House of Assembly: Vol106 - FRIDAY 10 FEBRUARY 1961

FRIDAY, 10 FEBRUARY 1961

Mr. SPEAKER took the Chair at 10.5 a.m.

QUESTIONS Crops Prohibited in Bantu Locations *I. Dr. D. L. SMIT

asked the Minister of Bantu Administration and Development:

  1. (1) What types of crop, plant or tree are the Bantu prohibited from planting or growing in any location except under authority of a permit issued by a Native Commissioner, in terms of Regulation 44 published under Proclamation No. 20 of 1961; and
  2. (2) what is the reason for this prohibition.
The DEPUTY MINISTER OF BANTU ADMINISTRATION AND DEVELOPMENT:
  1. (1) Chiefly sugar cane and wattle bark.
  2. (2) Quotas are fixed by the relative boards of control for these types of crops and it would be to the detriment of Bantu farmers to produce them in excess of approved quotas as they would be unable to obtain the necessary markets.
Enrolment at and Finances of University College, Western Cape *II. Dr. D. L. SMIT

asked the Minister of Education, Arts and Science:

  1. (1) How many students enrolled at the University College, Western Cape, during 1960 and 1961, respectively, (a) were fully matriculated or had the matriculation exemption certificate and (b) did not have the matriculation or exemption certificate;
  2. (2) whether any of these students were in receipt of a state bursary; if so, how many in each case;
  3. (3) what number and percentage passed all their first year degree courses at the end of 1960;
  4. (4) (a) how many White (i) professors and (ii) lecturers and (b) how many non-White (i) professors and (ii) lecturers are there on the teaching staff of the college;
  5. (5) what was (a) the total expenditure on the college for 1960 and (b) the estimated expenditure for 1961;
  6. (6) (a) what was the amount of (i) salaries paid and (ii) expenditure other than salaries for 1960 and (b) the corresponding estimated amounts for 1961 in respect of the college; and
  7. (7) (a) what was the capital expenditure on the college up to and including 1960 and (b) what is the estimated figure for 1961.
The DEPUTY MINISTER OF EDUCATION, ARTS AND SCIENCE:
  1. (1) During 1960 (a) 106 and (b) 50; to date in 1961 (a) 146 and (b) 86.
  2. (2) No.
  3. (3) 60 out of 106 or 56.4 per cent.
  4. (4) (a) (i) 8 and (ii) 16; (b) (i) none and (ii) 1.
  5. (5) (a) £81,560.
    1. (b) £106,500.
  6. (6) (a) (i) £35,340,
    1. (ii) £61,625;
  7. (b) (i) £46,220,
    1. (ii) £44,855.
  8. (7) (a) £41,675;
    1. (b) £35,775.
Enrolment at and Finances of Bantu Colleges *III. Dr. D. L. SMIT

asked the Minister of Bantu Education:

  1. (1) What was the number of enrolled students at the Fort Hare, Ngoya and Turfloop University Colleges, respectively, during 1960;
  2. (2) how many of these students at each college (a) were fully matriculated or had the matriculation exemption certificate and (b) did not have the matriculation or exemption certificate;
  3. (3) whether any of these students were in receipt of a state bursary; if so, how many in each case;
  4. (4) what number and percentage in each college passed all their first year degree courses at the end of 1960;
  5. (5) (a) how many White (i) professors and (ii) lecturers and (b) how many non-White (i) professors and (ii) lecturers are there on the teaching staff of each college; and
  6. (6) (a) what was the amount of (i) salaries paid and (ii) expenditure other than salaries for 1960 and (b) what are the corresponding estimated amounts for 1961 in respect of each college.
The MINISTER OF BANTU EDUCATION;

(1)

U.C. of Fort Hare

360

U.C. of Zululand

80

U.C. of the North

41

(2)

(a)

U.C. of Fort Hare

360

U.C. of Zululand

80

U.C. of the North

41

(b)

U.C. of Fort Hare

none

U.C. of Zululand

U.C. of the North

  1. (3) No students received bursaries, but the following students received study loans:
    • U.C. of Fort Hare 76
    • U.C. of Zululand 63
    • U.C. of the North 31

(4)

Passed

Per cent

U.C. of Fort Hare

12

21.4

U.C. of Zululand

2

28.5

U.C. of the North

6

33.3

(5)

(a) (i) and (ii)

White Professors

White Lecturers

U.C. of Fort Hare

11

25

U.C. of Zululand

3

14

U.C. of the North

7

13

(b) (i) and (ii)

Bantu Professors

Bantu Lecturers

U.C. of Fort Hare

13

U.C. of Zululand

5

U.C. of the North

2

(6)

(a)

(i)

U.C. of Fort Hare

£124,000

U.C. of Zululand

£39,000

U.C. of the North

£60,000

(ii)

U.C. of Fort Hare

£72,000

U.C. of Zululand

£41,000

U.C. of the North

£44,000

(b)

(i)

Estimated salaries for 1961:

U.C. of Fort Hare

£161,850

U.C. of Zululand

£58,200

U.C. of the North

£78,225

(ii)

Estimated other expenditure for 1961:

U.C. of Fort Hare

£83,100

U.C. of Zululand

£37,750

U.C. of the North

£58,125

Establishment of Police Reserve *IV. Mr. OLDFIELD

asked the Minister of Justice:

Whether he intends to establish a police reserve; and if so, (a) why, (b) when, (c) what will be the strength of the reserve, (d) what will be the required qualifications for recruits and (e) what duties will be performed by members of the reserve.

The MINISTER OF JUSTICE:

Yes.

  1. (a) Because it is considered expedient in the public interest.
  2. (b), (c), (d) and (e) Details are presently being formulated.
Applications for Training in Defence Gymnasiums *V. Mr. OLDFIELD

asked the Minister of Defence:

  1. (1) How many applications for training at the
    1. (a) Army,
    2. (b) Air Force, and
    3. (c) Naval gymnasiums for 1961 have been
      1. (i) received, and
      2. (ii) accepted; and
  2. (2) whether any steps have been taken or are contemplated to extend the gymnasiums.
The MINISTER OF JUSTICE:
  1. (1) (a) Army Gymnasium.

(i) Applications received

947

(ii) Accepted

670

  1. (b) Air Force Gymnasium.

(i) Applications received

1,154

(ii) Accepted

750

  1. (c) Naval Gymnasium.

(i) Applications received

770

(ii) Accepted

365

  1. (2) Yes. With effect from 1961 the total intake for the three gymnasiums was increased by 500. The maximum intake for each gymnasium now is—

Army

750

Air Force

750

Navy

365

For the 1961 course 80 vacancies in the Army Gymnasium were allotted to the Department of Prisons for the training of recruits of that Department. No further extension of the gymnasiums is at present being considered or planned.

Training in Military Academy *VI. Brig. BRONKHORST

asked the Minister of Defence:

  1. (a) When was the Military Academy established;
  2. (b) which degree courses can be taken by students at this institution;
  3. (c) what is the duration of each degree course; and
  4. (d) how many students in respect of each degree course in each Service
    1. (i) are admitted,
    2. (ii) are enrolled at present,
    3. (iii) have been enrolled to date, and
    4. (iv) have obtained a degree to date.
The MINISTER OF JUSTICE:
  1. (a) 1 January 1950 at Voortrekkerhoogte as a branch of the Military College.
  2. (b) B.Mil. (B.A. field) and B.Mil. (B.Sc. field) for general duties officers of each arm of the force. B.Mil. (B.Com. field) for administrative officers.
  3. (c) Three years.
  4. (d) (i) The number of students admitted in respect of each arm is determined from year to year dependent upon vacancies. There is consequently no definite quota for the different degree courses except in the case of the B.Com. field which has been introduced this year and for which the number has been put at two for each arm. The number of first year entrants together for the three arms (all degree courses) is set at 45 for the 1961 intake.

(ii)

B.Mil. degree course

Air

Army

Force

Navy

Total

B.A. field

17

3

2

22

B.Sc. field

5

5

18

28

B.Com. field

2

2

2

6

Field still uncertain

15

18

33

Totals

39

28

22

89

(iii)

B.Mil. degree course

Air

Army

Force

Navy

Total

B.A. field

126

26

2

154

B.Sc. field

25

54

51

130

B.Com. field

2

2

2

6

Field still uncertain

15

18

33

Totals

168

100

55

323

(iv)

B.Mil. degree course

Air

Army

Force

Navy

Total

B.A. field

40

12

52

B.Sc. field

9

15

10

34

Totals

49

27

10

86

N.B.—Where it is indicated that the field of the degree course is still uncertain, reference is made to first year students for 1961 who will indicate their choice when they report for the first semester.
Removal of Bantu Families from Alexandra Township *VII. Mr. WILLIAMS (for Mrs. Suzman)

asked the Minister of Bantu Administration and Development:

  1. (1) Whether any Bantu land-owners (a) have been and (b) are to be removed from Alexandra Township under the Natives Resettlement Act; if so, (i) how many in each case, (ii) under what conditions are they removed and (iii) where are they resettled;
  2. (2) whether the Natives Resettlement Board has acquired or will acquire their houses;
  3. (3) whether any compensation is paid to these land-owners; if so what compensation;
  4. (4) whether any Bantu tenants (a) have been and (b) are to be removed from Alexandra Township under the Natives Resettlement Act; if so, how many in each case; and
  5. (5) which body (a) is responsible for and (b) carries out the removal of Bantu persons from Alexandra Township.
The DEPUTY MINISTER OF BANTU ADMINISTRATION AND DEVELOPMENT:
  1. (1) (a) No.
    1. (b) There may be some Bantu landowners in Alexandra Township who are residing there illegally and will have to be removed under the Natives Resettlement Act, No. 19 of 1954, but no such cases have as yet come to the notice of the Department. Some 111 stands in Alexandra have been acquired by the Peri-Urban Areas Health Board from Bantu or their estates but this was purely on a voluntary basis. It has been ascertained that some of these Bantu, who are employed in Johannesburg, have since taken up residence at Diepkloof whilst others have apparently left the area.
    2. (i), (ii) and (iii) fall away.
  2. (2) If Bantu landowners, who are residing in Alexandra Township illegally, are required to move, their houses will be acquired by the Peri-Urban Areas Health Board which is the local authority responsible for the administration of the township.
  3. (3) Yes. Compensation is assessed on the market value of properties by negotiation with the property owners.
  4. (4) (a) 5,348 Bantu tenant families representing a total of 26,000 persons have been moved to Meadowlands and Diepkloof.
    1. (b) Details as to the exact number of tenants still to be moved are not known but a further total of 30,000 Bantu persons will probably be involved.
  5. (5) (a) and (b) The Natives Resettlement Board.
Representations by Bantu Persons in Alexandra Township *VIII. Mr. EGLIN (for Mr. Cope)

asked the Minister of Bantu Administration and Development:

  1. (1) Whether Bantu persons have a right of appeal against a notice for removal from Alexandra Township; if so, what is the procedure for such an appeal;
  2. (2) whether an appeal is available to all persons who have received such a notice;
  3. (3) whether the Natives Resettlement Board consults with any persons or bodies in connection with such removals; if so, (a) to what extent and (b) with what persons or bodies;
  4. (4) whether his attention has been drawn to Press reports that families in Alexandra Township are being broken up because parents are removed to different areas; and
  5. (5) whether he will make a statement in regard to this matter.
The DEPUTY MINISTER OF BANTU ADMINISTRATION AND DEVELOPMENT:
  1. (1) and (2) There is no right of appeal as such against the notice served on a Bantu in terms of Section 25 of the Natives Resettlement Act, No. 19 of 1954. Some Bantu do, however, make representations to the Natives Resettlement Board in connection with the notices served on them and, where circumstances warrant it, an extension of time is granted.
  2. (3) (a) and (b) The Peri-Urban Areas Health Board is the local authority responsible for the administration of Alexandra Township and the removal of Bantu from Alexandra is undertaken in close collaboration and consultation with that body. Interested Bantu also daily confer with the two bodies.
  3. (4) and (5) Yes. There have been cases where families of Bantu men were residing in Alexandra Township unlawfully. In such cases the breadwinner must make his own arrangements as to where his family must proceed but it is always open to him to enlist the aid of my Department in this connection. No families are broken up by the Natives Resettlement Board or any other responsible body. I have nothing to add to this statement.
Plan for Terminal Building at East London Air Port *IX. Mr. VAN RYNEVELD

asked the Minister of Transport:

Whether the plans for the new terminal building at East London Airport have been finalized; and, if so, (a) when will work commence and (b) when will the terminal building be ready for use.

The MINISTER OF AGRICULTURAL ECONOMICS AND MARKETING:

No, but preliminary sketch plans for the terminal building have now been approved, (a) and (b) fall away.

Discussions on Erection of Grain Elevator at East London *X. Mr. VAN RYNEVELD

asked the Minister of Agricultural Economics and Marketing:

  1. (1) Whether his Department has had discussions with the Railway Administration in regard to the building of a grain elevator at East London; if so, with what result; and
  2. (2) whether his Department has decided to build the elevator; if so, (a) when will work commence, (b) what will the capacity of the elevator be and (c) where will it be situated; if not, why not.
The MINISTER OF AGRICULTURAL ECONOMICS AND MARKETING:
  1. (1) Yes, the discussions are being continued with the Railway Administration by the Mealie Industry Control Board and my Department, but so far no final decision has as yet been reached.
  2. (2) The Railway Administration erects grain elevators and not my Department, (a), (b) and (c) consequently fall away.
Liquor and Pass Raids by the Police *XI. Mr. WILLIAMS (for Mr. Lawrence)

asked the Minister of Justice:

  1. (1) Whether his attention has been drawn to a report in the Cape Argus of 12 August 1960 that the South African Police were no longer making liquor or pass raids on Africans or arresting Africans for not having reference books, provided they could show alternative credentials;
  2. (2) whether this policy is being adhered to; and
  3. (3) whether he will make a statement in regard to the matter.
The MINISTER OF JUSTICE:
  1. (1) Yes.
  2. (2) Yes.
  3. (3) No, because the Commissioner of Police has already issued a suitable statement to the Press in this connection last year.
Mr. EGLIN:

Arising out of the reply, could the Minister give the date on which the subsequent statement was made?

The MINISTER OF JUSTICE:

On 12 August 1960.

Detention and Trial of Bantu Persons in Pondoland *XII. Mr. EGLIN (for Mr. Cope)

asked the Minister of Justice:

  1. (1) (a) How many Bantu persons have been detained in Pondoland since 27 January 1961, (b) what is the total number still being detained and (c) where are they being detained;
  2. (2) (a) how many Bantu detainees have been brought to trial since 27 January 1961 and (b) what is the total number awaiting trial;
  3. (3) (a) what have been the charges against the Bantu persons who have been tried since the declaration of the state of emergency in Pondoland, (b) in which courts were they tried, (c) how many were tried in each type of court, (d) how many have been (i) convicted and (ii) acquitted and (e) what sentences were imposed; and
  4. (4) whether legal representation has been refused to any detainee; if so, (a) in how many instances and (b) why.
The MINISTER OF JUSTICE:

All available particulars in this respect have been furnished to the House on 27 January 1961.

From the nature of the operation in a territory which is geographically difficult to negotiate, it is not possible to furnish such classified statistics time and again at will.

Accommodation for Students Attending Vacation Courses at University of South Africa *XIII. Dr. RADFORD

asked the Minister of Education, Arts and Science:

Whether the University of South Africa provides or arranges accommodation for students attending its vacation courses; and, if so, what is (a) the nature and (b) the cost of the accommodation.

The DEPUTY MINISTER OF EDUCATION, ARTS AND SCIENCE:

The University of South Africa arranges accommodation for students attending its vacation courses at existing provincial educational institutions. The cost of the accommodation is £6 per White student and £4 10s. per non-White student for the vacation course of 14 days.

Medium of Instruction for Coloured Pharmacy Students *XIV. Dr. RADFORD

asked the Minister of Education, Arts and Science:

  1. (1) Through the medium of which language is instruction in pharmacy for Coloured students at the University College, Western Cape, given; and
  2. (2) whether any provision has been made or is contemplated for similar facilities to be provided through the medium of the other official language; if so, what provision.
The DEPUTY MINISTER OF EDUCATION, ARTS AND SCIENCE:
  1. (1) Through the medium of both official languages.
  2. (2) Falls away.
Erection of Hotel at Jan Smuts Airport *XV. Mr. RAW

asked the Minister of Transport:

  1. (1) Whether it is the intention to erect an hotel at Jan Smuts Airport; if so, (a) at what cost and (b) when is it expected to be ready;
  2. (2) whether it will be run by the State; if not, how will it be run; and
  3. (3) whether the use of the hotel by the public will be restricted in any way.
The MINISTER OF AGRICULTURAL ECONOMICS AND MARKETING:
  1. (1) Yes, together with conference halls and necessary facilities.
  2. (1) (a) and (b), (2) and (3) This matter is being investigated and I am, therefore, unable to supply any further information in this regard at this stage.
Instruction in Decimal System for the Bantu *XVI. Mr. HUGHES

asked the Minister of Bantu Administration and Development:

Whether any steps have been taken by his Department to explain the change in currency to the Bantu in the Transkei and other Bantu areas; and, if so’, what steps.

The DEPUTY MINISTER OF BANTU ADMINISTRATION AND DEVELOPMENT:

Yes. A series of articles was published in English and Afrikaans in Bantu as well as in the seven main Bantu languages in the five departmental Bantu publications. In collaboration with the Department of Bantu Education, articles on the subject were also published in the Bantu Education Journal. The Decimalization Board, assisted by my Department, distributed large numbers of placards which were displayed at all Government offices, trading stations, police stations and other centres.

The Information Section of my Department also collaborated with the S.A.B.C. in putting over the air a series of talks on the subject in the various Bantu languages. Periodicals read by the Bantu were also utilized in this matter.

Mr. HUGHES:

Arising out of the reply, were any steps taken in regard to these Bantu?

The DEPUTY MINISTER OF BANTU ADMINISTRATION AND DEVELOPMENT:

The hon. member should not put that question over the floor of the House, but should give notice of it.

Union Not Represented at Commonwealth Law Conference *XVII. Mr. E. G. MALAN

asked the Minister of Justice:

  1. (1) Whether the Union was represented at the recent Commonwealth Law Conference held in Canada; if so, who were the Union delegates; and, if not,
  2. (2) whether an invitation to the Conference was received; if so, why was it declined.
The MINISTER OF JUSTICE:
  1. (1) and (2) No.
No Union Representation at Lagos Law Conference *XVIII. Mr. E. G. MALAN

asked the Minister of Justice:

  1. (1) Whether the Union was represented at the Law Conference held at Lagos; and, if not,
  2. (2) whether an invitation was received; if so, why was it declined.
The MINISTER OF JUSTICE:
  1. (1) No.
  2. (2) No invitation was received.
Emigrants Returning to the Union *XIX. Mr. E. G. MALAN

asked the Minister of the Interior:

Whether he is in a position to state—

  1. (a) how many persons who left the Union during each year from 1958 to 1960 to settle abroad permanently, have returned to the Union and
  2. (b) to which countries did they emigrate.
The DEPUTY MINISTER OF THE INTERIOR:
  1. (a) The required statistics are not kept.
  2. (b) Falls away.
*XX. Mr. HUGHES

—Reply standing over.

Loans Granted by the Land Bank *XXI. Mrs. S. M. VAN NIEKERK

asked the Minister of Finance:

  1. (a) What was the total amount of loans granted to farmers by the Land and Agricultural Bank during 1959 and 1960, respectively, (b) how many applications were outstanding at 31 January 1961, and (c) what was the total amount applied for in these applications.
The MINISTER OF FINANCE:
  1. (a) £32,590,000 and £22,059,262.
  2. (b) 582.
  3. (c) £2,405,877.
Compensation for Losses Suffered by Police during Emergency

The MINISTER OF JUSTICE replied to Question No. *X by Mr. Oldfield, standing over from 7 February:

Question:
  1. (1) Many many (a) European and (b) non-European policemen suffered personal loss or damage to their property due to the action of hostile elements during the state of emergency in 1960; and
  2. (2) whether the Government has compensated these policemen; if so, what compensation was given; if not, why not.
Reply:
  1. (1) (a) 1.
    1. (b) 27.
  2. (2) The question of compensation is being considered at present.
Fort Hare: Resignations and Dismissals of Staff

The MINISTER OF BANTU EDUCATION replied to Question No. *XXIII, by Mr. E. G. Malan, standing over from 7 February:

Question:
  1. (1) Whether any members of the staff of the University College of Fort Hare (a) have resigned or (b) have been dismissed since the passing of the University College of Fort Hare Transfer Bill; and, if so,
  2. (2) what are (a) their names and (b) the reasons (i) given for resignation and (ii) for dismissal in each instance.
Reply:
  1. (1) (a) Yes.
    1. (b) Yes.
  2. (2) (a) Resigned:
    • Prof. Z. K. Matthews; Dr. M. Webb; Lecturer A. M. Phahle; Lecturer S. B. Ngcobo; Lecturer C. L. C. S. Nyembesi; Lecturer Dr. D. G. S. Mtimkulu; Lecturer E. A. Mayisela; Miss D. D. Light; Mrs. E. L. Pretorius; Mr. C. R. Palm; Miss A. W. Francis; Prof. J. A. Venter; Prof. D. Z. de Villiers; Mr. N. T. Childs; Mr. J. C. van der Berg; Miss E. L. Giffen.
    • Dismissed:
    • Prof. D. Williams; Mr. T. V. R. Beard; Prof. F. H. Rand; Mr. G. R. Israelstam; Sir F. Agnew; Mr. J. Hutton.
  3. (b) (i) Prof. Z. K. Matthews, Dr. M. Webb, Lecturer A. M. Phahle, Lecturer S. B. Ngcobo and Lecturer C. L. C. S. Nyembesi have resigned in terms of sub-section (i) of Section 3 of the University College of Fort Hare Transfer Act, 1959.
    • Dr. D. G. S. Mtimkulu resigned because he accepted a better post. The rest of the members of the staff gave no official reasons for their resignations.
  4. (ii) Prof. D. Williams, Mr. T. V. R. Beard, Prof. F. H. Rand, Mr. G. R. Israelstam, Sir F. Agnew and Mr. J. Hutton were dismissed in terms of sub-section (4) of Section 3 of the University College of Fort Hare Transfer Act, 1959.

For written reply:

Naming of Public Works I. Mr. E. G. MALAN

asked the Minister of Public Works:

Whether any public works acquired or completed since 1948 or at present being constructed for or on behalf of his Department bear the names of present or former governors-general, cabinet ministers, administrators, senators and members of the House of Assembly; and, if so, (a) which public works, (b) what is the name of the public work in each case and (c) where is each such work situated.

The MINISTER OF PUBLIC WORKS:

The only public works completed since 1948 which are under the exclusive control of my Department are

  1. (a) the D. F. Malan Bridge at Vioolsdrift; and
  2. (b) the J. J. Serfontein Bridge at Colesberg.
II. Mr. E. G. MALAN

asked the Minister of Labour:

Whether any public works acquired or completed since 1948 or at present being constructed for or on behalf of his Department bear the names of present or former governors-general, cabinet ministers, administrators, senators and members of the House of Assembly; and, if so, (a) which public works, (b) what is the name of the public work in each case and (c) where is each such work situated.

The MINISTER OF LABOUR:

The reply to the first part of the hon. member’s question is no, and consequently the rest of the question falls away.

III. Mr. E. G. MALAN

asked the Minister of Mines:

Whether any public works acquired or completed since 1948 or at present being constructed for or on behalf of his Department bear the names of present or former governors-general, cabinet ministers, administrators, senators and members of the House or Assembly; and, if so, (a) which public works, (b) what is the name of the public work in each case and (c) where is each such work situated.

The MINISTER OF MINES:

No.

IV. Mr. E. G. MALAN

asked the Minister of Bantu Education:

Whether any public works acquired or completed since 1948 or at present being constructed for or on behalf of his Department bear the names of present or former governors-general, cabinet ministers, administrators, senators and members of the House of Assembly; and, if so, (a) which public works, (b) what is the name of the public work in each case and (c) where is each such work situated.

The MINISTER OF BANTU EDUCATION:

No.

ECONOMIC PLANNING IN AGRICULTURE *Mr. CONNAN:

Mr. Speaker, I move the motion standing in my name—

That this House expresses its disappointment at the lack of proper economic planning by the Government in the interests of South African agriculture.

I do not think there is anyone in this House, Sir, who is not concerned about the condition of the farmer in this Country. When you see that there are not less than five motions on the Order Paper dealing with the position of the farmer, you realize that there is general concern about his position and that the farmer in general is having a difficult time. The future of agriculture depends on three important factors. The first is the reclamation, improvement and conservation of our soil. The second is the cost of production—that should be kept as low as possible—and the third is that we should have markets that will give the farmer a reasonable livelihood.

As far as soil conservation is concerned we are told every year that soil conservation is not carried out fast enough and that the position is deteriorating annually. We are told that an insufficient number of officials are responsible for seeing that it is carried out. We are told that the officials who are there are doing their best but they cannot cope with the problem. The Minister tells us that so many officials are charged with this responsibility and so many do research work and the figures are impressive, but the fact remains that there are far too few to cope with this problem and that they make no impression whatsoever on this problem. We have heard of farms that have already been planned. The Minister has told us about farms where the carrying capacity has been doubled; that is true, but those are few compared with the number that is deteriorating. I want to read something which Dr. Ross, the former Director. said—

The present tempo of soil lost could be compared with the total destruction of from 100,000 to 200,000 morgen every year and it increases every year. Soil erosion costs the country tens of millions of pounds every year. It is clear that unless there was a large-scale improvement in planting practice, South Africa would not be able to provide the food needed at the end of the century.

That sums up the position, Sir. We are attending to the position but we are making no headway, we are not keeping pace with the problem and it is no use the Minister telling us that he has so many and so many officials. If we carry on the way we are doing at the moment, we will within the foreseeable future be unable to provide the necessary food for the country. The Minister must simply get more officials, because this matter is of the greatest importance and positive steps should be taken to find a solution for the problem.

The second factor is that of production costs. The Government encouraged the people to mechanize. Well, the farmers mechanized as fast as they could. Even the smaller farmer mechanized with the result that his production costs are so high to-day that he can hardly make a living. If the smaller mealie farmer, for instance, has a crop failure, he does not recover from that setback, because his profit margin is so small that he can hardly make a living and he finds it impossible to make up for the loss which he suffered the previous year because of the crop failure. In that way the smaller farmer is going down. Thousands of them go under every year and have to abandon their farms. Interest, wear and tear and replacements costs are so high to-day and production costs are so high that they simply cannot make a living. I think it is essential that the young farmer should receive a certain measure of training. I am not suggesting that they should all go to a Grootfontein College, but they should receive a certain amount of training so that they will make fewer mistakes in their farming operations, because it is because of the mistakes that they make that their production costs are rising. They should be trained to keep proper account of their production costs, their income and expenditure, so that they can readily see in which section of their farming operations they show a loss and in which section a profit. As I have said, they should receive a certain amount of training and provision should be made for that. It is also necessary that farm labourers should receive a certain amount of training, particularly those who operate machinery, because most of them are unskilled labourers. They ruin the machinery and because of that production costs go higher and higher. Another method would be the establishment of experimental farms. Year after year we have requests for experimental farms. I want to give one example which we have in the North-Western Districts. For the past 15 to 20 years we have been asking for the establishment of an experimental farm in the North-Western Districts, and I truly think that had there been such an experimental farm, the farmers in that area would have been better able to survive the recent drought. If the necessary experiments are carried out to show them which is the more economic way of farming with sheep, for instance, they would probably have been able to save sufficient of their sheep to have covered the costs of the experimental farm over and over again. In that way production costs are kept low and I want to make an earnest appeal to the Government to consider this matter.

A third factor is the marketing of our products and the necessity for proper planning in that regard. Most farmers do not make a decent living to-day for the simple reason that their profit margin is too low. Their income from agriculture is too low. The “State of the Union Year Book” gives the figures in respect of our national income and the figures for income derived from agriculture. In the year 1954 the national income was £1,559,000,000 and that of agriculture £258,000,000. In the year 1958 the national income was £1,888,000,000, an increase of nearly £440,000,000 and that of agriculture £244,000,000, an increase of £14,000 000. I got the figure for 1959 somewhere else. In 1959 the income from agriculture was only £236,000 000 as against a national income of over £2,000,000,000. The income from agriculture is declining year by year or remains more or less constant compared with a rising national income. That income from agriculture has to be divided amongst more people to-day. Cost of living is higher and there is not the slightest doubt that the farmer’s income is much less to-day than it was previously and he is finding it more and more difficult to make a living. Then, of course, Mr. Speaker, the farmer is liable to have crop failures, but you do not get crop failures over the whole country at the same time. There are crop failures in one particular part of the country this year and in another part of the country the following year and the figures which are given here are in respect of the whole country. In other words, it is the average figure and they indicate clearly that if it has not declined the income from agriculture has remained more or less constant, while the national income has increased tremendously over that period. If the farmer cannot make a living, he is forced to embark on exploitational cropping.

What is the position in respect of the various branches of agriculture? I want to say something about the dairy industry. Mr. Morphet, the chairman of the National Dairy Co-operative Society, one of the largest milk co-operative societies in the Union, said the following recently—

The whole dairy industry is in a state of confusion. The increase in the production of milk, to be used fresh and to be processed, has caused confusion.

The production of milk has increased as a result of research. As a result of artificial insemination our herds have improved. The individual cows yield more milk and the production has increased. There are farmers today who keep more cows and the result is that the total production is steadily increasing. But if the production increases there should also be proper planning to ensure a market for the milk products, because if we do not do so, we immediately find ourselves in difficulty. I believe too that the local market should be developed. The consumption of milk and dairy products is much lower than in the case of many other countries, particularly countries like Canada, the United States, Sweden, Denmark and Norway. One would have thought that the consumption of milk in this country would have been particularly high. I remember when we were children we were very seldom given coffee or tea to drink, we had to drink milk; we grew up on milk, and that is no longer the position to-day. The children of to-day are not encouraged to drink milk. The Bantu nation was a milk-drinking nation but to-day they drink very little milk. They ought to be encouraged to do so and our own people ought to be encouraged, both for health reasons and in the interest of the dairy industry. However, the price of fresh milk is so high to-day that milk is beyond the reach of many people. The Government should subsidize the consumer so that he will be able to afford milk, because it is in his own interests that he drinks milk, as well as in the interests of the dairy industry. As far as the processing of milk is concerned, there too we should have proper planning so as to ensure that too much milk is not converted into cheese or butter. I take it that it will not be easy to do that because our climate is so inconstant. Parts of our country are often drought stricken but we know to some extent what time of the year milk is plentiful and what time of the year it is scarce and we have to keep count of the periods that are more dry than normally. We ought to calculate and determine how much milk will be available from time to time. Towards the end of last year there was a surplus of cheese in this country which was exported at a tremendous loss, while at the same time there was a shortage of butter. We had to import 3,000,000 pounds of butter to supplement the shortage locally, while we had a cheese surplus. When that butter arrived we had already built up a surplus ourselves and we again had to export some of that butter, again at a loss. I believe it is possible to have better planning, and Dr. Morphet also says that in his report to the Co-operative Society.

Then I should like to say a few words about the citrus industry, one of the industries which is fairly well controlled and which, generally speaking, gives the producer a reasonable living. More trees were planted and the production gradually increased. It is a product which is mostly exported and our exports increased until last year when the citrus industry found itself in great difficulty. There were two reasons for that. They had an exceptionally good crop in 1960. The citrus growers exported 2,000,000 boxes more than the previous year which, of course, meant that the overseas markets received a greater supply. However, the supply was not so big as to cause the market to collapse, but the trouble was that many countries objected to buying South African products.

*The MINISTER OF AGRICULTURAL ECONOMICS AND MARKETING:

If there was objection how could the growers have exported 2,500,000 more boxes?

*Mr. CONNAN:

The question is at what price did they export? Was the money received more than that received the previous year?

*The MINISTER OF AGRICULTURAL ECONOMICS AND MARKETING:

There could not have been a boycott if we were still able to sell our oranges.

