(THIS D O C U M E N T - IS T H E P R O P E R T Y OF-H-IS B R I T A N N I C - M A J E S T Y * S
GOVERNMENT)
S E C R E T
C . P . ( 5 1 ) 80
COPY
1 6 T H M A R C H , 1951
NO.£
.
CABINET
ANNUAL REVIEW UNDER P A R T I O F THE A G R I C U L T U R E A C T , 1947 M e m o r a n d u m b y t h e C h a n c e l l o r of t h e E x a h e q u e r I h a v e b e e n asked b y t h e o t h e r M i n i s t e r s c o n c e r n e d t o r e p o r t on
t h e p r o g r e s s of d i s c u s s i o n w i t h t h e F a r m i n g U n i o n s a n d o n t h e p o s i t i o n n o w
reached.
C o u r s e of t h e N e g o t i a t i o n s
2.
T h e v a r i o u s p r o p o s a l s w e r e o u t l i n e d in E . P . C . ( 5 1 ) 1 7 .
There
have b e e n s o m e slight c h a n g e s in the f i g u r e s but b a s i c a l l y the position i s
this.
In 1 9 5 0 / 5 1 f a r m i n c o m e s a d j u s t e d t o n o r m a l w e a t h e r c o n d i t i o n s a r e
estimated at £299^ millions.
If c o s t s , p r i c e s a n d p r o d u c t i o n l e v e l s
r e m a i n e d constant so that t h i s i n c o m e w a s r e p e a t e d in 1 9 5 1 / 5 2 , t h e y would
b e £ 2 6 ^ m i l l i o n s i n e x c e s s of t h e t a r g e t i n c o m e p r o p o s e d f o r 1 9 5 1 / 5 2 .
I n c r e a s e i n c o s t s is. p u t a t £871" m i l l i o n s of w h i c h £ 3 4 m i l l i o n s h a v e b e e n
c a r r i e d i n 1 9 5 0 / 5 1 n o t w i t h s t a n d i n g t h e h i g h l e v e l of i n c o m e .
Towards the
r e m a i n i n g i n c r e a s e i n c o s t s of £ 5 3 j m i l l i o n s t h e r e w i l l t h u s b e a n e x c e s s
of i n c o m e a t p r e s e n t p r i c e s of £ 2 6 ^ m i l l i o n s a n d a f t e r a l l o w i n g f o r v a r i o u s
a d j u s t m e n t s the r e c o u p m e n t needed by the f a r m e r s is £37 m i l l i o n s .
The
A g r i c u l t u r e M i n i s t e r s p o i n t o u t t h a t , on t h e b a s i s of t h e s e f i g u r e s , w h i c h
the F a r m e r s Unions contend should not be the sole c r i t e r i o n for d e t e r m i n ­
ing p r i c e i n c r e a s e s ( s e e p a r a g r a p h 6(a)) t h e f i n a l r e s u l t w o u l d b e t h a t , if
t h e f a r m e r s r e a c h t h e t a r g e t i n c o m e of £ 2 7 3 m i l l i o n s p r o p o s e d , t h e y w o u l d
s u f f e r a n e t r e d u c t i o n of i n c o m e o f £ 2 6 ^ m i l l i o n s a s c o m p a r e d w i t h w h a t i t
is e s t i m a t e d they will r e c e i v e in 1950/51.
T h e f i g u r e s a r e g i v e n in A n n e x
A.
Our o r i g i n a l offer to the f a r m e r s w a s £35 m i l l i o n s b e f o r e allowing
f o r a n y w i t h d r a w a l of t h e c a p i t a l i n j e c t i o n ( s e e p a r a g r a p h 3) a n d d i s r e g a r d ­
i n g a s p e c i a l p a y m e n t of £ 5 ^ m i l l i o n s i n r e s p e c t of t h e S p e c i a l P r i c e R e v i e w
(see p a r a g r a p h 4).
