EGGS (GUARANTEED PRICES) (AMENDMENT) ORDER 1966 (Hansard, 17 May 1966)

§ BARONESS PHILLIPS
My Lords, I beg to move that the Eggs (Guaranteed Prices) (Amendment) Order be approved. This is a short and, I think, simple Order, the purpose of which is to amend in one respect the Eggs (Guaranteed Prices) Order 1963. As your Lordships will recall, the 1963 Order put into effect the changes in the guarantee system for eggs sold through the British Egg Marketing Board, announced at that year's Annual Price Review. Briefly, the arrangements are that the basic rate of subsidy, which is paid to the Egg Marketing Board, is the difference between the guaranteed price and an "indicator" price which is the price which the Board might reasonably be expected to obtain if supply and demand were in balance, both guaranteed and "indicator" prices being determined at the Annual Price Review.
The 1963 Order provides, however, that the basic rate shall be subject to certain adjustments. One of these, and the one which we are discussing now, concerns what happens when the Egg Marketing Board's actual selling price for hen eggs falls below the "indicator" price. It was recognised by all concerned in 1963 that it would be desirable to phase in the new system over a period of years, and it was therefore agreed then that the Government would continue to pay a proportion, although a diminishing 899 proportion over the years, of any deficiency between the "indicator" price and the Board's actual selling price. The 1963 Order specified the Exchequer's proportion of any such deficiency as 60 per cent. for 1963–64, 50 per cent. for 1964–65, 40 per cent. for 1965–66, and so on until, after the end of March 1969, the Exchequer's liability would have ceased. It was agreed, however, in 1963 that the working of the new guarantee arrangements would be reviewed during the third year of their operation, and this was done, in consultation with the farmers' representatives, as part of the discussions preceding this year's Price Review.
As your Lordships will recall, in the period since the new arrangements were introduced in 1963 there has been another important development in the egg marketing field. Following discussions between the Government, the farmers' unions and the Board, to consider what could be done to promote the more orderly marketing of eggs through packing stations and, by so doing, to bring supply and demand into better balance, it was announced in May, 1965, that the Board would introduce, on April 3, 1966, a system of contract marketing for eggs. It was recognised, during the review of the guarantee arrangements to which I have referred, that it would inevitably take some time for this new contract marketing scheme of the Board to get established and start to exert its full influence on the market. The Government therefore announced at the Review that, in order to assist the Board to stabilise producer's returns during the period before the contract arrangements could influence market prices effectively, they had decided to postpone for two years the reduction from 40 per cent. to 30 per cent. in their share of the deficiency which, under the 1963 Order, would have been made this year. In other words, during 1966–67 and 1967–68 the Government will continue to meet 40 per cent. of any deficiency, as they did in 1965–66. In 1968–69, by which time the Egg Board's new arrangements should have got fully into their stride, phasing out will be resumed. My Lords, the Government believe the change made by this Order to be in the interests of egg producers, it has the full support of the farmers' unions, and I accordingly commend it to your Lordships. I beg to move.

EARL FERRERS
My Lords, I thank the noble Lady for explaining this Order as lucidly as her colleagues have explained the previous Orders. The egg industry has been going through a certain degree of difficulty, and I think it is likely to go through more difficulty in the near future, not the least part of which is the adjustment which will be necessary for the new scheme by the British Egg Marketing Board for its egg contracts. Therefore I think this Order will be of help to the egg industry; it will know that at least for another two years the proportion of the deficiency borne by the Minister is not going to be reduced to quite the same extent as was originally proposed. But I am bound to say this. When the noble Lady, or perhaps I should say her right honourable friend, next produces an Order, I wonder whether she could persuade him to make things slightly more clear and less highly complicated both to the farmer and to the producer of eggs. This has really become an economist's heaven, because we have "indicator" prices, selling prices, deficiencies borne by the Minister and by the Egg Marketing Board; and it really becomes almost impossible for any farmer or egg producer to know whether his product is wanted or not and whether the final return to him is likely to be high or low.
When one looks at what is called the "Explanatory Note", it is difficult to decide what it is explaining, because it says: The reduction in the proportion of the difference to be borne by the Minister if the Board's average selling price is lower than the indicator price … and so it goes on. I found I had to read it through about five times before I could understand what it was saying and what it was explaining. So I hope the noble Lady will pass on that suggestion to her right honourable friend—that he should see whether it is not possible to get the payments which the Exchequer makes bear a little more relation to the farmer and what he is required to produce.

§ BARONESS PHILLIPS
My Lords, I thank the noble Earl and, having spent a lot of time trying to understand the position so that I could explain it to 901 your Lordships, I have every sympathy with him. I am most grateful that I have not been asked to explain the contract scheme. I will certainly pass on the comments made by the noble Earl.

EARL FERRERS
My Lords, if it is any comfort to the noble Lady, I might say that I received one of these contracts from the British Egg Marketing Board, which I think came in quadruplicate, and it was so complicated that I just put the whole lot into the wastepaper basket.

§ LORD SOMERS
My Lords, may I ask the noble Lady one question? Is there any possibility that in the future there will be a different guaranteed price for a battery egg from that of a free-run egg? Personally I will not touch a battery egg, and that is not merely because I object to the use of batteries, but also because of the utter tastelessness of a battery egg. As it is not unusual in most walks of commerce to have to pay more for quality, I wonder whether the noble Lady would not consider it appropriate in this case?

§ BARONESS PHILLIPS
My Lords, I thank the noble Lord. I also have an interest in this subject, in a different connection. Obviously I cannot at this moment give him a straightforward answer. I should think it would not be impossible to do this, but one difficulty would appear to be how to determine which egg has come from the battery hen and which from the free-range hen. We know that the label should give some indication, but this will ultimately depend on the retailer. I feel this matter will come up again in discussion in a different setting.