asked the Secretary of State for Scotland if he will take steps to assist Scottish dairy farmers; and if he will propose a subsidy for either feeding stuffs or for milk.

Mr. W. H. K. Baker:

asked the Secretary of State for Scotland what representations he has received from the National Farmers' Union of Scotland with regard to the increase in costs of animal feeding stuffs; and what replies he has sent.

asked the Secretary of State for Scotland what effect the recent increases in cereal prices is having on liquid milk supplies in Scotland; and if he will make a statement.

Concern on the level of feeding stuffs prices has been expressed by the National Farmers' Union and also by the three milk marketing boards, which have reported that milk production in Scotland is now marginally below last year's level. This has not, however, affected supplies for the liquid market, which are fully adequate.

The forthcoming annual review will give the opportunity for full consideration of the problems and prospects of those sectors of the industry affected by increased feed costs.

Is the hon. Gentleman aware that the annual review will be too late to deal with the problem which now faces Scottish dairy farmers? Has he ever known dairy farming in Scotland to be in such a state of crisis as it is at the moment? Have he or his right hon. Friends ever had such a degree of anger expressed to them by the dairy farmers? Is this not a crisis entirely of the Government's own creation, which could be solved if there were a subsidy either on feeding stuffs or on milk?

With respect, the right hon. Lady must not exaggerate the situation. I ask her to recall the position in the autumn of 1970 when we took over the country's agricultural policies and when the degree of indignation was far greater than it is today. I certainly acknowledge the problems faced by the dairy industry because of the cost of feeding stuffs, but we believe that the right place to deal with these is at the annual price review. As the right hon. Lady must be aware, my right hon. Friend the Minister of Agriculture announced last week that he is bringing forward the discussions on the annual price review and that the first session will start on 6th December, which is very early indeed.

Mr. Baker:

Can my hon. Friend assure the House that the added costs will be recouped by the dairy industry and by other sections of the agricultural industry, which are feeling the pinch at this very moment?

Obviously I cannot anticipate the outcome of the annual price review. It is intended, however, that the milk committee of the National Farmers' Union should meet with the Department of Agriculture in the week after 6th December in order to discuss the precise situation and difficulties facing the industry.

Is my hon. Friend aware that the sympathetic replies to letters and questions are very much appreciated but do not dispel the concern which many hon. Members feel about the problems facing the dairy industry? Can he give the House any more information about the speeding-up of the annual price review? For example, is it possible for a statement of intent on dairying to be made well before the publication of the full findings of the annual price review?

I must repeat what I said earlier. Obviously I cannot anticipate the outcome of the annual price review, but I think that the Government have given proof of their intentions by bringing forward the date of the discussions very considerably compared with previous years. I also ask my hon. Friend and the House to bear in mind that the other incomes of dairy farmers, from the prices of cull cattle and calves, are at a very much better level than they have ever been in the past.

While the Opposition would be the first to admit that many farm incomes have benefited substantially by increased prices for cereals and other commodities, surely the Minister will recognise that many dairy farmers, particularly in the West of Scotland, are facing a real crisis which is being reflected in the amount of milk coming from these farms. Can the hon. Gentleman at least assure us that action will be taken by the Government to alleviate this problem before the end of the year?

Hon. Gentlemen should also take account of the fact that over the last three years of Conservative Government the incomes of dairy farmers after costs are taken into account have very considerably improved. The hon. Gentleman may not know, but costs are deducted before incomes are calculated, and incomes more than doubled between 1970–71 and 1972–73, so that the state of the industry is very much stronger than it has been for many years. I do not deny for one moment the difficulties which the industry faces, but I believe it is confident that the Government are prepared to act at the proper time. I particularly remind the hon. Gentleman that in 1969–70, the last year of the Labour Government, the net price per gallon of milk which farmers received was 17p whereas the price in 1973–74 is estimated to be over 21p. That is a measure of what the Conservative Government have done for the dairy industry.

Does the Under-Secretary of State accept that many dairy farmers are suffering a loss of income of about 40 per cent.?

I accept that dairy farmers and facing very much higher costs, but at the same time there are higher incomes whom certain aspects of their production. These are all matters which will feature our discussions with the National Farmers' Union and with all three milk marketing boards, and we have undertaken to take them into account at the price review.

Is the Under-Secretary suggesting that the dairy farmers in the West, and others who have specialised and have not had the advantage of higher prices, are shouting about nothing at all? Is he suggesting that this is a "phoney" crisis in the dairy industry?

The right hon. Gentleman should know better than to try to put words into my mouth I said a few moments ago that I acknowledge the problem which they are facing, and I know that the leaders of the National Farmers' Union and the milk marketing boards appreciate that I acknowledge it. What I ask the right hon. Gentleman and his hon. Friends to take into account is that all is not bleak in the industry. There is other income, even on the specialist farms, than that which comes simply from milk, because there is income from beef and from the sale of calves. But I know very well from the history of the right hon. Gentleman's party that farmers cannot look for much help in that direction.