THE AGRICULTURAL INDUSTRY

HL Deb 04 April 1973 vol 341 cc273-382

2.40 p.m.

VISCOUNT DAVIDSON rose to draw attention to the state of the Agricultural Industry; and to move for Papers. The noble Viscount said: my Lords, it is rather a strange fact that it is nearly four years since there was a full-scale debate on agriculture in your Lordships' House. That debate was on a Motion by my noble friend Lord Nugent of Guildford, and called attention to the limitation which the 1969 Price Review placed on the Government's expansion programme for home food production. It took place on the day after the Budget for that year, which among other things imposed a freeze and a squeeze on the nation's economy, mainly as a result of the failure during the previous year to substitute home-produced goods for imported goods on anything like the necessary scale. It took place a few months after the "Little Neddy" Report had been published, which not only emphasised the potentially important role which our farming industry could play in saving imports but spelt out in great detail the increase which could be achieved in each commodity and the extra capital which would be required to produce it. It took place shortly after the demise of a Select Committee in another place which had been sitting there for more than two years and which had reached a similar conclusion from a more political angle: that a major expansion of home production to save imports would be in the interest of the national economy.

At the same time, my Lords, the natural climate had been far from favourable. The weather of the previous two years had been exceptionally bad, with two particularly difficult harvests and wet autumns. Many of us, indeed, were beginning to wonder whether some of our soil structures would ever recover from the pounding which they had received. On top of that there had been one of the worst outbreaks of foot-and-mouth disease on record. The farming industry was in a mood of deep gloom and depression, and it was little wonder that the National Farmers' Union, expecting a positive incentive towards expansion, declined to agree to the Price Review of that year on the grounds that it merely postponed any expansion. All these factors which made up the natural and economic climate of that time were realistically reflected in your Lordships' debate. It was at the same time notable for many excellent speeches, in particular the maiden speech of the noble Lord, Lord Congleton, who I am delighted to see has put down his name to speak in to-day's debate.

My Lords, so much for the past. Today, in very different circumstances, I feel that it is not only timely but important that we should again debate the state of our greatest industry; and perhaps the fact that there are two Motions down on the Order Paper on the same major subject indicates a certain admission that such a debate is overdue. However that may be, I am delighted that the noble Lord, Lord Walston, has agreed to speak to his Motion to-day, for not only is it complementary to the wider and more immediate issues which I should like to discuss but it underlines, perhaps, the fact that, although we sit on opposite sides of the Chamber, when it comes to farming we speak the same language and we understand each other's problems. I count it as an honour that the noble Lord has agreed to, so to speak, share this debate, in the same way as I value his friendship as a farmer. I should also like to say how delighted I am that my noble friend Lord Wynford has chosen this debate as the occasion for his maiden speech, and I am sure that I am speaking for all of your Lordships when I say how much we are looking forward to listening to what he has to say.

My Lords, there are many reasons for saying that this debate is timely. We are now an integral part of the European Community, and have to adapt ourselves to the Common Agricultural Policy. The sudden, indeed dramatic, rise in land values within the last year has attracted considerable public concern. Even more intense feelings have been expressed about the price of certain foodstuffs. At the same time we have seen only this week the implementation of the largest wage rise on record for our farm workers. So far as the latter is concerned, I am sure your Lordships will welcome this rise in the basic rate of 20 per cent. in that it recognises not only the increasing productivity per man but the important, indeed vital, role which farm workers play in our nation's economy.

My Lords, the immediate impact of our joining the European Community has perhaps not been quite so striking as some people imagined it would be. But many of us, I am sure, are convinced that January 1, 1973, will be recorded in future history books as a date of vital significance, not only for the nation as a whole but for our agricultural industry in particular. Most dates in history books remind us either of victories or of defeats in times of war. Although some may like to think of our entry into Europe as either a victory or a defeat for their deeply-held principles, I should like to suggest that January 1 of this year will be remembered as a date heralding a period of change and adjustment in our economic and political climate which will have far-reaching and beneficial effects on all of us and future generations. In the field of agriculture, the changes are bound to be dramatic: for in the same way as the formation of a Common Agricultural Policy proved to be the most difficult and complicated area in implementing the principle of a united Europe, so was it in our negotiations with the Six that the differences between our system and theirs provided a major stumbling-block. Indeed, these differences are so deep and significant that it is important to appreciate them thoroughly if the road towards ultimate harmonisation is to be a smooth one.

My Lords, the most fundamental difference lies in the method of price support. Since the middle of the last war we have had in one form or another a system of guaranteed prices for agricultural commodities which was designed to ensure the maximum production from our soil. It also, through deficiency payments paid to farmers, helped to ensure that food prices paid by the consumer were kept reasonably, and in some cases artificially low. The 1973 Price Review sees the beginning of the end of this system. For consumers, the days of cheap food are as numbered as those of deficiency payments for farmers. To say the least, it can only be described as unfortunate—and I emphasise "unfortunate"—that the dramatic upsurge in world food prices should have coincided with our entry into the Common Market, and that earlier this year we were facing price levels (due to world shortages) in cereals and beef not far less than those in the Community to which we envisaged adjusting ourselves over a five-year period. My only comment is that those prices, both for beef and cereals, have since fallen as dramatically as they rose, which only proves that a few weeks are as short a time in agriculture as they are in politics.

My Lords, the second difference lies in the fact that whereas 14 per cent. of the total E.E.C. work force is occupied in agriculture, the corresponding figure in the United Kingdom is just under 3 per cent. Whereas the Common Agricultural Policy was designed with the object of supporting the incomes of a vast number of relatively uneconomic small farmers until such time as they died or were pensioned off, our support system, and in particular the Farm Improvement Scheme, and latterly the Capital Grant Scheme, positively encouraged our farmers to become more efficient and more productive. Indeed, during the last decade the industry experienced simultaneously cost inflation and a virtual price freeze, which necessitated capital investment in new buildings, fixed equipment and modern machinery in order to ensure that the business remained viable. Statistics show quite clearly that the average size of farm holding has gradually increased and that the average number of livestock in a unit has got progressively larger. At the same time, the number of those occupied in agriculture has fallen. The net result of these trends and changes has been a dramatic improvement in productivity per man, so that to-day 50 per cent. of the nation's food is produced by 3 per cent. of its labour force.

My Lords, a third and major difference lies between the systems of land tenure. At the turn of the century over 90 per cent. of the agricultural land in this country was in the hands of landowners who let it to farming tenants. The owner-occupier was a very rare bird. By 1950, however, 38 per cent. of agricultural land was owner-occupied. By 1972, this proportion had risen to 54 per cent. This steadily increasing free market in agricultural land had no doubt contributed to the increase in the average size of holding as genuine farmers sought to expand their acreages in order to be able to practise economies of scale. At the same time, it has contributed towards the recent developments over the past nine months or so of agricultural land being offered and being bought consciously as an investment to act as a hedge against inflation.

This is nothing particularly new, but it is the first time that so many factors have combined simultaneously to bring about an explosion in agricultural land values. First, there was the fact that until this happened land values were known to be higher in the Common Market countries. Secondly it was anticipated that farming would be more profitable when we joined the Common Market. Thirdly, the pound was floated, and investment in stock market securities became less attractive; fourthly, institutional buyers came into the market with a view to spreading their portfolios more widely; and, fifthly, money received from the sale of land for development increased the pressure with the need for that money to be re-invested in similar business assets if the roll-over provisions for capital gains tax were to be obtained.

At the same time—and since I am on the subject of land prices, I might as well pursue it—the loss of agricultural land to meet the demands of urban expansion is said to have gone from 50,000 to 70,000 acres a year. Coupled with the fact that only about 1.8 per cent. of all agricultural land changes hands every year, is it to be wondered at therefore that the combination of all these factors produced a dramatic explosion?—or, at any rate, so it appeared to be; although most commentators tended to ignore the fact that land values had been relatively stable for a fairly long period before the explosion took place. It is easy enough for people to say: "What are you worried about? How pleasant it must be to have one's assets doubled or tripled in value!" That is not the point. The point is that farming is a long-term business, and no landowner, whether landlord or owner-occupier, is made richer in cash terms by high land values unless he chooses to sell out. All that happens is that the return on his capital reduces correspondingly and if he wishes to hand over his land to his son he must find the cash to pay capital gains tax on a value inflated by circumstances outside his control. If he dies, then estate duty liabilities are similarly inflated. Either of these situations will inevitably necessitate selling off some of the land or borrowing at crippling rates in order to pay the tax. This will result in either fragmentation or loss of the viability of the business.

All these matters may have some very serious repercussions on the structure of land ownership in the long term; but what is concerning the genuine landlord and owner-occupier at the moment is the fact that the equation of valuing a farm has changed. Whereas until last year it was usually a question of the income expected from an acre of land which decided the capital value per acre, the advent of large supplies of wealth from sources outside the industry, within a limited area, has resulted in the capital value of an acre of land bearing little or no relation to the income obtained from it. At the same time, the continuity of land ownership throughout the whole industry has been put at risk. Perhaps I have spent too long on this problem of land values, but it is one of current concern and constant comment from farmers to-day. It may be that all the implications which follow so far as the future structure of land tenure and farming are concerned have not been properly appreciated and need consideration in some detail.

My Lords, although the words "Price Review" are not included in the wording of either of the Motions being debated to-day, it would be wrong not to make some comment on the first Annual Review to be held since we joined the Economic Community. The Annual Price Review has been fundamental to the wellbeing of British agriculture for the past 25 years. Production subsidies and guaranteed prices have been the twin pillars supporting the economy of the agricultural industry and have enabled successive Governments to continue the policy of cheap food for the whole of the population. This year's Review reflects the changing circumstances. It is important, for example, to know how the scope of the Review has been widened not only to include those commodities subject to the E.E.C. régime and hitherto excluded from the Review, but also to draw attention to such wider matters as farm structure and the return to farm workers. The guarantee determinations themselves will become increasingly irrelevant as the transitional period advances, whereas the wider issues which dictate the economic condition and prospects of the agricultural industry will grow in importance.

Within this context, I have only two main comments to make. First, relief that the grants for drainage are being continued at their existing level. The report called Modern Farming and the Soil, published in 1970, emphasised that there was a great backlog of drainage where it was most needed; it also stated that not only could there be little progress in restoring and improving the structure of the soil until this work is done, but that the increased momentum in drainage must be accelerated if we are to avoid structural problems associated with modern heavy machines. There is still an enormous backlog of work, which will involve many years of planning before the work can be done. I hope that it will be possible for the rate of grant to be maintained at its present level until at least 1977.

My Lords, my second reaction is one of extreme disappointment at the cut in the standard rate of grant payable under the Farm Capital Grants Scheme, from 30 per cent. to 20 per cent. I am bound to say that I am at a loss to understand the reasoning behind this. There is little doubt that our system of capital grant aid for agriculture has played a major part in improving agricultural efficiency. If our agreed aim is to increase production in order to lower food prices, part of the expansion required must come from further capital investment. In spite of the fact that assisted credit is available for farmers in the Six, this has not proved as beneficial as our system of capital grants and, indeed, only a year ago the E.E.C. agreed that in addition to assisted credit facilities member countries could give capital aid ranging from 25 per cent. to 30 per cent. to encourage capital investment. It has been said that the level of capital grants had become too high in the context of the whole support system. But I would remind your Lordships that the present high cost of capital grants is a result of schemes which have already been approved and which stemmed from the impetus given to capital investment during the two years ending March 18, 1972, when the rate of grant was increased to 40 per cent. for that period. The Price Review states that there has been a dramatic increase in capital investment by the industry. I should have thought that the Government would wish that this momentum should be maintained. It seems to me that this cut does not accord either with the spirit or the intention of the first of our "new look into Europe" Reviews.

Agriculture is our largest single industry. It occupies 80 per cent. of our land. In the last 20 years the volume of production has increased by just over 70 per cent., while the labour force (farmers and workers together) has fallen by 54 per cent. These bald figures summarise a major technological revolution in all branches of the industry. As in all revolutions some problems have been solved and, at the same time, new ones have been created. In the case of farming, the old ones, such as the need for arduous manual work, were known only to those who were occupied in farming. The new ones appear to be becoming well known to, and shared by, the rest of the population and must be resolved within a much wider context and with understanding on all sides. Intensification of livestock into larger units has created problems of effluent and slurry disposal; the burning of surplus straw creates a public outcry; new farm buildings are built with non-traditional materials and so on.

Perhaps the greatest problem stems from the reduction in the labour force and the changing pattern of the countryside. Redundant cottages and farmhouses are bought by daily or week-end commuters who look for peace in a traditional countryside and who are often surprised when they look out of the window to see a hive of mechanised activity. Many villages, indeed, are no longer agricultural even though farming is the only activity in that area. Some remote and less attractive villages may end up by being completely depopulated. All these factors will have their effect on the environmental balance, and I would suggest that the whole problem requires the most serious consideration.

My Lords, as time goes on and more land is taken for the development required by an urban society, more intensive methods of husbandry will be needed if we are to maintain our existing levels of production. It has been estimated that by the year A.D. 2,000 some 2 million acres will have been lost to agriculture, and the population of this country will have reached some 66 million. I rather hope that these estimates may not turn out to be accurate, but if they do, it will mean that the proportion of farmland per head of population will fall from half to two-fifths of an acre. At the same time increasing world population, coupled with an increasing demand for higher standards of living in developing countries, may well mean that imported foodstuffs will be less readily available. Of course, by then we may all be living on pills and artificial foods—and very likely dying from them, too.

Those who are occupied in agriculture are motivated by a variety of factors; for the nature of farming is that it is partly a business and partly a way of life. Although the emphasis alters from time to time, the practice of it is both a science and also a craft. Whatever further changes improvements in technology may bring, I only hope that these basic and underlying attitudes remain unchanged. I refer in particular to the personal relationship between the farmer and his men; between the stockman and his animals; between the arable farmer and his soil. For in the final analysis it is the best craftsmen making intelligent use of the scientists' researches who will lead the way towards increasing the home production of food upon which we shall all continue to rely.

Finally, my Lords, I would repeat a remark made many years ago which, I submit, is relevant not only to to-day's debate but also in a much wider context. The most important crop that this land of Britain grows is men—and in these days of equality I must add, women. Nurture this crop well and the others will prosper. Times may have changed and will continue to change, but there is a basic truth in those words that cannot be ignored to-day. My Lords, I beg to move for Papers.

3.2 p.m.

LORD WALSTON had given Notice of his intention to call attention to the problems affecting agriculture between now and the end of the century, with special reference to labour and capital; and to move for Papers.

The noble Lord said: My Lords, it is a pleasure in many ways to follow the noble Viscount, Lord Davidson, and I am grateful to him for allowing my Motion—which, may I say in parenthesis, I do not intend to move—to be debated at the same time as his Motion. It is a pleasure because, as he said, although we sit on opposite sides of the House we are working at the same job and often working in close harmony. Although we may disagree rather fundamentally from time to time on certain aspects, we are in complete agreement about what we want for agriculture and what we believe to be good for the country. It is also a pleasure to follow him because, if I may refer to this, I have for upwards of forty years known and respected and had great affection for the noble Baroness his mother. I think back for very many years to the days when she and my mother worked for housing in Westminster, far removed from agriculture. That is an additional reason why I am pleased to be associated with the noble Viscount to-day. Another reason, and I suppose the most important, is because I can follow what was an admirable speech on agriculture as it is to-day. Though we do not frequently discuss the subject of agriculture in your Lordships' House, when we do the speeches are always well-informed, wideranging and objective. The noble Viscount has given us a first-class example of that type of speech to-day.

My Lords, I am tempted to follow many of the points raised by the noble Viscount, but I will forbear from doing so because I am afraid that the other things I want to say will detain your Lordships for a somewhat lengthy time. So I will concentrate not on the Common Market, not on the Price Review, not on to-day's problems, but on the problems which I believe will face agriculture between now and the end of the century. I do so because I think it is appropriate that Members of your Lordships' House should cast their minds forward, and spare time to think about matters of great importance which those in another place and other people intimately concerned with day-to-day problems have little time to consider; and because I believe it is vital to the future well being of agriculture that we act now in order to prepare the ground for a prosperous, healthy and efficient agriculture twenty years ahead. After all, my Lords, we do not need to look back very far to see what happens to us when that is not done. In the 1920s the planning of our agriculture, in so far as it existed at all, was gravely deficient. Thought was not given to what was going to happen in the 1930s and 1940s if we pursued the course adopted in the 1920s, and as a result we came very near to crisis at the outbreak of war. Unless we give thought now to what is going to happen in the 1980s and 1990s we may well, even without a war, come to some similar form of near crisis. I believe it is for us in this Chamber to take the lead in thinking about these matters and in encouraging others to think about them.

I believe that the two main problems which will face agriculture between now and the end of the century may be summed up in two words—capital and labour. There are already very clear signs that all is not well in respect either of capital or labour. Let me first look at the question of capital. I should like to make quite clear that I am not discussing the land itself. I am not talking from the point of view of a landowner or landlord, but solely from the point of view of the tenant farmer—though in passing I would strongly endorse the remarks of the noble Viscount about the present rise in agricultural land values. It may be very nice for people who try to value their assets by putting down figures on sheets of paper and totting them up to see that within the last six or twelve months the value has increased twofold, threefold or even more, and that overnight they have, on paper, become millionaires. But the land represented by that paper value does not produce one single extra bushel of wheat, gallon of milk or pound of meat because it happens to be worth £1,000 to-day instead of £300 or £250. That is the factor that we must bear in mind. I will not labour the point; the noble Viscount has dealt admirably with it already.

Forgetting the value of the land and of the buildings, we must remember that to-day agriculture is a highly capital intensified industry. In the old days, in the 1940s for instance, the capital required by a tenant taking a farm was approximately £10 per acre. By the 1960s the figure had risen to £50 an acre. To-day it stands at £100 an acre and the rate of rise is accelerating still more rapidly. My Lords, let me give some purely personal figures. In 1970 I bought a tractor and it cost me £1,300. An identical model to-day costs very nearly double that sum, £2,400. In 1967 a large combine cost £3,600. Three years later the price of the same model had gone up to £4,500. Last year it was £5,500. This year it is £6,400. That is the scale of the price rise which is taking place. That is the kind of money which farmers have to pay out for the implements which they need to enable them to carry on their job. And not only for machinery: in the last two or three years the price of nitrogen has nearly doubled; the price of potash has gone up by about 50 per cent. and the price of dairy nuts for cows has gone up from £37 to £50 a ton. Craftsmen's wages and tractor drivers' wages in 1969 (and I shall have more to say about wages later, so I will not dwell on it now) were just over £13 a week, in 1972 £17.82 a week, and to-day, within the last few days, £21..5. From the point of view of the farmer who has to pay those wages out, it puts a severe strain upon his capital resources.

Where does this extra money, these extra pounds per acre that every tenant farmer has to pay, come from? Let us look at a couple of representative farms. A 200-acre farm to-day has a tenant capital of approximately £20,000. If the farmer is highly efficient he can expect to make some 20 per cent. on his capital; and he is doing well if he averages that year in, year out: in other words, he has an income of £4,000 per annum. That does not sound too bad, but by the time tax of say £1,500 has been paid on it, he has £2,500 left over; and with inflation running at the rate of approximately 10 per cent. every year he needs an extra £2,000 of capital. So virtually all his untaxed profit, if he is farming in the way that he should goes into increased capitalisation, not to expand his output, but to stand exactly where he is. If you take a farm of 500 acres the figures are even worse, because the tax is higher and every penny of his untaxed profit is needed to keep his capital where it is at the present time.

This is borne out by an interesting survey carried out by the Ministry of Agriculture on 210 tenant farms of an average size of 198 acres. The average of these 210 farms shows that between 1969 and 1971 their total loans, their total indebtedness, rose by £740: in other words, by something over £1 per acre per annum. That was up to 1971, before inflation really took hold. Even on those figures, it means that a 500-acre farm by the end of 1993—and I am asking your Lordships to look that far forward—would have to find an extra £12,000 of permanent tenant capital. My own guess is that, because of inflation (even if it is stemmed now, as we all hope that it will be) that figure is more likely to be doubled. So much for the present serious capital position of the tenant farmer.

Now, my Lords, let us look at what in many ways is still more serious; namely, the position of labour. We all know about the drift from the land; we have lived with it over the years. We know also that the drift is slowing down. Thank God it is slowing down, because if it continued at the rate obtaining in the 'fifties and early 'sixties there would be no labour left on the land by 1990. But although it is slowing down, workers are getting older, and while younger troops are coming in, relatively few of them stay on the land after they marry but set their sights on higher things. There was a most valuable discussion paper prepared by Dr. Bessel and produced by NEDO a short time ago, which is of importance to anybody who is looking at the long-term future of agriculture. That paper forecasts that the total full-time labour force in the United Kingdom will drop from a figure in 1968, which is quoted at 324,000, to 179,000 in 1980, a decline of 45 per cent. Even more significant, the survey shows that 17 per cent. of the workers interviewed under 25 years of age intend to leave agriculture within the next five years. They are there to begin with: they leave school and take a job close at hand in the village. The wages of the young men in agriculture do not compare so unfavourably with those in industry, but because the prospects of promotion are so slight, because the ladder is not there for them to go up from one job to another, higher and higher, and because their wives are pushing them to earn more money and to have their weekends free, they are the ones to leave the land.

This survey goes on to try to find out why these people leave the land or why they intend to leave the land. Again, it is interesting to see (these are figures for all ages, not just the younger ones) that 23 per cent. of them intend to leave the land because of the weather. They do not like working in the open air all the time, in fair weather and foul. Another 23 per cent. say that they are going to leave the land because the wages are low; and 6 per cent. are going to leave because of the long hours. This is not surprising when you think of it and especially if you compare the wages of farm workers with those of other workers. I apologise for these figures, but I think it is important that we should have a factual basis on which to base the points of view that I am putting forward, so that they are not seen as the vague fears of somebody who is hankering after the old days or something of that kind. These are figures from 1970. If you take the wage of the male adult agricultural worker as being £100, and compare it with the wage of other people working close by in the village, whom he sees day by day—playing cricket, in the pub, wherever it may be—you find that the construction industry pays £140 and the road haulage industry £156. In other words, those two industries, very close to the farm worker, are paying approximately 50 per cent. more than the farm worker is getting.

