SOME THOUGHTS ON AGRICULTURAL POLICY *

Summary. In conclusion may I summarise the main points of my paper? 1. During the ten years since the war there has been no repetition of the “Great Betrayal” that occurred after the First World War. On the contrary there has been an unparalleled expansion of output, first to meet the world food shortage and secondly to ease the strain on the balance of payments. 2. The time has now come to concentrate on reduction of inputs rather than on further increase of output—in particular to reduce the labour and resources, both home produced and imported, now devoted to the production of wheat, milk, pigs and eggs. 3. The strategic argument for maximurn food production in peace is examined and found wanting. 4. Post‐war world food shortages have been replaced by growing sufficiency. In the case of wheat the problem is how to dispose of a surplus in the four main exporting countries recently amounting to nearly for 1 years' world exports. 5. Study of trends in world food and population suggests that there is a long‐term tendency for food production to increase slightly faster than population growth. Products of peasant agriculture and family farms, much of which is sold for cash rather than for profit, tend to exchange on unfavourable terms with manufactures. The case for protection and subsidies thus rests on fear of competition of cheap imported food rather than on the likelihood of growing food shortage. 7. Agriculture can help to improve the balance of payments (1) by the use of less imported feed and fuel, (2) by less expenditure on goods that could be exported (e.g. machinery and fertilisers), and (3) by release of labour and resource: which could be put to more economic use in reducing imports (e.g. of coal) or in expanding exports. 8. Output of milk, pigs and eggs has been over‐stimulated. A lower level of guaranteed prices can be justified on three grounds: (1) that supplies of all three products are more than sufficient; (2) that they involve a drain on the balance of payments through excessive imports of feed; and (3) that they involve excessive subsidies, which contribute to inflationary pressures. 9. Too much wheat is being grown at excessive cost on marginal land. Owing to higher yields two million tons could probably be grown economically, on a smaller acreage than pre‐war, without any subsidy. 10. To focus discussion and illustrate the long‐term objectives proposed, a tentative pattern of production for 1960/61 is given in Table 1, together with a hypothetical calculation of aggregate farm sales, expenses and net income in Table 2. 11. Economy of labour, involving continued migration of farm workers and small farmers into industry, is both the corollary and the condition of higher net output and incomes per head in agriculture. 12. If the goal of a more competitive agriculture is to be realised, economic aid to small farmers will be needed, partly to finance amalgamation and re‐equipment of holdings, and partly to compensate those who are willing, or forced by economic circumstances, to vacate their farms. Statutory supervision and dispossession under Part II of the Agriculture Act should be abandoned, if maximum production per acre is no longer required in the national interest. The N.A.A.S. should be expanded and given wider responsibilities in the administration of economic aid for small farmers. Pilot farms, as in Holland, should be developed. More regional surveys, like the Mid‐Wales Investigation, should be set on foot. 13. There is no general shortage of capital for farming on present lines. Some extra capital is needed for increase of efficiency and productivity; but the amount required will not be excessive, if we are not aiming at increased gross output or maximum production per acre. 14. Technical efficiency is needed as a means to economic efficiency, which implies ability to compete with imported products. 15. Progress towards greater efficiency in marketing will be achieved by more competition and voluntary co‐operation, not by more statutory Marketing Boards. The Marketing Acts should be repealed or amended. One final word. I hope nothing I have said, or left unsaid, will lead anyone to suppose that I claim to speak with authority or special knowledge. I think we are all conscious that we lack a lot of relevant data which no one has got, and we are all a bit puzzled about what should or is likely to come next. This is what makes agricultural economics so lively and fascinating a study. In any case I am only too anxious to learn from my audience—be they farmers, economists or civil servants—what they think should be the next instalment of a long‐term policy for agriculture. I am sure many of their thoughts will be very different from mine.