FOOD FROM OUR OWN RESOURCES AND CAP

HL Deb 02 July 1975 vol 362 cc204-316

2.52 p.m.

Lord WALSTON rose to move. That this House takes note of the White Paper Food from Our Own Resources (Cmnd. 6020) and of the Twenty-fifth Report of the Select Committee of the European Communities on the EEC stocktaking of the Common Agricultural Policy. The noble Lord said: My Lords, this is indeed a vast subject and I approach it with considerable diffidence. At the end of my speech I fear that many people will feel that I have skated rather too thinly and in too global a manner over matters which require more detailed treatment, while others may feel that I have gone in too much detail into a matter as wide as this.

I am very much afraid that the great majority of your Lordships will undoubtedly feel that I have trespassed for too long on your time.

I make these preliminary apologies but I do not make any basic apology because these two subjects—Food from Our Own Resources and the Report on the EEC stocktaking of the Common Agricultural Policy—are of interest not only to those concerned with food production, not only to those concerned with the organisation of the European Economic Community, but to every man, woman and child in this country today and to those who are going to come afterwards, because our food supplies are in jeopardy at the present time. I do not want to be alarmist about that, but we must accept the fact that the situation that we have grown up to be used to and that our fathers grew up to be used to has radically changed, and we must give thought to a radical change in our own organisation if we are to ensure adequate supplies of food in the coming decades.

It is probably worth going back very briefly into history to get into perspective the differences that existed—and still to some extent exist—between what one can call Continental Europe and the United Kingdom. For approximately the last 150 years we in this country have been accustomed to getting most of our food at very low prices from many parts of the world, and only a relatively small quantity—something of the order of 30 per cent. up to 1939—from our own land. We did that for a variety of reasons. We did it because during the Victorian period we had our colonial Empire developing to unprecedented heights and wealth; because we had enormous investments throughout the world, not only in the colonies and in the Empire but in other countries such as Latin America. Those investments had to be paid for and could only be paid for by the primary products of those countries—that is, food; because we had a very large Merchant Navy which could carry our food for us; and because we had complete military command of the seas we were not in fear, until 1914, of any interference with the free access of food. That is the basis upon which our policy for agriculture in this country grew up.

On the other hand, Continental Europe had a very different situation. It had the very vivid and fairly recent memories of the Napoleonic wars and of the British blockade of the Continent; it had a much wider amount and variety of land; and it had a powerful political voice, ranging from the great landowners of Prussia to the peasants of France whose influence on the Government was every bit as great as that of the great Whig landowners of the 18th century in this country. Therefore, their attitude was, "Food from our own resources, both for political and for economic and for defence reasons." whereas ours was, "Food from overseas." There was a very wide divergence between those two policies. But in recent years those differences have to a large extent disappeared. On the one hand, in Continental Europe the power of the agricultural vote has diminished and is diminishing rapidly. For instance, the number of farmers in the Community has halved in the last 10 years. We no longer need to pay any attention to the voice of the large landowners unless, perhaps, they come from certain parts of the United Kingdom—and we do not pay much attention to them, either!

The economic feeling of the Community is developing more and more towards the Third World, towards increased international trade, as their industry becomes of increasing importance to them. So they are coming more to the situation that we were in before the First World War; whereas in this country our investments overseas have virtually disappeared, our foreign exchange earnings are giving us perpetual problems and our desire to cut down our imports is of greater and greater importance. Above all, the world food situation has radically changed. We are now entering into a phase where the world population is increasing at the rate of some 70 million people a year and all those people have to be fed. The standard of nutrition demanded by those people—lamentably low as it is today, and as it has been in the past—is slowly, far too slowly, rising. The conscience of the world has been awakened to starvation in many parts of the world, but what is perhaps more significant—we are, after all, governed more by economics than by conscience—is that because of this increased pressure on food from more and more people with an increasing amount of money to spend on food the competition for food is increasing.

Our position as virtually the sole buyer—as it was in the old days—has disappeared and we shall have to look forward in the future to paying more for our food than we paid in the past. So we have the convergence of these two different policies which makes easier the problem of bringing together the Common Agricultural Policy, increased production at home, preference for the home producer and the British former policy of relying on other countries for our food. It is easier to bring those together in the future.

Perhaps at this stage it would be right for me to describe as briefly as I can—and it is a difficult job to condense this fairly and honestly—some of the salient points of the stocktaking of the Common Agricultural Policy which it may be your Lordships have before you; you certainly can obtain them if you wish in the Twenty-Fifth Report from the Select Committee of the House of Lords on the European Communities. I should like to give my very sincere thanks to my colleagues on the agricultural sub-committee of the Select Committee and to the officials who have helped us so much in the preparation of this Report, and also to our technical adviser, Professor Josling who has been of very great help to us in all our work.

Perhaps it is best for me to mention briefly what seem to me to be the most important points which emerge from this Report. In Part III paragraph 28 we say: The stocktaking document identifies four problem areas to which the specific proposals of the Commission are addressed. They are: problems of market balance;"— which is a very wide term, including the balance between demand and supply and also the balance between different countries and different regions of the same countries— disparities among farm incomes; the lack of a truly unified agricultural market; and"— the very important— problems of financial cost. The Community has decided that it should modify its agricultural policy in a fairly drastic way by relating prices to the needs of what is described as the "modern farm"; this means that a vast number of small, inefficient high-cost farms in unsuitable areas are not taken into account in arriving at prices. The problems of those people, great as they are, should be taken care of by social means rather than by economic and agricultural means, and the price paid to the farmers should be based on the modern farm.

I would draw your Lordships' attention to paragraph 31, where it is stated that: The House may wish to consider whether another principle enunciated in the stocktaking should not be the guideline for setting farm prices. The principle is that different products are located in areas that have a comparative advantage in their production. In other words, there should be a movement towards encouraging production in those areas with natural advantages and therefore where the costs are less. There is also the suggestion, which I am sure your Lordships will endorse, that when there is a surplus of farm products it should, in the first instance, be made available at subsidised prices, if necessary, to the neediest consumers within the Community; it should not, as in the past, be disposed of at subsidised prices, as, for instance, butter to the Soviet Union. Where such disposal cannot take place for one reason or another, or there is no no reason for it, the food should be disposed of, again at subsidised prices, to the most needy people of the Third World in conjunction with the food aid programme.

I then move on to the patterns of future Community trade with the Third World and here we said, in paragraph 38: In the past the Community's trade policy was based on tariffs and quotas; henceforward it will be affected by two main factors. The first is the Community's decision to expand her traditional policy to include development co-operation with Third World countries on whose development tariffs and quotas can only have slight impact. The second is the Community's need to establish stable supply and prices for raw materials in the light of the world economic situation since the oil crisis. In other words the Community is now moving—rightly, in my opinion—towards a general idea of some form of long-term contract primarily with the exporting countries of the Third World, but also on a reciprocal basis in certain cases. It is necessary to plan world food needs in the light of the dangerous situation of the future, so that we shall not find ourselves in the position in regard to food that we found ourselves only a few years ago in regard to oil. I believe that to be an important and significant change in the Common Agricultural Policy.

There are also the proposals for an active storage policy for agricultural goods, for setting up buffer stocks, for instance, of cereals, sugar and—as they have at present though they are not called buffer stocks—dried milk powder. These stocks are to be used to mop up surpluses when they arise as part of the intervention programme but also to go out when there are shortages, as there have been in the last 18 months in grain, so as to lower prices and thereby benefit consumers just as much as producers.

One problem which needs special attention from your Lordships and special thought—and I hope some of the later speakers will develop it more than I have time for—is the problem of milk. We have today had a Question from the noble Earl, Lord Ferrers, concerning that. Undoubtedly there is a danger of a shortage of fresh milk in this country during the coming winter, and without any doubt there is a shortage of milk for manufacturing. It is therefore reasonable—and I shall come to this later when I discuss the White Paper—that there should be efforts to increase milk production in this country. But in the rest of the Community there is a surplus of dairy products and the efforts of the Community are still directed towards reducing the size of the Community dairy herd and increasing the size of the beef herd. This is a problem which needs far more elaboration than I have time for this afternoon, but which is of very great importance in regard to the Common Agricultural Policy and in regard to the assurance of our own food supplies.

While I am on the subject of milk, I think it is worth pointing out some figures which have just been published by the Milk Marketing Board. They show that between 1955 and 1975 the cost of labour in the milk producing industry rose by very nearly 500 per cent. The cost of feedingstuffs rose by 250 per cent.; the wholesale price of milk paid to the farmer rose by a mere 88 per cent. That is a record of which any industry might be proud. I think from this House we should give our congratulations to all those who are concerned in it—to the Milk Marketing Board, the producers, the farmers, the farm workers.

Several Noble Lords

Hear, hear!

Lord WALSTON

My Lords, one is tempted to say that if the rest of the industries of this country had a similar record—where the increase in their labour costs was five-fold and their other inputs increased 2½-fold and they only put up their prices by less than double—we should be in a very much better position than we are today. That is roughly what stocktaking does. It has some very good points in it, of that there is no question. It has self-criticism, which is always valuable; it has a willingness to change, Shown by some of its proposals. It gives encouragement to world trade and shows concern for the Third World. I particularly recommend to your Lordships the long-term contracts that it recommends in this respect. It also shows a concern for the consumer, and not only for the producer.

The document also has its bad points. In many respects it is a weak document. It is vague, and concerns itself with generalities. It makes no assessment of the overall world food position, an essential thing to be done if you are going to plan food production, when one must have an assessment of today's situation and a forecast for the future, inaccurate though that may be; one cannot plan without it. There is no indication of how the improvement, accepted as desirable, will be brought into effect. These are some of the criticisms I think it right to mention.

My Lords, now let us turn to the White Paper, Food from Our Own Resources. Very briefly, the White Paper says that we should and can increase our food production in view of the world food situation, and that we should increase it by a specified amount, with which I will not weary your Lordships, although the main areas where increases are to take place are in sugar, where, by the end of 1980 there is a projected increase of something between 25 per cent. and 30 per cent.; an increase in milk for human consumption of about 20 per cent.; an increase in lamb and mutton of about 20 per cent.; an increase in beef of about 10 per cent., and cereals of about 9 per cent. These are very specific figures, and it is valuable that we should have them. I give the White Paper full credit for quantifying the figures, and for taking into account the general world food situation.

But, my Lords, the White Paper gives no indication of how this can be achieved, and what the price of this is going to be. In paragraph 54, the White Paper says: The Government are aware of concern in the agricultural industry lest investment and higher output from our farms might be prejudiced by new and proposed forms of capital taxation; and by other developments such as pressure for more rigorous control of effluents and agrochemicals.… The projected increases in the output of British agriculture should not result in any undesirable changes in the environment …". It deals with the second point, but does not deal in any way with the first point, although the noble Lord, Lord Beswick, in answer to a Question today, suggested to us that discussions are going on. I am glad to hear it, but I am bound to point out that this White Paper is dated April 1975. There has been ample time for discussion. While discussions are going on, increased production is not taking place.

I will not dwell on the very serious state of British agriculture today, due almost entirely to the weather. I am sure others will do that, but this is something the Government must be well aware of. The Government cannot live in a Cloud Cuckoo-land of thinking that a White Paper is a negotiable form of security which a farmer can take to his bank. In addition to that, I would say that credit facilities are not enough. It is all very well to borrow, but any prudent borrower or lender must be concerned with repayment. Until we are sure how we can repay the amount of money which admittedly we can borrow today from the banks, expansion will not take place as the Government and all of us wish.

My Lords, there are other handicaps apart from financial ones, and I will mention only a few. Among these are the slowing down of agricultural research. I have here a general report from Dr. Fowden, Director of Rothamsted Institute for the last year. I will read a short part of it. He says: … in November the Secretary of the ARC had to tell listeners at a conference held at the Farmers' Club that the 'agricultural research service is now a shrinking service'. As part of a programme of reduced government expenditure, the grant received by ARC in the present financial year was cut by about 6 per cent. With inflation also pushing up costs at an alarming rate, not least those of rates and essential services, other forms of expenditure have had to be drastically curtailed. … At a time when all economic and political considerations indicate that Britain should become more self-sufficient in food production, the wisdom of extending the cuts in government expenditure to agricultural research is surely questionable. May I give your Lordships a few indications of where I believe research of one form or another—and I hope it can be done on a community basis and not solely on a national basis—will give valuable and important results. Dr. Pereira, who is Chief Scientist at the Ministry of Agriculture, gave a public lecture some time ago in which he suggested that of all the food actually sold off British farms—not produced on them, but sold off them—and of all the food imported into British ports from overseas, 25 per cent. in some form or another was wasted. I grant that much of that is inevitable, but this is surely an example of where research could have a great effect in a fairly short space of time.

Take, for instance, the recycling of animal waste. Much valuable protein which is wasted could be used as animal feedingstuffs, and very little research is being done on that at present. Available research is not enough. Similarly with the conservation of fodder crops and the extraction of liquid—magnificent work has been going on in this sphere for years at Rothamsted, but it goes slowly; more money is needed to make that into something which will pay dividends. Let us take one small specific point, the precision drilling of grain crops. I am told that the theoretical maximum yield of wheat is 118 cwt. an acre; of barley, 115 cwt. an acre, based on the nutritional uptake of which the grain is capable in the environment in which it finds itself. It needs to be put into the ground in perfect condition. One of the ways in which this can be done is by precision drilling. However, experiments are going very slowly on that. An enormous increase of three- or fourfold over the present average increase could be achieved by success in this type of research.

The harvesting of beet crops is another matter. Every year, we produce from our sugar beet crop the equivalent of 500,000 to 600,000 tons of fodder grain. The great majority of that is wasted, ploughed back into the ground. There is no machine capable adequately of picking it up. These are just some of the examples. I am sure that any of your Lordships who are concerned with the matter could enlarge the list. So increased research, not a cut to 6 per cent., is one thing which must be done.

My Lords, then there is uncertainty in the industry over the future of the tied cottage. There is uncertainty in the industry over land ownership, due to the capital transfer tax. It would not be right for me to move into that sphere now. These are both subjects for complete debates. As have many of your Lordships, I have my own answers to the problems which I might suggest at certain times, but if the Government are going to achieve the expansion that they desire, these uncertainties must be removed. We need the same atmosphere in agriculture as we had in 1940, when we had that enormous surge forward in production and in the utilisation of land, the adoption of new methods, the increase in production in spite of the wartime difficulties, and a great increase in the actual amount of food which we produced from our own acres. The conditions then were extremely difficult. We were short of all sorts of materials; we were short of money and men and we were short of imports. Today, we are short of money and of imports. The need is no less great. We have a somewhat longer time to do it, but not a great deal of time. We must inject into the industry—and in this the Government must take the lead, which they have done with the White Paper, but they must follow up that lead rapidly —the feeling that the job is vital and that the resources will be made available.

I hope, in addition to this—I am moving from the purely domestic sphere to the international community sphere—that in company with our partners in the EEC we should work very closely with the United Nations and with FAO towards far more realistic international agreements and buffer stocks and long-term contracts, both ways, to ensure not only our own food, but also to ensure that the starvation and malnutrition in two-thirds of the world is, by the end of the century, if that is not too optimistic, entirely banished from this world. We must no longer content ourselves with saying—which people, I am glad to say, are now saying, and it is worth repeating—that the days of cheap food are now over. That is not enough. We must ask ourselves what it means that the days of cheap food are over. It means that we must no longer have in our agriculture a policy of deficit, of producing less than we need, curtailing production, knowing that we can buy cheaply whatever we need to make up our requirements.

We must instead plan for a surplus production in average years in order to have sufficiency in the bad years. That means that there will be times when we have too much food for our own needs, but not too much food for the hungry world, and we must concentrate our minds on the best means of disposing of these surpluses, rather than reducing production and buying from overseas. It means that we must spend a greater proportion of our national wealth on food than we have done in the past, and that can only mean that there will be less of our national wealth to spend on other things; in other words, a curtailment of our standard of living or of the increase in our standard of living. These are the things that the phrase, "the days of cheap food are over" really mean, and we must face them and we must accept them and their implications. If we do that, as a country, and, above all, if we do it as a member of the Community, I am quite sure that we shall not go hungry in this country in our lifetime, or in that of our children; and more important perhaps than that, we shall make a really valuable contribution to the problems of hunger and starvation in the whole world. I beg to move.

Moved, That this House takes note of the White Paper Food From Our Own Resources (Cmnd. 6020) and of the Twenty-fifth Report of the Select Committee of the European Communities on the EEC stocktaking of the Common Agricultural Policy.—(Lord Walston.)

3.24 p.m.

Earl FERRERS

My Lords, the House will be grateful to the noble Lord, Lord Walston, for introducing this debate this afternoon, and he is in a unique position to do so, being not only Chairman of the Agricultural Sub-Committee of the Select Committee on European Community Legislation, but also an eminent agriculturist and agricultural political thinker. I therefore listened to him with great interest, as I always do, and with much respect, and I for one should like to thank the Select Committee which the noble Lord chaired for the Report which they have produced and for scrutinising the European document.

Of course, what the noble Lord has done this afternoon is to set us a fairly formidable task. We are, in fact, considering in these documents the future development of European agriculture, British agriculture and British agriculture in a European context. Both are forward-looking documents and are designed to meet the needs of farmers and consumers alike, and I welcome them both. They are, of course, different in style and purpose and, in certain areas, they are also contradictory—but none the less valuable for that. Food From Our Own Resources is really stating the Government's aspirations for British agriculture and what they require from it. The European stocktaking document is a basic scrutiny and self-criticism by the EEC of the way in which the Common Agricultural Policy has functioned since its inception and how it might be improved. Soul searching is not always an easy thing to do. It needed doing, and I have no doubt that the whole of the EEC will be the better for it, though I note that the Select Committee did not think that they had gone quite far enough, and the noble Lord, Lord Walston, said so in his speech.

It is, of course, fashionable to decry the Common Agricultural Policy: it is too expensive, it is monolithic, it does not work, it provides mountains, or it produces expensive food. But I suggest to your Lordships that there is another side to it which is not wholly derogatory, within which the Common Agricultural Policy has met with a remarkable degree of success. Common to all European countries and, indeed, to most countries in the world is the need, for one reason or another, to protect their agriculture. The reasons for this and the methods by which they can be protected vary, but the Common Agricultural Policy has been a means by which all the different countries of the Nine, and the national requirements of the Nine from their own agricultures, have been brought under one common system of support. It is almost a superhuman success to have constructed a system, despite all its faults, which supports at the same time the small orange-growers of Sicily, the extensive corn growers of East Anglia and the wine growers of the South of France with the intensive pig units of Denmark.

On top of this, let us remember that no method of support will ever be perfect because one is trying to get into equilibrium two things which never will be in equilibrium—supply and demand. If, in an ideal world, you were to pitch your incentives absolutely right, so that in normal circumstances the supply from farms would neatly equate with the demand from the consumers, in a bad year you would have a shortfall and prices would rise, and in a good year you would have a surplus—and what do you do with that? You can destroy it, sell it to others, give it away or store it. But in all cases someone has to pay.

This simple fact is absolutely basic to any form of managed agriculture, and it is an obligation which I suggest any Government or Governments who try to operate a managed agriculture have to accept with their eyes wide open. When one hears, therefore, of beef mountains or butter mountains, or even, as one does now, of a wine lake of 20 million hectolitres—which in a fantasy dream world your Lordships might not consider to be wholly disagreeable—one should not immediately come to the conclusion that the system which produced them is necessarily useless. Rather should one attempt to find a way within that system of minimising the occurrence and of dealing with it more effectively when it does occur. In that I agree very much with what the noble Lord, Lord Walston, said. We can be sure of one thing—inevitably, those surpluses will occur.

I agreed with the Select Committee Report when it said in paragraph 36 that sales of surpluses outside the European Community, like butter to Russia, were "politically vulnerable as well as economically dubious". They were quite right. Equally. I regard it as wholly inadequate and inefficient that such surpluses should be disposed of, as in the case of meat, by such methods as giving 30p vouchers to old age pensioners. I was glad to see that the Commission recognise that a more conscious effort should be made to get surpluses back into the system from which they were produced as soon as possible, and so benefit the consumers in the countries which paid for those surpluses to be produced. But, of course, some stockpiles, such as grain, for example, are welcome and it is prudent to have them. This kind of stockpiling is not new; it has been going on since the days of the Pharaohs, and it is particularly desirable now that the United States Government have pulled out of the responsibility of storing structural strategic reserves. But, of course, the Community, in one form or shape, have to be prepared to meet the cost.

I would here pay tribute to the Government for having achieved an improvement in the beef situation by encouraging the Community to adopt a combination both of intervention and of national support. I am sure that this will prove to have a more stabilising effect both on price and on meat supply. But one must accept that if there is to be free and fair competition in agricultural products, then it must depend, broadly, upon an end-price mechanism supported, if necessary, by national aids—and I do not see anything wrong with that.

Of course, the level at which the end-price is pitched determines, to a certain extent, the likelihood of surpluses, and I commend the Commission's determination to orientate their policy towards the modern farm. I am sure that that is right, but it immediately throws up the social problem of what you do with the small farm. In this country, we have an enormous structural advantage over our EEC partners. In 1947, the average size of holding in Great Britain was 83 acres, now it is 124 acres and, if you were to exclude part-time holdings, the average is 239 acres. But in the whole of the EEC since 1958, a period of nearly 20 years, the average farm size has increased by only seven acres to the present size of 30 acres. One must accept that there is here both a social problem and a structural problem. In this country over the last 25 years, through consistent policies, we have gone a long way to resolving our structural problem, and this gives us a huge advantage over our Community partners, and one which we should be careful not to emasculate. If there is a social problem, that should be catered for by social policies and not by the Agricultural Policy, and I am glad that the stocktaking document recognises that fact.

Between 1963 and 1973, 4 per cent. of the population have left the land in the countries of the Community, but it still leaves a vast proportion of the EEC population engaged in agriculture. More will have to leave, and if this comes about—and to enable it to come about —there is need to be proper regional policies to offer alternative employment. Small farmers in many parts of Europe today are locked into their land with no way of escape, and this must be changed.

Therefore, the Common Agricultural Policy, for all its success, needs the support of social and regional policies as well, and these in turn depend on successful economic policies. Today, the Common Agricultural Policy is an agricultural and a social policy in one. An Agricultural Policy, which is designed both to achieve and solicit a required level of protection in the interests of consumers and farmers alike, cannot, at the same time, cater for the social consequences which those very policies inevitably produce. That is why I welcome paragraph 115, which says: A solution to the problem associated with farm incomes and the disparity of incomes in the agricultural sector … requires the continuous correlation of the Common Agricultural Policy and the regional and social policies. That is the key to the problem relating to productivity and farm incomes.

