It was the publication of the N.E.D.C. Report which prompted us to call for this debate on agriculture. Before turning to that Report, however, I must refer briefly to one or two other matters not directly connected with it. First, particularly as the reports of the appalling damage caused by last night's storms are still coming in, I must express on my own behalf and, I am sure, that of the whole House, our sympathy with all those in the farming industry who have suffered loss and damage over the last 24 hours. The farming community from time to time has to suffer tremendous setbacks at the hands of the weather and I hope that these latest storms will prove less devasting than the first reports have suggested.
I think that we all welcome the fact that the country is at this moment free of foot-and-mouth disease after the very long scourge which caused such terrible devastation in certain areas. The Minister recently visited Cheshire and Shropshire, as I have done myself. I do not want to anticipate the debate which we shall certainly have when we receive the report of the Northumberland Committee, but I would like to raise two matters now.
First, there is still in abeyance the question of the £ for £ scheme designed to help those who lost stock in the early weeks of the outbreak and whose rates of compensation will definitely be lower than the rest. The Minister is, of course, aware of this. Whatever has happened about the contribution from the industry, he will accept, I think, that there is a clear moral obligation at least on the Government for their share of this payment—and the need has not lessened as the weeks have gone by. Indeed, those who suffered first are in special need, and I hope that the right hon. Gentleman will be able to tell us today that he accepts that responsibility and will see that it is discharged to the extent of paying at least the Government contribution without any great further delay.
What struck me forcibly on my visit was the tremendous impact of the consequential losses, which extended extraordinarily in an area where there has been this concentration of the disease. No doubt the Northumberland Committee will consider this and report on it. We all recognise the difficulty over consequential losses and I hope that we will be given clear guidance. In particular, I feel a special sympathy for those farm workers who had to be stood off or, in some cases had to go on minimum pay for a long period, when it was clearly directly attributable to the disease. I hope that something can be done in that respect.
I have no wish to prejudge the issue and what we shall have to consider when the Committee reports, but I get just a little impatient at times with those who have special trade interests overseas when they seek to brush aside the financial implications which this disease can have and has had in this country. I hope that the Northumberland Committee will give a clear indication of the total estimated cost of the epidemic, both as regards the Government's participation through compensation and the consequential losses, so that we can have a serious assessment against which to judge the relative arguments about the risks which we should bear in the interests of foreign trade and the risks which we ought to impose on the fanning community.
I would like to refer also to the Report of the Reorganisation Commission for Eggs. This is a very full Report, which calls for sweeping action, and this is not the time to debate it fully. I do not suppose that the Minister himself is yet ready to give us his considered views. All I will say is that I am not opposed to the general proposal for a control, in this case, by minimum import prices. I have always made it clear that, although I opposed the general concept of a minimum import price for certain commodities, I do not feel that it is the same for eggs, since the total amount imported is very small and, therefore, the loss to the Treasury is not terribly significant. Probably, it is the simplest way of controlling imports, where necessary.
However, it is essential, if one is to adopt that attitude and the policy recommended in the Report, to include a limitation on imports of liquid eggs. Otherwise, this would leave a dangerous gap in the system. The same applies to the Report's recommendation that imports of shell eggs for processing should be exempt. Neither of these categories can or should be exempt.
The Commission made it clear in paragraph 299, in talking about the effect which imported eggs can exert on day-to-day prices, that
… they can have a disruptive effect on the market far in excess of their apparent significance in terms of quantity or value.
That shows how important it is, if that policy is to be adopted, that it should be adopted in full.
One thing that I am anxious about is the position of the small producers under the Report's recommendations. We shall want to be fully satisfied by the Government that they are taking this fully into account, and that, if they seek to adopt any of these proposals, a really effective transition period and adequate compensation will be provided. Without those two provisions, it would not be tolerable to consider adopting the proposals.
Apart from the comments about eggs, the position of marketing boards in general should not be weakened just because this one board has had insuperable problems. We should recognise that what happens over the Egg Board should not be an indication of attitudes in regard to other of the marketing boards.
Perhaps I might ask a question, in view of Worcestershire's importance in producing eggs. Would my right hon. Friend make it clear that our party's attitude is that we must have a full debate here before the Minister reaches any conclusions on the Report and sets about any change in the structure of the Egg Board or its abolition?
I will accept the importance of Worcestershire as a producing county, if my hon. Friend will accept that of Lincolnshire. There must be equality in these matters. I entirely agree that there should be a full debate, and I hope that the Minister will ensure that it takes place.
I, and, I daresay, many other hon. Members, have been receiving a good deal of comment and advice during the last week or so over the proposals of the Meat and Livestock Commission. As we were told only a short time ago that we are due to debate the levy Order for that organisation on Wednesday next week, I propose to leave my comments on the matter for that debate, since that would make for a tidier arrangement.
I turn now to the general background of agricultural production against which we must weigh the N.E.D.C. Report. At present, the industry is working under the selective expansion programme which was introduced under the National Plan. That Plan was produced a long time ago, but we are told that, for agriculture, it is still the relevant document. It says, on page 141, that the Government
… would expect home agriculture to be able to meet a major part of the additional demand expected by 1970, totalling some £200 million on food for human consumption. It would also supply much of the cereals required for the increase in livestock production.
That has been the policy of the Ministry for three years. But when we questioned the right hon. Gentleman's predecessor about his interpretation of the words "major part", we were unable to get from him any indication of what they meant. Perhaps the right hon. Gentleman can enlighten us on the Government's attitude which, up to now, has been left in obscurity. All we know is that some increase is called for. I shall not go over the old ground again, but our best estimate is that the maximum increased annual production expected under the National Plan represented about 3½ per cent. a year.
I asked the right hon. Gentleman on 26th June if he still hoped to achieve the target of the National Plan. I was somewhat surprised by his reply. He said:
On present calculations we believe that it will be achieved, but we might even improve on it." [OFFICIAL REPORT, 26th June, 1968; Vol. 767, c. 436.]
That is the most optimistic comment we have heard about the fulfilment of the National Plan. I am glad that the right hon. Gentleman is optimistic, but he
should give us the grounds of his optimism. We should know why he feels it likely that the target will be achieved. His predecessor, in his various White Papers on the Annual Reviews, showed clearly that we are way behind target at present.
The White Paper on the Annual Price Review, last March, in paragraph 11, stated that output was expected to be 6 per cent. up on the two previous years. If we got a 6 per cent. per annum increase, that would be fine, but the indication is that 6 per cent. covers the previous two years, as well and these two years both showed a decrease over the last year for which we were responsible. So a 6 per cent. increase now is rather less than 6 per cent. when spread over three years.
It is an increase at the most of 2 per cent. per annum, which puts it into a different picture. The Government are well behind target, and even if they seek to achieve the modest targets of the National Plan they have to get an additional 6 per cent. rise in production in each of the two forthcoming years. We are glad that the right hon. Gentleman is optimistic, but we hope he can tell us why he is.
We have a plan with a limited target and that plan is lagging substantially behind its target at a time when agriculture has a great opportunity to help the balance of payments. That opportunity was there before devaluation and, of course, it is much greater now. Devaluation has increased not only the opportunity, but the need as well. That is the background to any consideration of the N.E.D.C. Report. We have an agricultural industry with the lights at caution when they should be at green. This is the message we want to give the Government. We want to see the target set higher and a real incentive to achieve it.
The Report has been warmly welcomed by the Minister and in various degrees by most of those connected with agriculture. I gather that the Permanent Secretary to the Ministry of Agriculture told the Select Committee on Agriculture yesterday that he had certain reservations about some of the technical conclusions. I have some, too. But let us all welcome the constructive approach and the massive sweep of the Report as a whole. I think that Sir Edmund Bacon and his colleagues have performed a great service. I know that the Report has been endorsed by the parent body of the N.E.D.C. and I am glad of that.
The Prime Minister took the chair on this occasion and we are told that he said that the Report was excellent. But I want to give a word of advice to the Minister of Agriculture about this. I ask him to discourage the Prime Minister from making too many comments about agriculture until something effective has been done to give some meaning to his earlier pronouncements about it. They were all given prominence in the farming Press when they were made and are not rated very highly today. I remind the House of three of them.
First, on 24th May, 1965, before the National Plan emerged, the Prime Minister said at Newport:
We shall not solve our economic problems, our balance of payments problem, without a vigorous import substitution policy through agricultural expansion.
That was quoted widely in the agricultural Press. It was believed to indicate an entirely new attitude but nothing was done to implement it. Certainly, the National Plan never called for any import substitution.
Secondly, addressing the T.U.C. on 5th September, 1966, the Prime Minister said:
We are stepping up food production to save imports.
This was at a time when the then Minister of Agriculture had shown in his White Paper that agricultural production was going not up, but down; and, if anything, very slowly.
Thirdly, on 19th November, 1967, the Prime Minister made a television broadcast just after devaluation, when he talked about the £ in our pockets. He said:
Farm production will be stimulated. We'll be able to do more to replace food imported from abroad.
What has been done to implement these promises? I have quoted three separate promises and there has been no indication of anything being done to implement them. I hope that the Government will give a clear indication of the view they
take of the N.E.D.C. Report, which calls for real expansion.
I have shown that the National Plan did nothing effective to expand production and never set out to reduce food imports. That was never the intention. The only firm action on the agricultural front which I can trace to the Prime Minister, at least since he assumed office, was when he bludgeoned the then Minister of Agriculture into accepting the Anglo-Irish Free Trade Agreement against his better judgment.
I have always said that that agreement was not in the interests of the British farmer. When we study its total effect, it is clear that it is not in the interests of this country. I have been looking at the trade figures. For some years, we were roughly in balance at about £185 million in exports and imports. Last year, the real effect of the agreement came into force and our exports to Eire totalled £196 million while imports from Eire went up to £223 million. This was largely due to increased agricultural imports, which did harm occasionally to the stability of our own market. This is another indication of the way in which our agricultural interests get sacrificed under the present Government.
These figures ignore the additional cost to the Exchequer brought about when Eire subsided its exports of beef cattle to this country when our own market was glutted. All this indicates that we must have a fresh approach from the Government if we are to have confidence in agricultural expansion.
I have said that the N.E.D.C. Report has had a general welcome, and deservedly so. It postulates a rise in output of about £345 million worth of production, a net increase of £185 million, which is given as a 22 per cent. rise in output up to 1972–73. It is a substantially faster rise than that expected in the National Plan. It is claimed that this would result in a net import saving of £220 million a year by 1972–73.
This is a massive saving of imports. No other industry in the country is probably in a condition to bring about such a saving during such a period. This deserves the most serious attention of the Government. It has to be seen against the background of the Report and it was brought out clearly in the speech which
Sir Edmund Bacon made when introducing the Report. He said:
we wanted to set out what agriculture could do if it were given the opportunity. At the same time, we have not made proposals which would involve wasteful use of resources.
Sir Edmund went on to refer to certain assumptions. The most important should be quoted in full:
the assumption that all import saving possibilities should be considered, whether or not they might conflict with the United Kingdom's present international commitments. It may be questioned whether such an assumption was a realistic starting point for the study—whether, in fact, we should have started with the opposite assumption that we have these commitments and are likely to keep them. That could, I believe, have been even more unrealistic. International trading policies do change, as we have seen recently with G.A.T.T. agreement on cereals, and in the longer term I don't think we can ignore the vast underlying factor of world hunger and the population explosion which surely must exert a growing pressure of Change in the years ahead. Moreover, if there has to be restriction of home agriculture for reasons of broad international policy, is it not better to have a clear understanding of the potential increase in home production that we are forgoing and the resultant cost in imports of food that we are incurring?
That is a clear indication of the attitude of the Committee in its approach to its task which we should bear in mind in looking at the conclusions because it conditions a number of them.
There is a great deal in this Report. I was tempted initially to go through a large number of the items, but I realise that if I did so I would be trespassing for too long on the time of the House. I shall, therefore, summarise briefly one or two of my reactions to various proposals. The proposals for the expansion of cereal production are very interesting indeed. The increase of 1·7 million acres of cereals is postulated to produce over 3 million extra tons a year by 1972. I agree that this is technically possible and I believe it right to aim for it.
I am not sure that I agree with the Committee on the way in which it divides this up between wheat, on the one hand, and barley and oats, on the other. Although the Committee has talked about expansion of certain break crops, I doubt very much whether on the basis it has put forward that I should be happy about the expansion of 1 million acres under wheat. This is a matter on which to exercise judgment. I want to see produc- tion of wheat expanded, but I should like to see more done not only for wheat, but also for varieties like maris widgeon, and a definite opportunity taken to produce more of the harder type of wheat so that we do not have to import so great an amount of these.
As to the various break crops, there is a lot to be said for expansion of production of field beans. I have been advocating this for years. I also want to see a little more done about oilseed, rape and other things. The proposals for sugar beat break fresh ground. Until now it has not been assumed by many that it would not be practicable to think in terms of new factories and expanding the acreage. There is a definite technical ability to do this, but the problems of the Commonwealth Sugar Agreement have weighed on us in the past.
The worrying thing about potatoes is the possibility of increased imports of processed potatoes, particularly potato flour. I was in correspondence with the Minister's predecessor on what we should do to stimulate such production in this country. I hope that the present Minister is interesting himself in this problem, which various firms are taking practical steps to face. Public demand and requirement for potatoes is changing. It is not enough to ban imports; we have to see that there are facilities for production in this country and I hope that full opportunity will be taken for that.
Probably the most important proposals in the N.E.D.C. Report refer to the expansion of meat production, particularly beef. Anyone who has studied the Report will realise that it makes a bold proposal about beef. It proposes an expanion of the dairy herd by 300,000 cows and an increase of 140,000 calves, from those now culled for veal, and 300,000 beef cows. The first of these proposals will have its impact on milk products.
The most disappointing thing in the whole Report from the point of view of consequences for the farming community is the reference to sheep. Many of us have been surprised that the proposals do not plan for a larger increase in the number of sheep. I hope that members of the N.E.D.C. will think again about this. As they say, there has been no technical break-through with reference to Lowland sheep production, but there are clearly opportunities for expansion in sheep production. Sheep less than any other animals call for imported concentrate foods. Having an abundance of grass in this country we should seek to expand our sheep breeding. We produce less than 50 per cent. of our total consumption of mutton and lamb.
This bring me to the whole question of grass. Paragraph 23 of the Report is very interesting. I should like more emphasis placed on the need for expansion per acre and the use of fertilisers on grassland. There is a great opportunity for expansion in grassland and also in the utilisation of crops by whole crop silage and that type of thing. Anyone who visits the Grassland Research Institute at Hurley will learn of the very valuable work which is being done. It gives opportunities for a massive increase in production both of beef and sheep.
The estimates for pigs seem to be high. It is perhaps technically possible to achieve these figures, but there are some real problems here. When I look at the latest pig sample survey I think that the Minister will have some problems unless he is able and willing to tackle the question of getting a larger share of the pig market for our own producers.
Much as I should like to go into more detail on the Report, I must confine myself to one or two other points. The vital question: is any of this expansion likely to be achieved, or are we engaged in just a meaningless exercise? Again and again the Report refers to the need for confidence. Is confidence possible with a programme for massive expansion under the existing system of support or with the present unrestricted and uncoordinated imports?
Even ignoring imports, and taking merely the increased production given in the plan, if we take it on the present unit subsidy costs shown in Table B on page 42 of the Annual Review White Paper we find that to implement the plan would cost at least another £25 million to be put on the subsidy bill. Anyone who has studied this knows that that is only the tip of the iceberg, because an increase of the order of that envisaged under the present system of support would mean over-supplied markets. Once we have over-supplied markets it can mean an astronomical rise in defi- ciency payments. Look at what happened to the subsidy on pigs in 1962–63, when it averaged £1 million per week, and last autumn there was £1½ million a week on beef alone. This is the sort of thing that can happen once marketing gets out of balance.
So I say that under the present system of support an expansion of this kind would mean not only an additional £25 million, but possibly ten times that amount on our additional deficiency payment. The Minister may not know this —I hope he does—but if he does not, certainly the Treasury does. There can be no doubt that the Treasury will have worked out this sum by now. Under the present system, any programme such as this is doomed before it starts.
I want now to refer to subsidised imports. We in this country are massive importers of food and even if the whole of this expansion programme were achieved we should still be, and people should realise that when they talk about the effect on our international trade. Three years ago, the National Plan gave the value of imports of temperate foods at that time as £983 million. That figure has risen in the intervening period and has been subsequently increased by devaluation. But even if we achieve all the expansion in the N.E.D.C. Plan, we shall still require to import upwards of £800 million worth of temperate foods. What upsets our markets and what destroys confidence among our own farmers is the influx of additional, uncoordinated, dumped and subsidised food.
We get it every year in one form or another. At present, it is French wheat and milk products coming from a variety of places which are causing great concern. This year we have also had the problem of early potatoes being imported at a time when our own first early potatoes were just coming on to the market. That caused grave concern and heavy loss. I acknowledge that our climatic conditions played a considerable part, but the imports had been coming in first, and there is no doubt that many of our farmers have lost a lot of money.
Butter imports are on quota, so the position is not so difficult. Otherwise, in view of the world supply of butter, we should be in great difficulty. But the imports of cheese and milk powders are another matter. Imports of cheese rose by 11 per cent. between 1966 and 1967 and in the first four months of this year they were 25 per cent. higher than in the same period last year—an enormous increase. Imports of whole milk powder went up by a further 14 per cent. in 1967 and the imports of skimmed milk powder were nearly 25 per cent. higher than in 1966, another enormous increase.
These imports have a direct bearing on the farmers' returns. For some products, it can be argued that the effect of subsidised imports is merely to put up the deficiency payment so that the farmer is only indirectly affected until the impact on the next Price Review, but that is not the case with milk products. The "pool" price is depressed when the value of milk for processing is reduced, and farmers will be feeling the effect of the present position with every succeeding monthly milk cheque. There is no doubt that the increase in the last Price Review will be cancelled out.
There may not be a great deal of French wheat coming in, but it has been overhanging the market for months and has had a disastrous effect on prices. It has been offered at barely one half of the price which French farmers are supposed to get for it. It is a good example of the lengths to which people will go to off-load surpluses of food. It is this fact which tends to destroy confidence among our own farmers and it can be seen time and again. We have seen it with French wheat and milk products this year and we saw it with beef last autumn and the autumn before.
We are virtually the only free market for food in the world now that the Common Market countries are able to close their markets to foreign supplies overnight, and we get the full impact of the off-loading of these surpluses. If our agriculture is to plan ahead with confidence, this fact has to be faced. We have one or two restrictions on entry. For instance, butter is regulated by quota. The last Conservative Minister of Agriculture tried to stabilise the cereals market when he introduced minimum import prices for cereals. I supported that move at that time, but I have since come to the view that it is not the best way in which to control imports. It can often mean paying more to the overseas supplying country than is necessary.
That is why my party and I now advocate a system of levies whereby imports can be controlled, but the additional amount paid by the importer goes to the Treasury instead of to the foreign supplier. That does not increase our balance of payments difficulties, but reduces them. However, whatever one's view of the best method of dealing with subsidised imports, nothing can excuse the almost incredible muddle, confusion and loss caused by the Government in the grain trade over the last six months. I presume that today the Minister will at last tell us something about minimum import prices—at least, I hope he will.
If a change were to be made following devaluation—and we were told that this was the reason for it—that change should have been announced many months ago. At the time of devaluation, we were told by the Prime Minister that the whole operation had been carefully thought out and planned in advance. If that were so, why was there no announcement about minimum import prices for cereals last November? If it is argued that under the 1964 Act we had to consult the other signatories, I remind the Minister that under that Act the time allowed for such consultation is four months, and that four months from the end of last November takes one to the end of March, this year.
It is now the middle of July. It was in March that we first heard the rumours of an impending change. On 4th April, it was announced that discussions were going on and that a further statement would be made six weeks before any change took effect. On 24th June, we had yet another holding announcement, when we were told that news was still awaited, but that the interval between the announcement of the actual minimum price levels and their coming into effect might be no more than three or four weeks. We still do not know.
Farmers, merchants and compounders have all suffered heavy losses and great inconvenience, but, worse, is the impact on forward contracting. Over the last few years, there has been a genuine attempt to get more orderly marketing in the grain trade and planning contracting in advance. These are essential to effective and clear marketing and yet anybody who attempted to contract in advance this year under the threat of this change in the M.I.P. would have been mad. This is a sorry story of incompetence and bungling. It may not be the present Minister's fault, but it is typical of the Administration of which he is a member. I believe that the Government are using the wrong system, but nobody can deny that they are adapting this system in an incredibly inept way. I hope that the Minister will at last clear up this trouble, because it has caused grave concern to farmers and merchants.
This brings me to a comment on the whole subject of agriculture support. Both sides are agreed that effective support is necessary not, let it be emphasised, because of the inefficiency of our farmers, but because all our supplying countries support and subsidise their own farming economies. We could certainly compete on level terms with any other producers in the Northern Hemisphere, but when exporting countries subsidise their surpluses, as is instanced by French wheat, some support to British agriculture is essential.
When in office the Conservative Party introduced the present system of support. We believe, however, that if fanning is to develop its full potential, that system should now be ended and that we should move away from the deficiency payment system to one in which levies are placed on imports and the consumer pays the cost of production. We believe that an attempt to expand production in the way suggested in the N.E.D.C. Report would be so costly under the present system that no Government could contemplate it. We believe that a massive expansion of production is not only technically possible, but in the national interest. Thus we want to move over to a system which will enable home expansion to take place and at the same time introduce effective control over those heavily subsidised imports which cause so much dislocation to our markets.
Those who oppose such a change have argued that even if it would assist our farmers and even if it would help the balance of payments, it would be a heavy burden on the consumer. This argument has been used by hon. Members opposite
more than once. I have pointed out many times that this is not so and I am glad to have had my view confirmed by the Minister himself in a reply which he gave to his hon. Friend the Member for The Harlepools (Mr. Leadbitter) recently. The hon. Member asked what estimate the Minister had made of the increase in the price of food on the basis that the cost of agricultural support was passed to the consumer. The Minister replied:
It is not possible to give a precise estimate because many variable factors are involved; but to raise market prices to the levels of the current guarantees to the agricultural industry would result in an increase of some 4— 7 per cent. in the cost of food."—[OFFICIAL REPORT, 26th June, 1968; Vol. 767, c.75.]
That is very much in line with that I have said. I have said recently 5 per cent to 6 per cent., but the figure that he has given completely straddles that. If our proposals were spread over a three-year period, that means a rise under his figure of from 1⅓ per cent. to 2⅓ per cent. on the cost of food per year over three years. When one considers that the cost of food represents now little more than one-quarter of the weighting of the full retail price index, it means that this represents a cost of certainly not more than one-half of 1 per cent. a year over a three-year period in the cost of living index as the cost of the changeover from one system to another.
