§ 4.40 p.m.
§ Debate resumed.
§ BARONESS ROBSON OF KIDDINGTON
My Lords, I rise from these Benches first of all to thank the noble Earl, Lord Ferrers, for introducing this subject for major debate to-day, and secondly to say how much we on these Benches agree with and support everything that he said in moving the debate. I am also delighted to hear that the noble Lord, Lord Beswick, is in basic agreement with the terms of the Motion before us. However, I cannot help finding it a little difficult to accept, because in Her Majesty's most gracious Speech delivered to this House only a week ago we have only one sentence devoted to agriculture; and while we welcome the sentiments expressed in that sentence—for continuation of discussions—it seems to me that it did not in any sense show the sense of urgency that has to be devoted to this problem by noble Lords on the opposite Benches.
My Lords, is it, therefore, so difficult to understand that for the first time in history the farming community of this nation has become really belligerent? Historically, they have supported this country in war and in peace and they deserve better prices than they are getting at the moment. Like the noble Earl, Lord Ferrers, I do not condone violence, but within the kind of society in which 475 we live there are classes who occasionally feel that they cannot make themselves heard unless they succumb to what we all deplore. If you consider the industry that we are discussing, it is an industry which has reduced its labour force by almost one-half, while at the same time increasing its productivity by over 10 per cent. over the last 10 years: that is with 40 per cent. less people working within it. What other industry in this country can point to a record of that kind?
At the same time it is an industry which has had to absorb, quite apart from the increase in oil prices, a doubling of its machinery cost over the last three years and more than a doubling of its labour costs over the last five years. I am a farmer myself and I welcome the doubling of agricultural wages; of course I do. However, it has to be reflected in the remuneration and the returns to the industry if it is to be fulfilled. This has meant over the last three years that the livestock farmer has been taking one-third less in income as compared with the rest of the community which is asking for a minimum increase of at least one-third. Therefore we are looking at an industry which in the past, in a world which is suffering from a food shortage, has done magnificently for this nation, and we are looking at its virtual destruction in certain sections at the moment.
The Liberal Party is on record as being a supporter of Britain's entry into the Common Market and I do not think that we have changed our point of view. We believe in Britain's membership of the Common Market because we believe that as members we can influence policy. When Britain first negotiated entry into the Common Market, food prices in the world were lower than the Common Market prices and historically this country has been a country with a cheap food policy. To-day world food prices are higher than the Common Market prices for food: therefore a different attitude of mind must obtain. But because on entering the Common Market—as the noble Lord, Lord Beswick, pointed out to us—this country was against the system of support for agriculture that exists within the Common Market, and because we negotiated a five-year equalisation period for agriculture in this country, we have fallen between two stools. I cannot see what 476 is to prevent the present Government from going to the Common Market and saying that for a period, as an emergency measure, we need a change and that we need a guaranteed price for a certain section of our agricultural industry.
My Lords, may I say that it is important for this country that economically agriculture should survive healthily. It is important for the average housewife. We, as Liberals, do not support the idea of food subsidies on an overall basis. In our view, it would be much more sensible to deal with this matter through family allowances and help for the people who really cannot afford to pay the increased food prices, and any savings that could be made thereby should be devoted to the support of sections of the agricultural policy. The only support that has been forthcoming for the cattle industry in this country has been the headage payment. If you are a farmer and you wonder what has happened in the market since the headage payment was introduced, you will find that as that goes up the market price which the cattle fetch is reduced by exactly the headage payment amount. In actual fact, it has not helped the British farmer one iota. If anything, it has helped the middleman and the butcher, and we do not believe that this is the right way to assist agriculture at the moment. In many cases it has killed competition in the market.
As I have said, I am a farmer and I am a milk producer. Of course I am delighted with Her Majesty's Government's 8p a gallon increase for the milk producer. I should like to point out that that was exactly what was necessary to keep the industry going. It has not made any milk producer a millionaire. I believe also that it was easier to negotiate that kind of help for agriculture because milk is an emotive product. Children require milk. You do not get the same emotion behind the feeling for a guaranteed price for beef. I am, as I say, a farmer and a milk producer: but I realise and am fully aware that agriculture is an interdependent industry No one section of the agricultural industry can survive in isolation because most of the calves that are reared by the beef rearing industry in this country come from milking herds. My own experience over the last few months in places as near London as Oxfordshire has been that I have seen calves being killed 477 at birth because it does not pay the farmer to bring the calves into market.
I have also received information from the national insemination centres that the demand for insemination of cattle is down by 40 per cent. That means that there will be 40 per cent. fewer cattle born in one year's time. You cannot repair that sort of damage overnight. Therefore the damage to the cattle breeding industry of this country has already taken place and it is almost too late to begin to give it the right kind of support. The losses per head for beef breeders at the moment are approaching £30 per head. As has already been stated, last week there were 15 per cent. more cattle offered for sale in the market, and the slaughter rate has gone up by 42 per cent. as compared with last year.
My Lords, I want to talk about a particular section of the cattle breeding industry of this country; namely the hill farmers of Scotland and Wales, because I think they are the people who are suffering more than anybody else at the moment. Through encouragement and support of hill farming, hill cattle have increased in number from 50,000 cattle to 400,000. That is a tremendous achievement on the part of hill farmers and it has not occurred purely as a result of Government subsidy. They have been enabled to increase their production to that extent through the Government subsidy, but they have done it through good farming and an increase in the fertility of the land. At the moment we are running the risk of destroying the whole of that achievement "at a stroke" and they need an extra emergency payment—not a bringing forward of their normal subsidy but an extra emergency payment—if they are to avoid bankruptcy. This is a very important issue and I believe the Government should deal with it as a matter of urgency
I believe we also need to negotiate with the Common Market for an emergency guaranteed price for beef production in this country. I am told by fairly reliable sources that this proposition has never been put by the Government to the other Common Market Agriculture Ministers. It was not put on October 2, and I believe if it were put the Common Market Ministers would see the justice of our case and we could achieve some 478 assistance for British agriculture. After all, the intervention buying allowed under the Common Market rules guarantees the Common Market cattle breeder £20 per hundredweight; the British farmer is getting between £11 and £13 per hundredweight. It may be that the cold storages of the Common Market are full of beef. It may be that we do not believe that in the long run the intervention way of dealing with agriculture is the right way. But we certainly cannot afford to allow British agriculture to fall between the two and get absolutely no support at all for the cattle policy of the country. So, if we cannot negotiate a guaranteed price for an emergency period for this country, we should at least introduce the intervention price.
§ House adjourned during pleasure.
§ House resumed by the Lord Chancellor.
§ 4.53 p.m.
§ LORD NUGENT OF GUILDFORD
My Lords, may I begin by congratulating my noble friend Lord Ferrers on putting this Motion before the House, and moving it in such an attractive way and in such cogent terms. I felt that he dealt most comprehensively with the immediate situation and I do not myself intend to rehearse it, especially as there is such a long list of speakers following me. In this connection, I should like to thank the noble Lord, Lord Beswick, for giving such a comprehensive and detailed answer to the various points, commodity by commodity. He has indeed a very sombre case to deal with, particularly on beef, which is at the heart of the problem. It is of course a tragedy that this collapse of the market should coincide with an exceptionally bad fodder year when there is a very serious shortage of fodder throughout the country.
But I would acknowledge that the measures which the Minister of Agriculture has taken will help the market. I would not be quite so pungent as the noble Baroness, Lady Robson, in my comments. I think they will help the market; I hope they will steady it and that it will recover, not just for the moment but in order to try to hold on the farms the young, unfinished cattle which will provide the supplies for the future. The only point I wish to make about the Minister's actions, which now amount to a good deal, is that had they been taken 479 together a couple of months earlier they might well have saved some of the damage which has been done; and, as the noble Lord will know, the National Farmers' Union were making their representations last August and September.
The points I should like to turn to are those connected with the long-term prospect. I ask the noble Lord, Lord Beswick, and his colleagues in the Government whether they will now formally adopt a further major expansion programme. It is certainly not a good moment, but farming is a long-term business and farmers recognise that every year is not a difficult one like the present year, and if they can be helped through this year they will be there to go on and continue with the job in the future. So I ask the noble Lord whether he will consider this point and, in particular, the admirable case which has been made out in the pamphlet, which I am sure a number of noble Lords will have received, from the noble Lord, Lord Netherthorpe, which sets out the case for making this expansion. The capacity is there and the fact that this expansion, or a similar expansion, has been achieved over the past five years, based on the N.E.D.C. expansion document of six years ago, and that that achieved such a major success over those five years is surely confirmation that the industry can do it. provided it is given the necessary financial and Government backing in order to bring it about.
I see that in this document the claim is made that the saving in either the imports or exports of fat stocks or other commodities over that period has amounted to £790 million per annum. This is a substantial help, both to feeding the country and to helping our trade balance with the outside world. If this was a good thing to do six years ago, then when we look at the scene to-day with this gigantic trading deficit of £4,000 million—as I suppose it will be this year—on the one hand, and on the other hand the desperate situation in the world outside which is being brought home to us daily as we read the reports of the United Nations Conference in Rome, we can see that it is even more desirable that we should mount a further expansion programme here. I will make only one comment about the United Nations Con 480 ference in Rome, which is bringing home to us the facts of the starving hundreds of millions. It is estimated that approximately 500 million people in the world are now starving, and the greater the measure of success in diverting food supplies to them the less there will be for us and the more we shall have to pay for it. But all of us must hope that there will be a very large diversion to them although it will not make life any easier for us.
There are three obstacles to the policy to which I should like to refer, and two technical points. The first one can be stated shortly and simply. The Government have confused not only this area of our national life but many others by their own uncertainties about our membership of the European Community. This bears directly upon agricultural policy in this country, and therefore the sooner the Government can clear their minds and I hope, decide that our membership shall continue, the better. I would only add that this House has debated the matter on various occasions. I know where the majority opinion lies, and that is that if we find ourselves outside and have to buy the 45 per cent. of our food, which we now buy in the outside world, from outside the Common Market and without them to help us, we shall find, as my old friend Christopher Soames said last week, that, "The world is a damn cold place". So I hope that the noble Lord opposite and his friends will resolve this great issue very quickly.
My second point is one which has been referred to by my noble friend Lord Ferrers and concerns consumer food subsidies. Again, I refer to the background of a world in which there are hundreds of millions of people starving, and here is our Government following a policy of subsidising food. This is fostering a dangerous illusion in the people of this country that food can still be cheap and plentiful. We know it is not; we know it is not throughout the world, and I am sure we should do everything we can to bring it home to the community that this is a precious commodity which should be used economically and valued as such.
Turning to the technical aspects of the market, the market will work best if the consumer pays the price for the commodity, with stabilising machinery there in order to ensure the long-term processes 481 which are necessary in agriculture. Therefore, I would urge the noble Lord and his right honourable friends elsewhere that they should taper off these consumer food subsidies as rapidly as they can and that they should deal with cases of personal hardship by specific cash grants rather than this comprehensive system, which is absolutely inappropriate today. Looking at the market, there is no doubt that if we work on a system, as I suppose we are committed to do in the EEC, of market prices for consumers plus an intervention system, it is most important that the market should not be interfered with by consumer subsidies. By cheapening food we are adding one further aspect of loss of confidence to the farmer.
My Lords, the third major point I wish to mention is that of taxation referred to by my noble friend Lord Ferrers. I have two points to make on this. First, the incidence of income tax and corporation tax has been sharply increased by the 1974 Budget. It bears on all businesses in this country. They are all suffering problems of cash flow. But probably in agriculture it bears most hardly because of the seasonal swings inevitable in the farming world. Farmers accept this, but if taxation is too high they are left with a shortage of cash flow, a situation in which they most certainly are now, to finance their current undertaking.
My noble friend referred to the enormously high level of overdrafts which has already made the bell ring and there is nothing more to come from the banks. I would suggest to noble Lords opposite that if it is their intention to continue with these penal rates of taxation, they really must consider an old idea we used to discuss in the past, of averaging farmers' profitability over a three-year period so that they can even out the inevitable seasonal swings. Unless this is done, noble Lords opposite will find in a combination of years like the present—high profitability last year, high taxation demand and low profitability this year—that many farmers will not have the cash to carry on.
On capital transfer tax, to which my noble friend Lord Ferrers referred, I endorse his every word. There is no doubt at all that, combined with the threat of a wealth tax in the background, with the reduction of the estate duty, 482 45 per cent. on farmland, the effect is to cause grave anxiety in the minds of many farming families, families which are quite modest although they sit on a large chunk of money. They are anxious now as to how in the future their farms will be carried on. I therefore join with my noble friend in asking the noble Lord, Lord Beswick, to examine this matter with the greatest care, not only for the personal hardship that will result from it, but also from the point of view of fragmentation which is inevitable in the course of a generation or so if this kind of taxation is loaded on our farms, just at the time when the economic unit grows bigger every year if we are to get maximum production from our farms. I hope noble Lords opposite will consider removing those three obstacles to success.
I have two points to make on the technicalities of how this expansion may be achieved. Of course, price levels must be fixed at a satisfactory level in order to give farmers the necessary incentive to produce. On cereal crops, the existing system is good, the existing guaranteed investment price levels are satisfactory, and the cereal farmers have made good profits even this year. I was interested to hear the excellent figures which the noble Lord, Lord Beswick gave us of the size of the crop. Certainly this is true, and it is marvellous, in an exceedingly difficult year, just how well our fanners get their harvest in with modern machinery, but modern machinery of that kind costs money. A full-sized combine harvester costs £10,000, so we are talking about big money for capitalisation. But this is all right, and in my judgment the intervention machinery is satisfactory for cereal crops.
I would go further. I believe the time has come when Government should set up in this country our own strategic stockpile of cereals. Traditionally we have relied on the stockpiles in the United States and Canada. I see the noble Lord opposite nodding his head. But we have heard that these stockpiles have disappeared. The stockpile in the United States does not exist as a Government stockpile; it is left to private enterprise to do as it likes, and even if it was there, they would not necessarily give us priority. So in a world which is hungry, and in which there may be difficulties in harvesting in any year it is common sense 483 that we should set up a strategic stockpile of at least 5 million or 10 million tons, to be kept here as a strategic reserve to ensure that our people have sufficient food to eat—bread grains particularly—in a difficult year. On the other hand, this will provide the machinery for intervention buying if prices at any time fall to a level where intervention is needed.
My Lords turning to the red meat side of the question—and beef is the key to all this—it is going to continue to be short in the world and become more and more expensive, but there will be temporary fluctuations of the kind we have seen this year. There must be some kind of price guarantee for a type of farming which is so very long term. I am bound to agree with the noble Lord that intervention buying and cold storage really is not the answer. It is enormously expensive, and having done it it gravely reduces the quality of the meat. So it does not supply a satisfactory answer. I am persuaded that the old deficiency payments system, of which I am proud to say I was one of the inventors, seems to be the best system invented. I do not believe intervention buying and cold storage is working all that well in the other Common Market countries. I am delighted to hear that the Minister of Agriculture is still "banging on" and trying to persuade his colleagues there that this is the right method. I am sure it is, not only for us, but for them as well. The complications of the existing system are very great indeed, so good luck to him, and I am sure this is the right thing to go back to.
My Lords, I conclude by asking the noble Lord, Lord Beswick, to persuade his right honourable friend the Minister of Agriculture and his colleagues that now is the time to make another major policy statement that a further major expansion of home food production should be undertaken, and that the Government are ready to sit down with the representatives of the farmers, of the National Farmers' Union, to settle the means by which this can be done. We are told in the pamphlet—and I believe it is true—that if we do this, despite all the setbacks of this year, we shall have a good prospect that by 1979 or 1980 we can so much increase home production that we could halve the import of the temperate climate food that 484 comes into this country. This is possible, and has been done in the last five years. It can be done again in the next five years. Nothing would help us more in assuring the food supply of this country, and in helping our balance of payments.
§ 5.8 p.m.
§ LORD O'BRIEN OF LOTHBURY
My Lords, I am very glad to be given the opportunity of taking part in this debate. Of course, my pleasure is tempered by the ordeal which it must be for anyone to address this House for the first time. I hope I do not test too severely the patience of your Lordships but if I do, I hope that just this once your Lordships will extend to me your indulgence. Previous speakers in the debate have declared their interest, and I should do so, too. I had a godfather who was a farmer. He disappeared from my life early on, and I have since held to the notion of so many lifelong town dwellers that the farmer's life is the best. No doubt I shall take this illusion to my grave.
I do not know much about farming, but for many years I have been concerned with our balance of payments, now probably in as poor a shape as it has ever been. In so far as it is bad on the ordinary trade account, this is something which we can and should put right as soon as possible. In so far as it is much worse on oil account, this is something which we simply cannot put right quickly. The reason for this is that those who provide us with the oil at such astronomically increased prices are quite unable to take, in full exchange at any rate, the goods and services which we or indeed any other nation can provide. Therefore we must pay the very large balance in foreign exchange which, of course, we have in insufficient quantity, and that being the case we must willy-nilly borrow, borrow very heavily as we are already doing, and borrow for some years to come. We, of course, are in a better state than many other countries in that the rescue of North Sea oil is not so far distant. Certainly in the next decade we shall be self-supporting in oil and shall probably be exporting some. But that is still a long wav away. The borrowings meanwhile will be very heavy, and the interest we have to pay on them very high; the charge on our resources in the future will be very onerous indeed.
It follows from that, obviously, that any way in which we can minimise this 485 borrowing and thus this future charge on our resources should not be neglected. There are some ways in which we could minimise the charge by economy, by seeking other fuels, but these are negative ways of helping ourselves, and the positive ways are far better. What positive way could be better than to enlarge and strengthen our agriculture so that we grow more of our own food and thus have to import less from abroad? There was a time maybe when agriculture could be left to look after itself, with the world swimming in cheap food and the British in an exceptionally good position to buy it. That is not the case now and it never will be the case again. So attention to our agriculture is absolutely obligatory.
It is very easy to advance that argument, and I would guess that very few people would argue with it. It is the question of the best way to do it which provides all the arguments, and on both sides of this House no doubt there are different views as to how best it could be done. I am certainly not one who can enter into such a debate and add anything to it. It requires great technical knowledge of the industry which I do not have. But the noble Earl, Lord Ferrers, in opening the debate referred to the Report of the Committee on the Export of Animals for Slaughter which was published in February—a committee of which I had the honour to be chairman—and the noble Lord, Lord Beswick, has said that in another place there will be a debate on that Report. I, of course, cannot take part in that debate, and even if I could I would not wish to do so; I would not want to be put in the position of a partisan.
The Committee was formed by the previous Government to examine the question as factually as possible. I may say that when I was on the point of leaving the Bank of England and went to see the Prime Minister he said to me, "Would you be prepared to take on more public work?", and I said "Yes indeed I would". Three weeks later they came up with the idea that I should chair the Committee on the Export of Animals for Slaughter, a most unlikely idea. Indeed my wife said to me, "They could not have picked a worse man". However, my predecessors at the Bank have 486 shown how versatile Governors of the Bank have been, and I was not going to be beaten, so I decided to press on, and I am glad I did; it introduced me to a new field of life that I found frankly fascinating.
I do not want to weary your Lordships this afternoon by going over the Report and its recommendations and so forth. I want to make one point in particular. This is a very controversial question, as I discovered to my cost. I shall certainly not speak of it this afternoon in a controversial way. But there are many people of humane feelings and worthy objectives who feel very strongly indeed about this matter. We had hundreds of letters from such people, many of them in most immoderate language, many of them imputing to us motives which were quite unworthy. Indeed the only friend of the trade we were examining was the trade itself. Many of the critics were sensible people who had good points of view. I am bound to say that some of them were less sensible and more extreme in their attitudes. But we were conscious that on the one side there was a great weight of disquiet and dismay about the trade and on the other side was the trade trying to tell us quietly what in fact took place.
The Committee which the Government formed was a small one, only five people. I was easily the most non-expert. We had the President of the Royal College of Nursing, the President of the Royal College of Veterinary Surgeons, a distinguished QC who had been on the Northumberland Committee and a distinguished agricultural scientist. Two of those were farmers, but I do not think this in any way warped their judgment or view of the problem we were studying; indeed, of course, it helped the rest of us who were non-expert. We were asked to get on with the job as a matter of urgency. We took six months in the end, which was twice as long as the Balfour Committee took in 1957. I do not say that we did a better job than the Balfour Committee, because at that time the trade was only beginning whereas we were dealing with something which had developed a great deal. We went to markets, to slaughterhouses, to lairages, to export points both in England and on the Continent. We travelled by sea and by air 487 with consignments of cattle and we did everything we could to get into the matter. We stood on the steps of stunning pens in slaughterhouses, which anyone who has never done it before would find, and certainly I found, a very daunting experience; I needed a stiff drink afterwards. But on the whole I must say that I found that these tasks were performed in a humane, expeditious and professional manner which was reassuring, and I found this so both in this country and on the Continent.
I think the illusion which many people have that the devil starts on the other side of the Channel is really an illusion. Indeed in some countries on the Continent their practices are, if anything, better than ours. I say this only because I want to make this point. Admittedly the Report contains the opinions of only five people, five people who had to work quickly within a period of six months, who did all they could in that period, but who in the end came out with views which were virtually the same as those of the Balfour Committee some 17 years before. I may say that, when they started, three out of the five members of that Committee had made up their minds that they would be difficult to persuade that this was a trade which should continue. So we were persuaded by what we saw.
