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T H I S D O C U M E N T IS T H E P R O P E R T Y O F H E R B R I T A N N I C M A J E S T Y ' S
GOVERNMENT
CONFIDENTIAL
52
C P . (56) 73
7th M a r c h ,
COPY
NO.
1956
CABINET
F A R M P R I C E R E V I E W 1956
M e m o r a n d u m b y t h e M i n i s t e r of A g r i c u l t u r e ,
and Food
Fisheries
I c i r c u l a t e f o r t h e i n f o r m a t i o n of m y c o l l e a g u e s t h e d r a f t of t h e
W h i t e F a p e r o n t h e A n n u a l R e v i e w of t h e A g r i c u l t u r a l I n d u s t r y a n d D e t e r ­
m i n a t i o n of G u a r a n t e e s , w i t h o u t a p p e n d i c e s .
2,
I m a y , of c o u r s e , f i n d i t n e c e s s a r y t o m a k e s o m e m i n o r
t i o n s b e f o r e t h e p a p e r g o e s to p r i n t .
D.H.A.
M i n i s t r y of A g r i c u l t u r e ,
and Food, S . W . 1 . 7th M a r c h ,
1956.
Fisheries
altera­
AGRICULTURE ACT, 1 947
ANNUAL REVIEW AND DETERMINATION OF GUARANTEES, 1 956
I.
1.
Introduction
The 1956 Annual Review of t h e economic c o n d i t i o n and p r o s p e c t s
of t h e a g r i c u l t u r a l
i n d u s t r y has now b e e n h e l d i n a c c o r d a n c e w i t h
S e c t i o n 2 of t h e A g r i c u l t u r e A c t ,
1947.
In the l i g h t
of i t
the
Government have d e t e r m i n e d t h e g u a r a n t e e s f o r l i v e s t o c k and
l i v e s t o c k products i n the year A p r i l ,
1956,
t o March, 1957,
and
f o r c r o p s from t h e 1 957 h a r v e s t .
These are s e t out i n Appendix V.
2.
of c h a n g e s i n wage c o s t s ,
A S p e c i a l Review,
on account
b e e n h e l d c o n c u r r e n t l y w i t h t h e Annual Review and t h e
a r e g i v e n i n Appendix VI.
results
These S p e c i a l Review d e t e r m i n a t i o n s
r e l a t e t o c r o p s of t h e 1956
of
has
harvest,
and t o l i v e s t o c k
products
1955/56 - i . e . i n e a c h c a s e a y e a r e a r l i e r t h a n t h e p e r i o d
t o w h i c h t h e p r e s e n t Annual Review d e t e r m i n a t i o n s
II.
relate.
Economic C o n d i t i o n of t h e A g r i c u l t u r a l
Industry
Production Progress
3.
A g r i c u l t u r a l net output for t h e y e a r
1955/56 i s f o r e c a s t a t
55 p e r c e n t above p r e - w a r . The r e v i s e d i n d e x f o r l a s t y e a r , 1954/55,
i s 51 p e r c e n t above p r e - w a r .
a f f e c t e d by t h e w e a t h e r .
to the
L a s t y e a r ' s outcome was
seriously
The volume of n e t o u t p u t i s now back
1953/54 l e v e l , w h i c h was t h e h i g h e s t p r e v i o u s l y r e c o r d e d .
This r e f l e c t s
credit
on t h e e n d e a v o u r s of t h e i n d u s t r y .
r e s u l t has b e e n a c h i e v e d d e s p i t e a s u b s t a n t i a l f a l l
a r e a and p i g p r o d u c t i o n .
tillage
These d e c l i n e s have b e e n o f f s e t
r e c o r d y i e l d s of c e r e a l c r o p s ,
consequential f a l l
in
The
a b e t t e r hay h a r v e s t
i n i m p o r t s of f e e d i n g s t u f f s )
(with a
and a
c o n t i n u i n g upward t r e n d i n t h e o u t p u t of m i l k and e g g s .
B r e e d i n g f o r p r o d u c t i o n of b e e f ,
t o expand.
/
by
mutton and lamb c o n t i n u e s
Changes i n
4.
Cosies
­
S t a t i s t i c s of changes i n c o s t s a r e shown i n Appendix I I I .
There i s a s u b s t a n t i a l
increase again t h i s year,
e s t i m a t e d t o amount
t o about £ 4 - 3 m i l l i o n i n a y e a r f o r a l l c o m m o d i t i e s ,
m i l l i o n f o r review commodities.
