§ 2.50 p.m.
§ THE EARL OF RADNOR rose to call attention to the recommendations for the improvement of marketing of agricultural produce put forward by the Committee appointed to review the work of the Agricultural Marketing Acts in their recent Report (Economic Series, No. 48); to inquire as to the action which the Government propose to take on these recommendations; and to move for Papers. The noble Earl said: My Lords, before embarking upon the complicated details of agricultural marketing, I think it only right that I should pay to the noble Lord, Lord Lucas, and his colleagues, a 1017 tribute for the Report which they have presented to Parliament. It is a valuable addition to the rather extensive literature on agricultural marketing; valuable not only on account of the proposals that it makes, but also because of the summary which it gives of the progress in agricultural marketing which was made in the years before the war under the various Agricultural Marketing Acts, of which, of course, the 1931 Act is the most important.
§ The marketing schemes which were brought forward under the 1931 Act have had varying success, but they were introduced, generally speaking, with the idea that they should improve the position of the farmer by improving his methods of marketing his produce in such a way as to give him a better price and a better market for his produce. In point of fact, when it came down to real work, the main objective of the marketing boards in practically every case was not to improve the marketing organisation so much as to strike a hard bargain for the farmer and so get him a better price for his produce. I think that is perfectly understandable, because when those marketing schemes were in operation England was still a market for the surplus produce of the world. The farmer was having a difficult time and could not get a decent price for his produce, and his mind was naturally fixed upon trying to get a better price. Concentration, therefore, was made upon price rather than on better marketing. It is true that subsequent enactments tried to remedy that position through the setting up of commissions and such like, but they were not very effective.
§ To-day, the position is vey different. There are two main reasons which account for the change. The first is that there is a world shortage of foodstuffs and, therefore, there is automatically a better market for the farmers' produce. But I do not think that is the main reason. The one upon which I place the most importance is the fact that all political Parties have agreed (without, I think, any reservation at all) that the agricultural community should have a guaranteed price and an assured market. That has been translated into action by the present Government in Part I of the Agriculture Act, 1947. It is quite true that its interpretation in that particular Act of Parliament in some respects does not go so far as many noble Lords on this side of the House think right. The guaranteed price 1018 is qualified to some extent in Section 1 of that Act and the assured market is a somewhat uncertain factor. That only really strengthens my argument, because if the Government who are in office to-day qualify the guarantee, the Government who may he in office to-morrow are not prepared to qualify it to the same extent. Therefore we may look forward at least to the present measure of security and possibly to an even greater measure of security in the future.
§ One other point ought to be mentioned in this connection, and that is that with our present restricted diet home produced food forms a comparatively large proportion of the total food consumed in this country. It is a point which needs to be home in mind in the light of subsequent arguments which I propose to bring forth. One other matter which I should mention is our difficulties with regard to foreign exchange. However, I am deliberately leaving that question outside my arguments. We are not discussing a short-term policy. When we discuss agricultural marketing, we discuss something which must stand for ten or even twenty years. If this country suffers foreign exchange difficulties for that length of time, there will be little need to discuss agricultural or almost any other form of marketing.
§ Before I get down to the details with regard to the actual marketing proposals, I think it would be as well to say a word or two about the point of view of farmers in respect to marketing proposals generally. The farmer has a profound distrust of any political promises. That is not the farmer's fault. He has recently had a number of severe blows, within the memory of most farmers, and I think he is really justified in that distrust. He also has in mind that the present world shortage of foodstuffs is possibly and probably only temporary He is reinforced in that view by statements which appeared recently in the Sunday Press, to the effect that there is going to be a bumper wheat crop. Those statements have been reinforced by the present Minister of Food, who is reported in one newspaper to have said that we can look forward to a bumper harvest in the Northern hemisphere. That is quite incidental, but I wish to goodness the Minister of Food would not make such premature statements when he cannot possibly know, because the middle of March is too early to say whether it 1019 is going to be a good harvest or not. Every farmer knows that, as I hope noble Lords opposite will realise, and it creates in his mind further distrust of political promises and forecasts.
§ He also realises that the guaranteed price, the price which is guaranteed to him through the enactment of the Agriculture Act, 1947, is not really operative to-day. It is not a guaranteed price; it is a selling price above which he cannot go. He knows perfectly well that if there were a free market in England to-day he would be getting considerably more for his produce than he is getting, and he cannot help wondering a little whether, when the boot is on the other leg and he is being subsidised and not the consumer, there will be the same willingness to help him that there is now, when he does not need much help.
§ I have laid a certain amount of stress upon the attitude of mind of the farmer. I am talking of the ordinary rank and file of the farmers, and not necessarily of the leaders of their Union, who have possibly a wider vision than their members. But I have laid this stress because in any alteration in the marketing organisation of the home production of food stuffs it is vitally necessary we carry the ordinary rank and file farmer with us. If we fail to do that, we shall not have a successful marketing organisation, and that may well have an adverse effect upon production. As one cart see from the farming Press, the farmers have so far reacted rather unfavourably to the proposals of the Lucas Report. Those proposals are fairly simple in some respects; yet they are not easy to understand, in that it is difficult to see exactly where they will lead in the future.
§ The proposals, to put them briefly, are that there should be set up commodity commissions which should cover each individual commodity or group of commodities. These commodity commissions would take control of the commodity concerned at the point of price guarantee, and thereafter the commodity commissions would have extremely wide powers, even to the extent of trading the commodity throughout the country. Alongside that situation, there is apparently no great objection to the maintenance of the existing marketing powers under the existing Marketing Acts. I cannot see that in 1020 that set-up there is a great deal of room for the marketing boards proposed. I am rather led to that conclusion by the instances given in the Report, with regard to a possible marketing board for livestock, where the proposed duties which the marketing board would carry out are enumerated. It appears to me that these are duties which might well be carried out by the present farmers' organisation, The National Farmers' Union, without all the paraphernalia of setting up a marketing board under the 1931 Act.
§ That, very briefly, is the set-up proposed by the Lucas Report; and I say quite candidly that I do not like it very much. The reasons I object to it are these. First of all, the setting up of a commodity commission would place yet one more body—and inevitably, an expensive body—in the channel that lies between producer and consumer. Although it may be said that they would usurp some of the powers at present exercised by the Ministry of Food, the Report quotes the Government Statement of 1945 to the effect that it is proposed to keep the Ministry of Food in being as an integral part of the Government organisation of this country. If the Ministry of Food continue in existence, I have little doubt that they will have a finger in the pie of English home production; if we set up also a commodity commission we are putting yet another body between consumer and producer. Furthermore, the commodity commissions which the Report envisages are to be composed of independent persons nominated respectively by the Ministry of Food and the Ministry of Agriculture; and an endeavour will have to be made to find individuals who are not tied to any particular side of the industry, whether it be the production or the distribution of food.
§ Two points arise on that matter. The first is that it will be extremely difficult to find men who are competent to fulfil all the criteria suggested in the Report, because the distribution of food in this country is not a simple job. If men who are not interested in the distribution of food are appointed, then the commissions will have to learn a great deal about their job before they can start to carry it out. But my main objection is rather that I can find nowhere in that Report any suggestion that these commodity 1021 commissions should be answerable to any particular body. We have already had some experience of nationalised industries, and we have learned that Ministers are not prepared to answer questions in detail. It does not seem to be realised to what an extent, in ordinary commercial practice, the actions of a board of directors are governed by the knowledge that they will have personally to face an annual meeting of shareholders. I can see nothing in the proposal with regard to commodity commissions which would correspond to an annual general meeting of shareholders. An Annual Report to Parliament, a statement of accounts and a debate in another place are not quite the same thing, unless the Minister concerned in Parliament is to be allowed a say in what transpires on that commodity commission. He will be replying to a debate almost at second-hand. I do like—and I think most people like—those who compose a body controlling an important part of our public life (and food is a pretty important part of our public and private life) to be under an obligation to sit on a platform and to answer questions. There is no provision for that in this Report.
§ It is easy enough for me to stand up here and say that I do not like the proposals of the Committee of the noble Lord, Lord Lucas. It is not nearly so easy to say what I do like. But I will try. I agree with the Lucas Committee on one fundamental point. In the past, the marketing powers of the marketing organisations of the farmers have been producer-controlled, for the reason that the producer was at the mercy of the world markets, and he had every right to try to improve his own lot. But to-day, with the guaranteed price and an assured market, if the guarantee is to be paid for by the taxpayer or out of the consumer's pocket, there is absolutely no doubt that the consumer should have the right to a say in the marketing of that produce. In the future, he may well need protection. I agree with the Lucas Committee on that point.
§ The other criterion which I apply to my consideration of this problem is that at the same time we must have the good will of the farmers. Without that any marketing scheme will fail, and fail rather unhappily. With those two points in mind, I passed through various stages in arriving 1022 at my conclusions. I came to the conclusion that the marketing boards, set up under the Agricultural Marketing Act, 1931, and entirely producer-controlled, could not be supported under existing circumstances. I then canvassed the idea that one might expand those marketing boards to include representatives of other interests—consumers, distributors, and the like. I was rather supported in that idea by the evidence quoted in the Report of the Potato Marketing Board. They, apparently, have in train a scheme whereby the distributors are included or the Board, with provision for arbitration if agreement is not reached on the Board. However, I do not think that would work very well. There would certainly be differences of opinion which it would be difficult to solve, and the next obvious step in the train of thought would be some form of arbitration.
§ Another thought which occurred to me was that, rather than have an arbitration tribunal, you might, if you had inde-dependent members on such expanding marketing boards, give them overriding powers. Again, I discarded that idea, because I felt that you would not want to single out some members of the boards as being different from their fellows, with different powers. Finally, I came down on the side of marketing boards as they are at present constituted—that is to say, producer-controlled marketing boards. I do not know that it is entirely desirable that they should, as now, be formed by election. Here again, I agree with the Report when it says that that course does not necessarily produce the right men for the job. My own personal experience in that direction confirms the view that election by producers does not necessarily produce the best men to manage the marketing side. Still, there could be producer-controlled marketing boards with, over and above them, a single Commission. That Commission would be of a quasi judicial character, charged with the duty of safeguarding the interests of all parties concerned—that is to say, the consumer, the distributor and the producer.