When we recall, also, that in the last 12 months to the latest available date, which is the end of May, the cost-of-living index as a whole has risen by over 4½ per cent., that amounts to more than nine times the actual cost that would be involved over this changeover. So I think that anybody looking at these figures dispassionately must agree that, whatever arguments may be used in relation to it, the question of the cost to the consumer being unreasonable is one which certainly should never in honesty be used again.
These figures show quite clearly that this cost compared with the actual increase in the cost of living under this Government is infinitesimal.
Before the right hon. Gentleman leaves his description of the system which he and his right hon. and hon. Friends would introduce, will he deal with the question whether he would do away with all production grants and all guaranteed prices within the system which he is advocating? This is something that the House would like to know.
I am grateful to the hon. Member. I was trying to hurry, because I have so much to say. We do not propose to touch the production grants; we would change them, no doubt, from time to time to meet requirements. We look at production grants as being something which can be clearly assessed in advance and which do not have the variation which the deficiency payments have. It is deficiency payments alone that we propose to deal with in this way. It was against the deficiency payments that the quotation from the Minister was given.
Quite apart from this, there is the other side of the coin, namely, that there would be resultant saving to the Exchequer of about £250 million a year, which would enable social security benefits to be raised to offset the effects for those in need, and still leave money over for the reduction of other taxation.
People may dislike our proposals for many reasons, but, since that answer given by the Minister himself in the House, nobody can in honesty pretend they would place an unreasonable burden on the people. The truth is that a levy system such as we are proposing is the right system for this country. It is not entirely new, because it has been in operation on one commodity, namely, sugar, for the last 10 years, and in that case the consumer is bearing the cost not only of support to our home producers but also to Commonwealth producers as well.
About £60 million to £90 million a year is collected by levy in this way. I have never heard sugar being described as something that cannot be afforded by the poorest of our people. Admittedly, I would not want to use the sugar system for the rest of the commodities, although I see a distinguished Labour peer, Lord Walston, recommended it in the Farmers' Weekly last week. That would be too expensive a system to adopt, but the system we propose is both realistic and sound.
If the N.E.D.C. proposals are to succeed, we must change not only the system; we also have to change the attitudes in Whitehall. The Ministry of Agriculture may genuinely want to see expansion, and, if the system of support is changed so that Exchequer funds are not at risk in the same way, I believe the attitude in the Treasury to home expansion may change also. There remains the stumbling-block of the Board of Trade, and this is a real problem. Only yesterday in the House the President of the Board of Trade gave a very strange answer to my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) on the question of bacon. He gave what seemed to me to be a quite incredible answer, the complacency of which took some believing.
The right hon. Gentleman said:
… we would all of us like to save imports, and recently ambitious ideas for agricultural import saving have been advanced. When we are considering these, we must also consider the possible cost to the consumer or to the taxpayer. I think that under the current Selective Expansion Programme we are moving satisfactorily in the kind of direction that the hon. Gentleman would like."—[OFFICIAL REPORT, 10th July, 1968; Vol. 768, c. 494.]
It is quite clear from that that the President of the Board of Trade certainly has not studied the White Paper or the Price Review. Had he looked at the outturn for pigs on page 24 this year, he would have seen that production, far from going up in the way he suggested, has gone down substantially in the last two years, and we all know that we are not at this moment completely filling the bacon quota which we have under the bacon sharing agreement.
Earlier, my right hon. Friend graciously allowed me to intervene on the question of eggs, very few of which, he then pointed out, are imported. In fact, 99 per cent. of our total consumption of shell eggs are produced in Britain and 1 per cent. are imported. Is my right hon. Friend aware that the reason why I raised this with the President of the Board of Trade yesterday was to bring out that 50 per cent. of the bacon consumed in this country is imported from Denmark, another 16 per cent. is imported from Commonwealth and foreign sources, and only 34 per cent. of all the bacon we consume is produced by this country? It is, therefore, the most rewarding of all the foodstuffs for a policy of import substitution. Bacon and eggs march together.
I agree entirely, and that is the reason why I picked out this point. Speaking from memory, I think that the figure we are entitled to is not 34 per cent., but 36 per cent. under the bacon sharing agreement. I confirm what my hon. Friend has so well expressed.
To return to what I was saying about the Board of Trade, one of the most revealing attitudes of this Department was that given by an official at a recent meeting of the Select Committee, when he made clear that it was the view of the Board of Trade that, if one had to choose between exports and encouraging the saving of imports, they would choose exports. The promotion of exports is, of course, something we all value, but the contention that it has some mystical advantage over the saving of imports seems to permeate Whitehall, and it is something which I reject.
There is one obvious and undeniable argument in the opposite direction, namely, that one has under one's control the saving of imports. The promotion of exports must be to some extent at the discretion of those to whom one is trying to sell. One can more closely predict the saving of imports, and I suggest that the Government should take note of that. We all rejoice to see today's trade figures which show a better position and some reduction of total imports. The Board of Trade, I gather, welcome this. I hope that it will equally welcome a reduction of imports arising from greater agricultural production in this country.
I apologise for having been so long, but I wanted to cover all these matters. I would sum up by saying that the advantages of import savings through agricultural expansion would be far more clear if it were not for the artificial nature of international trade in food and the heavy subsidisation to which I have referred. It is significant that all our main industrial competitors on the Continent and in America are careful to protect their own farmers from the effects of imports. Farmers in New Zealand know how impossible it is to get into the American market. We in this country repealed the Corn Laws 120 years ago. For many years that policy paid us handsomely. Conditions, however, are very different now. We no longer hold a predominent position in the export of manufactured goods. On the other hand, our agriculture has in the last two decades become one of the most advanced in the world.
Productivity on Britain's farms has advanced more rapidly than in practically any of our other industries, and that came out very clearly in the National Plan. From being a poor relation, agriculture has become a pace setter. It is not British agriculture that is backward now. It is the thinking in Whitehall. The N.E.D.C. Report points the way to a new era and a new attitude to farming on the part of those in power. I only hope that the Government will accept the opportunity that they have now been given.
The right hon. Member for Grantham (Mr. Godber) has dealt with a large number of subjects in his speech, and I will try to comment on them in the course of my own.
At the outset, he referred to the damage caused by yesterday's floods, and I would like to associate myself and my right hon. and hon. Friends with his expression of sympathy to those who have suffered loss.
The right hon. Gentleman referred to the Report of the Egg Reorganisation Commission. This is a detailed and important Report and, as the House knows. I have asked the interested bodies for their views by 31st July. It would not, therefore, be proper for me to comment at this stage; but I was extremely interested to observe the cautious reaction of right hon. and hon. Gentlemen opposite to proposals for a free market.
I am glad that we have this opportunity to debate agriculture. The right hon. Gentleman reminded us that Conservative ex-Ministers in opposition frequently are more drastic and adventurous in the policies which they advocate than when they were Ministers themselves. The House, therefore, will not be surprised that I do not agree with all the views on agricultural policy which the right hon. Gentleman has expressed. However, I agree that this is a challenging and interesting time for those engaged in agriculture, and a thought-provoking time for those concerned with agricultural policy.
Why should this be? First of all, but not for the first time in our history, the public—largely an urban public—has become more aware of the economic importance of agriculture to our economy. The lives of townsmen and countrymen alike are affected by economic problems connected with the balance of payments. Since we import £1,600 million worth of food every year, and depend to a greater extent than any other industrial country upon imported food, this has, naturally, led people to ask what more home agriculture can do to help.
The deep interest of the House has been shown by the selection of agriculture as the subject of the work of one of our new Select Committees. The interest of the public has been roused by the publication of the Report of the Economic Development Committee for Agriculture. I want to take this opportunity of expressing my appreciation for the work that both bodies have been doing. I will deal with the E.D.C. Report in a little more detail later.
Against this background of interest in the future of agriculture arising from its manifest importance to our economic future, it is no wonder that we have all been led to ask ourselves whether the broad lines of present agricultural support policies are still appropriate and right for the future, or whether the time has come for change, and, if so, what kind of change. The right hon. Gentleman was doing a service when he posed that question. I cannot say that I agree with his conclusions, and I will deal with them as I go along.
In any area of support policy, the factor most likely to lead to a call for change is clear evidence of the failure of the existing methods. In agriculture, the evidence points not to a failure, but to notable success. Since the mid-1950s taking a period of 12 years in which Governments of both of the major parties have been responsible for policy, the volume of farm sales has increased by 35 per cent. Crop production has expanded by about 60 per cent., mainly accounted for by the growth of our cereals production. Meat and egg production has risen by about 40 per cent., milk by about 20 per cent. and horticultural produce by about 10 per cent. Expressed as tonnages, these figures mean, for example, over 100,000 tons more beef and about 6 million tons more cereals.
The increase in value of our agricultural output over these years has been £500 million. Therefore, the right hon. Gentleman must not, merely because he speaks in opposition, lightly denigrate the record of the last 10 years or so. The value of imports now being saved as a result of higher production at home is certainly higher than the £250 million a year calculated at the time when the selective expansion programme was announced by my right hon. Friend.
During this period, the cost of support has fluctuated according to market circumstances, but, taking one year with another, it has been at a remarkably stable level. In real terms, it has fallen, and this is a point which the country generally should appreciate. The main reason for this is the increase in the productivity of the industry. Productivity has been growing by between 5 and 6 per cent. a year. That is a rate which compares very well with most of our manufacturing industries, and, therefore, a tribute is due to the industry for the work that it has done. This tribute should be paid to the farmers and farm workers and to our policies.
But, of course, because the cost of agricultural support is a major item of public expenditure, it must be closely watched. We must be satisfied that we are getting value for money. I shall certainly continue to look very carefully at expenditure. No one could expect a Minister of Agriculture to do otherwise. But I am sure that hon. Members on both sides of the House will need no convincing that the record of the agricultural industry shows that, over recent years, it has given the nation a good return on the investment put into it.
No one would claim that all the improvement in productivity is the result of the present system of agricultural support. There are other factors. The industry has benefited from the results of scientific research and from technical developments. Then there is the work and example of progressive farmers and the work of farm workers and the advisory services. Even so, there cannot be any doubt that the assurance given by the Agriculture Acts and the readiness of the industry to invest with confidence have been of the greatest importance.
I know that this assured stability is something that our farmers recognise as being of real value, and I am sure that farmers will read with great care what the right hon. Gentleman has said today. He has made an important speech on behalf of the Opposition, and it needs careful study by the farming community. But I do not believe that any responsible person would lightly abandon an agricultural policy which has served this country well for over 20 years, and it is with that degree of thought and caution that we should approach the problem.
There is the other side to this coin. The method of support that we have operated has been of great value in keeping the cost of the nation's food at a reasonable level. It has been important both to millions of ordinary families and their household budgets and, by keeping down the cost of imported foodstuffs, to the national budget as a whole. The policy of agricultural support, therefore, has brought great benefits to farmers, to the public and to the economy.
This is a suitable moment for me to emphasise that the cost of agricultural support, although undeniably substantial, is not a handout to our farmers. A mistake made frequently is that this is some form of a charitable handout. It could not be a bigger mistake. Farmers' incomes have been rising, as we should hope that they would, but by no means all of the increase has been available to them as cash to spend. In agriculture, income is the main source of new investment. Much of the industry's higher income has been used to sustain the level of new capital formation in the industry, averaging over £200 million a year. If one considers that this industry is composed of a large number of comparatively small industries, one sees that this is a very good record. That investment has brought about a continuing rise in output at moderate cost, to the advantage to our balance of payments.
The right hon. Gentleman gave figures about expansion of gross capital in the industry as being over £200 million a year. But none of the figures given to the Select Committee up to 1967 was over £200 million. That for 1967 itself was £188 million gross capital formation. Where does he get his figure of £200 million from?
This is interesting, but I do not think that we should enter into an argument about detail at the moment. I said that farmers are investing in their own industry and I gave the figure which I have before me. I will check whether I have made a mistake.
There has been a good deal of drift of manpower from the land. Agriculture has released manpower to the rest of the economy at the rate of 20,000 to 30,000 men a year. This is a considerable contribution. No doubt, the drift will continue to some extent, but the House and the Government will at some stage have to consider whether the industry can afford a drift at that pace. But that is something which we must consider again.
That then is the record. That is what has been achieved. It is well worth while underlining. But we must now turn our thoughts to the future. Is the system which we have known, and which has proved itself so well, still going to be the best system in the years ahead? This is the question that, as Minister, I put to myself, and it is the question that the right hon. Gentleman also posed.
This leads me straight into my objectives for agriculture. It is my aim, as it was that of my right hon. Friend, to see expansion based on increasing productivity and consistent with the best use of resources in the national interest. This has been the policy of the Government.
This does not mean expansion regardless of cost, or expansion towards which the industry makes no contribution by improving its own standards of technical and managerial efficiency. It means that the question of resources becomes of paramount importance. This is why the Annual Review has been used in a much more purposive way under the present Government than in the past, with the emphasis on the provision of resources for productive investment.
The farming community and the industry generally recognise that the Reviews have been constructive from their point of view—[Interruption.] There is no question about it. This is what they say. I was surprised at the uncharacteristically sarcastic remark which the right hon. Gentleman made about my right hon. Friend the Prime Minister, who, after all, is the chief executive and has responsibility for Government policy. Therefore, he is responsible for the Price Reviews which my right hon. Friend negotiated. I thought that that was unworthy of the right hon. Gentleman.
The right hon. Gentleman then referred at some length to the "Little Neddy" Report. I agree that this is one of the most important considerations which my colleagues and I will have in mind in examining the agricultural programme in the next year or two. The Committee has outlined a challenging programme and I have received it in that spirit. It has said that it is within the technical capacity of the industry to achieve a further very substantial increase in output which can contribute materially to import saving. Therefore, the Report is a valuable addition in our consideration of objectives and policies for the future.
As the Economic Development Committee recognises, the proposals raise a number of large issues which go a good deal further than the technical capacity of the industry to expand output. Not least, they raise questions with a direct bearing on our international obligations, with which I shall deal generally in a moment.
The right hon. Gentleman was less than fair about the selective expansion programme. As he attaches so much importance to the Report of the Committee, I should remind him, perhaps, of paragraph 92:
The broad effect of our proposals is to carry forward beyond 1970 the objectives of the Government's selective expansion programme for agriculture, but at a somewhat faster rate.
This does not suggest that everyone puts as little value on the programme as the right hon. Gentleman. The Report goes on:
There are, however, certain differences in emphasis which, in part, reflect restraints that were placed upon the selective expansion programme because of our international commitments.
Therefore, it is clear that the able men on this Committee, who studied the problem for about two years and decided what the import saving contribution of agriculture might be, realised that the Government are on the right lines. This is what that paragraph shows, in spite of
what the right hon. Gentleman has said—
Since the right hon. Gentleman has challenged me specifically, perhaps I may say that he read out this paragraph, which referred to the objectives of the Government's selective expansion programme. I analysed the objectives and I analysed their achievement. It was not their objectives but their failure to achieve them and their being way behind target which I criticised in the main.
Surely the right hon Gentleman does not think that this experienced Committee merely studied the objectives and not the achievements. Of course they studied the achievements. I shall deal with this later.
Although our system is mainly one of deficiency payments with a liberal import régime, it must not be overlooked that, within the system, we have arrangements which give a measure of market management. These include the Bacon Market Sharing Understanding, butter quotas, control of imports of main crop potatoes and, of course, the minimum import prices for cereals.
As the House knows, we have, for several months, been engaged in discussions with our main overseas suppliers of cereals about an increase in the minimum import prices to take account of devaluation. I had hoped that it would have been possible to announce new minimum import prices earlier than this. With the harvest approaching, it is obviously important both for fanners and traders to know exactly where they stand. However, we were bound by the agreements entered into by the previous Government with our overseas suppliers in April, 1964, which required the Government to obtain the consent of those countries to any significant change in the general level of the minimum import prices. I am glad to say that agreement has now been reached.
Again, I deplore the right hon. Gentleman's irresponsible outburst of criticism on this subject, when he knows what the situation was. As the Parliamentary Secretary to the Ministry of Agriculture, he knew how the machine works, and we were operating an agreement which his Government entered into. It is little short of tragic that he should play politics with the important agricultural industry.
I want to say now what the broad outline of the new prices is. For wheat, the increases lie between 12 and 13 per cent. The minimum prices for the two wheats which most affect the home market, namely, denatured feed wheat and continental milling wheat, will be £22 19s. and £25 5s. per ton respectively. For coarse grains, the increase is 9·3 per cent., making the minimum prices £21 19s. for barley and oats, £22 9s. for sorghums and £22 19s. for maize. The minimum prices for cereal products and by-products will be increased in the same proportion. The new prices will be embodied in an Order which will be laid before the House very shortly and will come into operation on 1st August. I am aware that the minimum import price system has been criticised from both sides of the House. Some of my hon. Friends have criticised it, fearing that it could result in an increase in the cost of food to the consumer and in the cost of feedingstuffs to the farmer. These fears stem, I think, from a misunderstanding of the purpose of the system. Its purpose is simply to stabilise the domestic cereals market by excluding excessively cheap imports, not to increase the general level of prices on the domestic market. Consequently, the minimum prices were originally set below the normal level of import prices at the time. It is only because the normal level has increased as a result of devaluation that we have increased the minimum prices. The objective remains limited, namely, to stop the price for the home crop being disrupted by, perhaps, quite small quantities of excessively cheap imports.
I am sure that, if my hon. Friends compare the prices I have quoted with current market prices, they will find that none of the consequences which they fear will materialise. On the contrary, it is possible to argue that the new minimum prices are rather on the low side for achieving the objective of market stability. The increase is, for example, less than the 16⅔ per cent. which would have been required totally to offset the effect of devaluation. Consequently, I have made clear to overseas supplying countries that we regard the increase as an interim measure subject to further adjustment, if necessary.
Hon. Members opposite, on the other hand, after having introduced the scheme when they were in power, on the basis of agreements with supplying countries which have caused us a considerable amount of trouble over the last four years, have now decided that they would instead prefer a system similar to the one operated by the European Economic Community. In other words, there has been a major switch of policy by the Opposition. In advocating it, they seem conveniently to have forgotten how the minimum import price system works. There is no difference in basic principle between the minimum import price system and a variable levy system. Both systems are enforced by levies when the price of imports falls below the minimum import or threshold price. The main difference lies in where the level is set. Under the Common Market system this level is very high in order to maintain high producer prices, so that levies are, naturally, always in operation. Under our system they are on the low side so that levies are imposed only occasionally.
One argument of the Opposition is that under the minimum import price system we pay more to our overseas suppliers, whereas with a variable levy system we should collect a levy for the benefit of this country. This is what the right hon. Gentleman has been saying. But, as I have said, both are levy systems. It is true that our system is operated on an individual country and not a general basis, but this does not allow our principal suppliers to charge us any price they like. Our two biggest suppliers of cereals, Canada and the United States, which together account for some 70 per cent. of our imports, cannot or do not make special export prices for the United Kingdom, their prices being governed solely by the world market. Certainly, the cost of our minimum import price system during the four years in which it has been in operation has been very small.
I realise that many hon. Members wish to take part in the debate, so that I shall try to limit my speech. Turning now to dairy products, I should say a word about cheese. The House knows that imports of cheddar and similar hard cheeses have risen appreciably. Stocks are well above the normal level and have depressed prices to the extent of 30s. a cwt., but there is no indication as yet of a market collapse in this country. Home produced cheddar and similar hard cheeses, which account for 45 per cent. of this market, have generally maintained their prices well. But, understandably, the Milk Marketing Boards and the industry have expressed their concern lest the price of home produced cheese should fall as a result of dumping. I am giving close and careful attention to this problem, which I regard as the most urgent at present confronting the milk producing side of the agricultural industry.
Is it not difficult to bring in anti-dumping duties in respect of cheese, as there are so many different types of cheese, specialist cheeses, Cheddar cheese, and so on? One would have to have information about the cost of production of each type.
Yes. As the hon. Gentleman knows, a Bill dealing with dumping has been passing through the House. He will know what its provisions are. We are dealing here with hard cheeses, not with soft cheeses. At present, there is no problem in the other sector to which the hon. Gentleman refers. However, I do not wish to go into detail at this stage because, as I say, we are giving the matter our urgent attention now.
I have been giving attention to potatoes, too. After barley, potatoes are the most valuable of our arable crops, being worth at the farm gate, on average, about £90 million. As the Report of the Economic Development Committee pointed out, the market demand has been turning increasingly to potatoes in diverse processed forms—dehydrated, canned and frozen, in addition to the pre-packs now regularly stocked by our supermarkets and self-service stores. The demand for potato crisps also continues to grow at a great rate. To meet the demand, manufacturers are expanding their capacity, but in some lines there has been a temporary shortage which has had to be filled by imports. This is the main reason for the importation of potatoes. There is a need for producers to organise their marketing to supply these specialised requirements, and for manufacturers to save imports by drawing their supplies from the home crop.
To meet this changing pattern of demand, improved marketing arrangements will be introduced from 1st August next, as an outcome of the discussions with the Potato Marketing Board and the Farmers' Unions which were referred to in the 1968 Annual Review White Paper. The Board's present ware standard will be replaced by a new compulsory minimum grade. There will also be recommended higher grades which will be based on quality and size. This should help to secure improved crop utilisation and provide a sound basis for improving the quality of potatoes reaching the consumer. I regard this as very important. The new grades should also help in securing that the varied requirements of potato users, including the processing industry, are met as far as possible from the home crop, thus reducing the need for imports. Details will be announced by the Board early next week.
The new arrangements also provide that the Board will no longer regulate the quantity of potatoes available for marketing by adjusting, during the course of a season, the minimum and maximum sizes of potatoes which may be sold. Prices, if there are buying programmes, will relate to the new grades and will be fixed to ensure that the cost of support in any season will not be greater than it would have been had the present arrangements continued.
The 1968 Annual Review White Paper referred also to the increased level of potato yields and the implication that, taking one year with another, a steadily falling acreage would be needed to attain, without over-large surpluses, the production objective of self-sufficiency in main crop potatoes except in years of unusually low yields. The 1967 crop gave rise to a surplus of about 580,000 tons. On the forecast United Kingdom acreage for 1968 of nearly 700,000 acres, which is a little less than in 1967, there will again be a surplus if the upward trend in yields continues. Allowing for this trend, a reduction in the acreage for 1969 towards a level of 650,000 would seem desirable. Accordingly, the Board have been considering, in consultation with the Government and the Unions, the use they could make of their present powers to prescribe a quota so as to bring the 1969 crop acreage more closely into line with requirements. An announcement will be made next week.
The Potato Marketing Board has consulted potato merchants, retailers and processors on these arrangements. The implications for Northern Ireland, where there is no marketing board, are still being considered.
I referred earlier to the international scene. These current questions—cereals, dairy products and potatoes—draw attention to our international obligations on agricultural products. The right hon. Gentleman referred to our international trading position. He proposed that we should abandon our present arrangements and adopt a levy system. I understand that the objective would be to expand home production in order to save imports, an objective with which I certainly would not disagree. I do not think that any sensible person would disagree with it. British Governments, mainly previous Governments, have given undertakings to Commonwealth, E.F.T.A. and other countries about their access to our markets for foodstuffs. The House knows what they are. The right hon. Gentleman referred to the Anglo-Irish free trade agreement. In addition there are, for example, the Anglo-New Zealand trade agreement and our agreements with Denmark and others as part of the negotiations upon which E.F.T.A. was founded.
