§ 3.37 p.m.
§ Order of the Day for the Second Reading read.
§ LORD BESWICK
My Lords, I beg to move that the Cereals Marketing Bill be now read a second time. The object of this Bill is to make possible the more orderly and efficient marketing of home-grown cereals. It will lead to the creation of a valuable system of market intelligence for the growers; it will encourage research and demonstrations in the handling and storage of these cereals, and it provides certain carefully defined trading powers for the new Home-Grown Cereals Authority. At a time when so many newspaper headlines are magnifying the differences between the farmers, or some of them, and my right honourable friend the Minister of Agriculture, we have here an example of the way in which the Minister is quietly pressing forward with positive and constructive plans to give the agricultural industry a more sound and profitable basis on which to work.
The Bill is based upon and implements an agreement reached last September with the farming and trading interests concerned. My right honourable friend has 964 readily and fully acknowledged the skill and patience displayed by his predecessor in office, in the negotiations which led to this agreement. I am sure your Lordships would like to record a similar acknowledgement. As would be expected with this background, the Bill enjoyed a wide measure of support during its passage through another place, and the agreed Amendments which were made have meant useful improvements to the original draft. I trust that the Bill will be afforded a similarly happy treatment in your Lordships' House.
Clause 1 provides for the establishment of the Home-Grown Cereals Authority. The Authority will be made up of three elements—three to five independent members includina the Chairman and Deputy Chairman who will represent the general national interest and the important interest of the consumers; nine members to represent the interests of producers, including those producers who feed grain to their livestock; and nine members to represent the interests of the trade. The Authority will be a United Kingdom body and the members will be appointed by the three Ministers responsible for agriculture in their respective countries, acting jointly. The Bill as originally published did not provide expressly for representation of growers' interests in Scotland and Northern Ireland. I believe your Lordships will welcome the specific provision which has now been made for this.
The Authority's first main objective will be to encourage a better phasing of supplies coming on to the market throughout the season. Much has been done already, under the seasonal scale for wheat and the Barley Incentive Scheme as part of the cereals deficiency payments arrangements, to encourage growers to hold their grain off the market for varying periods of time. But there is still a tendency towards shortages at certain times and excessive supplies at others. There is still need, in the interests of growers and commercial users alike, to ensure that supply and demand are more evenly matched. Forward contracts meet this need; they provide specific dates of delivery and thus enable it to be known at what times supplies will be coming on to the market. For this reason 965 the encouragement of forward contracting is given great prominence in this Bill.
The Authority will be empowered, under Clause 2, to prepare schemes for bonus payments to growers in respect of forward contracts, and as soon as possible after their establishment will be required to prepare schemes for wheat and barley. The financial incentives which the Authority will be able to offer should do much to encourage the development of forward contracting. The clause will also enable the Authority to make arrangements for loans to those growers who are prepared to enter into forward contracts. This will help growers who could not otherwise afford to hold their grain off the market. It was part of the September agreement that information about loans to growers made by the Authority should be made available in order to safeguard the interests of agricultural merchants and others providing credit to farmers. There was a good deal of discussion in another place on the best way of giving effect to this. The amended wording of Clause 2(5), now before us, was generally acceptable in the other House as implementing the September agreement but, at the same time, safeguarding the privacy of the grower.
In addition to their powers under Clause 2 to encourage and facilitate forward contracting, the Authority will be able, under Clause 3, to bring in schemes for bonus payments to growers linked to deliveries at specified times of the year, irrespective of the form of contract. Our experience with the Barley Incentive Scheme has shown the value of arrangements of this kind. The Authority will be under no obligation to introduce schemes under Clause 3, but if they find these would be a useful adjunct to their schemes under Clause 2 they will be able to provide accordingly.
The Authority's second main objective will be the promotion of better market intelligence, research and demonstration and improvements in trade procedure. I need not emphasise the importance of prompt and accurate information about the state of the market and the prospects ahead in enabling growers to plan their sales over the season to the best advantage. Clause 6 will enable the 966 Authority to provide a market information service, and this should be of the greatest value to farmers and traders. The Authority will also he able to take over, if they so decide, the valuable work of the unofficial Working Party under the chairmanship of Sir Charles Norman, and to continue the system of guide prices. Apart from encouraging improvements in trade procedures, the Authority will also be empowered under Clause 6 to undertake or promote research and demonstration in connection with the storage and physical handling of home-grown cereals. This would enable them to promote the development of bulk handling and storage and to encourage other improvements in the physical collection, distribution and condition of home-grown supplies.
So far I have been dealing with the Authority's non-trading powers under Part I of the Bill. These powers could and should, on their own, bring about significant improvements in the marketing of home-grown cereals. But it is possible that a situation might still arise where, although the price of imported supplies was held by the minimum import prices, the market price of our own grain might fall below the fair equivalent of those prices after allowing for the normal quality, handling and transport differentials. This is the possibility which Part II of the Bill is designed to cover by providing, in certain clearly defined circumstances, for the exercise of trading powers by the Authority.