The establishment of a single market was a fundamental objective of the Common Agricultural Policy and it must remain so, but at present this is destroyed by the variation of European monetary exchange rates against each other, and the famous monetary compensatory amounts which are designed to minimise the effect of these changes. Inflation, and the weakening of currencies in different degrees relative to each other, has put a torpedo through any form of monetary parity within the EEC and the Common Agricultural Policy. This has subjected the Common Agricultural Policy to immense stresses, not of its own making. Any devaluing or revaluing of currencies totally distorts the common pricing system.

The monetary compensatory amounts were, of course, designed to avoid this distortion. They have certainly saved the CAP over the last two years, but they have been very expensive to operate, although we in Britain have obtained great benefit from them—a fact which is not readily recognised by many people. But they cannot operate fairly so long as, in our case, the mystical thing called the Green Pound is out of parity with the pound sterling. The present rate of the Green Pound was fixed last March, and since then the value of the pound sterling has dropped by some 20 per cent. The answer must be an immediate realignment of the representative rate of the Green Pound.

I recognise the problem which a full 20 per cent. jump will present to the Government, but I suggest that the Minister must know that this will go a long way to injecting confidence in the United Kingdom industry, and it will prevent the type of absurdity whereby somebody gets a fiscal advantage by sending lorry-loads of beef to England, sending them around the roundabout, and then sending them back to Europe again. I hope that the Minister will be able to comment on that.

I agree with the Commission when they say that the monetary compensatory amounts cannot in future be tolerated when they constitute factors where they disrupt the unity of the agricultural market and create distortion in competition, but I suggest that they can serve to minimise the short-term effects of fluctuation in exchange rates, and that is what they are intended to do. All this depends on economies being sound—which manifestly they are not—and that is why, in this area as well as in others, it is vital for our economy to be strengthened, and I welcome the appearance that the Government intend to introduce measures to bring this about.

With our economy being bad at the moment, with dwindling world food supplies, with our inability to find or pay for large imports of food, the case for an expanding British agriculture is really quite overwhelming. The Government recognised this in the Queen's Speech of March 1974 and October 1974, and again in this White Paper, Food from Our Own Resources. I commend this resolve and this White Paper. But if we are to expand, this poses two questions: first, where do we expand?; and, secondly, how do we expand? The White Paper says: Most benefit is likely to come from higher output of milk (with its by-product, beef from the dairy herd) and sugar beet. Cereals and sheep should also make a significant contribution. In other words, the key to expansion relies on the better utilisation of grassland—greater productivity and, if possible, from a smaller acreage. That must make sense, and I fully endorse it, although I am bound to say I wonder how thrilled the European Commission were by the emphasis on milk at a time when they find a not peculiar embarrassment in the surplus of milk in the EEC.

The Commission want producers to share the responsibilities of surpluses and to achieve this they want to apply the target and intervention prices for milk in two stages—the first in the spring and the second in the autumn. This, I believe, is directly contrary to British interests, and I venture to suggest that it is not a long-term solution to the surplus milk production in Europe which, in the Community, is geared to the manufactured market where as in Britain it is geared to the liquid market. It is an inbuilt structural surplus in the EEC, where the average herd size is only nine cows as opposed to a herd size in Great Britain of 39.

As the White Paper says: Britain has a comparative advantage in milk and milk by-products. This, I suggest, should deserve encouragement and not penalties. A more appropriate and less emotive answer to solving the European Community's milk problem is an improvement in marketing in Europe, as the stocktaking document suggests; the promotion of liquid milk on the Continent, which accounts for about only 30 per cent. of all the milk produced, compared with 90 per cent. in our case; and the implementation of an adequate structural policy. Tinkering about with prices on an ad hoc basis cannot resolve the underlying cause of the EEC milk problem, nor will it achieve a better market equilibrium.

British agriculture is predominated by its livestock sector. It always has been, and in terms of our comparative advantage in grass growing it always will be. This is perhaps all the more true in a European context. Any expansion policy must be designed to follow, but not be wholly restricted by, the course of greater comparative advantage. In the case of Britain, that course must be orientated initially to our grassland. More and better grass, and more and better grassland management, is no new philosophy; that cry was put forward some 25 years ago and we do not seem to have made much of a fist at it. But now that the price of grain and the universal demand for grain are such as to make grain an expensive commodity to use for animal feed, the Government are quite right to lay the emphasis yet again on grass.

The Government have set the objective, for which both they and the industry should aim, of an expansion, on average, of 2½ per cent. per year. This is to be in the national interest. I commend the Government for seeing this need and for stating it, and I fully endorse the White Paper. The problem is how to achieve it and, as the noble Lord, Lord Walston, said, about this the White Paper is totally silent, other than paragraph 23 which says: The prospect of higher market returns should itself give farmers an incentive to plan for greater output. If that is to be the sole criterion for encouraging increasing output, the corollary would equally apply, that the prospect of enormously increasing costs would remove any incentive for farmers to plan for greater output; and indeed such a statement would apply right across the board to the whole of British industry.

But the vital word in that paragraph 23 is "incentive". If there is to be expansion then there must be incentive to expand. Incentive comes from confidence—from a whole variety of causes, of which prices is one—and confidence comes from stability. Of course, it is one of the hazards of Government that they get blamed for everything when things go wrong, and particularly is this so in a managed agriculture. I readily recognise that no Government, not even in a totalitarian State, can be responsible for prices which are paid or for cost of inputs, nor can they be responsible for market trends, at least not wholly. If wheat prices drop from £70 to £50 a ton, as they have done, that is not the responsibility of Government, but it is a fact of life. However, Governments can influence and they can set the conditions, and if we are to achieve this expansion then the Government will have to set the conditions in which this can come about.

One cannot disregard the fact that, for one reason or another, there was a major beef slump about 12 months ago; the pig herd has dropped back to the level of 1966, and the milk industry is still contracting. There are 5 per cent. fewer cows in the dairy herd this year than there were last year; 60 million gallons of milk less is being produced this year than last year; inseminations of cattle were down 9 per cent. in April and 11 per cent. in May, showing that more empty cows will be walking about and the likelihood is that milk production will decrease yet further; no butter at all will be produced between August and March in our own butter factories because there is not the milk there; farmhouse cheese-making is likely to be stopped because of inadequate milk supplies; it is anticipated that cream will have to be imported this winter.

All these things show a continuing decline since the peak years of 1972–73, and on top of that farm incomes were down 26 per cent. last year. This is not stability. It is not expansion. It is contraction. I am not here trying to attribute to the Government the blame for this. What I am saying is that it is a fact which the Government must take into account and one which we must all take into account and recognise. We all know and accept the need of this country for an expanding agriculture, and I was delighted that the Prime Minister re-emphasised this at Stoneleigh on Monday in words of quite unmistakable clarity, when he said: The argument for expanding agricultural output today— and his next words my noble friend Lord Standys quoted— and for help to do it—rests on grounds which the most hard-bitten economist, the most dispassionate industrial consultant, would accept. One could not get anything much clearer than that, especially from a Prime Minister, I hope the noble Lord, Lord Hughes, will be able to say how those six vital words— "and for help to do it —will be implemented.

As the noble Lord, Lord Walston, said, no longer is there cheap food. As the value of the pound is lowered daily, so our imports become more expensive and therefore the Government must encourage agriculture to expand. But how is this to be done, and how will it be done? We have an efficient agriculture. Each man employed in agriculture is backed by no less than £34,000 in capital assets. Even compared with ICI, which must be rated one of our most efficient industries, the figure is not £34,000 in capital assets but £24,000. The growth in productivity per man has averaged 7 per cent, over the last eight years, which leaves most industries standing. These figures represent a quite outstanding achievement. Agriculture turns its capital over only once in five years, whereas most industrial organisations turn theirs over twice in one year. In a time of roaring inflation it is not surprising that agriculture faces severe liquidity problems.

This is not the Government's fault, but again it is a fact which the Government must recognise. Not only will 30 per cent. more working capital have to be found to take care of inflation over the next 12 months but more capital will have to be found to replace that which is removed by capital taxation just in order to keep production at the same level as last year, before one talks of expansion, and that requires yet more capital. My question to the Government is: where is this coming from? I do not ask that in an offensive way, but in a genuinely interrogatory way, because that is the question which all farmers and all those in agriculture want answered. One cannot remove capital from an industry and expect it to expand. That just does not work. The Government must realise that some of the actions they have taken in some quarters have had an effect on agriculture which has been totally at variance with the Government's wish in the White Paper. As the noble Lord, Lord Walston, said, the industry is faced with the capital transfer tax, the Community Land Bill, a proposed wealth tax, proposals to re-rate agricultural land, and the Government have promised the abolition of tied cottages.

I ask your Lordships: where is the incentive or the capacity or even the ability to expand? I beg the Government to realise that, however meritorious these actions may be for the purposes for which they were introduced—whether these were social, economic or political, and I accept that there are many commendable if disputable reasons for them—these actions are having an influence on agriculture which is diametrically opposed to those put forward in the White Paper, and they are acting as a rebuttal to expansion. If the Government want to see increased production from agriculture, the industry must be encouraged.

A plant will not grow if one stamps on it with the heel of one's foot and then uses in justification the argument that one did not really mean to hit the plant but merely the weed which was growing alongside it. My experience is that in these cases the plant dies but the weed continues to grow. When things have precisely the reverse effect from that intended and required and when we are in an economic mess, I urge the Government—and I mean this in no Party sense because I urge my own Party to do the same thing—to stand back, to put sums momentarily on one side and to scrutinise basic attitudes and what motivates people, whether their lives be in agriculture or elsewhere.

The first fact that one sees is that fundamentally people right across the board, whether in agriculture or in other industries, from the highest paid to the lowest paid, want to work. They want to work in order to earn. They want to earn in order to keep. High taxation militates against this and generates the feeling, "What on earth is the point of trying?" The second is that it is a natural and, I venture to suggest, commendable instinct for people to want to pass on to their children the fruits of their life's work. If it is not a commendable instinct, the antithesis must be that it is more virtuous to seek high rewards only to spend them on oneself, and such a self-indulgent society as would ensue from that philosophy is one that cannot have been seen since the days of Sodom and Gomorrah. This basic and fundamental concept is all too easily forgotten by our political masters of all persuasions and all Parties. The curious thing is that the nearer to the centre of the political machine one gets, the heavier one gets showered from the bureaucratic tarbrush as it swings round, and the more obfuscate become the simple principles which motivate the individual.

My Lords, I make no apology for mentioning this, because it strikes at the very heart of the Government's desire for expansion as put forward in their White Paper. Many of the most successful and well-established farming families throughout the country have come about by the endless hard work and effort which has been put in by themselves or by their fathers or by their grandfathers in order to build up a business, often from small beginnings, to hand on to their children. Maybe they were inspired by the idea of increasing their standard of living—people throughout the ages have done that, and none more than the present generation—and there is not much wrong in working hard for that. Maybe they were also inspired by a natural instinct to give their children a better start in life than they had—and I venture to suggest that there is nothing wrong in that either. Many people in all walks of life, throughout the length and breadth of the country, and not confined to agriculture, are similarly motivated. These may be unpopular, unfashionable or even despised attitudes, but I venture to suggest that anyone who disregards them disregards the very mechanism which makes the clock tick. And any nation which tries to suppress them will inevitably stop the clock.

If we want an expanding agriculture the Government can only set the conditions. That they can do; and, indeed, that they must do. But I would earnestly urge the Government to reconsider some of the things which they have done—commendable as they have been for many reasons and to many people, but for reasons which are totally disconnected with the expansion of agriculture—and to realise that they are at this time having an effect quite the reverse of that for which they are asking in this White Paper. I cannot urge the Government too strongly to note this and, having noted it, to act upon it.

We are all agreed on two things the first is that the country is in considerable economic difficulties. The second is that because of that and for other reasons, we need more food from our own resources.

The only thing which is lacking is the means to bring this about. That means lies within the capacity of the Government—and I can do little better than quote the words used in the time of Winston Churchill, in different circumstances, "Give us the tools and we will do the job". It is just that for which the agricultural industry looks to the Government.

3.54 p.m.

Lord MACKIE of BENSHIE

My Lords, I, too, must congratulate and thank the noble Lord, Lord Walston, for initiating this debate. I think he deserves the thanks of the whole House for the work he did in summarising for our consumption the work of the stocktaking on the Common Agricultural Policy. I do not want to say much about this because it has been well covered by the noble Lord, Lord Walston, and by the noble Earl, Lord Ferrers.

I should like to say that many of the indicators in the Report point towards a great deal of common sense coming into the thinking on CAP by the Community at large. I would point out that paragraph 10 reads: (a) the need to relate price levels to the supply and demand situation for each product as well as to the earning ability of modern farms"— and further— (f) the establishment of better price relationships between agricultural products"— and then— (g) the assumption by producers of some degree of financial responsibility for surpluses", which means that the Community policies are moving towards a high degree of common sense in production. But I would stress that in the Community the policy which may have supported small and inefficient farmers has done a tremendous service to Europe as a whole in seeing that the supply of food by these people, uneconomic as it may seem, was there when we had a shortage in the world two years ago and certainly kept down world prices to a very large degree.

I should like to spend some time on the White Paper, Food From Our Own Resources, and would say, first of all, that the target of 2½ per cent. a year is quite achievable. I do not think there is any doubt at all that we can have a net gain and can save £500 million of imports at today's prices, and that the farming community can do it. They have done it in the past, and anybody who knows anything about practical farming has no doubt that if the standard of farming throughout the country was the standard of the best farmers throughout the country, the achievement could be far greater. Given the fact that the Government have said firmly that they want this and that they are to provide the means to do the job—which, as the noble Earl, Lord Ferrers, said means providing the money to do it—then I should like to examine some of the steps which I think the Government should take.

The reason for the great advance in agricultural production in this country since the war has been the confidence of farmers in the pricing system, in the annual Price Review and in the guarantees which successive Governments have given. The reason for the malaise at present felt in farming is the total abandonment of this policy during the last couple of years in the case of beef. Some measures have now been taken, but the lack of confidence is very strongly felt in the industry today. The Government must give this confidence to farmers otherwise they cannot get the production because, as everyone knows, farming is a very long-term business. It can be done and it will be done, but the confidence must be there and only the Government can give it.

We have great resources in this country which we have been slowly building up. One of them, of course, is the use of our hill land. I have spoken on this before, but I do not think one can mention it too often. The fall in the price of beef—the drastic returns received by producers of hill lambs and producers of calves from the hills—has knocked confidence to an extent that I would say has undone maybe 50 per cent. of the work which has gone on since the end of the war. It will require very firm assurances to make these men, who do not get a high return from their capital, begin to expand their herds again. This is absolutely vital, especially in the case of hill farming, where the capital is high and the return is not great.

There is a curious lack of confidence among the beef farmers today, and it is worth while the Government studying this. If you send a store beast to market at the moment and it is 8 cwt. or over and near the end of its work and it can be fattened in three of four months, you will get a reasonable price for it. But if you send in cattle of 5 cwt. which have just gone through the tricky period—the period of great expense; of aborted milk and so on—they will fetch anything from £5 to £6 per cwt. less than the more mature cattle. This can only indicate a tremendous lack of confidence regarding the future among beef farmers. This is one of the major tasks which the Government must tackle.

It is no good the Government talking about £23 per cwt. as being a price which will encourage people to produce cattle. All the costings I have seen from independent sources presently show that the minimum to give a reasonable return is in the region of £25 per cwt. At present our colleagues in the EEC are receiving returns which, while they vary, average £27 to £28 per cwt. Our costs in this country are not all that amount lower than they are on the Continent, and this is a perfectly straightforward matter which the Government will have to face. I know it is tremendously important to keep down the price of food, but the fact remains that we will not get the food unless the costs of production are covered and some return is made to the farmers producing the beef.

The Green Pound, so-called, is really a scandalous device in the farming industry, and the Government must assure farmers that there will be a realistic value put against the unit of account so that the prices come more into line with those pertaining on the Continent. I believe that consistency is very necessary because at this time ridiculous situations obtain: you can actually get a subsidy for going out of milk and into beef, while at the same time you can get help to go into dairying, in the form of grants for buildings and other items. The farmers need to know exactly what is the Government's intention. Many other things are necessary, too. The noble Earl, Lord Ferrers, was absolutely right when he said that there must be a return for your money; there must be a simple material reward. But the supplying of the capital will be very difficult. I think that the calculation is that we need £500 million of capital in order to provide the equipment to give this increase.

The Government should look at some form of land banking system which would provide capital for expansion at reasonable rates of interest. This is done in almost every one of the better agricultural countries on the Continent, such as Denmark and Holland. The Government should look at this as an extra source of capital for expansion. The Government must look very carefully at agricultural education as well as agricultural research, because it is only by getting farmers rewarded, and by their knowledge and their willingness to adopt the most modern products of research, that we will get the sort of expansion we require.

The advisory service needs to learn lessons from some of the commercial firms. One of the most successful forms of advice in this country has been provided through the ICI scheme of promoting certain farms and giving full details of their financial success. This has certainly had an enormous effect in the dairy industry, in terms of the proper use of grass, the application of fertilisers, and the raising of the return. The Government must consider establishing demonstration farms along these lines, or promoting those which have already been successful, thus giving the information to farmers so that they will realise that it will pay them to follow the best practices.

My Lords, if the Government are to get expansion they must do something about the system of land tenure. What do they want? Do they want to nationalise the land, and rent it to farmers; or farm it themselves? Do they want a system of owner-occupancy; or do they want to preserve the many good features of the landlord-tenant system? No one could say what the Government's policy is in this regard. On the one hand there is taxation designed to discourage the owner-occupier. The 45 per cent. relief on estate duty for tenanted farms has been removed; and I trust and hope that the Government will not go ahead with plans for nationalisation. But there is no consistent policy on land tenure, which is one of the most important factors in any advance in agriculture.

I personally have no objection at all to a capital transfer tax. I think it is a good thing—or a bad thing—for a young man to start where his father left off. There is no better incentive than to have a lot of money to repay a large overdraft; and let him get down to it. But if one adds that to an income tax system with tax on personal earned income at the highest rate in Europe you are getting nowhere fast. The ridiculously high taxation of personal incomes in this country has probably done as much harm as anything to land structure and the efficiency of farming.

I ask the Government to sort out the situation in their minds and tell us what type of system of land tenure they want. because it is absolutely vital for production to get this clarified. Along with this the Government must think of how we are to have a ladder in farming. At present there is no real farming ladder. In days gone by, a young man could work on the land, save a little money, and by immense effort could get a farm; but that is almost impossible today. No industry can be really efficient and thrive unless people are coming up from the bottom. The established farmers—I am happy to say that I am lucky enough to be one—need pushing from below. In present circumstances, without a land bank and without any device to bring the keen young men into farming, the farming ladder is practically non-existent. This matter is tremendously important to agriculture and to the achievement of the modest target of 2½ per cent.

We also ought to watch this business of productivity per man. The highest productivity in the world is in the States, where a man can plough vast acreages of flat land and can grow a very large amount of corn, fairly easily, by fairly simple and not very commendable systems of agriculture. The production per man in the States is very high. We must watch that we do not move too far in productivity per man, and we must remember that with our limited acres productivity per acre is probably more important for us. At present we are losing 77,000 good arable acres every year. It appears to me and to many farmers, who should not worry about it as much as the town folk, that it is absolutely ludicrous that this amount of good land is disappearing every year. Every effort should be made to preserve it. As a farmer, I should perhaps selfishly welcome it, because the less land the higher our prices. But the community, and certainly the people who buy the food, should be thinking very seriously about this desperate loss of land.

I do not wish to detain the House longer because many other noble Lords wish to speak. I simply reiterate that if the Government want the expansion they must pay for it. They must give farmers the confidence, and if they do that—if the confidence is there—the farming community has the will and the skill to achieve the target.

4.10 p.m.

The MINISTER of STATE, SCOTTISH OFFICE (Lord Hughes)

My Lords, I am grateful to my noble friend Lord Walston for initiating this debate and for providing us with this opportunity to discuss what, it will be generally agreed, are two of the most important publications on agriculture to come before your Lordships' House in many years: the Commission Report on the stocktaking on the Common Agricultural Policy and the Government's White Paper which examines the prospects and policies for food production at home into the 1980s. I should like to say to my noble friend that I am grateful to him on three grounds.

First, I appreciated, as I think did all who listened to my noble friend, the way in which he painted the historical background to agriculture which so very effectively demonstrated the wholly different circumstances in which we now live and, therefore, the totally different views we have to take on certain of these matters from what we might have taken even as recently as four or five years ago. Secondly, I want to thank him for the very skilful way in which he directed our attention to certain of the highlights in the report of the Select Committee. Thirdly, I want to thank him for the opportunity which he has given to noble Lords generally to hear a number of effective contributions to this subject.

If those that we have just heard from the noble Earl, Lord Ferrers, and the noble Lord, Lord Mackie of Benshie, are indications of the general attitude to be adopted during the debate, then I can assure your Lordships that Her Majesty's Government will find this a very worthwhile debate. If I might comment first in general terms on what the noble Earl, Lord Ferrers, said in a most interesting and very constructive speech which lasted exactly 30 minutes, I thought that only four minutes could be attributed to the fact that he sat on the Opposition Front Bench. The rest of his speech could have been made from any part of the House. The noble Lord, Lord Mackie of Benshie, with traditional Liberal modesty, spoke only half of that time. An equally small proportion of his speech could have been attributed to the fact that he was speaking from the Liberal Benches. I hope that I shall not transgress unduly on the pattern which my noble friend, the noble Earl, and the noble Lord, have set.

We also owe a special debt of thanks to the Select Committee for their careful scrutiny of the stocktaking Report and their consideration of papers submitted by a wide range of interested organisations. The Committee have not only prepared an extremely useful summary of a very long report, they have also helped us to focus our attention on the main issues and have made a number of useful suggestions which the Government will bear in mind in the discussions which will take place in Brussels. Noble Lords will know that both in Opposition and since taking Office, we on this side of the House have been critical of certain aspects of the Common Agricultural Policy, and have sought, and will continue to seek, changes in the mechanisms by which the Community pursues its aims. But I doubt if many people would quarrel with the basic objectives of that policy which are quoted in paragraph 6 of the Committee's Report. There is a great similarity with the aims of the 1947 Agricultural Act which was the charter for the agricultural policy pursued by successive Governments for about 25 years and which was so effective in improving both the productivity of the land and the income and standards of living of farmers and farm workers in this country.

