HL Deb 12 November 1968 vol 297 cc449-58

4.4 p.m.


My Lords, I am greatly obliged for the courtesy of my noble and learned friend on the Woolsack. With permission, I will now read the Statement which has been made in another place by the Minister of Agriculture, Fisheries and Food.

"The Government have carefully reviewed the contribution made by agriculture to the national economy over past years. This review has amply vindicated the industry as one which has made efficient use of the resources devoted to it. Productivity has continued to rise. Output has increased. There has been a valuable saving in imports. All this has been achieved without a significant increase in support costs and consistently with our international obligations. The industry has given good value for money to the British people, both as consumers and tax payers.

"Against this background the Government have decided that the selective expansion of agriculture should continue, provided that this is based upon the maintenance of the rate of increase in the industry's productivity. The programme announced in 1965 took us forward to 1970. Now we are going to project it to 1972–73. We shall of course continue to take stock from year to year as we go along.

"We have had a valuable report from the Economic Development Committee for Agriculture on the import saving possibilities of agriculture to 1972–73. The Government have examined the Committee's technical assessment. In addition, we have had to take into account the likely consequences on the use of resources and support costs and our international obligations.

"The Economic Development Committee, in looking at cereals production for the next four years, believed that it would be possible to overcome the husbandry and disease problems to achieve increasing average yields. We consider that, taking into account the quality of the additional land which would have to be brought into production, the objective set by the Economic Development Committee may prove to have been a little optimistic. This year's difficult harvest underlines some of the uncertainties which cereal growers can face.

"For pigmeat the Economic Development Committee proposed a very large increase indeed. Much of the expanded production would have to go for bacon. The Committee assumed that it would be possible to obtain a rapid expansion in the production of British bacon of the right quality and at the right price. There are some difficult technical and marketing problems in doing this. But we are looking to the curing industry to increase its share of the market by improving its productivity and competitiveness.

"Subject to these points, we welcome and endorse in broad terms the Economic Development Committee's assessment.

"Our broad objectives over the next four years will be as follows. I have sounded a note of caution about the practical pace of advance in cereals production. Our objective, however, for cereals is clear. We aim to expand production as much as is technically possible and consistent with reasonable resource use and support cost. With this objective goes an expansion of the appropriate break and fodder crops. For sugar beet we shall maintain the acreage against a level of consumption of sugar which is, at best, static. We shall continue to aim at meeting the demand for main crop potatoes for human consumption. We shall encourage the output of the right quality potatoes for the processing industries.

"It remains important that we should make significantly better use of our grassland. The Economic Development Committee considered that, on this basis, a continuing growth of beef production was possible. We should like to see an increase in suitable calf retentions. We should also like to see any increase in the dairy herd for beef production related to cheaper milk production, for example from summer grass. We accept that we should continue an expansion of beef from the beef and dairy herds. This means that for these important commodities, beef and milk, we are aiming for increased output similar to that suggested by the Economic Development Committee up to 1972–73. We recognise the importance of sheep and aim at a continued shift of the flock towards the hills and uplands.

"For those commodities where we are already virtually self-sufficient; namely poultry, eggs and pork, we shall aim to increase production to meet rising demands. We shall encourage the bacon curing industry to improve further its productivity so as to produce more bacon of a quality and at a price which will attract the consumer.

"We also wish to see the encouraging expansion of the horticultural industry continuing on the basis of its competitive efficiency.

"I have tried to set out clearly the broad aims of a balanced programme for the whole industry. It goes a long way towards the import saving objectives of the Economic Development Committee. Although for the reasons I have set out the full import saving envisaged by the Committee would not be reached by 1972–73, nevertheless by that time we should achieve a net saving of about £160 million a year.

"I should emphasise that, in the context of the programme, the Government are well aware of the need for stability in our markets. This stability contains support costs and gives confidence to the industry. Measures to promote such stability already exist for many commodities, such as cereals, butter, bacon and potatoes. Further measures for other commodities may be required. This is under consideration by the Government.

"We believe that it is within the capacity of the British industry to achieve the objectives of selective expansion which I have outlined. Much must depend, however, on the ability of the industry to go on improving its technological standards; on the extent to which its rising productivity can help to hold down support costs; and on the attention which it pays to marketing. We believe that, if this progress can be made, the selective expansion can be achieved with an economic use of resources and consistently with our international obligations. The development of the programme, its cost, the resources required and the market situation will clearly have to be examined with the industry at each Annual Review.

"I believe that the industry and the country will welcome the guide lines that we are laying down for the years ahead. I am sure that farmers and growers will do their part. They can be sure that the Government believe in them and in their potential for making a further major contribution to our economic prosperity."

4.11 p.m.