§ I know that I shall stand to be shot at and criticised, and shall be told that such a Commission would have to be composed of supermen of a calibre which does not exist to-day. I am inclined to think that men of the type to do a job 1023 of that nature are more readily available than men of the type to carry out the executive functions in the complicated business which is envisaged in the commodity commissions of the Lucas Report. It is true that this single Commission would have to have certain executive functions. For instance, they would require the power to enforce their decisions. They would also, of course, be an appeal tribunal, to whom any body could appeal against anything which they considered unfair. They would have to give their decisions in such cases. They might even need the power to supersede an existing marketing board, if they thought it was not performing its function. I am not suggesting that this Commission would carry out that function, but they could supersede an existing board with other people more capable of carrying out the function. I am not suggesting at any stage that the Commission which I have in mind would in fact perform any of the marketing functions. They would merely carry out the duty of safeguarding any section of the public against any injustice.
§ In that set-up, there is one exception which I think must be made. The First Schedule of the Agricultural Marketing Act, 1931, details the commodities on which price is guaranteed. There are a number of agricultural commodities outside that Schedule which still have to stand on their own feet in the face of world competition. In those cases, I can see no logical reason why the functions of the ordinary marketing boards under the Act of 1931 should not be carried out in the ordinary way, without the intervention of anybody, because they would then be producer-controlled marketing boards helping their own fellows in the face of a competition over which they had little or no control. They would be producing the commodities in which the general public, I do not say had no interest but were not supporting them so far as price was concerned.
§ I will not detain your Lordships much longer, but this subject of agricultural marketing is very involved. I do not believe there is any single royal road to success. Each commodity must be treated on its own merits. In the suggestions which I have outlined to your Lordships, I can see no reason why the 1024 Milk Marketing Board, for instance, should not continue to function as they have in the past, with the guiding hand of a Commission over their head. The Milk Marketing Board have done a good job of work, and I can see no reason why in the future they should be superseded entirely by a new organisation in the form of a commodity commission. There are other commodities, also—potatoes and even hops—where the 1931 procedure has worked well. There are others, such as pigs—and here I speak from personal, experience—where it did not work nearly quite so well and, indeed, practically broke down before the war. Under this procedure, however, you would be enabled to have almost any form of organisation to buy commodities—provided that it was appropriate to the commodity concerned. At the same time, so far as I can see, the consumer and the distributor would be safeguarded, and would not be placed in the background by an entirely producer-controlled organisation. Under such a set-up, too, the farmer under the control of the Commission would be able to run his own show; and that is probably the most important point of all. Unless we secure the good will of the farmer, we shall never make a success of this marketing organisation. And the fact that he has his own representatives, controlling not only his produce but the quality of his produce—which is almost as important—is something which is very near to the heart of the ordinary farmer.
§ May I deal, quite shortly, with two or three points which arise out of this? The first is that a simpler method such as I have outlined does not mean any multiplicity of commissions. Equally, the single Commission which I propose would have a limited executive power, instead of what appears to be an almost unlimited executive power on the part of a number of commissions. The second is that whatever scheme is brought forward it must be sufficiently flexible to protect both consumer and producer alike. And, thirdly, we must remember that there is no golden rule which applies to every agricultural commodity. That is all I have to say at this stage. In my conversations with a number of people I found that most are shying off the difficult problem of agricultural marketing. For myself, I am rather like the lady who is reputed to have said "How can I know what I 1025 think until I hear what I say?" I have heard what I say; I would not be too certain yet that I know what I really think. I beg to move for Papers.
§ 3.25 p.m.
§ THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE AND FISHERIES (THE EARL OF HUNTINGDON)
My Lords, the Government welcome the opportunity which this debate affords of hearing your Lordships' views on this subject, and of exploring what I think is admitted to be a most complicated subject. We on these Benches—and probably here I also speak for other noble Lords in the House—are very grateful to the noble Earl, Lord Radnor, for having introduced the debate, and for having given such an extremely lucid exposition of his views on the subject. He also put forward in his speech some constructive suggestions. It is very helpful to listen to that kind of approach—balanced and carefully thought out—and it assists us to reach our decisions.
I should also like, both on behalf of the Government and on my own account, heartily to congratulate the noble Lord, Lord Lucas, and the other authors of this Report. If those of your Lordships who have a copy of the Report would turn to pages 73 to 76 you will appreciate the amount of evidence which had to be taken by the authors from innumerable bodies and individuals.
The details on those pages give some idea of the amount of work involved in hearing that evidence, weighing it up, sifting it and, finally coming to the conclusions of the Report. If your Lordships turn to page 1 of the Report you will observe that the terms of reference were:To review the working of the Agricultural Marketing Acts; to consider what modifications of the provisions of those Acts for the organisation of producers are desirable in the light of experience before 1939 and of the developments since then in Government policy, as it affects food and agriculture, and to make recommendations.I think that a good many noble Lords, if they had been faced with the problem, might well have felt their hearts sinking within them and would have hesitated before they undertook such an extremely far-reaching measure of research and such an arduous task. Therefore, I think we all owe a vote of sincere thanks to the 1026 noble Lord who actually brought out this Report.
This country is in an extremely difficult economic position. The Government have come to the conclusion that they will wholeheartedly take the people into their confidence; and in the Economic Survey for 1948 they have expounded the exact position in regard to the difficulties and dangers with which we are faced, and also the proposed remedies that we think are desirable to meet the situation. So anxious were the Government to bring this to the attention of the people that they have also published a popular edition of this Report which some of your Lordships may have seen, illustrated with diagrams and drawn up in the simplest and most direct wording, so that the facts can be brought home to as many people in this country as possible.
Whatever differences of opinion may arise out of that, one thing emerges without any possible contradiction; that is the absolute necessity for increased production, and particularly the production of food grown in this country. I do not think that would be contradicted by anyone. But there is another side to this question. It is no use producing the food unless we can market and distribute it in the most efficient manner possible. We want the farmer to grow the crops, or other produce, and we want the goods to be handled afterwards and sent forward in such a manner that they finally reach the consumer in as good and as cheap a form as is reasonably possible. That is the other side of the picture. His Majesty's Government have been concerned with production for some time. We have done our best to encourage the farming community to produce more and more to meet the difficult situation in which we now find ourselves.
I am giving away no secret when I say that for some time the Government have also been extremely concerned over the process of distribution. We are determined to try to get it running on better and more efficient lines. It is for this reason—and I am speaking more particularly of agriculture and food production—that we asked Lord Lucas and his colleagues to explore the whole subject and to draw up the Report which we now have before us. As the noble Earl, Lord Radnor, has said, the Report covers a wide field. It is no wonder that some 1027 people have found it very complicated to study, and that, consequently, some misconceptions have arisen. Those misconceptions have been reflected in the Press and in statements which have been made by various people who do not seem clearly to have understood the intentions of the Report. My right honourable friend the Minister of Agriculture tried at Reading, on February 14, to correct some of those misconceptions. I have no doubt that the noble Lord, Lord Lucas, when he speaks will perhaps correct others. I should like to do something in that line myself, and I propose, therefore, to deal with one or two of the misunderstandings which have become apparent.
In the first instance, I should like to point out clearly that the Report is not antagonistic to producers' marketing boards. In fact, your Lordships who have read the Report will have seen that it goes out of its way to pay a tribute to the way in which the boards have worked in the past. It also emphasises the fact that there is a place for them in the future, and that it is very desirable in some cases that they should continue. I think that is a point which should be considered carefully. It is true, however, that circumstances have changed very much since the Marketing Acts were brought in, and the powers and functions of the boards may all need to be examined in the light of the changed situation. Particularly has it to be recognised (and this was a fact which was brought out by the noble Earl, Lord Radnor) that the guaranteed prices and assured markets which have been given to the farmer have brought an extra element which has never before existed—that of the interest of the community—into the business of production and distribution of the goods. This certainly calls for examination. What it amounts to is that the community is guaranteeing specifically to the farmer markets and prices for his goods.
I was interested in the noble Earl's suggestion for an overriding Commodity Commission. I understood him to say (I hope he will correct me if I have not understood him rightly) that this Commission would be above all marketing boards. It would, I gather, have almost judicial functions. If anything went wrong, if some injustice or inefficiency were discovered, then this Commission would have power, and sanction, to put 1028 matters right. It would at no stage own or trade in any commodity; it would instead have strong powers to correct any abuses. That, of course, is a very different conception from the commodity commission visualised in the Report of the noble Lord, Lord Lucas, and his colleagues. That commission is a much more active body. It would not be judicial, but an executive, functioning body, taking an active part in the control, marketing and distribution of the produce. I do not want to argue about the merits of these different types of commissions or get involved in a cross-fire on this subject between the noble Earl and the noble Lord.
The second misconception with which I should like to deal is this. The Report does not suggest, as some seem to think, that the producer should lose interest in his commodity at the farm gate. What the Report suggests is that responsibility should be taken over by the Commission at the point where the guaranteed price operates. That might be at the farm gate, of course, as in the case of potatoes. On the other hand, it might not be till the product was in the hands of the wholesaler distributor. Whatever happened, whether we accepted the commodity commission or not, the Government would have to look into the problem and see where the guaranteed price would operate in regard to each commodity. Thirdly, the Lucas Report emphasises clearly the distinction between non-guaranteed commodities and guaranteed commodities. In regard to the guaranteed commodities they suggested that a commodity commission should come into being and keep a good watch on the consumers' interest. But they were much less emphatic in regard to commodities not guaranteed. They left that very much an open question.
In regard to horticulture, the Committee stressed only the idea of the commodity commission, because they did not think that any producer board would have adequate finance to set up and reorganise the stations for packing and conservation of the product—both matters which are extremely urgent. Finance on a large scale is needed in this connection, and the Committee thought that the commodity commission would be more likely to be able to shoulder the financial responsibility for the establishment of modern packing and conservation plants than would the 1029 marketing board. But even in regard to this matter there was clear indication in the Report that the marketing boards should be given every opportunity of functioning if they wished—subject always to some modification of the powers allowed to them in the Agricultural Marketing Acts.
Fourthly, it was not suggested in the Report that the commodity commission should actually and physically own the product. Although the committee considered that in some instances it might be appropriate and indeed necessary for ownership to be assumed by the commodity commissions, they also recognised that in some cases regulatory powers would be sufficient. For instance, in the case of milk the Milk Marketing Board sell milk to the Ministry of Food, who resell to the distributors. The Ministry of Food hold the milk only momentarily in their possession, and it is more a question of book-keeping than of actually holding the produce. Such momentary control of the produce is useful. If anything is going wrong with the distribution, the Ministry can get to the root of any abuse or fault. Secondly, if the Government wish to inject a subsidy, it is easy to change the price at the point where the product is held by the Ministry and then to pass it on to the retailer and the consumer. Thirdly, the holding body are enabled to set up experimental stations, such as experimental abattoirs and creameries, which can show exactly the cost of distributing the produce, and so give a check on whether or not the ordinary channels of trade are doing their job properly, and whether they are charging excessive prices.