My Lords, I think we must acknowledge—and perhaps in this respect the Committee has been not quite fair—that the application of the Common Agricultural Policy has brought about substantial improvements in farming in the original Member States. But the Commission recognises, and has conceded in the Report, that while the Common Agricultural Policy has been most successful in achieving market stability and security of supply, it has done so at heavy cost. It has been less successful in securing the optimum use of resources and reasonable prices for consumers. Moreover, wide divergencies between the incomes of producers have persisted. I agree with the Committee that one of the prime reasons for the policies' shortcomings has been an excessive reliance on end price support. I think that there is a general awareness in the Community now that a more flexible application of the policies is needed in order that we might achieve all the Common Agricultural Policy objectives and at a reasonable cost.

My Lords, if I now look at the Government's views on the stocktaking Report and the broad policy objectives, I think it will be helpful to the House if I explained our general approach and commented on some of the points made in Part III of the Committee's Report. I know that the Committee has expressed disappointment at the form and content of the paper. In particular, it is critical of what it calls the failure to answer the fundamental question of how the Commission envisages that the food supply of the EEC will develop; and consider that while the Report is useful it is not an appropriate response nor a realistic appraisal of the views of member Governments. I think that is a rather pessimistic view.

It seems to me that the Commission approaches its task in a commendably critical way; and as the noble Earl, Lord Ferrers, said, soul-searching is not a terribly easy task. It produced what was called for: a full-scale reappraisal of the Common Agricultural Policy. Some of the proposals in the Report represent fairly major changes in the Commission's thinking. It is true that there are some important omissions and some proposals that we like less than others and we shall have to try to put matters right in the discussions now in progress; but in general the Report has been welcomed by all Member-States and that is quite an achievement in itself. We believe that it holds out good prospects for further progress along the lines we have been advocating for the past 18 months.

We do not look upon the stocktaking as a self-contained exercise. It has been said before, but I do not think I need refrain from saying it again, that the CAP is not a rigid and fixed system; it is constantly subject to review and revision. In our view, the stocktaking report should be looked upon as providing a basis for ensuring continuing improvements in that policy. In replying to the discussion on the stocktaking in the Council of Ministers on 28th and 29th April, Commissioner Lardinois agreed that the CAP had become more flexible and could be further adapted to meet the needs of Member-States and changing circumstances and he pointed out that, primarily on British initiative, the Community had made considerable progress in finding pragmatic solutions to its problems.

I have myself some direct experience of this in Brussels as I took part in the negotiations leading to the introduction of the variable premium scheme for beef and the agreement on the Less Favoured Areas Directive, both of which represent significant departures from previous Community policy.

The Commission have rightly drawn attention to the fact that the key issue in obtaining the objectives of increased productivity so as to produce food at reasonable cost to the consumers, while at the same time agreeing a reasonable standard of living for farmers and farm-workers, is an improvement in farm structure throughout the Community. It is a matter for regret that some Member-States have not yet implemented the Directives which provided for, first, aid for farmers undertaking a farm modernisation programme; secondly, compensation for farmers leaving the industry: and, thirdly, the introduction of service to provide social and economic advice to persons engaged in agriculture.

Your Lordships will know that similar measures have been in force in the United Kingdom for many years, and have contributed to the very good structural position and efficiency of United Kingdom farming. But I endorse what the noble Earl, Lord Ferrers, said in this connection. Improvements in structure inevitably create social problems which cannot be solved by agricultural measures alone. They require sound regional and social policies, and no Governments have been more prominent than the United Kingdom Government in pressing these issues.

May I now turn to some of the specific issues which have been commented upon by the Select Committee. On the matter of price decisions which relate to the needs of the modern farm, we have been pressing for this for some considerable time and progress along these lines has already been made. I note the Committee's warning that costs on high technology farms can be high relative to those in agriculture as a whole. Our objective must be to relate prices to efficient farms whether or not they are "high technology" farms. The Committee has suggested that the House may wish to consider the principle that products should be located in the areas that have a comparative advantage in their production. This should of course be the automatic consequence of the establishment of an agricultural common market with common tariffs and the elimination of obstacles to trade. I am sure that it is right that the CAP should be designed to encourage that result, but I stress the word "encourage". I would hope that the Committee did not envisage some kind of direction towards that end.

Then we come to the subject of the disposal of surpluses to Community consumers. There is no doubt that pressure from the United Kingdom has undoubtedly had a considerable effect in persuading the Commission to conclude that, Community consumers ought to be able to obtain more benefit from any surpluses occurring"; and consumers in the United Kingdom have derived considerable benefits from this in the past year. I fully accept the point made by the Committee that it is better to try to prevent the surpluses from occurring in the first place, and my right honourable friend, in welcoming this particular proposal, has stressed that it must not be regarded as an alternative to a sensible price policy. It is practical, however, to recognise, as the noble Earl, Lord Ferrers, emphasised, that temporary surpluses will occur whatever the system of support, and we are glad to see the prospect that our own consumers may benefit more from them. It was demonstrated last year in relation to both beef and butter that a system can be introduced that generates an increase in demand and so reduces the need for intervention buying.

On the subject of external trade arrangements, we shall certainly bear in mind the Committee's comments on this aspect of the stocktaking report. My right honourable friend the Minister of Agriculture has long stressed the need to encourage trade with third countries whenever this can be done without detriment to our own production within the Community, and he has cited strong wheat and lamb as examples. I am sure that noble Lords will agree, however, that there is a very delicate balance to be struck here. An increase in self-sufficiency, provided it is not as a result of high cost production, can benefit consumers in the Community by helping to assure the availability of supplies, which is a major objective of the CAP: and it can at the same time help consumers elsewhere by releasing stocks which might otherwise be bought by Community States.

Then there is the subject of direct income subsidies and other structural measures. We have always taken the view that there might be scope for more use of direct aids to producers as a substitute for higher common price increases or a high level of intervention. I think it is understandable that the Commission should give only a "guarded" approval to the idea of direct income payments to farmers since it is their view that the way in which these have been used in the Community in the past has tended to militate against the improvement of the agricultural structure and has tended to distort competition. I think these are real dangers, but it should be possible to devise arrangements that can avoid these difficulties and add flexibility to the operation of the CAP.

The Commission's suggestion that farmers should assume some degree of financial responsibility for structural surpluses will clearly require careful consideration. The stocktaking report concentrates particularly on the imbalance between supply and demand in the dairy products and wine sectors. The Committee has recognised the difficulty for the United Kingdom dairy industry in the suggestion of a two stage price arrangement which could depress the premium for winter milk. The Committee has rightly drawn attention to the significant differences in the pattern of production and consumption of milk as between the United Kingdom and most other Member-States and I can assure the House that my right honourable friend will have this point very much in mind in discussions on amendments to the milk régime.

I should like, if I may, to spend the last few minutes at my disposal to comment on the relationship between the Commission's stocktaking proposals and our own plans for agricultural expansion as set out in the White Paper Food From Our Own Resources. In this connection I am grateful to the noble Earl, Lord Ferrers, and the noble Lord, Lord Mackie of Benshie, for the general welcome that they have given to the Government's proposals. I have noted, of course, the comment which they shared with my noble friend Lord Walston about the absence of specific Government measures to achieve the objectives. I think they will agree that a White Paper dealing with long-term objectives is not the place for such measures. In saying that, I do not dispute that they are right to say that the industry expects the Government to follow this matter up. I do not think that the noble Earl was wrong in directing attention to what my right honourable friend the Prime Minister had to say earlier in the week.

Noble Lords will be diminishing the value which ought to be attached to speeches made in this debate if they judge them as successful or otherwise by the extent to which they extract instant information from the Ministers replying to the debate. No debates which take place in this House are more carefully examined and noted for the value which can be extracted from them than the debates which take place on agriculture. The real value which will accrue from this debate is not what I am saying today or, with all due respect to my noble friend Lord Strabolgi who has, as we say in Scotland, the tarry end of the stick in having to reply to the debate, will say, but on what action the Government take as a result of what has been said by your Lordships.

I was most interested in what my noble friend Lord Walston said about the need for research and development. We recognise the importance of these matters and of advisory work in agriculture. As we had indicated in paragraphs 18 and 19 of the White Paper these services will have an important role to play in increasing productivity. In common with all the activities financed from the public purse, these services have had to accept some reduction in funding because of the need to limit public spending. But in the current year the Agricultural Research Council will receive, in real terms, only marginally less than in 1974–75. On the subject of milk production, for example, I may say that we cannot accept that there is any inconsistency in our looking for increased production in the United Kingdom of the commodities in which the Community as a whole is self-sufficient, or indeed is over-supplied, as in the case of milk, It is not the objective of the Common Agricultural Policy to preserve the present pattern and application of production. The common price structure and harmonisation of national aids are designed to create a situation in which commodities are produced in the areas in which this can be done most efficiently and economically. It is our duty to determine the best future pattern of United Kingdom agricultural production, based on the best use of our own resources.

This is perhaps best illustrated in the case of milk production. We believe that, particularly through the better use of grassland, we should be able to increase milk production more economically over the early years of the 1980s and that this would be a good use of our resources. In short, we believe there is a case for our having a bigger share of the total Community milk market. Currently, we have a smaller share of this market and, more particularly, of the butter market, than we had a year ago. Under the impetus of the transitional steps which will increase our producers' return, and through the improved use of grassland, we hope to reverse this trend. This is what a Common Market is about.

I am pleased to say that the proposals in the Government's White Paper have been generally welcomed by all sections of the industry. Despite the difficulties which have been caused by a declining labour force and a decreased use of productive land, the farming industry of this country has continued to improve productivity and maintain output. I should be failing in my duty if I were not to join with the noble Earl, Lord Ferrers, the noble Lord, Lord Mackie of Benshie, and my noble friend Lord Walston, in paying a special tribute to the way this has been done. Like them, I must agree that if the rest of industry in this country had been able to achieve the same results, the Chancellor of the Exchequer might not have had to make the sort of Statement which he made the other day.

Noble Lords will note that our conclusions, following a period of intensive consultations with all the major organisations connected with agriculture, are that the industry should be capable of a continuing expansion of about 2½ per cent. per annum which, on the basis of the projections of the White Paper, would produce by 1980 annual net import savings of about £500 million. I noted that the noble Lord, Lord Mackie of Benshie, said that this was well within the capabilities of the industry. We fully recognise that if the industry is to move forward in the way that is desired, producers need to have a fair return for their labours and for capital invested. A prosperous agriculture should also enable farm workers to be assured of a reasonable standard of living.

The main incentive for expansion must, however, come from the high level of market prices, the expectation of which underlies the analysis in the White Paper. At the same time, noble Lords will note that we have given a firm assurance that our agricultural policies will be framed in the light of the White Paper's conclusions. We have already started discussions with the industry to determine whether there are measures which it would be right and practicable to take to achieve the White Paper's aims. I am confident that the Government and the inndustry, working together, can bring about the expansion we are seeking, which can make a significant contribution to the improvement of this country's economic situation.

The noble Earl, Lord Ferrers, mentioned one rather peculiar fact that emerged from the way the Policy has worked recently, when he spoke about bringing meat across from the Continent and sending it back by a roundabout way, and making money. I can understand the concern which has been expressed that the EEC system should have been exploited in this way by certain beef traders. What happened was that for a period it was found by certain people, who were not breaking the law but had found an ingenious way of working within it, that by transporting beef from Germany to France via the United Kingdom they were able to make a substantial profit out of the accession compensatory amounts system.

I can assure the noble Earl that the reports of the "carousel beef trade", as it became known because of this roundabout way of working, were thoroughly investigated by the Departments concerned. As a result of this, Her Majesty's Government were able to persuade the Commission of the need to tighten the rules for calculation of the compensatory amounts supplied in this sector during the transitional period. As a result of that, certain changes were introduced in March. So far as our investigators have been able to establish, this abuse has not been a problem since then. I should not be prepared to go as far as saying that it never happens, and because of that the matter must naturally be kept under constant review. The Government will not hesitate to seek further changes if they seem to be necessary, because it is by abuses of what in themselves are perfectly sound procedures that, perhaps, sometimes unjustified general criticism of the CAP is most easily brought about.

I have come to the end of my remarks and think it would be appropriate for me once again to congratulate the Select Committee on its Report. Noble Lords in this House have a very great experience of agriculture. I, for instance, am very conscious of the fact that the first three speakers have been actively engaged in agriculture and speak from great experience, whereas I am merely an amateur pitched in from the political end. But, as I have said, the value which the Government will extract from this debate comes about because the people who take part are those with a great general experience of agriculture and, while the debates on this subject do not necessarily always show complete unanimity, they are always of a very high standard. My Lords, other duties will prevent my being here during the whole of the debate, but I look forward to hearing as many speeches as I can before having to leave at about half-past six. I can assure your Lordships that I shall read the Report of those speeches which I have not heard and, in addition, I know that my noble friend Lord Strabolgi will be an ample compensation for my departure.

4.39 p.m.

Lord RATHCREEDAN

My Lords, I feel that I should declare an interest, as I own and manage personally a highly specialised dairy farm. For that reason, I propose to confine my remarks to the dairying industry and to the milk industry. This will have two advantages, in that I shall be talking about a subject which, from my own knowledge and my contacts with other dairy farmers, I should know something about. It will also mean that I shall make an even shorter speech than I would have done had I embarked upon a general view of the White Paper, Food From Our Own Resources. I feel that it is not necessarily unwise that I should concentrate on the milk industry, because in the White Paper, in assessing priorities, I think it is agreed that the milk industry and beef from the dairy herd are given a high place.

It seems there is no doubt that the Government wish to have an expansion of the milk industry, and it is certain that it is necessary that they should take steps rapidly, not necessarily to increase the milk output but to prevent an even further decline in production of milk; that has already been referred to by previous speakers. I suggest that the way in which this should be done is stated in paragraph 40 of the White Paper, which says: In order to secure a sustained increase in milk production to 1980, dairy farmers will need to have sufficient confidence of a remunerative return from their milk and from beef from the dairy herd. I think all your Lordships will agree that that is what we need to aim at.

How is it to be done? It is to be done by two methods: cash and confidence. The Government have it in their power to provide cash by providing an increase in the price of milk to the producer. The more important factor is confidence—to give the dairy farmers confidence. I maintain that it will be extremely difficult for the Government to do this. Probably your Lordships realise that during the last year the Government and the Ministry have been stating that they still require an increase in milk production, while at the same time, up until the end of last month, until the day before yesterday, they were giving an incentive to the milk producer to go out of milk into beef. I am sure that this has a great effect. At any rate in the area in which I am I know that many, certainly half a dozen farmers in an area of about 10 to 20 miles, took advantage of this beef incentive scheme to go out of milk. It is very difficult for a milk farmer who is deciding whether to stay in milk or go out if he realises that simultaneously the Government are encouraging him to go out of milk. It is often the one factor which turns the scale, and he goes out of milk.

As was stated in a recent edition of the Farmers' Weekly, the result has been the slaughter of cows; 100,000 extra breeding cows have been slaughtered in the first five months of this year. They are potential breeders and the dairy herd in this country is thus being reduced. Also, any noble Lord who has had an opportunity of discussing this matter with those in this country who control the markets and the slaughterhouses, knows it is common knowledge that a great many in-calf cows have been slaughtered. This means that in the future we shall have an even greater shortage of milking cows.

Unfortunately, the Government have not as yet produced any proposals as to what they intend to do about increasing the production of milk. Certain promises have been made. I am delighted to hear from the noble Lord, Lord Hughes, that they wish there to be an increased production of milk in this country despite the fact that there is a surplus of milk in the European Community. A great many farmers are frightened that in the future the Government may well desire to increase the production of milk in this country but, through some reason arising from our being part of the Common Market, something will arise and the Government will say: "Oh, we should have liked to increase the price of milk or to have taken certain action for you, but unfortunately we are unable to do so because of our having joined the Common Market." I think I am right in saying that, had this country not been part of the European Community, the beef incentive scheme would never have been brought in here. That is the kind of fear the dairy farmers have which makes them hesitant to expand in milk, or certainly to start up afresh in milk.

The price of milk will I think undoubtedly be increased. The Government have more than hinted that they are going to increase it. But the important point—and this has been suggested by many—is that the price of milk ought to be revised more often. The price is now fixed once a year. With the rate of inflation as it is at the moment the farmer has no guarantee that in six months' time he will be obtaining for his milk a realistic remuneration to reward his efforts. As has already been mentioned, the effect of the Green Pound is that the milk producers of this country are not receiving for their milk the price that is being received by milk producers on the Continent. It seems at any rate to many producers and farmers in this country that often the benefits which they might derive from the Common Market do not accrue to them. If something arises which is not of benefit to them, it is said: "We cannot possibly get out of that," whereas if something arises to their disadvantage, such as instituting a Green Pound, that is said to be perfectly feasible. So I hope that the Government will immediately give an increased price for milk and also give some indication that there will certainly be a higher price if the cost of production rises in future.

The other incentive which the Government possibly have in mind is that of grant for buildings and milking equipment. It is very doubtful whether that will be a great incentive to numbers of dairy farmers. They see their friends who have taken advantage of grants now in the position of not making sufficient out of their dairy enterprise to cover the amount of money they themselves have put in and often money which they have borrowed at very high rates of interest. The remuneration they receive from their milk is not sufficient to cover the interest on these loans. Therefore, the one incentive which I feel will mean that production will rise is the increased price and the guarantee that this price will be a realistic one in six months' or a year's time.

To come to a rather more specialised question—the question of the eradication of brucellosis in this country—the Government are going ahead with the eradication scheme and have designated certain areas that should become brucellosis-free. This is of very great importance because there is danger that unless this country becomes brucellosis-free we shall have great difficulty over the export of certain of our cattle. There are rumours that next year regulations will be made which will prevent us from exporting our cattle. I should like to know whether the Government are in a position to deny this or whether they say that there is this possibility.

Owing to the slaughtering of cattle that has been taking place there is likely to be a shortage of milking cows and of replacements for the dairy herd, and if the Government wish to increase the production of milk they must increase the number of milking cows. Nevertheless, I hope that on this account they will not slow down the brucellosis eradication scheme. They may well be tempted to do so, because it would mean the further slaughtering of cattle: of necessity the brucellosis scheme will mean an initial reduction in the number of cattle. However, I hope that the Government will not be tempted to slow down the brucellosis eradication scheme; already they have dragged their feet considerably with regard to it.

My other question concerns the tied cottage. This affects the dairy and the milk industry more than any other part of farming. It is important that we should get away from the term "tied cottage" which is rather a dirty one now. Instead there should be some arrangement whereby one can be certain that the herdsman, or whoever is looking after the cattle, lives—of necessity he must do so—within a short distance of where the herd is kept. Noble Lords must realise that in the same way as the cow will not stop producing milk on Saturdays and Sundays, a cow will not be prevented from having calves—sometimes these are difficult births—in the middle of the night. It is essential, therefore, that somebody should be on the spot to deal with these calves.

Finally, although I know that at this stage the Government cannot possibly give even an indication of what they are proposing to do in order to encourage the milk producer to produce more milk, I hope that they will do something quickly, otherwise, as has already been stated, there is a distinct likelihood of there being a considerable shortage of milk before the end of the year. As has already been indicated, this White Paper has done nothing to stop the decline in, let alone increase, milk production. The answer that discussions are taking place does not help in any way to give confidence to the farmers to increase production. If discussions are taking place, let us hope that they will not take too long and that the results will soon be announced to the country.

4.56 p.m.

Baroness EMMET of AMBERLEY

My Lords, I had the privilege of asking a Question at the beginning of today's sitting and I must confess that I was deeply shocked and saddened by the completely blank Answer which I received from the Minister. I did not think it was possible that he could come here and give no Answer whatsoever to the Question that I put to him. I do not blame the Minister, but I blame the Department who briefed him, because the figures for which I asked should be known and familiar to everybody.

I shall limit what I have to say to two points. May I refer to what the noble Lord, Lord Walston, who initiated this extremely interesting debate on home produced food, said about the war? During the war, food was our big problem. I was rearing four children at the time and had great difficulty in feeding them. The result was that one developed a great deal of ingenuity. I kept rabbits, chickens, guinea fowl, the family pig, geese and goats. The kids were a great help with the meat and the milk went to the elderly people in the village who were short of it. Also we reared a turkey for Christmas, but unfortunately the old retainer who looked after the turkey became so fond of it that when the time came to cat it she would not have a single morsel, although the rest of us enjoyed it.

Even the people who lived in towns had ingenuity and developed ways of growing food. I remember Lady Horsbrugh telling me that she was determined to have tomato plants in her window boxes. She knew where to get the plants, she had the window boxes but she had no soil. That night a bomb fell in the square in which she lived and the soil arrived in her window boxes. The problem was therefore solved in that beautiful way. These may sound trivial matters but the fact is that, as the noble Lord, Lord Walston, has said, during the war there was a spirit in the country, which is missing at the present time, of trying to produce food and being more self-sufficient in every way.

I personally very much regret the disappearance of allotments. Allotments should come back as quickly as possible. While I was waiting to enter this afternoon, somebody suggested to me that a very good place for allotments is along those disused railway tracks which are at the moment lying waste. Therefore, may I ask the Ministry to do all they can to try to revive in this country the spirit of self-sufficiency in food production? To grow tomatoes in a window box may sound a little thing, but it adds up if everybody does it. I think that in the noble Minister's country they say, "many a mickle makes a muckle".

The other point I want to stress is the question—and your Lordships will not be surprised at this—of fish farming. I am deeply disappointed in the White Paper. There is only one mention of fish on, I think, page 18, which refers to fish and fishmeal and shows that we import £122 million worth of fish and fishmeal. I should have thought this was money that could be saved by our becoming self-supporting—or much more self-supporting—in fish farming. I know that I have two sympathetic Ministers on the Front Bench opposite at the present moment, and I am making my appeal directly to them.

I should like the Government to help with three very short legal problems by which the fish farming community are hampered. These problems could easily be overcome by the Government, whereas it is much more difficult in a Private Member's Bill. These are the three points which I should like to put to the Government. The first is that fish farming should be recognised as part and parcel of the farming industry in the country, as it is in the EEC. If it were so recognised it would be in the White Paper, but it is not. It is a most valuable form of food production, and it is shameful that it should be so disregarded by a Ministry which calls itself the Ministry of Agriculture, Fisheries and Food. Where are the fisheries?

