CEREAL HARVESTS

HL Deb 21 May 1974 vol 351 cc1406-28

7.0 p.m.

THE EARL OF ONSLOW rose to ask Her Majesty's Government whether they have any information on the prospects of the next North American, Russian, Indian, Chinese and Australian cereal harvests. The noble Earl said: My Lords, I make no apology for rising yet again to talk upon food, a subject which is more important than any other. The present circumstances appear to me, and I believe to all interested observers, to be perilously close to catastrophic. According to the Economist of April 20 last, this year's harvest will be the most important in modern times. If there is not a bumper harvest, not just in Europe and not just in the United States of America and Canada but all over the world, there is near certainty of famine in the poorer countries, and the hopes that we in the rest of the world all have of reducing inflation will be reduced to near mirages. When he comes to reply, perhaps the noble Lord, Lord Strabolgi, will give us an estimate of the increase in world demand over last year.

The plains of North America produce, I believe, 60 per cent. of the world's grain. Have Her Majesty's Government detailed forecasts of the prospects there? The Americans, oddly enough I believe, have a lack of fertiliser manufacturing capacity to provide the fertiliser required for the extra 40 million acres which are being re-sown, and which are known as "the land bank". Have they the storage and drying capacity? A few years ago there was crisis, to a certain extent, in the Kansas wheatfields; they could not dry the wheat because the oil was not available. Has this problem been resolved? If Russia has to import American grain on the scale that she did a few years ago, is it certain that the Russians will have to pay the proper price for it and not, as I believe and according to the Sunday Times last week, that the Americans will be subsidising the Russian Government to the tune of 120 million dollars (I think that is the right figure), when all that will happen is that England, Europe, Japan and other places have to pay even higher prices than would have been necessary in the first place? What are the prospects for the spring wheat harvests in Siberia? It has been reported that they are a month behind in their sowing, and that town-dwellers are being urged and are drafted to help in these agricultural communities. Have the prospects for winter wheat areas of Western Russia, European Russia, been good? Did the snows come at the right time and leave at the right time? All these pieces of information go to make up the general picture of next year's grain harvest. Has the Russian capacity to harvest, to store and to move the grain advanced in the last two years from its state of total mujik incompetence, as I believe was the case?

What has been the effect on the Indian grain prospects of the astronomical rise in fertiliser prices and oil prices? The miracle new wheats require massive doses of fertiliser, and they require the proper watering. Has the increase in fertiliser prices denied them that fertiliser? Has the increase in oil prices meant that the irrigation pumps have not been working to full capacity because the poor peasants have not been able to afford to buy the oil? Is it true, as is reputed, that India's wheat harvest will be down by 7 million tons? And that, my Lords, I venture to compare with the total United Kingdom wheat harvest of 4,100,000 tons. If these, questions can honestly be answered in an optimistic way, then possibly the future does not hold so much gloom. If not, then Mr. Peart's words to the Financial Times Conference on World Food, expressing concern about the future, saying that over the next few years he feared there would not be enough food to go round—and, of course, that means that cheap food has gone for ever—will become only too true.

My Lords, grain is the foundation of all food, bread or meat. The Common Agricultural Policy last year—and I think this has been insufficiently realised—reduced the cost of grain in this country because millers and compounders could obtain E.E.C. grain, mostly from France, at about £70 a ton, as opposed to having to buy U.S. grain at £110 a ton. This helped make the losses now being suffered by the pig, beef and poultry producers disastrous but not catastrophic. In view of these factors, I hope we can stop any further drift towards acrimonious Party politics whenever the subject of agriculture is discussed. Let us remind ourselves that we in the agriculture industry remember the 1947 Act as a very good Act; but now, I regret to say, Her Majesty's Ministers in the present Administration are not living up to that high standard. Will the Minister realise the crisis which is upon the producers of meat, and that, with this crisis, it is in the consumers' interest as well as in the producers' interest that we should have a good product at a realistic and steady price?

Will the Minister urge upon his Cabinet and Government colleagues the need to introduce either a deficiency payments scheme or intervention, because if we do not have one or the other—and I do not think it really matters particularly which, except that the Treasury will probably be a little tight on a deficiency payments scheme—then, with the prospective rise in the cost of grain, if any of the gloomy forecasts which I have outlined to your Lordships come about, the meat industry in this country will come to a halt. There is already a very grave danger of a great deal too much beef going on to the market in the autumn, and of store cattle and prices going rock bottom. As night follows day, meat will be unobtainable soon after that, and it will be purchasable only by the very rich because of that acute shortage. I am sure that it is not the intention of an egalitarianly-minded Government to allow only the rich that privilege, and in the process to bankrupt several useful, worthy, upright and hard-working citizens. My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

7.8 p.m.

