AGRICULTURE

HL Deb 27 March 1963 vol 248 cc150-68

2.48 p.m.

LORD WILLIAMS OF BARNBURGH rose to call attention to the state of agriculture; and to move for Papers. The noble Lord said: My Lords, in view of the paramount importance of agriculture to our national economy, we thought it right and proper to provide an opportunity for your Lordships to discuss the subject, particularly following the recent Price Review. Your Lordships will notice that the Motion is very wide, because we are anxious that a large number of Members, particularly Members opposite, will have an opportunity to say something to urge the Government into activity in certain directions.

This is an annual event which enables us to re-examine the economic condition and prospects of the agricultural industry and to make our individual and collective assessments of the wisdom of past decisions and of the latest decision announced two weeks ago. It would be an extraordinary feat if the Government and the agricultural unions were to agree on the determinations every year. On the other hand, it seems regrettable that there has been disagreement on the Price Reviews in three out of the last four years. There can be no doubt at all that the industry has good reasons for resenting a continued situation where, despite increased efficiency, increased capital expenditure and increased output, the real value of its net income continues to decline. Fortunately, failure to agree does not foreshadow non-co-operation, strikes, lockouts, and industrial chaos in agriculture, as all experience has gone to show, and I think it is to the eternal credit of the industry that it has remained steady, despite the set-backs at the hands of the Government which it has suffered over these last several years.

In the White Paper (Cmnd. 1968), which I have no doubt will be referred to many times during the day, are the following words: A further substantial increase in agricultural output is forecast for 1962–63. So that, despite disagreements, agriculture continues to carry on, and output continues to increase; and I think it is now taken for granted that it is increasing year by year. But that does not mean that the Government can afford to carry discontent too far. Even the farming community, which I have described for many years as the best political suicide club in the country, must have a limit to their patience. In previous debates, I have tried to demonstrate that the Government were aiming to keep the net value of our agricultural income down to about the 1948 level, despite increased output and increased efficiency, and the result of the recent Price Review seems to confirm that opinion. However, it is not my intention to pursue that argument in detail. All the facts are available in the White Paper, and I leave it to noble Lords to reach their own conclusion as to what has been happening and what happened on this occasion at the Price Review. I shall content myself by drawing your Lordships' atten- tion again to two sets of figures which I gave in your Lordships' House some three weeks ago. The figures are given on page 14 of the White Paper.

The actual net income for 1948–49 was £297½ million; the actual net income (or, at least, the estimate) for 1962–63 is £408 million. But, according to the Treasury the 1951 pound is to-day worth about 13s. 11d., say 14s., so that the £408 million for 1962–63 is equivalent to only £284 million in 1951 value. Therefore, the farmers begin to feel like the fellow who is running up an escalator that is moving down—the harder they try, the more slowly they move. As I see it, the failure to agree on this occasion was due to the indisputable truth of those figures. The Government contend that they are being generous by leaving the value of guarantees unaltered, despite an increase in cost to the Exchequer, and the farmers contend that to leave the values unaltered in the face of rising costs and lower farm incomes is unfair to an industry whose prosperity is not keeping pace with efficiency. As the Financial Times said on March 14: It was not a disagreement about details, but about agricultural policy in general. I think that is true. Certain of the items in Schedule 1 will be referred to, formulas applied and so forth, but I think that, generally, what is stated in that extract is the truth. However, the same leader, in the same paper, on the same day, also said this: Britain needs reasonably cheap food as well as a reasonably prosperous farming industry. We can afford neither to abolish agricultural guarantees, nor to keep out imports of food from the Commonwealth and elsewhere. A compromise must be worked out between the interests of home producers, the Commonwealth, foreign farmers and our own consumers. I would only add to that comment my Lords, that means must be found to avoid gluts and scarcity and wildly fluctuating prices. When we talk about stability, we mean stability; and it is impossible to have stability when such incidents as are happening at this moment are taking place.

As the President of the National Farmers' Union said last Sunday week on television, the price of beef is 25 per cent. less than it was last year, and the cost to the Treasury goes on soaring sky high. He then posed the question: What would happen if the price of motor cars fell by 25 per cent. almost overnight? I can answer that question for him. There would be deputations from Dagenham, Luton, Oxford, Coventry, Birmingham, Liverpool and elsewhere, and the Government would have to sit up and take notice. Their inhibitions would not prevent them from acting in face of an industrial barrage of that description. I shall return to that point later.

