Britain: An official handbook > 1966

BRITAIN: AN OFFICIAL HANDBOOK
milk, cereals, potatoes and sugar beet. These guarantees apply to livestock
and livestock products for the ensuing twelve months, and to crops to be
harvested in the current year. Various grants in aid of particular kinds of
production or farming practice (known as ‘production grants’) are also
considered. Any changes in ‘relevant’ production grants (broadly, those
payable to occupiers rather than landowners) are taken into account. The
Government’s conclusions and its decisions on changes in guaranteed prices
and relevant production grants are published as a White Paper.
The long-term assurances provided for in the 1957 Act require the total
value of the guaranteed prices and relevant production grants in any year to be
maintained at not less than 97! per cent of their value in the preceding year,
after allowing for changes in costs. In addition, the guaranteed price (adjusted
for any change in the basis of the guarantee) for each commodity must be
not less than 96 per cent of that of the previous year. For livestock and live¬
stock products—where farmers’ decisions need time to take effect—there is
a further provision that reductions in the guaranteed price for any product
must not total more than 9 per cent in a period of three years. The cost of
government support to the industry in 1964-65 was about £265 million; the
estimate for 1965-66, adjusted for the effect of the 1965 review decisions,
forecast an increase to about ^293 million.
The general policy of the Government is to use methods of agricultural
support that allow the ordinary channels of trade to flow freely. The form of
guarantee most generally used is the deficiency payment, which means that
the Government makes payments to producers, related to the differences
between the average market price realised and the guaranteed price, for
output eligible for the guarantee.
The deficiency payments schemes for cereals and fatstock are administered
directly by the agricultural departments. Payments for wheat and rye are
made on the quantity of millable grain and, in the case of wheat, potentially
millable grain sold and delivered by the grower. For barley and oats, much
of which is consumed on farms, payments are made on the acreage grown.
New arrangements, first introduced for the 1961-62 season, provided growers
with an incentive to hold barley until later in the season. ‘Standard quantity’1
arrangements for wheat and barley were introduced for the 1964 crop.
Deficiency payments for fatstock are made weekly to individual producers on
certified sales on a liveweight or deadweight basis but under new arrangements
introduced for 1964-65 there may also be a second payment at the end of the
year for cattle and sheep. The weekly standard prices for fat cattle and
fat sheep vary on a seasonal scale; for pigs there is no seasonal scale but the
weekly prices are adjusted for changes in feed costs and, under a flexible
guarantee arrangement designed to stabilise pigmeat production, adjustments
may also be made quarterly by reference to a forecast of the number of pigs
likely to receive the guarantee payment during a period of 12 months. In
Northern Ireland guarantee payments are administered through the prices
paid to producers by the Pig Marketing Board.
1 The Agriculture Act 1947 postulates that the guarantees should be related to the
volume of agricultural produce which, in the national interest, it is desirable to produce
domestically (see p. 338). This is effected by including ‘standard quantities’ in the
guarantee arrangements for milk, pigs, barley, wheat, potatoes and sugar beet.
‘Standard quantity’ agreements vary in form but, in general, the basic guaranteed price
determined in the Annual Review is related to a specific quantity of produce marketed
annually on a national basis; if this quantity is exceeded the producers’ average unit
return falls.