If our obligations are to be removed or the agreements are to be modified, we shall have to conduct negotiations with that object in view. Hon. Members opposite have recognised this, and the right hon. Gentleman has said that trading agreements will have to be re-negotiated as appropriate. He has said that it is vital to have the co-operation of our overseas suppliers before implementing changes. He has not, however, indicated how this co-operation is to be achieved, nor did he do so today. This is a very important matter for the Government, certainly for any Minister of Agriculture. International relations are bound to affect the pace at which we could carry out any major change in our agricultural support mechanism, if we decided that it was desirable. It is only right to recall that the E.D.C. Report said that it excluded consideration of our international commitments and resource costs. The whole House will recognise that what I said is true for the present and any other Government.
When I began, I described in general terms the progress made by British agriculture in recent years. I said that it was a success story, as indeed it is. I attributed part of that success to the methods of agricultural support we have adopted since the 1947 Act. I said that in asking ourselves whether the time had come for change we should be open-minded. Hon. Members opposite have committed themselves to variable levies. I have no objection to a system of variable levies, if I can be satisfied that it is a better system than the one we have now. But I shall need to be satisfied beyond a peradventure of doubt that that is so.
It might be possible, by the management of the market, to raise prices to levels that would enable the British producer to get from the market a return equivalent to that which he now gets under our guaranteed price arrangements. It might be possible to go further, and by raising prices still more to replace the existing range of production grants by higher returns from the market. I am glad to note that the right hon. Gentleman said that he did not think that this was his Party's policy. This apart, we have the basic proposition of the Opposition that we should set out to transfer the cost of support from the taxpayer by raising prices to the consumer.
The right hon. Gentleman has recognised that there would be difficulties to overcome. He may have forgotten that, if he were ever in a position to implement his proposals, he would be Minister of Food as well as Minister of Agriculture. He must bear this in mind. In that capacity one must carefully consider the repercussions, particularly on the less well-off sections of the community, and more generally on our social and economic policies. These are very big issues. For some commodities in which we are basically self-sufficient some of the problems may not be so great as for those commodities of which we shall have to remain substantial importers. Even so, there would be problems in maintaining prices of entirely home-produced commodities.
The right hon. Gentleman has argued that the great advantage of that system is that revenue from levies can be used to offset the disadvantages of higher consumer prices. I can see this. But he also seems to assume that prices can be raised so that greater resources will be available for investment by agriculture in further expansion of production. But the real problem is one of resources, not the mechanism by which they are provided. It is either naive or disingenuous to suggest that if one ceases to identify support costs by allowing them to be diffused, one thereby escapes the problem. One does not; one creates a newer and more difficult problem. In agriculture, apart from the resources made available by the industry's increasing productivity, resources must come from the Government, the consumer or a combination of the two. There is no other source. In the national interest, no responsible Government can avoid considering what these resources should be.
Therefore, whilst I am not opposed to change—on the contrary, I believe that good reforms are necessary, and I am prepared to accept the challenge of change—we should not approach it like a bull at a gate. I want a thorough explanation of the advantages. I want to know the disadvantages. I want to consider how, and to what extent, they can be overcome. I want to know how the new arrangements would fit in with our objectives for agriculture and the wider needs of the economy. This is what we must now consider and, therefore, I think that the debate is very timely.
I said that agriculture is a great industry with a proud record. The policies of successive Governments have contributed to this. Over the years agriculture has contributed to the nation's economy. An industrial society like ours sometimes tends to think of farming as an industry apart from the rest. This is wrong. The farmer should rightly be seen as the manager of an important business, and he is running it with increasing skill as a manager. The farm worker is doing a job no less vital to the nation. With all his skills, he is equivalent to any worker on the shop floor of a factory. They are supported by the research workers, advisers and progressive ancillary industries. Technology and improvements in management and structure have made, and will continue to make, substantial advances. Our agricultural industry can stand comparison with the best anywhere, and it is one of the most efficient, if not the most efficient, in the world. That is what we are really talking about.
This is my first major debate as Minister of Agriculture, and I want very much to underline these points. It will be my aim to see that progress is continued. If changes in methods of support are necessary to assist in this progress, they would be right. Within our system there is room for plenty of flexibility, and this we can exploit. But change simply for its own sake is of no value. The future of this great and progressive industry must be our first consideration. It is on that basis that I shall approach my task.
There are three factors which make the debate very timely, and for that reason I agree with what the Minister said just before he sat down.
First, there is the massive balance of payments deficit which the country has been running for at least three years. Much of it is made up of the very heavy import bill indeed, particularly since devaluation. The second factor is the agricultural N.E.D.C. Report on how imports can be saved, which is a most interesting technological document. The third is the flooding onto our market of imports from overseas countries to which the right hon. Gentleman did not pay sufficient attention in his speech.
There have been two fairly lengthy speeches, and I want to keep my remarks short, and so I shall just deal with two commodities which are important to my constituency. The first is potatoes and the second milk.
I think it will be readily conceded that in this country we can produce as good potatoes as anywhere in the world. We need no imports of main crop potatoes, and they are usually banned from 1st August unless by reason of scarcity we need a few imports. Together with this we have acreage quotas to ensure that the supply is kept reasonably in line with demand, and a guaranteed price of £14 10s. a ton. We also produce good early potatoes. There is no reason why we should not supply the British market with home-grown early potatoes in the months of June and July, but we allow unlimited imports.
My eye was caught by a passage in one of those documents which all Members of Parliament receive and generally throw into their wastepaper basket. It is a passage in a Spanish newsletter:
Palma de Mallorca … Wages of between 900 and a thousand pesetas a day are now being paid in the fields around the town of La Puebla on this island to workers engaged in the task of harvesting spring potatoes, which are to be exported to England.
We do not need to buy potatoes from Spain. We can grow them perfectly well here. Yesterday I received a telegram from my constituency saying:
Situation critical. Field prices down to £7 a ton. Ban all imports.
That was from the early potato growers. What they are getting for this crop, which needs expensive fertiliser and a great deal of cultivation, is less than half the guaranteed price for main crop potatoes.
This is not the end of the matter. I see no reason why we should be buying potatoes from Spain, from Egypt, of all places, and from Cyprus. The ones from Cyprus are dumped on the British market, because they are consigned to anybody, not a definite merchant. This is particularly so in Glasgow and Cardiff. The potatoes are put on the market at any price that the market will fetch, and as a result they depress the price of the home crop. The Chairman of the Potato Marketing Board, Mr. Rennie, said last week that if those lifting crops could regulate supplies to market requirements prices could be caused to get firmer. That was rather laughable. It is simply not true when supplies are flooding in from, particularly, Cyprus.
There is a quota for home grown early potatoes. The farmer cannot grow as much as he likes. One can see the acreage on the Ayrshire coast dropping gradually but significantly every year while the acreage in Cyprus is going up and up. I appeal to the Government to look into the problem. They are interested in regional development and have done a great deal to encourage it, but on the other hand they so often give it a knock on the head. This is an industry which is particularly important to remote areas such as Cornwall, Pem- brokeshire and Wigtownshire. The policy of unrestricted imports is just doing down the regional policy.
I am sure that I shall be told that there is some reason under G.A.T.T. why nothing can be done about imports of potatoes. If there is no provision under G.A.T.T. relating to the binding of imports of potatoes, I see no reason why the main crop ban should not be extended from August to July and even to June.
If we are to have talks with our main suppliers, let us say firmly to the Cypriots, "We will take your potatoes up to, say, 31st May, because some people will want to buy them then and they will not be competing with home supplies, but we do not want them dumped on our market in June and July at present because we can quite easily produce potatoes for ourselves at that time." I see no reason why the Cypriots should not accept this arrangement. They have the right climate and they will get better prices than previously.
I turn to milk. Recently the dairy products market has been the butt of all sorts of foreign imports at ridiculous prices. The prices have often been given. I take milk powder for a start. This is an interesting modern product in that it is very useful for many manufacturers in this country and also helps with world food programmes overseas because it has very good keeping qualities. We can easily supply all we want for our home market from United Kingdom production and Irish and Commonwealth production. But, once again, our production has been going down. In 1961 we produced 25,500 tons, and by 1967 the figure was down to 23,000 tons. This has an effect on my constituency. We have a Nestle condensed milk factory at Dunriggit, and it is putting off workers. We are losing much through the foreign dumpers of dairy products. A new factory is being opened in Stranraer this month for making milk power. Princess Margaret will be opening it. The future of such projects in remote areas must be very problematical when we allow milk powder to come in at the dumped rates at which it is coming.
About 10 days ago the Chairman of the Scottish Milk Marketing Board sent a telegram to the Secretary of State for Scotland about milk powder, saying that a licence had been given by the Board of Trade permitting the importation of 5,000 tons of Belgian milk powder, and the price was believed to be £56 a ton, compared with the Belgian home price of £180 a ton. He said that we produced quite enough of it at home and that this licence makes matters more difficult and that it is surely within the terms of our agreement that immediate action should be taken. As the Secretary of State for Scotland will be winding up the debate, I shall be very grateful if he will tell me what is meant by the phrase that within the terms of our agreement immediate action should be taken. As far as I know, no action has yet been taken to prevent the dumping of milk powder or the dumping of cheese.
The cheese situation is very much more serious than the Minister of Agriculture gave us to believe. It is only now that British cheese is normally coming on the market. It will undoubtedly meet a bad market and the price will be very low. For example, France is subsidising cheese to the tune of £200 a ton, and Holland is subsidising it to the tune of £250 a ton. The effect on the pool price of milk is likely to be a 1½d. drop, rather more than the increase given in the last Price Review. This will be an extremely serious matter to dairy farmers, whose costs are continually going up.
No. I think the hon. Gentleman will find that the prices of dairy products will be controlled at a much higher level in the Common Market. I do not think that what he suggests will be the case.
I do not think that the provisions for bringing in anti-dumping duties, even including the new measure which came before the House a few weeks ago, are sufficient. There have only been about three orders in the last three years. There are many different kinds of cheeses and in each case one would have to establish the cost of production and whether material damage was done, etc.
I think that Britain is at the crossroads of agricultural policy. I believe that we are mesmerised by the G.A.T.T. The Treaty was arrived at in different circumstances, when food was in short supply, and I think that many of its provisions are negotiable. In our very sad debtor position at the moment, there may be one bright side in that other countries will be wanting to help us get out of our difficulties, particularly when it is understood that this will only effect something like a 10 per cent. increase of production at home and that we shall still be an ample market for imported temperate foodstuffs if an agreement within G.A.T.T. is made.
The last Government, at a time when the import position was nothing so severe, was able to come to agreements on bacon sharing, minimum prices for cereals and butter quotas, which have been extremely helpful to the country. Agreements of this sort could be reached again.
Yes, on potatoes, too. I was sorry to read the evidence given to the Select Committee on Agriculture by a distinguished representative of the Board of Trade. I thought his attitude defeatist and that, in many cases, he did not seem to know what could be done. On the question of dumping, he said:
We are unhappy about it but do not see much we can do about it.
That is not good enough for the fanning community. He then said:
In agricultural matters subsidies tend to be so common that the rules which normally apply to industrial goods do not always fit.
One should try harder than that to protect the agricultural community and if the anti-dumping procedures are not suitable, as I think is the case, we must go over to a system of import levies, as has been suggested by this side of the House.
I want to see the Ministry of Agriculture taking a much bigger part in these affairs. Negotiations on food matters, particularly with foreign countries, are better not left to the Board of Trade. Many of these negotiations could be transferred to the Ministry of Agriculture to be fully responsible and answerable not only to the consumer but to the farming community.
It is with some trepidation that I intervene for the first time in an agricultural debate. Some of my hon. Friends have asked me how many fanners are in my constituency. Of course I have none. It is a highly industrial constituency. But I am within a stone's throw of some very beautiful farming country in Staffordshire and Shropshire and have, from time to time, had occasion to have very good relations with the Staffordshire N.F.U. and I feel, as my right hon. Friend said, that what affects the agricultural community affects us all.
I therefore want to say a few words about something which appears to be running through the debate as a theme. It is the whole problem of the balance of payments and import substitution. The balance of payments has concerned us all for many years and it seems that there are three ways of dealing with it. First, we can do what we have been trying unsuccessfully to do—unsuccessful in that it does not bring the required results —and that is to cut down on consumer demand and on investment, and therefore on imports. But we find that, by cutting down on investment, we damage other things because of the unfortunate backlash on the economy. Secondly, we can impose import quotas. Thirdly, we can produce more goods at home instead of importing so many of them—import substitution.
Import quotas can be imposed in various ways and on different kinds of goods, both manufactured and agricultural, and they have the advantage of flexibility. They can be used selectively. Import quotas are allowed by G.A.T.T. and our agreement with the rest of the European Free Trade Area. Where there are balance of payments difficulties, there is no difficulty about import quotas. It is clear that we can control imports much more easily than we can increase exports. But I think that import substitution is the most effective way of dealing with the problem and this is what the Labour Party put forward in its 1964 and 1966 election manifestos. We said in 1966:
Intense efforts are now being made to replace those imported products which British industry can produce competitively.
It is clear that British agriculture is an industry which can make a considerable contribution to the economy by this means and by 1972 it can make a real impact on our balance of payments problems.
The N.E.D.C. Report has been mentioned. It came to my hands quite by chance and it is this which persuaded me to speak in the debate. The Report should be read by every hon. Member. It is fascinating and shows that a rise of £345 million or 17 per cent. in annual gross output or £185 million or 22 per cent. in net output is possible by 1972 over the 1967–68 figures, and that further increases could follow.
This means, therefore, that, in a few years' time, we could look forward to a net import saving of £200 million per annum across the whole range of agricultural production. This includes cereals, livestock, meat, poultry, horticulture, flowers, bulbs, nursery stock and many other things.
I was interested to see in the minutes of evidence to the Select Committee on Agriculture, published last week, that the N.F.U. has confirmed these figures and supports them. It is anxious to have the opportunity to go ahead and expand productivity in this way. Of course one understands that, if one is to have increased productivity, investment is needed to back it up. This means that there must be improvements in the technical side of farming and in marketing efficiency, expenditure on better drainage, improved fertiliser application, and, of course, more research into agriculture generally —above all, the speedy application of the results of the research.
This problem does not only apply to agriculture. It cuts across the whole of industry. In the building and civil engineering industry, about which I know more than I know about agriculture, the results of research take perhaps 15 to 20 years to be applied. I hope that this time lag is not the case in agriculture. If we are to intensify research, we must have more graduates to do it and this means that my right hon. Friend must make approaches to my right hon. Friend the Secretary of State for Education and Science to ensure that there is a rapid flow of biology and agriculture students through our universities, so that the industry can carry on the research necessary and ensure that its results are applied.
At present, half our food and feeding-stuffs requirements are imported at a cost of £1,600 million per annum. Some things cannot be grown here and we have to import them, but that total includes almost £1,000 million worth of food from the temperate zone, and that is where there are possibilities for substitution.
Unfortunately, part of the problem is that in the 1970s we shall need more food, because, unless something is done on the lines of the remarks by my right hon. Friend the Member for Sowerby (Mr. Houghton) a few days ago, remarks which caused some concern among a minority of hon. Members, we shall endure a considerable increase in population. It has been estimated that from 1966 to 1972 there is likely to be a 3½ per cent. increase in population, a considerable increase over a short time, and along with that increase there will be a rise in incomes needing another 6 per cent. in food production. Of course we all eat too much and we could all do with cutting down on our intake. It would be jolly good for the economy and jolly good for our waistlines.
The Report makes it clear, and my right hon. Friend made much of this and was right to do so, because it is backed by the evidence, that agriculture has proved itself to be a highly productive and highly efficient industry. Net output per worker over the past ten years has increased by an average of 6 per cent. per annum, which is stupendous. If we could get that sort of increase, or even half of it, throughout the economy in British manufacturing and in the exporting industries, we would not be in our present economic difficulties.
Agriculture has shown the nation what can be done by the application of up-to-date methods and the introduction of mechanisation, and that is the need in many manufacturing and exporting industries. It is much cheaper to use imported labour from countries abroad than to invest in the capital machinery needed to step up productivity. This is part of the difficulty and part of the legacy from the period of the 1950s when the party opposite was in power with which we have had to contend.
Experience has also shown that in agriculture productivity increases rapidly when output rises rapidly, so that proposals for a faster increase in net output would generate even greater productivity. There is an enormous incentive to all of us to support agriculture. Of course, increasing agricultural productivity will not solve all our balance of payments problems and I am not even remotely trying to suggest that it would, but it would certainly make a splendid contribution.
With the increased backing which we have had for the £, which has given us greater flexibility to do much more in certain areas of the economy, surely agriculture is an area where we can do more in terms of import controls and physical controls on the imports of certain goods which we can produce beautifully ourselves. It is scandalous that we should import foreign cheese masquerading under British names. What the heck is imported Cheddar? Cheddar is a splendid English cheese and Caerphilly is a marvellous Welsh cheese which I like very much. We import very much which we could produce ourselves. Why do we have to import celery from America and pay dollars for it? Why do we import strawberries from America and pay dollars for them when, with a bit of investment in horticulture, we could produce early strawberries ourselves and not need to spend dollars?
I hope that my right hon. Friend will give support and backing to this Report from the Economic Development Committee on this subject of import substitution in agriculture. He would help the fanning community which, I am convinced, is anxious to serve the nation as well in the future as it has in the past.
I hope that the hon. Lady the Member for Wolverhampton, North-East (Mrs. Renée Short) will continue to come to our debates on agriculture and that she will continue to support the British farmer as she has this afternoon and to press her right hon. Friend to give British farming a greater share of the market. I hope that she will also continue to press her right hon. Friends on the Treasury Bench to give more money for research which is also greatly needed.
I feel that the Minister lost an opportunity today to give agriculture a new policy, or at least a fresh approach. He could have given our farmers some new guide lines. He could have told them what the future held for them. Why is he so timid about change and why is he being so cautious? Most members of the agriculture community, as he will find, are very reasonable people and are willing to give the Minister a fair hearing. He starts in his new office with a "clean slate", which is something nowadays. He has; been in this office since 5th April, and I would have thought by now that he could have got to grips with the problem and produced a Mark II policy and brought it to this House this afternoon. If he is to get anywhere in the next few months while he is still the Minister of Agriculture, he must be bold; unfortunately his approach this afternoon was far too timid.
The right hon. Gentleman's predecessor had a long time in the office. Surely there is some form of continuity in the office and I should have thought that the right hon. Gentleman could have produced a new policy after three months. We should not have to wait for changes until the next Price Review, because the last Price Review clearly showed that we must change from the present system. This year's Budget virtually cancelled out any financial help which we had had from this year's Price Review.
Last weekend, I met the executive of my National Farmers' Union in Herefordshire. They are sound farmers who know their job. Yet these farmers are frustrated and feel themselves to be in a strait-jacket under the present system because they cannot expand as they must. Above all, they have no confidence in the future and, what is worse, feel that there is no future in farming for their sons. That is why they want a change.
It was interesting to discuss with them the findings of the Report of the "Little Neddy". Surely the Minister must agree that it supports Conservative agriculture policy as put forward at the last elec- tion. The Conservatives feel that we need a workable policy which could give a real stimulus to increased production. This policy would apply whether we went into the Common Market or not. At the moment, due to a change in the French Pime Minister, I think that our chances of entering the Common Market will have to be put into the deep freeze for some time, but in the end it must be the right and proper policy to get into the Common Market, given the right conditions.
Surely the Government want to save on imports, as they must, while at the same time raising the annual growth output. We believe that a levy system would permit this. As the "Little Neddy" report states, this is technically possible. The Minister has only to study the levy system in the Scandinavian countries. I know that they are smaller countries and have different problems, but the system works there and those countries have even managed to finance their research institutions from the levy.
The Minister said that a levy system would mean that we would have to renegotiate our international food commodity agreements, but we will have to do that soon anyhow.
I hope that during the next few months we on this side of the House will be able to convert the Minister to our system, and convince him that it will work and that it is the best one. Something that is worrying the entire industry is that, if we cannot get confidence and stability, there will be a real drift from the land. This can be seen now, Soon there will be a serious manpower shortage. The annual rate of farm workers leaving the land is accelerating. The drain of vital manpower can only be stemmed if farmers are able to pay their workers a fair wage compared to their industrial counterparts.
Wages must be increased for skilled manpower, or these young men will not be attracted or, what is worse, will not remain on the land. Farmers must be able to make a better profit. It is absolute madness to attempt to restrain agricultural incomes by the restraints of the present prices and incomes policy. This has come out clearly in the last few months.
A problem that I have had in my area, and which I have continually brought up with the Minister's predecessor, is foot and mouth disease. I repeatedly brought to the notice of the former Minister the fact that the Government's policy of allowing beef to be imported from countries where foot and mouth disease is endemic simply does not make sense. It is madness, dangerous and far too great a gamble. Time goes quickly but we should not forget that nearly 500,000 animals, worth £26 million, were lost in the past few months. The entire farming community hopes for great things from the Northumberland Committee. I hope that it will give a clear guide on what should be done.
I also hope that the Minister, who is a reasonable man, will act on the Report, and not pigeon-hole it. He should begin on the right foot by reversing the present policy. All of his experts are advising and pressing him to do so. The Royal College of Veterinary Surgeons has advised him to do so, and these people know what they are talking about. We hear that Prof. David Hughes of Liverpool has submitted a report to the Northumberland Committee, asking for a ban to be imposed. In the meantime, if there is a resurgence of this terrible disease, the Minister must take charge immediately. No matter how great the pressures may be from his right hon. Friends at the Board of Trade or the Foreign Office, he must impose a ban. I hope that he has already carried out a complete review of the standing emergency orders in his own Ministry. During the last epidemic, the chain of command was, many of us felt, wrong. It took too long for the Ministry to get organised.
We must wait and see what the Northumberland Committee will suggest. I do not want to prejudge it, but the majority of my farmers would be very much against a programme of vaccination, as they are by no means convinced that this is the complete answer, or is 100 per cent. fool-proof. They do know that it would be extremely expensive. A great deal more research is needed. Even operating a policy of vaccination, in the Argentine, as the Minister knows, there are 5,000 cases of foot and mouth annually. Vaccination would aslo kill a very profitable and valuable export market in an area like my own.
When does the Minister expect the Report of the Northumberland Committee to be produced? The entire country is interested in it, and if he can give any indication it would be helpful. Will it be before the end of this year? I hope that when the Secretary of State for Scotland, who I believe is to wind up, addresses the House, he will expound on the Government's future policy a little more than the Minister did when dealing with the control of imports. What is the Government thinking of altering the quota for applies and pears, bearing in mind that a bumper harvest is forecast?