When it comes to hours of work, again taking the agricultural worker as 100, the road haulage worker, the driver, admittedly works rather longer hours at 108, but the construction worker, the builder and builder's labourer, works only 96 hours. These are 1970 figures. On more recent comparisons, the latest White Paper on agriculture gives the average wage of the farm worker in 1971–72 as £22.43, whereas the Department of Employment gives the average wage in manufacturing as £36.20, well over 50 per cent. ahead of the farm worker: and the hours worked are, the agricultural worker, 47.1, the manufacturing worker 44.1, close on to 10 per cent. less.

That is the situation as it is to-day. It is the trend we have been seeing, and the trend which I believe will continue at an even faster pace than it has gone over the past five years. What can we do about it? First of all, what should the Government be doing to-day to prevent this deterioration and to remedy the problems with regard to capital? There must be remunerative prices. You cannot have sufficient capital if farming is operating at a loss. I make no complaint about to-day's prices. That may sound an odd thing for any farmer to say, and of course I should like them to be higher; but I cannot honestly say that they are too low.

I am, however, seriously perturbed by the agitation which is going on in both Parties for cheap food. The noble Viscount, Lord Davidson, is quite right when he says that the days of cheap food are over; but we cannot get the sort of agriculture we want if we are going to aim at a cheap food policy. Let us bear that in mind when we are talking about remunerative prices. That is quite insufficient to provide the finance necessary for the rising costs in agriculture. Industry had precisely the same problem a hundred years ago and it met it by forming the public companies, going out to the public and asking them to invest in the equity of the concern. For a whole variety of reasons, agriculture cannot do this, or not in the same way, but there are already some schemes which wise and clever men are thinking about which are making it easier for equity capital to be put into farming, and these schemes must be encouraged, if necessary by fiscal policies on the part of the Government and certainly by technical advice and help through the Ministry of Agriculture.

I believe there should be particular encouragement given to partnerships between landlords and tenants. Let us move away from the old landlord-tenant relationship, the landlord providing the fixed capital, taking a fixed rent and having nothing else to do with it, the tenant providing tenant capital, taking the risk and hoping to get a higher return on his capital. There must be a close partnership between the two which will involve not only the landlord, which I believe is a good thing in itself, in the hazards and problems and the successes of farming, but will also enable more capital to come into the industry because there will be there the security not only of the skill of the farmer and his ploughs and his cows but the actual security of the land itself. I am very glad that the Agricultural Mortgage Corporation is thinking most progressively along these lines.

In addition to this, my Lords, I think we can look to the whole co-operative movement for considerable help in solving this problem. One of the reasons, as I tried to indicate to your Lordships earlier, why farmers' capital requirements have risen so much is that the cost of machinery has gone up so much. If they can be provided with that machinery without having to put out capital for it themselves, either through contractors or through co-operative movements, there will be a very great saving of capital to the farmer himself and he can restrict his capital needs to his wages, fertilisers, herbicides and so on, and it will be easier for the co-operative movements to raise capital on a more businesslike basis than is ever possible for a farmer to do. I know that the Government are giving help and encouragement to the co-operative movement and I hope they will continue to do that because I believe that this is one of the ways in which the problems of capital in the years ahead can to some extent be solved. In general I would say that we must have more hard thinking; we must have more co-operation between Governments, financiers, bankers, people knowledgeable about these matters, and the farmers themselves in trying to solve this problem.

Now may I turn to labour. Above all, wages is the crux of the matter. In spite of the recent rise in wages the farm workers still lag far behind and it is my own view, supported by the figures which I have already given, that they are at least 50 per cent. behind wages of comparable skills in the majority of other industries. I suggest very seriously that the first job of the new Pay Board must be to raise agricultural wages and, what is more, that it should raise them by 50 per cent. from the present level, given the fact that other wages remain at the same level. If other wages rise, that 50 per cent. must be pro rata increased. That is the only way in which farm workers can really be brought into line with the wages of workers in most other industries. Possibly it will take three years. I do not think that that is unduly long, but it should not be any longer than that otherwise the drift from the land will continue. Of course that will mean that food will cost more—there is no doubt about it. But it will not cost quite so much as people think. Wages to-day comprise no more than 15 per cent. of total farm costs, and farm costs are less than 50 per cent. of the cost of the food, the price of the food in the shops, so a rise of 15 per cent. in wages would in fact mean a rise of only 3 per cent. in the retail price of food. I urge upon your Lordships not to fall victim to the present danger of talking of food prices as if they depended solely upon farm prices. Processors, distributors, retailers, all the other people involved, also have a very big say in how much our food costs when we go into the shops. Apart from this, do any of us really want cheap food at the exploitation of the farm worker? That is what we have been having in the past and that is what those who will oppose a significant rise in the wages of farm workers on the grounds of an increase in the cost of living are in fact saying.

Wages, my Lords, is the first and by far the most important aspect and is something on which action can be taken by the Government if they so wish. Secondly, I believe that there should be better conditions of work. Your Lordships will remember that one of the reasons given by people who leave the land was that of weather conditions. We cannot expect even this great and powerful Government to control the weather of the country, but we can take steps to see that the farm worker is protected to a very large extent from the weather. Already the makers of farm machinery are examining these matters. The National Institute of Agricultural Engineering is giving a lot of thought to it, and not only to protection from the weather but to a general improvement in conditions of work—protection from the dust on the combine harvester in the harvest field, protection from the bumping of the field by better springing and protection from noise. The decibels on a tractor are far in excess of those on a heavy goods vehicle. These are matters which require fundamental research and I hope the Government will continue to give support to the National Institute of Agricultural Engineering specifically for its work in this field.

Thirdly, my Lords, housing. The noble Viscount rightly mentioned the difficulty there is going to be with regard to houses, because of the way in which the former farm workers' cottages are being sold to weekenders, to commuters, to businessmen and so on. I have no objection to that. It is good that people of that kind should come and live in the country. It is good for them and it is good for the former country dwellers. But it means that there is a growing shortage of houses for young farm workers, and too many local authorities are inclined, when they increase their housing programme, or when they formulate their housing programme, to put up relatively large estates in a few villages which are going to be developed for industry on the outskirts of small towns rather than a smaller number in the actual villages where the farm workers are living. There is much to be done, and it must be done now if we are to ensure that agriculture continues to be the efficient contributor to the national economy that it is at present.

Of course we can do nothing, and very many of us here in this Chamber to-day will not live to see the results of our inaction. We shall be able to jog along without too much pain for several years to come. But sooner than we think we shall find that instead of that prosperous and efficient agriculture, well supplied with capital and with skilled labour that we are proud of to-day, and that we benefit from, we shall have instead farmers struggling with insufficient resources and with no labour to work the land. Our fertile land will no longer be cultivated as it must be, and we shall depend upon others for an ever-increasing proportion of our food at ever higher prices—because again the noble Viscount was right in pointing to the world food situation which we must take into account as we look upon our own. Uncultivated fields, a declining rural agricultural population, a declining agricultural production, and greater dependence upon expensive imported foods—the avoidance of all these things, my Lords, is one of the greatest challenges that face the statesmanship of our country to-day.

3.31 p.m.

VISCOUNT THURSO

My Lords, it is a measure of the concern of your Lordships' House for the state of agriculture, and a measure of your Lordships' unanimity in wishing to do something about it, that we are to-day discussing two Motions which are, in effect, on the state of the agricultural industry and the movers of these two Motions have agreed to merge their interests in one debate. This may mean that some of us will perhaps appear to be repeating some of the things which have already been said, but I hope rather that it will be taken that among us there is a certain degree of consensus about what is important to agriculture, and that some of us are endeavouring to underline what we consider to be the more important points.

At this time when prices are soaring in the market place people are inclined to blame anybody and everybody for the situation—everybody, that is, except themselves. There is sometimes a sense of panic abroad, and this atmosphere of near hysteria is dangerously likely to intensify the difficulties, to intensify the effects of shortages, and even to intensify the shortages themselves. It is certainly not conducive to a calm appraisal of the situation, and yet it is exactly this, a calm appraisal, that we must give to British agriculture if we are to create conditions where British farmers can play their full part in helping to solve the country's economic difficulties and in helping to steady the cost of living. British farmers can help to steady the cost of living—although even they would not presume to be able to do so "at a stroke". As the noble Viscount, Lord Davidson, has already pointed out, our farmers are among the most efficient and most productive in the world. With only 3 per cent. of the national labour force they produce over half—my figures suggest it is nearer to two-thirds—of our temperate foodstuffs.

We are now nearly or totally self-sufficient in liquid milk; in pig meat, except in bacon, and in poultry and eggs; and we could be self-sufficient in other products also if we created conditions in which British agriculture could thrive. British farming should be a never ending source of pride and wonder, instead of being looked upon merely as the object of earthy fun in the manner of a Giles cartoon. Indeed, if the whole country were as efficient as the farmer and his boy there would be no economic difficulties for us at this time. So I say that it is the duty of any Government to create the conditions in which farming can thrive, and it is to the advantage of all of us to support every Government in doing so. We must expand our home production, especially in the areas of livestock production from grassland, in which this country is supreme. We must achieve a standard of living for farmers and for farm workers that is in some way relative to the hard work which they put in their indisputable skills and their heavy capital investment.

What conditions are these which we would seek to create? First and foremost, I would suggest that we must offer stability to any branch of farming which we wish to see flourish. Agriculture by its very nature is a long-term business, but it is in the building up of an enterprise and in the maintaining of its efficiency that the long-term view has to be taken. One can destroy an agricultural enterprise very quickly. If you remove support from an agricultural product or artificially or suddenly cut off demand, you will very quickly create a scarcity of that product. You may also affect the availability of other products. If you have been wrong in your estimates and wish to restore the supply of that product, it will take a long time and considerable inducements to do so. This is exactly why we have seen a shortage of beef and a high price for all meat at this time. The European Economic Community produced a butter mountain. It had to get rid of this mountain, and in doing so it created a shortage of mothers to produce calves for veal and beef. In this country we could do nothing about the situation because on the cattle side we were heavily committed in trying to produce replacements required by the brucellosis eradication schemes and the sheep industry, to which we might have looked to fill the gap, had no reservoir to draw on as its hill flocks had been decimated by long years of inadequate prices.

It is not the farmers' fault that meat is scarce and dear. It is our fault that we did not foresee the consequences of deliberately making agriculture cut back on sheep production. It is our fault that we did this to the point at which many hill sheep hirsels went out of existence, and are still out of existence, and where many shepherds left the land and our reservoir of meat producing animals dried up by so many thousands of head. We are like the "goats" in the story of the Calvinistic Minister's interpretation of the Last Judgment, who cried to the Lord: "Lord, Lord, we didna ken!", and to whom the Lord, in his infinite mercy, replied: "Well, ye ken noo!" We may know now—but we should have known all along. We should surely know that we cannot afford on this overcrowded planet to do away with any form of agricultural production, except in exchange for some other more desirable or more efficient form of farming. It has already been said that we have said, "goodbye" to cheap food forever. But this should not mean that we should say, "hello" to expensive food. This should mean that in exchange for a fair price we should get a fair quantity and a fair variety, and we should see that we have no serious shortages of supply.

That brings me to the second of the conditions which I consider essential if we are to use our land properly and fully. Like the noble Lord, Lord Walston, I consider it essential that we have adequate capital resources. For efficiency nowadays a huge amount of capital has to be invested in machinery and fixed equipment, and large amounts of capital are required for stock whenever an enterprise is expected to expand. We must ensure that the capital needs of agriculture can be catered for. Why then, I ask, as did the noble Viscount, Lord Davidson, at this moment cut capital grants? It is not called for by membership of the E.E.C., so why do it? It seems a particularly "penny wise" thing to do at this time. Can we not reverse this mistaken decision? Capital grants do two things for farming. They increase the total amount of capital available to the industry, thereby enabling it to expand and modernise, to stay productive and efficient. Secondly, they keep down the cost of money to the industry, thereby helping it to operate at the low levels of return on capital which we have made traditional. One thing is sure: if we insist on cutting back on capital grants we shall have to pay agriculture more for increases in both production and productivity.

Nevertheless, whatever price farming has to pay for capital or whatever return it will get on capital invested it will still need massive amounts to stay efficient. The policy most likely to provide these massive amounts in the best way is the policy which has been put forward from these Benches for nearly as long as I am able to remember—the establishment of a land bank. A land bank has been desirable for many years. It is now becoming almost essential—especially so, if one is to recruit new talent into the ranks of an industry which is becoming more and more capital intensive. Many other countries have such banks. The French land bank, for instance, is reckoned to be the fourth most powerful bank in the world. A land bank becomes even more important if one values the basic tool of farming—the land itself—at its true value. It is ridiculous that we should pretend that we really value land as from 10 to 100 times more valuable if it is used for housing than if it is used for producing food. This means that agriculture can always be forced off good land by housing and industry and made to reclaim poor or derelict land in its place. Why should not urban needs be met more often out of our poorer land? The answer lies in the relative depths of pocket between town and country. A land bank should be able to help us to achieve a fairer bargaining position between urban and rural land users and with it a new and—who knows?—a better approach to town and country planning.

I, for one, am not sorry to see the disappearance of the subsidy as a tool of agricultural inducement. At best, it was a blunt instrument; at worst, it encouraged the wrong things and went into the wrong hands. It was mainly a way of keeping down farm prices below a true level and of deceiving the people into thinking that food could be had more cheaply than was true. It often discouraged productivity and efficiency. What has always produced the goods in farming is a fair price plus a market demand. But the making available of capital and the giving of capital grants is not subsidisation; it is a proper national investment in perhaps our greatest national asset.

There is another thing we can do quite easily if we want to get the maximum production of food. That is to rid our minds of prejudice against food produced in a building as compared with food produced in a field. Intensive methods are here to stay and, properly handled under the sort of regulations which we have devised in this country, like the Brambell code, they are not only acceptable but essential if we are to avoid paying even higher prices for meat products. Why then treat them as though they were some form of cheating? Why make them pay high rates? Surely this is not demanded by the E.E.C.? A very easy way of encouraging the production of more animal protein at reasonable prices is to de-rate intensive farming units.

In this country we seem to grudge paying for essentials or what is good for us while at the same time being willing to pay any price for non-essentials or what is bad for us. We grudge the price of a pint of milk but happily pay four times as much for a pint of beer. We are happy to see large areas of the world under crop for carcinogens and will pay fabulous prices for the product which they produce, but we are horrified to see the price of oats, peas, beans, or barley rise. We have got to readjust our thinking.

We may never see low prices for food again, but we should see that we get fair supplies in return for fair prices. If we want adequate supplies we must look after the farming industry properly. We must start by re-valuing the farmer and the farm worker. Both deserve more for their labours and investment than they get. We must see that the industry has an adequate supply of capital, and if we want to keep prices as low as possible we must see that the cost of this capital is kept low—so why not restore the level of capital grants? We must see that all forms of food production get a fair crack of the whip—so why penalise intensive methods with high rates? Finally, if we want agriculture in this country to be put into a really strong position we should seriously consider setting up a land bank to service the industry. Farmers and farm workers have never let this country down, and we shall prove ourselves mad if we do not give them proper conditions in which to continue to serve the nation. We shall prove ourselves stupidly ungrateful if we do not recognise the vital role which they and their industry can play at this time in ensuring the welfare of the country.

3.46 p.m.

EARL FERRERS

My Lords, my noble friend Lord Davidson reminded us that it is four years since we had a full debate on agriculture in your Lordships' House and I am sure the House will be grateful both to my noble friend and to the noble Lord, Lord Walston, for putting down their Motions and enabling your Lordships to have this debate this afternoon.

Price Reviews and Determinations may be fresh in our minds but I, like the other noble Lords who have spoken before me, will deliberately avoid specific reference to them, certainly in my opening remarks, because I hope that to-day we may look at agriculture in the wider context of where it is likely to be going over the next few years; what part it should play in our national life and what we expect from it. When I say "we" I do not just mean those engaged in agriculture, but the nation as a whole.

As a starting point let us look back a mere three years—and here I seek to make no Party point whatsoever because I think we should take a broader view than that. Agriculture has, during this time, undergone a massive upheaval and has been involved in many expected, and unexpected, stresses. Three years ago there was widespread despair in the agricultural community. We need not go into the reasons for this despair but merely record the fact that it was there. Farmers were blocking the roads with their tractors (a spectacle which did not necessarily enhance either their cause or themselves, although it drew attention to both) and they were marching on London. Confidence was lost and there seemed to be no sense of direction. Then this Government came into office—and again, I stress that I am making no Party point whatever—

LORD HOY

It does not sound like it, my Lords!

EARL FERRERS

My Lords, I am merely stating what I consider to be the case and I am not apportioning blame. There was a major task which fell upon whoever held the office of Minister of Agriculture, Fisheries and Food. This was to restore—and indeed to inject (if one may use such an "instant" phrase)—confidence into agriculture.

Whatever our views of the present Government may be, whatever our views of the Common Market may be, one must record that farmers do now have a confidence in their industry and in the future. We are adopting, without undue chaos, a change to a totally different method of support, and agriculture (and indeed the acceptance of the Common Agricultural Policy) has not prevented us, as at one time some people thought it might, from becoming full members of the European Economic Community.

These have been great changes and the effect of them is only just beginning to be felt. We have recently seen the price of fresh, and indeed imported, food rise, and there has been—and quite rightly so—an outcry from the public at large about, and against, this. The Government share the concern of the public. There are some who would seek to show that these prices have come about because we have become members of the E.E.C. I would not wish to deny—nor have the Government ever denied—that membership of the E.E.C. will involve some rise in prices, but the problem goes much deeper than that.

THE EARL OF ONSLOW

My Lords, would the Minister confirm that various prices, such as those of grain and beef, have fallen by approximately 15 to 20 per cent. since Christmas? Would the Minister also like to make this point very clear to the population at large because it has not been brought home to the public?

EARL FERRERS

Not particularly, my Lords, but if my noble friend wishes to do so when he comes to speak, he is of course entitled to do so. I would rather not get sidetracked on to individual prices at this particular moment.

The problem goes considerably deeper than that. For many years we in this country have enjoyed the benefit of cheap food and deliberate cheap food policies. We were able to purchase much of our food on the world market at prices which were low because there was a surplus of that type of food in those parts of the world which were rich enough to buy it. It was relatively simple, and indeed expedient, therefore, to subsidise the British product so that the food which was produced on British farms could compete with that which was imported cheaply. But we have suddenly—and I emphasise the word "suddenly"—moved out of an era of relative world food surplus of some of the prime agricultural commodities into one of relative world food scarcity. It is not the Common Market which has "bumped up" the price of our grain but the disastrous corn harvests in Russia and China. It is not the Common Market which has been responsible for the rise in beef prices but a combination of less beef coming on to the world market, more beef eaten by those countries which are traditional exporters of the commodity, and the high price of grain putting up the cost of feed. It is not the Common Market which has caused the increase in the price of our lamb, pork and poultry, but the effect of the law of supply and demand operating when one of the commodities in the game becomes in particularly short supply.

How can one react to this? One can complain and demand legislation, but there is only one real cure for this particular problem and only one real way to do this, and that is by increasing the supply. It is that which the Government have tried and are trying to encourage and there is already evidence that this has been successful. If one compares the June Agricultural Census figures for 1970 and 1972 one finds that the cereal acreage has increased and the rise in the area under wheat and barley has more than offset the decline in the acreage of oats. In 1972, last harvest, over 15 million tons of cereals were produced in the United Kingdom, and that is an all-time record. The noble Viscount, Lord Thurso, said that we should increase our livestock. There the figures are even more dramatic. Between December 1970 and December 1972 the dairy herd in England and Wales increased by 4½ per cent. and the beef herd by over 16 per cent. But there is one really important figure which I should like to draw to your Lordships' attention. If one wishes to see whether the beef herd is likely to increase, one must look at the number of beef-type heifers in calf for the first time, for they are the animals which will enter the breeding herd to provide the beef calves for the future. These animals—beef-type heifers in calf for the first time—have increased by no less than 87 per cent. That would indicate that the expansion in the beef herd has started and is likely to be maintained.

British agriculture has a large part to play in the Common Market. I should not be foolish enough to think that there are not substantial problems or that the Common Agricultural Policy in all its ways is entirely suited to the United Kingdom's needs. The Government have always thought that the future of our agriculture will best be ensured by our playing our full part as a member of the Community. But under the Common Agricultural Policy, our farmers know that there is a need for an increase in production. Every ton of food which is produced in the United Kingdom is a ton less which has to be imported. When one thinks of the high degree of mechanisation in British agriculture; that we have a climate which gives us, normally, adequate amounts of both moisture and sun; that we have a holding of stock and a sense of stockmanship which is of the highest quality; and that we have an industry that is in general better structured than any in Europe, we can reasonably claim that we can give our European counterparts a pretty good run for their money.

Our industry provides, as my noble friend Lord Davidson reminded us, 3 per cent. of the gross domestic product, and that is produced by less than 3 per cent. of the labour force. The French agricultural industry, to take only one example, in 1970 produced between 6 and 7 per cent. of the gross domestic product, but required 13 per cent. of the labour force to do it. While there can be no doubt that in general our industry is better structured and has a higher labour productivity than most of the other member States, let us not for one moment be complacent because there are plenty of highly efficient farmers on the Continent who can compete with the best in the world. The better structured that our industry is now and the better the labour productivity which we may have, the more room there is for our Common Market counterparts to improve their position relative to ours. One merely has to drive through the plains of Northern France to see vast rolling acres, without hedges or ditches, frequently growing only small acreages of a crop, to realise the huge potential for competition which lies there if size and efficiency are the criteria. In other words, our industry must continue to improve in order to maintain its relative advantage, One could infer from that that the only way in which we can compete in the future is for our units to get larger. I believe that it is a brave man who puts too much store on what he sees when looking into a crystal ball, although it is an interesting exercise to carry out. It is likely that the need for economies of scale will encourage units to get bigger so that the effect of skilled manpower and expensive machinery such as the noble Lord, Lord Walston, mentioned in his opening speech, can be disseminated over larger areas. On the other hand, and here I would touch upon a point which my noble friend Lord Davidson made, the incidence of death duties (rightly or wrongly, from the point of view of agriculture) can on occasion have a contrary and fragmenting effect. But the evidence continues to show that the average size of farm is increasing.

At a time of rising land prices a holding can suddenly become far more valuable and therefore become subject to an even larger share and a larger rate of estate duty. But there are other aspects of the rise in land values. They have enabled farmers to raise working capital with which to intensify their production. There are a number of ways of doing that. Institutions purchasing land on sale and lease-back arrangements have extended their facilities. Syndicates providing outside capital, subject to certain statutory restrictions on promoting their capital-raising activities, can purchase farms, and individual members can claim estate duty relief on their investments. There is also a tendency for family limited companies to increase. Then there is the latest scheme to which the noble Lord, Lord Walston, referred, of the Agricultural Mortgage Corporation by which the owner-occupier retains 51 per cent. or more of the equity but could raise working capital on part or all of the remainder with an option to re-purchase. With all these arrangements available or in prospect the Government find it difficult to prognosticate with any degree of accuracy over the future size and nature of agricultural holdings.