If I may, I would refer your Lordships to paragraph 255 of the Report, which says:Trading powers would only be used in so far as these agencies"—that is, the ordinary trade channels—failed to provide the most efficient and economical service and for the purpose of providing the Commissions with a yardstick whereby they could measure the efficiency of these services.I do not wish this afternoon to prejudge in any way the final decisions on the Report. At the same time, I think it is only right and fair to say this. If the type of commission suggested in the Lucas Report were accepted by the Government, it is more likely that we should regard them not as fixed bodies which could not 1030 be altered, but as organisations which could be varied in size, functions and scope, according to the kind of produce involved—cereals, or livestock and so or. We must recognise that circumstances have changed a great deal since 1931, when the original Marketing Act came into being. We must also recognise that what we do now is done not only to meet the present critical position, but is something which will have a great effect on our economic life in the years ahead. We are called upon to make far-reaching decisions which will be operating ten or twenty years ahead.
The noble Earl, Lord Radnor, suggested, if I quote aright, that we should at all costs secure the good will of the producers and carry them with us. I fully appreciate the importance of that, and I hope that we can. At the same time, we ask the industry to look at this question without prejudice and to consider it in combination with present events. I feel confident that they will show a statesmanlike view and will be both co-operative and wise in examining our problems. It is an extremely important subject, which must be examined with great care. For that reason, your Lordships will not expect me to make any final pronouncement this afternoon. At the same time, to use a hackneyed phrase, the matter brooks no delay. At this moment a Committee composed of the senior officials of all the Departments concerned are considering this matter, and we are expecting their report shortly. We look forward with interest to what they will have to say. I end as I began, by saying that we are extremely anxious to collect the views of all sides; particularly do we welcome the views which your Lordships will advance in this debate.
§ 3.46 p.m.
§ LORD CARRINGTON
My Lords, Lord Lucas and his Committee have produced a valuable historical survey of agricultural marketing, and have made some very interesting recommendations, but like my noble friend the Earl of Radnor I think it is difficult to see where they are leading us. I should like shortly to put two considerations before your Lordships this afternoon. The first is the position of production. One of the main principles upon which the Lucas Committee made their recommendations was the principle that, in so far as commodities 1031 with guaranteed prices and assured markets were concerned, the exclusive interests of the producer should be fixed at the point where a guaranteed price operated. I think, broadly speaking that we should agree with that, we agree that the consumer and taxpayer must be protected. We would also agree that the producer retains an interest in his product right up to the time when it is consumed.
I feel, however, that there is one thing worrying farmers to-day, and that is the term "assured markets." I realise that the Lucas Committee could not assume that the Government were not going to honour the pledges which they specifically gave last year during the debates on the Agriculture Bill in your Lordships' House and in another place, that the quality limitation would not be introduced other than in very exceptional circumstances. But, the fact remains that these words could be so used to make a farce of guaranteed prices, and could make it very difficult for the farmer to sell his produce at a reasonable price. Pledges given by one Government are not binding on another. Sometimes, even, as we have seen just recently in another place in regard to university seats, agreements between Parties are not always honoured. Further, in the position in which we now find ourselves there may be attached to any aid we shall receive conditions which will make it essential for the Government to introduce a quality limitation on the amount of any particular produce to be sold at the guaranteed price. That being so, it is perhaps not altogether surprising that some farmers find it difficult to accept the principle of losing the primary interest in their produce at the point of first sale. It will be difficult to convince them that that is necessary, unless they are satisfied they will receive a guaranteed market for their produce, and not just an assured market, which is laid down in the first section of the Agriculture Act.
My second point concerns the question of commodity commissions. It is proposed that they should be small independent bodies, not influenced by producers, retailers or processors. I agree that they should be small. I sit on quite a number of committees, and I have always noticed that the amount of work done by them 1032 varies inversely with the number of people who serve on them. None the less, I am not sure that independent people are quite what we want in this case. Paragraph 247 of the Report says:If suitable persons having experience of the production, processing or distribution of the commodity concerned were available to serve on the commissions their particular knowledge and experience would undoubtedly be of value, but Ministers should not, in our view, be thus limited in their field of choice. They should, if necessary, be free to canvass the general fields of industry, commerce, finance and public administration in order to secure persons of the calibre needed.I am not at all sure that there are as many suitable people as the noble Lord, Lord Lucas, seems to think who would be prepared to serve on these commissions. I believe also that if these commissions are to function smoothly, and are to have the confidence of the industry, they must be composed of people who know the special difficulties of the producers, processors and retailers.
The Report continues:We are strongly opposed to any form of nomination of members of the Commodity Commissions by outside bodies. Members of commissions will be, in fact, the business executives of the tax-payer and as such they cannot be responsible, as delegates, to anybody else. Each member of the Commission must be interested solely in serving the aims of the commission and must not be diverted by responsibilities or affiliations to sectional interests.I disagree rather strongly with that. I think the way to appoint the executive committee, or commission, or whatever it may be called, is by a form of modified nomination, perhaps on the lines of the county agricultural committees, where the landowners, workers and farmers nominate a number of persons, and the Minister selects the most suitable. He has also the opportunity of appointing independent members with special qualifications. This method works well. On those committees there is never any difficulty about sectional interests; all members work to the best of their ability for the agriculture of the county in which they serve, and nobody worries about affiliations to sectional interests.
I have always thought this to be an outstanding example of how we in this country subordinate our own interests for the good of the majority. I cannot help feeling that something of the sort might well be tried in marketing: perhaps something on the lines of a representative 1033 marketing board, consisting of all interests, who would themselves elect a small inner executive committee from their own members. I have touched on only two points this afternoon, and in regard to both I have been rather critical of the Report. However, I would not like your Lordships to think that I underestimate its value, or the value of the suggestions made in it. All I hope is that, before any decision is taken, the Government will make quite sure that the farmers are behind them; that there is no misunderstanding about their intentions, and that the commissions or committees, or whatever they may be, are composed of the most suitable people.
§ 3.56 p.m.
THE MARQUESS OF READING
My Lords, I should certainly not have the effrontery to launch myself on the main current of this debate, but there is one point, legal, and therefore, if you will, prima facie tedious, which I wish to raise; because it seems to me not unimportant. As I understand the position under the 1931 Act, there are certain bodies—the producer boards—which are empowered to determine whether individual producers have, in fact, violated the provisions of the marketing scheme; and, if they come to the conclusion that the producers have been guilty of violation, to impose upon them not inconsiderable monetary penalties. Moreover, these tribunals, if my information be correct, are entitled to proceed with complete disregard of the ordinary accepted rules of evidence which are followed in courts of law.
When I had the honour to introduce to your Lordships some time ago a Bill for the preservation of certain rights of the subject (a Bill which, with your Lordships' permission, I hope to reintroduce at a suitable moment) there was included in it a provision dealing with these tribunals under the Marketing Acts, for the purpose of proposing that the powers of these tribunals should be transferred to the ordinary courts of the country. The view was taken that the normal courts of summary jurisdiction were perfectly competent to deal with this matter, and that it was unnecessary to have extraneous tribunals established which, as I have already said, do not obey the normal rules of evidence, but have power to inflict these substantial monetary penalties.
1034 When that Bill was discussed on Second Reading in your Lordships' House, the noble and learned Viscount on the Woolsack, who replied for the Government, said:At the present moment this matter is being considered by the noble Lord, Lord Lucas; yet whilst it is sub judice, and before the noble Lord has made his Report, this clause is put into the Bill. I think that it is most extraordinary, and, except on the basis of its being a slogan, I should have thought the noble Marquess might have waited (if only as a matter of courtesy) until the noble Lord, Lord Lucas, has reported and brought the whole matter under review.It may be that the noble and learned Viscount was in a somewhat uncharacteristically censorious mood that afternoon. I certainly had no intention of being in any way discourteous to the noble Lord, Lord Lucas. But I am prepared to plead guilty to ignorance, because I confess that at that time I had no idea that the Committee, the labours of which are now being discussed, had been set up. I am raising the point this afternoon in response to the noble and learned Viscount's suggestion—I would not put it as high as an invitation—that I should wait until the noble Lord, Lord Lucas, had reported and brought the matter under review.
On page 70 of the Report is the recommendation in this respect from the Lucas Committee. Under the heading "Powers and Duties of Boards" there is paragraph (1), "Imposition of penalties by boards," which suggests that:the 1931 Act should be an ended to provide that Penalties Tribunals should be composed of special committees of the board, to be presided over by an independent person who should be a Barrister of not less than five years' standing.I confess that I can see no advantage in setting up that tribunal. It seems to me to have practically every disadvantage of the existing system, and no new advantage to compensate for that lack of attraction. The fact that the tribunal is to be "presided over by a Barrister of five years' standing" does not, I am afraid, carry complete conviction with me. It is quite possible that he may be a civil servant who, five years ago, was called to the Bar and has never practised in his life. It seems to me that it is far more satisfactory from every point of view that this not unimportant jurisdiction should be confided to the hands of the ordinary courts, and that persons thought to be guilty of offences against the provisions of the Act 1035 should be tried according to the ordinary rules. It is in an endeavour to extract or invite from the Government some indication as to their attitude towards this matter, and their intentions with regard to any legislation affecting it, that I venture thus briefly to intervene.
§ 4.1 p.m.
§ LORD PIERCY
My Lords, I should like to begin by associating myself with the expressions of gratitude to the noble Earl for having brought forward this Motion, which has given the Government an opportunity of indicating their general attitude, and I hope that something more may fall from the Leader of the House. I should like also to say that, in my view, this is a masterly Report by the Committee presided over by my noble friend Lord Lucas, though on that I can add nothing to the expressions which have already fallen from several noble Lords.
The problem of agricultural marketing has always been seen to be a difficult one. On the one hand, the agricultural community consists of a multitude of small businesses—indeed tiny businesses. To apply one yardstick, if you divide the number of agricultural holdings into the agriculturally employed population in England and Wales, you find that there are on the average 2.8 persons employed per farm; there are less than 5,000 farms in England employing more than 10 persons, including the farmer, and the average on those farms comes out to less than 30 persons. In that particular structure of British agriculture there has always lain some difficulty for the effective marketing of its produce, particularly as the British farmer has never taken kindly to co-operation and did not even take very kindly to the marketing board.