The Minister must attempt to explain how the Government's policy of farm amalgamation is to work when the Chancellor is squeezing out a Capital Gains Tax which only encourages fragmentation of agricultural holdings. The fanning community wants to give the Minister a fair chance, and time to find his feet. He was thrown in at the deep end on 5th April, but he missed a chance this afternoon by not being able to produce a Mark II policy. I am sure that he must have some new projects in his Ministry. He must make the restoration of confidence his main goal, because only then will this industry have a profitable future and the real stability we all want.
I would agree with the hon. Member for Leominster (Sir Clive Bossom) that confidence and a forward-looking policy for agriculture is required. I am not as convinced as he is that the policy put forward by the right hon. Member for Grantham (Mr. Godber) would necessarily have this effect at the moment, unless a number of queries in the minds of the farming community, and the community generally are answered. I propose to put these questions to the right hon. Gentleman during the course of my speech.
I would like to congratulate the Minister on his very able speech which put the situation in an admirable way. I feel that we are now in a period when the whole rôle of agriculture in our community may be changing. The change will not be drastic, but it will be a change of emphasis, over a number of years, which will make a definite difference. It is part of the whole process by which this country is readjusting to the end of a world rôle, a worldwide overseas trade to primary-producing countries, with a constant inflow of cheap food. It is part of the process by which Britain is once again becoming a Europe-centred Power, trading primarily with other manufacturing countries, principally in Europe. The other side of this development is a great concentration on supplying our own food.
It is going back on the policy which we followed since the repeal of the Corn Laws, 120 years ago, when our industrial position made us the workship of the world. We must treat the current change in our position as a slow change in emphasis towards a new rôle in our policies. I fully understand the position of the Minister. While he wants to make this change, and head in this direction, a number of complicated points, in international relations, domestic support, the whole attitude and structure of the farming community, which have to be handled simultaneously, are extremely complex.
I will mention a few. The whole point is that we have an efficient industry, but one which is in a peculiar mental state. This is because it has become efficient over the last 15 years but has found that it has increased production at a time when its real income has not risen. One has, therefore, a combination of manpower flowing out of the industry, increased capital, and markedly improved, higher, productivity. This is despite Government policy of either party. It happened while Governments of both parties were not intending an expansion; it happened because of technical changes because of the need to produce to make up for lower guaranteed prices and because of the increase in efficiency within the industry.
This was the situation, and we are left with an efficient industry but one in which, because of the lack of increase in real income, there is a problem of confidence. The farming community now realises that its rôle may change in coming years. It welcomes this, but it is not sure how, or what methods are to be followed, and it is looking for a lead. The problems that we have to face are the difficult ones of how much expansion we are to go for and what it would cost, what will be the effect on the balance of payments and on the structure of the industry? These are the inter-related problems which we must try to solve. There is an example of the difficulties that will be encountered in the experience we have had of the selective expansion programme in which we have been engaged from 1964 going on to 1970.
It is true, as the right hon. Member for Grantham says, that on one or two items in the selective expansion programme, principally wheat and livestock production, the targets are not being achieved. There are special reasons for this. I was surprised at the right hon. Gentleman's emphasis that he thought that this was due to lack of monetary incentives and confidence, because there are also technical factors. One technical factor which has been mentioned was the foot-and-mouth problem and the replacement question. There is the conflict between slaughtering calves for consumption and keeping them to add to herds, thus increasing the total number of animals. There is the problem of disease in cereals which is peculiarly heavy. I was surprised to see that up to 20 per cent. of the cereal crop suffers from disease and therefore productivity is lower than was expected.
I should have thought that it was fair to mention that in achieving the targets of the selective expansion programme there are technical problems as well as incentive and capital problems. If that is admitted, it casts light on the question whether we can change to a rate of expansion which the N.E.D.C. Report suggests would have to be faster than the rate we are achieving and faster than the original targets of the selective expansion programme. This is why I was surprised when the hon. Member for Leominster said that the N.E.D.C Report demonstrated convincingly that this was technically possible.
I feel that the N.E.D.C. Report worked on a set of technical assumptions that break-throughs in crop and type variety and yield which had taken place in the last 10 years would continue at the same rate and that problems like the incidence of disease would be tackled. It makes a series of optimistic assumptions that they will be dealt with at the same time as the problems of capital and labour input. I should have thought that the Report was a little optimistic on the side not merely of the Governmental approach to the industry, but of what is technically possible.
I turn to the other factors in agricultural expansion, one of which is the question of incentives and the problem of capital in the industry. There is a most Interesting situation concerning incentives. Hon. Members opposite have come down decisively in favour of an alternative form of incentive and agricultural support. I am open to any argument of this kind, and in certain cases I should find it attractive. I should like us to do without production grants in some cases because of the costs and difficulty of administering them. The Conservative Party, however, has decided in favour of a system of variable import levies plus production grants as the best method of coping with the situation.
I should like to put forward a few points to see whether hon. Members opposite can answer them. Theirs seems to me to be a half-baked or an inadequately worked out scheme which does not induce confidence in the farmers. Members of the N.F.U. in my area view them with considerable alarm. The right hon. Member for Grantham said that a minimum import price scheme has the very serious disadvantage that if we set a minimum import price we invite all those supplying this country to put up prices to that level and, therefore, we should have to pay through the balance of payments a considerable amount of money, perhaps more than we need pay, in import prices to foreign suppliers.
A great deal depends on the extent to which this country is in a powerful bargaining position in certain commodities. In cereals, for which there is a world price and of which we are not a major buyer, there may be very little effect. On the other hand, when we are a major market for the product in question there is a selling monopoly position and with a minimum import price system we may have to pay considerably more than we should have to pay with an open market system.
The right hon. Member for Grantham said that if we move away from minimum import prices to a levy system we evade this problem and the money paid by the importer in levy goes to the British Exchequer. I have grave doubts about this in all commodities. If we set a threshold price, we invite our foreign suppliers to increase prices to that threshold price. If one is an importer and has to pay the price plus levy to get it to the threshold, there is no incentive to bid down the price. The importer has to pay the same in the end, however much he might succeed in whittling down the price in bargaining with our suppliers. Why not let the price rise? Why not be a soft negotiator? The nearer one is to the threshold price, the less one pays in levy. A good deal of leakage of money from this country would go back to the foreign supplier in this way.
Alternatively, the right hon. Member for Grantham may say, "You have a fixed levy on imports of this kind". But if there is a fixed percentage levy there will still be the problem of dumped goods from abroad being brought to this country at a price which, plus levy, will still under-cut the British market in glut seasons, when foreigners want to get rid of their produce for the sake of making some money, if not the full price.
I am worried that if this were done there would be drastic fluctuations in British market prices. What bothers me is that if we close off the British market and say that the price level is what the farmers get, if there is a good yield during the year, down goes the price. This leads to market fluctuations, as in France and other countries which have followed this system. In a good producing year, the bottom falls out of the market level price.
If the right hon. Gentleman disagrees, he should have dealt with this point. There is evidence of this from other countries. It worries our own farmers, and it is very hard for hon. Members opposite to argue that they want more stability in the British market and then go simply for an open home market on price levels, this being the sole source of return to the farmer.
I am sorry to stress this point, but when the parties are divided about the method of agricultural support hon. Members opposite owe the agricultural community a full explanation. I cannot speak for the Select Committee on Agriculture, but no doubt it would welcome evidence in detail from the right hon. Gentleman about how his scheme would work, because so far no agricultural economist has been able to spell it out in detail. It is a plan which has not been published or brought before the agricultural community. As far as I can see, it would cause considerable worry in its present form if this type of question remained unanswered. I do not say that it cannot be answered, but it should be answered.
Having said that about the proposed Conservative system of agricultural incentives, my feeling on Exchequer aid is the reverse of that of the right hon. Gentleman. I should like to lay more stress on guaranteed prices. The production grant system often warps the pattern of agriculture. It was a good thing to develop when we tended to play down the amount of Exchequer support. I now feel that in terms of confidence it is the end price which matters to farmers. Many of them would prefer an end price rather than a mixture of sources of aid —so much for drainage, for water supplies, this sum for sheep and the next for winter keep—and one must bear in mind the extra costs of administration involved in such complex grants.
Nevertheless, if we are to have the expansion which we have been considering under the selective expansion scheme or under the N.E.D.C. Report proposals we need to put into the industry £230 million worth of capital and about £110 million per annum. This is a matter of resources. It is a technical and social problem how the resources are to be found. I agree that it is a matter of technique, but the techniques which we have at the moment, although cumbersome, to which I have some objections, offer, on the whole, a more certain method of getting the resources into the industry than the techniques advocated by the right hon. Member for Grantham.
On the question of inputs one input which worries me considerably is labour. Hon. Members will have noticed that the the N.E.D.C. Report points out that the outflow of labour from agriculture is proceeding at a rate faster than that forecast in the National Plan and at a rate which, if it is to be combined with the output objectives, would mean a 9 per cent. rise in the productivity of manpower, and the Report frankly doubts whether that would be possible.
This is true. It seems to be particularly troublesome in parts of the country where they are facing an outflow of labour faster than the emphasis which we wish to put on agriculture would permit or justify. The only reason for that, I am afraid, and we must fact this, is that agricultural wages have for too long lagged behind the average wage in the rest of the community.
I have been surprised about this, because the agricultural wage is taken into consideration in the Annual Price Review. We know that there is no guarantee that the full wage increases will be returned to the industry in terms of costs, but if we have a guarantee from the Government that at future reviews the cost of wage increases would be reimbursed to the industry in toto this would help us to achieve a higher level of agricultural wages, particularly when we are moving to a period of expansion in the manufacturing industry where other employment opportunities are available. It would be a pity if we drained the skilled labour off the land to such an extent that we were not able to expand our agricultural industry as we would wish.
There is one other problem I would mention on this, because it is a real worry to hon. Members from agricultural constituencies, and that is the question of the tied cottage. I do not think that any of us now wants the abolition, as such, of the tied cottage. I recognise its function. The real headache comes, and particularly in Scotland, because of a number of local authorities which interpret the present housing regulations in such a manner that they will not contemplate putting an agricultural worker on a housing list till he has received notice of eviction and will not consider him for inclusion on a housing list in the normal fashion.
While they take this attitude they put a very heavy burden on the agricultural industry and even stop men wishing to come back into the agricultural industry from contemplating this, because a man wants a little security. When a man changes his job he looks around for a house, and, similarly, if a man is leaving the agricultural industry he needs a little time to look around before leaving his tied cottage. The answer to this is a guarantee to farm workers that they will not be evicted till they have found other accommodation and a corresponding guarantee to farmworkers who wish to change their occupation that the local authority should consider their names in the normal fashion, on their application for inclusion in the housing list.
I think that this would get round the feeling of discrimination against farmworkers in this matter, the feeling that they are in a peculiarly bad position, and, at the same time, retain the tied cottages for certain types of remote occupation where a house has to be offered with the job.
So much for labour input. It is a matter, as so often is the case, of housing and wages. I now come to a technical problem. As I say, I think that the N.E.D.C. was a little optimistic about this question. I have mentioned the matter of disease in cereals. In general, it becomes clear from a study of the N.E.D.C. Report that the most careful technical operation will have to be done if we are to get this very large expansion of agricultural production off the same acreage. An increase in total acreage under agricultural production is not contemplated. Yet there is to be an increase of 3½ million tons of cereals to come from 1·7 million more acres under cereals so that the extra livestock will have to be reared on 1·7 million fewer acres of grassland. It means a tremendously greater concentration on the proper use of grassland and intensive production of animals.
If this is to happen there has to be an improvement of the farms at the lower levels of efficiency up to the level of those at the highest rates of efficiency. It also means structural changes in the agricultural industry, and the emphasis on larger units will have to continue.
All this leads us to the question of what the Government's immediate policy should be. How should they tackle the immediate questions? A point mentioned in the Report and by so many hon. Gentlemen is that the industry is caused unnecessary alarm and worry by periodic dumping of foreign products. We have had this again and again. Nevertheless, I think that it is my duty to repeat this. It does occur and it knocks the bottom out of the industry over the short period, and it happens to people who happen to be marketing at that time and cannot market at any other, and it affects them very seriously.
We investigated this in the Select Committee on Agriculture. The attitude of the Board of Trade was entirely appropriate to manufacturing industry, but not to the agricultural industry, for it was pointed out that the Board will not act till damage has occurred. The procedure is that people have come to the Board and say, "I have been damaged. Do something about this." Till this happens the Board will not act. This means, of course, that the antidumping procedures are far too late for those who have seasonal crops and who have been damaged at that point and who will not be able to recover or return to that position till the next year or the year after that.
Therefore, I would hope that we would devise a procedure not merely for action against dumping when it has occurred, but when we get reports from our commercial attaches abroad that it is about to happen. Then action can be taken in time before the stuff gets here; when we know there is a glut in a foreign country, we can be ready to act.
I am grateful to the hon. Member. The fact is that I was a member of the Select Committee on Agriculture which investigated this question. He will notice from our Report that we were alarmed that in Europe there is only one—in Brussels; and there is not one in Paris. Commercial attaches are extremely thin on the ground. I take the hon. Gentleman's point.
We want an end of dumping and we need an attempt to renegotiate our international agreements, and here there is need for positive Government action. Under these agreements we promised Commonwealth countries we would not supply an increasing share of our own market, but that is just what we are now proposing to do.
In addition, the Government will need to take a more positive rôle in such an expansion and to look at the distribution of government assistance. For instance, if we are increasing the incentive for the production of pigs and of pigmeat, there might then be a shortage of factories for curing and processing pig meat. This would require Governments grants for building such plants and perhaps an advertising campaign to counter the Danish advertising campaign and the housewife's preference for Danish bacon. Otherwise, there will be difficulty in expanding output to the optimistic level suggested of 50 per cent. of the pigmeat and bacon supplies we need being produced in this country. In cases like pigmeat and bacon, the Government will have to step in with a more positive programme and help to switch resources to the appropriate points to get this expansion.
The real problem for the Minister in making a change of the overall kind I have described is whether he decides to make, as it were, a single impressive announcement—"Here we go: we are going to renegotiate our international agreements; we are going to increase agricultural wages; we are going to change our support policy and our pattern of grants now", or whether the Government should do this bit by bit, year by year. After all, this level of expansion is a technical problem whose costs cannot be fully estimated. We do not know how much the incentives would cost or the precise impact and effect which it would have on import saving. Whether we should tackle this year by year, or whether we should have a single major shift of policy, is certainly a problem I find very hard to answer.
In terms of confidence, a major change would be better. In terms of costs and of not wasting resources, the bit-by-bit approach would be better. But whichever one of these courses we follow we must congratulate the Minister again on his approach, and in the next year or two, I hope, we shall see confidence spreading in the farming industry and developments taking place which will amount to a major change in our attitude to agriculture in keeping with this country's rôle in the modern world.
I think that none of us on this side of the House would quarrel with the open- ing part of the speech of the hon. Member for Berwick and East Lothian (Mr. Mackintosh), when he analysed the changing forces which are affecting agriculture at the moment. I only wish that he had been as accurate in the middle part of his speech and about the agricultural policy put forward by my right hon. Friend the Member for Grantham (Mr. Godber). Had he really studied that policy he would have realised that in addition to the levies the Conservative Party would retain the present system of deficiency payments to give the agricultural industry the security and the protection from the foreign fluctuations in prices which, he said, would follow from a change in this system.
Perhaps I might intervene in this cross-current of discussion and say that my hon. Friend is right. I have always said that during the transitional stage deficiency payments would remain. It is only at the end of the transitional stage that deficiency payments will be phased out.
I am grateful to my right hon. Friend.
I think that most of us on this side of the House wish the Minister well in bis first speech in a major agricultural debate. We wish him well personally, but I think that we are all disappointed with his performance today. The speech hardly matched up to the challenging situation which the Minister said he would begin to unroll for us.
The Minister posed a lot of questions in his speech, but he never attempted to answer them. We could have told the Minister what causes the drift from the land at the moment. It is simply that the agricultural community, under the present Government, cannot afford to pay people more to stay on the land.
I felt that the Minister, in his speech, represented the small farmer who will not change his system in time and will not see the changes in market forces until it is too late and the bank manager has almost foreclosed on him. I hope that the Minister will not bring to his new Department the mentality of many small farmers in the country today. The Ministry of Agriculture is the one Ministry today that really needs sound business management and sound business judgment for the future course of the industry. I feel that the Minister brings that old-fashioned conservatism and resistance to change that we find so strongly embedded in the traditional supporters of the Labour Party.
I will be brief, but I should like to look for a moment at the present position of the industry. Up to three weeks ago the countryside looked better than it has done for many years. However, since that time the hay harvest has been practically spoilt by the wet weather. The trouble with modern mechanised farming is that it is very good at handling a hay crop when the weather is reasonable, but it is not very good at making better hay under bad conditions. Driving round the countryside one sees that a great deal of the harvest is flat.
I am sorry that the Minister, or one of the Parliamentary Secretaries, was not able to visit the Rothwell Research Station, in my constituency, earlier in the week. The Ministry was very ably represented, but I think that the Minister would have been impressed to see how many of the new varieties that have been developed in North Lincolnshire have stood up to the present bad weather and high winds. But what does a flat harvest mean to the agricultural community? It means a great deal more expense in getting in the harvest when the profit margins of the farmers are already badly squeezed.
I find, going round the countryside, a tremendous feeling growing up that there is an enormous gap between what the Government does or does not do, what is said in Whitehall, and what the position really is in the countryside as we find it and as we know it. There is a tremendous feeling that Whitehall is out of touch and behind the times concerning conditions in the countryside.
At long last we have had an announcement by the Minister about what he thinks the minimum import prices will be when he announces them next week. We shall have to study those figures to make a proper assessment of them. While we have been waiting for those figures to be announced, practically every fanner has been telling the Ministry that French wheat is being dumped in this country at £22 a ton when the farmers in France are paid £40 to produce it.
There has been chaos in the potato market. We are also threatened with the collapse of the cheese market, with subsequent repercussions all the way along the line for dairy farmers.
I think that it is fair to compare the present vacillating attitude in the Ministry of Agriculture to the robust attitude we saw in 1964 when the then Minister of Agriculture dealt with the dumping of Russian barley on our home market. I appreciate the position over dumping from the E.E.C. countries which have this bogus high price level for their agricultural produce. But I do not understand why the Minister has to be so feeble about dumping from Iron Curtain and Communist countries. Surely the object of those countries in selling goods in our market is to raise a certain amount of sterling. If only it can be explained to the Communist countries that the workings of a capitalist economy are such that we would prefer them to sell their goods here at a higher price, enabling them to raise more sterling for less goods, than continually trying to dump in our markets. The Russians eventually understood this over the dumping of their barley.
Both sides of the House have agreed so far that the present position regarding anti-dumping legislation is too slow and too ineffective. One has only to look at the excellent work which has been done by the Farmers' Weekly in always warning the farming community and the Government about the early effects of dumping—butter oil in February, 1967, and Austrian powdered milk in March 1968. The only solution to this problem is that put forward by my right hon. Friend the Member for Grantham, namely, that we must have a full-scale policy of import levies with the great advantage that the levy money can be used to stabilise the home market when necessary.
In opening the debate, my right hon. Friend said that we would not deal with eggs and the Report of the Reorganisation Commission for Eggs. I am impressed that the really big and responsible egg producers in my constituency appear to welcome that Report. There is obviously the problem of the small producers of eggs. The answer to them must be that they must get together in small co-operatives to try to compete with the bigger producers. I hope that the Government will endorse the Report of the Reorganisation Commission which gives the efficient egg producers the chance to go ahead, because they seem to have confidence in the Report.
I was interested in what the Minister said about potatoes. It is fair to say now, with hindsight, that the potato growers made a great mistake when they refused to accept the higher levy suggested by the Board of £5 an acre. Had they accepted it, that money could have been used to help develop the home market for potatoes. Of course, one needs to spend a great deal of money on a thumping good advertising campaign to persuade people to eat more potatoes. That would have been a very rewarding way of spending the levy.
I was interested in what the Minister said about the need for the potato producers to develop processing plants in this country. I can show the Minister a very advanced one in Crowle. This is the way that the potato growers will have to move. The emphasis so far has been on presenting the raw potato more attractively to the housewife. It looks as though the market in future will be for manufactured and processed potatoes. This point is well proved by the enormous sudden demand to import processed potatoes.
I am sorry that we are not to have any View from the Minister about the Meat and Livestock Commission. We on this side of the House disagree with the size of the levy which is being imposed by that Commission at the moment. The Commission is asking for much more than it needs. Faced with the fact that the levy to the Agricultural Training Board is extremely unpopular among the farming community at the moment, it seems the wrong moment to impose on the industry a bigger levy than is needed to help the Commission. However, I understand that we will have a chance of voicing our concern on this matter in greater detail next week.
Finally, I think that all on this side of the House welcome the Report of the "Little Neddy" on agriculture. I had hoped that we would get from the Minister a little more than an assurance that he was going to take note of that Report. Mention has been made of the section of the Report dealing with the import saving of about £220 million a year, but as I see it the greatest difficulty lies in the capital injection into the industry which that Report envisages. It refers to £230 million of fixed capital expenditure, and another £110 million of working capital. This money will not be forthcoming until there is more confidence in the future. That confidence will be brought about by better prices, by security, and by an import policy. I very much doubt whether the Board of Trade will agree to these precious capital resources being injected into the industry at this time.
If the Minister wants to find more capital for the industry, I hope that he will look carefully at some of the capital grants that he makes. I am glad that the Secretary of State for Scotland is to wind up the debate, because I think that we ought to look carefully at further investment in marginal land schemes. Most private investors like to invest their money only in good land, and it seems a wrong use of capital to go on pouring it in to marginal agricultural production schemes, often destroying by the process of farming something which the rest of the community would like to keep as it is for recreational and other purposes. We should look carefully at marginal agricultural production to see whether the investment in tourism, and a change of use of the area would not be a much better use of our resources than is the case at the moment.
Under present reseeding schemes the Government pour out large sums of money for people to reseed the hills. The Government have not solved the problem of how these pastures should be maintained. In Scotland, one can find numerous examples of tremendous sums of money having been paid by way of grant to reseed pastures which have now returned to molinia and rushes. That is the sort of investment which we should reconsider.
I offer my congratulations to my right hon. Friend for the way in which he reviewed the progress of agriculture during the past few years. My right hon. Friend has undertaken a major task. Previous Ministers have found it very difficult to solve the industry's problems. Nevertheless, I am sure that we all wish him well in his new office.
We devote a good deal of time in the House to agriculture in its many facets, and it is right and proper that we should, because, in spite of all the criticism which has been, and will continue to be, levied against the agricultural industry, the fact remains that it is still our largest industry, and its production has impacts on the community as a whole.
In an industry which has been subject to change throughout the years, I suppose it is natural that one should review the system which has operated over the past few decades to see whether it is serving the needs of the community and those associated with it in the best possible way.
