Ministry of Agriculture and Fisheries.

Part of Orders of the Day — Supply. – in the House of Commons on 7th June 1937.

Alert me about debates like this

Photo of Mr Colin Patrick Mr Colin Patrick , Tavistock

I find myself in agreement with almost everything which the hon. Member has said. I am in agreement also with at least one statement by the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George). He pointed out that there were only about 5 per cent. of our population left on the land and that that figure was declining. We on this side fully agree that that is an unhealthy, unsound and dangerous position. We have realised that for a long time, and that is the reason why, in season and out of season, we press for any action which the Government may take, whether by subsidy, protection or any other means, because we are convinced that the situation is such as to justify almost any measures.

This Debate has ranged over a wide field. For my part, I want merely to touch briefly on one subject, and that is milk. It is the milk problem, among many others, which most merits Government attention at this moment. Reference has been made by several speakers to the rise in prices which has taken place in other departments in agriculture. That rise, unhappily, has not affected the milk producer at all. There is one point on which there will be universal agreement, that it is a highly desirable thing that the retail price of liquid milk should be lower than it is at present. There is no one keener on that than the producer himself. Liquid milk is the only form in which he can sell his products other than at a loss. There is general agreement, too, that if we are to increase the consumption of liquid milk in the interest of the national health there is only one way of doing it on a large scale, and that is by reducing the price. Publicity and returning prosperity have done something; there has been a rise of 12 per cent. over the last year. But for a big increase prices have got to come down. Where a sharp difference of opinion arises is over the suggestion that the producers, as represented by the Milk Board, are endeavouring to make much too good a thing out of liquid milk and are endeavouring to exploit a monopoly.

The hon. Member for Don Valley (Mr. T. Williams) used the phrase "that the Milk Board had taken the wrong turning." If he meant that they had started in the direction of exploitation of a monopoly I would venture to say that he is quite mistaken, because, whatever the exact price of production may be, whether 9d. or 11d., with the cost of feeding-stuffs at their present level, the margin to the producer is very slight, particularly for the small man. It only wants a little bad luck in the shape of loss of a cow or two for that slender profit to be turned into a loss, to lower the price of liquid milk, and the payment of better wages cannot be done on the present basis of prices.

As to the reason for that state of things—because it is accepted that the prices of liquid milk in this country are on the whole high, certainly high as compared with some foreign countries—the reasons are not difficult to find. In almost every other State where conditions are comparable the milk producer has three outlets for his products, roughly equal in value. He can sell his milk as liquid or in the form of butter or cheese. In this country these last two outlets are virtually closed to the home producer. For overriding considerations of national and Imperial economy, we must, rightly I think, allow heavy imports of milk produce. The ratio to-day of imported to home-produced milk products is roughly six to one. The effect of that is virtually to shut out the home producer. That has to be, but it is natural that some milk producers resent the situation very much. They see almost every other industry getting protection while they are denied it. I am afraid that the milk producer has got to put up with it, but that is not to say that he is not entitled to some other form of assistance if it is available for him. I think it is available.

One of the favourite objections of critics of the milk scheme and the way the Milk Board conducts its operations, is that milk production in this country is too high. Last year the gross production in this country passed the thousand million gallon mark for the first time. The critics said, "Why do the farmer produce so much if a third of their produce has inevitably to be sold at a loss?" That sounds good on paper, but it lacks reality. In the case of thousands, perhaps tens of thousands, of producers, the farmer has only three choices before him: He can produce beef, either in the form of stores or in the form of fat cattle; he can produce milk; or he can go out of business. Until just lately, the prices of beef were such that he could not produce except at a loss; he was not anxious to go out of business; and so, having no other alternative, in thousands of cases the small farmer has taken to the production of milk. When beef prices improve, as they are now doing, it will, I have no doubt, relieve the pressure on the manufacturing part, but it will never remove the milk surplus altogether. That cannot be done unless and until we train our cows to produce only the same amount of milk in the summer as they do in the winter, and that will not be for a considerable time hence. I conclude, therefore, that some other form of assistance to the producer is justifiable and necessary, and I think that the best and most practical method of assistance is to be found tucked away, so to speak, in the recent report of the Milk Reorganisation Commission.

The Commission pointed out with perfect truth that, given the very high ratio of imports of milk products into this country as compared with home production, a very small levy on imports would produce a very substantial sum for the benefit of the producer in the form of subsidy. Here I find myself in some difficulty. I am well aware that I must not refer to anything involving legislation, but I hope to avoid doing so. I think the question of the imposition of some import duty on milk products is already being considered by the Import Duties Advisory Committee, and, of course, if the Committee recommend in favour of it, and the Government adopt the recommendation, legislation will be necessary, but my concluding remarks will be on the assumption that such a decision has already been taken, and I want to devote a few minutes to discussing the best way in which the proceeds of an import duty might be used, supposing that to be decided upon.

Although the Milk Reorganisation Commission made no recommendation on the subject, I personally, if I had any say in the matter, would impose such a levy, roughly on the scale tentatively put forward by the Milk Reorganisation Commission, namely, 1d. per lb. on imported butter and ½d. per lb. on imported cheese. But I would make it a condition of that amount being handed over as a subsidy to the Milk Board that the Milk Board should reduce the price of liquid milk by about a corresponding amount. It seems to me that that policy would fulfil the criterion, which the Minister mentioned at the beginning of his speech, of a fair price to the producer without damage to the consumer. A small levy of 1d. and ½d. on butter and cheese respectively would have very little, if any, protective effect; it would not hamper Dominion trade. In the same way, assuming that the consumer paid the whole of the levy, the burden upon him would not be a heavy one, and experience has shown that in fact he does not pay the Whole of the levy.

The hon. Member for Don Valley who, I am sorry to see, is not at the moment in his place, mentioned the experience of Smithfield in the case of the levy upon Argentine beef. I think he must have seen in the Press, as I did, the arrangement which has been come to by the Argentine authorities. According to the Press, at any rate, the Argentine Government agreed to pay one-third of the levy, and the shipping companies agreed to pay one-third, so that only one-third was left to be paid by the consuming public here. No doubt in the case of imported milk products much the same process would obtain, and in that case, as I have said, the consumer would not suffer, nor would the importer suffer to any marked extent. In fact, the consumer would stand to gain, because the price of liquid milk would fall by an amount roughly corresponding to the extra amount that he might have to pay for his butter and cheese. The producer would be in a better position that he is now, because the total yield of such a levy was estimated by the Commission at roughly £5,000,000. That sounds a reasonable figure to me, and it would be considerably higher than the Government assistance which is being granted now. The Government would be relieved of the necessity of paying a direct subsidy, and could devote the money which they are now spending in that way to what, to my mind, might be a more useful object, that is to say, subsidising liquid milk consumption for classes of the community who most want it, such as nursing mothers, children, and so on, or people in the depressed areas. It seems to me to be, in the case of everyone concerned, a matter of "Heads we win, tails you lose," except that there would be no losers. I sincerely hope that the Minister, who must be considering the matter, will not lightly reject a plan of this kind.

One other thing which I think needs his attention is the state of affairs on the distributive side of the industry. There have been several very interesting inquiries into questions which have been raised with regard to distribution and production, and I think one very clear lesson from them is that on the distributive side of the industry there is over-organisation and overlapping. If that could be reduced or done away with by a process of rationalisation, costs would be reduced, the public would drink liquid milk at lower prices than prevail now, and would drink more in consequence, and at the same time the efficiency of distribution need not be upset. As I have said, I hope the Minister will give his most careful attention to measures on these lines. If he does, it seems to me that the milk difficulty might be resolved, if not immediately, at least in years to come.