AGRICULTURE BILL

HL Deb 16 February 1967 vol 280 cc441-84

4.38 p.m.

Order of the Day for the Second Reading read.

LORD HILTON OF UPTON

My Lords, I beg to move that this Bill be now read a second time. Your Lordships have waited quite a long time for this Bill, which seeks to do many things to benefit agriculture and those engaged in it. Earlier in our discussions this afternoon it was suggested that the large attendance was because of the interest of your Lordships in local government. I was hoping it was because of your Lordships' great interest in agriculture and this Bill. After all, agriculture is still one of the most important, if not the most important, industries in the country. Time is getting away and, if it is acceptable to your Lordships, I feel that my best course is probably to traverse the main provisions in broad outline without detaining your Lordships too long. Then, at the end of the day, I am sure that my noble friend Lord Walston will be happy to respond to questions on which noble Lords may wish to have further enlightenment.

Part I of the Bill implements the policy set out in the White Paper on the Marketing of Meat and Livestock. Over the years, the House has considered a series of Reports by Committees who have inquired into this complex industry, the most recent being the Verdon-Smith Committee, which produced a most comprehensive account of the industry's problems. Various recommendations have been made by these Committees, but all have been convinced of the need for improvements.

The Bill provides for the establishment of an independent Meat and Livestock Commission charged with a wide range of functions to bring about improvements in efficiency over the whole field, from farm to consumer. The Commission will be assisted by committees representing producers, distributors and consumers, who are all, of course, vitally concerned with its work. Clause 2 provides for these committees to be consulted on any matter affecting their interests; they may initiate proposals and make representations to the Commission; and they may be employed by the Com- mission in an executive capacity. They will therefore actively participate in the development and execution of the Commission's policies.

Provision for the Commission's functions is made in Clauses 3 to 8 and in Part I of Schedule 1. Producers will be provided with a full range of livestock improvement services and will be helped in a number of ways to produce the type of product their customers want and to market their stock to the best advantage. Those engaged in marketing and distribution will benefit from activities applying to all stages in the marketing chain, from the auction and slaughterhouse to the retail shop. These include the development of research and advisory services and the provision of carcase classification and improved market information. For the consumer, provision has been made in Clauses 7 and 8, and elsewhere, to provide far better opportunities to assess, and discriminate between, the products on sale in the shops. The Commission will take over the important work which the Pig Industry Development Authority has been doing and the Authority will then be dissolved. Your Lordships will no doubt wish to pay tribute to the Authority's work, which will, we hope, be continued and expanded by the Commission, with the minimum of interruption and disturbance of the staff.

In addition to the functions specified in the Bill, the Government have thought it advisable to provide for the possibility that as the industry develops—and it is changing very rapidly at present—a need may emerge for new services or other changes going beyond what is at present proposed. Clause 9 accordingly provides the necessary machinery and powers to permit the Commission to submit schemes for this purpose for ministerial and Parliamentary approval. Your Lordships will know that these powers have been criticised as being too wide, but they are no wider than is necessary to achieve their purpose and they are accompanied by very substantial safeguards, which have been strengthened by Amendments made in the other place, and which in our view will ensure that no scheme could become law unless it commanded a very wide measure of support.

On the question of finance, the Commission will be reimbursed for work done specifically on behalf of the Government, and may be assisted by the Exchequer to meet the initial cost of new projects. The main source of finance will, however, be a levy on the industry in Great Britain. There have been some very exaggerated estimates of the possible size of this levy, and it may help your Lordships if I repeat that a levy on all stock at a level comparable with the present P.I.D.A. levy on pigs will probably be adequate. Even if the whole cost of a levy of this order were passed on to the consumer, it would represent less than a farthing per lb. on the average retail price of meat; but in any case we should expect that in the long run improvements in efficiency resulting from the Commission's activities should more than outweigh the cost of the levy.

In short, my Lords, the provisions for the establishment of the Commission offer a real opportunity to obtain greater efficiency in the meat and livestock industry which will be of substantial benefit not only to those engaged in the industry but also to consumers. Before leaving Part I of the Bill, I should add that provision is made in Clauses 10 and 11 for the extension of the calf subsidy arrangements to permit subsidy payments on stock certified on a deadweight basis, and in Clause 12 for the beef cow subsidy which was announced at the last Annual Review.

I turn now to Part II of the Bill, which provides for new schemes to improve farm structure, a new and extended Farm Improvement Scheme and new grants to encourage agricultural investment. I am sure there will be a general welcome for the farm structure provisions. Half the agricultural holdings in this country support farm businesses smaller than one man could run full time, and another quarter require less than the equivalent of two men. Of course many of these holdings provide a reasonable living for the occupier—and, indeed, will benefit from the provisions of this Bill. The Government have made it quite clear that they are fully alive to the importance of the small farmer and the family farm. I am particularly pleased about this, because when I was Member of another place I was regarded as one of the spokesmen for the small farmer. I am glad that my Government have made it known that they, too, are still keenly interested in the welfare of the small farmer. No such farmer will be compelled to make use of this Part of the Bill. The Government's aim is to encourage the voluntary amalgamation—and I emphasise the word "voluntary"—of such holdings with other land to make farms which offer full scope to a modern farmer, defined in this Bill as commercial units. If that cannot be done in one step, it is proposed to assist the formation of intermediate units, capable of employing one man's time. There are also to be grants for beneficial boundary adjustments.

This Part of the Bill provides for 50 per cent. grants toward the incidental expenses and remodelling works occasioned by an approved amalgamation or boundary adjustment, and enables loans to be made toward the balance of these expenses and the cost of buying land. When progress would otherwise be slow, the State may buy farms by agreement and incur losses for the purpose of improving farm structure. For farmers dependent on uncommercial units and prepared to relinquish them for amalgamation, there is provision for lump sums or annuities to help them to resettle elsewhere or to retire from farming. To prevent the reversal of amalgamations assisted in these ways, Schedule 3 will ensure that the land stays together in agriculture for forty years. The Farm Improvement Scheme, which has contributed so much to the modernisation of basic fixed equipment on existing farms since 1957, has been given a new lease of life. A further £80 million is provided for the new one-quarter grants, which cover a wide range of occupier's improvements and equipment. One-man farms will still qualify for these grants.

This Part of the Bill also provides (in Clauses 31 to 34) for the new investment grants for agriculture to replace the investment allowances which were withdrawn on January 17 last year. The new incentives have been concentrated for agriculture, as for industry, where they are likely to be of the most value. They take the form of the following three grants. First, there is to be a grant of 10 per cent. on fixed equipment, fixed plant and machinery and long-term improvements to land which do not attract other grants. This will, in particular, assist the specialist livestock producers who may be unable to qualify for grant under the Farm Improvement Scheme. Secondly, there is to be a grant of 10 per cent, on new tractors and harvesters, which are two vital and widely used items of equipment.

Finally, there will be a supplementary grant of 5 per cent. to grants for approved work carried out on farms under the Farm Improvement Scheme, on horticultural holdings under the Horticulture Improvement Scheme and, in England and Wales, for grants under the Farm Water Supply Scheme. As the Government recently announced, an additional incentive is to be provided for expenditure between January 1, 1967, and December 31, 1968, to correspond with the increase in industrial investment grants announced in December. The grant on tractors will be raised from 10 per cent. to 15 per cent., and on fixed equipment from 10 per cent. to 12 per cent., for expenditure during this period.

Part III of the Bill is concerned with the hills and uplands. There are three main proposals here. First, a new land improvement scheme designed to increase the productivity of hill land without being tied to the present farm structure; for this the proposed rate of grant is 50 per cent. Secondly, under Clause 42 the Government, in fulfilment of their declared intention, are seeking powers to place the hill livestock subsidies on a permanent footing. The third major proposal is that for certain areas in the hills, which have special problems and difficulties, new executive bodies—to be known as Rural Development Boards—should be established. These will be small independent bodies who will be mainly people with experience of special knowledge of forestry and agriculture. They are required to consult with local authorities and other interested bodies in drawing up a programme for their area. This will provide for the co-ordinated development of agriculture and forestry, and assurances have been given that they will consult private forestry interests as well as the Forestry Commission. The Board will be able to put up a programme of financial assistance designed to help in the implementation of their plans. They will encourage and assist the improvement of farm structure in their area, buying land for amalgamations where appropriate. Although they will no doubt work very largely by advice and persuasion, nevertheless to enable them to carry out their tasks effectively it is thought right to give them powers to control land disposals and tree planting that could prejudice their programme. These powers will be exercised subject to the many safeguards for the individual written into the Bill, such as appeals to the Minister against decisions and to the Lands Tribunal on price.

The Government propose to set up only one or two boards in the first instance, and then proceed in the light of experience gained from their operation. Your Lordships will note that before a board is set up an Affirmative Resolution of each House is necessary. I am sure these new executive bodies have a most useful role to play, and I am confident that they will make a real contribution to the re-development of difficult areas in the hills.

