I wish to draw the attention of the House to the problems of farming on the Weald of Sussex. Perhaps I should explain that the Weald of Sussex is that part of Sussex lying north of the Downs, which was once an extensive forest but of which only St. Leonard's Forest and Ashdown Forest now remain. In times past, all those who travelled through the Weald were unanimous on one matter, the villainous state of the roads. It was the clay which made them virtually impassable—a thick, glutinous clay—and it is this same clay which, despite all attempts at drainage, makes farming exceptionally difficult.Farming on the Weald is always late, much later than on the greensand which is only a few miles to the west, and sometimes it is too late altogether. The pattern of farming on the Weald is unlike that in the broad acres of Hampshire. There is a high proportion of small dairy farms, often tenanted, but, large or small. they have one thing in common in that all are losing money. For at least a year I have been writing to the Minister to warn him of this situation. I have given the most detailed figures and costings provided by my farming constituents, and he has done nothing to relieve their anxiety. There are four main points of concern, which can be summarised as clay, cash, capital and confidence. There is not much to he done about the clay, particularly in the miserable weather which we have had recently, but the evidence is there for all to see in the large number of cattle being brought forward for slaughter, in the emaciated condition of many of the animals and in the photographs of tractors churning about in the clay. On the Weald, spring has barely begun. Cash is another problem. In 1974 agriculture saw its greatest decline in aggregate net incomes, a drop of nearly 30 per cent. That is the average over the country as a whole, and the position of Wealden farmers was much worse than the average. One has to take into account also the increase in costs, which rose by £692 million last year, largely as a result of inflation. Inflation, however, is getting much worse, not better, and its effects can be found in every aspect of our lives though in no more striking way than in agriculture. The Government bear the sole responsibility for inflation, and they alone have the means to relieve its worst consequences for farming. At present, there is a serious cash shortage. I understand that costs for the 1975 wheat crop on the Weald have risen to £90 an acre, and are likely to reach £106 an acre for the autumn-sown 1976 crop. I am told that it is impossible now to get a yield of 30 cwt. to the acre, so that with a market price of about £50 a ton in prospect it will be impossible for the Wealden farmers to cover costs. That is the situation at present. Of course it may be better elsewhere, but the Government have to take account of the marginal areas in their policy if agriculture is to succeed. That is why the Government's recent White Paper "Food from Our Own Resources" has been met with such incredulity. Paragraph 16 points out that the total area of agricultural land in the United Kingdom is declining at the rate of 144,000 acres a year. Every year there is much less farming land. We are told that between 1972 and 1974 our net deficit in trade in food rose from £1,750 million to nearly £3,000 million. The Minister himself says that we can no longer expect to find cheap food elsewhere. The conclusion must be that we must encourage our own food production by every means we have. Unlike so many other industries which the Government are supporting, agriculture has proved its efficiency and its productivity. In recent years production has been growing so that agriculture now produces two-thirds of the food which can be produced here with a much reduced workforce. This compares favourably with agriculture in the other countries of the EEC. Paragraph 23 of the White Paper says:
But what sort of assurance do they get? None at all. It is quite clear that if the Government's programme for agriculture is to stand a chance of success, the marginal land will have to be used to the full. This is particularly so in the case of dairy farming, for which the Weald is best suited. Paragraph 46 of the White Paper shows, in the assessment for 1980, that dairying, together with the beef from the calves produced, would be likely to offer the United Kingdom, as a member of the EEC, a greater margin than lowland beef over the resources used. Table 2 in that document shows that milk production could increase by 620 million gallons by 1980, an increase of £220 million at EEC farm gate prices, which is the largest increase of all agricultural products. Furthermore we are only 60 per cent. self-sufficient in milk, which is one of the lowest proportions of all the EEC countries. The farmers' unions believe that the extra capital costs will come to between £425 million and £500 million at current prices, I do not know what rate of inflation they are assuming, but I should not be surprised if that was an underestimate. From that estimate, however, one conclusion is inescapable. There is no prospect of achieving anything like that level of production unless we make the fullest use of all our agricultural land and unless it is made profitable to farm in marginal areas. That is plainly not the position at present. The Government must be made aware of the damage that is being done to agriculture through the capital transfer tax and through the proposals for a wealth tax. Farming is very much a family business. Of course, it makes sense to invest in more land and more machinery in a good year because the economics of farming favour larger units. But what farmer does not believe in doing so in order to provide for his family, to enrich and enlarge the land he owns to pass on something