The right hon. Member for Grantham (Mr. Godber) set out the Tory concept of the future pattern which should be applied to British agriculture, and from time to time we have read in the farming journals the opinions of those who have expounded the levy principle. I have yet to be convinced that the implementation of a levy system will solve the problems of our home market. There is no doubt—and indeed the right hon. Gentleman mentioned this—that the operation of a levy system will cause the cost of living to rise substantially. I am not sure that any party would be willing to go to the country at the next election and advocate a substantial rise in the cost of food.
I was particularly interested to read in the Farmer and Stockbreeder a short while ago the opinion that
the levy system is a non-starter.
I think that the writer of that article is on sound ground. However, this is the policy being advocated by the Opposition, and my right hon. Friend has said that he is willing to consider methods of dealing with the problems confronting the industry.
I hope that my right hon. Friend will think very carefully before he agrees to any form of levy system. I am sure that within the ranks of his party he will find a great deal of opposition if he introduces a system which bears heavily on the cost of living of those who are in receipt of low incomes, pensioners, people on fixed incomes, and so on. However much the industry may say that the consumer ought to pay the full cost of production, the fact remains that people in this country would not welcome the idea of paying the full cost of home-produced food. They have become accustomed to some support to keep the cost of food at the lowes possible level, and any major departure from that principle would not be welcomed by a large section of the community.
The industry is subject to a good deal of buffetting. I am thinking of the effect of the disease which hit it earlier this year, and now we are finding our cereal crops badly affected by the weather. I went down to Norfolk this morning and saw some of the havoc which the wind and rain have caused to many of our cereal crops. Unless there is a considerable change in the elements, the harvesting operation will be very difficult. Here I agree with the hon. Member for Gainsborough (Mr. Kimball). It is true that the method of harvesting is not the old-fashioned one in which I used to take part, where one had to slog hard to gather in corn that was badly laid and twisted, but even with the most up-to-date combine harvesters which we now operate thousands of acres of crops will be extremely difficult to gather in. I think one has to recognise that the industry is somewhat uncertain about its future. Nevertheless, so far as I can see, the N.F.U. does not welcome the scheme put forward by the Opposition as a means of solving its problems.
I was interested to note today that hon. Gentlemen opposite have not produced their green "cyclos". Usually when there is a debate on agriculture a number of hon. Gentlemen opposite wave their cyclos in an effort to condemn the action taken by the Government. Today these documents seem to be missing, although I am certain that hon. Gentlemen have received copies of them.
It is not often that I agree with the cyclos, but on this occasion I agree with the statement which reads:
So long as the British Government is not free unilaterally to apply measures of import control the practical consequences of abandoning the guarantee system in favour of variable levies or other import control arrangements would be to reduce the producers total return and, perhaps of even greater consequence, to increase the element of instability ".
That is the considered view of the N.F.U., as shown in the document that it has circulated to most, if not all, hon. Members. It is therefore clear that the fanners' organisation does not look with favour upon the levy system proposed this afternoon by the right hon. Member for Grantham. Hon. Members have referred to certain aspects of the "Little Neddy" Report on Agriculture. In paragraph 93 it states:
Implicit throughout our proposals"—
that is, the proposals for expansion within the industry—
is the need for sustained confidence among fanners and growers … Both fanners and growers are, moreover, becoming increasingly dependent upon market stability because of their increising specialisation …
The cyclo circulated by the N.F.U. expressed concern that the levy system might increase the element of instability, and it is therefore difficult to see how the introduction of such a system would provide a means of achieving the objective of which the "Little Neddy" has said the industry is capable.
The Report points the way to increasing productivity and production on our farms. This is a continuation of the selective expansion policy that my right hon. Friend announced to the House a year or two ago. I see no reason why the industry should not be capable of achieving the objectives indicated by the Council, but the task will not be easy to accomplish, as will be realised only too well by anybody with a practical knowledge of the industry.
One of my hon. Friends indicated that, in respect of cereal production at least, perhaps the best method of achieving the objective was to create a break-through in controlling the fungus diseases that have so much effect on our crops. No fewer than 20 per cent. of our cereal crops are lost as a consequence of fungoid diseases, and that is a very important factor. There is no easy solution to this problem. The Research Council is considering the question at home and similar bodies are studying it overseas. In time methods will no doubt be found of controlling or eradicating this disease, but in the meantime the losses continue.
Reference has already been made to the manpower position. Ever since I came to the House I have put forward the view that if we are to continue with a policy of expansion in British farming it will be necessary to halt or reduce the drift of our workers from the land. During the last twelve months the drift has not been as great as previously, but the outflow of labour is largely determined by general employment conditions. If there is a good demand for labour in industry generally there is a greater outflow of labour from the farms. In the last 12 months over 20,000 workers left the land.
My right hon. Friend has said that he may have to consider the manpower position. That will not be sufficient; something will have to be done about it if we are to slow up the outflow of labour. I am not sure that the outflow that has taken place has been as gainfully employed in its new work as it was when employed on our farms. Merely to look at the problem will not solve it.
Wages and earnings in agriculture still fall substantially below those which are obtainable for unskilled work in other industries, in spite of the fact that agricultural work is highly skilled. I have never been able to secure, at the proper place— across the Wages Board table—agricultural wages which fully recognise the skills and responsibilities that have to be undertaken by our men on the farms.
If my right hon. Friend is going to look into this matter he should provide a jolt in the right direction by suggesting that the claim of the farm workers which is shortly to be heard by the Wages Board should be sympathetically dealt with. If it were so dealt with it could help considerably to reduce the outflow of labour.
For some years British farm workers have been increasing productivity annually by about 5 per cent. or 6 per cent., but in order to achieve what the "Little Neddy" has set out, if the exodus of labour proceeds at the same rate it will require a 9 per cent. increase in productivity, and that is a substantial increase to achieve. I have my reservations whether it can be accomplished.
When my right hon. Friend considers the manpower position I hope that he will realise that in addition to basic wages the question of a wages structure requires to be settled for the industry. Furthermore, the question of the cottage that the farmworker lives in is still an important one. My union has never said that it wants to see the tied cottage abolished. It recognises it as an essential part of a farm, where that farm is isolated. But it has said that before a farm worker and his family are threatened with eviction alternative accommodation must be made available. That is its policy. It is a humanitarian and practical line of approach, and if we could solve that problem we should be making a contribution towards retaining the skilled labour that is required if the industry is to achieve the objectives which have been set out for it.
It is always a pleasure to listen to the hon. Member for Norfolk, North (Mr. Hazell) when he is talking about farm workers, their problems and difficulties. I cannot go far with him in his plea in respect of the wages negotiations which are now going on, but I have a great deal of sympathy with him on that subject.
I am also glad that both he and the hon. Member for Berwick and East Lothian (Mr. Mackintosh) raised the question of the tied cottage. This problem has arisen in my constituency. It is full of difficulties. It was clear from what the hon. Member for Norfolk, North said that the problems in this respect have not yet been resolved. The hon. Member for Berwick and East Lothian talked about cases in Scotland, and directed his plea in the other direction—to me. He spoke in terms of the difficulty of finding alternative accommodation quickly enough.
I agree that these difficulties do exist, and I hope that the Minister will note what has happened in West Derbyshire. I have a farmer constituent who has dismissed a farm worker who lives in his tied cottage. The farm worker hopes to find alternative employment quite near. The ex-farm worker will not leave the cottage. The farm of my constituent was wiped out by foot-and-mouth disease soon after this dismissal, but it has now been restocked. The farmer wishes to replace in his cottage the farm worker who has left, by another one who is living seven to 10 miles away, but he cannot take possession of the cottage, and has taken the matter to the county court.
When we talked about this in 1965 we accepted that court procedure is the right way to do this, and the county court judge is charged with specific responsibility to bear in mind the farming circumstances Not once, but twice, the case has been before the court, and each time there has been a delay of six weeks given after the hearing. There has also been a long period of time in between the hearings. The case came up for the second time last week, a further six weeks delay was imposed by the county court judge and the case cannot be heard again until after the Hilary recess some time in the late autumn.
My constituent still has not obtained possession of his cottage. I ask the Minister to look at the problem. There are difficulties not only in finding accommodation nearby for the ex-farm worker, but also in seeing that the courts and judges understand the agricultural problems which arise.
An encouraging aspect of the debate has been that many hon. Gentlemen have been talking about the Conservative agricultural policy. Every hon. Gentleman who has spoken has mentioned the policy and questioned part of it; of course they should. The Minister spoke as if this were a policy which my right hon. Friend the Member for Grantham (Mr. Godber) had announced only during the last few weeks. We were talking about this policy in 1965. We fought the 1966 General Election on it. We have improved and adapted it since then, but, basically, it is the same.
The questions asked by the hon. Member for Berwick and East Lothian have been answered time and again. He mentioned the import levies and threshold prices and said that he thought this would encourage soft buying. He had forgotten that it is not Government-to-Government buying. It is the United Kingdom private trader who buys in the foreign market as best he can, and he will buy at the best level he can in keen competition.
I am delighted to hear from the hon. Gentleman the Member for Norfolk, North that the N.F.U. has circulated information about the Conservative policy. Much discussion is going on with the N.F.U. and other bodies for the development of the Conservative agricultural policy, which, of course, will be put into practice when we return to power after the next election.
The lack of direction in the Minister's speech has been the disappointing aspect of this debate. He is an amiable man and he made an amiable speech, which was delightful to listen to, but he had only three things to say. He mentioned cereals, potatoes and cheese. One was profitable and the other two he was negotiating and could not say much about. That does not show tremendous drive and initiative and will not encourage the agricultural industry along the lines of his own selected expansion plan or, indeed, along the lines of agricultural import saving put forward by the "Little Neddy".
I was astonished by the paucity of information in the right hon. Gentleman's speech. We have no idea what are his feelings about co-operation, or the Cereals Commission. Is it working satisfactorily? Is he happy about the way in which the Meat and Livestock Commission set about its task? Is he pleased with the way in which the industry is shaping up and in the amount of new capital formation? By the way, here his figures were wrong. Is he pleased about the way in which capital formation took place last year in the industry? He has mentioned none of these topics.
I entirely agree with my right hon. Friend the Member for Grantham in supporting the "Little Neddy" Report that the basic factor is the degree of confidence within the agricultural industry. "Little Neddy" may agree the broad objective of the selective expansion policy. But the Government have not even achieved that, so it is unlikely that they will achieve the spectacular expansion which is argued in the "Little Neddy" Report.
There are factors to which the "Little Neddy" Report does not pay sufficient attention concerning their proposed expansion, such as disease, international agreement. I return to the fact that if the agricultural industry is to expand, if production is to expand, confidence is necessary, confidence that there will not be tremendous upsets and market fluctuations. Equally, capital must be available. The right hon. Gentleman the Minister said that capital came from the Government or from the consumer. I do not think that he meant quite that. There are other sources of capital as well. The return on capital invested in agriculture at the moment is in the region of 2·7 per cent., including land, equipment and stock.
I have been trying to discover a more accurate figure. The research division of the Library of the House told me that the statistical departments have not yet managed to find a way of calculating accurately the return on capital. The Select Committee met on 10th April to hear evidence concerning the acquisition of capital, the accruement of it and the return on it. The Committee was informed by the right hon. Gentleman's Department that statistical information and documentation were not available. An approximate return of 2·7 per cent. is obviously too low; it is a derisory return compared with the return on capital invested in other industries.
If we are to expand along the lines laid down in the survey it is absolutely essential that we should get on with it as soon as possible. This cannot be done under the existing system, which is why hon. Gentlemen opposite have been talking about the Conservative agricultural policy. As my hon. Friend has pointed out, under the existing guarantee system £25 million a year extra will be needed in subsidy. This is to say nothing of the increase which will be needed if any fluctuations or difficulties arise.
As the right hon. Gentleman the Secretary of State for Scotland knows, nobody is more difficult to get money out of for agriculture when there are difficulties than the Treasury, particularly for deficiency payments. So this will not happen under the present system. There was a faint ray of light when the Minister said that he would examine once again the agricultural policy put forward by my right hon. Friend and hon. Friends on this side. Expansion hinges to a large extent on, first, confidence; secondly, on the capital available not only from within the industry and from the income which is reinvested by farmers, but also the capital which is available from the Government and from banking and other sources; and, thirdly, on whether the physical resources—stock machinery, etc. —are available in time. Those are the three factors. But, above all, any possible expansion depends to a large extent on a reasonable control of imports.
A factor which is inherent in the Conservative agricultural policy is that there should be an import control by import levy to solve the problem of dumped agricultural produce. We have been trying to get a better system for a long time. In the days of a Conservative Government, we had the same difficulty of dealing with agricultural produce dumped in this country. But I suggest that we were far quicker in dealing with it than the present Government are, and that is the root cause of the difficulties facing our potato and cereal growers.
Our early potato growers, especially, have had an extremely difficult time of it, not only in the part of the country which I now represent, but that which I used to represent in the West Country. I understand that they have received as little as £10 a ton for new potatoes. That would be understandable if it was due only to climatic conditions, but when one has to compete with climatic conditions and dumped cheap imports from Cyprus and Egypt, one begins to think that something has gone really wrong, particularly when imported potatoes are coming it at a price below that paid by their Government for home produce.
We must have strong import controls. If the Government are not prepared to turn over to an import levy system, which would do away with the necessity for other dumping controls, I ask them seriously to look as soon as possible at bringing in a quicker system of control in imports. Imports from the Eastern bloc countries are not difficult, because they are mostly on quota, but a large number of products such as French wheat and early potatoes from Cyprus and Egypt should be controlled much more quickly in the interim period before the Government change over to our system.
I am not quite happy with the Minister's announcement about the new minimum import prices for cereals. He announced only a 9 per cent. rise in the M.I.P.s, whereas devaluation has resulted in a difference of 16·2 per cent. It is a pity that he has not raised them to a higher figure as he has for wheat which is rising by 11 to 12 per cent.
As for the right hon. Gentleman's announcement about cheese, he accepts that damage is being done to the milk products industry, and that there is difficulty and that any expansion is jeopardised by the state of the dairy industry at present. However, it is a little weak to say that he does not want to talk about it because he is engaged in negotiations. He should come to the House at the earliest opportunity and say what kind of negotiations he is conducting, what he intends to do, what controls he intends to put on, and when. That should be done at the earliest possible moment.
In the debate so far, there has been no mention of agricultural exports. When he was Minister of Agriculture, the present Leader of the House formed the British Agricultural Export Council. I hope that the present Minister is giving that body directions to go out and get trade for this country. We have highly-qualified technical people and one of the most developed agricultural industries in the world. I hope that the Minister is directing the Council to go out not only to the Iron Curtain countries, but to the Middle East and Africa to get us trade, because that is its job, and it can do it well. It is an important way in which we can help the starving nations.
In Nigeria, for example, agricultural experts have an enormous amount to do once the fighting ends, and I hope that the Minister will direct the Council to get on with its job in that country, too. It is equipped for it and, in the same way, the agricultural industry has the equipment, in terms of machinery, technical knowledge, stock, seeds, and so on. However, directions are needed from the Minister, and it is to be hoped that we will at last begin to build up our exports to those countries which will not only help them and their hungry people as well as helping our own industry, but will improve our standing in the world and carry out some of the tasks which we would have been carrying out in the world had it not been for a Socialist Government.
I intervene briefly in this debate with no trepidation, despite the fact that I do not represent an agricultural constituency and am not a farmer. I do so because the people in my constituency eat.
The debate so far has been of great interest, because it has not had the usual measure of political points made from the other side of the House. Instead, we heard a number of very good suggestions, and the debate was extremely interesting until the contribution of the hon. Member for Derbyshire, West (Mr. Scott-Hopkins), which seemed little more than a political speech. It rather spoiled the debate.
The hon. Gentleman chided one of my hon. Friends with the fact that he made reference- to the Conservative policy for agriculture. He pointed out that this marvellous policy had existed since 1965. That is becoming almost a hardy theme of hon. Members opposite. It would seem that everything that we discuss is the subject of a brand-new policy which right hon. and hon. Gentlemen opposite produced in 1965—not in 1952, or 1954, but, suddenly, in 1965. I am coming to the conclusion that the year 1965 will be as important in Tory Party annals as 1922.
One way in which the Government can help the agricultural industry is to get ordinary people to understand not only the problems of the industry, but its achievements as well. I do not believe that it is sufficiently realised at every meal time that most of the food which appears on our tables comes from the efforts of our own farmers and agricultural workers. Ordinary people do not understand and have never had explained to them what is meant by complicated matters like levies, Price Reviews, the rôle of marketing boards, subsidies and the rest of it. If people had these matters explained to them, instead of simply dismissing them because they appear to be so complicated, automatically they would develop an interest in the agricultural industry.
I do not believe that this great industry is getting the credit to which it is entitled. It is a magnificent industry, and it has made great steps forward in the past decade, especially during the last four or five years. Speaking to friends who are farmers, or who are interested in the industry in other ways, I am told that, despite all the faults of the present Government, they have done many good things. Not being a farmer, I have had to look at some of the good things, and I understand that many of them are extremely good. For example, the encouragement of amalgamation of small farms is apparently getting slowly under way and is a boon to the industry. It was pleasant to hear hon. Members opposite saying that they were interested in the industry and wanted to see this carried on. I am not trying to make any political point— —
In a moment.
I understand that the new Farm Improvement Scheme, which was introduced in 1967 by this "wicked" Labour Government, has also proved of great benefit, not only to the large farmer but to the small farmer, and that these two things alone have proved very helpful to agriculture.
Is the hon. Gentleman really advocating, on behalf of his party, that all the small farmers should be driven out of business? [HON. MEMBERS: "Rubbish."] This is what he is claiming. In my constituency, there are many small farmers who say, "Do not let the big chaps swallow us up". I hope that the hon. Gentleman is not advocating, on behalf of his party, that the small man should be driven out.
All I will say in answer to that is, "Do not be so daft". I know a number of small farmers who, because it is now possible for them to amalgamate to various degrees, know that their financial and land resources can aid the country better than hitherto. There is no terrible plan to drive the small farmers out. I do not believe that this country could exist if we were to adopt the attitude of some hon. Members opposite that we can survive with the "dog and stick" farmer.
I also believe that it might be necessary to have even closer liaison between the industry which provides the equipment for farmers and agriculture itself— perhaps by collaboration between the Government and the unions. But closer integration and examination is needed and should, if necessary, have some support from the Government. In the end, the country itself benefits.
It is sometimes assumed that people in towns and large conurbations are not interested in agriculture. Of course, they have a massive interest when there is a shortage of some food, but they should not arrive at the frontiers of understanding only when there is some desperate shortage. Therefore, we should try to acquaint people not only with agriculture's problems, but with its undoubtedly magnificent achievements. If this can be done, something else might follow.
The need has been mentioned to attract young people to the scientific and technological aspects of agriculture, and this is true. I would ask the Secretary of State for Scotland to consider the possibility of making known to our youngsters in fifth and sixth forms at comprehensive and secondary modern schools—not only in the universities, but at this level—the possibility for achievement which can come from studying to make a contribution on the technological and scientific side of agriculture. This aspect has not been altogether neglected, but it has been somewhat overlooked.
The industry faces a problem which probably no other industry has. In large coal mining areas there is a mining community, probably within a small area. The same applies to the steel and motor industries. Hundreds of thousands of people are involved in the industry in a comparatively small area. This does not apply to agriculture. It has suffered from this for a considerable time, because the people concerned have been demoted in the order of priorities when they should not have been—not only by successive Governments, but because of the attitude of mind of ordinary people. I plead with my right hon. Friend to consider a scheme whereby youngsters at school, in no matter what industrial area, could be given the opportunity not only to know their own local industry but to learn of the opportunities and advantages in agriculture.
I have seen some of the efforts of British agriculturists in other parts of the world, as have other hon. Members, probably, particularly in visits to former Colonies, when we see the material as well as financial aid which we are giving and the sort of British equipment which is being produced and for which they are very grateful. There should be a much closer link between some of the developing countries and our own agriculture. Some sort of link may exist, but I do not believe that it is broad or firm enough or that the passage of information is free enough.
Our agriculture compares more than favourably with any in the world. Two-thirds of mankind is starving tonight. When we are talking about the problems of British industry, we should try to consider this aspect so as to resolve these problems—not only to aid our balance of payments and feed our own people, but because a thriving agriculture here could, at the same time, make a massive contribution to alleviating world hunger.
Agricultural debates are something of a ritual and have, I suspect, rarely helped the cause of British farming. There is probably more cant per column of HANSARD on agriculture than on any other subject. It seems to be traditional that spokesmen for the farming lobby should come here and beat their breasts for the votes they can get out of them. Perhaps it has not been so bad today as in the past, but this is a tradition. Many hon. Members indulge in the wilder fantasies of the expansionist lobby without any relation to realities.
Farmers have not been very well served by their representatives in this House, whose aim has been largely to convince local committee men that they have real muck on their boots. I come from what would be called an agricultural constituency, but I have no muck on my boots and I will not pretend to have any. It is not for nothing that the Sunday Times referred to agricultural debates in this House as taking place in "a half-empty chamber, full of axe-grinding experts".
I intend to set out the expansionist case in a realistic fashion. I want to confine myself to the case for expansion and will take, first, the world case. We are, after all, dealing with the largest single social, political and economic problem of the next 25 years. The world population is increasing by about 165,000 people a day, and by the end of the century we shall have 6,000 million people to feed, 75 million of them in this country. The Food and Agriculture Organisation recently estimated that world food production would have to increase by as much as 4 per cent. per annum to cope.
Apart from the basic problem of feeding starving people, there is the question of where we shall get our own food supplies from in this situation. We can choose between two alternatives. We can assume the continuance of world surpluses and cheap food bargaining through our inability to conquer the distribution problem, or we can assume that the distribution problem will be solved. If we make the first assumption it follows that it would be a waste of money to develop our own relatively high-cost industry. If, on the other hand, we assume that we shall overcome the world's distribution problem, we shall shortly find ourselves bidding in a more competitive and expensive market for our food.
In my view, we should make the second assumption, and we are vulnerable as the world's largest food importer. In 1967 we imported over £1,560 million worth of agricultural produce, and that was a quarter of all imports. If we deduct the one-third of tropical products, it is still an awful lot of food to have to buy in a competitive market in which the terms of world food trade have turned against us.
I turn now to our own situation in Britain. Historically we have bought our food in the cheapest markets because we were the first country in the Industrial Revolution and we could sell our manufactured goods easily. We were a monopoly supplier of manufactures and we dominated the market. Moreover, we had a plentiful source of cheap food from the Empire. It made good sense to sell manu- factures dear and buy their food cheap. That is why we have reached a position of such dependence on overseas sources of supply.
But it is not so easy now. We have to recognise that the situation has changed completely. Others are competing in our manufactured goods markets, and world food will not remain as cheap as it has been in the past. It would be ridiculous in such a situation to cling to outdated doctrines which are no longer relevant. There are important consequences, too, for our balance of payments problem. As the E.D.C. Report on Agriculture has shown, one of the major ways by which we can solve our balance of payments problem is by increasing our own food production and thus saving imports.