Disregarding the reductions in the
c o s t of f e e d f o r p i g s and e g g s , w h i c h are r e f l e c t e d
adjustments to the guarantees f o r those commodities,
would be about £ 4 5 m i l l i o n f o r a l l
m i l l i o n f o r review commodities.
cannot be a p p o r t i o n e d ,
and about £ 3 5
automatically
the
in
figures
c o m m o d i t i e s and j u s t under £ 3 7
Apart from f e e d c o s t s ,
which
some £ 1 2 m i l l i o n of i n c r e a s e d c o s t s on
r e v i e w c o m m o d i t i e s w i l l have a l r e a d y a f f e c t e d n e t income i n t h e
current year 1 9 5 5 / 5 6 ,
still
t o take e f f e c t
l e a v i n g about £ 2 4 m i l l i o n on r e v i e w c o m m o d i t i e s
on f u t u r e n e t
income.
Efficiency
5.
The annual i n c r e a s e i n e f f i c i e n c y , a r i s i n g p r i m a r i l y from
improvements i n husbandry and farm management, can o n l y be e s t i m a t e d
broadly.
£30
The Government a s s e s s e d t h i s a y e a r ago a t s o m e t h i n g
m i l l i o n a year for the i n d u s t r y as a
a. y e a r f o r r e v i e w c o m m o d i t i e s .
Yviiole
and about £ 2 5
like
million
They have examined a l t e r n a t i v e ways
of a s s e s s i n g t h i s and have c o n c l u d e d t h a t t h e r e a r e r e a s o n a b l e
grounds on w h i c h t o c r e d i t a g r i c u l t u r e w i t h an i n c r e a s e of some
£ 3 0 m i l l i o n a. y e a r f o r t h e i n d u s t r y a s a w h o l e , w h i c h i s
t o about 2 p e r c e n t of g r o s s
equivalent
output.
Changes i n Income
6.
The f o r e c a s t
of t o t a l n e t income f o r 1 9 5 5 / 5 6 i s £ 2 9 9 ? m i l l i o n ,
and compares w i t h £ 2 8 5 ' g m i l l i o n i n 1 9 5 4 / 5 5 "
-
weather c o n d i t i o n s ,
1 955/56;
When a d j u s t e d f o r normal
t h e net income i s e s t i m a t e d a t ,£292-g- m i l l i o n
t h e comparable f i g u r e f o r 1 9 5 4 / 5 5 was £ 3 2 0 ? m i l l i o n .
outcome f o r e c a s t f o r 1 9 5 5 / 5 6 d o e s n o t f u l l y r e f l e c t
the
for
The
recovery
t h a t i s t a k i n g p l a c e from t h e a c t u a l l e v e l of n e t income i n 1 9 5 4 / 5 5
1
when t h e weather was s o bad.
T h i s i s due t o a number of
a p a r t from t h e c o n t i n u i n g e f f e c t
For example,
factors
of that year's exceptional weather.
i n t h e c a s e of c r o p s l o w e r g u a r a n t e e d p r i c e s f o r
1 9 5 5 h a r v e s t had b e e n determined a f t e r t h e 1 9 5 4 Annual Review,
the
w h e r e a s t h e h i g h e r p r i c e s d e t e r m i n e d a f t e r t h e 1955 Review w i l l n o t
t a k e e f f e c t u n t i l t h e 1956 h a r v e s t ;
and t h e r e h a s b e e n an i n c r e a s e ,
compared w i t h 1954/55, i n s t o c k s and- work i n p r o g r e s s a t t h e end of
the year,
on w h i c h no p r o f i t
i s reckoned u n t i l t h e output i s s o l d .
Economic C o n d i t i o n o f t h e I n d u s t r y
7.
The Government's a s s e s s m e n t of t h e e c o n o m i c c o n d i t i o n of t h e
industry i s as follows.
Output h a s r e c o v e r e d from t h e s e t b a c k i n
1954/55, h u t t h e i n d u s t r y i s h a v i n g t o b e a r a s u b s t a n t i a l burden of
increased c o s t s .
Favourable f a c t o r s
a t work a r e t h e i n c r e a s i n g
e f f i c i e n c y o f t h e i n d u s t r y and t h e c o n t i n u i n g e f f e c t s
Annual Review award,
of t h e 1955
some of w h i c h have n o t s o f a r b e e n f e l t .
But on b a l a n c e t h e i n d u s t r y n e e d s a f u r t h e r i n c r e a s e i n t h e v a l u e
of t h e g u a r a n t e e s .
III.
8.