These are reserve powers and the initiative in seeking them would have to come from the Authority. If they could satisfy Ministers that the powers were necessary to carry out the objects of the Bill, Ministers could make an order conferring trading powers on the Authority. Under Clause 8(6) of the Bill the Order would come into force immediately, but would lapse after forty sitting days unless approved by each House under the Affirmative Resolution procedure. This provision in the Bill gives effect to the agreement reached last September. The Authority would need to weigh the factors in the situation very carefully before approaching Ministers, and Ministers would have to satisfy themselves that the case had been made out. But, if that position were established, it clearly would be essential for the Authority to be able to proceed without delay, but without prejudice to 967 proper Parliamentary consideration of the necessary Affirmative Resolution.
The Authority would be free to buy grain only when the average market price had been below a prescribed level for a stated period, and they would have to cease buying when the average market price had risen above that level. Under Clause 9 the prescribed level would be a price derived from the relevant minimum import price after due allowance for quality, handling and transport differentials. The purpose of the trading powers would be to help further, if necessary, the matching of supplies atfd requirements over a particular cereal year. Under Clause 11 the Authority would be required to dispose of all the grain they had bought, either within the same cereal year or at latest within a month thereafter. This provision is intended to ensure that there is no carryover of stocks from one year to the next, which could only serve to disrupt the market in the following season.
I turn now to the financing of the Authority. This is dealt with in Part III of the Bill which also contains supplementary provisions. The main beneficiaries of the improved marketing which this Bill is designed to bring about will be the cereal growers. The greater part of the Authority's revenue will therefore be raised by levies on growers. At the same time the Bill will authorise my right honourable friend to make an Exchequer contribution towards the Authority's administrative or other expenditure on their non-trading activities under Part I of the Bill, excluding actual disbursements on bonus payments, loans and loan guarantees. The Exchequer contribution is dealt with in Clause 12.
Under Clause 13 the Authority will be required, before the beginning of each cereal year, to submit to Ministers their estimates of the amount required to be raised by levies on growers in that year. There will be separate estimates for non-trading purposes and for trading purposes, if any. The effect of Amendments made in another place is that the Authority will have to submit, with their estimates, proposals for the apportionment of the amount or amounts shown as between the different kinds of home. grown cereals. It will then be for Ministers to determine the rates of levy 968 for each kind of cereal. Their decisions will be embodied in annual orders prescribing the levies, and will show separately how much is attributable to the non-trading functions and, if any, to the trading functions. These orders would be laid before Parliament and would be subject to Negative Resolution procedure. The normal method of collecting the levy would be by deduction from the cereals deficiency payments to growers. The Bill sets out the machinery for this and also provides, should the occasion arise, for the alternative method of direct collection of the levy by the Authority.
As I have said, the Bill gives effect to an agreement reached between the farming and trade interests. It embodies a programme of action which has the support of all the interests primarily concerned with the production, marketing and first-hand processing of homegrown cereals. These interests will be represented on the Home Grown Cereals Authority and the Authority will be able to count on their good will and co-operation. This good will may well prove the Authority's greatest asset. With this good will, and constructive co-operation all round, there should result benefit and advantages to all—producers, traders and consumers. I beg to move.
§ Moved, That the Bill be now read 2a. —(Lord Beswick.)
§ 3.50 p.m.
LORD ST. OSWALD
My Lords, I am grateful to the noble Lord, Lord Beswick, for his exposition of the Bill, and I am happy to welcome him face to face across this Table for the first time on my part. The fact that his former experience in the aviation industry is now being applied to agriculture is not as curious as it might at first seem. They are, in fact, the two most adventurous and technologically advanced industries in the country, and neither of them appears to be getting a great deal of encouragement from the present Government. However, to-day is an exception.
Last Thursday when we were debating the market development scheme, the noble Lord, Lord Champion, after a little light prompting from me, said that he was pleased to be able to pay occasionally a compliment to the previous Government for some little thing which they did, by 969 which he meant some bequest of which the present Government has become the fortunate beneficiary. Now, 120 hours later, he will have yet another cause for pleasure in the form of the present Bill which also concerns marketing. It seemed a trifle curious to me last week that he should regard marketing as a "little" matter. I recall that when in Opposition the noble Lords now occupying the opposite Benches did not regard marketing as a "little" matter. Columns of Hansard were filled, notably, for instance, by the noble and indefatigable Lord, Lord Stonham, in catechising me, quite properly, on the Government's intentions regarding marketing, both agricultural and horticultural. Now it becomes a "little" matter. There is nothing, I think, unexpectedly inconsistent in this. It is purely a Parliamentary admission of the way in which, when examining the interests of agriculture, the present Administration reverse the telescope and peer with great absorption through the wrong end. However, in this case they have not chosen to change seriously the scale or structure of this bequest, as now presented to Parliament.
I remember well the background and the special character of this achievement. For some years our support system had been under an increasing strain, resulting in ever greater deficiency payments. It stood to reason, though the Opposition of those days was sometimes loath to observe the reason, that a system which made up the difference between the guaranteed price to our farmers and the world price of grain would become intolerable and unrealistic as, on the one hand, the efficiency of our own growers increased, while on the other, we remained an unlimited market for the grain producers of the world. My right honourable friend the previous Minister therefore determined that the open-ended character of our support system, at least as applied to some agricultural commodities, would have to be adapted to modern conditions. This was done for cereals last year, as noble Lords will remember, in time for the Price Review.
