EGGS (GUARANTEED PRICES) ORDER 1969 (Hansard, 28 April 1969)

§ LORD BESWICK
My Lords, I beg to move that the Eggs (Guaranteed Prices) Order 1969, a copy of which was laid before the House on March 26, 1969, be approved.
This Order marks the second step in the implementation of the Government's proposals following the Report of the Reorganisation Commission for Eggs. The first step which was taken earlier this year was of course concerned with the ending of the obligation to stamp subsidised eggs. The Order in fact makes three changes in the present guarantee arrangements. First, provision is made in Articles 4(2) and 8 for the introduction of a standard quantity following the decision to end the obligation to stamp subsidised eggs. Secondly, provision is made in Article 7(2) for an acceleration of the phasing out of the loss sharing element of the profit and loss sharing arrangements so that if the indicator price is above the selling price in 1969/70, the proportion of the difference to be paid by the Government to the Board will be 10 per cent. instead of 20 per cent. as provided for under the previous Orders.
Finally, provision is made for the profit and loss sharing arrangement to cease to apply altogether after the guarantee year 1969–70. This effect is achieved by the wording of Article 7 which limits the operation of the arrangements to that year only, following which the subsidy will be on a flat rate basis. In addition, since the current Eggs (Guaranteed Prices) Order 1963 has already been twice amended the opportunity has been taken to consolidate the earlier Orders. I should perhaps mention that there is no need to deal statutorily with the ending of the feed formula or indeed the reduction of the guaranteed price following this year's Price Review since these arrangements have always been operated by administrative action.
My Lords, there has already been much discussion within the agricultural industry of the Government's proposals for the future marketing and subsidy arrangements for eggs from which the present Order stems. This House has already 660 had two opportunities to discuss these proposals when some very pertinent questions were put to me by the noble Lord, Lord Nugent of Guildford, and other noble Lords, and I repeat on this occasion that the Government are well aware that the industry will need a reasonable transitional period to make an orderly adjustment to free market conditions, and our proposals therefore provide for a five year transitional period during the first two years of which the Egg Board have been asked to continue with their present function. I should also like to repeat that in making these changes we remain mindful of the interests of consumers and will continue to have these very much in the forefront of our minds. Finally, I should like to stress the importance which the Government attach to the introduction of a minimum import price scheme for eggs and egg products which we regard as an integral part of the new arrangements for eggs.
Your Lordships may also care to know that we are now pressing forward with further consultations with the interested organisations on the many details which remain to be resolved before the introduction as soon as possible of the necessary legislation as the third stage in the implementation of our policy. I beg to move.

§ LORD NUGENT OF GUILDFORD
My Lords, in thanking the noble Lord, Lord Beswick, for explaining to us the purpose of this Order and its features, may I apologise for my absence when he started his speech. The noble Lord has explained the two changes which are intended here, and I should like to make this point to the noble Lord. The method of calculating the payments due to egg producers is already so complicated that hardly anyone outside the Ministry understands it—and I should think very few people inside—and it seems a pity to introduce further complications and refinements of the scheme when it is already on its way out. I make that point particularly with regard to the introduction of a standard quantity this year. I am not against standard quantities for commodities—in fact I think that on the whole they are sound in 661 principle—but I think there is very little point in introducing a new feature of that kind in the last couple of years of the scheme. I will not discuss the complexities of the other change because I believe they are too minimal to discuss, although I think they are a little unfavourable to the producers.
I should like to mention a document which I received this morning from the National Farmers' Union about the Order and indeed about the Government's decision to bring to an end the existing scheme for guaranteeing prices and markets for eggs. I feel that the views of the National Farmers' Union on these matters are of such importance that they certainly deserve comment, even though in fact on this occasion I do not find myself in agreement with them. The main burden of this document is to continue to inveigh against the Government's decision to bring this scheme to an end. My own view, as I have mentioned here before, is that the Government have taken a right decision and that they should now receive the support of the industry as a whole in getting the best transitional arrangements that we can in making an orderly transition into the future.
I am quite certain that the logistics of this industry are such that, with the mechanics of modern egg production, production can be increased so rapidly that it would probably be possible to get an increase of 50 per cent. from one year to another, and that no sort of Government guarantee system could possibly give stability to the industry. In fact, because it interferes with the free working of the market, it is more likely to make for instability than for stability. Therefore, the National Farmers' Union's anxieties about the hazard to the small producer are, I am sure, not real; and I believe that the Government have taken the right decision, although it means that there is to be a transition period which will be awkward for everybody. Nevertheless at the end of it I think it will be better for everybody, and that the egg-producing part of this poultry industry will then settle down to the same situation as the table poultry part of the industry, where a huge volume of table poultry is produced every year without a penny subsidy from the Government or from anybody else, at a low price to the con- 662 sumer and allowing at any rate a fair return to the producer.
The last point I want to make to the noble Lord, Lord Beswick, is that what would be most helpful to the industry now would be to hear the whole of the Government's arrangements for this transition, especially up to the point, in two years' time, when the existing system of the Egg Marketing Board, standing there as the ultimate buyer and the machinery by which the guaranteed price is implemented, comes to an end. I hope that the National Farmers' Union will accept the decision that the Government have made as being broadly in the interests of the whole industry, and will turn their great resources and energies to helping to work out with the Government the best transitional arrangements and the best arrangement for the future. I am sure that by doing this they would be serving the interests of the producers far better than by continuing to protest against the decision.
In regard to the Order itself, I would say again to the noble Lord that I hope that the Ministry of Agriculture will not come forward with any further refinements to a most complicated piece of machinery for what is a diminishing period of time. With those comments, my Lords, I am pleased to support the Order.