We p r o p o s e d in t h e f i r s t p l a c e to w i t h d r a w £ 2 0 m i l l i o n s
of c a p i t a l m a k i n g o u r n e t o f f e r t o t h e f a r m e r s £ 1 5 m i l l i o n s , b u t w e l a t e r
r e d u c e d t h i s c a p i t a l w i t h d r a w a l to £10 m i l l i o n s making o u r net offer £ 2 5
millions.
All this w a s done u n d e r the a u t h o r i t y given b y the E c o n o m i c
P o l i c y C o m m i t t e e at t h e i r 4th M e e t i n g ( E . P . C . ( 5 1 ) 4th M e e t i n g , M i n u t e 1).
t o t h e A g r i c u l t u r e M i n i s t e r s , t h e M i n i s t e r of F o o d a n d m y s e l f .
1
3.
Capital Injection.
In 1 9 4 6 / 4 7 w h e n t h e a g r i c u l t u r a l e x p a n s i o n
p r o g r a m m e w a s s t a r t e d we added £40 m i l l i o n s to the f a r m p r i c e s b y way
of a t e m p o r a r y i n j e c t i o n t o p r o v i d e s o m e of t h e c a p i t a l n e e d e d f o r t h e
expansion p r o g r a m m e .
Our intention has b e e n to let t h e m have this injec­
tion for five y e a r s (i. e . £ 2 0 0 m i l l i o n s in all) but we h a v e n e v e r h a d a n y
f i r m a r r a n g e m e n t with the f a r m e r s about withdrawal.
We a r e c l e a r that
it m u s t be w i t h d r a w n g r a d u a l l y a n d t h a t we should make a s t a r t t h i s y e a r .
W e h a v e , h o w e v e r , r e a c h e d t h e c o n c l u s i o n t h a t if t h e f a r m e r s a r e t o h a v e
£200 m i l l i o n s in a l l w e o u g h t not t o w i t h d r a w m o r e t h a n £ 1 0 m i l l i o n s t h i s
year.
4.
Special Price Review.
Following on the wage i n c r e a s e s last
a u t u m n the f a r m e r s asked for a S p e c i a l P r i c e R e v i e w .
At t h a t t i m e we
u n d e r t o o k t o make a s p e c i a l p a y m e n t in t h e p r i c e s for 1 9 5 1 / 5 2 to c o v e r
t h e a d d i t i o n a l c o s t s w h i c h w o u l d b e c a r r i e d b y t h e f a r m e r s i n 1 9 5 0 / 5 1 if
a Special P r i c e Review was postponed.
T h e a m o u n t i n v o l v e d i s £5^­
millions.
I t i s q u i t e o u t s i d e a n y e s t i m a t e of r e c o u p m e n t r e q u i r e d f o r
1951/52.
I t w i l l h a v e t o b e a d d e d t o t h e p r i c e of t h e d i f f e r e n t c o m m o d i t i e s
in p r o p o r t i o n to the w a y in w h i c h i n c r e a s e d w a g e c o s t s fall.
It i s d i s ­
r e g a r d e d in, and will be additional t o , a n y r e c o u p m e n t d i s c u s s e d in the
r e s t of t h i s p a p e r .
5.
Wool.
The p r e s e n t guaranteed p r i c e which the f a r m e r s r e c e i v e is
2 s . 3 d a l b . ; t h e w o o l i s s e l l i n g a t a b o u t 1 2 s . Od.
The surplus less lOper
c e n t g o e s i n t o a s p e c i a l fund a n d i s a v a i l a b l e f o r five y e a r s t o m e e t a n y
future shortfall ii receipts by the Wool M a r k e t i n g B o a r d after paying the
f a r m e r s the guaranteed p r i c e .
If t h e r e i s n o t s u f f i c i e n t i n t h e f u n d t o
m e e t such a shortfall m o n e y h a s to be voted to i m p l e m e n t the g u a r a n t e e
a n d the E x c h e q u e r t h e r e f o r e h a s a n i n t e r e s t in t h e l e v e l of the fund.
