§ 5.1 p.m.
§ Lord RAGLAN rose to move, That this House takes note of the most recent decision of the Council of Ministers to implement a two-tier intervention price for wheat. The noble Lord said: My Lords, earlier this year Sub-Committee D reported upon a proposed common regime in respect of a two-tier intervention price for wheat, one price being for wheat judged suitable for bread-making and the other for wheat which is judged suitable for animal feed. We had a debate and as I spoke to the Report on 4th February and explained the Commission's proposals to the House as best I could then, I feel I ought not to go over that ground again.
Our Sub-Committee opposed these proposals in their Report, but the Commission have gone ahead with them just the same, and now the Council of Ministers have agreed to institute from August of this year a test for wheat considered suitable for bread-making. Perhaps I might quote from paragraph 13 of the Report, which reads as follows:
…no quick or certain test had been developed which could determine whether a sample of wheat was suitable for making British type bread. Hence no quick and cheap system exists of identifying the suitability of wheat for bread-making at the point of sale into intervention. The only reliable method appears to be to test-bake, which is lengthy and costly. This difficulty in the opinion of the Committee appears to render impracticable any two-tier intervention system of the sort suggested in paragraph 12 above.
§ However, the Commission's scientists have now devised a test based not upon baking a sample of the dough but on the stickiness of that dough. The Regulation states that the wheat should qualify as being of bread-making quality if the dough produced from it can be kneaded mechanically. I understsnd that is called "the test of machinability ".
§ Much criticism has been made of the reliability of that test. The Home Grown Cereals Authority says it has considerable doubts about its suitability under United Kingdom conditions, and the instituting of these tests was much opposed last week in another place. The burden of the evidence given to our Sub-Committee last autumn impressed upon us the differences of types of wheat used in Common Market countries which are thought 1070 suitable for making bread. The Sub-Committee, of course, are not technically qualified to argue the pros and cons of a test of such suitability. We have to depend upon advice. It might be, though I doubt it, that this test could be adapted to discriminate accurately between various types of flour.
However, my purpose in moving this Motion today is to endeavour to impress once again on the Government the total undesirability and impracticability of having a two-tier system for wheat in any case. I should like to draw their attention to paragraph 14 of our Sub-Committee's Report—that is, the final sub-paragraph (d), which indicates that the Committee:
…considers that the problem would best be solved by fixing the intervention price at a level which would enable different wheats for bread-making to compete with other grains as animal feed, allowing wheat of assured bread-making quality to command what premium it can in the market.
§ In other words, millers buy their own wheat, do their own tests and then pay the premium. This question of differentiating between different types of wheat which are thought suitable for bread-making or for animal feed is exceedingly complicated, and we took a lot of evidence on it. In addition, the question is vexed further by emotional attitudes which I acknowledge may be difficult to change, but which I think we should try to change.
§ We in this country have traditionally grown wheat for animal feed. Most of the wheat we import—mainly from North America—is used for bread-making because the kind of bread we have become accustomed to eating is nearly all made from types of wheat which grow best in North America and do not grow well in this climate. In other words, we have become conditioned in our taste for bread by the age-old policy now of importing wheat from abroad. They can grow this kind of wheat in the States: we cannot grow it here.
§ But I must emphasise that there is nothing at all superior in the nutritional quality of bread-making wheat. In fact, some of the high-yielding wheats which are grown in this country and added to the traditional imported wheats in increasing quantities (I believe it is now up to 50 per cent.) mainly differ in such technical ways as differences in alpha-amylase content and other characterìistics 1071 which are very difficult to quantify. It is a question of protein quality, though not necessarily protein quantity.
§ So let us not proceed with the belief that by instituting a two-tier régime we are helping the nutrition of the population and defending them from attack by purveyors of an inferior product. I emphasise this point because it was stated in a reply last year given by my honourable friend Dr. Gavin Strang in another place that this wheat used for bread-making was of a superior kind; at least, he inferred that it was. It is not superior and neither is the animal feed inferior: it is simply inferior for turning it into the particular kind of bread that we eat. Therefore the high-yielding domestic wheats we have here are not inferior; they are simply different, and so are not suitable for making the long-life British bread, though they make excellent cakes and biscuits.
