saying the Government ought to have done something. This is from a farming newspaper— That is a suicidal process … Heroics are all very well, but we are all in this for a living. I think that shows the common sense and resolution of farmers, who are sensible people, that we are in this for a living, and that heroics are all very well.

The noble Viscount who leads the Opposition said that no attempt was made to answer the indictment which the noble Lord, Lord Williams of Barnburgh, made. I would reply in this way. I would say that on this Review no attempt has been made by the opposition—whether it be farmers or the political Opposition in this House—to propose any alternative policy. I except the noble Lord, Lord Walston, whose speech I will come to in a moment. He, indeed, made some suggestions which I should like to discuss when I come to deal with his speech. But the noble Viscount, Lord Alexander of Hillsborough, quoted, for instance, the circular letter from the National Farmers' Union— Cutting at the farmer's income is no substitute for a … policy. But, my Lords, simply shoving up the farmer's income is no substitute for a policy, either.

VISCOUNT ALEXANDER OF HILLS-BOROUGH

Or pulling it down.

EARL WALDEGRAVE

My Lords, what we are looking at here is a policy which is a realistic one, and which has relation to the market. Everybody must realise the depth of the sincerity with which the noble Viscount who leads the Opposition speaks. None of us wants to go back to the dreadful days of unemployment, hardship and horrors of the 1920s and early 1930s, when I started farming. I do not think that a Government who shoulder their responsibilities, and determine reasonable and realistic prices for the individual commodities in the spirit and in the letter of the Acts of Parliament under which we act, can be accused of trying to force the industry back into those dreadful days.

My Lords, I must now turn to the speech by the noble Lord, Lard Williams of Barnburgh. Nobody could be proof against the noble Lord's charm. He started off by congratulating my son on winning the Boat Race. It is almost an embarrassment, when anybody is as nice as the noble Lord, to have to disagree with him as strongly as I have to disagree with him. My Lords, how times have changed! When I was a chairman of an agricultural executive committee under him, shortly after the war, we used to say, "There is no politics in farming. Let us just get on with farming; there is no politics in this ". And there was no food, either. We had a comparatively easy time—no politics and no food! Our job was to get food, by fair means or foul, by any means we could. My Lords, how different to-day! To-day we had a really political speech from the noble Lord.

Loan WILLIAMS or BARNBURGH

No.

EARL WALDEGRAVE

Yes: all about Orpington, Election Year Reviews, the 1957 Act being a fraud, the farmers getting nothing but White Papers, and so on. Yes, a good political speech. But he never mentioned the value of support, the many millions that the taxpayers paid to the farmers. It was all very good fun but it did not lead anywhere.

He was saying, "How sad it is that you are not handing out a lot of money to the farmers ", but he never once tackled the question—he brushed it aside—of commodities. He said, "I am not going to touch the commodities. I am not going to go into trivia of this sort. I am not going to speak about the commodities ". He then made very great play of the figures that were quoted by my right honourable friend—and I have gone out and got them, my Lords. In a written Answer to a Parliamentary Question, on April 2, 1962, my right honourable friend was asked whether he would publish a table of farmers' real net average income, year by year, for the period 1951 to 1961. So, of course, that table was published.

Now when the noble Viscount, Lord Alexander of Hillsborough, came to read out this table, he started at 1952–53 Then he said, "Oh, I will go back a year", and he went back to 1951–52. May I say, "Oh, I will go back a year, and start at 1950–51 ", at which the table in the Parliamentary Answer starts? We find there that the figure is £278½ million, which is considerably less than the figure of £310 million forecast for 1961–62. Some of the steam now begins to go out of the noble Viscount's statement. He asked me whether, if there was anything wrong in these figures, I would put him right, because what he wanted to know was the truth. I entirely agree. Of course we must seek after truth. But in this instance, as in so many others, truth is many-sided, and is not to be arrived at by an oversimplified comparison of one selected figure with another.