But this Price Review has been interesting for more reasons than one. For example, thanks to ever-increasing efficiency and increased capital investment, we have reached a stage where, with some commodities at least, the new support formula will mean that the more farmers produce the less they will get for them. I suppose that that was inevitable. For example, we are producing 99 per cent. of our supply of eggs, and there seems little or no sense in adding to the volume unless there is a market, here or elsewhere, at an economic price for the excess. The National Farmers' Union have agreed to that proposal. With pig meat it is a different story. We are probably producing less than half our requirement, although we could produce infinitely more. But the same disincentive as the one applied to eggs will also operate for pig meat. This is a very difficult question, and I must assume that the difficulty is largely due to a series of trade agreements with other countries. But whether the Government have reached the right balance between home supplies and imports will remain a debatable question.

That reminds me of the proceedings in the Standing Committee in another place when we were dealing with the 1947 Bill. Conservative Members protested violently against Clause 1, which they claimed implied some limitation to the United Kingdom market by United Kingdom producers; and, of course, they voted against the clause. The offending words were: … a stable and efficient agricultural industry capable of producing such part of the nation's food and other agricultural products as in the national interest it is desirable to produce in the United Kingdom. I remember that one young enthusiastic Conservative lawyer who was a member of the Committee went so far as to describe it as "a fraudulent prospectus". Well, he knew something about law, despite his youthfulness. That young Mem- ber was the noble and learned Lord who now sits so comfortably on the Woolsack. Now that the chickens and eggs and pigs have come home to roost and to roast, we do not hold that against the noble and learned Lord. After all, he has now had time to grow up. It would be unkind to ask him whether he is now supporting the limitation of the United Kingdom market to United Kingdom farmers. I would not ask the question, because I should not expect an answer.

I shall not attempt to deal with the wide range of commodity prices and formulæ dealt with in this Price Review, but some of my noble friends with more intimate knowledge will probably have a good deal to say about them. I am more concerned at the moment with the long-term view for agriculture, and what may emerge from the anticipated discussions between the Government and the industry now that the Common Market is no longer a live question. If we are to preserve the basic principles of the 1947 Act, it is generally agreed that steps must be taken to safeguard the Treasury, the producer and the consumer.

How can this be achieved? The Prime Minister, speaking in another place on February 11, suggested conferences and consultations with overseas suppliers, including the Commonwealth. He mentioned long-term contracts, import controls, commodity agreements, which he described as a great hope to avoid price fluctuation. All these suggestions are relevant to the subject, when one looks well ahead. But most of the suggestions made on the 11th of last month could have been applied many years ago, solutions found and applied, and the chaos we are now in could have been avoided. But speed, except for wrong causes, has never been the chief characteristic of Conservative Governments. Owing to their apathy or indifference, a situation exists at this moment which must be causing both alarm and despondency to both the Chancellor of the Exchequer and the Treasury.

Now I come back to the price of meat, to which I referred a moment ago. Meat is 25 per cent. lower in price than it was at this time last year. The increase of deficiency payments, which are due to these excessive supplies, I am informed have amounted to £750,000 per week, instead of just over £300,000 per week which was agreed upon at the Price Review. That is the sort of penalty the country and the taxpayer are paying for the apathy or disinterestedness of the Government, and not, as most people seem to imagine, to some defect in the machinery of the 1947 Agriculture Act. I think I should make it crystal clear, that however high the deficiency payment may go, the farming community will not receive one single penny extra. It simply means that they receive more from the Treasury and less from the market because of conditions the Government have allowed to arise. It is a situation which the farming community dislike as much as the taxpayer himself. They thoroughly dislike it because they know that they are always abused, quite misguidedly by most of the Press who make references to agriculture in their newspapers.

For month after month, and particularly since the breakdown of the Brussels talks, the two main farming weeklies have been headlining our weakness once again, and calling for appropriate action. Moreover, noble Lords will recall that the Sub-Committee of the Estimates Committee in another place last year issued a very clear warning, when they wrote in their Report: The Department has no powers to control the pattern or marketing, or the timing of imports and it was these factors which caused the most violent falls in market prices. It is these same factors that have caused the rapid fall in prices during February and March of this year.