My Lords, may I thank the noble Lord, Lord Beswick, for giving us this very important Statement on agricultural policy, and may I join with him in the tribute to the farmers and farmworkers for the production they have been giving the country up till now. I should like to give a general welcome to the Statement. The target figure of £160 million per annum of import saving by 1972–73 is less than the "Neddy" estimate of £220 million. Would I be right in thinking that this is because a period of only four years is taken into account, instead of the five years in the "Neddy" Report?

I have three questions that I should like to ask the noble Lord on this important Statement. First, could the noble Lord be more explicit on poultry meat? The Statement is silent, but the "Neddy" estimate gave an increase of 170 million tons per annum by 1972–73—that is, of broiler meat and turkeys—with a net import saving of £36½ million per annum. These are substantial figures. Do the Government accept this as part of their target? It could be implied in the Statement that the noble Lord has made.

My second question concerns the sugar beet acreage. The Statement says that it is the Government's intention to maintain the existing acreage. Is the noble Lord aware that the present Commonwealth Sugar Agreement ends in 1974? Will he therefore undertake to consider, on re-negotiating the Agreement, enlarging the home produced sugar quota from one-third of our total consumption, as it now stands, to include the production of another sugar beet factory, equivalent to 45,000 acres of sugar beet, in view of the increasing acreage of cereal crops and the great importance for crop husbandry of an additional sugar beet acreage in the rotation?

Thirdly, on finance, is the noble Lord aware that in recent years the earnings of both farmers and farmworkers have been falling further and further behind those of the rest of the community? One serious consequence of that is referred to in the "Neddy" Report, which estimates that no fewer than 113,000 further agricultural workers will leave the industry in the current five years. Would the noble Lord tell us what action the Government intend to take to check this growing disparity of incomes and to provide the extra cash needed for the expansion postulated in the Statement? Is the noble Lord aware that we shall not get the potential extra production of food unless both the chaps and the money are there to produce it?

4.16 p.m.


My Lords, may I welcome this encouraging and important Statement, in which the Government reaffirm the broad outline of the expansion of the industry which they proposed two years ago and in which they have gone a long way to accepting the Report of "Neddy". The Government have gone much further than I expected. I say this with particular pleasure, because I was getting cold feet about this. I was wondering whether the Government were going to reject or put on one side the "Neddy" Report, and I am glad that they have not done so.

I welcome the fact that the Government have gone out of their way to say about the industry in general that they have given good value for money to the British people, both as consumers and as taxpayers. If the Government really mean to go so far towards meeting the "Neddy" recommendations, it will cost a lot of money and we have to bear this in mind. But I am sure that the agricultural industry will carry on doing what the Government have congratulated them upon.

I cannot think of any specific questions to put to the Government as to their intentions. The sort of questions I might ask are so bound up with what is contained in the next Annual Review that it is only when we see it that we shall know whether the Government really mean business. It seems to me from this Statement that they really do mean business. But when I look at the last couple of paragraphs I notice that there are a good many escape clauses. I hope that these will not have to be used. For instance, the Government draw attention to the fact that this will work only if the industry plays its part. They also draw attention to our international commitments and so on. Nevertheless, I do not think that we should look a gift horse too closely in the mouth. I hope that when we see the Annual Price Review I shall be on my feet, still saying the same things.

4.17 p.m.


My Lords, may I first of all thank the noble Lords, Lord Nugent of Guildford and Lord Henley, for the welcome that they have given to the Statement. May I say to the noble Lord, Lord Henley, that his feet were not the only ones that at times got a little cool, but I am glad that it has worked out all right. May I say to the noble Lord, Lord Nugent of Guildford, that the difference is not really between this £160 million and the £220 million in the Report of the Agricultural "Neddy", since if he looks at the summary of conclusions he will see that £220 million a year is a saving which would accrue on completion of the expansion programme. Some import savings will not accrue until after the expansion year 1972–73.

On the specific question about poultry meat, I am glad to confirm that the increase in production is included in the anticipated savings. On the Sugar Agreement, I am aware that the C.S.A. comes to an end in 1974. This Statement takes us up to only 1972, and up to that time the anticipated increase in production from the present acreage will be taken care of, we hope, by improved efficiency of the present factories. After 1972 it will be necessary to look again at any additional provision of factory accommodation. The noble Lord, Lord Nugent, had some relevant and cogent remarks to make about earnings. I have no doubt that this very delicate question will be one around which a good deal of discussion will take place when we come to the Annual Review.