On the other side, between the farm gate and the kitchen table, there is a complicated mass of agencies of old standing but which have never been very satisfactory. It may be that its orientation has been more towards the handling of imported produce; but, however that may be, it has not given satisfaction to the home farmer. To-day, that mass of agencies is riddled with factors of change—new methods of storing and preserving produce, new methods of storing and processing; not only canning, but freezing and freeze drying, and a whole lot of things. That puts the whole complex in 1036 a transitional state. One can look at the problem of marketing from another angle. The focus of attention up to now has tended to be on the farmers' problem of marketing his produce; that is to say, of exchanging his produce for cash. But the problem can be looked at from the other aspect—that of supplying farm produce efficiently to our great urban aggregations. A lot of what we have done in the past has been related to the first of those issues, but, as has been justly pointed out this afternoon, now that there are guaranteed prices for the main products and an assured market—whatever those guarantees and promises may precisely be worth—the balance of attention must shift over to the other side, the terminal consumer; in other words, the kitchen table rather than the field.
With that preamble, I should like briefly to re-state, if I can, the Lucas Committee's solution of this problem as I see it, cheerfully ready to be corrected by my noble friend if in some respect I have it out of perspective. It seems to me that the Lucas Committee's solution rests on three positions. The first position relates to the functions of the Ministry of Food. The Report quotes statements by the Minister of Food in 1945 that, on its permanent footing, the Ministry would be responsiblefor the procurement and subsequent distribution of all foods of importance in the national diet,andfor the operation of such modified controls as might be necessary to reform the system of food distribution.As I understand it, one of the main themes of this Report is to clarify the future position of the Ministry of Food. The Report does not contemplate—at least it hopes that it may not be necessary to contemplate—that the Ministry of Food in future years will continue to purchase all the home supplies of produce and share them out through the channels of distribution. Starting with that point, the Committee do not consider that the Ministry of Food should be responsible for the rationalisation of the system of distribution or the modernisation of its apparatus and technique.
Those two points are fundamental to the whole question. Until it is resolved what the future position of the Ministry of Food in this field will be, everything else is somewhat academic. I do not expect the Government to be able to make 1037 any pronouncement upon that point today, but I do say that it is one of the three positions upon which this solution rests, and a position which must be clarified. Personally, I am impressed by the arguments of the Committee upon this particular aspect. They point out that the handling of British crops from the fanner to the consumer is essentially a commercial operation for which, in their opinion, the organisation of a Government Department is not really suitable. Furthermore, they point out that the bringing about of anefficient system of agricultural marketing"—this is one of the important points—is bound toentail a fairly ruthless cutting away of many distributive margins, and the elimination as redundant of many distributive and processing interests.They point out that matters such as that are politically invidious, and if it were possible they would be better left to be dealt with at the level of business operation where the necessary acumen and, it may be, the necessary ruthlessness towards vested interests, might perhaps be most successfully used.
That is an impressive argument, and it might be enforced by another, which is the difficulty of converting a war-time organisation into a satisfactory peace-time organisation, particularly after several years of operation. Some of your Lordships may perhaps know the Navy Department building in Washington. It was set up in the last war and has been added to since. It contains a great many passages and corridors which seem to lead nowhere, and staircases which again do not seem to have any particular rationale. In my time in Washington it was said that a stranger who lost his way might easily, in the corner of a corridor, come upon the skeleton of some previous person who had lost his way and never got out! That is a parable of what a war-time Department can become if projected too far into times of peace. What the Committee say on this subject is this—and I think your Lordships will all endorse it. The Ministry of Food achieved admirably its war-time aim of "fair shares for all." But the system was notdesigned to promote marketing efficiency and it has not done so. It was conceived as a temporary device and in order to secure 1038 co-operation of the distributive trades, undertakings were given to vested interests as to the eventual resumption of their normal operations and margins were paid out for services that were no longer rendered. The costs of distribution were and remain unnecessarily inflated.The first point, then, is that the future position of the Ministry of Food's permanent functions should be clarified, and that it should revert as soon as may be to a policy-making and supervisory department.
The second position relates to the marketing boards. The Committee's analysis clarifies and crystallises the proper functions of marketing boards. The great point there, as was pointed out by the noble Earl, Lord Radnor, and other noble Lords, is the fundamental difference that is introduced into the situation from the farmer's point of view, when his price is guaranteed and his market assured, and he is told more or less that everything he produces will find an outlet. One does not then need to press forward with plans for boards with a great range of optional powers, or to instil into our widespread farming community a far reaching interest in the final markets for their products. On the other hand, as the Committee point out, the taxpayer now has underwritten the producer's price, and while, because of that, the producer's interest in what takes place beyond the point of delivery of his produce is much reduced, the interest of the taxpayer and consumer in what happens is very much increased.
The Committee do not in the least suggest that the marketing board as a device has no future. On the contrary, the functions which they suggest for them are very real functions. They would first have the duty of settling with the agency—which in the Committee's scheme is to be the commodity commission—which is going to accept delivery of the produce, the terms and conditions of annual or seasonal contract. There is a great deal to say for the producer having his representative board for this. Secondly, it will take responsibility for the due fulfilment of the contracts by fie individual farmers concerned. It will police the contracts. For that purpose the boards will require statutory powers; and we must beware that the statutory powers shall not be such as would be obnoxious to the noble Marquess, Lord Reading, 1039 who made some very just animadversions on the powers at present possessed or capable of being possessed by marketing boards. Thirdly, the marketing board would have important functions of reflecting back to individual producers the requirements and the advice of the buyer. And then there would be a marginal zone, in which the marketing board or the Commission indifferently might be the agency for setting up warehouses for grading storage and so forth.
That, then, is the second position, the clarification and re-definition of the province of the marketing board, and that part of the Report I find convincing. Marketing boards with those functions would not be liable to the criticism that in the past has been levelled against them; there would not be any question of restriction or of consumers' interests. And, after all, the most successful of the marketing boards, the Hops Board, was successful precisely in restricting access to the market on the basis of quotas and thus maintaining the price. It is a fortunate fact that its operations made no appreciable difference to the price of beer.
The third position is the Committee's substantive proposal, the creation of a new type of business unit, called perhaps the commodity commission, to take responsibility for all marketing and distributing operations—one commission for each of the commodities or related groups of commodities scheduled in the Agriculture Act plus one for horticultural produce and perhaps one for hops. I will not go closely into the appointment and set-up of these boards, but it may be worth while briefly to enumerate their functions. Their primary duty would be to negotiate the annual or seasonal contracts with the producers, to take delivery and to make payment. Then they would have responsibility for the subsequent storage, transport, and distribution. They would have a kind of supervisory control over the whole complex of marketing process between the farm gate and the kitchen table. To enable them to exercise those powers they will not rely simply on the fact that at the initial stage they acquire property in the produce; they are intended to be clothed with a range of powers which are set out in page 59 of the Report. These represent a kind of eclectic gathering together of useful powers in this field, 1040 which before the war were exercised by various authorities. In the conception of the Committee, these commissions are intended in one way or another to set on foot a rationalisation of the whole of these post-delivery marketing processes. They are designed to have no inhibitions about introducing simplification and rectification in these processes, perhaps very drastic simplifications. They will not displace existing processors but they will be free to enter the field with a view to exploring or exhibiting the technique, or with a view to establishing their own check on costs. They would dispose of the necessary capital for these operations.
The basic elements in the conception of the commodity commissions are two. One is the general design of the commissions, their functions and powers, on which I hope I have dilated at not too great a length. What I conceive that the Committee have managed to do, in a very striking way, is to combine the fruits of experience of marketing boards and the commodity commissions before the Second World War. The other element is the organisational make-up of the commissions. There I am bound to say that I feel they have displayed sense, as well as originality, in suggesting that the controlling personnel of these commissions should be people of general ability and background, and should not be nominated, elected or appointed by reason of specialist qualifications. I am not sure that the noble Lord who dealt with that point, and who did not favour it very much, appreciated that it is part of the pattern that each of these commissions will work with a number of advisory committees representing the wholesalers, the retailers, the processors, the producers and so forth. I suggest that this method of bringing in the representation of the various interested bodies and parties fits with the notion of the commission itself as being an independent body of general ability, with no attachments. As a final point, these commissions would naturally be advisers, both to the Ministry of Food and to the Ministry of Agriculture, and they would be the agents perhaps for the administration of subsidy.
Is the setting up of a number of corporations like this, one for each of the main comodities or group of commodities, amounting perhaps to eight, nine or ten commissions, a feasible plan? That 1041 largely turns on the possibility of collecting together sufficient business ability to form the organising nucleus for each of these organisations. A start could clearly be made with two or three. Apart from the question of the organising nucleus, one must bear in mind that there are large elements of organisation lying around, controlled by the Ministry of Food and otherwise, which would naturally be brought into these new organisations when set up. Although this has not been stressed in the Report, it would be essential to tailor these new organisations into the existing system. Some of the existing bodies may transform themselves into commissions, and others may be disbanded. All I mean is that you are not precisely setting up these commissions in vacuo; to a certain extent, you will be rearranging elements of organisation which are already there.
As to the notion that these bodies are an addition to an already large complex of agencies, one must bear in mind that once the commissions are set up, if they do their job, there should result over the course of a few years, at whatever cost to vested interests, a considerable diminution in the amount of the marketing machinery in existence, coupled with (we may hope) a much greater efficiency in the full utilisation of the crops and a reduction in the total spread of cost between the point of delivery by the farmer and the point of consumption by the consumer. I might clinch that point by reminding your Lordships that before the Second World War products of British agriculture came to a value of more than £200,000,000 a year. They are probably double that amount now. Indeed, recently the Ministry of Agriculture suggested a much higher figure.
§ LORD WOOLTON
I have been interested in this subject for a long time. I think it would be useful to the House if the noble Lord could tell us why he thinks that there would be this reduction in cost in the operations if we had these commissions created. I think he made it as a general statement. I am sure that he has some evidence behind him; otherwise he would not have made the point.
§ LORD PIERCY
I am afraid that my remarks did not proceed so much from evidence as from general reasoning, 1042 though I am sure that evidence could be put together. I am thinking of this: in the first place, there is great room for simplification of machinery so that we might have a smaller number of margins. That should mean a reduction of cost. Also, by modern techniques of storing, sorting and grading, and the help of other new methods with which the noble Lord is familiar—such as the new processes of drying and freezing—the total commercial value of the crop should be improved. That may be a Utopia, for I see the noble Earl, Lord Radnor, is smiling. He would perhaps agree with this: that associated with the fluctuations in market prices to which we have been accustomed—seasonal gluts and all the rest of it—there has been a great waste of product and of value. If you have a more rational control of the handling of the total crop, the total value would be greater at the same time as the spread of costs between the farmers should be less. I cannot prove that; I can only respond by giving roughly what was in my mind.