At
t h e e n d of f i v e y e a r s , h o w e v e r , a n y t h i n g r e m a i n i n g i n t h e fund i s p a i d o v e r
to the f a r m e r s and the whole p r o c e s s s t a r t s again.
A t t h e e n d of t h i s
(the f i r s t ) y e a r t h e r e w i l l b e a b o u t £ 1 7 ^ m i l l i o n s s e t a s i d e in t h e fund a n d
w e c o u l d a f f o r d t o l e t t h e f a r m e r s h a v e a g u a r a n t e e d p r i c e of 5 s . Od o r
6 s . Od w i t h o u t a n y r e a l r i s k t h a t w e s h o u l d h a v e t o v o t e m o n e y t o i m p l e m e n t
t h e g u a r a n t e e b e f o r e t h e e n d of t h e f i v e y e a r l y p e r i o d .
The f a r m e r s c l a i m
t h e r e f o r e that any e x t r a p r i c e we allow on wool is t h e i r own m o n e y and out­
s i d e p r i c e r e c o u p m e n t . On t h e o t h e r h a n d w h a t e v e r w e a l l o w ( f r o m £ 4 j
m i l l i o n s t o £ 9 f m i l l i o n s - s e e p a r a g r a p h 11) i s q u i t e c l e a r l y i n c o m e a n d s h o u l d
be taken into a c c o u n t in deciding what p r i c e r e c o u p m e n t on o t h e r c o m m o d i t i e s
is n e e d e d to achieve a given t a r g e t i n c o m e .
Of c o u r s e t h e l e s s t h e f a r m e r s
g e t n o w t h e m o r e t h e y w i l l h a v e a t t h e e n d of t h e f i r s t q u i n q u e n n i u m a n d if
wool p r i c e s r e m a i n v e r y high there will be a v e r y big addition to their
i n c o m e s o n t h e d i s p o s a l of t h e s u r p l u s , a n a d d i t i o n w h i c h i t w i l l b e d i f f i c u l t
to fit into t h e P r i c e R e v i e w p r o c e d u r e .
It m u s t n e v e r t h e l e s s b e c o n c e d e d
that it is difficult for the National F a r m e r s ' Unions to explain t o the
i n d i v i d u a l f a r m e r s t h a t a l a r g e p a r t o f t h e p r i c e r e c o u p m e n t i n a y e a r of
h e a v y i n c r e a s e d c o s t s i s b e i n g g i v e n i n r e s p e c t of w o o l w h i c h m a n y
f a r m e r s do not t h e m s e l v e s p r o d u c e .
The F a r m e r s '
Case
6.
The f a r m e r s have r e j e c t e d our offer and a r e asking for £55 m i l l i o n s
with no capital injection withdrawal.
We t h i n k , h o w e v e r , t h a t t h e y w i l l
come below this figure.
T h e y b a s e t h e i r c l a i m on the following g r o u n d s : ­
( a )
T h e y c o n s i d e r that too m u c h s t r e s s h a s b e e n placed on a p a r t i c ­
u l a r c a l c u l a t i o n of f a r m i n c o m e : o t h e r c a l c u l a t i o n s e x a m i n e d
at the r e v i e w point to a declining t r e n d .
All the calculations
c o n s i d e r e d show a declining t r e n d in c a s h s p e n d a b l e i n c o m e s .
(b)
T h e y c h a l l e n g e a s i n a d e q u a t e t h e a l l o w a n c e of £ 2 8 m i l l i o n s m a d e
i n r e s p e c t of i n c r e a s e d p r o d u c t i o n of £ 3 5 0 m i l l i o n s s i n c e
1 9 4 6 / 4 7 i n t h e b u i l d - u p of t h e t a r g e t n e t i n c o m e o f £ 2 7 3 m i l l i o n s
( s e e p a r a g r a p h 5 3 of E . P . C . ( 5 1 ) 1 7 ) .