LORD HALE

My Lords, the noble Earl has spoken with very great knowledge and brevity. Indeed, he rather disappointed me in that, to try to emulate his example, I shall have to cut out all my best bits and concentrate on a series of figures. But I appreciate what he says. I can assure him that I happen to know the present Prime Minister, and I recall the part he took in these matters. When he was President of the Board of Trade he was very largely responsible, on this side, for the International Wheat Agreement. Then, people who ask what he was doing after his resignation in 1951 do not know (because he is not really given to personal boasting) that he was engaged with us in working on War on Want and for years in contributing by far the most gifted brain to the labours of a committee that sat downstairs. I admit that we were then working almost in a state of euphoria.

I admit that there were rosier visions that did not mature. I admit that in some of the early experiments money was lost—though not on the Concorde scale—and experience was gained. But the noble Earl will recall that when the First World War started (I am sure that his vast knowledge of history will include a little of recent history) the State of Montana was growing virtually no wheat at all. The price of wheat went up in America to 2.75 dollars a bushel and Montana became, in the almost lyrical words of John Gunther who threw over it, "a massive coloured palette of every form of the brighter colours, flowing with wheat". Two years later the price fell to 1.05 dollars per bushel and the first step had been taken to world recession, world deflation and world disaster.

Things were very different immediately after the last war and we owe that to Harry Truman who showed an astonishing vision. I think wheat then varied from 1.35 to 1.85 dollars. It was generally accepted that 1.65 dollars was the kind of price per bushel that would make almost a wheat bonanza. The Labour Government negotiated the International Wheat Agreement. The headquarters were to be in London, but it was not a mighty effort when it started; very few of these things are. It was a very unfortunate decision for the world when the next Government decided that Britain would not sign the agreement under the new Government. That was one of the turning points. There was another turning point when one of the most distinguished Members who sat in this House in our day, Sir John Boyd-Orr (as he then was), President of the World Food Organisation, propounded his scheme for a World Food Board and in that case the Labour Government entered the situation. It was to be financed in dollars and we did not have the dollars. I feel that an opportunity was missed and I am quite sure that we are all to blame.

It is a strange matter that in those euphoric years when food development plans were going on all over the world, many with great success (and the noble Lord, Lord Ritchie-Calder, has written about many of them); when even religious inhibitions—the toughest of all—were being overcome, there suddenly grew up an argument which was important and seriotts—the population argument. It was said, "You will never overtake. People are breeding like rabbits all over the place. In China the population is increasing almost beyond belief and no world food organisation will ever be able to cope with that". I shall skip a great deal because I want to come to the Western States of America, and perhaps I may add a little reassuring note to the noble Earl's justified apprehensions about the world position generally and the E.E.C. in particular.

On July 5, 1972, according to the Sunday Times, the United States received a private communication about the almost disastrous failure of the Russian wheat crop. That communication was classified highly secret. It may seem surprising that the Reds did not want the Reds to know what was happening to the Reds. But the Sunday Times gives the more plausible explanation that, had the facts been revealed, world food prices would have risen astronomically and disastrously. As an innocent, that was something of a surprise to me, but it appears to be an accepted fact of capitalist economy that if there is a shortage you exploit it; that if people need food you demand money they do not possess; and that if in London people need housing, you buy them up and float them as a company and then invest the money in the Cayman Islands. Apparently this theory—which has been accepted so far as I know in private enterprise countries as one of the laws of the Medes and Persians, or as one of the economic laws handed down by some economic god from Mount Sinai and which is called the law of supply and demand—must operate.

It was interesting, therefore, that the Russians should have an exercise in private enterprise methods in America. The Russians arrived in the United States on the same day. They began to negotiate the purchase of wheat almost immediately. Each private enterprise company in America with which they were dealing checked that the Government support price would be preserved without disclosing the nature of their contracts or the nature of their sales and the fact that they were in increasingly astronomical proportions. I think the Russians were in America on that visit for a matter of less than three weeks. They negotiated a loan of 700 million dollars with the United States Administration on terms. They negotiated that after they had already placed some contracts and they then collected contracts for something like 10 million tons of wheat grain, partly to be financed out of the money lent to them by the United States Treasury, partly by their own reserves of gold and, of course, as the noble Earl has said, by the amount—my figure I think was 130 million dollars—which was actually contributed by the United States Treasury in support prices over the price of 1.63 dollars a bushel. It actually rose 47 cents a bushel in support prices before the United States Treasury called a halt and said, "We are not prepared to go bust over this". A still more remarkable fact was that the Russians were back again in a fortnight and buying more, and when the private enterprise competitive salesmen in America realised they had oversold the American supplies, and telephoned Canada, they found that the Russians had quietly been there first and got at least a million tons from Canada also. It was an interesting but very expensive and costly experiment to the world.

