§ 3.32 p.m.
§ LORD HILTON OF UPTON
My Lords, I beg to move that the Draft Horticultural Improvement Scheme 1966, laid before the House on June 15 last, be approved. I hope, after listening to my noble friend, that this may bring a more sober note to this House. I do not have to remind noble Lords that horticulture accounts for about one-tenth of the total value of agricultural output in the United Kingdom. Therefore this Scheme affects a significant part of our agricultural industry. The purpose of the Scheme is to encourage further capital investment in British horticulture to raise its efficiency and reduce its costs, and to enable it to play its full part in the objectives of the National Economic Development Plan.
This is the third in the line of Horticulture Improvement Schemes. The first, in 1960, was designed to encourage primarily the better preparation and presentation of produce for market. Its scope was enlarged by the second Scheme of 1964—the current Scheme—which provided grants for the equipment needed to reduce the costs of production, as well as an extended range of equipment needed for preparing the produce for market. The Scheme had in mind the need to make home-grown produce more competitive with that grown in 784 comparable conditions abroad. These two Schemes, valuable as they were, did not seem to us to provide sufficiently for the changes that are taking place in the industry, which are at present important factors in its development. For example, the 1960 Scheme provided a grant for improving heating systems in glasshouses, but only in glasshouses already in existence at the date of the Scheme and already heated for two years; and there was no grant for the grower who wished to expand his business.
But, as we know, industries live by change; and horticulture is no exception. This was brought out by the examination of the industry which the agricultural Departments conducted in 1965, in consultation with the farmers' unions. The record of this examination, published last March, revealed some interesting facts. It shows that the industry is very much on the move. For example, in 1954, nearly a quarter of the glasshouse area was in the Lea Valley; in 1965 it was less than one-sixth. In the same period, certain Eastern counties had attained a predominant position in vegetable growing. Thus in 1954, the Holland Division of Lincolnshire had 15 per cent. of the national cauliflower acreage; by 1965 the proportion had nearly doubled. In 1954, 26 per cent. of the land under carrots was in my native county, Norfolk; in 1965, Norfolk had 42 per cent. of the carrots grown. What this means is that in the past ten years many growers must have increased the size of their businesses. New and possibly better land, in more favourable localities, must have been brought into production and, perhaps, less good or worn-out land has been put back to crops or grass. There has undoubtedly been a development in specialisation.
The Schemes of 1960 and 1964 have done much good. Growers have committed themselves to investment approaching £15million, of which a third will come from the Exchequer in the form of grant. Horticultural marketing co-operatives have also taken full advantage of the Schemes. But we now want a Scheme that will not inhibit change or place restrictions in the path of the progressive grower. So we are removing the provision of the 1964 Scheme that land, to be eligible for 785 grant, must have been used continuously for horticulture for at least two years; and we are also making grants available to the bulb growers and others who grow horticultural crops in rotation with other crops. We are extending the grants available to vegetable growers, at present limited to land managed on intensive market garden lines which involves a certain amount of double cropping, to the production of vegetables on a farm scale, including such crops as celery, whose growers have not hitherto benefited from the grants. The Scheme now before your Lordships' House achieves these results by omitting the definition of eligible land incorporated in the 1964 Scheme. A whole page of closely printed and carefully worded conditions has disappeared. I am sure that those in agriculture will be glad about this. Simplification is always a good thing; and the Scheme will as a result be far more flexible and intelligible to growers.
The main condition which remains is that at all times during the two years preceding application, the business must have occupied at least four acres of land (though not necessarily the same four acres); where the land is covered by glasshouses, light and so on, the area will be calculated very much as in the existing Scheme. The occupier of such a holding will be able, with the help of grant to make it better or, if he thinks fit, bigger. But I think we must retain this lower limit; otherwise we should, to all intents and purposes, be encouraging the creation of entirely new holdings rather than the improvement or extension of existing ones.