P r o d u c t i o n and Guarantee
Policy
P r o d u c t i o n and g u a r a n t e e p o l i c y have b e e n r e v i e w e d and t h e
p o l i c y of t h e Government i s s e t o u t i n t h e i m m e d i a t e l y
following
paragraphs.
Production
9.
Policy
The Government have c o n s i d e r e d w h e t h e r a g r i c u l t u r a l
production
p o l i c y a s h i t h e r t o s t a t e d r e q u i r e s t o be r e v i s e d i n t h e l i g h t o f
t h e b a l a n c e o f payments problems t h a t f a c e t h e U n i t e d Kingdom.
F a c t o r s t o be c o n s i d e r e d a r e : - t h e p o s s i b l e s a v i n g o f d i r e c t
of f o o d by a d d i t i o n a l home p r o d u c t i o n ,
of animal f e e d i n g s t u f f s
and t h e a d d i t i o n a l
imports
imports
t h a t might b e r e q u i r e d f o r t h i s p u r p o s e ;
t h e p o s s i b l e s a v i n g of imported f e e d i n g s t u f f s ;
the benefit to the
b a l a n c e of payments and t o t h e n a t i o n a l income of a f u r t h e r
increase
i n home a g r i c u l t u r a l p r o d u c t i o n compared w i t h t h a t w h i c h could b e
o b t a i n e d from o t h e r i n d u s t r i e s u s i n g t h e l a b o u r ,
m a t e r i a l s and f i n a n c e
which t h e i n c r e a s e i n a g r i c u l t u r a l p r o d u c t i o n might r e q u i r e ;
n e t a d v a n t a g e o f any p o s s i b l e import s a v i n g ,
having regard t o t h e
s o u r c e s of t h e i m p o r t s and t h e i r p l a c e i n our g e n e r a l o v e r s e a s
10.
and t h e
trade.
The c o n c l u s i o n i s t h a t n a t i o n a l r e q u i r e m e n t s can b e s t be met
by i n t e n s i f y i n g t h e p o l i c y d e v e l o p e d s i n c e 1 952.
The o b j e c t i v e o f
p r o d u c t i o n p o l i c y remains t h e most t h a t c a n b e produced
and e f f i c i e n t l y
i n a c c o r d a n c e w i t h market r e q u i r e m e n t s ,
economically
steadily
cost.
increasing technical
efficiency
and d i m i n i s h i n g
unit
But e v e n g r e a t e r emphasis t h a n b e f o r e must be p u t on t h e
s u b s t i t u t i o n of home-grown p r o d u c t s ( m a i n l y g r a s s and o t h e r
feedingstuffs)
materials.
for imports,
and on e c o n o m i e s i n t h e u s e of
imported
I f t h i s i s done i t w i l l i n c r e a s e t h e n e t o u t p u t of
a g r i c u l t u r e more e c o n o m i c a l l y t h a n would an i n d i s c r i m i n a t e
of e n d - p r o d u c t s ;
and w i l l b r i n g g r e a t e r and more c e r t a i n r e l i e f
the b a l a n c e of paynents.
11.
to
The a g r i c u l t u r a l i n d u s t r y w i l l be expandin,
a s i d e of i t s b u s i n e s s - t h a t which i s c o n c e r n e d w i t h i t s
material
expansion
s u p p l i e s - which o f f e r s the g r e a t e s t scope f o r
raw
development.
T h i s ca.n b e s t be done by a v i g o r o u s c o n t i n u a t i o n of
the
p o l i c y of : ­
( i ) m a i n t a i n i n g a l a r g e a r a b l e a r e a w i t h e m p h a s i s on f e e d
c r o p s t h a t can b e u s e d t o r e p l a c e i m p o r t s ,
on temporary
g r a s s and on i m p r o v i n g crop y i e l d s ;
( i i ) improving t h e s t a n d a r d s of our temporary and permanent
g r a s s and our t e c h n i q u e s f o r c o n s e r v a t i o n ,
and
encouraging
the i n c r e a s e d u s e of g r a s s i n t h e p r o d u c t i o n o f b e e f ,
mutton and m i l k ;
(iii)
u s i n g f e e d t o t h e b e s t a d v a n t a g e by economy and
skill
i n our f e e d i n g m e t h o d s .
Commodity P o l i c y
1 2.