They consider that the
a l l o w a n c e m a d e is too low b y £ 1 5 m i l l i o n s .
( c )
T h e r e i s l i k e l y t o b e a f u r t h e r r i s e in c o s t s d u r i n g 1 9 5 1 / 5 2 w h i c h
the f a r m e r s will have to b e a r and this together with a n y
i n c r e a s e d t a x a t i o n w i l l make it difficult for t h e m to find the
n e c e s s a r y further capital investment.
(d)
T h e y a r e a l r e a d y f i n d i n g it d i f f i c u l t t o g e t t h e c r e d i t f r o m b a n k s
and m e r c h a n t s which they need.
This m a y be partly the r e s u l t
of t h e b a d h a r v e s t l a s t y e a r a n d , i n t h e c a s e of m e r c h a n t s , t h e
l a r g e r p r o p o r t i o n of/their funds t i e d up in c a r r y i n g s t o c k s ;
w h a t e v e r the r e a s o n it i s a n e m b a r r a s s m e n t to the f a r m e r s .
(e)
The a v e r a g e profit is no m o r e than £800 a f a r m which h a s to
c o v e r t h e r e m u n e r a t i o n for t h e l a b o u r of t h e f a r m e r a n d h i s
wife, i n t e r e s t on c a p i t a l , f u r t h e r c a p i t a l i n v e s t m e n t n e c e s s a r y
a n d t h e w h o l e of t h e r i s k ,
(f)
Other incomes, including w a g e s , and profits a r e rising and the
f a r m e r s ' profits should not be reduced at such a t i m e .
(g)
T h e G o v e r n m e n t a r e s t i l l a s k i n g f o r a n i n c r e a s e of p r o d u c t i o n a n d
t h e r e i s a l a r g e u n s a t i s f i e d d e m a n d for food in t h e c o u n t r y .
T h e e f f e c t o n p r o d u c t i o n of u n d e r - r e c o u p m e n t of c o s t i n c r e a s e s
will be s e r i o u s .
(h)
W e a r e p a y i n g s u b s t a n t i a l l y h i g h e r p r i c e s f o r o u r i m p o r t s of f o o d
and should not deny h i g h e r p r i c e s , b a s e d on higher c o s t s , to our
own f a r m e r s .
T h e M i n i s t e r of F o o d ' s
View
7.
T h e M i n i s t e r of F o o d c o n s i d e r s t h a t o u r p r e s e n t o f f e r of £ 3 5
m i l l i o n s (before w i t h d r a w i n g £10 m i l l i o n s c a p i t a l ) is fully a d e q u a t e to
s e c u r e t i n food w h i c h t h e c o u n t r y r e q u i r e s a t p r i c e s c o n s u m e r s w i l l p a y .
( W e d o n o t w a n t a g e n e r a l i n c r e a s e of p r o d u c t i o n ; w h a t i s n e e d e d i s a s h i f t of
production f r o m m i l k into m e a t . )
In g e n e r a l , h e p o i n t s out t h a t t h e i n c o m e
of f a r m e r s i s f o u r t o f i v e t i m e s g r e a t e r t h a n b e f o r e t h e w a r , a l t h o u g h n e t
output is but 45 p e r cent g r e a t e r and labour c o s t s have i n c r e a s e d only two
a n d a h a l f t i m e s ; a l t h o u g h i m p o r t p r i c e s a r e r i s i n g , t h e p r i c e s of m a n y
h o m e - p r o d u c e d foodstuffs e s p e c i a l l y s u b s i d i s e d foodstuffs a r e a l r e a d y m u c h
h i g h e r t h a n t h o s e of i m p o r t e d s u p p l i e s ; t h e g a p b e t w e e n t h e p r i c e p a i d t o
the f a r m e r and what the c o n s u m e r pays is a l r e a d y dangerously high and
m u s t not b e w i d e n e d ; a n d l a s t l y , w e h a v e a l r e a d y t o face in t h e n e x t t w e l v e
m o n t h s t h e p r o s p e c t of r i s i n g r e t a i l f o o d p r i c e s b y a v e r y s u b s t a n t i a l
amount (see E.P.C.(51) 4).