But much more important than the diseases of anchovies and matters like that, to which the present Leader of the Opposition referred in talking about his difficulties, they bought a million tons of soya beans, too. The present Leader of the Opposition forgot to mention that quite independently of that, on one occasion on a single commodity ex- change, soya beans doubled their price within 36 hours on rumours of a shortage. But we still voted at UNCTAD against measures for the control of commodity exchanges. I did not know about these matters and that people sold or bought cocoa they had not got, not because they might want cocoa in the future—they had plenty—but because they anticipated a profit out of a world shortage and a world tragedy.

The effect of this in the Western States of America has been quite remarkable. At the time the Russians were there, there were 61 million acres of good American agricultural land—good quality land—lying fallow. Within a very few months they were being replanted. In the States of Washington and Oregon, near Seattle and so on, there were vast areas of scrub and of pure sand, but since the Russian visit they have also begun to irrigate under new systems at least 110 million acres so far, with up to another 50 million acres to follow. These are being irrigated by vast revolving irrigators which draw their water from the Columbia River—irrigating machines running on rubber tyres a quarter of a mile in length and 10 feet high, continually revolving by means of electric motors. They provide a "rainfall of 60 inches per year, including fertilisers—because this is virtually desert sand. It has no nutriment in it—all the nutriment is being applied—and they are showing at the moment immense new production of wheat, which is increasing the estimate of next year's first crop by about 27 per cent. over what was a record crop last year. In addition, there is anticipation of substantial improvements in the later crops and in other forms of food production.

Therefore, something has taken place and it may be that now, in the face of this example, we can re-think our policy towards competitive enterprise, towards gambling in food and on the commodity markets. Perhaps we can come back to our old euphoric dreams of making the Kalahari Desert flower—though I remember Shekede Khama saying that there were some difficulties in ranching in Bechuanaland and that one should really think of the climate before starting things like that. Certainly, no expert now denies that world food production could be very rapidly increased.

I made what may have seemed to be a rather discourteous quotation about China and I should like to just go back and mop that up. I went to Peking after this. I did not actually get to the Yangtse Valley, which was a development so extensive that the figures dwarf the imagination. But again I go back to the Sunday Times—it was about the same issue—when they talked about the Chinese economy and how they dealt with their vast population. They are feeding themselves very comfortably and are producing about 88 per cent. of their total consumption. They are not at the moment greatly worried about the export trade: Britain is much more anxious for Chinese trade. They have oil reserves which are said by experts to be almost comparable to the whole reserves of the Middle East. During my brief visit to Peking, one could see a prosperous-looking town with happy people and with little girls, whose feet in earlier times would have been hound throughout their lives, cycling happily round the town and some signs of hope and prosperity.

It may be that we have to reconsider our system and learn a great deal about China. I believe that we can help to establish some striking changes there. All this does not deal, I know, with the noble Earl's perfectly justified warnings and apprehensions. Some of them are very much here. But I believe that when the present Government get over their teething troubles and perhaps move into full legislative power and authority, they will be the first to wish to make what contribution is possible for this comparatively small country to achieve the sort of conception we have been talking about this evening.

7.25 p.m.

EARL FERRERS

My Lords, there may not be many of your Lordships here this evening, but those of us who are here must have been quite fascinated by the speech which the noble Lord, Lord Hale, has just made. I found it immensely impressive, if I may say so with respect. Not the least impressive thing about it was that he carried all the facts and figures in his head, whether they were in dollars and cents or bushels. I understood him to say at one point, "I did not know these things." All I can say to the noble Lord is that he certainly knows them now, and a very impressive array of knowledge it was.

I believe that the Unstarred Question of my noble friend is a very important and pertinent one. I should declare an interest, because I am a farmer and also a consumer. But the Question raised by my noble friend goes far deeper than agricultural home consumption, although we are bound to regard that as a very important part. Cereal products, as my noble friend said, are the basis of all feed and of all food, and part of the huge inflation with which we have recently been inundated—not only in this country, but in the rest of the world—has been due to a world shortage of cereals and the poor harvests, to which the noble Lord, Lord Hale, referred, both in China and Russia. As a result of this, bullock fatteners and pig fatteners in this country are losing money in a big way, because of the high cost of feeding. If they lose money, as my noble friend said, they will then stop producing. Once that happens, you have a shortage of food; and all this depends upon the availability and price of world food.