The Report goes on: Your Committee considered that so long as the market prices are liable to be affected by uncontrolled imports so long will it be impossible to submit estimates based on the present system of deficiency payments with any degree of accuracy. What have the Government done about it? So far as I can understand, they have sent a couple of love letters to the Argentine and Yugoslavia, but nothing else. I should imagine that those love letters have been popped into the wastepaper basket. It is an unfortunate situation. It could have been, and indeed was, anticipated many years ago. Our own increase in production of meat was a guiding light.

I mentioned in my speech three weeks ago that since pre-war our production of beef and veal had increased from 568,000 tons to 867,000 tons; mutton and lamb from 195,000 tons to 267,000 tons, and pigmeat from 435,000 tons to 745,000 tons. That has been a continuous process. The increase did not come in 1962, 1961 or 1960; the amount has been gradually increasing over the years. Of course, the Board of Trade and the Ministry of Agriculture must have known about it.

Having said all this, I am not unmindful of our obligations to EFTA countries, GATT and to any other countries with whom we have trade agreements. But surely that is no excuse for doing nothing and for just allowing things to rip until they reach the stage we are in at the moment. It is time now for action, for the nation can no longer afford long-drawn-out and interminable discussions on this urgent problem. I regard it to-day as a problem which is almost outside Party politics, and which could be kept outside Party politics if the Government would only act, which it is very difficult to persuade them to do. I do not think, and I have never thought, that simple import duties on food, or simple free trade, could solve a problem of this description. It is not quite so simple as that. Speaking for myself, three weeks ago I ventured to make what I hope were constructive suggestions on what I thought ought to be done to meet the situation. Of course, I have received no answer since then, and I am not terribly optimistic that I shall get one to-day. Perhaps we shall be told that those love letters to which I referred have at least been noticed, and that these exporting countries might conceivably be a little more sympathetic now that the horse has got through the gate and the trouble has been created.

If some of the newspapers this morning, are correct in what they report when they say that 70 Conservative Members are bombarding the poor, wretched Minister of Agriculture, who has no power to take any steps at all, there is obviously trouble within the Conservative Party over this matter. Nevertheless, I suggested that to deal with this urgent problem the Government should, as quickly as possible, set up a commodity commission for meat on the lines recommended by the Lucas Committee of 1947—a commission of impartial, authoritative persons, acting for the nation, whose main duties would be planning, coordinating and timing of imports with the home supplies, thereby avoiding gluts and scarcity and wildly fluctuating prices.

The Lucas Committee reported when food was in short supply. But even then they realised that sooner or later there would be an increase in the production of meat, both at home and abroad; and they saw the weakness of the situation with a wide open door and yet no means of co-ordinating or timing supplies with imports, which could involve the Treasury in vast payments. We know what happened last year, and we know that the Government have done nothing about it. We know that when the situation arose a month or so ago, the poor Ministry of Agriculture were helpless in the matter, although not unnaturally they got most of the blame. I repeat that the deficiency payment is running at two-and-a-half times what is should have been with normal, well-advised timing of imports to ally them with what we produce in this country. I think this is a task not, as many noble Lords may think, for the Board of Trade, but for a comparatively small commodity commission who could not only take the right view about imports but the global view including, perhaps, exports, too.

Since 1953, when the Government announced their policy of "setting the people free", the Board of Trade have had ten years in which to provide safeguards for the Treasury, producer and consumer. Their minds seem to have been as empty as Mother Hubbard's cupboard. They have done nothing about it. In my view, this is a task which ought to be undertaken by a body outside the Board of Trade, a body who would be acting for the nation in the largest possible sense. I would only add to the commodity commission a producers' meat marketing board, working in harmony with the commission and providing information on supplies, present and prospective, which could be of great assistance to any such Commission, when set up. Finally, as I said three years ago, a carefully sited series of factory abattoirs would complete the machinery for the complete efficiency in the marketing of meat.

If a Labour Government had remained in office in 1951 I am perfectly certain that this would have been the next stage in our agricultural policy—a commodity commission for meat and a similar commission for wheat—and I am convinced that it would have saved the nation scores of millions of pounds without adversely affecting the consumer. It would have reduced much of the misguided criticism about the farming community, helped to rationalise and modernise our trading relations with other countries; and strengthened the basic principles of our support system.

