AGRICULTURAL AND HORTICULTURAL CO-OPERATION SCHEME 1967

HL Deb 25 July 1967 vol 285 cc834-42

9.47 p.m.

THE PARLIAMENTARY SECRETARY, BOARD OF TRADE (LORD WALSTON) rose to move, that the Draft Agricultural and Horticultural Co-operation Scheme 1967, laid before the House on June 28, 1967, be approved. The noble Lord said: My Lords, the Government's policy on co-operation was set out in the White Paper, The Development of Agriculture. We now propose to stimulate co-operation, as outlined in that White Paper, by establishing a Central Council for Agricultural and Horticultural Co-operation, and by a new, comprehensive scheme of grants. The main powers were granted in Part IV of the Agriculture Act 1967. The name of the chairman of this new Council and the details of the membership of it were announced in another place last week, and I hope that the Council itself will be set up quickly. I join with others in welcoming as chairman Mr. Roger Falk, and thank him for taking on yet another and very important public duty. I am sure that he will be most successful in this task. The approval of this Draft Scheme completes the powers necessary for implementing the Government's policy, and I hope that your Lordships will give it your support.

I shall not go through the provisions of the Scheme in detail, but there are just a few points which are worth mentioning. Paragraph 4, for example, sets out the rates of grant. Paragraph 8 provides for the Council to deal with applicants for grant through intermediaries, such as the central co-operative bodies, and to reimburse them appropriately. I should also like to deal with two particular points which seem to have given worry to some people. The first of these is the fear that grant aid under the Scheme will result in the widespread development of small marketing societies, to the detriment of existing societies. I can assure your Lordships that the Government have no wish whatsoever to see this happening; and for my part I see no reason at all to think that it will. But this does not mean that independent group marketing may not in some circumstances be desirable for some commodities.

Equally, we must bear in mind that if we get the development of co-operation in production which we desire, the members of the co-operating groups will wish to ensure that their, production is geared to meet the needs of the market. Their production plans may have to be changed in order to do this; and also, of course, they will want to receive the full benefit for their successes. But it should not be assumed—indeed, there is no reason at all to assume—that such producers will withdraw from the existing co-operatives of which they are already members. I know that a number of the larger multipurpose co-operatives want this type of co-operation between producers and welcome anything which leads in this direction. We have been in consultation with the Agricultural Co-operative Association and other central co-operative bodies to see how these co-operatives can be helped under the Grants Schemes to develop such group activities within their existing organisations. Finally, on this particular point, may I remind the House that the administration of the Scheme will be in the hands of an independent and responsible Council? I am certain that the Council will act in the best interests of agriculture co-operation generally.

My Lords, the second point which has worried people concerns grants for cooperatives pioneering in new aspects of co-operation. This has been set out in sub-paragraph 4 of Paragraph 4 of the Scheme. Some rather extravagent comments have been made which have suggested that the Government are proposing to subsidise wholesale competition with existing marketing organisations and to make good financial losses, no matter how hair-brained a particular scheme may be. It is perfectly true that there are exceptional powers which may be used for a particular marketing venture. But what we want primarily is cooperation in production. Normally, grants for such ventures will be no higher than those for other schemes; but there may be occasions when the ordinary run of grants are not enough to stimulate good, new ventures which, because of their experimental nature, entail exceptional financial risk. That is why these special powers have been given. But I can assure the House that the use of these powers will be very rare.

The sort of case I have in mind in which they might be used is one where co-operating producers undertake a new venture that would result in the whole pattern of their farming having to change in such a way that it would be very difficult for them to return to their earlier systems if the experiment proved to be unprofitable. Of course, we hope and believe that the possibility of failure is very remote; because, already, the Council would not recommend grant aid for new ventures of this kind until they were satisfied that it had a good chance of success. What is more, they would always be keeping these pioneer activities under very close supervision, and they would not simply allow them to start without paying any attention to them thereafter. I am certain that we can perfectly safely leave the selection of these projects and their supervision in the hands of a responsible body.

There is one other point that I should like to make, and it concerns the future of AMDEC. I am sure that your Lordships will join me in paying tribute to the work which this Committee has done and, in particular, to the part played by the noble Lord, Lord Nugent of Guildford, as Chairman of the Committee. That part of the work of AMDEC concerned with co-operation will become the responsibility of the new Council when it takes over the administration of the grant scheme. There are differing views about the amount of work left for AMDEC but, fortunately, we are not in any great hurry: we have a certain amount of time left in which to consider the matter, because the current scheme does not expire until March of next year. My right honourable friend the Minister of Agriculture has told me that he hopes he will have an opportunity of discussing the future of AMDEC with Lord Nugent of Guildford in the autumn, and I very much hope that the noble Lord will be able to fit in some time in which to do so. So there is, as I say, plenty of time for these discussions, working out in the future, and tied in with AMDEC and the new Council, before the existing Scheme expires.

Finally, my Lords, a word about the date on which the Scheme will come into operation, if it receives the approval of both House of Parliament. Paragraph I provides that it should come into operation 28 days after it is made. We are anxious, of course, that this should be as soon as possible, but the new Council must have time to organise its affairs and to look round, so that it can administer the Scheme efficiently. We shall consult the Council about the actual operative date. For that reason, I cannot tell your Lordships now the proposed date when the Council will start work, but I hope that it will be before the end of the year. This Scheme, in conjunction with the promotional and publicity work of the new Central Council will, I am quite sure, be a real stimulus to co-operation, both in agriculture and horticulture, and of genuine assistance to all those engaged in the operations which are likely to benefit from this type of co-operation. My Lords, I beg to move.

Moved, That the Draft Agricultural and Horticultural Co-operation Scheme 1967, laid before the House on the 28th June, 1967, be approved.—(Lord Walston.)