better for his family? What incentive is there now to carry out such a policy? Why should a farmer build up his farm only to find that he has to pay a heavy burden when he passes it on to his family? The alternative is for a farmer to spend the earnings he gets from farming instead of reinvesting them, and that is what he will do. Especially is this so in the marginal areas such as the Weald, where profits are so small in any case. These arguments apply equally to the wealth tax. The Government do not seem to understand that farming is essentially a creative business. What suits the farmer and his family must by definition suit the country. If what happens does not suit him, we shall find that farming land will be allowed to deteriorate and the Government's objective of raising production will be impossible to achieve. That is what is so important about capital. Without it there can be no future for farming. English farmers do not look upon themselves as Russian kulaks. What they mean by a secure long-term future is the prospect of creating a fruitful asset of their farm. Of course, this means creating capital. If the Government do not understand this, they will never achieve a successful agricultural policy. That is why I welcome the fact that the Conservative Party is pledged to repeal the capital transfer tax. There are, however, certain measures that the Government can take to ease the present desperate situation of farmers on the Weald. I remind the Minister of his statement of 11th December last. It was designed to give help to livestock feeding in winter. The hon. Gentleman announced a headage payment of £15 per hill cow moved from a hill farm to a lowland area. It was forecast that the total cost would be £150,000. I should like to know what has happened to that fund. How much has been taken up? If, as I understand, much is still there, cannot some of it at least be used for farmers in the marginal areas such as the Weald? The Government also announced guaranteed bank loan subsidies for hill farm grants made by the Agricultural Mortgage Corporation. I think that that was announced at the same time. Could not these loans be extended to apply to hill farmers as well? The principle of special aid to marginal farming, such as the hill sheep subsidies, is well known and accepted by the Government and by the European Community. I understand that by the draft Instrument R/27/75 a directive has been issued that allows for a 50 per cent. rebate from Community funds for headage payments made by member States from the beginning of 1975. I believe that the United Kingdom is the principal beneficiary of this proposal. Certainly a large number of counties seem to benefit from it, not only Cumberland and Northumberland, but Somerset, Shropshire and Herefordshire, which are not particularly noted, I would have thought, for their difficult farming areas. If they are included, why not the Weald of Sussex as well? Certainly the Weald would seem to fit at least one of the criteria—it has a low grass yield compared with the national average. I thought it right to draw the attention of the House to the particular problems of my constituents farming on the Weald. I conclude by saying that, useful as any temporary expedient may be, there is no alternative to the main requirement and that is to make farming profitable. If we are to secure our own food supplies, there is no alternative to providing farmers with the long-term incentives that they need by allowing them to create capital by ploughing back profits, by creating greater investment and by creating a renewal of the confidence that farmers everywhere so desperately need."If farmers are to invest in expansion, they need a degree of assurance about their future returns."
The hon. Member for Horsham and Crawley (Mr. Hordern) has given us a description tonight that I expected, and, of course, he has dealt with some of the problems that have been encountered by his constituents and others who farm on the Weald in Sussex. I think it useful to have this opportunity to debate the problems which he has outlined and which affect particularly his part of the country.Some of those problems are no doubt facing farmers on heavy land in other parts of the country, and I recognise that the main problems that the hon. Member and his colleagues face in his constituency are connected with the clay soil. The wet winter and spring have certainly created major difficulties, which the hon. Member mentioned, particularly for those who want to grow cereals on the Weald. Such difficulties are an unavoidable hazard for cereal production on such land. A number of small farmers on the Weald are always liable to face special problems in operating as viable units, and the hon. Member referred to the smaller units. The Ministry's advisory staff do all they can to help and I know that farmers on the Weald did much to help each other with the problems of fodder they faced during the winter. It must be recognised that some of the problems which have been faced on the Weald are due to structural and husbandry factors to which there are no easy answers. The weather, to which the hon. Member referred, is an important factor in farming. The immediate cause of the difficulties described by the hon. Member tonight was the wet winter and the unexpected and unusual cold snap at Easter. There was also the problem of turning out stock during that period, with a consequent effect on fodder. That also held back the spring growth of grass. The hon. Member made the point about cereals being grown in his area. There are particular problems concerning the heavy soil. We are naturally concerned about the effect of the wet weather on cereal production prospects. Growers on heavy land on the Weald were unable to get much of their winter