My Lords, I should like also to join with my noble friend in welcoming this Statement, because whatever else may be the subject of Party politics and great controversy, the greatest blessing that can be given perhaps to the agricultural industry in this country would be an assurance that there would be continuity of policy and security, whatever Party is in power. I should like to put this question to the noble Lord. I welcome the policy as it has been outlined, but one of the essential factors is that we should get efficiency on our farms. Will it be part of the continuing policy, which has been very sensibly instituted I think by this Government, that every possible encouragement should be given to make farms into economic units? Will all practical encouragement be given to small and inefficient farmers, who will never really be able to make a living, to give up, in order that larger farms and economic units may be introduced? That is what I should like to ask.


My Lords, I am again grateful to the noble Earl for his welcome to this Statement. He can rest assured that the policy which this Government have pursued up to now, to try to get the most efficient unit, will continue to be followed. Grants for merging and amalgamating small farms into larger units are of course available.


My Lords, may I welcome the noble Lord's reference to the import-saving ability of this industry? In the past, farmers have always thought that Governments of all complexions have been very reluctant to refer to the import-saving quality of this industry. May I say, too, that I hope it will not be long before Governments freely pay regard to its exporting ability, not just of agricultural products straight, but also of agricultural machinery and the products of other industries which service our agriculture. I have one last point on one commodity. The noble Lord mentioned a certain increase in the production of milk, which I think he intended to be read as going hand in hand with an increase in beef, and not for milk on its own. May I say that farmers would be much heartened if the Government could take an early opportunity to say that they have under control this question of imports of milk powder and other dairy products from Europe at prices which we all agree are absurd.


My Lords, I am surprised that the noble Lord has said that this Government have been reluctant to pay tribute—


All Governments, I said.


I am speaking for this Government only. As I say, I am surprised that the noble Lord says we have been reluctant to pay tribute to the import-saving possibilities of this industry. In fact, one of the criticisms I have heard is that we have been too ready to pay tribute without coming forward with this kind of Statement. I hope that action will go hand in hand with promise. The noble Lord asked me about milk production, and I know there is the problem of disposal of processed milk. As the noble Lord possibly knows, my right honourable friend has endeavoured to get a voluntary limitation on imports of cheese. It has not been possible to get agreement for this year, but he is now working hard in the hope of getting a voluntary limitation on cheese over a period up to the end of 1970. That should go a long way to meet the problem the noble Lord has in mind. As for the exporting of agricultural produce, I am sure he has in mind the efforts that have already been made by the Council of which my noble friend Lady Plummer is a member, and I hope there will be results from their efforts.


My Lords, regarding voluntary agreements with a specific country on the import of a specific food, in the event of negotiations failing to come to a happy conclusion, will the Government be prepared to put a physical control on imports of that commodity from that country?


My Lords, I am sure that the noble Lord, Lord Balerno, who has great experience in international affairs, would not expect my right honourable friend to engage in negotiations with friendly countries holding out the sort of threat he has in mind.


My Lords, may I, without delaying your Lordships too much from the Administration of Justice Bill, follow up one or two points which have already been raised? Specifically I should like to ask my noble friend whether, in addition to paying tribute to the important import-saving function of agriculture, specific encouragement may not be given to the export of agricultural products. As my noble friend knows, in normal years our exports of barley from this country have been very substantial indeed. I would ask my noble friend whether he does not agree that there is great scope there for an increase and therefore an improvement in our balance-of-payments position.

The second question I should like to ask him concerns the encouragement of beef production. Undoubtedly we all agree that that can be done and should be done. But the cost of our livestock production in general is unnaturally augmented by the minimum import prices which have been agreed for cereals which are largely used for feeding livestock. Would not my noble friend agree, not only that one of the greatest incentives to increased production of livestock at a relatively low price lies in providing the farmer with good grass from home production and with good home-produced cereals at a low price adjusted with the deficiency payments, but that the imported feedingstuffs necessary for livestock should be allowed to come into this country at as low a price as possible?


My Lords, I think, in answer to my noble friend's point about export of agricultural products, that I have already indicated that there is scope there. Whether it is as great as some people think, I do not know, but there is scope; and certainly those people who are endeavouring to export agricultural products are receiving some encouragement from the Government. My noble friend then went on to ask me a question about which I think I had better be very careful indeed, because, as I see it, there seems to be some contradiction in what he asks. I cannot really see how, on the one hand, we can encourage the production of beef by the importation of cheap grain without, on the other, doing something to discourage those who are trying to get a living from growing cereals. I should have thought there was a balance to be achieved here, and I have no doubt that my noble friend would agree with me if we had an opportunity of going into this matter further.


My Lords, will the noble Lord give me some assurance that in the oncoming Price Review prices will be materially raised so that we can pay the farm worker more money? We cannot get this increase in agricultural production without labour; and I hope the Government will keep this point in mind when they are fixing prices in the Price Review.


My Lords, one object of this Statement is to lay down guidelines for the discussions which will take place during the Annual Review, and all these matters will have to be taken into account.