It required a twofold operation with two quite separate, equally delicate, chains of negotiation. There were import controls, a completely new conception for this country, which had to be agreed upon by our various suppliers. There 970 were Standard Quantities, in a form also new to our own industry, which had to be agreed upon by the unions on behalf of our own producers. Neither one of these could be obtained by agreement without the other. Once they were achieved, then it became possible to introduce a system of more orderly marketing, as the noble Lord, Lord Beswick, has said, and the present Bill is, in fact, the promising child of that main achievement in cereals. It is a child of truly distinguished parentage.
However, the third agreement which made this Bill possible did not emerge like Jupiter from a shower of gold. It was achieved in the last weeks of August and part of September by the determination and patience of my right honourable friend the previous Minister, to which the noble Lord who introduced the Bill has already paid graceful tribute, for which I thank him. When one remembers that at this time my right honourable friend was lying in hospital with a broken pelvis, with his legs suspended on pulleys and in considerable pain, I think most Members of this House would be prepared to pay him particular tribute. It was a time when most men would have contracted out of any sort of effort, political or otherwise. But, regarding himself, as he always has, as the servant of agriculture, such inactivity and withdrawal from his duties was not in his character. It was, in fact, in his hospital room that much of the negotiation took place which bore fruit in the agreement signed on September 22.
My Lords, many people, as the noble Lord has said, contributed to this agreement, and to all of them the industry and the consumer may well give thanks. But I think it is worth alluding to the wise and broadminded approach of the trade to this original proposal. The Bill ensures that the grain will be sold at the maximum price feasible with regard to the size of the crop. At first sight, this would hardly seem to be to the advantage of the trade. But the encouraging aspect of those discussions was the willingness of all to appreciate a common interest, and the basic objective of this common interest has been retained in the Bill now before us. Better marketing suits everyone, but it does not always happen that those representing individual and distinctive interests are able to see that, 971 by apparently giving in one direction, they themselves will benefit from the general improvement obtained thereby.
I am not going to score Party points by painting in at this juncture how this conception differed from that of a commodity commission, the beau-ideal of the Labour Party's manifesto. Suffice it to say that, in this instance, they perceived the wisdom of our approach and turned to good account the work already done. I sincerely congratulate the noble Lord and his colleagues, reflecting across the Floor the pleasure of the noble Lord, Lord Champion, last Thursday, in his glow of political gratitude to ourselves. I would say, however, since he qualified it as only an "occasional" pleasure, that he will now have experienced it for a second time within two Parliamentary days, and to expect to win approval with greater frequency while sitting on that particular Bench, and in this particular Parliament, appears to be just a trifle optimistic.
Before sitting down, I have one or two questions to ask the noble Lord. The farming industry, in general, breathed a great sigh of relief on learning that this conception would be adopted instead of having a commodity commission imposed upon it. It will breathe even more easily, if the noble Lord would tell us to-day, that the Home Grown Cereals Authority, to be set up under this Bill, will not become a kind of sub-office of a future commodity commission. lf that particular ghost could be well and truly laid, then farmers would be able to enjoy a deeper and more tranquil sleep at night, well earned after their day's labour.
My second question concerns the composition of the Authority itself. As the Bill reaches us after its Third Reading in another place, the Authority will consist of nine N.F.U. members—including not less than one from Scotland and one from Northern Ireland, as the noble Lord pointed out—nine from the trade and three independent members. The question I have to ask concerns the nine producers' members who at present, as I understand it, are to represent statutorily and exclusively the growers of cereals. There is to be no one specifically representing the feeders of cereals, and there seems to be some oversight here. I am aware 972 that the noble Lord, Lord Beswick, mentioned those who feed grain to their animals, as if they had some ex-officio place on the Authority. I have not discovered that in the Bill. If I am wrong, I shall be very glad to be corrected; but if not, I wonder whether the noble Lord will undertake to look at this point and will extend some hope that, at a later stage of this Bill, this omission will be rectified, preferably by the Government.
Thirdly, I should be glad if the noble Lord could be clearer or fuller in describing the point at which the Authority would intervene in the market. His noble friend said the Minister was bound to be satisfied; but if the Minister is satisfied with this year's Price Review, as he appears to be, this is an alarming assurance rather than otherwise. The noble Lord in fact gave more of an explanation than that, I am aware. He mentioned the prescribed level; but I thought his description—and I do not want to be unfair—of the prescribed level was a little cloudy, at least to me. Perhaps I ought to have understood it better. The process of raising money, as described in Clauses 8, 13, 15 and 16, is complicated, though I think necessarily so, but it would interest us to understand better in what circumstances the Government propose that this whole process would be set in motion.
The other purpose for which the levy or levies are required is for market research. This is a most praiseworthy purpose, visualised in the original agreement, but it carries, of course, the danger of duplication and overlapping with other research bodies. I am thinking, for instance, of that remarkable institution, the National Institute of Agricultural Botany at Cambridge, which I was fortunate enough to visit on certain occasions during my own term of office; but there are others doing equally important work, all fully occupied. I am sure that many of my noble friends would thank the noble Lord for an assurance that the Government will be on their guard against any duplication of their efforts.