§ The tradition in some Member countries of the Community, notably France and Italy, is that wheat is not an animal food. It is not right to feed it to animals. That is what conditions their attitude. It is called the "noble cereal "and other similar names, and pressure to institute this two-tier price stems from this attitude and not from a desire to maintain a quality standard. In our Committee's belief, the two-tier price system will lead to distortions in the market, it runs the risk of encouraging the production of wheat of a type which is not needed and which will not necessarily save FEOGA anything, although the Commission say that they hope it will, and in my view the whole elaborate scheme is entirely unnecessary and potentially expensive.
§ If millers want suitable wheat, it is always open to them to offer a premium for growing it. At present in this country, millers are paying a premium for bread-making type wheat of 30 to 40 per cent. over the home grown product, with imported Manitobas at £95 a tonne against home-grown wheat at £65 to £70 a tonne. There is no reason to think that Continental millers would be unable to offer adequate premia for that type of bread-making wheat. What will happen, if this scheme for two-tier Government support goes ahead, is that the taxpayer may be required to fork out if the wheat goes into intervention—which it possibly will not 1072 do this year because of the drought, but if we have a good season and one of those embarrassing surpluses it may—for wheat which will not necessarily, in any case, be used for its avowed purpose and may find its way back into animal feed.
§ I should explain that the two-tier system is a test for finding out whether wheat is suitable for making bread. It does not differentiate between what goes for bread-making and what does not. It is merely testing what might be suitable for making bread, if anybody wants to buy for that purpose. So it seems to me that the price will be paid only for keeping up appearances. The premium will be paid for a superior wheat which should not suffer the indignity of being classed as animal feed.
§ So I urge the Government to oppose the institution of this test and keep up their pressure against the two-tier intervention idea. It is the view of the Sub-Committee, as well as my own strongly held view, that one level of intervention set at the feed grain price will cope very adequately with the situation, leaving the market to set the premium. Any other scheme is fraught with difficulty, open to abuse and quite unnecessarily expensive to operate. My Lords, I beg to move my Motion.
Moved, That this House takes note of the most recent decision of the Council of Ministers to implement a two-tier intervention price for wheat—(Lord Raglan.)
§ 5.14 p.m.
§ Lord SANDYS
My Lords, once again, from this side of the House, I should like to support the noble Lord, Lord Raglan, very warmly in bringing forward this further issue of two-tier wheat. In view of the fact that we debated the subject on 5th February, and there was a Statement by the Minister of State in another place on 16th June, it appears that it will have been very fully discussed by the time we have completed our deliberations today, and I propose to say only a very few words.
I speak with some trepidation on this subject of very considerable technicality, but I should like to say this. It must be very clear that everything depends upon this year's harvest, so I should like to ask the noble Lord, Lord Strabolgi, what 1073 assurances he can give us in present circumstances. Do the prospects for the 1976 harvest appear bright? Does it seem that the circumstances in which intervention buying would have to take place might be obviated? Is it possible that the intervention price is likely to be set at a very much lower rate than the United Kingdom price, which is what we believe to be the case?
The Minister of State in another place referred to the difficulties and mentioned one variety, which is a very good one. He quoted Maris Huntsman and said that this being a hard grain it will mill well but make poor bread, which bears out very clearly what the noble Lord, Lord Raglan, said. It is most inappropriate that we should have a situation in which certain varieties are subjected to tests knowing full well that they will not be conclusive, because part of the tests will be satisfactory while the other half will not. I do not wish to go into further detail, but I hope that the noble Lord, Lord Strabolgi, will be able to satisfy us that the circumstances in 1976 may prove that it will be possible to postpone this situation, through the force of circumstances and the fortune of circumstances, until next year when some more satisfactory system may be evolved.
§ 5.17 p.m.
§ Lord COLLISON
My Lords, I took part in the earlier debate and, like the noble Lord, Lord Raglan, I do not want to go over the ground which I covered then. I would again thank the noble Lord for presenting so ably this Report of the Committee. As we have heard, the Council of Ministers confirmed the Commission's proposal to fix a single intervention price for wheat of bread-making quality, and a lower intervention price for feed wheat. The agreement of the Council of Ministers to a two-tier intervention arrangement for wheat reflected the Commission's view that, with the spread of high yielding but poor bread-making quality wheats, such as Maris Huntsman and Clement, it was necessary to discriminate within the intervention arrangement between good bread-making wheat and other wheat. The French, in particular, had expressed misgivings about the spread of the high yielding varieties which they feared might replace much of the better quality wheat.