Part IV of the Bill provides for the setting up of the Central Council for Agricultural and Horticultural Co-operation to promote and develop co-operation generally throughout the United Kingdom and for the making of a new, comprehensive scheme of grants to be administered by the Council. The scheme will incorporate the various existing co-operative grants, extend them as equally as possible to agriculture and horticulture, and provide for the first time a wide range of assistance for co-operation in production. We are particularly anxious to develop co-operation in production. We believe that such co-operation can prove to be an important way in which smaller producers may increase their viability, and in which producers generally can raise their productivity. These proposals have been widely welcomed, both in another place and throughout the country generally, and I feel sure that they will commend themselves to this House to-day.

Finally, I turn to the miscellaneous but very worthwhile provisions in Part V of the Bill. I am sure that the House will welcome the credit provisions in Clauses 62 and 63, and also the grants to encourage better management through the use of adequate business records in Clause 64. The technical progress of the industry in recent years has been quite remarkable, but this must now be matched by improvements in management if the benefits are to be fully exploited. Then Clause 65 enables the introduction of livestock health schemes. I am personally very glad that, by Clause 66, we are helping the conditions of life of our farm workers, by the introduction of a payment-during-sickness scheme. I am sure this will be welcomed by all farm workers.

There we have the Bill. It would be idle for me to pretend that this is not a great day in my life, to be moving the Second Reading of this important Bill. I believe that the Bill in its various provisions, will be of genuine lasting benefit to an industry which so many of us rightly hold in such high esteem, and which in recent years has such a very proud record of increased production. My Lords, I beg to move that the Bill be now read a second time.

Moved, That the Bill be now read 2^a. —(Lord Hilton of Upton.)

4.57 p.m.

LORD NUGENT OF GUILDFORD

My Lords, I should like to thank the noble Lord, Lord Hilton of Upton, for the felicitous manner in which he has moved this Agriculture Bill this afternoon, and for the admirable, comprehensive and lucid description which he has given us of its contents. I can certainly join with him in agreeing that it is a useful Bill and has many good things in it. Indeed, there are only a few points in it on which I shall want to criticise it on the Committee stage, and I should tell the noble Lord now that my criticism of the Bill is directed not so much to what is in it as to what is not in it. I have warned the noble Lord, Lord Walston, who is going to reply to the debate, that I should like to go rather wider than the contents of the Bill itself, because I believe that the benefits in it will not materialise unless something can be done for the basic structure of the industry.

It is, I think, germane to remind your Lordships that this Bill started its life in 1965. It is, in fact, a 1965 model, and what we want to-day is a 1967 model. Conditions change so fast to-day—and particularly have they changed in the last three years—that some basic new legislation now, at a time when farmers are hard up, when production is slowed up and when Europe is squared up, is required. I advise noble Lords opposite that something more fundamental than this Bill is urgently wanted. What is wanted, I believe, is a complete "rethink" of the economic foundations of the industry, including the very structure of the price guarantee by deficiency payment system. In our agricultural debate in this House last summer I urged the need for a fundamental overhaul of policy on these lines, and I believe that the intervening six months have confirmed the wisdom of that advice. The autumn collapse of livestock prices, and now the Prime Minister's initiative for entry into the Common Market, I think confirm the need for action—and urgent action—now. I only wish I could see some signs of grace in the Ministry of Agriculture that this was forthcoming.

However, let me begin by a brief comment on one or two of the major features in the Bill, and then, if I may, I will pass on to what is not in it. I have a special welcome for Part IV of the Bill, which sets out the measures to encourage co-operation in the farming industry and provides for the setting up of the Central Council for Agricultural and Horticultural Co-operation. This, I agree with the noble Lord, Lord Hilton of Upton, is a major step along the road of development of co-operation, in particular in the field of production and marketing. During the past four or five years I have been personally associated with this work as chairman of the Agricultural Market Development Committee, which I think might fairly be claimed to be the prototype for this new Central Council. Perhaps I should declare an interest in this Part of the Bill—or, as the effect of this Bill is to remove more than half the Agricultural Market Development Committee's functions, perhaps it should be a disinterest that I declare. I should like to pay a tribute to the progenitors of A.M.D.E.C., because I think it has done very useful work in this field. It was founded on the initiative of my right honourable friend Mr. Soames, when he was Minister, jointly with the three National Farmers' Unions. They set up this strange, hybrid body, with the administration paid for by the Farmers' Unions, the membership coming from the Farmers' Unions, and the Ministry providing £1½million worth of grants, to promote better marketing.

In practice, our experience has shown that our main activities have turned out to be to encourage and help farmers forming groups, co-operatives and companies to improve the marketing of their produce. The most important lesson that I suppose we have learnt in the last four or five years is that you cannot make any useful progress in the improvement of the marketing of agricultural and horticultural produce unless you turn to its production as well; and, to their eternal credit, the Ministry of Agriculture, working with us in this task, have been most flexible in the administration of these grants and have allowed us to go far into the field of production with the broad purpose of improving the actual marketing of the products. It has been a very fruitful partnership, and I believe I am only stating what is fair and true in saying that the A.M.D.E.C. has been the prototype of this new statutory Council.

This new provision can, of course, do much more. It provides greater powers, greater grants and wider scope, and it can do a great deal to help especially the small and medium-sized farm to make itself viable in the conditions of to-day. But I should record in passing that our experience is that it has usually been the larger farmer who has seen the advantage of combining with his neighbours for this purpose. It has been the smaller farmer who has followed his example and reckoned that if it was a good thing for the big chap, it would probably be a good thing for him too, has then come in afterwards.

First, by combining for marketing it puts a group of farmers (a small group, as a rule) into the position of being a bigger, stronger seller, able to make contracts and, what is even more important, to keep them, and to get beyond the farm gate a bit nearer to the consumer who is going to consume the food, and therefore able to learn more precisely what the consumer wants. On the production side, to which the noble Lord, Lord Hilton of Upton, referred, we have a number of examples of small groups of farmers in the same neighbourhood who have integrated their production together, thereby saving machinery costs and being able to even out the flow of their produce to market, to redesign production the better to meet consumer taste by changed breeding programmes, by altering cropping programmes, and so on.

But I think I should just say this word of warning in passing: that every group of farmers who join together in this way are not immediately going to make a fortune. The road to success is a hard one. Success is possible only where there is the right structure and the right management and where there is 100 per cent. loyalty by the members of the group concerned. The result then will be that there will be lower production and marketing costs, and there will be a better return from the market, because they will more precisely meet the consumer tastes that they set out to serve. The Central Council can do just these things. They can give guidance on the right kind of structure to be formed by a group wishing to start and they can give them grants; and I believe that they will do a valuable job over the years. They certainly have my best wishes.

Turning now to Part I of the Bill, dealing with the Meat and Livestock Commission, I can join with the noble Lord, Lord Hilton of Upton, in welcoming the setting up of this Commission. It is, of course, based on the Verdon-Smith Report which was made to the last Conservative Government. To me, it seemed a thoroughly sound Report: a very good Report indeed. In fact, what this Meat and Livestock Commission do is to confirm that the existing system of fat stock marketing, which is based mainly on live auctions, is accepted as the best that we can do. The new Commission are there to guide and help its development, as the noble Lord has described to us. It is perhaps interesting to record that this settles, at any rate for the time being, the great post-war debate about meat marketing in which noble Lords opposite and I have often taken part, as to whether we should continue with the live auctions on the hoof or sale on the hook by grade and dead-weight, usually suggested by the Producer Marketing Board.

Of course, the existing system is very easy to fault—it is full of defects—but it has the ultimate virtue that it works. It works to get a highly-perishable commodity quickly on to the counter in good condition. My own view is that Her Majesty's Government have acted rightly to base their legislation on the Verdon-Smith Report, and that this is the best way to proceed. Dead-weight sales will develop on their merits alongside the live markets. In addition, the Commission will have the difficult job of establishing grades—much easier to talk about than to do. They have a useful long-term role to play, and I certainly wish them well. I must add this critical note: that, despite the explanation of the noble Lord, Lord Hilton of Upton, I am still very doubtful whether Clause 9 is not giving much too much power to the Commission. But we can discuss that matter on Committee.

My concern in this field generally is more with the livestock producers themselves, who are now so very seriously depressed. My comment on Part III, the hill land provisions, is similar. They are useful measures, but their value will not materialise unless the confidence of the livestock industry can be restored. The cattle simply will not be there. In passing, I must warn the noble Lord, Lord Hilton of Upton, that we shall have some critical comments to make about the treatment of private forestry in these hill areas when we come to the Committee stage—indeed, some of my noble friends may have some critical comments to make to-day.

The reaction of the farming world to this Bill is slight, because its immediate impact—I stress the word "immediate"—on the basic economic problems of farming is also slight. The grants for farm improvements in Part II and the new investment grants are certainly substantial and very important, but they are no more than the existing provisions of the aid served up in a new form. The farm structure grants to which the noble Lord referred are, in my judgment, mainly sociological, but I certainly welcome them, such as they are.