LORD ECCLES

Before the noble Lord passes from this point, may I ask a question? Is it the idea of the noble Lord that this commission should have control over the volume of imports; and, if it did, what would happen to the commercial treaties with the countries whose exports to us were restricted?

LORD WILLIAMS OF BARNBURGH

I am rather surprised that the noble Lord should feel disposed to ask such a question, for he knows that a commodity commission such as I have described would be set up jointly by the Board of Trade and the Ministry of Agriculture and would be responsible to the Board of Trade for all its activities. Consequently, it would not be the commodity commission finally who decided the issues; it would be the commodity commission who negotiated with exporting countries so as to get a sense of balance with imports and the needs of the consumer population. That would obviously be the case.

I was about to say that I have every sympathy with the National Farmers' Union in pressing for the establishment of international commodity agreements, and I hope that the Government will give them all the help they can. But, apart from the inevitable delay before anything substantial emerges, such agreements can never be a substitute or a alterative for the sort of commission to which I have referred.

Therefore I hope that the Government, after many years of hibernation will at long last awake from their nineteenth-century dreams, stop shuffling, edging and dodging the column, and do something really worthwhile in the national interest and do what seems obvious to everybody in the country—except, of course, the Government themselves. In 1951, they promised to "seal the hole in the housewife's purse". They failed miserably. Must we add one more colossal failure to the mounting list? I hope that I have been able to show that the Government have not been too generous to the agricultural industry, that their ancient inhibitions and dislike of controls have helped to create chaos in the marketing of meat. In their last dying days as a Government—

LORD STONHAM

A moment's silence.

LORD ST. OSWALD

The noble Lord is shocked by the enormity of what he has said.

LORD WILLIAMS OF BARNBURGH

What I was going to say was: In their last dying days as a Government can they do something to rise to the occasion? Is there anything they can possibly do sharp enough to avoid the complete annihilation of the Conservative Party? I have my doubts, but I still hope for the best. I beg to move for Papers.

3.16 p.m.

LORD HENLEY

My Lords, on whichever Benches one sits it must surely be an honour to follow the noble Lord, Lord Williams of Barnburgh, when we talk about agriculture, because we must all recognise the fact that the noble Lord was the architect of that great Act (although I know that to some extent it was an all-Party Act) and that whatever he says on this matter must be of the very greatest interest and importance to us all. I feel that he has hit the nail on the head here when he asks whether the Government have reached the right conclusions in trying to settle this most important issue of home production and imports. But what seems to me to be the crux of this whole matter is whether we have considered enough how much it is not just a matter of policy for ourselves but the world-wide nature of food and agriculture policy. I think that this is how we must look at the problem from our own point of view.

We know that in the world at this moment there is great poverty and great under-nourishment. The astonishing fact is that to-day there is an even larger proportion of people who are suffering undernourishment than there was twenty years ago, just before the war, when the proportion was something like half. Now, it is something like two-thirds of the popu- lation. We know this, but I rather suspect that it is a problem of distribution. It seems to me that if one looks at trends of future yields in agriculture, there is going to be an explosive increase in what world agriculture can produce. Once you apply modern knowledge and education to backward agriculture; once you start putting big capital into it; and once you start applying modern ideas on fertilisers and mechanisation, there is absolutely no reason to suppose that the rather backward agricultural countries in those parts of the world which we now regard as underdeveloped are not going to produce a perfectly staggering increase in food supplies.

In this context I should like to point out how wrong we have been. When I first started to take an interest in agriculture professionally all the experts in the world Food and Agriculture Organisation were talking in terms of a growing world population and a lack of food. The American experts, in trying to evaluate what American increases in agriculture were going to be, made this same mistake. They all said that we were going to improve here at a rate of about 15 per cent., or there at about 10 per cent., and somewhere else at about 8 per cent. Since then, fifteen years later, so far from those percentages being right, the improvement has been something like 80 per cent. or 90 per cent.

That is going to happen so far as world production is concerned. I cannot help feeling that there is going to be a really explosive increase in what we can produce. It is not only in relation to techniques, to improved agricultural ideas, to more capital; it is also in relation to land. One is rather apt to think that we have cultivated practically all the land available to be cultivated. We have not. Although I know something like 60 per cent. of the world's land is desert and tundra and so forth, and only 30 per cent. or so can be cultivated, we have still only cultivated something like 10 per cent. As soon as we start cultivating all that can be cultivated we are going to get the same sort of state of affairs; we are going to get a vast increase in production of food and all that goes with it.

