§ 3.7 p.m.
LORD ST. OSWALDMy Lords, I beg to move that the Draft Fertilisers 97 (United Kingdom) Scheme, 1964, a copy of which was laid before Parliament on May 7, be approved. In its general character this Scheme is similar to those of past years; and as in the last three or four Schemes the major point of change is a reduction in the rate of subsidy, following an Annual Review determination.
This year the Government decided to reduce the annual fertiliser subsidy bill by £2 million. This is about 6 per cent. of the present subsidy, and, applying this percentage to nitrogen and phosphates, we propose reducing the rate for nitrogen by 5d. a unit; for water soluble phosphoric acid by 4d.; for insoluble phosphoric acid by 2d. and for the higher grades of basic slag by 3d. The percentage reduction for lower grades of basic slag ranges has been heavier—as much as 10 per cent. In arriving at these various figures we have tried, so far as possible, to arrange that the principal straight fertilisers should all remain subsidised at about the same percentage of their cost to the farmer.
Leaving aside these changes in rates of contribution, there are four alterations in this Order, as compared with last year's Scheme, to which I should draw your Lordships' attention. Two of them concern minor matters in the arithmetic of computing the amount of subsidy due on a claim. In paragraph 6(1) we are taking powers to disregard anything less than a quarter of a hundredweight in assessing a claim. Any claims involving a fraction of 28 lb. have to be taken out of the mechanised payment system and computed by clerks, at a disproportionate expense compared with the small amounts of subsidy involved in them. In the Schedule to the Order we are similarly taking powers to calculate subsidy only to the first place of decimals by the weight of nutrient involved. Hitherto, we have calculated to two places. We can use the space thus saved for punching other information needed for verifying claims into the cards which are the basis of a mechanised payments system. Both changes have only trivial effects on the calculation of subsidy in a transaction.
In paragraph 5 we are making two changes. The first is to reduce the period in which applications must be put in by farmers from six months to three 98 months from date of delivery. Experience has shown that well over 90 per cent. of applications are made within three months already, and most of the balance within the following month. To enable our verification systems, and particularly field officer visits, to work as effectively as possible, we want to see all applications made within the three-month period. Moreover, linked with this, and to enable field officer visits to be made with most expedition, we are now also requiring farmers to send their applications direct to our divisional office, instead of to their merchants, for onward transmission to the Department as hitherto. This again will tend to reduce the interval between delivery date and the time we first learn about a transaction. I should like to assure your Lordships that both this reduction in the period for an application and the rerouting procedure are being well publicised.
Finally, in paragraph 3 we are proposing to disqualify fertilisers to which aldrin or dieldrin has been added from benefits of the 1964 Scheme. The Government have already announced their decision to give effect to the recommendations contained in the Report of the Advisory Committee on Poisonous Substances used in Agriculture and Food Storage on the persistent organochlorine pesticides. One of the Committee's recommendations was that the use of aldrin and dieldrin in fertiliser mixtures should be discontinued as soon as this could be arranged. Withdrawal of subsidy from fertilisers to which aldrin and dieldrin has been added before purchase will support the voluntary action proposed by the Government to which manufacturers have already agreed.
The Motion before the House seeks the approval to the Draft 1964 Fertiliser Subsidy Scheme. As I have explained, it contains a number of changes from the Schemes which have operated in previous years. The main purpose of the Draft Scheme is, however, to allow the fertiliser subsidy to be continued for another year, and I hope that it will have the approval of the House.
Moved, That the Draft Fertilisers (United Kingdom) Scheme 1964, laid before the House on May 7 last, be approved.—(Lord St. Oswald.)
§ LORD WISEMy Lords, I must thank the Minister for his full explanation of this Order. So far as we on this side of the House are concerned, we approve it, as year by year in the past we have approved the fertiliser Orders which have been put forward for consideration. This Order carries on the useful work which was started in the past and assists in the national food production efforts. For that reason, we commend it.
There are one or two figures which may interest your Lordships in regard to the fertilisers consumed on our farms. According to the White Paper which was issued some time ago, the cost of fertilisers to farmers in 1962–63 amounted to £108½ million, and for 1963–64 the forecast of expenditure is £119 million. which is an increase of £10½ million. The cost to the farmers from the merchants is, I believe, the same, and is likely to be the same, as in past years, so that it is obvious from these figures that the use of fertilisers in farming is extending. The expenditure of £119 million by farmers on fertilisers is no less than 8.6 per cent. of the total expenditure on farming—that is, about one-twelfth of the expenditure, It is useful to notice that the subsidies for fertilisers have increased year by year from £14.8 million in 1955–56 to last year, when they were slightly less than they are likely to be in the year ahead, when they will be £35 million.
I should like to say a word about the reduction of £2 million in the subsidy. I wonder whether the Minister could tell us if this amount is based on last year's tonnage or on the forecast for the 1964–65 tonnage. If it is based on last year's tonnage, then it will probably be more than £2 million in the year into which we are entering. This loss, whatever it may be, is suffered by the farmers themselves, and I was wondering whether we could not devise some system whereby the loss could be divided between the manufacturers and the consumers. That seems to me to be more equitable, because the price to the manufacturers will be the same, so that the loss to the farming community in their purchases, by way of loss of subsidy, will be £2 million or more.
The Minister referred to the alteration of the period. I am wondering whether it would be right to conclude that the advantages of mechanisation which is 100 now being instituted will save any additional cost in collecting the claims over a period of three months instead of over a period of six months. We approve the Order and I hope that it will be received with satisfaction by the whole House.
VISCOUNT STONEHAVENMy Lords, I want to ask the Minister a question, but I do not think that he will have the answer in his brief and I do not mind if he cannot answer it. Could he tell me the position of fertilisers containing a large quantity of lime? The lime scheme and the fertilisers scheme are independent schemes. How does one put in claims if using, for example, a fertiliser such as Nitra-Shell, which contains 34 per cent. calcium carbonate? I do not know whether my noble friend has the answer, but, if not, perhaps he will let me know later.
LORD ST. OSWALDMy Lords, I am afraid that I cannot put my finger on the answer to the technical question of my noble friend Lord Stonehaven, but, of course, as he suggests, I will let him know later. I am very grateful for the support of the noble Lord, Lord Wise, for this Draft Scheme. He asked me if the £2 million reduction was based on last year's consumption or on this year's anticipated consumption. If I am wrong I will let him know, but I have assumed throughout that the calculations must be based on the calculated consumption for this year in order to reduce the bill by £2 million. I cannot see how else it could be done, but I did not do the calculations myself-the noble Lord will not be surprised to know that.
On Question, Motion agreed to.