Now I should like to turn to make a comment on what is not in the Bill: that is, what I believe to be the necessary measures to restore the economic health of the industry and to enable it to meet the nation's needs to-day and indeed tomorrow. I have three major reasons for reviewing the system of price guarantee by deficiency payment in this country. First, and by far the greatest, is, of course, the Common Market issue. If we enter the Common Market we know that our system of deficiency payments must go and that we must change to a system of minimum import prices and levies. But after last autumn's experience we have now learned—and I sincerely hope that noble Lords opposite have learned—that even if we do not enter the Common Market the repercussions of the formation and development of the Common Market agricultural policy will still necessitate a change. If we do not make such a change, we shall suffer again and again from price collapse, due to temporary influxes coming on to our own market.

In the meantime, the Prime Minister is going round Europe assiduously wooing the Common Market capitals for Great Britain's entry and stressing that agriculture is our main problem; so that many people in Europe now must know the Prime Minister's policy for solving this problem, or at any rate the outline of it. Is it not time—I put this question to the noble Lord, Lord Walston, whom we look forward to hearing answer our debate—that the Government told our farmers here what is proposed for them? After all, they are the people who do the business. The silence of the Minister of Agriculture on this matter is positively deafening. I hope that the noble Lord, Lord Walston, will give us to-day some indication of Government thinking on this matter. It would also be of great interest to the whole farming world outside—although I appreciate that a statement here could hardly expect to get such good publicity as that of the President of the Board of Trade in a private meeting yesterday.

My second reason for reviewing the deficiency payments system of guarantees—and this is a very cogent one within the industry—is that the continuous postwar expansion of production has stopped; and I believe it has stopped in such a way that it will not recover without some new approach. The December returns for the industry, which have just been published, confirm this. I should like to give just one quotation from the market report published in last week's Farmer and Stockbreeder. Under a headline of "No confidence anywhere", it reads: A picture of almost unrelieved gloom is presented by the December returns for England and Wales. They show that there is a complete lack of confidence in every major section of the industry. Sheep numbers are falling for the first time for many years. The expansion in the beef-breeding herd appears to be levelling out. The dairy herd is not rising as expected. Numbers of young cattle have turned downwards. And so it runs on.

To that statement I would add that the overdrafts for the industry have now for the first time exceeded the figure of £500 million. Perhaps I should declare an interest in that, too—I should be happy to be able to do so. But, to be serious, the industry is evidently seriously short of cash. I hope that the noble Lord, Lord Walston, when he comes to wind-up will give us the forecast of the Ministry of Agriculture for production for the year 1967–68, the coming year.

Thirdly, my Lords, there are production problems in each commodity section, some worse than others. By far the worst is in the livestock industry. Let me just outline the problem the livestock industry had to meet. Last autumn the market collapsed; and the important point to notice is that the collapse was due to the policies of the Common Market countries. They each raised import levies on cattle up to £4 per live cwt., or about £40 per live beast. The result was that consignments of cattle for meat due to these countries were immediately switched to wherever else they could go—the only other place being here. A large Argentine consignment intended for Italy was switched to this country, and a considerable number of Irish cattle, also intended for Europe, were similarly switched here. I should say, in passing, that the position of Irish cattle, which normally we welcome here, has greatly exacerbated the collapse of our market. The export subsidy which the Irish Government is now operating has undoubtedly worsened the position, and the result has been that we have had some 18 per cent. more Irish cattle coming on to the flooded market here.

Finally, the export of British fatstock to the six countries of the Common Market was stopped; so that this balancing trade was ruled out. The result of all this was that cattle prices here fell by about £3 per live cwt., or £30 per beast—a price about £20 per beast lower than would occur on a normal market in the autumn. Sheep prices fell almost as badly. The price guarantee system is of some help; but it was not able com- pletely to protect the farmers from this fall; especially as the abatement payment worsens the position. It remains to be seen how much the Minister's undertaking to revise this will help. In the store markets, which influence the future, the prices followed the fatstock prices—and there is no price guarantee to help there. To complete the picture, the disincentive to pig numbers has been so sharp that there is now a serious shortage, and a number of bacon factories are in danger of going out of business for lack of through-put.

My Lords, the total effect of this has been that our fatstock industry has suffered the most severe set-back since the war. The seriousness of this arises from our growing dependence on home supplies for our meat. To-day, over 70 per cent. of all our meat is home-grown, compared to the pre-war figure of 46 per cent. During the next five years, inevitably, imports of meat will continue to shrink—especially, I would say, beef from the Argentine, for after that time, I think, we shall not get more than the occasional consignment. New Zealand lamb and Danish bacon will continue to come here in large quantities, but the increased demand from the newly affluent countries will almost certainly increase the price that we shall have to pay for our meat and further reduce our share of it. The present market glut is therefore undoubtedly temporary, and so it is of vital importance for our nation, for our consumers, that as imports decrease, production from our own farms should rise steadily. But exactly the reverse is happening. The set-back last autumn was sharp enough to upset the confidence of the industry. The December returns, the facts that I quoted from last week's market report, prove this.

The rhythm of the industry has been upset, and calves which should be reared-on to make more meat in two years' time are still going to slaughter. Far from getting an expansion in 1968–69, we shall get a reduction in the home-produced supply of meat. For the past century we in Britain have had the benefit of cheap and plentiful supplies of meat, based on cheap imports acquired from all over the world by the enterprise of our own merchants. The trade started from America soon after the Civil War, and it is interesting to note that by 1880 the first frozen beef had arrived in this country from Australia. It was sold here at 5d. per lb.—and even then it gave 150 per cent. profit to the shippers. Happy days! But the result here has been that for a long time, for several generations, the livestock industry has survived as a by-product industry: profit margins have been slender, or non-existent.

There is an old joke about three ways of losing money. The quickest is horse-racing; the most pleasant, wine and women, but far the most certain is by fattening beef. In post-war years successive Governments have tried to change that tradition. They have increased prices, and improved the profit margins, but there is still very little profit in the fatstock business, even if everything goes right. If things go wrong, as they did last year, there is no profit in it at all. It is significant that the Common Market countries are fixing their target price for carcase meat at a level which is about one-third more than ours. So market stability, my Lords, is fundamental if we want to get our production increasing, and better returns: if we are to give producers a sufficient return to make a profit out of it.

I hope that noble Lords opposite will bear this point in mind and will take note of the fact that Britain is probably the only open market for meat left in Europe, and possibly in the world; so that if there is any glut at any time, it will come here, unless we protect ourselves. The right way to do that, and to give a fair return to producers is to use the European system of target prices and import levies, and set the target prices at a sufficiently high level to give producers a fair return and a fair living. I hope that Her Majesty's Government will take immediate steps, which they can do, to reconvene the Meat Study Group, and to co-ordinate the phased imported supplies with home production. This system worked very well for cereals, so that at any rate in the interim, until they can move on to a general policy, they can do something to give the necessary stability to this market.

Another section of the livestock industry which needs a change is the poultry industry. It is a vast modern industry, turning over some £270 million a year and bringing to our tables, without a penny of subsidy, 400,000 tons of the cheapest meat there is. I should declare an interest in the poultry industry, as I keep some chickens. A simple change is needed in the poultry industry, and the industry has done its homework for the Ministers. The change proposed will involve no cost on the Exchequer: it is simply a change in the marketing system, involving the abolishing of the lion stamp on the egg. At present, we have the ridiculous anomaly that the unmarked eggs which by-pass the official system make continuously 6d. to a 1s. a dozen more than the guaranteed official egg. A series of odd reasons, and un-reasons, account for this, including the superstition of a great many housewives; but if the lion mark were removed, the premium would quickly disappear and this would be to the benefit of all concerned. The whole industry wants the change, the Egg Marketing Board has worked out a viable scheme for doing it, and I hope that the Minister will be able to say something encouraging about the prospect of it getting done.

Even in cereals, my Lords, the most profitable part of the farming economy, there are warning lights. And I am sure the noble Lord, Lord Walston, with his great experience of farming in the Eastern Counties, will know that the profit margins have been tightening. In fact, the wheat price shows a net reduction of 20 per cent. over the last ten years, against continually rising costs. The result has been that farmers have continuously searched for economies in production, and this has undoubtedly led in sonic cases to dangerous practices of husbandry and of continuous corn growing. I dare say that the best land could stand up to it, but I am sure that a great deal of the land growing corn cannot do so. There is an urgent need for a new break crop, possibly rape, and I hope that in this Review it may be possible to find something to encourage that. In the long term this is urgently necessary.

My Lords, let me say this, in conclusion. With the price negotiations in progress, it would not be fair for me now to press Ministers in detail on the financial position of the industry. I will therefore confine my observations to saying that all the signs indicate that profit margins have been pinched too hard in the last year or two for the long-term good of the industry. I think the review I have made also indicates that for both internal and external reasons the present system of price support by deficiency payment has had its day and is no longer giving the industry the stability and a fair living that is necessary. So a change to a system which maintains price levels by import controls is overdue. In advising your Lordships to give a Second Reading to this Bill, which I emphasise, is a 1965 model, I must earnestly advise Her Majesty's Ministers to bring forward a further Agriculture Bill, a 1967 model, which will make these urgently needed changes.

5.26 p.m.

