HL Deb 22 May 1969 vol 302 cc472-5

3.30 p.m.

LORD BESWICK moved, That the Draft Fertilisers (United Kingdom) Scheme 1969 laid before the House on April 29 last be approved. The noble Lord said: My Lords, I beg to move that this Order be approved. The Scheme, which applies to fertilisers delivered between June 1, 1969, and May 31, 1970, is similar to the previous ones approved by the House regularly since 1952, but the rates of subsidy are changed to implement the decision at this year's Annual Review to reduce the subsidy by £3 million. The effect of this reduction will be to increase the overall net cost of fertilisers by just over 2½ per cent. or about 12s. per ton. Subsidy will continue to be paid upon the phosphoric acid and nitrogen content of chemical fertilisers.

Although there were substantial price increases on fertilisers between March, 1967, and January, 1968, I am glad to say that since then prices have remained fairly constant. In fact, nitrogen, which is the most widely used nutrient, is cheaper now than it was five years ago, and I do not expect that the small price increase resulting from the reduction in subsidy will check the expansion in consumption. It is estimated that in the past year consumption of plant nutrients will have reached 1,750,00 tons compared with 1,665,000 tons in 1967–68.

Expenditure on this subsidy during the coming Scheme year is expected to be £32½ million which, because of the increase in consumption, is about the same as the average for the past three years. The rates of subsidy in the Scheme cover some 22 per cent. of the gross cost of subsidised fertilisers.

It does not need me to emphasise that the proper use of fertiliser is essential if the British farmer is to continue to improve productivity and expand output. In making their price determinations following the Annual Review, the Government made allowance for the reduction in the fertiliser subsidy. I believe that there has been general acceptance of the merits of concentrating support, as we did, on end prices this year. The broad outlines of this Scheme will be familiar to those who are knowledgeable about farming, and I do not think more words are required from me, and I do not think there will be anyone who will wish to oppose this Scheme in its application to the current year. I therefore ask the House to approve the Scheme.

Moved, That the Draft Fertilisers (United Kingdom) Scheme 1969 laid before the House on April 29 last be approved.—(Lord Beswick.)

LORD NUGENT OF GUILDFORD

My Lords, may I thank the noble Lord, Lord Beswick, for moving this Order, and also for telling us what it is about. May I assure him that we are not going to oppose it from this side of the House. His confidence in that respect is well placed. He may not be altogether surprised if we express a note of criticism on some aspects of it. The effect of this Order, as the noble Lord has told us, is that it is going to increase the price of fertilisers by 2½ per cent., or 12s. per ton, and it is going to cut the total value of the fertiliser subsidy by £3 million over the year.

The noble Lord anticipates that the total usage of fertiliser will, nevertheless, keep up the tonnage to a level at which the total value of the subsidy will be £32½ million. I hope he is right, but I rather wonder. Everybody who is in touch with the countryside knows that, following the difficulties and hardships of the past year, most farmers are extremely short of cash at the present time. I also wonder whether the increase in the cost of fertiliser at this time will not have an influence of deterrence, a marginal deterrent, on the optimum use of fertilisers. This must be seen against the background of the Government's option of an agricultural expansion programme. While it is true that we have some reason to doubt the validity of this programme, it is still the Government's programme. This was the programme advised by the agricultural "Little Neddy", and adopted by the Minister. That programme indicated that there would be an estimated increase of fertiliser over the current five years of an extra 40 per cent. in total. That is something over 5 per cent. per annum compound interest in the current five years.

Last year, as the noble Lord, Lord Beswick, will know—because he has all the figures at his fingertips—there was a falling trend in the application of fertilisers. The question I want to ask the noble Lord is this: does he really think that this price increase, small though it is, will have the effect of arresting the falling trend that we encountered last year? What prospect is there of getting this sharp increase in the usage of fertilisers which the "Little Neddy" Report indicated, and which we should all like to see? Will the noble Lord tell us what reports he gets through his right honourable friend the Minister of Agriculture from the National Agricultural Advisory Service about the usage, the take-up, of fertilisers at the present time for this year's harvest?

It is common knowledge that autumn sowings were inevitably very much reduced by the appalling weather, and spring sowings have been late and lower than we should like because of the wet spring. One needs to have all the more liberal an application of fertiliser to give us any chance at all of getting the kind of harvest yields which the Government have forecast and which all of us wish to see. That is the main point I am putting to the noble Lord. Does he really believe that this determination will give us the increase in the harvest this year that we are all hoping for and, indeed, the Minister of Agriculture has predicted?

Secondly, I wish to raise a minor technical point with regard to potash. As noble Lords will know, these fertiliser subsidies are applied only to nitrogen and phosphates. There is difficulty in the supply position. There is, relatively speaking, a monopoly control, although not a complete monopoly, of potash supply which has always deterred the Ministry of Agriculture (even in the days when I had the good fortune to serve there) from giving a subsidy on potash.

The noble Lord and his right honourable friend wish to see areas of the country which are pretty low in potash, and are in need of extra applications, ploughed up, and crops grown there. I should like to ask the noble Lord whether he would ask the Ministry of Agriculture if they would look again at this question of a subsidy for potash. In these areas additional applications are very badly needed. We shall not get the kind of crops and the yields we wish to get, and the profitable crops that the farmers must get, unless additional applications of potash are given. With these comments—the first one rather critical—I am very happy to support this Motion. I only hope that the noble Lord's own forecasts are correct.