The second point is an important one. It is that free swimming fish, in an area which is recognised and licensed as a fish farm, should be recognised as the property of the fish farmer and protected from interference. I do not know whether your Lordships realise that at the present moment anything that is on the bed of the sea belongs to the fish farmer, but anything that is swimming free belongs to anybody who can catch it, even though it may be within the farmer's own fish farming area. Fish farmers need protection from skin divers and so on, very urgently.

Thirdly, the size limit for fish, and the close season for certain fish where they are part of the production of a fish farm, should be lifted. At the present moment, there is a close season for sporting fish such as trout and salmon, and where they are produced in a fish farm this close season should be lifted, as also should the size limit where it is a question of fingerlings and so on, which are needed for the repopulation of a fish farm.

These are three quite simple legal matters. It would not cost any new money; it could be put through by the Government on the nod, because I am quite certain that nobody would be against these regulations being redressed. So I appeal to the two Ministers sitting in front of me—I am very glad that the noble Lord, Lord Hughes, has not had to go before I said this—to help, as far as they can, in putting these matters right. It would be a very great encouragement to the fish farming industry and would help in increasing the production of food at home, which is what the noble Lord, Lord Walston, hopes to do. So I hope that my very short intervention will have some success.

5.4 p.m.

Lord SAINSBURY

My Lords, first I should like to thank my noble friend Lord Walston for giving us the opportunity of discussing this very important White Parer. Food from Our Own Resources, and also the Report of the Select Committee on the stocktaking of the Common Agricultural Policy. Secondly, I wish to apologise to your Lordships for the fact that owing to a previous engagement I shall have to leave your Lordships' House before the end of this debate.

The first paragraph of the introduction to the White Paper clearly states that its subject matter directly concerns not only those who work and invest in the agricultural industry, but also those who work and invest in food processing and distribution. In paragraph 12 on page 4, it also states that, An expanding home agriculture would also provide the basis for a bigger United Kingdom food processing industry. Not only would some agricultural imports be replaced but there would also be a benefit to the economy and to employment from the value added by United Kingdom processors. Perhaps I might crave your Lordships' indulgence to say a few words from the point of view of these industries. In the past, we have suffered from the interests of the processing and distributing industries being regarded as in conflict with those of the agricultural producer, whereas they have many interests in common. For example, both need to make profits if they are to have the necessary resources to maintain or improve productivity and efficiency, and both prefer stability rather than violent fluctuations in the price of their products. Consumer interests and points of view should always be kept in mind. For instance, it is obviously no use growing, producing or processing something that the consumer does not wish to buy or cannot afford.

There is also the general question which has been mentioned in your Lordships' House earlier, and was mentioned again this afternoon, of new investment necessary to achieve the new targets. The White Paper has little to say about the source of these funds. Would it be right to infer that the Government plan to achieve expansion by the improvement in farm gate prices which would follow phased devaluation of the Green Pound, rather than by new grants or subsidies? This would be understandable in view of the need for controlling public expenditure, but it would mean significant increases in food prices unless this was counteracted by consumer subsidies. It is also an obvious truth that we should concentrate production in areas where we know we have certain advantages from climatic conditions and can produce efficiently and obtain high yields. We are blessed with many good grass growing areas, and if we feed them with nitrogen we can become less dependent on imported grains as animal feedstuffs.

I welcome what John Grant, the Parliamentary Secretary to the Ministry of Overseas Development, said at the World Food Council meeting in Rome on 26th June. He stated that Britain would be making more use of nitrogen fertiliser to produce more grass, and so reduce the country's demand on world supplies of food grains. I quote: to demonstrate our political determination to make sacrifices to help the poorest and those most threatened by the spectre of hunger. However, I notice that the Government White Paper states that world supplies of nitrogenous fertiliser may be short over the next two or three years, until manufacturing capacity is increased. If we have to make better utilisation of our grassland it will require new investment in land drainage. No doubt farming experts, of which there are so many in our Lordships' House, although I do not claim to be one, would agree that a firm undertaking by the Government to maintain grants for this purpose at the current level, or better still to improve them, would help considerably.

My Lords, in reference to the Twenty-fifth Report from the Select Committee, as one who has criticised the Common Agricultural Policy in the past, I freely admit that it has shown itself more flexible than some of us expected, but we still have to face the problem of surpluses, in particular of milk products and cereals. It is as well to remember that the occasional surplus is better than the occasional shortage, as we experienced recently with regard to sugar. I also welcome the greater use of consumer subsidies in the disposal of surpluses, rather than sales at ridiculously low prices to the Soviet Union and elsewhere.

I welcomed particularly the beef vouchers for old-age pensioners. In my view, the right honourable gentleman Mr. Peart obtained a notable victory for beef producers in getting the agreement of his colleagues in the Community on maintaining returns to farmers by deficiency payments. In my opinion, this is infinitely preferable to piling up stocks in cold stores, which is very expensive in terms of cold storage costs, and when meat is taken out it is likely to be fit only for manufacturing purposes at a much lower price than the fresh product.

My Lords, among the stated objectives of the Common Agricultural Policy is the importance of reasonable prices for consumers. It is sometimes overlooked that foods compete with each other—for example, meat with poultry, beef with pork and lamb, margarine with butter. Many housewives are good judges of comparative values, and buy accordingly. This should reinforce the need to relate price levels to the supply and demand situation for each product. There is also need for improved consultation between the producer and trade interests for their mutual benefit and understanding.

In conclusion, may I say that no one can doubt that the continuing expansion of food production in the United Kingdom is in the national interest. I agree with the White Paper when it states that a return to a period of low prices such as we experienced in the 'sixties is unlikely, although it is always hazardous to predict future trends as there are so many factors which can affect price levels. What applies to prices also applies to predictions about future world food supplies. Agricultural expansion requires the use of resources. It is the task of the Government to try to ensure the right use of resources, to make an assessment of comparative costs, and to determine priorities. But we will not get the desired increase in production without the confidence of the farmers and without assurances about their future returns. The task of the Government must be to give farmers the necessary confidence to plan ahead and take long-term decisions. I am confident that the Government will respond to the challenge.

5.17 p.m.

Lord CRAWSHAW

My Lords, I am sure the whole House will particularly welcome the speech from the noble Lord, Lord Sainsbury, because of the unfortunate distress he must be suffering at present, about which I heard on the wireless on the way to London. Along with many others, I welcome the initiative of the noble Lord, Lord Walston, in introducing this debate this afternoon. I was particularly glad to find myself in total agreement with so much of what he said. I have always respected the deep thought that the noble Lord has given to the many agricultural problems, but I thought this afternoon that I might have to question one or two of his conclusions. I am delighted to find myself so much in agreement with him. If it is not too presumptuous of me. I also wish to say how much I appreciated the speech of my noble friend who spoke from the Opposition Front Bench. I have known the noble Earl perhaps longer than any Member of your Lordships' House. I think I can say that this afternoon he showed to greater advantage than I can ever remember, and I agreed with every single word he said. My only regret is that I may be repetitive in my speech.

My Lords, I have a little good news for your Lordships, in that when I was in the Printed Paper Office looking for the Twenty-fifth Report of the Select Committee, I picked up the Sixteenth Report—and unless your Lordships would like an assessment of the Lomé Convention I will leave that for another occasion and concentrate my attention on the Government White Paper, Food from Our Own Resources. I am among those in this House who over the past decade have been advocating the increased supply of food from our own farms. We have not always had total support because of the recent belief that plenty of cheap food was still available from abroad; in other words, from our old Empire. There is much less talk of that now. I warmly welcome the White Paper; I might even have written it myself. It is becoming more and more obvious every day that we must depart from the present situation, in which we have to buy from abroad with a fast depreciating currency nearly half the food we eat, including 30 per cent. of the food that could be grown here.

British industry, apart from failing to emulate the agricultural output at level prices, should be doing far more to help cure our present habit of buying millions of depreciating pounds' worth of foreign plant and machinery. I found it ironic the other day to visit the national grassland demonstration at Stoneleigh to find that 80 or 90 per cent.—and that is no exaggeration—of the machinery on show was German, while only a stone's throw away, in Birmingham and in Coventry, millions of pounds of taxpayers' money was being used to subsidise unprofitable and overproduced motor cars.

I am feeling particularly sore on this point, because only 18 months ago, unable to find a suitable British plant, we bought a Dutch grass drier for a great deal of money. To take advantage of their 9½ per cent. rate of interest, we arranged a loan from the Dutch, repayable over five years. In the comparatively happy days of Christmas 1973, the pound was worth 6.3 Dutch florin, while today it is worth 5.3. Therefore, all plans have been drastically upset. Add to this illustration the problem caused by the Green Pound, which has been referred to by several noble Lords today. Nobody can refute my contention that the first essential in any programme for the future of agriculture, or any other industry for that matter, is the protection of our currency and in that light I welcome what the Chancellor had to say yesterday.

Unfortunately, this instability is still being compounded by the introduction, or threatened introduction, of the notorious and excessive capital taxes. Several noble Lords have mentioned this today. The noble Lord, Lord Walston, said that it should be the subject of a separate debate, but I find it so fundamental to our problems that I cannot reconcile it with the Government White Paper, which in paragraphs 4 and 23 stresses the importance of stability. The only thing certain in the present state of bewilderment and uncertainty is the current wave of cynical resentment throughout the farming world, and this is hardly the atmosphere in which to fashion the spirit of co-operation and trust between the Government and farmers which is so needed if the intentions of the White Paper are not to be stillborn. Surely, to gnaw away at the capital and lifeblood of such an industry can only frustrate the cause of social justice, as well as strangling any plan to produce more food.

I mention social justice, because I believe that there are many people who consider that these taxes are, in some way, a form of social justice. I do not mean those who encourage inflation in order to destroy our society; I mean those who are genuinely concerned. As I understand it, social justice—and I think this needs a little scrutiny—means, above all, that the interests of those not in a position to protect themselves should be safeguarded. The only realistic way to pay out adequate social benefits is to maximise the profitability of industry, and that really means private enterprise. Agriculture in this context is not only our largest industry in toto but also the largest collection of small privately owned firms, which form the most vigorous sector of our economy. That is by way of a diversion, but I felt that one ought to try to look into the minds of those who believe that these taxes are in some way socially justifiable.

Some people also base their assumptions on the basis that these capital taxes are here to stay, that farms and properties will inevitably be fragmented and bought by the State, which would henceforth act as landlords. I do not accept that. The State very often is bad at business, and very often not as good as the private individuals at labour relations. Also, the Government's efforts to improve efficiency by gradually reducing numbers of smallholdings through the farm structure scheme will be threatened. It is realised that the large owner is likely to suffer more than the smaller, but 15 per cent. of farm businesses—that is, the larger farms—produce more than half of our total output.

It is not only the owners and the employers who will be adversely affected by fragmentation. Most of the highest paid and contented employees in the industry work on these larger units and gain satisfaction from being part of a modern and efficient enterprise. Capital, or the word "wealth" in this context, means a new tractor or an improved milking parlour, and a denial of these things in order to pay a tax will have just as adverse an effect on the morale of the employee as the employer.

Taxes on land will have the further effect of bringing to a halt a large proportion of planned improvement work, such as new buildings, drainage schemes, et cetera. People will prefer to keep their cash liquid. Taxes on stock, such as on a dairy herd, may well prove to be the last straw to break the camel or dairy cow's back. There are quite enough headaches involved in running a dairy herd without adding this one to them. I know there are various forms of stock relief proposed for herds, but I do not fully understand how they apply to capital gains tax and capital transfer tax. I hope that the noble Lord, Lord Strabolgi, when he winds up, will be able to enlighten us.

I have dwelt rather at length on the Government's fiscal policy, because the fact is that it is more fundamental and of more concern to farmers than the Government's agricultural policy. The present situation may be a bonanza for the various accountants, solicitors, insurance and investment consultants and a host of middle men—I hope I have not trodden on any noble Lord's toes who indulges in any of these practices—but in this climate no more food will be produced, and that is the acid test. If the wealth tax is nevertheless added to the capital gains tax and capital transfer tax, can the Minister assure us that the Government will adopt the procedure of most European countries by allying it to income tax with a ceiling which restricts the total liability and ensures that the taxpayer can meet both taxes out of income?

Turning to paragraph 17, I entirely agree that agricultural workers will have a key part to play if higher output is to be achieved, and that they will need adequate incentives and facilities. A prosperous industry will pay a good wage. This is beneficial only if the value of the wage is maintained. But a good wage can be paid only so long as a realistic price is paid for food. Cheap food can only mean low wages. This point was stressed over and over again during the Common Market referendum campaign in relation to hypothetical cheap food from abroad. Many speakers said that it was morally wrong to expect this, and that it amounted to exploitation. So it is with cheap home-produced food. Facilities for agricultural workers mean, above all, housing, and here the matter of the service or tied house crops up. The Tavistock Report, of course, will deserve a debate by itself. But for the meantime, I would implore the Government to be careful before the total abolition of the tied house is effected.

The noble Lord, Lord Rathcreedan, mentioned the problem of the dairy farmer and the herdsman. I fully understand a point that I read in the farming Press mentioned by the noble Lord, Lord Walston, about the retiring farm worker. This is a genuine position, and in the debate on the Queen's Speech last November, I asked the noble Lord, Lord Strabolgi, whether he had anything to say about the idea of putting a retired farm worker at the top of the council housing list. He promised he would look into that. Perhaps he can enlighten us this afternoon. I believe that that is the first step, because we have to face the fact that the existing system in many ways is convenient, is efficient and the least extravagant. Other systems could work but they are likely to increase the cost of food, and we have to make up our minds whether we are prepared to pay for it. There would be extra cost of travelling, rent, the possible idea of licensing tied houses, and all these will ultimately mean that the cost of food must increase.

I have nearly finished. My final point concerns milk, and paragraph 35 onwards. I am glad that the Government feel that increased milk production should take overall priority. The White Paper rightly says that grass is the best and most suitable crop we grow. If I had not already spoken enough I would expound on this. Its conversion into milk is a familiar exercise in this country. Like other noble Lords, I am concerned that, as shown in Table 2 Annex V, in the EEC as a whole milk and milk products are now 2 per cent. overproduced. My other concern—and here I return to the nub of my speech —is that with the present fiscal policy farmers will find that their cows are the most readily realisable asset they have, and will gradually be forced to sell off to pay taxes. You cannot run a longterm project like a dairy herd on a hand-to-mouth basis like that; you cannot run the most important national industry on a basis like that; my Lords, you cannot run a sweet shop like that.

5.32 p.m.

The Lord Bishop of WINCHESTER

My Lords, I also want to thank the noble Lord, Lord Walston, for introducing this important debate. I wish that I did not have to be under some discourtesy, because I understand that normally when one speaks in a debate one shows enough interest to remain until all others have spoken. Unfortunately, I am under a courtesy obligation to appear a little later this evening in the Mansion House—and in a considerably more complicated costume than I am wearing at present. However, I shall stay for as long as possible because this is a debate of such importance.

By the nature of the case this debate is bound to be repetitive; yet noble Lords will readily concede that it cannot be repeated too often that the context of this and similar debates is a world shortage of food. This state of affairs is due to a variety of causes. We are no longer dealing only with the perennial poverty of large populations living on or below the subsistence level in the developing countries. That distressing problem has been compounded by unprecedented monsoon failures in recent years and the dramatic expansion of the great deserts, and by bad harvests in the major grain exporting countries of the developed world. Reserves of wheat, as we are told in paragraph 29 of the White Paper, which four years ago were about equal to the whole volume of world exports, have shrunk to only a third of that volume; yet at the same time the developing countries are having to a much greater extent to join the bread queue in the world market since their own production, in spite of the so-called Green Revolution, falls further and further below their needs as a population.

Demand is rising, supply is decreasing, so prices go up. High prices hurt everyone. We know they hurt us, but they hurt him who can pay more a lot less than they hurt him who can pay nothing. In Britain a high price on the world food market means subsidies to the consumer; in India it may mean death to the consumer. So currently the World Food Conference recommends that at least 10 million tons of grain is contributed as emergency food aid each year from 1975 to meet the present needs in developing countries.

What is happening to cereals is typical of what is happening to mankind's food in general. Even if the White Paper had included food from the seas the story would have been the same. But cereals are more than typical; they are, in a unique way, staple. Noble Lords will recall the statement in the White Paper that cereals are the most important group of products in world food trade, and, either directly or indirectly as animal feeds, they provide most of the world's basic food requirements. Moreover, considered directly as human food they are cheaper to produce and easier to store and to distribute than any other forms of food. So for most of mankind cereals are synonymous with food. In the last resort, they are the thing you buy with the money you make by producing something else.

Only when they are in surplus can cereals be a cash crop. For most of mankind there is no alternative to cereals. Other kinds of food are extras, even when eating habits are adapted to include soya or other augmented proteins. It is certainly true, as the White Paper says, that, either directly or as animal feeds, cereals provide most of the world's basic food requirements, but that bland either/or, if it is applied anywhere outside the wealthy over-consuming nations, smacks of the same culpable lack of awareness as that more famous inanity, They have no bread. Let them cat cake". For most of mankind neither meat nor milk products are an alternative to cereals. So every time grain appropriate for human consumption is used up in the production of meat or milk, the prospects of keeping human beings alive is being reduced. My plea this afternoon is not only to Her Majesty's Government but to all who have occasion to plan, however locally, part of our nation's agricultural policy, that we keep this global perspective of human welfare ever in mind.

In one sense the White Paper recognises the global context. It shows a detailed knowledge of the short supply of food in the world market and recommends a policy with the consequential high world price in view. But the conclusion it draws from this context betrays a narrow Western insularity. The world perspective to which I have drawn your Lordships' attention demands an agricultural policy in which productivity is paramount. But this White Paper presents one in which profitability is paramount. Food is regarded in exactly the same way as any other industrial product—something to be sold—and choice of product is determined solely in terms of short term financial return. I quote: It is in the national interest to concentrate on those commodities which seem capable of yielding the greatest economic return to the nation. This is farming money rather than farming food. Food is an incidental means of making money. All very well for us, but for most of mankind money is only a means of obtaining food.

I am of course open to misunderstanding when I put it this way. I am not advocating another worldly altruism. Those who live by growing the nation's food must of course receive a proper, and I would say a better, remuneration. That is what they work for. But it is certainly not all they work for. The farmers I know, the ones who really farm their own land, are concerned with food for its own sake, not merely as a means of making money, and if they could have their way their choice of priorities would be governed not only by the immediate profitability of this or that product, but certainly by two other considerations as well; what foods are most genuinely needed to keep people alive and healthy, and what food is a particular farmland best suited to produce? Provided a fair profit can be assured to the farmers, those I know would prefer to farm in the way that is most in keeping with the climate and nature of the land and in the way which enables the greatest number of consumers to have the food they really need.

I welcome gratefully the White Paper's acknowledgement of the special place that grassland should naturally have in a good British farming policy when it says: The favourable climate for the growth of grass makes this country particularly suited to milk production. It also says: The potential from greater use of homeproduced grass is very great. It is important that the size of our national herd and flocks should not outrun the pace of improvement in the use of grassland and the conservation of grass. it concludes that With the wider application of better methods of grassland production and the more general use of well-known and tried conservation techniques for grass, a higher density of dairy cows could be supported without increasing the amount of imported feed.… That would be an altogether admirable policy, reflecting a far-sighted concern for the people of the world as a whole, together with the people of Britain and the European Community—a steady substitution of pasture and conserved grass feed in place of the home-grown and imported grains that are needed to swell the world's supply of human cereal food —and all achieved while maintaining the level of milk production we knew, or even slightly more, before the recent decline.

But no, my Lords. That is not what is intended. The last sentence I quoted from the White Paper does not end where I stopped— … without increasing the amount of imported feed …". It contains the qualifying phrase, "required per cow". Thus, if one has more cows one must import more feed. In fact, the Government intend to increase the amount of domestically Brown cereals to be used as animal feed by an extra 1.4 million tons, according to Table 2 in the White Paper, and also continue to import 4 million to 5 million tons of grain for animal feed, in spite of the drastic situation in the world cereal market. Greater advantage is to be taken of our natural wealth of pasture and grassland, not in order to alleviate the world cereal situation, but because the Government have decided that the most profitable short-term objective is to increase our production of milk by 20 per cent.

It might be said that as long as total food production of all sorts is pushed up, it does not matter whether it be cereals or milk. But whereas I have already shown the vital necessity of more cereals for mankind as a whole, there is nothing like the same call for more milk products. Of course we must recover the shortfall of the past 18 months and ensure that cheese factories in Britain do not stand idle. But I seriously question whether a 20 per cent. increase in milk production is a sensible target as the number one objective in the national policy in face of the existing over-production in the European Community as a whole. The stocktaking of the Common Agricultural Policy noted as the primary problem the fact that milk production is the sector which has a persistent structural surplus and is also the one with the highest budget expenditure. There is a grave need to achieve a better balance and a wider sharing of responsibility for the surplus.

The noble Earl, Lord Ferrers, included dried skimmed milk among the derivatives of food surpluses which could he distributed to alleviate need in developing countries. But I remind noble Lords that there is some argument as to the value of skimmed milk as, according to the White Paper, "a valuable protein food for developing countries". It is at best an emergency food, as has been proved time and again in major disasters, and when the disaster has passed what the people need for continuing life is more abundant cereals and technical aid to help them produce their own vegetable and animal fats and proteins. So on balance, I would welcome a policy of improving by all possible means our use of grass in order to eliminate as far as possible the use for animal feed of any cereals that could serve for human consumption and, within those conditions, of building up our output of milk with its by-product, the beef from the dairy herd, but not to make this so outstandingly the main thrust of new policy as to add greater imbalance to the Community's marketing arrangements.

The principle of respect for the quality of the land and the climate of a particular region makes me endorse the emphasis which the White Paper gives to upland farming, and my other principal concern for the world perspective adds point to its encouragement of wheat farming in Britain, though I would have preferred to see a larger proposed increase than the 9 per cent. of the White Paper. I confess that I was considerably angered by the suggestion that it was beyond the wit of British invention still to bake an English loaf from English wheat.

