Motion made, and Question proposed,
That the Amendments of the Potato Marketing Scheme, 1955, a draft of which Amendments was laid before this House on 28th March, be approved.—[Mr. Hay.]
§ 10.31 p.m.
§ The Minister of Agriculture, Fisheries and Food (Mr. Christopher Soames)
The first question with which I should like to deal is the reason why these Amendments come before the House. I have seen it suggested in a number of newspapers that the potato producers feel that this Scheme militates against them. To what extent is that suggestion correct? I wish to try to show to the House that the vast majority of potato producers are in favour of the existing Scheme and of the Amendments which the House is considering this evening.
When the Amendments were published it was possible for the producers, had they so desired, to ensure that a poll on them took place. It required 1,000 producers out of a total of 76,000 to request a poll if there was to be one, but this number was not forthcoming. Only some 200 producers wanted a poll so there was not one. Following the publication of the Scheme, an opportunity was provided for making objections. Some 8,500 objections were received to the Scheme, the overwhelming majority of which were in a stereotyped form laid down under the Act, and I ordered a public inquiry. Only a handful of producers attended the inquiry to object to the Scheme. About fifteen producers, in fact, gave evidence against it. Again I would ask the House to bear in mind that this is against a background of 76,000 producers.
The commissioner who held the inquiry found in favour of the Scheme. But because this inquiry took place under the Statute from which the Scheme and the Amendments to it stem, it is necessary for the House to consider the Amendments.
This Scheme is so closely linked with our guarantee arrangements in general for potatoes that before going into the details of the Amendments it might be helpful to the House if I were to say 396 something about the Scheme itself and its objectives.
It is very difficult to ensure a similar yield from one year to another from potatoes. This is more so in the case of potatoes than with any other crop. I will give the House on example of this. In 1958 722,000 acres of potatoes were planted. They produced just under 5 million tons of potatoes. In 1961 628,000 acres were planted to potatoes. They produced 5,600,000 tons. In other words, 100,000 fewer acres produced 600,000 tons more. It is just not possible to budget for a specific crop of potatoes.
We cannot have any assurance as to what the weather will produce or what the crop from a given acreage is likely to be, but the figures are roughly these. The crop which we seek to get from our own soil is between 5½ million and 6 million tons, because the consumption of home-grown potatoes—I am not now counting imports of early potatoes—is about 4¼ million tons. Taking into consideration the wastage, the small potatoes, the chat potatoes, the wastage that takes place in clamps, and the potatoes that have to be saved for the following year's seed, in order to get 4¼ million tons on to the market for consumption we need a crop of between 5½ million and 6 million tons.
The yield varies considerably from year to year. It has varied over the last six years from under 7 tons per acre to almost 9 tons per acre, as it was this year. The average over the six years has been 8 tons per acre. One can seek as an average over a number of years to achieve 5½ million to 6 million tons a year and to do that we should need to hold the acreage at about 700,000.
The guarantee arrangements are that the Government assure to producers a guaranteed price for that part of the crop which is taken up for human consumption. This is a direct reflection of the 1947 Act, which said that the Government should assure a reasonable return for that part of the food which it was in the national interests that we should produce. Since 1959 the Government have given a guaranteed price on average—not to individual producers—on the part of the potato crop which goes for human consumption. In a year of shortage all the crop goes for human 397 consumption and seed, other than the very small (potatoes, which are not suitable. In years of plenty there is a surplus and a proportion of the crop goes for other than human consumption.
Since this scheme was introduced in 1959 it so happens that the 1959 and 1960 crops produced surpluses. The question arose how best to assure the guarantee. The surplus in both years was about 500,000 tons. It was found that if the market was allowed to run completely free, with a 500,000-ton surplus the market would go so low that the difference between the market price and the guaranteed price—the deficiency payment which the taxpayers would have had to find—would have been unacceptably high.
It was evident that the better bargain, from the viewpoint both of the taxpayer and of the producer—and certainly the consumer was losing nothing—was a support buying operation to ensure that sufficient potatoes were taken off the market: in other words, that the Potato Marketing Board should go into the market and assure producers that it would give a certain price for potatoes. This would hold the price reasonably steady. The cost of this to the taxpayer for the 1960 crop was about £8 million, whereas we believe that had we let the market go completely free and not done any support buying it would have been nearer £15 million.
It became clear, therefore, that if the Potato Marketing Board was successful in holding the acreage at about 700,000, which is the most likely acreage to achieve the desired level of production of 5½ million to 6 million tons, in a year when yields were heavy and there were surpluses, support buying should become a permanent feature of our support arrangements as being better value, from the point of view not only of the producer and of the taxpayer, but, indeed, of the consumer, than letting the market go rip.
The question was, from where should the money come to do this support buying? It evidently should come both from the Government—because the taxpayer benefited from this system as opposed to letting the market go rip—and also from the producer, because the 398 producer also benefited inasmuch as whereas under the alternative system of letting the market go free he would have very low prices, his price would be made up to the guaranteed price by a deficiency payment for that part of the production that went for human consumption. The remaining surplus acreage, which could be 10 per cent. of the total production, would have fetched very low prices of, say, £2 or £3 per ton as cattle feed.
It was accordingly resolved, and it was agreed with the Potato Marketing Board and the National Farmers' Unions, that both the Government and the producers should contribute to building up a support fund for that purpose, for at the same time as being successful in holding 700,000 as roughly the acreage to be planted, experience in recent years shows that in three years out of six there has been a surplus yield. This, therefore, will be a regular feature of our system of support. It springs from the fact that the yields of this crop off the same acreage can be so variable.
Thus arose the question of the source from which the money was to be found. To find it from the Government was simple, but how should it be found from the producers? It was decided and agreed between the farmers' leaders and the Government some time back now that for every £1 put up by the producers, £2 should be put up by the Government.
It is rare to have an average year. I am beginning to wonder if it will ever happen that we shall get an average year.
§ Mr. Soames
If we were to get an average year we should get over 700,000 acres yielding 8 tons an acre, which is about the right number of potatoes. It is, however, likely that we shall get either a surplus or a shortfall. If we get a surplus we support buy. If we get a shortfall then we import potatoes from abroad. That is the point. That is the best way to achieve that combination of interests which the Government aim at as between the producers on the one hand and the consumers on the other.
399 I hope the House will excuse my having entered on this explanation in order that I may be able to come on to the Amendments now and to show what they are designed to do in order to fortify the existing Scheme.
§ Mr. Charles Loughlin (Gloucestershire, West)
Will the right hon. Gentleman explain one figure to which he referred within the last few moments—that is the acreage? He cited the figure of 700,000. Is that the acreage of second early potatoes or the main crop? Because in the last 10 years it has never reached that figure. Indeed, it was 470,000 last year. Is that the acreage figure to which he is referring?
§ Mr. Soames
No, I am referring to the total acreage under potatoes of all kinds in the country. I do not know where the hon. Member got the figure of 470,000. I am talking all the time about Great Britain—England, Wales and Scotland—because Northern Ireland is outside this Scheme. The acreage last year was 628,000. It has been as high in 1956 as 796,000, and it has varied between those. Hitherto, up to between 1956 and 1961, it has always been above 700,000, between 700,000 and 796,000. This year it fell well below 700,000. I shall be coming later to the reasons it fell so much below 700,000 this year.
§ Mr. John Mackie (Enfield, East)
We admire the right hon. Gentleman's memory. He is speaking without notes. I wonder, though, if he has inadvertently made a slip. Surely the Potato Marketing Board's figure was 592,000 acres in 1961?
§ Mr. Soames
Yes, but that excludes the acreage which is grown by potato growers not registered producers. In other words, there are a number of growers who grow one acre and less of potatoes who are not registered producers. Their figure, added to the Potato Marketing Board's figure, comes to 628,000 acres.
Now, if I may, I will go through the Amendments to the Scheme. The most important aspects of the Amendments lie in paragraph 84 of the Scheme, and the most important sub-paragraphs of paragraph 84 are sub-paragraphs (1), (2) and (3). They are designed to do two things.
400 Firstly, to increase the ordinary contribution which the Potato Marketing Board levies from its registered producers from £1 per acre to a maximum of £3 per acre. Why should this be? If we were to have an average acreage of 700,000, then £1 per acre would give a return of £700,000. This is not sufficient. Hitherto that figure has provided money for the Board's administrative purposes and for a small amount to put to reserve; but it has been a very small amount. It is not sufficient to meet their side of the contribution to a support-buying programme if and when that is necessary.
Every £1 should produce an extra £700,000 in round figures, and 30s. of the extra £2 which we are asking for in the Amendment to the Scheme is designed to produce about £1 million, which will be the Potato Marketing Board's, or in other words the producers' contribution to a support-buying fund.
What sort of sum is likely to be necessary for support-buying? Generally, over a period of years, if we were to hold the acreage at 700,000 we should have a surplus one year and a deficiency the next. Let us assume that we have a surplus every other year and that the surplus is about 500,000 to 600,000 tons over the 5.6 million tons we need. If support-buying cost us a net £10 a ton, this would require about £6 million, of which £4 million would be provided by the Government and £2 million by the producers. If that is to happen every year, £1 million per annum seems to be a reasonable sum of money for the Board to levy off producers to achieve the objective.
We cannot tell whether this sum of money will be too much or too little. If it is too much, it is provided for in the first two lines of paragraph 84(2) which state:The Board shall not require any registered producer to contribute in respect of any calendar year sums which exceed the aggregate of …This means that the Board cannot levy on producers more than £3 per acre. But if we were to have a run of years of shortfalls and no support-buying necessary and therefore an accumulation of funds, the Marketing Board, at its discretion, could either not levy £3 per acre 401 or levy less than £3 on producers. But it cannot levy more than £3.
It might, however, be that we had a run of years where a greater sum of money than £1 million a year was required as a contribution from producers; that is, if we had a series of years of surplus one after the other. Paragraph 84(3), therefore, enables the Board to raise the sum above £3, but only after it has put it to a ballot of registered producers and has had a two-thirds majority in favour of so doing—a majority not only in terms of numbers but in terms of producers producing two-thirds of the acreage of potatoes.
So much for the 30s. extra, bringing the sum up from £1 to £2 10s. There is an extra 10s. which the Board wishes in order to carry out a more intensive programme of research and marketing development, which is extremely necessary.
Hitherto, the Board has been spending only about £35,000 a year on research. Yet it is a regulatory Board bearing responsibilities towards a section of the industry which has a turnover of £70 million or £80 million a year. The extra 10s. per acre from producers will give the Board another £350,000, which will enable it to extend, to a very considerable extent its research activities. These are the reasons why the Board is seeking, with the Government's support—and in this I believe that we are speaking for the majority of producers—this extra payment.
Paragraph 84 (2, b) provides foran excess acreage contribution of £25 per acre …'as opposed to the existing acreage contribution of £10 par acre. Why is this? Of course, there is nothing the Board can do to affect the yield of potatoes over the acreage planted. That, I think, we all accept. It can, however, try to ensure by influence, by persuasion and by advice that roughly the acreage that is required is planted. How can it do this?
It has to make up its mind early. Farmers decide their cropping programmes for the following year in about September. It is thus necessary that the Board shall, as paragraph 84 (5) says,… not later than the 31st August … prescribe whether or not the next ensuing calendar year is to be a quota year.402 By that date, what information has the Board which is likely to affect the following year's crop, which has to be planted from March onwards and lifted from May onwards until September?
It can sample the crop which is coming in for the current year. It has a rough idea of what the yield is likely to be in that particular year. That is the only information it has. But it is necessary for the farmers to have an idea from the Board by the end of August as to whether the Board thinks it necessary for producers to increase acreage or decrease it compared with the current year. Thus, the Board puts out a rough guide by the end of August.
How does the Board do this? It does so by stating that the acreage should be 80 per cent., or 90 per cent., or 100 per cent. of the quota basic acreage of the current year, or whatever the figure may be. That gives producers an idea. The Board does not claim any more than that. It can give the producers only an idea as to whether they should increase or decrease their acreage over the current year.
What is necessary from the point of view of the Board, if it is to fulfil its obligation of trying to hold the acreage about steady, is that it should be able to impose penalties on those who plant over their quotas. Otherwise, we get excess acreage planted. If, then, we get into a surplus year, the problem of surplus is very much aggravated. For example, 1959 and 1960 were both surplus years. In each year, approximately 20,000 acres above the quota were planted. This was largely in the heavier yielding land, because it was this land which could well afford to pay the then £10 an acre surcharge and take the chance of the current year being a short year, with prices high. Supposing these 20,000 acres to produce, on average, 8 tons to the acre—probably the average was higher—then this totalled an extra 160,000 tons with which the Board had to cope. In years of surplus the 160,000 tons had to be purchased through the support-buying programme; that is, they had to be bought at perhaps £10 or £11 a ton and, at that lower price, the cost was about £1½ million. A proportion of that not inconsiderable amount had to be found from the producers and a proportion from the taxpayers, and this 403 aggravated what might be called the surplus situation.
It has been shown that £10 an acre was not sufficient of—if I may use the expression—a disincentive to inhibit growers from exceeding their quota, and especially was this the case with the growers on the heavier yielding land. Accordingly, it is recommended that the payment be put up to a maximum of £25 an acre. Now this does not mean that the Board will charge £25 an acre each year. One can envisage years when the Board, foreseeing that the quota would not be taken up, might welcome extra acreages on certain farms and decide not to levy any excess acreage at all. On the other hand, the evidence available to the Board might show that all the quota would be taken up and in that case the Board would not like to see extra acreages planted. The Board might put on an excess acreage payment which is going to mean that each grower has a disincentive to produce extra acreages.