*Mr. CONNAN:

The one consignment to Sweden had to be diverted to the London market and even there they encountered trouble. The fact is that there was objection, particularly in Sweden, and to a certain extent in Britain as well, and as a result of that it was more difficult to find a market. As I have already said there was a bigger crop than the year before but I believe that it would still have been possible to obtain a reasonable price had it not been for this objection, an objection which caused a total collapse of the market. The citrus was sold in the long run, but at what price? As a result of the price obtained every citrus farmer in South Africa is showing a loss this year. Mr. Speaker, new markets have to be found. We believe that Russia is a potential market, or was a potential market. Whether it still is after Langa, is doubtful.

*Mr. M. DE LA R. VENTER:

Now you are spoiling your case.

*Mr. CONNAN:

No, I am only stating the facts as they are. Russia was a potentially big market but she is no more so to-day. We have to find new markets if we wish to protect the citrus industry, and we must ensure that potential markets are not lost to us.

As far as the tobacco industry is concerned, there too we have surpluses to-day and the small tobacco farmer is going under as a result of surpluses. Hundreds of them are being driven off the land to-day. One of the reasons for that is the fact that the duty on tobacco, cigarettes and pipe tobacco, etc., is too high. It is true that every year when the duty is increased there is a certain amount of resistance for a while. People smoke less for four or five or six months but after that they smoke as much as they did previously; that is quite true, but the smoking habit is being discouraged because of the high duty. Had the duty been lower the consumption would have been higher. I wonder, Sir, whether it is not possible to place a cigarette of inferior quality on the market for the Bantu, a cigarette on which the duty will be low. We have a big potential market in the Bantu. Once the Bantu start to smoke we will have a big market for our tobacco.

The mealie industry is also experiencing difficulty to-day. As I have already said, the small farmer is having a hard time as a result of higher production costs. There are surpluses in the case of mealies as well, but fortunately the mealie industry is under proper control. We export mealies annually at a tremendous loss. Can those surpluses not be used on the local market? Is it not possible for us to absorb those surpluses locally by feeding them to our cattle and so fatten them for the market? Can those surpluses not be used, at a reduced price, in the drought-stricken areas of the country? I do not know what difficulties there are, but it should be possible to devise some plan or other whereby the surpluses can be used for that purpose at a reduced price and thus prevent the necessity of exporting them at a tremendous loss. Why should the taxpayer of this country subsidize the consumers of other countries?

Take the onion industry. Until two years ago when the one-channel marketing system Was introduced in the Caledon/Riviersonderend area the position of the onion industry was very poor for years. But they had their troubles even then. Unfortunately there was a record crop the first year and it was naturally difficult to find markets immediately or to cope with the tremendous surplus that year. I understand that 24 per cent was exported but there was still such a large quantity left that it kept the price low on the local market. The following year the position returned to normal. In that year 35 per cent was exported with the result that the local market afforded a steady price to the producer. But then again some people could get a slightly higher price outside and they complained so much that the Minister unfortunately gave way and withdrew the scheme.

*An HON. MEMBER:

Those were the United Party supporters of Caledon.

*Mr. CONNAN:

It makes no difference whatsoever whether they were United Party supporters or Nationalist Party supporters; it is the principle which is involved. Had we continued with that scheme, those people would have been in a stronger position to-day. Immediately after the withdrawal of that scheme the market for onions dropped by 30 per cent. I believe that the co-operative societies will again try to market those onions as best they can and if they succeed it will ensure a somewhat better price to the onion farmer than he is getting to-day.

I do not want to say much about the marketing of meat, but in that respect, too, orderly marketing has been departed from and whittled down from year to year, with the result that there is nothing left to-day. The last straw was the withdrawal of the permit system; that was the last vestige of control which was removed. We are back where we were 20 years ago, we are back in the former chaotic position where the speculator had free rein. You cannot do otherwise, Sir, than get the impression that the Government is not serious as far as orderly marketing is concerned. All these surpluses, bad marketing systems and increased production costs impoverish the farmer and make it impossible for him to exist. No farmer, Mr. Speaker, will run the risk of going bankrupt for the sake of conserving his land. If the Government expects the farmer to protect the soil for future generations, it should see to it that the farmer is in a position to do so.

Mr. WARREN:

I second. One must express gratitude to the hon. member for Gardens (Mr. Connan) for having raised these most important points here this morning. I want to deal with points Nos. 1 and 3 at a later stage, but there is one point on which I must enlarge at this stage, and that is the question of the lowering of production costs and some planning for the training of young farmers. I maintain that we are not sufficiently equipped with agricultural schools and agricultural colleges to equip our youth as the future farmers of this country. That is part of the planning that we must undertake. This Government or any government will have to offer assistance at some time or other, as is being done at present, to give relief to farmers who experience difficulties. I think one of the deciding factors, when a Government has to come to the assistance of people, is how well they are equipped to carry on their job, and we can only suitably equip those people by means of agricultural education in some shape or form, be it through a school or a college. Over quite a lengthy period of time we have been to agricultural conferences, farmer association meetings, national wool-growers’ congresses, and at every one of them there has been a score or more of notices of motion asking for assistance in some shape or form. Even in this House we have motions introduced in which we ask for assistance or thank the Minister for some assistance or other. Sir, these resolutions have been pleading for financial assistance, and over the last two years the Land Bank has had to find millions of pounds to relieve the position of farmers in this country. All this indicates the seriousness of the financial position in agriculture and over the years we have tried to spotlight that position across the floor of this House, but when this side of the House drew attention to it, the farmer was thriving, according to the Government; he had never been better off; he was in a sound position, and every day we had members getting up and thanking the Minister. To-day we have motions on the Order Paper and we have them on the agendas of farmer association meetings thanking the Minister for assistance to the tune of millions to help the farmers in their difficult position. Sir, how the hon. the Minister is going to reconcile these facts. I do not know. Agriculture has never been in a better position and the farmers have never been better off than under the present Government, but at the same time we are voting millions of pounds to give relief to farmers. There is definitely something wrong. If something is not wrong, how can you reconcile those facts? We have asked for investigations from time to time, and we have been told that the matter does not require investigation or that there is a departmental invesigation taking place or that some control board has set up a committee of inquiry to investigate something that has gone wrong. Sir. I am justified in assuming that all is not well in the agricultural industry, and I think that in private conversations with hon. members of this House, some of them will admit that the position with agriculture to-day is nearly as bad if not as bad as in 1932. I maintain that these things have arisen out of bad planning and bad management, and I think I am quite justified in saying that. The first point I want to come to is this lack of confidence that you have in agricultural finance to-day. You have a shrinking confidence in agriculture. Short-and long-term investors no longer have the confidence that they had in agriculture many years ago. Credit facilities have gone and according to many financiers there is not the confidence in agriculture that there should be.

We have to investigate what is wrong, and part of the answer lies in the lack of planning. The hon. the Minister cannot deny— the proof is not far to seek—that there are people in agriculture to-day who would better serve their country in some other employment rather than be the drag on agriculture which they are, and unfortunately we are responsible for keeping some of them on the land. Those men may be extremely able but they are a drag on agriculture. I am not saying that to try to belittle those people, but they are misfits. The hon. the Minister has had the necessary machinery ever since he came into office, and I want to say this for him that he has inherited a legacy in that he has to assume responsibility for many of the mistakes made by his and his colleague’s predecessors. My own belief is that with the machinery we have had, the Marketing Act, there has been a measure of abuse. That machinery has been used to peg and to adjust the prices of agricultural commodities in the interests of the cost of living of the consumer, regardless of the rising costs of production. Let us just take a look at the heavy selling costs that have to be borne by the producers of this country. I am going to take meat as my first example. The hon. Minister is fully aware that it costs the meat-producers of this country not less than 12½ up to 15½ per cent to sell his produce in the controlled markets; it is higher where there are any combinations, but let me confine myself to those figures. It varied under the system we had, with no stability, of from 15d. which was the floor price to the highest price of 30d., a variation as high 15d. per lb. Now, Sir, what farmer can spend that, because it means a return, or rather a shortfall of at least £2 per head of cattle? The same applies to beef. You have variations there of as much as £2 per cwt. the same day. There are hon. members on the other side of the House who are prepared to support those things. That in itself means anything from £10 to £16 loss per animal. That is the type of stability that we have had over the last five to six years. Sir, it is the result of bad economic planning. The farmers of South Africa under the meat scheme have been called upon to pay £4,000,000 to £5,000,000 of their income either in levies or in sales costs. Now, Sir. can the hon. the Minister honestly claim that we had any stability? Can the farmers stand the drain of that amount of money out of their pocket? And may I say in passing that there are hon. members sitting on that side of the House who. when they sat here, condemned that meat scheme as “rotten”. All we had to do was to hand over to them and they would rectify the matter. But what happened when they did take over? Against the expressed wishes of their own people, they accepted auction on the hook, and that brought about the greatest measure of instability that we have ever had in the meat industry of South Africa. Sir, we had a permit system that has recently been discarded, and I want to ask the hon. the Minister whether he is aware of the chaos in some of the controlled markets to-day? I want to tell him that where the Control Board has come in and in the past only bought third grade, it is now buying second and first grade meat at pounds below what they were going prior to the abolition of the permit system. After 13 years of bad planning, that is what we have to face. We have confusion worse confounded in agriculture. What we have got to-day is a stampede to try to get ourselves back onto our feet. That is the lot of the unfortunate farmer in South Africa. In passing I want to draw the hon. Minister’s attention to one of the biggest bungling in planning we have ever experienced. For some years we discussed the Stock Theft Act. With it we discussed a Diseases and Cleansing Act. A Select Committee dealt with the one question for a lengthy period of time, a Bill was submitted to this House and ultimately accepted after a lengthy debate. Now these two Acts together completed the circle. But what was the result? The Stock Theft Act which was to stop all movement of cattle and exercise the greatest amount of control is still lying, I don’t know where. But some three years ago, you had the introduction of a Stock Diseases Act. with compulsory cleansing, and that was promulgated immediately and it has been applied in various parts of the country. We got the complete removal of the east coast fever regulations where all stock had to be moved under a permit system. That has completely gone now. But what control over stock theft have we; what control over the movement of stock? I think the hon. Minister has consulted his colleagues in the Native Affairs Department and he must be aware that stock theft is at least 100 per cent worse than it was before the removal of those regulations.

Let us turn to wool. I have no objection to the collection of levies for the purpose of providing stability, but does the levy give us stability and can the farmer afford it? That is the major point: “Can the farmer afford it?” We are now collecting approximately £1,500,000 per year towards the stabilization funds and research. Now collectively the farmer has got to sacrifice at least 9 per cent, including selling costs, of his wool clip for this stability. If it would give that stability, nobody would be more pleased than the wool-farmers of this country. But one thing I do object to, and I want to say that it is time that the hon. Minister intervene with his colleagues, and that is that the collection of these enormous sums by the various control boards is a heavy burden on the farmers, and then these huge amounts are deposited with the public debt commissioners as long-term loans. May I quote one here? An amount of £1,244,000 at 3¼ per cent, 3 per cent, repayable 1971. 1969 and so on. Mr. Speaker, can the farmers of this country afford to have their money collected in that way and handed over to the public debt commissioners as long-term loans? We on this side of the House have no objection if that money is required to bring about planned stability and to assist sales. Nobody has any objection against that.

I turn to veterinary services. We have some 40,000,000 sheep, goats and mutton sheep, in this country and some 11,000,000 cattle. Added to that, we have probably every infectious and contagious disease that other countries have got and our own besides. We have got external and internal parasites, and added to that we have got herbal poisons in this country that are unknown in other countries. That is the legacy of the farmer, and with all those things we have an ill-equipped veterinary service, outside Onderstepoort. I have only praise for the research that is taking place at Onderstepoort, but Onderstepoort is handicapped today because it cannot get the material with which to work. I ask the hon. the Minister, or must I address that question to his colleague: Where has he got his field-men stationed? In all the big towns, Mr. Speaker. I am wondering whether they are attending to cats and dogs, or what? Sir, they have no laboratory accommodation where they are situated. You will find some of them in the Colosseum Building if you go down to East London. They have no room for any post-mortem, and eyen if they had them, of what assistance would it be to the farmers? While the permit regulations were in force, it was forbidden to bring any stock in there, and in any case, the health regulations would not permit it. I want to ask the hon. the Minister: Why not put those people in the field where they can employ themselves in collecting, correlating this information for the purpose of Onderstepoort research? That can be done at the experimental farms where the diseases prevail and where the herbal poisons are to be found. Is that not the right place where they have easy access to all they require? To make administrative officers of qualified veterinary surgeons, I think, is a shame. Is it any wonder under those circumstances that we are faced with the position that we are faced with in this country? Serious losses are taking place at this very minute in some parts of the country. I only got back yesterday, and I would just like to give you the figures of two leading farmers in the particular area in which I found myself. They have lost at least 6 per cent of some of the nicest herds we have in that part of the country from English redwater. Now English redwater is not something new to us. There is a disease that takes a toll in January and February of every year from the Kei River to as far as we have the tick. And nothing is being done about it. Onderstepoort is perfectly capable of dealing with that and providing a serum. But what are we doing about it? The losses go on. Is that contributing to the lowering of our cost of production?

The MINISTER OF AGRICULTURAL ECONOMICS AND MARKETING:

Surely it is up to the farmers …

Mr. WARREN:

Up to the farmers! And where must he take the animals to?

The MINISTER OF AGRICULTURAL ECONOMICS AND MARKETING:

He knows redwater.

Mr. WARREN:

Of course he does, but there is no vaccine to prevent it. Those two herds I have mentioned have been inocculated against redwater, every beast in it, but that particular virulent form of English redwater is such that there is no serum with which to immunize that stock.

Now I want to deal very briefly with what the hon. member for Gardens spoke about in respect of maize, the price of maize and the surpluses. Now the price at which it is delivered in the main to the consumer (I am going to confine myself mainly to my part of the country, is 37s. to 40s. Now, Sir, can you expect to reduce the cost of production with maize at that price? At the same time we refuse to consider ways and means to overcome our difficulties. We refuse to consider the use of that maize for producing products that are in short supply, simply because somebody says “No”, and in the main that is the one commodity that is the basis of production in respect of most of the perishable products. We are prepared to export our surpluses at a loss, and, as the hon. member for Gardens suggested, to subsidize other countries. Now I am reliably informed that we are in for a bumper crop this season. Is there nothing we can do about utilizing that surplus for the purpose of raising the efficiency of our people by feeding them better, getting greater energy and output? Can we not utilize those surpluses, be it maize or other products, to raise the standard of living of those people who in the main find it difficult to live? I want to conclude that part by asking the hon. the Minister whether he does not think that agriculture needs greater attention than what it is having at present in research and planning for the purpose of trying to absorb the whole of these products in some other way rather than exporting them out of this country! I still maintain it can be done. Much could be said on the perishable products side of it, but I would like to say this, and I have said it to the hon. the Minister before, that it costs the producer of fruit and vegetables and other morning market produce up to 25 per cent to sell that commodity. And being a perishable product we have no say about it. May I direct this question to the hon. the Minister: The markets in these large centres are now being established miles and miles away from where the food is required. Is that in the interest of the consumers and is it in the interest of the producers? Definitely not. We have grading of all of these products and I want to deal very briefly with that. Every product is graded. But are those plans being carried out? In many instances your producers are the biggest consumers of some of these products. Take for instance maize. We have been large consumers of that commodity and have got to put up with anything. If the maize is weevily, we have got to take it, but weevily maize is not fit for human food any longer. Why should a board, whatever board it may be, have the right to impose that stuff upon the consumer? These things are allowed to go on. I mention another example. Unfortunately as we know our elevators and so on have not got sufficient capacity to take all the maize that is produced. Much of this is left dumped in the Free State and Transvaal under canvas. It starts to grow. But does the hon. the Minister know that much of that maize that is growing out of the bags is sent down to consumers and has got to be sent back?

Mr. G. F. H. BEKKER:

That was in the Sap days.

Mr. WARREN:

I can produce correspondence that I got this year and last year, where maize was inspected at the Döhne Station. In any case that is still going on. And, Sir, if we have to type and grade maize, why must these conditions be tolerated? Why should a board have the right to say to you: Take it or leave it?

I want to come a little bit nearer home. The hon. Minister is more at home with oats and wheat. Now, what I am going to mention has been brought to his attention for a number of years. Why cannot we get from a control board or buyer the quality or grade of oats that is required for the production of food? Why not? I have been to the hon. Minister personally in this connection, but every resolution coming from farmers’ associations indicates that there is something wrong. What is the hon. the Minister going to do about it? I don’t suppose there is anybody more conversant with this question of the plight of agriculture where you have persistent droughts over a long period at times, than the hon. member for Gardens, who, I think, has gone through it himself. Now, when hon. members, now sitting on the other side, were sitting here, they pleaded for fodder banks. So did we. What has Agriculture done towards providing fodder banks, which could be most useful in saving thousands of sheep which simply die during droughts? Fodder banks could be utilized to the greatest benefit in South Africa, in fattening stock that is not fit for the market.

The MINISTER OF AGRICULTURAL ECONOMICS AND MARKETING:

Must the Government pay for it?

Mr. WARREN:

I have not asked the Government to pay for that. I say it is part of what the Department of Agriculture should be planning for, in order to reduce the losses, and thus reduce the cost of production. Whose responsibility it is, is not the important point. It should be done. We have got millions lying with the public debt commissioners that might be utilized for that.

The MINISTER OF AGRICULTURAL ECONOMICS AND MARKETING:

There are millions of bags of mealies available.

Mr. WARREN:

Does the hon. Minister expect this maize to be utilized for that purpose at the price it is to-day? Sir, what we want in this country is research and intelligent planning to meet our requirements.

May I deal very briefly with soil conservation? In the particular part of the country from which I come, we have taken the greatest advantage of soil conservation. There are very few areas, if any, that have not been planned and in which they have not gone on with the job. The people have become soil conscious, and they are saving and rehabilitating their soil. But I want to put this to the hon. the Minister: Why is it, after everything has been planned, approved, after the accounts have been approved, measurements taken, those documents go from the extension officer to the regional office, are approved there, and when they get to Pretoria, nothing further is heard of it? There are some of those farmers who have given up all hope of recovering these amounts. In one case at least £1,000 has been owing for five years, and he has given up all hope. I have a letter here that I can hand to the Minister and that I received yesterday, asking whether and when he might expect payment, after everything has been approved. If soil conservation is applied, let it be applied in the whole of South Africa, because there is not a portion of South Africa that has not got to be rehabilitated. Why is it that you fly over or travel over hundreds of miles of this country not seeing a single contour furrow and not seeing a sign of soil conservation?

Mr. GREYLING:

You don’t travel through the country and you don’t know what is going on there.

Mr. G. F. H. BEKKER:

What part are you talking about?

Mr. WARREN:

I repeat that you can travel for hundreds of miles and not see a single contour furrow in parts that lend itself to erosion.

In conclusion, I want to say this: Let the Minister and his Department and his colleague and his Department apply themselves to some true planning in the interest of the reduction of the cost of living, in the interest of the reduction of the cost of production. These hon. gentlemen who are constantly interrupting have seen the Transkei and its denuded grazing ground. They have seen those cultivated lands that have been abandoned. Some are even to be found in European areas. Should we then not realize that this question of planning, this question of reducing the cost of production and preparing ourselves to meet our requirements for the future, has to be attended to in haste?

*Mr. GREYLING:

I want to move the following amendment to the motion of the hon. member for Gardens (Mr. Connan)—

To omit all the words after “That” and to substitute “this House expresses its thanks to the Government for the generous aid given to bona fide farmers during the past and recent years, and in particular for the purposeful economic planning under the Marketing Act.

This House further requests the Government to consider the advisability of—

  1. (a) establishing a more effective scheme for providing credit facilities to bano fide farmers; and
  2. (b) reviewing the price levels for produce, where it proves to be necessary, regard being had to (i) planning of production, (ii) production costs and (iii) the distribution and disposal of produce both at home and abroad.”

The speech which the hon. member for Gardens has made here is as familiar as the droughts in South Africa. He wandered from citrus to mealies, to butter, cheese, sugar, meat and from South Africa to Russia. When talking about Russia, Sir, the hon. member attacked the Government for not seeking markets in Russia. I wonder whether the hon. member was sincere when he said that? He said that because of Langa there was no market for us in Russia, and that Russia would resist any attempt on our part to establish a market there. Does the hon. member remember what attitude hon. members adopted when a consignment of meat landed in Russia by mistake a few years ago?

*Sir DE VILLIERS GRAAFF:

By mistake?

*Mr. GREYLING:

Mr. Speaker, I want your advice as to how to reply to the speech made here this morning by that hon. member. There are many hon. members who still want to speak to-day and I have consequently decided not to deal with the arguments of the hon. member. I want to give you an example, Sir, of how unfounded the allegations of the hon. member are. I am not allowed to use the word “misleading”. I want to refer to it merely to show how incorrectly the hon. member for Gardens has been informed. He alleged that the gross income from agriculture had declined during the last few years. But the whole approach of the hon. member is totally incorrect. Why did the hon. member not use a basis? The figures given by the hon. member were obviously based on a certain year, probably the year when our income was exceptionally high due to exceptionally high wool prices.

*Maj. VAN DER BYL:

You did not listen.

*Mr. GREYLING:

He probably took the year when wool fetched 240d. per pound. Let me give you a few figures, Sir. In 1955-6 agriculture in this country had a gross income of £384,170,000; it was more or less the same the following year. In 1957-8 there was a slight decrease as a result of the decline in the wool prices which in turn was a result of factors beyond the control of the Government. In 1959-60, however, it rose again to £384,000,000. During the past 25 years the increase in the physical volume of production was as follows: Agricultural products, 86 per cent; garden products, 135 per cent; livestock production, 71 per cent. During the same period there was a 50 per cent increase in the population. However, I want to leave the hon. member at that. I leave it to other speakers to reply effectively to the legion of matters raised by the hon. member. I want to deal with the allegation made by the hon. member that the economic planning, as far as agriculture was concerned, was wrong. While I was sitting here, Sir, I made a few notes as to what I understood by economics and economic planning. To my way of thinking it meant the harnessing of all production factors such as soil, labour, knowledge, training, and organization, so as to produce the best quality for the market, thus ensuring the biggest profit possible over a long period of time without exploitational cropping. When we analyse that further, I would say that that can be obtained by means of farm planning, which includes construction of camps, water supplies, the combating of soil erosion, water conservation and rotational cropping in the various fields of farming. Furthermore, there should be the best possible co-ordination between labour and equipment with due regard to capital, transport facilities, marketing and organization. I say, Mr. Speaker, that the approach of the hon. member, his whole outlook and his ideas about planning in the agricultural field, leave much to be desired. Had the hon. member wished to criticize the Government and the Department of Agriculture effectively, his approach should at least have been based on four basic or fundamental factors which affect agriculture. It seems to me that we have been teaching them how to govern for the last ten or 12 years and to-day I have to teach the Opposition how to criticize. If the hon. member wishes to criticize the Government on its agricultural economic policy, I think he should deal with production, financing, marketing and research. Because those, Sir, as far as I am concerned, are the four big corner-stones on which agriculture is based, and on which it has to develop.

In the course of my speech I shall raise the question of production and financing. I think other hon. members who will take part in this debate at a later stage will raise the subject of research marketing. Mr. Speaker, my amendment reads “That this House further requests the Government to consider the advisability of establishing a more effective scheme for providing credit facilities to bona fide farmers”. When you talk about financial assistance and credit facilities to farmers, Sir, you should ask yourself whether there are sufficient channels to provide that assistance and whether there is effective legislation to provide for it and to authorize it; whether there are sufficient funds to ensure effective assistance and whether those facilities can be used in practice. We find that during the past few years a new pattern has developed in the agricultural industry. The industry has become highly commercialized; it has become necessary to apply stricter business principles in your farming operations. The process of mechanization during a post-war period of high prices has made the investment of capital in the agricultural industry a costly and risky investment. The agricultural industry has placed heavy burdens on the shoulders of the agricultural producer. It has made it necessary for the producer to acquire knowledge and training, and to follow strict scientific and costly farming practices. As a result of keener and more complicated competition from abroad, both as regards quantity and quality, the producer has been forced to concentrate more on the production of super-quality products and on the application of the best possible marketing techniques than before. At the same time the development of this new pattern in the agricultural industry has placed certain responsibilities on the shoulders of the Government as far as the producer is concerned. Such factors as the output of the labourer and the national income are mainly determined by the quantity and the quality of the food which is available to those people who have to do the work. Past experience has proved that because of our peculiar climate here in South Africa the agricultural industry will never be able to stand alone without Government assistance. Time and again the Government has to come to its assistance by way of emergency measures by way of export subsidies in order to create an artificial market internally, by way of drought and flood loans, etc. This is not a phenomenon which we find only in South Africa. It is peculiar, Mr. Speaker, to note that the growth of credit facilities and the financing of agriculture in South Africa has run parallel with the growth in other parts of the world. And here I want to refer to America, Canada, Denmark, Germany and Australia where the position of the producer is identical to that of the producer in South Africa. We must accept it as such. That is characteristic of our agricultural pattern; it is inherent in our history. Because of the speed at which our agricultural pattern has changed, coupled with the periodic erosion of the capital and capital reserves of the farmer, as a result of stock losses, droughts, floods, and the collapse of world market prices, we have found a need for credit facilities in our agricultural industry. The compulsory changeover from cheap farming methods because of the disappearance of the animal factor, to a system of mechanization which meant expensive implements, in a post-war period when everything was costly, coupled with expensive fertilizer and fuel, has descended like a thief at night on the South African agricultural producer, the farmer with little capital and with eroded capital reserves. That fact greatly increased the need for credit facilities in the agricultural industry. The challenge of a growing nation, the challenge of a growing industrial state, the challenge of a keener-growing competitive world market as regards both quality and quantity, coupled with rising costs over which the South African Government in many instance had no control, the need for capital together with rising land prices, have all contributed towards an increased demand for credit facilities in our country. In the interests of feeding the nation, and with a view to stabilizing prices, and as a result of overproduction and with the object of tackling the marketing problem, the Government has been obliged to undertake the responsibility for the production, the distribution and the marketing of certain products by means of the Marketing Act, the Marketing Board and the control boards. The inevitable result has been that our price policy has become the responsibility of the Government. A further result has been that the marketing of controlled products, internally as well as externally, has become the responsibility of the control boards. The producer has sufficient sources of information, based on the research which the Department has undertaken, at his disposal to enable him to improve his farming methods. Other speakers will refer to that later on, Sir. There are also sufficient training facilities at the disposal of the producer, training facilities where he can acquire the necessary knowledge and receive the necessary guidance so that he can conduct his farming operations on the most profitable basis. There are many channels available to the producer where he can obtain credit. With the approval of the Minister the control boards follow a definite policy in respect of price fixation. Certain bases have been laid down. They assist the producer with the marketing of his products. I have in mind the Deciduous Fruit Board and the Citrus Board, who have permanent representatives overseas, people who are continually seeking new markets and continually advertising. Similarly, our trade representatives overseas are continually endeavouring to find markets. But, Mr. Speaker, in spite of all these sources of information, of which there is a sufficient number, and institutions where he can receive training, in spite of the number of credit facilities available to the farmer, in spite of the efforts which are made to prevent surpluses, such as the control of production by means of price fixation, or the refusal of licences for certain processing works to operate, in spite of that and in spite of all the control measures which are applied, a certain section of our farmers go under annually because of lack of capital. In spite of the tens of millions of pounds which was recently injected into the agricultural industry and which is still being injected, the prospects and results are not what they should be. Something must be wrong somewhere. The Department of Agriculture can do no more than it is doing at the moment. It cannot provide more training facilities, more credit facilities or more information. If we want to find the reason, however, if we want to find that something which is wrong somewhere, we must look for it amongst the class of farmer who has appeared on the scene during the last couple of years. As far as their credit worthiness is concerned, I think three types of farmer have come into the picture. The first type consists of the farmer who can go to any financial institution and obtain credit. The second type is the farmer whose liabilities are less than his assets and who can get assistance from the Land Bank. He is assisted. Then we have the third type of farmer whose liabilities are such and whose credit worthiness is such that the Land Bank is unable to assist him, the commercial banks do not want to assist him, and the trust companies, the assurance companies and the credit corporations refuse to assist him. He is, however, established on his farm and he has to make his living there. He is the man who is greatly in need of credit. As far as these credit facilities are concerned, the financing of our agricultural industry, particularly as far as the two latter types of farmer which I have mentioned are concerned. I think there is a lack of co-ordination between the various financial institutions as regards the application of a definite policy and a lack of knowledge on the part of the type of farmer I have mentioned. I want to give an example. Various co-operative societies in the same agro-economic area follow different policies in granting credit facilities to the same type of producer. I want to say something else. When a farmer applies for credit not one of these financial institutions, such as the Farmers’ Assistance Board, trust companies, commercial banks, insurance companies, brokers, shopkeepers, co-operative societies, auctioneers, market agents and private moneylenders, knows enough about his financial obligations towards other institutions. I go further and say that there are too many financial institutions, institutions where the farmer who is in a weaker financial position, can obtain credit without any control being exercised. As a result of a lack of knowledge of and insufficient information about the applicant’s farm, about his production potential, about his organizing ability, about his knowledge and experience, about his transport facilities, about his labour position in the area concerned, or the type of commodity he is producing, sufficient care is not always taken to ensure that the credit is utilized productively and it is granted without considering the chances of it not being utilized profitably. I say, therefore, Mr. Speaker, that there are too many financial institutions where credit can be obtained, institutions which are not co-ordinated and who do not have sufficient information about the applicant at their disposal. I want to add that in very few cases is the interest rate charged by those financial institutions too high. A farmer cannot pay 20 per cent or 22 per cent on the capital which he requires for his costly farming operations. I say that the credit facilities are not sufficiently varied. We have long-term credit facilities, interim credit facilities, and short-term credit facilities. To a large extent the Land Bank meets those needs. But the Land Bank does not finance the third type of farmer whose liabilities and assets stand in such relation to one another that the Land Bank does not see its way clear to help him. Because of their poor credit worthiness, many producers are to-day left out in the cold and have to depend on sporadic emergency credit facilities. I say it is wrong to have different institutions within the Government itself which grant various farmers various forms of credit. Here I have in mind the financial requirements of the Land Board; I have in mind the financial requirements of the Farmers’ Assistance Board; I have in mind the form of credit granted by the Department of Agricultural Technical Services in connection with soil conservation. Is it really necessary to have different forms of credit for the same farmers in the same agroeconomic area? Will we not be able to eliminate overlapping by introducing one central uniform system of financing our farmers, a system based on the uniform application of conditions, uniform information, agro-economic differences, training and experience? Will such a centralized financial institution not be cheaper and promote savings? Will that not be better planning and will it not ultimately mean bigger profits over a long-term period for the farmer? I therefore want to ask the Minister whether it will not be advisable to consider establishing such a central financial organization where farmers can get assistance on a uniform basis, under guidance and with planning, at a low rate of interest, with perhaps an initial redemption free period and a longer period of redemption. Should we not establish such a central financial institution, an institution that will undertake all forms of financing and where the type of farmer, who cannot get assistance from existing financial institutions to-day, can be assisted? Also those institutions which, apart from the co-operative societies and the Land Bank, finance the discounting of hire-purchase agreements. That is the kind of institution which can finance the beginner—after he has purchased his farm, paid his transfer duty, after he has paid all costs in connection with the transaction—to buy stock, or to sow grazing, or to fatten his stock for the market, or to purchase cows thus ensuring a fixed monthly income for himself while he is waiting for a crop; or to create emergency credit facilities on a uniform basis, or to consolidate existing debts, or to bring about improvements on his farm, or to provide working capital for the coming season. When I ask for that, Sir. I am not asking for something extraordinary. I am merely asking for a consolidation of the existing facilities, but facilities which are so divergent and widespread that the poor man has to go from pillar to post and wait a long time before his application is decided upon. What I am pleading for, Sir, is not something which will operate in South Africa alone. They have a similar system in America as well as in Canada and it works very well. In America they have the Farmers’ Home Administration, in Canada they have the Veterans’ Land Act, which is on the same basis as the one I am pleading for here, a basis which will provide credit to the farmers in a profitable and fruitful manner. But, Mr. Speaker, when this kind of credit is granted, still subject to the condition that it conforms with its source and that detailed information is available to the institution or to those departments—detailed information in connection with his farm, the type of land he holds, his production potential, his credit obligations, the capital invested in his farm in the form of buildings and implements, his training and experience, and the marketing prospects of the particular commodity in respect of which he wants credit in order to produce it—the applicant should receive guidance and advice in so far as planning and production are concerned from the particular department concerned. With this in mind, we can perhaps do one of two things: We can develop the Land Bank and establish more branches on an agro-economic basis, branches that will be assisted by district advisory boards under the guidance of the agricultural technical officials of the Department, so that it can undertake the task of financing the producer because of a detailed survey of all the relevant data concerning him, apart from the granting of long-term credit facilities and the task of financing the discounting of hire-purchase agreements and the granting of interim credit facilities which is to-day done by the Land Bank. In case the Land Bank does not see its way clear to undertake this, I suggest that we ask the Government to consider establishing a central financing department for the bona fide agricultural producer, namely those farmers who cannot obtain assistance anywhere else, and also the settlers of the Land Board, the farmers who to-day fall under the Farmers’ Assistance Board, the farmers who cannot be assisted by the Land Bank to-day, and the type of farmer who raises a loan annually so as to employ White labour on his farm but who is unable to pay them their monthly salary in cash so that they in turn can live, but who is nevertheless in a position at the end of the year, when he reaps his crop, to pay the labourer. Mr. Speaker, we are living in a period where the White man is becoming more and more entrenched in our agricultural economy, to the exclusion of the Black man. With the best will in the world, Sir, and with the best intentions we will never get the White man integrated in our agricultural industry, either in the form of manager, or as general help, if we do not make provision for the financing of the high costs connected with it.