My Lords, I end by saying again that we like this Bill. We felicitate the noble Lord upon its introduction. I should like to think that to-morrow I shall be able to be equally uncritical, but the more I study the Price Review White Paper, I must mournfully admit, the 973 harder I think this is going to be. However, to-day he may wear his inherited halo with welcome and well-deserved panache.
§ 4.3 p.m.
§ LORD WISE
My Lords, when I put my name down to speak on this particular Bill I noticed that the noble Lord, Lord Digby, was to make his maiden speech on it, and I was hoping that I should have the opportunity of following him. However, as I am in front of him on the list, I want to assure him of a very warm welcome in your Lordships' House, as so many of us knew his father and respected him very much indeed. He was an old friend of mine, and I am very glad to welcome his son.
My Lords, the Minister has explained the purpose of this particular Bill, which is to improve the marketing of homegrown cereals. At the moment, it appears that wheat and barley alone are mentioned, but I gather that later on, or even when it comes into operation, oats also will be included. The improvements foreshadowed by this particular Bill are long overdue in cereal marketing. The marketing of cereals and other farm products is unreliable, unsatisfactory and subject to week-by-week, and sometimes perhaps even day-by-day, fluctuations. In most agricultural marketing stability and orderly standards are, for the most part, unknown. It is perhaps a matter of some wonderment that efficiency in farming has been maintained, and even increased, when one remembers that an important part of the farming business is left to the manipulation of grain market bidders or buyers on the farm or at the granary, who very often pay no heed to the welfare of the producers if they themselves can prosper at the expense of others through their lack of knowledge or toil. If other businesses were carried on in the same haphazard way as agricultural marketing and we all tried to score off others, what a discredited business nation we should become.
Agriculture has suffered from this marketing inefficiency and incompetence for all times in living memory. I hope we are at last about to remedy the deficiencies. Here is a Bill which may bring about improvements and stability in cereal marketing and disposal. Whatever may have been its inception or its distinguished parentage, as was men 974 tioned by the noble Lord, Lord St. Oswald, and its later progress towards the Statute Book, it merits support from all sides of your Lordships' House. It will serve a purpose for a trial period, but in my view it is only a stop-gap as it covers only home-grown products of a certain kind, and leaves us still to some extent at the mercy and competition of imported cereal. I do not believe you can effectively deal piecemeal with the marketing difficulties of cereals without joining home-grown and imported together under the jurisdiction and organisation of one cereal authority. This Bill takes one step, but we may find that the next steps are the more important and effective ones. Whatever we do in the future must be done in the national and consumers' interest, and for the betterment of the conditions and prosperity of our food producers. Other interested parties are organised, and can look after themselves.
The noble Lord, Lord St. Oswald, mentioned the debate which takes place to-morrow. I do not want to trespass upon what may be said or discussed then, but now that a start has been made for the improvement of cereal marketing the door is wide open for extending our future experiences into other agricultural products. The noble Lord, Lord St. Oswald, put one or two queries to my noble friend who is to reply, and, very briefly, I should like to do much the same. The question of market intelligence has been mentioned, and I am wondering what procedure will be adopted, or what method of circulation will be used, to notify farmers as to the prospects of the markets, or when and how they should sell their grain advantageously.
The question of the levy has also been referred to. As has been said, the procedure in regard to the levy is very difficult to follow. It refers to registered growers, and I am wondering (perhaps it has already been dealt with) whether the levy will be raised on all the registered growers or only on those who sell their products either to the Authority or to the merchants. It is suggested also that the Authority may in certain seasons make a profit, and I am wondering whether the levy will be automatically imposed in the particular year when profits are made or whether those 975 profits will be put on one side and used to establish a reserve fund. Has any estimate been made as to what the total annual amount of the levy will be? This Bill refers only to the farmer, and the levy apparently refers also to the farmer alone at the present time. I am wondering why it would not be possible to join the merchants in the particular amount of the levy and let them share with the farmers a portion of the levy, so as to ease the burden which may fall upon the producer.
The question of the purchase of cereals by the Authority has also been raised. If the purchase has to be made and the grain stored for any length of time before it is resold by the Authority, I wonder what arrangements will be made for storage purposes. Those are just a few comments which I thought I should like to make on the Bill, but I commend the Bill and hope it will have a quick passage through your Lordships' House and so reach the Statute Book at an early date.
§ 4.11 p.m.
§ LORD DIGBY
My Lords, I am prefacing my first words in your Lordships' House with a declaration of interest. While I have not been elevated as a "barley Baron" and, indeed, would vehemently deny that title, cereals marketing affects my activities as a typical West Country mixed farmer, in that I grow cereals, I dry cereals, I store cereals and I sell cereals, either to brewers or millers, and then I change my hat and I buy back those cereals in the form of brewer's grains or dairy cake for my cows.
Cereal growers fall roughly into three groups. First, there are those with no drying or storage facilities, who must sell at harvest time consequently causing a glut, leaving themselves at the mercy of the corn merchant, who, though making the most of the situation and offering the lowest possible, price, yet is in very genuine difficulties in coping with the vast flood from the combines. It is worth noting that there is an increasing acceptance that these farmers are following the best policy, bearing in mind that they are not carrying large stocks financed by a 7 per cent. overdraft and that the capital otherwise tied up in a grain drier can be used for the purchase of livestock.