9.56 p.m.

LORD NUGENT OF GUILDFORD

My Lords, I should like to thank the noble Lord, Lord Walston, for moving this Motion and explaining the scheme so fully in such felicitous terms. May I thank him also for his kind words about my own minor part as chairman of AMDEC, of which I should like to say a few words in the course of my speech. It is perhaps apposite that we should now be discussing, in a quieter atmosphere than during the previous debate, what is ultimately the fourth line of defence of the country, that is, the industry that produces the country's food—agriculture. Here, of course, there is no division of opinion. We all want a steadily increasing home production, and in that context this Scheme has a warm welcome from me, because I am sure that it will make a useful contribution in this field.

Nowadays in the farming industry, as in other industries, developments move very fast, and again, as in other industries, there are advantages to be derived from the sheer size of the unit of production, and not only in production, but in processing and in marketing. Therefore, the encouragement of farmers to form themselves into groups and co-operative societies or private companies under the Industrial and Provident Acts is in every way to be welcomed in order that they may win for themselves the economic benefits of size. It is, of course, as we all understand, in the nature of things that there will always be very large numbers of small production units in agriculture and in horticulture, and if these small producers are to hold their own in the fast-moving competitive world of to-day they should certainly be encouraged to group themselves together and to integrate their operations both for production and for marketing.

I hasten to add that experience has shown that there is no automatic benefit from forming themselves into a cooperative society or into a group. Success depends on two factors, good management, basically, and the constant loyalty and discipline of the producer members of the society or group. With these two factors forthcoming, a group can win great benefits for all its members. During the past five years while I have been Chairman of the Agricultural Marketing Development Committee, to which the noble Lord so graciously referred, we have been engaged in pioneering this kind of development. The group or co-operative activities may be limited to one fairly simple operation, or they may develop into a comprehensive range of operations covering the whole process of production and marketing, and AMDEC, as it is called, has grant aided many kinds of schemes. The simplest kind of operation is where a number of farmers get together to market one particular product—for example, pig weaners or calves. This has happened with many groups in the West Country wishing to sell in their markets in the Midlands and in the East country.

Then there is, at the other end of the scheme, the more elaborate development where farmers have joined together and have integrated production and the preparation and marketing of their products. Of course, by coming together into a group to market the produce of a number of farms, they are big enough then to have a direct relationship with their markets and consumers, to find out what they want and reflect this back into production and to reshape it to meet more precisely the consumer demand, either by breeding different kinds of beef or lamb or growing different varieties of potatoes. In practice, we have found that such co-operative operations, successfully done, can reduce the unit cost of production, and increase the realisation price for the advantage of all. Small producers on their own could not possibly achieve such a result.

As I said earlier, and I stress it again, success is not automatic, and a good deal of expert advice and much patient and hard work are needed to get it. This new Council can give this expert advice and the appropriate grants to help groups of farmers to get going in the right way. In passing, it may be of interest to record that one of the major lessons that AMDEC learned—AMDEC being primarily set up for marketing produce—was that it is usually impossible to improve the marketing of produce without bringing in production as well and reshaping it on the farms in order to get better marketing. It is to the credit of the Ministry's agricultural officials that they have accepted this lesson and made our scheme flexible enough to do it, and the scheme now before us covers production as well as marketing.

May I say that AMDEC was set up after the 1962 Price Review by my right honourable friend Mr. Soames, with a £1½ million grant in order to get it going. It was actually set up as a committee by the three National Farmers' Unions of England, Scotland, Wales and Northern Ireland. I think it is a notable credit to the enterprise and vision of the three Farmers' Unions that they set it up and operated it successfully. The only sad note in welcoming this new Council is that, with its setting up, as the noble Lord has said, the Minister has decided to transfer to it all the work which AMDEC now does in connection with cooperatives and groups—rightly, of course, in order to bring it all into one place; but as this comprises about 60 per cent. of AMDEC'S work it is bound to leave AMDEC with rather an uncertain future, as the noble Lord recognised.

I am still of the view which I originally expressed to the Minister, that the right course was to merge AMDEC into the new Council. This would have had two substantial advantages: first, in avoiding the confusion of having two authorities working in the same field and the danger that only one might be viable, and, secondly, in giving the new Council the benefit of the considerable reputation which AMDEC has won in the farming world, particularly in winning the confidence, on the one hand, of the Farmers' Union world and, on the other, of the agricultural co-operative world. These two sides have not always seen eye to eye in these post-war years, where there has been a certain amount of friction. I think everybody is looking to this new Central Council in the hope that it will bring these two basic sides of agriculture together in friendly harmony. In the event, there are only two members of AMDEC who appear as members of the new Central Council, but I should like particularly to welcome one of them, Mr. John Jenkins, who is the new vice-chairman, and a distinguished member of AMDEC. I know that his great gifts will be invaluable on the new Council. I noted the noble Lord's kind invitation from the Minister to consult with him about the future relationship, and this I am ready and willing to do at the Minister's convenience.

I would add just one other point in commenting on something which the noble Lord said about the fear of some of the old traditional agricultural cooperative societies that the new Central Council might set up a large number of small units. I would join with the noble Lord in saying that I think these fears are unfounded. AMDEC has grant-aided many small groups within the existing agricultural co-operatives, very much to the benefit of both. This, far from having a disrupting effect, has had the reverse effect of strengthening the traditional agricultural co-operatives, which have been much more concerned with the purchasing of agricultural requisites than with the marketing and production side. I would support the noble Lord's comments. I do not think these great agricultural co-operatives need have any anxiety. I think they will find this entirely helpful to them.

For myself, I am entirely concerned to see the Central Council successfully launched and making a valuable contribution to the farming world, which I am sure it will do. I have much pleasure in supporting the Order.

On Question, Motion agreed to.