Mr. Speaker, for this purpose farmers will have to register with such a department; the farmer will have to submit a detailed account of his income, the nature of his land, and details of everything that has a bearing on his production, his organization, his creditworthiness and the area in which he is developing; and based on that such an institution can, in co-operation with the Department of Agriculture and various other departments either through their branches or through advisory committees, introduce a co-ordinated credit and financing policy under the guidance of technical officials, also in respect of the various policies which are to-day being followed by various co-operative societies.

*The MINISTER OF AGRICULTURAL ECONOMICS AND MARKETING:

Must every farmer register?

*Mr. GREYLTNG:

No, that will be voluntary, and it applies only to those farmers who make use of those institutions. If a farmer does not wish to register that is his affair. The Minister may see this matter in a different light, and hon. members of this House may see it in a different light. If we succeed in assisting certain farmers in their farming operation, by providing them with credit facilities on a more effective, more scientific, more economic and more profitable basis, we would still not have gone the whole way.

Now I wish to say a few words about the second part of my motion, which deals with the revision of the price levels for produce with due consideration to certain things which I mention there. Let me make it quite clear that when I talk about the revision of price levels. I am not asking for increased price levels for all products. I am not saying that that should be done. My whole plea centres round this, whether or not our present basis of price fixation is still the best basis to-day. Generally, in the case of controlled products, the price is determined on the basis of costs of production plus a reasonable living wage for the producer. I cannot think of any other basis. I am not suggesting that we should abandon the production cost-plus basis in price fixation. I am not asking for that, but I have certain doubts about the average production cost basis because I have seen the results. In the case of the average production cost basis you always have a few farmers above the average line and a few below the average line.

*Mr. H. G. SWART:

Hear, hear!

*Mr. GREYLING:

The production costs of the farmers above the average line are above average and they are the people who, in my opinion, are the victims of high production costs, the victims of fortuitous losses as a result of droughts and floods. It is not the farmer who farms on a big scale; nor is it the one who farms on a reasonably large scale. The small farmer, in particular, is the one who is most vulnerable and who is least able to weather set-backs. If we accept the average production costs as basis, I want to know whether it is not possible to investigate whether the profit margin in respect of certain products, in certain circumstances which may prevail in certain areas, is sufficiently high to enable that particular type of farmer, who is above the average production cost line, to make a living. Mr. Speaker, the proof is there. We have the position that through the Land Bank and the Farmers’ Assistance Board, tens of millions of pounds have been injected into the farming industry, and in spite of all our praiseworthy efforts—and I do not think the farmers will exchange this Government for any other alternative Government because of what it has already done during the past 12 years to bring about price stability, to encourage production, and to promote a progressive outlook in the agricultural industry as a whole—a great deal has still to be done. We are entitled, however, and we will have to do it, to see to it that whatever we do in connection with an industry, such as the agricultural industry, which is a dynamic industry and an industry subject to changing circumstances, is the right thing. I want to ask the Minister to make further thorough investigations in order to ascertain whether in respect of certain products in certain areas and in respect of a certain class of farmer, the method of calculating the profit margin on the average costs of production is satisfactory.

*The MINISTER OF AGRICULTURAL ECONOMICS AND MARKETING:

We know it is not satisfactory, and we will investigate it.

*Mr. GREYLING:

I want to repeat that I am the last person to plead for the abolition of the average cost basis. I am merely asking for an investigation into the profit margin. I appreciate the fact that difficulties will arise if we increase the profit margin. It will increase production and bring about an increase in land prices and it will increase the production costs per unit. It may bring about overproduction which results in surpluses, surpluses which in their turn mean a loss to the farmer, because over-production lowers the prices. If the farmers follow the advice of the Department and apply the best scientific methods there will be an increase in the production per unit and that means a decrease in prices, based on the average cost of production. We are in a vicious circle and we cannot do anything about it. In addition to that we are faced with the difficulty connected with surpluses, surpluses which we find throughout the world to-day. A a result of our system of control, as implemented by the Government, we have not fallen victim to the present international price fluctuations. but we are faced with another difficulty. In spite of the fact that we have a population of approximately 14,000,000 people, those people do not have the most economically effective purchasing power in the world. It is not our fault. The economic purchasing power of a large section of the population may improve greatly in 20 years’ time and it may become greater and greater, but in spite of all our efforts we find ourselves together with the rest of the world in a position to-day, where as far as stability is concerned, as far as research and price stimulation are concerned, and in the case of certain commodities, our production exceeds the economic purchasing capacity of the nation and that makes the problem of over-production such a great one, with the additional problem of finding an economic market overseas. The Mealie Board and the Dairy Board can testify to it that due to over-production in other parts of the world their missions to countries abroad have great difficulty in finding profitable markets. That makes our marketing problem internally as well as abroad a difficult one and a solution must be found. I want to say immediately that I have no solution to offer. I do not know what to suggest. All I can say is that during his visit overseas in 1937, Dr. Viljoen visited countries such as Holland, France, Germany and Denmark and he found that all those countries planned on a national basis in order to keep surpluses down. Certain measures were applied from time to time in South Africa in order to limit over-production. In the past that was done by means of price fixation and by the curtailment of licences for the erection of processing industries. The production of cheese is already being controlled, because further production will stimulate over-production. I have no solution to offer. For years it has been our policy to limit production, so that is not a new idea. I think of the days, Sir, when we paid a subsidy of approximately 7s. per bag on mealies in order to keep the price constant. At various times different methods have been employed to discourage production, but we have not as yet solved the problem of over-production. We shall have a permanent surplus for many years to come and certain steps will have to be taken to cope with that problem. I therefore want to ask the hon. the Minister—and he can either accept or reject it—whether an investigation cannot be made in order to evolve some scheme or other whereby the evils which will flow from increasing the profit margin in respect of certain producers and the evils connected with the resultant over-production with its accompanying adverse effect, can be eliminated. I have, therefore, pleaded for a change in the system of granting credit facilities in respect of those producers who require them and I have pleaded for an investigation into our system of price fixation. At the moment our present system is the best which the Opposition and the present Government have been able to evolve during all the years. I have pleaded for steps to be taken to combat the permanent surpluses which we will have in future according to present-day calculations. If we do that, we shall be doing no more than the National Party has been doing all these years, a progressive party with a progressive policy, a party which has from time to time by means of research and guidance and advice injected life into the agricultural industry. Even if my plea does not amount to anything and bears no fruit, I trust that, other than the plea of the hon. member for Gardens, it will be regarded as an attempt to inspire us to think along the lines of a progressive and dynamic agricultural policy for the future.

*Mr. G. P. VAN DEN BERG:

I second. While seconding the amendment moved by the hon. member for Ventersdorp (Mr. Greyling) I want to congratulate him on the very able manner in which he delivered a well-prepared and studied speech, in which he gave our reasons for moving this amendment and why we would like, in spite of the hollow laughter on the other side, to thank the Government for what it has done for our agricultural economy in recent years, and in particular for new thoughts which he expressed and which I regard as constructive criticism deserving of the attention of the hon. the Minister and his Department. When you express new thoughts they do not necessarily amount to destructive criticism. That is the way in which we try to contribute constructively to the interests and welfare of this important agricultural industry in South Africa.

The fantastic and almost phenomenal growth of our agricultural industry during recent years belies the contents of the motion of the hon. member for Gardens (Mr. Connan). There is, of course, always room for improvement in any sphere and particularly as far as this difficult and intricate part of our economy is concerned, namely, agricultural economics and marketing. There is always room for improvement although we will never get perfection; that we will certainly never get and nobody expects it.

I really want to refer solely to two points raised by the hon. member for Gardens. In the first place he referred rather offensively to the sending of citrus to Sweden and the resistance that was experienced there. Now what on earth the resistance in Sweden has to do with the economic planning of agriculture in South Africa I cannot understand. I do not know how the hon. member expects us, by means of local planning, to prevent the resistance of the people in Swedish harbours, where they refuse to off-load South African products. Or does the hon. member expect us to change our whole traditional policy in order to have our products off-loaded there? But it definitely has nothing to do with economic planning in the agricultural sphere. And in reality it is not even the reason why losses were suffered in connection with a consignment of citrus to Sweden which was not off-loaded there. The real reason was shipping space and the glut on the market at that time.

Then there is another point which the hon. member for Gardens made, concerning which I have a lot of sympathy with him. He pleaded for an investigation into the possibilities of training for young farmers who enter this industry and I want to support him very strongly. It is estimated that about 2,500 to 3,000 young farmers enter this industry every year and that not more than 15 per cent of these young farmers get any training in agriculture. Now, we are grateful to see that attention is being given to this matter, although I think we are entitled to expect that even more attention be devoted to this matter of training for young farmers. It is disconcerting to think that you have to leave your agricultural industry, in which so many millions of pounds are invested, in the hands of people who have not had the necessary training for it. We know that the students of the agricultural colleges of Stellenbosch, Cedara, Glen. Grootfontein and Potchefstroom only numbered 338 in 1948. 552 in 1956. 559 in 1957, 584 in 1958 and 553 in 1960. They are persons who attend a diploma course for three months, a sheep and wool course. At the agricultural faculties at the universities, like Stellenbosch and Pretoria, there were 562 students in 1948, 949 in 1956, 1,033 in 1957, 1,077 in 1958 and 852 in 1960. It is pleasing and encouraging to see. and I think it should satisfy the hon. member for Gardens to know that it is being done, but I want to admit that we have to consider the possibility of giving more training facilities to these young farmers who enter this industry. I think that the phenomenal growth of our agricultural industry during the last few years really belies the motion moved by the hon. member for Gardens, in which he asks the House to express its disappointment in the Government because of its poor economic planning as far as agriculture is concerned. Let us see how our agricultural industry has grown. In 1910 the gross value of all agricultural produce was £28,900,000. For the period 1955-9 the average for every year was £359,000,000. That means an increase of 368 per cent. That is why I think there is no justification at all for the motion moved by the hon. member for Gardens. We have achieved much during past years as a result of economic planning in our agricultural industry.

The House should also take into consideration what the position of the farmer would have been had there been no economic planning, and without apologizing to the Opposition or anybody else I want to thank the Government on behalf of the farmers of South Africa, and in particular the Departments of Agricultural Economics and Marketing and Agricultural Technical Services, for what has been done in recent years to achieve this efficiency and this stability in our agriculture. I express my gratitude to the Government for this economic planning, not only for the stability which we have, but because we know there is a policy for the future and that as far as agriculture is concerned, we can face the future with confidence. I say we have achieved much in this respect.

We must not lose sight of the fact that there are two ways in which we can plan, and that applies not only to agriculture but to many other Departments as well. The one way is to plan for a short term. The other is to plan for a long term. While I want to deal briefly with this matter I want to make this request, that we in South Africa should never make a political bone of contention of our agriculture, and on the other hand that we should realize that we will be doing a disservice to agriculture if we try, for personal gain or political gain, to play the consumer and the producer against each other because they are supplementary elements. Short-term planning would be selfish in agriculture but perhaps it could mean a considerably higher income for the farmer if we had short-term planning and it could do much to make the Department of Agricultural Economics and Marketing popular if we want to do sheer short-term planning. Let me use this example. If, for example, we would concentrate on the adding of fertilizer and trace elements to get quick results it could mean a far bigger turnover for the farmer. But the faster you make money from your soil in this way, even if you do make the Department popular, you destroy the heritage left by your ancestors for your children to inherit. For this reason agricultural planning should be long-term planning which will not only provide for the present but also give a guarantee for the future. That is why I say that we should not make a political bone of contention of this matter and should not try to make capital out of it. Your economic planning should be such that in time to come you will know that you have done nothing to exhaust the soil of South Africa and that those who come after us will not be able to point an accusing finger at us.

As has rightly been quoted, a number of factors should be taken into consideration in planning and with regard to any planning, but particularly economic planning for agriculture, you have to have certain aims. To my mind what we are aiming at is a dual purpose. Firstly, it is to provide the farmer with a decent living and to give him the opportunity to build up reserve funds for the unexpected setbacks which always come periodically in South Africa. In the second place we must plan with a purpose, to use the soil of South Africa in such a way that its fertility is not harmed. I want to make this plea because the recognition of all other resources, the exploitation of our mineral wealth, our secondary industries, etc., still leaves the agricultural soil as the communal mother of all of us who has to feed her children also for generations to come. The assistance that is given to farmers is often wrongly described in South Africa in such a way that the farmer is made to appear as a beggar. The mover of this motion has already shown that in South Africa through the ages agriculture has not been able to stand on its own feet. Agriculture always had to get State aid in order to survive. We want to thank the Government for providing an economic living for the farmer in order to enable him to farm judiciously.

Let us see what has been done in this respect. When I quote the figures I must ask that they be not regarded as aid to individual farmers but to the farmers of South Africa as a whole and to the industry as a whole. I want to quote a few figures. I quote the figure for recoverable loans. I am not going to mention the figure for every year separately but I am mentioning the years 1954-5 to 1959-60, the assistance given to farmers in connection with soil conservation, £1,892,000; general assistance, £3,624,000; State advances, general assistance, £4,517,000; assistance given by the Department of Lands to farmers to buy land, £5,278,000; stock and implements, £280,000; drilling for water, £647,000. Then there is the Land Bank. As far as the Land Bank is concerned I only have the figures available and covering the years up to 1958-9 and I do not have the figures for 1959-60 but loans on land and mortgages amounted to £50,700,000.

If all these are taken together for the period 1954-5 to 1959-60—and here I am making an estimate for the year 1959-60—it amounts to about £100,000,000 for the five years in the form of loans given to farmers to assist them and therefore given to agriculture in South Africa. This is recoverable money—loans granted. But with respect to different subsidies, rebates, and bonuses during this same period the following amounts were provided: to land conservation, £3,796,000; subsidy on fertilizers, £6,027,000; rebate on railage of fertilizer, £7,406,000; drought loans, £59,000; rebate to drought-stricken areas, £118,000; subsidy on drilling for water, £5,796,000; a further total during this period in the form of subsidies, rebates and bonuses of £23,205,706 and for this assistance given to farmers we have reason to thank the Government and the hon. the Minister of Agricultural Economics and Marketing as well as the hon. the Minister for Agricultural Technical Services together with their staffs for what has been done during the past years in the interests of economic planning in agriculture. As far as the agricultural industry in South Africa is concerned we have two parties: we have the Departments of Agricultural Economics and Marketing and Agricultural Technical Services on the one hand and we have the farmer who practises this industry on the other hand and these two parties do not fight each other; these two parties, the State Departments on the one hand and the farmer who practices farming, on the other hand supplement each other because in this country we have a mutual aim and also common dangers. Our aim is to have permanent stability and to retain the fertility of the soil. The dangers are periodical droughts, stock diseases, plant lice, caterpillars, commando worms and other pests—more than Egypt ever had—which continuously affect some part of our country. That is why we should treat this matter with so much sympathy. Every penny the farmer invests in order to produce is invested in two different ways, on the one hand with the object of providing him with a living from the soil because that is his trade, this is his livelihood, and on the other hand he invests this capital in order to produce and feed the people. His motives are not only selfish; it is quite human for every person to aim at getting the maximum advantage from his calling. But he also practises his calling to feed the people and now he has to do with these unforeseen circumstances over which he has no control and over which the Departments have very little control —circumstances which do not flow from your own actions—and seen against this background with this common purpose and these common dangers we have to co-operate—these two Departments and the farmer who really practices agriculture in South Africa—in order to get more efficiency and to produce more efficiently and to find decent markets for the products which we do produce. In this respect much has been done.

At this stage I want to embroider further on a matter which was only touched upon by the hon. member for Ventersdorp (Mr. Greyling). It is not only an appeal to the hon. the Minister, it is also an appeal to the farmers on their farms and that is that we should give very serious attention to our non-White farm labour. It is good, and it was also mentioned by the hon. member for Gardens (Mr. Connan), that the non-White labour should get some degree of training. But if we go round, particularly in our towns, then we find a land hunger which we will never be able to satisfy. It is the wish of the young White man not so much to own land but to go farming because he loves the soil. And we want to plead here for the farmer of South Africa to be enabled to make more and more use of White farm managers or general White assistants on their farms. He is to-day, however, forced to use cheap Native labour. I say “cheap Native labour” but I am not so convinced that Native labour on our farms is really cheap. I think that Native labour on our farms is very expensive labour. I think that the productivity of one White farm manager is much higher than that of three or four Natives on the farm.

*An HON. MEMBER:

There are sorts and sorts.

*Mr. G. P. VAN DEN BERG:

To that I readily agree. There are sorts and sorts. The same applies to the non-Whites—there are also sorts and sorts. But I am speaking about this person with the urge who desires so much to help to cultivate the soil of South Africa and to produce food who must be assisted to get training either by way of a bursary or in some other way. He must be assisted economically to go back to the farm even if he does not become a landowner at that stage. There are many of our young people who are technically trained who work in factories although they are not all the owners of factories. There are many of our young White boys in the gold mines although they are not all mine-owners. There are numbers of these young Whites in South Africa, and not only in South Africa. It opens up the field for suitable immigrants who can come here as farm managers and to be trained as farm managers. Unfortunately I do not have the figures available but recently there was a lecture on the destruction and damage to expensive farming implements and there was an equation of the percentage of deterioration of a tractor which was exclusively handled by a White person and the percentage of deterioration of a tractor which was handled by both White and non-White hands and that of a tractor which was exclusively handled by non-Whites. Unfortunately I do not have the figures with me but I know that it is fantastic. The farmer is forced to entrust these expensive implements to non-White labour as the result of economic reasons, because he is not able to afford the services of a White farm manager.

Now I want to associate myself with what has been said by the hon. member for Ventersdorp when he asked the hon. the Minister not to be over-sensitive about this; this is not really criticism and I want to ask the Opposition not to rejoice about this and to think that they will win votes in this way. I do not want to make a political matter of this but I want to state here that matters are not going well with the farmers of the country to-day; things are bad for the farmer. We see what we may regard as prosperity on the farms but I want to give hon. members the assurance that much of that prosperity is only sham prosperity. For many of those shiny objects which we see on the farms the farmer often carries debts which keep him down and which he is never able to pay. I would be untrue to myself and my constituents, regardless of which party I belong to, if I did not say these things. I am not prepared because of a little sensitivity here or there about the agricultural industry in South Africa to see agriculture, which I believe we should all foster and regard as something very valuable, go to pieces. We cannot allow that to happen. We will have to review the profit margin of the farmer and it must be adapted to our present economic structure in order to prevent the farmer from lagging behind; in order to make it possible for the farmer also to send his son to the university and to have him trained. Our boys on the farms cannot all become farmers. The agricultural surface of South Africa has already been divided into economic units and if a man has five sons he cannot divide his farm into five parts and have five more farmers. Four of those boys must be absorbed by the labour market in the industrial world and that is by the way also the reply to the hon. member for Gardens who quoted comparative figures to show how the agricultural income has decreased as compared with the national income. Of course your agricultural income will decrease on a percentage basis; it cannot be otherwise. It decreases because those boys from the platteland do not remain on the farms and farmers are not just absorbed by the industrial world. He is productive there and he helps to increase the national income in that sphere. As I have said the agricultural area has already been divided into economic units; you cannot increase that area—you cannot make 20 morgen out of 10 morgen—but we approach the future with confidence because we know that in the hands of the hon. the Minister, who is interested in this matter, together with his secretary and his staff, the planning for the future will be such that we will be able to increase the productivity of the soil without harming the fertility to the detriment of generations to come.

Capt. HENWOOD:

I want to deal with the amendment moved by the hon. member for Ventersdorp (Mr. Greyling), because from what he said it would appear that everything in the garden of agriculture is lovely and that the farmers are happy and prosperous; that they have no worries or real financial difficulties. Later on in his speech he did refer to the high cost of production, but apart from that, if you read the amendment, there can be no doubt that he considers that the agriculturist is happy and that the Minister should be thanked for what he has done. Sir, what is the true position? In my opinion this Minister in fixing ceiling prices, is responsible for the position that the farmers of the Union have had to borrow all these millions of pounds made available by the Government. Admittedly this Government, through the Land Bank, have made available many millions of pounds to the farmers. But that just proves the necessity for planning and for the Government to see that the economic position of the farmer is improved. The Government must do more than just to lend the farmer money on which he has to pay interest and which he has to return. Here, of course, I am not dealing specifically with the drought areas, where one area may have hailstones, droughts or floods. That is a different proposition completely, and where the Government does help those farmers by lending them money, it is definite help and one is grateful for that assistance.

Business suspended at 12.45 p.m. and resumed at 2.20 p.m.

Afternoon Sitting

Capt. HENWOOD:

When business was suspended, I was just passing a few remarks on the amendment moved by the hon. member for Ventersdorp (Mr. Greyling). I pointed out that his amendment really amounted to thanking the Minister and saying that everything in the garden was lovely as far as agriculture was concerned. Sir, organized agriculture does not think so. One only has to read the official publications and statements of the commodity committees of the South African Agricultural Union to realize how wrong the hon. member is in trying to paint that picture. In fact, I am sure that the hon. member is not speaking from personal experience as a practical farmer.

Mr. GREYLING:

Who is not a practical farmer?

Capt. HENWOOD:

The remarks made by the hon. member for Ventersdorp in regard to the economics of farming are not borne out by his practical experience as a farmer, because I know as a practical farmer that some of these prices for agricultural products to-day are quite uneconomic. Sir, the seconder of the amendment quoted the large amount of money which had been made available by the Government, mainly through the Land Bank and some other institutions, to the farming community to tide them over this very bad period. In fact very many farmers have had to pledge everything they owned to cover the advances which have been made to them. That does not show that the farmer is enjoying economic prosperity or that the price that he is receiving for his products is an economic one which allows him to pay his way, to rear a family and to build up some reserves for very bad seasons. Some parts of the Union, as you know, have had very bad droughts this year. The figures which were quoted here by the hon. member relate to the last three years, and during that time we had some very fine seasons. It has been suggested here that the fact that the maize farmers have been getting bumper crops proves that the farmer is doing well. But what are the facts in relation to some of these bumper crops? Owing to very heavy mechanization and the heavy application of artificial manure, it is true that very large crops have been produced in maize and one or two other products, but what happens to that surplus? Because with a bumper crop like that you are only creating a further surplus and that surplus has to be exported at a loss on a subsidized basis. Sir, if we produce grain crops to that extent, are we not mining our soil through heavy mechanization and the heavy application of fertilizers? Are we not selling the fertility of our top soil overseas so that the producers of other products in Europe and elsewhere can utilize that grain and the fertility of the soil of South Africa to their advantage and not to ours? It would be to the advantage of South Africa as a whole, but particularly to the farmer, if some plan could be evolved, so that more and more of our so-called surpluses could be absorbed in this country, particularly on the animal husbandry side of farming in South Africa. We would then be retaining our soil fertility and build up the fertility of our soil. In spite of this heavy mechanization for the production of crops for sale overseas, the maize farmer is not making a lot of money as an individual farmer, although we have had these bumper crops this year and last year. A few big organizations may be doing so but that is because they are producing on such a huge scale. The ordinary farmer with 400 or 500 morgen is not making much profit. I am not talking about his gross earnings. He is not making much profit out of maize at to-day’s prices. I say that because I have been told by some quite big producers in the maize triangle that when they have met their very high costs of production, which is going up every year, there is not much profit left for them, except where they can utilize that maize themselves in some other line of farming. I think it is a pity that we should go on mining our soil to export grain. That is certainly not to the best advantage of the country. I know it sounds nice to quote globular figures, but what does it means in terms of profit to the individual farmer, so that he can raise a family and build up some reserves, and what does it mean to South Africa in the end? We must not forget the dust bowls of America when they exported wheat in huge quantities. Are we not perhaps going that way? I would remind the Minister that our rivers are still running red with our top soil in every rainy season. Where is the planning that is doing so much good for agriculture when this goes on month by month and year by year? There seems to be no end to that soil erosion. When you go to certain parts of the maize triangle in the early spring, when the high winds are on and in winter, you see evidence of wind erosion that really is quite frightening. Sir, I am trying to deal with the subject objectively, and I say that we are not going far enough with our planning to see that this is prevented. You can spend huge sums of money on other projects and put money aside for soil conservation, but we do not seem to be able to attract enough of our own people, who after all are South Africans who need a job, into the soil conservation scheme as officials, or train enough engineers to carry out the work. The Minister may come back—and of course this comes under the Minister’s colleague who deals with soil conservation—but until we can get sufficient people to put into practice soil conservation on a huge scale, we will not go ahead agriculturally in this country as we should. I appeal to him to see to it that the conditions are made suitable so that we can attract enough young South Africans who will be trained and then will stay in South Africa and not go to the northern territories as soon as they are trained in this country because our conditions of service and our salaries are not good enough to keep them in this country. That is a very important factor in developing the soil conservation side.

The Minister and his Department must help to bring down the cost of production of primary products. Two things can be done. Today the farmer is not getting an economic price and so he is mining the soil on the one hand and many people are leaving the land and drift back to the towns, many are getting into debt and pledge all their assets to the Land Bank or other financial institutions. But the price of the product when it reaches the consumer is in many instances very high indeed, and you are not going to extend your consumption if prices are uneconomic to the consumers. So you must assist the farmer, the primary producer, to bring down the cost of production so that the prices to the consumers are reasonable, or alternately, where it is not feasible, or not easy, the state must face the subsidization of the consumer. But what does this Government do? This is the gravamen of my charge in regard to dairy products and the uneconomic position of the dairy industry in South Africa to-day that the Government instead of promoting consumption, is actually doing the opposite. This Government has done away with all the school-feeding schemes. They have stopped subsidizing the consumption of protective foods, particularly dairy products. That has brought down consumption, because most of the people who received those subsidized meals or other food were people who needed that and could not afford to buy those protective foods. I think it is not only a shame, but a great pity that this Government has stopped school-feeding and stopped subsidizing food for the children of this country, because the children of this country who need those protective foods in many instances …

Mr. SPEAKER:

Order! The hon. member must not go too far into that. He should come back to the motion under discussion.

Capt. HENWOOD:

With all due respect, Mr. Speaker, I am only mentioning that in passing. This is one of the factors that keeps down the consumption of dairy products, and we have a surplus of dairy products. Here was one place where we could get rid of our surpluses to the benefit of the nation and to the benefit of the farmers. However, I will not go any further into the feeding schemes. But what are we doing? During the last few years we have exported dairy products, the finest protective food available to the youth and for the health and growth of the children of South Africa—the real wealth of the nation—and the farmer has had to subsidize the export of several of these products, as for instance, the cheese that we had to subsidize and sell lower in Italy than the price was here.

Mr. VOSLOO:

Should it have been dumped on the market here?

Capt. HENWOOD:

Why did you not create a market here? We had these schemes under which cheese was utilized in huge quantities, but the Government has stopped that and is now exporting these protective foods. What did the Government do last year and the year before? Through that export at a loss, we in South Africa produced less and less over the last few years, less cheese and certain other dairy products. I gave the figures during the last session when we were discussing the Minister’s Vote. What was his reply? The only answer he gave me was: When we had to import butter and cheese, we had to do so to keep up our contracts with Rhodesia and the territories north of us. Mr. Speaker, earlier in this season we had exported these products. Why was there no proper planning to carry over sufficient to fulfil our contracts so that the producer in this country could get the full price for his produce instead of exporting them to the European market at a loss? I admit that we want to keep those markets. We have always had those markets. But why should we export at a loss to the European markets and then import from New Zealand and Australia to fulfil contracts which we knew we had to fulfil in Rhodesia and elsewhere? That shows a lack of planning, a lack of policy. The present Minister has not been in office long, and I know that he has inherited many of these problems and troubles from the previous Minister, but surely this is Cabinet policy and the hon. Minister has not done anything to improve the position. We complained last year. But what did the hon. Minister say to the Natal Agricultural Union at its conference in 1960? I was there as a delegate. The dairy industry put forward facts and figures to show their cost of production. The Minister said: “We cannot take all these costs when finalizing the ceiling price for dairy products.” What the Minister said was that while there is plenty of industrial milk and plenty of fluid milk, I can’t see my way clear to give you an increased price. In other words, the cost of production did not mean a thing. If for that temporary period there was a surplus of milk, the farmer must be kept down and get lower prices so that he will produce less. As much as saying to the farmer, the Minister suggested that production should be curtailed. That was also the conclusion the Natal Agricultural Union came to. On the other hand, in his opening speech, the hon. Minister referred to price fixation, because there were complaints from all parts of the province that there would be a ceiling price but no guaranteed floor price. What was the Marketing Act brought into being for? It was to protect the farmer and see he got a reasonable price, but it is now being utilized entirely for ceiling prices and keeping down the price of the producer.

The MINISTER OF AGRICULTURAL ECONOMICS AND MARKETING:

Are you referring to fresh milk?

Capt. HENWOOD:

Both, fresh milk and industrial milk. When the industrial milk people put up their plea for an increased price through the Natal Agricultural Union and the fluid milk people then stated their position, you said you had to keep them correlated, and as long as there was sufficient milk on the market …

The MINISTER OF AGRICULTURAL ECONOMICS AND MARKETING:

There is a fixed price for industrial milk and cheese milk.

Capt. HENWOOD:

I know there is a fixed price, but it is too low. For your fresh milk, you have only got a ceiling price. You keep down the ceiling price of your fresh milk so that you can fix your industrial milk at a lower figure. And the cost as put up by the producer has never yet been proved to be incorrect by the Minister in public debate. A few years ago, in the time of the then Minister, Stephen Le Roux, when we had Professor Tomlinson investigating the cost for the whole of the dairy industry, both fresh milk and industrial, he put in an interim report, and that report, which was never published for us to see, although some of us know it actually produced figures which proved that we were right, Professor Tomlinson was taken off the job, he was put onto another and the report was never completed. Why? Why does this Government not have a full investigation and treat the dairy industry on the same lines as any other industry? In other words, those who are employed in the dairy industry, or agriculture as a whole, where they can prove their costs, and where the Government can put a cost accountant on the job to get the exact cost, why are not they allowed their cost of production plus a reasonable return on their money? The price to the consumer can be adjusted through lowering the cost of production, or alternatively by subsidizing the consumer. The producer is entitled to a reasonable profit to enable him to raise his family, to live decently and pay his way as is anybody in any other industry. But the agricultural industry is the only industry in South Africa that is treated by this Government in such a way that cost of production is not taken into account. The hon. the Minister has on another occasion said in regard to cost of production: Well, if you produce more, you will bring down your cost of production.

The MINISTER OF AGRICULTURAL ECONOMICS AND MARKETING:

I did not say that.