The other political parties have at last accepted that. They tend now to talk rather earnestly about import saving and expansion as though it had been an article of faith for a long time. In fact, their conversion is recent. One has only to remember standard quantities, a system which could have meant nothing but restricted production or lower producer prices, or both. I believe that standard quantities put British production in a cider press which any Government could tighten at any time. That system is the very opposite of the policy of planned expansion which we have advocated in the Liberal Party. Do what it will to give off the authentic smell of the farmyard, the Tory Party can never entirely escape the charge that its past policy was a matter of paying the farmers less so that they had to produce more.
At a time when an angry National Farmers' Union was conducting a campaign throughout the country, a pamphlet published in 1965 by the National Farmers' Union said:
From 1954 to 1964 successive Governments forced farmers to shoulder £168½ million in increased costs … Yet in the past 12 years, the farmer's real income has risen by less than 1 per cent. while that of the community as a whole has risen by 56 per cent.
Agricultural expansion has become all the rage, but expansion cannot be conjured out of the air. Devaluation has made it more desirable, and certainly more topical, but it has not necessarily made it more easily obtainable. The first truth which we have to recognise is that agricultural expansion has to be
financed from agricultural profits. This is as true for agriculture as it is for any industry.
We can raise the profits of agriculture only by reducing costs and raising productivity. Even in the past farming profits have not been sufficient to finance the expansion which we all want. This is why there has been a marked increase in bank borrowing and total farm debt. Now, the supply of bank finance for British agriculture is coming to an end. [An HON. MEMBER: "That is not new."] It began some time ago, and over the past three years there has been little increase in bank borrowing by farmers. Farmers are no longer quite such a good proposition for bank managers, and even when they can borrow the money, they cannot always afford the huge burden of interest charges. We cannot, therefore, expect the necessary expansion to be financed from that source. That method of finance has reached the limit.
Can we secure the expansion through productivity? Again, this idea can be taken too far. If the productivity is of land through increased stocking, there is a problem for the agricultural scientist in such things as cereal disease. If it is a matter of raising the productivity of farm labour, there are other problems. In the past five years, the number of full-time workers has dropped by 114,000 to 345,000. There must be a level at which efficiency declines. In the South-West, for instance, experienced and well trained stockmen are in short supply.
If capital investment is to give full value, the quality and training of labour must be improved. There has been opposition in the countryside to the Agricultural Training Board, some of it, perhaps, a bit pig-headed, but the Government have not set out their policy clearly. I find incredible confusion in the minds of farmers in the far South-West about the exact purpose of the training scheme, and I hope that the Minister will soon set that matter right.
I suppose that the National Plan targets are almost unmentionable nowadays. The trouble with them was that they were never backed by the necessary capital, and it was not until the 1967 Review that an attempt was made to inject sufficient capital in order to achieve the target. At the half-way stage, we are far behind the target set by the National Plan.
Unfortunately, the E.D.C. Report while welcome for its insistence on the import-saving rôle, says just as little as the National Plan about how to secure the expansion which we need. This is where I part company with the Minister. In my view, he is rather over-confident about the ability of agriculture to achieve the target. I am convinced that we have to change course.
My contention is that we have reached the end of the road with present agricultural policies. It is true that they have served us well in the past, but they will not serve us well any longer and we must part company with them. The Government inherited the present policy from the previous Conservative Government, but they should no longer persist in trying to build on the wreckage of past Conservative policies. The guaranteed price system cannot produce enough finance to promote the long-term expansion which is necessary. A great deal has been made by the hon. Member for Derbyshire, West (Mr. Scott-Hopkins) of his contention that he, or some of his colleagues, invented the expansion policy in 1965. He did no such thing. Since we are in the business of swopping dates, it was our policy in 1963. We were the first political party to come out for it. We fought the 1964 election on it, and the hon. Gentleman whose speeches I had to read because I was opposing him, attacked my Liberal colleagues for advocating the very policy which he is now putting forward. In the Committee on an agriculture Bill in 1963 the Conservative Party attacked my hon. and learned Friend the Member for Montgomery (Mr. Hooson) bitterly because of his determination to introduce the subject of levies.
I was on the Government bench in that Committee, and I did not attack the hon. Gentleman's hon. and learned Friend for that. He did not understand what we were putting forward on minimum import prices and import levies. At that time I was trying to explain to him what that was all about. We were talking about import levies. We have progressed quite naturally from that to the policy we are now putting forward.
The Conservative Party always progresses too late towards Liberal policies. That is a fairly natural progression, and I suppose that we persuaded them after a long time.
We want to see a managed agricultural market. This is now more necessary than ever. We should take the first step towards this in cereals, because we already have the tools to hand. The internal price level could gradually be rasied to eliminate the subsidy. Foreign supplies should continue to be bought as cheaply as possible, and the difference between the internal and imported price should be taken in a levy to offset costs, which may well have to be increased, such as extra subsidies to increase the price of beef to the beef producer. The next step would be to extend the managed market to beef production through the medium of the Meat Commission.
I regard marketing as absolutely vital to the future of agriculture. I may not have muck on my boots, but I have marketing expertise. It is the one sphere in which I have some specialist knowledge. We cannot hope to increase production unless we can increase markets, because at the end of that road all we have is a pile of rotting potatoes in a quarry.
I do not wish to discuss in detail the Report of the Reorganisation Commission for Eggs. The right hon. Gentleman has been in the Ministry for only three months, and I have not had much time to throw eggs at him, but I have had some interest in eggs since coming to the House. I regard the Egg Marketing Board as a classic example of what happens when agriculture dwells in cloud-cuckoo-land. I hope that the right hon. Gentleman will arrange for a debate on the Report long before he implements its recommendations. I ask him to beware of the siren voices of the N.F.U. and the Board, because they do not represent the views of the egg producers. There is a severe lack of communication between the Board and the producers. The Minister has asked for the thoughts of the producers to be put to him by 30th July. I hope that he will not rely on the report he gets from the Board as being in any way the views of the producers.
There has been a good deal of discussion in the debate about import saving, but what about exports? There is a case for raising production for the home market, but there is also a case for increasing farm exports and giving farmers the wherewithal to do it. Imports saved are not necessarily a net saving. There is a balance of expenditure on imported fuels, feeding stuffs and machinery. Overseas sales of farm produce in 1967 amounted to £125 million, an increase from £90 million in 1960. That is not a very substantial increase. In farm machinery we are the world's leading exporter, selling two-thirds of our total output. But in relation to total farm sales, which amounted to £1,850 million in 1966–67, exports are very small beer—and our share of overseas markets is declining. Many of our competitors are geared to exporting their surplus, and have a positive export policy. Long-term planning would require a deliberate policy of producing surpluses for exports.
I am listening to the hon. Gentleman with interest, but I am a little concerned about what products we could export, and to what markets. Except, perhaps, for barley, I should have thought that it would be very difficult to expand our exports of farm produce, and I should be very interested if the hon. Gentleman could tell me what he wants us to export, and to what countries.
Since the Netherlands, Denmark and many of the Scandinavian countries, producing much the same sort of products as we do, can export not only to us—for we are not their only market— it is obvious that if we research the market there is scope for it. The British Agricultural Export Council, which I welcome, should now move into a more positive field of activity, selling abroad through advertising, sales promotion, market research in particular, sales missions and trade fairs. There is a market to be had. It is not very large for we can never match the major world food producers in this, but we could make a significant contribution to our balance of payments problem by going after what is there.
I should like to raise an incidental point about the aggregation of tax for farmers over three years. Several hon. Members have mentioned the stability required in farming. Farm income tends to become very unstable because of bad-and good-weather years. The Minister could well take up the point with the Chancellor of the Exchequer to see if there is some way in which we could aggregate farm incomes over a period of three years, which would solve some of the farmers' tax problems.
We demand that agriculture be encouraged and allowed to expand to its fullest potential. This requires the establishment of long-term confidence, which can come about only through a managed market and a levy on imports. We recognise that if society wants the benefits that could accrue from increased production it will have to pay the fanners for this, and we are prepared to pay the bill. We have great confidence in agriculture, and we believe that the country should invest in its success.
We have all listened with interest to the speech of the hon. Member for Cornwall, North (Mr. Pardoe), but I wish that he had gone much further into the question of where we shall send our agricultural exports. He must be aware that only two or three years ago we began to export eggs and raised a storm on the Continent from the usual egg suppliers of countries there. It was pointed out that we were breaking our agreements with G.A.T.T. At the same time, we were exporting cattle to France, but that has been stopped. Wherever we try to export agricultural produce there is always something that stops us. There is an agreement or a country objects. We find that we are so tied up with agreements with one country or another that we just cannot export these things. If we did we should cease to export much of our manufactured goods.
I wonder whether the hon. Member would agree with me that one of our major handicaps in the exporting of cattle to the Continent during the last six months or so has been the foot-and-mouth outbreak in this country. Yesterday, in Ireland, I met one of the chief exporters from this country and he happened to be buying for Roumania and Yugoslavia about 1,500 carcases a week, which would have been sent from this country. It is a great handicap if we still import meat from countries where foot-and-mouth disease is endemic.
We hope that the scourge of foot-and-mouth disease will pass from this country so that we shall be able to sell our pedigree animals abroad much more than we have done in the last few months.
There is always a similarity about agriculture debates in this House. I have listened to a great number over the last 23 years. It has always interested me to find that whatever party is in opposition has always got solutions for the Government to put into operation, and whatever Government are in power always have to listen to the solutions that its members put forward to the previous Government when they were in opposition. The problem of agriculture is kicked about like a ball from one side to the other according to the political party in power.
One of the problems that have bedevilled every Government has been the dumping of produce. We have always had it. Potatoes have been mentioned today. How many times have we heard about early potatoes coming in and clashing with the lifting of our own early potatoes? How many times have we heard about dried milk being dumped here? How many times have we heard about cheese being dumped here? We have them all here. While our egg producers were producing all the eggs that we required, we had eggs dumped here from Denmark, the Netherlands and other countries.
How are we to solve the problem? We are the largest foodstuffs importing country in the world. Many countries pay for the manufactured goods which they take from us in the only way they can—with foodstuffs. It is not just a question of the dumping of foodstuffs. It is a financial question. I wish that the international financiers, instead of concentrating so much upon currency as they know it, would concentrate upon finding a way in which countries which need food could acquire it. It is estimated that half the population of the world are underfed. Why? It is because they have not the money to buy the food where it is.
I am sure that it is not so much a matter of not being able to buy the food where it exists as their lack of improved seeds, agricultural implements and agricultural techniques. This is far more important to such people than the wherewithal to purchase food produced in other countries. They want to acquire the techniques and materials to enable them to produce the food themselves.
All the things mentioned by the hon. Gentleman require money, just as the purchase of foodstuffs does. It is a financial question, and it is time that the international financial people got down to the issue. The greatest currency in the world is not the currency of money; it is the currency of food. Food is the greatest currency because it can be accepted in any country as payment, whereas notes and coins cannot.
Where such countries require food, but cannot get it, I am certain that it is possible for the financial experts to devise a scheme whereby they can obtain it on a credit basis. Dried milk is one of the foods required. We do not need it. It is a tragedy and shame that at present we are having dried milk dumped here from the Common Market subsidised to the extent of £200 to £250 a ton. We do not require it; we have plenty of food.
All sorts of food—milk powder, eggs, bacon and meat—is coming here, but we do not require it. Yet there are countries which are crying out for it. The people there are dying because they cannot get food. It is a topsy turvy world. If only those who are so keen to watch the currencies and financial situations of other countries could find a means to enable such countries to acquire food I do not think that we should find it dumped on our shores, because it would be taken where it was needed. It is not only the maldistribution of food that is at fault; it is the financial situation as well. This matter should be examined. I do not know whether my right hon. Friend should bring it to the notice of the Treasury, or the Foreign Office, but something should certainly be done to change the situation. It would relieve our farmers because we should then be able to produce. We know that we can produce more, but what happens when we do? Only two years ago we increased our beef production, and then there was a flood of imports from Ireland and beef prices fell. Whenever we increase our production of beef, sheep, eggs, or poultry, down comes the price. Before we can increase productivity that will have to be stopped. The farmer will not penalise himself by producing more if he gets a smaller return for his produce. But every time he produces more milk he brings the price down.
The situation is not settled by the "Little Neddy" Report. Anybody can say that we can produce more and more, but will the return that we get for it enable us to continue to produce? If that is not settled and the return continues to fall, production will fall. We can produce more pigs, but if we do we shall fetch the price down.
So it goes throughout all our commodities. Until we can get a stabilised price for everything we produce over and above what we are producing now, this will not be settled. I hope that my right hon. Friend will not be carried away by these reports. They need a great deal of examination. Before he moves into implementing any of them, I hope that he will put before us his plans so that we can examine them and have something to say.
Before long, my right hon. Friend will have to deal with the Report on the Egg Marketing Board. I do not know what he intends to do about it. It is clear that if the Board is abolished hundreds of small egg producers will go out of business.
But does not the hon. Gentleman realise that the Board has put out of business a large number of small producers during its 10 years' existence and that small producers have been showing their lack of confidence with their feet, so to speak, by reducing the number of eggs they put through it? They have no confidence in the Board.
The Board has also enabled a large number of small egg producers to continue in business. One of the troubles of the egg producers is that they have been able to sell their eggs at a higher price at the farm gate, etc., and through small shops. They have then dumped their surpluses on the Board. If the small egg producers have to deal with all the eggs they produce when prices are at rock bottom, it will not be long before they are out.
The Board should have been able to refuse surpluses from small poultry farmers who never gave it an egg when eggs were scarce. But there are many factors which need examination and I feel that my right hon. Friend, when he has examined the whole case, will put his plans before the House and give us the opportunity to examine them.
I am sorry that my hon. Friend the Member for Ealing, North (Mr. Molloy) relegated me to the background in his speech. He decried the "dog-and-stick" fanner. I have always been a "dog-and-stick" farmer and I am proud of it. If I could take him across some of the moors I shall go over during the Recess, I would take out of him some of the stuffing that he has shown tonight.
I was interested in what the hon. Member for Chorley (Mr. Kenyon) had to say, particularly in his latter remarks about the Egg Marketing Board. The Annual Review and Determination of Guarantees, 1967, stated:
The United Kingdom is virtually self-sufficient in eggs and the objective under the selective expansion programme is to meet any increase in demand. This is well within the technical capacity of the industry.
I have a report here by Miss Audrey M. Chalmers of the North of Scotland College of Agriculture entitled, "The Economics of Egg Production in the North of Scotland ". She draws interesting statistics from the area and it is partly on those statistics and what she has to say that I base my remarks. On page 21, she says that imports are not helping the situation and she goes on:
Normally, they constitute between 2 or 3 per cent. of total packing station throughput. Of late, however, imported eggs were coming into Britain when the market was already well supplied, at prices well below our own and depressing demand for home supplies.
If the reorganisation of the Board takes place and the Minister of Agriculture and the Secretary of State for Scotland agree to implement the recommendation of the Reorganisation Commission, we shall be faced with a very grave problem in the more remote rural areas. The hon. Member for Cornwall, North (Mr. Pardoe) begged the right hon. Gentleman
not to pay too much attention to the representations he would no doubt have from the Board and certain sections of the N.F.U. I think that the right hon. Gentleman would do well to pay attention to those who advocate some kind of support for the small egg producers in the areas I have in mind, the important point being that, over the years, almost traditionally the small egg producer has played a considerable part in the agricultural economy of those areas.
Statistics available in "Scottish Agricultural Economics", vol. 18, published by the Stationery Office in Edinburgh, show that egg production in Scotland has been on the decline during the last three years. Total production has gone down from 558 million through 502 million to 488 million last year. These are the quantities put through the packing stations. But similarly the disposal of eggs at the farm gate has gone down from 385 million three years ago through 359 million to 356 million last year.
This shows obviously a steady decline in egg production in Scotland. It is not only a decline in the number of eggs sent through the packing stations, for there has been proportionately an almost equal decline in the number of those sold at the farm gate. If the figures of those sold at the farm gate in Scotland had not also declined, there would have been far more justification for doing away with the Board.
On the other hand the decline in production in Scotland is almost exactly the same as the figure of 2 or 3 per cent. which is the amount of imports we get in any one year. Therefore, in Scotland alone, the egg producers are quite capable of taking up the slack—the difference between our almost self-sufficiency and being self-sufficient. It could be said with certain justification that the 2 or 3 per cent. gap is negligible but I point out to the Joint Parliamentary Secretary —and I hope he passes this on to the Secretary of State for Scotland—that many a mickle makes a muckle.
I appreciate that the Government will have to pronounce on these proposals for reorganisation and that no doubt we shall then have a chance to debate them, but it is right to warn the Government about what will happen on certain aspects. To abandon the Egg Marketing Board without adequate checks and balances, I say quite categorically on the advice which I have taken and from what I have seen for myself in my constituency, will be a mortal blow to the small egg producer in areas such as mine.
It applies equally, I am persuaded, to South Devon as to Banffshire. Such areas, particularly the upland areas, are of necessity areas where small farms are more prevalent than are large farms. Traditionally, as I have said, these small farms depend more or less on the sale of eggs. On non-dairy farms, the farmer's wife is the person who looks after the poultry and who sells the eggs and on a small farm which has no employed labour she does a useful job to which she is well suited.
In Scotland, over the last three years, egg production has been 6·3, 6·2 and 5·6 per cent. of total farm output in the country. These are large figures. I do not know what amount of this production is due to the small egg producer. In the Report it is stated:
We are doubtful about the wisdom of the Board's system of fixing margins for remunerating packers and the Board's arrangements for reimbursing packers' costs in transporting eggs over 30 miles".
The Secretary of State for Scotland, who is not now present, knows as well as I do that in Scotland vast distances have to be covered by the egg packing lorries. It is essential that money should be given in some way so that the eggs can still get to the market, and 30 miles is a very reasonable minimum distance. There is not only the long haul from the farm to the packing station, but the equally long and often much longer haul from the packing station to the point of disposal. It will, therefore, be essential for some kind of subsidy to be paid, perhaps in the form of a transport subsidy, if the small farmers are not to go to the wall. In many areas, and I know this to be a fact in my own constituency, the amount which a farmer's wife earns from the sale of eggs, even though she may not be very efficient or economical, is often the difference between a profit and loss in any one year.
The Report argues that the seconds scheme has worked against the interests of producers. I do not agree. If the seconds scheme had not been brought into effect, the price which producers have been getting recently would not have been as high. The seconds scheme has hardened the price of other grades.
If the small producer is to be squeezed out like a pip between the fingers and thumb of the Government and the new authority, two things are essential. First, there must be a fairly extensive interim period between the change-over to the new system and, secondly, the small producer must be given generous and realistic compensation, if for no other reason than that those who have been using the battery cage method will not be able to sell their battery cages, because there will be no market for them. Whatever scheme is put into operation, a levy will obviously be required, and I suggest that in future that levy should be at the hatchery stage and not at the production stage.
I am not persuaded that in the interests of the country at large we shall be better off with fewer and bigger egg producers. I hope that the Government will give due consideration to all that is said in this and future debates and to representations from outside the House and that they will consider the small egg producer in the social environment if nothing else, because unless something adequate is done for them, small egg producers will be put out of business.
I endorse what many hon. Members have said about the serious problem this year for the growers of new potatoes. Many new potatoes are grown in South Ayrshire and it is my duty to convey to the Minister of Agriculture and to the House the disquiet which has been felt during recent weeks about the importation of new potatoes from France, Cyprus and Israel. When ships have arrived in Leith or Glasgow, the market has been upset and Ayrshire farmers have suffered the economic consequences.
This is not a new problem. It has been a problem ever since I became the Member for South Ayrshire, 22 years ago. At about this time of the year, representations are made by farmer constituents and the mode of the representations is an indication of the seriousness of the problem. If farmers write letters, they are exasperated; if they send telegrams, they are infuriated; but when a Scottish farmer has a long conversation over the telephone, the position is desperate.
This situation occurs entirely irrespective of party. Hon. Members who have been here long enough will know that I frequently questioned Conservative Ministers about this problem year after year and that I never got a satisfactory answer. During the troubles over Cyprus, there was a big importation of Cyprus potatoes in July because there had been a strike at Famagusta.
The Ayrshire farmers paid the penalty for the Government's policy which resulted in the Famagusta strike. Ayrshire potatoes had to compete with Cyprus potatoes, which arrived late. I do not know what the problem is this year, but foreign potatoes are arriving and causing concern among my constituents. It is very difficult for us to think of this problem without also thinking of those who have to buy the potatoes. It is the Government's business to be just and fair. The present Government are as fair as any other Government. I do not want to be too critical, but I would like some assurance that this problem is being looked at carefully, from week to week and day to day, so that the grower of new potatoes in Ayrshire may have a fair deal.
They do not want a great deal of priority, but they ask that their economy should be considered. The economy of that part of Scotland depends upon the new potatoes going to market at a certain time; other crops which follow are also affected. I hope that, under the Government's guidance, we will try to find a constructive solution which will be of help in preserving the new potato economy in this part of the country. It is a traditional one—it was there before Cyprus entered the Commonwealth. Will there be some hard thinking to develop a plan so that the farmer will have a clear idea of what he can expect to sell in the market in two or three years' time?
There has to be planning, and I hope that we will make another attempt to solve this problem. We will never do it unless we have international agreements on markets, and plan the whole of the agricultural production of Europe and North Africa as a whole. I know that that will be difficult. I do not expect to see it done in one year, but that is the direction in which we should be moving. Producers all over the world should know exactly what they can plan, in a world perspective.
One subject which is rarely mentioned in this type of debate, perhaps because it is a four letter word, is "rent". Because it has only four letters hon. Members opposite are always fighting shy of it. I have been looked at with reproach, as if I were mentioning something indecent, when I ask about the rent being paid by the small farmer. The small farmers are worried about this problem. Perhaps it has escaped the observation of hon. Gentlemen opposite, but in recent years in Scotland there has been a tendency for farm rents to rise. This is also the case in England, and I would welcome the appointment of a commission to inquire into the whole business.
I have suggested that this matter should be referred to the Prices and Incomes Board, and I do not know why this was turned down. It was said that this would be considered in fixing prices in the Annual Review. When one considers the obscurity of how this can be negotiated in the Price Review, the problem becomes baffling. People who know most about farming in Scotland, the writers to the Scottish Farmer, always return periodically, as do the branches of the National Farmers' Union, to the question whether rents are too high. They have produced a prima facie case for an inquiry into the rise of rents over the last five years.
Another question which I asked, and which was regarded as indecent, was whether, in view of the plight of the small farmer, both sides of the House could not agree to landlords fixing a moratorium in rents during the economic crisis. The silence that greeted my suggestion on that occasion was deafening.