wheat in and over the country as a whole there has been about 20 per cent. less winter wheat sown than last year. On the Weald, winter ploughing is still unfinished. Waterlogging is restricting growth and little spring sowing has been completed. This is clearly worrying for those who depend upon cereal production as the best way of utilising land not used for livestock production. Whereas normal rainfall allows the heavy Weald soil to be ploughed for cereals, the abnormal conditions we have had this year have made cultivation difficult. The fodder situation has been discussed in correspondence with the Ministry. The land conditions and the weather accentuate the problems, which have been variable in different parts of the country. The effect of the weather has been mixed. The mild winter allowed stock to be kept out more than usual. It has led to the problem of damage to pastures in wet conditions. Overall the weather has helped to ensure that the worst fears about fodder supplies have not been realised. We also had a record cereals harvest last year. This has helped considerably with feed supplies although there was still a need for ruminants to have roughage. Also, though unwelcome to cereal growers, the fall in cereal prices this year has been a significant help to the livestock sector. The hon. Member referred to the cash flow position, particularly with regard to fodder. The Government have done a lot to help the cash flow of many of the hardest hit. Last October there was a special increase in milk producers' prices worth nearly 8p per gallon over the six winter months. The 1975 beef cow subsidy payments, as well as the hill cow subsidy payments, were brought forward and cash flow over the winter months was thus improved. The Agricultural Development and Advisory Service has been and continues to be available to advise on the most efficient and economic use of fodder and other resources. Throughout the country there has been liaison between ADAS and the NFU which has been of value in overcoming some of the worst problems facing farmers. I turn to the dairy industry. For most of the 1974–75 period the milk yields per cow were at the same low level as in the previous year, principally because rising costs led to a reduced use of the concentrated feed. Yields had begun to Improve this year and were running at a higher level than in the same period in 1973–74 until the setback in the weather in late March and early April. Not all parts of the country have had the same pattern. I appreciate that the Weald in particular seems to have suffered from the abnormally wet weather, principally because of the nature of the soil. I have been reading some of the correspondence from the hon. Gentleman's constituents and discussing the situation with our regional officers. On all the various problems currently facing farmers on the Weald the Ministry's advisory officers arc ready to help. They are very busy answering farmers' inquiries about how best to get their land into cultivation and deal with the problems caused by the poaching of pastures. They are ready to help with advice on the best use of fertilisers and the use of resources on the land and other facilities so as to minimise cereal losses at harvest time following the difficulties of winter and spring. In conjunction with the local NFU, they will hold a large open meeting next week in the Horsham area. This meeting will be aimed at providing farmers locally with further advice on ways of coping with this year's production problems. Communications in the industry are important. Sometimes people wonder whether the Ministry or indeed Ministers are au fait with some of the problems affecting various parts of the country. Most people will appreciate that there is a very strong link between the Ministry and Ministers and the industry. I pay tribute to all the NFU branches throughout the country because they never miss an opportunity to make known the conditions affecting the industry. There is the Ministry's regional organisation and the ADAS officers, to whom I pay tribute for their advice to people in need. I mention also the work done by the regional panels which are appointed by the Minister in the various parts of the country and with whom Ministers are in contact out in the regions as well as in London. We get impartial advice which is valuable in providing the important links between the people they represent and the Ministry. The hon. Gentleman referred to the fall in farm incomes last year. We do not deny that 1974–75 was a difficult year. especially for the livestock sector. The figures were set out in this year's Annual Review White Paper. However, one must remember that, although farm incomes fell last year, this followed a very large increase in the year before. Aggregate net income in 1973–74 was 49 per cent. higher than in 1972–73. The fall last year still left aggregate net income 31 per cent. higher than in 1972–73.
I am surprised to hear the Minister using that argument. Does he mean that the Government will be content to allow aggregate farm incomes to drop until all the good work done by the Conservative Government has been dissipated and we return to the miserable days of 1970 when farmers were demonstrating on the streets?
I do not want to be partisan, but we inherited some problems, which would have arisen anyway, not necessarily because of the Conservative Government's policy but due to worldwide conditions, such as inflation and the oil situation. One has to take income one year with another. It is good when the industry has a big increase in income, and we recognise the problems which the industry faced last year when income was severely reduced. But I still think that the point is that income over a period of years is the matter to which we should have regard.