Our Report is an attempt to gather together all the facts about this trade in so far as they are ascertainable. We hope it is a document which a person can read; he may not share the views expressed at the end of it, but having read it he will feel he has a good grip of what the trade is all about. I may say that we reached unanimity without any kind of argument at all: it was quite spontaneous. Having had the privilege of chairing that Committee and having reached those conclusions I do not now wish to press them in a partisan manner. I wish merely to put on Record what we think, as against the highly emotional attitude of people who had no idea what was happening and had never seen this trade in being, but who had merely taken the views of some welfare society or some newspaper article; and I am still receiving very harsh letters, particularly from ladies who do not like what is said in the Report even if they have not read 488 what is said. I merely want to take this opportunity, in a debate which is of much larger ambit than this quite small matter, to place on Record that this has been an honest attempt to get at the facts with as little bias as possible and to make recommendations which we feel the Government could implement.
Of course those recommendations include provision for many safeguards which do not exist now, but they are safeguards which the trade suggested might be inaugurated. I would urge, in particular, that the hostility between the "welfarists" and the trade should be ended. That hostility seems to me to be much more on the side of the "welfarists" than on the side of the trade. I believe that if they co-operated together this trade could continue without undue stress to the animals, and with their being dealt with in the final slaughterhouse sensibly and properly without prejudice to the farming community.
§ 5.21 p.m.
§ LORD VERNON
My Lords, it falls to me—and it is the first time that it has fallen to me—to congratulate the noble Lord, Lord O'Brien of Lothbury, on his maiden speech. He gave us the sort of speech that we would have expected from someone of his wisdom, wit, and experience, particularly in the economic field, and of course his remarks were all the more relevant to us in view of his chairmanship of the Committee on the Export of Animals for Slaughter. We look forward to hearing the noble Lord many times on future occasions.
I shall not discuss the immediate difficulties facing British farmers, particularly beef farmers, because these have already been covered by my noble friend Lord Ferrers, and will no doubt be covered by others in the debate. I want to look at the longer term future of British agriculture and the relative importance attached to it by the Government. In doing so, I shall be treading some of the ground, though not all, of my noble friend Lord Nugent of Guildford.
As a nation of 56 million people with 46 million acres of agricultural land we have to import roughly half of everything that we eat, or which our animals eat. That was no great problem in the early days of this century, when we governed a large portion of the globe and 489 could bring in an unlimited quantity of foodstuffs, but it is a most unenviable position to be in today. Food imports cost us, in round figures, £4,000 million a year, which is about 20 per cent. of our total import bill. I think that it compares with something like £3,000 million for oil. It is an immense drain on our balance of payments.
But that is not the whole story. Events are not moving in our favour, and in the next 30 years there will be another 3,600 million people in the world to feed—double the existing population. Already there is widespread starvation in India, Bangladesh, and other countries and, as we all know, world food stocks are low and world prices, over which we have no control, are escalating. What is certain—and I think that we are agreed on that in your Lordships' House—is that food prices will continue to rise and that the days of cheap food are gone for the foreseeable future.
Unfortunately the people of this country have not yet grasped this fact. They have relied for so long on cheap food that it is difficult for them to understand that it is no longer available. One of the reasons why they have not grasped what has happened is that the Government are trying to disguise it under the cover of food subsidies. I believe, as others have said they believe, that this policy is totally mistaken. Sooner or later, we shall have to pay the true cost of our food, and the sooner we face up to reality the better. The noble Lord, Lord Nugent of Guildford, described food subsidies as fostering a dangerous illusion. That is exactly the point.
If the situation beyond our shores is as I have described it, what should be done by the Government? I believe that a number of things should be done. First of all, we should seek gradually to reduce our population to levels which make us less vulnerable to outside pressure. This would, of course, be long-term in effect, but it is no less important for that. Secondly, British agricultural production should be encouraged in every way possible. This means not only giving maximum incentives to farmers to increase their output—a matter to which I wish to return in a moment—but stopping the present insane policy (and I am not making a Party political point, because I think that the two major Parties are 490 equally guilty) of taking 60,000 to 70,000 acres annually out of agricultural production for so-called development. An area the size of Bedfordshire has been removed in the last six years, and another Bedfordshire will go in the next six years. That is what we are doing to this country.
It also means having a much more vigorous national policy for clearing and utilising derelict land, and instituting a more thorough research into the feasibility of reclaiming land from the sea. Finally, and in some ways most important, the Government should ensure that we remain in the European Economic Community which, as a whole, is largely self-sufficient in foodstuffs. This will at least give us some degree of protection when the icy winds of starvation begin to blow in the world—and they have already started blowing! And yet on all these measures which many of us believe to be essential, the Government are either doing nothing, or what they are doing is in the opposite direction to that required. So far as the EEC is concerned, perhaps it would be truer to say that half of them are doing the opposite of what is required.
I shall not now develop my ideas on preventing the loss of agricultural land, on land reclamation and on the desirable level of population for these islands, because there is not time. Furthermore these aspects of the subject are so important that I hope we can have a special debate devoted to them. Likewise, I am sure that there will be many opportunities in the next few months to discuss the E.E.C. All I should like to say on that is that when the full facts about the sort of existence that we can expect outside the E.E.C. are explained to the British people, as I hope they will be, then I do not think that the British people will be so plain stupid as to opt to go it alone.
I now come back to the matter of incentives, and the state of mind of the farming community. In the debate on the state of the nation last week, my noble friend Lord Mansfield described the present mood of the countryside as one of despair. I think it is despair and we should look for the reason. I believe it is because farmers and landowners—and let us not forget that many landowners are farmers too—believe that the Labour Party as a whole, with, of course, some notable exceptions, does not really understand the countryside and does not understand what 491 makes it tick. What is worse, they do not really care. There is, in fact, a built-in prejudice against the farming interest because it has never provided the Party opposite with its traditional support.
§ LORD SLATER
Would the noble Lord forgive me? He is making against the Party at present in power the allegation that we have never understood the countryside nor given consideration to the agricultural fraternity in the way that we ought to have done. Is he not overlooking the fact that following the last war, after 1945, when Labour came into Office they produced one of the finest Ministers of Agriculture that this country has ever known, who was exalted to a great extent by the farming community themselves, in the person of Mr. Tom Williams?
§ LORD VERNON
My Lords, I do not think the very great qualities of Mr. Tom Williams have ever been denied, and I certainly would not seek to do so. But I was talking about the situation as it is now. Perhaps I could explain what I mean. Whereas the Conservative Party hold some of the urban constituencies at the moment, albeit a minority, Labour constituencies are now confined exclusively to the towns. I regard this as one of the tragedies of the present situation because, in addition to all the other divisions in our society, we now have this division between town and country. It is a division which has always existed to some extent throughout history but never, I suggest, to the extent that it does to-day, and I do not regard it as healthy for a democracy such as ours. I would much prefer to see some Labour-held country seats, just as I would prefer to see more Conservative-held seats in the towns.
Mention has already been made in the debate of the effect on the farming community of the new proposed capital taxation. "Taxation" is in some ways the wrong word. When a person's assets are removed during his lifetime on the scale envisaged it amounts to a confiscation which has never been previously practised in a Western democracy. It will result in a severe cut back in private investment, in new buildings and new equipment, which are badly needed in order to increase production. It will result, as has already been said, in the fragmentation of private estates. I am 492 myself a landlord and I must declare an interest, but I personally believe that the fragmentation of these estates is bad for farming and I believe it is bad for the environment, too. It will result, moreover, in the fragmentation of owner-occupied farms, the very same farms which successive Governments have been encouraging in one way or another to expand in size. How important are these owner-occupied farms? There are 153,000 of them altogether and they cover 56 per cent. of the fanning land of the United Kingdom. This compares with 36 per cent. owned by private landowners and 8 per cent. owned by institutions. The total value of the home food produced at the farm gate is just over £4,000 million a year, so it is fair to say that the owner-occupier provides at least £2,000 million of our home-grown food which we would otherwise have to import. Yet these people whose production is so vital are to be savagely penalised by the capital transfer tax, by the wealth tax and by the capital gains tax; and it is worth noting I think that the latter, during a period when inflation is running at 20 per cent., is not a tax on capital gains, it is much more frequently a tax on capital losses.
It is said that the new taxation is required to prevent evasion under the existing system. If that were the case it would be possible to treat capital in land like capital in standing timber or capital in exceptional works of art—the tax would be payable only when the land was sold. That should be a way out of the evasion argument. And, my Lords, if individual farmers and landowners are not going to own the land of this country, who is going to own it? I think we are entitled to know, and I hope that the noble Lord, Lord Strabolgi, when he comes to wind up, will be able to tell us. Is it the Government's intention to nationalise agricultural land by the back door after there has been further fragmentation, or is it to become increasingly owned by pension funds and other institutions who generally own it solely for what they can get out of it? The present uncertainty is most damaging.
I have always thought that the pattern of land owning in this country should not be immutable. It has changed in the past and it has got to change in the future. In my view a case can be 493 made out for some degree of public ownership of agricultural land if sym-pathetically handled, if only to take over some of the larger private estates which would otherwise be broken up in order to pay estate duty. I also think that land ownership by the independent boards of the National Parks should be encouraged when suitable land becomes available on the market; but this would be a gradual process with the private sector continuing to play a vigorous part. It is entirely different from what the Government appear to have in mind. My Lords, despair, if it is allowed to continue, breeds bitterness; bitterness breeds anger, and anger will in due course breed contempt for the law. I cannot believe that that is the Government's intention.
§ 5.39 p.m.
§ BARONESS FISHER OF REDNAL
My Lords, I crave your indulgence this evening in making my maiden speech. No doubt some of your Lordships will be wondering why a woman coming from the City of Birmingham should be entering a debate concerning farming interests. The City of Birmingham has lost its farms over the last ten years, they having had to give way to housing.
To-night I speak not as a farmer. I grow a few roses; I cut the lawn when my husband is not available. My contacts with the land are limited. Listening to noble Lords in this afternoon's debate, one is led to the conclusion that farming is a very complicated industry. If one has followed the television broadcasts and read the Press as a leader to the Rome World Food Conference one will see that the situation concerning food is not a purely local problem but is world-wide. It is also a highly political problem. It was said yesterday at the Food Conference that man has learned to reach the moon but is not able to solve this problem of food shortage. It might be that its highly political content—I do not want to be controversial—is one reason why we are not able to provide not only ourselves but the Third World with the food which is so urgently needed.
This evening, my Lords, I want to congratulate the British farming industry on its efforts over the last 25 years in making farming in this country so highly efficient an industry. The farming indus 494 try should be congratulated on its efficiency because the more we can produce in this country—I am fully aware that we cannot produce all our needs—the less strain we are then upon the world resources. So one congratulates the British farming industry upon its great output over the past 25 years. I will leave it to other noble Lords who are to follow me in the debate to explain away the militant action at present being taken by farmers in various parts of the country. It has been clearly shown, through television programmes, that those persons who earn their living above the ground can be roused to anger, can resort to breaking the picket lines, just as readily as those people earning their living below ground.
It is not for me to understand all the ramifications of the different prices paid for different products; I would just call them various subsidies which are being paid to farmers in various ways. This afternoon we may perhaps ask for more cash benefits for beef farmers, but surely there is something wrong within the system. While again I do not want to be controversial, it seems strange, watching television and seeing farmers taking their calves to market and not being able to sell them, to hear that this is because fodder is too expensive and that the animals will die during the winter. Then we hear another farmer say, "Of course I am exporting my grain to France because I can get a better price for it". This is why I do not understand the farming system. Of course, I am not an expert on farming matters, but to me there is something strange in the system when one sees that kind of situation unfolding in a television programme.
I agree that the Government should examine closely the state of British agriculture, not only because of the possible ruin that will be faced by some farmers—important though that issue is—but also to protect the housewife from the tremendous upsurge in prices which will arise because of scarcity. The words "shortage" and "scarcity" send a chill fear down the back of every housewife in the country. They are deadly words to the housewife. We have seen this position arise only recently with sugar and salt. We know that if one mentions the word "shortage" it creates panic buying. We know what happens with panic buying. Very soon the supermarket 495 shelves are left empty. When that happens not only is it frustrating for the housewife, who has to look around and spend more time and energy in finding that commodity; but the worst situation to arise is that when the supermarket shelves begin to fill again with that commodity she knows full well she will have to pay exorbitant prices. So when shortages are mentioned—and I say to noble Lords this evening that the words "shortages" and "scarcity" should almost become a criminal offence when used about food—what happens is panic, and in the long run obviously this has an inflationary effect.
I want to put some points of view which noble Lords might think naïve, but which the housewife constantly expresses. She fails to understand when excuses are given for increased prices that they are due to the weather, the bad harvest, or to some little insect that has crept inside the potatoes or sugar beet. We get these excuses for increased prices, but, on the other hand, if we get a good harvest, good weather and no little parasites creeping into all the different kinds of food, we never have a corresponding reduction of food, we never have a corresponding reduction in prices. We are always asked to bear the brunt of bad weather—and I know this year has been an exception—but, for goodness sake! my Lords, let the housewife have some benefit from the better weather and the better harvest when they occur. Let the housewife also share with the farmer the good as well as the bad years.
It is also very difficult for the housewife to understand the problem about beef. Two or three years ago she decided she had had enough. She told the butcher, "You can keep your beef", because she could not afford to pay the prices. Then, somehow, beef prices began to fall. I do not know whether someone intervened, or whether the farmer decided that in order to keep the housewife happy he would take less profit. Suddenly, we found a beef mountain alongside the butter mountain. This afternoon we are being told that there will be another beef shortage. How on earth can you get the co-operation of the housewife who is trying to think things out but fails to understand how these cycles can happen?
496 I am not suggesting that the housewife is a simple person; she is normally a person with a great deal of common sense. What needs to be applied to the food problem in this country is a great deal more common sense. The housewife is also very confused when she reads about prices in the Press. The figures I use are not yesterday's or last week's market figures; they are the kind of figures which will illustrate an example. She reads in the Press that, say, the farmer is getting 30p for a box of ten cauliflowers, and she fails to understand why she has to pay 20p for one cauliflower. Figures quoted by farmers for the prices paid for their produce bear no comparison to what the housewife pays in the shops. She would say that the Government need to find out what causes—if there is a cause—the conundrum of cheap food being sold by the farmer and high prices being paid by her in shops.
I am drawing to a conclusion, my Lords, and I hope that I have not wearied your Lordships too much. The majority of housewives in this country were grateful for the action which the Government took over their subsidy payments. Here, perhaps, I disagree with some noble Lords who have already spoken. Many housewives realised that the Government were trying their best to keep down retail prices. They did this by a form of subsidy payments which have helped considerably the lower income groups and the pensioners.
The Government also set into motion their control on profits and their restrictions on price increases. The housewife accepted this help being given to her, but her job to-day is a thankless one. While I am not a farmer, and am certainly not experienced in farming methods, I hope that by now your Lordships will see that I have some experience as a housewife. The job of a housewife is a thankless one to-day. She is caught in a vicious circle, because her job is to ensure that her family are well cared for and are well fed, and it is on her kitchen table that the buck stops. It is at her level that the cash-flow has to be found from week to week to meet the bills and make the housekeeping go round. So I would say this afternoon, my Lords, that while I have some sympathy with the farming 497 community, one farmer's price increases are another housewife's financial loss.
§ 5.50 p.m.
§ LORD BALERNO
My Lords, it falls to me to congratulate the noble Baroness on her speech. It was one of the most incisive and one of the most fluent speeches that I have heard for a long time. She will not of course expect me to follow her all the way, but I would ask her not to believe all that she sees on television about farmers. I would also tell her that many farmers cannot see television. We certainly hope to hear more from the noble Baroness in the future, especially as a housewife. May I draw her attention to the problems of the middle-man, who comes between the producer and the housewife? I think they would be well worthy of her closer attention in the future.
My Lords, the noble Lord, Lord O'Brien of Lothbury, stated very clearly the importance of extending our agriculture. He said that we should grow more of our own food. The fact of the matter is that we can. We have the know-how and we still have the men on the land. We could grow all of our own food. We could grow all of the crops that we need, of the types that we are growing just now, and we could grow all the livestock that we need to feed ourselves. But farmers must be given the necessary incentives. I was, however, particularly struck by the maiden speech of the noble Baroness, Lady Robson of Kiddington, because she touched on a subject which is very close to my heart; namely, hill farming. This affects the lives of people who cannot speak for themselves, as a rule; people who are patriotic to a degree, in that they do not complain. That may be partly because they do not know what they are missing. However, I should just like to make these remarks to the Government about hill farming. The noble Lord, Lord Beswick, spoke of bringing forward the subsidy. I was talking to two hill farmers only last week, and I mentioned this to them. The hollow laugh that came from them: advancing the hill subsidy to be paid in March by about six months, mortgaging the future, when at the moment they are unable to buy the feedingstuffs to see their calves through the coming winter !
498 My Lords, in the autumn of 1972 one of the "Little Neddies" produced a Report on hill farming. For a long period through the 'sixties the hill farmer had been going from bad to worse, but in the two years prior to the Report there had been a transformation. At the time that "Little Neddie" was writing its Report the picture was rosy, but at the time of the publication of it the first clouds were in the sky—grain prices had started to rise. Future historians will take 1972 as the watershed in the crisis of world food production. It is curious that, so far as I know, not one of our highly-paid economists in the United Kingdom spotted that that was going to happen, and yet the signs were probably there, and that is why we keep economists. But this considerable rise in cereal prices throughout the world took us flat. An American economist, perhaps being somewhat wise after the event, has made the point very clearly—and I quote from last Monday's Daily Telegraph:Food demand is up 50 per cent. since 20 years ago while world food stocks as of last summer stood at 27 days of world need compared to a 95-day world supply around 15 years ago ".That sets out completely the problem that we are up against in the world at the present time, and accounts for the difficulties our meat farmers, our livestock farmers, now experience.
I am quite unable to agree with the noble Lord, Lord Beswick, that the higher yield of cereal crops which he forecast for the past harvest will help our livestock farmers in any material way whatsoever. The majority of the livestock producers of this country grow very little cereals indeed, and many of them grow none at all. So it is wrong and misleading to say that because the cereal farmers are benefiting from higher cereal prices there is therefore a benefit of some kind going to the livestock farmers. There is not even a little benefit. For myself, I am concerned with a farming unit that grows barley. We feed all the barley that we have. The increased yields (if they are increased over those of the previous year, which I doubt) will certainly marginally help us, but if we have to buy the feed, as we do have to buy further feed, it is of no help to us that the barley prices in this country have gone up in the past year. It is a detriment; it is a hurt to us.
499 As to the shortage of hay the noble Lord spoke about, is it four, five or six times what it was ten years ago? And it seems to be steadily rising. Then the noble Lord spoke of silage. Does the noble Lord, Lord Beswick, know that when one grows silage and stores it there is virtually nothing else you can do with it but to feed it to one's stock? It is not a marketable commodity; and it is not normally a commodty which one can use as the full ration for one's livestock, even if one grows sufficient of it. Depending on its quality, of course, it has to be eked out with bought-in feeding stuffs. I find these arguments of the noble Lord, Lord Beswick, singularly unconvincing. In his speech there was not one word of hope for the livestock farmer.
My Lords, at the Meat and Livestock Commission Conference held yesterday the vice-chairman said:Unless there is an immediate return to more realistic market prices the situation can only worsen and the import-saving role of the livestock industry of this country will be further eroded".I wonder how many of your urban Lordships realise that the average retail price of meat has fallen by 10 per cent. during the past year but that the price of beef to the farmer has fallen by a much greater percentage. The next point is an important one: the all-food index has gone up by 18 per cent., so those people who blame the farmer for rooking the housewife should think about what they are saying.
My Lords, I turn now to the capital transfer tax and I add my plea to that of the noble Lords, Lord Nugent of Guildford and Lord Vernon. In their White Paper, the Government say that considering the possibility of continuing some relief for full-time working farmers and businessmen in respect of agricultural land and business assets. To do any good at all, the basic concession for farming must apply to all agricultural land, even though this would have some effect in increasing the market value of farm land. Even if it does so, I wonder whether it would increase it any more than the rate of inflation we are undergoing at the moment. There must be, too, if this becomes law, preferential rates of tax on transmissions to closely related members of the family and on gifts inter vivos, so as to encourage transfers to 500 give the young man his chance while he is still young.
If the Act does not contain some concession of this sort, I can see it constipating agricultural development. The farmer builds up his enterprise by hard work with brain and brawn; he builds it up by long-term husbandry of the land and of his animals. The object of his striving is to make the land yield more per acre and to make his animals more productive. For many years he ploughs back the greater part of his profit into his enterprise at personal sacrifice to himself, his wife and children. He does this largely because of his innate love of his land, which he sincerely believes he holds in trust. He looks forward to handing this trust on to his son and they both regard it as sacred. One cannot expect the city dweller and the urban industrialist to understand this, but it is very deep-seated in the country. One has to be of the country—of a particular bit of land—to realise what is the true and powerful incentive for a farmer to carry on and to keep carrying on under adverse conditions of weather, economics and government. This is far more deep-seated than some of your Lordships could understand, but I submit that it is the mainspring of agricultural efficiency.
The capital transfer tax will rapidly erode productive efficiency and will alter radically the pattern of land tenure within a generation. The damage which will be done will then be done not only to the farmer and the farm worker, but to the whole of the rural community and, in the long run, the entire national economy. The noble Lord, Lord Vernon, spoke of how the application of such an Act would break up the farms and so lead to the nationalisation of agriculture. May I remind your Lordships that, before 1914, the greatest world exporter of grains was Russia but that, since the change in the Government and the nationalisation of the farms, Russia has been unable to feed herself, even though the population did not show a particularly great increase. It is just that, with the nationalisation of the land, Russian agriculture has never become at all efficient in the sense in which we regard efficiency—production per man per acre.
