Mr. Callaghan's anti-budget
Sir: Man Watkins's passing reference (14 April) to the recent agriculture price review as 'ludi- crously lavish' would suggest that he has little knowledge of the vital role that farming plays in Britain's economy or of the handicaps under which
the industry's contribution has been achievillr'-' It is not difficult to imagine bow critical would be the balance of payments situation without the £250 million a. year savinj in imports for which the increased farm output over the past decade has- been responsible.
Despite the continuing reduction in the size of the industry's labour force, the continuing cost/ price squeeze which has curtailed real income and farmers' resources for fresh investment, and a con- siderable diminution in the cost of Exchequer sup- port, agricultural net output increased by 19 per cent between 1961-62 and 1964-65 alone. Farm in- come has remained relatively static during the last three years, although the rest of the community has enjoyed a substantial rise in spite of the coun- try's economic difficulties.
Labour productivity in agriculture was increas- ing until two years ago by some 6 per cent per annum, about twice the rate ruling for the economy as a whole. In the two most recent years, however, net output has shown a small decline. It is in order to reverse the downward trend in net output and in the rate of increase in productivity, that the Government has increased the farm price guaran- tees (including production grants) by a modest 11 per cent against increased costs totalling fl5} million-
Bearing in mind the much larger increases per- mitted recently in such things as motor cars and fertilisers, and the fact that in the ten years to the mid-1960s each extra f spent on men, materials and equipment in agriculture saved the country £4 in imports, 'lavish' seems hardly the word to de- scribe an increase whose primary purpose is to stimulate the selective expansion in food produc- tion that the Government desires and the nation needs.
Asher Winegarien Chief Economist, The National Farmers' Union, Agriculture House. Knightsbridge. London SW1
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