Anyone who indulges in prediction is really indulging in speculation, because one cannot predict with any degree of accuracy what a harvest will be. There are too many unknown factors, such as the weather and pesticides; too many things can happen to crops until they are actually in the garner. But I have tried to do a little ferreting around to find out some facts, and I shall be interested to know what the noble Lord, Lord Strabolgi, says when he comes to reply. I do not profess to be an expert on the world supply of feeding stuffs, but the information I have gathered certainly gives me cause for concern. As I understand it, there is only about three weeks' supply of grain around the world in total—and that is pretty slender. In America, the figure is about ten days' supply. What they call "the carry-over stock" is the lowest for 22 years. It is estimated that on July 1—because that is the day from which the Americans take their figures—it will be about 170 million bushels. That does not take account of the wheat which is at present being harvested. They reckon that by July 1 there will be about 600 million bushels in all, which includes the carryover stock.

Of course, there have been two big developments. First, there is the shortage of oil, to which my noble friend referred, which has resulted throughout the world not only in a lack of diesel fuel physically to fuel the tractors (and the expense of that), but also in a lack of nitrogenous fertilisers which come from petroleum products. Therefore the cost of both diesel fuel and fertilisers has gone up. This has particularly hit the developing countries. I understand that the Indian High Commission expects this year a crop of only 21 million tons, as opposed to 30 million tons. I apologise if I confuse "tons" and "bushels", but I suppose if anyone were keen on mathematics they could transpose the two figures. I thought it would be more suitable to use the figures that the countries themselves deal in.

Many of the developing countries use semi-dwarf varieties of crops, both cereals and rice. The advantage of these varieties is that they produce about twice as much yield as the conventional variety. I remember being told in Indonesia that a new variety of rice was a very prolific producer. The only trouble was the inhabitants did not like it, because it had no taste. That is a familiar argument that we hear about food in this country to-day. The fact is that these new varieties produce about twice as much, but they require a lot of fertiliser and water. If they do not get these, they do less well than the conventional varieties. Because of the oil shortage, there is a real shortage of fertiliser to put on these varieties.

The market in Russia really determines the market in the world. As I understand it, there are three cereal growing areas in Russia; the European area, the area in West Siberia, and the area in Kazakhstan. My understanding is the cereals grown in the European area, which are the Winter wheat varieties, have done quite well and are looking well Those in the other two areas, West Siberia and Kazakhstan, are areas where spring wheat is grown. This is giving cause for concern, because it has been a very late spring and the crops have not been put in. As my noble friend rightly said, people have been drafted from the towns to try to put in these crops. Because it is so late, it is necessary to put in drought-resisting varieties in case there is a drought. One of the troubles with the drought-resisting varieties is that they produce less than the conventional variety. On the face of it, wheat prospects from those two areas of Russia do not look too good and I understand that the next two months are critical. Russia aims at about 185 million tons of grain, whereas last year it was about 212 million tons, so that is a considerable drop. We do not know what they have in store, but one assumes it is not too much.

In America the signs appear to be more hopeful. As at May 1, the winter wheat crop is, by volume, estimated to be about 27 per cent. greater than last year. They have brought more land from the land bank into production. Two years ago there were 60 million acres in the land bank out of production. This is staggering when one thinks that that is the whole of the size of England, Scotland, Wales and Northern Ireland put together. Of those 60 million acres a year ago, they have brought 27 million back into production. This year they have brought back a further 18 to 20 million acres, so in all they have brought back about 47 million acres in two years. It is sometimes assumed that this is bad scrub land; this is not so. This is land on which lucerne has been grown, and it is reasonable and suitable land. It may be asked whether this increase of wheat acreage has been at the expense of maize or soya, and whether the high price of wheat has encouraged farmers to grow wheat instead. I am assured that this is not so and only about 3 million acres less of soya were planted this year than last year. The Americans expect a record maize crop of 6,600 million bushels, compared with 5,700 million bushels of maize last year.

But how much of this will go on to the market? How much will go into store to replace that which it has been necessary to take out over the past few years? How much of that crop will it be prudent to keep as reserves? The situation in Canada is one that may give cause for concern. As I understand it, they have had a long winter there with a lot of snow, and there has recently been a lot of water as a result of the snow melting. This has meant that they have not been able to plant the wheat crop. This is a very serious situation. If the weather gets right in the course of the next week or ten days, it is possible for a large amount of wheat to be put in. But, again, it is late and it is anyone's guess whether this will produce as good a harvest as it should have done.

The Argentine used to export wheat; now it is a net importer. If we in this country are to plan, and if the Government are to plan, we must have some idea of the world situation. It will be interesting to hear what the noble Lo Lord Strabolgi, says. We have had unprecedented increases in the price of wheat in this country over the past three or four years. Last year the price of wheat went up to about £69 a ton; now it is down to £55 a ton. But Canadian hard wheat went up to £115 a ton. We have to import all our hard wheat. In the olden days we used to have a mix of 70 per cent. hard wheat with 30 per cent. soft wheat. Now this has been reduced to approximately 50 per cent. of each. We import all our hard wheat, and we also have to import a lot of soft wheat. At least one of the advantages of being Members of the European Community is that we have been able to import soft wheat from France in the course of the past 12 months, which if we had not been members we should not have been able to do because, to start with, it would have carried a tariff of £20 a ton, so we should have been paying about £80 as opposed to £60 a ton for imports. The Community later decided to ban all exports, and had we not been in the Community we should have been denied the supply of wheat from France.