LORD WALSTON

My Lords, may I interrupt the noble Lord for one moment? So far he has dealt with the methods which are open to the owner-occupier.

He has not touched on what, to my mind, is a much more serious problem, namely, that of the tenant farmer who has no land. I hope that at some stage he may give us some of his thoughts on that aspect.

EARL FERRERS

My Lords, that is perfectly true, and I accept the fact that the tenant has different problems with regard to financing than does the owneroccupier or the landlord; but he has one advantage, that, on the whole, rents do not reflect the interest which the capital value of the land could obtain elsewhere.

With all these different points to which I have referred in mind, one must be aware of one thing; that is, that these services and these facilities enable farmers to take advantage of the rise in the value of their land so that they may continue farming in an era when increasing capital investment on a large scale becomes a growing necessity. The side effects of this can be a change in the ownership of land to an entity whose main concern may well be not agriculture, but could be (but not necessarily is) predominantly financial. This may well be a good and healthy thing. I would not seek to argue its merits, but merely draw attention to the change.

The noble Lord, Lord Walston, envisaged a considerable drop in the number of those engaged in agriculture. As he said, the agricultural labour force has declined at varying rates for many years. In the last two or three years the rate of decline has slowed. With a more rapid rate of growth in the economy generally, it is possible that the rate of decline may increase again. The decline used to be spoken of as a rush from agriculture, of people leaving the land to get away from its poor housing and poor rates of pay for the lusher pastures, if they can be so described, and the attractions of the town. Conditions have greatly changed now and housing and remuneration have greatly improved. But I have never been convinced that this was solely or primarily a rush. It was to a considerable extent a push necessitated by an ever-increasing demand for lower costs of production and mechanisation. But let there be no mistake about this: whether it is a rush or a push, the skilled farm worker is a unique person, skilled and practised in a variety of different jobs, and he always was and always will be in short supply, and should command, and is bound to command, a good return for his work.

One then wonders what the future holds for the small farmer. There is no merit in being large unless size confers upon the enterprise advantages which are denied to the smaller one. And, of course, it frequently does. But the converse can equally be true. There is no merit in being small unless a limited acreage in turn confers advantages of which the larger unit cannot or does not make use. Frequently it does. Where the large farmer can gain in scale of operation of some enterprises, the small farmer can gain in the attention to detail of other more demanding enterprises. And there is no reason why these two extremes of the agricultural structure cannot exist together in the future. What is likely to be fatal, though, is if the small farmer tries to emulate the larger farmer in the crops which he grows and the machinery which he uses. He then gets the worst of both worlds and suffers high costs without the economy of scale, and this, of course, is the recipe for disaster. There is room for a wide spectrum of farm size within British agriculture, and as the Daily Telegraph said in an admirable editorial article last week: Not every farm can or should be of vast extent with high profit margins, any more than everything moving on the road should be a 'long vehicle'". My Lords, land is the raw material of agriculture, but land has functions other than agriculture, and agriculture has functions other than the production of the cheapest food in the largest quantities. The poet, the artist, the musician, and indeed even the townsman seeking escape from his urban surroundings, have all taken inspiration from, and refuge in, the countryside. We have a right, and indeed a duty, to make our land fruitful and productive, but that should not be the sole aim. There should be a place for those things, whether they be animal or vegetable, which do not command the highest price in the market place, or even a price at all, to have a home and to live and to grow, simply because they are a part of life. An old tree can be worthless to a farmer, and indeed an obstruction to his enterprise which he would willingly pay £20 to have removed. But to another the same thing can be an object of beauty beyond price.

A hedge can divide an otherwise large and convenient sized field, but to some, possibly birds or animals or insects, it may be a refuge and a home and a breeding ground. There is always a balance to be kept of opposing views, and it is not always the economical view which should predominate.

My Lords, the machine age is with us, the scientific age is with us, and these two developments have enabled farms to become more intensive. And this move, as the noble Viscount, Lord Thurso, said, is likely to become more accentuated. Factory farming has found many enemies on welfare grounds, but few would deny that it has contributed substantially to the output of food for home consumption at prices which are well below traditional methods, although there are those who would vigorously claim that this does not justify the methods. One might well wonder where we should be now, with the price of food so high, if we had been denied the output from those premises which come under the all-embracing term of factory farms. I accept that here is seed for argument, but there is a balance which must be drawn, and we must continuously challenge our existing practices to ensure that the prevailing balance is the right one.

I entirely agreed with my noble friend Lord Davidson when he said that agriculture is part art, part science and part business. All the modern techniques which research has provided, whether they are scientific or mechanical, have their drawbacks as well as their advantages. It is the soil and the animal, both living organisms, which are the prime ingredient of agriculture. These others are merely the tools which research has given the farmer to help him in his task. It would be a poor man who did not avail himself of the tools, but a fool who let them become the master. In the end—and I think that this is a satisfying thing from the human point of view—it is the man and the quality of the man which will determine the degree of success of an enterprise. In other words, what really matters is husbandry and humanity.

We want to see a flourishing agriculture, one in which the nation and the people can both benefit and take a pride, one which is conscious of, and successful at, keeping a balance between technical advances and nature, one which adapts progress and does not merely accept it, one which provides a livelihood for those engaged in it and an acceptable environment for those who are not, The future for agriculture inside the E.E.C. offers opportunity for the farmer and opportunity for agriculture to help the nation. It provides an opportunity for expansion. It provides an opportunity for a reasonable return to those who are engaged in it, whether they are farmers or farm workers. It provides these opportunities, but it does not guarantee success. It provides the conditions, but whether advantage is taken of the conditions will depend upon those who are engaged in the industry. This is as it should be. The Government want to, and have, set the stage. We want a flourishing agriculture, but it is up to the industry to achieve it, and I believe that they will.

LORD NUNBURNHOLIVIE

My Lords, may I ask the noble Earl two questions? With the ever diminishing area of agricultural land, and only a marginal increase in food production by proficiency, would it not be possible for the Government to encourage the reclamation of about 150 square miles of the Thames Estuary, and maybe the whole of the Wash, and, on a more marginal basis, hill land and heather-land which is now not being used for agricultural purposes? If this were done, we should have quite something to look forward to.

EARL FERRERS

My Lords, I do not believe that even the noble Lord, Lord Nunburnholme, would expect me, off-the-cuff, to give an answer as to whether the Government would be prepared to reclaim 100,000 acres of the Wash. If he wishes that question to be answered, I shall be delighted to go into it in detail, but not at this stage.

4.10 p.m.

LORD HOY

My Lords, I can only congratulate my noble friend Lord Nunburnholme, who has delivered what is so far the most succinct speech in this debate, and I have no doubt that we all look forward to hearing the answers to his questions when the Minister replies.

There are many sections of the agricultural industry, and it has been pretty noticeable that one section—that is, the consumer—has so far had very little mention. I propose to come to the consumer's point of view at a later stage but I want, first, to say to the noble Viscount, Lord Thurso, who talked about getting rid of subsidies and so on and then said that there must be bigger capital grants, cheaper capital and reduced rates for intensive production, that those three concessions can be made only at the expense of the local ratepayer. So we must be a little careful when we are demanding cuts for everybody else and a little more for ourselves. I compared that speech with that of the noble Earl, Lord Ferrers, who said, "I do not want to introduce any Party political points, but I remember that three years ago the farmers demonstrated in Whitehall. They would have nothing to do with the Government of the day. They were in a poor and parlous condition, but"—

EARL FERRERS

My Lords, may I interrupt the noble Lord? If he is going to quote me, I know that he will do me the courtesy of quoting me accurately. I never said anything about their not having anything to do with the Government of the day.

LORD HOY

My Lords, I will concede that they were protesting against the Government of the day. If I make the noble Earl's meaning a little clearer, then we shall all be able to understand what he was talking about. When that behaviour is recalled, I can only contrast it with the fact that the miners doing the same thing in the recent strike did not bring forth all these protestations; on the contrary, they were condemned out of hand by people sitting on the other side. I shall not take the Party political points any farther. I would merely suggest that they ought never to be introduced with the words, "I have no interest in Party politics, but…" The noble Earl, Lord Onslow, who wanted to emphasise a point about the fall in cereal prices, was rebuked by the noble Earl, Lord Ferrers, who said that he did not want to be diverted, after that very point had been made by the noble Viscount, Lord Davidson, in opening the debate. I thought the noble Viscount made the point very clearly indeed. I hope my understanding of it was correct, because I did not understand the complaint later about its not having been made.

The agricultural industry of this country is one of the most proficient industries in Britain. It has an efficiency which ought to be envied by most other industries, and measured against its output it compares more than favourably with any other industry that I can think of. The rewards have not been very great—and I am talking about rewards for everyone connected with the industry, the farmer as well as the farm worker. We have a habit in this House and elsewhere of saying, "We think that the wages paid are low", and we always argue that if they are earned as a result of production we do not care how high they go. But having said that, on many occasions our actions fall far behind our speeches. So that looking at the agricultural industry to-day, we ought to keep in mind the fact that farm workers are a very highly efficient section of our working community, and that without them we shall not get such good results. But what we ought not to do is to exploit the position so that we expect them to live, as my noble friend Lord Walston said, with a wage rate about 50 per cent. less than the rest of the community. Then there are the farmers who have invested in this industry, and like any other employer they are entitled to expect an adequate return on their investment. Measured against many other industries, their returns at the present time could not be regarded as extravagant—far from it.

I come now to the third section, the housewife, who has to buy what the industry produces. I think I agree with my noble friend who said he would not argue that prices are too low, but the housewife has been having a very difficult time indeed. The constant rise in food prices has been making life very difficult for her. Of course, this problem is not confined to this country alone. One has only to look at the United States of America, which is supposed to be the most highly developed country, but where housewives are uniting to protest against the price of meat. There may come a time when housewives here are doing the same thing. The announcements about food prices, yesterday and to-day will certainly not bring the housewife any solace. Yesterday, my noble friend Lord Shinwell quoted the speech of Mr. Anthony Beresford, the President of the Food Manufacturers' Federation, who predicted that before the end of this year the price of butter would go up by 24 per cent., the price of sugar by 18 per cent., the price of dried eggs by 20 per cent., the price of meat by 12 per cent. and the price of fish by 10 per cent. It is no use the House trying to burke this issue. If prices are to go up by those amounts, whatever the cost to the industry might be, it cannot be said to those engaged in this industry, or in any other industry, "Your wages are expected to remain where they are". You cannot freeze wages without tackling these very high price rises. I was interested to note that at the convention where Mr. Beresford made his announcement, the Minister of Agriculture was also present. Mr. Godber did not contradict Mr. Beresford's forecast but, to avoid any misunderstanding, may I quote what he himself said, as reported in yesterday's Daily Telegraph? The Daily Telegraph said: Mr. Godber, Minister of Agriculture, who opened the convention, said that there were still some increases in raw material prices which had to work through to manufacturers' food prices. Several price rises had been held back where cost increases were very substantial. These would be considered by the Prices Commission at an early stage, and he expected that in Phase II of the freeze there would have to be further rises. Therefore, we have not yet reached the peak in my view, but I hope that it is not far away. It cannot be pretended, when things of that sort happen, that there will not be some effect on the housewife, nor retaliation.

LORD STRATHCLYDE

My Lords, I do not want to interrupt the noble Lord, but he was on a very interesting point just before he began to talk about the rising cost of food to the housewife. He talked about the return on the farmer's capital. Can he give a figure of what that return is?

LORD HOY

No, my Lords. I am certain that the Minister could, because he will have brought the figures along with him, having had them supplied to him. As the noble Lord knows, when a Minister is coming to a debate the Department sees to it that he has all the figures with him, as they did when the noble Lord was a Minister. But now he and I are on the Back-Benches we have got to supply our own figures. So all I say to him is that if he is interested in that figure he must ask the Minister.

LORD BALERNO

My Lords, would the noble Lord allow me to interrupt him on the point that he was making in regard to his quotation of what was said by Mr. Bcresford? Mr. Beresford made a further statement yesterday elucidating the original statement which the noble Lord, Lord Hoy, quoted. Yesterday he put emphasis on the price reductions that were taking place, and he added: Phase I will have its difficulties in food prices, but as far as the future is concerned it is relevant to note that the rate of inflation as a result of Government policy is decreasing". My Lords, the details of the argument on this point are to be found in yesterday's Hansard. I was quoting not what the Minister of Agriculture said, but what Mr. Beresford said.

LORD HOY

My Lords, I shall certainly have a look at that. I quoted it quite clearly and concisely, and the noble Lord is not, I think, denying that I quoted it accurately. May I draw your Lordships' attention to the fact that, although the clock records that I have been speaking for ten minutes, I have kindly given away five of them to the noble Lord, Lord Balerno, and the noble Lord, Lord Strathclyde, in two interjections. If these things can be remembered, perhaps I can get on to what I should like to say.

My Lords, the forecast by Mr. Beresford, which no one has denied, was that the price of butter would go up 24 per cent. by the end of this year. With regard to butter, I want to say that we have not had long to wait. This morning's Press announces—and I have had this confirmed by the best-known authority—that on May 1 the price of a pound of butter will go un by 4p. That is l0d. in real money, and when I saw that there was to be an increase quite as substantial as that I was really interested, because Britain apparently has her own private mountain of butter. I do not exaggerate it—her own private mountain of butter. It says here that it amounts to not less than 105,000 tons, and that it may be as great as 150,000 tons. Hitherto when we used figures of this size in this House and in another place we were discussing coal, not butter. My Lords, 150,000 tons! It seems that these are our stocks, and it appears that we are determined to hold on to that stock until May 1, when the price will be increased by something in the region of £42 per ton. If we accept even the lower figure of 105,000 tons as being correct, it means that, simply by holding this amount in stock, those who then sell it to the Intervention Board will have made another £4½ million. By simply storing it and then handing it over, they get another £4½ million.

That is why I say that the consumer has an interest; because, whatever the end price is, it has to be met by the consumer. This, of course, destroys the first argument of the noble Earl, Lord Ferrers, about the Common Market not being responsible for increasing prices. It may not have been responsible up till now, but certainly on this occasion it cannot be denied that butter prices to every housewife in this country will go up by the price stated. One has also to remember that the Intervention Board has to take this butter even if it does not want it. It is compelled by the agreement to accept it. In fact, at the present time the Intervention Board has so much butter on its hands (if that is the right phrase; if you can have butter on your hands) that it is attempting a cut-price deal with Russia to try to dispose of it. This seems to me to be the economics of bedlam.

My Lords, perhaps that replies to the question I raised on the day of the Price Review. Your Lordships will remember that on two occasions I asked the noble Earl, Lord Ferrers, how the Government were going to recoup the increase of £30 million given to the dairy industry at the same time as prohibiting any increase in price to the consumer. I suggested that it might be that the money would be recovered by an increase in the price of both butter and cheese. I suggest that we now know about butter; because we are quickly moving to the position which was outlined by a previous Minister of Agriculture, Mr. Prior, who indeed, I think, is at present Leader of another place. I remember one occasion on which we were debating the fishing industry—and I shall be grateful to know whether the noble Viscount, Lord Thurso, agrees with this point, about cutting off subsidies, because on that occasion we were discussing the fishing industry, which is not unimportant in the noble Viscount's part of the country. The present Leader of the House of Commons then took part in a debate, and he said we ought to get rid of subsidies altogether in both the fishing industry and the agricultural industry. I do not know whether the noble Viscount subscribes to that view.

VISCOUNT THURSO

My Lords, I am sorry to interrupt the noble Lord, Lord Hoy, but he seems to be going at me about this question of subsidy. There is a difference between a subsidy and a grant. There is a technical difference; and it was this difference which I was emphasising. A subsidy for merely producing an unwanted sheep provides an amount of subsidy per head for the unwanted sheep, but it does not create a demand for the sheep. What I was saying was that where you can create a demand in the market-place for a product and you then provide the farmer with the capital, this will more efficiently produce the product than simply to pay out money because the farmer demands it, whether there is a demand in the marketplace or not.

LORD HOY

My Lords, I think I should intimate that this is the last time I shall give way. I have had three speeches interrupting my one. I want to say to the noble Viscount that he was under no misapprehension if he thought I was going for him. I was. Indeed, when he argues, as he is now arguing, as if I do not know the difference between a grant and a subsidy, I must say that I administered them for over six-and-a-half years, and at least I was able to understand what they meant, if nothing else.

VISCOUNT THURSO

My Lords, I hope I did not—

LORD HOY

Yes, the noble Viscount did. I listened to the noble Viscount with great courtesy. Indeed, it was because I was so courteous that I did not interrupt him. The Leader of another place said that he wanted to get rid of all subsidies, and the noble Viscount has not quite replied to that yet even though I said something about the fishing industry. Mr. Prior said he wanted to get rid of them all, and I remember his words so well. He said: … the nation bas been mollycoddled for too long…". But at a later stage he became P.P.S. to the Prime Minister, and he was still acting P.P.S. when the Prime Minister made his famous speech, which was recalled by the noble Viscount, Lord Thurso. That was the bit of his speech which I enjoyed most, when he recalled Mr. Heath's claim that he could cut prices at a stroke. It has not happened. Indeed, one remembers that Mr. Prior himself, when challenged about it, said, "Surely, when the Prime Minister made that speech nobody was expected to take it seriously". One does not say these things about Prime Ministers.

The Minister in the course of the Price Review mentioned by the noble Earl declared that the only way of overcoming most of our difficulties was to have greater output by our own farms. Like the noble Viscount, Lord Davidson, I could neither understand that nor match it with the action of the Government; because one of the first things that he announced was that as a result of that action, capital grants would be cut by no less than £15 million. In other words, the industry was to find this £15 million for itself. I do not understand how you can encourage people by taking their money from them. This is what happened: capital grants were cut and this amount is what it will cost the industry. I know the noble Earl, Lord Onslow, will not agree with what I am about to say next. When that cut was being announced, the Government also made a substantial cut in the calf subsidy. The noble Earl thinks it ought to be abolished altogether. He and I do not agree. In relation to the calf subsidy, I have always felt that what is important is to put in this subsidy right at the beginning of the cycle when the money is required. This is where it makes its big contribution. So I think that those two actions were quite wrong.

Thirdly—and again this matter was raised by the noble Viscount, Lord Davidson—there is the cost of land to-day. It would be interesting to know what an acre of land to-day costs on average compared with its cost a couple of years ago. The burden one can lay on the farmer of a reasonable sized farm because of the great appreciation of cost value can be very high indeed; it can make things almost impossible. That is why I think that unless many farms get larger, a great many people will dispose of them. There is also the possibility of fragmentation as a result of selling off parts of the farm to pay death duties. What will the Government do to meet that situation?

My Lords, I want to conclude with three small points; they are very important but I can put them shortly. If the industry is to make the progress we want it to make it must know what is going to happen to the Boards which are at present in existence. We have had one lesson—and I have spoken about this on other occasions—with regard to the Egg Marketing Board. The egg industry itself started to deteriorate when the Egg Marketing Board went. I do not blame this or any Government for it; it was because of lack of support by the industry itself. It betrayed the Egg Marketing Board—and this is the kind of unholy mess into which it has got. If we are going to have co-operatives in marketing I should like to know whether it is the intention of the Government to reestablish the Egg Marketing Board, perhaps with much more power than the old one. And what is going to be the position of the Milk Marketing Board? Is it to be kept? Are any changes to be made if it has to be kept; for this is extremely important? Finally, what is going to happen to the Potato Marketing Board? This plays a very important part inside the agricultural industry. Is it intended to retain it in its present form or, as I have heard it rumoured, will it be retained with considerably altered powers? It is not only we who want to know: the industry itself wants to know what the Government decisions will be.

Finally, my Lords, on prices, I think it would be wrong for me to finish what I have to say without congratulating the Minister on the stand that he took at Brussels about the prices inside the Common Market. But he is faced with a difficulty because, as I understand it, his only other partner inside the Nine was Italy; so he is going to be in difficulties with the Seven against him. How is he going to prevent that? I congratulate him for the stand against further increases in prices, but when it comes to the showdown what action is he prepared to take? I know that he has a power of veto and I know that it would be wrong to use that power if it could possibly be avoided; but what he cannot avoid is the making of the decision. That is what the House would like to know.

4.35 p.m.

LORD WYNFORD

My Lords, I rise to ask your Lordships' indulgence and patience on this, the first occasion on which I have addressed your Lordships' House. As I sat first in this House in 1945, so many of your Lordships may be excused for thinking, "About time too!" The 15 years after the war were not good times for a professional soldier to participate in the work of your Lordships' House, and since then I have been managing, or learning to manage, agricultural property at my home in Dorset. I found much to learn about this industry and its problems. In mitigation, I would simply say that I have taken such opportunities as have come my way to make short and infrequent sallies to your Lordships' House to learn the wisdom of your ways.

I must declare an interest. I do not myself farm, but I own a property comprising three farms, one large, one medium and one small, all of which are let on life tenancies. I am not, therefore, able to farm, but I do all my own management, my own planning, my own planning for maintenance as well as for development. I do stores ordering and all the day-to-day work that many of your Lordships may know comes the way of somebody in that position. I also do all my own accounting, wage paying and the rest. In other words, I claim to have my feet in the mud as well as under the desk—and I know that a good many of us, probably all of us, spend too much time at the latter. But I think I know now something about farmers' problems and their ways.

With your Lordships' indulgence, I propose to confine myself to the problem of the retention in the industry of sufficient capital to allow it to grow and develop so that it can better compete in Europe, make an increasing contribution to our balance-of-payment problems and so have a steadying influence on our own food prices at home. I realise very well that I should gain very little sympathy from any side of the House if I simply cried "Havoc!" at capital taxation as such.

What I want to draw attention to is the distorting effects which steeply-rising land values (about which we have already been hearing) have on capital taxation as we now have it, a taxation which was originally geared to quite different land values and quite different money values.