8.
He e m p h a s i s e s t h a t t h e g l o b a l a w a r d on food c a n n o t b e c o n s i d e r e d
w i t h o u t t a k i n g a c c o u n t of i t s c o n s e q u e n c e s o n t h e p r i c e of i n d i v i d u a l
c o m m o d i t i e s ; t h e b r e a k d o w n of t h e a w a r d a m o n g c o m m o d i t i e s h a s a l s o t o
be negotiated with the f a r m e r s .
A n a w a r d of £ 2 5 m i l l i o n s n e t o n f o o d a l o n e
e n t a i l s b y c o m m o n c o n s e n t a t l e a s t j d a g a l l o n on m i l k a n d the f a r m e r s m a y
w e l l a s k for m o r e .
Any e x c e s s a b o v e £ 2 5 m i l l i o n s net would a l s o , it is
a g r e e d , have to fall a l m o s t e n t i r e l y on m i l k .
This would run counter to
the policy a g r e e d at the E c o n o m i c P o l i c y C o m m i t t e e (see E.P.C.(51) 4th
Meeting).
M o r e o v e r , a n a w a r d of £ 2 5 m i l l i o n s n e t w o u l d e n a b l e u s t o
m a k e v e r y s u b s t a n t i a l i n c r e a s e s in t h e p r i c e s of f a t s t o c k a n d p i g s ( s e e
A n n e x B ) ; to t h e e x t e n t t h a t t h e r e i s not a s u f f i c i e n t d i s i n c e n t i v e on m i l k ,
t h e a t t r a c t i o n of t h e s e h i g h e r p r i c e s i s r e d u c e d .
9.
T h e o f f e r of £ 3 5 m i l l i o n s w a s m e a n t t o i n c l u d e s o m e i n c r e a s e i n
t h e p r i c e of w o o l ( w h i c h w e h a d n o t i o n a l l y p u t a t £ 4 ^ m i l l i o n s ) a n d t h e m o s t
t h e M i n i s t e r of F o o d f e e l s a b l e t o c o n c e d e i s t o o f f e r £ 3 5 m i l l i o n s ( b e f o r e
c a p i t a l w i t h d r a w a l ) o n food p r i c e s a l o n e , l e t t i n g t h e f a r m e r s a l s o h a v e , if
t h e y w i s h i t , a p r i c e of 5 s . 6d a l b . ( £ 9 f m i l l i o n s ) o n w o o l .
This would
give the f a r m e r s £ 4 4 f m i l l i o n s b e f o r e capital w i t h d r a w a l and is m o r e than
t h e y would n e e d on a s t a t i s t i c a l b a s i s .
At this point therefore the
M i n i s t e r of F o o d w o u l d s t a n d f i r m e v e n if ,it m e a n t a b r e a k w i t h t h e
f a r m e r s involving scheduling p r i c e s and a l l the political and other diffi­
culties which would follow.
He feels that we should have an overwhelming
v o l u m e of s u p p o r t f r o m t h e c o u n t r y a t l a r g e .
The Agriculture M i n i s t e r s '
View
10.
T h e M i n i s t e r of A g r i c u l t u r e r e g a r d s o u r p r e s e n t o f f e r a s
inadequate, m a i n l y for the r e a s o n s given by the f a r m e r s t h e m s e l v e s .