What does this in fact mean? It means that, although there is at the moment great poverty and great under-nourishment, and there are vast areas of the world in which the people have not enough to eat, in the course of a generation there is in fact going to be a dramatic increase in the supply and a very much less dramatic increase in the demand. The problem, as I say, is essentially not one of producing more and more food for an admittedly very rapidly increasing population, but one of distribution and regulation. Is not this really the same problem that we are affected with here in the United Kingdom?

It seems to me that the problem that faces us—and we cannot look at agriculture in any other way at all—is, how much are we going to produce in this country and how much are we going to import? It seems to me that any policy that we have must be framed to try to establish the sort of level of production which will make the balance of this right; and I am sure that when the noble Lord, Lord Williams of Barnburgh, said this he was in fact touching upon the nub of the whole problem. I think this is the sort of thing that the Government must make up their mind about—how they are going to tackle this problem, and also how to let us in the agricultural industry know. We do not at the moment know at all. I believe I touched on this question when I spoke for five minutes at the end of the debate on the Agriculture (Miscellaneous Provisions) Bill. I suspected I saw a tendency in the Government's policy here, but I do not know; nor does anybody else in the industry. We do not know what the Government are intending to do, and we want a very definite lead. So far as we in England are concerned we have not very many natural advantages other than possibly meat and milk; and when I say "meat", I include both beef and mutton.

The sort of attitude which the anti-agriculturist might take is, "Well, why are we producing anything in this country at all? Why don't we turn the whole thing into a delightful National Park?". There are, of course, cogent reasons why we might do that, but at the moment the arguments the alter way are really better. First of all, if we have very good agricultural land—and in some ways, with our rain and soil, we have better land than anywhere else—clearly, if we do not use it to the full we shall be wasting something. But I think probably the balance-of-payments argument is the most important here: that without pro- duction of agriculture, what we do produce in terms of agriculture in this country, we could not in fact balance our payments. I know quite well that people who use this argument are a little inclined to make too much of it. What they forget is that a great many of the resources which we devote to agriculture could possibly be devoted more effectively to backing up our exports. Again, they rather tend to forget that, so far as primary producers are concerned—and this goes very much for the Commonwealth, and not only the Commonwealth but the ex-Commonwealth countries—if they cannot send food to us they, in turn, cannot buy our exports. If they cannot buy our exports we are still more in the soup. Then I think this argument about balance of payments tends to forget that the more intensive your farming is, the more you have to import to make it intensive. I always feel this very much so far as pigs and poultry are concerned. It is all very well to step up our pig population; it is all very well to try to beat the Danes at that particular thing; but for every side of bacon, every piece of pork, we produce we are importing almost the same amount of feedingstuffs. I do not think that this can help very much towards our balance of payments.

The implication of this, it seems to me, is that our agriculture must be based, not on more intensive expansion but on the low cost—low output idea. Our production costs are already rather more than world costs, and that cannot be a healthy state of affairs. I do not want to confuse this idea of low output with bad farming; do not for one moment think that; it is far from what I mean. It is a different approach to farming, a different way of doing it. But, as I say, the implication of the world situation, so far as we are concerned, is that we must not be aiming all the time at expanding our production at all costs, which was a reasonable idea fifteen years ago, and was a reasonable idea twenty years ago when the war began, but is not now. Now we have to think in terms of trying to reduce our costs even if per acre or per unit it means slightly less in terms of actual output. I cannot help feeling that on all sides of this House there is a growing feeling that this is the right way to approach our agriculture.

I wonder how far the Government—and here I think I echo what the noble Lord, Lord Williams of Barnburgh, says—have caught up with this idea. Are the Government moving towards this feeling that we must be thinking in terms of trying to lower our costs, even at the expense of our output? What I felt was disappointing about the Price Review was that there was no indication whatever either way; there was no estimate in the Price Review of what the future balance between home production and imports should be. Again—I think I said this when we spoke about the Agriculture (Miscellaneous Provisions) Bill—although I detected a slight tendency towards production grants, as it were, instead of support subsidies, I nevertheless felt it was a very tenuous trend. The trend was rather towards the small farmer schemes and the farm improvement schemes, which are both a little dangerous. They tend towards production at any cost rather than towards what should be the sort of central policy that we ought to have, that of reducing costs. However, that is to some extent a different problem. It is a problem of where the emphasis on a particular subsidy should be.