§ LORD JACQUES
My Lords, would the noble Lord not agree that it might 501 also be due to an increase in the standard of living in Russia?
§ LORD BALERNO
My Lords, I think there has been a similar increase in the standard of living in this country and the rest of the world, so that I rather think that that argument cuts itself out. That brings me to an end, my Lords. I should like to conclude by saying thank you very much to my noble friend Lord Ferrers for introducing this debate. I ask his pardon if, when he has been so kind, gentle and forbearing, I have been forceful and perhaps a little rude.
§ 6.18 p.m.
§ LORD BROUGHAM AND VAUX
My Lords, I must first apologise to the House, to the noble Earl, Lord Ferrers, and to the noble Lord, Lord Beswick, for the fact that, as I explained yesterday, I did not know at the time of putting my name down to speak in this debate that I should have to attend a funeral this afternoon. It is my pleasant duty to congratulate the noble Lord, Lord O'Brien, on a notable and witty speech and I am sure that we shall all benefit from his experience not only in agriculture but in other spheres. I should also like to congratulate the noble Baroness, Lady Fisher of Rednal, on her excellent maiden speech. I know that my wife, and the wives of a lot of other noble Lords, would entirely agree with her sentiments about the ups and downs of the housewife's budget. I should like to know where the difference in price goes, between what is paid in the shop and what the farmer receives.
My Lords, noble Lords on both sides of the House usually start, not only in agricultural debates but in others as well, by saying that we should thank the noble Lord for giving us the opportunity to discuss this very important subject. I would say that to-day's debate is extremely opportune as there are certain spheres in the agricultural industry that are in a desperate situation, a situation that will become critical in a few months, if not weeks, if nothing is done to alleviate the present position and that of the future. I am sure that much will be said about the present situation in the spheres of beef and sugar. There are reports of a short-fall of home-produced sugar beet of 30 per cent., but this will be more like 50 per cent., due to adverse 502 weather conditions. This side of the industry has until recently been totally neglected so far as expansion is concerned, and we are now in a situation where we have to live from hand to mouth. So far as beef is concerned, this commodity will be so expensive by the middle of next year that, even if it is possible to buy a joint, that most popular dish of roast beef and Yorkshire pudding will be out of the question for many housewives.
There are many factors apart from the weather which affect agriculture. I refer to gas, oil, fertilisers and feedingstuffs—and here I should like to declare my interest, in that I am connected with a firm of importers and distributors of fertilisers and animal proteins. I mention gas and oil, because these commodities are used in the manufacturing process, and therefore fertiliser prices are reflected in the price of these materials as well as of others such as rock phosphate. The farmers have had to bear an increase of about 35 per cent. since January 1, 1974, for a compound fertiliser and an increase of about 60 per cent. for a nitrogenous fertiliser. Farmers have not seen the end of these, because I am informed there is an increase of about 15 per cent. on compound fertilisers and 10 per cent. in the price of nitrogenous fertilisers to come before the end of the year, and our prices are much lower than those of Europe or the rest of the world. Furthermore, the price of rock phosphate from Morocco is going up by at least 8 per cent. from January 1, 1975, and no doubt Russia and the United States of America will follow suit. So no doubt there will be more increases for farmers in the pipeline next year.
This will also affect the animal feed trade. Some of the proteins needed for these materials come from nitrogenous fertilisers such as rock phosphate, as well as animal by-products, the prices of which are back to where they were a year ago. Should there be a marked fall in the numbers of cattle being slaughtered, this would mean less bones for animal protein and it would lead to higher prices than at present, as animal protein is at present much cheaper than mineral protein. The demand for animal feeding materials has put the feed industry back to where it was 10 years ago, and it has been estimated by one of the national 503 companies that sales of animal feed will be over £1 million pounds down on last year—and that is just one company. This must mean that farmers cannot afford to feed their stock and cannot afford to sell them owing to low prices. If we have a hard winter we may see a lot of cattle dying from starvation. I do not mention this subject for my own benefit, but for the benefit of people in this country and also for the millions of starving people in places such as Bangladesh, because a healthy, permanently expanding British industry and a healthy Western agricultural industry also help a great number of the more unfortunate people in the Third World.
Finally, in making this brief intervention in the debate I must mention one of the shortest passages in the gracious Speech. It has been said before, and usually if enough people talk about a particular subject something is done about it. I refer to the passage with regard to agriculture and in particular to the last part which says:… and will continue their discussions with the farming industry to this end.I should like to remind the House of what was said by the noble Lord, Lord Beswick, on May 1, 1974, quoting from line 9, Column 148 of the OFFICIAL REPORT in a very interesting debate initiated by the noble Lord, Lord Walston. He said:My right honourable friend has in fact announced that he is proposing to consult the interests concerned on the longer-term future of the industry.My feeling so far as agriculture is concerned—and I say this with the greatest respect to noble Lords opposite—is that the present Government is all talk and no action, and that after five months of talking one would have expected more positive measures being announced to alleviate the disaster that is just around the corner so far as our livestock farmers are concerned, and that also has a great bearing on the housewives' larders.
§ 6.14 p.m.
§ THE EARL OF KIMBERLEY
My Lords, I am afraid that quite a considerable amount of the powder and shot I was hoping to use has already been expended by other noble Lords who have spoken before me. Nevertheless, I do 504 not feel that the subject has been entirely exhausted and there are one of two other points which I should like to raise, even though they may have been broached already. Unfortunately, little mention of agriculture, as has been said by the noble Lord behind me, was made in the gracious Speech, and there was no mention at all of beef prices. I am afraid that my speech will have little humour, since the subject we are debating this afternoon is far too dire for me to be flippant about it.
The other day I was listening to a programme on the wireless. A listener had written in to say that he had never seen a poor farmer and that all farmers travelled about in Bentleys and Jaguars. My Lords, I wish that were true—because if it were we should not be here this afternoon debating a subject which is of vital importance to every man, woman and child in this country. At one stage in the history of our island we were told to dig for victory: in fact, this meant survival. If some help is not forthcoming to the agricultural industry, and forthcoming very quickly, we shall be digging our own graves.
Without going into too much detail, there are one or two points that I should like to raise which I hope may help to clarify the situation. First, going back to beef, there was a fair price about a year ago of £18 to £19 per cwt. and a few months before that a price of £22 per cwt. was not unknown. Today the British farmer is lucky if he gets between £12 and £13 per cwt. We have already heard that feedingstuffs which cost £30 to £40 per ton a year ago now cost nearly £80. The price of fertilisers has almost doubled, and all the other costs that the farmer incurs have increased and escalated completely and utterly out of control, due to inflation.
I shall not quote the figure for inflation, because I gather that this is a slightly controversial matter. However, I should like to comment generally on fertilisers. As I have already mentioned, they have almost doubled in price since a year ago. A year ago there was a small subsidy of some £3 to £4 per ton which, though small, was of some help to the farmer. Today there is no subsidy at all. In my opinion, fertilisers are one of the few products which need a subsidy, since they are 505 the very lifeblood of agriculture and without them we can grow very little. Therefore, through them everybody in this country, and in particular the housewife, benefits.
I should like now to mention the Common Agricultural Policy of the EEC member-countries. Surely it should be possible to reach some form of agreement with these countries, while at the same time leaving us room for manoeuvre in this country, so that when a crisis occurred, whether it be due to weather and climatic conditions or something else, the question would not have to be referred back to Brussels—because by the time that is done the result is very often too little and too late. For instance, if the hill farmer had a bad hay harvest, at least he could then go to the Government for assistance without the matter being referred to Brussels.
My Lords, the problems that beset British agriculture today are twofold: they are long-term and short-term. Unfortunately, these problems can be laid at more than one door. There is only one possible salvation, and that is to have an agricultural policy which will last for a minimum of five years, and preferably seven or eight. I do not have to remind you, my Lords, that it takes nearly three years to produce a bullock fat for slaughter. It takes nearly as long to produce milk from the time you have your dairy calf, and it very often takes the British farmer five years to pay back to his bank manager any money that he has been lucky enough to borrow to try to do some improvements to his farm.
The British farmer has always been a master of improvisation. He has made and produced more and more with less and less and, broad though his back may be, eventually the last straw will break it. Surely, as the noble Earl, Lord Ferrers, said, the time has come when all the Parties in this Chamber and in another place put their heads together to produce a combined agricultural policy over a long-term period, even if they can agree on nothing else.
§ 6.21 p.m.
§ THE EARL OF ONSLOW
My Lords, I am very privileged to congratulate the noble Earl, Lord Kimberley, on his maiden speech. It was a good speech and I am afraid he has used many fig 506 ures that I was going to use myself. The noble Baroness, Lady Fisher of Rednal, also spoke about something which I was going to touch upon. The noble Lord, Lord O'Brien of Lothbury, not only made his maiden speech, but also gave an excellent report on the export of live cattle.
Obviously, I must declare interest—I am a farmer. The main theme of the maiden speeches that we have heard to-day probably underlines the importance of the subject which we are debating. The noble Lord, Lord Beswick, was, I regret to say, depressing beyond measure and held out precious little hope. I felt he showed little understanding of the problems, and he is not even in his place to learn. The television screens have been full of pictures of near-riot and demonstrations by Welsh farmers. Several noble Lords have already referred to them. I should like to state here and now that their grievance is totally and completely justified. The totality of the fault lies with the Party opposite—Her Majesty's present advisers. This time last year, top class fat cattle were fetching, as several noble Lords have said, £20 and over a live hundredweight. Feed barley was £40 per ton; hay was £20 to £25 a ton. That was for good hay. To-day, top class fat cattle fetch £16 and under a live hundredweight. This includes a subsidy of £20 an animal, or thereabouts. Feed costs have gone up as follows: feed barley, £62 a ton; medium hay, £60 a ton; good seed hay up to £120 a ton; I can sell my barley straw tomorrow for £35 a ton, and I am not in a heavy cattle area. In the West Country it is going for a far higher price than that. The noble Lord, Lord Beswick, said that the near record harvest should help feed our stores over the winter. It should, but who can afford to pay for it, if he sees no profit at the end of the day?
I and others in your Lordships' House have been pointing out these facts to Her Majesty's Government for a long time now. Even more people outside Parliament have been telling the same story. Her Majesty's Government have paid no effective notice. Mr. Peart, in another place, said, when he introduced the headage subsidy, that £18 a live hundredweight was a minimum profitable price for the farmer. The N.F.U. put this figure at £22 a hundredweight. As your 507 Lordships know, the subsidy is on a headage basis. In other words, the subsidy for the 8½ cwt. fat bullock is the same as that for a 14 cwt. fat bullock. That is slightly "dotty".
As the noble Earl, Lord Ferrers, has said, the price in the market place has fallen in exact proportion to the amount of the subsidy. Has the housewife benefited by this fall in cattle price? No, she has not. According to last week's Guardian, the price of silverside was 68½p a pound in August, 1973. Live cattle were then £20 and over a live hundredweight. In October, 1974, it was 69p a pound, live cattle being less than £16 a hundredweight. Can we please have some explanation of this? Further to what the noble Lord, Lord Beswick, said about the retail mark-up of French butchers, I did a small experiment in Brittany two years ago. I was certainly of the impression that the mark-up by the French butchery trade was lower than ours. We in England have tended to pride ourselves on the efficiency of our retail trade. Good Hereford cross white faced store bullocks are now costing £10 to £11 a hundredweight. These are the ones which will be fat in February/March and so benefit when the subsidy is at its highest, which is £36. Friesian bullocks are fetching only £6 and £7 a hundredweight because no one can afford to feed them. Perhaps if the recommendations of the O'Brien Committee were to be implemented, the price for Friesian stores could improve as these were the stores and fat bullocks which the Continental trade required.
Her Majesty's Government are prepared to subsidise Charles Clore's pint of milk to the tune of £1 per pint. That is 2p to him and it would cost him an extra 98p to earn that 2p to pay for his pint of milk. They are spending vast sums of money subsidising all and sundry's food with no bearing on the recipient's income. But they will not properly help the Welsh and other store and beef producers. They spend millions subsidising the manufacturers of motor bicycles that no one wants to buy, because if they did they would not need subsidising. When finally these Welsh farmers to whom I have already referred take it into their heads to demonstrate, against all their traditions and 508 against all their inclinations, as they have better things to do, the Home Secretary in another place starts talking about law and order. At the same time his Government are bringing in legislation to indemnify the Clay Cross councillors. Did we hear any talk of law and order over the miners' strike from the Party opposite? Did we hear a squeak of law and order over the dockers who defied the IRC? No, my Lords, nothing but a deafening silence on law and order except a shrill effort to make the Clay Cross councillors and the five dockers into heroes. Those were not people trying, in adverse conditions with, if anything, a vast decrease in income in the past two years, to make food for us to eat. These Welshmen have lobbied and talked, and talked and talked; and finally they have been driven to desperation. But, as the noble Lord, Lord Vernon, said, the Party opposite seldom sees votes from farmers. This I must say is odd, because one of Mr. Peart's predecessors, Mr. Tom Williams, was one of the farming industry's greatest friends and produced the 1947 Agriculture Act.
My Lords, something must be done about beef and mutton, otherwise, as so many have said before, there will be a terrible shortage in a year's time. Those 20,000 calves to which the noble Earl, Lord Ferrers, referred, will not be there to fatten. It has happened already in pork. Pork prices have hardened in the past week or so. The reason is simply because—and we told Her Majesty's Government this last May, when in-pig gilts were being slaughtered—this produces a deficiency and a shortage of pork later on. And as night follows day, this is what is happening. Either intervention or deficiency payments—probably deficiency payments—must be brought into the livestock industry, otherwise the industry will face a worse catastrophe than it faces at the moment. But, my Lords, I regret to say I am beginning to think that on the subject of agriculture the Party opposite and Her Majesty's Government's present advisers have the attributes of the Bourbons: they have learnt nothing and forgotten nothing.
§ 6.30 p.m.
§ LORD CLIFFORD OF CHUDLEIGH
My Lords, I should like to begin by associating myself with those who have 509 congratulated the maiden speakers to-day, especially the noble Earl, Lord Kim-bedey, as he seems to be the only one of the three still here. I will be short and my speech will be solely a declaration of interest—and perhaps a declaration of despair. I run a small agricultural estate in the far South-West. I farm 450 acres of it, a good quarter of which is down to woodlands; it has to be, as it is too steep for anything else. I will return to woodlands later. When I can sell my beef I am currently losing, so my accountant tells me, £40 to £45 a head. Way back in July when I presented the prizes and made a speech at the local agricultural college, I said that I was losing £30 a head, but now, after a few months, when I can sell them I am losing £40 to £45. Everyone who has anything to do with agriculture has of course heard our story of the farmer who went into the local market to sell a couple of calves and found he could not get anything for them, or only 10p or some such figure per head. So he put them back in a small trailer behind his car, went across to drown his sorrows in the pub and when he came out he found that somebody had dumped another couple of calves there.
I have had the worst hay this year that I have had for years. Last year I made just over 4,000 bales. This year I made 1,800 bales. I had a moderate grain harvest—moderate because we did not get the rain needed when the heads should swell but got all the rain at harvest time. I could not harvest half of my barley straw. As many of your Lordships know, it is by feeding barley straw with urea compounds that we help to keep a lot of our cattle through the winter As has been pointed out, sheep have gone down with the rest. Last night a noble Lord who is not in the Chamber at the moment was telling me that he was complaining with some other noble Lords about what a bad season it had been, and he was accused by another of being a liar. This noble Lord farms in the far North-West. while I farm in the far South-West, and it seems to me that on our side we have had a bad season. I asked him why, if in repetition this chap called him a liar, he did not take the "B." outside and deal with him. I am not usually a pugnacious chap, but my reaction typifies what I know so many of our farmers in the South-West feel, and what we are seeing 510 demonstrated by Welsh farmers at this moment.
To move from concentration on what we produce to the agricultural set-up, I, for example, have on my property 21 let cottages at controlled rents, four of them at eight shilling a week. One at a controlled rent of four shillings a week was bulldozed down recently to make way for the Chudleigh bypass. Six months ago I renewed half the roof of one of those cottages and it cost me £750. The builder tells me that if I did it to-day it would cost me £1,000.
The next point I want to make is about woodlands. I have about 700 acres of woodlands, some of which I have already referred to. It seems to me that many people do not appreciate what management of forestry is or entails. One does not plant trees for oneself: one plants trees for one's sons and grandsons. From the woodlands point of view, I am living on the foresight of my grandparents and earlier ancestors. I have been carrying out a replanting programme every year. Everyone knows the connection between agriculture and trees. So what happens if the Government bring in and apply to woodlands a capital transfer tax? I think I speak for most owner-occupiers in saying: "If you do that I will plant no more trees. It won't do me any good. I cannot hand the farm over to my son, so it won't do him any good. Therefore I'll cut those trees down to pay taxes"—and the countryside will be left in a bare, unbeautiful condition.
Connect that, my Lords, with farming. A good farmer fertilises his land according to the way he has been taught or the experience he has gained. But if I am not to be allowed to hand over my farm to my son, then in the last declining years of my farming life I shall cease spending money on expensive fertilisers and rob the soil, and when I go my land will be in a worse condition than it has ever been in before. That is bad husbandry. But if the Government are to apply these taxes in this way they will encourage bad husbandry.
The same applies to where one lives in the country. I took over a dilapidated grain store as a house in 1957, and have spent the last eighteen years restoring the pictures and repairing the house. Now 511 I think I am right in saying that my pictures—after all, they are my family phograph album—are probably enough to make me liable for wealth tax. I have already taken one precaution. Some of your Lordships may have been here when I had an exhibition of some of my documents about four years ago. It is just a small bundle, but my American brother-in-law was over the other day, so they are now in a bank in America and they will not come back here until I know that that tax will not be applied.
My Lords, I mention this because I am trying to emphasise the importance of these proposed new taxes to people in the agricultural part of the world. So for the woods; so for the farm; so for my house. I think that if the Government go ahead and apply these taxes, then owner-occupiers will be forced into a "scorched-earth" policy which will not do this country any good. Successive Governments have said, "Go for beef". I went for beef, but now look at me. Therefore I have all the sympathy in the world for the Welsh farmers regarding the "IRA" beef which is coming in now. Successive Governments have said, "Go for the golden pitchfork. Amalgamate your smallholdings. Make everything into a viable economic unit. "Now the Government say they are going to apply a wealth tax. So what happens? You sell off bits here to pay your tax and you are back to square one. My Lords, I think that we shall starve—not just the undeveloped nations—if we do not do something quickly, and if we bring in these threatened taxes on the agricultural community.
§ 6.42 p.m.
§ BARONESS EMMET OF AMBERLEY
My Lords, I am delighted to follow on that very forceful speech from the noble Lord, Lord Clifford of Chudleigh. I shall not detain your Lordships for more than a very few moments because I know that listening to the human voice after a certain period becomes, perhaps, rather tedious. We heard a series of figures from the noble Lord, Lord Beswick, which I am afraid are very difficult to retain and are not really very convincing. Instead I propose to give your Lordships a picture of a recent experience I have had—a picture which I hope will haunt the dreams of the noble Lords opposite.
512 especially those on the Front Bench, for the next few nights, if not longer.
My Lords, I have no vested interest now, although I was a farmer for some twenty years. However, I gave that up a good while ago. On the other hand, I had lunch last week with a dairy farmer friend of mine who, fortunately, was not persuaded by the Government to go from milk into beef but who, nevertheless, is in very dire straits at the present moment, and I should like to give you a picture of his present position. He is a small farmer, in that his farm is between 200 and 300 acres. He is a scientifically trained farmer and has done all the modernisation on his farm that he should do. Recently he has had to part with one-third of his Friesian milking herd—some of them because, owing to the difficulty of feeding, they have fallen below the economic level of producing milk and some of them through infertility which the "vet." who supervises the herd says is not due to disease but to a lack of vitality, again through lack of feeding stuffs.
My Lords, the loss of one-third of his herd is a big matter to a small man. With the herd that is left to him, he has to face the question of bedding for the winter. There is no straw. We know that hay, even to buy for feedingstuffs, is too expensive at about £70 a ton, and it will probably go higher. He is now thinking of trying bracken which, of course, is sodden by the recent rainfall and very difficult to dry. In a freakish moment I suggested to him that he might use the Guardian, The Times and the Daily Telegraph as tramps do who sleep out under a hedge, but he told me that it would have to be shredded and later ploughed in which would present difficulties. So far as a beef grower is concerned, it does not matter so much whether the cattle lie on their dung but it does matter in the case of dairy cattle.
My Lords, the other matter which I should like to put to the Front Bench opposite is that we had a very good market in France for cow beef which the French rather like—but on the hoof. The French are an economical nation and they will not buy frozen beef; and we have lost that market. I know that it was done for humanitarian reasons, because the transport of cattle was supposed to be inhuman 513 and cruel, but what I do not understand—and perhaps the Front Bench can give me an answer to this question—is why, if it is inhuman to transport cattle across the Channel it is not inhuman to bring over cattle from Ireland, which is a longer distance, and in worse weather? It seems to me to be a very extraordinary and illogical point of view. And not only that; it adds to the trouble of our beef farmers in increasing the glut. From the humanitarian point of view, however, if we are going to take this point most certainly it ought to be stopped at once.
My Lords, the other question which I should like to ask the Government is this: has enough attention been paid, as certainly it would have been paid during the war, to the deep freezing of our surplus beef? I know that individuals are doing it and that certain companies are doing it, but have the Government taken this point really seriously in hand? It may happen with other commodities as well as beef and I think that an investment in large cold storage would be useful.