VISCOUNT ALEXANDER or HILLS-BOROUGH

Mr. Baldwin all over again!

EARL WALDEGRAVE

I do not know about that.

The noble Lord, Lord Williams of Barnburgh, more than anybody, knows what was going on in those years, because he was Minister of Agriculture. The key point in the whole of this argument, which has been had over and over again, and which I am glad to be able to have an opportunity to answer in this House, is that the high level of farming income a decade ago was achieved as a result of a deliberate injection by the then Government—Lord Williams of Barnburgh was Minister of Agriculture in it—of £40 million capital a year. That was the figure, £40 million of capital a year, which was injected into the Review figures deliberately for the industry to be able to re-equip itself with machinery and livestock in preparation for the major expansion of output which was then called for. Since that time, the need for heavy annual investment of this kind has diminished. I believe I am right in saying—I have been racking my memory—that it was during the last year of the Labour Government that an under-recoupment Review was given because Lord Williams of Barnburgh thought it was then right to start getting back some of this money because the need for this injection no longer existed—indeed, it had passed.

Production having been expanded, there is now another necessity for capital injection into the industry. The injection which is needed now is not for machinery and livestock but for new buildings and works. The 1957 Act (which the noble Lord, Lord Williams of Barnburgh, calls a fraud), was the Act which brought in the Farm Improvement Scheme and which produced very large sums of money to enable the industry to invest in new buildings. That Act is still on the Statute Book.

My Lords, I could go into these figures in greater detail, and I was asked to go into these figures in greater detail. While I was away during the speech by my noble friend Lord Massereene and Ferrard, I had worked out what the index would be of spendable income. That is what the farmer wants—spendable income. Now in Appendix II of the White Paper your Lordships will find the income figures which are often so much challenged. The index figures of spendable income in real terms (I have worked these figures out carefully, and I hope they can be followed) are these. Taking the average of the three years 1945–46 to 1947–48 as 100, the index would be 121.5 for 1951–52 and 132.4 for 1961–62. That is an increase of about 9 per cent. There is a further factor to be taken into account, although, unfortunately, I cannot at this moment give precisely accurate figures: the total number of persons in farming households is more likely to be falling than rising. In other words, in this last decade the successive figures of aggregate net income—the successive cakes, as one might say, of aggregate net income—have been shared by fewer people each year.

The noble Lord, Lord Williams of Barnburgh, may perhaps say that while I have tried, I hope successfully, to demonstrate that the income position is much better than he suggested, the fact remains that in recent years farmers have not kept pace with the rest of the community. There is no reason to go into this in too great a detail, but the facts are that in all countries in the world it is the very greatest difficulty and problem to keep the income of the primary producing farmer up to the level of that of the industrialist. We in this country have not done any too badly. In fact, we have done well. I have here a table that I take from the Food and Agriculture Organisation of the United Nations, and it shows that the income per head in agriculture as a proportion of income per head in other industries is remarkably good in this country when compared with many others. This table shows that in the United Kingdom the income per head in agriculture as a proportion of income per head in other industries is 80, and that we are level with Denmark. The figures are 110 in Ceylon and New Zealand, and 140 in Australia; but it is 30 in the United States of America, Yugoslavia, the Philippines, and the United Arab Republic, and it goes down as low as 20 in the Union of South Africa and the Belgian Congo. So we seem to come out fairly well in that particular field.

May I now turn to the speech of the noble Lord, Lord Walston, which I thought was a very interesting and exceedingly honest speech? First of all, we had the bread and flour prices argument again—or, we had half of it. I do not know how much further we must take this matter in public. The noble Lord's method of getting statistics is a novel one, and I do not know that it would not make some statisticians turn in their graves. He writes to his friends, of which he appears to have a large number in practically every part of the world, and asks them what their joint for lunch cost. It is a statistic, but I prefer to work from the figures we have in the I.L.O. tables—figures which may be disclosed at any time. I agree with the noble Lord that not all our foods are the cheapest; but by and large it is a fair generalisation to say that our foods in this country are cheap, and that our system helps that very much.

