I thank you, Sir, for the opportunity to bring this matter before the House. The beef trade position has gone beyond a joke. The benefits of the green £, the rise in the intervention price and the disposal of large amounts of intervention stocks have been whittled away by the totally unacceptable behaviour of a few of the meat factories. There are odd meat plants buying on the open market and selling nearly their entire output to Britain and making a profit. The price being paid this week to producers at the marts is about 24p per 1b. The intervention price is 34½p to 35.4p and 67.3 per cent of prime bullocks are going into intervention and 7.8 per cent of prime heifer beef after going in at 32.1p to 33.7p where another 25 per cent get the full slaughter premium of £20.94 per beast or over 3p per 1b. The discrepancy between what the farmers are being paid and what the factories are receiving is far too large to be explained away by saying it is a function of supply and demand. The factories have an unlimited demand at good prices through intervention for their products.
In the present situation of oversupply factories can get cattle at totally unprofitable prices to the producer. These low prices are forcing producers to hold on to their big cattle, which is further depressing the price of stores that will now be going into the feeders' yards. The Department of Agriculture and Fisheries have a certain amount of muscle through the operation of the slaughter premium and the intervention system. If over 90 per cent of the prime cattle are benefiting from these subventions the Department must try to ensure that the benefits get back to the producer. The Department have the whip hand and they should not be afraid to use it. The Department can assist by ensuring that factories buy a large proportion of their cattle through the marts and refuse to handle those factories' meat for intervention and refuse to pay the premium unless an extra payment is made to the producer.
That gives one an idea of what is happening. I will go back now to the prices more or less per month since July. In July the factories were paying 28p per 1b. The minute the slaughter premium came in they dropped the price of cattle to the exact amount of the slaughter premium down to 26.5p plus £9 slaughter premium. Then, as September came in and the premium went up, down came the price again and towards the middle of the month it had gone down to 22.5p to 23p plus the slaughter premium. Then the green £ came in and in October the price in the factories rose a little bit from 23p to 26p per 1b. plus the slaughter premium of £20.94 but, with the slaughter premium going up at that stage, so did intervention from 34.5p to 35.4p. Then the Minister brought in the meat factories to the Department and in his answer to me last Thursday he said they would contribute 1p a 1b. to a voluntary fund to assist farmers with young cattle to purchase feeding at a reduced price. What I call that is small "conscience money" when one remembers that they also agreed at that meeting to pay a minimum of 27p all-in—that is, counting the slaughter premium; 27 from 35 leaves eight and most of it is going in at 35.4p and 1p a 1b. on a 10 cwt. bullock is roughly £6; six multiplied by eight is 48. That is what they are getting under this agreement and then they say to the Minister: "We will contribute 1p to a voluntary fund." It is like what they called in America earlier on when they set up trusts or foundations, "conscience money". This is exactly the same thing. They are barefacedly robbing the farmer of £48, taking it that they paid that.
To develop the point further, I will show where they are paying so little for intervention. Earlier this year, in January, as reported in the papers, the factories were paying 28.5p to 28.8p for bullocks and they were getting 30.5p from intervention, plus the hides and the offals, which they had for themselves, and in a great many cases a butcher or a factory will consider these are nearly sufficient to pay expenses. Take a comparison now. They say some of it had to go on the open market. Now Smithfield is where most of the factories go and the price at that time was 31.5p to 33p for hindquarters and 19p to 22p for forequarters. Then, in April, which is a slack period—this covers the whole April-May period—prime bullocks were making 31.5p to 31p and the prices at Smithfield were 34p to 35p and, in certain cases, it was as high as 38p for the hindquarters and 22p for the forequarters. Those factories were not, of course, making a loss. They were selling both in Smithfield and into intervention at 30.5p.
At that point they had the ball at their feet and supply started to come in and they decided they had better start making real profits and, as I pointed out, since July each time the slaughter premium came in down went the price and they made their profits. To give an idea of the situation, even after the Minister's agreement, at the moment the price in the factories is 24p to 26p a 1b. One might get an odd one which would go beyond 26.5p, plus the slaughter premium of 20.94p, which is running from 27p to 29p. In Smithfield it is 31p to 33½p for hindquarters and 17½p to 18p for forequarters. In Smithfield it has not fallen very much—about 2p or 3p at the most. Our intervention has gone up considerably but our price has actually dropped.
On the radio the other day a representative of a meat factory admitted that they were making profits. He said: "We must make profits now so that we can compete with the other factories which are making extreme profits when there is a bit more competition." A friend of mine, a banker, told me that the profits the meat factories are making are fantastic and exorbitant and that no business in the history of the state has ever made the profits they are making. If they are killing and paying the price at the gate of the factory and making £45 to £50 a head, when you consider that about 29,000 cattle are being killed per week at the moment, you realise that that involves some money. It's not chickenfeed by any means.
Another area in which I think there is abuse is that five factories are putting between 90 per cent and 98 per cent of their kill into intervention at 35.4p. I have seen dockets from those factories showing that they are paying 23p and 24p a lb plus the slaughter premium which brings it up to 27p. They are putting the slaughter premium on to the end of the bill and paying it to the farmer to make him happy. He says: "I have got my slaughter premium".
I maintain that they have not gone to the Department for the slaughter premium because you cannot get intervention and the slaughter premium together. They pay the farmer the 27p and when you see over 90 per cent going in—which means that practically everything has gone in—you see that they are bluffing the farmer or the person who is putting it in and collecting intervention. I build my whole case on the position in those five factories; and, as I said, 67.3 per cent of prime bullock beef and 7.8 per cent of heifers, which means that 75 per cent of the recent kill, has gone to intervention.
Is there any control? Does not this call for a public inquiry to show where exorbitant profits are being made? The Farmers' Journal shows a beef farmer up to here in water, with one hand up, shouting for help. Two civil servants are looking at him and one says: “I nearly think they need help.” That was quite a while ago.