I understand that this year India will have to pay the going rate for wheat, and any wheat it has will not be supplied in the form of aid. How much will this affect the supply and demand? I find these facts frightening. The noble Lord, Lord Hale, was optimistic. I feel that things do not usually turn out so badly as one expects. But so far as this country is concerned, the only conclusion I can draw is that no longer is there any cheap food; no longer will there be cheap food in the world. There used to be, and we could take advantage of it, but this will not happen in the future. The food is not there. The demand is greater for human consumption and for animal feed.

I cannot help feeling—and I do not want to be partisan over this—that the Government are making a mistake when they try to subsidise food in order to make it cheap, because that is not the answer. It is rather like King Canute trying to prevent the waves from coming in. I believe that it would have been far better to try to help those who are unable to fend for themselves, and those who are poorly-off, rather than give an overall blanket subsidy of £52 million as has been done in the case of bread. What any Government must do is to increase the production of both wheat and meat. This is the vital task, and the frightening fact is that if we see a substantial lowering in the price of wheat the arable farmers in this country will be in a mess. If, on the other hand, the price of wheat goes up, as it well may, then the bad state in which the pig and beef producers in this country are now finding themselves will continue and will get worse.

This is the real dilemma, and I beg the noble Lord, Lord Strabolgi, to take back this message to his right honourable friend. Let us increase our output from agriculture. Let us encourage the production of both cereals and meat, for by doing that not only will we help the world situation but we will also help our own situation. I do not think that the two are incompatible. I hope that that will be the message which the noble Lord will give to his right honourable friend.

7.41 p.m.

EARL BATHURST

My Lords, I suppose I should declare an interest in these times being a cereal farmer and with dairy and beef cattle. I very much regret that I was not able to notify the noble Lord, Lord Strabolgi, on the technical point that I should like to put before your Lordships. I believe, and I hope your Lordships will agree, that it may be even more relevant now than I thought it was when, perchance, yesterday morning I noticed that my noble friend Lord Onslow had down this interesting Question; and it was only last night that I knew I should be able to attend your Lordships' House this afternoon.

My Lords, it sounds awful to say so, but some 17 years ago when the noble Lord, the late Lord Boyd-Orr, was in his heyday at F.A.O., I had the pleasure of being taken round the F.A.O. buildings in New York and meeting the most charming and delightful Italian lady. The noble Lord is nodding his head; perhaps he knows this Italian lady even better than I do after my very short acquaintance with her. She was, I understand, the Director General of all the Cereal Departments of F.A.O. Admittedly, she spoke with a slightly different accent and in different tones, but in almost the same words as my noble friend and the noble Lord, Lord Hale, opposite used in suggesting that there would be a famine in the world. That was indeed the theme of the noble Lord, Lord Boyd-Orr, in all his dealings. I could not understand this and I begged this lady to put me right. Why, if there was to be a famine at that time, was the price of barley sliding down and down in this country, and I think in Europe and elsewhere, while with modern advances the yields were going up and up? I am afraid I had no answer from her on that; but it was certainly a most interesting and delightful visit.

My Lords, the time has come, the clock has moved on, and the prognostications of the noble Lord, Lord Boyd-Orr, look, for the time being at any rate, as though they are coming right. We have heard of these questions to which an answer is being sought from the noble Lord who will be replying, but I wonder whether most of those answers could not be found from agricultural attaches. I wonder what their orders are when they are going about their business in various countries. Are they not supposed to find out exactly this type of information that the noble Earl is seeking? I believe that they probably do find it and can find it, but that it is difficult to collate it. Perhaps the noble Lord, Lord Strabolgi, will be able to give us some of that information.

I suppose we ought to have known that the Russian harvest had failed. The Americans were informed apparently, according to the book that is being serialised in the Sunday Times. What they did with that information is their business. But did we know that the Russian crop had failed? Did we know that the Chinese crop recently had failed? I understand the Chinese were buying from Canada, and that that started the shortage the year before the Russian failure. But the noble Lord is a great expert and knows a great deal more than I do. I understand they had a very considerable failure.