I know it is all very well for me to say that it seems to me that the trend towards low costs and low output is a trend that we ought to follow, but it involves certain rather fundamental changes, not only in our policy but in the way we attack that policy. I think that profitability has nothing to do with whether it is low cost and low output, or whether it is high cost and high output. The question of profitability depends much more on whether the balance between things of this sort is the right kind of balance; and, as I understand it, the right kind of balance, so far as agriculture is concerned, is fundamentally as to whether the unit is the right size. So far as structure is concerned—so far as the agricultural industry is concerned, this is a structural problem—I think we are probably better placed than almost anybody else. We are certainly better placed than Europe. We have no really difficult small farm problem here. We have a small farm problem—of course we have—but we have not got it to quite the same extent as it exists in Europe.

I think the same applies to America. America has a much worse small farm problem than we have; many people fail to realise that. They, too. have this problem of what to do with the small farmer. They, too, to some extent, have the problem that their unit of agriculture is still geared to the last agricultural revolution but one. We are still all geared to that revolution—I should like to say that this is less so in this country than in Europe and America—geared to the horse and cart. When the modern small farmer is faced with the sort of capital that he must have so far as modern machinery and that sort of thing is concerned, he is in a hopeless position. It just cannot be done. The small farm which worked as a perfectly good family unit 70 years ago, with the sort of machinery that it requires now—bailers, combines, the lot; you have only to look round the farm to see it—just is "not on". That is so far as the small man is concerned. So what I am saying is that the implication of the kind of policy which I feel we must follow tends to make it even more difficult for the small farmer. To some extent we must try to help.

I think there is quite an interesting analogy here with the Inclosures of the middle eighteenth century to the middle nineteenth century. I think all historians would really be agreed that the inclosures were a necessary part of an agricultural revolution; that without them we could never have fed the vastly increased population that came with the nineteenth century. But, unfortunately, what happened with it was that there was terrible hardship. That kind of terrible hardship can to a lesser extent come with trying to amalgamate modern small farms, trying to do away with them. But it seems to me that where we have advanced so much from that is that we now have the idea in our minds and the machinery behind us by which we can prevent this from becoming a disaster. We can help people who have to leave the industry. Is this not one of the aspects of the small farm problem? Not only is there the problem of making viable the small farm which is not viable now—by means of co-operation, machinery syndicates, group buying, and that sort of thing—but we have to help the small farmer who is not viable and who cannot go on, to go out of the industry.

There are various ideas in regard to this matter. The elderly farmer may be clinging on to a farm which he should not be in, and he could be helped to buy a house to retire to. There are one or two things like this that could be done, and I think we should be doing them. As I say, the problem is twofold. First of all, we should make sure that the small farms that we do keep on can be made viable in the modern world, with new ideas and new mechanised farming. We should help them to go on and also help them to help themselves. We ought also to help those who cannot and should not go on, to come out of the industry. I think that this problem can be compared with that of the Inclosures, which we all recognised as having been necessary.

So far as the Government have to shape this kind of policy—it is a policy that is not going to grow of itself—it seems to me that agriculture, in regard to the long term, is always slow. In industry you can build a factory in five years, and when you get a new idea in a short space of time, with energy and determination, you can put it into action. You cannot do that with agriculture. In agriculture a generation elapses before any impact is made at all; it takes a generation to put into effect any new idea. So in the modern world we are not going to achieve any results in this way unless there are results which are essentially motivated by the Government.

It seems to me that so far as the immediate problem in our home policy is concerned—as I say, the whole of my speech is really devoted to trying to make us feel that our home policy is essentially a world problem as well, and that it is this world problem that we have to solve—the first and most important thing is some kind of import regulation. We must first simply make up our minds that it is no good having an exceptionally well-planned home agriculture which stems from that great Act of which the noble Lord who has just sat down was the architect, if you have a totally unplanned import situation. Surely, to have this makes absolute nonsense. Take our own friends in the Commonwealth: so far as Australia and Canada are concerned, our market for food is open to them; but so far as our industrial exports are concerned they discriminate against us. Surely in the long run it would be in the best interests of the Commonwealth, of ourselves and of anybody else, to get rid of this difficulty. It really is a matter for co-ordination. It seems to me that we can get this right. If we do not get it right we are making nonsense of the whole thing. So much for regulations so far as imports are concerned.