LORD HENLEY

My Lords, this 1965 Bill has been going on so long that I thought that I had already spoken to it. In fact, I said so to the noble Lord, Lord Nugent of Guildford, the other day, but he reminded me that it was only in another place that it had already had two Second Readings. However, having got to the Second Reading of this very old Bill at last, I am delighted that the noble Lord, Lord Hilton of Upton, so much of whose life has been spent in various aspects of agriculture, should be moving the Second Reading in this House.

Although I have not in fact spoken already to this Bill, over the last year we have spoken all round it. We spoke of the Price Review on that part of the Bill, the new cow subsidy, which was introduced, and we spoke on the problems of agriculture in the most interesting debate last June which was initiated by the noble Baroness, Lady Elliot of Harwood. To-day, the noble Lord, Lord Nugent of Guildford, has spoken not so much to this Bill as given us a very interesting dissertation on the problems of agriculture as he sees them. I am bound to say that I agree with a great deal of what he said. Therefore, before I go on to discuss the Bill, I wonder whether I might make one or two comments on what the noble Lord said? What he said, I think, amounted to a belief that the Bill is really irrelevant to our problems at the moment, and that it is out of date.

LORD NUGENT OF GUILDFORD

My Lords, may I interrupt the noble Lord? I certainly would not say that this Bill is irrelevant. What is in it is good, but it is not sufficiently fundamental to deal with the basis of the industry.

LORD HENLEY

My Lords, I take that point, and perhaps I over-stressed the criticism of the noble Lord. What in fact he is saying is that in this Bill there is no attempt to consider the fundamental problem of agriculture, which is really the question of what we produce in this country and what we import. There is no attempt to reconsider the corollary to that central problem, which is how we support the industry; whether we do it by subsidies, which we suspect is a cumbersome process with the money going into the wrong pockets, or whether we start thinking again in terms of doing it through the price of the end product. I agree with almost everything that was said by the noble Lord, Lord Nugent of Guildford, in this context.

My Lords, I sympathise with the Government very much for not having yet brought in a Bill to deal with these problems. Although we have been talking about these problems now for years, and with increasing urgency in this last year, this is a problem which is so fundamentally different from that with which we have been faced before that I sympathise with the Government in not wanting to tackle it yet. But this, my Lords, is something which we must face. It is a problem which we have been saying is urgent for the last two or three years; yet at the same time we say that this is such a big change that we cannot really contemplate it now. We are getting into the dangerous situation in which the agricultural set-up is becoming provincial and out of line with what is going on in the rest of the world. We simply must face up to these two fundamental issues.

So far as the Bill itself is concerned, the noble Lord, Lord Nugent of Guildford, has said that it was originally introduced at a time when agriculture was still doing well, that during the last two years we have had a struggle to keep going, and that, to that extent, the Bill is out-of-date. I accept that. The Bill is meant to fit in with the National Plan, but that Plan was put forward two years ago. All the major aspects of the Bill are a jolly good try to solve problems which have been with us for a long time. I do not know how far they are going to work. We welcome the Meat and Livestock Commission. This does not go so far as some farmers would like in strengthening their position, though it may go too far for others concerned, like the butchers. But in general I accept the Commission and think that it is likely to do well.

I am rather keen on Clause 9 and its associated clause, Clause 2, because I think that these may be fruitful. The Commission are going to produce new ideas, and they will do so in consultation (under Clause 2) with the industry. This may lead to useful developments in the way we organise the marketing of fat-stock. So I welcome Clause 9, in spite of the criticisms that have been levelled against it.

I welcome two other provisions in Part I of the Bill, the extension of calf and beef cow subsidies, which came in with the Price Review. I think that the support structure outlined in Part II is a laudable attempt to deal with a problem which has been with us for many years. I do not know whether this will work, but it is as good a shot at it as any. It has to work against the existing small farming schemes, which pull in another direction, but because certain aspects of Government policy pull in another direction that does not mean that either one or the other is bad. I do not know whether the Government's suggestion of voluntary amalgamation will work or will go faster than market pressure in bringing these about, but it is a good try. Landlords always have the problem that, when they amalgamate two small farms, they may find the cost of amalgamation in terms of capital equipment is not less than the two farms separately. The problem is far from a simple one, as owners of agricultural property will recognise. Speaking the other day on the Industrial Reorganisation Corporation, I suggested that the Corporation could become a landlord and try their hand at dealing with the problem of these small farms, rather on the lines of the National Trust. This may be rather a fanciful idea, but I put it out then, and I repeat it now.

Part II provides for improvement and investment grants. I welcome the enlarged scope of the farm improvement scheme, and I am prepared to settle for the grant being only one-fourth instead of one-third, though, of course, there is the 5 per cent. supplement on top of that. I would say that this is a reasonably good bargain, and that on the whole most farmers will welcome it. As regards investment grants, again I simply do not know. Are they necessarily going to be more flexible or better than the old investment allowance? Or is this merely a sop to egalitarianism? Will it help the man who does not pay high taxes more than the man who does? It is anybody's guess; I just do not know. I am inclined to favour a policy which helps the ploughing back of one's own money into one's own work, rather than a straight grant.

Part III of the Bill deals with hill land. This is a special problem, which has to be looked at divorced from the rest of agriculture. I think that probably the Government are doing the right thing here, with a 50 per cent. grant and moving it on to a permanent basis. I like the role of the development boards. If we are going to deal with special problems in areas of special difficulty, we must expect to have special powers. I do not see anything wrong with this. Noble Lords on the Liberal Benches welcomed the Highlands and Islands Development Board, because we thought it was the only way of dealing with a difficult problem. This is another of these landlord problems which have become too big for the modern landlord, and the State is right in devising a scheme to meet it.

The same applies to the rural development areas. They may well be a success, but it depends on the temperaments and skills of the people who run them. There is one point, however, that wants watching. We are getting so many overlapping authorities in every direction, and here is yet another. I need not enlarge upon that, as the point is taken. This point will become increasingly difficult. I am not going to say much about co-operation, about which I know very little. The noble Lord, Lord Nugent of Guildford, obviously knows a great deal about co-operation, and he has told us about it. I welcome the other miscellaneous provisions, but we must watch credit. I think that the A.M.C. wants a bit of a "jerk up", because it is slow and cumbersome and all the other things it ought not to be.

On the whole I think that the Bill is a sensible, but rather pedestrian, attempt to solve these minor problems, apart from the central problems which the noble Lord, Lord Nugent of Guildford, raised. In giving the Bill a modified welcome, I do so because it is so difficult, as I emphasised at every point, to know how these new ideas are going to work. Will the Livestock Commission work well? Will Clause 9, with Clause 2 in alliance, be fruitful of new ideas? Will the structural position of agriculture be improved by the Government's suggestion, or will nothing more happen than has happened under the pressure of market influence? Will investment grants do as well as the old investment allowance? Will co-operation be promoted by what is in the Bill? I welcome what is a good try, and I hope that the Government will soon have a go at the more fundamental issues. There is really disinvestment in agriculture. Capital is not coming back into the industry. It is obvious to all that it is extremely difficult for any of the partners in agriculture to get a fair return on either the fixed equipment—which is, after all, still more than half the total value of the agricultural industry—or that aspect of the capital structure which is the tenant's capital, his stock, machinery and the rest. Lastly, there is the man who has invested his whole capital in the industry, the worker, who is still the worst paid in industry.

We are in difficulties in the agricultural industry. This Bill will help in a small way some of the smaller difficulties, but the major difficulties will be solved only by facing up to them. This Bill, though good in so far as it deals with the minor problems, does not go anywhere in the direction of the big ones. I welcome the Bill, but I would urge the Government to get down to thinking about the fundamental problems of the industry.

5.42 p.m.

LORD WISE

My Lords, in view of the number of noble Lords who are to follow, I shall be reasonably brief in what I have to say. I was not anxious to speak on this Bill. I have been concerned with agriculture over a long period of years, and I was one of five who initiated the first agricultural policy of the Labour Party for the 1929 Election. However, as there were only three speakers from this side of the House I thought it right that I should speak in the debate. I am sorry for the Ministers concerned in introducing this Bill, because, so far as I know, neither of them has played any part in the promotion of it, although they both have long agricultural experience. No doubt they are forced to confine themselves to their briefs. I am happy that I am not in that position to-day.

I speak as a retired farmer with 11 male relatives still farming for a living. I wish the Bill were such that I could support it fully, but I am afraid I cannot do so. I do not want to say much at the present stage; no doubt there will be discussions later on the Committee stage. However, the Bill is something of a disappointment to me, and, in my view, although it is a long Bill and contains many clauses, it is quite inadequate to meet the present conditions of agriculture. I can agree, to a considerable extent, with what the noble Lord, Lord Nugent of Guildford, has said. The industry at the moment is recognised as being one of the most efficient, and the Price Reviews of each succeeding year bear this out. But what the next one will tell us, who can say?

Agriculture is the greatest import-saving industry of all. It feeds half our nation, and could do even better if the financial means in respect of services rendered were forthcoming and some competitive imports were kept out. Farmers and farm workers are not properly rewarded for their labours. They are lessening in numbers and, for the most part, lead hard, industrious and uncertain lives in ever-changing weather conditions such as we have known in the last month. This Bill does not attempt to remedy their position. There are no teeth in it. Now that it is on paper, I am afraid we cannot materially alter this situation.