The main f e a t u r e s o f c u r r e n t p r o d u c t i o n a p p e a r t o be a
c o n t i n u i n g l o n g - t e r m e x p a n s i o n i n t h e p r o d u c t i o n of b e e f ,
and lamb; a l o w e r l e v e l
1954/55;
i n o u t p u t of pigmeat t h a n the peak of
and a c o n t i n u i n g t r e n d of r e l a t i v e l y s m a l l
i n t h e outpirt of m i l k and e g g s .
falling,
increases
Although t i l l a g e area
c r o p p r o d u c t i o n , p a r t i c u l a r l y of g r a i n c r o p s ,
present-fairly
has b e e n
is
at
s t a b l e b e c a u s e o f an i n c r e a s e i n c r o p y i e l d s .
The i n c r e a s e i n t h e a r e a under g r a s s has o u t s t r i p p e d t h e
in grass-eating
mutton
animals.
increase
1 3.
The main d i r e c t i o n s i n w h i c h t h e Government would w i s h t o
p r o d u c t i o n d e v e l o p e d c o n t i n u e t o he a s
follows:­
( a ) a l a r g e a r a b l e a r e a should be m a i n t a i n e d ; t h i s w i l l
to include a large t i l l a g e
a r e a , b u t t h e emphasis
be more on f e e d c r o p s ( b a r l e y and o a t s ,
and h i g h q u a l i t y l e y s ) ,
( b ) t h e p r o d u c t i o n of b e e f ,
see
need
should
other feed
crops
and on i m p r o v i n g c r o p y i e l d s ;
mutton and lamb s h o u l d be increased; ( c ) more of t h e m i l k o u t p u t s h o u l d be p r o d u c e d from home-produced
feed;
( d ) f o r p i g s and e g g s , w h i c h a r e l a r g e l y d e p e n d e n t on imported
feeds,
t h e major c o n c e r n
c o n t i n u e s t o be t o r e d u c e
of p r o d u c t i o n and, i n t h e c a s e of p i g s ,
to relate
costs
them
more c l o s e l y t o t h e c o s t s of our o v e r s e a s s u p p l i e r s while­
still
Guarantee
14-
improving
quality.
Policy
The l o n g - t e r m o b j e c t i v e c o n t i n u e s t o be t o a c h i e v e a s t e a d y
improvement i n t h e c o m p e t i t i v e p o s i t i o n of t h e i n d u s t r y .
To do t h i s
t h e i n d u s t r y must c o n c e n t r a t e on r e d u c i n g u n i t c o s t s of p r o d u c t i o n ,
m e e t i n g consumer c h o i c e ,
and r a i s i n g q u a l i t y .
The t o t a l
of t h e Exchequer s u p p o r t g i v e n t o a g r i c u l t u r e h a s b e e n
d u r i n g t h e c u r r e n t f i n a n c i a l y e a r t h a n i t was i n
cost
less
1954/55.
i s p a r t l y due t o t h e i n d u s t r y ' s s u c c e s s i n i m p r o v i n g
This
quality
and r e s p o n d i n g t o consumer c h o i c e i n ways t h a t have h e l p e d
d u r i n g t h e r e c e n t p a s t t o improve r e t u r n s from t h e market
some p r o d u c t s .
But t h e c o s t t o t h e E x c h e q u e r i s s t i l l
for
high
and i t i s important t h a t t h e i n d u s t r y s h o u l d c o n t i n u e t o do
a l l that i t
can t o r e d u c e i t s need f o r
support.
I^..
15*
D e t e r m i n a t i o n of G u a r a n t e e s
The f o l l o w i n g a r e t h e G o v e r n m e n t s d e t e r m i n a t i o n s of
the
g u a r a n t e e s f o r l i v e s t o c k and l i v e s t o c k p r o d u c t s i n the y e a r 1 9 5 6 / 5 7
and f o r c r o p s from t h e 1957
harvest.
A d d i t i o n a l d e t a i l s are
given
i n Appendix V.
F a t C a t t l e , Sheep and Lambs
16.
There i s s t i l l a n e e d f o r more good q u a l i t y b e e f ,
and lamb;
mutton
though f o r mutton and lamb a t l e a s t t h e l o n g e r term
p r o s p e c t s depend on f u r t h e r r e d u c t i o n i n u n i t c o s t s of p r o d u c t i o n .
The s t a n d a r d p r i c e f o r f a t c a t t l e i s b e i n g i n c r e a s e d t o 151s.
a l i v e cwt.
The s t a n d a r d p r i c e f o r f a t s h e e p and lambs w i l l
i n c r e a s e d t o 3s.
17*
2d.
a lb.
Od.
be
estimated dressed carcase weight.