Any idea that estate duties or death duties are the worry of the large landowner went out of the window six to nine months ago when the prices suddenly escalated. I will not reiterate what the noble Viscount, Lord Davidson, said earlier about those rising values. I think he made that position quite clear. I will merely quote a series of examples from my own home area where I know the position very well. What has happened is that values have suddenly moved from the £250 to £300 an acre bracket to the £600 to £800 an acre bracket. That has happened in the past six to nine months. Some sales, in fact, have exceeded £1,000 an acre, and not for exceptional land, either, but where very large blocks were involved, or indeed, very small blocks. I am speaking all the time, my Lords, entirely about agricultural land. May I take first the owner, occupier, the farmer? I should like to consider the relatively small man, or rather three men, with farms of 300, 400 and 500 acres which are relatively small farms in these days. Under the new values, those three owner-occupiers will find themselves liable to estate duty at about the following rates: the 300 acre man will have to find £80,000, the 400 acre man £100,000 and the 500 acre man £155,000.

Naturally, I have had to make some assumptions, in arriving at those figures. I have, for example, assumed mixed farms; some dairy farming, pig breeding, sheep and some arable. I have also assumed the lower end of the price scale to which I referred earlier; that is to say, about £600 an acre as the value of the land to-day. I think that the figures I have given are fair, at any rate for the sake of argument. Those figures, may I remind your Lordships, take account of the 45 per cent. abatement on agricultural land and small businesses. That, of course, is very important to the industry.

What are the remedies, my Lords? What are these three men to do about it? They have several choices. They can attempt year by year to save some cash and put it aside for the eventual payment of the duty. I think that the noble Lord, Lord Walston, pointed out earlier that this is hardly practicable because of the narrow profit margins in this scale of farming. But if that should be done, the effect would be that that cash is lost to the farmer. It is lost to development, and the farmer has already suffered the reduction of the farm capital grant scheme from 30 per cent. to 20 per cent. It is lost to re-machining, and to increased stocking, and to all the other aids that the farmer might be able to devise to promote higher productivity.

Second, my Lords, he may do nothing, and then his executors will have to face the problem when he dies. There seems to me to be no real alternative for them but to sell at least part of the farm. It will certainly become less economic and it may well become non-viable. Then fragmentation will have set in, the very thing that we have been trying to avoid by the creation of what we call the farm amalgamation scheme for which grants are given. That is aimed specifically at increasing the size of units in order to lower costs and to raise productivity. Those two things together should result in cheaper food. I know that we have been told that as yet there are no signs of fragmentation having set in. But the increased values began only about six or nine months ago and we have not yet felt the blast. Our competitors in Europe have suffered for generations from the evils of the Code Napoleon, from the fragmentatory effects of that Code. Now they are making headway towards a remedy. Their unit sizes are increasing. They have been at a grave disadvantage but perhaps they are not so much now.

Our farmer has one other remedy. He can give his farm away. But at the moment of gift, no cash having changed hands whatsoever, he is faced with a 30 per cent. capital gains tax on the difference between the 1965 value and the value at the moment of gift. Inflation, the increased value of land, has seen to it that he cannot make that gift without suffering this capital tax. Furthermore, my Lords, if he gives his farm away—and he may well delay taking that unwelcome step—and, having given it away, he dies within seven years, estate duty will have to be paid on top of everything. The estate duty will be in no way reduced by reason of the capital gains tax paid at the time of gift. Surely that is plural taxation? Consider also, my Lords, the stunting effect on the development of the farm during those seven years of uncertainty. Is the old man going to make it, or not? This is a real blight on the land and it would have been better for that farmer, and possibly for the farm, if he had died before he made the gift. That summarises the dilemma of the owner-occupier. May I remind your Lordships that we have been considering the case of the relatively small farmer, the working farmer? He may have to milk twice a day if it is a dairy farm; his wife may help him, and his son, and he may have one or two paid hands.

Now may I consider the man who has let his land? Once again, I should like to apply my remarks to the relatively small man with, say, three or four farms in a group which is grandly called an estate. I should like to consider a case where there are no particular developments or mineral rights to complicate matters, where it is a purely agricultural holding. This man, as I think everyone would agree, tries to do the best by his farm, and, incidentally, the best by the countryside. In these days he has to keep a watchful eye on conservation, and rightly so. He has to see to the growing needs of a predominantly urban population which is increasing, and this involves him in some expense. It takes a great deal of his time, as I can say from personal experience, and possibly time is money. He does not expect high yields, he never has. That has never looked remotely possible. I suppose that during the past 15 years the yield would have been 1 per cent. to 3 per cent. net before tax that would be the accepted limit. In the 15 years before that, just after the war, the yields were about half that amount, certainly very much less than that, because we were catching up with maintenance and development after so much had been left during the lean war years. However, he is content to rely first on long-term appreciation, second on the amenity and, third, on the sentimental connection. But now such equilibrium as he has managed to observe in his long-term plans is all upset by these steeply-increasing values and their effect on capital taxation. As in the case of the farmer, estate duty escalates at once, but the options for this man are narrow. He cannot possibly save out of those low yields in order to pay estate duty. Whatever he saves he may well have to spend in premiums for life insurance policies year by year to provide for estate duty when the time comes. If he makes a change of ownership to an individual, to a number of people or, indeed, to a company, he is in the same capital gains position as was the farmer—30 per cent. straightaway, no cash passing hands. So I do not think I am exaggerating if I say that here again fragmentation must follow. There may be some who would think that it was not the end of the world for England if her estates were diminished in size, but all I would say is that if fragmentation does follow for an estate, it is very likely that one or two or more farms will suffer fragmentation at the same time.

My Lords, there may be some who think that the landlord/tenant system as we have it to-day is an out-of-date anachronism. The noble Lord, Lord Walston, referred to partnerships and other things as possible developments. But these things cannot be done overnight. We have a system that has to be adjusted. We have this landlord/tenant system and it has worked extremely well for a very long time. It is delicately balanced, and has been described by one great authority as the most sophisticated system of land tenure in the world. The Continent has nothing like it. There, owing to the ravages of fragmentation, a farmer may find himself with several landlords—indeed he may have 10 or 20.

How many young men coming out of university or coming out of the agricultural college to-day can possibly afford to buy a viable sized farm, then to stock it and equip it, without tying round their necks a massive mill-stone of borrowed money? The answer in many cases, of course, is a lease. Thank goodness that roughly half our acreage in England and Wales (and I speak of England and Wales) is still worked in that way. But there is an urgent need to stop the trend, which has already gone too far, of owners trying to get their land in hand and away from leases, a trend which to some extent is given rise to by capital and income taxation. We have young farmers to-day who are highly expert; they have plenty of initiative, are virile, enterprising and venturesome, and we must bring them on to the land as quickly as we can. This great industry of ours has given us a higher and steadier rate of productivity rise than any other since the war. Why should we now hamper it by imposing on it grossly distorted capital taxation of what is in fact the farmer's raw material, running at two or three times the level of his competitors in Europe?

4.55 p.m.

LORD WOOLLEY

My Lords, it is my pleasant privilege to congratulate the noble Lord, Lord Wynford, on his maiden speech, to which I am sure we have all listened with the greatest interest, as indeed this House always does listen to noble Lords who are really knowledgeable from practical experience of the subject on which they speak. The noble Lord has given us his first-hand observations from his practical experience on a most important problem.

I do not intend to speak for very long, partly in deference to the excellent coverage that there has been of the subject by speakers up to now, but also in consideration of those noble Lords who still have to speak. But I cannot forbear to say a few words on this subject which is dear to my heart, and on which I also perhaps have to declare an interest. I think probably everyone who has spoken might have to declare an interest in this matter, even if it is only as previous Ministers of the Crown with heavy responsibilities.

I should like to apologise to the noble Viscount, Lord Davidson, and at the same time to express my appreciation to him and to the noble Lord, Lord Walston, for introducing this debate, in that I missed the noble Viscount's speech. However, I have gathered a great deal of the speech from the references made to it by subsequent speakers. I am sure the noble Viscount has covered all the important points that concern us to-day. I was detained by a natural hazard of the electric lines blowing down on British Rail, which delayed me for 40 minutes, and as I always cut things rather fine, being a busy working farmer, that made me just miss the noble Viscount's speech, which I imagine lasted about that length of time. Being well accustomed to being frustrated by natural hazards, I took this with such philosophy as I could.

My Lords, I was most interested in the wide-ranging speech of the noble Lord, Lord Walston, who speaks from great experience in agriculture, in which he has always been a leading figure. He indeed covered a tremendous range of the problems in the industry, which I will not attempt to emulate. One may or may not agree with all the views put forward by the noble Lord, but they were clearly put, and were important views on important points. I am not going to spend time in talking about the achievements of the industry because this has been done by other speakers. It is a happy position for anyone who has been much concerned in the particular activity to hear the tributes to the contribution that is being made by this old and very vigorous industry of agriculture, with its modern outlook and its ancient traditions.

If I may say so, I was much in agreement with the noble Earl, Lord Ferrers, in his approach to the question of labour and that of size of holding. I think we sometimes tend to run rather too far too fast in our thinking about how these things are going to develop. I personally should hate to think that the mixed pattern of agriculture was ever going to be completely distorted. Change, of course, it will; it is always changing: but I do not go along with deliberate policies of trying to coerce or push people out in order to get ever bigger holdings. Let the natural pattern evolve on sound and fair criteria, and be it what it will. We have evolved in that way, I think, a better pattern than perhaps most other countries in Europe. In saying that, my Lords, I should like, as it were, to ask your Lordships to pause and look at this situation. We are talking about agriculture to-day at a time when we have very recently become members of this larger European Community, and now all that is going to happen there lies in the unknown future. It is all hypotetical; we do not know. It is no use saying that we will do this and we will do that. We do not know. What we do know is that we stand as a well equipped, efficient, vigorous industry that constantly is being compared favourably with the industry in other countries with whom we shall be in close association. I think sometimes this may be exaggerated. There is a danger in assuming that we are so much better than everybody else. I think we are good, and probably on average we are better, but let us not assume that the French are not good, that the Germans and the Italians are not good; certainly the Dutch are very good indeed. However, I think our industry is greatly envied in the progress it has made, the way in which we have made it and the system we have operated: and too little tribute, in my view, is being paid to the means whereby we have achieved the position in which we stand to-day.

We are talking about agriculture on the advent of going into Europe; we are talking about its being so efficient, how it can compete more than adequately with its competitors in Europe; but we do not take enough time to think about the means that have brought us to this point. I believe that this has been the best devised, the most sophisticated and practical system that has ever obtained in this country or anywhere else in the world. I have no doubt in my mind about that. It has had its difficulties, of course. Many of us have been very conscious of those difficulties and some of us who have gone through many, many Price Reviews know the strain and stress and the battle, and we know what it has been like to be up against the Treasury. The Treasury, I am sorry to say, often had far too much influence, and that influence has been based on far too much shortsightedness. That has been one of the main difficulties in the working of our system.

Let us look at it for a moment or two. I make no apology for, as it were, harking back. It is important to look at the road you have come, because from that road one learns experience which can stand one in good stead in the road one has to travel that lies ahead. We have combined in this the needs, the interests, of both the agricultural industry and of the whole national community that the industry serves. This is its purpose. This is its only justification: to serve the community. If it ceases to do that, it is in a non-viable position. This has been done by this combination of price guarantee, market price, careful review and particularly the combination of price and production grants. And here I am a little baffled—and perhaps the noble Earl can enlighten us when he replies—because on the one hand we have been told that subsidies are a thing of the past, that they are no longer appropriate and we must stand on our own feet. As Mr. Prior said when he was Minister, "We must look for our returns to the end price, to the market place." Yet now we are told by the present Minister, Mr. Godber, that he is exhorting the Community not to raise the end price but to increase the production grant; in other words, to go back.

Now this does develop a sense of spinning and one gets a little mentally dizzy. Not only is it a question of Mr Godber being Janus, but it is also Janus revolving at a fast rate, and I think we need to know the position. It is true, as the noble Earl has said, that there is much greater satisfaction in the industry to-day. They feel the sun on their backs somewhat. That is quite true and I think the Government are entitled, without making political points—which, if I may say so, the noble Earl made extremely well—to take some satisfaction in that fact. But this state of affairs is because of a combination of circumstances. I am not going to attempt to go into all of them. Farmers to-day are much happier and their level of profit is much better, and I believe (the noble Earl may give the figures) that the return on capital—and this we have worked for for years—has approximated somewhere near to the return on capital in industry generally. That was a measurement that we sought to get for years but had the greatest difficulty in getting. I could never see how one could interpret the words of Part I of the 1947 Act, "a proper remuneration", unless in some way one defined what was a proper remuneration; and how does one define it except in comparative terms? So we have made headway along those lines, and that I am very glad to see.

But in this bluer sky there are clouds that are worrying farmers, and some of the recent actions of Government have worried them. Their action in relation to dairy products in the Community worried farmers considerably, because this seemed to them to be somewhat of a betrayal—if that is not too strong a word. Also I think farmers find it extremely difficult to understand (and this point has already been made by other speakers) how, at a time when we are seeking to improve efficiency and increase production, when capital is increasingly difficult to come by, when inflation is affecting us all so very much, the Government should choose to make two successive annual cuts in capital grants—lhat really is illogical—and also in the calf subsidy which I believe played a significant part in increasing particularly our stock of beef-type cattle to which the noble Earl has referred and which had been going up very satisfactorily.

We enter an unknown era. I have said that I believe it is important to bear in mind the valuable experiences that we have gained in the past and which are being cast away, in my view, far too carelessly, with hardly a word of acknowledgement. Let us look at these things, because I believe that as we go along we shall have to think more about them, whether we are in or out of Europe; and de facto we, of course, are in Europe, but de referenda one does not know whether one is in Europe or out of Europe. At least let us bear these things in mind. I have never believed, I do not believe now, that the Common Agricultural Policy can work satisfactorily for a Community of nine nations. It never worked satisfactorily for a Community of six and I am quite certain that with Britain one of the nine it will not work satisfactorily. Therefore we should not let go carelessly and indifferently all the very valuable pools of the past. We may need them again. We may need those principles, and, who knows, we may yet hear Sir Christopher Soames advocating them inside Brussels. I should like to be there to hear him. That could happen and I believe it will happen. I do not know what will happen to this set-up, but I have no strong faith in operating the Common Agricultural Policy as it is now.

Various noble Lords have said that cheap food is gone forever, but one must go and tell that to the Russians. The Russians will be delighted to have the prospect of some very cheap butter flowing from the butter mountain. Whether this will lubricate the Ostpolitik I do not know, but at any rate I am sure that they will welcome the cheap food which we have decided to forgo. I am not for cheap food. I am in favour of food at the best possible value that can be given to the public of this country. I believe that that can best be done, and has best been done, by a combination of reasonable import regulation—and this was inadequate; it was gradually improving—and guaranteed price. Let me say that in real terms the cost of subsidy in 1972–73—and this is before the Common Market had begun to take effect, before we were in the Common Market; this is on the old basis—having regard to the change in the value of money and to the increase of 40-odd per cent. in the volume of output, is 45 per cent. of what it was ten years ago. This I think demonstrates that this has not been a runaway system that was insupportable. I know that ten years ago I calculated it was about 5 per cent. of our total food bill at retail price levels, so I presume at the present levels it is about 2½, per cent., and I think we have had extremely good value for money for that amount of public expenditure. My Lords, I would again thank the noble Lords who have introduced this Motion. I have been very glad to take part in the debate and I am sure there are many important points that other speakers are going to deal with.

5.12 p.m.

LORD CRAWSHAW

My Lords, the noble Lord who has just sat down speaks of course from a vast wealth of experience, and I know that everybody in the agricultural industry will always be grateful to him for what he has done for agriculture. As, so to speak, a survivor of the 1969 debate I would congratulate the noble Viscount, Lord Davidson, on his masterly opening speech this afternoon, after the passage of four years, on this vital and complex subject. I would also congratulate the noble Lord, Lord Wynford, on his maiden speech and on the points he made about fragmentation and the Napoleonic Code and so on. I very much agreed with what he had to say.

I think all of us here have it in common that we are upholders of British farming and of the expansion of home production as the salvation of the producer and consumer alike. It is now clear that agriculture has a key role, similar to its position in war time, brought on this time by several factors such as inflation, pressure on sterling, entry into the E.E.C., and world shortages. We have not heard so much recently from those economists and planners who a year or two ago advocated the turning of vast stretches of country into glorified playgrounds and National Parks, et cetera, and buying our food cheaply from abroad. What price that idea now! But this key role must be a responsible role and I feel sure that the industry has no wish or inclination to abuse the position. There is no history in agriculture of industrial action such as strikes, the withholding of supplies, and so forth, and I feel that the country can and must trust the agricultural industry. People should not grudge the farmers making a profit. Profits are good for several reasons. First, the farmer is a person who very much "lives above the shop", and the first thing he does is to go and buy a new machine or literally plough the profit back in some way. Not only will this reduce future unit costs, but of course he will be providing much employment among machinery and fertiliser manufacturers, builders and people of that kind.

Second, if products show constant profit we shall not get a repeat of this winter's beef situation, which, as has been said already this afternoon, was really caused by the depressed and uneconomic price of beef over very many years. This was a point that the noble Viscount, Lord Thurso, made, and I very much agreed with him. Third, I should like to see investment come from profit in agriculture and the industry to be independent of Government capital grants. But if certain products are not going to be worthwhile to produce, cheap surpluses from abroad will not be available to fill the gap. Ever since early 1970, when Mr. Cledwyn Hughes was the Minister, it has become obvious that the increased prosperity and some seasonal shortages in countries which had previously produced surpluses meant that overseas communities were using more of their own produce; and by 1971 it was clear that few world surpluses were around to depress the home market prices. Not only is the cheap food policy vulnerable on this count, but also we have to consider, as we are now in the Common Market, questions of five-year phasing up of our food prices to E.E.C. standards.

In spite of the sensitive position of food prices, I believe that, intentionally or unintentionally, we are on the right lines. We should not automatically fear higher food prices so long as—and this is important—the Government reduce taxation or use all money saved in subsidies to help those most affected by higher prices; for example, old-age pensioners. In the period 1972–73 because of higher market prices, the Exchequer was able to save close on £100 million and I think this figure will certainly increase, partly because of the phasing out of capital grants. Higher farm incomes will clearly mean more revenue to the Exchequer from income tax, however reluctant the farmer may be to part with it. But, apart from the Exchequer, farm workers will, and must, have a greater share—and the noble Lord, Lord Walston, made all these points very well. We should they lag behind people such as road haulage drivers? Unrealistic food prices have always meant lower wages for the agricultural worker, and this cannot be right in dealing with these vitally important people. So much for the general position.

I want your Lordships now to consider one or two other items and I would start with the largest crop that we grow in this country; namely, grass. Our damp and mild climate was called by Sir Winston Churchill our salubrious if not altogether unmixed dispensation"— which means that we grow unequal grass in this country. In my case "the green, green grass of home" means the rolling fertile acres of the shire so well known to my noble friend Lord Ferrers and to many other noble Lords here this afternoon, including the noble Lord, Lord Hives, and the noble Lord, Lord Allerton, who is going to speak in this debate. Not only does grass cover 73 per cent. of the British mainland but a really good crop can produce 150 cwt. of dried matter a year, compared with 80 cwt. of potatoes and 40 cwt. of grain. It is certain that because of the rising prices of concentrates and grain there will be much more intensive use of fresh and conserved grass for feeding ruminant animals. There is a great renewed interest in dried grass as the best way of continuing the feeding of grass in its best condition throughout the year. The capital cost of the equipment is the main snag here. I believe there is great scope for the engineering industry to produce a machine for making up to, say, a thousand tons of dried grass per annum. The main indirect product from grass is milk. Indeed, of our 180,000 full-time farmers in this country 120,000 are engaged in some way in milk production. Unhappily, one detects a certain amount of sourness—not in the milk itself, but in the faces of dairy farmers at the moment. Milk production is a slog: seven days a week, 5.30 a.m. start, winter and summer alike. The cost of production, mainly because of the increased concentrate prices, has gone up in the last year by 2.8p per gallon. The guaranteed price increase of 1.5p per gallon is not considered to be an adequate reward for all the effort. I believe that the system used has been largely to blame. Sixty-six per cent, of milk production has gone into the liquid market and, as your Lordships know, this amount has formed what is known as the "standard quantity" for which alone a guaranteed price has been paid. Milk produced above 66 per cent. has to be sold for what it will produce in the manufacturing market and has always depressed the price the farmer has received.

The key to the future of this vital sector of farming—a sector which is of course also responsible for so much beef—is in the Common Agricultural Policy of the E.E.C. If I understand it aright, milk for manufacturing is much more favourably treated in the E.E.C. and farmers' returns now will move steadily upwards until they ultimately approach the Common Agricultural Policy target in 1978. But what I believe is more important is that British dairy farmers will at last have broken out of a system under which any expansion of total production almost always caused a reduction in producer's price per gallon. I think this is a great thing, and a much deserved improvement for the dairy farmer. If I am right about this, and if the weather, or any other uncontrollable factor does not play havoc with predictions, I would say that the economic barometer for agriculture in Britain as a whole is at last "set fair".

5.23 p.m.

BARONESS ELLIOT OF HARWOOD

My Lords, like many noble Lords here I must declare an interest in that I am a practising farmer and I spend quite half my life engaged in the industry. We have had an exceedingly interesting debate. I have listened to all the speeches so far and I think all have made a great contribution to the subject. I should like to congratulate the noble Lord, Lord Wynford, on his maiden speech (which I found extremely interesting) on a subject on which I do not think any of us had intended to speak. The noble Lord, Lord Woolley, is, I suppose, the most experienced and the most knowledgeable, having led the farming industry for so many years, and his words are always of enormous value. I agree with everything that he said.

I should like to speak on an aspect of farming which is to-day of vital importance and which is practised in the Border area where I farm. Every day in the newspapers we are being asked to produce more beef and more mutton in the United Kingdom and throughout the whole of Europe, and that is something which is the staple produce of the area in which I live and work. One of the reasons why there has been a big reduction in the production of beef and mutton in the great Border areas of Scotland is quite simple. Over a number of years—I think one can honestly say about 10 years, from 1957 until 1967—the production of mutton and beef was hardly paying at all. In fact in the case of sheep it really was not paying at all, and in that area a great many farmers went out of business altogether. They could not stand the fact that they had no reserves: perhaps their acreages were not big enough; they could not make money, and so they sold out their land to the Forestry Commission or to private forestry companies.

I know that a great many of your Lordships are enthusiastic supporters of forestry. I am a rather mild supporter of forestry, because we cannot eat trees and I think it is better to produce from the land of this country something that we can eat and to import the timber that we need from those areas where they can grow it more easily and cheaply. However I know that is not the view held by many of your Lordships, so I do not press it. But I greatly regret that thousands of acres in the Borders, stretching from the Carter Bar, the great entry into Scotland, right down to Kielder, the Ettrick Forest and the other areas are all new covered with trees.