LORD WALSTON

My Lords, may I ask if the noble Earl would be a little more explicit, and perhaps give us some exact comparisons between the cost of some foodstuffs, such as a bottle of milk, in this country and in other countries? I gave some figures from the I.L.O.

EARL WALDEGRAVE

Yes, my Lords, I will, if it will not weary the House. I was going to say that I have no percentages on his wheat and flour figures, but I have figures here which I should like to put on record. The price of baker's flour ten years ago was 57s. a sack, and carried a subsidy of 45s. I think that is what the noble Lord is apt to forget in all these comparisons with a decade ago. There were some very heavy food subsidies in force.

The noble Lord was honest enough to say that he wanted subsidies put on again. He wanted three subsidies. He wanted a food subsidy, a farmer subsidy, and then the taxpayer should buy the surpluses and give them to the hungry poor in foreign countries. Well, he was honest, because that is the only alternative. If you are going to stimulate production regardless of the market by paying high subsidies to the producer, then you will very likely have to subsidise the consumer as well, so as to try to enlarge your market by practically giving the food away to the consumer. Then you will have to subsidise what we are not now supposed to call the "heathen Chinee" by giving him the food, because, as Lord Stonehaven said, he cannot afford to pay for it. At least this is an honest policy, but I doubt whether it would be an extremely popular one on the hustings. But then, Lord Walston and I do not have to go on the hustings, so that is the value of this House.

The noble Lord also asked, I believe, for a "bed and breakfast" subsidy for the Highlands. He said, "All right, if you cannot afford to do these things, to subsidise the, milk, just hand out some money to the people in the bed and breakfast business they do not mind how they get their money so long as they get it out of the taxpayer "—and, I suppose, so long as "the taxpayer" is not themselves. But, in fact, the taxpayer is ourselves. We all have to pay taxes, and this airy way of suggesting subsidies to the consumers, subsidies to the farmers, and subsidies to the bed and breakfast people, to keep them on the land, does not seem to me very sensible.

My Lords, I have been diverted, but the noble Lord asked me whether I would quote him a specific price, and I will. He asked for a price for milk. He knows very well that the price of milk is high in this country, and that is largely because of its quality. Let me take a figure at random. Let me take pork. I see that the United Kingdom is 100, Denmark 94, Norway 117, Switzerland 142, Sweden 123, Belgium 128, and the Federal Republic of Ger- many 111. This is reasonably proving my point, and I chose that one at random. There may be some prices less and some prices more, but, on the whole, our prices in this country for retail foods are cheaper. The noble Lord, Lord Walston, also said that if you put the prices of the guaranteed products down, promptly more will be produced, and that is no way of avoiding a surplus. I waited for him to say what he would do instead. I think he was hinting—certainly other noble Lords on that side of the House were—that the prices should be put up. If the prices go up, surely, a fortiori the production goes up even more. So that is no way out of the problem, to my mind.

If I may now go on to the speech of the noble Earl, Lord Ferrers, he made, if I may say so, what I thought was an absolutely first-class speech. I liked his phrase about our Price Review this time having been a painless extraction. I think it was. I think that it was a necessary extraction, but it was comparatively painless. I went to Devonshire—I do not know whether the noble Earl did—and attended two meetings. I went to a meeting of very sober-sided farmers in the morning and was not asked to resign. I went to another meeting, where there was a great deal of publicity and a great deal of pre-arranged pressure, and we were all asked to resign. But this was a little bit fabricated, in my own view, and not what I usually get. For instance, the noble Lord, Lord Williams of Barnburgh, will know how much he valued the advice given to him by his executive committees and liaison officers. This is not the kind of advice we have been given or the type of report we have been given by them on this Review.