The other feature in the White Paper which I welcome is its assent to the Economic Community's declared intent to relax the terms of the Common Agricultural Policy in order to grant more favourable terms to the agricultural exports of developing countries. Paragraph 13 of the White Paper says: It is important to frame our policies with regard to the interests of developing countries as producers, particularly of those commodities which we do not grow ourselves. But if developing and developed countries are ever to reach agreement on the prices and supply of commodities, that agreement must surely cover all commodities, not only those from the developing countries. Fair terms of trade are what the developing countries need far more than aid even food aid. The original simple laws of supply and demand are still the best. They are tough and they are competitive, but they are just and anyone can learn to play the game.

What makes the game impossibly unfair is the use of superior bargaining positions to evade the consequences of supply and demand by intervention and manipulation. The Green Pound is only one of many devices with which we have distorted our trade relationships. In the long run these invariably come home to roost to our own disadvantage, but in the meantime they have condemned other struggling peoples to complete helplessness. Will the Community stand by its agreements, as at Lomé for example? When it became self-sufficient in beef, the provisions to allow beef exports from South America were unilaterally suspended by the Community. Will our policy of increased sugar beet production tempt us to renege similarly, either on our own or in the Community as a whole, from our agreements with the cane producing countries of the Commonwealth? The price of that kind of honour is eternal vigilance.

My Lords, in all this I am not standing for any unrealistic idealism. Britain's first responsibility, like that of every other nation, is to give her citizens adequate and secure supplies of food. But to try to do that without taking the world situation, mankind's situation, into the picture and into the policy at every point is truly unrealistic.

5.50 p.m.

The Viscount of ARBUTHNOTT

My Lords, at this stage in the debate rather than stick to any previously prepared notes I will take up some of the remarks made by previous speakers and add some comments of my own. First, like other speakers. I should like to congratulate the noble Lord, Lord Walston, on the work he did with the Select Committee and to thank him for introducing this debate. May I also wish him well as a member of the delegation to the European Parliament where he will add a sound agricultural voice to the delegation and its deliberations. Various speakers have raised points that I should like to have made myself. I can only endorse what the noble Lord, Lord Walston, said about the uncertainties that affect the industry, particularly in the fields of land ownership and tied cottages. These subjects have been taken up by later speakers. Indeed, the question of the concern and lack of confidence due to the threat to the capital invested in the industry has been most ably outlined by the noble Lord, Lord Crawshaw, and I can only endorse and support all that he has said.

My main personal comment would have been in relation to the stocktaking exercise and to the comments in the White Paper on the same subject, and I would ask the Government to take a very urgent and serious look at the question of the monetary compensatory amounts. In paragraph 56 and also in paragraph 11 of the White Paper the Select Committee referred to the fact that there must be some adjustment. Whether or not the adjustment goes the whole way to repair the discrepancy is a matter for judgment. But everyone concerned with agriculture would also hope that the adjustment will he linked with a system for adjustment in future if there are any further changes.

The other matters on which I should like to comment are all concerned with the White Paper, Food From Our Own Resources. A problem which faces the the industry today and which so far has not been mentioned is that of marketing, and I should like to throw in some rather philosophical comments. A number of people have suggested that apart from a thorough monitoring system for agricultural marketing there must be greater recourse to producer-run boards of one kind or another, even though there are commodities which cannot possibly be tackled in this way. There should be producer-imposed levies or some large self-disciplining co-operatives (which I know people would prefer) which are more concerned with selling for the farmer than simply selling to him. But I believe that a balance has to be struck between this form of discipline, however self-run and self-imposed it may be, and that characteristic of the British farmer which is enshrined in the word "individualism". By an independent attitude to all around him and a regard for his land and his countryside he has taken the industry to the high place at which it is today. But how far—and I think we need to be careful about this—can we sacrifice this spirit of independence for what may be a necessary spirit of interdependence in marketing?

I should like to comment on the current fodder situation; the conservation of food for winter feeding which is of considerable concern to the industry at present. I would illustrate two agricultural aspects which I think are important for our deliberations. One is the fact that, with the emphasis in recent years on the expansion of livestock production, particularly that of beef, farmers were lulled into a false sense of security. They were lulled initially by the low price of cereals in relation to cattle-feed costs, and then by mild winters, into neglect of one of the old principles of the farming world; that is, the need to be as self-sufficient as possible in fodder crops and grass conservation and storage on your own farm. Then there were those who expanded and expended capital on reseeding, fencing, water supplies and drainage to improve their management capability and their stocking rates. They erected silos and bought improved machinery so that they could conserve their own grass and grow their own fodder crops to better advantage. They now find themselves paying excessively high interest rates without the expected returns on those investments. I must admit that I am slightly less sorry for what one might call the foolish virgins, even though they were led up the primrose path by the emphasis on expansion of livestock farming, than I am for those who have expended their capital and now find themselves in a parlous state. The added threat of capital taxation to those who have expanded, and with Rood sense, is one of the sad aspects of the industry today.

The other point which I would have taken up myself. and which I should like to follow up, is that made by the noble Lord, Lord Mackie of Benshie, on the subject of loss of land from agriculture to development. In paragraph 16 of the White Paper there is mention of 144,000 acres of agricultural land going to other uses in an average year. But 69,000 acres of this land were transferred to forestry and woodland. Before anyone else introduces this point, I should like to say that I do not necessarily consider this a loss to agriculture or the countryside. It is fair to point out that, in the border uplands of Scotland and the North of England, the present very high investment in forestry land has been equalled by a larger number of hill cows and beef cows and sheep drawing subsidies than ever before. There has been an equal expansion in forestry and hill agriculture.

The problem about the loss of land to agriculture needs watching in two ways. I am sure that the Ministry and the Department of Agriculture need to stiffen their resolve in considering applications for the development of land. I believe further that the limits at which they can look at acreages of land should be lowered from the present figure of ten to five. Equally, I think we all need to strengthen our resolve, and if we can. give strength to the arm of the agricultural Ministers and the officials of the Department so that they can pay greater regard to the importance of agricultural land in future, and not be overruled by other Departmental Ministers and officials. This will not be any easier if the Community Land Bill goes through in its present form, because, so far as one can see, it gives unrestricted powers to local authorities in this field.

My Lords, MCAs, marketing and loss of land lead me to the final point I wish to make; namely, the consideration which we must all bear in mind that agricultural land and the countryside did not just happen. I wish to pay tribute to those who have already spoken of the need for a wider regard for the future of our agricultural land in this country. Where it is best used, and most productively used, in the best agricultural sense, I am sure that our people and our Governments will pay due attention. It is in the areas where there is less opportunity for full agricultural development that I should like to see more attention paid by European institutions, by our Government and by the agricultural establishment. I wish here to pay tribute to the noble Lord, Lord Hughes, and the team of United Kingdom negotiators who have produced the Less-Favoured Areas Directive in its present form. This recognises the importance of the hills and marginal lands of this country, and of other European countries, for their agricultural value primarily, but it builds into the agricultural thinking the ability to supply other than agricultural income-producing facilities.

I again urge the Government and the agricultural establishment to retain as much of the management of the activities that are possible under that Directive within their own hand. I believe that they may be fighting shy of handling benefits for tourism, amenity benefits, and benefits for other than purely agricultural uses. I urge them to maintain the whole farm approach in both agricultural land management and in the advisory services. Once again I should like to thank the noble Lord, Lord Walston, for giving us this opportunity of discussing both his Committee's work and the White Paper.

6.3 p.m.

Viscount THURSO

My Lords, I, too, wish to thank the noble Lord, Lord Walston, for giving us this opportunity to discuss this important White Paper. I welcome this opportunity. I also welcomed the White Paper until I opened it and saw the first paragraph of the introduction, whereupon I noticed that fishing had suddenly become divorced from the Ministry of Agriculture, Fisheries and Food, and was not to be discussed and thought about in the same context. I can only assume from this that the Government expect us to eat chips without fish, to withhold from a main dish on a Friday and to give up our smoked haddock with our high tea; and that, further, they have in mind that we should no longer use fishmeal in agriculture, and should instead use imported nuts, beans and seeds wherewith to balance up the extra cereals which we shall be growing in order to carry the increased dairy herd.

I do not seriously believe this, my Lords, but certainly one can read the White Paper in this way. I, for one, am most disappointed that it should have been possible to start considering the needs of agriculture, and the needs for feeding this country, without considering our fishing fleets. In my view, this is a very serious omission from a White Paper that is concerned with food and which is supposed to examine how we feed ourselves from our own resources, and which, at the same time, includes a figure which shows that we import £122 million-worth of fish and fish products annually, and that the bill for fish and fish products has risen by 27 per cent. between 1972 and 1974; and no doubt is rising fast at this moment.

Here surely is an area where our own resources not only could, but should, be called upon to help feed us. The fishing industry can help the farming industry, as I have said, by producing livestock feed. In this context I wonder why we discourage commercial fishing for species which, although not suitable for human food, are used by other countries, and are fished out of our waters by other countries, to be made into fishmeal and sold back to us as animal feedingstuffs. We must do more to help and encourage our fishing fleets and to help them to assist our agriculture. We must do more to conserve the stocks of fish from which our fishing fleets take their catches to feed us and supply our agriculture.

I find most parts of this White Paper rather vague and sweeping—almost as vague and sweeping as some of the speeches I make in your Lordships' House—in its treatment of the subject under review. Yet it talks blandly about offering the farmer a sufficient assurance of the level and of the stability of his return. It does this at a time when there are two schemes—as we have already heard—running concurrently; one offering a subsidy to farmers to go out of dairying into beef, and the other offering subsidies for beef farmers to go into dairying. One point is clear: whatever this White Paper says, Her Majesty's Government will have to work hard to gain the confidence of the farming industry, especially when one considers that they no longer have a practical farmer in any position of day-to-day executive responsibility.

Among the tables of statistics with which the White Paper is adorned is Annex II, in which one sees a table demonstrating the average annual increase in farm product and decrease in labour force, and with it an increase in productivity. If your product goes on increasing and the labour force goes on increasing, so you must have an increase in productivity, because that is what it means. The White Paper seems to me to assume that this will go on forever as a sort of straight-line graph. I cannot believe that this is likely; I do not think that it is even desirable. Certainly by itself this Annex means little, and in my view it is dangerous to assume that this situation can continue for very much longer. I suggest that we have already gone far enough. We have depopulated the land for too long—certainly too long for the good of the farming industry.

The criterion we should be seeking in this context is not productivity per man but productivity per acre. The farmable acreage of this country is not only limited; it is shrinking. Many noble Lords this afternoon have referred to the fact that we are continuously losing good agricultural and arable land to other forms of development. We cannot go on borrowing land from the hills in order to pay back what we take for other purposes. We have to face the fact that if we want more per acre we shall need more people working on the land, not less. We have pruned our labour force enough.

My noble friend Lord Mackie of Benshie referred to the farming ladder. He might equally have referred to the mix of farm size. There is no intrinsic merit, for every purpose, in large farms which makes them better than crofts. For some purposes the small unit is actually better and more efficient than the large. We must take a second look at these latter days clearances and, if we do, we shall suddenly see again the value of the crofter and the smallholder. I was brought up on the old saying that the best manure is the farmer's boot. There are dangerously few boots treading the acres of Britain today. We will gain nothing by diminishing their numbers. Little or nothing is said in the White Paper about how we are to keep our farm labour force and how to foster our crofters and smallholders from whom, very largely, come the workers who go to help on the larger farms and from whom come the larger farmers of the future.

Finally, my Lords, I endorse the plea of my noble friend Lord Mackie of Benshie to instil confidence in the farming industry; to make that its priority; to safeguard the supply of capital to the farming industry and to ensure an adequate flow of capital into the industry and to safeguard the essential bottom rungs of the farming ladder. I also endorse the pleas of other noble Lords that the Government be not afraid of surpluses. I hope that they will realise with what grave suspicion the farming industry regards Government—not this Government, but all Governments. I hope that this Government will work hard to dispel that suspicion and instil that confidence so that the White Paper will not be just another bureaucratic belch from the churning paper in the rumen of Whitehall.

6.12 p.m.

Lord RITCHIE-CALDER

My Lords, I want to thank my noble friend Lord Walston for introducing this debate, and I am particularly grateful for his having started his speech by putting the whole situation in historical view. In fact, I felt tempted—but I will restrain my temptation—to go further back, if only to point out that all civilisation has been based on the tillers and that all through history the tillers have been the exploited part of the community. They have had to carry the weight of the priesthoods, the warlords, the moneylenders, the artisans and so on which formed the city civilisations. In recent history we had, in the 19th century, exploitation of the underpaid tillers in order to produce inadequately (at least it was not effective) the food for the underpaid industrial workers. It was then that we moved into the wider exploitation of the tillers of the wider world. I point out that one of our problems today when we look at the situation in West Africa and so on is the fact that we have in the course of our history taken land out of food production—food in the sense of subsistence or provision for the people on the ground—and have turned it into such vast plantations as those which produced margarine for the industrial population of Britain. We did this at the expense, now, of the people who have to turn back these plantations into producing real survival food.

This is a problem which has been with us through the whole of history. I do not regret having to say, though some people hesitate to say it, that the price of food will never be cheap again. My Lords, food has always been cheap, too cheap in terms of what is the return ultimately to the people who produce it; and this has had the effect of holding back production because the people who were producing the food were not getting adequate returns. I am not talking about successful farmers, or landlords; I am talking about the tillers, in the total sense of the word, anywhere in the world, including this country. It seems to be that we are now facing the facts of life. The price of food is relative. If people are hungry and they have no means to purchase food, therefore they have in the widest sense to make food cheap and totally available. We have a compulsion to produce food which will be available to the people who need it. I repeat that the price is relative; but it must not be at the expense of farmers.

I have quoted in this House before, but it is always appropriate in the circumstances, the epitaph of the Canadian farmer in the 1930s: Here lies the body of Farmer Pete, Who died from growing too much wheat. I quoted it in India and I got a reply from an Indian student: Here lies the body of Achariya, Who died 'cos Peter's wheat wasn't here I quoted it in the London School of Economics and a smart guy said: Statistics prove one must be shammin' If there's too much food, you can't have famine. The answer is that we have famine and we are liable to go on having it. We can have food in abundance; still people starve to death.

Therefore what we are talking about is not the cheapness of food, or the cost of food; it is the failure of adequate distribution. That is what we are concerned about. When we are talking about what we are going to do to safeguard the British farmer—and I agree with what is suggested in the White Paper and I have other suggestions—the fact is that we are talking here about something which is of real concern and desperate concern to all of us. As the White Paper says, and as anyone who knows anything about the matter says, Britain is moving back (I hope moving back) to producing food from our own resources. That is the only contribution that I can see that we in this country can make to the grotesque food situation throughout the world. And we do so simply by withdrawing our demands on the food which ought to be going to the starving.

I notice with some approval, and I am grateful that it is in the White Paper, that our demands of wheat and feeding-stuffs have been reduced (from 12 per cent. in the case of wheat and 20 per cent. in feedingstuffs) to 5 per cent. last year. This I regard as a contribution to the world situation. There is not much we can do in an industrialised country like ours with the demand by our own population on resources which we are looking to the farming community to sustain.

It is to me totally ironic that we should be discussing this matter today. For the last 40 years I have been involved in the world food situation and nutritional problems; and yet we seem to have forgotten all the lessons that we ourselves learned. It is important, as my noble friend Lord Walston re-emphasised, that we not only get back to the spirit of 1940 but to the realities of it. We were then facing a siege economy and we had to realise what our resources amounted to and what we were capable of doing by our own efforts and by our own imagination.

I would remind your Lordships that we went into the war in 1939 as a malnourished country. There was a high state of malnutrition, throughout the country; there were committees against malnutrition: there were the hunger marches in the 1930s. During the war we had been reduced to a situation which, I suggest, we should be facing up to today. We had depended on our own resources and the spirit of our people not only to produce but to accept what was then the nature of the case. But we must remind ourselves that we came out of it a healthier country than when we went in. We forget sometimes there is a form of malnutrition which is the malnutrition of the well-to-do—what I call "death on the expense account." We had to cut back and share out in the war. This meant realistically that not only did we meet the situation we are now looking at again in this White Paper, but we emerged a very fit people. It is regrettable that we have to be reminded of this.

I was looking at the questions raised in the White Paper about what we should be doing about regeneration of grasslands, but I have been here before. We went through that with Sir George Stapleton in the 1930s and the question of research which my noble friend Lord Walston rightly mentioned. Whatever my noble friend on the Front Bench may say, what we are spending on research is not enough in terms of the situation which we are now facing. It is not a question of whether you can save on research, or whether it is adequate for what you think; you have to do a great deal more, and this is the challenge of our time. We have to employ our ingenuity to meet the situation. We did it during the war and we can do it again.

I come back to a fault which the nobie Viscount, Lord Thurso, has pointed out, as did the noble Baroness, Lady Emmet of Amberley. It is a curious phenomenon that we have the "Min. of Ag. and Fish" but we get a White Paper entitled: Food from Our Own Resources in which fish is deliberately and specifically left out. I am not thinking just about the sea fish catches, but about what the noble Baroness, Lady Emmet of Amberley, is always emphasising: What are we doing about aquaculture? What are we doing about fish farming? This is part of farming. It should be as much a part of the farmer's concern as growing potatoes and grain. We should look around the world to see how far short we are falling.

The irony of the situation is that lots of us, farmers and research experts, have been going around the world wagging our fingers at the developing countries, giving them do-it-yourself instructions. But we did not take the do-it-yourself instructions ourselves. We have been telling them what was good for them, but it was also good for us. I recall, in emphasising the need for agriculture, that throughout South-East Asia, in the Middle East, particularly in Israel, the production of food from farms in the shape of fish cultivation is an enormous contribution. When the noble Viscount, Lord Thurso, said we were going to have the chips without the fish (or something to that effect) I recalled that in South-East Asia they planted their fish supper at sowing time. The paddies were flushed with water and the fingerlings were put in. When the paddies were drained to harvest the rice there was the fish supper ready made.

We have to consider seaweed again. I am not talking vulgarly about caller dulse and Fangle which I ate when I was young, but about the potentialities of harvesting the seaweed and using it at every stage right down to the refined stage, as the Japanese do in the shape of delicacies. You can do this in terms of manure or increasing feedstuffs and so forth. I was speaking earlier this year to the intensive farmers, the horticulturalists of the National Farmers' Union, and I pointed out that this country has been preeminent in the development of intensive farming. But they are now on a spot because they have found themselves trapped in the oil shortage. The oil problem is again a matter of missed opportunities. From the 1940s through to the 1950s we were thinking seriously about how we could make farms self-sufficient in terms of fuel, as the Israelis do. You can do it by the cycling of farm waste. You can produce methane. We want constructive management in this regard.

I should like to know what Rothamsted and the other research bodies are going to do, if there is a restriction on their resources, about things which people like Dr. N. W. Pirie have done so magnificently and imaginatively in terms of the protein. You can take what is now waste, the indigestible forms, and turn it into human foodstuffs. This is something which is not a matter of investment of money, but all we have to do is get enough imagination to call upon people, as we did in the war; and it is not a question of sacrifice but imagination and responsible leadership.

I am getting more and more concerned about the inescapable fact that we in this country are going to have a decreasing growing season in the future. I believe changes in climate will mean that we will need to look at the nature of our crops. There is no threat provided we have the imagination to cope. A new cereal has been established. I have been having arguments all day about the pronunciation. It is called "triticale". This is a hybrid between the wheat and the rye and it is extremely effective in its characteristics. It is drought resistant and cold resistant. It has a much higher protein content than either the wheat or the rye. It is very sturdy in relation to the amount of sunlight required. This is something which we should be developing. If it is a high source of protein, as claimed, as it is sturdy it is obviously tailor-made for these islands.

There are many other things we should be looking at, not only for adequate production for our own people, but in order to set an example. Your Lordships will notice I am not saying that we shall keep the rest of the world alive by exporting our surpluses, but we could set an example to the rest of the world by practising what we have been preaching. This is not a political situation; and I think the Minister of Agriculture was perhaps rather unwise to say in Rome in the opening days of the World Food Conference that we were facing malnutrition in this country. I do not think that for one moment.

What is more—and I have just caught the eye of my noble friend Lord Sainsbury—I will finish by saying that what he said concerning food technology is vitally important. We now have the capacity not only to avoid great wastages in food by processing, but we have a means, by utilising food technology, of adapting foods which are not palatable or which are not normally acceptable so that they may become part of our normal diet. For example, when I was young in Strathmore—a part of the British Isles which is familiar to many of your Lordships—Indian corn was something that was fed to chickens and not to human beings. Today it is a breakfast cereal, and this is simply due to the processing of the corn. We can do so many different things in these days. We can encourage people to eat what is good for them, but which they do not eat at the moment because they do not perhaps like the taste. All we need to do is use imagination and make full use of the many different processes available in food production, and food technology and we shall certainly be able to take care of our people from now on.

Lord BALERNO

My Lords, before the noble Lord sits down, I should like to ask him about one point. He mentioned triticale. As I understand it, one of the dangers of triticale is that it carries the ergot of rye. Does the noble Lord know whether sufficient precautions are now available to prevent infestation with ergot and the consequent unpleasantness to humans?

Lord RITCHIE-CALDER

My Lords, I am grateful to the noble Lord for for his question. This was indeed one of the difficulties about triticale. It is well-known that one can get the ergot-poisons of rye, which caused the "dancing" disease from which people suffered in the Middle Ages. As I understand it. work has been done in Mexico for Rockefeller Foundation, and assurances have been given. The side-effects might, as the noble Lord says, be serious but they can be taken care of.

6.34 p.m.

Lord VERNON

My Lords, the aim of expanding food production in this country and reducing our enormous import bill of £3,000 million a year is bound to appeal to all of us, and to none will it appeal more than to the hungry millions, to whom the noble Lord, Lord Ritchie-Calder, has referred in his speech. These people will be able to eat some of the food we might otherwise import. I, too, should like to say how grateful I am to the noble Lord, Lord Walston, for giving us the opportunity of debating this very important subject.

The doubts which I have are whether the White Paper really gets to the root of our problems and how it is possible to reconcile the intentions of the Government, as stated in the White Paper, with some of their actions in certain fields, which seem to be completely contradictory. The first contradiction I should like to refer to is that relating to land ownership and capital taxation. I do not wish to deal with this at all fully because it has already been covered by my noble friend Lord Ferrers; but I do not think it can be emphasised too often that 90 per cent. of the land in this country is still privately owned, and until the Government come forward with constructive proposals about who is to replace the private land-owner—and no proposals have yet been forthcoming—it is extremely foolish, to put it no higher, to kill the goose which lays the golden egg. Notwithstanding the so-called concessions to working farmers in the Finance Act, a great many eggs that would have been laid are not being laid, and they will not be laid so long as the present Government attitude continues. One can only hope that the study mentioned in paragraph 55 of the White Paper into the effect of capital taxation on agricultural production will produce a more consistent Government policy.