Capt. HENWOOD:

Produce more per acre, produce more per cow and you bring down your cost of production. But the moment you do that, you have got a greater surplus, and to-day this Government is not utilizing the surpluses in the best manner. So the larger the surplus, the less you get for it and instead of making a more reasonable living, you actually are worse off. Others will deal with the citrus industry, but I think I have said enough to prove that this Government has not planned sufficiently, especially on the marketing side, and can also be accused of not making the best use of surpluses. Because these surpluses. except in the instance of maize and one or two others, really are there as a result of under-consumption, they are not true surpluses.

I do hope that the hon. Minister is not going to interfere with the sugar industry in any way. Up to now, the sugar industry has controlled its own destinies, it has organized and run the sugar industry efficiently and well to the benefit of everybody.

The MINISTER OF AGRICULTURAL ECONOMICS AND MARKETING:

With a closed shop.

Capt. HENWOOD:

We do not want the sugar industry interfered with in any way.

The MINISTER OF AGRICULTURAL ECONOMICS AND MARKETING:

You want to keep the closed shop?

Capt. HENWOOD:

Yes, you see, Mr. Speaker, you have got an industry that is paying its way, that has organized itself well. Why do you want to introduce areas that are not economic for sugar production, with the result that the price will be brought down for everybody?

The MINISTER OF AGRICULTURAL ECONOMICS AND MARKETING:

Of course you don’t worry about the small man, do you?

Capt. HENWOOD:

No, don’t say that. You are bringing in people on uneconomic land to produce sugar and that will make the position difficult for the industry as a whole. I say: Do not let politics come into it in any way. Don’t interfere. I plead with the Minister to leave this side of agriculture that is paying its way to the benefit of everybody in that industry alone, don’t ruin it, whatever you do.

*Mr. KEYTER:

Listening carefully to the hon. members opposite we find that in one breath they say that the producer should get a higher price and in the next breath they ask that the consumers must be enabled to buy the product cheaply. And then they say that in order to get some play between what the producer receives and what the consumer pays the Government should pay a subsidy. It appears to me that some of the hon. members have been presenting a case here which they have never yet studied and worked out. The hon. member for Pietermaritzburg (District) (Capt. Henwood) said that because the maize farmer is not getting a reasonable price for his maize he is finding it very hard, and that certain farmers came to him and told him that really only big combines are able to farm but that farmers with 500 to 1,500 morgen are unable to make a living in the grain areas. The hon. member must go to the neighbourhood of Lichtenburg to have a look at farmers farming on 300 and 400 morgen of land. Then he will sing a different song. In Lichtenburg he will find that at the time the Opposition was in power the price of land there was between £8 and £10 per morgen but now it is between £80 and £100 per morgen. That shows that things are not as bad with the maize farmers as the hon. member pretended.

The hon. member for Gardens (Mr. Connan) moved this motion. We do not know whose case he is advocating, whether he is pleading the case of the consumer in the cities or whether he is pleading the case of the farmers. To me it seems that if you farm in the north-west and at the same time you represent Cape Town Gardens in Parliament you get a bit mixed up. The hon. member talks of the cheap export maize which the Government must allow to go to the stock farmers. Has the hon. member ever ascertained what the price of export maize is and what the farmer will have to pay if he wants to buy that maize at the same price? I know there are many of our stock farmers who come along with this story. I have heard it before but I want to put what the position quite clearly is in order that an end may be put to this misconception. There is a basic price for yellow maize of 30s. 3d.; if you want to buy in bulk you can buy yellow maize at 30s. 3d. f.o.r. the agent’s station. And in order to give it to the consumer at 30s. 3d. the Government went so far as to subsidize the consumer to the extent of 4s. per bag. Had the Government not subsidized the consumer the latter would have had to pay 34s. 3d. per bag f.o.r. Then he would also have to pay the railage which to the Eastern Cape or to the Boland would amount to 2s., 2s. 6d. or 2s. 9d. That means that the consumer in the Cape would have to pay about 37s. if he buys in bulk. It he buys by the bag it would be even more expensive. But the Government is subsidizing the consumer to the extent of 4s. per bag in regard to yellow maize and then the consumer also gets a 37½ per cent subsidy on the railage. In other words, the railage is 37½ per cent less than it should really be. The Government therefore subsidizes the consumer to a great extent.

Let us now come to the so-called cheap export maize. On this export maize the Government does not pay a penny in subsidies and the railage on export maize is fully paid; there is no rebate on it. So when the Mealie Control Board exports maize at a loss it means that it would have to pay the basic price of 30s. 3d., it must pay 3s. 6d. to 4s. in railage and that 3s. 6d. subsidy or 4s. subsidy which the Government pays on white and yellow maize respectively to the consumer the Mealie Control Board does not get on export maize. That means that the Mealie Control Board must at least get 38s. per bag in order not to export at a loss. In other words, if the Mealie Control Board now sells maize at 36s. 6d., 36s. 9d. or 37s.—in the past week the price was round about 36s. 6d. and you know that the oversea market changes from day to day—then the Mealie Control Board still suffered a loss at 36s. 6d. In other words, people who say that they must get cheap maize will have to pay 36s. 6d. if they want it in De Aar or Queenstown or wherever they want it, but then they have to buy 5,000 bags of maize at a time because we sell 100,000 bags at a time at that price. They must not want to buy one bag and expect to get it at that price. The people buy maize from their dealers. The dealer perhaps bought it from a wholesaler. The wholesaler bought it at 30s. 3d. The wholesaler makes a profit and the retailer who buys from him also wants to make a profit and the railage is added and then it works out at 35s. or 36s. a bag and then they say “it is far too expensive”. Our stock farmers must not think that when I succeed in getting cheaper maize for my pig farm I will be able to make a bigger profit. We must all work together in this country and the one cannot expect to live on the other. Now the trouble is that maize which forms the staple food of many of our industries is always the product hammered at. Everybody wants that product at a lower price because it is the basic food of the country and they think if they are able to procure it at a lower price they will be able to make a slightly bigger profit. We must live and let live.

It is said that the farmers are worse off to-day than they were before. I want to remind hon. members opposite that in 1948 the profit allowed to the farmer on his average production of maize was about 4s. 8d. per bag and at that time his production was only about seven bags per morgen. When we multiply that then we find what the farmer’s profit per morgen was. For the past five or six years now the farmer’s entrepreneur’s wage was 9s. 2d. per bag. It did not decrease and the production per morgen increased from seven bags to nearly 11 bags per morgen. Multiply 11 by 9s. 2d. and then you find what remuneration your farmer gets on his enterprise. You see, Sir, our friends opposite must not drag this debate into politics. The control boards meet the South African Agricultural Union, in most cases of which I know, every year before prices are fixed and every year production costs are discussed with them and each item is examined. They are told: Look, this is the finding; have you any comments to make or can you prove that our figures are wrong? If you can prove to the Board that it is wrong the Board will be prepared to add to the figure. But then you must come and prove to us that it is so. Then all the increases shown by the index figures are taken into consideration and the production cost is calculated on them and to that production costs remuneration for enterprise is added. That is why I am unable to see how the farmer can be worse off to-day than he was before. If hon. members came and said that there are farmers, that there is a farmer here and there who is finding it hard we could understand it. But it cannot be said that it is the price of maize or the price of milk which is causing this. I know the circumstances. There may be a hailstorm which destroys the mealies of a number of farmers and even if the price of maize was fixed at £3 per bag then those farmers would still not have any maize to sell and the increase in price would be of no avail. Then you help him from the frying pan into the fire because he himself will perhaps have to buy maize in order to continue farming.

There is also so much glib talk about fodder banks. We know that for years and years this matter has been discussed at conferences and organizations have been started to see what could possibly be done to provide such fodder banks. But it had always been found that it is a very difficult problem to create fodder banks. You do not know how long the stuff will have to lie idle. There is talk of fodder banks on maize farms and that special provision must be made for this. It is true that certain facilities are given to stock areas and even in the Eastern Cape in order to enable them to store maize and only pay for it in two or three months’ time, in order to make it available to them when they need it. But after two or three months they must take it over. They cannot expect the maize farmers to subsidize the stock farmers by providing them with cheap maize. The Government subsidizes maize for the consumer and it is unreasonable to expect the maize farmers in addition to subsidize the other farmers. This is not a question where one section of the population must subsidize another section. When it comes to subsidies it is a question for the Government and in this case the Government already subsidizes the consumers of maize to the extent of about £4,000,000 per year.

I also want to say that hon. members opposite asked for cheaper maize and then they say that the maize exported at cheap prices should be made available to local consumers at low prices. Those hon. members should realize that they will have to pay more for export maize than they have to pay now for maize made available out of the stocks available in the country. They say that maize which is exported should be made available to the stock farmers and then they create the impression that the result of this would be that only a small surplus would have to be exported. If the normal consumption of maize is 25,000,000 bags per year then the consumption could easily be 24,500,000 in one year and 26,500,000 the next year, depending on how the crop was distributed and on droughts, etc. But whether 500,000 more is consumed, it is only a small part of the normal carry-over of 7,000,000 bags which the Mealie Control Board carries over for the consumers of the country. The little maize they will buy will only be a drop in the ocean of the quantity which has to be exported. If we have ten bags of mealies to sell and we have buyers for only six bags then four bags remain over to be exported. But say we take the four bags and we sell them to people who normally buy the six bags, in other words if we sell the surplus to those people who usually buy the normal crop, then the surplus in this case would still remain four bags which would eventually have to be exported. You cannot get past this economic law—do whatever you like.

The hon. member for King William’s Town (Mr. Warren) complained about the bad quality of maize they get. The hon. member knows as well as I do what the procedure is when maize is delivered to him which is not of the correct grade or weight. He is entitled to send it back, and he is not compelled to accept it if the grade is not right. He is entitled to send it back and it will not cost him a penny. In addition, the agent who sent him that maize which was not of the correct grade will be fined because he sent such maize.

Mr. Speaker, this sort of argument which the hon. gentlemen advanced here should not be advanced in this House. They only want it in order to make political capital out of it. Langa was this morning dragged into the debate and so was Russia and this afternoon the feeding scheme was also dragged in. Because there is a difference of opinion between the Opposition and the Government on those matters they must not be dragged in here because they mean a disadvantage to the farmer. Let us keep this a farmers’ debate. Let us discuss the farmers’ interests here. Let us not only discuss matters which could give us political advantages. When we see how one member opposite pleads for an increase in the price to the producer and then you see another one rise and that in some instances even the same speaker pleads for lower prices for the consumer then we see how one pleads for the consumer in the cities and the other pleads for the farmer on the platteland. It is a pity that hon. members dragged these things in here where the farmers’ interests should be the main point of concern. We will not make any progress if we drag in politics in this way.

Mr. BOWKER:

Mr. Speaker, in spite of what the hon. member for Ladybrand (Mr. Keyter) has said about the export of maize, and in spite of his saying that he adheres to their policy for the exporting of maize at a loss, the public understands that the maize crop this year will amount to something like 50,000,000 bags. Of those, 8,000,000 bags will have to be exported, being a surplus that cannot be retained for use in this country, and this maize will be exported at a loss of 5s. a bag. Now all that we on this side of the House are asking is this: cannot that maize rather be made available for the production of food for stock at a reduced price? Let our farmers in this country be enabled to make their products pay at the present level. We cannot get away from the fact that the prices of our agricultural products are the lowest in the world. I have before me the publication Organized Agriculture of November 1959 and I read in that—

Cheaper to Live in South Africa. Using six items for comparison, the Financial Times of London recently published an interesting table showing the cost of living in 26 of the world’s major cities. Cape Town showed up well with almost the lowest cost of living on balance. Cigarettes were cheaper in Rio de Janeiro and Tokyo but rents almost double. Only one city, Vienna, could show a lower cost for a food basket containing one pound of butter, two pounds of bread, five pounds potatoes, one pound fillet steak and a bottle of vin ordlinaire.

I think the case we want to put up here to the Government, is one to enable the farmer to maintain a low cost of production in this country. In spite of the two motions we have had of “dank die Minister” here this Session, there is much evidence that proves that there is something fundamentally wrong with the agricultural industry. The agricultural industry is passing through very dark days. The hon. the Minister knows this. He has had to provide facilities for farmers for chattel mortgages, to borrow on their implements. The Land Bank cannot cope with the applications it receives for increased loans, and the Minister has made provision for moratorium facilities to be granted to numerous farmers. We say that much of this is a result of the lack of economic planning in this country, and that is why this motion has been brought before the House by the hon. member for Gardens (Mr. Connan). There is a marked lack of economic planning in this country in our agriculture. and this industry seems to have developed on a hit or miss basis. Food and raw materials have been produced to meet the expanding demands of the country at a cost that imperils the whole structure of our soil and our economy in this country as far as farming is concerned. And that is because we have no planned agriculture. The hon. the Minister issues a weekly news bulletin on agriculture. The Secretary for Agriculture produces an annual report. But we can hardly regard these as anything more than progress reports. We know that in times gone by we did have the necessary planning. I have here a White Paper on the agricultural policy of the Government issued by General Smuts in 1946, that is W/P. 10/46. I also have the Social and Economic Planning Council Report No. 4 dated 31 August 1944 which is packed with material on which to build and plan for agriculture and which enabled farmers to know what was actually planned for the industry. I have here a report on agriculture in Great Britain, which is also packed with information and which is available to the public and the agricultural community. And from this I read that a small country like Great Britain has a greater cattle population than that of the Union and, they are all cattle of a show standard whereas the great majority of the Union’s cattle are actually scrub.

Mr. Speaker, I will try to curtail my remarks because I want to enable the hon. the Minister to reply. If this debate is curtailed and if the Minister is not given time to reply we will be very much the poorer to-day.

I was referring to the British farmers. Under their limited conditions and restricted areas of agriculture these farmers actually produce more than half the food requirements of the 56,000,000 people in Great Britain. To give an instance of how their agricultural production has been developed, on page 5 of this report on agriculture in Great Britain it says that 99 per cent of the condensed milk requirements are produced by the farmers; 56 per cent dried milk; 99 per cent shell eggs; 100 per cent milk for human consumption, and potatoes for human consumption 95 per cent. And as we all know, they export seed potatoes to practically all the countries in the world. In my curtailed contribution to this debate, I would like to commend our Minister to pay greater regard to what is happening in other countries.

Sir, even in Kenya a farmer is guaranteed payment for the crops he sows, if they are not reaped, provided he adheres to the Government’s agricultural policy. In America farmers are paid for the products even if their lands lie fallow, if the system is approved by the government. And the previous Government did plan and issue statements on agricultural policy which are available to this Government but which, as I have pointed out, they have not taken advantage of.

I did want to discuss several other matters of interest but my time is limited. I did want to refer to the Government’s lack of interest in the mechanization of farming, and point out how our small farmers in this country are not being encouraged to undertake a co-operative system as regards mechanization. The indiscreet mechanization of farming is responsible for a great deal of the trouble which we experience in this country, but I have not the time to go into that any further. I also have much literature here, but perhaps I will have an opportunity, at some later date, to place it before the House for the Minister’s consideration.

*The MINISTER OF AGRICULTURAL ECONOMICS AND MARKETING:

Mr. Speaker, the motion which the hon. member for Gardens (Mr. Connan) has placed on the Order Paper reads as follows:

That this House expresses its disappointment at the lack of proper economic planning by the Government in the interests of South African agriculture.

When I read this motion I thought that we could anticipate a most fruitful discussion on the really important principles which apply to economic planning in agriculture. To my disappointment I must say that most hon. members opposite have made speeches which could just as well have been made on the Agriculture Vote, without any necessity for a motion being introduced here. I have sat here all morning and waited for one concrete indication of how hon. members opposite view economic planning in the agricultural industry. But I have heard about product prices which are not high enough; I have heard about mealies which are being exported and which are being sold at a loss or at lower prices overseas; I have heard that the entrepreneur’s wage of the farmers is not high enough and so on, but very little has been said about the actual economic planning of our agricultural industry.

Mr. Speaker, if I must analyse what our attitude towards economic planning in agriculture is and what the requirements are, I should put it in this way: Economic planning includes in the first instance the co-ordination of related branches of the agricultural industry; the planning of a farming organization with a view to, for example, production requirements and financing; and the determination of economic levels of fertilization, feeding, cultivation, capital investment, marketing and the provision of credit to our agricultural industry. As I see the position, those are the basic principles which we can lay down for ourselves if we want to have economic planning in agriculture.

In the first instance it is pointless talking about economic planning, price determination and inadequate price levels if at the first stage of production the farmer is following uneconomic practices. For that reason the first requirement if we want economic planning in agriculture, is that we must start by providing the farmer himself on his farm with economic guidance. Since the passing of the Marketing Act in 1946 we have introduced planning in various spheres. There is planning under the soil conservation programme. Hon. members have tried to contend that very little success has been achieved. During one year the Government has paid £4,500,000 in subsidies for soil conservation works alone! But in addition farm plans have been submitted and approved in which methods of farming are prescribed for those farmers who are trying to rehabilitate themselves under the provisions of the Soil Conservation Act, and who are planning their farms under that Act. It has been found that our farmers are engaged in many various activities on their farms and that there are many branches of the agricultural industry regarding which our farmers themselves do not always know whether they may be uneconomic. The farmer is not always aware of the fact that his labour is being used uneconomically. He is not always aware of the fact, as we have for example found through investigation, that farmers are producing lucerne on their farms which they cut and dry themselves while an analysis of the costs involved shows that this lucerne costs him £22 per ton, on the basis of his own figures, while he can have lucerne delivered on his farm at £8 and £9 per ton if he buys it elsewhere. The farmer is not aware of this fact and no one blames him. But when this practice is brought to the notice of the farmer, he realizes that he is spending money on something which he can really buy at a lower price elsewhere. I am merely mentioning that.

There are other aspects to the planning of farming activities on the farm itself. I refer to capital investment, particularly to the investment of capital, especially in the grain areas, in machinery, tractors and other implements; to what extent must a farmer invest capital in proportion to the scope of his productive activities to place his farming activities on an economic basis. These are all matters which should be investigated. That is planning. There are other matters. We take for example the dairy industry. People keep cows and they send their milk to a factory. It is said that the farmer cannot live on the price he is paid. But when one investigates the position, one finds in many cases that the farmers are sending milk to the cheese factory. Their rate of production is 1,700 lb. of milk per cow per annum. We have to point out to the farmer that a cow which provides 1,700 lb. of milk per annum is a goat. We have to tell him how to plan and to point out to him that he is farming in a way which must inevitably involve him in losses. He cannot continue on that basis. I am merely mentioning these matters to show that when one is considering the planning of agriculture, one must in the first instance direct one’s attention to the primary producer, to the farmer who is following these practices, and we must be able to give him guidance in connection with the various branches of his farming activities which are on an uneconomic basis and which are uneconomic not merely because the price the farmer receives is not remunerative, but because the methods he is using are in fact making the prices uneconomic in his case. That is why in 1958 the Department of Agricultural Economics immediately initiated an information system or in the first place an investigation system, because we must in the first place investigate the position if we are to understand the various problems. We have therefore started economic investigations in various regions. As a result of a staff shortage we could not start everywhere at the same time. We have started in various regions and in co-operation with the farmers concerned we have devised a bookkeeping or record system, which they maintain in collaboration with the Department. By these means we are investigating these problems in co-operation with the farmers. By these means we have already made a great deal of progress towards ascertaining what the problems are. We must first determine what the problems are before we can take steps to combat problems. I am merely mentioning this to show that the Department of Agriculture, despite the statement of hon. members that nothing is being done as regards economic planning, is in fact engaged on planning and that progress has already been made in various regions. We intend extending this planning as rapidly as we can and as rapidly as we can recruit the necessary trained staff. But in those instances where we have already carried out these economic investigations, in co-operation with the farmers, we have already in many instances established what the basic problem is. There is another problem inherent in our economic planning as a whole. In regions where grain farming and stock farming are both practised, the cry is often raised that we must introduce the animal factor into our farming. It is essential that we should have the animal factor which can provide the necessary stability. But, Mr. Speaker, in economic planning it is necessary and very important that the stock and grain branches should be in proportion to one another. There must be the correct balance between them. It is pointless a farmer saying that he is not making a profit on his mealies and therefore he must now change over to milch cows. He changes over completely and the balance is once again incorrect because he is not producing fodder for his cows. The balance between these various farming activities must also be correct. In the first instance research is required. We must first establish what the problems are. That is what we are doing at the moment and we have already made reasonable progress. It is our intention through the medium of our extension officers to provide this economic guidance to the farmers. I am merely mentioning this because this is what I consider to be economic planning in agriculture. But simply to criticize in this House and to say that the prices our farmers are receiving are too low, that many of them are in difficulties and cannot make an economic livelihood; and that the Government has had to provide financial aid to the agricultural industry from time to time—to make this type of statement without analysing the basic causes and merely trying to attribute them to incorrect prices, is not planning. Hon. members have argued that in certain branches of farming there are farmers who cannot make a living, but on the other hand we find farmers cultivating the same products and becoming rich. The one mealie farmer can pay £90 and £100 per morgen for mealie land and still make a profit. Another mealie farmer cannot make a living. He gets into difficulties and he must obtain Government assistance. To say that the only method of planning is to raise the price of mealies is not planning. If we should increase the price of mealies, we would enrich the farmer who has paid £100 per morgen, and the one who is in difficulties will simply get into further difficulties.

A second aspect of economic planning in agriculture, and a very important aspect too, is of course the provision of credit to and the financing of our farmers. To say that the Government has failed in its duty as regards the provision of credit to and the financing of our farmers—well, Mr. Speaker, I cannot understand where hon. members come by the right to make such a categorical statement. In recent years this Government has spent millions of pounds on stabilizing the agricultural industry and on meeting its credit requirements. Over the years the provision of this credit has been organized. We have our co-operative societies who provide credit and who help those farmers who are in a sufficiently strong position. We have the normal commercial institutions which provide credit to the farmers. But then of course we have those cases to which hon. members have referred where there are special circumstances which have been caused by various reasons. If we want to plan, do not let us merely seek the reason for these difficulties in one direction, namely the prices. There can be many other reasons why farmers get into financial difficulties. It is not merely due to the prices. One very important reason, is the droughts such as we have experienced in recent years. Prices can also be a reason, but there are others too, such as inefficient farming methods. The excessive provision of credit can also be a very important reason. This can also be a very important reason why some of our farmers have got into difficulties. When we discuss planning, Mr. Speaker, we must not only seek the reason in one of those directions but we must investigate the various circumstances which may be be causing the difficulties of the agricultural industry. We must go to the root of the various reasons. If the excessive provision of credit is the reason, then we must remove that difficulty. If it is too little credit, then we must remedy the position. If we want to plan, we cannot solve the whole problem by saying that we should simply increase the prices and then everything will come right.

Then I want to mention a third and important aspect, namely marketing, which is an important factor in planning. If the accusation is that the Government is not devoting its attention to the economic planning of our agricultural industry, then the person who makes such an accusation is a stranger in Jerusalem. Under the Marketing Act alone we have 17 different schemes aimed at establishing stability in the agricultural industry. We have one or two schemes under our Co-operative Societies Act. We have special Acts relating to agriculture, such as the Wine Act and others. These are all aimed at ensuring the improved marketing of our products. That constitutes the economic planning aspect of marketing in our agricultural industry. Then hon. members say that we are not planning and that the Government has neglected its duty as regards economic planning. The Department is now engaged on three or four schemes which farmers wish to establish under the Marketing Act in order to market their products. The day before yesterday we passed legislation which dealt with municipal markets and which will enable us to exercise control along such lines that there will not be any abuses. Then hon. members say that there is a lack of planning. We have the various marketing boards. From time to time, with the approval of the Minister, they have sent missions abroad to study market conditions so that eggs, milk, cheese, citrus, deciduous fruits and grapes can be marketed. The Department has also decided to appoint a special agricultural attaché in London for that purpose. Then certain hon. members say that if other hon. members thank the Government for the little it has done, they do not know what they are talking about because the Government has done absolutely nothing. No, when hon. members criticize the Government and their motion deals with economic planning in agriculture, and they have so little criticism of the planning itself that they are forced merely to discuss the few bad mealies which the Mealie Board happened to deliver to a farmer via an agent, or they have to discuss the little bit of fruit which has arrived rotten on the market or which did not get a good price as a result of a boycott, and they claim that therefore there is no economic planning, then their case is very weak.

*Mr. J. A. L. BASSON:

May I ask a question? I just want to ask whether the Minister will take this opportunity to tell us what his price planning policy is.

*The MINISTER OF AGRICULTURAL ECONOMICS AND MARKETING:

The hon. member has discussed surpluses but the whole basis of controlled marketing is the disposal of surpluses to the best possible advantage and the hon. member does not know it. Take the wine industry. The K.W.V. is the controlling body. The whole object in establishing that organization was that it should dispose of the surpluses which cannot be sold in South Africa. If the K.W.V. had not been established, we would have had the chaos which existed in the days before the K.W.V. came onto the scene. The mealie scheme under the Marketing Act has been introduced to deal with surpluses. If we had not had a surplus we could simply have fixed a floor price and anyone could have bought at that floor price, but when we have a surplus and we must export it at a loss, there must be planning and the Marketing Act provides that planning. Does the hon. member not know that? If that is not planned marketing, then hon. members just do not know what they want.

The hon. member has referred to the sugar position and has urged that it should be left unchanged. Why is the sugar position as it is to-day? It is because there has been planning so that their surpluses do not exceed what they can sell abroad. What is that if it is not planning? I want to give an example. The hon. member has referred to butter and has said that there was a time last year when we did not have sufficient butter for domestic consumption and we then had to import. But there come times, particularly in a country like South Africa, when we have periodic droughts and seeing that the butter producers especially are located in the drought-stricken areas, butter production does vary. But I now want to ask the hon. member this. If the sale of our butter had not been planned and this shortage of 2,000,000 lb. had arisen, butter prices would have risen sharply during those few weeks and in the following month, when there was a surplus of 4,000,000 lb. they would have fallen just as sharply again. That is obvious. But the hon. member says that the Dairy Board was wrong in retaining its regular markets—because they normally have surpluses and shortages only occur occasionally—by importing butter from another country. We should not have imported that butter at a loss. No, we should have lost that market just because we had a shortage for 14 days. We should not have imported butter, and we should have allowed our overseas competitors to capture this regular market of ours, and when we bad a surplus again the other countries would have had our market and we would not have had a market. That is their argument. If we are to believe that hon. member, there is no planning, but it is precisely because we have planning that we acted in this way. The hon. member has discussed milk and he has contended that I said in Natal …

Mr. LAWRENCE:

What do you know about butter, except that you have fallen in it?

*The MINISTER OF AGRICULTURAL ECONOMICS AND MARKETING:

The hon. member says that I said that the people should produce more because they would then be producing more economically. I never said that. It may very well be that the more one produces the less economically one is producing. I said that they should produce more efficiently; then they could produce more economically. Can the hon. member rise here and honestly say that our farmers are all producing on an efficient basis? He will surely not claim that No, when we discuss planning including the planning of marketing and of economic guidance, I say that this Government has done more than any previous Government.

Then the hon. member discussed the provision of credit to our farmers. The hon. member for Ventersdorp (Mr. Greyling) has also referred to this aspect. Farming to-day is an expensive undertaking, and has to compete with all our other industries for its labour and capital. Agriculture is also a more risky industry than any other, and because to-day it requires far more capital than in the past, the agricultural industry finds itself in the unfortunate position that it does not compare favourably with other industries as far as obtaining capital is concerned. We all admit that. The Government realized this and because a stage was reached where droughts and other conditions had forced the farmers into a position where they were under economic pressure and in many cases could not obtain the necessary credit to continue farming, the Government last year introduced these schemes to help the farmers. After all, we all knew that agricultural industries do not find it as easy to obtain capital as other industries. On the one hand the hon. member says that the Government must ensure that the farmers obtain credit, but on the other hand as soon as we give the farmers credit he says this is proof that the Government’s policy has resulted in the farmers receiving such unsatisfactory prices that they are now in difficulties and the Government is obliged to provide them with credit. This is the type of argument we hear in this House. A few years ago we had a debate in this House which dealt with this very question of the provision of credit. It is clear to everyone that whereas a farmer could start out with a few thousand pounds in capital 20 years ago, it costs £20,000 to £30,000 to start a farm to-day. We know that there are certain farmers to-day who are living on smaller farms, who are just starting out and who cannot be financed by the normal methods. The fact still remains that most of our farmers can still obtain all the credit they need from the normal institutions, and that is the yardstick which we must apply. If we were in the position to-day that 70 per cent of our farmers could not obtain credit through the normal channels, hon. members could say that the position of the agricultural industry was extremely critical, but I maintain that at least 90 per cent of our farmers can still obtain credit without approaching the Land Bank or the Farmers’ Assistance Board. We tested this last year. We had one of the most serious droughts in the north-west which had continued for four years. We have made fodder loans available to these people, and up to a little more than a month ago, despite all these years of drought, less than 6 per cent of those people had applied for fodder loans. These people were still able to obtain credit elsewhere. The great majority of our farmers can still obtain credit through the normal channels.

But then there are other groups who find it difficult to obtain credit through the normal channels, and the Land Bank facilities have been provided to help them. The Land Bank can assist most of them. I admit that a small percentage of our farmers who are beginners or people whose position has deteriorated under difficult circumstances or who are living on settlements cannot obtain credit through the normal channels, not even from the Land Bank. That is why we have appointed this study group to investigate the credit position to ascertain what measures can be devised to provide those people with credit. To-day there are various ways in which they can in fact obtain credit. It is also felt that this group of farmers whom the Land Bank cannot assist in the normal way, should be provided with a more consolidated type of credit, and this study group has already submitted its recommendations in this regard. The hon. member for Ventersdorp has made certain proposals to-day which correspond to a large extent with the recommendations of that commission. He has said that this is the new direction in which he is thinking, and I am glad that his new direction corresponds to such a large extent with the recommendations of the commission. The commission has completed its work and its recommendations are before the Cabinet. We are discussing the matter but unfortunately I cannot announce any decision at this stage. I just want to add that when the State provides credit to a particular group of farmers, we must not make the mistake of thinking that we should provide credit to every farmer in that group. There will be people who, because of their personal qualifications or their inability to farm, or because of other factors, simply will not qualify for that assistance. We must simply accept that there are certain people who will have to leave the agricultural industry just as there are people who have to leave any other industry. If we imagine that we can plan in such a way that we shall retain in the agricultural industry all the people who are in it at the moment, we are making a very big mistake. The credit which we will provide must be consolidated credit, and it will have to be controlled as well. It is pointless giving people credit if they really use their credit to their own disadvantage. If such a person is given credit, he must obtain it from one central organization alone and not from other credit organizations as well. Otherwise we shall not be achieving our object which is to rehabilitate those people. This type of farmer will have to be prepared to accept control and only to obtain credit from such an institution. Furthermore he will also have to undertake to farm under the guidance and instructions of the Department because otherwise we shall be wasting our money.

I just want to say a few words about something which has been discussed at great length this afternoon. The hon. member for Ventersdorp raised it, namely the surveys of the costs of production in the various branches of the agricultural industry. When we talk of production costs, I just want hon. members to appreciate that we are using a very relative term. Certain costs of production surveys can be very useful in determining prices, particularly in those instances where we have control, but in most instances, as far as price determinations are concerned, these surveys can only relate to areas of production which are suitable for the cultivation of certain products, and we cannot extend them to cover all South Africa. We have undertaken costs of production surveys in respect of a few products, such as wheat and mealies and to a lesser degree dairy products. In the case of these three products the costs of production are taken into account to a certain extent in determining prices. But before we determine the costs of production we say that only certain areas will be recognized as production areas in the case of the particular product. We only recognize certain areas as mealie areas and certain areas as wheat areas. In those areas the approximate costs of production are calculated. We cannot take the costs of production of all the producers in South Africa who are cultivating a certain product and then determine the price on that basis. I am convinced that there are many farmers in the Boland who can produce mealies, but if we were to take as a basis the farmer in the Boland with his land, his irrigation and his costs of production, where would we finish? I say it is a very relative term. There are various factors which play a tremendous role in the costs of production, and one of the most important is the price of land. If a survey of the cost of production of meat for example must be undertaken, should it be based on land costing £5 a morgen or £10 or £80 a morgen? Anyone knows that if one’s investment is £10 a morgen, one’s costs of production are only half those of the farmer whose land cost him £20 per morgen. But there is another factor as well, and that is the efficiency of the farmer himself. This also affects the costs of production. The one farmer can make a profit out of the same undertaking on which another is losing money, and that is very important. But there is yet another very important factor, namely one’s investment in machinery, i.e. whether or not one’s investment in machinery has been economic. The one farmer will reap 10,000 bags of mealies with three tractors, while another farmer will use six tractors to reap the same number of bags. As a result his costs of production are far higher than those of the other farmer.