In order to counter that fact, those of us who continue to try to produce sheep and cattle (which is what we have been asked for to-day) are increasing our production in every possible way. We are being helped now by the fact that the tide has turned—I think that has been said by most noble Lords here—and sheep and lambs and cattle are now fetching remunerative prices. That is partly due to scarcity and also partly to the fact that many of the arable farmers who have been growing nothing but cereal crops for so long are now coming into the auction markets and buying sheep and cattle (sheep in particular) to graze the land in order to try to put fertility into it. This is a great help to those of us who have only hill land and can only grow sheep and cattle.

So at last the livestock farmer is getting a decent return on his money, and on this point I should like to congratulate the Government very much on the stand they have made in Brussels on the subject of hill farming and of land that is difficult to farm—in the rest of Europe as well as here—so that the assistance which is given to hill farming throughout the country is continuing and not being cut off. With other noble Lords I regret the reduction in capital grants, although I will not conceal from your Lordships that I have taken every opportunity to get capital grants for buildings of all kinds because I had a nasty feeling, having lived a long time in this industry, that some day somebody would come along and say, "You are going to have 10 per cent. less"—or 20 per cent. or 30 per cent. less. In fact I was always terrified that the subsidies were going to be cut altogether. I am glad to say they have not done that; but they have reduced the capital grant which I think is a pity, although, speaking for myself, I was so certain that it would happen one day that I took jolly good care to do all I could while the grants continued.

The methods by which we can now produce beef, in particular, and sheep remain very much the same on the hills, but buildings are of vital importance. This is one of the ways in which we can increase production. But of course the public and the mass media are shouting about cost and it seems to me that many people believe that we can increase our production of animals in a very short time. Well, we cannot. We all know that. The course of nature is not something that we can speed up. All we can do is to try to prevent animals dying from disease or land being taken away and used for r other purposes. I have spoken about trees, but do not let us forget the urban developments which are eating up land every year, and also the great urban motorways. All that has to be balanced against the production of food; but to speed up the production of food is not possible.

What is possible is to be perfectly certain that people who produce food do not go out of business because the prices they get are so low that they cannot continue their production. That is what has happened in the last 10 or 15 years; people have stopped producing beef and mutton because it did not pay them to do so. I agree with the noble Lord, Lord Walston, who is not here at the moment, that we all want to see the agricultural worker, who is absolutely vital in all this picture, given a fair and generous remuneration. I say to the agricultural workers that I employ, that so long as I am not running into debt and so long as my farm is still a commercial enterprise, I will pay as much as I possibly can. But very often one cannot do as much as one would like, for the reason that the end product does not fetch a good price, and equally because the cost of the machinery, fertilisers, and so on that we use is rising all the time. I may be a pessimist, but it is only at this moment when rising cost has not met rising prices that we are making quite good profits, and those profits, as some noble Lords have said, are being ploughed back into the land as hard as we can because that is one way to increase production.

We are now on a good wicket. I think that it is a rising wicket, and I do not think that it is likely to go down. But I should like to put out some counter propaganda against the mass media who are talking all the time about such matters as controlling meat prices. Most of us here lived through the war. We know what controlling prices meant. The only way it could be done was by rationing. You cannot control meat prices to-day because meat in the sense of selling is a generic term. It means a whole mass of things. It does not just mean one kind, type or cut of meat; it means dozens of different things. In addition, it means the manufactured meat that people eat: meat pies, sausages and other things that the public use. In regard to control, unless you are going to ration (and to me rationing would be the end of everything in this day and generation, when we have to some extent an agreeable and free life) someone should say categorically that it is impossible to control meat prices because anybody who knows about meat knows that that is impossible. I back up the Government very strongly in their statement that it is impossible. As I said, there is only one way to control things and that is to ration them, and I am dead against rationing.

Speaking now as a member of the European Community I believe that one can say that the rising standard of living everywhere, particularly in Europe, will provide us with a great market for all that we can produce in this country. Therefore, everything that can be done to increase our production should be done. I should like to add my congratulations to the Government on their stand in Brussels the other day about the demand for a rise in prices. I am sure that they are right to resist that. This is not the moment, nor is it the wise thing to do when the natural course of events now is giving a fair return to farmers. The agricultural worker will get a higher wage—and I am all for that—and I feel therefore that we are on a much better wicket than we have been for many years.

I should like to ask, as the noble Lord, Lord Hoy, asked, about marketing boards. Although I have nothing to do with milk, I am particularly interested in the Milk Marketing Board because it is undoubtedly one of the best organisations in the world for this product. I have, as I think some of your Lordships know, a personal interest in this organisation, since it was my husband who started it back in 1933 or 1934. It began then under very difficult circumstances and my husband was accused of every conceivable kind of evil and wickedness. To-day it is the lynchpin, the pillar of the dairy industry, and I hope very much that no one will be foolish enough to try to do away with the Milk Marketing Board. I hope that the Minister is able to give the assurance for which the noble Lord, Lord Hoy, asked, and for which I ask, that those Marketing Boards that are working highly successfully will be continued.

Everybody is very anxious to respond to the calls for more production, more food. We have new economic methods with which we are working; new machinery is being invented which we can use, and that all helps to increase production and to reduce costs. Everything that we can do to develop that further is admirable. The Government must bear all this in mind. At no point must they allow prices to go so low that people go out of business, and then come along and ask why we have a shortage of meat and beef. We all know why: it is because the people who produced it in the past had to go out of business. It is much more economic to help them at the time they are producing food than to do it when there is a shortage and prices rise enormously. I hope that the Government will stick to this policy because I am sure that the industry will then continue to flourish.

5.37 p.m.

LORD CONGLETON

My Lords, a year or so ago I was obliged to apply for a new passport and to make quite certain of obtaining it within the limited time before my departure abroad, I visited the Passport Office in person and was there swiftly and courteously granted access to a senior official—a person of charm and perspicacity. I began to recite the answers to those questions which are asked on such occasions and all went well until I came to what, paradoxically for me, was the simplest of all: "What profession did I follow?" Unhesitatingly, I replied that I was a farmer. Now here, my Lords, I have to report that a look of complete disbelief came into the official's face. There was a moment or two of silence and then he said, "That, I am afraid, will not do. But I'll tell you what, we can put 'Gentleman' in front of 'farmer' and that will make it all right." I did not protest, my Lords.

So I have an interest to declare this afternoon, not as a member of that high order of human beings to which the Passport Office assigned me but as a member of that equally high order of humanity, as a farmer. I join in thanking the two noble Lords who are responsible for our debate this afternoon, the noble Viscount, Lord Davidson, in particular for his kindly reference to some previous remarks of mine in the 1969 debate on this topic, and the noble Lord, Lord Walston, both of whom are noted East Anglian agriculturalists. I hope they will allow the validity of the remarks and views of one who farms in Wessex, like the noble Lord, Lord Wynford, whose maiden speech I much enjoyed. I am, of course, obliged also to declare an interest in that I belong to all those indispensable organisations best known simply by their initials: N.F.U., C.L.A., R.A.S.E., N.S.A. and so on. I am bound to say that the thoughts lying behind my opinions expressed this afternoon will have been engendered by discussions with my farming friends and with some of those bodies, but the opinions I express are my own.

It has been pointed out already that there has been an interval of four years since your Lordships last discussed farming matters in a full-scale debate such as the one we have this afternoon. Much has happened. There is a great deal of ground to cover and a great deal of that has already been covered in most masterly fashion. I was becoming increasingly worried as to whether there would be any points left to make when the time came for me to speak. However, I intend to make a specific comment concerning the sheep sector of the agricultural industry which seems to me so often on occasions when farming is discussed—whether in your Lordships' Chamber or elsewhere—to have been slightly neglected. The noble Baroness, Lady Elliot of Harwood, referred to it, as did the noble Viscount, Lord Thurso, but very briefly. It seems to me that here perhaps is a chance to fill some of that gap, which is the shortfall in red meat production. I shall make a specific comment on that, and I shall then go on to make some more general comments concerning the way in which certain aspects of the industry seem to be pointing. The Annual Review 1972 (Cmnd. 4928) stated that the decline in the sheep breeding flock appears to have been halted, and now the Review for 1973 (Cmnd. 5254) maintains that the breeding flock is on a clear upward trend following a period of declining numbers. There is still quite some way to go before the peak post-war figure of something just under 30 million ewes and lambs recorded in 1965 is reached, but the 1972 figure that I have here indicates that the head of ewes and lambs was in the region of 27 million. Obviously, therefore, the picture is encouraging; the figures are moving up.

The sheep enterprise is one of particular interest to me. I have maintained a flock on one of my farms for 14 years, and during that time I have endured the barbs and derision of the agricultural economists, and sometimes those of my neighbours, for doing so in what has not always been an easy period for this particular enterprise. I have never been able to understand why farmers, who apply themselves with immense concentration to the dairy side of their activities, aided and abetted most skillfully by the research and the wisdom resident in the experimental husbandry farms, the universities, the agricultural colleges and so on, should never have shown the same willingness to tackle the problems of improving the standards of sheep husbandry of lowland farms. It has always seemed to me to be left in the background. Some years ago the sheep were something that came after everything else; the cattle came first, then the crops and then there were the sheep; at least, so it was in the part of the world where I farm. I do not know whether it has been the abuse and misapplication of techniques of analysis in enterprise and whole farm-costing, or what has been the cause, but in my view the sheep sector of the farming economy has not been helped very much by the economists over the past ten or 15 years.

If I understand the general sense of what has been said this afternoon, it is this: that what the country needs is as much food as possible produced in this country, and at as low a price as possible. And this must mean low cost production; we have simply got to keep the costs as low as possible. Here the sheep farm, I suggest, is a winner. The 1973 Review does give financial incentives in this direction, following those of previous years; the guaranteed price is stepped up. But I would also like to see encouragement of a rather different sort given to the expansion of the sheep industry. The technical and veterinary advances of the past 20 years now enable farmers to maintain far higher stocking rates—and in the end it is the stocking rate which determines the profitability of a livestock enterprise—than were possible before the advent of some very remarkable vaccines and other aids to combat all those diseases which led to the belief that one sheep's worst enemy was another sheep. My belief is that there is no longer any validity in that saying so far as the lowland farm is concerned. When I prepared my notes I was afraid I would end up by delivering a lecture on sheep husbandry to your Lordships, and I am afraid it does seem to be developing in that way, but I cannot make the points that I wish to make without going into some of the attractions of this sheep job. The main attraction, it seems to me, lies in the low capital outlay required; it lies also in the flexibility which it can bring to any cropping system on a farm; it lies in the direct return of animal residues to the fields and not to the slurry tank or the main sewer or the nearest ditch, and all this is done without cost by the animal itself.

If I may digress here, I think I am not alone in feeling that it is a pity that economic forces have made farmyard manure a potential pollutant, instead of a valuable fertiliser and soil conditioner. The subsidy given to inorganic fertiliser exacerbates the situation by acting as a negative subsidy against organic manure. We know that there is quite a lot of work going on towards the better use of slurries and sewage sludge, but perhaps these matters do not receive quite the priority that they deserve.

I did digress, and I am now going back to the sheep. In past days in my part of the world, the hurdled flock was an integral part of any lowland farm. We still have the sheep, I am glad to say, but we can do without the hurdles, very largely because of the introduction of electric netting. This is a splendid development which has made the job easier for the shepherd and easier on the flock master's pocket as well. Fencing is really the only fixed equipment item that is required on a lowland fat lamb producing flock. You do not have to have buildings. I know there is an argument for winter housing of sheep on the low lying wetter farms, and stocking rates can be increased in this way. But buildings cost money, and it must surely be the aim and object all the time to keep the costs as low as possible. I was a little bit disappointed that no encouragement has been given in the Price Review by the restoration of the fencing grant. That is one obstacle. The chief obstacle at the moment to the expansion of lowland sheep flocks lies in the lack of expert shepherds and the lack of expert knowledge about the management of flocks. This is a legacy of those many years of neglect and denigration of sheep as an enterprise on lowland farms. I do hope that the county agricultural colleges will pay proper attention to the place that sheep can play on lowland farms. I do not know the means by which these things are transmitted or how they are put into effect. But it seems to me that the great and immediate need is to increase the number of shepherds, and the knowledge of management of lowland farms. Before I leave sheep, I will give an illustration of the present situation on the farm where I maintain this flock. With an annual stocking rate of 4; ewes to the acre, and a lambing percentage of 160 per cent., this sheep job is coming out better than 30 cwt. of barley, which is about the average over the past three or four years.

Now I must make mention of the Common Agricultural Policy with regard to the sheep. There is no C.A.P. regulation. I know that the National Farmers' Union and the National Sheep Association (I do not speak for them, but I do discuss matters with them) are most anxious that regulation should be brought into being as soon as possible. It is for the Government to decide, of course, at what level sales of sheep meat, mutton, lamb and so on, may be allowed to other E.E.C. member countries, but there are opportunities here for export, if that is the right word, for sales to other member countries. The N.S.A., I know, is doing what it can to encourage producers in this country to get together on the marketing side, but again it is not easy, after so many years of official indifference and of low returns to the producer, to achieve the turn-round in skills and enthusiasms which have been eroded or lost altogether in recent times. I hope that the Government will not turn aside from helping the sheep industry to contribute towards filling that gap between consumption and production of sheep meat which I am told amounts to 40 per cent.; that is to say, the existing Community of nine produces only 60 per cent. of its requirements in respect of sheep products. I firmly believe that a resurgence in the lowland flock situation in this country would be a real means of helping to fill the gap in the present red meat supply situation with a low-cost product, which is what we must all be hoping for.

I have referred to the uncertainty of the barley enterprise. It is not good business at 30 cwt. an acre, which I have hinted is the sort of level of production which I am getting on a chalkland farm in Wiltshire, and when compared with the 45 cwt. or 50 cwt. an acre of maize which, I am told, we can expect in the sunnier parts of the E.E.C. countries, it does not stand up at all. We may well see a decline in barley growing on the chalkland of the South of England. With the sharp increases in costs which have already been mentioned, the returns on barley must be very suspect on many farms and some reappraisals will be required. What then is to replace the barley crop? I have mentioned sheep as a possibility, but another is wheat. Why cannot the millers use more homegrown wheat in our loaf? The premiums offered to a farmer for hard milling varieties are, frankly, not attractive enough at the present time to lure him away from the higher yielding soft varieties. Could not some incentive be written into the guarantee arrangements? I should have thought that the increased use of home-grown wheat in our daily bread was something which ought to commend itself to any Government.

Time is getting on, and I had better reserve my remarks on the effects of existing restrictive trade practices legislation, in which I have taken some interest during the last year or two, until the arrival in your Lordships' House of the Fair Trading Bill. Suffice it for me now to say that there is concern at the apparent reluctance of the Government to recognise the disparity which exists between the current E.E.C. legislation and the way in which the laws are interpreted relevant to farming, and our own restrictive trade practices laws. There is a feeling, which is fairly strongly held, that this disparity places our own producers—forming the associations, groups and so on—at a disadvantage as compared with our E.E.C. competitors. Again I echo what other noble Lords have said on this question. I am sure that the farming industry in this country has little to fear from our competitors, provided always that our political leaders put the case in Brussels, or wherever it has to be put, so that those of us who are involved in the industry can compete on equal terms.

In general, my feeling is that the immediate prospect for the farming industry over the next two or three years is fair, and all credit to the Government for whatever they may have done to bring this situation about. But I think I ought to report some deep-seated concern, not specifically tied to farming, which I find in the rural areas, concerning the long-term future. We have had so many changes in the last two or three years, some of which are welcome, some of which were unavoidable and some of which are certainly not the result of Government action or inaction. Let me list some of them before I sit down: our entry into the E.E.C., with the consequent change in the support system for farm produce and the movement away from Whitehall and Westminster of the final determination of the price structure; the reorganisation of our local government institutions, with the possibility of a movement away from rural areas of a degree of control over local affairs—in this context one thinks especially of water extraction problems and so on—and, as always, as we have heard, notably from the noble Lord, Lord Wynford, taxation problems, capital gains and estate duty, allied to the sharply increased price of agricultural land.

All these things seem to me to be engendering a fear, which is fairly deeply felt, that control over the rural economy has moved quite a long way, and continues to move away, from those who claim no special divine right in these matters but who feel, simply by virtue of their years of residence in rural areas and their traditional responsibility towards rural affairs, that they know more about these matters than others. Perhaps not without some justification, they feel that they are not being consulted often enough with regard to some of these proposed changes. I am sure that there is room for many separate debates on some of these questions, and I shall leave the matter there.

Finally, I go back to the latter half of last year, to the announcement of the Agricultural Wages Board's determination of a 20 per cent. increase in the basic agricultural rate. I should like to pay tribute to the demeanour and restraint which farm workers known to me—and, I am sure, many thousands of others unknown to me—at a time of what must have been considerable disappointment for them, have exhibited over the past six months. In those six months I have not come across a disagreeable expression either of face or of word, or a raised fist or anything like that, and I should like to express my admiration for the way in which they have met this difficult situation, which is surely an example to all of us. Steadiness in times of trouble is rather a dull virtue, I suppose, but it is an essential one and that is what has been exhibited over these last six months. I close by expressing the hope that if ever these splendid farm managers, foremen, tractor drivers, herdsmen, shepherds, ploughmen, whatever they may be, come into confrontation with that admirable and perspicacious official to whom I alluded in my opening remarks, they, too, will be assigned to that high order of humanity to which the Passport Office assigned myself.

5.57 p.m.

LORD ALLERTON

My Lords, I join with other noble Lords in thanking the noble Viscount, Lord Davidson, for introducing this debate and in offering him my humble congratulations on what was to me a very remarkable speech. I also wish to congratulate the noble Lord, Lord Wynford, on a remarkably well-informed and most interesting maiden speech. I am sure I speak for us all when I say that I hope we shall hear him again very shortly. At this stage of a wide-ranging debate, it is difficult to bring any fresh thought to bear upon the problems which we have been discussing, and it is almost impossible not to be repetitive. I shall endeavour to be as brief as possible and to avoid repetition if I can.

In some ways, the annual Price Review was rather perplexing to those of us who have become accustomed to it in its old form. It would be much more convenient if the changes in the guarantees and other arrangements could be shown in the White Paper without the necessity of referring to Hansard in order to obtain this information which is so vital. This would not affect your Lordships so much, but the public who buy the White Paper are really entitled to expect the information to be in it.

It is also perplexing in that the new support prices in many cases bear very little relation to current market prices. Indeed, the prosperity which we presently enjoy is due more to world shortages than it is to Government intervention. Yet there can be no certainty that the present level of prices on world markets will remain where they are. If they were to fall, those farmers for whom cereals are the raw material for animal production would benefit, but the purely arable farmer would suffer. However, owing to the high price of cereals concentrates and the very high price of calves, those farmers who indulge in intensive calf rearing, despite the high price of fat cattle, are now, according to my calculations, at any rate, getting somewhere back to where they were before. If you are trying to rear calves and find that you are forced to pay £70 a head, which is by no means an unusual price now, your barley, even if you produce it yourself, could be sold at possibly £36 a ton and concentrates are as high as £55 a ton. These figures make a very nasty hole in your profits. I appreciate that at the end of the year the valuations will be much higher, but, unfortunately, paper profits do not pay many bills, and more and more capital will be required in order to keep the production line going.

As as been said so frequently this afternoon, it is clear that our agricultural policy must be one of expansion, especially as regards livestock and general increased investment in the industry. The noble Lord, Lord Walston, has already drawn attention to the vastly increased cost of tractors and other agricultural machinery. That has been my own experience, too, and I fear that this will continue. But as the Government are hard put to it to stabilise domestic prices at not too high a level and yet not to appear too generous to an industry which is now superficially prosperous, in my opinion this Review is a fair compromise. Difficult though it may be, farmers must accept the fact that they have to look at their position in the context of the economic problems of the country as a whole.

More money is needed for expansion, as I have just said, but we have come to the end of the road so far as getting more money out of the Treasury is concerned. We must accept the fact that there is not much treasure in the Treasury, and that the best we could hope for is not that they would hand out more but that possibly they would take a little less away. Could not the system by which farmers are taxed be altered? Would it not be more fair to an industry whose profits fluctuate so widely as do farming profits if farmers were allowed to be taxed on average profit based on a period of three years? This industry, however well conducted it may be, is normally dependent upon conditions over which it has no control. Even the White Paper bases some calculations on sums adjusted to take account of weather conditions. High rates of income tax and surtax—I know it is called something else now, but the effect is the same—make it difficult for farmers to plough back profit in a good year; nor do they offer relief in the bad years. A three-year average would go some way towards overcoming some of the shortcomings of the present system. The present fiscal system seems perversely designed to undermine some of the stated objectives of our farming policy. I understand these to be, first, to retain capital in the industry; secondly, to increase investment; and, thirdly, to encourage larger and more economic farms. Our present taxation system, which includes high rates of estate duty, capital gains tax even on so-called technical disposals and high rates of income tax and surtax, works in direct opposition to these objectives.

To pay money to amalgamate farms into larger holdings, and then to expose them to fragmentation with heavy estate duty and capital gains tax, seems to me to be, to put it mildly, rather muddled thinking. I am old-fashioned enough to see virtue and value in family farms; and as to capital taxes, which take capital out of the industry, they often result in the break-up of the larger holdings and make it difficult, and in some cases impossible, for farmers to pass on their business to their successors. I would suggest that it would be possible, and not unreasonable, for capital gains tax to be suspended if a farmer sells or passes on his farm to another member of his family, provided the farm remains in the possession of the same family. Inflated land values are of no help to families who only wish to farm; they are only a detriment: and in most farming families it is usually fortunately true that they wish only to farm; they do not wish to sell. They merely want to live on their own land and to live the same sort of life that they have lived for generations—and a very great deal of good they have done by doing so. In this way inflated land values are a serious handicap to the backbone of the farming industry, which I believe to be the families who have farmed for generations and who have neither the wish nor the inclination to do anything else. My Lords, the Ministry of Agriculture may be the fairy godmother of the farming industry, but I am afraid that in some respects the Chancellor of the Exchequer assumes the role of the wicked uncle.

6.9 p.m.

