Orders of the Day — AGRICULTURAL AND FORESTRY ASSOCIATIONS BILL (changed from AGRICULTURAL AND FORESTRY ASSOCIATIONS (TRADING AGREEMENTS) BILL)

– in the House of Commons at 12:00 am on 6th April 1962.

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As amended (in the Standing Committee), considered.

12.23 p.m.

Photo of Mr William Aitken Mr William Aitken , Bury St Edmunds

I beg to move, That the Bill be now read the Third time.

This Bill also has had support from both sides of the House. The reason for this happy situation is that it seeks to remove what could be a very serious handicap indeed to something which we all desire very much—that is, the maximum possible development of agricultural co-operation in this country.

The vast majority of farmers in Britain are certainly the most efficient producers of foodstuffs in the world. If only we could say the same about them as businessmen and merchandisers, they would almost certainly be the most prosperous agricultural community in the world as well. Almost every Member on Second Reading emphasised again and again what co-operatives could do to improve standards, lower costs, raise profits, and provide the sort of stability every farmer must have if he is to face up to the highly competitive conditions which loom ahead.

The Government have given every encouragement to agricultural co-operation. There is the Horticulture Act, 1960; there is the Industrial and Provident Societies Act, 1961. The Annual Review White Paper this year tells us that £1½ million is to be set aside for market research and development. Among the major purposes for which the grant may be made is to promote business efficiency and local producers' marketing organisations and assist in the formation of new ones.

Co-operation is the most effective practical form of self-help that the wit of man has yet devised. In view of the variety of tasks, the many skills, and the wide experience required by those who farm the land, I do not think it is altogether surprising that very few farmers have been able to acquire the highly specialised skills required for modern merchandising. Much the best way of making use of business skill, which the farmer has not got the time or, in many instances, the inclination to acquire, is through the producer cooperatives. It is also one way in which he can be absolutely certain that he can maintain his independence as a producer.

Without some such Measure as this, the declared intention of Parliament to encourage the formation of, and support, the activities of agricultural co-operatives would certainly have been frustrated by the operation of the Restrictive Trade Practices Act, 1956. Nobody visualised at the time the Act was passed through Parliament that it would impose this almost disastrous disability on agricultural co-operatives. For this reason, and also because of the help and assistance I have had from many people who know a good deal about this subject, the Bill has so far had an unopposed passage through all its stages.

I should like to say how very grateful I am, first to the Government for the great help they have provided in the technical aspects of drafting what is really quite a complicated Bill, and also for a number of practical suggestions which they have made to clarify various Clauses.

It was at the request of the National Farmers' Union and the Agricultural Central Co-operatives Association that I introduced the Bill, and I am grateful to them, too, for their support and competent assistance. Most of all, I am grateful to colleagues on both sides of the House for their support at all stages of the Bill.

The main Amendment to the Bill in Committee was the extension of the protection of the Bill to such trading restrictions between members as are actually in the constitutions of co-operatives, usually horticultural co-operatives. I and those associated with the drafting of the Bill did not realise that these restrictive clauses and conditions in the constitutions of co-operatives were not actually covered by the Bill. However, they were not. If a co-operative insists—most horticultural co-operatives do this—on members sending all or a stated proportion of their produce to the cooperative, that must be allowed. There are often very good reasons why this rule is not always adhered to, but it must be in the constitution of the cooperative, because no co-operative could be expected to operate successfully if its members were free to sell their produce through other channels when supplies were short but could dump it on the co-operative when there was a glut. That was the only major Amendment, though there were some minor consequential ones.

The Committee also slightly extended the ambit of the Bill in relation to forestry co-operatives which are not just selling organisations. Their major activities are often the planting of trees—

Photo of Mr Anthony Kershaw Mr Anthony Kershaw , Stroud

If my hon. Friend will allow me, he speaks of the extension of the Bill to forestry co-operatives whose main activity is not selling. I understand that the main difficulties would arise, were it not for the Bill, in relation to selling. If the main activity of forestry co-operatives is planting, how do they come under the Bill?

Photo of Mr William Aitken Mr William Aitken , Bury St Edmunds

My hon. friend knows a lot about forestry, so he will realise that although the major job of most of these forestry co-operatives is to assist their members in setting out trees and in giving technical advice, they also sell. In the original draft we stated that the major activity must be the selling of produce on behalf of members, but that would have been very unfair to forestry co-operatives. It was an anomaly that had to be cleared up.

The very nature of the activities we wished to cover made it necessary to draft the Bill rather more widely than the Government were prepared to accept. That is the explanation for subsection (3) of Clause 1, which enables the Minister to make an Order restricting the application of the Bill, and I apprehend that the Government will make such an Order concurrently with the Bill becoming law. I cannot forecast the contents of that Order, because some of its provisions will be purely technical, but there will certainly be two provisions which will reassure anyone who fears possible abuse under this Measure.

I think that one provision will make the Bill inapplicable to agreements covering factory processing of ordinary consumer goods. For example, for a cooperative to take on the factory production of cider from apples would go far beyond the principle of farmers coming together collectively to market their produce. Other examples would be the manufacture of custard powder and furniture. It is quite clear that such cases ought to be examined by the Restrictive Practices Court in the same way as would other agreements dealing with those goods. The real principle remains that the protection of the Bill will be given to any farmer who, in his normal trading, has to process his goods to some extent.

I also willingly accept the need for another provision which I believe will be included in the Order, and that is the exclusion of multilateral arrangements between co-operatives which would result in the rigging of prices or the sharing of markets. I hope that that provision will reassure private traders, several of whom have written to me on the subject. They need have no fears on that score.

The Bill will give agricultural cooperative associations the same trading freedom as the ordinary farmer has. All experience has shown that these associations can do the job of selling a good deal better than can the individual. I therefore hope that the Bill will encourage those co-operatives, so that they will go from strength to strength to bring about the increased efficiency in marketing which is really the vital problem of agriculture today, and most essential in the days to come.

Question put and agreed to.

Bill accordingly read the Third time and passed.