The point is that most of the Weald farmers are dairy farmers and they had had another bad year the previous year. It was the cereal farmers who did well the previous year, but, unfortunately. not enough of them farm on the Weald.
The hon. Gentleman will recall that in the last six months there was an increase of nearly 8p a gallon—one of the biggest increases over that period of time under any Government in the last few years. However, we recognise the problems of the industry, and it is no help to farmers for us to average out incomes when they face problems in years which are not so good.There was the annual review and there was the CAP prices, and the Government did much last year to alleviate the situation. Livestock produces on the Weald have benefited from the special pig subsidy. the temporary increase in the calf subsidy and the beef premiums. In addition, the industry's difficulties were taken into account in this year's review. The determinations made following the review provide substantial increases in guaranteed prices and, taken with the increases in the CAP prices for 1975–76 and the new EEC beef régime, they provided a sound basis for farmers' production plans in the coming year. Overall there was a major increase in the levels of support. The new beef régime is not only a radical improvement in the EEC system but gives producers a real assurance of a substantial level of returns, more than 20 per cent. higher than in 1974–75. The hon. Gentleman made a relevant comment on the Government's long-term White Paper, which was produced after a great deal of consultation with the industry, the NFU, employees' organisations and so on, to give long-term assurances for the industry to have the necessary confidence. Much of the detailed filling-in on the support and the financial aspects will have to be considered after the debate on the referendum is over in June. By producing a long-term White Paper the Government have set out the main objectives that we hope to achieve in the next few years, into the 1980s. A brief reference was made to capital taxation. We are all aware of the concern expressed throughout the country about the possible effects of capital taxation. The Government's measures of capital taxation are designed—I am sure that the hon. Gentleman will not disagree with the objective—to bring about a more equitable distribution of wealth. The Government have said clearly that they recognise the special problems relating to agriculture. This was made clear in the White Paper, Cmnd. 5705, dealing with the capital transfer tax. The Finance Act 1975, which gave effect to the tax, provided special relief for the land of the full-time working farmer. In addition, in his recent Budget Statement my right hon. Friend the Chancellor of the Exchequer announced his intention of introducing a similar relief in regard to capital gains tax. The proposals for a wealth tax are still under consideration by a Select Committee. In the Green Paper on the wealth tax the Government made clear, in paragraph 34, their recognition of the special problems of agriculture. The Government have made it clear that they recognise the special needs of agriculture in relation to capital taxation, and that we shall be keeping the situation under review. This is no idle statement. The recent White Paper "Food from Our Own Resources" (Cmnd. 6020) explained that the Government were setting up certain specific studies on issues which could be important to the achievement of potential growth in agriculture. One of these studies will be a review of the effect of capital taxation on agricultural production. I believe that I have dealt with the main issues which have been raised. As I said at the beginning, many of the problems raised affect our agriculture industry as a whole and not only farmers on the Weald. Therefore, I am grateful to the hon. Gentleman for the opportunity to reply to some of the points he raised. The Government believe that there is a long-term future for agriculture nationally. We must fill in the objectives as we go along in the annual reviews and in our continuing negotiations with the Common Market, provided we stay in the Community. In their determinations over the past difficult year the Government have shown the ready help which has been available. We intend to maintain the reassurance which the industry needed. When the hon. Gentleman talks about the difficulties of the past 12 months, it is relevant to point out that about £300 million was spread over many commodities. The milk producers have had a considerable share. They are being paid a quite large increase. Government subsidy payments were made soon after we came into office in March 1974. Help was given to pig farmers with the payment of 50p a score for a considerable period, and that was welcomed by the industry. The hill farmers have had a considerable income boost as a result of the legislation introduced by my right hon. Friend and, as I said earlier, the beef and hill cow subsidy payments which were brought forward in January this year have helped the cash flow. The hon. Gentleman will recall the fodder survey and the action which was taken last winter when we recognised the special problems which faced the livestock industry and the need to make sure that adequate supplies were available. Over the past year my right hon. Friend has not been slow in taking action within the Community and within this country to ensure that the farmers have had the assurances which were necessary. I know that on occasion the industry has accused us of having a "fire brigade" policy—
The Question having been proposed after Ten o'clock on Monday evening, the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at six minutes past Twelve o'clock.