The noble Earl, Lord Ferrers, asked me one specific question, and I hope I have been able to get for him the figure he wanted. He said that the really important thing would be to know what was the capital investment in this industry, so that we could know ho[...] much we ought to have by way of income. I believe these figures are published in Table 57 of the Blue Book on National Income and Expenditure. I suppose they are tables produced by the Central Statistical Office. The cost of gross fixed capital formation in agriculture in 1960 was: buildings and works, £42 million; vehicles, £21 million; plant and machinery, £65 million. That is a total of £128 million. These figures cover both landlord and tenant capital. I hope they are the sort of figures the noble Earl asked for. If they are not, perhaps we had better not go into the matter in detail, because I do not have the figures in my head, but I will communicate with him afterwards.

May I now turn to one point raised by several noble Lords—Lord Alexander of Hillsborough raised it, Lord Allerton raised it, and I have a note here that Lord Wise, who has now gone, also raised it—with regard to the new grading standards under the Fat-stock Guarantee Scheme? This is a matter I should like to clear up, if I may. There has been some confusion about the effect of the revised general minimum standard which we find at the bottom of page 21 of Command Paper 1658. It has been suggested that graders have been instructed to step up the standards generally, so as to keep down the cost of the guarantees. No such general instructions have been given. The new standard is a new minimum standard. It appears as a result of this year's Review and will have the effect of excluding a proportion of the poorer beef cattle marketed in unsatisfactory condition at the bottom of the scale. Contrary to the opinion that has been expressed, this does not mean that it will be any harder for cattle to qualify for Grade I guarantee, the standard of which has not been changed at all. The instructions given to graders have been designed to take account of the change made as a result of the Annual Review and go no further than that.

It has been estimated that if this minimum standard had been enforced during last year it might have excluded some 75,000 cattle out of a total of fat cattle brought to market of about 2½ million. As to Scotland, it was assumed that out of about 450.000 cattle which were marketed the new standard might have excluded about 13.500.

VISCOUNT ALEXANDER OF HILLS-BOROUGH

My Lords, is that figure of 75,000 a net addition to the cattle which were rejected on submission for subsidy?

EARL WALDEGRAVE

Yes, my Lords; this is an estimate of how many cattle would have come out of the grade if this standard had been applied. It has been suggested that we ought to have allowed a longer time, so that cattle in all stages of breeding by farmers should go through on the old standards before the new come into operation. Would that be practical? I think we must take some risk somewhere. If there is a farmer sailing so close to the wind with his standard that it is a toss up "whether he can get his cattle through the grade or not, and along comes the new Price Review, or some new administrative arrangement, such a farmer who was running on the edge of his margin will find himself unlucky. And I rather suggest that he should be.

This change is not designed to take out beef cattle from the dairy herd, on which we must continue largely to rely. It is designed to take out low-quality beef which the market does not want—not to take it out of the market altogether, because the farmer can sell it and get a price for it, often a good price, but to take it out of the Government guarantee. Is there any reason why beasts not really first or second class in quality should be subsidised? I have heard people talking as if we were taking these beasts away from the market and making them a total loss. That is not the case. We are saying that the taxpayer ought not to be asked to pay except for animals of a reasonable quality.

Several noble Lords raised a question about paragraph 22 on the Winter Keep Grants, which have a special application to Scotland, because the Scottish farmers look to them to fill the gap now that the M.A.P. scheme is ending. I hope that they will fill the gap. It is our intention and hope to have legislation through in time to make these available for the 1963 cropping season. I do not know how much detail your Lordships want, but the schemes are in their very early stages. They are hatching in the departments, in the stage When consultations are going on with the National Farmers' Unions. I am sure that they will be administered humanely and flexibly and will be as widely drawn as possible.

My noble friend Lord Stratheden and Campbell suggested that we should make some use as a fertiliser of the effluent from silos, which smells so horribly and which he alleged was poisonous when concentrated. That is a very interesting point, which I take seriously; and I will ask our technicians to look at this to see whether we can find means of utilising it. Whether we shall be able to assist research into this idea under this or any other scheme, I do not know.