He
points out in addition t h a t once this offer h a s b e e n t r a n s l a t e d into i n c r e a s e s
i n t h e p r i c e of i n d i v i d u a l c o m m o d i t i e s a l l t h a t t h e o r d i n a r y f a r m e r w i l l
k n o w i s t h a t h e h a s b e e n s e r i o u s l y u n d e r - r e c o u p e d for t h e i n c r e a s e in h i s
c o s t s o f p r o d u c t i o n of e a c h c o m m o d i t y .
This will be r e g a r d e d a s a v e r y
p o o r r e w a r d f o r a l l t h a t t h e f a r m e r s h a v e d o n e t o i n c r e a s e p r o d u c t i o n of
f o o d s u p p l i e s f o r t h i s c o u n t r y w i t h , a s a r e s u l t , a s u b s t a n t i a l s a v i n g of
dollars.
S e v e r e u n d e r - r e c o u p m e n t t h i s y e a r will follow upon u n d e r ­
r e c o u p m e n t i n e a c h of t h e l a s t t w o y e a r s a n d t h e c u m u l a t i v e e f f e c t i s
b o u n d t o h a v e s o m e r e s u l t o n t h e l e v e l of p r o d u c t i o n a n d c o m p l e t i o n of t h e
agricultural expansion p r o g r a m m e .
If a n i n c r e a s e i n t h e p r i c e of w o o l i s
g i v e n ( e v e n o n l y t o 3 s , 9d) t h e r e w i l l b e a s a v i n g t o t h e E x c h e q u e r of a b o u t
£1-1 m i l l i o n s o n t h e h i l l s h e e p s u b s i d y .
T h e M i n i s t e r of A g r i c u l t u r e s h a r e s
t h e s c e p t i c i s m of t h e f a r m e r s a b o u t t h e r e l i a b i l i t y of t h e t a r g e t n e t i n c o m e
a p p r o a c h a s the d e t e r m i n i n g factor in fixing p r i c e s .
It n e c e s s a r i l y a s s u m e s
that output, efficiency, etc. r e m a i n constant, a s between the c u r r e n t y$ar
and the y e a r for which p r i c e s a r e being fixed, and that the calculations can
b e m a d e f r e e of a l l e r r o r s o f f o r e c a s t ; i n a c h a n g i n g w o r l d t h e s e a s s u m p ­
t i o n s a r e n e v e r b o r n e out b y e v e n t s .
Finally he points to the v e r y s e r i o u s
p o l i t i c a l d i f f i c u l t i e s of a b r e a k w i t h t h e f a r m e r s , w h i c h w i l l u n d o u b t e d l y
m e a n t r o u b l e in the H o u s e and p o s s i b l y a C e n s u r e Motion, at t h i s t i m e .
T h e M i n i s t e r of A g r i c u l t u r e h a s s u g g e s t e d a s a c o m p r o m i s e o n t h e M i n i s t e r
of F o o d ' s p r o p o s a l t h a t w e m i g h t l e t t h e f a r m e r s h a v e £ 4 0 m i l l i o n s ( b e f o r e
c a p i t a l w i t h d r a w a l ) o n f o o d p r i c e s a n d a s m u c h o n w o o l , b e t w e e n £4^­
millions and £9f millions, a s m a y be n e c e s s a r y to s e c u r e a g r e e m e n t .
T h e S e c r e t a r y of S t a t e f o r S c o t l a n d c o n c u r s .
Conclusion
11.
A n n e x A s h o w s t h e e f f e c t of t h e s e t w o p r o p o s a l s o n f a r m e r s '
incomes.
T h e m a n n e r in w h i c h t h e offers c a n b e broken down a m o n g the
different c o m m o d i t i e s is shown in A n n e x e s B and C, but they a r e given only
f o r p u r p o s e s of i l l u s t r a t i o n s i n c e o u r n e g o t i a t o r s m u s t b e l e f t w i t h s o m e
latitude in fixing individual p r i c e s with the f a r m e r s .