The Bill sets up commissions and boards for all sorts of things, but does not provide the real means of assuring farmers that they will obtain fair prices for their home products and animals. The Meat and Livestock Commission cannot buy or sell, except so far as is reasonably necessary for, and incidental to, the discharge of other functions of the Commission. The whole crux of the matter, in my view, is that the Commission should have power to buy and sell in order to stabilise the markets, obtain remunerative prices for farmers, and end for all time the uncertainty and unfairness of fatstock and other marketing.

The duties of the Commission seem mainly in the direction of giving advice. I expect farmers are by now tired of receiving advice from all sorts of people. But with all the advice which is given, stock prices are unremunerative and stock is often sold at a loss. Cereal prices are the same now as they were ten years ago; but there is no reference to cereals in the Bill. Bread went up a few days ago, but not home-grown wheat. Farming costs are rising, and there has been no Government move for control to restrict these increases of recent years. Everything that the farmer needs has gone up and his returns are stagnant or going lower. Subsidies save many from giving up entirely. It is high time that the Government realised that agriculture is of importance in the nation's economics and survival and legislated accordingly.

In brief, what have we, in the long run, in this Bill? We have a Commission of 10, which will appoint three Committees numbering 45 persons; a Rural Development Board of 12, and a Central Council for Agricultural and Horticultural Co-operation of 14. This is 81 persons in all, due to be partly paid out of the levies on farmers; some to receive pensions, and their necessary staff to be appointed and paid. It will be a very expensive set-up.

How does the farmer share in the good things, if any, in the Bill? He is faced with levies of unstated amounts. The Minister tried to persuade us a few minutes ago that they would be low, but I would remind him that the wheat and barley levies already approximate £2 million, and it may be the same with the levies provided for in this Bill. We receive grants from the taxpayer for certain items which may benefit the farmer, but if he is a small farmer his land may be wanted for amalgamation and boundary adjustments, and he may have to quit. We may receive certain remedies in respect of bank overdrafts. And last, but by no means least, we receive advice on how to run the farming business. My Lords, the Bill has been a long time coming. It is all very nice on paper, but it does not meet present farming needs; and, as the noble Lord, Lord Henley, said, I hope that very shortly we shall have something to replace it. I had hoped that the Government would have grasped the opportunity to do something courageous and effective. This Bill does neither.

5.52 p.m.

THE EARL OF DUNDEE

My Lords, I want to say only a word on that part of this Bill which concerns forestry. As for the rest of the Bill, so far as it goes I think it is generally welcome. It is virtually identical with the Bill which was born in the last Parliament and which was based on the White Paper which your Lordships discussed very fully about 15 months ago. I think that is no doubt the debate which the noble Lord, Lord Henley, was thinking about. In that discussion I expressed my own support of nearly all the proposals which are now embodied in this Bill. But I made one qualification: I said that I thought the very extensive and detailed powers of interference which were given to the Rural Development Boards with private forestry would to a great extent restrict and probably frustrate the Government's policy of expanding, forestry in this country.

As the White Paper explained, Part III of this Bill, which gives power to set up these Rural Development Boards, is mainly intended—in fact, I think entirely intended—for hill farming and marginal areas where agriculture for the most part is very poorly off, sometimes quite uneconomic, and where there is usually a large exodus of population either abroad or to the great conurbations; and it is very necessary, if we want to keep the rural population there, that afforestation should expand.

There are two agencies by which forestry can be expanded: the Forestry Commission and private planters. Neither of them has the necessary means or opportunity to do everything that is required in the national interest. Both of them, for various reasons, are timid and reluctant to do as much as they ought. The White Paper talks a great deal about the integration of forestry and agriculture—a very unexceptionable phrase with which we could all agree. But I wonder whether we always think of what it means. In the areas which we are discussing now, where large-scale afforestation is required, at the present time very often not more than 5 per cent. of the land which ought to be planted is in fact planted; and very often perhaps 50 per cent. or more of the agricultural land, where the farmer is still struggling along, is really quite uneconomic and ought to be afforested. You cannot talk about the integration of existing forestry with existing agriculture. What you must mean by integration is not really integration but the conversion of large areas of uneconomic agricultural land to productive forestry. That, I think, was brought out very clearly by the Zuckerman Report about nine years ago.

These two agencies, public forestry and private forestry, are doing less than they should, for various reasons. The Forestry Commission are often naturally timid; afraid of offending public opinion, because the whole weight of inertia in this kind of matter is always on the side of doing nothing, against changing the scenery and converting something that everyone is accustomed to into something new and unfamiliar. The Forestry Commission have to contend against that; and, as for the private owner who must, if our policy is to succeed, play a considerable part in the process, he is often reluctant because probably he has not enough cash—and if he borrows money from the bank he would at the present moment have to pay a rate of interest which would make Shylock blush. Although he may—I think most people do—care for his unborn grandchildren, when the moment comes to make a practical decision in the human mind, the pressing needs of the moment often seem more urgent than those of the children as yet unborn.

I have had some experience of this, because I was for some time on a regional committee of the Forestry Commission in the North-East Region of Scotland. Part of our duty was to try to persuade reluctant landowners and planters to do a bit more. Although they quite understood the need for it, it was a very difficult job indeed. I am afraid that all these restrictions—I am thinking particularly of the restrictions in Clause 51 of this Bill—will have the opposite effect from what the Government intend. It looks to me as if the people who drafted this clause had done so on the assumption that large numbers of landowners were anxious to plant good agricultural land which ought not to be planted, and there must be all these restrictions to prevent them from doing so. The truth is exactly the opposite. The majority of landowners who ought to be doing more planting are, for reasons I have given, extremely reluctant to do so. They need a great deal of persuasion. And there are the wobbly ones who are perhaps being persuaded they ought to do a bit more, and they will be clean put off by the kind of restrictions contained in Clause 51. It will have the effect of stopping them. They will not bother to fill up forms and make applications to two authorities, the Forestry Commission and the Rural Development Board, instead of to one.

Let me draw attention to subsection (4) of Clause 51: The Board may…grant a licence subject to any condition

1. (a) governing the kinds of trees planted, or
2. (b) where the licence authorises the planting of a short term crop, requiring the use of the land for growing trees to be discontinued by the end of a specified period, and requiring before the end of that period the carrying out of such works for the clearing of the land as will make it suitable for agricultural purposes…"

and they are also given power to specify the kind of trees which may be grown. These are powers of interference, I think I may safely say, which would be regarded as utterly intolerable in agriculture. It is all very well for the noble Lord, Lord Walston. There is little chance of a Rural Development Board being set up in East Anglia. But suppose he lived in some other part of the country, and suppose a development board consisting of most estimable people came and looked over his farm and told him, "You must not grow turnips here at all; you must grow carrots instead. And as for this field in which you are proposing to grow wheat, you obviously ought to put potatoes here, and put the next one down in grass for the next three years". Were that to happen, I think the noble Lord's well-known amiability might be a little strained. And it would not do any good because it would not result in making the noble Lord farm any better. It would only put him off; and that is what I am afraid will happen to private forestry in areas where these Boards are set up.

My friends and I have put down a few Amendments for the Committee stage, and they are intended to help the Government in pursuit of their policy, and not to hinder them. I will give only one short example of the kind of thing I am going to try to do. If your Lordships will look at the beginning of Clause 51, you will see that subsection (1) lays down that: no person shall plant land in the area of a Rural Development Boad with trees except under the authority of a licence granted to him by the Board. Then the Bill goes on to say that this shall not apply (a) to planting by the Forestry Commission"— Of course, it would be a nonsense if it did—and (b) so long as the covenant, agreement or scheme in question continues in force, to land which is, on the establishment of a Rural Development Board, subject to a forestry dedication covenant or agreement as defined in the Forestry Act 1947… Of course, it would make an absolute nonsense if they were able to stop the planting of land if the covenant had already been agreed, but the Amendment I should like the noble Lord to consider is that this exemption from licence should apply not only to land which already has a dedication covenant when the Board is constituted, but to all future agreements in that area, after the Board is constituted, which are agreed between the owner and the Forestry Commission. I think that would make much better sense of this.

I am quite sure that I know the answer which some of the noble Lords' officials will ask him to make. It will be that this Amendment is quite unnecessary, because the Forestry Commission are supposed to be in close consultation with the Rural Development Board all the time, and of course the Forestry Commission could not accept land for dedication if they had not previously agreed to do so in consultation with the Board. But it does not always happen quite like that. Perhaps I may tell the noble Lord and the House what happened to me only fifteen years ago.

In 1952 I wanted to plant a fairly considerable area of ground in the Scottish Highlands. The Forestry Commission were delighted, and they accepted it for dedication. At that time, the emer- gency war regulations governing the use of land had not been repealed, and to get authority to accept dedication the Commission had to sumbit it to the Regional Agricultural Executive Committee (which was very much the same kind of body as these Boards will probably be) before they could complete the dedication agreement. The Regional Agricultural Executive Committee refused permission and said that I could plant only bits of it. There were doing their best, but they knew very little about forestry.