1074 The debate had gone on within the Community for a year, and the difficulty for us lies in the simple fact that our classification of wheat is based upon variety. We have determined what is hard wheat, which is used for making the type of bread we eat in this country, and soft wheat, which goes to produce animal feedstock. On the Continent, they make a different type of bread and simply speak of wheat of bread-making quality. The great problem for them, as well as for us, is to devise tests which will satisfy the need to know which wheat falls within the bread-making quality, and as we have already heard these tests are not very satisfactory; we cannot be sure of them.
For example, the Home Grown Cereals Authority feels that the stickiness test is very dicey. One cannot be really sure. The only way of knowing whether one has a bread-making wheat is to make bread out of it, which takes time and trouble. One has to have a miniature grinding mill in order to reduce the grain to flour. One has to bake it, and that takes time. To do this around the country for each selection of wheat, perhaps in smaller quantities from the farm, is obviously quite impossible.
At this point I must declare that I am a member of the Cereals Authority. Clearly this matter concerned us very deeply and we discussed it at great length. We discussed the possibility of the scientists being able to devise an easier but nevertheless more determinate test. That has not yet happened, although they are still working upon it. Therefore the position of the Authority, having looked at the problem—and today I am speaking as a member of the Authority— is that, while it still doubts whether a two-tier intervention system is necessary in the United Kingdom to ensure the continued production of reasonable quantities of wheat of bread-making quality, it states:Given, however, that there is to be a two-tier intervention system for wheat, the Authority would prefer to see a simpler method of distinguishing wheat of bread-making quality, based possibly on its own classification schemeunder which wheat for breadmaking is classified according to type. The Authority goes on to point out:however, the Commission evidently desires a Community-wide scheme for this purpose and the Authority considers that a scheme involving a bread-making test, although creating certain difficulties, would be workable in UK conditions ".1075 The Authority also takes the view (this point was made just now) that:it is improbable that there would be widespread use of intervention for high quality British wheats in this country.To sum up, the Authority dislikes the idea of the two-tier system. It does not think it is necessary for the United Kingdom, but if there is to be one the Authority would like it to be based on wheat classification, which is very easy. Thirdly, if there is to be a bread testing scheme, the only one which the Authority knows at the moment as absolutely certain is the actual baking of the bread. It has doubts about the stickiness of the dough test. In those circumstances, although the Authority would be willing to work some kind of adequate scheme for testing, at the moment it has very great doubts about the possibility or advisability of doing so.
§ 5.23 p.m.
§ Lord STRABOLGI
My Lords, as the noble Lord, Lord Raglan, has said, it was on 5th February that the House debated and took note of the Report of the European Communities Committee on High Yielding Wheats and we are grateful to him for giving us the opportunity once again to debate this matter. The House then accepted that support for feed wheat should be at a feed grain level. Following from this, the Council of Ministers on 2nd and 6th March agreed that for the 1976–77 marketing year the intervention price for common wheat will relate to wheat of breadmaking quality, with a lower support price for feed wheat. In order to operate this two-tier system it was clearly necessary that before the beginning of the 1976–77 year on 1st August 1976 scientific experts in the various Member States should agree on a satisfactory test to distinguish breadmaking from non-breadmaking wheats.
At this point I should like to remind your Lordships that, as has been said, the proposed test is for use only in an intervention situation and need not therefore affect normal trading practice. I think it has been agreed that this dough handling test will be satisfactory for the 1976–77 year. It will also prove a useful step towards the introduction of a full baking test for use during the 1977–78 marketing year. As your Lordships will recall, in the 1076 1977–78 marketing year support for bread-making wheat will occur at a "reference price "set above the feed wheat intervention price at a level reflecting the difference in yield of the two types of wheat.
At the March Council of Ministers an intervention price of 131 units of account per tonne for the 1976–77 marketing year was agreed for common wheat of breadmaking quality, with a drawback of 15 units of account per tonne for non-breadmaking wheat. In addition, the present system of regionalised wheat intervention prices is being replaced from 1st August by a single intervention price. The United Kingdom intervention price for wheat of breadmaking quality in August of this year will be £64.04 per tonne and support for non-breadmaking wheat will be at the lower level of £56.12 per tonne. These prices are subject to monthly increments of about 81p per tonne.
I was asked which United Kingdom varieties of wheat will qualify as bread-making quality. I am confident that the dough handling test will distinguish wheat which is of bread-making quality. Until details of the test have been finalised, it is not possible to say which wheat might qualify for the higher intervention price, but I would expect those varieties of wheat which appear in List A of the Home Grown Cereals Authority's wheat classification scheme to pass the test. On the other hand, Maris Huntsman which, as was mentioned this afternoon, is not regarded as a breadmaking wheat is more likely to be eligible for intervention support at the lower level.