Apart from these broad changes in the structure and purposes of the Scheme, the main new features appear in the Schedule which has been rearranged in a more logical order. The most important additions are the erection of new glasshouses, mushroom sheds and other buildings in which produce is grown—as distinct from the replacement of existing ones. The 1964 Scheme required an acre of glass to be demolished for every acre of new glass erected with the aid of grant. Similarly, the making of watercress beds will now be eligible for grant where formerly the Scheme went no further than grant-aiding the replacement of existing beds.
786 I think I should say a word about new glasshouses. Many of our growers to-day are, I am sure, managing a larger business than they were ten years ago; and the same will no doubt be true ten years hence. But the fact that we are proposing to help the progressive grower to expand his business does not mean that there will be an excessive expansion in the size of the industry as a whole. Growers, after all, have to put up the greater part of the capital cost, which is substantial. In these matters we are satisfied that we can safely leave the matter to the commercial judgment of the growers and should not impose arbitary restrictions which may stand in the way of progress.
The Schedule now includes several types of machinery which, though their merits were appreciated, were excluded from the 1964 Scheme because of the fear that they might be diverted to non-horticultural uses. These are fork-lift and similar trucks, precision drills and machinery for stapling, stitching, tying and strapping containers for produce. It is important for its efficiency that the industry should have these tools. We have come to the conclusion that there is less risk than the previous Administration thought that such equipment will be sold for a profit by the grower who has received the grant. We are, after all, dealing with a responsible body of men. We shall, of course, satisfy ourselves before offering grant that the equipment is needed and will achieve economies, particularly in the use of labour. We do not believe that any grower, having achieved those economies, will be tempted to dispose of the machinery and revert to his old methods.
As will be seen from paragraph 4 and Part II of the Schedule, grants will continue for the time being to be available to horticultural marketing co-operatives. When the comprehensive system of grants to agricultural and horticultural cooperatives has been established, as provided in the Agriculture Bill now under consideration in another place, no more applications will be entertained for grants to co-operative bodies under this Scheme, as they will be fully provided for in other ways. The maximum sum available for these grants up to the summer of 1974 remains unchanged at £24 million, which may he increased to £27 million. Although 787 the response to the 1964 Scheme has been good, the sum of money provided in the Act seemed likely to be more than ample and this remains our best estimate of the cost of the scheme. So we are not at this stage makingfurther provision for the extra expenditure which the new Scheme is likely to generate. It is not easy at this juncture to estimate how much it will be. We shall see how we get on under the new provisions.
I have endeavoured to be brief and to the point. As I said at the beginning, horticulture makes an important contribution to the economy. It is important, in more senses than one, as will be apparent if one considers the vital need of our huge urban populations for ample fresh fruit, vegetables and—may I add—flowers. This Scheme is designed to encourage horticulture to develop freely in whatever direction the demand for its varied product requires, and to give financial assistance to the business decisions of efficient and responsible growers. I commend the Scheme to the House. My Lords, I beg to move.
§ Moved, That the Draft Horticulture Improvement Scheme 1966 laid before the House on June 15, 1966, be approved.—(Lord Hilton of Upton.)
§ 3.44 p.m.
§ LORD NUGENT OF GUILDFORD
My Lords, may I thank the noble Lord, Lord Hilton of Upton, for his interesting and informative explanation of this Order now before the House, and may I say a word of welcome to the Order, which will further extend the valuable Scheme started in 1960. Experience has taught, as the years have gone by, that the 1960 Scheme, which was mainly limited to marketing, did not go far enough. The 1964 Act was put on the Statute Book to make it possible to extend the grants to production activities, and the immediate response of growers to the widened Scheme, which enabled them to get grants for production activities, indicated that that was very welcome. As the noble Lord has explained to us, this Scheme now makes valuable further extensions which will no doubt be of great help to growers.
