Orders of the Day — Agriculture

Part of the debate – in the House of Commons at 12:00 am on 14th July 1975.

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Photo of Mr Michael Jopling Mr Michael Jopling , Westmorland 12:00 am, 14th July 1975

This being one of those days when the Opposition have the choice of the subject for debate, we have decided that we should talk about the current crisis in the agricultural industry. There is a real crisis which is perhaps best summed up in the document which the National Farmers' Union has circulated to Members of Parliament within the past few days. Its first paragraph briefly and baldly reads: The agricultural industry is now facing without any doubt its gravest crisis since the end of the war and confidence in the industry has never been so low. With that as the background, we believe it is essential that the Government use this debate to do whatever they can to restore the shattered confidence of farmers.

Of course, we know that the Government are committed to expansion and to the renewal of confidence. They produced their White Paper three months ago and it was welcomed by us. Indeed, it was welcomed by the industry. We believe that the White Paper is a recipe for the expansion which we all want. It provides expansion targets of around 2½ per cent., which we and the industry believe are reasonable. However, what is needed now is the cash to implement the aims of the White Paper.

For a good many months before the White Paper was produced the Government talked about what they were to put in it. But now, three months after its production, there has been no sign of the cash to inspire the confidence that is necessary so that we can achieve the targets that the White Paper set out. Surely it is now time for action. Surely, after three months, the talking has been going on long enough. We know that the Government have not gone cold on the aims of the White Paper. Only two weeks ago today the Prime Minister went to the Royal Show and made a speech about the need to expand agriculture. At the beginning of this debate it is no bad thing to put on record what the right hon. Gentleman said at that time. He is reported as saying: The argument for expanding agricultural output today, and for help to do it, rests on grounds which the most hardbitten economists, the most dispassionate industrial consultants would accept … It is on that basis, the hard commercial and economic facts, that it makes sense to expand food production in this country". Therefore, we know that as recently as two weeks ago the Government were still committed to the aims of the White Paper.

It seems that in the agricultural industry we have much the same problem as we have as regards the economy and the problems of inflation as a whole. Like the inflationary problems, the longer the Government delay the harder in the end will it become to put matters right. Already we have a much worse position in the farming industry than in April when the White Paper was produced. The Minister may well tell us that the weather has made things more difficult, but the effects of the weather will be felt hardest next winter and not now. It is now that confidence is running away and production is beginning to fall.

Many more serious underlying problems are apparent in the industry than the problems of the weather. When we look from one sector of the industry to another we see that there is falling profit, falling confidence and falling production. This has been going on for longer than the difficult weather conditions of the past few weeks in particular. Indeed, it has intensified since the White Paper was produced in April.

The Minister cannot be other than aware of the drop in confidence within the industry. The Minister goes round the industry a good deal and he must be aware of its mood. Farmers are beginning to argue that expansion is not in their best interests. There is a new mood of retrenchment in the industry which I have not seen before. I think that both sides of the House will agree that expansion of food production at home is in the national interest. Therefore, it must follow that we all agree that the present mood within the industry is a bad one for the nation. We must all do our best to restore confidence and to set the industry again on an expansionary path.

It is up to us to persuade the Minister to provide and inject the cash which the industry needs so badly. If we look around the industry and consider the various sectors, the same picture is apparent. I begin with the egg producing sector. It is a sector which has been having huge losses recently despite tremendous investment over the past few years. I heard an estimate last week, which I am sure is correct that, taking average costs of production in the egg producing sector, those engaged in it have been losing money in 12 out of the past 14 months. Recently even the most efficient producers have been losing money. Within the past few weeks the price of eggs to the producer has dropped as low as 15p a dozen. That implies losses for those producers who are producing at average costs of approximately 10p a dozen. Egg producers cannot continue for very long at that rate.

I must acknowledge that the Minister has taken action under Article 135 of the Treaty of Rome to try to get something done on a Community basis. That has resulted in the suspension of the monetary compensatory amounts and the increase in export restitutions for eggs exported from the Community. I am sure we all hope that these measures will be enough to restore confidence and profitability to the industry. However, if they do not—and there is no certainty that they will—I hope that the Minister today will give us an assurance that within a very few weeks he will seek a ban on imports from other Community countries.

At the same time, it is essential to work for a system within the Community in order to establish a more stable egg industry and a European system for egg production so that confidence may be restored not only to our own industry but to that throughout the Community.

I am sure that the Minister has plenty of examples of what is happening in the egg industry. I give him one small example, though perhaps it may not be thought so small when I have described it. It is that of a hatchery in Wiltshire which recently has gone bankrupt. It had an operation working up to a turnover of £10 million a year. In the words of its owners, it has gone bankrupt … because of the effect of imported eggs and the low price of eggs on the domestic market. Consequent upon that, customers have been unable to pay their bills, and cash flow problems have resulted, causing the company to go bankrupt. This is a straw in the wind showing what is happening in the egg producing industry, and the House should be aware of it.

I turn next to two industries, one of which I intend to talk about specifically but both of which have been clobbered by the increased cost of oil in the past year or so. Two weeks ago, we debated our fishing industry which, unlike most other fishing industries in the Community, has had no help. Although the Community allows help to deal with the oil crisis, here the Minister has done nothing to help the fishing industry, and trawlers continue to be tied up.

A similar situation exists in our glasshouse industry where, because of the increase in oil prices, the Community has allowed help to be given on a State basis when our own Minister has refused that assistance to our industry. I find it fantastic that although the right hon. Gentleman went to Brussels when the Council of Ministers debated whether individual States should be allowed to give this assistance in the face of increased oil prices, and was one of those to hold up their hands allowing individual States to pay these subsidies, he came straight home and refused to pay the subsidy to growers in this country—