Hon. Members may ask in what terms we are thinking when we talk of £25 and what, proportionately, is this to the cost of growing the crop. Let us take main crop potatoes. The cost can be of the order of £80 and £100 an acre. The return on the basis of a yield of 8 tons to the acre, with a price of, say, £15 a ton, means a return of about £120 an acre. Now £10 did not, on the heavier yielding lands where the return is greater, prove capable of reducing the excess acreage below 20,000 acres. That was proved in 1959 and 1960, which were both surplus years. This aggravated the problem, and it is hoped that £25 will enable the Board the better to control the acreage which is planted.
This is the main contribution which the Board can make in the context of what we are discussing tonight to get the acreage about right and then, over a period of years, production should average out to a figure which is not far wrong.
§ Mr. George Lawson (Motherwell)
There is one thing which puzzles me very much. Why is it that at a time when we understand wild dogs are being used to guard the very scarce supplies 404 of potatoes the Government should bring in a measure designed to restrict the growing of potatoes?
§ Mr. Soames
I ask the hon. Gentleman to listen and to form his view on the sum total of the case and not to try to pre-judge it, or to think that this is a simple question to answer. We are endeavouring to ensure that over a period of years we get the least possible swing between a heavy surplus and a heavy short-fall. We are bound to get some swing.
Paragraph 84 (4) enables the Board, if it sees fit, to exempt early potato growers from any part of the payment of £3 per acre. The reason is that growers of early potatoes do not benefit in any way from the support buying operations of the Board. Their produce is cleared well before there would be any support-buying operations in any possible or feasible circumstances.
§ Mr. John Hall (Wycombe)
Will my right hon. Friend give some indication of how this is to work? As I understand it, this would depend on information given by the growers as to the acreage of early potatoes which they had lifted. Would there be any means of checking that?
§ Mr. Soames
It is not a question of the amount lifted. It states:Where … the registered producer satisfies the Board by such date and in such manner as the Board may require that on or before the relevant date the potatoes planted thereon had been lifted …In other words, when the Board sets a date before which potatoes are to be lifted it is thinking in terms of early potatoes lifted before a certain date. The Board could rule that on that acreage some part of the amount of £3 per acre need not be paid.
§ Sir Harry Legge-Bourke (Isle of Ely)
It might be helpful if the Minister looked at paragraph 98 of the Report of the Inquiry, where Mr. Rennie, the chairman, is quoted as saying that the exemption would apply to potatoes lifted before the Saturday nearest to 15th July each year in respect of which an appropriate return was made.
§ Mr. Soames
It is for the Board to decide the date, I was merely giving an 405 indication in relation to sub-paragraph (4) which in broad terms enables the Board to exempt the growers of early potatoes from paying the extra levy. They will not gain, as will the main crop growers, from the support fund which is the chief object for raising this extra money.
§ Mr. John Hall
I am sorry to interrupt my right hon. Friend again, but I am still not clear. It refers to the main acreage being reduced by the lifting of early potatoes. It is conceivable that part of the total acreage of potatoes would be planted for early potatoes and that part would be lifted. Presumably it would be in respect of that part for which the grower was claiming a reduction of abolition of the levy. How would that be checked by the Board?
§ Mr. Soames
It is up to the Board to check. It is for this reason that the amendment appears in paragraph 83 in heavy type:… knowingly or recklessly makes any false statement in complying therewith or in furnishing to the Board any information relating to potatoes which may be required by the Board for the purposes of paragraph 84 …My hon. Friend the Member for Wycombe (Mr. John Hall) is asking how the Board would check whether or not the potatoes were lifted by a certain date. I am saying that if the producer renders a false return he is liable to the penalty as laid down in paragraph 83.
I now come to paragraph 69 (3), to which the Select Committee on Statutory Instruments called the attention of the House on the ground that it appearsto make unexpected use of the powers",conferred by the Statute under which they are made. Paragraph 69 is designed to enable the Board to exempt categories of producers from the Scheme either partially or wholly. To give an example, the Western Isles are exempted from the provisions of the Scheme by the Potato Marketing Board because it is known that the maximum production of that area cannot be such as to interfere with the Scheme. It is largely for consumption in the islands and the export in terms of quantity is not significant from the Board's point of view.
There are other parts of the country to which the Board might wish to extend this provision. It does not wish to impose its Scheme unless that be necessary. 406 There are other parts of the country which have traditionally grown a quantity of potatoes not material to the Board, but which perhaps would be capable of increasing production. It is reasonable that, if the Board has power to exempt, it should also have power to attach some stipulations to that exemption such as asking producers within an area to give it information required, for example, as to the acreage planted.
The purpose of sub-paragraph (3) is to enable the Board to increase its exemptions while at the same time being satisfied that in doing so it is not putting the Scheme in jeopardy. As to whether, to use the words of the Select Committee, this appearsto make unexpected use of the powersI point out that those powers exist already for the Egg Marketing Board. Also in paragraphs 75 and 76 of the Potato Marketing Board, the Board already has similar power to call for such information. This is not all that unusual. I understand the point made by the Select Committee in drawing this to the attention of the House, but I believe this a reasonable sort of power for a regulatory Board. It must be remembered that the Potato Marketing Board is only a regulatory board and is not like the Milk Marketing Board, which actually trades in its own product. This power exists already for the Egg Marketing Board and, in a different context, in the Potato Marketing Board Scheme. I hope the House will think it reasonable that this power should be added.
I hope the House will agree that there is nothing which the Government or the Board can do which will ensure that we get exactly the right tonnage of potatoes each year. We can do our best to ensure that roughly the right acreage is planted each year. We impose excess quota payments on over-planting, but we cannot and do not wish to force farmers to grow potatoes or to impose penalties for under-planting. The Board, by encouragement and disincentive, can have an effect—we hope a considerable effect—in endeavouring to get the acreage about right.
We shall have our years of surplus and our years of shortage according to the yield. That is quite inevitable. I think that this is the best arrangement that we can make for such a volatile 407 crop as potatoes with such wide differences in yield. There is no perfect system for a crop which gives such very wide variations in yield.
In times of shortage, what should we do? We should import from abroad. I want to say a word or two about this year. I have seen it claimed that the Board reduced the acreage last year and that it is the Board's fault that there is a shortage in the yield this year. In fact, in the previous year 742,000 acres were planted. This was too much. The Board advised producers to grow about 10 per cent. less last year than in the previous year. But the weather and the condition of the land was such that in the event only 628,000 acres were planted—not because of any action by the Board, but merely because it was not physically possible to get potatoes in a bigger acreage last year.
We had the late winter and the floods of the spring, which we all remember; I well recall the Questions which I answered at the time. The land was waterlogged, there was no frost, the land was not broken up and only 628,000 acres of potatoes were planted. This was not because the Board sought an acreage of 700,000, but because it was not physically possible to get more potatoes in the ground. This is something to which the potato growers are accustomed every so often. But 628,000 acres were planted and it then seemed certain that we should have to import potatoes. But nature was kind in the growing year and we had the highest yield of potatoes for years, nearly 9 tons an acre. From 628,000 acres we got 5.6 million tons of potatoes. This is just about the figure likely to go round. If ever there were a year when it looked as if, by sheer luck and with a much lower acreage than the Board had sought, but with an exceptional growing year and a very high yield, the nail would be hit on the head and we should get the right quantity of potatoes, this was it.
In all my talks with Mr. Rennie from October—November onwards he told me that it was touch and go whether there would be a slight shortfall or a slight surplus. He said, "We shall not be able to tell you until we get well on into 408 the year." Throughout the year up to March prices were reasonably normal from the point of view of the producer and the point of view of the consumer. It was not until the February census was taken that it was certain that imports would be necessary and that there would be a Shortfall of perhaps 300,000 tons. This is against a background of a yield of 5.6 million tons and is a measure of the degree of the shortfall. We asked the Board to speed the February census so that a decision could be taken.
We knew then that it was touch and go whether or not potatoes would have to be imported. The Board considered the results of the February census on 13th March and told me that there would be a shortfall. We made a statement that imports were to be allowed, and the licences were given on, I think, 15th March. In other words, it was immediately decided that imports should be permitted.
We have now run into the extra trouble that this year potatoes are short on the Continent as well, so that we shall be short of them, too. There is no gainsaying that. It may be that more imports will be forthcoming when the price reaches a certain level, but at the moment it looks as though we shall be short of potatoes between now and the time when the early crop comes in in quantity.
But the fact that there is a shortage of potatoes in Europe this year, when we wish to import, does not mean that this is not the best scheme for controlling production of this very volatile and difficult crop—
§ Mr. Julian Snow (Lichfield and Tamworth)
Is the Minister satisfied that there was no untoward delay between the receipt of the definition of the February review and the time when that definition was brought to his attention on 13th March?
§ Mr. Soames
The review goes on in February; the whole country has to be covered, and the figures have to be collated and assessed. We asked the Board to speed things up. Normally, the result of the Board's review is not available until about the end of March, but the Board speeded up the process so as to be able to report early in March. As 409 I say, the results were considered and reported on by the Board on 13th March—
§ Mr. Jeremy Thorpe (Devon, North)
Has the Minister any idea of the demand for increased acreage quota for the last few months of 1961, and how much of it was turned down by the Board?
§ Mr. Soames
No—in that particular period, I could not say. In the last few months of 1961? After the potatoes had been planted in 1961?
§ Mr. Thorpe
Application was made in 1960. The figures supplied to me by the Ministry show that at least half of the increased application was turned down.
§ Mr. Soames
That may well have been so, because the Board has always to aim at getting 700,000 acres planted. It has to have some control over the amount of basic acreage that the farmers have. It has to think of protecting those who traditionally produce potatoes. How could the Board have told, in the late months of 1960, that there would be a shortfall in either acreage or potatoes in 1962? The Board has to take the rough with the smooth, and try to get the average about right.
As I was saying, the fact that potatoes are this year short on the Continent as well does not condemn this scheme. We believe it to be the best scheme by which we can regulate the marketing of potatoes through the Potato Marketing Board.
I should just like to read to the House what was said by the Commissioner who was asked to look into the matter as a result of the objections to these Amendments. In page 29 of his Report, he says:Moreover, I consider that the proposals of the Board are a practical and efficient means of attaining the object of the 1947 Act in relation to the potato-growing industry; that they are fair to both producers and consumers, and that the cost is reasonable, and within the capacity of the industry.I would also call the attention of the House to the fact that the consumers' panel set up under the Marketing Acts considered this Scheme in great detail, and was of the opinion that it was the right scheme from the consumers' point of view as well. We try to average it out, but since we are bound to get years of surplus and years of shortage, it is inevitable that the Potato Marketing Board is bound to come in for some 410 "uneducated stick," behind which there is not a great deal of thought, knowledge or consideration of the problems involved.
In the two years during which I have had something to do with the Board I believe that it has run this scheme with great efficiency. Last year, for example, the taxpayer was saved a good deal of money by a support-buying programme which was excellently run. As I say, it is inevitable that the Board will be the Aunt Sally of the handful of producers who are against marketing boards altogether. It is also inevitable that those who set themselves up as the champions of the consumers' interest will from time to time say that the Board is making a mess of things. In fact, the Board does a good job, and we are lucky to have a man with the ability of Mr. Rennie as its chairman. The Board needs these extra powers to fortify the Scheme which, we are convinced, is the best one we can think of. However, I certainly hope that improvements will be made as time goes on.
I hope that advice will be given regarding the acreage that should be planted and that we can get a census of farm stocks more quickly. This is the right scheme and the right foundation and I hope that the Amendments will fortify it. I commend them to the House.
§ Mr. Mackie
I am sure that the right hon. Gentleman did not intend to mislead the House, but would he qualify certain figures he quoted? He said that there was a 30,000 acre excess in 1959–60. Since we are discussing the Potato Marketing Board, the figures isued by the Board show that its total basic acreage in 1958 and 1959 was 753,000 and 759,000, respectively. Adding the Minister's figure of 30,000 to the acreage not registered, that gives an acreage of 700,000 and 701,000 for 1958 and 1959. Were his figures related to individual farmers who exceeded the acreage?
§ Mr. Soames
The figures related to individual farmers exceeding the acreage. Of course, some did not plant up to their full quota. That was inevitable, but the Board is seeking to achieve an overall acreage of 700,000 and it must be in a position to impose penalties on those who go above their quota.
§ 11.29 p.m.
§ Mr. Frederick Peart (Workington)
The Minister made a careful speech in defence of the Scheme. I trust he did not think me discourteous when my attention was distracted. It was only because I had just heard the results of the by-election in which we have got a majority of 8,000 and in which the Conservatives have been beaten even by the Liberals. However, I will not dwell on that point.
§ Mr. Peart
A slight minority. I think the right hon. Gentleman should at least be generous in defeat. I pay the right hon. Gentleman the compliment of having an excellent memory, but I wish he had stuck to his brief. Had he done so his speech would have been 20 minutes shorter. I make the complaint because he so often used to complain about my hon. Friends and myself speaking for so long in Committee on the Sea Fish Bill. Without wishing to appear offensive, I suggest that he could have condensed his speech, because on broad principles there is no difference of opinion about the need for a marketing board.
The right hon. Gentleman went on to try to convince us of the real need for a marketing board and the importance of a support policy for agriculture. I can only remind him that it was a very distinguished right hon. Gentleman on his own side of the House who, when he was Prime Minister, said that the party opposite would return to the laws of supply and demand, to a free market. Therefore, it is refreshing to hear a Conservative Minister of Agriculture rejecting that nonsense and that theory and arguing for support marketing and orderly marketing.