The second contradiction has already been referred to by the noble Lord, Lord Mackie, and also by my noble friend Lord Arbuthnott, and relates to the loss of land for agriculture. According to the Government figures given in the White Paper, we have in this country 47 million acres of agricultural land and, leaving out of account the land lost to forestry, 76,000 acres are being lost to agriculture every year. One can look at this in another way. I happen to live in Derbyshire, and in that county we have 480,000 acres of agricultural land. Therefore, in seven years we shall lose nationally the equivalent of all the agricultural land in Derbyshire. In another seven years we shall lose all the agricultural land in Nottinghamshire and so on. Moreover, once this land goes under concrete you can never get it back.

Why is it taken? For housing, for industrial development, for recreation, for reservoirs and for motorways; at least those are the main uses. Can we afford it? I shall, of course, be told that all these things are needed and that as stated in paragraph 16 of the White Paper, Government policy is to ensure that agricultural land of a higher quality is not taken when land of a lower quality is available. But, my Lords, that is not adequate, and in any case much of the land that is of a low quality can be vastly improved if enough effort is put into treating it.

I should like to give a few examples of what is happening. Before the Third London Airport was scrapped for economic reasons, it was proposed to take some of the best agricultural land in Essex for a new town; and in The Times today we read that although there is to be no airport at Maplin, 1,300 acres of the land that was to be taken will now be used for housing development. In the Farmers' Weekly of 16th May. it was reported that 1,000 acres of the best farmland in Glamorgan was scheduled for quarrying. Earlier this year, 1,000 acres of farmland due to be flooded for a reservoir at Carsington in Derby shire was reprieved at the 11th hour after massive local protest and after the inspector at a public inquiry had ruled that alternative methods of finding the water by extraction from the rivers Der-went and Trent should first be examined. But why was not this examination carried out in the first place?

Then there are motorways. With their wide, wasteful verges which have to be expensively mown, they use up 40 acres a mile. And they are not even always needed. In the case of the proposed M.64, which is to link Stoke-on-Trent with the East Midlands, traffic requirements can be adequately met by dualling the existing trunk road, which is already dualled in some places, with an enormous saving in agricultural land and no farm severance. But that is not a solution which appeals to the planners; it does not look so good on a map. These are just a few examples—one could give many more. I have mentioned them because I believe that the whole attitude of Ministers, of Government Departments and of local authorities needs to be changed.

As a start, the disastrous proposals in the Community Land Bill, whereby vast acreages of farmland will be blighted and sterilised ten years ahead pending their development by local authorities, should be withdrawn. It is difficult to conceive of any measure more calculated to damage the agricultural industry. And much greater use should be made of derelict land. I believe that new directives should be sent out to local authorities and others with a view to reducing the loss in agricultural land by at least 50 per cent. Given the will it could be done, and in other countries less profligate in the use of their most precious asset it would be done.

I return now to the White Paper. Both the Government and the National Farmers' Union are in agreement that, given the necessary incentives, a 2½ per cent. annual productivity increase, with a saving of £400 million to £500 million in the balance of payments, could be achieved. These targets are to be reached partly by producing more per acre and partly by producing more of those higher-cost products which have the biggest impact on our balance of payments. This last is an important point because some of the improvement will not affect our actual degree of self-sufficiency, an aspect to which I will return in a moment. It is an economic improvement and not an agricultural one. Moreover, if the cost of inputs and feedingstuffs continues to rise, as seems likely, even the economic benefit may not be quite as great as forecast.

On the specific proposals, I particularly welcome that in paragraph 42 that we should make better use of our grassland and expand the national dairy herd at the expense of our beef herd. It seems to me absurd that, with some of the finest grassland in the world, we in the United Kingdom in 1973 were only 60 per cent. self-sufficient in dairy products, whereas the Netherlands, which is equally densely populated, were 250 per cent. self-sufficient, and Italy 84 per cent. After allowing for the fact that these countries, especially the Nertherlands, have a far higher input cost than we do, the discrepancy in our two performances still seems far too wide. But our lack of self-sufficiency in dairy products is only one example of the weakness in our whole position. With 56 million people dependent on imports for roughly 45 per cent. of our food and feedingstuffs we are as a country highly vulnerable.

We are vulnerable as regards the price of imports, over which we have no control, and in a world whose population will double in 30 years we are also vulnerable as regards a continuing source of supply. That is why I do not believe that the Government are setting their sights nearly high enough. The aim should not be merely to increase production by 2½ per cent. per year, which, judging by experience over the last 20 years, will do no more than satisfy the growing needs of an expanding population. We should be much more ambitious and seek over a period to become largely self-sufficient in temperate zone foodstuffs. This means not only expanding production by making better use of our resources, as suggested by the White Paper; it means also reducing consumption and altering our diet. The case for doing all these things is cogently argued in a paper entitled, Losing Ground, published by the Friends of the Earth, which I commend to your Lordships and a copy of which I sent to the noble Lord, Lord Strabolgi, prior to this debate.

How is consumption going to be reduced? First, we must eat less meat, and perhaps eat less altogether. We must develop alternative and much less wasteful sources of protein. Fish farming—so ably advocated by my noble friend Lady Emmet of Amberley on so many different occasions—is an obvious example. But, in general, what I am proposing will mean obtaining a higher proportion of our protein direct from cereals rather than from animals which are such inefficient and expensive converters. Secondly, our population should be gradually reduced to a more realistic level, to the 30 million to 40 million people whom we can feed from within our own resources.

This is not the occasion for me to argue the many benefits, as I see it, of a population policy. I have done so before in your Lordships' House and I shall probably do so again. But for the purposes of this debate I should like to remind your Lordships that, notwithstanding the falling birth rate, our population is likely to continue to expand if only because of the number of potential mothers who are already born. At present, the average family size is roughly 2.2 when the replacement level is 2.1. If we produced two per family from now on, the population would begin to fall in about the year 2050. Only if we now produced 1.6 per family would there be any immediate decline in our population. Therefore, we have a long way to go. The sooner the Government make up their minds positively to encourage smaller families the sooner we as a nation will be able to feed ourselves.

In conclusion, I should like to return very briefly to the matter of productivity. The British nation have always been very good at patting themselves on the back. We do so as regards our political institutions and in many other ways—often, I suspect, without sufficient justification. I am the last person to wish to denigrate our very fine agricultural industry but sometimes, perhaps, we tend to be a little smug. Indeed, before our accession to the European Economic Community there were some farmers who feared that we should be helping to subsidise the allegedly inefficient farmer on the Continent.

Yet what are the facts? West Germany produces 2 per cent. more wheat, 16 per cent. more sugar beet, 56 per cent. more fodder beet and 12 per cent. more livestock per hectare than we do. They achieve this by a much higher input of feedingstuffs and fertilisers, by using 194 per cent. more tractors per hectare and by employing a 133 per cent. greater labour force. Productivity in Belgium and the Netherlands is greater than in West Germany, although their inputs are also greater. In Ireland, on the other hand, the situation is quite different. Their labour force is comparable with ours. Their inputs and mechanisation are much less, whereas their yields are similar, except in the livestock sector where the Irish are considerably behind.

Lord INGLEWOOD

My Lords, will the noble Lord allow me to ask one question? When he makes a comparison between this country and Western Germany is he taking account of the fact that a very large proportion of our country's agricultural land is hill land and, therefore, cannot produce anything like the same quantities? Is that taken into the calculation, or is it just acre for acre?

Lord VERNON

My Lords, I was coming to my comments on the figures.

Lord INGLEWOOD

Then, my Lords, I apologise to the noble Lord.

Lord VERNON

My Lords, I take my noble friend's point. Equally, it is fair to say that even in West Germany there are certain areas which are very low in productivity. In any case, the moral of these figures is not at all straightforward. The position is highly technical and certainly I am not competent to analyse it. However, the figures do suggest that we have few grounds for complacency and we should not hesitate to learn from some of our EEC partners. For instance, I suggest we might learn from the Irish as regards their low inputs and we might learn something from the West Germans as regards their much higher labour force. The point has already been made—I think by the noble Viscount, Lord Thurso —that we cannot afford to allow our labour force to run down much further.

My Lords, I have spoken for too long and I apologise for doing so. In conclusion, I return to the main theme of my speech; that is, that it is not sufficient just to produce more food. There must be a limit to how much food we can produce in this country. Instead, in the very difficult conditions in which we shall find ourselves in the last 30 years of this century we should seek to become largely self-sufficient in food and feedingstuffs. If we are to become self-sufficient, a much more radical approach to the whole problem is required than any so far suggested by the Government.

6.56 p.m.

The Earl of LYTTON

My Lords, once more it is a pleasure to take part in an agricultural debate in which the noble Lord, Lord Walston, takes the prominent part. I congratulate him on his stamina today—also on his elevation to the European scene. I hope that does not mean he will cease altogether to appear in this House.

In the course of preparing the subject for this debate, I obtained by accident from the Printed Paper Office the stocktaking report itself. It is virtually a book of 64 pages and I read it, in parts two or three times before realising that a summary was available and that this is what we are talking about. However, I am afraid that the effect of having read it is that both the summary and the White Paper seem to me to be a little inadequate, the White Paper not having been sufficiently related tot he European problem. Nevertheless, let me say how much I enjoyed—as did the noble Lord, Lord Hughes—the reference by the noble Lord, Lord Walston, to the historical position.

The British tradition of the open door and throwing our farmers to the wolves for most of the time is a long-standing tradition—dating from 1850, anyway. The French tradition—the Napoleonic one of the closed door—is also a long tradition and it persists. But both of these traditions are embodied in the Treaty of Rome —both traditions, not merely one of them. Surely we see the French notion thoroughly embodied in Article 39, and surely we see our outlook on the whole world embodied in Article 110. And if we come to the 1947 Agriculture Act, which I regard as the Magna Carta of this country's agriculture in the modern context, it reads very much like the French version—Article 39—except that it is more full of life and vigorous. It talks about guaranteed prices and secure markets, a stable and efficient agriculture industry capable of producing such part of the nation's food and so on. That is the spirit to which I should like to go back —not that of 1940 which was a siege economy of, "Dig for victory". The 1947 Act turned the corner in our farming history. I remember so well the situation immediately before that, especially on our Exmoor hills, and the position today—that although we have had recessions since then we are still enjoying that Magna Carta. Its value has not been lost.

I believe that any Government now require time to relate our problems more closely to those of the Europeans. After all, the White Paper had to claim that its content was equally valid whether we came out or whether we stayed in. Surely, now that we have decided to stay in a different kind of positive and active thinking is due. Therefore, I am not depressed by the fact that the White Paper seems to be a little insufficient. However, I want to say something about the big change which seems to have occurred—the change in our balance of payments.

According to the White Paper, for every 1 per cent. that the pound falls in value our food import bill may—and probably will—go up £35 million. Is it therefore not a fact, since the pound was floated and started sinking and went down some 28 per cent., that the additional cost is £1,000 million pounds, or thereabouts? And if yesterday's statement by the Chancellor of the Exchequer—which I greatly welcome—marks the hitting of the bottom and not going any lower, surely we still have to take into account the fact that the £1,000 million extra is something that we have to live with? It is not only the traditional bill but the extra bill which has come on us recently in a very short period, that we have to take account of. If that is the case, one of the inadequacies that I see in this is the question: is the 2½ per cent. increase and the saving of £500 million enough? It seems to me to go towards only half the extra and might well be doubled, if not trebled.

Secondly, I share the doubts of the right reverend Prelate the Bishop of Winchester (although for totally different reasons from the ones he gave), about the increase in milk because of the fact which he mentioned, that there is a structural surplus of milk in the Community; and even according to the White Paper it looks as though we are encouraged to produce more milk only up to 1980, which is less than five years away. After that time, we are exposed to the end of the transitional period and the full brunt of whatever discouragement is imposed by the Community on those who produce more milk. Therefore, I am in doubt whether sufficient thought has been given to it. I am not depressed, but I am in doubt.

I am a little shaken by some of the remarks, both in the White Paper and in the stocktaking document, about the slightly airy way in which by tinkering with prices the production of milk can be altered within half a season, and the production of beef within two years. Surely, if you have a holding of any sufficient size you realise that cows do not live by grass alone; they live with a milking parlour and a feeding yard in which in winter they live for most of the time, and the same with the followers and the beef by-product. These buildings cost anything from £10,000, £15,000 to £20,000 and they are going to last for 30 years. By tinkering with prices you cannot alter that sort of thing. It may be that with smallholdings of 30 acres and nine cows you can reduce by one cow, but if you start tampering with the capital investment in buildings you will find yourself up against something just as inflexible in terms of supply as the allegedly inflexible demand in the language of the European Community. I believe their thinking is based on a kind of peasant economy which we have grown out of, and I think we want to beware of taking part in that.

I now want to turn to the very inspiring remarks made by the noble Earl, Lord Ferrers, on our need to study our basic philosophy with regard to the land. I agree that that should be studied. After all, in the Community our holdings are still pointing to the necessity of fewer farmers, fewer labourers and larger farms. In this country, a lot of that is over and done with. A great deal of the consolidation has already occurred. Farms are substantially bigger and there comes a moment when you ask how big they should he in any given circumstances. That is one of the things that I think should be studied: how much further consolidation is really desirable, especially with animals? With cereals you can treat with machines alone, whereas animals require a personal touch and it is with animals that the size of the holding and the manner in which it is managed is important.

Having studied these things, I think it is a great mistake that the people should be taxed in such a way that they will fragment what is desirable. Having decided what is a desirable holding—let us say, over a large area, 300 acres or 600 acres—then do not apply a tax system which causes them either to sell when they inherit from their parents or to fragment further. We have encouraged consolidations; they have received help from the taxpayer. Do not turn around now and introduce a fiscal system which induces fragmentation. So much of this needs to be studied. I think it was the noble Lord, Lord Mackie of Benshie, who said earlier that if the landlord/tenant system is generally to be terminated, let us face the matter and do it properly.

I have had occasion to disperse one estate, given plenty of time, and I did it because I thought it was in the best interests of the tenants. I had occasion to disperse another estate because I jolly well had to—I had to pay 80 per cent. death duties and it was most inefficient. I was succeeded by a whole string of millionaires here, there and everywhere, taking the pickings. That is not the way to reform the countryside. If it is to be done, let us face it and do it properly. Have a co-operative, have landlords in a different relationship, but do not destroy it in this dreadful way. I believe we ought to get down to that and study it; we cannot, of course, do it today.

I want to conclude with a remark on surpluses. I have had the greatest difficulty in finding out what is the general position of the Third World regarding food. I know the areas where the people are starving, and I should have thought those should be treated in a special way. Then there are tens of millions of children who, even if they are not starving, go to bed every night very hungry. They are near to starvation. But one must look at the picture as a whole and over a longer period, and look away from periods of drought and monsoon failures as well.

I notice that the expectation of life in this country from the middle of the century to the 'seventies has risen from about 40 to 70. It is only very lately that we in this country have had an expectation of life of over 70 years. Most of what we used to call the primitive countries had a terribly low expectation of life until quite recently. It was not 40; it was 25 or less. In spite of the shortcoming of what we have done, the expectation of life in India is now 40 and in Pakistan it is 50 and that is double what it was at the beginning of the century. It is satisfying that there is some progress, but of course the changes do not occur instantly.

There are two factors which require emergency treatment—the very considerable factor of famine, and gross undernourishment. I strongly support what I understood was the contention of the noble Lord, Lord Walston, that these surpluses should be devoted to relief, and that that relief should have a prior claim, always provided that it is possible, over redistribution among the consumers of the country where it was produced. I think that is what the noble Lord meant to say. I have said before that this should be regarded as a natural burden on the rich nations towards the starving element of the poor nations.

When we think of other countries, there are so many different factors. For example, the people of Nigeria have an expectation of life of only 36 years.I cannot believe this is due to lack of food, because Nigeria has plenty of food. With all its teeming multitudes and all its difficulties, India is handicapped beyond belief by having a non-slaughter policy. There are 70 million barren cows, 70 million "teacup" cows, as some of my Indian friends call them, because these cows yield only a teacupful of milk. The Indians handicap themselves. They alone can only help themselves. I was talking to a Minister of Agriculture in India, and asked him, "How are you getting on with the problem of slaughter?" He replied, "You people were here a long time, and you did not succeed. We do not want to offend everyone all at once. Give us time." This is very true. There is something about self-help which is just as important as giving for famine relief. They alone can do it. That, my Lords, concludes my scattered remarks collected from the speeches of many speakers.

7.12 p.m.

The Earl of ONSLOW

My Lords, the noble Lord, Lord Walston, to whom we are all grateful for initiating this debate, said in his opening remarks that we do not take much notice of large landowners. I believe he himself is a large landowner. I hope Her Majesty's Government will not take the advice of the noble Lord on that subject, but will listen to what he said in the rest of his speech. I was going to talk at considerable length on the problem of land use. The noble Lord, Lord Vernon, has said it more briefly, so I will spare your Lordships that.

My Lords, the agricultural industry, like all others, will degenerate into a low production and barter trade if we do not get on top of the inflation problem. As an example, the fixed costs per acre on a general cropping farm, according to reliable figures produced by the ICI Farm Advisory Service, have risen from £49.3 per acre in 1973 to £65.8 per acre in 1975. This is pure and complete inflation. It has not produced one extra grain of wheat, one extra husk of maize, one extra gallon of milk—it is pure inflation. If I may, I will come back to this factor, I introduce it only to underline the difficulties caused by inflation.

Turning to the White Paper, will noble Lords opposite please accept that any criticisms I am making would have been made if Her Majesty's Government's advisers had been drawn from my noble and honourable friends, both here and in another place. If they had presided over recent events and produced this White Paper, I would make exactly the same speech. At paragraph 23 the White Paper says, completely correctly, and this has been underlined by several speeches, that: If farmers are to invest in expansion, they need a degree of assurance about their future returns. The White Paper also says that net farm incomes have fallen by 26 per cent. What a formula for confidence! The Conservative Government were warned in the autumn of 1973, in a debate in this House and certainly from other quarters, of the coming crisis in the dairy industry, but did nothing about it until it was too late. In 1974, just after they came to power with slick slogans about "beef is for eating and not for storing", the present Govern ment abandoned the intervention scheme for beef. It took the ochlocratical-minded Welsh farmers to persuade Mr. Peart to produce what is now agreed to be a very good beef support scheme.

The point of these remarks is that it is the general feeling among farmers that they find it difficult to trust Governments of either complexion. Furthermore on the subject of confidence, the present price of barley for September delivery is £56 a ton. I saw this figure this morning. The average yield on British farms is worth £33 an acre. If, and this is a big "if", the farmer can get £15 an acre for his barley straw, then he will just about break even; he will make no profit on those figures. If barley or wheat has to be sold into intervention at the present prices, the bankruptcy rate will be horrifying.

I am saying this in order to go on underlining the importance of confidence. The present price of barley at £56 a ton and £4 a ton more for wheat, is only at this level because of a feeling in the trade that there must be an adjustment of the Green Pound. If this feeling were not prevalent, the crop forecasts in the rest of the world would depress prices very considerably. For instance, in the Union of Soviet Socialist Republics, the wheat crop is forecast this year as 95 million to 100 million tons. Last year it was 84 million tons. This is merely a 20 per cent. increase in the supply of the grain of the Soviet Union. This is a warning that the amount of food grains and grains coming on to the market could continue the slide in wheat prices and grain prices. If this goes on, and we have to sell into intervention, we will have exactly the same situation, only worse, in the grain section of the industry as earlier on we had in the beef section of the industry.

My Lords, the central theme of the White Paper is the increase in the use of grassland. In my view, without doubt this is right. But as both the noble Earl, Lord Lytton, and the right reverend Prelate the Bishop of Winchester, said, is it right to increase our milk production when there is an EEC surplus of milk products? Large parts of the South-East of England can be supplied from Friesland and Normandy. There are 600.000 tons of dried milk in store in the EEC at this moment. Should we not perhaps encourage by all means the greater use of our grassland, encourage a higher standard of quality of cow—because a bad cows costs exactly the same amount of money to feed as a good cow—encourage the use, certainly, of better leys, relaying permanent pastures, the greater use perhaps of maize silage for winter feed in certain parts of the country which can grow it very well? If we do that, we will then release more land for crops such as rape, cereals and sugar. After all, this would then be complementary to the EEC and not, as this White Paper implies, slightly in competition with the EEC.

Then ultimately, as has already been asked, how is this expansion to be financed? The disadvantages of all sources of extra finance are politically daunting, but they must be faced. Is it to be higher prices to the consumer, is to be extra Government expenditure? I think this is for the Government to answer. I thought the noble Lord. Lord Hughes, to whom I listened with a great deal of attention, glossed over this matter in his speech. I have a feeling that it has not been thought through.

If it has not been thought through, then the confidence of which I have spoken ad nauseam will certainly not be there. If inflation is not cured, then it will not be there. If there is no confidence and no cure to inflation, Mr. Healey will be left with only the words of the Labour Party Manifesto to eat, as he did with such gusto yesterday, and precious little food will be produced not only for him, but, above all, for his fellow citizens.

7.22 p.m.

Lord WYNNE-JONES

My Lords, as one who has never been directly associated with the agricultural industry, I have found it extremely interesting to listen to noble Lords in this debate. I was particularly interested in a lot of what the noble Earl, Lord Ferrers, had to say, though I must admit I was a little surprised to learn that the fate of Sodom and Gomorrah was brought about through a wrong agricultural policy. I had thought that, if there was anything wrong, it was the salinity of the soil that might be wrong there. But apart from learning that interesting fact, there were a lot of other observations which I found very interesting and important. As one who is not an agriculturist, I have looked at this White Paper, and the point that particularly caught my eye was paragraph 18, which refers to research, and on that perhaps I can say something.

From my early student days, I have been interested in agricultural research, not because I have taken a direct part in it, but because I was, first of all, lucky enough to be at the University of Wales at Aberystwyth when Stapledon was doing his famous work on grass breeding. I think it is true to say that almost the whole of our present grass policy stems from the work of Stapledon. It is interesting to notice that although some people think, as apparently it is now becoming the fashion to think, that scientific research is of no significance, the productivity of our grasslands has increased over the last 30 years by about 2½ per cent. per annum almost entirely due to the work of Stapledon and his pupils and successors around the country. I think that is a remarkable tribute to the effect of such agricultural research.