The Green Revolution has been referred to. My understanding of that—and the noble Lord will know far more than I about it—is that new breeds of rice are a flop, and they are possibly of more consequence than the wheat harvest that we are talking about. Canada, we understood, suffered last year the depredations of a rust disease—true or false? I have a friend who lives in the backwoods, somewhere out in Calgary, and this is what he told another friend of mine—true or false? I understand that the American soya bean crop suffered because of a flood. Have they been able to correct the depredations of their flood? What has been the effect of the hurricanes in the soya bean area immediately after the crippling floods of last year? What of Australia, where there are hundreds of thousands, possibly even millions, of acres of corn growing land and grassland? What are all the effects of this? I should have thought that agricultural attaches and trade attaches could find out considerably more information than is able to be collated and put forward to the ordinary farmer in this country and the rest of the world.

My point is that it is not so much these particular questions to which I believe there may be a solution but what is happening when the crop is growing. My understanding is that there is now a process of infra-red photography which can be worked from satellites. There was a fascinating article about it in, I think, the Daily Telegraph Supplement showing pictures taken by infra-red of this country. The caption said, though I must admit I could not recognise it, that one could see the source of the Thames, which is only two or three miles from my own home. I have no doubt that with proper interpretation and a magnifying glass that would have been perfectly clear. I understand that the purpose of this infra-red photography is to take photographs by heat given off by green crops and it is possible to tell first of all whether that green crop is down or not. We have heard of the shortage of diesel oil. How many acres short will we be of growing crops because of the shortage of diesel oil for crop spraying and so forth? Once the crop is there one can tell from photography whether it is growing, and one can also tell whether that crop is diseased. I believe this can be done on a nation-wide basis, or, if one wishes, locally over one's own field.

I have already told the noble Lord who is to reply that I do not expect an answer, but I should like to ask whether Her Majesty's Government are taking every advantage of the processes that are now available. If the answer is, "Yes", my next question is, "How can this information be put out?" I think the noble Lord, Lord Hale, would perhaps share my doubts about this device. We have "barley barons" here in the House. But I do not think the "jet set in grain merchants in the United States would be the right people to put out such information. Should it be the United Nations, F.A.O.? Should it come through the Ministry of Agriculture in Her Majesty's Government, whose statistics and figures are not only universally trusted in this country but are probably the most accurate in the world? Who will provide satellite pictures? Are they already being provided in America? Where do they go? Can we buy them? Can any noble Lord here buy one of these photographs or take out a subscription? Possibly the Russians are already doing it and I suspect they are probably doing it (if they are) very much better than either ourselves or the Americans, knowing the advanced state of their photography. But if this can be done, as I believe it can be, unless the noble Lord tells me otherwise, how can it be done? And if a method can be devised whereby the information can be got, and it is accurate, how can it be disseminated and put forward in a way that all will trust and, above all, in time to enable one to make marketing arrangements?

I was most interested in what the noble Lord, Lord Hale, said about these irrigation projects. Perhaps he also saw the fascinating film on television concerning the Colorado River. There, as I understand it, salt is being put on to the land and as much land is being put out of production as is coming into production with new irrigation projects. True or false? I should think that if infra-red photography can be used it would be of immense assistance to the local people in such a scheme and also to the worldwide market in this vital staple diet of wheat and of rice. We must be grateful to my noble friend Lord Onslow for bringing up this subject at this late hour this evening.

7.52 p.m.

LORD DAVIES OF LEEK

My Lords, as I have not put my name down to speak I am going to delay the House for only about two minutes. It would be grossly unfair to do otherwise, in spite of the fact that I have prepared quite a lot of information which has come from the Food and Agriculture Organisation. There will be another time to use that information. But there are a couple of facts I should like to spike down in the two minutes. First, I want to thank the noble Earl, Lord Onslow, and the other noble Lords on the other side of the House who have spoken, because they speak from experience. I listened fascinated, too, to my noble friend Lord Hale, to whom I have listened for many years—and he always is fascinating.

As the Food and Agriculture Organisation say in their bulletin of this month, the great Powers of the future are not going to be those who have nuclear power; they will be those who have the food production to feed the people. This mighty problem of the parts of the world living within the revolution of awakening expectation is, in the next 10 years, going to grow because of an increase in population of 226 million people. This alone in the next 10 years relates to just one part of the world: Latin America, Asia and South-East Asia. Just to have an increase of that number, excluding the mass of China, is a mighty problem. Mankind is forgetting. Like Antaeus, human beings' strength comes when they keep their feet on the ground. Our tendency in the technological age is somehow or other to drive people more and more away from the natural sources of their strength and their vitality; namely, the soil. This is a sad fact that is happening. As most noble Lords who have visited South-East Asia and the Far East will know, we see this drift to the towns. We are no longer sailing in a ship of abundance. No longer is the world a cornucopia. We must learn the art of producing.