I do not know where the hon. Member for Devon, North (Mr. Thorpe), who represents the Liberal Party, stands; no doubt, he will make a speech. I myself support the principle of a marketing board, but that does not mean that we on these benches should not criticise. I was surprised that the Minister should use the expression "uneducated stick." I thought it was rather a strange expression.
§ Mr. Peart
I thought the right hon. Gentleman said "uneducated stick." I know he meant "uninformed stick," but he should have read from his brief instead of relying on his memory. Does he include in that the reasonable criticisms which have appeared in the Observer, the Financial Times and in responsible farming papers? Whilst I defend the principle of a marketing board, I have never argued that it should be sacrosanct and that hon. Members or, indeed, farmers through their organisations should not criticise the operations of the Board. If we are to have this sort of attitude from the Minister that a Board must be sacrosanct, and that there should be no criticism, then there is a danger that we create a bureaucracy.
I am not saying that the Potato Marketing Board is a bureaucracy. I have a great respect for the chairman who has been mentioned. But that is not to say that we should not criticise its operations. Surely, the Minister is not going to say, even tonight when we are analysing the present position, that we should not make our criticisms.
I shall not go into the details of the Scheme, as the Minister has done. They are available and I am sure that all hon. Members have read them. It would be wrong and foolish to get involved in the legal minutiae of the Scheme itself. I believe that we should examine the broad principles, and I should like to make some criticisms of Government policy. The Potato Marketing Board has a certain responsibility and autonomy, but in the end it is virtually the agency of Government policy.
I want to deal with the Board. The Minister may dismiss opinion in the country, but there is concern. The producers are worried, despite the small number of people who participated in the poll and the public inquiry. One only has to read the farming Press and to meet farmers to discover that fact. One only has to read the daily Press to learn that there is concern about the potato. The Minister rightly said that this is a volatile crop. We know from our history that it has played a major part in our political life. We cannot dismiss its importance today. I have 413 here Press cuttings showing the concern of people because there is a potato shortage.
I agree with the Minister's statement that it is right that money should be provided for support buying and also that the Board should build up a fund for research and development. I here is no quarrel about that. Hon. Members on this side agree with orderly marketing, but, whether the Minister likes it or not, there is a potato crisis. There is a crisis in the sense that producers may be facing difficulties and, above all, consumers may have to pay a higher price. I detected throughout the Minister's speech very little concern for the position of the housewife and the consumer. Throughout his speech there was the emphasis on the scheme for the producer. He quoted the consumers' report on the operation of the Scheme, but he will agree that the report was issued a long time ago. We are dealing with what is happening now. There is a crisis. Farmers have reduced the number of acres devoted to this crop by 100,000. There has been a drop of nearly 15 per cent. Potatoes are becoming scarce in the shops. Prices are rising.
The Minister gave his reasons. I agree that prices for the 1959 and 1960 crops, which were low, might be a contributory factor. There is also the fact that farmers were suspicious of the new support system introduced in 1959. Press opinion, which is not favourable to the Opposition, takes the view that farmers were suspicious of the new deficiency payment system introduced in 1959. Farmers were afraid that the price system would work to their disadvantage. They thought that they would suffer because the system of a guaranteed price paid to the producer was replaced by a deficiency payment system. The Government pay the Board, and the Board takes appropriate action when it thinks fit. There was, and still is, suspicion in the minds of producers. After all, we had a recent example of the breakdown of the deficiency payment system in another field when we had a debate on the increased Estimates. There is a suspicion amongst producers that the present guarantee system will work against them.
414 I am prepared to admit that there is another factor, but it was not mentioned by the Minister. Potato growing is a very labour intensive crop. Many hon. Members opposite are connected with farming. They know that the average cost per acre to grow is about £100. The farmer is rightly often afraid to take a gamble. I can well understand him not taking up his quota and, in certain circumstances, now criticising not only the Board but also the Government. We must take these factors into consideration. I accept that the weather plays an important part. It is estimated that losses in clamps due to the frosts of last January were between 2 per cent and 5 per cent.
I expect that the Minister who replies will answer this question directly. Could this shortage have been foreseen? It is all very well to talk about the weather and the other factors which I have mentioned, but the Minister is responsible. He has officials to advise him. He is in touch with the Board.
The farmers were warned in August. I have with me a report from the Farmer & Stock-Breeder of 1st August. The heading isPotato acreage the lowest since 1939.Another heading isLarge imports may be needed this year.It goes on to say that theTotal acreage of potatoes planted this year has probably been the lowest since 1939. The Potato Board last week said that a reduction had been estimated of about 100,000 acres in plantings by registered producers this year compared with last. The present acreage was said to be 593,000 acres, leaving 150,000 acres of available quota which had not been used by growers.We knew in August last year that there was likely to be a potato crisis.
Let us examine the figures given by the Potato Marketing Board. Its Press release of 31st January, 1962, shows that the available stocks, 1½-in. riddle, in tons at 31st December were—[An HON. MEMBER: "Which year?"]—in 1957, 1,654,000. I am quoting the five years to prove my point. The tonnage available for human consumption was 1,990,000. On 31st December, 1958, available stocks were 1,514,000 tons and imports of ware potatoes 253,000 tons, making a total available for human consumption of 1,767,000. In 1959, available stocks were 2,448,000 tons, and 415 available for Human consumption, 1,639,000 tons. In 1960, available stocks were 2,622,000 tons, there were no imports and 1,918,000 tons were available for human consumption. The 31st December, 1961, figure was only 1,720,000 tons, which is less than the 1958 figure, yet the Board's figures show that the rate of consumption had increased. The 1958 rate of consumption was 195 lb. per head, similar to the 1957 figure, yet by 1961 the rate of consumption had increased to 197 lb. per head.
Surely the Board, from its own figures, must have known that inevitably there would be a potato crisis during the current period. Apart from the weather and the difficulties mentioned by the Minister, it was inevitable, in view of all the reasons I have given and of farmers being suspicious, that the acreage quota was not being taken up.
Why did not the Government act earlier? Why did they not see that the Board relaxed its quota system? I appreciate the need of the quota system, but if there was danger of a crisis, as was obvious from the figures, surely it would have been better to risk the possibility of a slight surplus than the present crisis, which will react against the housewife. It is all very well for the Minister to say that import licences have been granted, but why was not action taken earlier? Why was not the Board encouraged to approach the Board of Trade earlier? It is the view of many hon. Members, on both sides, that the quota system could have been relaxed. Indeed, even the chairman of the Board now is asking, I see from the Farmer & Stock-Breeder, that farmers now should plant more potatoes.
§ Sir James Duncan (South Angus)
Would the hon. Member explain what a quota system means in that context?
§ Mr. Peart
A quota system, as the hon. Member knows, and as the Minister has explained, is quite usual to use as a means of avoiding surplus at certain periods so that prices do not go awry. I am saying that, in view of the fact of the possibility last year of a serious shortage, I would have thought there could have been a relaxation of quotas. I accept the fact that quotas are there, 416 and I accept the fact that some farmers have certainly not taken up the quota, but I believe that if there had been some measure of relaxation this crisis would perhaps not have arisen in the way it has.
I accept that the fines of farmers have been exaggerated. I know that the Board fines farmers only for falsification of accounts, and we must not be led astray by Press campaigns in this respect. The levy payments are of a rather different nature. Nevertheless, there is a feeling in the farming world that there is a tight, rigid discipline of which, in a period of crisis like this, there could be some measure of relaxation. I would have hoped that even under the sections of the Scheme discussed by the Minister there could have been indications how the powers could be used to minimise their effects on individual producers. I would have hoped that the Scheme itself would have enabled some measure of relaxation.
However, there is concern. After all, every hon. Member has had letters. We cannot dismiss other people who are affected. The fish friers, for instance. It is easy to smile about fish and chips, but it is a major industry. Every hon. Member here has had a circular from the National Federation of Fish Friers about the potato crisis, the circular dated 2nd April, 1962. I am not going to read it out. I have another one supplied to me by my hon. Friend the Member for Bradford, East (Mr. McLeavy) from the Bradford and District Fish Friers' Association complaining that there is a crisis of shortage which may cause many honourable business men who supply a basic meal and a basic commodity to go out of business or at least be placed in serious difficulties. It is not just a matter for the farmer, or indeed for the housewife. It is also an important matter for those who are concerned with the trade itself. There is, too, a report now that even in our schools potatoes are to be rationed. I read today in the morning papers that arrangements are being made in Manchester by the Education Committee for rationing potatoes.
Well I remember that hon. Members opposite are sometimes rather indifferent about this, and how they used to chide 417 my right hon. Friends on this side of the House about potato rationing. They chided us about shortages. Let me read what advice a Tory Minister gave to the housewives on a previous occasion when there was a potato shortage under a Tory Government. The Parliamentary Secretary to the Ministry of Health, addressing the Women's Council of the Scottish Unionist Association in Edinburgh once—I admit it was during a previous potato crisis when she said this—said:Instead of grumbling about potato prices women should be thinking in terms of root vegetables and rice.
§ Mr. George Jeger (Goole)
Would my hon. Friend recall the fate of the lady who advised the masses to eat cake?
§ Mr. Peart
That advice has been given, but the Minister should take this matter seriously. He is Minister of Agriculture and Minister of Food. He should be concerned about what is happening from the point of view of the consumer. It is all very well to expound a Scheme which will give a measure of stability to the vast majority of producers. The right hon. Gentleman is Minister of Food and he must be responsible for the supply of food at reasonable prices in the shops.
My hon. Friends will demonstrate that the price of this basic foodstuff, which is so important to our national diet, is increasing in the shops. There is danger of a serious shortage and that many people will be unable to buy sufficient quantities. This is reality. It is not an exaggeration. The Parliamentary Secretary to the Ministry of Health gave what I thought was foolish advice on a previous occasion. I hope that this time she will exercise discretion.
I want to know what the Minister is doing about this situation. Has he had representations from the trade? What action is he taking? What is the position about imports? I have had a telegram 418 from the United States handed to me which reads:Reports have reached America that a critical potato shortage exists in Great Britain. After inquiry I find American potatoes at this time are not permitted entry into England.
§ Mr. Peart
Yes, but we once had potatoes from America. There may be good reasons for this. I ask the Minister what is the position about imports. I am informed that we could obtain imports from Southern Ireland. Are there supplies there? What are the Government doing about it? It is all very well for hon. Members to shout about American farm produce. There may be good reasons for excluding it.
§ Mr. Buck rose—
§ Mr. Peart
No, I will not give way. Time is going and other hon. Members want to speak.
Whilst we on this side of the House accept the Scheme, we believe in orderly marketing. We do not believe in the operation of the law of supply and demand. We accept that there must be orderly marketing, but we reserve the right of hon. Members to criticise if certain conditions operate against the consumer or the producer. I accept the principle of having marketing boards, but to make them sacrosanct as the Minister has done today could lead in the end to a bureaucratic organisation that could harm orderly marketing and the interests of producers and consumers. If we are to err in agricultural policy, I would rather we erred on the side of surplus. I know there are difficulties, which the right hon. Gentleman mentioned, in judging whether the Government should go in with a support policy at the right time and either have a surplus or rely on imports. But I would rather take the risk on the side of surplus.
419 The Government still think too much in terms of restriction in agriculture. We have had this argument before, but it is fundamental. I am glad to see that the N.F.U. has accepted the case that we should think in terms of using our surpluses through some sort of international arrangement. As the right hon. Gentleman knows, the International Federation of Agricultural Producers met in New Delhi in 1959, and the F.A.O. met last year. Following those meetings, we are pledged to take part in the creation of an international fund and organisation which will use surpluses produced by countries like ours to help those countries which need food.
Out of this debate, I would like to see not merely an argument as to whether we should pursue a policy of restriction for potatoes but the message that we should encourage more production, seeing to it that international arrangements are made for the disposal of surpluses where food is badly needed. I am sorry that the Government have not yet caught up with farming opinion on this issue. I am informed that they are not even represented on the F.A.O. inter-Governmental Committee. I hope that that will be remedied.
We on this side of the House accept, in principle, the marketing scheme, but we believe that there could, perhaps, be a measure of relaxation. The Board could have acted quicker. The Minister himself should have appreciated earlier that there was going to be a potato shortage. But as the shortage is here, he must see that the housewives in particular are protected.
§ 11.57 p.m.
§ Sir Harry Legge-Bourke (Isle of Ely)
I hope the House will forgive me if I tend to make my remarks seem of a constituency character. The House already knows that the Fenland is one of the most productive areas for potatoes and that we come very high on the league table of potato production. I think that we are third, with Lindsey and Holland, in Lincolnshire, at the top, by a small margin.
There are 36,000 acres grown in my constituency, but I hope it will not be thought that I am interested only in producers. Although there is a very large acreage in my 420 constituency, there are only 11,257 regular workers employed in agriculture out of an electorate of 61,000. Therefore, I am very conscious that we have to approach this problem not only from the point of view of the producer but also from that of the consumer. If it is of interest to the hon. Member for Workington (Mr. Peart), the last packet of fish and chips I ate was bought in Wisbech, in my constituency—and very good it was, too.
We have to make a clear distinction which the hon. Gentleman totally failed to make. He showed that he does not realise the importance of making it when he said that the Board did not act soon enough. Let us be clear about the Board's duties. Those duties are not to arrange the importation of potatoes when there are not enough home-grown. That is the Government's job. The Board is not to be blamed if imports are not bought in time. It is true the Government were criticised some years ago, when Lord Amory was Minister, for not consulting the Board before they decided to allow imports to come in. Certainly I think that any Government would be most unwise not to consult the Board. But let us be clear about the Board's responsibilities. Imports are the responsibility of the Government, not the Board.