The l a r g e i n c r e a s e i n t h e s t a n d a r d p r i c e f o r f a t c a t t l e
b e e n made t o g i v e f u r t h e r encouragement t o b e e f p r o d u c t i o n .
As
l o n g - t e r m p l a n n i n g i s p a r t i c u l a r l y i m p o r t a n t t o p r o d u c e r s of
fat
cattle,
has
the Government f u r t h e r a s s u r e them t h a t t h e y r e g a r d a h i g h
l e v e l of g u a r a n t e e a s a n e c e s s a r y p a r t o f t h e i r l o n g - t e r m p o l i c y
for beef production.
18.
The c l a s s e s o f c a t t l e e l i g i b l e f o r t h e g u a r a n t e e have been
reviewed.
I t has b e e n d e c i d e d t h a t t h e minimum s t a n d a r d f o r
steers
and h e i f e r s s h o u l d be r a i s e d from 50 p e r c e n t t o 54- per c e n t
k i l l i n g - o u t percentage.
For
1956/57
s p e c i a l young cows w i l l
c o n t i n u e t o be w i t h i n t h e s c o p e of t h e
guarantee.
Fat Pigs
19*
1954/55?
P r o d u c t i o n of p i g m e a t h a s f a l l e n from t h e peak l e v e l
b u t t h e r a t e of s u b s i d y i s s t i l l h i g h ;
i n the c u r r e n t
f i n a n c i a l y e a r the s u b s i d y r e p r e s e n t s about o n e - t h i r d of
market v a l u e of p i g s c e r t i f i e d
I t would n o t b e d e s i r a b l e
of
under t h e g u a r a n t e e
the
arrangements.
t o e n c o u r a g e any r e n e w e d e x p a n s i o n
until
b o t h p r o d u c t i o n c o s t s and t h e u n i t r a t e of s u b s i d y can be r e d u c e d .
O v e r r i d i n g i m p o r t a n c e must c o n t i n u e t o be a t t a c h e d
to
improvement i n q u a l i t y and s u b s t a n t i a l r e d u c t i o n i n c o s t s .
The g u a r a n t e e a l r e a d y r e f l e c t s c h a n g e s i n f e e d c o s t s w h i c h a c c o u n t
f o r a l a r g e p a r t of t h e c o s t s o f p r o d u c t i o n .
The Government have
a c c o r d i n g l y d e c i d e d t h a t a s m a l l f u r t h e r r e d u c t i o n of 6 d .
a s c o r e s h o u l d be made i n t h e s t a n d a r d p r i c e f o r p i g s .
20.
For the l i v e s t o c k year
1956/57
a
q u a l i t y premium w i l l be
p a y a b l e , b u t on a h i g h e r s t a n d a r d than h i t h e r t o .
Moreover,
in
a c c o r d a n c e w i t h t h e i r p o l i c y of e n c o u r a g i n g the p r o d u c t i o n of
o f the q u a l i t y r e q u i r e d by t n e m a r k e t ,
the Government i n t e n d
i n t r o d u c e a more r i g o r o u s s p e c i f i c a t i o n .
A minimum c a r c a s e
measurement w i l l be i n t r o d u c e d w i t h e f f e c t from
a t an e a r l i e r d a t e ,
subject
to
length
25th March, 1957* o
t o s i x months' n o t i c e ,
s p e c i f i c a t i o n s may be m o d i f i e d ,
carcases
r
and t h e o t h e r
s u b j e c t t o s i x months'
notice.
F a t s t o o k Guarantee System
21.
The Government have d e c i d e d t o d i s c o n t i n u e
the
individual
g u a r a n t e e s for a l l c l a s s e s of f a t s t o c k w h i c h were a f e a t u r e of
g u a r a n t e e scheme i n t r o d u c e d i n 1954
the
a f t e r t h e end of c o n t r o l .
These
were intended t o provide i n d i v i d u a l producers w i t h a safeguard
a g a i n s t any s e r i o u s i m p e r f e c t i o n s
p r i v a t e t r a d i n g was r e s t o r e d .
in t h e a u c t i o n m a r k e t s when
They w e r e n o t i n t e n d e d t o p r o v i d e
a f l o o r p r i c e f o r the i n d u s t r y as a whole;
s i n c e the c o l l e c t i v e
t h i s was u n n e c e s s a r y
g u a r a n t e e was d e s i g n e d t o make up any d e f i c i e n c y
b e t w e e n the a v e r a g e market p r i c e and t h e s t a n d a r d p r i c e .