Another very important factor is the utilization of labour. The one farmer will produce the same quantity of mealies with ten labourers as the other produces with five. But the most important factor remains the yield per unit. One farmer produces five bags per morgen and the other 15. The one dairy farmer produces one gallon per cow and another three gallons. And then we still talk about average costs of production. And after all these factors have played their role, one region of the country may experience a tremendous drought and another may have excellent rains, with the result that the one produces nothing and the other produces a fine crop. I now ask you, Sir, if we determine the costs of production and then pay an average price based on the costs of production, who would we subsidize by so doing? In the first place we shall be laying down a price which will make it a most attractive proposition for some people to buy land and then the price of land will immediately shoot up. The second result will be that whether the farmer is efficient or inefficient, he will remain in the industry and he will therefore be compensated for his inefficiency. Whether or not the farmer is building up the soil, and whether or not he is exhausting it, he will be compensated. Is that planning? I ask hon. members whether they think for one moment that we can determine a price for a product which will keep in the industry all the farmers who fall below the average? If we were to lay down a price which will cover all the costs of production incurred in producing any article, we would see the platteland being depopulated because then the big farmers who make the profits will buy up all the land. That is logical. [Interjections.] I say that if we fix prices at such a level that the most inefficient farmer can make a living then the most efficient farmer will become wealthy.

At 3.55 p.m. the business under consideration was interrupted by Mr. Speaker in accordance with Standing Order No. 41 (3) and the debate was adjourned until 17 February.

The House proceeded to the consideration of Orders of the Day.

FERTILITY OF ARABLE LAND

First Order read: Adjourned debate on motion on fertility of arable land, to be resumed.

[Debate on motion by Mr. Wentzel, upon which an amendment had been moved by Mr. J. A. L. Basson, adjourned on 3 February, resumed.]

*Mr. LABUSCHAGNE:

Mr. Speaker, when the debate was adjourned, I was pointing out, and I wish to repeat, that when we discuss a motion such as this in this House then we are dealing with a matter which is very important and which has been greatly neglected in South Africa in the past, that is to say, the fertility of our arable land. We appreciate that in the end our greatest source of welfare is the soil, and the growth of every country or nation is limited by its possibilities of producing food for the nation. In other words, the fertility of its soil, its potential to produce food is a restrictive factor in the future of any country. Since that is so one would think that every country and every nation would exert all its energies and do everything that is humanly possible right from the start to build upon that foundation of its existence, to improve it for the future and jealously to cherish it for the succeeding generations. But unfortunately we in South Africa—and I think initially many of the countries of the world did the same thing—have greatly neglected our soil. It is a fact that South Africa is unfortunately very poor in fertile soil, particularly agricultural land, but even our livestock areas are ravaged by drought and the land is very arid and poor. By the application of over-cropping—and when I talk of over-cropping I want to add this, that I feel that over-cropping in South Africa has been promoted to a very great extent by the fact that the share given the farmer has always been such that the farmer has had to resort to a system of over-cropping. So the prices allowed to him have been so low that he has been simply forced to practise over-cropping. He has made such a poor living out of farming that he has had to resort to over-cropping to keep body and soul together and to provide the necessaries of life. I said that here as long ago as 1936. I said then that if maize had to be sold at 5s. a bag, the farmer would be compelled to plunder the soil and to exhaust it, because once he had subtracted his production costs he had nothing left, and that is just what happened. For that reason I am glad that this motion has received so much attention this year. I want to thank the mover of the motion, but I want to express the hope that when we leave here we will not revert again to our old sins and continue on the road that has been the cause of so much poverty over the past 50 years; that we will not stand by supinely while the best parts of the country dry up, while our fountains dry up and the arable land is exhausted. When one crosses the Drakensberg range the land looks as though it has been ripped up. There are dongas wherever one looks. I want to express the hope that we will be able to awaken the nation to the realization that a great task awaits us and that the preservation and future of our arable and grazing lands places a very great duty on every good citizen of the country, whether he is a farmer or a city-dweller. That is why I enjoyed the speech so much that was made here by the hon. member for Parktown (Mr. Cope) recently. As a city-dweller he made a valuable contribution to the debate. It was most heartening.

*Mr. LAWRENCE:

He is greatly interested in the soil.

*Mr. LABUSCHAGNE:

Yes, he is very interested in the soil and he made a very good contribution. I am sure that there are thousands of others in the cities just like him who are equally interested in this matter and who will help us to solve this big problem. But if we want to do justice to this cause we will have to adopt an entirely new approach. We will have to cultivate a new vision in South Africa. As far as research is concerned we will have to think big. We may have a man studying forest encroachment and doing research; we may have a man conducting research into the desalting of salt water, but we will have to learn to emulate the Americans: If we want something we must go after it. You must fight for what you want and you must take it. We must say to ourselves: “This problem requires all the energies of the nation.” We must do what we would do if an enemy appeared on our frontiers and marched upon us. When we are threatened by an enemy we mobilize the energies of every man, woman and child to repel the enemy. But the greatest enemy of all we allow to invade our country and we take no positive action to keep him back. I say, “the greatest enemy of all” because one cannot drive him out again. Other enemies one can drive out by using cannons, but it is an almost impossible task to build up soil that has been impoverished and destroyed. We are capable of great things but we can never realize what it will cost to build up the soil again. May I refer here to what the Jewish people are doing to-day in Israel. They are doing the most wonderful constructive work. Is it not possible for us to light our lamp from their torch and to see whether we cannot do the same here? If we do that then we will be on the road to what I would like to see in South Africa, on the road to what we ought to do. We ought to awaken from our deep sleep. The soil of South Africa is being threatened seriously, and unless we wake up in time it will be too late. Let us go and see what the Jews are doing in Israel in turning the desert into a country for the future of their sons and daughters. There they are really trying to …

*An HON. MEMBER:

… create a paradise.

*Mr. LABUSCHAGNE:

Yes, I have been assured by well-informed persons who have been there that they are turning that desert into a beautiful country for their descendants. Mr. Speaker, let us wake up in South Africa. I am not saying these things to accuse anybody; we would then have to accuse everybody—nobody can be said to be blameless. I hope we will wake up and realize the situation in which we find ourselves. South Africa is fortunately in this position that it has gold and diamonds, that we can still afford research workers to tackle this problem. I want to express the opinion here that South Africa’s greatest need is research in this field. We require a great deal of research. We have heard here of all the fine work that is already being done here. I do not want to repeat it but nobody is more grateful than I for what men have done in South Africa to improve our position in the field of agriculture, and in saying that I have in mind a man such as the late Sir Arnold Teiler; I have in mind a man such as the late Dr. Anecke who opened up the eastern lowveld for occupation and changed it from a malariaridden area where no person lived to one of the most beautiful and most fertile parts of our country. We think of many other men who have performed great work for South Africa but we cannot mention all the names here. Mr. Speaker, this only goes to show how necessary research is. We must wake up and realize that we do not yet know how to maintain the fertility of the soil in the maize triangle. It has been shown here how a farmer disturbs the composition of his soil by applying fertilizers although he may have the best of intentions, and where the composition of the soil has been disturbed it is practically impossible to build it up again. For many years now not only I but many others who have had to deal with these matters, have viewed this position with concern. On the Maize Board, just one of many boards in this country, we tried for many years to find out what we could do to retain the fertility of our soil and we then decided to buy experimental farms. We said to the Department of Agriculture: “We know it is very difficult to get the necessary funds from the Central Government to finance such an experimental farm. The Maize Board will buy those farms and make them available to the Department of Agriculture. Go and farm there and show us how a farmer should farm so as not to destroy or deterioriate his soil and yet make a living.” That was the idea behind it. At the time we gave this matter a great deal of thought before taking that step. We considered whether we should apply other methods; we thought of trying to pay a bonus to farmers who looked after their soil. We thought that if a farmer looked after his soil and did not destroy it, he should get more for his product than the man who goes in for over-cropping. We discovered that we could not put this into practice without enormous difficulties and we consequently hit upon this idea. To-day I am very proud to be able to say that our board took that step because we have rendered an enormous service to the maize triangle.

*Mr. LAWRENCE:

Where are those farms?

*Mr. LABUSCHAGNE:

They are situated in the most important maize areas. There is one in the Western Transvaal, one in the north-western Free State in the sandy part, one in the Eastern Free State and one in the Eastern Transvaal.

*An HON. MEMBER:

What was the result?

*Mr. LABUSCHAGNE:

The result was not very satisfactory. The result was such that we realized that these farms ought no longer to be used as experimental farms, but that the time had arrived for the Government to take them over and use them entirely for research and investigation purposes. We realized that it was a big mistake to blame the farmers for all the misfortunes experienced in farming. As a result of tests done there we discovered that our knowledge of agriculture, even the agricultural knowledge of the best specialists, fell very much short of the mark. That is why the Maize Board made this offer and that is why the Government accepted the idea of taking over these farms for their purposes so that they could proceed with tests without hindrance. I am convinced that those farms will be of great value to us in future in the agricultural areas and in the maize triangle in particular, and enable us to find out how a farmer ought to treat his soil in South Africa to be able to continue to reap good crops from it without its fertility deteriorating. Up to now we have had little knowledge as to how to tackle this problem of soil impoverishment. We knew certain basic facts but that was not enough.

Mr. Speaker, that is one point, but now I want to mention another which is just as important, namely, what do we in South Africa know at this stage and what do our agricultural specialists know, our extension officers stationed everywhere, about grazing problems in our country, in the livestock areas? There is much ignorance in that regard. We do know that wrong grazing methods can ruin grazing. We can also not get away from it that one cannot talk about soil conservation without talking about the water supply. In South Africa one cannot apply soil conservation if one does not provide for adequate water in the various camps on an agricultural unit.

Mr. LAWRENCE:

That is the crux of the problem.

Mr. LABUSCHAGNE:

The hon. member is well informed and now he is helping with the right word. It is the crux of the matter, as he rightly says. I hope the time will arrive when we will be in a position to make a proper survey and not only to do research in connection with the maintenance of the fertility of our arable grazing lands, but that we will also do research work in connection with our subterranean water supplies. Mr. Speaker, are we not following a policy of letting things develop when we sink thousands of boreholes each day without replacing a drop of water in that subterranean reservoir? We do not know how full or how empty that dam is; it may be fairly full or it may be empty, but we continue to take water from it. The day when that subterranean dam runs dry then South Africa will certainly become a desert, and we will have to quit it. But what do we do? How many people in the country are busy using their brain power in connection with this extremely important problem? If to-day there are 10 or 20 or 50 persons making a study of that problem then we are fortunate, but if we use 500 for that purpose we will perhaps be nearer the mark in showing that we appreciate the danger facing us. If in the meanwhile we can do nothing else, then I want to ask whether we cannot say: While we are busy with research we are going to try to determine to what extent it is practicable to carry water by pipe-line from the big rivers to large parts of the drought-stricken areas for drinking purposes. To-day that water is running down the Orange River straight to the sea. I want to go further.

Mr. LAWRENCE:

I want to ask the hon. member whether he has thought about the possibility in the future of using atomic power for the purification of sea water for irrigation purposes?

Mr. LABUSCHAGNE:

It is a very useful question and I hope, Mr. Speaker, you will allow me to answer it. In short I want to tell the hon. member this: I thought that we should use atomic power in the South Pole to warm up the cold current which flows past our western coast so that we could get plenty of rain. I feel we ought to think along more realistic lines, where we have water available, to supply that water along pipe-lines instead of carrying on in an indiscreet manner extracting water from the earth until such time as we have more knowledge in connection with our supplies of water in those areas where subterranean water is scarce. Mr. Speaker, to-day we spend millions of pounds on boreholes in South Africa and what is the result? We know to-day that the more boreholes one bores the more holes dry up in certain parts. Eventually it becomes a kind of vicious circle. One carries on and on and one’s water tank drops further and further. We shall have to do more and more research in this country. We shall have to realize that we do not by any means fully understand our biggest problems, on which our whole future depends. We shall have to realize that we will have to make money available to those departments which are busy doing that good work so that they can really make progress, so that we can achieve something. I want to predict that if we carry on as we are doing now, one threat after another, one enemy after another will prove unconquerable. It will almost be the same as in the case of the colour problem in South Africa. To-day we notice that bush penetration is assuming enormous proportions in South Africa. In large parts of South West Africa the farmer’s cattle have been driven off certain parts of his farm. The same applies to Vryburg and Mafeking, that splendid cattle-raising area. The bush is gradually forcing the farmer’s cattle off his farm. One has the same position in the Northern Transvaal to a far greater extent than is generally realized. Mr. Speaker, what are we doing? We are tackling it on a very small scale. We will have to wake up and realize that our country is being threatened by problems which will give us no rest. We must deal with them now, while we still can, otherwise they will prove insoluble.

I want to conclude by saying that I believe we must awaken the conscience of the farmer to assist us in this matter. No Government alone can solve a problem such as this; it is a natter for the whole country. In the first instance it is a matter for the farmer, it is a matter for the Government and it is a matter for those in the cities. It is a matter for everybody in the country. We will have to realize that it is a matter in connection with which we can either destroy or save our future. I want to express the hope that we will move forward with all the energy at our disposal to try to save the future of South Africa by building up the fertility of our soil. At this stage we can perhaps find no better example than what is being done in Israel in those desert areas where a new country is being developed with so much determination and resoluteness. I hope that our farming community will assist the Government in the application of such a policy and that the whole country will support it and give it all the assistance it may require in such an enormous undertaking.

Mr. BOWKER:

The hon. member for Vryburg (Mr. Labuschagne) seems to have allowed his oratory to run away with him to such an extent that he has run right into opposition to the Government. He seems to have forgotten that this is a motion of “dank” to the Minister. He has actually supported the amendment introduced on this side of the House—

That this House expresses its deep concern at the continuing low fertility and productivity of the country’s arable land and calls upon the Government forthwith to take all steps necessary in the field of research and in the provision of adequate technical services in order to restore, reserve and enhance the fertility of our land.

The hon. member for Vryburg has stressed “research”. He has actually indicated that some of the wealth of our gold and diamond industries should be used in the interests of research. We quite agree with him as far as research is concerned, because we know that we are among the poorest countries in the world as regards the development of research in general as well as research in agriculture, and that is what I think the hon. member for Vryburg had in mind.

Sir, this Government has been in power for 13 years during a period of unprecedented prosperity and during that period it has not achieved anything of proportionate value in research and in respect of the preservation and redemption of our soil. We do not believe that the hon. the Minister is satisfied that his Department has been enabled to do everything possible to turn the scale against the deterioration which is so evident in our soil on account of the difficult periods which the farmers have experienced over the years. In this White Paper on agricultural policy (W.P.10 1946) it is stated—

When man’s struggle for existence becomes too acute, his will to live holds nothing sacred; so it is that a depressed agriculture becomes a destructive agriculture.

And that has taken place in this country for many years—a destructive agriculture, and I believe it is continuing to-day. We know that with mechanization production has been increased by ripping and tearing up many areas which are better suited to pastoral uses than agricultural production. The hon. member for Vryburg said, there is nobody in the Agricultural Department who knows anything about pastoral control; they are absolutely ignorant in that regard.

Mr. Speaker, I shall not detain the House long. I just want to say that the Orange and tons of our top soil. I say that the Government has done nothing to counter this. The Tugela Rivers still convey annually to the sea more than three-quarters of the Union’s flow of water, and with it they convey millions of great southern desert is steadily encroaching southwards. The sand dunes of the Kalahari are making progress south of the Orange River. The Karoo is extending in all directions, which is an indication of desert encroachments, and we must face these facts. Here we have nature’s evidence before us. We can see it happening and we are not doing enough. The grass in our grass areas is being displaced and grass is necessary to build up the structure of our soil and to hold it against the erosion of waters. These are things, Sir, to which the Government must pay attention. We must face facts. South Africa, unless something of a drastic and radical nature is done, will become the great southern desert of Southern Africa.

At this stage I would like to move—

That the debate be now adjourned.
Mr. DE KOCK:

I second.

Agreed to; debate adjourned until 3 March.

The House adjourned at 4.25 p.m.

MONDAY, 13 FEBRUARY 1961

Mr. SPEAKER took the Chair at 2.20 p.m.

PART APPROPRIATION BILL

First Order read: Second reading,—Part Appropriation Bill.

The MINISTER OF FINANCE:

I move—

That the Bill be now read a second time.

Mr. Speaker, it is customary for a Minister of Finance to ask the House at this time of the year for an advance to cover state expenditure during the new financial year, pending the passing of the ordinary Appropriation Act for the year, and that is the object of the Bill now before the House.

Hon. members will notice that an amount of 300,000,000 is being requested. At first sight the amount may seem somewhat exorbitant, but I hasten to assure hon. members that it is R300,000,000 and not £300,000,000. Since this Bill will not become law until after D-Day, the amounts are expressed in Rand. It is, however, not yet D-Day and King Rand has not yet ascended the throne. I think out of respect for the last moments of the old King Pound, who has reigned in South Africa for 135 years, I should use the pound as the monetary unit in my remarks this afternoon and in the course of the debate. To-morrow it will be a case of “Le roi est mort, vive le roi”.

Mr. RUSSELL:

“Honi soit qui mal y pense.”

The MINISTER OF FINANCE:

I think as an act of piety to acknowledge the old king as such, even though it be for the last time, I think hon. members who take part in this debate should show an equal sense of propriety and piety by acknowledging the £ to-day and in the course of this debate. Even though we are moving over to the new order to-morrow, I think it will avoid a lot of confusion if during this debate, at any rate, we will all speak in the same language, and do it as a parting tribute to the old king.

I may just for a moment pause here and remind hon. members of what is obvious, and that is that to-morrow we are moving on to a new era when the new bank notes and coins will come into operation and when as a nation we will begin to calculate only in terms of tens instead of twelves and twenties. When that takes place, we shall be seeing the fruits of a very considerable task which first came to the notice of Parliament by way of a Bill introduced by one of my predecessors, the late Mr. N. C. Havenga, in 1932. In the years that followed, the matter was considered in turn by the so-called Becklake Committee, by the Bureau of Standards and finally by the Diederichs Committee which was ‘appointed as a result of discussions on a private Bill introduced in this House in 1956. Hon. members will therefore realize that the decision taken was not a decision taken lightly, but only after many years of investigation and of careful consideration. The immense task of organizing this change-over was entrusted to the Decimalization Board, whose members, hon. members will no doubt know, represent between them a very wide diversity of banking, commercial, industrial and public interests. Let me say at once, Sir, that the committee spared no efforts to make the public fully aware of the implications of decimalization, and its educational programme has probably been the most ambitious ever to have been undertaken in the Union and South West Africa. Its major concern naturally has been to educate our vast and diversified non-European population so as to ensure that there would be no hardship as a result of a lack of understanding of the monetary change-over. But let me add this too, that the task of this Board would have been far more difficult than it actually was, had it not been for the whole-hearted co-operation of all sections of the community and all the newspapers and all the organizations and Government Departments. They have co-operated wonderfully and made a most difficult task less difficult for the Board. As you know, Mr. Speaker, South Africa is the first of the highly mechanized countries of the world to undertake decimalization of its monetary system and, as can be expected, the eyes of the world are focused on us and what happens to-morrow and following days. The change-over has become a matter of national importance and also, I would almost say, a matter of national responsibility. I do not want to make any comparisons, but it is almost as important as winning a very vital test match in rugby football. We have to see to it that our honour is not sullied in the process. I think that I can, with justice, pay tribute to the work of the Board and to all those who have co-operated in this great task. And let me say at once that the task is not over after to-morrow and I must ask all those who are concerned with this matter to continue this co-operation in the very difficult time which will ensue, the period when we will have the dual system in play. I hope that all hon. members in this House and of the public will co-operate in making the switch-over as easy as possible and with the least dislocation of our ordinary business.

The amount of £150,000,000 should be sufficient to cover the expected expenditure over a period of four months, that is, April to July. In view of the uncertainty in regard to the duration of the Session, provision is being requested for a period of four months instead of the usual three months. I hope—and I am sure all hon. members of this House will share my sincere hope—that I have made too wide a provision in four months and that we will still be able to finish within three months. But owing to the fact that there will be an extraordinary recess I think it is as well that we should be on the safe side and provide for four months. Nevertheless, it is still my sincere hope, which I am sure is shared by all of us, that we will be able to get the Estimates through in the customary three months.

Of this amount of £150,000,000, £121,000,000 is requested on Revenue Account; £25,250,000 on Loan Account, and £3,750,000 on Bantu Education Account.

From Clause 2 it is evident that only those services which bear the approval of Parliament are covered by this measure. Any new services are not covered by any provision we make in this Bill, and they will have to await the passing of the main Estimates. Possible budgetary proposals are not affected and hon. members on both sides of the House are asked to be patient and to await my Budget statement for a review of the financial position for the current financial year, as well as the prospects for the coming year. It has already been announced that I propose delivering my Budget statement on Wednesday, 15 March.

There are, however, one or two financial matters which I should like to deal with now. Firstly, I wish to give the House some particulars of the various loans which the Government has raised since the last session of Parliament. Last August the Government received a loan of 30,000,000 Swiss francs (about £2,500,000) from a consortium of Swiss banks —the same group from whom we have obtained several loans in the past. The loan is for two years, but may be renewed for a third, and the rate of interest is fixed at 31 per cent above the Swiss bank rate, which is at present 2 per cent, giving a total of 51 per cent.

Over a year ago we arranged a loan of $16,000,000 (about £5.7 million) from the Export-Import Bank of America in order to finance the purchase of the three Boeings by South African Airways. Owing to some delay in completing all the necessary formalities we have so far only drawn £3.7 million, leaving a balance of £2,000,000 still to be drawn.

We have also arranged to draw from the International Monetary Fund an amount of foreign currency equivalent to about £13,500,000, which is equal to the value of our gold subscription to the Fund. Of this amount we have already drawn £9,000,000 and we may take the balance at the end of this month. These drawings increase the Reserve Bank’s foreign exchange holdings but are not reflected in the Exchequer Account. If it should be necessary, we can ask the Fund for further facilities. In theory our total drawings could go up to our quota of £45,000,000, but naturally the Fund is not over-anxious to lend up to the limit. In this connection I think it is probably wise to quote from a recent speech by the Governor of the Bank of England who said—

I hope that we shall all get more used to regarding the International Monetary Fund as a second line of reserve for this sort of purpose. I should like to see countries draw on these facilities as a matter of ordinary business when they need to reinforce reserves, and repay them when reserves are rising. If drawing on the Monetary Fund is regarded as only a last resort, then half its utility is lost because it will come to be seen as a crisis measure which may cause as much nervousness as it allays.

We must realize, in other words, that our reserves in the International Monetary Fund are there to be used and must not be regarded as something which we only do in extremis.

As regards internal loans, two loans totalling £18,750,000 fell due in December and January last, and we issued two new loans, one for five years at 4¾ per cent and for 15 years at 5⅜ per cent, for conversion and new subscriptions. Conversions from the maturing loans amounted to £10.3 million and cash subscriptions to about £8,500,000, so that the total amount raised was slightly more than was necessary to retire the maturing loans. We made it clear when the loans were issued that we were not seeking additional money, as the indications were that we would have adequate funds in hand to finance the Loan Account for the balance of the financial year.

A great deal has been written recently about the upward pressure on interest rates, and most of it is greatly exaggerated. So far as long-term rates are concerned, however, there has undoubtedly been a tendency for rates to rise. When buying Government stock offered to it for sale the Reserve Bank may, if it considers that the circumstances require it, apply a penalty rate of ¼ per cent above the official pattern of rates, that is, it agrees to buy only at a lower price which will give an effective yield of ¼ per cent above the ruling pattern. On several occasions recently it has applied the penalty rate and the sellers have been prepared to accept the lower price, for stock offered to the Reserve Bank. This indicates that the supply and demand in the market demand a revision of the pattern of rates, and, as was announced on Friday, the Reserve Bank has, after the customary consultation with the Treasury and the National Finance Corporation, decided to raise its pattern of rates by ¼ per cent, that is, for Government stock with a maturity exceeding three years. The result is, Sir, that for long-term stock, that is over 11 years, the rate is now 5⅜ per cent instead of the old pattern of 5⅜ per cent.

I want to emphasize, Mr. Speaker, that in deciding upon this increase in the pattern of long-term rates the monetary authorities had very much in mind the possible broader effects on the economy of the country as a whole of higher interest rates, particularly at a time when it is so desirable to stimulate industrial development and encourage exports. Although, as explained above, the new pattern is in a sense merely a recognition of existing circumstances—since the penalty rate was already being applied we first satisfied ourselves that the trend was a genuine one and not a short-term fluctuation, possibly affected by artificial manipulation. It is our policy to lean against the wind, to test its force, direction and duration, and not to run before the wind regardless of the circumstances and the effects on the economy of the country as a whole. After careful consideration of the present position of the capital market, I am hopeful that it will be possible to stabilize interest rates at the new pattern. In view of the wider implications for the economy as a whole I hope that the monetary authorities will be supported in their endeavours to achieve stability.

Short-term rates have also risen recently, but they are only now coming into approximately their normal relationship with the Reserve Bank’s discount rate. When this rate was raised from 4 to 4½ per cent last August, the tender rate for Treasury bills had been rising for some time and it was thought that the rate for such bills would continue to rise to around about their present level. Instead, however, the tender rate then fell, and only recently has it risen again to a level of about 4⅛ per cent. There is therefore no reason to raise the bank rate at the present time. Moreover, the present level of short-term interest rates is not such as to encourage any outflow of capital in order to take advantage of small interest differentials, and there is no indication that any outflow is taking place for this reason. Thus, although the United Kingdom bank rate is still ½ per cent higher than ours, the commercial banks’ prime rate for overdrafts is only 6 per cent in the United Kingdom as against 6½ per cent here. There is a possibility that the bank rate will also be decreased further in the United Kingdom and in other of the Western European countries.

Mr. Speaker, there is one other Budget matter which I would like to mention now. In my Budget speech last year I mentioned that the rates of investment allowances on new factory and hotel buildings and machinery would remain in force until 30 June 1961. The need for stimulating investment in industry is still present, and it would be of assistance to industrialists and hoteliers to know as soon as possible whether the allowances will continue after 30 June of this year. I therefore propose taking the somewhat unusual step of giving way one of my Budget secrets a month in advance. I shall, at the proper time, ask Parliament to agree that the investment allowances which were granted last year should be extended on a basis not less favourable than the present, until 30 June 1962. I hope that this will remove certain doubts and will give the green light to those people who propose making use of this concession within the next 12 months.

Mr. WATERSON:

Mr. Speaker, the hon. the Minister of Finance, in his speech made clear what we all knew, that his main object was to ask for money. He then proceeded to bid a not undignified farewell to what he called the “King £”. I notice he did not welcome the President Rand. He asked us to agree with him that the change-over which was due to start to-morrow was one which, in the interests of the country, everybody should do their best to make work smoothly. I am sure that from this side of the House he has our assurance that, being realists, we shall not fall behind in our endeavour to make the unfortunate people of this country understand the new system under which they have to work.

Mr. LAWRENCE:

But he has not yet told you where he is going to get another doubleheaded coin.

Mr. WATERSON:

I have not seen any of the new coins. Whether they are to be doubleheaded or not I cannot tell the hon. member for Salt River (Mr. Lawrence). The double head may not be the only thing they have on them.

The main point is that the hon. the Minister is asking us for a large sum of money, and it does not really matter to the people who are going to find that money whether they are going to pay it in pounds or in rand. I would have wished that the hon. the Minister, in view of the present state of the country, could have spent a little less time on the question of the decimalization change-over and a little more time enlightening us on matters which are worrying all sections of the community. The Minister told us that he was going to extend the depreciation allowances for another year. Thereby he is belatedly taking the advice of the Opposition who told him when he introduced the measure that simply introducing it for one year was quite useless.

I do not think that the hon. the Minister could expect us simply to agree, tamely, to vote this very large sum of money without raising certain matters which are worrying the rest of the country. I think it is high time that our attention was devoted to the financial and economic problems of the country, and I think it is especially necessary in view of the unbridled optimism which is voiced by Government spokesmen led with great eloquence by the hon. the Prime Minister, on this subject. Moreover, it is difficult for the average citizen to gauge what the financial and economic state of the country is. At the beginning of the year he knows that he has not much over from what he has earned during the year. He grumbles at any new taxation. At the end of the year he sees the Government with a grossly swollen surplus on current account—which, of course, he is going to see again this year —and he just says “Oh well, I must be unlucky myself, the country as a whole must be doing pretty well.” He quite forgets that this enormous surplus is coming out of his pocket. Had it been left in his pocket he would have been considerably better off than he actually is.

A glance at the Order Paper will show that there are motions from all sides of the House indicating urgent concern at the various facets of the country’s life. Most of them, of course, will not be debated, but the fact that they are on the Order Paper will undoubtedly prevent some of them from being dealt with in this particular debate. However, in order to initiate the discussion which I think is highly necessary I should like to move the following amendment—

To omit all the words after “That” and to substitute “this House, alarmed at—
  1. (a) the continued outflow of private investment capital from the Union;
  2. (b) the steady loss of skilled and useful citizens;
  3. (c) the general retardation of the country’s economic development; and
  4. (d) its resultant depressing effect on agriculture and commerce and industry,
declines to pass the second reading of the Part Appropriation Bill unless the Government gives satisfactory assurances that adequate steps will be taken to rectify the manifest faults in its present policies”.

I would like, if I may, to refer as briefly as I can to the four points in this amendment. Other speakers are waiting to deal with the points in greater detail and to combine in building up an indictment against this Government such as has seldom been done before. I refer, first of all, to the question of the continued outflow of private investment capital from the Union. The Federated Chamber of Industries stated categorically a few months ago that there is no real substitute for overseas capital. Overseas visitors, financiers, bankers, business men, all comment favourably on our economic possibilities, on the economic potentialities of the Union. But they qualify it, almost without exception, by saying that the policies of the present Government and the political climate are making overseas investors reluctant to come in on a large scale and to participate in what, potentially, is a most promising market for investment. At the present moment, as you know, that reluctance has reached a stage of a large-scale withdrawal of capital. In the first nine months of last year, as we know, the net outflow of private investment capital amounted to some £79,000,000. I do not know what the last quarter showed, but the two years previously witnessed a substantial outflow of capital from this country, and I believe it is estimated at the present moment that the net outflow is still in the vicinity of between £2,000,000 and £3,000,000 per month. Now I know that the hon. the Prime Minister and the Minister of Finance have both made the point that this is a blessing in disguise, that the repatriation of overseas holdings places the shares in the hands of the South African people who will get the benefit of the dividends and so on. That may be so, but you can have too much of a good thing. I do not think there is any doubt that when the limited domestic capital market is called upon to repatriate overseas investments on a substantial scale on the one hand, and, on the other hand, is squeezed mercilessly in the Budget to provide capital for the public sector—capital which the Government cannot get anywhere else—then there is no doubt that it leads to the present state of affairs, namely, to an acute shortage of capital and of credit. And, of course, this in turn has affected the general exchange reserve position. The hon. the Minister gave us figures of his borrowings, and the exchange position at the moment is that our reserves stand at somewhere in the neighbourhood of £90,000,000. If conditions were perfectly normal and there was no undue strain on those reserves, that would not be anything to worry about. But the fact is that these reserves are being bolstered up by borrowings from the International Monetary Fund and from the Import-Export Bank, as the Minister has told us.