§ Sir H. Legge-Bourke
But the fact remains that the hon. Member has just said that the Board did not act soon enough. The hon. Gentleman said that the Board should have done something about the shortage by way of imports; but that is not the job of the Board.
§ Sir L. Plummer
I think it will be agreed that it is the job of the Board to decide on any alteration to the riddle. Did the Board, in fact, give instructions for the riddle to be altered so as to increase the supply of ware potatoes on the market?
§ Sir H. Legge-Bourke
I will come to the matter of the riddle in a moment. I realise that there was a division of opinion in the Board itself about what was the risk of a shortage, and my right hon. Friend, in what was, if I may say so, a brilliant speech, made clear that 421 Mr. Rennie had said all along that it would be touch-and-go. There was obviously a division of opinion, and I happen to know that some members of the Board were certain that this shortage would arise. However, as in any team, the majority voice had to be taken and the Board had a calculated risk to take. In any advice which it gave to the Minister there was obviously a calculated risk, and my right hon. Friend accepted the responsibility for that too.
Surely anybody who knows anything about this matter can see the enormous difficulty of forecasting. To illustrate that, let me give a few constituency figures. To quote my right hon. Friend's estimate that it costs, on average, £100 to grow one acre of potatoes, so far as my constituency is concerned it would cost £3,600,000 to cultivate 36,000 acres. The average yield there is 8.6 tons an acre, so that there is a total yield of 309,000 tons. If all that tonnage were to receive the guaranteed price of 265s. a ton, the return would be £4,102,200, which would represent a profit, to all intents and purposes, of £502,200. But, suppose a quarter of the crop—and here I come to the question of the riddle—has to be riddled off as unsuitable for human use, there is a loss of £524,350.
That, I think, shows the narrowness of the margin on which growers work and how terribly important it is to have a ton an acre above or below the average yield over the years and what an extraordinary amount of harm can be done if the result is on the wrong side, especially for the small growers. After all, they are not all big growers in my area. There are 4,200 holdings in the Isle of Ely, and of those, nearly 4,000 are of fewer than a 100 acres. There are a great many small men, and it hurts them very much if the yield is below average. What about the rest of my constituents? What about the consumers? I would say that there is nothing more damaging in the long term—and sometimes in the short term as well—than to have a lack of confidence among growers of this staple item of our diet.
It is very important that we have stability, and, by and large over the years, the Board have done a remarkably good job in bringing about that stability. But when we changed over from the individual to the collective guarantee, about which the hon. Member 422 for Workington spoke, there were many growers who were worried. I do not dispute that for a moment. Let us consider, however, what it would mean if we went back to the old individual guarantee. There was a year when we grew 8 million tons of potatoes under the old system. When we moved over to this new system of a collective guarantee for the industry the figure declared as being necessary for human consumption per year was 3,800,000. The Minister has upped that figure to 4¼ million. I think that is good if it means that the publicity provided by the Potato Marketing Board and others has led to an increased consumption. Certainly there has been a great deal of improvement in the presentation and marketing of potatoes by pre-packaging and so on, although there is a limit to that.
By and large, we can say that if we went back to the old system of an individual guarantee and did not impose a limit on the acreage of each grower, we should run the risk of having an open-ended cheque which the Treasury would have to pay at the end of the year and the amount of the cheque would be vast. Today, when there is a greater variety in the diet, I do not believe that the taxpayers would relish having to pay such a sum; nor would it be to the benefit of the producers, the growers or the consumers.
I think it right that we should attempt to reach an equation between what is required for human consumption and what we have to produce. I believe that what the Board is proposing is sensible. I hope that the hon. Member for Workington was right in his supposition that most hon. Members had read the Report. It is certainly worth reading if anyone wishes to make sense about potato marketing. Evidence was produced at the inquiry to show that £25 an acre was not enough to deter men from growing more than their quota. Other witnesses said that it was a prohibitively punishing figure. Perhaps that is the nearest that we can get to a fair figure, and Mr. Rennie and the Board think that it is.
Whatever figure is decided on, it is important that the industry should build up a cushion by means of which the Board and the industry can ensure that there is some comfort in the years of surpluses. If we are not careful we shall have the 423 Board running out of funds and having to come to the Government, and in turn the Government would have to come to Parliament to ask for another Order and there would be a big bill. It would be much better if the industry were able to do things for itself. I believe that a proportion of two-thirds from the Government and one-third from the industry is a good bargain from the point of view of the producer and the consumer. There is no doubt that had the Government not decided to adopt the same proportions in 1959–60, the amount that we should have had to pay for deficiency payments would have been far greater. The Minister mentioned a figure of £15 million compared with the actual figure of £4 million, and that is probably about right, although I have heard mention of a figure higher than £15 million. We shall never get the figure exact, but that is probably as near as we shall ever get to it.
There is much in the Report to which I should like to refer, but I shall not do so at this late hour. Long-term stability for the industry is vital and I am glad to see that there is a reference in the Scheme to a period of five years. That should give some stability to the industry. I am not blaming my right hon. Friend, but I think that sooner or later we must face something to which I referred in a debate on this subject on 29th June, 1959. I apologise for quoting myself. I said.… as the Board develops and becomes established … the Government may well find that it would be far better to make the Board responsible for imports too.The crux of Order-working is sound importation policy combined with a readiness on the part of the Government to step in to ensure that the Board is not broken by lack of funds in a surplus year."—[OFFICIAL REPORT, 29th June, 1959; Vol. 608, c. 186–7.]I know perfectly well that hon. Members do not like the idea of the Board having a say on imports. There is a feeling that consumers would not have their interests looked after.
§ Mr. Lawson
The hon. Member is telling us that he knows very well that hon. Members—looking at this side of the House—do not want the Board to have any say on imports. Will he tell us which hon. Members he has in mind?
§ Sir H. Legge-Bourke
I am sorry, but it happens that I am standing in this position facing the other side of the House, which is customary. I do not usually talk out of the back of my head. If I may say so, I am addressing you, Mr. Deputy Speaker, and the House as well. I know very well why hon. Members on both sides of the House—if that helps at all—do not like the idea of a body such as the Potato Marketing Board having powers over imports. I know that there is a belief that consumers will suffer if that happens, but it is too often forgotten that members of the Board also happen to be consumers. Therefore, it is in their interest to see that the consumers as a body of people get properly looked after.
This is where we cannot have the best of both worlds. If we say, as we have said so far, that the Board should not have powers over imports, we must not blame the Board if we find that the imports have not come in, or that too many have come in. That is a matter for the Government, and the Government are reserving rights over it—[HON. MEMBERS: "Hear, hear."] We are all agreed on that. Are the Government blameworthy at this moment—[HON. MEMBERS: "Yes."]—for not having allowed imports in sooner? I have examined this with the utmost care. I do not think that it does the growing industry the slightest good for prices to reach the height they have—£35 a ton. I accept that straight away, but, on the advice available to them, I am not sure that the Government ought to be blamed as heavily as they have been by uninformed opinion outside.
Of course, the Government have not been exactly accurate in assessing what the need would be, but if I have done anything tonight I hope that I have shown that in my constituency it is impossible to forecast exactly what will be the yield and exactly what the demand will be. It may be a sad thing, but the fact remains that one of the factors in the present situation is that the Board itself under-estimated the success of its own publicity in encouraging people to eat more potatoes. We are working something out with the new set-up of the Board. I think the hon. Member for Workington overlooked the fact that 425 we axe amending the powers of the Board by this Order. We are not saying that the Board as conceived two years ago is sacrosanct, but we are trying to improve it. It is right that we should do that, and probably we shall have to try to improve it again later.
I want to make one or two requests to the Minister. I have a feeling that he may be under pressure shortly to delay the operation of the higher tariff on new potatoes coming into the country, which is due to come into operation on 15th May. On 15th May the duty should go up from £1 to £9 6s. 8d. a ton. That tariff is designed to protect the English grower of early potatoes. I hope that the Minister will not surrender to any pressure, because of the present situation, which tries to make him delay the imposition of that tariff. If he does, he will undermine the industry's confidence more quickly than by any other method which he could choose. I hope that he will stick to the date.
Secondly, I hope that he will seek to persuade Governments to allow those who have entered into commitments to supply potatoes to this country to honour their commitments. The Dutch Government have decided to put a quota of 15,000 tons on exports from Holland. That is resulting in a considerable breach of contract on those who had undertaken to send potatoes to this country. As this is the result of Government action in Holland, our Government are entitled to try to persuade the Dutch Government to allow Dutchmen to honour their undertakings.
§ Sir H. Legge-Bourke
If there is a break clause I am not aware of it. If I had thought that there was such a clause, I should not have made those remarks.
The same thing is happening to some extent in Cyprus, and the Egyptians are already asking for £6 a ton more for 426 potatoes which have been ordered and against which they have a credit. I can think of no greater encouragement to Egyptians or anyone else to put up the price of their potatoes than some of the idiotic charges which have been made against the Board and the Government by ill-informed opinion in this country and in the newspapers. We ought not to brandish about the world the fact that we are short of potatoes. It is stupid to do so if we want to get potatoes at a fair price. But the damage has been done.
There is one other piece of damage which I hope the Minister will not allow to be done. I hope that he will not allow the importation of any potatoes from North America along the lines suggested by the hon. Member for Workington. If he does, he will introduce here one of the most dreaded of all potato diseases—ring rot. We do not want it in this country. If we have it, we shall be a great deal more short of potatoes than we are today. So far we have managed to suppress it. The hon. Member may have it in his party, but I hope that he will not bring it into the Fens.
If we are given assurances on these matters it will greatly relieve the industry. I apologise for having delayed the House for so long, but my hon. Friends on my right have been particularly helpful tonight.
§ 12.18 a.m.
§ Mr. Desmond Donnelly (Pembroke)
I hope that the hon. Member for the Isle of Ely (Sir H. Legge-Bourke) will not consider me discourteous if I do not debate with him tonight. I warmly congratulate him on his appearance below the Gangway. I remember him speaking from above the Gangway, and although I do not entirely agree with all that he said tonight, for which I hope he will forgive me, I agree with him on some other great affairs of State which have led him to move to below the Gangway, and at least I join with him on his view on who should not be guiding our affairs of state.
The Minister first justified the extra acreage payment, which has been raised from £1 to £3. His justification was that the Board needed larger funds to meet any deficiency payment contingency. Secondly, he sought to justify 427 the increase, in the penalty section, of the powers which the Board possesses from £10 to £25 an acre. I was less able to follow him in this case because of some arithmetical news which reached us from the north of England, and I apologise for my discourtesy if I was not following him at that moment.
Thirdly, the right hon. Gentleman referred to the situation that has developed this year. He said that the Board had cut the acreage allocation by some 10 per cent. on the previous year, and that some unspecified circumstances—perhaps the weather, the Lord, or, perhaps, the intervention of a Liberal candidate—had led to a further reduction. I do not know what the other unspecified circumstances were, except the weather, which he did mention.
In brief outline, that is what the Minister had to say, but this House cannot consider his case outside the context of the present potato shortage. We cannot consider the demand for increased powers for the Potato Marketing Board without consideration of the present acute potato shortage. What is the situation as it has developed? On the admission of the Chairman of the Board himself, we are faced with an acute shortage. He said a few days ago that we had about three weeks' supply in hand, while there are seven or eight weeks to go before we get the new supplies of the early potatoes. In other words, there is a gap of four or five weeks, and a week has gone by.
The right hon. Gentleman—although he did not refer to it in detail, it was implicit in his remarks—made it clear that a certain number of people had over-planted last year, and that without that over-planting the present shortage would be even more acute. For the privilege of over-planting—and, indeed, for saving us from even more acute shortage now—those people have had to pay about £200,000 to the Board. It is in those circumstances that the Government are asking for increased powers for the Board—at a time when the country is having to pay very large sums for its potatoes. Before we are out of the wood we shall have had to pay between £25 million and £30 million more for our potato supplies than we needed to have done had we had 428 adequate arrangements in the last year. And if the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke) would like to have further details, I shall be happy to go into the arithmetic—
§ Mr. Donnelly
Exactly. I am delighted to find the noble Lord in entire agreement with me for once. There is not only this enormous subsidy, as he calls it, I but this enormous fine on some who have overplanted.
This £25 million or £30 million which the nation is now having to pay as a result of the excess prices resulting from the shortage falls, broadly, on the community as a whole, but on which sections does that burden fall particularly? We all know that potatoes are a staple diet of the children, so the first to suffer are the parents of young children. The second group of people who are made to suffer are those who rely on potatoes to make up the carbohydrates they need in their diet—the heavy manual workers. That is, broadly, the working class. Thirdly, there are the old people, who also rely on potatoes which in the past have been a cheap food by which they could make up their diet.
As a result of the Government's policy, this particular burden has fallen upon the very sections of the community that are least able to bear it. The indictment of the Government tonight follows on the Minister's own admission that last year was a record year for potato yield, and that it has taken the organising genius of the Tory Party to create a shortage, and a burden of about £30 million on those least able to bear it—[Interruption.] I am glad to hear right hon Gentlemen opposite cheering. It has nothing to do with the weather. It is Governmental incompetence. It is not only Governmental incompetence. Who else is responsible? Well, for a start, we could indict the Potato Marketing Board, but it is no part of my case, or of the case of my hon. Friend the Member for Workington (Mr. Peart) who, in an excellent speech, make it clear that we hold the Minister responsible.
429 The Board, it is true, has figured as something of the villain, and the unfortunate Mr. Rennie has appeared in the papers recently as a kind of poor man's Selwyn Lloyd. I would be the last to say more; sufficient condemnation for the poor Chairman of the Potato Marketing Board who evokes the sympathy of my hon. Friends. I come, instead, to the Minister who was, undoubtedly, directly responsible for the cut in the acreage allocation last year. He was indeed responsible since, on his own admission tonight, he was warned by Mr. Rennie. He then failed to take the necessary steps for the importation of potatoes. Thus, the Minister is responsible to this House for the true state of the muddle today.
