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Food And Agriculture

Volume 526: debated on Tuesday 6 April 1954

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Now for the outlook in food and agriculture. On food there is expenditure of £229 million and, as I have already indicated, revenue which amounts to £110 million. This year consumer subsidies will apply to milk and bread only, at a cost of about £87 million. This is, as the Committee will have noted, very broadly the expense to the Exchequer resulting from the fixing of consumer prices insufficient to cover costs. The reduction of the scope of the consumer subsidies has, of course, widened the area over which assistance to our agricultural policy is given in the form of direct undertakings to producers.

Agricultural guarantees in this year's Estimate amount to just over £150 million. The total provision which corresponds to what we have hitherto called food subsidies—that is, it includes the welfare subsidies and such of the production grants as have hitherto been included in the total of food subsidies—is £325 million. We intend to carry out our undertakings to the farming community to maintain a system of guaranteed prices settled at the Annual Review.

Last year's experience has given both the farmers and the Government a good deal to think about—notably the fall in market prices abroad and at home, the return of plenty, and the curious effect of abnormally warm weather at seasons when the wit of men had fixed a price to suit a cold climate. In fact, the hens simply would not graduate in any of our schools of political economy. The Government and the farmers have therefore been conferring together on a variety of schemes designed to reconcile two needs —the need to secure a greater measure of financial control and the need to preserve the broad stability of the farming industry. The introduction of Deficiency Payments Schemes is an improvement, but our arrangements will have to vary from commodity to commodity.

We may, for example, quantify or limit the extent of Exchequer help to a particular commodity. Thus the guaranteed price may be related, in the words of the recent Annual Review White Paper,

"to levels of output of particular commodities, as in the case of the new financial arrangement for milk ";

or there may be an arrangement for sharing some part of the effect of changes in market prices. But I am sure that in one way or another we must establish, in consultation with the farmers' representatives, some limit to the open-ended Exchequer liability. Of this we shall hear more during the year.