In
fact
t h e a u c t i o n m a r k e t s are now working r e a s o n a b l y w e l l and t h e s t a g e h a s
b e e n r e a c h e d when t h e r i s k s w h i c h t h e s e a r r a n g e m e n t s were
t o meet n o l o n g e r j u s t i f y
intended
the e l a b o r a t e machinery i n v o l v e d .
The
i n d i v i d u a l g u a r a n t e e s have had the d i s a d v a n t a g e s of t e n d i n g t o
t h e normal market i n f l u e n c e s ,
distort
of weakening the t o n e of t h e market
b e c a u s e t h e y may remove some o f t h e s e l l e r ' s i n c e n t i v e t o g e t the
best
p r i c e o u t of t h e market, and o f c o m p l i c a t i n g the s y s t e m , w i t h
c o n s e q u e n t heavy a d m i n i s t r a t i v e c h a r g e s .
The Government have
therefore
come t o the c o n c l u s i o n t h a t t h e s y s t e m should, now be s i m p l i f i e d by
the w i t h d r a w a l of t h i s p a r t i c u l a r f e a t u r e and the e q u i v a l e n t
guarantees.
deadweight
T h i s w i l l a l s o mean that i n t h e c a s e of p i g s the p r e s e n t
complex of t h e i n d i v i d u a l g u a r a n t e e ,
t h e market a d d i t i o n ,
and i t s
d e a d w e i g h t e q u i v a l e n t w i l l he e l i m i n a t e d .
22.
There w i l l be a s i n g l e g u a r a n t e e payment f o r each group o f
fatstock (cattle,
s h e e p and p i g s ) w h i c h w i l l be t h e d i f f e r e n c e
b e t w e e n t h e s t a n d a r d p r i c e and t h e o v e r a g e o f r e a l i s e d
f o r t h a t g r o u p of f a t s t o c k .
prices
T h i s s i n g l e g u a r a n t e e payment w i l l be
a d j u s t e d a s and when n e c e s s a r y t o e n s u r e t h a t t h e a v e r a g e
total
r e t u r n t o p r o d u c e r s e a c h week r e m a i n s vo.th.in t h e f o l l o w i n g
on e i t h e r s i d e of t h e r e s p e c t i v e s t a n d a r d
cattle
- 23s.
Od. p e r l i v e
prices:­
c w t . : s h e e p - 4d.
d r e s s e d c a r c a s e w e i g h t ; and p i g s - 5s.
ranges
per l b .
Od. p e r s c o r e
deadweight.
The g u a r a n t e e f o r p i g s w i l l c o n t i n u e t o be l i n k e d t o a s t a n d a r d
p r i c e of f e e d .
Eggs(Hen and Duck)
23.
P r o d u c t i o n of hen e g g s c o n t i n u e s t o i n c r e a . s e , b u t b e t t e r
market p r i c e s have reduced s l i g h t l y t h e u n i t c o s t o f s u b s i d y .
This i s s t i l l
average c o s t s .
high, and t h e r e i s room f o r f u r t h e r r e d u c t i o n i n
No change i s b e i n g made i n t h e l e v e l
guarantee f o r hen eggs.
reduced t o 2s.
of t h e
The g u a r a n t e e f o r duck e g g s i s b e i n g
Od, p e r d o z e n .
Milk
24.
The g e n e r a l p r o d u c t i o n o b j e c t i v e r e m a i n s a s s t a t e d i n t h e
1954 Annual Review v?hite Paper (Cmd.9104).
substantial
There h a s been no
change i n t h e l i q u i d market d u r i n g t h e l a s t
production i s s t i l l expanding.
year,
I t i s o f g r e a t importance
that
more o f t h e output s h o u l d b e produced from home-grown f e e d .
It is
a l s o d e s i r a b l e t h a t t h e r e s h o u l d b e some c h a n g e - o v e r from m i l k t o
beef so f a r as p r a c t i c a b l e .
Having r e g a r d t o t h e i n c r e a s e
in costs
of p r o d u c t i o n t h e g u a r a n t e e i s b e i n g i n c r e a s e d by igd. p e r g a l l o n ,
25.
The s t a n d a r d q u a n t i t i e s have been r e v i e w e d and i t h a s b e e n
d e c i d e d t h a t f o r 1956/57 no change s h o u l d be made f o r any o f t h e
milk m a r k e t i n g a r e a s .
II 0 Ytfool
26.
There a r e s p e c i a l
arrangements f o r a s t a b i l i s a t i o n fund,
but
1
t h i s i s now n e a r l y e x h a u s t e d .
