LORD ST. OSWALDMy Lords, I beg to move that the draft Fertilisers (United Kingdom) Scheme 1963, a copy of which was laid before Parliament on May 15, be approved.
This scheme extends the fertiliser subsidy for a further year. There are a number of changes as compared with previous schemes, but perhaps the most important is the new list of subsidy rates which have been drawn up to give effect to this year's Annual Review determination that a reduction of £2 million should be made in the aggregate amount of subsidy payable. The new rates of subsidy are shown in the Schedule to the Scheme. There are reductions of 6d. a unit for nitrogen, 5d. a unit for water soluble phosphoric acid and 6d. a unit for insoluble phosphoric acid, while the rates applicable to basic slag have received a modest increase.
Our aim in fixing the new rates this year—in addition to achieving the overall saving of £2 million to which I have already referred—has been to devise a simplified schedule of rates which will secure, as far as possible, that all the principal straight fertilisers are subsidised at about the same percentage of the cost to the farmer. Whereas previously the rates of subsidy, expressed in this way, varied from between about 44 per cent. to about 35 per cent. of the cost to the purchaser, the new rates should represent about 37½ per cent. of cost in all cases. This seems to us to be the right approach to the matter, particularly as far as the different kinds of phosphatic fertilisers, which do to some extent sell in competition with each other, are concerned.
I think perhaps the most significant feature of the fertiliser scene is the striking way in which usage is increasing at the moment. For example, the increase in usage this season over last is likely to be about half the total pre-war usage. This year we shall almost certainly use over a million and a half tons of actual plant nutrient, as compared with only a quarter of a million tons before the war—in other words fertiliser usage is now running at a rate about six times above pre-war. The most striking increase has been in the use of nitrogen. This year usage will be well up over the half-million 568 ton mark, and such is the current rate of increase that it looks as though we shall have to look forward to an annual consumption of three-quarters of a million tons or more by the end of this decade. It is a striking but fundamental fact that the pre-war annual consumption of 60,000 tons of nitrogen is probably no more than the amount of nitrogen delivered to farms in the fortnight between the laying of this draft scheme and the date on which it is due to come into effect.
Of course, this remarkable increase in consumption has not been achieved without considerable expenditure on the part of Government and farmers. I doubt whether I need remind any noble Lords that this is much the largest of all the agricultural production grants. In the financial year ended March 31 last, nearly £34 million was paid out in the United Kingdom, and had the hard winter not delayed cultivations so much at the end of this period, I think we should have had to face a bill of at least £35 million. Though this is a very large sum, we feel that this subsidy is one of the best means of increasing the efficiency of the industry, and feel it is fully justified on that account.
There is one minor point about the scheme which I feel requires some elucidation. In the last column of the Schedule which shows the rate of the subsidy in cash, the figures, of course, refer to pounds, shillings and pence per ton, as in all previous schemes. Since this appears unclear in the draft order I propose formally to lay an Amendment to the Order making this plain, before the end of the week.
The Motion before the House seeks the approval of noble Lords to the draft 1963 Fertiliser Subsidy Scheme. As I have explained, this scheme contains a number of changes from the schemes which have operated in previous years. Nevertheless, the main purpose of the draft scheme is to allow the fertiliser subsidy to be continued for the ensuing year, and I hope that it will have the approval of the House.
§ Moved, That the Fertilisers (United Kingdom) Scheme, 1963, be approved.—(Lord St. Oswald.)
§ LORD WILLIAMS OF BARNBURGHMy Lords, I do not intend to detain the House for more than a moment. Of 569 course, broadly speaking, when the National Farmers' Union, the Government and the fertiliser producers are in agreement, one would be entitled to suspect this move. However, it is not our intention to be awkward to-day, when that happy-go-lucky Bill, the London Government Bill, is waiting for further review, but I would say to the noble Lord that of all things that post-war Governments have done which have been of great value to agriculturists, as distinct from farmers, and apart from guaranteed prices, the practical encouragement to use still more fertilisers has been the most valuable. I know that this is merely a continuation with slight variation, born of wider experience, of what has been done over the last twelve or fourteen years. But I am all for encouraging the Government to encourage the farming community to make experiments with fertilisers. I suppose that only those concerned with wild life will be suspicious of further subsidies of this sort. However, we entirely agree with the proposal.
§ On Question, Motion agreed to.