I was glad that the noble Baroness, Lady Elliot of Harwood, thanked us for the hill sheep subsidy of 6s. a ewe, because I had thought that I might be mildly scolded by the Scots for not having made it more. But you never know what luck you may have. The noble Baroness is a great sheep-breeder and she has also told us that she is a great auctioneer. I have many times sold sheep at Lanark, which I believe is near her establishment. She said that she was grateful for the 6s. subsidy, and I am glad, because we do not get much gratitude for doing what we ought to do.

The noble Lord, Lord Swaythling, asked why eggs are stamped. As he is not here, I will write to him. It would not be practicable to sell all the eggs required by our large industrial towns except by large-scale marketing through packaging stations. The Egg Marketing Board considers it necessary to have eggs stamped for the protection of the consumer and for identification. The sales under B licence are very small indeed.

I think that I must leave it to the noble Viscount, Lord Alexander of Hillsborough, to tell my noble friend Lord Stonehaven why we should have our main meat research station at Bristol and not at Aberdeen. I feel that I have something of a vested interest in this matter, living not 100 miles from Bristol. As your Lordships are certainly aware, this question of the research station was given most careful consideration. It is not so much a question of where the beef cattle are as of where the facilities of a university, a veterinary school and slaughterhouse are. It was agreed that the station could best be set up near the university veterinary school at Langford, just outside Bristol. I hope that there will be a sub-station in Scotland, and I am sure that a great deal of research will be done in relation to Scottish beef, even though it may be done in Bristol and not in Aberdeen.

In conclusion, I would emphasise what have been the main objectives of our determination. They have not been in the nature of a social service share-out. We have tackled the problem of those commodities being produced by farmers which, either in quantity or quality, were out of line with the needs of the market and the consumer. It clearly makes no sense to produce quantities or qualities for which there is only a weak market or no market at all. But it does make sense Ito improve quality and stimulate demand. Those are the considerations which have governed our decisions on the individual commodities.

We have also had in mind the problems of the small farmers. We give this special assistance under the Small Farmer Scheme, and it is already doing much to help many farmers. As your Lordships know, we have raised the limits of man days so that we can help still more. This will now bring small farmers with rather larger farm businesses into the scheme, so that they can qualify for the special assistance designed to reduce costs and to make their farms more profitable. I hesitate to enter into an argument at this late hour with the noble Lord, Lord Walston, but I cannot believe it is wrong to get our very fine National Agricultural Advisory Service—a service of advisory officers second to none in the world—to give special thought and assistance to the business plans of these medium and small farmers. Nor is it wrong that the Government should give extra money to put them on the right lines, even though they may be producing marginally a little more of the commodities with which we have overall difficulty. I say this because (and I want to emphasise this strongly) in our experience it is not by any means the small farmers of that size who are necessarily the high cost producers. These we feel are not going to be the ones who may go. The high cost farmers can be found in all ranges, and they are not necessarily the small farmers.

Finally, in the arrangements for encouraging market research and development, we have returned to the essential and vital theme of helping the industry to match its products to the need of the market. Better marketing will yield great benefits throughout the industry. The noble Baroness, Lady Elliot of Harwood, can, I think, rest assured. It is not our policy to limit in a doctrinaire way people's choice. I feel that, so long as this Government are in power, if she runs a market as efficiently as I know she does, it may survive a year or two, because there are some people who like to go there.

I think it was the noble Lord, Lord Wise, who tried to make our flesh creep by saying that there will be a butchers' ring and that all will be "done down". Nevertheless, some of us are fools enough to go there still and to feel that a service is being given. I think that freedom of choice should remain. I have heard it said that farmers do not like these new grading standards when they are by eye in the local market; that farmers are taking this rather hard and that they find it new and may suffer. But the farmer has the choice. If he thinks that the grader is going to reject the beast in the livestock auction, he can send it to the deadweight centre. This is what there should be. There should be the deadweight centres and the livestock auctions, so that the competition is there.