I was faced with two alternatives: either I had to face two or three years of tiresome and frustrating argument, or else I had to take a risk. I took the risk and I planted the whole thing in one season. If I had done it under this Bill I should have been liable to a fine of £200. I do not know what penalty there would have been under the war-time emergency regulations, but I wrote to the Secretary of State and said: "I have now planted this land. It is done and finished, and the Forestry Commission are delighted to accept it for dedication. You can, of course, stop them from accepting it if you like, but it seems to me, as you have been imploring landowners to plant trees, and since I am one of the very few landowners who has done anything about it, you ought to be grateful to me for doing it". I am glad to say that nothing happened, and it is now a flourishing young wood.

What will happen is that the Forestry Commission may be prevailed upon by members of the Rural Development Board (who may hold different views from the Commission) not to accept ground for dedication when it ought to be accepted and would be approved by all good judges of forestry. That is why I should like to provide in this clause of the Bill that only the Commission, and not the Board, shall have the duty of deciding whether or not the land shall be accepted for dedication, and that the Board ought not to have to be consulted about it in advance.

I would like to impress upon the noble Lord, who probably agrees with me already, that there is a physical limit to the number of people in this country who have enough talent and enough knowledge to be able to interfere successfully in other people's business. They are not innumerable. We found that out during the war, of course, when we had to recruit so many people of less than the highest standard of intelligence to administer the many war-time regulations which were necessary. We had to go out into the highways and the hedgerows and recruit all sorts of people, some of whom came rather near to illiteracy. I remember one case of a temporary civil servant who had to issue the petrol coupons, who spent the entire morning in trying, unsuccessfully, to look up one telephone number in the telephone directory because he was never able to remember the order in which the letters of the alphabet were arranged.

I am not suggesting that the people who will be put on the Rural Development Boards will be that kind of person. I think they will be admirable and good people: a worthy alderman, probably; possibly an eloquent and loquacious trade union official; probably a stolid and amiable retired secretary of the local branch of the N.F.U.—all very good people but not necessarily fitted, by nature or experience, to determine these questions of whether land should be planted; and, if so, how it should be planted.

I am not against all kinds of control; I am in favour of some. I and my friends supported the Highlands Development Board which is now set up in the Highlands. That is a fairly good Board; at least, it has a very good Chairman, and it is efficient, within the limits which it is allowed. But one reason why we supported it was because it did not have these meddlesome powers conferred in advance on the Rural Development Boards under Clause 51 of this Bill. I happened to be on one deputation about this subject to the present Secretary of State for Scotland a little more than a year ago, and I am glad to say he assured us that it was not his intention to extend the powers in Clause 51 to the Highlands Development Board. Indeed, I am quite sure the Board would be the last people to want them. They will not want to go hopping round, telling everybody whether to grow spruce or larch on a piece of ground, or, indeed, to interfere with dedication schemes between the Forestry Commission and private individuals.

I hope, my Lords, that the Government will seriously and favourably consider the Amendments, which are intended to be helpful, and which we shall seek to move in the hope of modifying those parts of the Bill which seem likely to retard and to restrict the expansion of British forestry.

6.10 p.m.

BARONESS ELLIOT OF HARWOOD

My Lords, I hope that in this debate I shall not go over ground which other people have already covered. I should like to say that I hope the noble Lord, Lord Wise, will never apologise for addressing this House on agriculture. He could not have made a more admirable speech. It showed quite clearly that he understands the problems of farmers, which is what most of us speaking in this debate are. I declare an interest, not only as a farmer, but as chairman of an agricultural auction market. I am very interested in the Meat and Livestock Commission. I am glad that in the Bill the recommendations of the inquiry have been followed and that we are to he allowed to sell meat on the hoof and on the hook. I am sure this is important, and I hope that this policy of being able to do one or the other will always be adhered to, because I think the auction markets serve a very useful purpose and provide a service for the farmers. It would be a great pity if they were prevented from dealing both with store-stock and fatstock.

I am glad that on the Meat and Livestock Commission there is to be a committee dealing with the consumer side of meat production, because I think that the idea of labelling and describing meat as it is sold in the shops will be very valuable and useful to the housewives and to others buying meat. I welcome also Clause 12, which brings into being the beef cow subsidy for animals that are dairy calves which are being bred for beef. I think it only fair and right that this subsidy, which up to date those of us who have hill cattle have been receiving, should not be denied to other producers of beef calves, and I am glad that has been agreed.

I should like to say a word about Clauses 30 and 31 which deal with agricultural investment. I would say, in the presence of the noble Lord, Lord Hughes, that he and I have had quite a correspondence on this subject, and I have received very courteous and friendly letters from him without being able to impress him with my point of view. Nevertheless, I am going to try again and I hope he will not object. The noble Lord, Lord Henley, drew attention to the fact that the improvement grants and agricultural investment grants have been changed to some extent. They have been reduced in one case from one-third to one-quarter, which is not very welcome. On the other hand, there are many additional items of farm equipment which will now qualify for grant, and that is certainly a good thing. But for some farmers who are engaged in upland and hill farming, some of these investment grants are really hedged about with unnecessary restrictions. For instance, I take particular exception to the fact that all the time they stress that to attract grants machinery must be fixed, and that nothing which is a mobile unit, unless it has its own propulsion, like a tractor or combine harvester, will be able to rank for grant.

I should like to give one or two examples, because this is something which I think is very foolish, and I believe it could be altered easily without a great deal of trouble. Take threshing mills which in the old days were built into buildings. On many old farms in Scotland you will find threshing mills built into buildings, and the corn had to be carried to those mills inside, where it was threshed. To-day this is quite old-fashioned; you either thresh corn with a combine harvester, if that suits you best, or you have a mill which you can pull with a tractor and take wherever you like so that it is available for your work. If it is one which you can pull with a tractor, you cannot get any grant. If it is one which is fixed inside, you can. This seems to me extraordinarily silly. If you have a drying apparatus for drying corn, potatoes, hay or what-have-you, and it is fixed in a shed, it is eligible for investment grant. But a mobile blower, one which is hauled by tractor, which you can take into the field and put under a haystack or baled straw-stacks, and is therefore infinitely more useful than one which is fixed, is not eligible for investment grant. The dryer which you can take from one place to another pulled by tractor is far more valuable than a machine fixed inside a barn.

We live in an age when engineers are continually inventing new machinery, and the more varied the use the greater the help for the farmer. A mobile milking parlour may be much more valuable to the milk farmer than the static bale, but one is eligible for grant and the other is not. I have a letter from a young man who is just starting to farm, an enterprising fellow, trained in an agricultural college. He has written: In order to make the best use of my land for milk production I decided to invest in a portable milking parlour which would allow the whole farm to be grazed and the policy to be more flexible. On this type of parlour … no grant is paid. If the same parlour is concreted into [a static] position, thereby losing its main advantage, the full grant is paid. I foresee the time when modern machines may all be able to be moved around and be of increased usefulness, and the Minister of Agriculture in the 1970s and 1980s will be tied by these clauses which will limit investment grants to fixed machinery. This is putting a premium on old-fashioned methods.

Somebody described this as a 1965 Bill. We are trying to look further forward to 1968, 1969, 1970, and so on. We want to be up-to-date and modern, and I suggest to the Minister that if his grants are going to be tied in this way they will encourage people to have old-fashioned methods, when we are all longing to have as modern and advanced methods as possible. I have had quite a lot of correspondence with the noble Lord, Lord Hughes, in this matter, and naturally he has to stick to the letter of the law. But I am suggesting that when we discuss it in Committee we might explore this and see whether or not an alteration could be made to make it infinitely more valuable to the farmers.

I should like to turn to Part III of the Bill, which deals with hill land. I welcome Clause 43 which amends the number of years for the winter keep scheme, extending grants from three to five years. This is a great help, and enables farmers to plan ahead. Five years in a farming enterprise is not a long time. With a big scheme of hill improvement, which can be very expensive if it includes hill draining schemes or the making of roads for access to shepherds'houses—even though grants are available for roads—five years is not a long time to see a major return for this expenditure. I also welcome Clause 40, which means that the date 1967 no longer applies, and that help will continue for the hill farmer beyond this year.

Several noble Lords have made comments on the particular needs of agriculture, and I do not want to trespass on your Lordships' time to enlarge on that. But the really desperate situation of some of our hill farming enterprises is well known, or should be well known, to the Minister. I hope the Government and those who are planning the Price Review will realise what is happening. It really is no use urging the increased production of sheep and beef unless the return on these commodities pays. We are not standing here to run charitable food producing enterprises, but to make a proper contribution to the feeding of our people, and thereby save the nation's import bill and help the balance of payments. The Bill is designed to help farmers and I think it will; but if, as the result, we produce more and there is no market for the produce, then the whole object of the exercise is negatived.