I do not see that the black business of coal makes a white for the farm industry. If one goes to Lord Robens, he would say, "Look how rents have risen in the private sector". That has been the argument of the smallholding farmer. They follow the example of the private landlord. I can assure the hon. Gentleman that the small farmers had grievances about rent long before the Coal Board was ever thought of. Whatever the criticisms we may have of the Board, I submit that the hon. Gentleman's intervention was irrelevant to my argument.
If the hon. Gentleman will give me the particulars, I will go to Lord Robens and say, "You are following the example of the landlords and charging your farmers too much rent." If he says, "No, I am in favour of high rents," I will make my criticism of him during a debate on the activities of the Coal Board. That is a black red herring.
I do not prejudge this question. I know that some landlords are in great poverty. I know that they have had difficulty in making ends meet—some of them cannot go to Ascot, and some are no longer seen at functions in the City because they can no longer afford to come to London. But I saw a page of photographs of Scotland's 20 biggest landlords in a paper called the Sunday Mail with which hon. Members from Scotland will be familiar. I still have that picture in my memory. I do not wish to mention the names, but some of the faces would be recognised by hon. Members.
I wish to be just to the landlords. I do not wish to impoverish or liquidate the landlord—at least, not on this occasion. I do not want landlords to be treated as they were treated in the Soviet Union, because that would only create another problem. I do not believe in liquidating the landlord. I want, not a Royal Commission, because it would take too long, but a commission of inquiry to investigate by how much the rents of the poor fanners who have figured so much in the speeches of hon. Members opposite have increased.
Before we trim our policy, we must get the facts. I should like to know who owns the land of Scotland in 1968. We do not know who owned it 50 years ago as a result of the famous book by an ex-Secretary of State for Scotland. I should like to know how much the landlord is taking from agriculture.
I am listening with interest to what the hon. Gentleman is saying, but surely he is being most unfair. Certainly, in the South-West of England landlords are co-operating with tenant farmers and are on the best of terms with them. I have not had one complaint. If it were not for the active co-operation between landlord and tenant, many farmers in the South-West would not be able to continue. You are being unfair.
All that I wish to know is the facts. I am not prejudging the issue. I wish a committee of inquiry to be set up to consider the view of Mr. William Young, Chairman of the Scottish Milk Marketing Board, who has alleged that the price of milk per gallon could be reduced if the farmers had not had to pay increased rents. That is the allegation of this gentleman, who knows far more about the South-West of Scotland than even the hon. Gentleman. All that I ask is that the figures in the Milk Marketing Board be checked and analysed and the whole question investigated so that the House may know the facts, whether the landlord takes too much and what the remedy is. I fail to see how that is being unfair. I cannot see the relevance of the hon. Gentleman's interruption.
May I suggest that rather than ask for setting up a commission to consider rents, the hon. Gentleman should, when he has finished his speech, step across the Floor of the House, when I will hand him an excellent summary of the rise in Scottish rents which has taken place, published by the Department of Agriculture and Fisheries for Scotland. The whole matter is set out in the greatest detail. Perhaps that will help the hon. Gentleman. I do not think that there is any need for a Royal Commission. All the information is contained in this excellent document.
I shall be delighted to have that excellent document. If it is as informative as I wish it to be, I shall be able to form my own conclusions. It has not come to my attention that there was a concise, clear and factual analysis of rents in Scotland. I asked questions of the Secretary of State for Scotland about such a document and I understood that one had not been produced. I shall avail myself of any statistical material which I can obtain. I am always open to conversion on this point. I hope that it will remove from my mind all fears that the landlords have been exploiting the tenants of Scotland. I cannot say fairer than that.
If relations between the farmers of South-West Scotland and the landlords have been as harmonious as has been made out, why was it necessary to insert a certain Clause in the Agriculture (Miscellaneous Provisions) Bill? I remember that when, in 1958, I was a member of the Committee of the House which dealt with the question of security of tenure for small farmers there was strong agitation by the farmers and serious doubt expressed whether the relationship between tenant and landlord was really so harmonious.
I know that the right hon. Member for Argyll (Mr. Noble) labours under the delusion that the relations between landlord and farmer in Scotland have always been harmonious. I have pointed this out to him before—and he had not even read the poems of Robert Burns about tenant farmers in my constituency. Even today, whenever I pass the farm at Loch-lea, I recollect that this was where Burns lived and where Burns's father was driven to an early grave because of the landlord. I will not recite for the right hon. Member quotations from Robert Burns, but it is an historical fact that the relations between the farmers and the landlords have not always been so harmonious and friendly and sweetly reasonable as hon. Gentlemen opposite will try to convince me.
We know about what is called the factor's snash. If the English Members want me to translate that, or my hon. Friend the Welsh Member here, a factor is an agent who collects rent for a landlord and the snash is what he gets from the landlord if he does not pay the rent. This is part of Scottish history and runs right through it. I would not dream of going back into Scottish history if I were not provoked.
However, I think that the time has come when we should question whether the landlord has a right to take so much out of the industry as he is doing. Indeed, I wonder how much of the money which goes into agricultural subsidies goes into the pockets of the farmers and how much the farmers have to pay out in rent. I would like an authoritative analysis of how much of the subsidies which the Government provide for agriculture goes to the landlords, and very often the wealthy landlords: I doubt whether they deserve so much subsidy from Government funds. Therefore, I should like to see these matters investigated.
I want to turn to another question, milk.
A shame I think it is.
I would say a few critical words to the Government about their policy which has hurt the farmers in my constituency to some extent. As a result of the economy of cutting down the supply of milk to secondary schools a quite valuable market has been lost to the farmers in my constituency.
I had no support at all when I raised this before; I had no support at all from hon. Gentlemen opposite—except the hon. Member for Louth (Sir C. Osborne), who said a few words by accident; and by accident he voted in the same Lobby as I did.
I believe that farmers who produce milk would welcome the end of the cut in school milk; and for this reason, that many of them depended upon the amount of milk they supplied to schools to cover their overhead charges for supplying milk at a reasonable price to the other consumers. I know that it is too late to do it this year, but when the economic crisis begins to ease I hope that one of the first things the Government will do will be to restore the supply of school milk and enable secondary school children once again to get their bottles of milk as they did before we made these cuts in an attempt to appease the international bankers.
But in all these proposals, in which I have put the point of view of farmers in my constituency, I find no support from hon. Gentlemen opposite. They do not seem to be concerned about putting the point of view of the farmer; they are more concerned to put the point of view of the landlord.
I did not understand the relevance of that intervention.
I endorse the opinions of hon. Members who have been arguing for planning of agriculture in such a way that we will have a prosperous agricultural industry which will enable both the consumer and the producer to get a fair deal without having to pay out so much to parasitical landlords and parasitical bankers, who are often the same people. Therefore, I ask the Government, in planning the future of agriculture, to recognise that we need to produce more food. The country would welcome a decrease in food imports. There is a need for an agricultural industry which will enable people to live on the' land in such a way that their standard of living will continue to rise, thus encouraging them to remain on the land instead of flooding into the cities.
This has been a very wide-ranging debate indeed, but the matter about which I wish to speak has not been referred to by any previous speaker. This is not surprising, because it is a matter that applies particularly to Wales, although it has wider significance and may become of great importance to other parts of Britain. It concerns the Rural Development Board in Wales. It will be agreed that as people's understanding of the Rural Development Board in Wales increases, so their opposition to it in- creases. It is now the burning issue in agricultural life in Wales.
This Board is essentially a mid-Wales Board. The great social problem of agricultural Mid-Wales is depopulation. Indeed, it is the greatest social evil in Wales generally. It has become clear that this Board, instead of trying to solve the problem, will actually exacerbate it and increase the rate of depopulation in rural Wales. This has been made clear by the way in which the Board was defended recently at a hearing in Aberyswyth. The Permanent Undersecretary, when asked by Mr. Dewi Watkin Powell if the conclusion he drew was that the policy involved was certainly not going to halt the process of depopulation, answered in the affirmative. When asked if the net result of the scheme would be to cause a certain amount of rural depopulation, the hon. Gentleman answered that over a short time it probably would.
It is, therefore, understood that this will cause more depopulation. I submit that deliberately to create more depopulation in Wales is as reprehensible as deliberately to create more unemployment there. I suggest that the consequence of depopulation flows naturally and almost inevitably from the whole concept of the Board, which seems to be mainly to get rid of the small farms.
The Government said in their White Paper, published three years ago, that they wished to see far greater speed in this matter and they were anxious to change farm structure in that direction. This cannot be done without changing the social pattern, and for the general purpose of farm structure farms have been divided into three categories, those which require fewer than 275 standard man days of labour per year, those requiring between 275 and 600 standard man days, and those requiring more than 600 standard man days.
It is on the third category and only that one, that the Government seem to smile. Their favourite farms are in this category. These are the upper class farms, and they are given accolade of being "commercial units". Class distinction is said to be more prevalent in England than in most countries, and here it is firmly embedded in the Government's farm policy, with their lower, middle, and upper class farms.
I divide them into classes because that is how the Government have divided them. The lower class farms are run by working people such as road workers, transport workers, farm workers themselves, and busmen. These are the people whom the Government seem to want to get out. These small holdings provide their tenants with a great interest in life, and also with a supplementary income. Remove this interest and this income, and many of these people will not wish to remain in the rural areas. They will drift, as so many others have done, to the owns, and thus increase rural depopulation.
One would have thought it right to assume that the reason why this Board is being established in Mid-Wales—and this may be the prototype of a number of boards—is that the proportion of very small farms in Mid-Wales is greater than in other parts of Wales. In fact, the reverse is true. The proportion of small farms in Mid-Wales is smaller than in the rest of Wales.
In Radnorshire, in the heart of the Board's area, 44 per cent. of the farms require less than 275 man days labour per year. That is lower than the proportion in England as a whole, where the figure is 48 per cent. The highest figures are to be found in the Minister's own constituency, in Anglesey, where the proportion is 75 per cent., and Caernarvonshire, where the figure is 71 per cent., but these counties are not included in the Board's area, and yet it is in these counties that there is the highest proportion of small farms.
As for the commercial units, those requiring more than 600 man days labour per year, in Radnorshire there are 28 per cent. of such farms. In Montgomeryshire and Merioneth, the figure is 22 per cent. In Anglesey, it is only 7 per cent., while in Caernarvonshire the figure is 11 per cent.
What are we to deduce from those incongruities? Are we to deduce that the Government's intention is to include Anglesey, Caernarvonshire, and other counties in the Board's area to secure the speedier disappearance of the small farms? Or is this just another example of the Government's illogicality?
Part of Carmarthenshire is inside the Board's area. In the part inside the Board's area 49 per cent. of the farms require fewer than 275 man days labour per year. This is similar to the proportion in England as a whole. Outside the Board's area, the figure is 55 per cent. Inside the area 18 per cent. of the farms require more than 600 man days. Outside the area the figure is 13 per cent.
The truth of the matter is that farm structure is not at the heart of the problem at all. There are many pressures which have been forcing small farms out of existence, without the Government stepping up the pace. In future these pressures will tend to be felt more severely by the larger farms, by those farms which are called commercial units. I think that agricultural policy in Wales should be directed to the encouragement of the family farms, those which require fewer than 600 standard man days labour per year.
These are the economic backbone of our traditional way of life, and these are also economically more productive per acre. They have proved their survival value in very adverse circumstances. As labour difficulties mount, and they will, it is sane policy to strengthen this big group of family farms by ensuring for them a proper return for their labour and their outlay.
One thing that the great body of Welsh farmers badly need is reassurance and confidence. They want to be sure that the Government appreciate the rôle of agriculture. There has been much talk of agriculture as a business. Agriculture is a business, but for most farmers it is not just a business; it is also a way of life, and the Government should show some appreciation of that fact. Its importance is not only economic but social, and in Wales that aspect should never be underestimated.
Farmers want to know in what direction farming is moving, and what its future will be. They want stability and security, and in this matter the Rural Development Board is doing immense harm. In the eyes of many farmers its policy creates a feeling of insecurity and instability outside the Board's area as well as inside it. To many farmers this scheme seems half-baked. Its implications were not thought through before the Government appointed the Board.
The Aberystwyth inquiry showed that the situation inside the Board's area was not known to the Government. There has been no comprehensive review. The Government now talk about having one, after the Board has been formed. There was no review beforehand. This was admitted at the inquiry, when it was said to be due to an understaffing of the Ministry in Wales. There has been no statistical survey to discover the difficulties of amalgamation, or to balance the respective claims of agriculture and forestry within the Board's area. The Ministry was driven to rely upon statistics which were about 14 years old to support its case, as is clear from the transcript of evidence given at the inquiry
The conclusion is that the Board was formed to solve the problems of a large area in a certain way before the nature and extent of those problems were exactly known.
The hon. Member has made a number of groundless charges. Does not he agree that the North Pennines Rural Development Board is now in the process of being set up, and that opportunities are being given for objections—and that there are no objections from Welsh areas of the character to which he has referred? Does not this indicate that the objections are political ones, fanned by speeches such as he is now making?
Welshmen could draw a Very different conclusion. They could draw the conclusion that there is more intelligence and alertness in Wales, and that the Welsh are more aware of what the Government are trying to do. If the Minister will have a little patience I shall go on to refer to the kind of opposition that there is in Wales.
First, I want to give one illustration of the falseness of the claim that the Board would greatly benefit Welsh farmers in respect of grants. I refer to the question of electricity supplies. Of the 800 properties in my constituency which are within the Board's area no less than 770 are already connected with a mains electricity supply. There is no need for a Board with compulsory powers to connect the remainder of those properties. The most valuable grants are for tourist purposes and I suggest that these should be made available through the Tourist Board and that the Board should be made responsible for their administration.
The inquiry at Aberystwyth has brought to light administrative weaknesses of the Ministry of Agriculture in Wales, which are mainly due to under-staffing. These should be remedied. All Ministry staff should be made responsible to the Welsh Office, in accordance with the undertaking given by the Labour Party in its programme before the General Election of 1964. The opposition of the community in the Board's area to their inclusion in the area is overwhelming. Of all the county branches of the two farmers' unions, only one is in favour of the Board. This is no wonder, when one considers that no farm in the area can be sold without the consent of the Board, which would mean that there would be virtually no more sales by auction, and when one considers the nature of the compulsory powers of the Board.
The Minister is not responsible for the creation of the Board, he has inherited it, but I suggest to him that the Rural Development Board scheme should be dropped forthwith, thereby cutting public expenditure at the inquiry in Aberystwyth. This has already cost the Government £13,500 up to 27th June, in addition to the great expense to which it has put objectors to the Board. These objectors include the vast majority of the people affected by it.
I rise to speak briefly on behalf of the small farmers, of which I have a great number in my constituency in West Cornwall. I do so with particular concern, because, as has been mentioned several times in the debate, the mainstay of the small farmer in West Cornwall is very largely horticulture, particularly potatoes, and milk. Both these activities are seriously threatened by imports.
May I briefly, however, make one or two general personal points about agriculture before referring to the small farmer. I have not spoken in a full agricultural debate since I became a Member of the House, although I have asked many questions on behalf of my agricultural constituency. I find it difficult to speak in these debates because of the length of the speeches, such as the speech of the hon. Gentleman opposite to whom I listened with great interest. If he had done a little more homework, he could perhaps have truncated his speech on the subject of rents.
I have been looking at a document which relates to farm rents in Scotland. The document quite clearly states that only 2 per cent. of the agreements on farm rents in Scotland were settled by arbitration during the three years leading up to 1966. Far and away the major proportion of farm rent agreements between landlord and tenant were settled perfectly amicably. I have yet to meet a farmer who is not prepared to extend his acreage because of the present level of farm rents, and I doubt whether the hon. Gentleman has either.
I was referring to the document about Scottish farm rents, which has nothing to do with Cornish rents.
Too much has been said over the last few years about the problem of structure in agriculture. I am sure that this is an important factor, but I am convinced that the small farmer in my constitutency, farming intensive early land on a 60-acre holding, can make a good living and has a great future on his family farm. We hear far too much discussion about productivity per acre in terms of labour input, but the small farming output per acre is extremely high.
A statistical survey of the farms in the West Country published by the Universities of Bristol and Exeter shows that the Cornish dairy farmer has an output per acre of £69, against £43 for Devon and Cornwall generally, £46 for Dorset and £36 for the Bristol area. If one goes through all the farms in the West Country, one finds that the output per acre of small farms in Cornwall is considerably higher than that of larger farms in other parts of the West Country. Indeed, when one turns to the figures of output per acre in the country generally, one finds that on small farms of under 93 acres it is considerably higher than in larger farms. That is a factor which is not mentioned often enough in our debates on agricultural matters.
Potatoes give rise to a constant problem. It is one which has been recurring year after year, and I can see the difficulties in solving the problem of imports of potatoes from Commonwealth countries like Cyprus. I understand that one of the recent difficulties is that it has become more difficult for Commonwealth producers to sell their crops in West Germany and in other E.E.C. countries and, therefore, we tend to get more new potatoes from the Commonwealth than hitherto.
However, one of the problems this year has been in the shape of imports from Spain. I believe that there should be a system which enables the tariff on early potatoes to be varied more flexibly. The 9s. 4d. tariff goes on on 15th May. I can see no reason why it should not be varied and brought in a fortnight earlier if conditions in the home market make it necessary. Perhaps we can be told whether studies have been made in the Ministry of the possibilities of varying the tariff so that it is applied more flexibly. I believe that it is really the Plant Health Regulations which shut out early potatoes from Spain on 20th May rather more than the tariff, but certainly, if the tariff were shifted back a fortnight earlier, it would make a substantial difference to Cornish growers getting their potatoes to market.
I am aware that this year was very bad for local conditions and that our early potatoes from West Cornwall, owing to weather conditions, only came to market at the same time as those from Kent and Lincolnshire. But I have some figures of imports, and it is clear from them that they were very high this year. One way of overcoming these large imports from non-Commonwealth producers of potatoes would be by a more flexible application of the tariff. In addition, producers of potatoes in the country have to organise themselves better to supply the canners and manufacturers of potato crisps. These are two huge markets which should be supplied to a much greater extent by home producers than at present.
Passing to one or two other comments made in the course of the debate, one hon. Gentleman opposite talked at some length about the appalling problem of poverty in some parts of the world, in spite of: agricultural surpluses in the Western world, and he asked why international financiers did not give some thought to solving the problem.
I do not know how international financiers spend their time, but I read my newspapers and I know that the problem is under constant study all over the world. How is one to solve the problem of the lack of currency on the part of the poorer nations to buy the agricultural surpluses of the Western world? It is very much a financial problem, and I do not see that it is susceptible to easy solution. Certainly I do not agree with the solution towards which the hon. Gentleman seemed to be moving, namely, an increase in barter transactions, bartering food against such items as wheelbarrows, manufactured goods, and so on.
That is no solution to the grave international problem which worsens year by year. The solution must lie in an increase in international liquidity which will enable the poorer countries to buy the surpluses of the Western nations. The answer certainly does not lie in charity and in the giving away of surplus food production by the Western nations to the poorer nations. That would merely make them dependent on our agricultural output, and that is not a long-term solution.
However, this is obviously one of the graver problems of the latter part of the 20th century. I also wish that the international bankers could come up with a solution, but it seems an insoluble problem, because the poorer nations just have not the currency with which to buy our surplus production. I have always believed, as a businessman and someone who has very little knowledge of agriculture, that a basic change in attitude towards agriculture in this country could, more than anything else, contribute to a revival of our national economy.
I regard it as a fundamental importance to our national recovery and the things which stand in the way—they have been mentioned—are, first, the present support system for agriculture. We must go over to a system of minimum import prices and variable levies. Second, I am convinced that a change of attitude in Government circles is neces- sary. The attitude of the Treasury and the Board of Trade, although it made perfect sense in the 19th century when our commercial strategy was utterly different, makes none today.
When we consider our balance of payments with almost every food producing country in the world, we see that we are in heavy deficit with practically all of them. In our trade with Denmark and other countries, we have a huge deficit. This argument, which we have heard again and again, that our international agreements prevent us from cutting down on imports from these countries because we would lose manufactured exports as a result is a myth fostered by the Foreign Office and the Board of Trade to support their activities in Government circles. Our balance of payments with almost all these countries is in heavy deficit, and they cannot blackmail us. The boot is on the other foot. We must take a much more strenuous approach in Government circles to this problem.
Lastly, there is the tremendous problem of lack of capital, which is primarily a problem of farm incomes, because farming must be financed out of profits, which clearly are not great enough now to make agriculture more efficient. But there is also a serious problem in regard to the institutions which finance agriculture. I am never convinced by the claim of the joint stock banks that the farmer can get all the money he wants from them. There is the problem of mechanism and the fact that we need medium-term institutions to help with the financing of agriculture.
The Westminster Bank, Barclays and others have been moving around the periphery of this problem of operating schemes to help with the medium-term financing of agriculture, but our institutions in this sphere are not as well developed as they are in Europe, where, through co-operative arrangements, there has been a different system of financing medium-term agricultural demands to that in this country. This is also a field in which further thought is needed.
Once again, I appeal for the small farmer. His output per acre, in Cornwall at any rate, is higher than practically anywhere else in the United Kingdom, yet, somehow, it is always considered that, because his productivity may be low —it is low in terms of man hours per output—an amalgamation of farms or revision of farm structure lies at the root of our agricultural problems. I do not believe that it does. The small intensive producer, particularly on good early land, can provide an enormous service to the national economy and should receive more encouragement than he does at present.
With those elongated rather than truncated words, I will give my right hon. Friend the chance to wind up the debate.
It has been a most pleasant debate, and I am in many ways delighted that I was able to let my hon. Friend the Member for St. Ives (Mr. Nott) take part for the first time in a debate on agriculture. I thought that he showed great promise, and my only small reservation is that he said so many things so well that he took out of my mouth several of the words which I was hoping to say. However, that will serve to shorten my speech.
It was an exceptional debate also because it was the occasion of the first appearance in a major debate of the Minister of Agriculture himself. He is not with us at the moment, but I congratulate him on having made his debut in a speech of far more clarity than we were used to receiving from his predecessor. Although there were points in it with which we did not entirely agree, we thoroughly enjoyed the right hon. Gentleman's first speech and look forward to hearing him on many other occasions.
The debate was unusual for another reason for those of us who regularly sit through our discussions on agriculture. We had two powerful contributions on the theme of agriculture, one from the hon. Lady the Member for Wolverhampton, North-East (Mrs. Renée Short), the other from the hon. Member for Ealing, North (Mr. Molloy), both speaking from the Government benches and representing entirely industrial constituencies, and both speaking with great eloquence on the importance and success of agriculture in the quality, quantity and price of food which their constituents so obviously enjoy. It was a pleasant change. I have for long been keen that hon. Members from industrial constituencies should understand the problems of agriculture so that we should not have permanently, so to speak, and in a way which I know the hon. Member for South Ayrshire (Mr. Emrys Hughes) would like to keep permanent, a battle between the country and the industrial areas. We have heard his record so often—I for ten years— that I can prompt him if he stops for a second.