The G o v e r n m e n t s p o l i c y r e m a i n s t h a t ,
t a k i n g one y e a r w i t h a n o t h e r , t h e g u a r a n t e e s h o u l d n o t r e q u i r e
c o n t i n u i n g Exchequer payments.
The g u a r a n t e e d p r i c e i s b e i n g brought
down n e a r e r t o t h e c u r r e n t market l e v e l ,
foreshadowed l a s t y e a r ,
by 2d. p e r l b .
As
no f u r t h e r r e q u e s t i s b e i n g made by t h e
Government t o t h e B r i t i s h T o o l M a r k e t i n g Board i n r e g a r d t o t h e
s p e c i a l bonus on t h e wool of c e r t a i n b r e e d s o f h i l l s h e e p .
a matter that should,
i n t h e G o v e r n m e n t s v i e w , be l e f t
This
is
t o the
d i s c r e t i o n of t h e Board.
Cereals
27.
Cerea.1 p r o d u c t i o n w i l l c o n t i n u e t o p l a y an i m p o r t a n t p a r t
in
t h e m a i n t e n a n c e of a l a r g e a r a b l e a c r e a g e b a s e d on a r o t a t i o n a l
s y s t e m of c r o p s and g r a s s .
profitable
increases.
P r o d u c t i o n a p p e a r s t o be g e n e r a l l y
and improved y i e l d s w i l l have done more t h a n o f f s e t
I t i s i m p o r t a n t t o e n c o u r a g e a g r e a t e r s u p p l y of home­
grown f e e d i n g s t u f f s ,
b u t a t t h e same t i m e t o b r i n g t h e
g u a r a n t e e s f o r the d i f f e r e n t
another.
cost
price
c e r e a l c r o p s more i n t o l i n e w i t h one
Wheat i s a t p r e s e n t g e t t i n g a d i s p r o p o r t i o n a t e p a r t of t h e
s u b s i d y payments on c e r e a l s .
At a t i n e v/hen t h e r e are l a r g e wheat
s u r p l u s e s - e s p e c i a l l y i n o t h e r Common w e a l t h c o u n t r i e s - t h e r e i s no
l o n g e r any s p e c i a l r e a s o n t o j u s t i f y e x c e p t i o n a l encouragement
t h e p r o d u c t i o n of w h e a t .
for
The Government have t h e r e f o r e d e c i d e d
r e d u c e t h e g u a r a n t e e d p r i c e s f o r wheat and r y e by 1 s .
to
6d. p e r cwt.
On t h e o t h e r hand, t o e n c o u r a g e t h e growing of b a r l e y and o a t s
for
f e e d i n g t o l i v e s t o c k and t o a s s i s t a number o f s m a l l f a r m e r s and
t h o s e f a r m i n g on some m a r g i n a l l a n d s , t h e g u a r a n t e e d p r i c e f o r b a r l e y
w i l l be i n c r e a s e d by 6d. p e r c w t . ,
p e r cwt.
and t h a t f o r o a t s by 1 s .
6d.
Potatoes
28.
The g u a r a n t e e i s a s u p p o r t p r i c e w h i c h i s i n t e n d e d t o p r o t e c t
p r o d u c e r s a g a i n s t l o w r e t u r n s i n y e a r s of h i g h y i e l d .
The g e n e r a l
p r o d u c t i o n o b j e c t i v e c o n t i n u e s t o be t h a t i n y e a r s of a v e r a g e
y i e l d s s u p p l i e s s h o u l d be s u f f i c i e n t
t o meet demand a t r e a s o n a b l e
prices.
29.
The Government have d e c i d e d t h a t t h e time has come t o
exclude
s u b - s t a n d a r d ware p o t a t o e s from t h e scope of t h e g u a r a n t e e .
a p p l i e s o n l y t o Great B r i t a i n ,
included f o r Northern I r e l a n d .
This
s i n c e s u c h p o t a t o e s have n e v e r b e e n
S u b - s t a n d a r d ware p o t a t o e s were
i n c l u d e d d u r i n g t h e war and p o s t w a r y e a r s b e c a u s e of t h e need
to
m a i n t a i n t h e l a r g e s t p o s s i b l e a c r e a g e , u s i n g c o m p u l s i o n when
necessary.
I n the very d i f f e r e n t
c i r c u m s t a n c e s of t o d a y t h e
a p p l i c a t i o n o f t h e g u a r a n t e e t o p o t a t o e s not up t o t h e
standard
r e q u i r e d f o r s a l e f o r human consumption c a n no l o n g e r be
justified.