LORD HENLEY
My Lords, when the first part of the Order came out we welcomed it from these Benches as a step in the right direction and, on the whole, as sensible. I think the same about this set of Orders, and I agree fairly substantially with what the noble Lord, Lord Nugent of Guildford, has said. There is one small point which I think will require watching. It is not so much the small producer as the producer in isolated areas who may be in difficulty. I think this is something which will need to be watched closely under the transitional arrangements.

§ LORD BESWICK
My Lords, I should like to thank the noble Lords, Lord Nugent and Lord Henley, for the general welcome they have given to this Order and for their reaffirmation of support for the general policy of the Government in this sector of the agricultural industry. I 663 gathered that the noble Lord, Lord Nugent, seemed to think that this particular Order was unnecessary at this point of time. I only say to him that we undertook to phase out the old in bringing in the new, and the whole essence of a phasing operation is to do it in steps. As I said at the beginning, this is the second step; and there will be a third step. To that extent, I should have thought it was better that things were done gradually rather than in one abrupt change from the old to the new.
I accept what the noble Lord says about the desirability of letting the whole of the producers know the details of the Government's new policy, but of course it just is not possible to say that we can let them know either this year, or indeed next year. Certainly this year there will be discussions with regard to the import control arrangements on the minimum import price. One would hope that some decision will be taken in this matter as soon as possible.
So far as the raising of the levy is concerned, this cannot be settled until the new authority are established: as they have the responsibility, it must be done by them, and this may take some time. So I hope that, on reflection, the noble Lord will agree that it was useful to have this intermediate step, and that as soon as possible we should come along with legislation embodying the necessary changes of the third step.
The noble Lord mentioned the document which has been distributed by the National Farmers' Union. I agree with him that, coming from the Union, it is an important document and it will have to be considered most carefully. However, I am sorry that it was not possible to get the document a little earlier; it makes it a little difficult to consider it properly. One doubt which comes to my mind when I look at the reservations, or criticisms, which the N.F.U. make is that despite all their criticisms, despite all the short-comings to which they call our attention, the fact of the matter is that many producers are of their own volition opting out of the present scheme. I cannot think, therefore, that the new proposals are so serious as one might gather from some of the criticisms made.
But, again, that is probably too simple a statement, and not quite fair, because 664 within the whole structure of the industry there are a number of producers who quite certainly will not benefit as do the majority. The remote producers, as the noble Lord, Lord Henley, says, will be disadvantaged. Their position will be a special one. Their position will have to be considered. So far as the overseas producers are concerned, in Northern Ireland and the Orkneys, special arrangements are being made. As to the rest, I think that what the N.F.U. say will have to be considered. But, over and above that, for the majority of the efficient producers I think that this will be a good second step towards a good scheme, and I should like to think that the House would be able to approve it unanimously.