I know that some people say, "If a farmer can't make money why doesn't he get out?" My Lords, a farmer's farm is not only his farm but his home. Where is he to go? What is he to do? He has been trained for this particular form of life and it is quite impossible for him, even if he is going to go bankrupt, to get out and do something else. The fact is that at the present moment farmers are going bankrupt; and they are not only going bankrupt but they are having to kill off cattle, of which we shall be in very sore need next year. There will be a shortage of milk because, as I have said, one-third of my friend's herd has gone to be slaughtered; and that is happening not only on his farm but elsewhere. We shall be short of beef because the calves are being slaughtered also. And just at this moment when a conference is taking place in Rome about how to feed the overpopulation of the world, I think that we ought to be just a little concerned as to how we are going to feed ourselves if we go on in this way.
My Lords, I hope that at some future date I shall have an opportunity to make a suggestion about a further source of food which, as some of your Lordships may know, is fish farming. However, I 514 shall not detain you any longer this evening, except to say that from the point of view of the farmers—I saw this with my own eyes last week and I know my friend's financial circumstances—they are going bankrupt and something must be done about it.
§ 6.49 p.m.
My Lords, in common with honourable Members of another place I am sure that your Lordships must be sick and tired of seeing and hearing representatives who come across from Northern Ireland and do nothing but gripe and "whinge". Over the years I have been attending spasmodically your Lordships' House, I have tried not to gripe and "whinge". I have tried to give credit where credit was due. Regularly and gladly I paid tribute to my noble friend Lord Windlesham and his right honourable colleague Mr. William Whitelaw when they were serving in Northern Ireland. I readily and gladly pay tribute to my noble friend Lord Donaldson of Kingsbridge and his present senior colleague, the right honourable Merlyn Rees. Therefore it is difficult and painful for me to have to say what I regret I am to say this evening.
The speakers in the debate to-day have outlined the crisis that faces the agricultural industry in the whole of the British Isles and Western Europe, and I will not go over that again. Similarly we have heard eloquently described the significance and importance of the future of our agricultural industry, so I will not go over that again. But perhaps we in Northern Ireland—and I know that there are a couple of noble Lords who also come from that country and who are speaking later in this debate who will amplify this—are getting the worst of all worlds. Things are tough here, in Scotland and in Wales but they are tougher still in Northern Ireland. I am sorry to have to say this but Her Majesty's Government—not just this Government but the previous Conservative Administration also—put us into this mess and it is up to them to get us out of it again.
May I quote from a speech made by the Minister of Agriculture, Fisheries and Food on August 2, 1973. He said:I am pleased to announce that the detailed arrangements on the intervention system for beef under the European Economic Community common policy have now been agreed. For the 515 United Kingdom the intervention prices which are set for carcase meat are broadly equivalent to a support price in the range of £15.50 to £16 a live hundredweight under our former guarantee arrangements. These figures fairly reflect the arrangement reached in Luxembourg at the beginning of May. I am sure that this will help to maintain the confidence of farmers and their determination to continue expanding beef, in the interests of both themselves and the public at large.This is the advice we were then given; this is the advice that we were given by the local advisory officers of the Ministry of Agriculture, or more recently in Northern Ireland by the Department of Agriculture, as it now is. I concede that a small portion of the blame can be attributed to farmers who were so enthused by this advice and by the prospect of beef being the most successful enterprise to expand that they were perhaps somewhat indiscriminate in the quality of the heifers which they served. But I submit that that is a very small contribution to the real trouble that we are now in.
Over two months ago I went to see the noble Lord, Lord Donaldson of Kingsbridge, with a delegation of Ulster Farmers' Union leaders. I wearied the noble Lord and I put it to him that bad though things were during the summer months, before the end of November the real crunch would come, and I am sorry to say that in Northern Ireland such is the case. If I have my facts wrong I will happily give way should any noble Lord wish to intervene, but it seems to me that while the Government were continuing to encourage people to go into beef—and that policy has for some twelve or fifteen months turned out to be erroneous—there is still an incentive scheme for converting from milk into beef. Perhaps I am wrong; perhaps it has been discontinued but my information is that such is still the case.
There are other questions I should like to ask. A recent Press release from the Northern Ireland Department of Agriculture outlines the incentives that will be given for storing beef. If private operators are prepared to deep-freeze their beef they will get an incentive of £296.41 per long ton provided they store it for six months. I am not an expert on the difference between a long ton and a short ton but by my reckoning this means that it is something like three 516 to four head of cattle, and that means that there is an incentive to store that beef of approximately £75 to £95 per head. That is just about the value of those beasts on the market, if not perhaps more. So why spend that amount of the taxpayers' money to put off the evil day for another six months and then put the beef on the market, in which case it will make no more than the cost of storing it? I am sure many would consider this to be a ridiculous suggestion, but quite honestly I think it would be better to give it away. If a beast is worth £80 and one is to spend £80 on storing it, why not get rid of it? Why not get it off the market? Why not give it to India—why not to the Government of India, or Bangladesh, or wherever starvation exists? One could say, "You pay for the transport and we will give you the meat". At least it would take it off the market.
Then why should beef—and I think it has been mentioned that in the United Kingdom context it is a very small percentage whereas in the Northern Ireland context it is a very much larger percentage—subsidised in the South of Ireland to the tune of 60p per live hundredweight be exported to the North of Ireland, driven straight to an abattoir and then qualify for the United Kingdom slaughter premium, without any minimum period during which that animal has to be domiciled? He does not have to spend three months, ten weeks or anything like that being fattened; he can come straight across the border.
Why should that be the case and why, indeed, should this subsidised beef be causing all this trouble in cases like Fishguard and Birkenhead when the British producers are suffering in the same way as the producers in the North of Ireland? When the breeding herd in Northern Ireland is in grave danger, when people are slaughtering their breeding cows because they just are not going to be able to find the money to buy the feed to keep them over this coming winter, why should there still be an incentive of something like £6 per head to import cheap stores from the South of Ireland into the North? If a farmer takes his fat cattle to the abattoir in Northern Ireland and the abattoir do not want to know about it because they are packed out already as they do not have the outlets, and that farmer has to go to 517 a dealer, why then does the slaughter premium go to the dealer and not to the farmer? The answer given is that the price is adjusted, but many farmers will tell you that this is not the case and they are at the mercy of the abattoirs and the dealers.
I regret that I have made some unkind remarks. I realise that the E.E.C. is in a mess and it is a mess that is not the fault of Her Majesty's Government presently in Office. There has been a long history of incidents and errors which have brought about the present situation and my information, which is not founded on any profound knowledge, is that perhaps within 18 months the situation will be shaken out, renegotiated and resorted.
I would say to Her Majesty's Government that our beef farmers, certainly in Northern Ireland—and I cannot speak for Yorkshire or Aberdeen—are up against it now. It is incumbent on Her Majesty's Government to take the necessary interim measures to enable our beef industry to survive. If any remnant of our breeding herd for beef is to be rescued interim measures are needed, and needed now. In fairness I may say that the noble Lord, Lord Donaldson of Kingsbridge, agreed with me when I said that, but I realise it is out of his hands. To noble Lords now on the Front Bench, I would say, "Please, this is the time for urgent action."
§ 7.1 p.m.
§ LORD HOY
My Lords, we have had a very interesting debate to-day. We have listened to many good speeches. If it does not seem like patronage, I would say how much I enjoyed the opening speeches on both sides. They were of first-class quality. If I may add one other noble Lord to my list, it is the noble Lord, Lord Nugent of Guildford, who I have known for a long period. His speech was a remarkable contribution, and one which faced up to the situation with which agriculture is now confronted. To the noble Lord, Lord Dunleath, I would say that it was my job, along with the Minister, to look after agriculture for some six years. The greatest complaints ever I got on all Committee stages of every Bill were that we were being much too kind to Northern Ireland, and not kind enough to the farmers here. So it does not matter what one does. While you may get a little support from one 518 section, you can rest assured that the other two-thirds will be telling you how badly you have done. This is the case with agriculture.
I want to correct an impression that seems to have arisen in the course of this debate; namely, that we are discussing the agricultural industry as a whole. We are doing absolutely nothing of the kind. There are sections of agriculture to-day which are doing remarkably well. Indeed, in I think May of this year, before we all departed, we had a debate initiated by my noble friend Lord Walston who, as many of your Lordships know, practises agriculture in rather a large way. In that debate in May of this year, he told us, and it was not denied by a single noble Lord, that the past calendar year had been the best within living memory for cereal farmers. Does anybody deny it, even to-night? They do not. The noble Lord also added at that time, "and the two previous years were not bad, either". So that this section of agriculture has been amazingly successful. I resent it a little that people should say that, now they have this production, they will exploit other farmers in the sale of animal feed. It does not become them. That section of the industry has done well.
There is no doubt at all, either, that the injection of the 50p per score into the pig industry did that industry a lot of good. I am not saying it is making tremendous profits, but as a result of this subsidy who will deny to-night that the pig industry has been able to meet its competitors, and that to-day there is a reasonable price to be got for what it is producing? This has been done. If we take the milk industry, despite what the noble Baroness from the Liberal Benches said, I must say to her that I have never heard anyone talk of £100 million or £300 million in the way that she did, as if it just meant nothing at all. It is a lot of money. Even in these inflated days, £100 million is still a lot of money to be put into one section of any industry.
We ought to take into account not only the £100 million put into the milk industry, but what was done inside the pig industry. Indeed, when the noble Baroness was talking about hill cattle and hill sheep, I hope she had not overlooked that very recently the Minister gave it a further injection of another £9 million.
519 As an ex-Chairman of the Hill Farming Committee I wish I had been able to get £9 million in my day. I am not saying that it has brought about a bonanza, but it is a contribution and surely we are entitled to say to any Minister of any Government, "We are grateful for it. It may still leave us with problems, but we are grateful for what you are doing." Indeed, in toto, do not let it be forgotten that my right honourable friend the present Minister of Agriculture, since he came into Office—and it was only a few months ago; all the problems which have arisen to-day have not arisen because he became the Minister of Agriculture; they were in existence long before that—has given an injection to the industry of a sum of not less than £300 million. That is a lot of cash. I am not objecting to it, but at least sometimes I think there are some who might show a little more gratitude than they do.
These cycles occur. I remember taking part in a debate in 1973, when a very great personal friend of mine, the noble Baroness, Lady Elliot of Harwood, was then discussing agriculture. She spoke about the same theme, the fall in agricultural production in the hill country, and was saying exactly the same things, that beef and sheep were in great trouble, that economically they were unsound. She was arguing in that period for which this Government were not responsible, that sheep were so non-productive that farmers were going out of business. This is one of the things we must face up to and meet. How did we make the attempt? There is no industry that calls for greater planning and stability than agriculture, and I want to say that we have a good case to argue. I say to the noble Earl, Lord Onslow, that he does not enhance the case by the language he uses. No matter what political abuse you pour forth, it will not solve any problems. The Minister of Agriculture has given £300 million. To conclude in the way he did, he had either to know what had been done or to tell the noble Lords that he was quite unaware of it. So stability is——
§ THE EARL OF ONSLOW
My Lords, if what Mr. Peart has done is so excellent, why are there scenes of rioting Welsh farmers around Holyhead and 520 Birkenhead? Is this a sign of gratitude because everything is all right?
§ LORD HOY
My Lords, no, but I am going to come to that. All I am going to say to the noble Earl, and I was resisting it, is that if the noble Earl's agricultural output is half as great as his political abuse, he is a good farmer. Stability was in the industry. What was the stability for the agricultural industry in this country? It was under the Fat-stock Guarantee Scheme. That is what it meant. When deficiency payments came into operation, this was the basis on which the industry worked. It was the noble Viscount and his friends who deserted that scheme, who gave it up. It was the Liberal Party who gave it up. The noble Baroness ought to recall that, because when we went into the Common Market we deserted this scheme, and went in for a policy of intervention. I am certain the noble Baroness and those who thought like her at the time—I am not criticising except in the after event—might have thought it was going to work. It is obvious it did not work. It could not work here; it certainly did not work on the Continent. This is the problem with which we are confronted today.
My Lords, in the new negotiations now going on, I would have thought that my right honourable friend might be directing the attention of the agriculturalists inside the EEC to following the practices we have had in this country. Indeed, if it can be shown that our system is better than theirs, obviously we are going to get support. What is proved beyond any shadow of a doubt is that their system of intervention is quite unable to cope with their problems. Indeed, if we want to talk about demonstrations, let me remind noble Lords that there have been agricultural demonstrations in Europe and that our little shindig is nothing compared to what happened there, with the policy of intervention prices. So obviously that is not the way out, and we must face up to this responsibility.
Another point is the export of live cattle. One would think from listening to-night to many speakers that this Government had decided to abolish the export of calves and so on. It was not done by this Government; it was not even done really by the previous Conservative Government. It was done by 521 a free vote in the House of Commons. People were free to vote as they liked, and it was they who decided that the practice ought to stop. We are getting to a slightly dangerous stage when, the House of Commons having reached this decision by a free vote of its Members, noble Lords in this House say, "Well, simply ignore it. Just forget that it happened and change the policy." It is not as easy as that; it will be for the Members of another place to make up their minds whether or not they wish to make the change.
Having said that, I want to state that I also understand the present problems of the beef industry. But I thought there was a fair amount in favour of what my noble friend said in making a maiden speech this afternoon. It is always difficult when the industry is wanting a little more—unless one is intimately associated with it—to understand the reasons. But it is all the more difficult for the general public, and especially for housewives, when they see every farmer in the country, and certainly in your Lordships' House this afternoon, telling tales of woe about how prices have fallen to catastrophic levels. The housewife asks: "Why do I have to pay so much for my meat? If prices are down to that level, why am I not getting some of the benefits?" That is the question that has really got to be answered. I understand that the Government, through the Department concerned, are inquiring into this problem at the moment, and I am certain that I speak for all the Members of your Lordships' House when I say that we will be grateful when the answer is provided.
I remember a previous occasion when I was in the Public Accounts Committee and the Department had to produce a Supplementary Estimate for many millions of pounds. All we could prove in the Public Accounts Committee was that the farmer did not get it, the middleman did not get it, the butcher did not get it, and the housewife did not get it, but it cost us about £50 million to satisfy the need that did not exist in any of these categories. So to-day when we hear these stories it is quite natural that the housewife will ask, "When do I get a share?"
Of course, it is no use coming along to-night and saying, "We have had a 522 bad harvest and bad grain crops and bad storms ". It does not matter which Government we have; they cannot control the weather; and we just have to suffer it. If there is a method which can be found to solve this problem, I should be very willing to subscribe to it. But do not let us go on asking for unilateral action. What the noble Baroness was saying this afternoon, despite her agreement with the Common Market, was that if we do not like it we should take unilateral action to save our own industry. This you cannot do; you have entered into an agreement and you have to try to keep to it. So it will be for us all to try to work out a solution to this problem
All I would say to noble Lords is that this Government have proved by their policy that they have agriculture at heart. We know how important agriculture is to the British economy. What the noble Baroness was saying this afternoon, I have said on many occasions myself—about output figures, the reduction in the labour force, and what agriculture has been able to achieve for this country. I will take second place to no one in my praise for the agricultural industry and its record. Sometimes the supporters of the industry do it more harm than good, as I found during my term of office. All I would say is that if we can find a solution I am quite certain that my noble friend and my right honourable friend the Minister will want to push it to its logical conclusion. But for goodness sake, my Lords, do not let us underestimate the value of agriculture in the interests of this country. We have tried to seize on a single portion of it, and rightly so, but do not let us deprive the industry as a whole merely to make this one point.
§ 7.16 p.m.
§ LORD SANDYS
My Lords, despite the fact that I agree almost wholly with what the noble Lord, Lord Hoy, said in his closing sentences, the mood of the debate as a whole has been one of extremely sombre caution and despair, generally reflecting the mood in the country seen in what is taking place at Holyhead. I stood at this Dispatch Box on May I, when the noble Lord, Lord Walston, introduced a Motion calling attention to the agricultural industry and its problems. At that time from this side of the House we besought the Government to do two 523 things: to drop their ban on intervention on beef prices, and to drop indiscriminate food subsidies—and I stress that word "indiscriminate". Here, once more, is proof of the law set out before your Lordships this afternoon by my noble friend Lord Ferrers, that it is totally counterproductive to bring forward a Motion of that sort; I think it proves his point. There is wry pleasure in that. We warned Her Majesty's Government at that time of all those things which have been repeated this afternoon; there will be a desperate shortage of beef, a desperate shortage of pigs, a desperate shortage generally of farming success, and in 1975–76 an appalling shortage for the housewife in the market.
I wish, in making my speech this evening, to go to the very roots of the problem. Your Lordships will know that I have taken an interest in the world food scene for many years. I have sat at the feet of the late Lord Boyd-Orr and the noble Lord, Lord James of Rusholme, in my interests in a very much wider context. For this reason I was delighted to listen yesterday, in the debate on the humble Address, to the speech of the right reverend Prelate the Bishop of Coventry, and to that of the noble Lord, Lord Ritchie-Calder. They both called our attention to the roots of the problem and where it lies; and in geography I think we should see this as a problem which resides almost wholly in Russia. My noble friend Lord Balerno referred to it this afternoon.
The failure of the crops in 1973 in the virgin lands in Kazakhstan is basically the root cause of everything that is happening to-day. Your Lordships will be well aware that in promoting the virgin land policy the Soviet Government took a calculated risk, that probably two and possibly three crops in every five years were likely to be poor or very poor. It is an accident of history, and the most terrible and tragic accident, that this should have coincided with the failure of crops in other parts of the world, in the dry zone of the Sahel, and coincided with the incalculable damage done by the world increase in oil prices.
I have been studying in the last week, before delegates went off to Rome, the World Wheat Statistics. I will not weary your Lordships with this volume, which 524 is very thick and extremely interesting. For one thing, I think it proves that not only freight rates but also fluctuation in yields in Soviet Russia are the cause. World freight rates have trebled in the last 18 months, but it is undoubtedly the grain crop in Russia which has been the cause of the trouble.
I would ask your Lordships to bear with me while I developed my argument a little further. My noble friend Lord Ferrers, during the early part of the summer, made an extremely interesting journey to Canada as part of a delegation, and he had a view of the grain elevators on the shores of the Great Lakes. At that time, of course, they were largely empty. But they make one recognise the scale on which both Canada and the United States have invested in looking after a buffer stock. We owe an incalculable debt to the Governments of both those countries for what they have so prudently done over so many years. In Soviet Russia there is no equivalent. This is a fact of some uncertainty. If I had attempted to get a visa to go and look at Kazakhstan, I am perfectly certain I should have been refused permission to enter the areas where the present difficulties have arisen. But I think that our experience of what takes place in Russia, and the practice of storing grain in heaps rather than in elevators, and the consequent loss of those enormous crops, is enough to fill our imagination with what happens in that part of the world.
According to the Food and Agriculture Organisation—and their statistics are uncertain, as indeed one would expect them to be—the losses due to storage of grain amount to about 10 per cent. of the total world cereal crop. In the past years this has been running at an enormous figure, but what we ought to realise is that this is a reducible amount. I would beg Her Majesty's Government to examine with all the power at their command, and all the resources and research facilities available to them, how we in this country can maintain a buffer stock. My noble friend Lord Nugent of Guildford suggested this in his most admirable speech this afternoon. If we attempt to look after a stock of approximately 5 million tons this will be a major investment, but it is on that sort of scale that we should plan. He suggested up to perhaps 10 million tons. These are 525 not very large figures in the world context, but so far as the United Kingdom is concerned it would be a most useful buffer.
The experience worldwide of the bugs and beetles referred to in a most admirable maiden speech by the noble Baroness, Lady Fisher of Rednal, is something that we should take into consideration. Pesticides may be good, but they are extremely sophisticated and very costly to maintain. The cost to the American Government of maintaining their bulk crop over the years has been crippling—far more than the bulk crop itself, as I am sure the noble Lord, Lord Ritchie-Calder, is well aware. We must find at our command some means of protecting that buffer stock if it is to be a runner.
I should like to support all that Her Majesty's Government are doing in sending a strong delegation to Rome for the World Food Conference. It is a brief period indeed up to November 16, but this is the sort of thing that we warmly welcome from this side of the House. I cannot say that we support much of their policy, and on the closing remarks of the noble Lord, Lord Hoy—who is just leaving the Chamber—I should like to say that it is very important to recognise that there is a great disparity between what is written into the gracious Speech and what appears in the Green Paper on Wealth Tax.
Here I must strike a controversial note. The Green Paper on the wealth tax has been referred to this afternoon. It is for public discussion, and where better to discuss it than in your Lordships' House? I would draw your Lordships' attention to paragraph 35 of the Green Paper, in which it clearly states:In the Government's view it would be wrong to exempt business assets or farming from the tax, or to calculate liabilities on such assets on specially favourable terms.The avowed intentions of Her Majesty's Government are to expand food production. The value to the nation is stressed in doing so. But it is of very great consequence that the fiscal policy conflicts with the avowed intention in the gracious Speech.
I should here like to make a suggestion to Her Majesty's Government, knowing that the noble Lord, Lord Diamond, is to be the chairman of a Select Committee 526 to investigate this whole subject, and I wonder whether the noble Lord, Lord Strabolgi, will pass on this suggestion to him. I believe this to be a concept which would be favoured by the noble Lord, Lord Strabolgi. My noble friend Lord Balerno, in his speech, suggested that there existed in the farming community throughout the United Kingdom a tremendous bond in the families who own smallholdings, large holdings, or family farms as a whole. I think his words were: "A deep and abiding interest. A sense of. trust. A sacred sense of continuing involvement." Surely there is an opportunity to examine the possibility of putting farmland into a special category.