The other person involved, of course, is the real Selwyn Lloyd. [HON. MEMBERS: "Order."] Of course I am in order. I speak, of course, of the Chancellor of the Exchequer. At the back of the whole of the Governmental policy is the hand of the Treasury seeking to keep down the deficiency payments. This is all part of the Government's general policy. And where does it end? It ends with a further (burden on the working classes, for they are the people who are suffering the most.
The answer is planning. We need real planning and not muddle. In the light of present circumstances, what should be done? The first step towards real planning is to have greater flexibility in the allocation of acreage.
A constituent of mine, Mr. Charles Llewellin of Little Haven—one of our large Pembrokeshire early potato growers—has just been fined, which is my way of describing what happened, £1,300 for growing too many potatoes. That is the sort of planning the Minister supports.
§ Mr. Anthony Fell (Yarmouth)
Would the hon. Gentleman not agree that the Potato Marketing Board is comprised of people who are trying to do their job as best they can? The fact is that the whole of the hon. Gentleman's speech so far as been a glaring indictment of planning.
The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. W. M. F. Vane)
Regarding the hon. Gentleman's constituent who, he says, was fined £1,300, would he make it clear whether this was an ordinary excess acreage payment or a fine, which is more appropriate to cheating, and give the years involved and say whether they were surplus or deficit years?
§ Mr. Donnelly
Certainly. Mr. Llewellin registered with the Board for the production of potatoes in 1956. He was allocated a basic acreage of 12 acres, although he wished to go in for intensive potato growing. In 1957 79 acres were planted, but there was no excess acreage contribution because 1957 was not a quota year. In 1958 he applied to the Board for an increase in his basic acreage and was granted 70 acres. That year he grew 114 acres, but that year there was also no quota. In 1959 he again applied, and his basic acreage was increased to 90, at which figure it remained for 1960 and 1961.
But in these three years Mr. Llewellin incurred acreage contributions, as the hon. Gentleman would call them, although I would prefer to call it, in plain English, a fine. He incurred these excess acreage contributions—a nice Civil Service piece of jargon—for having planted 143, 130 and 118 acres, respectively. The true indictment of the Board is that this year Mr. Llewellin applied for an increase in his basic acreage and has ben granted 146 acres. Nothing has changed except the Board's attitude. Neither the land nor the circumstances have been changed. If Mr. Llewellin's application is proper now, it was right two years ago. The least that the Government and the Potato Marketing Board could do, if they had a sense of self-respect, would be to cancel that fine here and now. More of my constituents have suffered. In the past year they have suffered to the tune of £5,000 and the whole country has suffered to the tune of £200,000. They ought to have their money back.
Returning to the need for greater flexibility, which is the first answer to this problem, I should have thought that it would be essential for the Potato Marketing Board to be much more flexible in dealing with such applications as 431 this. If people such as my constituent make applications and they are finally granted, surely this is a clear admission that the Board was wrong in the first place, and it ought to have the magnanimity to accept the fact and to repay the fine.
Dealing with the £3 contribution instead of the £1 contribution, I accept the need for a Potato Marketing Board, and of course I accept the need for adequate arrangements for control.
§ Mr. Donnelly
Because I happen to be a Socialist. I believe in planning—but good planning. Here I come to the way in which the good planning can be implemented. At the moment anybody who is granted an acreage allocation is not compelled to take it up. Therefore, the Board has no clear idea of what is likely to be taken up. In the present circumstances, as the Minister said, the acreage was not taken up, to the confusion and embarrassment of the Board. I should have thought that the simpler arrangement would be for a person to pay his contribution at the time he is granted an allocation. If he is granted 100 acres he should pay £300. That is the best way of ensuring that the farmer plants up to the acreage that he has been granted. Of course, there are margins within which the farmer will find it difficult to operate. If the seed is small, he may find himself planting slightly more. There must be some margin for flexibility in this arrangement.
But it would be far better to have a clear idea of what is happening from the point of view of the Board. There should also be some arrangement whereby these acreage allocations can be transferable if they are not taken up, as in the case of the Hop Marketing Board. [Interruption.] I appreciate that the noble Lord the Member for Dorset, South feels strongly about these matters, but he must be careful to see that he is not abolished from this House in view of the news that we have heard tonight.
With regard to the £25 an acre penalty, or fine, I warn the Government that this is going to be a severe inhibition in circumstances such as those which have prevailed in the past year. Nobody will 432 risk an excess payment. Everybody will put in for slightly more than they are going to plant because they will want that safety margin. If this kind of penalty had existed a year ago, the situation would have been far worse now than it is. Nothing that the right hon. Gentleman or the hon. Member for the Isle of Ely have said gives any hope for believing that the present situation will be any (better this time next year. Indeed, it could easily be worse. This is the real indictment of the Government, and at the root is a fallacy in the Government's thinking about our agricultural production.
Sooner or later we must face the fact that this country is going to produce a surplus in its agricultural production. Sooner or later we must realise that we may be exporters of food. Sooner or later we must address ourselves to the mechanics of the export of food and the practicalities of the conservation of food. In these subjects the Government are a long way behind in their thinking. Nothing the right hon. Gentleman said today was other than a condemnation of the Government for incompetence. I regard the Government's decision to come forward with this Order at the moment as an insult to the public and an impertinence to the House.
§ 12.35 a.m.
§ Mr. Denys Bullard (King's Lynn)
In listening to this debate on potatoes I feel a sense of warmth, or promotion, or almost elevation, because I have been connected with this humble vegetable all my life. I never thought that I should sit in the House of Commons late at night and listen to a very learned dissertation on how to regulate the production and supply of potatoes. I was very amused by what hon. Members opposite said about about the possibility of planning the production and supply. It is one thing to be certain about what has been planted, but one is often greatly surprised at what comes out of the land. When the crop is put into the clamp and left until this time of the year, one can also have some great surprises at what comes out compared with what went in. There are snags all along the line.
Whilst I was listening to the dissertation on planning I thought of my father, who was in the potato trade all his life. 433 He has been dead for several years now. As we riddled the potatoes out of the heap the men and myself had little bets about how many would be left in the untouched portion of the heap. There were various estimates as to how it would turn out. My father would never participate in any of this gambling. He merely said that all that he knew was that there would not be too many.
I want to ask my right hon. Friend whether he is quite sure on the question of exempting early potatoes from this payment. I regard the potato crop as indivisible. Earlies and lates are all potatoes to me. I find it difficult to think that one can separate earlies and lates. If a large acreage of earlies is grown and they stay around the country towards the end of the season, they have a great effect on the late potato crop and its marketing. The same can apply at the other end of the season. I hope that the Board will not draw a distinction when levying this payment between those lifted early and those lifted late.
The Board has chosen a rather unfortunate time to bring these Amendments forward. However, the present shortage is in no way the result of the Board's operation. Last year was an extremely difficult year for getting the crop in. Quite apart from the physical difficulties, I can inform the House from practical experience that many growers after the wet season of the previous year and the difficulty of getting the potatoes out of the ground had had quite enough of the crop. They did not hurry to put in a very large acreage last year, because they had such a struggle with the previous year's crop. That has had a big effect on the present situation.
I should like to declare an interest, because as a grower and seller of potatoes I am glad to say that I still have a few left. Although I think that the price is high to the consumer, considering the element of speculation involved in keeping the crop round to this time I do not know that 4½d. per lb. wholesale is an enormous price for the small proportion which growers have left. They should not be accused of undue speculation concerning the present prices.
In the question of planning and regulating the crop, we have a decision to take as to whether we want to go in 434 for absolute freedom to grow what any grower likes or whether to try to have some kind of regulation and orderly marketing. The hon. Member for Workington (Mr. Peart) said that the law of supply and demand no longer operated. I assure him that it does. It operates forcibly, and I do not know that that is very undesirable. Once we begin to depart, however, from the free operation of the law of supply and demand, we have to have acreage control and riddle control and we are bound to have discipline and penalties such as the Board has found it necessary to impose.
I prefer a degree of organisation rather than the old pure speculation. I am sure that with the cost of growing the crop as it is today, it would be quite impossible to carry on the potato industry without the element of control over acreage and over riddles and the support buying which the Board is trying to operate.
§ Mr. Bullard
My noble Friend asks "Why?" I have sold potatoes for £3 a ton, and they have gone at the same sort of time for up to £7 or £8 a ton, which we thought was a big price. Our costs of production then, with the costs of labour and other things as they were in those days, were very small. Today, however, with costs running at over £100 an acre, it is too risky a job to be left entirely as a speculation. Farmers should not be called upon to indulge in pure speculation in growing a crop of the importance which the potato assumes.
The Scheme should be regarded as a price insurance scheme. That is the object of this exercise, I understand from my right hon. Friend the Minister. The growers are being asked to pay an increased regular contribution so that, with Government assistance, the Board may be able to build up a fund with which to buy surpluses and to go in for support buying. That seems to me to be an eminently reasonable idea. Therefore, I hope that we shall give the Minister support in the Scheme tonight.
One further thing that I would say concerns future supplies. I have heard it said that because seed potatoes are scarce and dear, on that account the acreage of potatoes planted in the coming year will be less. In other words, 435 there may be a risk of shortage not only now, but in the coming year, as a result of seed supplies being scarce and dear. I do not believe that it operates in that way.
My experience of the potato growing business, going back several years, is quite to the contrary. When seed is scarce and dear, growers will plant all they can. They will get hold of it somehow. They will plant once-grown seed in the south of England when they cannot obtain Scotch. They will plant their acreage because when seed is dear there seem to be a kind of incentive which gives the job a worthwhile look. It works in quite the opposite direction from what one might expect.
As to the immediate future of supplies, I am not so sure that the position is quite as black as made out. Money has a wonderful power for finding supplies somewhere, and I shall not be at all surprised, now that potatoes have got to the price they have, if supplies arrive from places where they were not expected to come from at all. I do not mean altogether abroad. It will be surprising where they can be dug up here. Already very big quantities are being landed in my own constituency town of King's Lynn and at Great Yarmouth. [Interruption.] Certainly, potatoes are being landed at Great Yarmouth. I commend my hon. Friend to read the local Press, where he will see good accounts of that. I do not think that the immediate supply position is quite as desperate as perhaps some people are led to believe.
I certainly hope that, in the interests of the future of the industry, this price insurance scheme will get the approval of the House tonight.
§ 12.46 a.m.
§ Mr. John Mackie (Enfield, East)
Like the hon. Member for King's Lynn (Mr. Bullard), I, too, am a potato grower, and I know the difficulties there are in planing a crop. I thought he was unduly derisive about the Marketing Board's efforts, and the Minister's efforts, for that matter, in working out a crop of round about the size to satisfy the consumers. The hon. Member spoke about his still putting potatoes in a clamp—an old-fashioned method of storing. I think his methods of handling potatoes are a bit out of date.
§ Mr. Bullard
Quite apart from the clamp—and I am not so sure about its being old-fashioned—potatoes can be mighty comfortable in some nice straw under a bit of earth. I think that even with his modern stores the hon. Member may be disappointed at what he may find at the back end.
§ Mr. Mackie
Obviously I hit the hon. Member on the raw by what I said. But his ideas of profits are quite modern; 4½d. a lb. is exactly £42 a ton. We heard the Minister say costs are £100 an acre. I feel sure that the hon. Member, good farmer as he is, can earn £327 an acre, which, less cost, means a profit for him of £257 an acre.
§ Mr. Mackie
I do not know. I am just taking it that the potatoes in the clamp covered with a nice bit of straw—I am sorry I cannot imitate the hon. Member's Norfolk accent—will keep very well and can be put on the market at the figure which has been mentioned.
However, I do not want to be led astray by interruptions. The argument tonight is really on what the Marketing Board is doing. The Board is carrying out the Act under which it was formed. That is the only thing it can do. It does its job. The only real criticism I think we can make of the Board is on the question of why it did not reduce the size of the riddle earlier. When the Chairman said he had warned the Minister that he thought there would be a shortfall this year, he still kept the riddle at a high figure. But for that potatoes of perfectly reasonable quality could have been on the market earlier.
There is no doubt about it that to clear a surplus of potatoes is a much more difficult job than clearing a surplus of eggs or milk. Very seldom does the surplus price of eggs or milk drop much below half the normal price, but with potatoes it is different, and taking the figure of even the guaranteed prices of £13 5s. a torn the surplus price can go down to 30s. to £2 a ton, giving the Board a fantastically difficult job, of course.
There is no doubt that the problem is how to get this fairly regular acreage of 700,000. It is a perfectly sound thing to try and plan. I make no apology for 437 using the word, though it causes great derision on the other side of the House. It is sound for the Board to try to plan to get 700,000 acres, year in and year out, and potatoes carry forward considerably further than other farm produce. What we have to ask ourselves—and I go back to the Board's figures—is why this year we had 104,000 acres less than the quota which the Board was prepared to allow. Why did farmers plant that number of acres less? This is the reason for the shortfall.
The Minister and the hon. Member for the Isle of Ely (Sir H. Legge-Bourke) and others have said that it was because of the weather. It may be that the weather was responsible for a few thousand acres less, but certainly not for 104,000 acres or anything like that figure. I have grown potatoes for a long time now. It is quite a reflection on farmers' planning to blame the weather. There can be frost as late as March and seed potatoes would not be sold on the assumption that we should not have any frost because there was a wet back-end. It is wrong to suggest that farmers did not plant the expected quantity of potatoes because of the wet back-end.