976 The second group have what might be termed "Heath Robinson" facilities, converting their existing buildings with much ingenuity and little expense to store limited amounts of grain on the floor and in sacks. Provided they have a reasonably dry harvest and the considerable labour required to move the grain, this group can store until the price rises after the harvest glut; but, due to high moisture and vermin troubles, they are unlikely to be able to store for more than two or three months and therefore must sell before Christmas.
The third, an increasingly large group, have invested considerable capital in drying and, bulk storage plant. As they can store indefinitely, their only criterion for time of sale is a financial one. They must offset the cost of their bank overdrafts against a possible price rise on the market and any Government incentive payments. Once in three or four years the price of barley rises high—as is the case this year, due to the American dock strike. Many farmers feel, having invested the capital, that they must retain the chance of a big return in certain years by holding, barley until the Spring. Thus we see the pattern emerging of a torrent at harvest, a steady stream in Autumn, reducing to a trickle in mid-Winter and a final disposal rush which is very hard to predict.
This is contrary to the wishes of the compounders and the exhortations of Governments. They say, very reasonably, that they cannot be expected to take all the home-grown cereals unless they can be assured of a predictable quantity evenly spread over the season. For several years the Government have exhorted us to arrange forward contracts. I have tried this, but the forward price offered has never been high enough to constitute a reasonable gamble for the seller. In fact, the only two forward contracts that I have made have resulted in my selling grain at £2 below the current price.
The bonus payments and loans in Part I of this Bill should go far towards levelling out deliveries of cereals, thus simplifying the job of the trade and helping them to use all supplies of homegrown cereals. But let us remember that these loans and bonuses must be paid for and that it is the grower who has to pay, not the trade and not the Government. In fact, the bonuses will be paid 977 to the "wise virgins" who have spent capital on grain driers, at the expense of the "foolish virgins" who have spent all their available capital on livestock. These are the farmers who will be penalised, not only as at present by low prices at harvest time but also by having to pay a levy to subsidise the capital expenditure of the "barley Barons". This is quite right in terms of orderly marketing and balance of payments, but I cannot accept that anyone can be foolish who prefers a herd of cows to a gleaming grain drier.
We may well find that this Bill will put an end to the attempt of West Country dairy farmers to maintain their income in the face of rising costs and wages by growing a few fields of barley. Again, it may well be right that the less efficient producers should revert to grass and stock; but rest assured that if forced out of grain these farmers will fight even harder to force an increase in the penny a gallon on milk announced by the Minister, which is reduced by the computers of the Milk Marketing Board to a halfpenny.
This Bill sets out to help growers with limited capital to take advantage of these schemes by providing loans; but this is of no use to the grower who cannot dry and store. I hope the Authority will take positive steps to encourage co-operative drying and storage schemes, so that it is only the unenterprising who pay the penalty of harvest-time marketing, and not the smaller farmer with a shortage of capital. Consequently I would ask your Lordships to consider an Amendment at a later date to permit the Authority to make loans to bona fide co-operative grain drying syndicates to encourage erection of grain drying and storage plants. If the Authority succeeds in achieving the object of this Bill, the return on these plants should be ample for servicing these loans and the Authority would have a good security.
I am optimistic enough to believe that Clause 6, which provides for market intelligence, may be the best safeguard of small producers, as I take an unfailing joy in each new year's crop of stories about Russian barley coming in with "snow on its whiskers" to depress the price. Thus I welcome this Bill as a measure to help millers and farmers who use cereals, because it "falls over back 978 wards" to ensure that it does not artificially raise the price and because it gives them some stability for forward planning. I welcome it as a help to the Government to keep down deficiency payments and to effect the maximum saving on the balance of payments by full utilisation of home-grown cereals. Finally, on behalf of the grower, I welcome the provision of a stable framework and the information required to strengthen his weak bargaining position.
§ 4.20 p.m.
My Lords, when I saw the noble Lord, Lord Champion, this morning and gave him notice that I was going to ask him a question, to which I hoped he could reply at the end of this debate, I did not know that I was also going to have the unexpected opportunity and pleasure of congratulating the noble Lord, Lord Digby, on his maiden speech—a most lucid and knowledgeable speech. I am sure that many of your Lordships who knew his father much better than I did (I had the pleasure of knowing him but not very well) will be delighted to know that he is following in his distinguished parent's footsteps, in the sense that he not only has a real interest in agriculture but obviously has also had a wide experience of it. I hope that we shall often have the pleasure of hearing him again on many occasions. The noble Lord has been skilful in choosing this occasion to make his maiden speech, because if he does not receive satisfactory answers to his points this afternoon, he will have a chance of putting them again to-morrow, on which occasion I hope that he will put them with still greater force.
I should like to follow up one point in his speech, in regard to the problem of the smaller grower. I wonder whether the noble Lord, in his reply, can give us any idea of the size of the levy and the amount of the bonus which the Government may have in mind. I know that he cannot say accurately, but whatever he can say will be a great help, particularly to the smaller grower.