To develop my theme a little more, I should like to suggest that farmland should be treated in rather the same way as forestry, in that it is possible to dedicate an acreage of land for the purpose during the lifetime of the owner—and hence derive certain benefits to the owner—but in the national interest to preserve that land and to develop both the heritage and the prosperity of the area. Surely it does not require a great deal of expertise to see the necessity of the right of withdrawal of small areas, be it for a road improvement, a housing estate, or any purpose not connected with agriculture. But these are matters of detail, and I believe that it will be possible, during the coming months when this Green Paper is being discussed, for the matter to be more fully investigated.
The scene, as a whole, leaves me with a sense of shell-shocked paralysis at a tragedy which enlarges daily. But I should like to strike a positive note throughout, and draw to Her Majesty's Government's attention measures which could be taken to prevent an even greater catastrophe. The question of beef has been examined almost ad nauseam. I should like to mention the question of fertiliser, because I believe it to be equally important. Your Lordships will be aware that the amount of fertiliser used in this country is enormous in comparison with the size of our agriculture, and upon that vast amount of fertiliser rests the success over the past three years of a very good cereal crop. The run-off of that fertiliser into ditches and drains, dykes and rivers, estuaries and finally the sea, is a matter of grave concern, and 527 from a scientific point of view it promotes what is called efflorescence—a long word for a nasty smell.
This is of great consequence, and something that the scientific advisers to the Ministry should investigate, because in this problem lies an opportunity. Seaweed, as your Lordships are fully aware, is one of the finest fertilisers, containing excellent phosphates and also a proportion of nitrogenous compound. In the new scene in the coming decades we shall have very large structures being erected close to the shore in the North Sea, and these will promote a very large quantity of seaweed in their immediate vicinity, both attached to the structures and, rather like the substances in the Sargasso sea, floating membranes. Surely here, feeding upon these fertilisers being poured out through our rivers, is a compound which the opportunist will seize upon as a valuable national asset. Seaweed is useless in the sea, but most valuable on land.
Should we not take note of the successful 18th century farmers in Scotland who recognised very early in the day the value of bringing land into production by using fish waste and so promoting large areas of the Lowlands of Scotland and making them fertile and abundant as they are to-day. I have spoken long enough. I should like in closing to thank my noble friend Lord Ferrers for giving us this opportunity so early in the Parliamentary Session for a debate of vital national consequence.
§ 7.31 p.m.
§ LORD SWAYTHLING
My Lords, may I be permitted to remind your Lordships that during a previous agricultural debate I spoke of the dangerous fall in the milk production of the country. I explained that if last Christmas one in every 400 people in this country had asked for an extra pint of milk there would not have been enough for the industry. Although we have had an increase in the price of milk, the situation for next Christmas is still very alarming. As your Lordships probably know, arrangements have been made to import cream and further quantities of butter and there is not likely to be sufficient milk produced in this country for the manufacture of cheese. It is easy to pre 528 cipitate the fall in milk supplied "at a stroke", as is mentioned nowadays, by merely going out of milk production but of course your Lordships will realise that it is much harder to increase the supply of milk. This, of necessity, takes time, more especially when so many dairy cows have been slaughtered.
Among all farmers there is a rapidly growing and genuine anxiety about the proposals concerning the tied agricultural cottages which were contained in the Labour Party's Election Manifesto. The vast majority of service houses on dairy farms have now been modernised and are maintained in excellent condition at the farmers' expense. Many thousands have been built in recent years to meet the requirements of the highly skilled technicians needed for the larger herds now found on dairy farms. New and modernised housing has involved heavy investment by farmers, as your Lordships will readily appreciate, but without good accommodation, which is usually provided free or at a nominal rent, it would be impossible for farmers, and especially livestock farmers, to obtain the services of the men they require. Dairy farmers are in a particularly vulnerable position in this respect. Farmers are convinced that if the system of service tenancies on farms is abandoned there will be a widespread tendency for men to obtain positions on farms with the sole object of gaining possession of a house. Once installed they would have security of tenure and would be in a position to work elsewhere and the farmer would be unable to obtain alternative labour. It will be remembered that many farms are in isolated positions with no available accommodation at hand. The consequence would inevitably be a lower national output of milk, already at a danger level. Furthermore, without security of labour farmers will not have confidence to expand nor to invest in more efficient equipment. Many are already in desperate need of funds for farm development.
I believe that there is a danger that should legislation be passed concerning service tenancies in the agricultural sector, the position of satisfied service tenants in other industries, such as council workers, policemen, teachers and coal miners would be endangered. I am convinced that the great majority of farm employees living in service cottages 529 know that any disadvantages are fully outweighed by the advantages. They are at present at liberty to move from one part of the country to another knowing that houses will be available for them. If tied cottages were abandoned there would soon be no accommodation at a new situation available, and they would be forced to remain in their present employment. Indeed, when seeking new employment stockmen insist that housing is provided, and in fact they could not carry out their work efficiently if it were not so. In my opinion, if it were possible to take a referendum among tenants living in service accommodation in all industries, including agriculture, there would be an overwhelming concern to retain the system. I am informed that in some districts councils allow agricultural workers on reaching 60 years of age to register on their local council housing list so that by the time they reach retiring age at 65 or so they will be near to or at the head of the list. They say that this system works extremely well and might be extended, or should be extended, to all councils in the country.
It must be remembered that the vast majority of agricultural workers are not members of their union and that in spite of this the National Union of Agricultural Workers has been agitating for the abolition of the agricultural tied cottage for many years. In one of their arguments they speak of the "eviction" from farm cottages. I venture to suggest to your Lordships that the number of evictions from farm cottages is minimal except in the cases, which are few, when it is undertaken by mutual consent and even to the farmer's embarrassment, in order to enable agricultural workers who are retiring, or their widows, to be entered on the council housing waiting lists which they cannot be unless an order is granted. The union offers no suggestion of an alternative if the tied cottage is abandoned. I think the reason for this is that there is no alternative that is workable and which would ensure the farmer employers being able to continue their farms. To jeopardise the entire livestock industry, particularly the dairy industry, on an emotional issue of this nature is wholly unjustified and certainly not in the national interest.
530 One aspect of the suggestion of abandoning the tied cottage seems to have been forgotten. What would happen about agricultural cottages Which have been erected or grant-aid improved on the condition that they must be occupied by agricultural workers working on the farm concerned? What would be the position of the farmer if he could no longer comply with this proviso? Another aspect that requires explanation is what would be the position of a tenant farmer who pays a rent for the farm which no doubt includes a house for himself and cottages for his workers? If the cottages became occupied by people who were not working for him, the rent which he was paying to the landlord would be unjustified and he would not be able to continue farming at all.
Your Lordships will have noted that I have referred mainly to dairy farmers. All farmers will be affected—cereal farmers, beef fanners, sheep and pig and poultry farmers. But dairy farmers will be affected by the loss of tied cottages more than any other because, of course, dairying requires the herdsman to be near his work, not only for the early morning milking but because cows and heifers may calve at any hour of the day or night and may require help or attention. Just before the Election a letter on this subject was addressed by the Royal Association of British Dairy Farmers, of which I have the honour to be a Vice-President, to the leaders of the three political Parties, and it expressed the very great concern of farmers throughout the country with this threat which would prevent them continuing their livelihood. It seems obvious that it is in the interests of everyone—farm workers, farmers, landlords and last but by no means least the consumer of food—that this threat of the abolition of the tied cottage should be abandoned once and for all.
§ 7.39 p.m.
§ VISCOUNT MASSEREENE AND FERRARD
My Lords, I should like to support the noble Lord who has just spoken. The noble Lord is quite right in saying that if the tied cottage is abandoned in agriculture the position will be quite impossible for all farmers other than small owner-occupiers whose family is prepared to work on the farm. As the noble Lord quite rightly implied it would 531 be disastrous. My Lords, I shall be short to-night and rather parochial, and I am not going to attack the Government. To be parochial and not to attack the Government is rather a rare position for me to adopt.
I am going to speak about sheep since they have not been mentioned a great deal in this debate. By "sheep" I mean hill farming. I suppose some people might say that I am a fairly big sheep farmer in the Highlands. I have tenants in that line of business, and of course in cattle. The sheep market and the lamb market this year has been very erratic. In the Western Highlands it has been worse than in any other part of the country. My top lambs were down about 25 to 30 per cent. on last year, while the smaller lambs have virtually been thrown away. I have seen thousands of lambs going through the market at give-away prices. If you weighed them their price would not work out at much as 10p per lb. This is a phenomenon because we are told, correctly, that there is a world food shortage and that the population of the world will increase by 70 million this year. World food produced this year will be 2 per cent. less than last year. It is therefore puzzling why the lamb market has been so depressed. Unfortunately, we cannot blame the Government.
§ THE MINISTER OF STATE, SCOTTISH OFFICE (LORD HUGHES)
My Lords, why does the noble Viscount after his early kind words, say "unfortunately, we cannot blame the Government"?
§ VISCOUNT MASSEREENE AND FERRARD
The noble Lord has a point. I realise that we do not have the same Party feeling in this House as in another place, but I am sure that the Front Bench would always prefer that I should blame the Government. But I honestly cannot do so regarding the depressed prices for sheep. There may be various causes. Regarding store lambs, perhaps one may be the high cost of borrowing money because dealers cannot get from the banks the money for their trade. Another reason has been the late harvest. In the South there has not been enough ground cleared to fatten lambs. There are other reasons.
Before I go on to the main reason, I should like to inform the Government 532 that in Oban many farmers who got poor prices in the market wanted to have their sheep slaughtered in the abattoir and to sell them privately. At first they were allowed to, and then permission was withdrawn. The abattoir is a public slaughterhouse, as I understand it, but it is controlled by the local butcher who owns most of the butcher shops in Oban. I have not looked into the law on this question, but I should have thought that in the case of a public abattoir any farmer ought, if he so wished, to be allowed to have his livestock slaughtered there for the requisite fee. I should like Her Majesty's Government to tell me what is the law in this connection.
The real trouble in the very erratic state of the lamb market—it has not always been depressed—is that few people understand that we export a great deal of prime lamb from this country as well as beef. Last year we exported 27,000 tons of lamb. This year the tonnage will probably be greater. We export chiefly to France, but some goes to Belgium and Switzerland. We can export to France only if the domestic French price is above 56p per lb. We have six major exporters. When the price is above 56p a lb. in France, all these exporters—they are completely independent—rush in there with as many lambs as they can provide. The French market is flooded. Then the market closes on us. When that happens all the lambs that should be going to France come on to the home market, the home market is then depressed. I should like to see—here perhaps the Government might be able to help—these major exporters combining in some form of central organisation so that the exports to France were controlled and we had regular weekly shipments throughout the year. We should then not have this flood on the French market with its bad repercussions on our market. We should take a leaf out of New Zealand's book. There they manage their marketing extremely well.
I was interested to hear the noble Baroness, Lady Fisher of Rednal, refer to the bewilderment of the housewife over the bad prices in the market for beef when prices in the shops do not appear to have come down. I raised this matter on the first day of the debate on the Queen's Speech. I asked the noble Lord, Lord Sainsbury, who must be a great 533 expert on the retail trade, how it was that many farmers were throwing their stock away when prices in the shops had not come down. The noble Lord, Lord Walston, took me up on this. He agreed with me and suggested that some experts on behalf of Her Majesty's Government should go to France to investigate there the difference in the gap between what the farmer gets and what the housewife gets. In France the retail price is closer to the farm gate price than is the case in England. I would ask the Government whether they would adopt that suggestion, to see whether something can be done through more efficient marketing to reduce the retail price. The retail price here is too high at the moment when one takes into account what the farmer gets for his livestock.
Before I sit down, may I say a few words about beef. I have some beef breeding cows but I am only in a small way of business. As we have heard, we are getting about £13 per live cwt. for fat cattle. In Northern Ireland the figure is only £9 for steers and less for heifers. We have heard much to-day about the anger of the Welsh farmers at the imports of Southern Irish cattle. I understand that anger. Regarding the Irish forward store steers, surely the remedy lies with the British farmer. If he does not buy them they will go back to Ireland. But as for fat cattle, the noble Lord, Lord Beswick, said that Irish imports were only 5 per cent. of the total into this country. I agree, my Lords, that 5 per cent. is only a small amount but if you have a surplus of cattle in the country, if you have 100 per cent., then, of course, an extra 5 per cent. is a very large amount and it can tip the scales. But I agree that it is an old established trade and for political purposes I think it would probably be a mistake to stop it, perhaps even temporarily.
The Irish imports of raw meat including sheep and poultry were only £36 million in the first eight months of this year whereas the imports of meat from other sources from other parts of the world in the first eight months of this year were £465 million worth. So the Irish imports are not, as I say, of great impact in normal times, but they do make a difference while we have this surplus of cattle. It is quite certain that we will 534 have a shortage of cattle at the end of next year. There is no doubt at all.
As I think the noble Lord, Lord Beswick, mentioned, we are slaughtering calves twice as much as we were last year. I am told that now five times as many calves are being slaughtered as at this time last year. I think 25 per cent. more cows are being slaughtered, quite a few in calf. Certainly over 30 per cent. more steers and heifers are being slaughtered and some of them in rather poor condition. Obviously if this goes on we will have a beef shortage. The Prime Minister has made a great play of renegotiating the terms of our entry into the Common Market. I hope that he will renegotiate to allow us to go back to the old support system with the Government's guarantee on the end product. I quite realise that the Minister of Agriculture, Mr. Peart, has injected much money into farming and that we have this beef premium, but the trouble with the beef premium is that every month when this premium becomes due farmers flood the market with their cattle and therefore it does not help them. The market is flooded and the price that they obtain is probably less than if they did not have a premium. This bears out my noble friend's law, which he called "Ferrers' law".
My Lords, I do not want to say anything else but I should like to make two points to the Government. I hope that they will renegotiate to allow British farmers to have the guarantee per live hundredweight for fat cattle. It certainly ought to be over £20 a hundredweight. It ought to be £25 I think but perhaps I am being too greedy. But after all on the Continent I believe it can go as high as £30 a hundredweight. The other measure that I should also like, as I have said, the Government to try to take—it will not be easy for them—is to try to introduce some central organisation into the exporting of lamb. Otherwise I am sure that next year we may have the same trouble again in the sheep market, if this coincides with a late harvest.
§ 7.55 p.m.
§ LORD LYELL
My Lords, first of all I must congratulate (and I am delighted to do so) the three maiden speakers whom we have heard this afternoon and this evening—the noble Lord, Lord O'Brien, 535 the noble Baroness, Lady Fisher, and the noble Earl, Lord Kimberley. All of them made very notable, eloquent and excellent contributions, and I hope we shall be hearing all three of them in the future. Then I have to apologise to your Lordships that I may have to leave before the noble Lord finally answers all the questions we have raised in this debate, because I am afraid I have a previous engagement in Scotland to-morrow which, it may surprise your Lordships to know, is due to farming. I see that there is still a considerable list of speakers, so I think that above all I should be brief.
Then, my Lords, I have to declare an interest myself, in that I am very proud and very lucky to be able to farm on my own account 1,200 acres of the best land in Scotland, in the vicinity of the noble Lord, Lord Hughes, in the county of Angus. Our main crop is grain, but I also have a major commitment to cattle. I stress that the commitment is fairly solid both financially and practically, since the alternative crop, potatoes, would and does require a large amount of capital and expertise, which we do not feel able to supply at the moment. I hope that the noble Lord who is to reply to this debate will be able to give some indication of how the Government are to restore some kind of order in the livestock industry, for it is, indeed, still an industry.
I believe there have been two major setbacks to this industry fairly recently. First, there was the ban on the export of live cattle. For better or for worse, and for various reasons, this has affected the price of cattle, certainly in Scotland, in an adverse way. It may be that any method of keeping prices down could be adopted, but I am afraid that the faith which the Government put in exhorting agriculture has begun to decline from that very measure. Secondly, I think a greater folly (if one can call it that) was perpetrated when the intervention system was abandoned. We have heard that this system has fairly brutal imperfections but, nevertheless, the removal of a floor from the beef price has led to disorders, not only at Holyhead, Birkenhead or anywhere else, but also in the more financial sense in the beef market.
The beef price is falling in the markets all over Britain. Sellers of store cattle and fat cattle are now making fairly sub 536 stantial losses; and the reference in the gracious Speech to continuing discussions with the farming industry comes close, I am afraid, to an insult to farmers who are still continuing to put their faith and their financial capital into cattle. One wonders whether farmers can continue to have faith in governmental exhortation and encouragement, or even in incentives. Nevertheless, some of us still believe that we must continue in cattle, but I am afraid that this will not be due necessarily to any comments or words from Ministers, from their right honourable friends or from their noble colleagues here, however honeyed they may be. We shall continue because we believe it is the best thing for the land and for the fertility of the land.
§ LORD HOY
My Lords, will the noble Lord allow me to interrupt him? He has criticised the abandonment of the policy of intervention. They have intervention as a policy on the Continent of Europe, and the farmers there are in greater revolt than the farmers here. How does the noble Lord think that that policy, which does not work there, might work here?
§ LORD LYELL
My Lords, if the noble Lord, Lord Hoy, will bear with me, I think we (I will not say "we in Scotland", but certainly in Wales and in various parts of England) have only just woken up to this more violent outlook. I do not say that intervention is the best method, but it is at least a method to ensure some floor to the cattle prices. I am sure the noble Lord, Lord Hoy, will agree with me that there are many farmers on the Continent who are very envious of our efficiency, and when they see the producers of our (if I may put it this way) raw material, the hill cattle, becoming extremely angry in Wales, I think that they, too, will wonder whether intervention is the right way. Nevertheless, it is a brutal change just to remove the cattle floor. I agree there might be better methods, and that a guaranteed price might have been a better way to ensure a stable market; but, nevertheless, the destruction of both intervention and the guaranteed price has led to the present situation.
My Lords, various comments have been bandied around to the effect that farmers have had several fat years. I do not 537 dispute the question again with the noble Lord, Lord Hoy, and this may be true in some areas but, from my own personal experience in grain and cattle over the last four years, this has not always been the case. In my own case this is mainly because we have been expanding. It certainly is the case that in farming the profits are almost always put back into the farm in the search for greater efficiency. We have heard from the noble Lord, Lord Nugent of Guildford, in his notable speech that the cost of a new combine harvester is about £10,000 and I suggest that if we go along to Smithfield in a few weeks' time we may find that the cost has gone up considerably, if indeed one can be obtained. With inflation currently advancing at nearly 20 per cent., all the profits and every available penny which can be obtained from the bank are needed to keep the agricultural industry in its position as the most efficient in Europe.
I should like to say a word or two about the proposed capital and wealth taxes. Whatever may be the views of any radical Government on social justice or the redistribution of income and wealth, that Government will not benefit the nation if they attack the livelihood and the wellbeing of the 3 per cent. of their people who produce our home grown food. I am sure that my noble friend is aware that, whereas 8 per cent. of farm land was owner-occupied and farmed before 1914, the figure is now in the region of 56 per cent. I believe that the proposed measures of capital taxation will reverse this trend or at best will mean that huge tracts of farm land will be in the hands of institutions, thus forcing up the price of land and exacerbating the problem of paying arbitrary taxes levied on a decreasing number of private owners of farms. This is sure to be the result of heavier, more clumsy capital taxation, but I hope that the Government will look at consequences of these fairly brutal changes.
The situation in agriculture is certainly bad, but any of us who are involved in it will certainly seek to continue because we are not born pessimists. Our geographical position and our population require us to import between one-third and one half of our food; the remaining proportion has to be produced here with the help of a vigorous and stable agriculture. The vigour, as we have already noted this 538 afternoon, already shows in all aspects of the industry; the stability can only come with the help of the Government, and it is for this reason that I should like to support the noble Earl, Lord Ferrers, and thank him for this opportunity to add my support to this Motion.
§ 8.5 p.m.
§ LORD RITCHIE-CALDER
My Lords, I, like other Members of this House, am grateful to the noble Earl, Lord Ferrers, for giving us this opportunity for this debate, but I am even more grateful for what he called "Ferrers' Law" because it seems to me that in this debate we have had a perfect example of Ferrers' Law; that is to say, a mirror image. The impressive thing about the discussion to-day is that all the arguments for Government intervention are coming from the other side of the House—we on this side support it. The main thing is that it demonstrates beyond any argument that what we need to-day is not free trade (or whatever we used to call it) or unrestricted free enterprise—but that what we need now above anything else in this world—and I mean the world, not just these islands—is a managed economy. I am not putting ideological labels upon this. It is perfectly clear from what we have been talking about to-day that the main product of the agricultural industry is lame ducks. If the farmers must—and my sympathies are with them all the way—turn to the backing of the Government, they are accepting something which I regard as absolutely indispensable in to-day's world situation; that is, some degree of management which will make not only our own but the world situation intelligible for the first time.
I have had a very curious feeling during the past week watching television and seeing the farmers demonstrating, rioting, taking to violence, because it takes me back to the 1930s. Not that there was rioting—it was almost too subdued a time—but it takes me back to the ridiculous situation of the 1930s when there was hunger in the midst of plenty. This was the basis of the great positive humanitarian movements of the 1930s which exposed the idiocy of the world producing food and destroying it. I do not say that the present situation corresponds to that time. I hope that some of your 539 Lordships who are ingenious in management can tell me what one would do in a world situation with the protein which cannot be sold in the shape of red meat. Is it to be refrigerated at enormous expense? Are we to put it in a can and find that we have no aluminium to make the cans or that the cans themselves are more expensive than the contents? Or are we going to put what we have to take off the market to support prices for the farmers at the disposal of the outside world?
