Orders of the Day — Agriculture

Part of the debate – in the House of Commons at 12:00 am on 3rd November 1966.

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Photo of Mr Gerald Fowler Mr Gerald Fowler , The Wrekin 12:00 am, 3rd November 1966

If one listened only to the speeches of the right hon. Member for Grantham (Mr. Godber), the hon. Member for Harborough (Mr. Farr) and one or two other hon. Members opposite, one would think that all agriculture's troubles could be laid at the Ministry's door. One would believe that agricultural setbacks were always the fault of Government policy and that agricultural conditions were always entirely under the Government's control.

This is simply not the case. If hon. Members opposite believe that it is, they would themselves have to account for the rundown in the beef herd from 1961 to 1964 and for the sharp fall in milk production in 1963–64. They would also have to account for the sharp drop in pigs from 1958 to 1960 and for the very sharp drop in farming income in 1958—and they might account for it. This was largely a consequence of the 1957 Agriculture Act.

It is a game that two can play, and the game is not worth playing. Not only are agricultural setbacks not always to be laid at the door of one party, but they are not always the Government's fault. One can see this clearly enough by looking at the reverse case. How did we recover from the setbacks in pig production in the early 'sixties? There was a rise through 1964–65 to a record total of cattle on agricultural holdings in June, 1966, and no doubt the Government can take some credit for this. But there has also been a rise in most other Western countries.

Part of the explanation is that the rise was a response to a drop in Argentine slaughter in 1962–63, that is to say, it is not necessarily a result purely or entirely of the Government's policy. If the Government cannot take the entire credit for something that is desirable, neither should setbacks in the industry always be laid at their door, precisely because the situation is not entirely under our domestic control. It is clear that forecasts of the future are very difficult to make.

Some hon. Members jeered at the National Plan tonight, but the estimates for the Plan were prepared not by the Minister, but by the National Farmers' Union, the Natural Farmers' Union of Scotland, and the Ulster Farmers' Union. In one of the passages from page 8, Part II of the National Plan, quoted by the hon. Member for Rye (Mr. Bryant Godman Irvine), one finds that … special attention has been given by the industry to the present world shortage of beef. It says, later: To meet this situation, which shows no signs of changing, the possibilities have been explored of expanding beef production to the full extent which is technically feasible. … As the hon. Gentleman said, the situation showed no signs of changing. It has changed dramatically, but the industry foresaw no change and could not be expected to. The National Farmers' Union does not exist to be a latter-day Cassandra, but to represent the farmers. It is unfair to expect the Minister, any more that the N.F.U. to foresee such changes in agriculture's future which are not in the Government's control. [AN HON. MEMBER: "It is his job."] Nevertheless, the industry's present problems are real enough. I hope that the Minister will take some immediate action, perhaps without waiting for the next Annual Review.

The fall in beef prices since the end of July, which is as much as 27 per cent., has led, as my hon. Friend the Member for Berwick and East Lothian (Mr. Mackintosh) said in the different context of hill sheep, to lack of confidence by the beef industry not in the Minister but in the market and the market's long-term prospects. Inevitably, returns to producers will be down this year, even though the operation of the guarantee will ensure that there is no dramatic drop in income. For this reason, there is a crisis of confidence—a crisis of confidence in the market which jeopardises the fulfilment of the National Plan.

It is an irrational crisis. The Plan points out that consumer expenditure on food will probably rise by 8·4 per cent. by 1970. That may seem over-precise, and probably it is, but it will certainly rise by some amount of that order for the simple reason that the population is increasing. Furthermore, the Plan points out that there is room for beef and veal sales expansion up to the level of £30 million per annum without reducing imports at all. Therefore, even if imports continue to run at the 1964 level, there is still room for that degree of expansion.

It is an irrational crisis also because of the measures taken at the Price Review this year. Presumably, the Opposition are not pleading that the guaranteed price for fat cattle should not have been raised, that the beef cow subsidy should not have been introduced and that the guaranteed price and standard quantity for milk should not have been increased.

There should be confidence in the beef producing industry. But there is not, and the reasons why are many and complex. Basically, the reason is not the import of Irish cattle. This is another symptom of what is amiss. The basic trouble is, partly, the tariff barrier set up by the European Economic Community blocking foreign supplies, including our own, into the Community. We used to sell quite a substantial amount in the E.E.C. It is partly the expansion by most countries of their cattle herds in response to the international beef shortage of 1963–64. It is partly, also, the increase in home supplies at the same time, as witness the fact that we had a record number of cattle on agricultural holdings in this country in June this year.

The Irish reaction to this, of course, has been one which we all deplore. It is an irresponsible reaction for them to give an export subsidy, albeit for three months. If other countries were to behave in this way when they could not sell their cattle abroad, there would be chaos in the international market. We all deplore it, but, on the other hand, we can in a sense understand what has happened. The Irish have suffered as much from the world situation as we ourselves, and their reaction to it has been the last nail—or, rather, the last blow to the British beef producing industry this year.

What Government action is now necessary? Conceivably, we may require a further increase in the guaranteed price for beef as a measure to restore confidence. I hope that, if this is to happen, it will be announced before next year's Price Review even if it will not take effect until after the Review. But I believe that, in the long term, apart from this short-term crisis, what we need is a more planned market in the sense that we need a Commission with powers wider than are envisaged for the Commission about to be set up under the Agriculture Bill, a Commission which, above all, can handle the marketing of domestic supplies and also indulge in bulk buying from foreign sources as a method to regulate the market.

The answer does not lie in import levies and a rush into the E.E.C. Just to consider the Irish problem alone for a moment, it is highly likely that, if we were in the E.E.C. the Irish would be in, too. It is no good saying that they could sell to other Western European countries as well. Clearly, the British market will always, in circumstances like that, be the most attractive market for the Irish simply because of our geographical proximity. Furthermore, the Irish farmer would inevitably benefit much more than the British farmer from the E.E.C. agricultural guidance and guarantee fund into which the levies would be paid. His position, in other words, would become steadily more competitive vis-à-vis the British farmer.

Even if the Irish did not go into the Community, as was pointed out by my hon. Friend the Member for Cardigan (Mr. Elystan Morgan), the problem facing us is that of Irish dumping on the British market at the moment. Whatever the limits of one's tariff barrier, if a foreign Government are prepared to give a short-term subsidy to their exporters they will always be able to dump over that barrier, so we shall not be able to solve the problem simply by import levies and entry into the Community.

I do not want to say much about pig meat. We all know the situation. The output of certified pigs this year will be very much below that of last year and curers are having to pay very much more for them. This is a serious situation, not only because of the effect on curers, which is bad enough, but also because it may lead to a sharp rise in prices of bacon in the shops, and we should think of the interests of the consumer, which have been mentioned little enough today. We want to avoid price rises, especially at a time when we are trying to hold prices and incomes steady.

It may also lead to a rise in imports—that is to say, a rise in the expenditure of valuable foreign exchange. That is why I hope that my right hon. Friend will act in this situation with some expedition.