The original question about which I spoke to the noble Lord this morning concerns the rather raundabout drafting of Clauses 2 and 3. Unless anyone reading this Bill knew a little about the agricultural background, he might 979 wonder what it is all about. The Government draftsmen left out two words—"oats" and "Scotland". If both of these were inserted in the Bill, the intention would be much clearer. lf, at a later stage, we should pass a scheme covering the problem of oats in one part of the United Kingdom, may I ask the noble Lord not to assume that he has met the problem by authorising a scheme which covers Scotland only, because oats are as much a crop immediately South of the Border as to the North. From the point of agrowing oats, the area is really one, and it is thoroughly bad administration to provide, by Government action, different forms of administration North and South of the Border when there is no good reason for so doing. It has happened all too often, and I hope that the noble Lord will see that, if there is to be a separate scheme covering oats, at least its boundary includes all parts of the North where oats are important and does not just follow the Border between England and Scotland.
My second and third points, which have arisen since I have been listening to this debate, are both very short. Does the noble Lord really think that an Authority of 21 or 23 is the most efficient? Is it not much too large to get any business done speedily? What I should like to see is a body of 12 or 15 members, which I think is large enough to cover all the interests likely to be affected and would be much more efficient and speedy in action. My third point follows what the noble Lord, Lord Wise, said about importing cereals now and in the future. He made the very good point that we cannot consider home-grown cereals without also considering imports from overseas. Perhaps it would be more appropriate if the noble Lord left the answer till to-morrow, because I am sure he is going to be asked many questions about the outlines of his Party's agriculture policy. I shall not mind if the noble Lord does not say anything this afternoon, but I hope that, either this afternoon or to-morrow, he will try to tell us how the improved marketing arrangements will link up with imports from overseas, on which this country is, and always will be, to a certain extent dependent.
§ 4.26 p.m.
§ LORD BURTON
My Lords, may I also add my congratulations to the noble Lord, Lord Digby? I was very pleased to see the considerable knowledge he brought to this debate and how lucidly he has expressed it. I had not intended to speak, and the noble Lord, Lord Wise, has commented on most of the points I wished to make. However, they are so important that I think they will stand re-emphasis. No one will argue against the ordinary marketing board, or, indeed, against anything trying to establish one. However, the new Authority appears to be horribly like the Potato Marketing Board, and we all know that this wretched Board has no control over imports. Even with comparatively small imports of potatoes, the price available to farmers can fall catastrophically.
In the case of cereals there will be considerably greater imports, and therefore I feel that it is most important that something is done to give us at least advance notice of what cereals will be coming into the country. I wonder whether we can be given any idea of what notice will be available to us. Will the Authority have a potential seasonal knowledge of what will come in and will they be able to pass this on to the grower? Otherwise, as the noble Lord, Lord Digby, said, forward contracts will be extremely difficult. How can we possibly make forward contracts, when we do not know if there is going to be a sudden influx of Russian grain? Then the wretched farmer will once more have to meet the cost of this Authority. I shall be very pleased if the noble Lord could tell us how much this will be. My noble friend Lord Inglewood referred to Scotland. I believe that under the Bill we are allowed one member, but it is felt that this representation might be fairly small for the amount of grain grown in Scotland and I have been asked whether the Government would consider having another.
§ 4.28 p.m.
§ THE MINISTER WITHOUT PORTFOLIO (LORD CHAMPION)
My Lords, this has been a useful debate. I am grateful to my noble friend for having moved the Second Reading of this Bill for me. The noble Lord, Lord St. Oswald, started with the usual exchanges between him and myself. I 981 have nothing to say against these: they are always conducted on a friendly basis. When we were talking last week about the Agricultural Market Development Executive Committee, I think that I was surely right to say that it was a comparatively little matter. Here, we have a bigger question. I am grateful to the noble Lord for his exposition of the Bill, because what he said, added to what was said by my noble friend, has completely explained the Bill. The more I see the exchanges that take place between the "ins" and "outs"—and I have seen it happen a few times now in another place and here—the more I think of it, looking down upon it as from a great height, as, Plus ça change, plus c'est la même chose.
§ LORD ST. OSWALD: Keep to that!
§ LORD CHAMPION
My Lords, I am not keeping quite to that, because I imagine that my approach to-morrow will not be quite so friendly as it is to-day. I feel sure that I shall have the answers to the points the noble Lord may make, and I may be able to toss back a few remarks which will not be quite so friendly.
I would pay tribute to the work of Mr. Soames in this matter. I know that he conducted many of the negotiations while he was still in hospital; and that took a bit of doing. I would also thank the merchants for the way in which they have approached this Bill, because they might have thought that this Bill was against them. On balance, they decided to come in; and I join with the noble Lord in the tribute he has paid to them.