Here, I was very glad to note the suggestion of the noble Lord, Lord Dun-leath, that we might think sometimes about giving our surpluses to the hungry people of the world. However, we come back to the point that the freight costs are now forbidding, as was mentioned in the House to-day. In the present situation, there is no way in which we can intelligently move and redistribute the possible surpluses and be able to meet the manifest shortages which exist. We need a new system and that is why yesterday—and I repeat it to-day—I said that we need some recognition in the world that we are a world. The noble Lord, Lord Sandys, whom I am glad to support in many of the suggestions he made and the sentiments he expressed, said that one of the things that operated to the detriment of the present situation was the failure of the Soviet cereal crops the year before last, which manifested itself last year, and the fact that Russia had to turn and, presumably, empty the granaries of the United States.
My Lords, I should like to look at that situation for a moment: I do not know, as the noble Lord obviously did not know, what the Soviet Union does in terms of storage and I agree that the Americans and Canadians hold whatever buffer stocks the world has at the moment, but the fact of the matter is that the situation which arose in world terms—I am not looking at a map and marking place names on it—was one which produced a genuine shortage in the case of the USSR. The terms on which the Russians bought the grain from America is another matter. That is why the situation is rather distressing, because I think that the American people feel that they were hoodwinked on the deal and the result may be an ending of the sympathy of the Americans to any 540 demands for help from outside. But that is not quite right either; the fact is that we are all in a dilemma.
It has been stressed in this House to-day that Britain depends at least for half of its food upon the outside world. I suggest it is probably more. I suggest that what we produce in this country is considerably dependent on the kind of supplementary foods, and so on, that we have to import from abroad. This to me is confirmation, or reaffirmation, of everything we were saying in 1945, 1946 and 1947. I am delighted to see—I cannot call him my "noble friend"—my friend the noble Lord, Lord Netherthorpe, because I remember the conversations we had when he was president of the International Producers Organisation. We had then an awarenes of it, but we now have the catastrophic evidence of it: that is, that the interdependence of nations has to be recognised. But aid must not be thought of in terms of charity—because this is what has corrupted all our thinking about the world problem; we have tended to look upon aid as if it were an act of charity. Aid, in the terms we are talking about now, is enlightened self-interest and an intelligent investment in our future; and there is no alternative to it. The world is interdependent.
Last year in the United States they had a desperate meat situation—not too much meat but too little, so they said. As one who shopped in the supermarket and had to cope with the meat situation, I felt that was rather like the oil situation, in which the faots were not exactly what they appeared to be. Nevertheless, there were several things occurring simultaneously. First, there was the failure of the anchovy fishing harvest, involving 12 million tons of Peruvian anchovies intended to go into fish meal for the feeding of stall-fed cattle, battery-fed chickens and factory-fed pigs. In the United States—as I said, simultaneously—the soya harvest failed. By some freak which an agriculturalist may seek to explain, the United States had become the dominant soya producer in the world, and it was not an indigenous crop. Japan, Formosa and many other countries of the Far East are for most of the time dependent for their soya beans on the United States.
The failure of the anchovy harvest was very interesting, because it had nothing 541 to do with any of the kinds of complications we have been talking about, but was a perfect natural phenomenon—"El Niño". It was not due to over-fishing, though that may have had something to do with it. The fact was that nature had just had the last laugh and Peru, which had put itself in the position of being the largest fishing nation in the world in terms of catch, found itself without fish to catch. So it was that the United States found itself without any of this fish meal on which they were dependent for the feeding of their animals. At the same time, as I have said, there were these devastating floods in the Middle West which upset the soya picture.
What I am saying is simply what I was trying to say last night in similar circumstances. This world is now one. We may produce our own managerial answers intelligently within the bounds of our own country, but we cannot find all the answers within the bounds of our own country. Therefore, we shall be serving the British people extremely well if we emphasise to-day—as, indeed, everybody has done—that there is not going to be any more cheap food and that we are going to pay realistic prices for food. That includes paying the countries which provide us with some of our indispensables the proper price for their raw materials. What we do with the abundance which I hope we shall create—the abundance which I insist we must create; and it must be a world abundance which is to be shared—we must do quickly, for the developing countries will determine what the feeding of this country in future is to be.
§ 8.15 p.m.
§ LORD CONGLETON
My Lords, I should like to begin by expressing my thanks to the noble Earl, Lord Ferrers, for having initiated the debate at this time and to offer my congratulations to the maiden speakers we have heard this afternoon. I have been compelled to come to your Lordships' House to-day by a sense of foreboding engendered by conversations with farming colleagues in recent months. The foreboding takes two forms: first, as to the state of the industry as a whole at present; and, secondly, the fact that, with the industry in a sorry state—as I believe it is at present—with no world surpluses avail 542 able and, as the last speaker has just told us, with no cheap food to be had (nor is there ever likely to be again so far as I can see), so many in this country seem unable to grasp the situation as being as serious as I believe it to be.
When I hear from a Government, of whatever complexion, that they know there is no cheap food available, and they are telling the people that the situation is serious and that rationing may have to be brought in, then I believe such a Government understand how serious the situation is and that they intend to take proper action, in the words of the Motion, to see that we have an adequate supply of food and that there is a "requirement of a vigorous and stable home agriculture". If we as a nation fail to take this problem seriously, what hope can there be that other nations will take us very seriously?
Most of the ground has already been covered by previous speakers and I shall try to be as brief as possible. My message is that there is a need for urgent short-term remedial action in the livestock sector. It seems to me that there is also a need for a complete and thorough review of the requirements for the long-term, leading to the question of a three-year or a five-year programme for the industry. Nothing less than three years will do. We know there are no surpluses, and even if resources were available to this country from outside it seems that others have longer purses, that their currencies are stronger and that they come into the market first.
I have little by way of counsel this evening which is novel or revolutionary, but I should like to draw attention to several points. It seems to me that there are two fundamental truths which have not been outlined today, and I hope they will be borne in mind when long-term planning is being considered. I shall have some words to say about the sheep sector, although that has been covered to some degree. It has always been a subject of special interest to me. Turning now to one of the fundamental truths which has to be considered, it is a commonplace, I believe, that the deployment of assets to the best advantage is the key to success in any situation.
The assets to which I refer are two: the land of this country and the people 543 who work on the land. It is remarkable to reflect that it should be possible to grow three or four tons of wheat to the acre, but that is what is being done on some of our farms, on land which has been cultivated for many hundreds of years. The land is an asset which, properly and carefully managed, will continue to provide a high proportion of our requirements for years to come. It should be possible to increase the productivity of some areas by sensible drainage schemes and by making use of new techniques. In the longer term, it ought to be possible to reclaim areas which are presently under the sea, but this is for the very long term. In the main, I feel that a balanced farming system will have to remain the basis of increased production, and by that I mean a proper balance between crops and livestock. There is nothing very new in that. I hope that any long-term plan will take account of that fact.
The second asset to which I should like to refer concerns those who work on the land: the farmers and those who work with them and for them. The record of productivity in the industry is outstanding. I am sorry that the noble Lord, Lord Walston, is not in his place this evening to help us in our deliberations. He drew attention to this in what I thought was a remarkable speech during last week's debate in this House on the humble Address. The noble Lord has constantly urged Governments to treat the farming industry with a seriousness and to take action in certain directions, particularly over the past two or three years. His experiences as a farmer and administrator are wide and the depth of his knowledge is profound. I hope that the Government will pay heed to what this distinguished man has offered by way of counsel concerning the industry. We as a nation have the assets. How should they be deployed to the best advantage? Noble Lords have already spoken of various ways and means of bringing about improvements—the need for improvements, indeed! I hope that the Government will consider the suggestions now coming forward seriously and carefully.
Now I turn to the sheep sector which as yet has seemed to escape its proper share of attention in the industry when 544 ever its affairs are under discussion. Economists sometimes refer to farmers as "primary producers", but within the industry some are more "primary" than others. It is impossible to be more primary than upland farmers, those who work on the hills of these islands. They produce the foundation stock which lowland producers convert over the years—all these livestock operations take time—into finished beef or lamb, or for use as parent stock on the lower ground farms. Punish the upland farmer by neglect and the whole chain of production is affected.
Your Lordships will have to bear with me if the figures I am about to use are 5 per cent. out, but I have not been able to check them. Economists used to say—and may still do so—that something like 70 per cent. of the food production in this country came from about 25 per cent. of the nation's farmers. That is, putting it the other way round, that 75 per cent. of our farms were producing no more than 30 per cent. of the total production. The inference which the economists sought to highlight was that there was a poor case for increasing the support in the direction of the smaller producing units. "Focus the support and encouragement on the larger units", they say, "and the benefit will be more economically derived." However superficially attractive such an argument may have appeared in times when food supplies at lower costs were available from other parts of the world, I hope that it is not now part of the Government's thinking in relation to our food situation. Can we afford to go without that 30 per cent. at all? I do not believe that we can. Can we afford to ignore the value in terms of foundation stock of what the upland farmer is producing? I would say again most emphatically No.
I would ask the Government to consider this point very carefully, because I fear that certain economists may try to lead them in a direction which I believe to be a false one. We need to encourage the upland farmers to continue. I suggest to the Government that that can be done by incentives at both ends of the production chain: by maintaining and increasing, wherever necessary, hill farm support, hill farm subsidy and winter keep assistance. I am thankful to know that steps have already been taken in this direction. Whether they will prove to be 545 sufficient remains to be seen, but at least the problem is understood. At the same time, the guarantee for the finished product should be increased. That is at the lower end of the scale for the lowland farmer. Increase the guarantee—a figure of 35p per pound has been suggested as sensible—and increase the price of wool by 5p per pound and this will benefit not only the upland farmer but the lowland farmer as well. None of these things will bring the Government into conflict with the E.E.C. structure, since there are no regulations covering the sheep industry.
On the matter of exporting, I urge the Government to clear the O'Brien Report as soon as possible so that exports may recommence under proper conditions at the earliest possible moment. While on this point of exporting, I would also ask the Government to examine without delay the findings of the Market Research Department of Strathclyde University, who are undertaking to examine the sheep situation in Europe in order to assess the demand for both breeding stock and carcase meat, paying particular attention to the assets of marketing methods and consumer preferences. This Report is sponsored by the Department of Trade and Industry and by other organisations. Any recommendations from the Strathclyde study should be most carefully considered. If there is any way of speeding up the Report—I am told it will not be ready until February—so much the better.
Farmers, as others, believe that any Government have it within their competence and capability so to order matters to determine the level of production from the farms of this country. When production is seen to be rising, remaining static or falling, it is thought to be as a result of Government policies. In other words, when production alters course upwards or downwards, it is presumed that this is because the Government of the day wish it to be so. At this time the national economy is encompassed with more than just a touch of crisis. The same crisis pervades the farming industry. I am sorry that the noble Lord, Lord Hoy, is not in his place, because the crisis pervades the cereal growing sector of the industry just as much as it does other sectors. Costs have risen steeply in the past two or three years, and the guarantee prices are not as high as 546 many would like to see in order to provide the safety net that producers feel they ought to have to be able to go ahead with confidence.
At such moments of crisis, it can be useful and helpful to consider what previous actions may have been taken when similar situations of difficulty may have threatened. I am not one of those who believes that history is all "bunk" all the time. With this in mind, I shall refer to a conversation that I had with the late Sir Donald Ferguson about 12 years ago. He was my neighbour both as a farmer and in every other sense of the word. He was known to some of your Lordships. He was a wise, distinguished and much respected man who spent his life in the public service. After having served five successive Chancellors of the Exchequer as Private Secretary, he was plucked from the Treasury by the incoming Prime Minister and placed at the head of the Ministry of Agriculture and Fisheries. That Ministry, so I understand, was charged with contriving a plan for the resurrection of the farming sector of the economy so that maximum production might be achieved in the event of a war, that being the crisis that then threatened. Sir Donald told me of the following exchange that took place in 1938 or 1939. It went something like this:
We think it is an excellent plan. But it will work only if and when these poor, perishing farmers are allowed an opportunity to become solvent."
That was from a Scotsman, and from a Treasury man. He understood that the need was to create an economic climate in which farmers could operate with profit.
My Lords, I have urged urgent action in the short term to remedy as many of the present ills as possible; long-term planning (and this will take some months and will have to take account of our membership of the E.E.C) to rectify the current economic pattern—sadly, as I believe, reminiscent of Tower Bridge, that is up and down, mostly down—and in its place provide a more stable situation which will engender confidence in the industry: a confidence to stay in 547 business, a confidence to re-invest for machinery and livestock replacements which will lead to expansion and thus save imports which we cannot afford even if the supplies were available, which is increasingly doubtful. But confidence above all, my Lords, which will flow from the knowledge that the jobs they, the farmers, are about are worth while, very necessary to the maintenance of the life and work of an industrial nation, and, as such, respected and appreciated by the nation. Let them have the tools and the farmers will respond as they always have in the past. They will do the job and, what is more, will rejoice in the doing of it.
§ 8.32 p.m.
§ LORD MOYOLA
My Lords, I should like first to declare an interest as one who has tried to produce beef. I propose to address my remarks in the main to the situation in Northern Ireland as it has been affected by the agricultural crisis which we are all going through. I only hope I shall not too often repeat points that other noble Lords have already made, although in the crisis we are in it would not necessarily be bad to repeat them because the crisis cannot be emphasised too often or too strongly. I do not want to dilate at length on the shortage of fish meal or soya beans that brought about the big increase in feed prices. The people who I suppose were first hit by that, and hit very hard, were the pig producers. As a result of the fact that when the high feed price arrived there was no substantial increase in the guaranteed price, and nothing very substantial in the ensuing Price Review, a disastrous situation followed, or at any rate a disastrous situation so far as we in Northern Ireland were concerned.
To bear that statement out, the Northern Ireland agricultural census of June 1974 shows that the pig breeding herd fell in the preceding 12 months by 37½ per cent., which I am told compares with a fall of roughly 10 per cent. in the remainder of the United Kingdom. That fall in Northern Ireland continued into August, and I believe even into September; and while I have no actual figures I am told it is now running at about 40 per cent., although as we all know the position has improved. I am bound to say that I agree with one noble Lord who 548 preceded me and remarked that it improved only because there was now a shortage of pigs on the market. Be that as it may, pig producers are anything but happy and they are, after all, faced with the withdrawal of the 50p a score subsidy. And who knows what feed prices are going to amount to in the coming winter?
Then of course the beef disaster followed. Again, unfortunately, this hits harder in Northern Ireland than in the rest of the United Kingdom. It hits harder because in Northern Ireland beef represents a greater proportion of the whole agricultural production of the country than is the case in Great Britain. It hits harder because of the small farms there. Our farms are relatively much smaller than are yours in Great Britain. That of course means there are less capital resources behind the enterprise, and it also means—very important—that there is less credit to be obtained from the banks. We have a third disadvantage which is a permanent one. We are always at a financial disadvantage because of the strip of water which lies between us, and over the years the disadvantage has run at 60p to 70p per cwt.
Let us also not forget that over the past months or perhaps year or two all the authorities have taken a very optimistic view of the future of beef production. As has been said by many noble Lords who preceded me, large sums of money have been invested in new buildings and equipment of one kind or another in order to produce store cattle and beef. The result I need not emphasise. People are heavily in debt and in great difficulty. I can quote one figure. Take an average Northern Ireland farmer who last year had 20 breeding cows. He sold his 20 calves for something of the order of £80 to £90 apiece and got out of it a gross income of £1,600 to £1,800. This year that same man would have been very lucky if he had sold his 20 calves for £30 to £35 apiece and received between £600 and £700 of income out of it. I do not have to say that his costs have gone up in the year and the cost of living has gone with them.
I can quote another example. Take the case of any farmer finishing beef who not so long ago was encouraged by the fact that he was assured that the average price would not fall below about 549 £18 a cwt. Yet unfortunately that farmer to-day in Northern Ireland is receiving only £13 a cwt. for his finished animal, and that includes the slaughter premium which is running at about £2 a cwt. Neither he nor his wife has even the compensation of being able to buy his beef back cheaply in the shops. I know that various noble Lords have said that the price of meat has fallen here. I could not agree that that is the case with us in Northern Ireland. In the main, the price seems to be very much the same as it was when the selling price was £18 a cwt., although to-day the figure is around £11.
There has been a great deal of talk about food subsidies and limiting profits from time to time. I still believe that that is an area which requires a certain amount of attention. I also should be very interested to know why the slaughter premium seems to have achieved virtually nothing, and why in fact the market price of beef declined in direct relation to the amount of the slaughter premium. I know that the noble Lord, Lord Beswick, said to-day that this was because of very heavy marketings. I wonder whether he is correct in that. I wonder whether there is not some more sinister influence at work, and whether there is not perhaps in some areas a ring and, if there is, what can be or is being done about it.
My Lords, I am not going to labour the matter any further because a great deal has been said already, I merely say that we are past the point when platitudes and promises for the future can do us any good—even advancing the dates of the subsidies. That, my Lords, is not a solution, nor, I submit, is building a beef mountain, as we have been promised in recent days, because eventually that beef mountain will come on to the market and once again will pull down the prices. We need action now, because in my opinion there are many farmers who cannot last until the "promised land" of March.
It has been said many times that feed is scarce. We had a disastrous hay harvest in Northern Ireland (as probably you did here, from what I have heard today) but by next spring a great many animals will be starving and a great many farmers will be destitute; and, as we have heard already, in eighteen months to two years' time we shall have a shortage of beef because the breeding stock and un 550 finished animals are being slaughtered since the farmers cannot afford to keep them.
My Lords, March is too long to wait. Something pressing needs to be done now. I would suggest that the only worthwhile action is to put a floor on the market immediately and give to the breeders some additional help.
§ 8.42 p.m.
§ LORD WISE
My Lords, I am sure that we are all grateful to the noble Earl, Lord Ferrers, for initiating this debate, especially so early in the Session, but it is a subject of considerable interest and importance not only to the agricultural industry, but to the general public as a whole. I think that the general public are becoming increasingly aware of the rising cost of their food and are also becoming fearful about its availability in the future. In addition, they are perhaps becoming conscious of the agricultural industry's problems in endeavouring to ensure that there is available a future supply.
The World Food Conference is now taking place in Rome and discussing the problems of worldwide food shortage, and it is obvious to us all that the days of cheap food from overseas are over. It seems to be impossible to understand the economics or the political expediency of allowing agriculture in this country to run down, for if production is allowed to fall we shall inevitably be held to ransom when we need to purchase requirements from overseas, whether we are members of the EEC or not. To ensure that this does not happen, we must have a confident, reasonably buoyant and prosperous industry, with capital available to reinvest.
My Lords, we have had a wide-ranging debate which has covered all aspects of the problem, although predominantly it has been focused upon the livestock sector. While so doing, we must not lose sight of the fact that depression in one sector inevitably leads to depression in another. As the noble Lord, Lord Hoy, said, cereal prices have been reasonably good. However, because of the predicted escalating costs, I can foresee that it will not be long before it will cost the best part of £100 to grow an acre of corn. And what will happen to the feed grain 551 prospects if we do not have the stock to consume it?
The ancillary trades are also affected. There are many people who are directly concerned with agriculture. The problems of the livestock farmers are derived to a great extent from their response to appeals from successive Governments to expand production. I believe that there has been an increase of something like 2,500,000 cattle and 2 million sheep over the last three years. Unfortunately, this Dosition has been further aggravated by the bad harvest for fodder crops, and now there is a dire shortage of winter feed in the traditional livestock areas. However, this could be overcome with help and also if some confidence in the future were available to them. There is not that confidence, and that is made evident by the number of calves which have been slaughtered; as the noble Earl, Lord Ferrers, said, something like 15,000 calves a week are being slaughtered now as opposed to 4,000 or so a year ago. Talking about calves being slaughtered, my son who is studying at Southampton University was in London to-day and called to see me this afternoon. He said, "Father, we must set up a new enterprise at home. You must get rid of all your cats. At Ringwood Market mice are making more money than calves."
My Lords, one can understand the action of the Welsh farmers. It is regrettable but they are unable to sell their cattle. As the noble Baroness, Lady Emmet, said they are facing bankruptcy; and with Irish cattle flooding in and undermining our market it seems regrettable. One wonders why this has to happen. I can understand the difficulties of the Southern Irish farmers, but other European countries are not taking their cattle and one wonders why we have to do so.
Again on the subject of beef prices, one wonders whether the low current prices are being adequately reflected in the shops. As we have heard, this is now the subject of study by the Price Commission. We shall all be most interested to know the result of that study and I wonder whether the noble Lord, Lord Strabolgi will be able to tell us when 552 he replies to this debate when we are likely to know the result of the Commission's findings. It is ironical, however, to think that while the public jib at paying more for food they will willingly pay more and more for other commodities. For instance, my wife was shopping the other day and looking for a particular type of woollen skirt. She found that this costs now about three times as much as she would have paid last year, and all that the shopkeeper could say was, "Madam, the price of wool is rising all the time". And what the producers receive is something like lp per lb. more. Hides and sheepskins, I am told, are now more or less valueless; suede jackets, sheepskin coats and leather goods have all risen astronomically in price. Admittedly there is much to be done and much money to be spent before a hide becomes a suede jacket, but it is an illustration of how the basic commodity is losing out and is not participating in any way in any of the profits made by that commodity.
My Lords, much has been done and much needs to be done in the short term. The Government should be congratulated upon the aid which they have given to some sectors—in respect of the high milk prices and so on. The implementation of the seasonal guarantees has undoubtedly saved the sheep sector, and somehow an effective seasonal guarantee for fat cattle must be reintroduced immediately, for even with the direct premium grant heavy losses, as the noble Lord, Lord Clifford, said, are being sustained.