The noble Lord, Lord Sandys, asked about the prospects of intervention of wheat in the United Kingdom from the 1976 harvest. It is too early to be certain about the likelihood of intervention in the United Kingdom following this year's harvest. However, we are in deficit both for breadmaking wheat and feed wheat, and as a result the price for imported grain, which enters the country at the threshold price, tends to keep market prices well above intervention levels. Much will depend on the weather and the world harvest generally, but our present estimates suggest that there are unlikely to be substantial offers of bread- 1077 making wheat into intervention in the United Kingdom from the 1976 harvest.
I was also asked whether or not there are tests which are more reliable than the dough handling test. Obviously the best test to distinguish breadmaking wheat is to mill the wheat and bake the bread. Failing this, one can proceed on the assumption that good breadmaking wheats tend to be high in protein and low in an enzyme called alpha-amylase which, as was mentioned, produces a damp and sticky crumb. There are a variety of tests for one or the other—for instance, the Zeleny test for protein content or the Hagberg test for alpha-amylase. These tests are fairly simple and quick to do. But the fact remains that performance under these tests is rather an indication of, than an absolute test of, breadmaking quality. The inequality of such tests is underlined by the fact that the variety Clement—a feed wheat widely grown on the Continent—would qualify as being of breadmaking quality if tested solely on alpha-amylase and protein quality, while Maris Huntsman, the most significant United Kingdom feed wheat, would fail.
The Hagberg test and protein tests give reliable assessments of particular aspects of individual qualities in wheat, but neither singly nor together do they give a complete or infallible assessment of overall bread-making quality. The dough handling test is much closer to a realistic assessment of overall suitability for breadmaking. Hag-berg and protein tests in addition to the dough test add little to the sum of knowledge. The proposed test is sufficiently objective for the purposes for which it is intended, that is, to distinguish bread-making wheat from non-breadmaking wheat.
It may be asked why we do not postpone the new support arrangements for wheat until the 1977–78 marketing year, when a full baking test will be ready. It is unlikely that the new arrangements for supporting wheat could have been postponed without the risk of reopening the entire price package agreed at the Council of Ministers in March. This is something we naturally wish to avoid. Furthermore, other Member States who will be more concerned than the United Kingdom with sales of wheat into intervention agree that the proposed decision will be sufficient 1078 to determine whether wheat is of the breadmaking quality.
The Flour Milling and Baking Research Association, which is a partly Government-sponsored organisation, for some years has been using a baking test as indication of breadmaking quality in wheat. In general, the trade would prefer to see a postponement of the new measures until the next marketing year, but understands the reason why this cannot be done. The trade has accepted that the proposals regarding machinability tests are as watertight as is possible at the present time. Moreover, they do not dissent from our view that there is unlikely to be any substantial offer of breadmaking wheat into intervention in the next marketing year.
In answer to my noble friend Lord Collison, I should like to say that in view of the relatively small risk of intervention taking place in the United Kingdom during the next year, we think one test centre will be sufficient for foreseeable needs. This is likely to be based at the Flour Milling and Baking Research Association at Chorleywood. I hope that has answered the various points raised by noble Lords.
§ Lord RAGLAN
My Lords, I thank my noble friend Lord Strabolgi for his reply. I agree with the noble Lord, Lord Sandys, that this matter has been ventilated, but the time to come back at it again, so important do I consider it to be, is when we have heard news that this is really to go forward. We could hardly believe our ears. I agree with my noble friend that, of course, with the drought as it is in Europe this year, it is unlikely that wheat will go into intervention, but even if it does not come into intervention, surely what we do not want to do is to establish the two-tier system.
I agree that we do not want to reopen what was agreed in March, but I continue to urge the Government to "have a go "at the Commission, to come back to this matter again next year, and the year after, until we finally stamp out this unreliable thing which, in my belief, is so very much open to abuse. This concerns not only the British wheat growers but many Continental wheat growers, as well, who can see all kinds of unhappy results from this if ever we come into intervention. I am glad to see my noble friend nodding his head. I hope he will take these words back to my right honourable friend the Minister, and 1079 that the Government will continue to oppose the two-tier system, this test and any other test.
§ On Question, Motion agreed to.