Then, of course, one looks in other fields. I was later in the University of Reading, which had an agricultural school, and indeed still has. There was a Professor of Agricultural Botany there, one Percival, who was world-famous for his study of wheats, and in fact the work which Percival did was, I believe, largely responsible for leading on to the production of Yeoman wheat, which was, I believe, a hard, rust-free wheat. There are many other cases where the scientific research that has been done has been of immense importance. In Reading they had a dairy research institute, at Shinfield, which played an extremely important part. In Scotland, they have had the Hannah Research Institute, the Rowett Research, the Macaulay Research, the Torrey Research, all playing an extremely important part in this agricultural work.

It is important to realise that without this research work, without this scientific work and its application, we should still be using methods that would be giving us a fraction of the yields that we are getting today. People talk about going back to the land. If you go back to the land without the resources of modern science and technology, you are going back to a primitive condition where, with luck, the whole family, working about 18 hours a day, would just about manage to eke out an existence. That is surely not what we are thinking of when we talk about utilisation of land, when we talk about agriculture. We are thinking of the proper, modern utilisation, and this means the application of every form of modern technology to the land. It means having all sorts of scientific research going on in research stations, and in universities throughout the whole country. Without this, we shall never get anywhere.

To a certain extent this is realised in the White Paper, but I do not think it is emphasised enough. I would ask my noble friend, when he replies, to give some indication of how far the Government are prepared to go, because I think they ought not simply to say, "We are prepared to keep research going". We must expand it. We have, in paragraph 18, the statement: The rapid growth in agricultural productivity over the last two decades has been materially helped by the successful application of research findings". That is a very correct statement, and one is glad to see it in this White Paper. It goes on: The yields of cereals, potatoes, field vegetables and fruit, the growth rates of beef cattle, the yields of milk cows and the feed conversion ratio of pigs and poultry have all benefited directly from research findings. That surely means that we ought to put a lot more effort into research, if that is what the result has already been.

I was disappointed when I looked at the recent Report from the Commission in Brussels, dated 26th February last, in which they made very little reference to research, but they said at page 16: Increases in productivity are generally the result of a significant increase in inputs, cattle feed, fertilisers, pesticides, machines. That admits the technological side, without saying much about the research required to produce all that. On the question of what has to be put into the soil according to the reports which I have been able to get, over the last 30 years the input of fertiliser in this country has increased six-fold, and the increase in nitrogen input has increased eight-fold. Where has all that come from. It has come from our chemical industry.

It is not something which is supplied by nature. Nature can supply very little of this sufficiently effectively on the scale that we want it. When you look back you find, if you take, for instance, the whole production of nitrates, ammonia and so on, that they come from the brilliant invetntions of the famous German chemist, Haber, about 50 years ago; this whole development resulted from pure chemical work, originally not even undertaken in order to produce anything of agricultural importance. It is important to realise that we neglect this research and scientific investigation at our peril, because it means that when we want something done the knowledge is not there to enable us to do it.

People are always talking about scientific work as though it is something magical that suddenly produces the answer. It never does. It does not produce the answer, it produces general ideas and specific ideas which intelligent people may later apply in the way they wish. That is the significance of scientific work. So I hope that when we talk about this whole problem of British agriculture we do not forget the fact that, in the end, its productivity depends upon research and serious scientific investigation.

Lord BALERNO

My Lords, before the noble Lord sits down, can I ask him whether he would agree that equal to the astounding results of the specific research that he mentioned is that jewel in the crown of Cambridge University, all the work that has been done on artificial insemination with the resultant increase in the productivity of both beef and dairy cattle?

Lord WYNNE-JONES. My Lords, I thank the noble Lord for adding that point. As he realises, I was not attempting a complete catalogue. I wanted to pick out merely the few points about which I have knowledge, but, of course, he is quite right.

7.32 p.m.

Lord INGLEWOOD

My Lords, the noble Lord, Lord Wynne-Jones, has shown, even though not giving us a complete catalogue, how lucky we have been in this country in the number of our research institutes and the people who have manned them. He was too modest to mention Newcastle-upon-Tyne, but a great deal of good work was done there also in the field of grassland improvement. I was glad also that another noble Lord mentioned Rothamsted. It is worth remembering that Rothamsted is one of the earliest, if not the earliest, agricultural research stations in Europe. It was founded before the days of modern taxation, when these things were possible, by an amateur who was interested in these things and who recruited a friend from his Oxford days, a professional chemist, who worked with him, and the two achieved results which have never been equalled in Europe since.

I am glad to be able to take part in this debate today. It is very timely. I was glad of the opportunity to visit Brussels last week as a member of the Sub-Committee, and I am very glad to be able to claim that of the three Papers we are considering this evening our House of Lords' Paper is undoubtedly the best. It is written in the best English; it is the most lucid and is the most helpful. I should like to pay tribute to the member of our staff who put so much work into that Paper and produced something remarkable.

Having been to Brussels, I think I can now see much more clearly than I could before the difficulties that they have to face. Their problems are really very much the same. They are so familiar. They are the same for anyone who has worked in the Ministry of Agriculture in this country, either as a Minister or an official. But, of course, they are on a much bigger scale. They are the same sort of commodity problems, the same sort of regional variations again, only on a bigger scale. They have two extra commodities in olive oil and wine to deal with. The latter is extremely sensitive politically. We have in this country mutton and lamb, and also forestry. It seems strange to me that forestry was not in the catalogue which constitutes the agricultural problems on the other side, but I am told that the Treaty of Rome made no provision for it to be included. I would suppose that, because forestry makes a claim for the same sort of land as extensive farming, sooner or later the Treaty of Rome will have to be amended and forestry included. However, at least today it is not there.

Our own Government's White Paper lays emphasis on increased production, and that is welcome. It is not a new theme for a Government White Paper. I Farmers always look forward to greater production, and so the Government have to say something about it. But they are generally cautious and guarded, and having talked about increased production they then say, "not too much", and that is exactly what they have said in this White Paper. But producers were glad to hear that this is the direction in which the Government want to see our agriculture here move.

I believe—and I do not think I am being over critical—that a Paper in this form, coming to these conclusions, could have been written in the Ministry of Agriculture at any time over the last ten or twenty years. I am glad to see the noble Lord nodding. I do not wish to disparage his efforts at all because he has had a rough time and achieved a considerable measure of success, but it could have been written by any Minister or any group of civil servants in the Department over the last generation. They are just as cautious as ever, because of course any small increase in quantity, or increase in demand, results in big and rapid price movements. No one has yet been able to master that, although I think we can say that on the Continent the agricultural policy of the Six has in fact resulted in lessening these up and down movements. It is one of the great problems that still lies ahead of us. It is easier if we appreciate that our problems are not isolated but are part of Europe's problems, and Europe's problems again are part of the world's problems, and not something separate in the West from the others.

I was pleased to sense that the Community is becoming less rigid and inflexible about surpluses. I am sure that it is right that where surpluses arise—and they will arise from time to time—that the less fortunately placed regions within the Community shall have the first chance of enjoying these surpluses, maybe at a slightly subsidised price. If a wine lake in fact materialises, I hope that some people in this country will be allowed to enjoy drinking part of it, because at least so far as wine is concerned we are less favourably placed than some other parts of the Community.

We must all beware of thinking that stockpiling is simple. It has already been mentioned in this debate. I can remember the difficulties that the French were meeting fifteen years ago, after it had been represented how simple it was to buy when there was a surplus in the market, and to put it back on the market when there was a shortage. I think it was the noble Lord, Lord Sainsbury, who pointed that out. Somehow, it never works out as simply as that. None the less it is one of the weapons in the armoury that we may have to use from time to time.

I was glad that the noble Lord, Lord Walston, in opening this debate, touched on the fact that half the world, or more than half the world, is short of food. I think it would come ill from us, or from any rich country, to say, "We can produce more, but we are not going to do so", because of some local or national reasons. Success here in the longer term will depend on some control of population increases throughout the world. You cannot solve these problems of starvation and undernourishment by the production of food alone. However, that is another big question and it is far too late in the evening to say any more about that.

I found it remarkable over the last few years what very large steps have been taken to bring the systems of support for agriculture in different countries much closer together. If the Nine come together to try to achieve a common marketing policy, they must move towards some common system of support. That will take time to achieve, not least because of the historic differences in the thinking, the organisation, and the working of the different agricultural departments; and, not least, their ability to collect accurate statistics and the willingness of farmers to co-operate in this work, which is vital. I do not think it is boasting too much about our achievements, nor being too rude to the Italians, to say that we and others in the North-West of Europe are far ahead of some in this respect, because it is a fact. I was glad to sense when in Brussels that there appeared to be no basic opposition during this transitional stage to seeing, say, two different systems of support within the Community. Obviously, every country cannot persevere with its own to the end, but at least in the transitional stage it is not necessary for every one, irrespective of the ability of the different Ministers of Agriculture to administer any system of agricultural support, to go over straight away to the same system.

In the farming policies of many countries, there is always a danger of paying too much attention to the problems of individual commodities. Because votes are at stake Ministers, their advisers and politicians know how even small price changes are brought home to everyone, and very quickly. Milk in Britain is an example of that. Wine in France is a similar example. There are many votes involved in both, but the real foundation of any agricultural policy, as has been said previously in this debate, is the land. The noble Lord, Lord Sainsbury, mentioned the importance of farm drainage and I would say that it is vitally important; and here in Britain there is a great deal of work still ahead of us in this sphere. However, nobody would deny that there are few votes to be had in connection with farm drainage, compared with small price rises in certain key commodities. All the same, it is the land and the wellbeing of those who live and work on the land around whom any enduring agricultural policy must be built, and I am glad to feel from this debate that at least we in this House have our priorities right.

7.42 p.m.

Lord WALLACE of COSLANY

My Lords, I rise to speak not as an expert but as a back garden producer. Perhaps I might mention at the outset that this year I have supplied tomato plants to a number of Labour and Conservative Members of another place, to certain members of staff of your Lordships' House and to friends and neighbours—all from a packet of seed costing 15p. I humbly submit this as an example of increased food production at a minimal cost. The main issue of the White Paper is, of course, the vitally important one of increased food production, and I suggest that the greatest challenge we have to face, remembering that increased production brings problems with it, is the need to ensure a fair return to the primary producer. The men and lads who toil and sweat on the land deserve a fair profit, and it is the responsibility of Government and those who demand more and better food to see that a fair return is given.

This brings me to the need urgently to investigate our marketing arrangements. What causes a poor return to the producer while at the same time prices are high in the shops? Last week in a London suburb a lady I know paid 20p for a lettuce. At this time of the year this is downright ridiculous; for a 5p packet of lettuce seed one can grow enough to feed the whole family and a few neighbours as well. This sort of problem must be examined at the same time as looking at ways of increasing food production. It is no good talking about the season of the year and the type of weather because, for instance, lettuce and other crops grow even in cold conditions under polythene, which is quite cheap to buy. I use it in my back garden and I understand that it is used by some commercial producers as well. Why, therefore, should an ordinary, possibly limp, lettuce cost so much in a London suburb and probably more in the West End or Inner London? This sort of thing must be examined while we are discussing higher and more scientific problems.

I am talking mainly about fruit and vegetables. Do we need to decentralise our markets for fresh produce? When I was returning home after all-night or late night sittings in another place I would see lorries coming from Kent to Covent Garden, where at a later hour buyers from the areas near to where the goods were grown would make their purchases, only to take them back practically to where they were produced. This does not seem logical. It has been going on for years and now we have an even more massive and up-to-date Covent Garden.

Is fancy packaging necessary, or is it a gimmick to boost prices? A week or so ago my wife and I were passing a greengrocer's shop and noticed some nice cucumbers at 12p, so we bought one. A little later my wife, unable to get something she wanted to buy for my daughter, went to another greengrocer's shop and saw the same quality cucumber, this time wrapped in polythene, at 20p. I am afraid that the supermarket methods of fancy wrapping and packaging are having quite an effect on prices. Why is it that, particularly for fresh fruit and vegetables, prices are higher at weekends than during the week? I am a housewife's chief assistant—I call myself that in this age of non-discrimination—and I am certain that prices go up at the weekend. I am all in favour of greater food produc tion, particularly in the fruit and veg. line, because, let's face it, home grown is best; the quality is better as is the flavour and nutritional value.

Home food production is today the vital issue, and in one connection it is closely related to the improvement of the environment, for there are too many areas of derelict land and marshland which could be reclaimed and turned over to food production. While we amateur gardeners are increasingly turning to producing compost from household and garden refuse, much more could be done by way of controlled tipping by local authorities to reclaim land. Many years ago I drew attention to the dumping of London refuse at sea, with frequent return on the tide. In Kent great areas of marshland and areas excavated for chalk, which is used in the main for cement-making, could be reclaimed by controlled tipping and turned over to food production and perhaps grazing. Some years ago a sanitary inspector in my area showed me a piece of land which he had reclaimed by controlled tipping. Within two years that area was growing lush grass, and within ten years it could conceivably be used for building purposes or as a sports ground. I admit that in the intervening years some slight improvement has occurred, but an enormous amount remains to be done along these lines because we are wasting far too much land which could be used for food production and grazing.

The noble Lord, Lord Walston, may recall the Wash barrage scheme, about which I do not seem to have heard much lately. It has been discussed, however, and a former MP for King's Lynn, Mr. Derek Page, and others have done a great deal of work in this connection. Certainly more land could be provided and more port facilities made available in such a development, and the national Exchequer might be put in the black by the discovery of King John's treasure, which is said to have been accidentally lost in the area many years ago. There is a lot in the old saying, "Waste not, want not" but today we see increasing wastage and wanting. More food production at home means growing more in the back garden and the flower bed, and I am glad to say that that is going on now.

Although local authorities have a responsibility to provide allotments, over the years the numbers have been reduced and they have been turned over to grass or used for buildings. Now, with the growing popularity of growing one's own vegetables and of amateur gardening (one can get a packet of spring cabbage seed for nothing and it grows enough to feed a family) it is time that increasing attention was paid to providing land and meeting the need of people to grow their own food. The domestic growing of vegetables and fruit should receive encouragement in a national campaign, not only on economic grounds but on health grounds as well. If I may give a little non-medical advice, it is indeed the finest antidote for the strain of modern living, and I have for many years held the theory that if all the world's leaders were keen gardeners the world would be a happier and more peaceful place than it is at present.

Mention has been made by the noble Lord, Lord Walston, and others of the deprived areas of the world where there are frequent instances of starvation. I have seen some of this myself. I do not want to take much time on this subject, but it is vital. Here there is one important need. Too much aid is given on the basis of national prestige. Aid to countries to develop their food production should be on a co-ordinated international basis, with politics removed.

Although we talk about ourselves and our need to increase food production, we should also be mindful of others. This call to produce more food, not only in this country but to meet the need of starving millions elsewhere, is the greatest challenge that faces mankind. Human needs come before space projects, and I believe that it is far better to solve the problem of the starving millions than to fly to the moon. The big remaining question is, when will mankind get its priorities right?

7.53 p.m.

Lord LLOYD of KILGERRAN

My Lords, may I join with the noble Lord, Lord Inglewood, and others in paying tribute to the noble Lord, Lord Walston, on the excellence of the report of his subcommittee and on the statesmanlike way in which he introduced this helpful debate. Without creating any acrid atmosphere of Party controversy, may I also presume to congratulate him on his nomination to the European Parliament. I have heard the noble Lord speak not only in this House and in Committee but also in Strasbourg in the rather sterile fields of the Council of Europe. Of course he is recognised as a great international expert in this field and I am sure that if he goes to Strasbourg in another capacity this will benefit European agriculture in the way which he so sincerely desires.

At this late hour I do not propose to make anything in the nature of a winding-up speech. In view of the speeches from these Benches by the noble Lord, Lord Mackie of Benshie, and the noble Viscount, Lord Thurso, I do not propose to discuss the White Paper except to endorse the views of the noble Lords, Lord Walston, Lord Ritchie-Calder, and Lord Wynne-Jones, and to emphasise how essential it is to continue to spend more money on research in agriculture. May I also support the statement in paragraph 19 of the White Paper paying tribute to the United Kingdom agricultural advisory services which I do not think have so far been mentioned in this debate.

I should also like to applaud the very great work that is done in association with university agricultural departments. Here I should like to join with the noble Lord, Lord Wynne-Jones, in paying a tribute to the work of the departments associated with the University of Wales. Although at this late hour one does not want to catalogue the work of universities, I should like to mention the work of Professor Bell in the experimental department in Cambridge.

As a member of the Select Committee of the European Communities, I propose in my few remarks to emphasise some of the major criticisms of the Common Agricultural Policy contained in the excellent Report prepared by the noble Lord, Lord Walston, and his subcommittee. This approach may assist in some small way in emphasing at least a few of the directions in which changes in the Common Agricultural Policy should be urged by Her Majesty's Government.

On many occasions in this House and elsewhere I have referred to the inadequacies and the inflexibility of the Common Agricultural Policy to the present agricultural needs of the United Kingdom. In particular, I have referred to its almost total irrelevance to the needs of hill and upland farmers in the United Kingdom, particularly in Wales and in the North-West of England. However, I should like to join the noble Earl, Lord Ferrers, in congratulating the Government and, in particular, the Minister, Mr. Peart, for the successful efforts which he has made in Brussels in recent months in introducing much more flexibility in connection with the livestock farming industry. We were told today by the noble Lord, Lord Hughes, that he also took part in these negotiations; so may I also thank him personally for the great effort he has made in dealing with the aspect of inflexibility of the Common Agricultural Policy. I should like also to draw attention to the Committee's views in paragraph 22 of their Report where it is stated that the Commission's Report on stocktaking does not constitute a fresh approach to the problems of European agriculture and food supplies; and that it does not comprehend the strategy within which national administration can formulate its own policies. I use almost exactly the same words as in that Report. These are basic criticisms which, in my submission, require the urgent attention of the Government.

Therefore, in conclusion, may I emphasise to the Government what the noble Lord, Lord Walston, stated and the noble Lord, Lord Hughes, indicated, that it seems, now that the Commission is willing to be more flexible in its attitudes to agriculture, that every effort by the Government is required at this time to effect radical changes. Again, as the noble Lord, Lord Walston, has said, these are urgently required in order to effect the expansion of agriculture which is now necessary in the European context. In urging the Government to take this action now that the Commission appears to show itself less inflexible, may I express the hope that the Government will not forget the needs of those small and efficient farmers to whom the noble Viscount, Lord Thurso, referred so eloquently, and also the desirability which the noble Lord, Lord Wynne-Jones, emphasised for more research in agriculture.

8.0 p.m.

Lord SANDYS

My Lords, as the twentieth speaker in the debate this evening I wish to begin by reiterating what the previous 19 speakers said. In particular I wish to thank the noble Lord, Lord Walston, for giving us this splendid opportunity of discussing both of these important documents. The remarks of the Prime Minister, in opening the Royal Show at Stoneleigh, are particularly significant, and I should like to quote two sentences from what the Prime Minister said and relate it to the Report. The Prime Minister said: We looked at the likely levels of world and Community food prices for major foodstuffs between now and the early 1980s and we looked at the risks of possible shortage and sharp price fluctuation. All those factors pointed to a policy of higher food production in the United Kingdom. That exactly reflects the principal comment on the first page of the White Paper, that The Government take the view that a continuing expansion of food production in Britain will be in the national interest. But, my Lords, the Consultative Document itself perhaps puts it much more sharply, where it states in paragraph 55 on page 21: At a time of unprecedented increases in world prices, the Common Agricultural Policy has proved to be a stabilising factor on most food prices rather than a source of inflation. Thus, the 1974 increase in consumer prices for foodstuffs was 10.4 per cent. in the original Community, 14.6 per cent. in the United States and 29 per cent. in Japan. Surely, my Lords, those figures alone justify the massive vote of confidence which occurred on the occasion of the referendum on 6th June of this year.

I wish to turn in particular to the opening remarks of the noble Lord, Lord Walston, in which he referred to the importance of Government research. I think almost all other noble Lords who have spoken in the debate also mentioned this. Perhaps we ought, with due deference, to offer a little shopping list to the chief Government research scientist, Dr. Perreira. If I were permitted to put forward three suggestions, I should put very high on the list the point made by the noble Lord, Lord Ritchie-Calder, on research into harvesting of seaweed. As it happens, on 1st May last year, when we were also given an opportunity by the noble Lord, Lord Walston, of discussing agriculture, I made this point myself. If nothing has happened, then perhaps with the backing of the noble Lord, Lord Ritchie-Calder, a greater interest might now be shown in the subject.

I also believe that there is great value in what the noble Lord, Lord Walston, said about the elimination of wastage. The noble Lord, Lord Wallace of Coslany, and many other noble Lords referred to this. We must consider in particular the post harvest situation, involving the storage of grains, feedstuffs, et cetera, and the innumerable commodities which are placed in store, in transport, in shipping and in the docks; in other words, the elimination of pests. At the top of the list, naturally, comes the rat. I believe most sincerely that the world food position can very largely be improved if greater attention were paid to the post harvest situation in all its forms. Therefore the research suggested this evening by all noble Lords should be given prominence.

I also wish to draw the attention of your Lordships for a short time to the question of conservation of the stock of farming land. This matter was raised in considerable detail by my noble friends Lord Ferrers and Lord Vernon, and by other noble Lords. I should not be using too strong a word if I say that I was scandalised by the complacency shown in paragraph 16 of the White Paper. As noble Lords have mentioned, we are told in this part of the White Paper about the loss of agricultural land, which—doing a sum—works out at 75,000 acres per annum. Surely now is the time when the Government—and this would involve nothing short of a Cabinet decision—should take a decision on the erosion of agricultural land and say thus far. We can only grow our stock of agricultural land by reclamation. Every acre that is won from the sea and added to the national stock would be of great and vital importance. Many noble Lords have referred to dereliction. Every acre won back from dereliction would be equally satisfactory. We must also, as my noble friend Lord Inglewood suggested, place in the forefront of our minds every acre brought into fruitful production by means of sound land drainage and irrigation.

It is very important to take in close association with that the asset to which my noble friend Lord Ferrers referred, namely, the system of land tenure, which is one of our principle assets in the Euro pean Community. I should declare an interest because, like the noble Lord, Lord Ritchie-Calder, I have been closely associated with Oxfam for some years. I think that the noble Lord would agree with me that a basic root cause of famine and the loss of agricultural production in countries throughout the world has been an unsatisfactory land tenure system. This is an absolutely basic point, and it involves one of the lessons which we in these islands have learned. We learnt it with great cost in the last century when, at that time, Ireland used the system known as the Rundale system, and modification of that system has contributed towards a thriving agriculture today. It is a lesson which we forget at our peril.