Above all, we need to create some semblance of order and stability out of our present chaotic meat marketing conditions. During the debate on beef producers' finances on July 2, I asked whether the Government could set up a committee to study in depth the possibility of a Meat Marketing Board. The noble Lord, Lord Strabolgi, said in his reply that the Government considered that the practical difficulties at that time were still as great as they were in 1964 when the Verdon-Smith Report came out. That was why at that time the Meat and Livestock Commission was set up. May I suggest that our present situation and present system have now become so chaotic that the project is perhaps worthy of further consideration.
553 I appreciate that the difficulties would be extremely great. It would not be anything like as simple as the setting up of the Milk Marketing Board because that Board is dealing primarily with only one commodity. There would probably be resistance by the trade, by wholesalers and retailers, there would undoubtedly be problems connected with the EEC and our trading with the other EEC members, but could we not see whether these difficulties could be overcome? By exerting its control, the Board could help to smooth out the fluctuations of the Market. Given control of imported supplies, it could prevent ups and downs arising; producers would know the kind of return they would receive; prices would be known well in advance and contracts made, and things would work out reasonably well. Working in conjunction with the Meat and Livestock Commission the supply and demand situations would be assessed and the prices set at the right level so that the amount of meat coming forward could be absorbed.
Failing all this, I wonder whether the Meat and Livestock Commission could not be given powers to buy and sell in order to assist in the stabilisation of market prices and to help remove the uncertainty, and, at certain times, the unfairness in meat marketing? Just before I left home this morning I saw in to-day's paper that my good friend and neighbour, Mr. Ralph Howell, Member of Parliament for North Norfolk, wants to consider the possibility of setting up marketing boards for meat, cereals and sugar on a European scale. I would back him all the way in this if it could be arranged. It is certainly a thought for the future. If we stay in the EEC then in all probability this will eventually come. Meanwhile, I think we would do well to remember some words used by the noble Lord, Lord Shinwell, during his reply to Her Majesty's most gracious Speech. Among other things he said:
We must build up our farming and agricultural industry and use our resources wisely ".How right he was!
§ 8.52 p.m.
§ VISCOUNT BROOKEBOROUGH
My Lords, I should like to start by congratulating the noble Baroness, Lady Fisher of Rednal, on her excellent maiden speech. It seems to have fallen to me to speak on two occasions after two able 554 speeches by two very able noble Baronesses. It is a great pleasure and I feel that in future when noble Lords are making their maiden speeches they will have a high standard to live up to as set by the noble Baroness, Lady Fisher, and the noble Baroness, Lady Stedman. It was indeed a great pleasure to listen to them.
I congratulate the noble Earl, Lord Ferrers, on providing this opportunity to so many of us to speak on such a very important subject. I hope that the tone which he set will not mask the tone of our determination, as expressed by every Member of this House who has spoken in this debate, to have some remedy to put into agriculture, because in reality, although the noble Lord, Lord Beswick, said we should not speak in terms of disaster, each one of us who is speaking from experience knows—and certainly I do from my neighbours who are small farmers—of the real disaster and hardship which faces those particular people who play such a very good part in the community and who have provided food for this country over many years, during peace and war.
The noble Lord, Lord Beswick, said that the Government would take note of what is said in the debate to-day. I should like him to note my support for the remedies which were suggested by the noble Earl, Lord Ferrers, and for his suggestion that the capital transfer tax should, like the wealth tax, go before a Select Committee to be discussed.
The noble Lord, Lord Beswick, also said something which I believe is almost at the core of our problems. He said that the Government have dealt with the agricultural industry "section by section". I believe the first thing the Government should do now—and I think they are going to do it, but the date is to be February and it ought to be done earlier—is to deal with the whole of agriculture with a total review instead of a section by section piecemeal approach at this stage. The Government have been able to say for some time that this is what they inherited; but you know, my Lords, the gestation period of a cow is nine months: could we now have a premature birth? We are just about at the time when the birth would be viable, and with a little help from us could be made to live.
555 The noble Lord, Lord Dunleath, said something which I should like to correct. He said that animals were able to come across from the Irish Republic to Northern Ireland slaughterhouses to be slaughtered. In point of fact, by agreement among all the owners of the slaughterhouses, either corporate or private, only a very few animals from the South of Ireland are being slaughtered there, because the owners of the slaughterhouses in Northern Ireland believe that their interest lies with their own producers. It may be that we should recommend that sentiment to those who are dealing with the backlog of animals in this country. It may be that some of this feeling arises out of virtue and some of it is because it is in their own interests and because their future lies with our particular producers rather than dealing with people who are in for a quick pound.
Various noble Lords, including the noble Lord, Lord Moyola, and the noble Lord, Lord Dunleath, have spoken about Northern Ireland, and I feel that I must emphasise that we are in a most serious position so far as agriculture is concerned. In the last twelve months we have seen our pig herds nearly halved. This is a major problem on a small farm business where the pig herd is a large part of the business and makes that farm viable or non-viable. In the next twelve months the beef breeding herd may be decimated. And what will come after that? Agriculture is the greatest industry in Great Britain, but its importance in the Northern Ireland economy is almost paramount. There are very few people who are not either involved directly or are not in very close relationships, and the prosperity of agriculture in Northern Ireland is a vital matter.
In my view the Government must take action on two fronts. They must restore confidence, which is such an important part of agriculture. They must establish that with authority and announce that they will ensure that there will be an economic return, however it is done, whether by intervention or by guaranteed prices. The Government must speak with far greater authority than they have of late because the Secretary of State for Agriculture, Fisheries and Food in another place has said that the returns 556 will be about £18 per cwt. This has not happened. I am not attributing this to political aims, but every time the Government have spoken and that particular wish has not been acceded to, confidence has been destroyed. If the miners, the engineers or anybody else were involved, I wonder whether the whole situation would not have been dealt with, whether or not they were bound up with the EEC? I believe if the small farmers—and they are largely small farmers in my part of the world—had taken action, as the miners would probably have done, some remedy would have been found.
Going back to the noble Baroness, Lady Fisher, I feel it is so important to ensure the future supply of beef at a reasonable price to the consumer—and I have seen 70 per cent. of the female animals going through markets in Northern Ireland, and they are in calf—that the Government must at once provide stop-gap aid, and must provide more aid to the owners of the female beef breeding herd. The remedy must be declared now on those two fronts: one the end product, and the second the prime producers.
The reason why I feel it is the Government's responsibility is because of the past. Every time the Government have asked for an increase in productivity the industry has provided it. No other industry has either trusted the Government or has rewarded them—and by "the Government" I mean the people—in so great a way. Productivity has increased to an enormous extent, and that productivity has been channelled by Government by exhortation. Indeed, whatever the product, the Government were ready to encourage it. Incentives have been given in one way or another, and the result has been to the Government's credit.
We believe that there should be a complete review of the whole industry and not just into parts of it, because it is really a question of forcing many families into bankruptcy. The fact is that at this moment—and, to this extent, I go along very much with those who have said it really does not matter who is to blame, because the whole public is to blame not only for suggesting that there should be an increase in beef production, but for providing incentives—we are in a surplus 557 position. I do not believe that maintaining intervention would have prevented this situation. The removal of intervention was the removal of an element of confidence, which is important. But whatever it was, and whether or not the oil crisis reduced demand, the fact of the matter is that we are now in a surplus situation which must be dealt with.
So far as we in Northern Ireland are concerned—and Wales is affected as well; that is another part of the United Kingdom which exports single suckle calves or store animals—there is not enough confidence in fattening to buy cattle and to remove them from the areas where they are bred. This has nothing to do with intervention or anything else, and is a matter of confidence. In the South of Ireland there are 2 million more cattle than there were two years ago, but not one ounce more fodder. So we have 2 million animals which will go very hungry. These animals, together with those from the North of Ireland which will not be willingly taken from the feeders, will add to the numbers remaining on the farms in Wales. In Northern Ireland, we have only 80 per cent. of the fodder we had last year. We have animals which will not be exported from Ireland to England. Those are the stark facts. My Lords, I can see no alternative except to give some incentive to people to maintain their breeding herds, and to maintain them in a healthy state in order to safeguard the future.
We have two vital problems. One is a surplus, and the other is a question of confidence. This is such a vital factor in farming where so many people are involved. I am afraid it is up to the Government to re-establish that confidence, and I believe they can. In the most polite but strongest fashion possible, I would suggest to the Government that they failed to realise what effect the extra animals going out of the South of Ireland would have on the market here. In the debate in July, I suggested that if one has a market that is 100 per cent. supplied, even a small number more can cause a major problem. I must admit I had no idea that it would make our very long-suffering fanners turn to violence, which is something we all deplore.
I do not believe the Government fully understood, although I was assured they 558 would, what would be the effect of the various subsidies and encouragements from the green pound and other matters in the EEC on the market in the United Kingdom, producing the extraordinary discontent which we have seen in various parts of the United Kingdom. I appeal to the Government, and implore them to realise that the future need of this country is for confidence. For the consumers—whom I feel the Government value more than the producers; and that is where I would blame the Government—will the Government please produce an immediate confidence. Confidence is what is required more than anything else.
§ 9.5 p.m.
§ LORD CRAWSHAW
My Lords, I feel it is something of a problem to break fresh ground at this hour of the night, or to enthuse your Lordships afresh. I was going to start by pointing out the various advantages which I have by living in the Midlands of this country, where one is not subjected to the extremes of climate or fortune, and where one hopes to take a reasonably dispassionate view of our present problems. I was also going to say something about what recent Ministers have put on record, but I think much of that can be taken as read because we must all agree that the situation is poor. The point of trying to find out who is to blame is not really worth exploring. We must concern ourselves with how to repair what must be a great deal of real and psychological damage in the country. How do we start to repair it?
There are two cornerstones on which we can build. First, I give a certain amount of credit to the present Minister of Agriculture, Mr. Peart, who has made the recent increase in the price of milk which saved the day in the dairy industry. I am also pleased with the current price of grain. The only point I would make is that after what has happened in the beef sector there is a certain amount of suspicion that this could also happen in the grain sector. It can be taken as read, too, that your Lordships and the Government realise that the days of cheap food are over. I hope that the Government will soon realise that our future lies with Europe. A number of noble Lords have stressed the fact that the beef market must be underpinned by intervention or some similar system. We all agree, too, that we must somehow create 559 a prosperous and expanding industry to serve this country well and to pay properly those who work in it.
Here I should like to raise a subject that I have not heard mentioned to-day, although I may have missed it; that is, the question of the tied cottage, which I know particularly concerns this Government. I personally see nothing wrong with the system of the tied cottage; I believe it is an essential part of the running of a livestock farm. I think the resentment occurs when a tied cottage is allied to a low wage. Jokes have often been made about the Prime Minister, the noble and learned Lord the Lord Chancellor and people of that sort living in tied houses. I do not believe that the comparison is so far-fetched. After all, good pay such as the Prime Minister receives—though perhaps he would not admit it—means a certain amount of independence. Opponents say that the occupants of a tied cottage are exposed to blackmail. I cannot see how you can blackmail an independent, well-off, skilled agricultural worker who knows that a prosperous industry will soon find him an alternative job and house. The only other point about the tied cottage that I would make is that, until the position where there are really good wages is universally reached, there should be some sort of system of placing retiring farm workers at the head of council house lists. I believe the Government are considering this point, and I believe it is something important which will reassure a great many people who work on the land.
I mentioned an expanding industry. Obviously, it follows that you cannot expand a bankrupt industry, and it seems to me that the case for expansion is as self-evident as that for producing our own oil and other forms of energy. There is currently a great desire to be independent of the whims of the Arab Sheikhs and people of that sort. I feel it is equally important to be independent and free from the pressures of the major food producing countries. The total imports into the United Kingdom in 1973 were valued at no less than £15,584 million, and no less than one-fifth of that consisted of imports of food and live animals—a total of £3,000 million. About one-quarter to one-fifth 560 of this covered the imported ingredients in concentrated animal feedstuffs—some 6 million tons—and a high proportion of this is the protein element.
The noble Lord, Lord Ritchie-Calder, gave us an interesting speech in which he mentioned the American soya bean and the Peruvian anchovy. It seems ridiculous to me that we should be dependent upon these two factors to the extent that we are at present, because we could get all the protein we want from the grass which is so abundant in this country—the crop which is so well-suited to our climate. The difficulty is that the harvesting and conservation of grass is a highly complex matter. Noble Lords have this afternoon pointed out that hay is really too chancy a crop to be taken very seriously; and you have only to ask the Welsh farmers for their opinion. Silage is less dependent on the weather than hay, but it is an awkward crop to handle and, to my mind, is wasteful. Grass drying is the best system, in my view, but like so many modern agricultural processes it needs to be done on a large scale in order to be economic, and it requires a large capital investment.
That brings me to my last point, which is the capital position in the industry. Obviously, money is short and interest rates are high. Admittedly, we still have the 20 per cent. improvement grants, but I am not particularly impressed by this system and never have been. The time and expense incurred by the farmer and the various civil servants involved while these grants are applied for, approved, amended, reapproved, claimed and eventually—and I have had a recent case of this—after four months paid, to my mind erodes their value to the farmer and is wasteful of public money. I would far rather that the industry was independent in this respect and generated its own money for improvements. This can be done only if the industry is not subjected to mortal blows from the proposed capital transfer tax and wealth tax.
I know that nobody likes paying tax—that is obvious. But I think that it is generally accepted that the better off in this country must shoulder the main burden for paying for our defence, for our social services and so forth. I further believe that a capital transfer tax can be devised to operate more fairly than 561 some of the recent systems. I do not find the practice one hears about of deep-freezing of one's immediate predecessor in order to obtain exemption under the seven year rule is particularly dignified, but a malicious attack, based on envy and so on, as my noble friend Lord Mansfield pointed out so well last week, would create a cynicism of Italian proportions, and will divert the attention of many capable people in the institutions in this country from their main purpose (which should be the efficient production of the country's food), into the money fields of sophisticated tax evasion.
I am glad that the Government are not rushing the question of the wealth tax, and that the subject will be explored carefully by the Select Committee in the House of Commons. Surely there must be many ways of sharing the assets, or profits, of a farming enterprise, or of any other business for that matter, among those concerned in it, if that is a practical solution, rather than the wholesale removal of scarce and vital capital from the largest and most important industry in this country. My final words are that the Chancellor is entitled to his spoonful from the golden egg, but he must not in the spirit of Shylock claim his pound of flesh from a live goose.
§ 9.16 p.m.
§ LORD RAGLAN
My Lords, I should like to congratulate my noble friend Lady Fisher of Rednal on her spirited speech. She asked about the housewife, and that indeed is a very good question which perhaps needs a debate to itself. We can all hear the farming prices every morning on the radio, and indeed they appear to bear very little relation to the price of goods in the shops. I suppose that the remedy is partly in the housewife's hands to refuse to pay large prices. The food manufacturing industry is a very large employer in this country, and one could say that huge numbers of people are employed as cooks producing prepared, ready-made food for housewives. I noticed, at a rough count, that four out of every five advertisements on independent television are for prepared foods or sweets, and that adds to the costs. It obviously must be a very popular form of food if people are prepared to advertise it on television. They know that they 562 will obtain big returns from their advertisements. Transport costs add enormously, to say nothing, of course, of the profits. So it all goes to make the final article in the shop very expensive. I heard a year or two ago that somebody had worked out the price per ton of a certain type of cornflakes at £2,000. It must be more now. Of course, if the cost of the finished material is up to that price, the price of the primary product contained in that finished article is a very small proportion of the cost.
I do not agree with the noble Baroness, Lady Robson of Kiddington, that it is only the Welsh and Scottish farmers who have had a poor time; it is people from Devon, the Pennines, or anyone on upland ground. They are having to sell on a low market because they have no fodder. It is most unfortunate for the Government that they can do very little about the weather. They are blamed for it, but they really cannot help it. It is a shame also that two coincidences have happened, in that we have had very bad weather and the first test of the EEC system of intervention—and it has not worked.
This situation is not, in my experience, unprecedented. I lived through this kind of situation before about 18 years ago in 1956. I had to sell cattle in the autumn at about half the price per hundredweight that I paid for them in the spring, while in nearby Cardiff docks they were busily receiving shiploads of Argentine beef at cut prices. I lost a great deal of money and I decided that that was no way to run a farm or the country's food supplies. Others apparently thought the same and during the following year the system of support was introduced which worked very well for consumers as well as producers and lasted until 1972. I think the then Minister of Agriculture was Sir Christopher Soames and from what I have heard today the noble Lord, Lord Nugent of Guildford, was instrumental in bringing about the better system of support. I was very pleased to hear my noble friend Lord Beswick saying this afternoon that we are to do our best to persuade the EEC to adopt our methods of support. I am sure that there is nobody better to put our case than Sir Christopher Soames. The matter is of the very greatest urgency.
563 I have an observation to add to the Ferrers law, and that is that economics are half psychology and only the rest to do with money. A threat of a glut is enough to produce a slump; the threat of a shortage is enough to produce high prices and indeed to produce a shortage. Some wisecrack was made some weeks ago that the salt miners of Siberia had gone on strike and there was to be a shortage of salt. Immediately every tin of salt disappeared from the shops in our district. Yet we have enough salt in Cheshire, I believe, to last, at double the present rate of consumption, for a thousand years.
We must try to regulate our food production and imports and to budget for a surplus so that we do not run short at all. I entirely agree with the noble Lord, Lord Nugent of Guildford, that we should build up a strategic reserve. The surplus should be bought and stored in that reserve so that that surplus does not cause a slump and destroy the confidence and perhaps the livelihood of the people producing it. It is easier to say than to do, and I believe it would be very expensive because food is enormously bulky for its value; but in the long run it would be well worth it. It would bring stability to the market and a steady supply of food to the consumer. That could be only a blessing to my noble friend Lady Fisher of Rednal.
My last thought is to support the noble Lord, Lord Crawshaw, on the matter of tied houses which is a very emotive subject. I should like to ask my noble friend a question. If he is unable to reply at the end of the debate perhaps he would write to me. I confess I am in a dilemma. I want to start a dairy herd, a very expensive venture and something of a gamble, but I think, having done my sums, that it will probably pay. The plans are fairly well advanced. I need a herdsman and I need to offer that herdsman a house because unless I do he will not be able to obtain one locally. I might be able to buy a house in the village or I could build one. Building one or buying one would cost not less than £8,000; £8,000 borrowed at 15 per cent. is £1,200 a year, or £23 a week, plus rates.
It may interest your Lordships to know that a local authority house built to 564 Parker Morris standards has an economic rent of about £35 a week. This would be cheaper than a local authority house because I would not have to build roads or buy the land. If the herdsman were to cease to occupy the house in connection with his job, choosing to leave my employment for another but staying in the house, I should find myself paying £20 a week for the house, less what taxed rent I could recover, and I should have to start building another. Of course I cannot do that. That is the kind of thing which would make economic nonsense of the whole enterprise. I cannot risk building a dairy unit if the Government are to bring in legislation to end the tied system. Neither could hundreds of other farmers keep their dairies.
Abolishing the tied system without replacing it with something similar, although it may be different, would be knocking the chocks away from under the livestock industry. It would roll straight down the hill. I see the force in the argument to abolish the tied house system. But as I see it, it would simply not be practicable at the moment, especially so far as livestock are concerned.
The employee must be given protection against a bad employer, and the employer must be given protection against the opportunist employee. I suggest the way to achieve this is by arrangement with the local authority, and not necessarily, as at present, by having to go through court proceedings in order that the employee may get on the local authority housing list. I invite my noble friend to try to tell me to-night if the Government have considered amending the tied house legislation so 'that I and many others may know what plans to make.
§ 9.28 p.m.
§ LORD STRABOLGI
My Lords, I think we have had a most notable debate. Many noble Lords have taken part. During all the time I have been in your Lordships' House I cannot remember any debate which has shown so much knowledge and which has been so moderate and constructive in tone. The noble Earl, Lord Ferrers, of course, adopted this approach in his speech which he said would be a reasonable approach from a non-Party point of view. We are grateful to him. The noble Earl reminded us that there is a great world food shortage. He touched upon the question of the 565 Conference in Rome, which I will refer to in a moment.
First, I must congratulate the three maiden speakers on their speeches, which have been very valuable contributions. First, I mention the noble Lord, Lord O'Brien of Lothbury, who, in addition to his distinctive career in the City, chaired the O'Brien Committee, if I may call it that, on the export of cattle. I shall refer to that in a moment. I have listened with great interest to all that the noble Lord had to say. I hope he will continue to contribute to our proceedings in future.
We have also enjoyed a notable speech from my noble friend Lady Fisher of Rednal, who spoke particularly from the point of view of the housewife, the consumer. I shall refer to her speech in greater detail later.
The noble Earl, Lord Kimberley, also addressed us in a notable speech, using hardly any notes. The noble Earl of course succeeded young, when he was under age, but I believe this is the first time in 20 years that he has addressed us. I hope he will not leave it quite so long before he comes again, because he showed himself to have considerable knowledge and experience of this subject, and I hope that he will join our agriculture debates frequently in future.
My Lords, several noble Lords mentioned the World Food Conference which is now taking place in Rome. Of course, my right honourable friends the Minister of Agriculture and the Minister for Overseas Development are attending this conference, to which all member countries of the United Nations have been invited. We believe it represents a serious attempt to get to grips with a problem which is of increasing relevance to us all; that is, the urgent and pressing problem of world food supplies, as the noble Earl has said. As a major food importer we cannot be insulated from the world supply and market situation. We can to a certain extent influence the course of events by international action, either unilaterally or through our membership of the European Economic Community. But, my Lords, in the final analysis our major scope for direct action to influence the nation's food supply lies within our grasp, as I think was referred to by several noble Lords during this debate.