We a r e all a g r e e d
t h a t we m u s t n o w a s k our c o l l e a g u e s to d e c i d e upon the final offer at w h i c h
w e w o u l d if n e c e s s a r y b r e a k w i t h t h e f a r m e r s .
Our negotiators would lead
up to t h i s offer g r a d u a l l y , p r o b a b l y keeping s o m e t h i n g in hand for M i n i s t e r s
t o u s e if n e c e s s a r y .
T h e q u e s t i o n on w h i c h w e t h e r e f o r e n e e d a d e c i s i o n
f r o m our colleagues is at what point do we make this final stand which m a y
i n v o l v e a b r e a k w i t h t h e f a r m e r s a n d t h e s c h e d u l i n g of p r i c e s .
The
a l t e r n a t i v e s for c o n s i d e r a t i o n a r e : ­
( a )
£ 3 5 m i l l i o n s (or a f t e r c a p i t a l w i t h d r a w a l £ 2 5 m i l l i o n s ) on food
p r i c e s with £ 9 f m i l l i o n s on w o o l .
(b)
£ 4 0 m i l l i o n s ( £ 3 0 m i l l i o n s a f t e r c a p i t a l w i t h d r a w a l ) on food p r i c e s
with a s m u c h on wool b e t w e e n £ 4 ^ m i l l i o n s a n d £ 9 ^ m i l l i o n s a s
m a y be n e c e s s a r y to s e c u r e a g r e e m e n t .
H.G.
T r e a s u r y Chambers, S.W.1,
1 6 T H M A R C H , 1 9 5 1 .
. ­
-4­
ANNEX A £ million 1.
Net income'1950/51 (estimate) 299^
2.
Target 1 9 5 1 / 5 2 275
3 . Excess income in 1 9 5 1 / 5 2 , at present. costs, prices and production levels would "be I4.0 Increase in costs
5 . Of- which carried in 1 9 5 0 / 5 1 notwithstanding excess income over target 6 , Balance of increased costs to he "borne in 1951/2 7,
Excess income at present prices and production levels
26^
8. Shortfall of income 27
9 . Allowance (see note) 10
1 0 . Recoupment needed'
37 '
Minister of
Food
11,
Alternative Offers:
Food Prices
Wool Price
Agricultural Ministers 35
to g j
Uhi to
1 2 , Capital withdrawal
1 3 . Recoupment needed (line 1 0 )
10
10
3Uf 3ki
3 1
Ihm Thus even after withdrawal of
capital, farmers will only he
under-recouped by
or, on the alternative "basis,
over-recouped "by
to 3 9
JlL
2i
NOTES; The Agricultural Ministers point out that with, these levels of recoupment proposed, if farmers' incomes turn out as planned, they will, after the withdrawal of £ 1 0 million ' capital injection, receive from £23-f- million to £ 2 9 million
less income than it is at present estimated they will
receive in 1 9 5 0 / 5 1 ,
Item 1 .
The estimated net income includes £hh-g million
for increased value of stocks. Although this is income, it is not available as cash to the farmers, and we cannot tell whether it will be repeated in 1 9 5 1 / 2 J this depends on cost increases in that year. Some allowance for-this factor has therefore been made in the calculation (see note on Item 9 ) . -1­
h3
Item 2 .
The target is made up of a basic income of
£ 2 0 5 million in 1 9 1 + 6 / 7 + £1+0 million capital injection
4- £28 million for increased production.
Item 9 .
This allowance consists of an addition to
take care of the valuation change (see note on Item l)
and a deduction for increased efficiency. The net figure
has been put at £ 1 0 million.
ANNEX B Possible price increases on the "basis of an aggregate
price adjustment amounting to £ 2 5 million net on food only
Commodity Unit Cost Increase (including
withdrawal
of
subsidies) Suggested
Price .
Increase
Aggregate . Recoupment Wheat (per cwt,) 15. 7 d .
Is. Od,
ii'000
1,695
Barley (per cwt.) 18. 9 a .
is.oa.