Three weeks ago the hon. the Minister told us that he had borrowed £4,500,000 from the International Monetary Fund. Since then he has drawn another £4,500,000. That means that he still has another £4,500,000 available to draw, and he tells us he may draw that before the end of the month. But in replying to a question from me the other day the hon. the Minister said, rather ominously, that it might be possible—and he repeated this in other terms this afternoon—it might be possible, if necessary, to arrange to borrow another £40,000,000 from the International Monetary Fund. That seems to me an alarming possibility. If I thought that the hon. the Minister really considered it likely that he would have to draw on that money I would say that the country was heading for a first-class financial crisis, for this reason Mr. Speaker …

The MINISTER OF FINANCE:

You should listen to what the Governor of the Bank of England says.

Mr. WATERSON:

The hon. the Minister quoted the Governor of the Bank of England. But, Sir, the Governor of the Bank of England said that the International Monetary Fund was there to be drawn upon in times of difficulties. That is what it boils down to. If we have to borrow £40,000,000 from the International Monetary Fund, that is not a temporary overdraft. That means that we are in very grave financial straits in regard to our foreign exchange reserves. I am not at all satisfied that the hon. the Minister’s quoting of the Governor of the Bank of Englandmeets the point. I think what the Governor of the Bank of England said was not at all germane to the position in which we find ourselves to-day if we have to go to the extreme of trying to borrow another £40,000,000 from the International Monetary Fund. The International Monetary Fund is intended as a short-term lending organization. We have borrowed from it before and we have repaid in a very few months. It is in the nature of an accommodation, of a temporary overdraft. If you are a member of the Fund you have that facility to tide you over any temporary difficulties which may arise. But I think the hon. the Minister should tell us how much he thinks he will have to borrow from the International Monetary Fund, and I think he should tell us how long he thinks he will have to have that loan before he repays it.

There are other symptoms which are causing concern. We agreed to a Bill here last week reducing the Reserve Bank ratio in regard to what the commercial banks have to hold with the Reserve Bank. That was reduced from 10 per cent to 6 per cent. Mr. Speaker, that can only mean that the commercial banks very short indeed of liquid funds. It is common talk that one particular bank has had the greatest possible difficulty in recent months in maintaining its 10 per cent. In other words, this reduction from 10 per cent to 6 per cent is intended as a shot in the arm for the commercial banks to enable them to release a little more credit to the country. But it is only a shot in the arm and by itself it can be nothing else but a temporary expedient. We heard last year that the Land Bank was going to the public for a large loan. They withdrew that proposal, but I understand they are going on with it later on. The hon. the Minister referred to the recent Government issue. He made it clear that he was not trying to raise more new money because he thought he had enough to carry on for the financial year. I wonder, if the hon. the Minister has really had large applications and these issues were over-subscribed, whether he would have refused to accept the money. At it is, he only raised about £3,500,000 of fresh money from private sources, and that is a very small amount compared with what generally happens on these occasions. He got £5,000,000 from the public debt commissioners, a good deal of which I have no doubt was already conversion money. As a result of that, flowing from the comparative failure of those loans, the Minister has repeated this afternoon that the Reserve Bank has seen fit to grant a slight increase in the interest rates on long-term Government loans. Personally, I do not think that will really help very much. I think it is too little to do much good, and I think it is too late. However, we shall see when the market is tested, as I think it will be in the near future, by the I.D.C. loan which will be floated, what the position is. But the point I wish to make is that all these things are basically due to the outflow of private investment capital in recent years. I would remind the hon. the Minister of the statement made by the Viljoen Commission, which said that all Government policies should be tested by the effect they have on the economy of the country. I think that in a nutshell sums up our difficulties to-day. I am forced to the conclusion that until that is done, until the Government tests its policies by what effect they have on the economy of the country, I can foresee no permanent improvement in the position in which we find ourselves to-day.

But there are other things contributing to the problem. There is, for instance, the alteration in the uranium agreement. We have not got any details, but I understand it will mean a loss of £10,000,000 to £12,000,000 a year to the revenue and the reserves of the country. There is the question of the export market. There are indications that Africa, which is likely to be the most forward-moving continent in the whole world for the next century in the way of economic development, is showing ominous signs of closing their market to us.

I come to the second point, the steady loss of the skills of useful citizens. There is a motion on the Order Paper dealing with immigration, which precludes me from discussing that question in any detail, but I would say that the first thing we have to do is to reverse the present flow of migration because, at present, the tide is flowing not in but out. Let me give just one example. At one university in South Africa a year ago 17 students graduated in engineering. At present only two of them are left in the country, and the other 15 have all gone. If you multiply that, it is really a very important development. Why is it happening? It is perfectly competent for the Government to keep a careful check on the outflow of skilled and technical people who are leaving the country continuously and to assess for itself what it amounts to and what the consequences are. As far as paragraphs (c) and (d) of the amendment are concerned, the general retardation of the country’s economic development and its resulting depressing effect on commerce, agriculture and industry, those are obvious and apparent to everybody in the country except the Government. We have had a statement from the hon. the Prime Minister this Session where he admitted that there had been certain problems in the past year, but he brushed them aside and declared that he found prosperity in every field. He said he had looked into statistics and into trends and throughout, without one single exception, he found prosperity in every field. He said it was a basic fact that South Africa is a fortunate and a prosperous country. Of course, when the Prime Minister announces that we are a fortunate and a prosperous country, it is almost high treason to question his statement, I suppose, but I am going to venture to do so. Surely when the Prime Minister said that we were a fortunate and prosperous country and that, without one single exception, he found prosperity in every field, does he not overlook the fact that 70 per cent of our people live in extreme poverty? He quoted Iscor and Sasol as examples of expansion and development. I do not think that was a very happy example to quote, because Iscor and Sasol, in the first place, have no shareholders to worry about, and, in the second place, they are Government-controlled, and it is their duty to assume that the Government of the day will so conduct the affairs of the country that economic progress will be satisfactory. It is, therefore, their duty to plan five or six or seven years ahead to meet the needs of the country which will require expansion, if it is properly governed. Why I do not think this is a very happy analogy is that if this Government had over the past ten years shown the same wisdom and foresight in planning as Iscor has done, the country would not be in the position it is in to-day. I say that statement by the Prime Minister was superficial and irresponsible to a degree. What authority is there for the Government to make such a statement? What basic ground is there for this lyrical optimism, which, so far, we have only been used to hearing from the hon. the Minister of Bantu Administration and Development? Take agriculture. Has the Government the right to say that agriculture is prosperous? If so, why did we have to find £56,000,000 in the last two years, not to provide for the expansion and the prosperity of agriculture, but to keep them out of the insolvency court? Has commerce given the green light to this statement? Commerce has made request after request and has handed plan after plan to the Government, but they have all been ignored. The chairman of the Chamber of Commerce in Johannesburg last October made a statement saying that the rate of capital formation in industry had not risen for six years and, during the last three years, it had actually declined. Is industry satisfied? Industry has declared that the industrial capacity is nowhere near fully employed. They produced a 25-point programme for the Government to consider. They said that what is badly needed is a three-pronged attack on stagnation and complacency. If any of the members of the Chambers of Industry were sitting on the gallery whilst the Prime Minister was talking, they would realize how right they were in talking about complacency. They have called for an increase in the national net income per head. They indicated that that could be brought about by creating greater spending power, by an infusion of capital and by an increase in skills, and they repeated that there was no real substitute for overseas capital, and that there was no stimulant as warming as immigration. What is the Government doing about that? Who is revelling in prosperity, and where is it? I say that the Government is treating the whole question of the economic affairs of the country with a levity which can be disastrous to the country. The fact is that, stimulated by the remarkable progress and expansion in the gold-mining industry, and assisted to a degree by the uranium windfall, there has been in the post-war years remarkable expansion in the economic life of the country, but for the last four years that rate of development has slowed down to the pace of the ox, and in the near future it will go at the pace of an untrained republican ox. Take one figure. The increase in the net income of individuals last year was 1.9 per cent. Any economist will tell you that that is well below the figure required for maintaining and expanding our economy.

The MINISTER OF FINANCE:

Is that the last figure you have, June 1960? Do you make that statement?

Mr. WATERSON:

[Inaudible.] Mr. Speaker, everybody at home and abroad agrees, and one cannot repeat this too often, that the development potential of our country is vast. But everybody complains that that development is frustrated by Government policy. If the present trend continues, it simply means that we have to look forward to increasing control and restrictions and higher taxation, and, before long, I am afraid, to a recession. We have to remember that our whole economy rests on twin pillars, capital and labour, and both these pillars to-day are developing obvious and ominous weaknesses, which are apparent to everyone. The question is, therefore, what the Government should do. Every authority here and abroad places the root causes of our economic climate as being due to Government policy. Can everybody in the world, except the Prime Minister, be wrong? Is he the only one who is in step?

An HON. MEMBER:

Yes.

Mr. WATERSON:

I say that in view of the overwhelming volume of opinion expressed everywhere, there is one thing which the Government must do. They must face facts as to why we are so short of capital and credit and skilled labour. Unless the whole of the world is wrong, which I do not believe —and when I say the world I include all the authorities in this country as well—this Government cannot have its cake and eat it too. They can stick to their present policies, or they can amend their policies and have prosperity, but they cannot have both. Therefore the first thing the Government has to do is to face facts, if they have not done so yet. Having faced the facts, what are they to do next? What they will have to do falls into two phases. They will have to take the short-term phase first and take active steps to stimulate consumption, to increase purchasing power and to increase employment. It is not for me to point out in detail exactly what they must do, but let me give some examples. They might, e.g., initiate a much more vigorous public works programme, and when I talk about public works I am not talking about farm gaols or Government houses in Bantustan but about things like water conservation. The Government has been handed a number of most valuable reports by the Natural Resources Development Council. Have they given effect to any of these reports? The Government has in its possession a painstaking report on the depopulation of the platteland, which makes some very important recommendations. Has anything been done about that? Having regard to the state of affairs in the country, surely things must be done at once and the Government has recommendations and advice but nothing seems to be done. I suggest that there should be a great intensification of our road-building programme. The Chairman of the Viljoen Commission pointed out that in many ways the development of our roads was more important even than the development of the Railways. The Government is taking no steps. I think that the Government should have taken steps to replace by other activities the Railway capital programme which has now just about come to an end, and there is no doubt that the cessation of the Railway construction programme plus the vast economies which, about ten years too late, the Minister introduced on the Railways had an effect on the purchasing power and the slowing down of our economy. The Government might consider increasing the food subsidies for the lower-income groups to reduce the cost of living for them and to increase consumption. They might consider increasing Government wages amongst the lower-paid workers. They have been exhorting evrybody else to do it, and everybody else has done so, but we have yet to hear of the Railways increasing the wages of the lower-paid workers. They might try to evolve means to stimulate consumption. They might even consider examining again the large body of pensioners in this country who as the result of the increasing depreciation in the value of their pensions are finding things very difficult. All these suggestions may be called artificial, but the fact remains that if we are to resume our forward march you have got to have some important stimulus to get the wheels moving again and the Government is the only body that can do this.

Then of course there is the long-term planning which we cannot discuss in detail this afternoon, but it is quite clear that the Government should get down to some serious long-term planning, as Iscor has done. The Chamber of Industries suggested a five-year plan. I suppose that has landed in the wastepaper basket also. But there should be some kind of clear-cut target for the country and for all sections of our economy. Of course, a major aspect of our long-term planning is our poor Black problem. It is claimed—I do not know how true it is—that we have solved the poor White problem, but the poor Black problem is numerically much greater. I have seen no proposals on the part of the Government to increase the skills and the wages earned by the Native people. Sir, there are a number of speakers on this side who are straining at the leash to tell this Government how far it is falling short of the elementary duties of a civilized Government. I think I have said enough … [Interjection.] … to show how we on this side of the House view the position and how every responsible authority sees our economy. Whilst it is basically strong and potentially very great, it is beginning to suffer very badly from financial anaemia, from uncertainty as to the future and a feeling of frustration at the refusal or inability of the Government to get down to the root of the problem and to take active steps in collaboration with responsible bodies to find the answer to our problems and to act accordingly.

Dr. CRONJE:

I second the amendment. The hon. member for Constantia (Mr. Waterson) has drawn the attention of the House to the fact that almost every economic specialist from overseas has pointed to the tremendous economic potential that this country really possesses. There is no doubt that if we follow proper economic and other policies, we can wipe out the poverty that affects such a vast percentage of our non-White population in a comparatively short period of time, and I make bold to say in a period which many of us in this House will still see in our lifetime. Just imagine what it would mean to South Africa if we can claim that we are the first country on the continent of Africa to wipe out poverty in the sense that all our own workers enjoy at least minimum Western standards of living. That would be worth more than all the propaganda we could pay for if we can prove that we have wiped out poverty for the first time in the history of Africa and have ensured to all our urban workers minimum standards of living. That would do more to safeguard all the institutions we hold dear than anything else could do. This is possible because, apart from the fact that we have this vast potential and that we are blessed with so many raw materials and resources, we also happen to be a country with a very high savings rate. Our savings rate and, consequently our investment rate, which, after all, is the mainspring of all economic progress, are amongst the highest in the world. For the last ten years it has averaged more than 20 per cent, and in certain years it was higher than 20 per cent, and only in recent years has it fallen to 15 per cent, but even a net investment rate of 15 per cent is one of the highest in the Western world. At this rate of investment certain European countries and others have managed to increase their real income, after making allowances for price increases, at the rate of 6 to 7 per cent per annum, and the real income per individual has been increased by over 5 per cent in many countries in the last ten years.

Now, how does that compare with what has happened here? Despite the fact that we have this high rate of savings and investment, our real national income, according to the calculations made by the Bureau of Economic Research at Stellenbosch between 1951 and 1959 averaged 3.5 per cent. If we allow for the population increase, the increase in the real income per head, which really measures the advancement made better than any other figure can do, is only 1.7 per cent. It is this figure, the average national income per person which measures the real welfare of your society, and not how much electricity you can produce, or how much petrol you can sell. It is this figure which shows whether your society is increasing its welfare or not. That is the figure of real income per head, which has been at the rate of 1.7 per cent from 1951 to 1959. I say that for the high rate of investment this has been a comparatively low figure compared with other economies. A rate of increase of 1.7 per cent is not high. Putting it another way, most authorities are agreed that the average standards of living of the mas of our urban workers must be increased at least 50 per cent to bring them up to what is regarded as minimum Western standards. At this rate of growth we have had over the last ten years that will take us 30 years, whereas if we had a higher rate of investment we could do it in ten years, if we achieved the same rate of growth that other economies have achieved. For the last four or five years this figure has not increased at all. If we again look at the calculations made by the Bureau of Economic Research at Stellenbosch, at page 3, we find that in South Africa the average figure of income per head calculated on 1948 prices reached a figure of £86.6 in the year 1956-7. It then dropped in 1957-8 to £83.5 and it dropped further in 1958-9 to £82. There was a revival in 1959-60 of about 3.5 per cent in this figure, which brought it back to £84.5. If the forecast of this Institute is correct the figure for this year will be no higher than last year and the economic indications are that in this year we will see no increased welfare compared with last year. This will mean that in 1960-1 we will still have an average income which is below that which we attained in 1956-7. Sir, if there is one thing that we cannot afford in this country it is economic stagnation, because we also have a very rapidly increasing population. Our population increases at the rate of nearly a quarter of a million per annum, and for at least half those people extra jobs must be found annually in our economy. Most people are agreed to-day— and I think hon. members on the other side will also agree—that only manufacturing industries can in the long run create sufficient job opportunities and give sufficient stimulus to the economy of the country to absorb the rapidly growing population. What has happened in industry in the last three years? If we look at industry for the last three years we find that whereas in 1957 there were on an average 689,800 workers, in September of last year, there were only 690,700 workers employed in private manufacturing industries. It is quite clear therefore that we are not creating sufficient job opportunities for our rapidly growing population. Hon. members opposite will no doubt quote this 1.9 per cent unemployment figure. Sir, that is a very artificial figure except as regards the European section of the population. Everyone who is aware of how this figure is constructed realizes that it does not really reflect the actual unemployment position amongst the Coloureds and the Indians and of course it does not even attempt to reflect the unemployment position amongst the Natives. There is a vast disguised unemployment amongst the Natives. I think that is generally accepted to-day. In fact, the Prime Minister’s statement of September last year acknowledged this fact. On page 5 we read—

In South Africa the increasing unemployment and the urge on the part of the population to move to the cities occurs for the most part in the Bantu areas.

Here is an acknowledgment by the Prime Minister, on the advice of his council no doubt, that there is unemployment amongst the Natives, and anyone who is acquainted with the system must realize that that must necessarily be so. If we look at all the other employment figures in our economy, we find that only mining has shown considerable expansion. The rate at which new jobs has been created has been far too slow for the rate at which the population has been growing in the last four or five years. As I have said before, we dare not allow our economy to become stagnant in this country, with our vast social and political problems. The only context in which we can solve our problems is one of rapidly increasing welfare. Even the Prime Minister’s policy of border development, a sort of policy of half apartheid, requires this. The Prime Minister’s new policy of half apartheid can never be implemented unless we have rapid industrial growth, and that is also acknowledged by the Prime Minister in the statement which he issued on 14 November, in which he said—

Moreover an acceleration of development is indeed essential for the implementation of the Government’s policy to increase the standard of living of the lower income groups of the population as rapidly as possible.

Whichever way one wants to attempt to solve the problems facing us in this country, it can only be done in a context of rapid economic development, of rapid industrial development. We must ask ourselves: Why despite this comparatively high rate of investment in the past, have we had such a comparatively low rate of economic growth, and why has the economy failed to supply sufficient jobs for our rapidly growing population? Sir, there are many reasons and I do not intend to go into all of them, but I would like to mention what I regard as some of the main reasons and what policy should be followed to counter them. In the first place, there is no doubt at all that consumption has not expanded rapidly enough; consumption has not kept pace to absorb the new products that can be manufactured in our newly established factories. This has led to over-capacity in industry. That is also accepted by the Prime Minister in his own statement, and it is also expressed by the Federated Chamber of Industries in their programme for economic development that there is at present over-capacity in industry. It has also led to a semi-depressed state in agriculture. I think everyone in this House will agree that agriculture is not in a healthy state at the moment, and it is entirely due to the fact that purchasing power in this country has not developed rapidly enough to absorb the slowly and steadily increasing production of agriculture. That is why we see signs of new surpluses arising and that is why despite the Marketing Act and the control boards, it is impossible to fix prices for farmers that enable them to make a proper living in this country. The fact that agriculture is stagnating becomes manifest when you look at the official national income figures. We find that in 1952-3 agriculture’s contribution to the national income was already £221,000,000. Now, six years later, to take the latest figures available, that is to say for 1958-9, agriculture’s contribution is £236,000,000, an increase of only £15,000,000. But, Sir, over that period of six years the cost of living increased for the farmer as much as for everybody else in this country; it increased by 20 per cent, so the real income of the agricultural industry to-day is probably below what it was six years ago. The only policy that the Government seems to have in mind is to lend the farmers more money. They seem to have no other constructive solution for the impasse in which agriculture finds itself that the markets are not developing rapidly enough to absorb these products at economic prices, at prices which are high enough to keep agriculture in a healthy state. We do not decry the necessary creation of credit. In this particular situation it is necessary, but that is not a remedy, it is a palliative. It is only a short-term measure. The thing to to do is somewhere or other to stimulate the consumption of agricultural praducts as rapidly as possible in the immediate future. The only possible way to do that would be to increase food subsidies very considerably, as far as I can see. If one did that, one would not only give relief to agriculture by increasing their markets, but to a large extent one would also move in the direction of raising the standard of living of the lowest income groups in the country who, by all objective tests, are not adequately fed to-day and who are under-nourished to-day. It is true that the Government itself is becoming aware of the need to expand the domestic market, but again, if we return to the economic statement by the Prime Minister on 14 November, we read the following—

It is felt that local industries should increasingly enhance their propulsive force mainly through the expansion of the domestic market, which would assist in the reduction of production costs following upon larger turnovers and higher productivity and enable them to find further markets outside the Union’s borders. In this endeavour the raising of the purchasing power of lesser paid employees and the effective protection of local industries would necessarily take an important place. The Government’s view with regard to higher wages and productivity has already been announced by the Minister of Labour in a recent statement, and the hope was expressed that private enterprise, upon whom the success of this endeavour depends, will attend to this matter on a national basis.

Sir, I think in that statement the Government is really trying to rid themselves of a responsibility which is primarily that of the Government, namely to see that the national income is fairly distributed and that the lower income groups are paid adequately, because it is not easy for private industry at a stage like this to do the work for the Government. In most other countries it is accepted policy that it is the prime responsibility of the Government to see that all sections get a fair share of the national income. I take it that private industry would be only too willing to increase the wages and the standard of living of the lower paid people, but in the present context where markets are not too buoyant, what happens if one private manufacturer puts up his wages? He prices himself out of the market. Or let us assume that he can, despite his higher wages, so increase the productivity of his labour that his costs do not increase, what happens then? It simply means that he sacks a percentage of his staff and he is no better off at all. Sir, in a context like this the first step should be taken by the Government itself. They should not try to rid themselves of their responsibility by trying to load it on to the shoulders of private industry. The hon. member for Constantia (Mr. Waterson) has already mentioned certain steps that they can take. They themselves are large employers of labour in non-competitive industries. They have not got the same problems that the private manufacturer has that if he pushes up his wages, he prices himself out of the market. The hon. member for Constantia has also mentioned that this is probably the time to review the pensions of so many people who draw Government pensions. We know that the last 10 or 12 inflationary years have eroded the value of these pensions very considerably. Surely now is the time, when the Government itself is aware of the fact that they must stimulate consumption, to improve the pensions of those people who have served the State in the past. The hon. member for Constantia has mentioned public works. I think there are certain aspects of public works that have been sadly neglected by the Government. If we look at their performance in regard to irrigation works, for example, it compares very poorly with that of a much smaller country like Rhodesia. The question of roads has also been mentioned. The Government has done a lot in housing and there is no reason why they should not perhaps expedite that too. I notice that the Minister of Finance is smiling; he is probably going to say to me that all these measures will be inflationary; that they will give him trouble with his balance of payments and necessitate increased taxation. I would like to anticipate some of his criticism. In the first place, in a context like this where there is clearly over-capacity, if one stimulates the demand one does not push up prices. The Chamber of Industries makes that point very clearly in a memorandum which they no doubt presented to the Minister of Finance. In fact, at this stage, if you can increase the demand for the products of industry, where you have over-capacity, you will probably have the very reverse effect and enable them to produce more cheaply because of the expanding market. The same point was made in the Prime Minister’s statement, so in this context I think the stimulation of consumption will in no way be of a highly inflationary nature. As far as the balance of payments position is concerned, in the first place our balance of payments problem at the moment is not really a classical balance of payments problem; it is not because our trade does not balance; we have a very favourable trade balance; the difficulty arises from the vast outflow of capital from this country, thanks to this Government’s policy and thanks to various acts of this Government. I notice in the Burger that Dawie estimates that one stupid act on the part of this Government may cost the country £5,000,000. That is quite apart from their general policy. One could make a long list of specific instances of stupid policies, and if I had more time I would do so.

The MINISTER OF FINANCE:

That applies a fortiori to the mistakes of the Opposition.

Mr. RAW:

You are supposed to be governing this country.

Dr. CRONJE:

Assuming for the sake of argument that that is so, surely that is no excuse for the Government to go and add to that burden by making more stupid mistakes? After all, they are the governing party. Our balance of payments problem is basically one of lack of confidence. You cannot really go and adjust your economic policies for growth because there is no confidence in the country, because there is an outflow of money. For that purpose the Government must take steps to restore confidence. But in any event, getting rid of surplus food does not cause an extra drain on your foreign exchange reserves. Most of the public works that we have suggested would not require large-scale imports. Most of the raw materials could be supplied from industries which are in existence already, so these measures that we have suggested should not lead to a great demand for imported products. Furthermore, as far as taxation is concerned, and in so far as we may have balance of payments problems, the Government will, of course, have to take steps and has already taken steps through import control. They might even consider increasing the import duties on luxury goods at this stage of our development rather than, for the sake of the balance of payments, restrict the growth of our economic development. They should rather take other steps at this time. As far as taxation is concerned, I believe that our economy at this stage is rather like grass in spring —it is bursting to grow. Your capacity is there and the people are there; it is simply a question of setting them off, just as rain in the spring makes the grass rush out and grow quickly, because the momentum is there to grow it. I think that is the stage that we have reached, so if the Minister can take steps to get our economy moving, to increase the demand for our products, to get confidence restored, we will have a very rapid growth in a very short period of time, and taxation will then look after itself. In any event the Minister has a vast surplus of taxation to play with, because people have been over-taxed in the past, so without increasing taxation he can carry out these remedies I have suggested, provided, of course, the extent to which people are over-taxed is reduced. Sir, these are all short-term remedies. Over a longer period one would have to make more fundamental changes to get our economy growing at the rate suggested by me, namely 5 per cent per annum, which I think is not an impossible and unreasonable rate. But in order to achieve that rate it is not enough just to make investments in machinery and in buildings. It is not enough just to make capital investments. One must also make investments in human material, in the people who are going to work in those factories. This is where we come up against the fundamental difficulty connected with the policy of this Government. Their policy is supposed to be one of separating the people. In fact, it is nothing of the sort. Our people are less separated to-day than they were 10 or 12 years ago. What the policy boils down to really is to put certain brakes upon the advancement of 80 per cent of the people of this country, the non-Europeans. We are putting bars to the acquisition of skills which are necessary for a modern industrial economy. In a modern industrial economy one needs vast numbers of administrative workers, of technicians and technological workers; one needs vast numbers of skilled workers. All those skills and abilities which are required in a modern economy are denied in some degree to 80 per cent of our people. The White people have to provide all those skills and abilities, which sets a bar to our rate of development, because I believe that to a great extent we have exhausted the ranks of our White population for those particular skills. The obvious thing to do, of course, would have been to have brought in immigrants, if this Government is determined to place a bar beyond which the non-White cannot advance, a policy which is based perhaps on the theory that if you do skilled work you are more integrated than when you do unskilled work in industry. Surely then the obvious thing would have been to have brought in immigrants, but the Government has not done that either. We cannot discuss the question of immigration here fully, as the hon. member for Constantia pointed out, because there is a motion dealing with that subject on the Order Paper. I would like to say, however, that I am very pleased that the Government has at last realized, after 13 years, the urgency and the necessity to bring in immigrants. But, Sir, over a longer period we cannot advance our investment—it will not be productive—if we do not also afford opportunities to 80 per cent of the people to develop these skills required for a modern economy. As long as that bar is there our investments will never show the return in this country that they have shown in other countries. Because, Sir, one cannot advance with only 20 per cent of the population; one must advance with the whole of the population. I know that it will be a slow process, that it will not be an easy thing to teach the large bulk of non-Europeans these skills, but unless we do so we ourselves really set a limit to the rate of our progress. I suppose that is something which the Minister of Finance can really do nothing about, because it is the policy of the whole Cabinet, but I would like him to realize that that is one of the facts that makes for slower economic growth than we would have otherwise. You set an arbitrary bar to the social development of the great bulk of the people in this country. Therefore if we are to achieve a desirable rate of increase of 5 per cent then this Government will have to change its racial policies radically. If we do achieve a rate of 5 per cent we can wipe out poor Blackism in a comparatively short period of 10 to 15 years if in addition to that we follow these other policies. The irony is that this process of rapid development; whereby you raise the standard of living of all your people, is really the only safe way in which we will maintain our institutions and our civilization here in South Africa. The very policy which the Government says they are following to maintain Western civilization must, in the end, be slowing down our rate of birth, put up so far behind other countries, that our society will be destroyed. Sir, just one last demonstration of what I mean. Surely we cannot afford in this country to increase our welfare and our wealth at a rate as low as 1.7 per cent when incomes are increasing in most European countries at the rate of 5 per cent? Incomes and standards will be so high in Europe that people will simply refuse to emigrate from Europe to South Africa if this process continues. In the long run there is only one way to safeguard the White man in South Africa and that is by not trying to keep down all the non-Europeans by refusing them entry into the skilled occupations which are required in a modern society like ours.

*Mr. VAN DEN HEEVER:

The approach of the hon. member who has just sat down, is so far removed from the real policy which South Africa has adopted and from which the nation will never depart, that he could just as well have made that speech of his at a debating society; it has no practical value in practical politics in South Africa. The hon. member’s approach is this: Let us see what we can do in the country over the next 50 years and then we will simply have to get out and leave it to the non-Whites. That must be his approach otherwise he could not have said the things which he said here to-day. As far as the figures mentioned by the hon. member are concerned, I should like to check quite a number of them before I say anything further about them. Another hon. member will at a later stage deal more fully with those, but I just want to say to the hon. member that he should at least try to be logical. He says that consumption has not kept pace with the development in agricultural production; that agricultural production is developing faster than the consumption of agricultural products and that is the reason why agriculture is in such a weak position. But in the next breath he says that over a period of six years there has been an increase in agricutural production from £221,000,000 to £236,000,000; that is negligible, Sir. Surely, he is contradicting himself there, Sir. No, Mr. Speaker, the hon. member should not come to this House and use that kind of argument in a debate.

*Mrs. S. M. VAN NIEKERK:

What about the price? The volume has increased and the price has decreased.

*Mr. VAN DEN HEEVER:

I do not know how the hon. member can make such allegations. She will have an opportunity to make a speech under the Agriculture Vote—as usual it will be a lot of rubbish—but she should leave this debate in our hands. The hon. member made a second point to which I should like to reply. He said that over the past nine years the standard of living had risen by only 1.7 per cent per annum per individual in South Africa. Well, I am not going to quarrel with him about that figure but I think his figure is totally wrong. I say that on the strength of the last Budget which Mr. Tom Naudé introduced in this House in 1958 in which he gave figures which showed that there had been an average increase in the standard of living of over 3 per cent. Does the hon. member want us to believe that it has dropped to such an extent over the past two years that the average is no more than 1.7 per cent to-day?

Now I want to deal with the amendment of the hon. member for Constantia (Mr. Waterson). Here we have a case, Sir, of a person who tried to make a mountain out of a mole-hill, but he did not succeed in doing so. I just want to say a few words on each of the points which disturb my hon. friend so much. The first point is the continuous outflow of private investment capital from the Union. Nobody will deny that £80,000,000 has left the country, but there are very sound reasons for that; and the one reason is this campaign of 13 years’ duration which the Opposition and their Press have conducted to incite the public in this country and the outside world against South Africa and against the Government. They are the people who are continually telling the world outside what a rotten country South Africa is. Consequently when we have a disturbance here such as the one at Sharpeville the people immediately say: “The United Party was right” and then they take their money and run away from the country. However, that £80,000,000 which flowed out of the country is no loss to us. No, we spent approximately £80,000,000 on purchasing South African securities abroad and those securities have an inherent value of approximately £120,000,000; in other words, we made a bargain and the dividends on the investments concerned will accrue to the South African citizens in the future. I am not saying that it has not made our exchange position appear somewhat weaker but that is another matter. But how many members opposite did not avail themselves of that? I am convinced that numbers of United Party members bought some of those securities which were offered abroad at a low price, and had they not done so, they would have been downright bad businessmen.

The second point which is disturbing the hon. member for Constantia is the loss of skilled and useful citizens. He has in mind, of course, the people who, after the episodes which we had in this country last year, left this country so hurriedly. We are all sorry to see people leaving South Africa, but I should like to remind the hon. member that those people are returning on a large scale. Only the other day we read in the newspaper that a whole crowd was returning to the Union from Australia. They say that an Afrikaner and a South African cannot live in that country. Nor does the hon. member say a word about the fact that the hon. the Prime Minister announced that he was going to establish a full Deparmtent of Immigration in order to try to strengthen the White population. No, he says nothing about that.

The third point to which he referred was the general slowing down of the country’s economic development. Subsequently he himself said that great development had taken place, development which had been brought about by utility companies for the future, but then he asked this: “Where then is all this prosperity?” I want to ask the hon. member this: Where then is this depression which he is talking about? The mere fact that the Revenue Account reflects far greater revenue than the amount budgeted for by the Minister, shows us that the position in this country is better than we thought a year ago. Financially we are in a much better position. Of course no one will deny that we in South Africa are faced with certain problems which affect the country adversely. There is not a country in the world which is not faced with similar problems. But it does not behove a person who should be giving a lead to the country to panic over things like that. I want to mention a few of those things.