The d e f i n i t i o n of ware p o t a t o e s h a s , howevei", b e e n amended s o -as t o
include a l l p o t a t o e s which are f i t
f o r s a l e f o r human c o n s u m p t i o n
i n normal c o n d i t i o n s .
30.
Taking a c c o u n t of t h e s e c h a n g e s , and of i n c r e a s i n g c o s t s ,
the
s u p p o r t p r i c e f o r ware p o t a t o e s i s b e i n g i n c r e a s e d by 8 s . Od. per- t e n .
Sugar B e e t
31.
The Government w i s h t o s e e t h e p r e s e n t
maintained.
A c c o u n t h a s b e e n t a k e n of c o s t
determined f o r 1957/58 i s 130s.
sugar b e e t
increases.
acreage
The p r i c e
6d. per t o n .
Production Grants
32.
The Government have r e v i e w e d t h e e x i s t i n g p r o d u c t i o n g r a n t s w h i c h
now amount t o about £ 6 0 m i l l i o n a y e a r .
They have d e c i d e d
that
f u r t h e r encouragement s h o u l d be g i v e n t o t h e u s e of f e r t i l i s e r s ,
f a r as s u p p l y and t e c h n i c a l c o n s i d e r a t i o n s a l l o w .
From 1 s t
so
July
n e x t i n c r e a s e d r a t e s of s u b s i d y w i l l be f i x e d f o r n i t r o g e n and
p h o s p h a t e s i n v o l v i n g (on t h e r a t e o f c o n s u m p t i o n i n t h e c u r r e n t y e a r )
a d d i t i o n a l payments of ,B3 m i l l i o n i n a g g r e g a t e .
The maximum r a t e
g r a n t under t h e m a r g i n a l p r o d u c t i o n schemes w i l l
a l s o be i n c r e a s e d
of
so
f a r a s work on m a r g i n a l farms i s concerned and t h i s i s e x p e c t e d t o l e a d
-
t o a d d i t i o n a l e x p e n d i t u r e of about £1 m i l l i o n i n a f u l l y e a r .
I 4 *s
l i t
33.
The making o f more good q u a l i t y s i l a g e , a l o n g s i d e
other
methods of making improved u s e of our g r a s s l a n d r e s o u r c e s ,
c o n t r i b u t e most u s e f u l l y t o g r e a t e r r e l i a n c e
would
on home-grown f e e d .
T h i s w i l l c o n t i n u e t o be e n c o u r a g e d by t e c h n i c a l a d v i c e and
demonstration.
Any form of d i r e c t
financial
making p r e s e n t s c o n s i d e r a b l e d i f f i c u l t i e s
legislation.
encouragement f o r
and would r e q u i r e
W h i l e t h i s would, not i n any c a s e t h e r e f o r e be
p r a c t i c a b l e f o r t h e 1956
season, the p o s s i b i l i t i e s f o r the
w i l l be c o n s i d e r e d f u r t h e r i n c o n s u l t a t i o n with,
V. E f f e c t of
34-.
silage­
the
future
industry.
Determinations
As was s t a t e d i n l a s t y e a r ' s Annual Review White Paper
(Cmd.9406) t h e e f f e c t
of any p a r t i c u l a r d e t e r m i n a t i o n s on t h e
income of t h e i n d u s t r y cannot be p r e c i s e l y f o r e c a s t
of a f r e e economy.
in
conditions
I n any e v e n t n e t income i s bound t o
a p p r e c i a b l y from y e a r t o y e a r .
!
fluctuate
?he d e t e r m i n a t i o n s now made
t h e v a l u e o f t h e g u a r a n t e e s by £24 m i l l i o n ,
net
increase
and s h o u l d a s s i s t
the
industry t o secure a s a t i s f a c t o r y l e v e l of remuneration.
35-
Agriculture i s s t i l l
in receipt
of l a r g e s u b s i d i e s and t h e
g u a r a n t e e s now d e t e r m i n e d i n c r e a s e s t i l l
Exchequer l i a b i l i t y .
further the
contingent
The a c t u a l c o s t t o t h e Exchequer w i l l
depend
on t h e f u t u r e t r e n d of market p r i c e s and on t h e volume and k i n d
of
output.
The Government e x p e c t t h a t w i t h t h e a s s u r a n c e
of
c o n t i n u i n g s u p p o r t t h e i n d u s t r y w i l l be a b l e t o m a i n t a i n a sound
p o s i t i o n i n the- n a t i o n a l economy w i t h d i m i n i s h i n g c a l l s on t h e
Exchequer i n f u t u r e y e a r s .