50
Oats (per cwt.) 16.
ls.0d.
310
Rye (per cwt,) 7d.
(as for wheat)
Potatoes (per ton) Iks.: 7 d .
Sugar Beet (per ton)
8s.. 6d.
Nil
0
S
'
l d
Pigs (per score d.w.)
2,31d.
Us.ll^d.
Milk (per gallon)
2.91d.
Eggs (per dozen)
U.56d.
4j912
5,895
-
1*146
1,528
Id, 1 , 4 1 9
1,419
4 s . Od. 4s,-6d,j 5 , 6 8 8
6,399
' 5,957
3,971
s
6
d
9 s
s
0
*
k
S
Id.
i
0
a
2d.
Less Eire Stores
( 1 4 7 , 0 0 0 tons)
Aggregate Recoupment
NOTES:
0 d
v
d
. Total
-
'M/Poocr^
-
7
'cattTe
' o t h e r -z^ p . - ,
cattle
'
'
3
Pat Sheep (lb. d.w.)
1,920
M/Food^ A g r i c ,
Depts;
Pat Cattle (live cwt.)
1
3.010
\
26,737
26,827
1.102
1.323
26,635
25,504
All price increases are anmial averages, ' These can, if desired, be concentrated on certain months to encourage production at those seasons. (1)
——
Nil 10s.Od.
ware
minus 4 0 s. Od.
substandard
Agric.
Depts.
1
For crops the price increases take account of the Special Review increases so that there is no decline
. in the rate between 1 9 5 1 / 5 2 and 1 9 5 2 / 5 3 .
(2)
( 3 )
The aggregate recoupment for eggs is net of a decrease
in price of duck eggs of 6 d , per dozen,
( 4 )
As in previous years it has been assumed that the
benefit of an increased price for fat cattle will
be passed back to the breeder of stores imported
from the Irish-Republic.
ANNEX 0
Possible price increases on the basis of an'aggregate
price adjustment amounting to £ 3 0 million not on food only
G
Commodity
1
Unit Cost Increase (including withdrawal
of subsidies)
Suggested Price iAggregate
1 Recoupment
Increase
j
£'000
Wheat (per cwt.) 15.
7d.
Is. Od.
i 1,695
Barley (per cwt.) 18.
9d.
Is.
6d,
75
Oats (per cwt.) 16.
7d.
Is. l+d. '
Rye (per cwt. )
Potatoes (per ton) Sugar Beet (per ton) . (as for wheat) 1
Nil
Nil
10s.
Od.
ware
minus l4.Os.Od.
sub-standard
7d.
llu
U13
2s.
8. 6 d .
,
1,920
6d.
630
'.
9s.
Pat Cattle (live cwt.)
10.
Pat Sheep (lb. d.w.)
2.31d.
Pigs (per score d. w.)
k.Hi&
Milk (per gallon)
2.91d.
Id. ' .
! 7,9h2
Eggs (per dozen)
U.56d.
2d. ­
j
Id.
;
Od.clean 5 , 8 9 5
cattle
l+s. Od. other 1 1 , 5 2 8
cattle
i
Us.
j
Less Eire Stores
( 1 ^ 7 . 0 0 0 tons)
Aggregate
NOTES;
lid.
2,139
6d.
6,399
Total
r
3.010
31,6U6
1
!
Recoupment
(1)
All price increases are annual averages. These can,
if desired, be concentrated on certain months to
encourage production at those seasons.
( 2 )
Por crops the price increases take account of the
Special Review increases so that there is no decline
in the rate between 1 9 5 1 / 5 2 and 1 9 5 2 / 5 3 .
(3)
The aggregate recoupment for eggs is net of a
decrease in price of duck eggs of 6 d . per dozen.
(h)
As in previous years it has been assumed that the
benefit of an increased price for fat cattle will
be passed back to the breeder of stores imported
from the Irish Republic.
[
1.323
j30,323