I notice that it conforms with the undertaking given by the Minister of Agriculture last February that the horticultural industry should contribute to a 788 selective expansion programme by providing a substantial part of our additional requirements of horticultural produce which can be grown here; in other words conforming with the objectives of the National Plan. This I very much welcome. In some ways I welcome this without qualification, because, as the noble Lord rightly told us, much change is taking place in the world of horticulture at present and expansion of growers' activities, whether intensively or in field work, can well be the high road to greater efficiency and lower labour costs. Certainly in regard to some rotational practices it is very desirable to bring in increased acreage in order to get the best kind of practices for growing the crops concerned, and this comes in particularly in regard to field vegetables. All these limitations are now to be removed.
There is one aspect of the Scheme which raises some anxiety in my mind, and I should like to put this point to the noble Lord. The grant-aiding of expansion, which this Scheme now provides for, welcome as it is in the ways I have described, could, if it encouraged an undue amount of additional production, lead to surpluses, which would be to the detriment of all existing growers. I am sure that that is not the intention of the noble Lord with his great knowledge of the problems that exist in horticultural holdings. This seems to me to be a point of great importance. The Order under the 1964 Act tried very hard, by defining the limitations, to avoid this danger.
The noble Lord mentioned that there will now be grants for new glasshouses. This is very desirable, there having been great technical improvements in glasshouses in recent years, and it will be of great help to those growers concerned. I should like to see more new glass going up, but glasshouse crops are extremely expensive to grow, and if as a result of this we were to get surplus crops from glasshouses, whether in vegetables or flowers, we should at the end of the day have done the growers more harm than good. I noted that the noble Lord told us that he felt that the commercial judgment of the growers would be sufficient to ensure that a surplus did not occur, and it is true that the building of new glasshouses is not something to be done lightheartedly. It would probably cost at 789 least £20,000 an acre, and the grower has to put up two-thirds of the money. Nevertheless, I feel that your Lordships might be glad to hear a further word from the noble Lord as to what safeguards he and his friends foresee will be used administratively to make sure that, not only in respect of glasshouses but in administering these new and more flexible grants generally, we do not encourage a situation where some kinds of production are unduly expanded with the result that we get unmanageable surpluses.
The horticultural industry is a highly competitive one, and profit margins are extremely small. Many small growers are getting a living out of it by working very long hours and with great skill. For my part, I am delighted to see any measure which will help them to make their business stronger and more efficient and will give them a better living. I join with the noble Lord in acknowledging the great service they do the nation in providing us with a supply of fresh fruit and flowers which are unrivalled in any other country of the world. In that spirit, I warmly support this measure on behalf of my noble friends. But I should like to hear a further word from the noble Lord on the safeguards that he might apply to avoid a surplus occurring in any particular line.
§ 3.50 p.m.
§ LORD HILTON OF UPTON
My Lords, I am very grateful to the noble Lord, Lord Nugent of Guildford, for the welcome he has given to this Scheme. I am sure we all welcome anything which is going to benefit such an important industry as horticulture, and I am also sure that this Scheme is going to do just that. It is nice to get this welcome, which was almost, but not quite, unqualified.
In reply to the point made by the noble Lord, that in the expansion which the Scheme will encourage there is a danger that growers might go too far, I think that the noble Lord may have a low opinion of the economic judgment of horticultural growers. After all, they will be investing the majority of the money, as well as receiving a grant from the Government, and I am sure that they are not likely to do this rashly. They have in recent years had experience of a surplus of horticultural produce, and I 790 honestly believe they have learnt a great deal in this connection from past experience. Our aim is to create the conditions in which expansion can take place, and it is up to each individual grower to decide for himself what the opportunities are, and when and how much it is wise to invest. I have every confidence in the judgment of our growers.
I believe that this Scheme will be welcomed by all concerned in the horticultural industry. I understand that the N.F.U. approve the Scheme. Their one complaint is that it is too slow. I hope that your Lordships are going to make sure that we do not hold up this Scheme any longer, and that we shall give it our full support this afternoon.
§ On Question, Motion agreed to.