The noble Lord asked me whether this new Authority was to become a sub-office of a commodity commission eventually to be set up; and the noble Lord, Lord Wise, clearly appeared to think that there ought to be some such commodity commission established in future which would have control over imports, as well as over the home market. The noble Lord, Lord Burton, who spoke last, seemed to me to make precisely the same point, and was arguing for a commodity commission. The noble Lord seemed to ask me to commit myself at this stage to something on this. I am not going to do so. The late Lord Morrison of Lambeth, whom I regarded as something of a 982 mentor in this matter of Parliamentary exchange, would, I am absolutely sure, if he were standing in my place to-day, say: "Let us see how we get on, and having seen how we get on, then take the decisions in the light of what actually happens. "I think that in this connection this approach is the right one. At the same time, I recognise the fact, as we all do, that somewhere there has to be this linking up of the amount of cereals going on to the home market and the import. The last Government recognised this fact —and, indeed, entered into agreements with the cereals exporters to this country; and we shall have to see how those arrangements that were then entered into will work out.
The noble Lord, Lord St. Oswald, then asked me whether feeders will have direct representation on the Authority, and in what capacity. The clause of the Bill which refers to this matter (and the noble Lord will know that they are specifically referred to there) provides for some flexibility. But I should think there is no doubt that there will be this representation; in fact, the Bill actually mentions the feeders in this connection. It will be for the Minister to decide, and I cannot imagine that he will leave out from the number of people who will form this Authority so important a section of the cereals aspect of farmers as the people who use their own grain for feeding.
The noble Lord also asked me, as did other noble Lords, what will be the amount of the levy.
LORD ST. OSWALD
I did not ask that. I agree that the noble Lord's noble friend went a long way to explain this, and I did not criticise the way he explained it. I merely asked for a fuller explanation of the point at which intervention would be made.
§ LORD CHAMPION
My Lords, this is a rather detailed point, and I should prefer to deal with it in Committee, if the noble Lord will raise it then. It is a difficult point, and I should not like to commit myself on the matters he has raised. However, I will carefully study his speech, and I hope to be prepared with the answer when we come to the Committee stage.
On the question of research, it seemed to me that the noble Lord rather hoped 983 that the research would not overlap that being conducted by other bodies; and surely he is right about this. But I am sure that he, having to some extent accepted parentage of this Bill, will know that it is the intention that the research shall, in the main, be confined to distribution, storage and like matters. It will certainly not, I believe, wander into the wider fields the noble Lord mentioned, and will not go into matters which are properly the duty of the agricultural research body. I am fairly sure that this will not happen, and in any case we shall frown on any unnecessary overlapping in this field, while hoping to cover all the research that is necessary in the interest of the whole cereals marketing and the arrangements in connection with it.
The noble Lord, Lord Wise, raised the point about wheat and barley being mentioned specifically in the Bill as at present. As I understand it, the Authority will have power to make representations to the Minister to bring in other products later on, such as oats, which have been mentioned elsewhere. The noble Lord also raised the point, as I have said, about the commodity commission. He referred to the fact that this could only be a stop-gap, and unless you do something about controlling imports there will inevitably always be a difficult market in cereals. I can only give him the same answer as I have given to the noble Lord, Lord St. Oswald: that we shall have to see how we get on, and in the light of experience take any necessary decisions. The noble Lord, Lord Wise, also asked me about market intelligence and how this is going to be notified to the growers. This is precisely the sort of matter which the Authority will have to determine. They will have to make their own arrangements, and provisions will be made in the various schemes, and so on, for the Authority to provide the industry with the sort of information they will require.
On the question of the levy and how it will be raised, so far as I understand it, the levy will be imposed upon all growers who might receive support under the Government's scheme. But we cannot possibly at this stage have any idea as to exactly what sort of amounts the 984 Authority will decide to levy. This will be a matter for the Authority to consider in connection with the work they have to do. The noble Lord, Lord Inglewood, also asked a question about this. The fact is that sitting on this Authority will be the representatives of the very people upon whom the levy will be imposed, and it will be their job—and, of course, they will do this—to ensure that the levy is not too high for the purpose for which it is designed. I think they will be adequately safeguarded in this respect.
§ LORD BURTON
Surely they will be very much in a minority. There will be seven of them as opposed to twelve, altogether, against them.
§ LORD CHAMPION
But the fact is that they will be seven upon whom the levy will be imposed, and they will be the important seven in this regard. I do not have the same sort of fears in this connection as has the noble Lord, Lord Burton. I do not think the Authority will make too high an imposition upon the industry, because clearly there will have to be agreement within the Authority, and the Minister will eventually have a say in this matter.
The noble Lord, Lord Wise, asked me why we do not make a levy on the merchants. Why do we not spread the net so that they have to carry part of the financial burden? I can only say here that this system is not designed specifically to help the merchants. It is designed to help the producers, and we are greateful to the merchants for coming into it, despite the fact that, as I have said, to some extent this scheme might militate against their commercial interests. So I think it would be rather unfair for us to try to devise a scheme that would put some charge upon the merchants who deal in cereals. The noble Lord also asked me about the financial surplus that there might be in one season. Certainly the financial surplus, if it was considerable or of any size, would be carried over to the next season. I should imagine that if the Authority find their levy is too high for the purposes for which it is required they will alter the levy for succeeding seasons. That would appear to me to be the sensible thing to do, and I am sure it would be done by the Authority.
985 Next we had the extraordinarily good speech of the noble Lord, Lord Digby. He has been congratulated by the noble Lord, Lord Inglewood, who is something of a connoisseur of maiden speeches. He has listened to many in the other place, and congratulated many people from time to time.