LORD COLLISON

My Lords, I must apologise to the House, and in particular to the noble Viscount and to my noble friend Lord Walston, for appearing at this late hour, but I think the House knows my circumstances and I hope I shall be forgiven. Your Lordships will know of my interest in agriculture, which prompts me to say at least a few words this evening. I suppose the most significant thing that has happened to our industry is our entry into the Common Market and the resulting changes which are going to occur in our support system, for example, but most certainly in the position in which agriculture is going to find itself in having to suffer much more intensive competition from the Continent. I must say that I have never feared, for agriculture, our entry into the Common Market. There is not time this evening to go into details, but my simple philosophy on the wider front leads me to believe that the industry and the economy generally will benefit by our being parties to the Continental system and that agriculture will rise with the general rise in the economy—not as in the past but to equal status. That is more likely to happen when we are in the Community. Certainly there is going to be more intensive competition, and this means that the efficiency in our industry which we have achieved and which we have a right to be proud of must not be allowed to decline. If we can, we must become even more efficient than we have been in the past.

The situation we find ourselves in at the moment is one which, I understand, is very difficult for the housewife in this country and, I think, difficult, too, for the Government in the sense that world food shortages are driving up prices and making problems for everyone. In this situation it is incumbent upon us as an industry to increase our production as rapidly as we can and, again, as efficiently as we can. In this context the National Farmers' Union has pointed out that despite the big increases in home food output in recent years, the United Kingdom is still one of the world's major food importers. In 1972, imports of food and foodstuffs totalled £2,104 million, which amounts to one-fifth of the country's import bill. The N.F.U. have given us a table which shows the percentage of various commodities which have to be imported. It shows, for example, cereals, 35 per cent.; sugar, 65 per cent.; mutton and lamb, 57 per cent.; bacon and ham, 56 per cent.; butter, 78 per cent.; cheese, 46 per cent.; apples, 49 per cent.; and tomatoes, 66 per cent. It is therefore important (and more so now) that the industry should be allowed to expand, and should be able to expand, its output.

In these days it is clearly understood by everyone that agriculture is a capital-intensive industry. It is fair to point out that, unlike many other industries, the capital is generated within the industry and therefore those concerned, farmers and farmworkers, have a right to be proud of their achievement in that they are largely financing themselves. Certainly the situation in agriculture is quite different from what it was only a few years ago. It is different from the days when I worked on a farm—when we worked with horses and had to be labour-intensive, to the disadvantage of everyone. I would comment in passing that for the reasons I have just mentioned I myself regret the Government decision to reduce the rate of grant under the Farm Capital Grants Scheme from 30 per cent. to 20 per cent. and also to reduce the calf subsidy. Both these grants were aimed at increasing agricultural expansion. I find it difficult to understand why at such a time this incentive should be removed.

As I say, things are different now. It is no longer sensible to expect the farmworkers—and I suppose that I still speak largely for them—to learn their jobs the "hard" way by going on to the farm as boys and learning as they go along. That will not do to-day. I am glad therefore that the Government have accepted that agriculture must have training facilities and have recognised that because of its special arrangements agriculture has particular needs of its own. Therefore, I am delighted that after some initial difficulties the idea is now firmly embedded in the minds of agriculturalists, whether they be farmers or farmworkers.

I think that I must declare my own particular interest in this field. I am still the Chairman of the Agricultural Apprenticeships Council, a kind of night-watchman over the remaining apprentices who are finishing their three years. Of course, future work will be done by the Agricultural Training Board. There is a problem which has arisen recently which I want to mention. The importance of training in agriculture is, as I have indicated, supreme and the people we are turning out will be quite an advantage to the industry. The boards are training them to provide a work capacity and a knowledge of the industry which is rapidly acquired and which meets the need for rapid expansion. It is an advantage both to farmers and farmworkers in the sense that after certification the trainee becomes a craftsman and he gets a plus rate of at least 10 per cent. of the agricultural minimum rate. But there are still many agricultural workers who, though craftsmen, are not certificated. The youngsters who will go through the training boards or who went through the agricultural apprenticeship scheme pass proficiency tests in their particular field of work at the end of their period of three years and gain a certificate. This entitles them under the Agricultural Wages Act to the increase, the plus rate, that I have mentioned.

I and others who felt with me in this matter on both sides of the industry have worked very hard to achieve for agriculture a wages structure. I believe it was important for the industry to have that dignity attached to it: that it was not just a fiat rate; that agricultural workers were not common labourers. The fact that there is a training board with apprenticeships and certificates, the fact that there is a wages structure, a ladder up which they can climb, gives the industry added dignity, brings it into line with modern ideas and gives it the status it ought to occupy beside the other great industries of this country. So the craftsmen, the people who are trained, automatically get a certificate and automatically get the 10 per cent. plus rate. The tests are given by an independent board and of course they cost money. They cost about £5 per test. The average craftsman has to take from three to five tests. The training board, in these circumstances, find £4.50 of the cost. If there are five tests, the total costs is £25 so there remains only 50p per test to find, sometimes by the farmworker but, I think, perhaps more often, by the employer.

It is understood that this is an advantage to the industry, but what was not so clearly understood (although we foresaw this when we were pressing for the establishment of a training board and a wage structure) is that there would be many workers in industry, the older men, who had acquired these skills and craftsmanship the hard way but who would have no certificate at all, and arrangements had to be made, in simple equity, to see to it that they qualified for the plus rates that were going. So it was agreed that the employers could supply them with certificates, and many farmers have done so. We expected that at least about 60 per cent. of the agricultural workers would qualify as craftsmen. That would include not only the youngsters but also those already in the industry. But, in the event, the number fell far short of our expectations.

I noticed in the issue of March 31 of the British Farmer and Stockbreeder that mention is made of this fact. In a short article headed "Where are you, you craftsmen?" it states: Why has the wages structure scheme made such slow progress? Both the N.F.U. and the N.U.A.A.W. would like to know. In the ten months since it came into full operation (after a 14 months trial run) just over one-fifth of regular full-time workers have registered as craftsmen—about 34,000 out of 158,000. This is believed"— and I am sure it is right— to be a third only of those who could qualify. Yet both employers and employees gain from craftsmen being seen as such. On the one side, it gets the industry away from the minimum wages image, demonstrates that agriculture is a worthwhile career, and helps to attract recruits of good calibre. On the other side, a registered craftsman can be sure of overtime"— actually it is plus time— at 10 per cent. above the minimum; also he has a saleable qualification and a status. The article goes on to say: Quite clearly what is happening is that neither workers nor their employers are bothering—or at least this is so in some counties. Counties like Wiltshire, Norfolk, Dorset and Lincolnshire have about 40 per cent. registrations, while Cumberland and Westmorland, the West Riding, and Surrey have under 10 per cent. The figure for Lancashire is 5 per cent. (160 men out of about 4,000). No single Welsh county exceeds 10 per cent.; in the whole of the Principality some 350 workers have registered out of 6,000. Why these discrepancies? In this issue both sides of the industry are at one, and one wonders why this has happened. I think it possible that the farm worker who is getting the plus rate and maybe more, and the farmer who is paying it, do not see the need to issue a certificate and so the worker does not go on the register. There is a need. Again the dignity of the industry is involved. We should know how many craftsmen we have. From the point of view of the craftsman it is important that he should have a certificate. I know there is a loyalty between farmer and worker which is very great, and sometimes farmworkers have a lifelong employment with one farmer. But some move about the country and it is right that they should do so, if they consider they may get a better job elsewhere. That is good for the industry. But when a worker moves he has no proof that he is of craftsman status unless he can produce a certificate, or unless his old employer writes a letter, or he can convince his new employer that he has the necessary skill. So here there is something wrong, and that is why I am talking about it.

There is another thing which may happen, and we know that it can happen. An employer may be unwilling to give a worker a certificate, it may be because he is keeping the worker on the minimum rate of pay when the worker should be receiving more. The worker says, "I think I am entitled to a certificate and the plus rate; please will you give it to me?" If the employer says, "No", what can the worker do? He has no remedy unless he has passed the proficiency test. I did not know this until yesterday when it came to my notice at a meeting of the Apprenticeship Council; but the queer thing and, I think, the wrong thing about the situation is that if a worker wants to take a test to prove his efficiency he has to pay for it unless his employer pays. An employer who is unwilling to offer a certificate clearly is not willing to pay for a test and the worker may be involved in expense amounting to between £15 and £25 to prove that he is a craftsman. I cannot think that that is right.

There is another spin-off from all this. The proficiency test committee expected a much larger number of applications to take the tests because of the arrangements made to enable older farm workers to qualify and to go on the register, but instead of there being 60 per cent. (many people think the percentage should be higher and farmers have suggested 90 per cent., or 95 per cent.) the average is 20 per cent. And because the throughput is so low, the Proficiency Board is in the red and in trouble. These matters need looking at. I apologise to the Minister who is to reply for unloading these things on him at this late hour. I would certainly have given him notice had I had time to do so, and again I plead my own circumstances. I shall not be upset if I do not get any comment or answer from the Minister this evening, but I should like the matter to be looked at.

My Lords, there is one great danger to the future of agriculture, particularly now that we are in the Common Market. It is caused by the continuing decline in the number of farm workers. I have seen this happening over the years. The reason, of course, is the low wages paid in the industry. Something has to be done about that. I was extremely sorry and distressed that the last award given, which was a relatively high one, had to be frozen. Farm workers feel strongly about this because they have suffered from such bad conditions in the past. The average earnings of farm workers are about 70 per cent. of those of industrial workers, and that cannot be right. I have worked in the industry and I know the skills involved and I am connected with the training scheme. I know the type of tests which have to be taken, and they require a high degree of skill, often more skill than would be necessary in a comparable grade in industry. We have to get away from the old situation where some workers are able to bring industrial pressure to bear to get wage increases and others cannot, or do not want to.

My Lords, do not be cynical about the farm worker or the nurse. People often think you are talking nonsense when you say that a nurse does not want to go on strike because if she does, patients may die. Farm workers do not want to strike because they know that if they do animals would suffer, and so they shrug their shoulders and say that they cannot do it. I have heard farm workers say at conferences that they did not want to strike. But they have been goaded into a situation where they are very near to striking, and equity has to come into the picture when one is determining what workers should get in terms of wages, instead of workers being successful where brute force is available and is used, and unsuccessful and being left behind where it is not used. I feel strongly about this.

My Lords, I cannot leave this subject without making reference to the organisations in agriculture. I can speak without being accused of immodesty about the efficiency of the National Farmers' Union, with whom I have dealt for years in the past. I am impressed by what they do. I may be considered immodest if I say the same about the Agricultural and Allied Workers' Union. Both these unions are highly representative and highly responsible. They need more money, but that is a problem they will have to solve themselves. But, looking at them as representatives of their section of industry, they do a magnificent job. Of course, this has to run on into the future, and even more so in these times. When discussions take place about agricultural policy the National Farmers' Union inevitably is deeply involved. I want to see the workers involved more and more in discussions which go to the root of agricultural matters, and I hope this will take place. I am a great believer in tripartite discussions. I have spent many years on the International Labour Organisation, which is a tripartite body. I believe that consultation is essential in any industry, and I could talk a great deal about that, having spent three and a half years on the Donovan Royal Commission. I hope that we shall see, particularly in agriculture, some machinery whereby the two sides of the industry, the farmers and the workers, and the Government can sit down together on equal terms, discussing the future of their industry and its importance to the country.

6.32 p.m.

THE EARL OF ONSLOW

My Lords, I should like to echo what the noble Lord, Lord Collison, has said on the subject of agricultural wages. Several noble Lords have referred to this, and I do not need to emphasise it any more. I must admit I was slightly surprised when, during the speech of my noble friend Lord Ferrers, I pointed out to him the good news of the fall in beef from between 30 to 20 per cent. he said it should be left to a humble Back-Bencher to make this point. How odd that a Minister of the Crown should not be thrilled by this piece of news! However, my Lords, I am not going to talk about beef or grain. I am going to talk about a smaller and much more specialised subject; that is, about rabbits and pigeons. Unfortunately, both these pests are protected by the most powerful weapon in the English armoury, that of sentimentality. Rabbits have sweet faces and were written about by Beatrix Potter. Pigeons have connotations with Welshmen, and the late Sir Noel Coward sang about the "billing and cooing" in Las Vegas, I believe. As a child, Taffy was a Welshman, Taffy was a thief", was what pigeons were supposed to say.

However, my Lords, after those slightly flippant throwaway lines, these two pests are a menace. They are probably the worst pests that we in agriculture have to tolerate. First, I will deal with rabbits. In 1953 myxomatosis killed 99 per cent. of the then rabbit population with a grade 1 myxoma virus. Now the virus, where it has come back, is returning at grade 3 level, which kills only approximately 60 to 65 per cent. of the rabbit population, leaving the remainder immune and to a certain extent passing on their immunity to their young; and this immunity is growing. This grading system, as your Lordships may know, goes from 1 to 5. The grade 5 myxoma virus kills well less than 50 per cent. It is at the moment dealing only with about 0.4 per cent. of the myxomatosis population in this country, and it then takes much longer to show. This grading system was produced to show the kill percentage and the case mortality ratio. I have with me the paper which was produced by Mr. Ross of the Agriculture Ministry Pests Infiltration Control Laboratory at Pirbright. Noble Lords may care to see it—I am sure my noble friend Lord Ferrers has lots of copies of it.

This immunity is increasing, and now that there are no warreners and far fewer agricultural workers on the land than there were in 1953, this increase of rabbits (and let us hope that it does not get from the infestation rate of 47 per cent. to what it was in 1953) will be very difficult to control. Therefore, what I am asking the Minister to do is to consider removing this anomaly that you may not introduce the grade 1 myxomatosis, like they do in Australia, or that you may not introduce myxomatosis on to your land at all. However, it is also an offence to harbour rabbits. I have a feeling that not only is the weapon of English sentimentality powerful, but the weapon of English sentimentality when allied with hypocrisy is almost unbeatable. The noble Earl will almost certainly suggest that I go and shoot my rabbits. I like shooting my rabbits, and the most efficient method of doing it is to shoot them at night. I go up a ladder. However, one's neighbours are inclined to complain and think that the I.R.A. are in the back garden. I have now done with rabbits.

Now to pigeons. There is this strong drug called Alpha Cloralose. The Minister knows about it, and I am sure he will produce a good answer why I cannot do, or he will not do, what I am going to suggest. It is allowed to be used under controlled conditions at the moment on sparrows and ferral pigeons, which are the ones to be seen in Trafalgar Square. It is not allowed to be used on wood pigeons. What it does is to narcoticise them (a horrible word), which means that it makes them go to sleep. Therefore, if any other bird, except corbies or prey-eating birds, were to eat this drug, provided the bait is being watched and picked up these birds may be allowed to recover and fly away. You then have to wring the necks of the sparrows or pigeons. But because there have not been big flocks of pigeons since 1963—and this is probably due to the fact that there have been no cold weather spells, and they have not come down from Lord Hoy's part of the world where they sit happily eating beech nuts—please, may we have from the Ministry, under controlled conditions—and I emphasise that—the introduction of myxomatosis and the use of Alpha Cloralose or similar narcoticisers to reduce these pests? If their numbers again reach high proportions, much of the productivity in agriculture will be slowed down. There is, as we all know, a food shortage, and the food shortage has, as we all know, up to Christmas, pushed prices up much too high. That is all I have to say, and I will leave the rest of the time to other more serious subjects.

6.39 p.m.

LORD ROWALLAN

My Lords, I should like to congratulate the two noble Lords who opened the debate on a most interesting afternoon and evening—I hope it is not night as well. I should like also to thank and congratulate the noble Lord, Lord Wynford, who for his maiden speech chose a subject which is unfamiliar to most of us and spoke with the greatest confidence and the art of an old hand who has had practical experience.

I am going to be only a very short time, but I want to call attention to one aspect of present day agriculture which has not been mentioned up to now, and that is the problems of heavy stocking which are becoming very real and which are going to make the problems of avoiding and eliminating contageous diseases very big indeed. I do not know if any of you listened, as I did on Saturday morning at 6.30, to the agricultural programme. It was a very interesting one. It came round inevitably at this time to brucellosis and what was holding things back—the lack of veterinary surgeons; what was causing the lack of veterinary surgeons—the attractions of private practice rather than Government service; what was causing them to avoid Government service—the lack of an adequate salary. My Lords, we have to learn that we cannot do what we are wanting to do on a shoestring. It is bound to cost money and the longer we postpone the elimination the more money it is going to cost.

One other thing: if you tell even a Highlander, let alone a Lowlander, that he is going to get full compensation and up to £280, whereas if he becomes accredited he is only allowed 75 per cent. of the market value and a maximum of £160, which would he choose? Those up in Caithness have no doubt that they backed the wrong horse when they tried to carry out the wishes of the Government and unfortunately had very heavy expenditure in the process. Now they find that they would have been far better off if they had given up the scheme which the Government were persuading them to undertake and taken the full market value and the maximum of £280 which they were offered if they chose to spurn the Government's offer. It is a tragedy that mistakes like that should cause so much distress to most honourable people, and that they should be done out of the money they would have received if they had followed their natural bent. It is important, my Lords, to take this business seriously. We have to see that those who are working to follow the Government's wishes are given their proper reward. Then we shall find that the scheme moves smoothly along to a great success and we shall be rid of the disease which has caused so much loss to farmers.

6.42 p.m.

LORD BALERNO

My Lords, I would like to support both points of the noble Lord, Lord Rowallan, especially with regard to the veterinary profession and their being attracted into the State service. There is no doubt that it is difficult to get the young veterinary graduates into the State service because the opportunities and the rewards in private practice are so very much greater. The second point is that we farmers owe a great deal to the noble Lord for his persistence on this matter of brucellosis. We cannot get away from the suspicion that the Government, of whatever party, could have been more vigorous over the elimination of this disease. When you try to eliminate a disease you should go all out at once. That is the lesson which other countries have learned. It has been successful there and it worked very well when, somewhat belatedly, the Ministry of Agriculture did it with swine fever. That was done under the auspices of the noble Lord, Lord Hoy. I should like to congratulate the noble Lord, Lord Wynford, on his remarks. It is with my tongue in my cheek that I say that it is more than seven years since I handed over all my land to my son.

The capital grants altercation between the noble Lord, Lord Hoy, and the noble Viscount, Lord Thurso, is intriguing to me. As I understand it from the annual review, the increased expenditure on capital grants has been fairly considerable and therefore the grant at 30 per cent. has, in a way, been over-subscribed, to the detriment of the taxpayer; and possibly at 20 per cent. it will still be the case that more will be handed out to the farmer than was handed out, shall we say, in 1971. I think the 20 per cent. is still quite a good incentive and I would remind your Lordships who are interested in this that many of the other capital grants have not been changed. I think we should acknowledge this, though I would not expect the noble Lord, Lord Hoy, to draw our attention to it. In the field of arterial drainage the grant remains at 60 per cent.; for remodelling on amalgamations it remains at 50 per cent.; for the facilities for hill land at 50 per cent.; hill drainage is 70 per cent. and horticulture gets 40 per cent. of capital grant.

LORD HOY

My Lords, I do not want to interrupt the noble Lord but if he looks back to the record he will find that in the days when I was Minister it was I who promoted these very substantial increases. I am never one of those who want to draw other folks' attention to their own achievement!

LORD BALERNO

My Lords, I am glad that the noble Lord has intervened in that way—he has taken the words out of my mouth.

My Lords, my chief interest in this debate is on the price of meat, and especially of beet. I think that any increase can hardly be attributed at all to the fact that we have gone into the Common Market. The higher standard of living in Germany and France has put the price of meat over there considerably higher than it is in this country. Admittedly, a rise of our meat prices was anticipated on entry to the Common Market, but it was to be phased gradually over five years. In fact, it has happened all at once, and I submit not for reasons connected with our entry into the Common Market. The reason is of course, as several noble Lords have mentioned already, the age-old reason for an agricultural deficiency in production: a world shortage; and at the present time it is a world shortage which is completely and absolutely beyond our control. The trouble, or, rather, the tragedy, is that the evidence for this world shortage has been there for us to see and take note of and react to. That no action, or very little, was taken by Governments in the 'sixties I attribute in no small measure to the economists who advised those Governments, especially I think during the latter part of the 'sixties.

The urban economist, who is without a background of country and farming things, can make the most egregious mistakes. As a rule, he is unable to face up to the long-term outlook required in dealing with farm production, and on the rare occasions where he shows some comprehension of this he invariably is ignorant of the human and psychological factors in attempting to control production and adjusting it to anticipated demand. It is not only the urban economist of whom we must beware; so far as agriculture is concerned, we must be very wary of the urban administrator. He can make even bigger mistakes, and when the two of them get together they can create disaster, much to the dismay of the urban politician Minister who, by and large, whatever his Party, is usually friendly and considerate to agriculture.

There is a clear example of this urban prejudice which has appeared during the past week in a publication issued by a body called The Open Seas Forum. I welcome the statement by the Ministry of Agriculture that the report of The Open Seas Forum does not tie up with the facts; and that indeed is an understatement. The present world shortage of beef has been evidenced for several years. I myself heard it predicted over ten years ago by an American agricultural economist, who incidentally is now the Secretary of Agriculture in the U.S.D.A. At the time when it became evident that the world market of beef was becoming dominated by the United States in the place of the United Kingdom I learnt that the beef imports to the U.S.A. amounted to 5 per cent, of all the beef and the veal eaten in the U.S.A. To-day the amount of beef imported to the U.S.A. is nearly double that of 10 years ago. The figure for imported beef is now over 9 per cent. of all beef consumed in the U.S.A., and not 5 per cent. as stated in another place yesterday. I believe the demand for beef is still strong in spite of higher prices, and that still more beef is being imported. Indeed, the latest figures which I have heard of, but have not been able to confirm, are of a 20 per cent. increase in beef imports during the past year. This is a quite astonishing change from not so long ago when the United States were not only self-sufficient but also, in some years, exporting a very appreciable amount, to the detriment of our farmers in this country.

By very good fortune, in 1970 there happened to be a major change in our agricultural policy which was linked with the prospect of our entering the Common Market. This policy was based on the fact that an expanded farm production meant that less would have to be imported and therefore the lower would be our cost of entry to the Common Market. Gradually and slowly it dawned on the British farmer that this, combined with access to the European markets for our livestock products, would mean a much more rosy outlook. And so, stimulated by the very substantial grant for farm buildings and improvements, the farmer gained confidence and expansion was in the air. Had it not been for this, the price of meat to-day would have been considerably higher than it is. True, the good harvests of 1971 and 1972 have contributed greatly to this feeling of confidence, and the more so as they have coincided with bad harvests in other parts of the world.