Lord Nugent of Guildford has drawn attention to the different aspects of the plight of agriculture. Somebody has mentioned overdrafts. If he can, I should like the noble Lord, Lord Walston, to answer one other question. This is not mentioned in the Bill, so perhaps I ought not to raise it. It refers to overdrafts. My question is this. When does the noble Lord think that the Chancellor of the Exchequer is likely to refund the selective employment tax which is coming back to those in agriculture? Innumerable forms have been filled in by myself and many other farmers, and not a single farthing has been returned to us at all. I hope that it will not be long before we do get something back. Overdrafts are one thing, but overdrafts plus selective employment tax really is another. I beg of him, if he can, to do something about this with his right honourable friend.

Lastly, I would mention one word about establishing Rural Development Boards. I am always rather chary of setting up more boards, consultative councils, or what-have-you, to tell people what to do. The noble Lord, Lord Wise, counted 81 people who were going to be involved in all this. Not one of them will produce anything except questionnaires, memoranda, bits of paper, telling us what we are supposed to do. They are all going to be paid. The salary of any decent official must be a decent salary, otherwise we shall not get good officials. These officials will have to consult with other local authority officials. And so it goes on—more and more officials, none of them producing anything at all, except memoranda and questionnaires.

Those of us who are in local government rather resent appointed people coming along and doing jobs over our heads, when if we were given the money we could probably have done the job ourselves, and with much less controversy. I do not know about the rural parts of Wales, in regard to some areas of which people are considering these boards. But I do know about the rural parts of Scotland. Already there is a Highland Development Board, a Border Economic Development Council, and I do not see the need for any more appointed authorities in Scotland and I hope that the Secretary of State will think twice before he sets up any more boards in Scotland.

There is emphasis in the Bill on co-operation between agriculture and forestry. This, obviously, is of the greatest importance. But it is already happening. Certainly in Scotland there is a close liaison between the Scottish Woodland Owners Association and the Forestry Commission. There is a close association between the Scottish Land Owners Federation and the Forestry Commission. Private woodland owners have made enormous contributions to forestry. The noble Earl, Lord Dundee, and the noble Duke who is to speak later, have far more knowledge of this than most of us, and have done probably more than anyone, as indeed has the noble Lord, Lord Lovat. I should be strongly opposed to handing all forestry over either to a Rural Development Board, or indeed to the Forestry Commission, with a lot of ad hoc bureaucratic powers which may cause much ill-feeling and interfere with the considerable good will and co-operation which exists between the many interests in rural areas to-day.

With those few remarks, I support this Bill. I hope that in Committee we shall be able to mice some Amendments, and that these Amendments will be treated by another place with respect, because in your Lordships' House I believe we have a great fund of knowledge to draw upon. I know that the noble Lord, Lord Walston, is fully aware of that, he himself being a great expert. I hope that we shall be able to improve the Bill. I support it in so far as it goes some way, if not all the way, along the road to help the farming industry.

6.15 p.m.

LORD INGLEWOOD

My Lords, I am glad to follow the noble Baroness in this debate. She farms on the other side of the Border from me. May I say, too, to the Minister how glad I am to see that this Bill applies both to England and to Scotland? Too often we have separate Bills on agriculture and other subjects brought before us, when, with a little more preparation and a little more give and take, we could draft one Bill which would be of general advantage. So this Bill will be especially welcomed by those who live along the Border, on both sides, and who have to put up with a good deal of inefficient administration in different fields because of this separate legislation. I am glad that we are not adding to that inefficiency to-night through this Bill.

I should like to apologise for the fact that I may have to leave before the end of this debate. I dislike asking leave to do that, but if I had not perhaps spoken in every Agriculture Bill since I first entered the other place twenty years ago—that is, I have spoken from both sides of both Houses—perhaps I should not have asked your Lordships' permission to excuse me this evening. But I wanted to add a word about this Bill; and I would say, first, that I think the Minister must have done well in the Legislation Committee to get authority for such a long Bill. There is always so much potential agricultural legislation in the pipeline that it is a question in the Department of what is to be left out. I would echo the words of my noble friend Lord Nugent of Guildford, who has already shown what a pity it is that the fundamentals have been left out. A great deal of this long Bill con- sists of the less important matters. Anyone who has served in the Ministry of Agriculture must sympathise with a Minister after a year of poor weather and had prices.

The income of the industry is falling. To bring this debate into perspective I should like to think that when the noble Lord, Lord Walston, comes to wind up, he will be able to give us the up-to-date calculations of the income of the industry. He must have these figures, because they are always available at the time of the Price Review. The latest figure we have at the moment is that contained in last year's Price Review White Paper. If he has not on the Box before him the up-to-date figures, I hope he will ask some official to get them for him, because they are relevant to this debate.

I would support my noble friend Lord Nugent of Guildford when he expresses the need for basic re-thinking of our support system, and carrying on where my late chief, Mr. Soames, began. Particularly ought the Minister to do this in the light of present practice and thinking on the Continent. I hope that the Price Review, which we shall hear about not many weeks hence, will show that this is happening in the Department, even if there are no indications of it in the Bill.

At Question Time to-day a Question was asked which demonstrated how easy it is for this agricultural support system of ours to become so complicated that the ordinary man can barely understand it; and the Minister must be constantly on his guard against letting this system become ever more complicated. It can easily become unintelligible, and I should like to invite any noble Lord who has a copy of the Bill beside him to look at Clause 10, which deals with calf subsidies, which are, of course, relevant to any small farmer in the country. The clause is virtually unintelligible. At every Price Review time there is a special temptation to introduce some new refinement such as this; but these refinements are no substitute for basic thinking.

Having said that, I would add that it is not always the Minister's fault when these refinements have to be introduced. The abolition of investment allowances was not the fault of the Minister of Agriculture. But I am doubtful—here I must part from my noble friend—about the wisdom of including mobile equipment, such as tractors, in the investment grant provisions, together with fixed equipment. There may be a few votes in it—I admit that. But I rather doubt whether for purely administrative reasons this is the right way of doing it, and whether, if it was necessary to grant aid for the purchase of tractors, harvesters and other machinery, it ought not to have been thought out in another way. I am glad, however, that the Farm Improvement Scheme is continuing. I would not quarrel with the drop in the rate. It is much better that the scheme should continue, because it has brought immense benefit to an industry which was badly starved of capital for fixed equipment.

I should like now to turn to the Rural Development Boards, which I think every speaker has mentioned. They are, indeed, a great experiment in Socialism. I have always supported the idea of greater integration of agriculture and forestry in hill areas, but I cannot see that this is a good way to do it; or, indeed, the simplest way. An elaborate new organisation is being set up, and I think that Lord Wise's calculation of 81 as the membership of all these bodies allowed for only one Rural Development Board. Under the Bill there could be many more than one.

This provides for an elaborate new organisation and the writing into a Statute of a whole list of restrictions and controls which, so far as forestry is concerned, applies, as I see it, to only one half of the industry: that is to say, private forestry, and not to the Forestry Commission. I would ask the noble Lord, Lord Walston, what the private forestry industry has done to deserve Clause 51. I have never seen a clause of this sort, in any Bill, crying out more loudly for amendment. How many Rural Development Boards is it in the Government's mind to set up? I am told there is likely to be one in some part of Wales, and probably another in the Pennines, but that there is unlikely to be one in Scotland. What has Scotland done to deserve this favour?

BARONESS ELLIOT OF HARWOOD

Everything.

LORD INGLEWOOD

As I see it, too, if it is considered that the Pennines are a suitable area there is no reason why the boundaries of the board should not extend from the Scottish Border to the Peak.

Then one comes to the question of overlapping which was mentioned by the noble Lord, Lord Henley. When the noble Lord comes to reply I hope we shall be told what are the planning powers of Rural Development Boards. How are they going to fit in with the planning authorities? There will surely be a clash with administration in a National Park area if the boundaries of a Rural Development Board should overlap with those of a National Park. It could well be that the country in a National Park exactly satisfies the sort of conditions set out in this Bill for the establishment of a Rural Development Board. There is no doubt at all that rural interests, and not just foresters, are particularly apprehensive, too, about the composition of these Boards. The chairman is going to be a figure of great importance, and whom are we going to see chosen? Will it be an ambitious Socialist urban alderman, or even a safe Socialist alderman to whom the Party feel that they owe some service in his later years? If one follows precedent, those are the sort of people from whom these chairmen are likely to be chosen.

LORD WALSTON

Like the chairman of the Steel Board?

LORD INGLEWOOD

Perhaps he would do; I do not know. This criticism is not against the idea of helping the small farmers in these areas to amalgamate, nor against helping agriculture, forestry and tourism; but I am against what I believe to be the absurdly far-reaching powers when little or no amendment of the existing powers of the Minister, and very little addition to his existing A.L.S. staff, would enable him to go a long way, if not the whole way, towards achieving important results, such as helping the small dairy farmers in the poorer parts of the Pennines to amalgamate. The Minister already has powers in his hands in this respect, and if they are not sufficient they could be made sufficient with far less amendment than the setting up of this elaborate and expensive system. I am sure that substitution of such a policy not only would cost less but would have general support in the countryside. But I admit it would not be Socialism. The Minister must, indeed, give back confidence to the industry and reverse this trend of falling prices, before he finds himself in the position of the psalmist and able to echo his words: For every beast of the forest is mine, and the cattle upon a thousand hills".

6.35 p.m.