The first is that Africa is regarded as one unit by the world outside; when anything goes wrong in Central Africa, in the Congo or those areas, the world outside thinks there is also something wrong in the Union of South Africa. That had a great deal to do with the outflow of capital to which reference has been made here. Because Africa is being regarded as one unit we find ourselves in this position that many of the sins of Central Africa and of North Africa are visited upon our heads and we have to account for them. Despite that position, we find that the hon. the Minister of Finance analysed the position, when he was in Johannesburg last week, and showed how South Africa differed from the rest of Africa and if you read that speech of the hon. the Minister of Finance, Sir, you will see clearly that the difference is as great as between night and day. You might just as well compare Siberia with England and say that the same things are happening in those two countries, as to compare Central Africa with the Union of South Africa. Here I have a statement made by Mr. T. Rees, export manager in Africa for the English Electric Company. Mr. Rees is in South Africa at the moment and on the 4th of this month he granted an interview to the Transvaler in which he said the following—

The South African economy is basically sound enough to meet fortuitous setbacks and he expects sustained agricultural development in the future.

This gentleman who views South Africa’s position more objectively than the hon. member for Contantia has done this afternoon, is not as pessimistic about our future as that hon. member.

A second point, which I have already mentioned. is that for the past 13 years the United Party has been busy telling the world how the National Party Government was ruining South Africa.

*Mr. E. G. MALAN:

Hear, hear!

*Mr. VAN DEN HEEVER:

The hon. member says “hear, hear!” If he tells people that, and those people withdraw capital from the country and he suffers as a result, he comes and blames the Government. The only thing that that hon. member thinks about is the small measure of sickly party political advantage that he can gain, the few votes he may gain by saying such irresponsible things. That is the only thing that is of any importance to him. The real interests of the country are of lesser importance to him. But in spite of these things which are said South Africa still remains one of the best fields of investment in the whole world and one of the safest. At the current market prices, Sir, investors receive 7½ per cent in the form of dividends on their industrial shares in South Africa to-day, whereas in America they only get a little over 3 per cent. I explained a few minutes ago how people in South Africa had bought up those shares which overseas investors had clumped on our market because they had lost faith in this country after Sharpeville. To-day those people receive from 10 per cent to 12 per cent on their investment, at the price they had paid for those shares. And those sellers would not have taken fright had it not been for the propaganda on the part of the Opposition Press and the Opposition in connection with what had happened at Sharpeville and other places. For 13 years the United Party has consistently indulged in this campaign of intimidation, and you actually find people who believe what the United Party says and that is why you have these phenomena, Sir. I can only say this to the United Party that where their arguments are always directed at apartheid, it will not avail them in the least to argue about it. We prefer apartheid and a White civilization in South Africa to hard cash. If hon. members on the other side of the House want it the other way about, they should clearly say to the public: Look, we only want a White civilization temporarily. Last year a prominent industrialist told me that he realized that the tide must turn against the White man in South Africa unless we carried on with apartheid. But he added this however: Just give us time for 25 years so that we can make money, then we will go and live somewhere else. That is the attitude of the United Party and the attitude of the Progressive Party. That is the attitude that will lead to a rich South Africa but a Black Government. We cannot support that.

A third factor that frightens people is the doubt about our continued membership of the Commonwealth. Hon. members opposite tell the world outside that if we were to leave the Commonwealth, or if we are forced to leave it, we shall suffer tremendously in the economic sphere. They say that we shall lose our trade preferences. I do not believe we shall leave the Commonwealth. I should like to know this from the members of the Opposition: Assuming they had been in power and had asked for a republic within the Commonwealth at the Commonwealth Conference, would their request have been granted? And will it be refused if we ask for it?

*Mr. E. G. MALAN:

We would not have asked for it because we do not want the republic.

*Mr. VAN DEN HEEVER:

That is what I expected. I have always known that they do not want a republic, in spite of certain statements which were made during the past few weeks. Let me tell the hon. member this, that membership of the Commonwealth as such is of no financial benefit to us whatsoever. I want to repeat that, because it is important: Commonwealth membership as such is of no financial benefit to us as far as trade preferences are concerned. I say that because nowhere in the agreements which provide for trade preferences does the word “Commonwealth” appear, and those contracts are not subject to cancellation on discontinuation of membership of the Commonwealth. In other words, assume we are forced out of the Commonwealth, it still does not mean that the Ottawa Agreement with its amendments will lapse. No, it can only lapse when the British Government specifically cancels that trade agreement. Nobody will tell me that the British Government will do that. The reason why they will not do so is that they are good business people. Because as far as ordinary trade is concerned, ordinary import and export, England exports more or less £80,000,000 per year more to South Africa than South Africa exports to her. Apart from that she conducts a lucrative shipping traffic round South Africa which yields her something in the region of £50,000,000 per annum. In the form of interest and dividends on investments in the Union England makes more than £100,000,000 per annum. That gives a total of £230,000,000 which she makes more than we do and does anybody want to tell me that England will try to wring the neck of the goose that lays the golden egg? No, Mr. Speaker, England is far too fond of gold to do that. I do not believe that.

Now I want to deal with something else that is causing trouble, another factor which is chasing money out of this country, and one of the factors which is advanced as a reason for the drop on the Stock Exchange over the past ten days or so, and that is the extremely irresponsible statements which the hon. member for South Coast (Mr. Mitchell) has made.

I think the hon. member for Natal South Coast has developed into a person who does not care one iota what happens to South Africa, as long as he can make a big fuss. He reminds me very much of a person 20 years ago who promoted himself from the rank of corporal to that of field-marshal. The other day when he got annoyed in this House and his hair became disarranged, I noticed that he flaunted a fore-lock very similar to that of Hitler’s.

There is an important matter in respect of which the United Party should tell us clearly what their policy is. We have just heard from the hon. member for Orange Grove (Mr. E. G. Malan) that they are not in favour of a republic. In the course of the debates which we have had in this House over the past few weeks, the hon. member for Sunnyside (Mr. Horak) said that our majority was too small for us to call out a republic and to maintain it. What does that mean? Surely it means that if they come into power they will not maintain the republic? The hon. member for Durban (Point) (Mr. Raw) said that the statement made by the hon. the Leader of the Opposition that they accepted the republic merely meant that they admitted that the National Party was governing the country and they did not want to break the law and for that reason they would accept it for as long as we governed the country. If we couple that with what the hon. member for Natal South Coast said at Durban last week-end, it amounts to one thing only and that is that when the United Party comes into power they will revert to our present status and they will disestablish the republic. The time has arrived that we get a clear reply on this question.

*An HON. MEMBER:

There are only three members of the United Party present at the moment: they are holding another caucus.

*Mr. VAN DEN HEEVER:

I notice at least that two of the provincial leaders of the United Party have just entered. I should like to learn from the hon. member for Florida (Mr. H. G. Swart) what his party intends doing with the republic when they come into power? Are they going to revert to our present status or are they going to maintain the republic?

*Mr. H. G. SWART:

That has already been answered.

*Mr. VAN DEN HEEVER:

That is the sort of prevarication that we get right through, Sir. But the constitution of the United Party says that they are in favour of our present relationship with the Crown.

*The DEPUTY-SPEAKER:

Order! The hon. member must come back to the Bill. That aspect was disposed of last week.

*Mr. VAN DEN HEEVER:

I am referring to this question, Sir, as far as it affects the financial disadvantages which the country will suffer. I mention merely in passing that the United Party’s constitution says that they want to maintain the existing British connections. Are they going to change that now?

*The DEPUTY-SPEAKER:

That is not relevant at the moment.

*Mr. VAN DEN HEEVER:

Very well, Mr. Speaker, then I will leave that subject. But the United Party will very soon have to pull the reins tight as far as the hon. member for South Coast is concerned or else that party must tell us finally that they support him and that they will wreck the new status which South Africa will assume on 31 May. I want to raise one other matter, namely another statement which has lately had some adverse effect on the Stock Exchange in South Africa and that is the statement made by the new President of the United States, Mr. Kennedy, in connection with the price of gold. I am raising this matter because I think the price of gold is a matter of the utmost importance not only to South Africa, but to the whole world, and in the second place I think that existing conditions in America are such to-day that if something is not done to alleviate the position, a world-wide depression may develop to the detriment of the entire Western world and to the detriment of our own country. For that reason I feel I am at liberty to say a few words in that connection. I want to point out that Mr Kennedy had no option in the matter. He had to say that he would maintain the existing gold price of the dollar because had he said anything else there would immediately have been speculation and gold would have left America on such a large scale that it would have created the biggest chaos imaginable. Any announcement on the part of America that it intends changing the price of gold will be made after the price has already been changed. There is no other way of doing it. For that reason I hope the public will not take that statement of the American President as seriously as the Stock Exchange has in fact taken it. When we study the position, it seems to me that it is no longer a question of policy whether America will change the price of gold. It seems to me that it has become a matter of political expediency. For that reason I hope people will not allow themselves to become too scared to buy gold shares because of what Mr. Kennedy had said. You will remember, Sir, that in 1957 we discussed a motion in connection with the price of gold. It was introduced by the hon. the Minister of Economic Affairs (Dr. Diederichs) who was the member for Randfontein at the time. Nobody envisaged at that time that America too would experience foreign currency problems. but the position is nevertheless that she has foreign currency problems to-day. America is in the process of losing her gold reserves on a large scale and all sorts of artificial measures are being adopted in an attempt to put a stop to it. In view of these measures which are being taken and in view of the fact that the whole world is left guessing as far as this matter is concerned, I trust that action will be taken in the most orderly manner to solve this problem on a reasonable basis. The real position is, of course, that the dollar has been valued too high. Its purchasing power is less to-day than it was during any time since 1794 and for that reason America can no longer compete with the outside world, particularly not with factories in Europe, factories which came into existence after the last world war, the most up-to-date factories which can consequently produce at the lowest prices possible. That has resulted in America losing overseas markets. On the contrary countries abroad are to-day marketing articles in America which compete on the American market. The confidence of the world in the dollar has been shocked and there is an outflow of gold as a result, and America finds herself in an unfavourable foreign exchange position. Then there is another phenomenon (and that brings me onto the subject of a depression) and it is this: According to the latest newspaper reports there is large-scale unemployment in America to-day. During the past three months unemployment has increased by 50 per cent and 76 of the 150 industrial areas have been proclaimed areas where there is acute unemployment (where unemployment is over 6 per cent). I am merely mentioning this in order to give hon. members an idea of what is happening. The gold reserves of America have dropped from more than $22,000,000,000 a few years ago to $17,415,000,000 last week. Against that America has heavy commitments abroad. President Kennedy himself announced the other day that there were $15,000,000,000 invested in the U.S.A. from abroad and that those investments had to be protected. They are long-term investments or reasonably save investments. In addition there are short-term trade investments which brings the total to over $22,000,000,000. The position of the dollar, therefore, is weak, Sir. Then you have the phenomenon in the other direction, viz. that the money of Germany and of Switzerland has been valued too low. They are too strong. As a result there is a lack of parity between the various monetary units in the world, and while the United States of America are trying all sorts of measures to get out of her difficulties, I want to bring an important report by their special financial correspondent in London to the notice of the Minister, a report which appeared in the Sunday Times of yesterday’s date. The report says this in connection with President Kennedy’s message to Congress—

There is no mistaking the vigorous expansionist theme in his domestic proposals …. The President re-affirmed the decision to have no truck with the devaluation of the dollar. How the two can be reconciled will be the main problem of international discussions which are to begin next week in Washington with a view to strengthening and amending the International Monetary Fund.

And then further on—

What is at stake may be a complete recasting of the system of international repayments. The objective is an attempt to make good the shortcomings of gold and the present price of the metal in providing a sufficient volume of international liquidity and reserves.

It seems that this coming conference will be of the utmost importance and I want to ask the hon. the Minister and his financial experts whether they are well informed as regards this coming conference which intends converting the International Monetary Fund into another body, a body which will control the reserves of the various countries throughout the world that belong to it. Because that is what this report amounts to. If that is the position I want to know whether this is not something which affects the sovereignty of other countries. At this stage I do not want to say anything more about the price of gold except to say that you need liquidity, a great amount of liquidity, much more than we have to-day, if you want a free flow of international trade in the world; and I think every member in this House is more in favour of the idea that the price of gold should be increased than they were in 1957. To judge from information from abroad it appears that that is the general feeling to-day, except in the United States. There is one thing, however, which worries me and that is the policy which America follows in a certain respect. The policy in America to-day is to give money to those countries which are short of the necessary foreign currency so as to enable them to buy from America. That is done under the “lend-lease” system and similar arrangements. When you go into this question, Sir, you can come to only one conclusion, namely, that where the United States give money away, or partly give it away and partly lend it, to countries which are not gold-producing countries, with the object of providing them with more foreign currency so that they can buy from America, the United States are increasing the price of gold to those particular countries but not to the gold-producing countries. Is that not discrimination against the gold-producing countries and against countries which have sufficient foreign currency? And is that not a way of circumventing this desire for an increase in the price of gold, something which is essential to the whole world and this desire for greater liquidity which is also as essential? I want to ask the hon. the Minister whether this is not a matter which should be raised on international level so as to ensure that it goes no further. Because I think it is unreasonable on the part of America to say that the price of gold must remain at a certain figure, if she gives certain countries special benefits, benefits which amount to nothing less than an increase in the price of gold as far as those countries alone are concerned.

*Mr. M. J. H. BEKKER:

I rise to participate in this debate, in the first place in the knowledge that with two exceptions the agricultural industry is our greatest asset and makes the greatest contribution to our national income, and in the second place because it is accepted by all that the agricultural industry determines the balance between the platteland and urban population groups in both the social and economic spheres. But we are now faced with this problem: What are we to do to place the agricultural industry on a stronger and firmer basis than was the position in the past, so that the industry can maintain its rightful place? In this regard I want to quote from para. 417 of the report of the commission of inquiry into European occupancy of the rural areas in order to impress on the House the importance of this aspect—

The commission, after a profound and searching investigation into all the aspects of the White occupancy of the platteland, and after a thorough study of all the problems relating thereto, came to the firm conviction that it is in the best future interests of South Africa to maintain on the platteland the maximum number of Whites, who are assured of a worthy and safe existence. There is definitely no way of arresting the exodus from the platteland, unless those engaged in agriculture are ensured of a sound economic existence. Only a prosperous, well-established and vocation-conscious farming population can make a positive and essential contribution to the continued existence and security of White civilization. The recommendations which follow are based on this fundamental conclusion.

Consequently, when we think of the platteland, we are thinking of the soil of our father-land which is our nation’s most valuable asset, because it is the resources which our soil contains that must feed our people. To neglect this asset is to endanger the future existence of any nation. Although a certain section of our people are known as the farmers who have been entrusted with the right to own that land, they form part of the great whole of our national economy together with so many others in other industries and occupations. In this way all of us are working separately and together to assure each citizen a place in the sun, to the honour of our nation and fatherland.

When we emphasize the weal and the woe of the farmer, we do so in a spirit of deep gratitude towards all the other groups and industries within the framework of our national economy, and in the full realization of the equal rights of others to assistance by the State. However, I maintain that the agricultural industry is one of the oldest in our country, and is also the industry which is the most subject to influences beyond its control. The unfavourable climatic conditions of our country are such that by international standards our country can really not be regarded as an agricultural country.

We can now proceed to examine the position of our agricultural industry more closely, and we find that here we have an industry which after approximately 300 years—in the northern provinces it is hardly 100 years old—has been developed to such an extent that our agricultural industry already holds a place of honour amongst the nations of the world. I want to show the House how in this country the agricultural industry has also shown itself to be a very stable factor as far as our national income is concerned. In 1938—and I am now quoting from the Finance and Trade Review of Volkskas for December 1959—agriculture contributed £49.8 million. This represented 12.6 per cent of our national income as compared with the contributions of other industries. By the year 1957-8 we were already contributing £244.3 million, that is to say, 12.3 per cent of the national income. In the light of these figures we have the right to say that our agricultural industry is a stable industry. Seen then from the point of view of the country’s economy, the Government has a certain responsibility towards agriculture as an industry. Mr. Speaker, it has been the experience in all other industries, and the same of necessity applies to agriculture, that there are certain growing pains and problems which make themselves evident over the years. Thus as long ago as 1934 a commission of inquiry was appointed to investigate the basic problems of the agricultural industry. I now read from para. 935 of the report of the commission which was appointed to inquire into co-operation and agricultural credit—

The Union farmer has reached the stage of development where production credit is an essential requirement to enable him to conduct his farming operations economically and successfully. In the more developed areas this need has long been felt. Other countries have recognized the need in providing special short-term facilities to farmers in addition to the long-term Land Bank systems and the need for such short-term facilities is becoming extremely pressing in South Africa.

This report was submitted as long ago as 1934. But the report goes further, and I want to read to the House one of its recommendations, as contained in para. 11—

That the existing agricultural credit system should be revised with a view to transforming the present Land Bank into an independent mortgage bank obtaining its funds from the public by means of farm mortgage debentures, co-ordinating the disbursement and collection of State funds to agriculture and introducing a system of chattel mortgage which will enable producers to pledge their movable assets as security for short-term loans and further, that a technical committee be appointed to inquire into the financial and banking aspects of these proposals and to advise as to the form of credit machinery ultimately to be adopted.

Mr. Speaker, as I have shown, as long ago as 1934 we already found that this urgent need had arisen amongst the farmers. I must say that the then government lent a sympathetic ear, because as an immediate result of this report the State Advances Recoveries Act and the Farmers’ Assistance Act were adopted in 1935. When these Acts were implemented, we found that an amount of approximately £7,000,000 was ploughed back into the agricultural industry. This enabled our farmers for a number of years to combat the problems with which they were faced from time to time. They were sufficiently strong financially to be able to meet these problems on their own. In 1956-7 further problems arose. But, Mr. Speaker, I want to show that during this period from 1935 to 1956 there was not any urgent necessity for putting the Acts I have just mentioned into full operation. The need was not present. During 1957-8 it once again became necessary to plough back an amount of approximately £14,000,000 into the agricultural industry through the medium of the machinery under the Farmers’ Assistance Act and the State Advances Recoveries Act. But no matter how grateful we are for that assistance and no matter how much we may appreciate it, there are nevertheless indications that this is not a permanent solution which will safeguard the future of our White farming community on the platteland. I therefore ask the House to consider briefly and to make a superficial analysis of our agricultural economy.

On the one hand we have the available financial resources, that is to say the private investment sector, to which we owe a great debt of thanks. The private sector is based more specifically on the profit motive. These are business and financial institutions which lend money, and it is their responsibility to obtain the highest possible dividends for their shareholders. That is the first aspect which I should like to mention. Then we have the Land Bank which is a very powerful financial institution, from which the farmer can obtain funds. This is also a completely independent financial body under the present set-up. Then we have the Farmers’ Assistance Act, the State Advances Recoveries Act, and in addition the various State Departments which provide credit to the farmers from time to time on the basis of merit and in accordance with the circumstances.

When on the other hand we consider the requirements of the farmers, I should like to classify the farmers into five different groups: (a) We have the financially strong and self-supporting farmers who are prosperous and, who do not need any assistance from anyone including the State, (b) Then we have the following categories of farmers with sufficient assets which can be used for security. This is the farmer who due to his creditworthiness can normally look after himself when unfavourable conditions arise, (c) In the third place we have the less well-to-do farmers, and it is these people who experience a shortage of working as well as development capital from time to time, (d) Then we have the young farmer, the youth who is starting out, as well as the man who had previously followed some other occupation, who has found it impossible through circumstances to realize his desire also to own a little piece of his fatherland, and who may start farming when he is middle-aged, (e) Then finally we have the farmers on our settlements.

Mr. Speaker, under normal circumstances these various types of farmer whom I have mentioned are financially self-supporting, i.e. when there are no special problems. But let us now make a brief analysis of what the position of these various groups will be if a state of emergency should arise.

We immediately find in the first place that the capital which normally flows from the private sector to the agricultural sector, dries up and is then gradually withdrawn because, as I have shown, these people are normally motivated by the profit motive. It is their duty and their task to ensure that the money which they invest earns profits for their shareholders. For that reason it is a quite natural tendency which we do not have the right to condemn, that that money dries up and is gradually withdrawn. As a result of the favourable position which groups (a) and (b) find themselves owing to their creditworthiness and asets which they can use as security, it is not essential for them to seek help elsewhere. They still offer a safe investment to these financiers in the private sector, and for that reason these investments are left untouched. But when these farmers also need the assistance of the Land Bank and other institutions, they have sufficient assets to use as security so that they need not suffer any financial inconvenience whatsoever. But then we turn to these groups (c), (d) and (e). These are the people who are not as creditworthy. From time to time, even under normal conditions, they are faced with this shortage of working and development capital. In addition, we have the farmer who is starting out and who to-day has to buy land at the highest prices. When he starts farming, he is immediately faced with a shortage of capital, and this is even more so when a state of emergency arises. The settler is exclusively dependent on the Department of Lands for assistance. Mr. Speaker, I want to show further that if the State did not periodically and in times of emergency accept the responsibility for providing the necessary financial aid to these groups, there would be only one course open to them, namely to cease farming. They cannot remain suspended in the air for an indeterminate period. They must obtain assistance somewhere. The next thing that happens is that such a person has to disappear from the scene as a farmer; he has to offer himself on the labour market, and this usually means that he must work as an unskilled labourer, probably in our cities.

Mr. Speaker, I want to go on to indicate what the report of the commission of inquiry into the European occupancy of the rural areas has said on this point. I am reading from para. 428 of its report—

The Commission agrees that the land will eventually be owned by him that cultivates it in the sweat of his brow; and the Commission is convinced, that if the tide does not turn and the growth of non-White preponderance on the White platteland continues, this state of affairs will in the end hold out a serious threat to White civilization in this country.

And then there is para. 430—

  1. (1) Economic:
From personal observation and after weighing all the evidence at its disposal the Commission has come to the conclusion that the main reasons for rural depopulation and exodus from the farms are of economic origin.

As I have already shown in my classification of our farmers, the last three groups are exclusively dependent on State aid in times of need. This is also the finding of this Commission which did very thorough work. Let us also analyse briefly what State aid our farmers receive at present. Prior to 1935 special legislation had to be introduced whenever a state of emergency arose. Without such legislation State aid could not be made available. But because, as I maintain, our Government keeps its finger on the pulse of the farmer, the law has since been so amended that certain State aid can be advanced to the farmers merely with Cabinet approval. We feel that this too does not yet go far enough. In cases of emergency the time factor is of the utmost importance. I believe that hon. members will agree with me that when a state of emergency arises in a certain area, and emergency aid schemes have to be worked out from scratch, the matter has to be taken through the various channels via the different departments right up to the responsible Minister, and it must then go before the Cabinet, ten to 14 days can easily elapse. I therefore feel, Mr. Speaker, you will also concede, that during these 14 days during which these people are in distress, a great deal could be done. You and I believe the the Cabinet will give the necessary approval, but the man who must assist one, the shopkeeper or the bank, the man from whom one must buy the necessities of life after one’s crop is ruined, does not believe it. He says he wants proof. We even find this to a lesser extent in the case of our co-operative societies. But that is the bitter truth. We then go further and we also find differences in the approach to, or in the interpretation or application of, that policy by the various State Departments. We find that when three farmers live next to one another, their economic position and their social position are in general more or less the same. They are neighbours and they are acquainted with one another’s affairs. The one farmer’s position is exactly the same as that of the others. If a disaster strikes them or the army worm, for example, destroys their crops, they approach the State for assistance. But. the one man falls into the category which the Land Bank must assist. The other man falls into the category which must be assisted by the Land Board or the Farmers’ Assistance Board; while the other perhaps has to be assisted by the Department of Lands. I firmly believe that all three organizations are sincere in their intentions. They want to give every assistance to these people who are farming under their guardianship. That is the basic principle. But the various schemes under the various Acts are implemented and applied in such a way that the amounts granted differ vastly as do the methods of collection. Now in practice we have the position that these three farmers compare notes. One says that he has received £100 and the other says he has received £200, and they simply cannot understand it. The first person the farmer blames is his Member of Parliament and the second is the Government. The position is in brief that these farmers do not believe one when one tells them that is in accordance with the provisions of the different Acts. They cannot accept it. As a matter of fact, nor can we expect them to accept it. If they accept it, they say: But can you not rectify the position; can you govern the country in this way? This is something which definitely emphasizes the importance of this matter. The solution is that the various schemes for helping the farmers should be consolidated so that we can expect uniform action by the State.

Mr. Speaker, as the representative of a constituency which consists of voters who come from the four corners of our land, I can be expected to give a reasonably representative opinion. Some of the most prosperous farmers of our country live in this constituency. In addition products of practically every variety are cultivated and under all possible climatic and other conditions. Every possible plague known to agriculture is found in that constituency; it is also very much subject to the ravages of nature. Yes, Mr. Speaker, this is in truth a constituency which many hon. members will envy me. Against this background of experience and of deep study, I once again want to confirm the statement I made just after my election, as reported in the Transvaler of 29 July 1960. At that time I said—

The necessity exists for the establishment of a full-fledged State department with its own Minister, under which all the existing State schemes for assisting the farmers as well as the settlers will be consolidated.

Let us now examine the future of our agricultural industry. I maintain that after 25 years—I am now referring to the year 1934 when the Viljoen Commission sat—we now have reason to review the position once again. In saying that I am not alleging in any way that the Government has not kept pace with the needs of our farmers. But I do feel that such tremendous development has taken place in our agricultural industry since 1934, that we should consolidate the laws, which have been amended from time to time, the application of those laws and the various departmental policies.

Mr. Speaker, I now want to tell the House that at present we are experiencing an unprecedented land hunger in our country. I quote from the consolidated figures for the past 11 years which I have obtained from the hon. the Minister of Lands. In 1948-9—this was immediately after the war and I contend that at that stage we could have expected a tremendous demand for land from the soldiers who had returned from the war and who had perhaps been uprooted, etc.—there were only 408 applications, of which 192 were approved. These applications were under Section 20, that is to say, the old one-tenth system, as the farmers called it. But these numbers have increased and we find that by 1947-8 applications had more than doubled, namely to 1,017, and of those we were able to assist 313. In the following year there were 777 applications of which the Department of Lands could grant 228. We then go further and analyse the position on our settlements. In the year 1949-50, 4,644 applications were made to the Department for State-owned land on closer settlements. Unfortunately as a result of circumstances, we were only able to place 150 of the applicants. In 1957-8 there were 3,755 applications and of those applicants 87 were placed on settlements. I now want to give the House the number of applications which the Department of Lands alone has received. I am not even referring to private purchases. Over the past 11 years the Department of Lands alone has received a total of 26,957 applications. Of these applications the Department was fortunately able to give favourable consideration to a total of 3,371. This gives us the position that over a period of 11 years there were 23,586 people whom the State could not assist and who therefore were unable to acquire land because they were not financially able to buy land themselves. We concede that many of these people may since have been transferred to another field of activity or industry in which they are contented. I am merely mentioning these figures to show the House how great a demand for land exists in our country.

To support these figures I must also show how land prices have risen. This is proof of the truth of my submission. I am quoting from the Finance and Trade Review of Volkskas for December 1959. which shows that during the period 1938-41 the average price of land was £2.4 per morgen. During the period 1946-52 it was £6 per morgen, and during the period 1953-8 it was £9.8 per morgen. This is an indication of the tremendous demand for land, and it should also indicate to us the potential development which we can expect in the agricultural industry.

Mr. Speaker, it will become necessary for us to help many of the farmers who in the meantime have had to farm under difficult conditions and who may have left the industry temporarily, to re-establish themselves. We must establish the majority of the people to whom these figures refer on land. Furthermore greater demands will be made of the agricultural industry as a result of our rapid industrial development. We shall be faced with competition and we cannot escape that fact. But we also have the position that industry offers the private sector an attractive investment field. Private capital earns a far better return in industry than in agriculture. Hence the necessity for the State as such to keep a watchful eye on the position in order to see what development is taking place in agriculture.

There is another factor, namely that our farmers will have to realize that we shall have to farm on a more scientific basis. For this purpose financial aid is also required. Capital is required and if the farmer does not have the capital, how is he is use more scientific methods? After all he needs the necessary implements. There is the essential investment in mechanization. We are living in an era during which manual labour is scarce and expensive, and in most instances unobtainable. This has caused an unfortunate state of affairs for many people, namely that we have to mechanise at a rate which may not be a sound relationship to our farming units, but we are obliged to do so by circumstances.

The basic principles which are envisaged under this new policy are the following: By taking this step the State will accept the financial responsibility for assisting certain farmers under certain circumstances. Hon. members must understand me correctly: The gates must not be thrown open so that anyone can simply ask for as much as he wants. That would be an impossible task and it would be foolish to ask the Government to do any such thing. But it will be necessary to assist and to look after these persons whom I have classified into groups (c), (d) and (e) and who cannot obtain assistance from any other source. As a matter of fact the position is also that wherever the need arrives such State aid must be made available to the farmer at any time and in any area. I want to give a practical example. In the past the policy was that the State aid to which I am referring in this particular argument, was applied on a regional basis. If there was a severe drought in district (a) or in certain districts, all the bona fide farmers in that area were regarded as qualifying for assistance. That is not what we want. We ask that a slight amendment should be introduced. We may have a district which is particularly prosperous, and in such a district which cultivates tobacco for example, there may be a hailstorm. While there may be a thousand prosperous farmers, 50 of those farmers may not have a crop. In taking this proposed step, it must be possible for those five or ten farmers who are affected in this way, to qualify for State aid. That is why I submit that this aid should be made available at any time and in any area, and not necessarily on a regional basis. In cases of essential development where the productivity of the unit is being increased, consideration must also be given to making long-term capital loans available with the main object of increasing the productive capacity of the unit.

There is also the collection policy of these organizations. We feel that in its collection policy the State, if it accepts the role of financier, must reveal the necessary flexibility—and this can only be done by the State; we cannot expect the private sector to reveal such flexibility in collecting debts because as I have said they are mainly concerned with the profit motive and this money is advanced so as to earn profits. And it is for this reason that since 1935, it has only been necessary to write off 4 per cent of the debts owed to the State as bad debts. This is proof of the following great truth: Help the farmer and even if he takes ten years, he will pay back his loan. If there are two, three, four or more crop failures in succession, we must show this necessary flexibility because at suchm times the borrower may not be able to meet his obligations to the Department. We urge that the necessary flexibility should be shown.

Mr. Speaker, I ask the House in considering this matter, to do so on a national basis; we must realize that there is one section of our people, of the White population, who are going through difficult times, who may be going under; and this timeous State aid will mean that we can save some of them and by so doing further protect and develop our agricultural industry as an industry which, as I showed at the beginning, produces a stable revenue for the State.

In conclusion I should like to convey my thanks to the Government for what it has already done for the farmer an individual and for the agricultural industry as a whole. Mr. Speaker, there is just one final thought I want to express. During previous debates it has been suggested that when such aid is advanced to the farmers, it should be given on a conditional basis. Such farmers should be prepared to obtain this financial aid from one source alone, and this aid will be accompanied by the necessary technical guidance with a view to permanently rehabilitating such farmers. This is a very sound idea and not one of us would dare to belittle and under-emphasize the importance of technical guidance for our farmers. But we must nevertheless guard against advancing this financial aid to capable, adult, experienced and self-respecting farmers on a conditional basis; we must guard against branding these farmers in giving them State aid, as people who are bywoners of the State. In taking these steps, we must do so with the utmost caution and discretion.

Mrs. S. M. VAN NIEKERK:

I have great pleasure in congratulating the hon. member for Groblersdal (Mr. M. J. H. Bekker) on his very able maiden speech. I must specially congratulate him as he has made such a perfect study of credit facilities that are necessary for the farmer, and I can see that the hon. gentleman is going to be a great asset to this House, particularly as he speaks with such assurance and with such knowledge.

The hon. the Prime Minister in his speech in reply to the no-confidence debate, made the following remark—

I want to say with the utmost certainty that South Africa has had a good year. South Africa has undoubtedly enjoyed a reasonably prosperous year. When we study all the statistics which can be regarded as a barometer of prosperity or recession, we find prosperity in every field.