Next, it seems to me that the Government ought to make a definite move in the whole subsidy set-up towards trying to make the system a better one. Let me make it absolutely clear that in regard to the word "subsidy" there is virtually no country in the world where agriculture is not, to some degree or another, subsidised, and in many cases subsidised to a far greater extent than it is here. What I mean is that agriculture is so long term an industry that in the modern world without planning all this can be turned into a nonsense. If you do not plan it you will have a tremendous glut here and starvation somewhere else. So, more than anything else, I have come round to the view of intensified planning from having worked and drawn my living from agriculture for a good many years. Agriculture simply will not work unless you organise it from top to toe.

As I said just now, I want to make it quite clear that when I talk about subsidies I am not talking as an agriculturist holding my hand out for more subsidies. I am pointing out the fact that the whole of agriculture, from Timbuctoo to here, is, and must be, subsidised. Cannot we try to move our subsidies a little nearer in line with those of the Common Market? I feel there is a slight tendency this way. The Common Market, in regard to its subsidies, is rather thinking in terms of the farmer's getting his return from the market and not from the Government.

This has two sides to it which seem to me important. The first is that if you do not get your subsidies in that way you get a false impression of subsidies in relation to agriculture. I hope that noble Lords who speak after me will plug this point. Far too much is being said about agriculture being subsidised. The motor car industry gets a subsidy—admittedly, it is a subsidy in a different direction, which one might say is paid by the foreigner, though this is not strictly the case from an economist's point of view; but whatever way you look at it is a subsidy. Anything that can be done to try to move it away from a direct subsidy and back on to the consumer will help enormously.

I know how difficult this is from a political point of view. There exists a kind of inertia. We know perfectly well that the consumer should pay, not as a taxpayer but as a consumer, but one realises how difficult it is to change people's thinking in this way. Food has been relatively cheap compared with other commodities. Whereas we say that a suit of clothes now costs us three or four times more than it did before the war, we do not expect our potatoes and meat to cost us that much. So there appears to be a time lag that will have to be made up by any Government which tries to switch this thing on to a consumer basis; but I am quite certain that it must be done.

I am also quite certain that support prices are bad, because they tend to go into the wrong pockets. Take, as an example, the great "to do" going on about Yugoslavian beef. The butchers are trying to make out that they reduce the price according to the reduced wholesale price. This is a specious argument. They have not done this, nor has this occurred in regard to any of the other fluctuations. Unless there is the most complicated arrangement to prevent it, some of the subsidy will go into the wrong pockets.

Lastly, in regard to the way in which imports should be balanced against home-produced goods, and how subsidies should be made so that they are producer subsidies, and yet not producer subsidies which are going to induce production regardless of cost, we should go about this according to the idea proposed by the Lucas Committee, by having commodity commissions. The noble Lord mentioned these. I have an idea that we on these Benches in fact accepted and supported this idea of consumer commissions, long before the noble Lords who sit to my left. I see the noble Lord shaking his head. He thinks we did not, but I seem to remember that we took this idea up before they did. However, no doubt noble Lords will answer me later on.

LORD WILLIAMS OF BARNBURGH

My Lords, the noble Lord will not be aware that in my election address of 1931 I included import boards, which were the equivalent to the commodity commissions.

LORD HENLEY

I am grateful to the noble Lord for pointing out to me what happened in 1931, because I am afraid I was not sufficiently politically alert at that age to have known it. Nevertheless, the crux of this thing is that it is simply nonsensical to plan home production and yet at the same time to leave imports and the rest of it unplanned. It is nonsensical for us to be open to Canada and Australia so far as food is concerned and yet for them to make discriminations against our exports. I know that there is this conflict between Commonwealth farmers and United Kingdom farmers, and I know that in the long run it can be put right only by a planned economy. But the crux of the whole thing is that we must think in terms of how we are going to relate what we produce in the United Kingdom to what we import. This is vital to our agriculture, and is equally vital to industry.