LORD BALERNO

My Lords, I should like to support what the noble Lord, Lord Inglewood, has said about the application of this Bill equally to Scotland and to England. I should like to join with him in congratulating the Minister upon steering this by no means uncomplicated Bill into the safe haven of your Lordships' House. I trust that such refitting as may be necessary will be done with expedition, and that this much needed Act will be brought quickly into operation, and so remove a degree of uncertainty and consequent anxiety which impending legislation inevitably produces. And all the more so when it concerns an industry based on a large number of small units, and an industry which, as the noble Lord, Lord Wise, has so ably pointed out, is at this moment somewhat overcast by hard times and the consequent difficulty of making a reasonable profit.

As a member of the Pig Industry Development Authority, whose functions will be absorbed by the Meat and Livestock Commission, it is with some trepidation that I venture to speak on the first Part of the Bill. But there are two points I wish to make. The first concerns the period of uncertainty to which I have referred in so far as the present staff of P.I.D.A. are concerned. The shadow of the axe has been hanging over them for nearly two years. I appreciate the tribute which has been paid to them by the noble Lord, Lord Hilton of Upton, and I should like to add mine for the way in which the P.I.D.A. staff have maintained their energy and drive. That, I think, is all the more reason why an assurance as regards their continuing employment would be a most useful encouragement, and it certainly would be welcomed by the members of the Authority who realise how much of the success of P.I.D.A. has been due to the devotion of its staff. I welcome the assurance of the noble Lord, Lord Hilton of Upton, that the work of P.I.D.A. is to be continued with the minimum of interruption.

The other point I wish to make is on the broad organisation of the Meat and Livestock Commission. I must confess that when the structure of the Commission was first announced I was very sorry that the main divisions were not vertical by animals—beef, mutton, pork. But on reflection I am convinced of the rightness of the proposed horizontal divisions representing respectively the producers, then a combination of marketing, processing and distribution, and, thirdly, the consumers. The method by which the Consumers Committee is constituted is an extremely attractive one, which I hope might be used as a model for future developments in other fields.

I welcome the proposals in Part II of the Bill which make possible the amalgamation of uncommercial units and the improvement of farm boundaries. Especially important are the proposals to pay lump sums or annuities to those occupiers who release the whole or part of their land for amalgamation. In this connection, I trust that there will be a fairly liberal interpretation of the term "uncommercial", and that its definition will include that the land is uncommercial by reason of the age or infirmity of the farmer. Indeed, if I had my way in this matter I should like to include inefficiency of the farmer as falling within the term "uncommercial". In every industry where grants for assistance are made by the State, there are some persons who seek benefit by making false statements. The effectiveness of much of this Bill will depend on the speed with which grants can be made. In the past there have been cases where delay has meant missing the benefits for the production of a whole year. If a greater measure of trust could be reposed in the farmer—and in the vast majority of cases this can be safely done—these matters can be settled much more quickly than has sometimes been the case in the past.

However, the quid pro quo for this should be more severe penalties for the farmer who makes a statement which he knows to be false. I submit that on summary conviction a fine of £100 is small in relation to a false statement by which the farmer could put £1,000 in his pocket. I realise that on conviction by indictment the extent of the fine is unspecified, and that both have sentences of imprisonment. In the initial stages of the application of this Part of the Bill immediate and summary retribution will be a very salutary warning to those applicants for grants who may feel tempted to be a little careless in the preparation of their application. I hope that some adjustment may be made in this respect.

With regard to the Rural Development Boards, there are two points which occur to me, and both are peculiar to Scotland. Pace the noble Lord, Lord Inglewood, the Bill obviously anticipates extension to Scotland. I would question whether adequate notice of the establishment of such a Board is given by a notice lodged at a county council office. While the detail of the Board's rights should be available for inspection at the county council office, I think that notice of its establishment should be given a much wider publicity. I share the apprehension of the noble Lord, Lord Henley, and the noble Baroness, Lady Elliot of Harwood, in this matter. There are now so many statutory bodies which have crept up behind farmers, of whose existence a farmer becomes aware only when he transgresses one of their regulations.

My other point relates to Clause 48, and I should have thought that the Scottish equivalent of the English Land Tribunal was the Scottish Land Court. I feel there must be good reason for the difference, and it would be interesting to a non-legal person like myself to know the answer. I must say, in fairness to the noble Lord, Lord Walston, that I do not expect to be given the answer this evening. I welcome the Bill and the attitude of the Government and of the Minister while it has been going through another place. I believe that something like 50 Amendments put down by the Opposition have been accepted, and there is general good will to see this Bill on the Statute Book as soon as possible.

In conclusion, I should like, if I may without impertinence, to revert to Part I of the Bill which deals with the Meat and Livestock Commission, in which I have already declared my special interest. In Schedule 1, Part II of the Bill, it is stated that the Commission shall be a body corporate with perpetual succession". As a sort of Morituri te salutant I would echo those words in the Schedule, and wish the Commission long life and perpetual succession.

6.42 p.m.

LORD LOVAT

My Lords, I should like to begin by congratulating the noble Lord, Lord Hilton of Upton, on the charming way in which he introduced the Bill. He made it sound so good that, although I would not say that some of the compulsory powers, and some of the farming by decree, which inevitably creeps into a very great document of this kind, were concealed, they were not, perhaps, made clear enough by any speaker except the noble Lord, Lord Wise, who I thought made a first-class contribution to the debate.

As farmers, we welcome almost everything in this Bill, because most of the things that are set out are inevitable with advancement in agriculture. I would make certain reservations, and I should like to speak on this occasion for the Highlands of Scotland. The noble Baroness left off on the Borders. I am glad to think that her rapidity and rate of fire has far exceeded that of any other speaker, and it is an honour and a privilege for me to treat her as my far from venerable great-aunt. We who are left in the debate shall all lag far behind her.

The Highlands have peculiar problems of their own. I would remind your Lordships that they represent two-thirds of the land surface of Scotland, and it seems to me that the hill farming side of this country has been neglected in the past. At a time when I took a more active part in your Lordships' House, I did a certain amount towards the passing of the Hill Farming Act, in 1946, and the Livestock Rearing Act, in 1951. Farming in the hills is now at the crossroads, and I genuinely believe that all that good work will be wasted, unless the Government take immediate action to arrest the drift of confidence of people, and take into account the necessary adjunct to hill farming, which is the long-term aspect. I cannot believe that, with a world food shortage, more should not be done in the hills.

The hill farmer, particularly the sheep hill farmer, sees himself now in a position in which he cannot begin to get back as little as 2 per cent. on his capital; and nobody wants to continue like that. If any of your Lordships have visited the Beauly or Conan Valleys after the recent disastrous floods, you will readily understand that one bad year in the hills can wipe out four or five years' farming profits in a declining industry. I am not well versed in Board of Trade matters, or in exports over imports, but it seems to me surely possible not to dump cheaper meat, whether it is beef or mutton, in a country which is trying to economise. I feel that attention to the whole long-term aspect in hill farming is lacking.

I am delighted to hear from the noble Lord that there is every chance of subsidies continuing. I shall not elaborate greatly on subsidies. I do not approve of them, but one certainly could not farm in the hills without them. But it is not a bit of good dangling 25s. on a ewe, or so much per hill cow, if it is expected to last only for a year, for two years or for three years. In the case of hill cattle, which multiplied on the hills in the past—and surely this could he done again—it is not a bit of good having a three, four, or five year programme, because before you come into production you are only starting with your first calves. You start with heifer calves; it is two and a half years before you put them to the bull, and another year before you get a calf; and by the time you sell your store cattle you may very well find yourself in Queer Street, with the subsidy coming off again.

I have said that the Highlands have particular problems, and one of the greatest, apart from the weather, the unrelenting climate and the poor soil, is the fact that we can only sell store animals out of the hills. Store cattle and sheep come on the market at the same time, and there is a glut, which it is impossible to deal with. There is nothing sadder than to see a hill man, who has been working for a year to get his lambs or his weaned calves to market, finding that there is absolutely no demand for them. But he cannot take them home, because he is faced with the severity of the winter, and has sufficient keep only for his breeding stock, with no followers.

I am sorry that this Bill has said nothing in any part of it about land reclamation. That seems to me to be one of the most important aspects of agriculture to-day in this country. We are losing 40,000 acres a year to various requirements other than farming. There is a Land Commission, which I am sorry to think could not be sent out, all 2,000 civil servants, every morning, with their buckets and spades, from Newcastle to reclaim part of the Humber Estuary. The general idea in the Highlands, which I have myself put to the Highlands and Islands Development Board—which, after all, is the first of these Development Boards in existence—is to try to reclaim land.

There are thousands of lost acres in the Spey Valley, and some of the more productive mud flats in the various estuaries could unquestionably be converted to make the Highlands, at any rate, self-sufficient. I feel that the Highlands may well be the poor relation in agriculture. Yet we do, of course, grow a lot of the barley which produces the whisky, which in turn raises levies of anything up to £150 million in taxation annually. We have no communications, and we could do with a lift in the hills. I hope that the noble Lord will pass on that reminder to the Secretary of State for Scotland.

House adjourned during pleasure:

House resumed.