§ LORD PIERCY
So far as I understand this excellent Report, I regard it as containing a scheme of solid value; but certainly the possibility of putting it into effect begins with a clarification of the future position of the Ministry of Food. I sincerely hope that the official committee which my noble friend has said is now sitting will give that point its fullest possible consideration.
There is one large point which overshadows all these discussions and which is germane to the question which was raised by the noble Lord, Lord Woolton. There are many economists who feel, and so far as I can see, justly feel, that it will be difficult for us to maintain our standard of living in this country unless somewhere in the total economic system we can effect very large economies. It has always been thought that, in the distributive system between farm or factory and the consumer, there is room for great economies of human power and monetary costs. The problem, taken as a whole, is a difficult one which any Government might shrink from tackling. Present circumstances have brought to light, I suggest, a possibility of dealing with this problem in the particular case of agricultural marketing. Perhaps the 1043 Lucas Committee Report shows us the way.
§ 4.29 p.m.
THE EARL OF GAINSBOROUGH
My Lords, I beg leave to intervene for only a few minutes as your Lordships will wish to hear the noble Lord, Lord Lucas, who will no doubt be able to put us right on this subject. He has been the Chairman of the Committee which produced this Report—a Report which has caused those of us who sit on committees connected with the farming industry many hours of discussion. It is due to the noble Lord that we have had much extra work to do; but I think that has probably been a good thing, because the Report is certainly timely. It has been mentioned that the guaranteed price is, in effect, a restriction, and it is possible, as the noble Earl, Lord Radnor, said, that instead of it being a guaranteed price the farmer might be able to get more if it were not a maximum price. That is a point with which all farmers agree, and it is a view very widely held. There are many who remember the slump of 1929 and 1930, and we hope conditions such as that will not recur. But who can tell? They may recur, and no one can say with conviction that, notwithstanding all our plans, we will not see the same sort of slump again. Many farmers, therefore, are rather wary of relinquishing the powers they had under the 1931 Act.
However, arguments have been adduced, and no doubt they will be again, that farmers are not themselves capable of tackling the job of adjusting distributive margins and all the complex matters connected with marketing. The report has admitted quite freely, however, that the powers which farmers have under the 1931 Act have never been abused, and it is a little alien to our philosophy to think that they may be abused in the future. However, much depends on whether or not the Ministry of Food is maintained as a permanent body. I am not sure, but I think it has not been stated definitely whether or not they will remain. However I believe their retention is envisaged. We cannot, therefore, really form a good opinion of these recommendations until we know whether or not there is to be a permanent Ministry of Food. I was glad to hear the 1044 noble Lord, Lord Piercy, say that possibly the Ministry of Food was not the ideal body to market farm produce. I think that is what he said, and that, of course, was said also in the Lucas Report. It is at once apparent to those connected with the industry that a successful marketing organisation must, as business men have always done, have the ability to make decisions and, if those decisions are wrong, face the consequences.
I think farmers will feel somewhat frustrated if they lose their powers, because they are not quite happy that their interests are adequately safeguarded in the proposed set-up of commodity commissions. There may be advisory committees—such committees are indeed suggested—but they are, as I understand it, purely advisory, and the commodity commission is not bound to accept their advice. As I say, the farmers may get a feeling of frustration if they are to lose the powers they have under the 1931 Act. There is quite enough frustration in the country to-day, and it would be unwise to create more. On the other hand, we must not be too opposed to the new recommendations, because if a successful compromise—and I suppose it will be something of a compromise—is worked out between all the interests concerned, we may see a much better position in the future.
I do not wish to say much more, because the debate has already covered a large number of the points which one might have wished to make. I would, however, like to conclude by saying that I am sure the producer is willing to play his part in seeing that the consumer gets a square deal; and if any new recommendations (of which there are a number in the Report) do come to fruition, I am sure no one will be happier than the producer that the consumer is getting his produce as cheaply as possible whilst a reasonable margin is still allowed to everyone. But I feel that the primary producer should have the best guarantee of a wider margin because, after all, he is the one who does most of the work and, if it were not for him, none of the ancillary people who deal with the distribution of food would be necessary at all.
§ 4.36 p.m.
§ LORD LUCAS OF CHILWORTH
My Lords, it is hardly necessary for me to disclose to your Lordships' House my 1045 special interest in the Motion which has been moved with characteristic courtesy by the noble Earl, Lord Radnor. I had the great honour of occupying the position of Chairman of the Committee which was charged by His Majesty's Government with carrying out an inquiry into the working of the Agricultural Marketing Acts and the framing of recommendations for the organisation of marketing agricultural produce in the future. The Committee presented its Report to the appointing Ministers on September 30 last, and it was published with commendable promptitude a few weeks afterwards. Since that time it appears to have excited some comment, and to have been the subject of some criticism in certain agricultural quarters. During this period I have thought it wise to remain silent, feeling that the most appropriate place for myself, as Chairman of the Committee, to make any observations in reply to criticisms would be in your Lordships' House. Therefore I am doubly grateful to the noble Earl for putting this Motion upon the Order Paper, because it gives me the opportunity of replying to some of the criticisms that have been made—criticisms which, I am frankly bound to admit, are, I think, based on a non-reading of the Report in some cases, misunderstanding in others and, in a large number of cases, entire misconception.
In the course of my speech to-day, I trust I shall be able to reply to the points which have been raised by the noble Earl, Lord Radnor and other noble Lords who have joined in the debate. There is one criticism which has been made, with which I would like to deal before I go any further; that is, that the Committee went outside their terms of reference, and that there was nothing in those terms of reference which entitled them to make any incursion into the field of distribution. That, my Lords, is literally correct. Distribution per se was ruled out of the terms of reference of the Committee. It somewhat restricted the Committee. I have no complaint because, if it had been included, I do not think I should be standing here this afternoon to address your Lordships; I might have had that opportunity some years hence! But, as was proved as the inquiry went along, if the Committee had not gone as far as they did, it would have made nonsense of any Report which they might have produced, 1046 because the production, the processing, the manufacture and the distribution of agricultural produce are so intermingled that it is impossible to divide, with a clear cut line, one from the other.
I think it will be appropriate if I disclose that, at quite an early stage of the Committee's inquiry, I addressed a communication to the appointing Ministers asking that a certain interpretation should be put upon the terms of reference which would allow the Committee to go to the length to which they eventually did go, and such permission was readily granted. The terms of reference of the Committee were not only to review the past, to be guided by the experience gained, but to have regard to Government policy and the developments in Government policy since that date. I would ask your Lordships' House to consider very seriously what that Government policy is. The noble Earl dealt with one aspect of it fully and admirably, but, if he will forgive my saying so, he practically disregarded the other part of Government policy which was so well mentioned by my noble friend, Lord Piercy.
Government policy as regards agriculture is laid down in Part I of the Agriculture Act. In Part I, Section 1, dealing with the subject of guaranteed prices, the Agriculture Act says that the farmer will be guaranteed and paid a price arrived at after consultation with the appropriate representatives of the agricultural industry, and that price will be such that it will allow him to provide good conditions of labour, pay reasonable rates of wages and receive a fair return upon the capital employed in the industry. That is what it says, and that is what the Committee understood it to mean. As regards the assurance of markets, the right honourable gentleman, the Minister of Agriculture, in the course of the Second Reading debate on the Agriculture Bill in another place, said on behalf of His Majesty's Government that they accepted the principle of an unqualified guarantee for the whole of the produce of the agricultural industry, so far as could reasonably be foreseen, with two exceptions—one in connection with oats, and the other in connection with sugar beet. The Committee took those points to mean what they said they meant. The Committee were never charged with making recommendations in some hypothetical 1047 circumstances at some hypothetical time, if these policies were jettisoned, or if one of them should mean something which it did not say it meant.
A further point is that on November 5, 1945, the then Minister of Food made a statement in another place concerning the Government's policy with respect to food. He said that it was the Government's intention that the Ministry of Food should in future be a permanent Department of State charged with the responsibility for the procurement and distribution of the basic foods of this country at reasonable prices. That declaration, again, the Committee took to mean what it said it meant. So those are the two fundamental points upon which the Committee had to base their Report. As regards the first, the Committee came to the conclusion without any hesitation—and I would emphasise here, for it will save repetition, that the Report of the Committee was unanimous—that Part I of the Agriculture Act in relation to guaranteed prices meant, in effect, that at the point where guaranteed prices operated the produce became the property of the taxpayer.
It has been said in some quarters that that is open to argument. In the view of the Committee there is no room for argument about that whatsoever. I make that statement emphatically, because if your Lordships appreciate that, you will appreciate why many of the Committee's recommendations are as they are. As I say, the Committee took the view that at the point where the guaranteed price operated, wherever that might be (and that is a point with which I will deal a little later), the produce became—according to Part I of the Act—the property of the taxpayer. It was inconceivable to the Committee that the responsibility for marketing that produce, the responsibility for all its processing from that point onwards should be in the hands of a sectional monopoly as under the Agricultural Marketing Acts of 1931 and 1933. It was also inconceivable to the Committee that the Ministry of Food, charged with the responsibility for the procurement and distribution at reasonable prices of the nation's basic foodstuffs, should hand over that responsibility to a sectional monopoly composed of producer interests.
1048 What agency should we substitute for the producer marketing board? The noble Earl, I think—I hope he will forgive me if I misinterpret him; certainly the noble Earl, Lord Gainsborough, was of this mind—rather tentatively suggested that a guaranteed price is of course only a ceiling price. The noble Earls rather suggested, I thought, that they wanted to go back to the days of laissez-faire, to the free market of 1931, because if you want the best return on the swings, you must always be prepared to take the worst of the losses on the roundabouts.
THE EARL OF RADNOR
I do not wish to interrupt, but I should like to point out that I said that at the present time the guaranteed price is a ceiling price. I did not say anything about going back to the days of laissez-faire.
§ LORD LUCAS OF CHILWORTH
The noble Earl will forgive me; I did not hear him say "at the present time." But the 1931 conditions are ruled out. What is the alternative? Is the alternative between a commodity commission or a producer marketing board, which latter the Committee ruled out? They had to consider the question whether the present distribution method of control by the Ministry of Food, which is the system operating to-day, should continue. The Committee felt so strongly upon this point that they were moved to put their conclusions in the Report in language which I think I can claim at least to be unambiguous. We did not consider a Government Department to be the appropriate agency for carrying out the huge commercial transactions that would be involved in processing, manufacturing and distributing the foodstuffs of this country.
