FARMING SUBSIDIES IN UNITED KINGDOM

Press, Volume C, Issue 29518, 20 May 1961, Page 14

FARMING SUBSIDIES IN UNITED KINGDOM

‘‘lf sanity prevails and ushers in a long, peaceful era, no political party, in my opinion, will long continue to prop up British agriculture, although without repealing the Agriculture Act of 1957 support can only decline slowly,” said Professor T. W. Walker, professor of soil science at Canterbury Agricultural College, speaking to the farmers’ conference at Lincoln about the future of subsidies on British farming. Late last year he returned from Britain after spending about two years on the staff of the School of Agriculture, University of Dprham. Price guarantees and farming grants and subsidies in Britain at £2sBm now represented about two-thirds of the net national agricultural income, said Professor Walker.

Targets for net output had been set and had been consistently raised and reached until now it was near 170 per cent, of pre-war production—the highest in history. But the pattern of expansion had not always been as planned. Wheat, milk, pigs, and eggs in particular had been overstimulated, and the cost of maintaining prices against cheaper imports had been excessive. In spite of switches in subsidies designed to expand production of beef, mutton, home-grown fodder, and particularly grass, it appeared to be easier to stimulate general rather than selective expansion and much easier to stimulate expansion rather than contraction, except by more drastic reductions in subsidies than allowed by the Agriculture Act of 1957. Guarantees Under this Act the Government had agreed not to reduce the total guarantees by more than 2J per cent, in any one year and on any individual commodity by more than 9 per cent, during any three-year period. This act also provided that substantial grants amounting to one-third of the cost of approved schemes could be paid to help farmers and landlords improve buildings and fixed equipment. ‘‘lt looks to me as though the National Farmers’ Union, under the able leadership of Lord Netherhope, could see the writing on the wall and was extracting from the Government all it could while the going was good. “The major trouble is that prices fixed to act as an incentive to high-cost producers inevitably mean that low-cost producers make a substantial profit. High prices and complete security can militate against technical progress just as much in agriculture as we know they do in industry in New Zealand.

There has been a definite trend for indirect subsidies such as fertilisers, lime, and drainage subsidies to increase at the expense of guaranteed prices because they cannot be obtained without carrying out the work that they are designed to promote. “A thought that might be worth injecting here is that if ever New Zealand agriculture needs a shot in the arm. and a clear sign was the drop in consumption of fertilisers in 1957 to 1959, the Government could subsidise the use of fertilisers. It would only cost about £6m to pay half the fertiliser bill for the whole country,” he said. Other Side

‘‘A New Zealand farmer might rightly ask if these subsidies are justified.” said Professor Walker. ‘‘Without them Britain would be growing much less food than she does now. which is at present about half the food eaten compared with one-third before the war. However, if Britain went into the world’s markets for a higher proportion of her food, then prices would almost certainly move against her. Less homegrown lamb and milk, for instance, would mean higher prices for New Zealand fanners, and perhaps little, if any, over-ail financial gain for Britain. Her agriculture might just survive at the expense of considerable suffering by the human resources and the deterioration of the material resources.

“I have little time for those who advocate the continuation of subsidies on strategic grounds. If there was another war it ■would probably be over so quickly that, the preparedness or otherwise of British agriculture would be unimportant.” Professor Walker said that subsidies in New Zealand—they could be called consumer subsidies if they liked —represented about the same percentage of the national income as in Britain.