There is no doubt that the shortage of acreage this year was caused by lack of confidence in the guarantee system. I have spoken to farmers in many parts of the country. I know of one young farmer in Aberdeenshire who has gone out of potato growing this year because over the last 5 years he kept careful figures and found that potatoes did not pay. Potatoes are not grown only in places where there is a short haul to the markets. They are grown throughout the country and in places where the cost of carriage is very high. Ware potatoes have been selling up to the middle of March in Scotland, and for several years I have not obtained anywhere near the guaranteed price. Many farmers have had the same experience.
A great deal of land in this country is unsuitable for growing potatoes, and we cannot expect all the potatoes to be concentrated in the best growing areas. The hon. Member for the Isle of Ely spoke about disease. We all know about the ravages of eel-worm. If we put ourselves into the position where the subsidy attracts potato growing only to 438 certain areas we shall run into an eel-worm problem which will produce an even far worse shortage than exists at present.
The question is how we are to secure this steady acreage throughout the country and a better system of guaranteed prices. The present guaranteed prices obviously do not secure a steady acreage. I doubt whether the price which the housewife pays has fallen below 3d. a lb., which is £28 2s. 6d. a ton. During the period when the price was 3d. a lb. the growers were accepting £9 to £10 a ton. I have discussed this matter not only with shopkeepers and greengrocers but with housewives. I have found that they have never grumbled at 4d., which is £37 10s. retail and which will give the producer £14 to £18 a ton dependent on the quality and kind of potato and the time of year. Now they are paying 8d. and 9d. a lb., and that is not for foreign imported earlies but for King Edward's and whites, making about £85 a ton retail.
The Potato Marketing Board must be given powers to market all its potatoes at fixed prices according to grade and time of year. I have discussed this matter with members of the Board. They feel that there are difficulties because of the different qualities and areas of production. I am not suggesting that this is an easy problem to solve, but I believe that the only way is to give decent guarantees both to the farmer and to the housewife, assuring her that prices will not rise to these fantastic figures nor will fall below perhaps 4d. a lb.—I am sure housewives would not grudge that. We must give the Board the power of levying to get rid of surpluses, because, with the figure of 700,000 acres, we shall have periodic surpluses.
The Government should think of these things. We all admired the hon. Member for the Isle of Ely for suggesting that the Board should have power to control import, but, if official expressions were anything to go by, he was not receiving much support from his Front Bench. If the Board has power to market all potatoes to wholesalers, there is no doubt that these 439 terrible fluctuations in prices will disappear. The Government should give power to the Board and not be guilty of gambling with this staple food, as they are doing now. We see the acreage at 700,000 one year and less than 600,000 the next.
It is a pity that these Amendments are not worded differently. It is not the Board which is to blame, but the Government. If the Amendments had been worded differently, I think we should have voted against them.
§ 12.57 a.m.
§ Mr. J. A. Stodart (Edinburgh, West)
I am doubtful if a really good case exists for the Board to increase the penalty, fine or levy from £10 per acre to £25. In the last two years there has been a tendency for the acreage to fall, and there has also been a tendency for potatoes to be marketed pre-packed. Two years ago, I believe, about one quarter of the total of the ware crop was pre-packed. Already it is up to one third. Obviously, the housewife is going to demand a higher and higher standard and the number of pre-packs will increase.
That obviously means that there will be a problem in getting rid of rejects which do not, perhaps, look nice, although they may not be particularly badly damaged. The net outturn from each acre will be much less than it has been for marketing for wares. It seems logical, therefore, that there should be a need for more acres in order to supply the higher quality demanded by the market. That could be offset by more careful harvesting and riddling, checking the damage done at the moment. But I do not believe that even the most careful handling will be able to offset the drop in the net outturn caused by the demand for higher standards.
I speak solely of the production stage in saying that I object to this very drastic levy because it tends to interfere with the smooth system of crop rotation and husbandry. It is almost impossible for one's acreage to coincide exactly with one's quota. I have a quota of 60 acres and my potato product varies through the normal rotation of crops art between 55 and 67 acres. I should be very much torn at the thought of paying £25 on 440 7 acres which would seem to be necessary in the interests of good husbandry. I might wear—if one may put it that way—7 acres at £10 an acre, but I shall now have to plant some other crop in order to fill up the corner of a field. This surely makes for untidy farming. I notice that section 14 of the Scheme does allow for an increased allotment on grounds, among others, of good husbandry, but the need to have a little latitude for an extra two or three acres has never been accepted as a ground of good husbandry in order to relieve one of the penalty levy.
There have been references tonight to a fall in acreages. The Minister gave his reason as the weather; the hon. Member for Enfield, East (Mr. Mackie) said that potatoes did not pay. I think that there is another reason. Every year, in November, at least for the last three years, there has been a debate in this House initiated by hon. Members opposite on the subject of schoolchildren harvesting potatoes in Scotland. Great pressure has been put on us by hon. Members opposite to have that source of labour withdrawn, and we on this side have said more than once what happens if it is withdrawn before an efficient mechanical harvester is introduced. I tell the House tonight that I believe it to be a fact that in some of the well-known potato-growing areas of Scotland growers have gone out of potatoes not because of the possibility of bad weather nor because they do not pay, but because they know that having planted what is an expensive crop they may not get the labour to lift it. The season may be bad, and the crop not profitable, but to other reasons which have been given I would include the Opposition's insistence on forcing this particular issue.
§ 1.3 a.m.
§ Mr. Jeremy Thorpe (Devon, North)
I wholeheartedly agree with what the hon. Member for Edinburgh, West (Mr. Stodart) has just said on the subject of the increase from £10 to £25 as the excess acreage contribution. In fact, I was so much in agreement with him that I thought he was making the sort of speech he made when he was the Liberal Party's agricultural adviser. [An HON. MEMBER: "It is good sense."] Of course it would be good sense if it were Liberal policy.
441 I hope that nothing which I say tonight will put up the price of Egyptian potatoes, as was feared by the hon. and gallant Member for the Isle of Ely (Sir H. Legge-Bourke) but I must hit very hard at the statement we have heard from him to the effect that the power to regulate imports should be given to what is a producer marketing board. He added that the members of the Board were also consumers, but the distinction is that they do not make a living out of being the latter but by being the former; and I would rather feel that the balance as between producer and consumer was held by the Government than that it should be handed over to a producer marketing board. But I apprehend that that idea will not get much support from the Minister.
Perhaps I should disclose that I was professionally concerned, as counsel, in the original inquiry into the Potato Marketing Scheme. But the objections then related wholly to elections, which are outside the scope of these Amendments. I am a wholehearted supporter of organised marketing. I think that experience has shown that farmers, particularly small farmers, are ruthlessly exploited if there are not adequate arrangements for collective marketing. None the less, I have considerable misgivings about the intention to increase the excess acreage contribution from £10 to £25. I hope that the Minister will correct what I thought was a somewhat unfortunate impression, that anyone who opposes any detail with regard to a marketing scheme is ipso facto hostile to marketing. I am sure that the right hon. Gentleman did not intend to give that impression. But, speaking for myself, and perhaps for the hon. Member for Workington (Mr. Peart), I may say that it was the impression left with hon. Members on this side of the House.
In the Report for the year ending 30th June, 1961, the Board made clear that it wants to increase the excess acreage contribution—I think this is a euphemism for fining a man for producing more than he is allowed to produce. But I appreciate that the Board wishes to discourage excess planting and to make adequate provision for a market support fund. In granting this power we are in- 442 creasing the powers of the Board, particularly those of the Basic Acreage Committee, and therefore I think that we should consider very carefully before making provision for a greater penalty of a quasi-judicial nature to be imposed by a consumer marketing board. I have been astounded by the fact that, with "he exception of the noble lord the Member for Dorset, South (Viscount Hinchingbrooke) who was sedentarily volatile, that point has not been dealt with by any hon. Member. The power to inflict a fine, or, if hon. Members prefer the more delicate phrase, an "excess acreage contribution" produced well over £200,000 last year. We now intend to increase this power substantially.
By this quota system and the power to fine the Board can control the volume of potatoes for marketing and, therefore, it can control the price; it could decide how much the farmer is to be allowed to grow and what price the housewife will have to pay. Therefore, before we grant this power we are entitled to ask two questions. First, how has this power been exercised in the past and what effect will these Amendments have in the future? We know that today there is a grave shortage of potatoes. Every hon. Member who has spoken has mentioned that. We know also that there has been a considerable reduction in the acreage under cultivation. I hope to give some figures—which the Minister candidly said that he could not give, but which are the most up-to-date figures—giving some indication of the policy pursued by the Board.
I believe that the shortage of potatoes is a cause for complaint by many farmers, including small farmers, who applied for an acreage quota and were turned down, and by housewives who find that the price is increasing. As a matter of principle I do not like this penal provision, but I do not think that a workable alternative has yet been evolved. We should be careful, however, before giving powers which may result in a restriction in food production and a restriction on the number of new entrants into the business.
In the last six months of 1961, from July to December, farmers applied—the application was made in 1960 for 1961 443 —for an increased acreage quota of some 24,906 acres—nearly 25,000 acres. There were 13,500 acres granted. Therefore, almost half the applications—11,500 acres—made in 1960 for increased acreage in 1961 were refused by the Board at a time when, as we had it from the Minister's statement, the Board knew there was a very grave risk indeed of a shortage. If is no good blaming that shortage on weather conditions, or saying that it has all been got up by the Press, which is a somewhat usual excuse we have heard for many things recently. Here was a situation in which the Board, right up to December, 1961, on the last figures available, turned down very nearly 50 per cent. of the applications in respect of extra acreage quotas.
What I should like the Government to answer is what considerations led the Board to turn down the 11,500 acres application? What was the policy behind that refusal? Unless we know what that policy was, the Government have no right to ask us to increase the fine for those in breach of a policy of which they are unable to tell us the outline and directions followed. We are entitled to know why, faced with this shortage, there was this massive refusal on the part of the Board. If the Government cannot tell us what those policies are, I for one do not intend to vote to give increased fining power.
The trouble today is that the real power in the Board lies inevitably with the large growers. In this, perhaps for a different reason, I agree with the hon. Member for Enfield, East (Mr. Mackie). We have the weighted voting system, which is not strictly relevant to this debate, but the real power lies with the producers of East Anglia, in Lincolnshire and on the East Coast. The trouble today is that we are producing too many potatoes from the uneconomic areas and not producing enough in areas which could get a premium for their potatoes. In Lincolnshire there are over 102,000 acres "under cultivation whereas, taking the part of the world of which I have some knowledge, in Dorset there are 1,200 acres, in Devon 5,000 acres and in Cornwall 7,000 acres. Yet in those areas where there is a low acreage there is a high local demand.
444 In Exeter market today it is possible to get a premium of £2 to £3 per ton ex-farm for locally produced potatoes, but, by reason of the application of the quota system which restricts the production on many of those farms, the local demand cannot be satisfied by local supply.
§ Mr. J. M. L. Prior (Lowestoft)
Going back a little to the question of the quota and the demand of producers for an extra 25,000 acres, as I understand that demand was made for growing potatoes in the season 1961. The application to grow those potatoes was put in before the end of the year ending 1960. I think that at that time it was fair to say that the Board did not know how many potatoes were likely to be planted in the spring of 1961. The weather had not been bad sufficiently long for the Board to take a view on that. From that point of view, I think the Board was justified in turning down half the additional acreage offered.
On the second point made by the hon. Member, about the need for increased acreage in the west of England and his part of the country, surely—
§ Mr. Deputy-Speaker (Sir William Anstruther-Gray)
Order. I hope that the hon. Member will not make a speech during the middle of another hon. Member's speech.
§ Mr. Thorpe
I am grateful to the hon. Member. An application has to be made in the autumn prior to planting in the spring The Minister's suggestion was that the Board had not deliberately decreased the acreage, that there had been no restrictionist policy by the Board and that the shortage was accounted for by the weather and other factors outside the Board's control. But in 1960, if one reads the reports in many farming organs, the Board should have known that there would be a likely shortage. This was something which the Board did not take into account. Not merely did the Board take no action 445 to deal with the situation, but it turned down very nearly 50 per cent. of the applications which were made in respect of the July-December 1961 period for increased acreage. Therefore, the Board was following a restrictionist policy and, therefore, the Minister was wrong to say that the Board was not doing so.
My complaint is that it is difficult under the scheme for the small farmer, the new entrant, to start up, because for 1961 it was based on 1955, 1956 and 1957 averages. That is the whole artificiality of the scheme. The farm is imbued with capital value because it has a quota attached to it, whether the whole quota is taken up or not. But if a small farmer, say in the West Country, wants to grow potatoes, and he may want to do it only once in three years, it is almost impossible for him to get a quota. This is true; to him which hath shall be given.
§ Mr. Prior indicated dissent.
§ Mr. Thorpe
I assure the hon. Member that is true. I sat for day after day at the Church House inquiry, and this fact was confirmed—though it was later justified—by witness after witness. If a farmer has an acreage on his farm he is all right. If he has a farm with no quota attached to it, he is in great difficulty, because it is extremely difficult to become a new entrant into the scheme. One must go to a farm with a high acreage and cash in on it. It is then easy to get an increase in the quota.
§ Mr. Stodart
That has been far from my experience. I went into a new farm and I got a quota without any difficulty.