My right hon. Friend the Member for Grantham (Mr. Godber) opened the debate very well and put to the House the key problem facing agriculture today when he said that devaluation had enormously increased both the opportunity for new agricultural policies and the need for them. In addition, this country has in the past few months and years had imposed upon it a heavy short and medium-term debt, and this makes the need for agriculture to make the largest contribution it can to the solution of our balance of payments problem all the more important if we are to survive. This island is not at the moment, thank goodness, threatened by U-boats, but we are threatened by a serious economic siege. Agriculture, once again, therefore, has to play a vital part in our survival.
A good deal of the debate has concentrated upon the valuable and interesting Report produced by the "Little Neddy" on agriculture. The hon. Member for Berwick and East Lothian (Mr. Mackintosh), in a fluent and excellent speech—I shall come back to some of his points later—asked whether the Minister would do right to make a major shift in agricultural policy immediately or to tackle the problem piece by piece as the situation developed. In my view, those are not true alternatives. After listening to his speech, I am certain that the Minister knows and accepts that there must be changes.
At one point in his speech, the right hon. Gentleman seemed to suggest that, because the success of agricultural policies over the past 12 or 15 years had been considerable, we should not lightly change. But I remind him—if he was not particularly interested in those days in the agricultural scene—that 14 or 15 years ago, when we went across to the deficiency payments system, the farming community, in its usual conservative way. was furiously against it and was certain that the: system from which we were changing was far better. Now, however, once they have got used to it and understand it, they accept the deficiency payments system as, apparently, perfect and tend to doubt that changes should be made.
I am delighted to hear it. I do not remember the right hon. Gentleman taking part in debates when I was doing so, but I have been doing it for only 10 years. In view of what he has just said, he will certainly remember that the farming community was very much against changing to deficiency payments, and therefore he will realise why change needs a little care if it is to be put over to the farming community in the most effective way.
It is absolutely essential that the Minister should give agriculture a clear and definite lead now. That is why I mean that to take a major shift and to do it bit by bit are not necessarily two alternative proposals. A clear and definite lead that change is in the air and will happen is needed. Then the change can be carried out bit by bit as the Minister finds the problems amenable to the various solutions he has in mind. If we have his acceptance, as I hope we shall, that the policy outlined in the "Little Neddy" Report is right, it is essential to say so now, so that the farming community can start going ahead with its thinking and planning. It is a five-year programme, and if we have delay month after month it will not properly be under way for 18 months or two years, because there is always a planning stage before one can move. The Minister should start his international negotiations now and not wait for a future date when they may be urgent and difficult to carry out.
Two problems have clearly emerged from both sides of the House. The problem of dumping is in some ways perhaps, a minor international problem but is irritating because it happens for short periods and causes short-term problems in one sector of the industry. There is also the much more important long-term problem of how best to negotiate treaties with the supplying countries to give the British farmer room for the expansion needed if the Government are to accept the "Little Neddy" policy. Those negotiations should be started now, so that once the planning for the expansion is ready the way is clear in international negotiations.
Next, the Minister should start to look seriously, as I believe that he has, at the suggestions that my right hon. Friend and the Conservative Party have outlined as alternative methods of producing the finance that agriculture needs. I do not claim, and I do not think that any hon. Member claims, absolute certainty about such new methods. The one thing that I and most of us on this side of the House are certain about is that if we are really going for expansion as outlined by the "Neddy" Report, and perhaps further, the old system will run into tremendous Treasury difficulties. Perhaps for that reason alone, a new method must be found, and I hope that the Minister will look seriously at ours.
Then, and I think that this is the third priority, it is absolutely essential to look fairly carefully at how capital is to be obtained for the expansion. I know from my experience and that of many of my friends that in spite of what the Government tell us that they have told banks about money for agriculture, it is exceedingly difficult for farmers to get capital from banks or any other source for immediate expansion programmes. If that is so this has to be looked at immediately. Perhaps some other new method, as my hon. Friend the Member for St. Ives suggested, may be needed for the medium or longer term if money is to be available for these plans to get under way.
Next, it would pay the Government well to look carefully at the extent and scope of the present plans for research and development. I have had a certain amount of experience going round many research stations on different agricultural projects, and I know how far ahead a great many of our research scientists are. But I find that there is an enormous gap between what is being done at many of these research stations and what is being done on the farms. I know that there are agricultural colleges which pick up some of this research and do some research on their farms. I know that there are technical officers, agricultural officers and all sorts of people wandering around different farms and saying that things of this sort are happening if one goes somewhere to see them. But this is not, I believe, the same as having definite development projects, which in many cases would at least partly be sponsored by Government money, where new ideas could be developed in the same conditions and with the same sort of surroundings and with the same type of workpeople as would be putting them into operation on a normal farm. It is a very important part of spreading the knowledge which is necessary from one research station to a vast number of farms that may be able to benefit from it. This is the gap at the moment in our scientific research.
On the same broad theme—the point was made in respect of crops by the hon. Members for Berwick and East Lothian and Norfolk, North (Mr. Hazell)—there is a considerable health problem. I believe that more money can profitably be spent by the Government on looking at disease problems in crops and also health in livestock. My right hon. Friend referred to foot-and-mouth disease, the terrible plague that occasionally descends on us. I agree with him about one of the steps at least that the Government ought to take to minimise that risk coming again. I know that the Government are starting on the brucellosis eradication scheme, but there are also a vast number of minor ailments and parasites, internal and external, that affect stock, sheep and so on. Representatives of a vast number of firms are going around the country—I get my fair share visiting me at the weekend—offering one specific or another to cure a disease that they think one's sheep may be afflicted with. But there is no equivalent to Which? to which one can go as a consumer and say "Which of this vast range of products is likely to do the most good to my sheep or cattle?" The result, I believe, is that a vast number of farmers are pumping a vast quantity of stuff down the throats of a vast number of animals at the wrong time of year, or perhaps it is the wrong stuff. A good deal more information is needed for the ordinary run of farmers in order to make certain that they are using the most effective medicines at the right time.
Before I pick up one or two of the points made in the debate, I should like to mention, particularly as the Secretary of State for Scotland will be winding up, one topic in the Green Book which seems to have been rather badly neglected—the question of sheep. With the exception of my right hon. Friend, no one has mentioned them in the debate and, as hon. Members know, it is this particular line of agricultural production with which I have been connected most of my life.
I do not believe that this Report does anything like justice to the potential development of sheep production in this country. I accept that, in the past, there has not been a great deal of change or development in sheep production. For that reason, in particular, I believe that today is an opportunity of making some very big changes. The technical knowledge is rapidly becoming available. The Joint Parliamentary Secretary has visited places in Scotland. One hon. Member mentioned the Hurley Research Centre, which is doing some extremely interesting experiments in sheep and grass. I know that the technical possibilities of expanding sheep production are almost unlimited. Of all the livestock animals, sheep have the great advantage of needing least in the way of imported feeding-stuffs.
The Report says that the knowledge and the materials exist to increase substantially the level of production and that, on the higher ground, this could be achieved without diversion of land or food, and I agree. It says that, if a million of these high acres were devoted to sheep, there could be an increase of 300,000 lambs a year by 1972. That is a fiddling target. If we wanted to, we could produce that in Argyll alone. I do not say that it would not be a major effort but that is the scale of the target in the Report. It would merely put our sheep production back to what it was in 1966 before it dropped in 1967.
I and most of my farmer friends interested in sheep would certainly not accept that our target and contribution towards solving this problem should merely be to put back by one year the production of sheep over the next five. I believe that we can do much better and that we will do much better if we can get the necessary support. I accept that there might have to be a little international negotiation because the New Zealand Government feel that they have a proprietary right to our market—which view we as sheep farmers often find a little difficult to understand.
My hon. Friend the Member for Galloway (Mr. Brewis) drew attention to the extent to which France and Holland subsidise their cheese exports to this country. This is just one example. I beg the Minister to realise how galling it is for farmers continually to be told, when they question the level at which foreign countries can subsidise the goods they send here, by whichever Government are in power, "We are unable to do anything about it because we are a trading nation". As my hon. Friend the Member for St. Ives (Mr. Nott) said, this is a 19th century idea. If we were trading at a profit with these countries there would be some merit in it, but often we are not and as farmers we resent having our hands tied behind our backs in favour of some international obligation entered into by the Government, quite often in a different situation, with the Government blandly saying that they cannot change it now. They must change it now.
The hon. Member for Berwick and East Lothian asked about the Opposition's policy. One of his questions was about threshold prices. I know that my right hon. Friend would be delighted to discuss this with him but it is rather complicated an issue to take up now. He asked whether the various production grants might not go altogether. His aim, I think, was to get the whole of this into the end product. This would be perfectly satisfactory if we were dealing with farmers all of whom were selling things at that stage, but, as the hon. Gentleman knows, in parts of his constituency and certainly in mine there are many people who do not have fat lambs or cash crops to sell.
I was thinking particularly not of regional grants but of special grants, fertilisers subsidies and things of that kind, which might well go on to the end price.
I accept that in certain limited ways that might be true.
I was delighted to hear from him and, with slight variations, from the hon. Mem- ber for Norfolk, North that the old battle about the tied cottage is won or lost, according to which way one looks at it. Of course, everybody accepts that if it is humanly possible, alternative accommodation should be provided, but, unless one has a series of caravans to be hired out, in many districts it is impossible to give alternative accommodation for five or six months and bring in the new person who is to do the work. I am glad this subject has left what might be called the black and white party battle and that the approach to it has become much more sensible.
The hon. Member for Berwick and East Lothian wondered whether grassland could be improved in order to pick up the slack from the 1·7 million acres having gone into increased arable land. I am perfectly certain that it is within the competence of farmers developing their grassland and I am not at all worried about that. It will need more fertilisers and more push behind some of the more old-fashioned farmers. Robbie Burns would find it difficult to achieve it, but I do not think that modern farmers would.
It is all right; the hon. Gentleman can go back to sleep again quite safely.
Although I did not hear him, I understand that the hon. Member for Cornwall, North (Mr. Pardoe) said that the Liberals were parting company from the Government about the present support system. Although this does not altogether surprise me, it seems a little odd after the Liberals saved the Government's life at the end of the prices and incomes debate the other day.
The Liberals love making points of this sort and being able to back everything both ways all the time, and occasionally they must allow people to deal with the sort of nonsense they talk.
My hon. Friend the Member for Banff made a point to which the Secretary of State for Scotland should pay attention, although it was not entirely relevant to the rest of the country. The egg problem will be serious in much of the North of Scotland and to many small farming areas. I hope that the right hon. Gentleman will take as much trouble as he can to brief himself thoroughly about the Scottish position and will consult the Minister of Agriculture before they decide how to develop their egg policy.
This has been an interesting debate. I very much hope that the Government will be able to give a clear lead to the expansion programme envisaged by the "Little Neddy" and will take the action which is necessary. The farming community is fully able and willing, given the necessary lead, the necessary capital and the necessary help in research and development, to play a major part in the balance of payments battle now before the country.
This has been an unusual time for debating agriculture, but an agricultural debate is welcome at any time. Sometimes the date when it is held governs the nature of the debate. We usually have one just before the Price Review, and then the claymores, and the Sassenach equivalents, are drawn.
This has been rather a quiet debate, and it is none the worse for that. It was probably prompted by the publication of the important Report of the Economic Development Council for Agriculture. I notice that my hon. Friend the Member for Wolverhampton, North-East (Mrs. Renée Short) suggested that everyone in the House should read it. I hope that everyone has read it.
Despite the fact that it was prompted by this, everyone has taken the opportunity to raise a number of important points. The right hon. Member for Grantham (Mr. Godber) mentioned a matter, also raised by his hon. Friend the Member for Banff (Mr. W. H. K. Baker). Frankly, I was grateful for his remarks. His entire speech dealt mainly with the egg position. I think that the hon. Member for Gainsborough (Mr. Kimball) referred to this, too. I was sorry that when he spoke, the hon. Member for Louth (Sir C. Osborne) was not present. He thought that the egg reconstruction business was wonderful, for the big man.
There is no doubt that the changes taking place in egg production have created certain problems. We would be very foolish if we lost sight of the contribution to the egg needs of the country by these small men, and the benefits that have accrued to them from the marketing scheme. I will certainly take into account the remarks made tonight, together with any representations received from interested parties before we arrive at decisions.
My hon. Friend the Member for Eal-ing, North (Mr. Molloy) spoke about education. This was a good point, but he probably under-estimates the amount of information that there is about farming in secondary schools. There is certainly a great deal in those that I know. I am sure that careers officers in the schools are aware of the prospects available, on the technical and academic side as well as the practical side of agriculture.
The subject of foot-and-mouth disease was raised by the right hon. Gentleman. There was a rather grudging point made by his hon. Friend the Member for Leo-minster (Sir Clive Bossom), who criticised the slowness of the Departmental machine in dealing with this matter. This contrasts with everything that practically everyone else has said, inside and outside the House. Justified compliments have been paid to the work of the Department. We have lessons to learn in any outbreak like this, but I do not think that we should pitch our remarks about what was done in such critical terms as he did.
As to the compensation scheme, I hope that the industry can agree on its contribution. The industry benefited from higher milk prices, and it is reasonable that it should contribute. The £ for £ scheme was placed before the industry on that basis, and albeit reluctantly, was accepted on that basis. The temporary inability of the industry to provide its share has not changed the Government's view about the necessity for this scheme to be on a £ for £ basis.
The hon. Member for Derbyshire, West (Mr. Scott-Hopkins), whom we are always glad to hear in these debates, referred to the question of new capital formation and criticised the Minister for quoting an inaccurate figure. He quoted from the Report of the Committee. They are probably both right. In 1967, investment in fixed assets, buildings, and so on, was £188 million. That is the figure which the hon. Gentleman banks on, but he must remember that an additional investment in stocks and work in progress was about £48 million. Therefore, the total new capital formation was over £200 million, as my right hon. Friend the Minister of Agriculture said. Therefore, the hon. Gentleman should be careful about getting a proper break-up of the figures.
No, I was not wrong.
The hon. Member for Gainsborough does not seem to like small men. He thought that the Government should stop wasting money on the regeneration and reseeding of hill land in Scotland and suggested that it was much better that this land should be used for recreational purposes. I tried to discover what kind of recreational purposes he had in mind. [An HON. MEMBER: "Grouse."] I know that the hon. Gentleman has certain interests in Sutherland, and I am sure that it was not a golf course of which he was thinking.
Does the right hon. Member for Argyll (Mr. Noble) agree with the hon. Gentleman? I am sure that he does not. If there is anything for which there is plenty of scope in the Highlands, it is recreation. There is, however, trouble about the public getting access to it because of the attitude of certain people who own the land. We might put that right with the Countryside Commission. The suggestion that we should stop regeneration and re-seeding and leave the land to the deer is not the kind of thing that we expect to hear in the House, even from a Conservative—and an Englishman at that— in 1968.
It is for the individual farmer to make up his mind about the 50 per cent. grant for improvement available under the Hill Lands Improvement Scheme. The Highlanders and Scotsmen whom I know who get only a 50 per cent. grant realise that they have to pay the other 50 per cent. and they are not wasting their money. They have to find the other half themselves, and that is fairly adequate safeguard to ensure that they do not undertake improvement of land from which they cannot benefit. One of the heartening things about some of the work done is what small farmers who are fighting and struggling for a living are able to do to improve their farms.
The question of early potatoes and the import of potatoes and its effect on the market has been raised. There has been an element of exaggeration in this matter. The hon. Member for Galloway (Mr. Brewis), who has a very important function to attend in Scotland tomorrow and has, therefore, gone to catch his train and has apologised for his absence, suggested that imports were flooding in and that there were shrinking acreages of early potatoes in Ayrshire. We must beware of exaggeration of this kind with the kind of crop with which we are dealing. This is not the first time that this has happened. My hon. Friend the Member for South Ayrshire (Mr. Emrys Hughes), who represents an area which produces very fine early potatoes, has raised this matter time and again. We should not get it out of perspective.
In the nature of the business, new potatoes must be something of a speculative crop. Last year was a very good year. The weather has much to do with this matter. It has more to do with our difficulties about potatoes than the question of imports, although I admit that imports are greater this year than last year. This year the weather took a hand and the earliest crops from the South-West of England—I think that the hon. Member for St. Ives (Mr. Nott) admitted this—and the West of England and Wales overlapped with the Eastern counties' crop. There was a long dry spell and then there was rain, and then there was heat, and not only did they overlap but the yields, when they came, were very heavy, and it was this which led to the difficulties, added to the fact that there was an increase of as much as 7,000 acres in the planting of first earlies, and with that heavy crop this led us into difficulties.
Matters could be very different next year; and we must keep to the fore the housewife's interest. She looks for a supply of early potatoes irrespective of what the weather is, and that means, in the spring months, Mediterranean potatoes.
There could be great difficulties in changing this long-established trade, especially in Cyprus. Let me remind hon. Gentlemen that that is a Commonwealth country, and so it is not quite as easy to apply there restrictions which one could apply elsewhere. It is not so easy, then, to apply the closure of the market at a relatively early date such as the end of May. If the trade were closed suddenly, what could become of those arrangements made between our importers and Cypriot growers? They were not made a month or a fortnight previously, but they were made very much earlier. If it were decided that, in any event, the British market would close to imports at the end of May the housewife might have to pay a very much higher price.
Bearing that in mind we are faced, in respect of early potatoes, with one of those seasonal difficulties which are not something entirely new. We could not— and this is my reply to the hon. Gentleman the Member for St. Ives—take unilateral measures and make arrangements, however attractive they might seem, for one sector, looked at on its own, because, clearly, this would have very considerable repercussions over a very much wider field.
As to cheese, I think that it was the hon. Member for Derbyshire, West who asked me to explain everything that the Minister of Agriculture was doing. My right hon. Friend said that this matter was being handled and that he did not want to say any more now. The hon. Gentleman was a Minister in the Department, and it is a little naïve of him to ask me to say everything that my right hon. Friend is doing, for if I were to do so that might hinder rather than help.
On the question of dumping generally, there are matters which take us by surprise, some of them, and on which we shall require to take action. We have been impeded by the anti-dumping legis- lation. We now have a new Act which, I think, gives us far better powers, and we hope that we shall be able to take quick, provisional action in the future.
The question has been raised—this was the right hon. Gentleman's point at the start—of the expansion and the amount of expansion and the effect of the N.E.D.C. suggestion. The Government are for expansion and have been for expansion, and we are not afraid of change. I think it was the right hon. Gentleman who suggested that farmers were afraid of change, and instanced the attitude of farmers in 1952–53 when we changed over to deficiency payments. That was when the farmers had to deal with a Tory Government. The farmers have had the benefit of the Act introduced by the Labour Government, an Act which gave them, for the first time, guaranteed markets and guaranteed prices, and what they have had in mind is what they had to suffer in the past.
That is the reason for any unwillingness by farmers to have a spurt of freedom—because they know that the House has let them down in the past, when they had to suffer. They have had the benefit of years of stability, and I am perfectly sure that they have got confidence in this Government to ensure that that expansion and support will be continued. I think that this was implicit in the speech of my hon. Friend the Member for Berwick and East Lothian (Mr. Mackintosh).
The hon. Gentleman said that we are not getting on fast enough with expansion. I am the first to admit that expansion does not come the day that it is declared. Investment comes first. The results in production come later. If the hon. Gentleman considers the support which has been given by the Government to agriculture it compares very favourably with what was done under the previous Government.
This is reflected in the forecasts of net output. The Index of Production is reflected by a net output rise in Scotland in 1967–68 from a forecast figure of 109 to 121, about 11 per cent., despite all the anxieties occasioned by the foot-and-mouth outbreak in England and the gale damage in central Scotland. In many respects 1967–68 was a successful year for Scottish fanning. Yields of cereal and potatoes reached record levels, as did yields of milk and eggs. In other words, expansion.
There are clear signs of continuing technological progress in the industry and, subject to the weather in the current year, I see no reason why the net output on farms should not move forward.
The trend in the United Kingdom— [Interruption.] The hon. Gentleman will have a whole debate to himself in the Scottish Grand Committee, despite the lack of interest in that Committee by the Liberal Party these days. I do not think that the hon. Gentleman is entitled to be so pessimistic in his outlook and proclaim his lack of confidence and declare that the farmers feel the same way. This is not so.
What are we asking the farmers to give up? Let us get clear the kind of support we are giving to the agricultural industry. Deficiency payments and production grants have been running at just under £300 million a year. Added to that there is expenditure on agricultural research of another £15 million a year, and another £15 million a year on the advisory services and development. Far from neglecting agriculture, we have given it tremendous support. This means cheaper food for the housewife. It does not all go in income to the farmer. As a result of what we do, he has to plough back a great part of that income into the modernisation and maintenance of his share in the industry.
The hon. Gentleman asked us to give this up and swing over to variable levies. He admitted that one of the first things that would happen if we did that would be that food prices would go up. He is prepared to accept a figure of 6 to 7 per cent. as the increase, in present conditions. If we are to finance further expansion it means further moneys to be added, so that means further increases in prices.
I think that the fanners are sufficiently adventurous. When considering the N.E.D.C.'s suggestion they said that it was not a question of yes or no, or one or the other. Even they suggest that there could be a blending of the two systems to get a managed market.
In 1963–64 the Tory Government introduced minimum import prices. They said that that was the way to deal with cereals, which included standard quantities. Hon. Members opposite now come along and say, "This is not right; we have changed our minds again about that", and they ask us to make up our minds immediately on a very important matter.
I think that the right hon. Gentleman had better look at this scheme again to see whether it meets the needs. I ask everyone to look at this N.E.D.C. Report with realistic eyes. It is not purely a question of the technical ability to do the thing. I think that my hon. Friend the Member for Berwick and East Lothian was the only one who questioned whether they were right in their technical assessments. I should not go as far as that.
What must be appreciated is that one goes from the technical assessment to the capacity of the industry, to the question of the processors and the distributors in the industry, to the consumer, to the market assumptions which have to be made, to the financing, to the effect which this will have on prices, and the effect therefore on imports.
That takes one right into the complicated international developments which would necessarily arise from our traditional and historic position. It may be that we should look at this position. It may be that we should make changes, but I do not think that there can be the massive announcement about which the right hon. Gentleman spoke, but which he did not support. We have to see how we go. We have to go into the matter very carefully before we depart from a system which has been proved, and which has benefited the farmer, the agriculture industry, and the consumer.
I know that the contribution made to Scottish life and prosperity by the Government's support of agriculture is considerable. We hear people shouting, "Where has Scotland's money gone?". Last year, £61 million was ploughed into Scottish agriculture, and that was not the the first year in which it was done. It has been done since the war. The result is that we have a far more prosperous and confident agriculture industry than we had in the old days, which far too many farmers tend to remember. We can with confidence go on with our existing programme and examine what has been put forward by the N.E.D.C. and then take practical steps to bring about the expansion which they see possible up to the years 1972–73.