566 The noble Baroness, Lady Robson of Kiddington, who spoke for the Liberals, told me that due to unforeseen circumstances she would not be able to stay, but I was very interested in all she had to say. She and I think other noble Lords talked about the question of food subsidies, and also the emergency measures, which were one of the suggestions made by the noble Earl, Lord Ferrers. If I may deal first with the question of food subsidies—that is, consumer subsidies—the Government's consumer subsidy programme on six basic foods is designed to give immediate and direct relief to those sections of the community most threatened by the inflation of food costs. This is to us, my Lords, the overriding requirement during a period of fast inflation. The effect of our subsidy programme has been that the retail price index is about 1½ per cent. lower than it would have been without subsidies. In choosing the products to be subsidised, we have been very conscious of the need to minimise market distortion. We have avoided products with high-price elasticities, like fresh foods, and the subsidy has normally been used, not to cut the price but rather to prevent or moderate a price rise which would otherwise have taken place. In the further development of our subsidy policy I can certainly assure your Lordships that we shall be seeking a balance between all the factors involved, including the market situation for each subsidised product and the need to minimise distortion.
The noble Earl, Lord Ferrers, also talked about the question of imports from Australia, and he referred to the imports of 300,000 tons of cane sugar. My Lords, we must accept that under the provisions of the Treaty of Accession these will come to an end in February. There is no escape clause. If importers wish to bring in Australian sugar after the present agreement has ended, they can do so without attracting levy only if it is imported at a price above the Community's threshold price. It is as yet too early to predict the situation for 1975, since the Community has still to conclude its negotiations under the Treaty of Accession. However, we have the assurance of supplies provided by the EEC imports subsidies scheme. I will not develop that in more detail because there will be an opportunity for a further debate on the subject to-morrow.
567 My Lords, the noble Baroness, Lady Robson, also suggested that emergency measures should be agreed with the EEC, and the noble Earl, Lord Ferrers, made the same point particularly, I think, with regard to beef. I would remind them that it is the Act of Accession, and more particularly Article 54 of that Act, that blocks the reintroduction of a guaranteed price for beef. However, I can also assure them that my right honourable friend the Minister of Agriculture has twice pressed his colleagues, the agricultural Ministers of the Community to agree to the introduction of arrangements designed to put a floor on producers' returns and I can assure them that my right honourable friend is continuing to press this point. The noble Baroness also said that farmers were not getting any benefit from the beef premium scheme. I realise that some people think that the benefit of the premium payments has gone to the meat trade and not to the farmers. We have already explained that the cause of low prices was the sudden upsurge in marketings and a deterioration in quality. The premium payments could not be expected fully to offset these effects, but I think that it can be agreed that they have helped. It is inconceivable that buyers at auction markets could have adjusted their bids to absorb the premium, and I think that this was a point made by the noble Lord, Lord Moyola. There are many hundreds of auction markets and farmers can claim the premium if they wish.
My Lords, the noble Lord, Lord Nugent of Guildford, also made a most interesting speech. He referred to the paper produced by the noble Lord, Lord Netherthorpe, and his friends which I should like to deal with a little later. I was glad to see, coming from the Benches opposite, his criticism of intervention buying, the cold storage system and the beef mountain, which is now growing almost to the size of the butter mountain. This point was also made by the noble Lord, Lord Dunleath, from the Cross Benches. I will deal with that a little later. With regard to Lord Netherthorpe's paper, The Case for Expansion of British Agriculture, we very much welcome what the noble Lord, Lord Nugent of Guildford, said about expansion over the longer term and about the pamphlet 568 on expansion that the Government have recently circulated. I know that my right honourable friends the Minister of Agriculture, Fisheries and Food, and the Secretary of State for Prices and Consumer Protection, have discussed it. Much of the thinking behind the report is in line with current policy and it is reassuring to know that men of experience in the agricultural and food sectors are thinking ahead on similar lines. This is very much in line with the Government's policy of economic and efficient expansion.
As noble Lords will know, discussions are also taking place with the Farmers' Union and other bodies on the long-term future of the agricultural industry and we shall certainly take into account the views expressed both in the report and in this debate. The noble Lord, Lord O'Brien of Lothbury, mentioned his Report. All I can say is that we are discussing this Report, and the recommendations in it will be considered carefully and as a matter of urgency. Of course, as my noble friend Lord Hoy reminded us, there was a ban on the export of shipments, except for breeding purposes, as a result of a decision taken by the other place in July, 1973, during the time of a Conservative Government of which the noble Earl was a member. Since then the Committee has been set up and has reported and their recommendations are, as I say, being very carefully considered. A decision will be made in due course.
With regard to the point made by the noble Baroness, Lady Emmet of Amberley, one of the reasons for the ban was not so much concerning transport, although this was a factor, but mainly concerning the conditions to which the animals would be subjected when they arrived on the Continent. These conditions do not apply in this country, which is one of the reasons why the Irish trade was not discontinued. The other reason is that Southern Ireland is an independent country. I hope that goes some way towards answering the point made by the noble Baroness.
The noble Lord, Lord Vernon, said, quite rightly, that the days of cheap food have gone. I am sorry the noble Lord thinks the Labour Party has never understood the countryside. I will not say 569 any more than that except that I think his speech——
§ LORD VERNON
My Lords, what I said was that there were many people in the country who thought that.
§ LORD STRABOLGI
My Lords, the noble Lord is now sheltering behind his friends. My noble friends behind me—my noble friend Lord Hoy has been a Minister and my noble friend Lord Raglan is a farmer—prove that we on this side of the House have just as much interest in and concern for all these matters as any other Member of your Lordships' House. The noble Lord did, however, stress the importance—and here I agree with him—of safeguarding agricultural land. The Government are concerned that, in encouraging the maximum economic production of food, wasteful inroads into the national bank of land should be avoided. Agricultural land, as your Lordships will appreciate, does not exist in this country in unlimited supply, and we shall seek to ensure that every acre that can be put to productive use is used as arable or grazing laud. Development will continue to be diverted from the high-quality land with its heavy yields and flexibility of cropping on to the less versatile land of a lower quality. We must make even more sure than hitherto that homes, roads and other essential developments take only the amount of land that is really necessary for the job in hand, and no more. The Government will continue to take even greater care that development plans and individual planning applications on which they comment conform with these requirements before they are approved.
The noble Lord also mentioned the question of the wealth tax, and this was also mentioned by the noble Lord, Lord Crawshaw, and others. I will deal with that question in a moment, if I may. My noble friend Lady Fisher of Rednal made a welcome maiden speech, and I am sure we shall also welcome it as representing an additional "voice of the housewife" in your Lordships' House. I was particularly pleased to hear the noble Baroness draw attention to the dangers of public reference to shortages. Many of our difficulties, particularly about sugar supplies in the shops, have been due to over-buying, panic buying and hoarding of sugar. I am sure she was right 570 in seeking to avoid such difficulties. My noble friend also referred to criticisms of the meat trade; more generally, for not passing on to consumers the benefits of cheap cattle purchases.
In fact, prices generally have come down but only noticeably on the cheaper cuts. The relationship between the cattle prices and retail beef prices is complex. Many poorly finished animals and a greater number of heifers are being slaughtered producing less saleable meat. Much greater demand for more expensive cuts is exacerbated by the loss of high quality chilled beef imports as a result of import restrictions. The meat trade is also facing sharply increasing costs, particularly in wages.
Your Lordships will be aware that the Price Commission is now carrying out an in depth study of meat prices. The noble Lord, Lord Balerno, and the noble Baroness, Lady Robson of Kiddington, asked for more aid for hill farms. No-one would deny that breeders and rearers of cattle in the hills and uplands are in severe difficulties, particularly in view of the shortage of fodder; but I suggest we should not overstate the position, although there are no grounds for complacency. Hill farmers have done relatively well in recent years and the Government have taken special action recently to provide help, to which reference was made by my noble friend Lord Beswick. They have done this by bringing forward the payment of hill cow and beef cow subsidies and this should improve the cash flow. I must emphasise that this will provide £35 million to these farmers early in the new year. In addition, the hill sheep subsidy has been nearly doubled. That means an extra £9 million in cash from early in the new year.
Several noble Lords mentioned the capital transfer tax and the wealth tax; and they have raised a variety of points about them. These are matters for my right honourable friend the Chancellor of the Exchequer and I cannot go into any more detail about them. But I can assure noble Lords that the points they made about agriculture—and I thought at one moment the noble Lord, Lord Nugent of Guildford, was going to talk about country houses—will be considered by the Select Committee and will be taken into account by the Chancellor of the Exchequer.
571 I am sorry that the noble Lord, Lord Brougham and Vaux, was not able to be here at the beginning of the debate. He was kind enough to tell me so and we fully realise why he could not be here. But we are very glad that he did speak. I am sorry that he thinks the Government are all talk and no action. When I come to the end of my speech, I hope I will be able to list a few of the things that we have done in this matter since coming into Office last March. We have been in Office only eight months, but within that time we have given additional aid to farmers, as my noble friend Lord Hoy reminded us, which will be worth nearly £300 million extra in the current year. This is more than the total cost of agricultural support in 1972–73, and almost as much as in 1973–74. This is additional aid granted this year.
The noble Lord, Lord Brougham and Vaux, also talked about fertilisers. It is true that there have been substantial increases in the cost of fertilisers to farmers. These have resulted from shortages and from increased prices of raw materials on the world market. Farmers will need to assess carefully how they can use their fertilisers more efficiently; also, they will need to order their fertilisers in good time. Provided they do this, they should be able to obtain reasonable supplies.
§ LORD BROUGHAM AND VAUX
My Lords, in the agricultural industry there has been talk of farmers using less fertilisers because they cannot afford to buy more. If they use less fertilisers, certainly on cereals, there will be a smaller yield and therefore we shall be back to a lower yield in the cereal industry.
§ LORD STRABOLGI
My Lords, I am sure that that is a point and one which we shall certainly keep under constant review. The noble Earl, Lord Kimberley, speaking about the Common Agricultural Policy, asked whether it would be possible to agree to an emergency policy for implementation without referring to Brussels. I am afraid not, my Lords. We are under the Treaty negotiated by the previous Government. I may say that many of us on this side of the House were in favour of entry into the Common Market, and we are now attempting to obtain better terms. Here I am not making a Party point. I often 572 supported it. But these were the terms negotiated by the previous Government and this, I am afraid, has been our legacy.
§ LORD DAVIES OF LEEK
My Lords, would the noble Lord give way? I should like to add (I have not intervened during the whole debate) that some of us pointed this out during the time the relevant Bill swept through this House like lightning. But we received very little support, despite the fact that we said we might be in favour of the Common Market if we could get suitable terms. I suggest that this month's Contemporary Review helps one to understand what intervention prices mean.
§ LORD STRABOLGI
My Lords, I am sure that my noble friend is right. Indeed, my noble friend Lord Beswick made this point, too, in his opening speech.
The noble Lord, Lord Clifford of Chudleigh, also had to leave, but he explained the reason to me and we fully understand. I should therefore like to answer the point he made about forestry and the capital transfer tax. We can appreciate that taxation considerations have an important influence on the management of woodlands. My right honourable friend has already received representations about this and he is shortly to meet representatives of the woodland owners. Careful thought is being given to the possible effects of the new measures on forestry. But Ministers must of course also bear in mind the need for fairness as between woodland owners and other property owners when assessing a proper share of any new taxation. I should like to say this about the wealth tax, which seems to be so much criticised from so many parts of the other side of the House. The Chancellor of the Exchequer pointed out that one of the great advantages of it will be that it is hoped it will result in a decrease in the surtax on earned income, which is something else the Party opposite is always making such a point about—about how high-powered executives have to emigrate because they cannot afford to live here, and how there is no incentive. This is one of the purposes of the wealth tax—to transfer wealth from those who inherit it to those who earn it.
I was glad that the noble Lord, Lord Dunlcath, supported us in discontinuing 573 the intervention policy. He also raised the question of the dairy herd conversion scheme. He questioned the continued existence of this scheme, which was designed to encourage farmers to convert from milk to beef production. This scheme was introduced on a Community basis, with provision for use of some Community funds, as one of the measures to reduce the milk surplus. It is still in existence but has had a relatively small take-up by United Kingdom farmers. My right honourable friend the Minister of Agriculture has urged farmers in this country, before taking advantage of the scheme, to consider very carefully whether it would really be in their interests. I think that the small number of applications made in this country is evidence that farmers have taken his advice. The noble Lord, Lord Dunleath, also spoke about the problems in trade between the Irish Republic and the United Kingdom and, of course, this was mentioned, too, by the noble Viscount, Lord Brooke-borough, and others.
My Lords, reference has been made to the introduction last month of net monetary compensatory amounts—subsidies of about 3 per cent. on United Kingdom imports from the Irish Republic. I should like to say immediately that we regard this as a regrettable development. It arises because the Irish Republic insisted in September at the Council of Ministers' meeting in Brussels on a larger change in the Irish agricultural conversion rate—or the green pound—than that made to the British rate. The result of this decision is that exports from the Irish Republic are liable to an export tax (currently 5.9 per cent.) on leaving the Republic and qualify for an MCA import subsidy (currently 9 per cent.) on entering the United Kingdom. The Government are, however, following the situation very closely to see whether this small net subsidy of 3 per cent. causes any increase in exports to us of Irish Republic foodstuffs. We are watching particularly the beef market, both in Northern Ireland and in Great Britain. There is no evidence yet, though, that current beef imports from the Irish Republic are out of line with the volume of trade in normal years but, my Lords, if evidence does emerge of trade distortion for beef or, indeed, for other commodities, we shall 574 be ready to consider what action is necessary.
The beef premium is payable either when the animal is sold by auction prior to slaughter or when the animal is actually slaughtered. Therefore the farmer has the option, if he wishes to take it, of presenting the animal for premium himself. Since this option is always open to the farmer, the dealer has little choice but to offer a price to the producer that takes the premium into account. My Lords, I am very grateful to my noble friend, Lord Hoy, for his support and in many ways, I think, for bringing us back to reality—not only for reminding us of our Treaty obligations in the Common Market but also for pointing out that this is a debate about agriculture in all its various subjects and not only about beef.
I come now to the speech of the noble Lord, Lord Sandys, which I thought was most interesting. He reminded us of the debate which we had upon, I think, an Unstarred Question of the noble Earl, Lord Onslow, about the world harvest situation and about the failure of crops in the virgin lands of the Soviet Union, particularly in Kazakhstan. I thought that the point which he made about fertilisers and about how these run off as effluents and could be used in conjunction with seaweed in the North Sea was a most interesting one, and of that we shall certainly take note. Also interesting was his very valuable suggestion of putting farmland into a special category. The noble Lord, Lord Swaythling, the noble Viscount, Lord Massereene and Ferrard and, indeed, the noble Lord, Lord Crawshaw, all spoke about the tied cottage. The tied cottage is, of course, primarily a matter for my right honourable friend the Secretary of State for the Environment. Two proposals are under consideration. These are, first, short-term measures, aimed at giving greater security of tenure along the lines of the legislation proposed in 1970 and, secondly, follow-up measures as reaffirmed in the Labour Party's Manifesto after the abolition of tied cottages.
We shall of course assess carefully the implications for agriculture of our proposals, particularly where secure tenancies are involved. Our present information is 575 that no agricultural organisations are interested in the short-term proposal, but if this is so we might not need to pursue it. We have noted carefully the views about abolition generally. I am afraid I do not have an answer to my noble friend Lord Raglan, but the interesting question and problem that he posed will certainly be gone into and if I may I will write to him.
§ LORD SWAYTHLING
My Lords, if I may interrupt the noble Lord for a moment, I wonder whether he could give a specific answer to one of the points I made about the tied cottage; namely, what is the position of the farmer who has had either permission to build or to improve a tied cottage by means of grant aid on condition that it is occupied by a farm labourer working on that farm, and how would he stand in that event if tied cottages were abolished?
§ LORD STRABOLGI
My Lords, that is a rather complicated legal question and if I may I will look into it and write to the noble Lord. We have also taken note of the interesting suggestion made by the noble Lord, Lord Crawshaw, that former tenants of tied cottages should be considered for some kind of priority by the local authority. That we shall certainly consider.
The noble Lord, Lord Moyola, spoke about the decline in the pig numbers in Northern Ireland. We are aware that the reduction in the size of the Northern Ireland pig breeding herd has been greater than that of the herd in Great Britain, but recent information suggests that the rate of decline has decreased and the pig market is now firming. We are also aware that traditionally the prices for fat cattle in Northern Ireland are less than in Great Britain and that there is some evidence to indicate a wider differential in recent months. My right honourable friend the Minister of Agriculture, Fisheries and Food is watching the market situation in Northern Ireland very carefully and he is particularly concerned to see whether there is any distortion due to the creation of the difference in the representative rates for the Irish and the United Kingdom pounds. The noble Lord, Lord Wise, in, I thought, a very constructive and interesting speech, asked when the Price Commission will 576 report on margins. I am sorry that I cannot say when the Price Commission will complete its study on margins. It is, of course, a fairly complex subject, but the Commission is treating this as a matter of urgency.
I hope that has answered most of the points which noble Lords have raised. I am sorry if I have had to speak for a fairly long time, but of course it is a very large and wide-ranging subject. In conclusion I should like to say that of course the Government have to balance, as indeed any Government have to balance, the interest" of producers and consumers. The Government have recognised that it is within the interests of both that the home agricultural industry should expand its production. With these points in mind the Government have participated fully in the work of the E.E.C. in order to obtain the best possible deal for the British people, despite having to renegotiate at the same time the unsatisfactory terms set for the United Kingdom by the previous Conservative Government. They have also succeeded in persuading the Community to agree to a major programme of assistance for the agricultural industry. Here are some of the things that have been done since we came into Office in March. There have been over £100 million increases for milk producers returns, over £85 million extra payments to the beef industry, a much improved cash flow for beef producers and rearers—thanks to the decision to advance the 1975 payment rates for beef and hill cow subsidies; large increases in the hill sheep subsidy, a special subsidy for pig producers.
My Lords, if the noble Lord will allow me to interrupt him, did he say there had been an improved cash flow for beef producers?
§ LORD STRABOLGI
Yes, my Lords, that is in the context of beef producers and rearers, thanks to the decision. We have decided to add the 1975 payment dates for the beef and the hill cow subsidies. There were also higher prices and a substantial quota increase for United Kingdom sugar beet producers. Perhaps we shall hear more of that tomorrow. There has been a special oil subsidy for glasshouse producers, a reintroduction of the lime subsidy that the noble Earl, Lord Ferrers, and I debated 577 last summer, and the extension of Community financial import subsidies on cereals to the benefit of all forms of livestock production. I suggest that these measures, which represent an injection of nearly £300 million into the industry, show that the Government continues to recognise, as was said in the gracious Speech, the value to the nation of expanding domestic food production, both economically and efficiently.
§ 10.7 p.m.
My Lords, I think those of us who are left are almost a happy band of pilgrims, because we have certainly come a long way since 3 o'clock. I wish to thank those of your Lordships who have been kind enough to stay all the way through to the end; in particular, my thanks go to the noble Lord, Lord Davies of Leek, who ought to get a medal, because he takes the biscuit for sitting right through to the end of every single debate and always showing a great interest, whatever the subject may be.
This debate has been notable in two respects; one is that 33 speakers said they wished to speak even though some fell by the wayside, possibly to the convenience of those left; the other is that we have had three maiden speakers. We had the noble Earl, Lord Kimberley, who was an assistant on the Liberal Benches, and who is a farmer. We also had the speech of the noble Baroness, Lady Fisher of Rednal; and I am bound to say I was very glad to see present someone from Birmingham, who is a housewife, speaking in this debate, because it is absolutely right that the housewife should be represented in a debate such as this. After all, food is very much the concern of the consumer. We listened to the speech of the noble Lord, Lord O'Brien of Lothbury, who is, of course, a very distinguished banker. He headed, in a very distinguished capacity, the report which bears his name. I was interested in that he said he had a godfather who was a farmer, because I had a godfather who wanted to be a 578 banker, and it was quite an interesting comparison, I thought.
I am very grateful to all those noble Lords who have taken part, and to the noble Lord, Lord Strabolgi, for having taken the trouble to answer almost every question, which is not an easy thing to do. I am grateful to the noble Lord, Lord Beswick, who was kind enough to tell me he could not stay to the end. This debate has been remarkably free from political controversy. At one juncture the noble Earl, Lord Onslow, put the political darts into overdrive, which proved too much for the noble Lord, Lord Hoy, and he retired. But there was no harm in that.
There are only two points that really came out of this debate. The first is that everyone wants agriculture to succeed, whichever side of the House they are on. Of course, every Government want agriculture to succeed. I am not one of those who would say that the Government opposite do not want it to succeed—of course they do. Occasionally there may be differences of view as to how that is achieved, but we realise that they are as concerned as anyone else.
The second is that, although the tone has been fairly quiet, I think there is a general concern about some sectors of the farming industry. Because the tone has been quiet, it should not be thought that those sectors are not extremely important. I was slightly disappointed that there was no real answer from the Government about what they were going to do about those who are in very substantial difficulty at the moment. However, I am grateful to the noble Lord, Lord Strabolgi, and to the noble Lord, Lord Beswick, for all they have said, and I beg leave to withdraw my Motion.
§ Motion for Papers, by leave, withdrawn.