§ Mr. Thorpe
I am not certain about which part of the country the hon. Gentleman has in mind. I do not know where he farms. In the West Country—and I make no apology for mentioning the West Country, although what I say is also true of the south of England and various other areas—the small farmer is getting the rough end of the stick. We are unable in Devon to satisfy the high local demand, which is prepared to pay a premium ex-farm of £2 to £3 a ton, because quota restrictions prevent us from producing without a fine of £10 an acre, and we still have to import all 446 the way from Lincolnshire and pay haulage costs of £2 to £3 a ton. I suggest that the penalty of £25 will further inhibit production in these areas which have not been blessed with a tradition of potato growing and that it will continue to siphon off £2 or £3 a ton which should be going to the farming community but which instead will be paid to the road haulier.
Has the Parliamentary Secretary had made a geographical breakdown of the 500,000 tons which were bought at a loss of £5½ million in 1960, and the 645,000 tons which were bought at a loss of £8.4 million in 1961? My information is that if he did that he would find that, by and large, the losses were incurred in areas which have high quotas. He would find that the areas that have actually increased their acreage are those that are making the heaviest call on the market support fund, and that, per contra, it is those areas with a low quota and a local demand that they cannot satisfy that are making virtually no call at all on that fund. What I say, therefore, is that we are very often encouraging production in areas where the price becomes depressed, as in Lincolnshire, owing to high haulage costs, and that we are reducing it in areas near the centres of demand.
It would also be interesting to know where the 21,000 applications from 1958 to 1961 came from geographically. Obviously, if the price is depressed the Exchequer contribution is thereby increased, but if the grower can get a premium the likelihood of his drawing on the fund disappears. I suggest that the Board is so designing its production policy that it is encouraging growing in areas where the price is artificially depressed and, therefore, make a call on the fund, and that is failing to encourage growing in places where growers can get a premium.
I do not believe that our agricultural problem is to keep the large farmers prosperous. They have been doing very nicely, indeed, as it is; not as well, perhaps, as the manufacturers, the producers and the suppliers in the industry, but we shall no doubt be able to deal with those people in the debate on the Annual Price Review. The only problem that concerns an hon. Member representing an agricultural 447 constituency is how the small farmer is to make a reasonable livelihood. The potato is one of his main crops, and it is of vital importance to the small farmer.
In Devon, we have small grassland farms which will be very hard hit indeed by the £3½ million cut in milk—very nearly 85 per cent. of their income comes from milk—so it will be even more important that they should be able to turn to potatoes. Many of these people do not want to grow potatoes every year; they want an occasional crop. They may not wish to have an acreage of arable, but will, now and again, have to renew their worn-out grassland. Unless, however, they are producing every year they have not a hope in heaven of getting a quota—and, of course, if they are growing in the face of the £25 an acre fine it will now make it completely out of the question for them to grow any potatoes.
Potatoes are one of the crops on which the small farmer depends. The implements are cheap—a potato spinner and a ridger—perhaps a total of £20 for second-hand equipment. Compare that with the price of growing barley and wheat. For that, there is need of a combine harvester and much other capital equipment. The small farmer will not have his own combine harvester. He will have to bring in a contractor, and that will remove any profit he might otherwise have had from such crops.
This present proposal will make it virtually impossible for the small farmer to compete—certainly in the face of that £25 fine. I should like to know whether the Board is genuinely interested in helping the small farmer and not just in seeing that the large quotas continue to go to the large farmers in Lincolnshire and other parts of the East Coast who, on sheer competition with local producers, would be put out of business in the West Country. But they are all right now because they have a monopoly position.
I believe that the Minister should persuade the Board to see that every farmer is entitled, as of right, to grow up to 15 acres of potatoes and that, thereafter, the £25 per acre fine—if it must exist—should be applied only in respect of an excess over 15 acres. Since the small farmer is very hard hit, particularly by the Price Review, the 448 county allocations should be looked into by the Ministry.
We are entitled to know what the Minister proposes to do about the present shortage and how the Amendment will increase production. His first step, as I say, should be to tell the Board to allow small farmers, as of right, to plant up to 15 acres without any question of a quota or a fine.
§ Sir H. Legge-Bourke
Has the hon. Gentleman made any calculation about the tonnage that would be produced by such a system, or is he prepared to let it rip and go well above human consumption? If so, what about the taxpayer?
§ Mr. Thorpe
The Minister has reckoned on a gross acreage which, he hopes, will remain constant throughout the years. There may be a case for asking a small farmer to register if they wish to avail themselves of this right to plant up to 15 acres, for the Board would be entitled to this information. After that registration and after the small farmer has claimed his right to grow that acreage, the Board could make its calculation regarding quotas for the rest of the industry. That would clearly establish that the small farmer was entitled to grow his fixed acreage and that the rest of the producers would be fitted in accordingly.
This was suggested at the inquiry and it met with a strangely sympathetic response. Meanwhile, the present system is to push uneconomic production into certain areas which are over producing and the result is that areas which could and should be allowed to compete are being denied by the quota system the right to do so.
§ 1.28 a.m.
§ Sir James Duncan (South Angus)
If my mathematics are correct, the 15-acre suggestion made by the hon. Member for Devon, North (Mr. Thorpe) would result in a total basic acreage of about 1,100,000. I do not think, therefore, that I need say more about it.
§ Mr. Thorpe
Then perhaps I might? I take it that the hon. Gentleman is 449 basing that calculation on every farmer in the country automatically wishing to plant 15 acres of potatoes. If that be the basis of his calculation I am sure that, on reflection, he will see that it is a somewhat unreasonable one.
§ Sir J. Duncan
I based my calculation on my right hon. Friend's figure of 76,000 farmers who are now registered producers. Concerning the West Country, I do not think the hon. Member for Devon, North has studied the full implications of Section 69 of the Scheme which we are amending. There is a reasonable chance for areas such as he described—where there is little or no export trade but a demand for local trade—that the amended Scheme will specifically exempt them from its provisions. It may be, if the conditions in Cornwall or other places are such as he described, that they will be exempted from the Scheme. The hon. Gentleman may know that the Western Isles, and parts of Argyllshire and Western Ross are exempt already. The intention of paragraph 69 (3) is to extend these exemptions to Chat sort of problem to which the hon. Gentleman has referred.
The hon. Member for Enfield, East (Mr. Mackie) wanted a full-blown marketing board with powers to trade. Nobody else should trade except the Board. That is not in the Scheme. We are discussing an Amendment of the Scheme, and to amend it to such an extent is a little beyond the intention of the Government at present, and is possibly even beyond the rules of order. I think the Board would have sufficient powers without a full trading scheme.
The hon. Gentleman has spoken as a potato grower, and I shall do likewise. I am sure the hon. Gentleman will agree that neither he nor I have mastered the potato yet. We know how to plant it; we know more or less what amount of fertiliser to put around the potato. Then we trust to luck, acts of God and the weather. But when we dig it out and store it, whether it be in a clamp—to use an English word—or in a pit, or a store, and then dress it or re-dress it, we then begin to realise that we do not know all that there is to know about the potato. I find it 450 extremely difficult to dig it out of the ground at all.
That is one of the reasons why I support paragraph 84 which is now being amended. The Board has been starved of money, with the £1 an acre levy. I have been delighted to pay it, of course, and, as a producer, I do not like having to pay more. But one is forced to the conclusion that the Board is right in asking us to pay more. The fact that there has been so little opposition to this proposal, in spite of the public inquiry or perhaps because of it, shows that the farmers, who are the growers, are prepared to pay this extra money without protesting.
Up to now the £1 has been used by the Board for its own administrative expenses, for doing a certain amount of research, although very little, and for attempting to build up a reserve fund for surplus years, rather unsuccessfully. It is only when in surplus years the Government have come to its aid that it has been able to maintain some sort of support price. Now we have this new arrangement for a levy of £3. The first £1 will go to the administrative expenses of the Board, with a little over. The second 30s. will go to build up a support fund. In spite of the acreage which we planted last year and which looks like being planted this year, we still have to look forward to the period when there will be a surplus. On the basis of past history, there will be surpluses in three years out of six. Therefore, we need a support fund. If we can build this up on a two-to-one basis, the Government paying two to the producer's one, it will be to the advantage of the industry in creating stability.
The Minister did not say much about the extra 10s., but I want to say a few words about it, because the potato is the least mechanised crop grown on our farms. It is the worst marketed. We have not yet got a machine to dig them out of the ground. We have a machine to put them in, but we have not a machine to dig them out. We are getting near it, but we have not yet got one. The Board should do much more to produce the perfect machine. Even a 90 per cent. efficient machine would do.
451 Having got the potato out of the ground, how is it to be stored? We are all experimenting. The hon. Member for Enfield, East thinks that he is a good chap because he does not store them in pits, but is he right to store them in sheds? We do not yet know. All we know is that we sometimes get some shocks when we take them out of pits, clamps or sheds. Diseases appear.
§ Mr. Mackie
If potatoes are put into a clamp and covered with straw and earth, they are left to chance. If they are put into a properly ventilated shed, the temperature can be controlled and everything is fine. That is the modern way. All our competitors—Holland, America and everywhere else—do this. The hon. Member is talking nonsense.
§ Sir J. Duncan
The hon. Gentleman should see some of the potatoes that come out of some of these wonderful stores he is talking about. They are not always 100 per cent.
Now, packing. The potato is an article of low value compared with its weight. There are all sorts of problems. Many people are thinking about them. The Board should spend more money on developing ideas and producing the type of pack the housewife wants. A great deal is being done. Washing plants are being set up all over the place by private enterprise. The Board is thinking of setting up a washing plant.
In years of surplus there is the problem of utilising at reasonably commercial rates the surplus, particularly that part of the surplus which is not readily marketable. I wish we could avoid the necessity for the Board selling the Board's potatoes—which they are in many cases—at £2 or £3 a ton for stock feeding. That is not an economical part of the Board's operations. I hope that the extra 10s. will be of great assistance to the Board, to the industry, and to the country as a whole.
The hon. Member for Workington (Mr. Peart) seemed to draw a distinction between the Board and the producer, as if they were in some way at loggerheads. The Board is the producers' Board. There is a meeting every year. Directors have to be elected. The Board is the tool of the producers. There should be no conflict between the one and the other, because the Board is com- 452 posed of the elected representatives of the producers. [Interruption.] Except for people like Jack Merricks, who does not matter. I hope that the impression will not be created by the hon. Member that there is a conflict between the Board and the producers.
The hon. Member for Enfield, East spoke about the Board not using the riddle in time. I am not prepared to say whether that was right or not. The use of the riddle is very limited. If the large riddle is used, the maximum saving in a surplus year is about half a million tons. Even with a 2-inch riddle, it is not more. At the beginning of last season they started with a 1⅞-inch riddle and soon got down to a 1½-inch one. So that there is not all that room for manoeuvre in dealing with the riddle. At most, it is half a million tons. The hon. Member exaggerates, therefore, when he suggests that the Board was wrong tactically even to take that move when it did. The two Amendments to which I have alluded, unlike many other hon. Members, will improve the administration of the Scheme and I give them my blessing.
§ 1.40 a.m.
§ Mr. Charles Loughlin (Gloucestershire, West)
I do not want to make a speech at this time of the morning, but I wish to address a question to the Joint Parliamentary Secretary, who, I understand, will reply. We are dealing with Amendments to the Scheme at a time when we have an acute shortage of potatoes and people are having to pay excessive prices for them. In reading the report of the inquiry, it seemed to me that the Amendments arose primarily out of two surplus years when support buying had to take place.
The two Amendments themselves are disincentives. Is the Minister quite satisfied that to introduce these two disincentives at this stage, arising out of two surplus years, will not mean a repetition of the present shortages and putting the consumer, as distinct from the producer, in the position of having to pay excessive prices for potatoes through famine two years out of every four?
§ 1.42 a.m.
§ Mr. George Darling (Sheffield, Hillsborough)
I hope that the Joint Parliamentary Secretary has taken note of the 453 pertinent question of my hon. Friend the Member for Gloucestershire, West (Mr. Loughlin). It is one of the key points in the whole debate, which has been interesting and useful. It brings home to us how important potatoes are, not only in our economy but in our social life, too. We all eat potatoes, even those of us who ought to cut them out to help keep down our weight.
When we are faced with a shortage, we are entitled to know the reason. In the context of this debate, we want to know whether the new powers for which the Marketing Board is asking in the Amendments to the Scheme will result in better marketing and in avoiding excessive shortages and surpluses. It is incredible to think of the prospect of potato rationing, as has been suggested in the debate, seventeen years after the end of the war. The hour is late and I shall not detain the House. I deplore the fact that we have to discuss an important matter like this at such an unreasonable and inconvenient hour; but that is the way that the business is arranged.
My first point is intended to make sure that the House understands where we on this side stand in regard to organised agricultural marketing. The purpose of the Scheme that the Board is seeking to amend is to organise in an orderly manner the production and marketing of potatoes, and we, of course, support that aim. As has been said, if there are violent fluctuations in supplies and price, they do nobody any good, neither the farmer nor the consumer.
The Potato Marketing Scheme has not produced steady supplies at steady, reasonable prices. The Board can argue, with some justification, that without the Board and the Scheme, with the weather that we have had recently, the shortage might have been much worse. Nevertheless, we are short of potatoes. The price has gone up in some places to over £40 a ton, three times the guaranteed price. It is still going up. Housewives are being told to switch from potatoes to rice, and fish friers are having to give their customers fewer chips a packet and to charge more for the chips, and are certainly losing money, I should think, as a result. This is what we complain about.
454 It is possible to blame the weather for the present shortage, but even the potatoes are a very chancy crop, and the weather has certainly made a difference to the yield per acre, I think it would be altogether wrong to put the whole of the blame on the weather. After all, the Board and the Ministry of Agriculture are charged under the agricultural legislation and, in particular, under the Potato Marketing Scheme with the task of providing, if they possibly can, regular supplies of potatoes in good seasons and in poor seasons, and, therefore, we want to know what has gone wrong and why we have this shortage after we have given all the powers to the Minister and to the Board to organise from home production or from abroad the supplies of potatoes which we need.