Before I sit down (I see from the clock that my two minutes is up), I want to pay a tribute to Lord Boyd-Orr, with whom I travelled a number of times, because this man had vision. I hope that the British Government, whatever their complexion, will more and more support the Food and Agriculture Organisation. As Earl Butz, the Minister of Agriculture for the United States, said only the week before last, both Russia and China demanded cereals. Russia had the greatest dry period she had had for a hundred years. But he gave balance to this. He said: We exported to Russia a thousand million dollars' worth of grain, but that was only a fifth of the increased grain that we had sent to other parts of the world, including Russia.

My Lords, the lesson from the short but valuable debate we have had to-day is that this House needs another debate, or two or three debates, to discuss in depth the problem confronting mankind: how to feed the people of the future at prices that mankind can afford.

7.55 p.m.

LORD STRABOLGI

My Lords, as my noble friend Lord Davies of Leek has said, this has been a short but most valuable debate. I am sure we are grateful to the noble Earl, Lord Onslow, for putting down his Question. The Question asks Her Majesty's Government whether they have any information on the prospects of the next North American, Russian, Indian, Chinese and Australian cereal harvests. Of course, arising out of that, the debate, as debates in your Lordships' House are wont to do, has ranged far and wide, but it is none the worse for that. We are grateful to the noble Earl, Lord Onslow. He asked me a great many questions. In fact, at one time there was a question in almost every sentence. I will do my best to answer them and also to answer questions asked by other noble Lords.

As noble Lords know, many of the recent difficulties have come about through the crop failure in the U.S.S.R. in 1972 through drought and the fact that the U.S.S.R. had to buy from the United States of America. My noble friend Lord Hale—I am sure we all listened to his speech with the greatest interest—will not expect me to comment on the details of the negotiations by which the Soviet Union purchased very large quantities of wheat and feedgrains from North America following the failure of this crop. But it is certainly an instructive story, and I think we can all draw from this the lesson of how important it is to achieve greater stability in world cereal supplies.

The noble Earl, Lord Ferrers, also raised a number of points. He was absolutely right to point to the need for caution in predicting the outcome of harvests, since so much can intervene in the way of weather, disease problems, et cetera, between the forecast and the date the crop is gathered in. But when we know how much grain has been sown we have some indication of the likely outcome given average climatic conditions and yields. With this cautionary comment, therefore, I will offer the information available to me and I hope will answer a good many of the points raised by the noble Earl, Lord Onslow, and other noble Lords.

While Her Majesty's Government have no direct access to information about the harvests in the countries mentioned by the noble Earl, we co-operate closely with the International Wheat Council and with the F.A.O., O.E.C.D. and other international bodies. From these sources, and also from the agricultural attaches accredited to our various embassies overseas mentioned by the noble Earl, Lord Bathurst, we obtain information and forecasts that are of great value in evaluating grain prospects. The latest report published by the International Wheat Council indicates that prospects generally for the coming harvest in the Northern Hemisphere are fairly good. In the Southern Hemisphere good crops were harvested at the turn of the year and conditions for sowing the next crop are reported to be generally favourable. As for coarse grains, F.A.O. sources report that early production prospects are reasonably promising in the Northern Hemisphere, taking into account the areas sown, or intended to be sown, and the generally good weather conditions in developed countries. The outlook in a number of developing countries is less favourable because of drought. The fertiliser shortages are clouding production prospects in some countries, both developed and developing.

Reports indicate that in the United States adverse weather earlier caused some damage to the hard winter wheat crop, but this has been offset by improved moisture conditions in most of the early harvesting regions. But ideal moisture and grain conditions have given excellent prospects for soft wheats. Based on planting intentions, and given normal weather, feed grain production in the United States is expected to be 14 per cent. more than in 1973.

The noble Earl, Lord Ferrers, mentioned the question of carry-over stocks and referred to the low level of the stocks in North America at the end of this season. While it is true that stocks are lower than before, grain from the new crop in the Southern States will soon be coming forward and the expectations are that in the course of the next season it will be possible to achieve some significant rebuilding of stocks.

My Lords, turning to Canada, which was mentioned by the noble Earl, Lord Onslow, spring is late this year in the prairie provinces as your Lordships will know, and heavy winter snows have thawed very quickly, causing floods and saturating the soil. As a result, the land is too wet to work and seeding operations will in general be late. Estimates of planting intentions show that the wheat acreage should be 10 per cent. up compared with last year. It is expected that the feed grain area will not be expanded.

The noble Earl also asked about the U.S.S.R. and 'this was also mentioned by the noble Earl, Earl Ferrers. The latest reports indicate that the condition of winter crops in most parts of European Russia, which was one of the areas mentioned by the noble Earl, Lord Ferrers, is reasonably good. Spring sowings have been delayed by cold weather in April but now seem to be on the way to completion. In the two important areas of Kazakhstan and Western Siberia—the other two areas mentioned by the noble Earl—in which spring-sown crops predominate, planting began in mid-May, as is quite usual. It is too early yet to prediot how the crop will develop. Much will depend on rainfall between now and harvest time.

