HC Deb 25 October 1956 vol 558 cc68-71W
62. Captain Duncan

asked the Minister of Agriculture, Fisheries and Food his estimates now of the sums needed from the taxpayer to meet the fatstock price guarantees on cattle, sheep, and pigs, respectively.

Mr. Nugent

The most recent Estimates were published on 5th July, 1956, and the total was £63.4 million, made up as follows :

Cattle 11.9
Sheep 10.2
Pigs 41.3

67. Mr. J. E. B. Hill

asked the Minister of Agriculture, Fisheries and Food whether he will make a statement on the modifications proposed to be made in the methods of implementing the guaranteed prices for fatstock.

Mr. Nugent

Discussions are now proceeding with the representatives of producers on new arrangements for carrying out the guarantees for fatstock to come into effect on 25th March, 1957. We hope to announce details soon.

Mr. J. E. B. Hill

asked the Minister of Agriculture, Fisheries and Food whether he will make a statement on the supplementary guarantee payments to be made to the producers of fat cattle referred to in his recent letter to the President of the National Farmers' Union.

Mr. Amory

Subject to Parliamentary authority which is now being sought, supplementary guarantee payments will be made on all cattle presented for certification and found eligible during the current livestock year. These payments will be graduated and will amount on an average to about 11s. per live cwt. In total they will amount to approximately £11 million.

During the current livestock year there has been a sharp and sustained fall in the prices of fat cattle from the very high levels ruling last year. The present guarantee arrangements, which are based on a 52-week moving average of market prices, have been too slow to reflect adequately these price reductions in higher guarantee payments. Thus, although guarantee payments have been rising, a substantial gap between the average return received by producers during the current livestock year and the

Period Time of certification Extra payment
per cwt.
s. d.
1 26th March, 1956–22nd April, 1956 23 0
2 23rd April, 1956–20th May, 1956 21 0
3 21st May, 1956–17th June, 1956 18 0
4 18th June, 1956–15th July, 1956 15 0
5 16th July, 1956–12th August, 1956 13 0
6 13th August, 1956–9th September, 1956 11 0
7 10th September, 1956–7th October, 1956 10 0
8 8th October, 1956–4th November, 1956 9 0
9 5th November, 1956–2nd December, 1956 8 0
10 3rd December, 1956–30th December, 1956 6 0
11 31st December, 1956—27th January, 1957 5 0
12 28th January, 1957–24th February, 1957 4 0
13 25th February, 1957–24th March, 1957 3 0

The following table gives the average market prices realised during the first eight periods of this fatstock year, i.e., up to 4th November, and the average returns

Period Average Market price, actual or estimated Rolling average rate of homebred guarantees per cwt. Stabilising adjustments per cwt. Additional payment per cwt. Total estimated average return per cwt.
s. d. s. d. s. d. s. d. s. d.
1 132 5 Actual 3 0 23 0 158 5
2 128 8 Actual 6 6 21 0 156 2
3 129 0 Actual 10 0 18 0 157 0
4 122 9 Actual 14 0 15 0 151 9
5 114 10 Actual 17 0 13 0 144 10
6 107 3 19 6 2 0 11 0 139 9
7 102 6 22 6 3 0 10 0 138 0
8 100 0 (est.) 25 6 2 6 9 0 137 0

standard price of 151s. faxed at the last Annual Review now seems certain. The supplementary payments now to be made are designed to make the estimated average return over the year approximate to the standard price, thus carrying out the Government's intention of encouraging the beef cattle industry.

Because the rates of guarantee for the early months of this fatstock year were low in relation to the low market prices at that time, producers in those months have suffered proportionately greater than those in later months. The most equitable way, therefore, of making these additional payments is by graduating them so that they are greater in the earlier part of the fatstock year than in the latter part. The following scale of additional payments has therefore been agreed between the Ministry and the Farmers' Unions for England and Wales, Scotland, and Northern Ireland :

received by producers during this same period after the guarantees and the additional payment have been added :

The present rolling average system will remain in force until the end of the current fatstock year and the following table shows the rates of guarantee which

Period Forecast rolling average rate of guarantee Additional payment Forecast total guarantee payments
s. d. s. d. s. d.
9 29 0 8 0 37 0
10 31 0 6 0 37 0
11 33 0 5 0 38 0
12 34 0 4 0 38 0
13 35 0 3 0 38 0

The actual rates under the rolling average system may prove slightly different from the above forecasts, since they depend upon the level of market prices between now and the 24th March, 1957, but the difference is unlikely to be much more than 1s. per cwt. up or down in any period. The total returns which producers will receive in these periods will of course depend upon the prices which they receive from the market.

From 5th November onwards it is hoped that the additional payment will be added to the weekly payment made under the present system and included in the same cheque. The extra payments for period 1–8, i.e., up to 4th November, will be made as soon as possible by additional cheques in respect of each payment already made. Extra payments for period I will be made first and then those for period 2 and so on. These retrospective payments can only be made to the actual presenters of stock for certification. In most cases these will be the producers themselves by where dealers, wholesalers and butchers, etc., have bought from the producers at prices inclusive of the guarantees, the additional payment will have to be made to them. Buyers will no doubt make the necessary adjustment with the producers from whom they have bought.

An improved method of calculating the rates of guarantee for the next fat-stock year, is now being discussed with the N.F.U.s. Details of the new arrangements will be published very shortly.