It seems to me, as has been said—and this is the point I want to make—that the clue to our present troubles and complaints does not lie in the total acreage which the Board has laid down in its quota schemes. If the total permitted acreage had been planted I think even this season we could have grown enough potatoes to carry us through. The key to the situation lies in the 100,000 to 150,000 acres—whichever calculation we take, whether we stick to the Board's figures and leave out the people outside the Board's scheme—which were not planted potatoes last year. This is, as I say, the key to the problem. We have now reached this situation, where the Board is being forced into the paradoxical position of increasing the surcharge on additional acres which may be planted with potatoes by some farmers, while hundreds of farmers throughout the country are refusing to plant up to their quotas.
I do not think it is altogether bad weather which has restricted that planting. I think there are two additional reasons. It seems to me that some farmers are clearly holding on to their basic quotas with no intention of planting potatoes because the quota is a valuable asset both when they sell their farms or exchange tenancies. I am not sure even with the Amendments, the additional powers which the Board is asking for, the Board will have power to cancel quotas not taken up over a reasonable period of time. I think that there is bound to be criticism of the 455 Board's levying the increased surcharge on farmers who want to grow more potatoes while nothing is done about those farmers who have no intention of using up their quotas.
The second reason is. I think, the guaranteed price. I do not know whether the N.F.U. accepted £13 5s. a ton in the Price Review or whether this price was something which the farmers reluctantly had to take, but if £13 5s. is not a fair price—I do not pretend to know the answer to that one—then it must have deterred many farmers from planting potatoes because they would not take the risk of carrying the loss. We have to remember in all this that potatoes are the costliest of our crops. Certainly they have the highest labour costs involved in planting and harvesting. We have seen that farmers have now got to make on average about £100 an acre to cover their costs and to break even and to get a little net income.
However, the Price Review is not the responsibility of the Board. It is the Government's responsibility, and the Government must take blame not only for the lack of inducement to the farmers to use their full permitted acreage but also for not responding earlier to the request made by merchants and others to import potatoes in increasing quantities.
There is a case for more flexibility in arranging the quotas, as the hon. Member for Devon, North (Mr. Thorpe) has said, though I do not agree with all his proposals for getting that flexibility. If we have more flexibility we will certainly run the risk of having heavier crops and having to contend with surpluses. We ought to run those risks. We must deal with the problem of surpluses, and if we do not go in for trading at fixed prices, as my hon. Friend the Member for Enfield, East (Mr. Mackie) suggested, we must have the system of support buying. I think, for that reason, that the Board should have the maximum contribution per acre from its producer members raised to £3.
The Board must have the money for support buying and for increasing research into harvesting and marketing. As the hon. Member for South Angus (Sir J. Duncan) so rightly said, if we can find a mechanical harvester which 456 will not damage the crop and which will reduce labour costs it will be a godsend. We want more research into marketing, better quality grading, better marking of bags with an indication of origin and so on. We must also help the Board to stop farmers from growing potatoes on unsuitable land, and we must think of transport, retail and distribution costs.
If there were time we should be discussing the siting of wholesale markets and the part played by transport costs in our present system, but the hour is late. We can legitimately criticise the Board for not realising soon enough that too many acres were not planted with potatoes this year and that the crop was too small. But the real culprit is the Government. They have let the farmers down in the Price Review in the matter of potato prices, and they have not acted soon enough on imports. But we hope that the increased powers in the Amendments to the Scheme and the debate, in focusing criticisms, observations and proposals, will enable the Board to do better in future and give us adequate supplies at reasonable prices not only for the benefit of farmers but for the benefit of housewives and of consumers generally.
§ 1.53 a.m.
§ Mr. Soames
The debate has covered considerable ground. Its general tenor has been that on the whole the House agrees with these Amendments, though it has certain reservations about some aspects of them. The hon. Member for Workington (Mr. Peart) said that the Board had brought the acreage down by 100,000. This was not what the Board was seeking to do. It was seeking an acreage of about 700,000 to 720,000. Other factors intervened, as a result of which an insufficient acreage was planted this year. The hon. Member asked whether the present shortage could have been foreseen earlier. From all the information which we had available to us and the Board had available to it. it was not until the February census—
§ Mr. Loughlin
On a point of order. Is it permissible for the Minister to speak twice in debate without the permission of the House?
§ Mr. Speaker
In this instance the right hon. Gentleman requires leave because 457 he did not move his own Motion. If he had moved it he would not have required leave, but I have little doubt that the House will give him leave.
§ Mr. Soames
I am sorry that I did not move my Motion. I wish I had. If the House will give me leave, I shall be grateful.
The hon. Member for Workington also referred to a farming paper which last year said that large imports would be necessary. I believe that that paper was saying that the acreage was extremely small and that in all probability we should have to consider imports. But we all knew that the acreage was small. It remained to see what the yield was. It was a near thing that we would not have to import. Any assessment last year could only have been based on acreage without taking account of yield.
The hon. Gentleman also referred to imports from the United States. We shall not import from there, because there are diseases of potatoes in the New World which we have not got here. Much as we deplore the shortage here in the remaining weeks before the earlies start coming forward, we could not agree to imports of diseased potatoes, thus putting our own crops at risk.
§ Mr. Peart
I hope I did not give the impression that I supported the importation of American diseased potatoes. I merely quoted a telegram which had been mentioned in the Press. My object was to extract from the right hon. Gentleman what the policy of the Government is on imports generally. If the right hon. Gentleman will read my speech, he will see that I asked about imports in a general way.
§ Mr. Soames
The hon. Gentleman quoted a telegram from the United States and I was answering him. I was also asked about imports from the Irish Republic. We would be glad to import potatoes from there. If they are available, there is no reason why they should not come, but I understand that they are not plentiful there either.
My hon. Friend the Member for the Isle of Ely (Sir H. Legge-Bourke) asked whether the existing arrangements for duties on imported potatoes, rising sharply in May from £1 a ton to just under £10 a ton, would continue this 458 year. I understand that representations have been made today or yesterday on this to the Government. They are now under consideration and my hon. Friend will not, therefore, expect me to answer now, but I can assure him that I have well taken his point. My hon. Friend also referred to contracts with Holland. No complaints have been made by the trade of any contracts having been broken. This is in spite of the fact that only today the Joint Imports Trade Committee saw officials of my Department to discuss imports in general. This point was not made by members of the Committee. If they make representations, we will listen.
§ Sir H. Legge-Bourke
The complaint was passed to me by a very wall-known merchant in London. I will pass the information on to my right hon. Friend.
§ Mr. Soames
The hon. Member for Pembroke (Mr. Donnelly) quoted the case of a constituent who is being asked to pay what he is due to pay for having grown excess acreage over back years. I understood that the hon. Gentleman, although the was supporting the Board and the policy of planning fox the growing of potatoes, was seeking to show that his constituent should not be called upon to pay this money. But this was an excess acreage levy on a very considerable excess. It covers the years 1959 and 1960, which were both years of surplus, although whether or not there is a surplus does not affect the principle. They were, however, surplus years in which this farmer, as was his right, grew a bigger acreage of potatoes than his quota. Having done so, however, he must conform to the rule of the scheme, which is that if one grows above one's quota an excess payment must be paid. Of course, in fact this would be an early potato grower, coming as he does from Pembrokeshire. So this year's crop of potatoes will have gone long ago. But two of the years, as I have already said, were surplus years, and the Board is claiming its due.
§ Mr. Donnelly
My point is that my constituent put in for an acreage allocation. This was refused for each of the years but has now been granted. Nothing has changed except the attitude of the Board. The facts remain exactly the same. If it is right for him to be 459 allowed to grow it now, it was right for him to have been allowed to grow it for this year which is a year of shortage. Any potato contribution to the overall production of the land has some effect on the number of potatoes available, even if it is early potatoes.
§ Mr. Soames
I should not have thought that a farmer, taking over a farm of 240 acres with virtually no quota and who, over a comparatively short period has had his quota increased from twelve to 146 acres, has much for which to condemn the Board.
My hon. Friend the Member for King's Lynn (Mr. Bullard) wondered if it was right to exempt the early crop and mentioned section 84 (4) of the Scheme. This is not saying that the early crop will be exempted but gives power to the Board to exempt some part of the payment for the early crop. The Board has the power to do this and, in view of the different advantages which the early crop grower has compared with the main crop producer so far as the support fund is concerned, it is therefore sensible for the Board to take this power.
The hon. Member for Enfield, East (Mr. Mackie) asked why the acreage had fallen so much in this last year. He felt that there must be something other than the weather; but there is no doubt that the weather made it difficult for a number of farmers to get the potatoes in. At the same time we must remember that it followed two years of surplus during which the average return to producers was around £11 to £12. They were both surplus years, and the facts would have been a great deal worse had there not been the support fund. That is one of the main reasons for the amendments we are making. It is to strengthen the arrangements for the support fund. The hon. Gentleman also said that the Potato Marketing Board should itself market potatoes, but that is right outside the Scheme before us and which we are amending.
The hon. Member for Edinburgh, West (Mr. Stodart) wondered if £25 was too great an increase from £10; and this thought was reflected also by other hon. Members who have spoken. The hon. 460 Member for Gloucestershire, West (Mr. Loughlin) wondered if it was not going to be too great a disincentive. If the Board is to bring about the sort of potato growing acreage which we need in an average year it must be able to impose a disincentive, as it were, on the growing of potatoes. In 1956, 790,000 acres of potatoes were grown and the yield was very high. There were over a million tons of potatoes surplus. If the acreage had been as high this year we should have been faced with a serious situation. The imposition of an excess acreage contribution of £10 has been proved to be not sufficient, and in the two years 1959 and 1960 20,000 extra acres were grown.
It is not intended that the Board shall impose a figure of £25 an acre. In fact a figure has to be decided for next year. I do not know what the figure will be, but it will not be £25. If it appears that there will be heavy plantings the Board will have this figure of £25 in reserve, and we believe that that amount is necessary in order to put a disincentive on the growing of an excessive amount of potatoes.
The hon. Member for Devon, North (Mr. Thorpe) gave the figure of applications which were turned down in the last six months of 1961. That is the period when the 1960 and early 1961 crop is disposed of. In 1959–60 we had a considerable surplus. There is no shortage of basic acreage, which is well over 800,000 acres. We need only 700,000 acres. I do not think that the suggestion of the hon. Member that every farmer with a potato growing potential, so to speak, should have a minimum of fifteen acres would make much of a noise like a dividend. There are 76,000 farmers who are registered producers and a good many more who grow a small acreage and are not registered. It could well be that on the hon. Member's calculations we should get well above the required figure of 700,000 acres if there was no control over the plantings of fifteen acres per farm. That would preclude potatoes from being grown on land which is particularly suitable for growing potatoes, like the Fen district and Lincolnshire.
§ Mr. Thorpe
Will the right hon. Gentleman deal with the point raised by 461 the hon. Member for Sheffield, Hillsborough (Mr. Darling) about the position of the farmer who gets a quota and does not take it up?
§ Mr. Soames
I will come to that.
My hon. Friend the Member for South Angus (Sir J. Duncan) spoke about research and said there was much to be done. The Board is aware of this. It has had little money to spend on research, £35,000 a year, which is not enough. A great deal of the £350,000 which will be raised by the extra 10s. will go on research. The Board plans to set up a research station in Lincolnshire where research will be carried out into the harvesting and marketing of potatoes.
The hon. Member for Sheffield, Hillsborough said that the arrangements had not produced steady prices or a steady yield of potatoes. This cannot be done. What we can do is to get as near as possible to the average over a period of years. Prices have been a lot steadier in two years of surplus and one year of shortage and in this year of shortage prices have been remarkably low until very recently. Taking the beginning of the potato year until the month of March, prices have been satisfactorily low from the consumers' point of view. All this shows how well the Board has set about its business.
The hon. Member also said that we must not blame the weather. It is not a question of blaming the weather, but in my speech I was pointing out the big variations in the yield we have had over the last six years. This is the one crop of all crops in which there are such wide variations of yield. The hon. Member, and the hon. Member for Devon, North spoke about farmers not using their quotas so that their quotas, as it were, were wasted. The quota acreages are reviewed by the Board every three or four years, taking into consideration the acreage which has been actually grown by the farmers over previous years. If they have not taken up the quotas to the extent they could, the quotas are very considerably reduced when the new ones are fixed. There is no definite time-table, but the reviews are every three or four years.
§ Mr. J. J. Mendelson (Penistone)
The hon. Member for King's Lynn (Mr. Bullard) said that perhaps the present shortage has been exaggerated and might not be as serious as some assume. We have all had correspondence on this matter. What is the view of the Government about the next five or six weeks, will the shortage be reduced, or will it be serious?
§ Mr. Soames
It is terribly hard to forecast. I cannot tell how many potatoes there should be coming from the Continent of Europe and how much the trade may be able to obtain. I do not see the point of trying to forecast a figure which I know would not be accurate unless I were very lucky. There is no doubt that we are short of potatoes in this country. We have had a late spring and the early potatoes may be late in coming on to the market. A lot depends on supplies of potatoes from Cyprus and the amount of main crop from the Continent of Europe for which the trade is seeking. I am not trying to hide anything from the hon. Member, but it would not be wise to forecast the quantities of potatoes which will be available to consumers in the next six or eight weeks. I could not make an accurate prognosis.
There is no doubt that the feeling of the House is that these amendments should be approved and I hope that this will now be done.
§ Question put and agreed to.
That the Amendments of the Potato Marketing Scheme, 1955, a draft of which Amendments was laid before this House on 28th March, be approved.