The price of beef is conditioned by the price of other meats. The current shortage of pig meat has a variety of causes: strikes in Denmark, swine vesicular disease in this country. Luckily, the efficiency of our pig farmers has improved out of all recognition, and here again we can say that, but for this efficiency, the price of beef would be yet higher. Likewise, our sheep production has expanded, largely due to the hill sheep subsidies and also to the potentiality of the market on the Continent. Long term it is clear to me that a substantial increase in pig numbers will alleviate the beef prices which will come down a bit, but it will probably be 1976 or 1977 before our national cattle herd is beginning to match our requirements or the opportunities opening for us in Europe.

In the meantime, for short-term increased production I would ask the Minister what the present situation is concerning bull beef and boar pork. I know that a lot of research work has been done on this; the results are very promising indeed but there are some legislative provisions or regulations which make it unattractive to our farmers at a time when our housewives may be buying, and certainly the housewives on the Continent are buying, both bull beef and boar pork, imported largely, I think, from Poland. But I understand that the other countries in the E.E.C. are also moving in that direction. I will say, for those who are not aware of it, that the meat from the entire male, of the modern breeds slaughtered at a reasonably early age—not too early—is entirely without taint but, far more important, it produces far more meat per pound of live weight gain, and that is very considerable

Finally, in the absence of the noble Lord, Lord Collison, I should like to say a word about the farm worker. On paper he has always been underpaid, and in fact on a properly run farm I rather doubt whether you could ever get (and certainly not in my part of Scotland) reliable farm workers at anything less than 50 per cent. over the minimum wage. Nevertheless, as the noble Lord pointed out, in relation to industry the farm worker is underpaid, and I think the minimum should be increased, if only as an incentive to make the good farmer pay his good men more. Therefore, I should like to know that it will not be long before the freeze introduced on January 22 last on to the wages award of a 20 per cent. increase can be taken off and that the farmworker can receive what he so richly deserves. I should like to thank your Lordships for your patience in listening to these rambling remarks.

7.2 p.m.

THE DUKE OF MARLBOROUGH

My Lords, I should like also to start by congratulating the noble Lord, Lord Wynford, on his excellent Maiden Speech. I am sure the noble Lord will not be sent the same type of press cutting as I received after my Maiden Speech. It was from the Daily Record, a paper that I do not myself read. It said, I think most people would agree that the Duke's Maiden Speech hardly achieved the significance of a Parliamentary landmark. All that can be said in its favour is that it strengthens the case for the abolition of hereditary titles. While I do not think we should necessarily be very worried about what the Daily Record says, nevertheless I feel I must apologise to all hereditary noble Lords for endangering our position, and I hope that what follows now will do more good than harm.

The farming industry has earned its right to some reasonable prosperity on four points. First, by the vigour it has shown in welcoming the challenge of Europe. Second, by the technological lead which it has over all European farming. Third, by the patience and tolerance shown during the long period of costly inflation, during which time the farmers' prices were held down by Government price reviews. Fourth, by having had the courage—and, I must also add, some incentives—to invest heavily in the industry. During the war and in the post-war period we saw the farming industry producing what the country needed, regardless of cost. Then we had the period from 1955 to 1968, approximately, when the industry produced more efficiently and more competitively. Incidentally, it was during this period that I myself started farming. It took me quite a long time to get my farming reasonably efficient. From 1958 to 1971 we had the difficult period of world surpluses, two difficult harvests and the cost price squeeze. To-day, I am sure all would agree that on the whole the agricultural industry is in a buoyant and healthy state. By the end of 1972 the beef herd was up by nine per cent. compared with 1971, the dairy herd by four per cent., young cattle by six per cent., sheep flock by five per cent., breeding ewes by about twelve per cent. and sow numbers by three per cent. With the massive depletion of the grain reserves of America and Australia and with the ever-increasing requirements of Russia and China, the outlook for cereal producers must be favourable. The credit must go first to the Government for giving the incentives, and second to the industry as a whole, which has seized the opportunities firmly.

I believe that another reason for the success story in British agriculture is the strong family ties and continuity with which our agricultural system has been fortunate enough to be endowed. This has meant that the farming families have staked their money and their future, knowing that they were building up an enterprise that could be carried on by future generations, either in the case of a tenant or as an owner-occupier. Before saying anything else I should like to pay my tribute to the British agricultural worker. Without his labours the productivity that I have mentioned could never have been achieved. The British agricultural worker is an example to all: hardworking, efficient and, above all, loyal. He shows endless goodwill and determination to carry out his job in all sorts of trying conditions; indeed the spirit of the agricultural workers' endeavours shines like a beacon during these dark days of industrial troubles, and like many other noble Lords I entirely agree that they deserve a better reward.

Because of our taxation system and the high capital requirements for farming, the main problem to-day and in the future, as I see it, will not be just the profitability of the industry but the liquidity position. At the moment there is not enough money in the industry for the financing of expansion, or even for financing the current turnover, which must be up approximately 25 per cent. since we joined the European community. To give your Lordships a few figures: the net income of the industry is about £700 million; depreciation, £400 million, giving a total of £1,100 million cash reserves. Going out of the industry is £2,000 a year for 300,000 farmers, making £600 million; working capital requirement is £400 million, giving a total of £1,000 million. This means that there is only £100 million left for reinvesting in the expansion of an industry whose assets can be put at approximately £15,000 million. Or, to express it in percentages, 0.5 per cent. of total assets.

Most industries reinvest anything up to 10 per cent. of total assets. To-day in The Times, the Chairman of I.C.I., in presenting that company's figures, said that their capital expenditure for the coming year would be about £150 million against assets of £1,770 million, which is approximately 7 per cent. of their total assets.

With the balance of payments problem facing us, while expansion gets under way it is more important than ever that we expand our home agricultural production so as to lessen the foreign import Bill. As I have already said, this can be done only with more money coming into the industry. Where will it come from? That is what I should like to ask the Government. As far as I can see, it can be done only in two ways. First, by giving farmers the opportunity to reinvest some profits before taxation, as the noble Lord, Lord Crawshaw, suggested; or, second, by providing subsidised credit of one form or another such as is available in all European countries except the Netherlands. The German farmer, for instance, can get a subsidy of up to 5 per cent. against his loan from a bank, so that if the bank rate is 8 per cent. he would be paying only 3 per cent. on the loan. Again I think the other suggestion put forward by the noble Viscount, Lord Thurso, is a suitable one. At the moment the British farmer is probably the most capitalised per acre in Europe and definitely the most efficient. It is very important that we do not reverse that position. It has been made possible partly because the farming community has had important concessions with a low rate of death duties, but I think that the results have been amply justified. Nevertheless, these agricultural rates have been abused and I believe that legislation should be introduced to prevent death bed purchases because they do a disservice to the farming community.

At the moment we are contributing vast sums of money for the reorganisation of the farming structure in Europe so that they can enlarge their units and compete more favourably with those in the United Kingdom, which are approximately four to five times larger. But at the same time our current taxation system is dedicated, because of the death duties and the high taxation, to breaking down those large units. The effect of high taxation and death duties having to be found from land assets can be to break up an efficient holding and could easily mean that buildings, and hence the capital that was invested, would not be fully utilised or, additionally, that the farm was under-stocked. What is the point of giving capital grants for buildings, et cetera, and then to take those monies back from a forced sale, leaving an uneconomic and under-capitalised unit?

I believe that it is very important to find some fair solution to this problem so that the country can benefit by adopting a taxation or financing system that will help the industry in the years ahead to continue to move forward. Only by doing that shall we maintain our lead over Europe. The farmers have shown their faith in the industry by their productivity, by their relations with labour, and by their sense of purpose. These together provide a solid foundation for a successful investment. Therefore I say to the Government, "Loan them the cash, or give them some taxation incentives so that they can expand and develop their various farming enterprises". British farmers are by no means lame ducks but the past has shown that it is surely better to invest in facts, figures and results rather than fantasies.

7.13 p.m.

THE VISCOUNT OF ARBUTHNOTT

My Lords, I should like to start as others have done by thanking the noble Viscount, Lord Davidson, and the noble Lord, Lord Walston, for introducing this subject which, as we have heard, we have not discussed for so long in this House. I should like also to add my congratulations to those of other noble Lords to the noble Lord, Lord Wynford, on his maiden speech. He said so many things that needed to be said, he said them so well, and I congratulate him for it.

I do not want to detain your Lordships very long, although having said that I do not want to diminish the importance of the subject on which I am about to address your Lordships, which is simply the immediate and long-term future of our uplands. In my opinion we have not heard enough about that very large sector of our agricultural land. I say "large" because certainly in terms of area something like 75 per cent. or more of our land is upland or hill land. In Scotland alone, four-fifths of our agricultural production is linked in some way to livestock and a very large proportion of that livestock starts off in the hills. Ninety per cent. of the breeding sheep in Scotland are linked with hill or upland subsidies. They come from the hills. In the United Kingdom over 50 per cent. of the beef cows are tract hill or upland subsidies. That alone indicates the importance of this sector of our agricultural industry.

There is no doubt that the income of the farmers in the hills and uplands has improved, and everybody is very glad of that. Some cynics have been heard to say that some hill farmers have been known to smile recently. But that is a cynical remark. One has to remember just how far from off the floor the hill farmers' and upland farmers' prices had to come. They are now beginning to reach sensible figures. But do not let us forget either that these prices are still not end-product prices; they are dependent on somebody else paying for a store lamb or a store beef animal and taking it on to fatten elsewhere. What we have probably forgotten—whatever the noble Viscount, Lord Thurso, may think about them—is that a very great deal of the income that has been attracted to the hills has gone there in the form of subsidies.

When we entered into the original Common Market negotiations, everyone who has a concern for the uplands was glad to hear the Government say that they had been able to negotiate terms which would enable them to maintain the income of hill farmers, and I hope that that will be so. Just now Directives are being negotiated in Brussels in which the British negotiating teams have had a real contributory part to play. The one I am particularly concerned with, of course, is the Directive for assistance to mountain areas. I should like to pay tribute to all the representative organisations of all land users and to the Ministry and Department officials for the way the drafts of these Directives appear to be coming out, which is in the way that upland and hill farmers would like to see them end up. But that will not be the end of the story and I hope that, when the political in-fighting comes along, as it will inevitably, we shall have as good a battle fought on our behalf by the political fighters as has been fought already by the negotiators for the representative organisations and the departmental and Ministry officials.

There are of course two points in that Directive which still concern many people in the uplands. One is the ability of our upland farmers to qualify for the development plan and the benefits that accrue to them; and the other is whether those farms that will not receive the development plan benefits will have a grant that is high enough to be a real incentive. The uplands, rs I have already intimated, owe much of their success, if it is to be success, to their interdependence with lowland farms. There must be room for help towards building up that interdependence. A great deal has been said about capital grants, and as the noble Lord, Lord Balerno, suggested, those who farm in the uplands are thankful that there has been no cutback in their capital grants. But if a cut-back occurs for a building that might otherwise have been put up in the low ground farms to fatten stock that had been produced in the hills, thereby diminishing the market for that hill stock, that will affect the hill farmer. You cannot separate one part of agriculture from another in this way. A cut in a capital grant to agriculture is a cut in the grant to all farmers, if you look at it realistically.

The more fortunate hill and upland farmers with the larger farms with a degree of improvable land are probably on a much better platform for advance that ever before. But again I think we tend to forget that these more fortunate people represent only a part of our upland and mountain area problems. Something like 25 per cent. of our agricultural production from the hills and uplands comes from the very small farms. We tend to forget, too, that most of these small farms, whether they are in the Highlands and Islands of Scotland, in the Welsh Valleys, or in the uplands valleys of Yorkshire or the West Country, have probably never been entirely dependent on agriculture for an income. There has always been some ancillary income available. It might have been knitting or weaving in the Highlands and Islands, or fishing, or mining, or some other form of off-farm industrial activity which helped make the difference in the family budget and which often produced the capital that went into the farm. These small farms are the places where the people live in the hills, where the people who are wedded to the hills are to be found, the people who create the environment that most of us want to see main-tattled in the hill areas.

How are we to help them in agricultural terms? I am quite certain that the general prosperity of hill farming in the upland areas must be maintained, and through that their basic income must always be found. But I think that the agricultural establishment, and the advisory services backed by the agricultural establishment, have been too slow in the past to give what I should like to call the whole-farm approach to their advice and to their economic studies for the benefit of the smaller farmer. I should like to see far more done to help him find ways and means of bringing up to date the ancillary income-producing capability. We talk a lot about tourism and recreation of all types in the hills; we talk a lot about craft industries and so on, but not much is done by the agricultural establishment to help the small farmer to benefit from what should be available. I think a great deal was about to be done by the North Pennines Rural Development Board. Many of the studies they were just getting under way were going to help a great deal towards this problem. I am not alone in thinking that it was a great shame that this Board was obliterated.

I do not take quite such a sour view of forestry in the upland areas as perhaps the noble Baroness does. I think that forestry can provide the type of off-farm industry and income that will help in the upland areas. But I come back to this. What are we aiming for in our hills and uplands? We are aiming, of course, for a basis of sound agriculture, on which the foundation for the prosperity of the people must lie. But the difference to the smaller farmer, to the crofter, to the hill farmer in Wales, will, I think, in future increasingly come from his ability to bolster his income with ancillary activities, and it is to that that I should like to see the Government, any future Government, and the agricultural establishment turn their minds more seriously.

7.26 p.m.

THE EARL OF LYTTON

My Lords, I must start with an apology. I listened to the first seven speakers and then left to be present at a longstanding fixture, and only arrived just in time to hear the latter part of the speech of the noble Viscount, Lord Arbuthnott. I therefore am unable to follow up what I think would have interested me very _greatly, his remarks on upland farms. I am a farmer and one of my farms is upland. I have had two professions, the profession of arms, followed by the profession of farms, and in both of those professions there is a common factor, namely, that we do not strike. To strike in the Army is mutiny. To go slow is an offence against Section 40 (I think) of the Army Act. And on farms if you go on strike it is virtually suicide. For our farm labourers it would be just possible to strike, but they do not. Therefore, I want to start by making a plea for the farm labour section of the community If I may go back just a little, I have frequently welcomed in this House the change for the better in our fortunes owing to the 1947 Act introduced by the Labour Party. That was the charter of revival in the farming industry in this country, and it may be the fifth or sixth time that I have said so. I am always grateful for that change in our fortunes. It was the aim, I think, of the Agriculture Act of 1947, although it is not actually said, to bring the agricultural community up to a standard of welfare comparable to that in industry.

Now I must turn to Article 39 of the Treaty of Rome, and that, I think, has exactly the same objective—although it does not exactly say so—to bring people up to the level of the rest of the community. That is the charter for everybody in Europe. It includes even Italy, which I think objected to the recent price levels presumably because Italy is dominated by the industrial North and has once again forgotten the rural poverty of its South. We are forgetting poverty on our doorstep if, by denying them a proper price, we do not acknowledge the necessity for agricultural communities to receive in full what is their proper remuneration for the essential, if ever there was, production of this life.

There are ways of achieving this proper price, and I hope it is common ground between both leading Parties in this House and this country that we seek an adequate remuneration for the agricul- tural community. I have read, I think partly from proceedings in another place, of a strong move that the representatives of the present Government should exercise a veto on the rise of prices advocated by the European Community. I have heard from these Cross-Benches an argument from the noble Lord, Lord Woolley, who is not present at this moment, criticising most strongly the Common Agricultural Policy. For myself, I would urge in the strongest possible terms that Her Majesty's Government do not authorise their representatives to veto these rises of prices, because all people want a proper remuneration for the producers and it is only the manner in which it is achieved that they are divided about.

Surely we, as neophytes in the European Community, would be more likely to destroy it and our prospects if we vetoed a rise in prices at this stage. If we favour a different system, surely it is our function and our vocation to work for it inside the Community and seek agreement between our neighbours. We should not enter on a head-on collision course over what, under Article 39, is vital to them and to sections of our community, without attempting to negotiate what we think is a better system. Therefore, I hope that that effort to exercise a veto will be utterly and totally resisted as entirely inopportune. Only after we have exhausted every possible device of negotiation should that be the resort that we come to, because if we do it we may break up the Common Market—in any case, we shall break up our relations with it—as they value it highly.

Moreover, we have a neighbour across the Irish Sea. Surely, we should do something to, one might say, atone for the past or, if your Lordships do not wish to go over history, to establish a liaison with Ireland on the basis of raising their impoverished agricultural community to the level of our industrial community over here. I have often felt a lack of sympathy for trying to unite Northern Ireland with Southern Ireland. I cannot say, however, how often I regret the partition which divided the United Kingdom from Southern Ireland, and I feel that a redevelopment of our negotiations on the basis of better returns for agriculture would be advantageous to Southern Ireland, would be advantageous to us and would tend to produce those conditions of welfare which eliminate the kind of subversion with which we are confronted all through that country.

I return now to what I intended to say at the beginning about the agricultural labourer of this country. The agricultural workmen have had agreed the largest rise that I think they have ever had in any one year. Nevertheless, even that rise leaves them short of the average remuneration of the rest of the community. I am not sure whether the noble Lord, Lord Walston, was quite right in saying that they are 50 per cent. below. Even on his figures, starting with 100 and making others 150, I make them one-third below and not one-half.

LORD WALSTON

My Lords, may I interrupt the noble Earl for a moment? What I was suggesting—I hope I said it—was that they need a rise of 50 per cent. in order to get level. If my mathematics are correct, I think that is the same as saying that there is a difference of one-third at the present time. So our figures are the same.

THE EARL OF LYTTON

My Lords, I was never very good at mathematics, but I think that the noble Lord is in agreement with me. I see the difference as one-third, and from one aspect it is one-third. From his point of view, it is one-half, but I am not sure. Before I came into this Chamber to-day, I assumed from such information as was available to me that in the matter of earnings they were about 25 per cent. below the rest of the community. Am I not correct in saying that agricultural productivity is something like double the average of the rest of the community, and, if it is, why should that increase, large though it is—bearing in mind that it still would not bring them up to the rest of the community—not be retrospective to the date on which it was approved in January? I think that this was a rather mean and stingy act, and perhaps Her Majesty's Government would reconsider their decision, and by mid-summer arrange that some bonus be paid to the agricultural workmen, so that they are restored to what is surely in accordance with the norms set forth for controlling inflation, with which I am totally in agreement. We must destroy inflation. On the other hand, there is the question of raising the income of the agricultural community so that it equals that of others. To call that "inflation" is a misnomer; it is a misjudgment and an application of a smear term in the wrong sense.

In conclusion, I suggest that we refrain from anything in the nature of a veto of a price rise which brings to agricultural communities the return which is unquestionably due to them. If we do not like the method adopted let us negotiate on it a little later. With regard to our own agricultural workmen, I would ask the Government whether, for reasons of justice and good argument, it is possible, having regard to the circumstances and bearing in mind that they can hardly strike—and nobody wishes to provoke them to strike—and many of them do not belong to a union to award them their title to this wage increase from January 1, instead of from April I. That is what I should like to suggest.

7.38 p.m.

LORD STRANGE

My Lords, I come at the end of a very long menu as, I hope, a very small cup of coffee and I hope that it will be sweet and short to drink. I must first congratulate the noble Viscount, Lord Davidson, and the noble Lord, Lord Wynford, one of whom was a farmer on a big scale before the war—I have known him for a very long time—and I think he still is, so he knows something about farming. I must declare the fact that for a long time, I myself was a fairly large-scale farmer. I must also declare that I hold a view which all proper farmers hold, that I was always right and the Government were always wrong. You cannot farm in any other way than by holding that view, because in farming you must make decisions and make them quickly. Very often, you find that your decisions are wrong and that it rains, or does something else. Then you have to keep your spirits up by saying, "I shall be right next time. In fact, I am always right." You must have confidence. As I was saying, I should like to congratulate the noble Viscount, Lord Davidson, and I should also like to congratulate the noble Lord, Lord Wynford, on what I thought was a very nice maiden speech. I have not read Hansard for some time. I think we have had the Battle of Oudenaarde to-day; we have got as far as that. The campaign is going forward with great success.

To start on my speech proper, I have absolutely no doubt that this is the most important agricultural debate in this century. Towards the end of the last century, there was rather a mess with the big and little loaf, and various things like that, but suddenly in this century the whole picture became crystal clear. There was a considerable inflow of excellent produce at a reasonable price from our Colonies, from places such as New Zealand, as well as from places such as Denmark. The Government had to adjust our own agriculture so that they would not interfere with the material coming in. The way it was done was that when they found that there was a shortage of, say, milk—perhaps because of a war, or for some reason like that—they subsidised dairy farming. Then, when there was a surplus in dairy farming, they would find that there might be a shortage of pigs, and they would then subsidise them. So it went backwards and forwards all through my farming life and all through the major part of this century, trying to subsidise agriculture in such a way that we could produce a good end product which would be cheap. The idea behind it, although nobody would ever admit it, was that we faced up in our hearts to low wages. We faced tip to the fact that low wage-earners must not starve. That was at the back of everybody's mind—not just towards the end, because it got lost in the end; but that was the basic idea all through the century.

My Lords, why this is important is because this has now come to an end. We are in the Common Market, and we cannot have cheap food any more. So we must look to the future and to the fact that our food is going to be very expensive indeed. What is more, with the very large amount of money that we are paying to start up in business as farmers our friends across the pond or the stream, we shall be short of cash to dish out. We shall be, without going into figures. We have to realise that the end of cheap food is here. It is in this House now. It has come to an end; it is finished.

To look back on the past for the last time—we need never worry about it again; it has gone—I must say that it was a very inconvenient policy on the part of the Government to subsidise one thing and then to change over to another. Suppose, as I had, you had been told you had to produce milk. When I came out of the Army I was told to produce milk—and so people concentrated on it. You got your herds coming up and up, you got your herds free from contageous abortion and from brucellosis, you got them up to a high butter fat and you got them up to a high gallonage. You got all that, and then suddenly you found that the Government did not want milk any more because milk had been over-produced, and you had to think, "What next?" In fact, the only policy you could farm by in those days was that you had several other lines to which you could go. You might be on pigs, which was the next thing that paid. Then, when there was a surplus of pigs, you went on to something else. It has been going backwards and forwards all my farming life, and my other life as well. That was one nuisance value of the thing—that you never caught up.

