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Credit Facilities

Volume 439: debated on Monday 7 July 1947

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49.

asked the Minister of Agriculture what steps the Government propose to take to ensure that the small dairy farmers and mixed farms throughout the country have adequate working capital to enable them to produce the maximum amount of milk and food.

I am satisfied that almost all farmers can secure, either from their own resources or from existing credit facilities, sufficient working capital, and I do not propose to make any further arrangements.

Is the right hon. Gentleman aware that 80 per cent. of the farms of this country are of 150 acres or less, that most of them are short of working capital and have to rely on bank overdrafts at 5 per cent.? Is ne further aware that the banks pay only half per cent. on deposit accounts, which is 10 times the amount they charge the farmers?

If the situation is as has just been described, would not a solution be to form a credit association for the farmers?

I am certain that the situation is not as the hon. Member for Evesham (Mr. De la Bère) suggested, and, that being so, there is no necessity to provide facilities other than those which already exist.

50.

asked the Minister of Agriculture whether he will take steps to make use of the existing 7,000 branches of the joint stock banks, with a view to the formation of an agricultural farm credit bureau restricted under its constitution from charging more than 1 per cent. above the current bank rate on all its transactions.

Is the right hon. Gentleman aware that if we are to develop food production farmers must have the proper working capital? I am not satisfied, even following the rebuke which the right hon. Gentleman has just given me, and I shall go on again and again. I know I am right.

52.

asked the Minister of Agriculture whether it is his intention to reduce the rate of interest from 5 per cent. to 2½per cent. on other credits under the Goods and Services Scheme in addition to the advances to hill farmers as announced on 20th June.

The reduction in the rate of interest is not restricted to hill farmers; it applies to any farmer to whom assistance under the scheme is given for the replacement - of livestock lost last winter through snow, frost, or flood. I do not propose to extend the concession to farmers who have not suffered in that way.

Do I understand that there will be two rates of interest which farmers will be able to obtain under one scheme? Do I understand that for livestock only it is 2½per cent., but that if a farmer's crops suffer, as they are suffering in the Eastern Counties at present because of the drought and the barley plague, he will not be able to get the credit at 2½per cent.?

Past experience of the Agricultural Goods and Services Scheme indicates that anything less than 5 per cent. would not cover the necessary overhead expenses. Therefore, it would amount to an indirect subsidy, and it is not the intention that that should be the case.