By getting together in market cooperatives small farmers can become stronger sellers of a more standard product and so reap many of the advantages of a large-scale enterprise, while still retaining the advantages they have always enjoyed, in that they actually do the farming themselves and are not troubled with the problems of supervision, decentralisation, delegation and all the rest. There are advantages to them if the individual farmers can co-operate together. Our grants, I hope, will (help them to do that.

Market co-operatives are, of course, only one example of the wide range of projects which could be assisted under this scheme. There is clearly much to be done. We believe that these grants for market research and development will prove to be of great and lasting value to the industry as a whole, to the big and small farmers alike. It is the surest means of tackling and helping to over- come that age-old problem for agriculture, that by and large the agricultural industry consists of a large number of relatively small and weak sellers confronting a relatively small number of large and strong buyers. This is one of our great problems in the industry that we must always tackle and keep in the forefront of our policy for agriculture.

We have had, as I say, an interesting debate. I thank noble Lords for their support, and particularly noble Lords on these Benches who have supported this Price Review and agree with me that, by and large, it is just and fair, and that we have acted only in the responsible way in which one would expect this Government to act.

7.27 p.m.

VISCOUNT MASSEREENE AND FERRARD

My Lords, before the noble Earl sits down, may I ask one question? When the Government come to discuss the 1963–64 Price Review with the N.F.U., can he suggest to his colleagues in the Ministry of Agriculture that they should try to fix a minimum price under which no foodstuffs can be imported into this country? Because if that is not done, it becomes increasingly difficult to forecast for these guarantees.

EARL WALDEGRAVE

I think that at this stage in the debate I should be unwise to start again on another tack on import policy. The Government always have this in mind.

7.28 p.m.

LORD WILLIAMS OF BARNBURGH

My Lords, I promise your Lordships that I do not intend to make another speech. After the delightfully inconsequential speech from the noble Earl to which we have just listened, I can only repeat what I said earlier on: that I concluded long ago that it was an act of cruelty to criticise a Minister of Agriculture. I think it would be more than cruelty to attempt to criticise the noble Earl. He has been extremely reasonable, in that he never attempted to answer the real questions that I put in my speech earlier in the day. By implication he admits that the figures given by his right honourable friend in another place are correct.

EARL WALDEGRAVE

Of course they are.

LORD WILLIAMS OF BARNBURGH

The noble Earl agrees that they are correct, which means in effect that he also agrees with my contention that the Government have made up their minds—and had last year—that they are going to keep the real net income of the farmers to round about the 1950–51 level.

EARL WALDEGRAVE

No, my Lords. I must object to this. I do not want to take too long, but the Government do not start a Review by saying: "We are going to keep the figure of the farmers' income at this level; it is wicked for them to have any more money." I do not know whether the noble Lord did that when he was Minister, but we certainly do not begin a Review in that way.

LORD WILLIAMS OF BARNBURGH

I never had that sort of thing in mind. The noble Earl referred in his speech to the £40 million injection we made for four years to provide, not only for breeding for breeding sake and not for breeding for immediate slaughter, but for machinery and equipment of every sort and kind. We did not think in terms of holding the industry down to a particular figure or round about that figure, however more efficient the industry became or however much more farm produce came from the farmers. So long as the noble Earl agrees that I was right in what I said, I have no more to say. If the noble Earl met a bit of righteous indignation down in Devon, it is only what one would expect, except that it happens to Parliamentary Secretaries to the Ministry of Agriculture only when there is a Conservative Government in office. We never suffered those indignities when I was in office.

The only other thing I would say is this. If, as the noble Earl seems to agree, farmers are getting just enough, does he still think that, on a static income and with increasing costs, the same capital expenditure can be expected to go on the land, with these diminishing returns? Do not answer, please, and then I do not think I need say any more to-night. I beg leave to withdraw the Motion standing in my name.

Motion for Papers, [by leave, withdrawn.