Next, my Lords, we must look to India, which was referred to specifically by the noble Earl, Lord Onslow, with understandable concern. Here, the monsoon rains were abundant, but there was less winter rainfall than usual and the spring harvested crops were affected. At present, wheat production is forecast at some 7 to 9 million tons below the 'target of 30 million tons.

My noble friend Lord Hale gave us a very interesting account of his visit to China, of which he speaks from first-hand knowledge. He asked me about the situation there. I regret that we have little information about the crop situation, but there are reports that prospects for the 1974 harvest look reasonably good at the moment. The wheat harvest recently taken in Australia, although late, was a bumper one. Ground preparation for the next one has been made difficult in the South-East by lack of rain, but in other areas excellent rains have fallen, giving rise to hopes of another good harvest. Overall, my Lords, there are signs of a significant improvement in the world supplies of wheat in the 1974–75 season and it should therefore be possible to replenish some of the stocks that have been seriously depleted over the last few seasons. The most likely prospect for coarse grains appears to be one of a close balance between world supply and demand, although some easing and replenishment of stocks may be achieved.

My Lords, that is the general picture. The noble Earl, Lord Ferrers, asked me particularly about French wheat and whether it is true that the United Kingdom can buy this at about £20 a ton cheaper than from elsewhere. Earlier this year, when world prices for cereals were above the Community's threshold prices, a levy was imposed on exports of cereals from the Community. By virtue of membership of the Community, the United Kingdom was not liable to pay these levies on imports from other Member States. Now that world prices have fallen below the E.E.C. threshold prices, export levies are no longer being applied, however.

The noble Earl also mentioned the question of subsidies. This is really outside the scope of the Question but the noble Earl was kind enough to tell me in advance that he proposed to raise this matter. I think he also made the point that the Government should be encouraging the production of cereals and livestock rather than subsidising the end product—that is, food. I think the noble Lord may underestimate the importance of consumer subsidies in the Government's economic strategy. There is no point in producing food at prices which people cannot afford, and farmers have just as strong an interest as the rest of us in moderating the pace of inflation. But there is a vital need to help and encourage the agriculture industry to expand food production. The measures which the Government have introduced since taking Office have demonstrated our determination to do just this. However, my right honourable friend the Minister of Agriculture, Fisheries and Food has now started discussions with the interests concerned on the industry's long-term prospects.

My Lords, I was also asked about price trends. We have seen wheat prices fall substantially from their peak at the beginning of the year, but the benefit will take some time to work through to the final product because of forward buying at the higher rates. The noble Earl, Lord Onslow, asked about animal feeding stuffs. We are aware of the difficulties currently facing livestock producers be-because of the high cost of feeding stuffs and the Government are keeping the needs of the industry under careful review, Recently, we have seen appreciable falls in protein prices, and cereal prices are also lower than earlier this year. I hope that this is a sign that better things are to come. The compounders have already announced price reductions of £2 to £3 a ton and have expressed optimism that there will be substantial falls before the end of the year.

With regard to proteins, about which I was also asked, I understand that the prospects for the 1973–74 soya harvest are very favourable, and that Peru has now started fishing so that world supplies of fish meal should increase. There is also the question of wheat prices. Over recent weeks, wheat prices both imported and home-grown have fallen, I am glad to say, from their peak in last January and February. For example, home-grown soft milling wheat, which in January and February was £73 a ton, is now £62 a ton and Canadian Western Red Spring wheat, which was £118 a ton in the same period is now only £91 a ton. The 14 per cent. Dark Northern Springs which was £117 a ton is now only £80 a ton. These falls can be expected to result in reduced flour and bread production costs, but the effect will be delayed because users had to cover their forward requirements by buying when higher prices prevailed.

My Lords, I hope I have answered all the various questions which I was asked. The noble Earl, Lord Bathurst, asked me about infra-red photography. He was kind enough to let me know in advance that he was going to raise this matter and I thought it a very interesting point which he raised in his speech. I am sorry that I cannot answer the question of the noble Earl beyond saying that I think he did not expect me to do so. All I can say to him at the moment is that we think that this is an interesting suggestion, although we cannot give any very precise information about it. It is possible that because of the advances in technology such developments cannot be excluded, but we will certainly bear very much in mind what the noble Earl has said.

My Lords, I hope that I have answered most of the questions asked by noble Lords. As I say, I think we have had a most interesting and useful debate. If I have not covered anything that noble Lords have asked me, then I undertake to write to them about it in more detail.