Also, and here I repeat what my noble friend, Lord Piercy, said in reply to the noble Earl, Lord Radnor, it is a misconception that all we have done is to insert another intermediary in this vast conglomeration of intermediaries. In paragraph 243 we say there must be a radical alteration and rationalisation of the channels of distribution with the aim of cutting down the intermediaries and the distribution margins. A Government department is no instrument to do that, and a producers' marketing board, composed of a sectional interest, is no instrument for doing that either. So we unhesitatingly said that at the point where 1049 guaranteed price operates, the controlling authority shall be an independent commodity commission.
The noble Earl suggested—he will correct me, I know, if I am wrong—that marketing boards as at present constituted under the Acts of 1931 and 1933 should have all their powers, including monopoly control, continued past the point of guaranteed price, but should be subservient to a grandiose commission that would sit over them and regulate them. I am free to confess that the Committee considered that aspect and rejected it out of hand. There are so many practical impossibilities, but the main objection, and it must be the main objection, is the point I have just made: that the Committee cannot agree that any sectional interests of producers should have control over the taxpayers' property past the point of first sale. That is fundamental. The noble Earl, in the course of explaining his very interesting alternative, doubted whether we should find men of sufficient calibre to operate on a livestock board, a cereals board, a potatoes board or a milk board. I hesitate to think of the difficulty that would confront him in trying to find people to sit on a board that had to combine the brains of all of them!
The noble Earl asked to whom the commissions are to be responsible. I know he will forgive me if I say I could not help smiling at his picture. He would like to have this grandiose Commodity Commission sitting on a platform confronted with irate consumers—the 47,000,000 people who comprise the population of this country. In my mind, I went from Hyde Park to the Albert Hall, because I did not know what kind of meeting that would be! Surely it is only sensible that the body to whom a commodity commission must be responsible are the elected representatives of the taxpayers, the House of Commons. Again, surely it is sense, in view of the Government's policy on agriculture and food, that a commodity commission must be responsible to the Government.
It has been suggested that the Report drives the farmer back to the farm gate. That, again, is untrue. We say that these commissions should operate at the point where guaranteed price operates, and this, as my noble friend (Lord Piercy) pointed out, can be movable. It can be right up almost at the chain of distribution. In 1050 the case of fatstock it can be on one side of the abattoir or even on the exit side. It all depends on the negotiating skill and economic sense of the representatives of the agriculture industry and of the Government, who to-day are responsible for meeting to arrange the prices of agricultural produce. To attempt to drive the farmer back to the farm gate, and to say the producer has no interest in his produce past the point at which he is paid for it, whether it be at the farm gate or anywhere else, is (if your Lordships will forgive the very strong expression) arrant nonsense. It does not make sense to anyone with a knowledge of the proper merchanting of agricultural produce. The producer's interest is there all the way through, from the point of production to the consumer's table, and it must be properly looked after.
But to say that a producer has an interest in his product right up to the consumer's table is a very different thing from saying that he has a monopoly interest and should preserve a monopoly control. I would illustrate it in this way. Agricultural produce goes into the sphere of adaptation, manufacturing or processing and then into the sphere of wholesale and retail distribution. I am quite prepared to admit that the producer has a monopoly interest in the process of production, but he must share his interest in the produce in the second sphere with the processor and manufacturer, and jointly they must share with the distribution system in the third. We tried on sound lines to preserve the rightful interests of the producer, right through the whole process. We said that the commodity commission was to be appointed jointly by the Minister of Agriculture and the Minister of Food, and as the Minister of Agriculture was the guardian angel of the producers' interests, surely he would see that the producers' point of view would be represented on a commodity commission.
Secondly, we said, very firmly, that a producers' marketing board composed solely of producers should have jurisdiction and monopoly control right up to the point of first sale. Thirdly, a point not yet mentioned, we said that there should be nothing—and there is nothing in any recommendation which this Committee makes—to prevent a producers' marketing board from going into manufacturing, processing, 1051 or wholesale or retail distribution. When it does, it stands on all fours with every other interest in that sphere of the industry. There is nothing whatsoever to prevent a producers' marketing board from opening retail shops, but it does so all square with every other interest.
Criticism has been made by the noble Lord, Lord Carrington, and other noble Lords, of the independence of the commodity commissions. That is one of the strongest points made by the Committee. I think that your Lordships, on reflection, will agree that where there are commodity commissions handling millions of pounds of taxpayers' money, surely it is not practical politics that they should be mandated by sectional interests and should be looking over their shoulders all the time at the people who sent them there. Surely, you must have on bodies like this men who are knowledgeable and at the same time thoroughly independent of outlook. That is the only conception we could possibly take of that appointment. We did not rule out the advisability of bringing in the knowledge of all sections of the industry—the knowledge of the processor, the knowledge of the manufacturer and the knowledge of the distributor. That is why we recommended that there should be set up advisory committees—advisory committees to advise. I know that immediately one talks of advisory committees the cynic raises a smile and says that an advisory committee are a body whose advice is never taken. That is not an indictment of the principle, but an indictment of the proper working of the advisory committee. While we were certain that the advisory committee could and should play a proper part, we felt that the executive authority must rule, wholly and solely, in an independent commission, answerable to nobody but to the taxpayer and the Government.
§ LORD CARRINGTON
Will the noble Lord forgive my interrupting? All his arguments apply equally to the election of Members of another place by sectional interest.
§ LORD LUCAS OF CHILWORTH
The noble Lord will pardon my ignorance if I am wrong, but I always thought that a Member was elected to another place to represent the citizens of his constituency. It may have been altered since I learned my elementary politics, but that is what I 1052 have always believed. If the Members do not represent their constituents, and the whole of their constituents, they should receive the same fate as the member of a commodity commission who does not do his job—that is, the sack.
I would like now to deal with the place of producer boards. It was suggested to the Committee very strongly, in evidence which we could not lightly disregard, that in the future agricultural economy of this country there was no place for producer marketing boards. That we rejected, because we considered that there is a wide function for which producer boards should operate. We took time to study our conception of the relationship between the commodity commission and the producer board. They would include the arranging of the contract, the premium prices for plus grades. Any noble Lord who has any interest or experience in the industry will know that unless safeguards are constructed, a system of guaranteed prices inevitably breeds inefficiency. We felt, first of all, that the producer board has all those cultural functions to look after. I will cite a case. Mention has been made of the Milk Marketing Board. The Milk Marketing Board did not in fact carry out all those functions which were in the minds of the architects of the 1931 Act until the Ministry of Food took over all their marketing organisation. The noble Earl, Lord Radnor, was quite right when he said that in the main the Marketing Acts of 1931 and 1933 were used only for price amelioration. They were never used for the purpose for which the architects (the chief architect being my noble friend who sits below me on the Front Bench) intended that they should be used. I am sure my noble friend would say that the cultural functions, the production of the proper graded produce to the National Mark standard, and all those things which were in the minds of the architects of the 1931 and 1933 Acts, were honoured more in the breach than in the observance. I join with the noble Earl, Lord Radnor. I am not casting any blame. Economic conditions, the law of survival, dictated the course in 1931 and 1933.
May I now turn to the case of horticulture? As has been pointed out, the Committee drew a distinction on all non-price guaranteed produce, of which horticultural produce is the biggest. There 1053 the producer still has to bear the commercial risk. We have said that while he has to do that, and until such time as an over all embracing Commission is, set up, he should have the powers under the Agricultural Marketing Acts. The trouble with the horticultural industry is not so much in production as in distribution. While the producer marketing boards can do a tremendous amount to improve the qualities of horticultural produce, the big problem to-day is in the conservation of produce, the re-siting of markets and in the whole structure of distribution. Unless something is done in that direction we as a nation, in a measurable space of time, will not know what a fresh vegetable is; we shall be consuming them out of tins.
The noble Marquess, Lord Reading, asked a question to which, even in the presence of the noble and learned Viscount on the Woolsack, I would venture to reply. As the Marketing Acts stand at the present time, disciplinary powers are vested in committees, and they can exercise those disciplinary powers over anyone who commits, not a breach of the Acts but a breach of the scheme that is put forward under the Acts. We went half-way towards meeting the noble Marquess. We took what I would suggest is the common-sense view, that all the breaches upon which this disciplinary committee would have to adjudicate would be breaches of agreements: the fanner or the producer undertaking to do something, and not doing it. It is not questions of law, but questions of common-sense, business and commercial practice. We felt that the elementary principles of justice would undoubtedly be preserved by the appointment as chairman of a barrister of five years' standing. We thought that if we made the chairman a man with a trained legal mind we could safely leave it to the committee to see that justice and equity were dispensed. We went on to add to this a recommendation that expenses should be paid at the discretion of the tribunal, and also that the tribunal should hold their sittings at points slightly more convenient to the delinquent than heretofore. I am sorry the noble Marquess, Lord Reading, does not think we went very far, but we did not feel called upon to make a recommendation that would send every small delinquent farmer into the local court of summary jurisdiction.
1054 May I be permitted three closing observations? I could not have presided over this Committee for nine months and, as the noble Earl, Lord Huntingdon, has been kind enough to say, engage in any intensive review, without becoming greatly interested in this problem of agricultural marketing. I would pose three questions to the agricultural industry. The first is: What is the choice before the farmer to-day? The choice is not between this Report, or something very like this Report, and the conditions of 1939; the conditions of 1939 are gone for ever. The choice before the farmer is between this Report, or something like this Report, and the conditions as they are to-day, where the fanner has to operate under the control of a Government Department, right back behind the farm gate. That, we say, would not be in the national interest.
I would not claim that the last word in agricultural marketing has been uttered by this Report, or that this Report contains all the wisdom upon the subject. I do say, however—with great respect to the noble Earl, Lord Radnor—that any scheme put forward which allows the taxpayer's money, and the distribution and processing of this nation's food, to be in the hands of a sectional monopoly, after the point at which the guaranteed price operates, would be against the national interest. Fear has been voiced that the policy of guaranteed prices and assured markets will go, will be altered, or in some way will become meaningless to the farmer. If there is a danger that that will ever happen, it lies, in my view, in the perpetuation and continuation of the extravagant, wasteful and inefficient distributive system we have to-day. I do not think the taxpayer of this country will be willing to find the millions required to ensure the stability—and the proper stability made necessary in the national interest—of the farming community and at the same time see a perpetuation of the system of wasteful distribution and processing which results in high prices.