Your Lordships have laid special emphasis on farm structure. In the past 15 years the increase in the size of farms has been a very significant part of the development of agriculture in the United Kingdom. Perhaps we ought to go back a little further in time, because the two Agriculture Acts of 1947 and 1957 are of the greatest significance. We in this House can take great pride in remembering the late Lord Williams of Barn-burgh, the author of an agricultural policy which has served this country very well since the war; and the success of a price support system then introduced, leading on through the late 1940s, the 1950s, and the 1960s, right up until very recently.

The 1957 Act, introduced by a Conservative Government, was of no less significance. Here I join the noble Lord, Lord Lloyd of Kilgerran, in congratulations and tributes which should be paid to the agricultural advisory services and all that those services have done to make this Act work. Every barn built, every drain laid, and every major construction for the benefit and improvement of agriculture in the past 15 years has stemmed from that Act, and it has been of great importance in preparing this country for entry into Europe.

I do not think that I have previously had the opportunity of expressing from this Dispatch Box my own personal thanks to the staff of the Ministry of Agriculture. Here I should declare an interest in relation to my own estate. I recollect with gratitude what has been achieved in the past few years due to that Act.

I turn now to the particular problems raised in the speech of my noble friend Lord Vernon regarding loss of land. This has been dealt with, but insufficient emphasis has been laid on the fact that fields are but factories for the production of food. Perhaps the speech by my noble friend Lord Hertford, when he addressed your Lordships on 7th November 1973, was extraordinarily helpful in crystallising this problem. He said: Every mile of motorway uses 40 acres of land; 40 acres of land can, and in Warwickshire last summer did, produce 80 tons of wheat; 40 acres can, and in Warwickshire do, produce 36 gallons of milk every year; 40 acres can and do produce 24,000 lbs. of beef every year; 40 acres can and do produce £14,000 of best English lamb every year—or one mile of motorway. This land is a very precious asset. Any Government who fail to recognise the present situation do so at their peril. I think that a greater realisation should take place in the Department of the Environment of what they are doing when they commit a large area—such as has been confirmed yesterday with the 1,300 acres in Woodham Ferrers in Essex—to housing development. Of course we need houses; of course we need an enormous number of developments; but we should place agricultural land in a special category. I recognise what the White Paper says. It says: Wherever possible the best agricultural land should be safeguarded. This is an "eel" answer; it is an easy way out. I feel we should reject it.

My Lords, I should like to turn to the international scene and the World Food Conference, because other noble Lords have referred to this. Surely, in the Commonwealth context this has been of very great significance indeed! My noble friend Lord Balniel referred to this in your Lordships' House on the 18th June when he said that after the very near abandonment of a final solution on the World Food Conference there was a coming together of the Commonwealth countries. In his speech, he said: First of all, Canada came forward and said she would provide a million tons of grain as aid to the starving areas of the world." —[Official Report, 18/6/75; col. 892.] Surely, that gesture was something of which the Commonwealth can be very proud! Further, he referred to the Commonwealth Fund for Technical Cooperation and this once again is a very significant activity. We were delighted when the Prime Minister announced in Kingston this year that our contribution was to be raised from £7,500 to £1.5 million. Every effort made by the Commonwealth for technical co-operation is money well invested. Surely this sum is small enough indeed!

My Lords, I should like to turn to what the noble Lord, Lord Sainsbury, said in regard to the processing industries. With many of his remarks all sides of the House will agree. I should particularly like to refer to a publication with which he will be conversant, one called the Grocer and to quote, if I may, from its current issue. I think it is of great significance in the present situation. The quotation is from an article called, "Inflation and the effect on the Consumer", which reads: The housewife faces the dilemma that over the years her family have come to expect good quality food, substantial meat-based meals and plenty of variety of choice and treats when she has a limited purse and may have forgotten or has never acquired any of the cooking, catering or shopping skills of the past. Surely our agricultural policy should very seriously take into account the needs of the housewife as one of the roots of the policy. Meat-based meals are really one of the principal problems when it comes to the production of protein. I do not think that even the successful efforts of Dr. Norman Pirie at Rothamstead who is trying to produce protein from grass will produce something completely satisfactory. Nevertheless, I welcome heartily the efforts of those who produce from nuts and other substances something which approximates to meat and with which the chemists are working hard to produce a palatable substitute for meat. We have to change our habits somewhat. We all like our cut off the joint if we can afford it; but surely the great thing is variety of diet and taking into account new substances and new commodities. Here I should like heartily to support the remarks of my noble friend Lady Emmet when she suggested that ingenuity was the watchword and demonstrated her own ingenity during the war.

Fish farming is a notable exception from the White Paper. From these Benches, we should very much like to associate ourselves with what the noble.

Viscount, Lord Thurso, said. Its omission from this document is a great gap in the agricultural policy. Nevertheless, I think that what the noble Lord said about Annex 2 of the White Paper is of even greater significance: the idea that the smaller the number of agricultural workers, automatically the greater the production on a declining amount of land. This is an illusion which the 18th century writer Voltaire reminded us was the first of pleasures. I believe that that table is an unnecessary illusion. I am quite sure it was not intended to be interpreted in the manner so described. I should like to congratulate the Government on the other tables at the back of that Report because I think they make a useful contribution towards showing how dependent or independent we were of other commodities. I shall not detain your Lordships longer except to say, in closing, that I believe that this debate, if it can bring about a change in Government policy—a variation and co-ordination of Government policies—will have done a great deal of good.

8.18 p.m.

Lord STRABOLGI

My Lords, we have had a stimulating and useful debate this evening on these two major aspects of concern to agriculture at present. I have heard almost every speech and I have found it most rewarding. I am sure we are all grateful to the noble Lord, Lord Walston, for providing this opportunity for debate on such important topics.

Noble Lords have raised a large number of issues during the course of the afternoon. I shall do my best to deal with as many as I can. My noble friend Lord Hughes dealt with great clarity with the stocktaking of the Common Agricultural Policy and I really think I need add little to what he said. One or two specific points were raised by noble Lords, however, and I shall come to these later. A large part of our debate this afternoon has been devoted to consideration of the Government's White Paper, Food From Our Own Resources. I should like, therefore, to deal with this first and to describe some of the thinking that lay behind the publication of this White Paper.

My Lords, we in Britain have always had to import a substantial proportion of our food supplies. We are a trading nation with limited natural resources and so it is not surprising that we should do so. Today we import roughly half our total needs and we grow in the United Kingdom some 70 per cent. of the food that our climate allows us to produce. But we have to recognise that the world food situation is changing. We can no longer rely on abundant supplies of food at low prices. The last two years have seen huge fluctuations in supply and price—of cereals and sugar, for example —and while we can and will continue to import much of our food from our trading partners overseas, we must recognise that it is only prudent to look to our own sources of supply, our own agricultural resources, to produce more food for ourselves.

Another major factor is the nation's general economic situation. The effect of rapid increases in world food prices on the United Kingdom's food and total trade deficit has been considerable. Between 1972 and 1974, the United Kingdom's net deficit in food and drink rose from £1,750 million to nearly £3,000 million. The total cost of food and drink imports in 1974 is put at almost £4,000 million, which is a massive sum. We must improve our balance of payments situation and agriculture is clearly one of the key areas in helping to do this. The Government also realise that when dealing with agricultural policy it is essential to take a reasonably long-term view. Policy cannot be based simply and solely on yearly examinations and reviews. Agriculture needs a longer-term framework. Producers need to be able to plan having some guidelines about the desired direction of their industry over a period of years rather than months.

These are all considerations of major importance. They are important to the industry. They are important to the nation. It was in recognition of them that my right honourable friend the Minister of Agriculture, Fisheries and Food started talks last year with the Farmers' Unions, the Landowners' Associations, the agricultural workers, the food industry and others. These were valuable discussions which lasted over a period of almost a year, and were aimed at identifying the long-term prospects and objectives for British agriculture. They stimulated a good deal of hard thinking—not just by the Government and their officials, but among all sides of the industry. They represented a valuable and far-reaching exercise and provided the essential background on which the White Paper is based.

The Government's main conclusions from the discussions, as set out in the White Paper, are threefold. First, the likely levels of world and Community prices for major foodstuffs between now and the early 1980s, and the risks of possible shortages and sharp price fluctuations, justify a policy of expansion of food production in the United Kingdom. My Lords, this is an important and major conclusion. This Government have always been committed to a policy of economic expansion of an efficient home agriculture, as have all Governments in modern times. But in this White Paper we establish the economic justification for this approach. And it is a powerful justification. Secondly, we have concluded that the net product of the agricultural industry should be capable of a continuing expansion of about 2. per cent. a year on average, as the noble Lord, Lord Mackie of Benshie, said, and that this is the objective at which the Government and industry should aim. There is a wide measure of agreement between ourselves and the industry on this. Noble Lords will know that the Farmers' Unions published their own projections of output between now and 1980. These implied a similar overall rate of expansion, although the product patterns of the two projections in the NFU's paper differ somewhat from the White Paper.

The White Paper's third conclusion is that, within the overall objective of expansion, most benefit is likely to come from higher output of milk, with its byproduct beef from the dairy herd, and sugar beet. Cereals and sheepmeat should also make a significant contribution. The estimates made have indicated that in 1980 dairying—and the calves produced from it—would be likely to offer the United Kingdom, as a member of the EEC, a greater margin over resources used and a larger import saving per acre, than lowland beef. Similarly, the assessments made indicate that an expansion in sugar beet production would be likely to give both a higher margin of output over inputs and a larger net import saving per acre than cereals. I apologise for these technical terms, my Lords. I should make it clear, though, that we are not calling for beef production to be reduced. It is simply that the analyses that have been made point to the advantages of increases in beef production coming from the dairy herd, rather than the specialised lowland breeding herd. Moreover, as the White Paper recognises, it may still make sense for individual producers, depending on their circumstances, to expand beef-breeding herds.

The White Paper has been widely welcomed and accepted in the industry. But questions have been asked here and outside about what the Government are going to do to stimulate the desired expansion. I can readily understand the points noble Lords have raised. To some extent, of course, the referendum was a factor here. Until we knew the outcome, we did not know whether agricultural policy was to be framed within an EEC context or elsewhere. Now we know the answer, the discussions foreshadowed in the White Paper are going ahead with the interests concerned to determine whether there are specific measures which it would be right and practicable to take in pursuance of the White Paper's aims. Noble Lords will know that my right honourable friend initiated these discussions in May, when he met the Presidents of the Farmers' Unions. Among the topics being covered are the effectiveness of capital and production grants, including possible ways of adjusting incentives for the better use and conservation of grass; the effect of capital taxation on agricultural production (referred to by several noble Lords in this debate); the effect of the Green Pound on farmers' support and market prices; and the beef market prospects. My Lords, I clearly cannot say tonight what will be the outcome of these studies. Some of them will take longer than others. But I do know that my right honourable friend is closely concerned with the progress that is being made.

The noble Lord, Lord Vernon, referred to the report called Losing Ground prepared by the Friends of the Earth. He was good enough to send me a copy of this and I have read it with much interest. This was prepared before the Government published the White Paper Food from Our Own Resources. This deals with many of the points made by the Friends of the Earth. I do not want to comment in detail on their report this afternoon, but it contains some suggestions to which the Government attach considerable importance; for example, the need to make better use of our grassland. Noble Lords will know that my right honourable friend is currently looking into this. I should like to thank the noble Lord for drawing attention to the report.

My Lords, I have attempted to give an indication of the Government's thinking in publishing the White Paper, and to answer the specific points raised in relation to it by noble Lords. Before leaving the White Paper, I should, however, like to reiterate that it represents an attempt to set objectives for agriculture over a period of years. It must be judged on that basis. Agriculture is not a short-term industry. Short-term decisions and short-term judgments do not help the industry. We have established guidelines for the years ahead. These are a valuable planning framework for producers. Moreover, the Government have stated that they will be framing their agricultural policies in the light of the White Paper's conclusions. We are now engaged in these discussions, as I have said. I should like now to turn to points made by noble Lords during the course of the debate.

Viscount THURSO

My Lords, before the noble Lord leaves general matters, he referred to the Government's policy in relation to getting more beef from the dairy herd, and in relation to not looking for more beef from the lowland herd. He did not refer to the Government's policy in relation to the hill cow herd. Can the noble Lord give us any idea whether the Government have a policy in relation to the hill cow?

Lord STRABOLGI

My Lords, that was one of the questions raised by noble Lords that I was going to try to answer. I have a long list here, so perhaps the noble Viscount will bear with me. I should like to turn first to the speech of the right reverend Prelate the Bishop of Winchester regarding the world food shortage. This was a matter which was also referred to by my noble friend Lord Wallace of Coslany. It has been said that these expansion plans may have an adverse effect on our help to developing countries. The Government are aware of the concern which has been expressed here today, and elsewhere, about the shortage of food in developing countries. Indeed, the White Paper refers specifically to the need to keep in mind the interests of the developing countries, both as producers and consumers.

The economic expansion of our own food production envisaged in the White Paper would by 1980 reduce our annual demand for imported food supplies by the equivalent of £500 million. To be successful, however, this expansion must be based upon economically viable methods of production. This implies the continuing use of feed grain as well as other animal feed; but the White Paper emphasises the importance of improving the use of our grassland for feeding livestock. We believe that this policy of increasing our home production on a sound economic basis represents a more practical approach than trying to impose artificial restraints on this country's pattern of production and consumption.

Several noble Lords mentioned the safeguarding of agricultural land. It was mentioned by the noble Lord, Lord Sandys, by the noble Viscount, Lord Arbuthnott, and by the noble Lord, Lord Vernon. The White Paper recognises the implications of the loss of land for agricultural production. It re-states the Government's policy of ensuring that, wherever possible, agricultural land of high quality is not used for development where land of a lower quality is available. Moreover, it is the Government's policy that land taken for development is the minimum necessary, consonant with reasonable standards.

There was also the question of development land, which was raised by the noble Earl, Lord Ferrers. The Government's proposals for development land are now being discussed in another place, but these are not concerned with land which is to remain in use for agriculture. However, the Government have announced their intention of strengthening the quota arrangements and are consulting the Department of my right honourable friend about the proposals for development by giving them for the first time statutory effect through amendment of the Town and Country General Development Orders.

The question of capital taxation reliefs was also mentioned and the noble Lord, Lord Crawshaw, mentioned livestock. The relief on agricultural land in respect of capital transfer tax and capital gains tax relates only to the land itself. Farmers' other assets, including stock, would be assessed according to their value at the relevant time. The noble Lord, Lord Mackie of Benshie, asked me about credit facilities. As the Government have recognised in the White Paper, there is a need to keep under review the availability of these credit facilities. This we are doing in the discussions we are having with the farmers' unions. The Economic Development Committee for Agriculture has also set up a finance section to look at the financial resources available to agriculture and how these will affect the industry up to the 1980s.

Several noble Lords, including my noble friend Lord Walston, the noble Lord, Lord Mackie, my noble friend Lord Wynne-Jones and the noble Lord, Lord Sandys, raised the important question of research. We shall, of course, take careful note of what has been said but, in common with all activities financed from the public purse, agricultural research and development has had to accept some reduction in its funding because of the need to limit public expenditure. In the current year the Agricultural Research Council will receive, in real terms, only marginally less than in 1974/75. The Government recognise the importance of R and D in agriculture, particularly in the context of the recent White Paper. We have this fully in mind and shall certainly take note of what has been said today.

My noble friend Lord Ritchie-Calder mentioned seaweed, and his remarks will be carefully considered. He also asked me about triticale. This is something which he mentioned first on the 15th April. As I was not able to give him an answer here then, it is only fair that I should try to give him one today. I understand that this is a crop between wheat and rye, and that a few farmers have grown it in this country for feed. The crop may indeed have some potential, as my noble friend has indicated, but a great deal more research is needed to overcome the problem of ergot infection and other drawbacks before commercial production on any scale is likely. The Agricultural Development Advisory Service is continuing to watch developments.

Several speakers mentioned the question of tied cottages. It is the Government's firm intention to honour their commitment to abolish tied cottages, as foreshadowed in the last two Election Manifestos. This is not open to doubt. The Government will be publishing a consultative document in the near future which will form the basis of discussions with interested organisations, including the Country Landowners' Association, the National Farmers' Unions and the workers' unions and local authority associations, on the best ways of fulfilling the commitment and on the precise nature of the legislation needed. I have taken careful note of the useful suggestion made by the noble Lord, Lord Crawshaw, about giving priority in council housing. I know that he has raised this matter before, and I will go into it.

Lord BALERNO

My Lords, would the noble Lord permit me to ask him a question about tied cottages in Scotland? Is he aware that farm workers in Scotland have joined with the Farmers' Union in Scotland in asking that the present system there be not changed?

Lord STRABOLGI

My Lords, I am sure we shall take note of what has been said and that this will be taken into account in the discussions. The noble Earl, Lord Ferrers, and the noble Lord, Lord Rathcreedan, spoke about the milk surplus in the EEC and how this squared with the proposals in the White Paper. There is no inconsistency in the expansion of United Kingdom production against the background of a Community surplus. It is clearly sensible to make the most of our own national resources. We have the right climate and our grassland is well suited to milk production. Moreover, our farmers are efficient. It is inefficient production which must be discouraged. I am sure that this is the Commission's view, as well as our own. Our producers have still some way to go to before reaching full EEC support levels, though they would have some improvement in support levels to come even if full EEC support prices were held down.

The noble Lord, Lord Rathcreedan, asked about brucellosis. Various aspects of the brucellosis eradication scheme are being reviewed and the results will be announced as soon as possible. The noble Earl, Lord Ferrers, asked about grassland, and he and other noble Lords have quite properly drawn attention to the prime importance of improving the production and conservation of grass if the White Paper targets are to be reached. The White Paper mentions the intensified programme of work by our advisory services. This is at present aimed primarily at improving conservation, bearing in mind the problems of last winter. The study of incentives also referred to has made progress. There have been some discussions with the interests concerned and we hope to announce the conclusions of the study in the autumn.

The noble Lord, Lord Mackie of Benshie, as the noble Viscount, Lord Thurso reminded us, raised the question of hill farmers. The Government fully appreciate the difficulties which have faced livestock producers in the hills. The cold spell and wet weather this spring of course did not help. But the much improved fatstock market situation, with better prices for store and cull cattle, and improving prices for farmers, should bring, we hope, some relief, especially if reflected in the autumn sales. The noble Baroness, Lady Emmet of Amberley, spoke about fish farming, a subject she has made very much her own. In fact, she is almost becoming the leading expert in the House on this fascinating subject. We take note of all that she has said and I am sure there are great potentials in this.

The noble Lord, Lord Rathcreedan, also asked about the dairy herd conversion scheme. The EEC Council of Ministers decided in January that this EEC scheme should be suspended from 31st December 1974. However, producers who applied before that date to join the scheme were allowed until 30th June to decide whether or not to commit themselves to the scheme. No new applicants have, however, been accepted since 31st December. My Lords, I hope that that answers most of the points raised by noble Lords. As I say, I think we have had a very useful debate, and we are most grateful to my noble friend for raising this matter.

8.43 p.m.

Lord WALSTON

My Lords, this has been a long debate, but I have listened to all the speeches, as many of your Lordships have done, with interest and profit. I thank all those who have taken part for having done so with so much thought, and for giving us the benefit of their knowledge. I am also most grateful to my noble friend Lord Straholgi for the very painstaking and conscientious way in which he has dealt with all the questions that have been raised. It is gratifying that there has been, I think I may say, complete acceptance of your Select Committee's Report on the stocktaking of the Common Agricultural Policy; and, what is more gratifying, perhaps, complete acceptance of the fact that the Common Agricultural Policy has changed considerably from what it was originally and from what some people feared it might remain. It has shown that it is flexible; that it can change to meet conditions; that it is becoming more consumer-orientated and, more important than that, that it is becoming more outward-looking and concerned with the Third World and with world trade. It is also quite clear that there is nothing in it which in any way need conflict with the interests of this country from the agricultural point of view.

So far as the White Paper is concerned, here again we have found a large measure of acceptance and approval of it. There has been a unanimous feeling that the world food situation and the nation's economic situation are such that we ought to press forward with a substantial measure of expansion of our agriculture. What is more, that is completely possible technically from our point of view. The general lines which the Government have set out in the White Paper appear to have been accepted by all noble Lords who have spoken. I am glad that there has been such emphasis on fish, and to hear that the Government are taking note of that. Undoubtedly it is something which can provide a very large increase to the very short supplies of protein in the country.

The only point that disturbs me, having listened to all the speeches and to the replies we have had from Government speakers, is that there seems to be a lack of urgency on the part of the Government. All that they have said I agree with; all that they are trying to do I think we on all sides of the House agree with. But when in reply to the strong points that have been made concerning research and the long-term nature of research it is said, with almost satisfaction on the part of the Government, that there has been only a small decrease in the amount of real resources, that is to me most disturbing. I fully accept the stringencies and the economic problems that exist. If the Government say that there is not enough money for research, they must at the same time say that in five years' time we shall have less food than we otherwise would have; and they must face up to that. But if they say we must have more food in five year's time, the money must be found from somewhere.

It is always difficult to cut; expenditure can be cut in some respects and it is a question of priorities. But we cannot fool ourselves, and the Government cannot fool themselves—I am sure they are not trying to fool us—into believing they can achieve their objectives of increased food production and increased efficiency in food at the same time as they make, even marginally, less money available to research. The same goes for the problem of financing expansion from the farmers' point of view. I accept the reasons why the talks have been delayed. I am happy that they are going on and it is right that they should. But the Govenment must realise that, until the results of those talks come out and are seen to be satisfactory, any beginnings of expansion will be delayed.

Another factor the Government must take into consideration is that confidence in the agricultural industry, as on previous occasions many speakers have pointed out, has been shaken. The longer there is delay in restoring that confidence, the more difficult and the more costly it will be. He who gives quickly gives twice—and that applies just as much to the agricultural industry as to charity. I urge the Government to treat these matters with the greatest possible urgency so that by the end of the coming harvest season we know precisely where we are and what resources are to be made available to us. If that is done, I am quite confident that the agricultural industry will respond. My Lords, I beg leave to withdraw the Motion.

On Question, Motion, by leave, withdrawn.