The other nuisance value was this. Apart from the Government altogether, fashions in farming change. For instance, I remember very well the demand that there was to produce a really suitable creature to supply the Argentine with baby beef, which they chilled and then sent over here. After a good many fights between short horns and other types, the Aberdeen Angus came out on top. It was very well bred, and there we had the answer. All right; but then the Argentine trade packed up. It was no good. I will say this—and I think it is important. We have always concentrated on breeding really good beef cattle; that is, good for eating. The reason for this is that British people cannot cook. They must have good meat. The French and other foreigners, on the other hand, can cook, and they do not turn up their noses at eating a horse. They think nothing of it; and when they have got it all fixed up it is jolly good. They have always gone in for very large animals, and they like to get a lot of work out of them first. In Italy, for instance, there is a cow that we shall see a great deal of in the future. It is a descendant of the huge oxen that dragged Caesar's chariots about the place. Some of them are wild even to-day; there is still a herd left behind running about, and they are rather savage. But they are huge animals, that is the point. They are enormous things, and there is an awful lot of meat on them. What the meat is like I leave your Lordships to guess, but when the French or the Belgians cook it, and to a certain extent the Italians, it is very good. So, in the future we have to change our policy altogether and change over from our nice cattle and go in for this big rugged beef, which we shall not like in this country.

My Lords, I have nearly reached the end of my speech. So we are facing this future, but we are also facing it in another way, on which I would make two comments. The first is that several people have mentioned that terrible phrase "large-scale farming". I told your Lordships that I was in large-scale farming, but it is all in bits and pieces. I have never tried to alter things around to make the place into a desert. Now that is a very serious thing to say. We have seen what has happened in Russia with collective farming. We have seen what has happened through cutting down forests and making collective farms. We know what has happened (though they are getting over it now) in the case of the dust bowls in America. You cannot farm on an enormous scale unless you have exactly the right circumstances for it, which are very difficult to obtain. Farming is really best on a scale which suits the county. For instance, if you go to somewhere like Devonshire, if you are a farmer you are horrified to see very small fields with huge banks all round. But if you live there you know that they are absolutely necessary. You get terrible gales, and if you shelter your stock you can bring out much earlier stock. Somebody coming into the district will get a bulldozer and dig them all out. Then, when the gales come afterwards they find that they were wrong and that the locals were right.

My Lords, that is the end of my speech. I have said everything I meant to say. I would end on this note: that we must think a little more. How shall I put it? We spray the fields and scatter the poison on the ground. Is that not a hymn, of something? That is what we are doing. We must think about one thing. We have found out definitely, I think, the great damage that our civilisation has done by using patent medicines and pills which have not been fully experimented, and we are doing exactly the same with the soil and the land. We are not thinking of the creatures that live there and help us: the worms, which can make the soil far sweeter, and various types of birds. We take down the hedges. A friend of mine—not a friend of mine, he has gone, but a friend of his; a very nice chap, a farmer—said to me two summers ago, about the farmer next door, "He burns his straw". When he drove me to ride a horse of his in a race, he ran straight through a covey of partridges. I leave it at that.

7.47 p.m.

LORD BURTON

My Lords, I, too, should like to add my thanks to the noble Viscount and the noble Lord who initiated this debate. I was interested to hear from my noble friend that in England in recent years you have had bad harvests. England's loss is often Scotland's gain, for, as we heard from the noble Lord, Lord Balerno, we have had good harvests in the North. However, even in the North, though we have been lucky in recent years with the weather, we have had another blight. You just cannot win as a farmer. Now we have the oil boom, and that is having a most serious effect on labour. As several noble Lords have already said, we are still not in a position to pay enough to our labour to compete with industry, let alone with the oil industry. The agricultural workers, as we well know, are without exception the finest of labour, and it is shameful that a tea boy in industry can earn more than a highly-skilled farm worker. If we are to get good men in the future, this image must be changed.

In the North, we are now getting desperate. Indeed, if a herdsman is not forthcoming shortly, I shall have to give up visiting your Lordships in order to milk my cows, or get rid of my Jersey herd. This oil boom is having a very serious effect on agriculture contractors. All their skilled men are leaving for the oil works—digger drivers, tractor drivers and so on. The farmer has been seriously hit by the loss of men from the agricultural support industries. This year, our wool was not properly graded at Invergordon owing to a shortage of graders. Agriculture mechanics are leaving wholesale; in spite of escalating prices for repairs to machinery, the garages just cannot hold their men. We are desperately worried as to what will happen at harvest time if one of our combines breaks down. It could well be that there will be no mechanic for some considerable time to come to repair it.

Now there is at least a partial remedy. The Government must stop the Highlands and Islands Development Board from wasting our money advertising for more industry to come into this area. It is high time that we should have a breather, time for a levelling off to allow things to settle down so that we can try to get this labour situation sorted out. There is a shortage of houses now as a result of the vast influx of labour: once you overcome that, things may sort themselves out. It seems pointless to go on advertising for more industry for the area when already we cannot supply the existing indigenous industries.

Another subject on which the Government can help not only the farmers but the country at large with little or no outlay from the taxpayer, and possibly with a saving to the taxpayer, is this. Your Lordships have heard much about brucellosis. Only this week I attended a few meetings at which this dreadful disease was discussed. The general feeling among all involved with brucellosis, including the vets, is that it is high time that the Government took a firm line and deviated from the entrenched position that has been taken up by them and by the previous Government, a position that they inherited and are continuing with. The fundamental fault lies in taking too easy a line with the farmers who harbour this disease. Such a farmer may have been unlucky or is a blackleg. Regardless of the cause, we must take more ruthless action.

It is nonsense that someone who waits for the compulsory scheme may be better off than the conscientious farmers who have tried to clean up their herds, as the noble Lords, Lord Balerno and Lord RoweIlan, have said. Those who, on a voluntary basis clear out their herds do so at their own expense and with no compensation until such time as they become accredited. This is unreasonable. The situation must be adjusted. Of the 27 breakdowns in the North of Scotland which is shortly to become a complete clearance area, two were brought in by animals which might have come from accredited herds or from herds infected through the fault of the farmer; three were from Irish animals which were supposed to be accredited, and 22 came from "over the fence"—from dirty herds just next door. This is most unreasonable and the Government must change their policy. There is nothing at the moment to stop dirty animals from being moved perhaps to hill pastures during the summer months. There is nothing to stop those animals in the hills wandering over large areas and infecting several other neighbours' herds. It is no use saying that insurance is the answer. Insurance has to be paid for. But not only that, it is only shifting the burden from the farmer to the insurance company. Someone is having to pay. It is costing the country money.

We were assured that the district veterinary officers would be given additional aid in clearing up this disease, but it appears that no additional aid is being given. I see no reason why during the summer months vacation students or people like them should not be taken in to extract blood from cattle. It is not a complicated business and it is not difficult to learn. There should be more blood testings. We really should "hit" this disease; for it is costing the country a lot of money. There is another point. Lorries which are moving about the country can transport infected cattle. There is nothing, no law, no regulation, which insists that they should disinfect their lorries before carrying feedingstuffs. In one serious outbreak which took place in the West of Scotland, a lorry was known to have carried infected cattle and shortly afterwards a load of hay. This hay infected quite a number of cattle. Something must be done of regulate this position.

Finally, the Minister said that we should produce more; that the potential is there. I cannot see why we are wasting cattle through brucellosis. I cannot see why we cut down capital grants. In this I would support the various noble Lords who have mentioned it; but I cannot agree with the noble Lords, Lord Collison and Lord Woolley, about the calf subsidy. Our local branch of the N.F.U. discussed this subject and felt that it was reasonable that the calf subsidy should be cut. As the prices of cattle have gone up, we could carry the small cut in the calf subsidy. But capital grants are quite different. I hope that there will be no further ban on the export of sheep. With the sheep industry, I think that it seems to be quite unnecessary. We must make it more attractive to men to work in the industry and, given the incentives, I am sure that We shall produce more.

LORD BALERNO

My Lords, before the noble Lord sits down, may I ask him a question? Does he oppose the action by the Highland Development Board to increase and expand the distilleries in the Highlands?

LORD BURTON

My Lords, I was not aware that they were doing that particularly; but I should think that such action is probably reasonable. I know that in Easter Ross, where there is already excessive industry and where good agricultural ground is being taken up at an alarming rate—and this land supports a great deal of hill ground—they are advertising for more industry, in spite of the fact that we have already a rapidly expanding industry brought about by the oil boom.

7.57 p.m.

EARL FERRERS

My Lords, with the leave of the House I should like to make a few remarks towards the end of this debate and to try to answer some of the points that have been brought up. I can assure noble Lords that I shall try to be as brief as possible and hope that they will not complain if I do not answer every question; because if that is done it would not meet with the approbation either of noble Lords present or of the noble Lord, Lord Avebury, who has an Unstarred Question to follow. The noble Lord, Lord Strange, said that he always took the view that he was right and that the Government were wrong. That is a fairly good British view to take. I am bound to say that I have always taken as my personal view that you can never hope to do the right thing and that you can only hope to do the least wrong. It may be that that philosophy could also apply to the Government. Whatever happens that which will satisfy everyone will never be done.

I think that the two noble Lords whose Motions are before the House to-day must have been pleased with this debate. The noble Lord, Lord Walston, I think said that we in this House are able to consider the future in a way that the other place does not have time to do. That has been done this afternoon with great effect, and we have been able to look at the really broad issues affecting agriculture with all its problems, and not just confine ourselves to the immediate problems. I should like to add my congratulations to the noble Lord, Lord Wynford, on his maiden speech. It is good to hear the opinion of somebody who is a practical person on the ground. His views on the matters which he presented will be welcomed both by your Lordships and elsewhere. I only hope that the interval between this speech and his next will not be as long as the break between when he was first able to come to this House, which I believe was 30 years ago, and now. We look forward to hearing from him a great deal more in the future.

There are a number of points which deserve scrutiny. I thought the speech of the noble Lord, Lord Walston, was fascinating and one which really stimulated the mind. He looked forward about 40 years and produced a great deal of food for thought. I cannot go along with him in his prognostication for the future, but at least it gave us a great deal to think about. I would not agree with the noble Lord in regard to our jogging along as we are. I do not believe that we are jogging along. He said that if we did jog along as we are we should not have any workers left on the land or enough food provided from our own farms. But I take the general point that he made, which was that we have to look to the future in order to see how best our policies may be formulated.

A number of noble Lords referred to farm workers and their wages and concern was expressed that farm workers should be adequately recompensed. The noble Lord, Lord Walston, referred to this matter, as did the noble Lords, Lord Collison and Lord Balerno, the noble Baroness, Lady Elliot of Harwood, and the noble Lord, Lord Burton. I think this reflects the degree to which people engaged in agriculture are concerned about the people who are employed in the industry. It is not for the Government to decide these things. There are the conventional and proper forums for deciding rates of wages, such as the Agricultural Wages Board, but what was said by those noble Lords was certainly of interest.

LORD BURTON

My Lords, if I may interrupt the noble Earl, may I say that I think the Government can control this. After all, they control the prices that the farmer gets and therefore the amount that the farmer is able to pay to his workers.

EARL FERRERS

My Lords, my noble friend knows perfectly well that agricultural wages are decided in the Agricultural Wages Board where all the arguments are produced and threshed out. I do not propose to be drawn into a controversial argument about the wages of agricultural workers.

THE EARL OF LYTTON

My Lords, the noble Earl has omitted to acknowledge that the Government have frozen the wages awarded by the Agricultural Wages Board for three months. The Government, surely, have exercised a power of control and have intervened in those matters where the noble Earl says that they should not intervene.

EARL FERRERS

If I may say so, the noble Earl, Lord Lytton, is trying very hard to confuse the issue. As he knows perfectly well, the freeze affected a great many things and a great many people, and it so happened that the agricultural workers were caught. I think that the noble Earl knows the situation with regard to that matter.

One matter which was referred to more than any other was the question of capital grant. The noble Viscounts, Lord Davidson, Lord Thurso and Lord Arbuthnott, and the noble Lords, Lord Hoy, Lord Woolley, Lord Collison, and Lord Burton all referred to it. The noble Lord, Lord Crawshaw, said that he wanted to be independent of all capital grants, and my noble friend Lady Elliot of Harwood said she had taken advantage of them when they were at a very high level because she knew very well that one day they would come down. There was concern expressed, which I acknowledge, that the reduction in the grant would result in a reduction in investment. In fact, the figures do not indicate this. There has been considerable investment in capital expenditure on agriculture. In 1970–71 it was £36.5 million. The estimated figure for 1972–73 is £74 million and the estimated figure for 1973–74 is £93 million. At the same time, in 1972 £167 million was invested in buildings, an increase of something like 19 per cent. We believe that this investment should go on, and that it will go on.

Views were expressed over land prices and the value of land. My noble friends Lord Wynford and the Duke of Marlborough were concerned over the capital gains tax and the death duties which resulted from high land values. Of course there are disadvantages when values go up, but there are also advantages. It is not impossible for private market sources to try to find ways to counter these problems. I accept that there is a Government responsibility overall in these matters, but the increase in the value of land and the future financing of agriculture is nothing new. It is something with which we have lived for a long time, and while the Government are anxious to see an increase in investment it is also up to the normal market forces to be able to provide solutions—I indicated some in my opening speech—to some of the problems which arise as a result of price increases.

The noble Lord, Lord Hoy, said he was sorry that there had been a cut in the calf subsidy. I accept that many noble Lords do not like it when subsidies are cut. But they have not been cut by a very great deal. When one thinks that in January, 1970, the average price for a Friesian bull calf under three weeks of age was £22.65, and in 1973 it was £57.59, that is the national average taken over 9,000 animals at 42 representative markets; and when one correlates that with the price of a Charollais cross bull calf under three weeks of age and realises that the average was £72.90, I think one may reasonably say that over the past years the Government subsidy has achieved what it was intended to achieve, namely, to stimulate the demand for and the production of these animals.

The noble Lord, Lord Hoy, referred to the stand taken at Brussels by my right honourable friend over prices. I do not want to get involved in that matter at this time in the evening, other than to say that my right honourable friend did make a fairly full Statement yesterday in another place which covered almost all the points which could be covered. I suggest that the noble Lord, Lord Hoy-1 am not trying to by-pass the point he made—should read that Statement and consider it. My right honourable friend went as far as anyone could go when entering a set of negotiations.

LORD HOY

My Lords, obviously I have already read what was said yesterday in another place. I was pointing out that, whatever was said, at the end of the day the decision had to be made by the Minister. I was not even seeking to drive him into saying that he would use the veto. But the veto is available to him. All I was suggesting was that the Minister will have to make up his mind pretty quickly as to what his final decision is going to be.

EARL FERRERS

Yes, my Lords, but the operative words, of course, are, "at the end of the day". We are not yet at the end of the day. The negotiations will be continued over the next two or three weeks. The noble Lord, Lord Hoy, and my noble friend Lady Elliot of Harwood were concerned about marketing boards. The Government have no reason to think that the Milk Marketing Board, in connection with which my noble friend's husband played such a prominent part, will be unable to continue its essential function. The noble Lord, Lord Hoy, asked about the Potato Marketing Board. The future marketing arrangements for potatoes are under consideration and it is hoped that a consultative document on this question will be produced in the near future. The noble Viscount, Lord Thurso, said that he thought intensive units ought to be de-rated. Of course they have been de-rated. I was not certain to what he was referring, but buildings used for intensive agricultural production were de-rated under the Rating Act 1971.

My Lords, I did not think we should get through a debate which included the noble Lords, Lord Rowallan and Lord Balerno, without a reference to brucellosis. I know that both noble Lords have pretty strong views on this. They have always said that the Government have not done enough; that they must do more to eradicate this disease as quickly as possible. We agree. We want it to be eradicated as soon as possible. But there must be a systematic approach to that end. The programme is going along well. Over half the national herd has been voluntarily brought within the eradication net, and one-third of it has already reached accredited status. It is true that we are hampered to a certain extent by the need to divert resources from this end to swine vasicular disease.

LORD ROWALLAN

My Lords, has the noble Earl not seen the very revealing programme on B.B.C. at 6.30 a.m. on Sunday?

EARL FERRERS

Well, my Lords, on Sunday morning I like to try and get a long lie in. If they put it on at a more acceptable hour, I might be able to get a look at it.

My noble friend Lord Onslow was concerned about rabbits and pigeons. He said that there had been a vast increase in rabbits. It is true that we have had three successive mild winters and there are more rabbits about. But reports which have reached the Ministry's regional pest officers do not point to any serious upsurge in the rabbit population, although this may occur in odd local pockets. But when my noble friend said, "Let us alter the law so that we can spread myxomatosis", all I can say is that I doubt whether, if he produced a Bill to do that, it would get very far in this House. Anyone who has tried to get through this House even a modest set of codes of practice to protect our animals has had a pretty rough ride, and if my noble friend were to introduce a Bill permitting people to spread a filthy disease I do not think he would get very far with it.

My noble friend referred to Alpha Cloralose. This has been cleared under the Government's pesticide safety precaution scheme for two purposes—as a stupefying bait for the control of bird pests, and as a rodenticide. Alpha Cloralose can be used as a stupefying bait for wild birds by licence obtainable from the Ministry of Agriculture. Licences for the control of ferral pigeons and house ferrals can only be granted to professional operators. Notice is required of the intention to lay the bait, and a report after the operation has to be sent to a pest officer of the Ministry of Agriculture. Licences are occasionally granted to farmers for the control of wood pigeons, but in this case operators are strictly supervised by Ministry officers. The rodenticide formulation is only available from specified sellers of poisons under the Pharmacy and Poisons Act, 1933, which also requires that the preparation should contain certain quantities of Alpha Cloralose. Full safety precautions are printed upon the containers for this rodenticide, and there will be no risk to wild life if these precautions are taken. Your Lordships will be aware of the great difficulty of ensuring that no one ever uses a poison improperly, and the Government have no sympathy with those who do.

The noble Lord, Lord Collison, raised an important and detailed aspect of certification under the training arrangements. I hope he will forgive me if I do not answer that point to-night. I will inquire into it and write to him. He also stressed the need for arrangements for farm workers and farmers and the Government to sit down together to discuss the future of the industry. This is important, and a forum does exist, as he well knows, in the Economic Development Committee for Agriculture, which is currently studying, among other things, the prospects for United Kingdom farming in the Common Market. The Committee has already published a number of such statistics and the prospects for individual commodities.

LORD COLLISON

My Lords, the point I had in mind was that understanding as I do—I was on the small "Neddy" and we discussed particular problems—the farmers' union by the very nature of the Annual Review do go into British agriculture with a tooth comb. In the past the workers' union has been consulted, but in a minor way. My hope is that the workers' union will be taken into much deeper consultation on the rather smaller aspects of agriculture than has happened in the past.

EARL FERRERS

I am grateful to the noble Lord for making his point so clear. My noble friend Lord Balerno asked me about bull beef. The Ministry of Agriculture have asked the Advisory Council for Agriculture and Horticulture of England and Wales to consider this question. The Council have been asked to investigate and report on the technical and economic issues involved in the production of bull beef. Equally, with boar pork the question is also the subject of a good deal of consideration. There are practical difficulties in using pork obtained from boars. Research is continuing and the efficiency of feed con- version by what is known as the entire male is widely acknowledged.

My Lords, I think that what has emerged from this debate is that everyone who has spoken is concerned that agriculture should prosper: that there should be a good return for the farmer and a good return for the farm worker. I think all noble Lords who have spoken, even if they did not specifically say so, implied that agriculture can, and must, help the nation by producing food and by saving imports. Concern was of course expressed over various aspects. One cannot look into the future without expressing concern. But we are in a changing environment and in changing circumstances. I always feel that agriculture is rather like a steam roller: it chugs on, and however hard the fellow in the cockpit turns the wheel, it just moves slowly to the left or to the right. In agriculture you do not change things quickly. My noble friend Lord Davidson said that the best clock the farmer can produce is the man. There is a great deal in that. When the noble Vicount, Lord Thurso, said—and I would end on this point—that agriculture should be a source of never-ending pride, I thought he was absolutely right. I hope that it will be.

THE DUKE OF MARLBOROUGH

My Lords, could my noble friend tell me whether it is the Government's intention to provide subsidised credits in one form or another, as are available to practically all European farming countries?

EARL FERRERS

My Lords, if and when the Government have such an intention, they will announce it. But as they have not announced it so far, I can assure my noble friend that that is not the case at present. What happens in the future may be anyone's guess, but it is not so at the moment. My noble friend the Duke of Marlborough said that his wish was not only that there should be subsidised credits, but also that there should be tax incentives to reinvest in agriculture. The tax incentive at the moment is one of up to 100 per cent. depreciation on plant and equipment in the very first year. That is quite an incentive.

8.19 p.m.

VISCOUNT DAVIDSON

My Lords, it merely remains for me to try to wind up this debate, which I consider to be a quite impossible task. It is impossible for me to mention individual speeches in such a long list, but I should like with the utmost sincerity to thank all those noble Lords who have contributed to the debate. I would repeat my thanks to the noble Lord, Lord Walston, for sharing this debate and thereby widening its scope, and add my congratulations to those already expressed to my noble friend Lord Wynford on his maiden speech. I had hoped that this debate would be wide ranging and it has far exceeded my expectations. Almost every facet of agriculture, every farming problem, has been touched upon and discussed, from the problems of the uplands to the sheep of the lowlands, from farm subsidies to capital gains tax, from food prices to the price of land, from increased productivity to the decrease of the pigeon population—the total spectrum has been covered.

My Lords, what are the main lessons that can be drawn from this debate? First, I would suggest, a general acceptance of the fact that the sun is shining more brightly and warmly on the farming fields than it has done for some time. Secondly, a general awareness of the problems of capital taxation, its assessment on the future of the system of land tenure, and the problems which stem from land prices. Thirdly, a general concern about the availability of both capital and labour in the future. Fourthly, a general criticism of the reduction in the rate of capital grant schemes from 30 per cent. to 20 per cent. Fifthly, confirmation of that well known fact that when any particular subject is due to be debated in your Lordships' House experts pour in from all parts of the Kingdom to make their contribution.

Finally, my Lords, I would finish where I started and once again remind you that the last debate on agriculture in this House took place four years ago. That one lasted for six hours and there were about the same number of speakers as there have been to-day. At the time of my starting to speak, this debate had lasted for about 54 hours. I do not know how one measures increased productivity in your Lordships' House, or indeed whether one should even dare to mention the subject at all, but if one compares to-day's debate with that of four years ago I estimate that the sooner I sit down the greater will have been our combined increase in productivity. And that, my Lords, I feel will not only conform but be entirely in line with the dramatic achievements of the great industry which has been the subject of this debate. My Lords, I beg leave to withdraw my Motion.

Motion for Papers, by leave, withdrawn.