The noble Lord, Lord Woolton, addressed to my noble friend a question which I could have answered. As Chairman of that Committee I heard accounts of the intermediaries between the fat stock beasts on the farm and the abattoir; the countless intermediaries building up the cost and adding not one scrap to the 1055 efficiency. And there were innumerable other examples of the same sort of thing. Twenty-five years ago a member of your Lordships' House, the Marquess of Linlithgow, presided over a Committee who were confronted with the same task as the Committee over which I presided. The Report of that Committee said that distribution costs were a far heavier burden than society would permanently consent to bear. Society has had to bear them for the last twenty-five years, but will society consent to bear them in the future; and will it subsidise and make secure, at the cost of millions, the agricultural industry at the same time? If there is any danger that the agricultural industry will go back to the days of 1931, it is in that direction that the danger lies.
§ 5.15 p.m.
§ LORD TEVIOT
My Lords, I am going to intervene for a moment or two, because the noble Lord who has just sat down referred in a sense to a debate upon a Motion on the subject of distribution moved by myself on June 3, 1942. I am glad that the noble Lord took notice of this particular point, although I do not suppose for a moment that he has read the report of the debate, which lasted the whole afternoon. The noble Viscount, Lord Addison, took part in that debate, together with many other noble Lords. I shall leave the main points of the speech of the noble Lord, Lord Lucas, to be answered by my noble friend the Earl of Radnor, but there was one thing in the speech which struck me as being somewhat curious. I hope that I have not misunderstood him, but I think he mentioned that guaranteed prices were inclined to lend themselves to inefficiency.
§ LORD LUCAS OF CHILWORTH
What I actually said was this: There is always the seed of inherent inefficiency in a system of guaranteed prices.
§ LORD TEVIOT
Although I am not of the political persuasion of the noble Lord, I would not say that. I have enough confidence in the integrity and 1056 the honesty of purpose of my race to think that, if they receive what they regard is a fair deal, they will do everything they can to carry out their side of the bargain. I was a little disturbed at the noble Lord's repeated references to processing and manufacture in regard to agricultural produce. Being (as some noble Lords know) one of those who believe in getting on to the tables of the people of our country as much freshly grown, home-grown food as possible, so far as we are concerned here I would put the question of processing and manufacture in a secondary position.
As I have said, I was interested and glad to hear the noble Lord concentrate a great deal of his speech on waste in distribution. The noble Lord may be interested to hear that in my speech in 1942 I made the same point. I spoke of the Linlithgow Report—which was made in 1922 and was followed in 1940 by Lord Perry's Report on Milk Marketing and the price of milk—and I indicated that this was the sort of thing that was happening then. It is, I believe the sort of thing which is still happening to-day. I said then that a good deal less than one quarter of agricultural and market gardening produce went through two intermediaries; nearly one-fourth through four intermediaries, and over one-eighth through five intermediaries. A very small amount went through one intermediary. I do not know what the figures are today, but at the time when this debate took place £650,000,000 worth of food, either grown in this country or imported, required £850,000,000 for its distribution.
I hope the Government are turning their attention to that matter. I am not familiar enough with what is going on now to know what is the position in regard to those figures, but let me suggest this to your Lordships. We are spending now about £400,000,000 in food subsidies. Does it not seem that we might very materially reduce the costs of distribution? That would help to reduce the subsidies, all of which come out of the taxpayer's—in other words, the consumer's—pocket. It seems to me that it would be quite easy, somehow or other, by organisation, to arrange for a material reduction in the cost of distribution. The consumer would benefit and at the same time it would help to establish confidence in the minds of the farmers that what was obtaining to-day 1057 would continue. There is a tremendous waste of expenditure in the realm of distribution and food subsidies.
Your Lordships may remember that we had considerable discussion on this subject some time ago. On that occasion a good deal was said about zoning. Your Lordships will be aware that a great deal of the farmers' produce travels a long way; and it has always seemed to me that that could be obviated by a system of zoning, such as the noble Lord, Lord Woolton, introduced in the war. So far as I remember, that system did away with the necessity for this movement of produce. If there was too much food in one place and too little in another, food was moved to redress the balance. That seems to me a simple operation, which could easily be arranged. At that time I was living in Northamptonshire, and some of us there started the Banbury local market. It proved of great benefit to the farmers in that district, as well as to the quality—through having a local grading—of the goods supplied. Everybody responded, because they knew that the better quality would bring them a better price in that local market.
The noble Earl, Lord Huntingdon, referred to what the Government had done for the farming industry. I should like to remind him that—at any rate so far as I know—nothing is being done to give the farmer help in the form of farming machinery. He has been promised priority of raw material over and over again. I know there are difficulties, but let us try to go ahead and arrange for the manufacture of farming machinery—even though there are, I know, steel shortages and consequent shortages of spare parts all over the country. I should like now to say a word on the subject of the size of the market for the farmers' produce. Naturally, the size of the market is governed by consumption, and here distribution is of enormous importance. It is no use the farmer producing more by his efficiency unless it results in lower distribution costs and unless the consumer reaps the advantage of the produce retaining its quality.
There is another point I should like to mention. I am all in favour of having the farmer as near as possible to the consumer. In other walks of life—in business, for instance—we get as near as possible 1058 to our customer in order to find out what he desires and what suits him. I want to see the farmers and their representatives closely in touch with the consumer in order that they may know exactly what he wants. The consumer appreciates good quality and will be prepared to pay a good price for it. It is all very well to talk about applying controls and taking the matter out of the hands of the people who are in fact producers, and having some other intermediary between the consumer and the producer; but I am a great believer in the producers being brought as closely as possible in touch with the consumer It means better quality and less cost. I hope that my few remarks may perhaps bear some fruit in the future policy of the Government on this important question.
§ 5.27 p.m.
§ THE LORD PRIVY SEAL (VISCOUNT ADDISON)
My Lords, I hesitate to intervene to-day, but I have been invited by my colleagues to do so as the Minister who was responsible for the first Agricultural Marketing Act. So far as the governing necessities of the situation are concerned, they remain the same as they did at the time of the passage of that Act, except that machinery and adaptations have changed. It is just as true to-day as it was then that there should be as well organised, efficiently working and economical a system as possible to secure the reasonable marketing of producers' products. I should like to join with other noble Lords who have spoken in paying a tribute to the meticulous examination of that problem which is presented in this Report. The noble Lord, Lord Lucas, and his colleagues have rendered a great and enduring public service. If anyone wants to study the record of the very slow development of improvements in these matters, he could not do better than study this Report. It shows how slowly we move.
The noble Lord, Lord Teviot, drew attention to the Linlithgow Report, to which I should like to turn for a minute or two The progress in this field, to which Lord Linlithgow drew attention, between then and now has been lamentably small. As to the general comments in the Report on the development of the agricultural marketing boards, I will be quite frank and say that I, with many others, have 1059 been rather disappointed. It was our intention when we framed the first Act that the boards would be brought into being on behalf of the producers who would not only secure the realisation of a proper price for their products, so far as that was possible, but would also co-operate in securing their better marketing. We had in our minds at that time the immense advantages that were being derived from improved grading, packing and all that sort of thing. I must say that, in reviewing the operations of the different boards that have been set up, I have been disappointed, and the Report only emphasises that disappointment.
I feel that it is better to say quite frankly that the directors of those boards, whilst quite properly concentrating their attention upon the realisation of fair prices, have not developed the many other activities of the marketing boards and of the producers' boards which we hoped would be developed when the Act was passed. The encouragement of research and improved methods of many kinds were in the minds of many noble Lords (some of whom are sitting opposite me now) who co-operated heartily in discussing some of the provisions of that Act. I am quite sure that we should be rendering no good service if we did not admit a certain measure of disappointment that these other activities of the boards, exceedingly useful for the producers and even more so for the consumers, have not been exercised as widely as we had hoped. I think it is only right that that should be said.
To a great extent, the Milk Marketing Board are a notable exception. There is no doubt at all that they completely transformed the collection and the marketing of milk, from one end of the country to the other. In so doing, the Board, in fact, saved thousands of farmers from bankruptcy, because their position then was very bad indeed. Apart from that, I cannot say that one is satisfied that the Potato Board, the Meat Board or even the Hops Board are contributing to the research into improved methods of collection, grading and so forth, for which some of us had hoped. Unfortunately, that does not make it any the less true that it is necessary that there should be an organisation of this kind to organise and help the sale of the producers' product. I suppose the fact that 1060 we have not one is due to our emergence from the war period and other adverse circumstances of long standing which have resulted in our making such very slow progress in some of the improvements in the distribution of food which are clearly our ultimate aim.
The noble Lord opposite has, as I have said, called attention to the Linlithgow Report. On my part, I well remember the Perry Report. In fact, we have had quite a crop of Reports. They all came to the same conclusion: that the costs of distribution for many foods were unnecessarily high. I think that in that respect the reflections of the noble Lord opposite have great justification. It was one of the things for which we had hoped, but in which we have been disappointed. I had hoped that this Committee, in their examination of this problem, would have presented to us some suggestions on how the matter could be dealt with, because, with regard to some of our processes of distribution, there is no doubt at all that the margin in price between the producer and the consumer is higher than it ought to be. There is no doubt about that.
I will confess that I was a little disappointed in one respect, in considering the Report of my noble friend. I see that the Committee somewhat shied off the question of horticultural marketing. I have said before in this House, and I say so again, that we never had time during the Second World War to get on to that matter, but the distribution of horticultural produce in this country is a disgrace to an intelligent community. That is the plain English of it. We should go to a few other countries to see how much better it is managed there. There has never been a producers' board for any of these commodities. As my noble friend has said, it is an exceedingly difficult problem. Therefore, whether it is the kind of body about which the noble Earl spoke or whether it is one of the commodity commissions that my noble friend has suggested, I do think that the necessity for calling into existence in some form or other a body of men who will address their minds to the improvement of these marketing processes is urgent. Personally, I should have said that the improved marketing of our horticultural produce stands out almost as a first necessity, so far as the diminution of distribution charges is concerned.
1061 We are immensely indebted to the Committee for calling attention to this matter and making some suggestions as to how it should be handled. I have studied the matter with great care, and I am sure that many of your Lordships have done likewise. It is, of course, impossible to take far-reaching recommendations of this kind without immediately raising a considerable number of questions of great administrative difficulty and complexity. As I have said, one question that occurred to me as soon as I read the Report was: What is to be the relation of any commodity board, for example, to the Government of the day? It must be a body with large finances at its disposal. It must have great authority. I do not think Parliament would be willing to create a body of this kind, with these immense powers and with this great authority, unless it was anchored in some way to our ministerial operations and responsibilities. The association of the commodity boards with the Government, or with some Departments of the Government, is one of the matters which clearly have to be explored before we can come to any conclusion about it.