Why in Heaven's name does the noble Lord make that intervention when I am making an extraordinarily good point !—at least I thought I was. That is one of the little difficulties about these things. Nevertheless, I am sure that he has listened to many maiden speeches in another place, and indeed here, and would agree with me that this was an extraordinarily good maiden speech—indeed, he said so. I did not have the pleasure of knowing Lord Digby's father in this House, but I did learn, as a result of inquiries, that he was highly respected here and also in his own county, where he held very high office.
The noble Lord himself did what the House always likes: he spoke out of his personal knowledge of the problems we are discussing. How welcome this always is to this House or, indeed, the other House—that we should have people who are able to talk, and talk well, about the things they really understand. The noble Lord was fluent, easy, and he had a touch of humour in his speech, which we all appreciated. If I end with the usual statement, a cliché almost, that we shall be glad to hear him again in the future, I am sure that this is the case. We shall be glad to hear the noble Lord on any subject upon which he chooses to speak in the future, but surely upon this agricultural business which he knows so well. Having said that, I do not invite him to participate to-morrow. I gather that already we have 24 speakers, and to add to that list I would deprecate rather than welcome.
The noble Lord told us of the difficulties which arise from the fact that there can be a torrent of barley or wheat coming on to the market at harvest time, and then a trickle in winter, and a final rush at the end of the season. How well this describes the difficulties which this Authority is set up to mitigate. That is, as I understand it, the purpose of this 986 Authority, and if it does not work in that way we shall have to find some way of ensuring that we get over the difficulties consequent upon scarcity and glut.
The noble Lord is not satisfied with the forward contracting as it at present exists, and I can understand it. I gather that he lost a ton on some of his barley last year, purely as a result of forward contracting. He went on to welcome the, bonus arrangements for which this Bill provides. This, surely, is the whole point of the Bill: that we should provide for the difficulties which he knows, and about which he spoke so well. The noble Lord made a point about drying and storing equipment. I hope this Government will certainly encourage the provision, co-operatively, of drying and storage facilities. If I remember rightly, in past Bills, passed by both Parties, provision is made for covering this sort of problem. If not, I am fairly sure that it will be found in the White Paper as presented, which I dare not discuss or I shall have the noble Lord, Lord St. Oswald, on his feet. I believe there is no doubt that there will be a possibility of our ensuring that just such a thing as that about which he spoke will come to pass—that there will be a greater number of facilities for storage and drying on a co-operative basis, assisted by the Government. I hope I have not committed the Government too far in this connection, but I think not, because this is the sort of thing which we definitetly welcome.
The noble Lord, Lord Inglewood, was good enough to tell me of the difficulties that he feels are inherent in the Bill as at present drafted. He mentioned a point which immediately struck me when I first looked at this Bill, and that was the size of the Authority. I must admit that to take something that looks like executive action I like a body that is of executive size, not mass meeting size. The Authority here is undoubtedly a large one. This was considered by the previous Administration, and it has been further considered by this Administration. Having regard to the interests which must find representation upon this Authority, we feel that we cannot have an Authority which is smaller than the one which the Bill sets out to establish and provide. This, I feel, is the only answer I can make in this connection, while 987 recognising the points which the noble Lord made.
The noble Lord, Lord Inglewood, also referred to schemes for different parts of the kingdom. The original Bill, as it was presented to another place, said that there should be schemes for different parts of the country. As a result, largely at the intervention of the late Minister of Agriculture and Fisheries, Mr. Soames, in another place, to the Interpretation Clause was added that the parts should be England and Wales, Scotland, and Northern Ireland. I see the point that the noble Lord makes: that there is little difference in the growing, say, of oats as between the North of England and the South of Scotland. I should think that in a case like this the Authority, being made up of knowledgeable people, would not make separate schemes for oats for Scotland and England. If it did, it would do so only after taking advice and considering all aspects of this matter. I am not sure that this will wholly satisfy the noble Lord who, I think, is very much against the hiving off of Scotland from the general agricultural provisions which apply to England and Wales. The noble Lord nods his assent to this, and to some extent I agree with him. But, you know, this lot North of the Border are a pretty steady, difficult lot; and the noble Lord has been in the Ministry and knows well some of the difficulties that have to be faced in this connection! I hope I shall not get into trouble with the noble Lord, Lord Hughes, or the noble Lord, Lord Balerno, for having said that.
§ LORD CHAMPION
This provision is based upon precedent and, I suppose, if precedent has worked fairly well in the past you do not necessarily want an innovation in a Bill of this sort. The noble Lord, Lord Burton, supported the Authority, but he did not want it to be too much like the Potato Marketing Board. I am not at this moment going to defend the Potato Marketing Board. I have already spoken at some length in reply to points raised by the noble Earl, Lord Kinnoul. All I can say in this connection is that the potato growers would be in a pretty sorry position if 988 they did not have a Potato Marketing Board. I think the Authority which is proposed in this Bill is certainly a step in the right direction, and I feel fairly sure that your Lordships will support the Bill.
§ On Question, Bill read 2a, and committed to a Committee of the Whole House.