Then, the financial relations of the commodity boards are also matters which would need, I think, a good deal more study and elucidation. At the same time I do feel grateful to my noble friend and his colleagues. They have taken the big view in these matters. They have seen that, in order to bridge the gap between the supply of the producer's produce and the needs of the consumer, we need a much more rational, economical and sensible organisation of distribution than we have at present. There is no doubt about it. That is the position in regard to many commodities. I take it that it would be one of the first duties of these commodity boards to bring that about. I am not quite sure whether they would proceed as my noble friend has the courage to say in one place, which I will venture to quote, for it is nevertheless a vital thing and one to be borne in mind. In paragraph 243, page 57, these words appear:We believe that efficient agricultural marketing will entail a fairly ruthless cutting of many distributive margins, and the elimination as redundant of many distributing and processing interests.With regard to the marketing of livestock, I am sure that that in many respects 1062 is abundantly true. If we are to secure an efficient marketing system in this country, we must contemplate the development of some machinery which will gradually reduce these margins, which are exceedingly costly to the community. I am not going to-day to discuss that tempting subject—I have referred to it many times in your Lordships' House—but I say that the efficiency of any organisation, whether on the line now suggested or some other, will have to be judged by one or two tests. It will have to be capable of developing a system of more reliable and better graded supplies for the community, and it will have to be a system which will eliminate waste, diminish distributive margins and make for a more prompt supply. As it seems to me, we are really only at the beginning of that process in this country.
It is sad to say so, but, although we have been talking about it, to my knowledge, for at least twenty-five years, we have made little progress in improving the actual marketing, after they leave the producer, of the supplies that the people need. It is not to our national credit that that statement should be true, but, unfortunately, I am afraid it is, and it is better to admit it. I think this Report is the most comprehensive and courageous study of that question that I have ever read. I am not in any way saying that we can be committed to some of its somewhat drastic conclusions, but it does put up for our consideration and thought a framework of machinery whereby we may attempt to achieve these desirable ends.
Before I sit down, I would like to make one comment on the opening remarks of the noble Earl and on something that was said by the noble Lord, Lord Teviot. They appeared to me to cast doubt upon the durability, if I may so term it, of the assured price system. I do not think that is either very well warranted or quite fair. So far as it goes at present we have embodied this system in an Act of Parliament. It is true that some other Parliament might alter it—no Parliament can guarantee the actions of its successors. But still, I am asking myself, what more could be done than we have tried to do—namely, to make it an assured part of our agricultural system. I believe that there is one thing that the farmers of this country can rely upon from all Parties at the present time, and 1063 that is that we must, by some machinery or other, assure that the producer is properly paid for his product. The machinery that is set up by the Agriculture Act is only in its initial stages but is, as it seems to me, workable on the whole. At all events, I do not think it is right that we should allow it to be suggested that there is in the mind of any Party any idea of going back upon that vital principle which we consider is essential to the development of sound British agriculture. I must be allowed to conclude my observations with that very moderate protest.
§ 5.43 P.m.
THE EARL OF RADNOR
My Lords, your Lordships will not expect me to reply to all the points raised in what I think has been a very interesting and, I hope, helpful debate. May I first reply to the last point made by the noble Viscount the Leader of the House, whose intervention I welcome very much indeed because his knowledge of the marketing problem is as great as that of any member of your Lordships' House, The point I made was not that I myself, or that other people, normally doubted the guaranteed price as embodied in the Act of 1947, but I was putting a point of view that is often expressed by a large number of rank-and-file farmers who, as I said previously, have some reason for doubting political promises. I am quite convinced personally that the reasons for those doubts are now gone, and I hope that those farmers realise it too.
May I now deal with one or two of the points which have been raised? I listened with interest to the speech of the noble Earl, Lord Huntingdon—an interest which I regret waned somewhat as the speech neared its end. I was hoping for some announcement on the part of the Government. I must confess that when I put the Motion down I did not expect any earth-shattering announcement to-day, but I did expect something a little more than the one phrase which the noble Earl used, which was that this matter "brooks no delay." That is a fine phrase! In the other place not long ago they had a debate upon Civil Service language, and it was suggested that the words "It will have to receive consideration at a high level" may be interpreted to mean, "We have lost the file, but we are looking for it." 1064 I do not know whether "brooks no delay" comes into that category, but it is something of that sort.
I entirely agree with the legal point made by the noble Marquess, Lord Reading, that these matters of penalty—particularly rather heavy monetary penalties—ought rightly to be in the hands of the proper courts of law, and that no tribunal, whether headed by a barrister or not, is quite a substitute for the courts of law. There is, however, one objection of which I know from my own experience. It is an objection which comes from the potential delinquents. Their own marketing board in the past has been far more reluctant than a court of law would be, either to take action or, having taken action, to exact the penalty; therefore the potential delinquent is likely to get off more lightly at the hands of the unofficial tribunal than he would be in a court of summary jurisdiction. That, presumably, is not a point of argument which would appeal to a lawyer, but it is an argument of fact.
A good deal of the discussion, especially in the latter part of the debate, has hinged round the question of distribution costs. I hope your Lordships will forgive me if I do not go into those points at any great length, because, as the noble Lord, Lord Lucas, pointed out, costs of distribution were really outside the terms of reference of the Lucas Committee. I am rather glad, however, that that Committee went outside their terms of reference to the extent they did, because, as Lord Lucas rightly said, the Committee's Report would have made nonsense otherwise. It is easy enough to say that the costs of distribution are far too high. As the noble Viscount, Lord Addison, remarked, that has been said for about twenty-five years—I would say it is nearer fifty years. It has been said over and over again. Successive Governments have failed entirely to grapple with the problem, and I very much doubt whether a commodity commission would have any greater success in dealing with that extremely intricate and difficult question.
I would, however, say that, so far as distributors generally are concerned, the distribution of food, as of other products, does not mean only conveying the product from the producer to the consumer. There is an element of service—and a very large element of service—in the distribution 1065 of food. Take, for instance, a common illustration used a great deal in the past—that of two firms distributing milk in the same street, when one can do it. The mere fact that there is a rival on the doorstep keeps each firm up to the mark, and the people who live in the street probably get their milk before breakfast, which is when they want it, instead of in the middle of the morning when the men have gone to work. Those things have to be borne in mind when one is considering distribution costs, and one must remember that, however hard one tries, perfection will never be attained, even with an absolute monopoly.
Both the noble Lord, Lord Lucas, and the noble Lord, Lord Piercy, mentioned that under the proposed system of commodity commissions advisory committees would be in operation. They would be an adjunct to these commodity commissions, and would keep them on the right roads. I know that advisory committees are recommended in the Report. I have had some experience of advisory committees. I have been a member of such committees, and I have also served on bodies which have had advisory committees to help them. If you are a member of an advisory committee advising an executive body you generally suffer from a sense of frustration because the body that you are advising do not always take your advice. If you are a member of an executive body advised by an advisory committee you have a feeling of irritation with the advisory committee for interfering with your proper job. I think that anyone who has had experience of advisory committees will agree that the employment of such committees is not a satisfactory method of getting business done.
I would come now to a point made by Lord Lucas, one which I think is of great importance. Lord Lucas said—I think I have his words right—that at the point where a guaranteed price operates, the commodity becomes the property of the taxpayer. The noble Lord said that that was the unanimous opinion of his Committee, and that that has coloured the whole of their recommendations. I must say that I find that statement astounding—even more astounding in the circumstances as they are today when the guaranteed price, as I explained, is the ceiling price and the taxpayer is not in the least involved. Even if the taxpayer were having to pay something in guarantee 1066 he would certainly not be paying for the whole of that commodity. I cannot see why the noble Lord and his Committee take the view that at that particular point the commodity becomes the property of the taxpaper and of no one else. Has the farmer no interest in his commodity after that point? Is he right out of court the moment he receives his money? I submit that he has a definite interest extending beyond the point at which he is paid.
§ LORD LUCAS OF CHILWORTH
I do not know whether the noble Earl is inviting me to give him a reply at this point. I am prepared to do so, but if we go into all the complicated matters that are involved it will take a long time. I agree that the producer has a very real interest in his products after the point at which he has received his guaranteed price. But after he has received the guaranteed price he has no monopoly interest and no direct financial interest. That must be apparent. I do not want to enter into discussions with the noble Earl about ceiling prices. In such a discussion we might have some interesting things to say as to where £400,000,000 goes every year.
THE EARL OF RADNOR
Of course the producer has not a monopoly interest after the point where the guaranteed price operates. But he has an interest in maintaining and, if necessary, enlarging his market. He has an interest even in the distribution costs, because if they are too high it will deter people from buying the produce which he produces and will make them turn to something cheaper. I desire only to register the point that in my view that statement that at the point where the guaranteed price operates the taxpayer has a monopoly interest—
THE EARL OF RADNOR
—that at the point where the guaranteed price operates, the taxpayer owns the commodity, is an astounding statement. At that stage the taxpayer may not have paid anything for the commodity, and we certainly hope that he will never pay for the whole value of the commodity.
I have only one other comment to make. Again, quoting from the Report, Lord Lucas said that guaranteed prices breed inefficiency. That suggestion has 1067 already been answered to some extent by my noble friend Lord Teviot. When the guaranteed price is, as now, the ceiling price beyond which the farmer cannot go, there is, I agree, a tendency to breed inefficiency. When the guaranteed price is a minimum—which is what it may have to be one day—and the farmer by being efficient can get more, that surely will not breed inefficiency. It will not breed inefficiency if farmers of this country seek a better price by producing a better product, by improved methods of distribution and so on. I cannot agree with the rather sweeping statement made by the noble Lord.
§ LORD LUCAS OF CHILWORTH
What the noble Earl says is quite right, or it would be if it applied to an altruistic world. But why did not the farmer do as the noble Earl has just been suggesting in the period 1931–1939? You will always get a section of the community who once they have obtained a guaranteed price will relax and be content. I invite your Lordships to consider Part I of the Agriculture Act which says that the guaranteed price will be one which will give the farmer a fair return on the capital invested. Many, once they have obtained that fair return, want no more; and there are farmers we know, with whom, in order to secure efficiency, one would have to arrange a contract so that premium prices were paid only for plus crops. That was the very argument which the noble Earl himself used.
THE EARL OF RADNOR
In the 1931–1939 period, there was nothing in the nature of guaranteed prices. The farmer was fighting for his life and striving to get guaranteed prices. I do not think that I have any further comments to make. I am grateful to those noble Lords who have taken part in this debate. I said at the conclusion of my opening remarks that I should know what I thought when I had heard what I had said. I have heard nothing in the debate to alter the opinion which I formed at the conclusion of my opening remarks. With your Lordships' permission I will withdraw my Motion.
§ Motion for Papers, by leave, withdrawn.