The hon. the Prime Minister speaks about the steady rise of the national income, and he says “throughout, without one single exception, progress is evident. South Africa is experiencing a period of prosperity”. Sir, I want to know who did the Prime Minister consult when he said these things? Who were his advisers when he made a statement like that? Did he think at all of the farmers of this country when he made that statement? Because he says very clearly “without one single exception progress is evident”. Did he ask the farmers of this country what their position was? Has he asked the citrus farmers, the wattle farmers, the dairy industry, the pineapple producers, the maize farmers, the meat producers, the sugar farmers, the poultry farmers, the onion producers? Has he asked any of them whether they are in this state of prosperity that he talks about? Have they enjoyed this undoubtedly prosperous year when the national income is steadily rising? Has he asked the farmers what their economic position is? Did he ask producers of fresh fruit and vegetables whether they find it an economic proposition to produce fresh fruit and vegetables?

In regard to the citrus farmer, is it not true that the citrus farming industry brought in £18,000,000 last year and that this year they exported 2,000,000 more boxes but that they will be pleased if their return is £9,000,000? That is exactly half of what their income was last year.

Mr. B. COETZEE:

Whose fault is that?

An HON MEMBER:

That is the fault of your policy.

Mrs. S. M. VAN NIEKERK:

I am asking who the Prime Minister consulted when he said that South Africa had had a prosperous year. I ask the wattle farmer, is it not true that the price of wattle is so uneconomic that farmers do not know what to do? Is it not true that after 1955 the price of this commodity took a steep downward trend? Is it not true that the price of dried bark fell from £31 per ton in 1954 to £21 per ton 1961? The price of wattle extract fell from £70 to £53 a ton in five years. Is it not true that bag-worm is now the worst ever and that the farmers find it absolutely impossible to spray because it is too expensive and uneconomic at the present price, and that trees are becoming denuded of leaves? I ask again whom did the Prime Minister ask? Did he ask the dairy industry? There has been an increase in milk production because of better farming methods. The amount of cheese and butter made has increased, but it is also true that consumption has remained static. There have been increased production costs and losses on exports. In this country the consumption of milk per capita is amongst the lowest in the world and there is an extra reason for this increase in production. Under the soil conservation scheme this Government advised the maize and wheat farmers to plant grass to restore their soil. The farmers at that time warned them that it would bring about increased production, but they took the advice of the Government and produced more milk and cheese and butter, but now they find that there is no market for their products. I find that Organized Agriculture says the following—

Twee jaar gelede het melkproduksie geweldig gestyg. Daar was destyds voorspellings dat die algemene aanvaarding van ’n grasrusoesskema as middel vir die herstel van uitgeputte grond, ’n oorvloed melk sou lewer wat met die huidige produksiekoste in ag genome nie ’n mark sou vind nie. Grondbewaring kan nie by die mark aangepas word nie, en die verwarring wat nou in die suiwelbedryf heers bevestig hierdie woorde … Geen boer sal homself bankrot maak om sy grond te bewaar nie. As die gemeenskap dit van die boer vereis dat hy die bodem vir toekomstige geslagte moet bewaar, dan moet die gemeenskap ook sorg dat die boer in staat is om dit te doen.

But the hon. the Prime Minister says: “I want to say with the utmost clarity that South Africa has had a good year.” Has he asked the pineapple farmers? Are they having a part in the steady rise in the national income, or are they suffering from over-production and from loss of markets? Why are the farmers from East London to Bathurst and portions of Alexandria leaving their farms forlorn and deserted? Why are the farmers in Natal around St. Lucia Lake deserting their farms? These farms, and especially the ones around St. Lucia Lake, were bought with the savings of many people who had what the hon. member for Groblersdal (Mr. M. J. H. Bekker) called a “grondhonger”. They bought these farms with the savings of a lifetime and cultivated their lands very well and built houses, but they had to desert these farms and go back to take jobs again.

Did the hon. the Prime Minister consult the maize farmer? What is his position? The Prime Minister says that throughout, without one single exception, progress is evidenced, and South Africa is experiencing a period of prosperity. It is true that in the past the maize farmer had 15 years of prosperity, but because the margin of profit to the maize farmer on the present determination of the cost structure was so low he is now in trouble after three years of drought and difficulty. I want to take just one case. The price of maize is calculated on the basis of two-thirds being production costs and one-third being profit, the sum from which the farmer has to live, educate his children and improve his farm. That is more or less 20s. for production costs and 10s. profit. Let us take it that this farmer has one year of drought, then he has lost plus minus 16s. per bag because that is the sum that he has spent on fertilizer, ploughing and cultivating his land and on fuel. That is the sum he has spent before reaping time comes. Let us take it that the year after that is a normal year and he gets the maximum profit of 10s. a bag, but last year he was 16s. down, so he still owes 6s. a bag. The third year is also a normal year. I said that the maize farmers have had three bad years, but I am now taking a case where he only has one bad year. The third year is normal and again he has a profit of 10s. a bag. He now has an over-all profit of 4s. a bag if I deduct the 6s. he was still owing from the previous year. This means that taking an average over three years he has a profit margin of Is. 8d. a bag. On this he has to live, educate his children, pay his interest and improve his farm. I ask whether this is humanly possible when the price of his product is calculated without taking into consideration the ordinary risk he has to run from the elements.

Did the hon. the Prime Minister consult the onion producer? What is his position? Or is there chaos in his marketing, as is the case with meat producers? The meat producer is back where he was 20 years ago.

An HON. MEMBER:

That is not true.

Mrs. S. M. VAN NIEKERK:

The permit system has been cancelled, and although that system was never perfect, instead of improving it this Minister has thrown it overboard without consulting the farmers, and what do we find? We find that on one day in one place there is a fluctuation of as much as 6d. per lb. in the price of meat. As a matter of fact, the farmers of this country are beginning to wonder whether this Minister is at all in favour of controlled marketing.

What about the sugar industry? That industry has been prosperous all along because it was a tightly controlled industry, but now we find more and more ministerial interference. We find that where the sugar people themselves put a moratorium on quotas, the Minister came and granted extra quotas, with the result that the farmer is facing cut quotas. We find in the dairy industry that local consumption has been stagnant, and as the result of these factors there has been a 23 per cent cut in production last year. We find that in his annual general report the Chairman of the Sugar Association said that the industry had faced a loss of £6,000,000 last year. This is a £35,000,000 industry and in one year it has to bear a loss of £6,000,000. This is the prosperity. Again, I ask who did the Prime Minister consult? Did he ask the Minister of Finance who told me on 10 February that £32,590,000 had been spent by the Land Bank in one year, in 1959, to help the farmers, and that in 1960 £22,000,000 had been spent. When you take into consideration the amount spent by the Farmers’ Assistance Board, you have about £62,000,000 spent on the farmers in two years. For what? Just to keep them out of the insolvency court. It is only a changeover of creditors. They still owe the same amount of money and they still are faced with the same narrow margin of profit which has brought them to this state. They are still faced with stagnant or shrinking markets and falling prices and losses on products sold overseas. I have said that in two years £62,000,000 was spent just for a changeover of creditors. Is this the prosperous state the farmers find themselves in? Now the hon. member for Groblersdal, whom I congratulated on his maiden speech, based his whole speech on credit and credit facilities for the farmer. In this time when all the experts on all sides say that there should be an extension of Land Bank funds just to give the ordinary credit facilities, the Land Bank curtails its credit, and why? Because in this prosperous time the Land Bank has more money than it can use. Is that it? Or is the Land Bank short of funds? Did the Prime Minister ask the Land Bank officials who tried to float a loan a little while ago? Did he ask them what their success was? I would be glad if the Minister of Finance would tell us what success they had in floating that loan, or the failure of it, or whether it was held back. I would like some information on that point, and if he did not succeed, why not? Because in a prosperous country surely that loan would have been granted. I ask again whether the Minister of Finance will tell us what the Land Bank says about the shortage of money? The Nationalist Party has constantly told the country, as the Prime Minister is telling the country now, that the country is flourishing. In debate after debate in this House hon. members on this side have pointed out that the farmers were getting more deeply into difficulty. In 1958 the then Minister of Agriculture said that the position was being exaggerated. In regard to the country’s general economy, I hope the hon. member for Pretoria (Central) will say the same thing, that the position is being exaggerated. The present Minister of Agricultural Economics and Marketing, whilst launching a personal attack on me, said that one would think that the agricultural industry was on the brink of insolvency. He went on with the same arguments which we who listen to the various debates on agriculture heard him using during the last week and the week before. It is tremendously interesting to note that there are five motions on the Order Paper all relating to agriculture, one in regard to economic planning, the others in regard to credit facilities, land prices and production costs, drought, etc. These motions are all drawing attention to the plight in which the farmers find themselves. I ask who did the Prime Minister consult, and where I reply to my own question I must say he consulted the Minister of Agricultural Economics and Marketing because he must have believed him when he made this statement, and as a reward for his lack of knowledge and for the misstatement that all is well with the farming industry he has made him a Minister. Because there are now two Ministers of Agriculture, and therefore I suppose the Prime Minister thinks we are now better off. I heard a suggestion made in the House this afternoon that we should have a third Minister, but heaven help the farming industry if that should come about. We have our Marketing Act, but the Act has not been able to prevent the steady narrowing of farmers’ margins as production begins to exceed the demand for many agricultural products. The Marketing Act has not been able to prevent the steady narrowing down of the profit margins. If the farmer cannot get a fair price for his products he cannot even conserve the existing productivity of his soil. We are still unable to distribute the abundance that we have. Let us take oranges. The White people eat a fair amount of oranges, but what about the Bantu and the Coloureds? Their consumption is negligible. If they eat one orange a week more, it would mean 5,500,000 cases of 100 oranges each to meet their requirements. It sounds almost impossible, but it happens to be true.

Mr. VOSLOO:

That is right through the year. There are no oranges in December.

Mrs. S. M. VAN NIEKERK:

That hon. member has never heard of cold storage, it seems to me. If the Coloureds and the Bantu increase their consumption of meat by ½ lb. a week it would mean 9,500,000 more sheep carcases or 712,000 carcases of beef. So I can go through the lot. I just want to name one more. The present production of butter is 1,750,000 lbs. If each of our Coloured and Bantu eat 2 ozs. more, i.e. 2 tablespoons a week, the production would have to be increased by 1,000,000 lbs. a week. In this fantasy of prosperity where farmers would not be faced with surpluses and falling markets, at the moment we are exporting at a loss because our own people cannot afford to buy these products. We are subsidizing the production of food for the benefit of people beyond our borders. There is neglect on every side by the Government, as the motions on the Order Paper prove, and they do not come from this side of the House. I want it to go on record that the facade of prosperity which the Prime Minister has built up is a false one as far as the farmers are concerned. The Government is sacrificing the prosperity of the farmer on the altar of their ideology. Because of their ideologies they have created economic stagnation which has restricted the inflow of capital and stopped the expansion of industry, with a resultant cut in wages for the employee and the loss of increased employment. Their attention has been fixed on the racial ideology and on apartheid, but they have left the farmer at the mercy of all and sundry. There has been no planning in this country for the farmer. I want to come back to something else. In other countries subsidies of from one-quarter to one-third of the cost of fertilizer is paid by the Government. This Government still pays the original £1 a ton introduced by the United Party Government and there has been no increase whatever. The cost of fertilizer has gone up, but the Minister does not seem to know that. As regards phosphates, the Government is forcing the fertilizer firms to use a certain percentage of local phosphates, and the farmers have to subsidize Foscor. Every year £20,000,000 is spent on fertilizers. The South African farmer is also subsidizing Sasol because he has to buy ammonium sulphate from them at a more expensive price than the one he can import it at. If these industries must be subsidized, let the country as a whole do it, but do not penalize the farmer. I say that there is a stampede on the part of the farming community to get themselves back on an economic footing. I say that in the farming industry there is confusion worse confounded, and it is going to become worse as long as this Government sticks to its policies, as long as we do not get in capital from overseas and our industries cannot expand and we cannot sell our products to our own people because they do not have a better income.

*Mr. J. D. DE VILLIERS:

Mr. Speaker, the hon. member who has just sat down has made me so sad that I was reminded of Gray’s “Elegy”, where he said—

  • Where palsy shakes a few last sad grey hairs,
  • Where youth grows pale and spectre-thin and dies,
  • Where but to think is to be full of sorrow and leaden-eyed despair!

I have quoted it, but it was not meant personally. We have again heard the old story about how difficult the farmers are finding things. That makes me think that the hon. member who has just sat down is remembering the old United Party days when there were shortages of all kinds and people had to queue up for everything. We cannot talk in the same breath of all the bad years and also of under-consumption. We cannot talk about record crops and then say that too little of our agricultural products are being consumed and therefore there is a surplus. Surely it is not the fault of the Minister of Agriculture if people are drinking too little milk, or if too little of our other products is being consumed in the country. The fact that the hon. member speaks about the “abundance that we have” is something of which the Minister of Agricultural Economics and Marketing can be proud, knowing that there is nothing wrong at least with the production side of our agriculture. The hon. member referred to the onion growers. It so happens that there are many of them in my constituency, but what was her contribution when a few years ago attempts were made to establish orderly marketing for that product, and when we tried to get the districts right throughout the country to allow themselves to be proclaimed so that there could be orderly marketing for that product? That is one of the reasons why it failed, because she did not do her share.

But I want to discuss a different aspect, not so much the production pattern or the consumption pattern of the platteland, as the population pattern. I have noticed in this debate that various speakers on both sides of the House referred to the depopulation of the platteland. I also want to refer to it, but in a particular sense. The fact that various hon. members mention it indicates to me that it is something which is foremost in our minds, and it is a good thing that that is so. Let me say immediately that I am not one of those who thinks that the depopulation of the platteland is always a bad thing. There was a time years ago when the poor White problem was very serious and when the process of depopulation and the migration to the cities helped us to solve that problem. In those days there was prejudice in the mind of the plattelander against the migration to the cities, and there were many sound reasons for it. The unskilled plattelander who was squeezed out and could not make a living at that time came to the cities and there he created a problem. There was no social pattern into which he fitted, and no educational pattern into which he fitted, or even an industrial pattern. There were not the educational and church connections to which he had been accustomed, and then he became an outcast as a misfit in the city to which he had gone. To-day the pattern is quite different; to-day there is security in regard to employment; there is housing and there is employment and a social pattern into which this person fits and in which he feels happy, and this process made its contribution not only to the solution of the poor White problem, but it also contributed towards enlarging the farms, by again making economic units of those agricultural units which had become too small due to subdivision. It can therefore be a healthy thing if it is a natural thing, but the depopulation of the platteland is not a healthy phenomenon when it is unnatural, when it takes place as the result of economic pressure.

I would like to direct the attention of hon. members to the changes which are busy taking place in the population pattern on the platteland. I have here the figures of 1921 and 1951. In those 30 years the number of White male farmers and farm workers in the Union decreased from 163,000 to 137,000, but the number of Coloured farm labourers and farmers increased from 71,000 to 89,000—a decrease in the number of Whites of 26,000 and an increase in the number of Coloureds of 18,000 between 1921 and 1951. That is the pattern in the Union, but let us take the Cape Province.

We then come to the conclusion that the Cape Province, more so than the Union as a whole, is becoming depopulated by the Whites. I have here comparative figures of the Union’s population for the first half of this century, from 1900 to 1951. All races increased from approximately 5,000,000 to 12,000,000. The Whites in the Union increased from 1,117,000 to 2,641,000. But the number of Whites in the Cape Province increased only from 580,000 to 935,000 whilst the number of Coloureds in the Union increased from 445,000 to 1,103,000, and the number of Coloureds in the Cape Province increased from 394,000 to 981,000. If we analyse these figures further we find that the percentage of increase during the first 50 years of this century taken right throughout the Union, in the case of Whites, was from 1.93 to 2.18, i.e. an increase of 25 per cent, but that in the Cape Province it increased from 2.41 per cent to 3.51 per cent, i.e. by 1.1 per cent. But now some people might perhaps argue that the Cape Province is becoming depopulated as the result of the fact that in recent times we have had very severe droughts. I now want to quote figures for the last ten years, from 1950 to 1960. During the last ten years the number of Whites in the Cape Province increased by only 62,000 whilst the number of Coloureds increased by 332,500, i.e. an increase for the whole of the Union, as I have already indicated, of 16 per cent in the case of the Whites and 35 per cent in the case of the Coloureds, but an increase during the same period in the Cape Province of only 7 per cent in the number of Whites as against 34 per cent in the number of non-Whites. In the past there were certain factors which to some extent restricted this increase, which exercised a strong influence on it. The Coloureds had a low standard of living. They had a high death rate, and a high infant mortality rate. There was malnutrition amongst them, bad housing and limited opportunities for employment. But to-day—we all talk about it lately and it is a good thing that it is so—we stand on the threshold of a new socio-economic pattern for the Coloured. The implementation of that pattern will make the pendulum of ratio between the two sections swing still further in favour of the Coloured in the Cape Province. With better housing, a higher standard of living, more opportunities for employment and improved health services, the tempo of population growth of the Coloureds will increase even more in future. During the past ten years we have had unprecedented droughts in certain areas of the Cape Province, and we still have droughts in certain parts. Consequently I feel that it would not be fair to quote the figures for those districts here, because there would in any case be a migration of all races from those drought-stricken districts. But now I want to take an area of the Cape Province, viz. the South-Western Districts, which is a fair area to take as an example because there was no drought there—in any case, not to such a large extent—and because there is a settled climate, a consistent rainfall and also reasonably stable people. In the seven magisterial districts which I took, from Caledon to Humansdorp, the following happened during the last ten years.

In the magisterial district of Caledon there was a decrease of 2,000 in the number of Whites between 1951 and 1960, and an increase of 5,000 in the number of Coloureds. In the district of Bredasdorp there was an increase of 2,000 in the Coloured population and a decrease of 800 in the White population. In the district of Swellendam there was a total increase of 33,000, but there was a decrease of 1,000 in the number of Whites, and an increase of 3,000 in the number of non-Whites. In Mossel Bay there was a decrease of 1,000 in the number of Whites and an increase of 3,000 in the number of non-Whites. I am referring to Coloureds now, and not to Asiatics and Bantu. In George there was a decrease of 2,000 in the number of Whites and an increase of 4,000 Coloureds. In Humansdorp there was a decrease of 900 Whites and an increase of 3,000 non-Whites. Mr. Speaker, this is a serious matter to me. I have been referring to one of the most well-established areas of the Cape Province. People do not normally migrate to any great extent. I know how attached those people are to their own areas. There have been no droughts. It is a stable part of the country. When I look at this pattern I described I cannot say anything else, if I take into consideration the tempo during the first 50 years of this century and the increased tempo of the last ten years, than that part of the Cape Province is becoming a Coloured province and the other part a desert. Mr. Speaker, the whole of the country belongs to all of us, and I am not pleading here because I want to be provincial, but it remains an economic fact that people go to where the money is; and where the people are, we find the markets and the industries and the opportunities for employment. That is where the markets are created for our agricultural products and that is where the political power will also be. In the Coloured townships which we envisage for the future, the opportunities for employment for Whites will become increasingly fewer. There they will in time, under the guidance of the Whites, enter the building industry, the transport services, the retail trade, the administrative channels of employment, become the owners of places of entertainment. and there they will in time fill the professional posts. How will this picture look in 50 or 100 years? To me it seems that the White man will increasingly leave this province and go to the provinces where the natural resources, the mines and the money are.

Now there is an anomaly which I would like to bring to the notice of the Minister. There are many things which are more expensive in the Cape Province than in any other province. It costs more to be the owner of a piece of land here, due to the system of taxation in the Cape Province. Education costs more in the Cape because a small number of Whites have to pay for the education of a large number of non-Whites. Because of its size the Cape Province has four times the number of roads as compared with the province which must closely approximate to it in size.

Mr. Speaker, I just want to make this point and then I will conclude. I listened the other day when the hon. the Prime Minister referred to the vulnerability of Natal, and I listened with appreciation whilst he sketched Natal’s problems and said that they were also the problems of the rest of the Union. There is an old adage which says that a chain is only as strong as its weakest link. This province, with all the problems for the future which I have depicted—is a member of the same body; it is part of our beloved land, and I would like to bring this fact to the notice of the Government, pursuant to the significant words of the hon. the Prime Minister, that the problem of every section of the population is our joint problem, and that the vulnerability of every part of the country is the responsibility of the whole of the population. Without derogating in any way from the achievements and the contributions made towards the riches of our history and culture by any other part of our country, I want to bring this thought home to the Cabinet and the Minister of Finance that unless something drastic is done for the Cape Province it will lose its greatest asset, viz. its White people. There are riches here, Mr. Speaker. One does not need mines alone, although we have those here also. We must just develop them; we have mines in Namaqualand. We have a mass of water running into the sea; we must start thinking in terms of greater things than farm planning and soil conservation. We must begin to think of the tremendous revenue we can derive from tourists because of our beautiful scenery and our long coast-line. We must start thinking of the riches in the sea around our southern coast, where the warm current stops just on the other side of Cape Point and which is lying fallow and undeveloped. And as my hon. friend next to me correctly remarks, there are not even sharks there. I therefore want to make this plea. Without talking now about the “Cape tradition” about which I know too little—I will leave it to the hon. member for Peninsula (Mr. Bloomberg) to talk about that—I merely want to say that those treasures will become lost to us which can not be restored with money.

*Mr. RALL:

I am grateful to have the privilege of being included in the team which is running on to the field where South Africa’s goal line is to be defended. This goal line symbolizes the interests of the Afrikaans- and English-speaking sections of South Africa. After 1910, after the establishment of Union, a small minority, men of Gideon, went on to the field cherishing certain big ideals. They fought the battle, they played the game and under the leadership of the late Gen. Hertzog they pressed on in order to make those ideals of their reality. Subsequently, under the leadership of the late Dr. Malan and the late Adv. Strydom they continued as a team to fight on that field and I have accepted for myself those ideals which those deceased leaders and that team had cherished as the ideals to strive for, and for that reason I am happy and grateful that I can go with this team on to the field to turn those ideals into reality. Through the years our line of defence has been broken through. Attacks have been launched on that goal line and they have often succeeded in breaking through. But since 1948 we have received reinforcements in the form of the support of the electorate, whom I will call the referee, and that electorate placed our team in a strong offensive position. The 1948 decision took us right up to the goal line of our opponents and in spite of the fact that attacks were often made on our goal line, in spite of the fact that strenuous attempts were made to discourage us, the leaders of our team succeeded on every occasion to beat back our opponents so that we were often in a position to score a try, a try which enabled us to expand the industrial development in South Africa. Our opponents also opposed that industrial development. We carried on, however, and the team carried on with the fight with all the force at its command until we attained complete independence here in South Africa. There was development in the technical and scientific fields—another try! Our farmers received financial assistance and guidance; we introduced measures which resulted in a satisfied labour corps in South Africa, and we achieved much more as a result of the team work of that team to which I have referred, a team which was under the leadership of those leaders whose names I have mentioned and whose memory we are honouring to-day. In all spheres the interests of South Africa were maintained, so much so that it would take up too much time of the House at this stage to enumerate them all. Under the leadership of our present Prime Minister we are continuing to score one try after the other along this road of our fatherland’s development and of our economy. May I express the hope, Sir, that he will be spared for a long time to lead this team that is working so hard on the field in the interests of South Africa. During this hard game that we have played over the years many members of the opposing team have come across and joined us. The result has been that we have become stronger to defend the goal line of South Africa. I want to say that they were very welcome because we were in need of reinforcements. So we had the position that, after our team had been strengthened and after some of our former opponents had joined our team, we were able to score the most important try on 5 October, and on 10 February 1961 that try was converted. That was the inauguration of a new era which marked the end of racial disunity and to my mind the beginning of racial harmony and common allegiance to the head of our South African State and father-land. I trust it also indicated the end of the sabotage which is taking place in the economic field to-day. Mr. Speaker, it was and still is the ideal of that team that with the re-establishment of a republic, a new day will dawn in South Africa and that we will be able to look forward to a new day in which we will work together and co-operate in the interests of our common fatherland. I want to ask this question: In view of the fact that our fatherland needs us, can we afford to continue to quarrel amongst ourselves? Can we afford to waste time by raising minor matters here and can we continue to hamper our country’s development by defiling the good name of South Africa abroad? No, I believe it is the wish and desire of every right-thinking South African that we should avail ourselves of this golden opportunity so that in future the Republic of South Africa which is to be established we will charge that goal line and score tries, tries which will unite us. In spite of the off-sides game which the opposing team has played, in spite of their attempts to frustrate us, we remain on the goal line of our opponents, thanks to the growing support we are receiving from the voters of South Africa. Can we be anything else but grateful, Sir? Is it surprising then, Sir, that I, as a young member of the House, am grateful for the opportunity of making my small contribution towards strengthening this team?

Mr. Speaker, in spite of what I have just said about the phenomenal growth which has taken place and the achievements we have attained, it is clear to me that a difficult time awaits our team which is on the field to-day. No one will deny that certain of our farmers carry a heavy burden. The reason for that is generally known. In my province we are experiencing droughts, floods and various kinds of pests. Various factors are causing this. On the other hand there are farmers in the Free State, established farmers, who are flourishing. You need only look at the number of transfers that are registered, Mr. Speaker, to realize how often those farmers purchase land. That shows that some of the farmers are flourishing.

But now I want to deal with the question of Land Bank loans and in this connection I want to express my personal thanks to the Government for the generous assistance which they give to the farmers in times of hardship, because if that assistance which amounted to £32,000,000 in 1959, had not been given to the farmers, and if the Government had not made that £22,000,000 available to the farmers in 1960 through the Land Bank, and if the farmers did not receive £3,728,000 in 1958 through State Advances, £5,753,000 in 1959 and £10,206,000 in 1960, if that capital had not been made available to the farmers, would there not have been cases of insolvency? Furthermore, not only would there have been insolvencies but that colossal amount would have been lost to the trade. That capital would not have been available to the trade; it would not have been in circulation and would not have stimulated trade in South Africa; it would have been frozen in the form of bad debts. Mr. Speaker, we want to say thank you to the National Party Government for having been so quick in coming to the assistance of the farmers in that emergency. It is estimated that every £1 that goes into circulation per month, increases in purchasing power to an amount of £16/£17, because the one pays the other and so it circulates from one person to the other. We can, therefore, make a rough estimate of the value of those loans which the Land Bank and State Advances made to the trade and farming industries in South Africa. We want to express our sincere gratitude to the Government for that assistance. But, apart from that, we are confronted with this problem that the farmers who received these loans were only assisted temporarily and perhaps an opportunity to rehabilitate themselves. But we must accept the fact that if agricultural prices are not fixed at such a level that that group of farmers can make a profit from agriculture, those farmers will never be in a position to meet their obligations. It is obvious that farmers should make a reasonable profit in order to be able to carry these burdens and in order to become financially sound. Some people reckon that the average profit on certain farming activities is no more than 2½ per cent in a normal year. That is not my personal opinion. If the interest he has to pay is higher than 2½ per cent and he still has to pay off on capital over and above that, you will reaslize, Sir, that the farmers who have been assisted, those farmers who carry a heavy financial burden, will find it difficult to meet their obligations. It is necessary therefore that some solution or other be found to the problem. We know that this statement that farming yields a profit of only 2½ per cent is certainly not altogether acceptable, because in my opinion it varies from farmer to farmer and from farm to farm. I have said that one or other arrangement should be made. It is obvious that there should be an increase in the price of primary products but I agree with the hon. the Minister of Agricultural Economics and Marketing that as soon as the Government increases the agricultural price for agricultural produce it is inevitable that land prices will rocket sky high. That is obvious. Now we are confronted with the porblem of what to do in this particular instance. We know that there has been a decline in the fertility of the soil. We are aware of all the poblems; that there are more diseases, more pests, that the farmer has to contend with. We also know that their production costs increase from year to year, but we have to find a solution, and in my opinion the first requirement is to stimulate consumption. That is a very difficult problem, and it is obvious that if the consumer has to pay high prices for primary products and the producer has to be satisfied with a much lower price, the position becomes absurd, and the higher the selling price of primary products the smaller is the consumption because the lower income groups and the under-privileged classes cannot afford those expensive items. I have said that I fully agree with the hon. the Minister of Agricultural Economics that if we merely increase the price of primary products chaos will follow also as regards the inflationary position which will result. I want to point out, however, that the average family, which eats meat only once a day, spends about £8 a month on meat, and a much larger family spends £10 or £12 per month. If you relate the quantity of meat consumed with the price which the primary producer receives for it, you find a very big gap between the selling price and the price which the primary producer receives. Let me give a few examples. During the past year pigs were sent to a ham factory and the farmer was present when the pigs were graded. They were all graded second grade at 1s. 7d. per lb. That was what the farmer received. The next day the same farmer went to the section of that factory where they sell their products and asked for second grade ham. He was informed that they did not stock second grade products and he had no option but to purchase first grade ham at 3s. 6d. per lb. Do you see the incongruity, Sir? I know of a case where a producer sent first grade wethers to the controlled market at Durban and they were sold at 1s. 8d. per lb. The following day a consumer bought mutton there at retail price and he had to pay 3s. 8d. per lb. The position cannot go on like this. We must find ways and means of bringing the primary products within the reach of the consumer so that the lower income groups can also afford those primary products. Furthermore not only will that be in the interest of trade, of the consumer and of the producer, but it will be in the interests of the nation as a whole because the nation must be fed properly and must be in a position to buy the product which we as farmers produce. I say that the only solution is 100 per cent control over the meat market. The meat will then be arranged under supervision, the strict supervision, of inspectors according to their grade, and that meat must be subsidized, and the amount of the subsidy should also be shown on the price tag attached to that meat. We must subsidize only for the sake of the producer and the consumer and that can only be done if the entire market is controlled. I am convinced that if we can stimulate consumption it will ultimately benefit the producer as well, because a good demand will definitely affect the price offered. It will also put a stop to the present position where we suffer losses on the export market. Has it not become necessary to review the whole question of total control?

Now I come to something else namely the subsidization of agricultural products, the fixing of prices for the primary producers at a higher level. As far as that is concerned I agree with the hon. the Minister, but steps should also be taken in that regard and I want to suggest something to the House for consideration. I am not saying that this is a thoroughly worked-out and water-tight plan. But if we change our income tax system, if the method of assessment is changed, we shall also be able to combat the inflationary land prices. For example, a taxpayer should be taxed on his net income with due consideration of his capital strength. I want to make it quite clear that I am not at all pleading for taxation on land or taxation on capital. On the contrary I am against it that capital and land should be taxed, but the capital strength of the taxpayer may serve as a yardstick in order to determine what amount the taxpayer should pay on his net income. I want to suggest that there should be a uniform system of taxation on farmers, on companies, on salaried persons and on employees in general, and if we can suceed in taking the capital strength of a taxpayer in consideration in determining the basis on which he should pay tax on his net income, we shall be combating this position which has arisen in which land is acquired uneconomically, if we do not succeed in putting a complete stop to it. Because nobody who has capital will pay an uneconomic price for anything if he knows that the higher the price he pays for that asset, the higher will be the basis on which he will be assessed and the higher the tax will be on his net income. Let me give you a simple example, Mr. Speaker. If a farmer or a businessman, or whoever it may be, has £50,000 capital and he has to pay 5s. tax on every £ of his net income (not his capital) and his capital assets increase by £20,000 or £30,000 which takes him into the next bracket where he possibly has to pay 6s. or 7s. in the £, then anybody who has capital to invest will ensure that he makes such capital investments that will not unnecessarily take him into a higher bracket of taxation. I think it is worth while considering this matter. It has many advantages. In the first place it will put an end to the purchase of land at exorbitant prices and it will also prevent people who do not need it from purchasing land. Bearing in mind how the platteland is becoming depopulated, I think what I have just said is one of the reasons for that depopulation and that is why I think my suggestion deserves consideration. It is absolutely essential that we do everything in our power to solve this problem. Otherwise we will have what none of us would like to have, namely, the further deterioration and impoverishment of our agricultural land and a further deterioration in the financial position of our primary producers. I have shown that had the Government not made those large amounts available to the farmers, many of them would ultimately have gone bankrupt, and had that happened they would have been unable to make a decent living anywhere. There is only one thing left for them to do and that is to go and work as unskilled labourers, and become a liability on the municipalities and on the Government, in order to make a living. We must avoid that.

I have raised these few points and I want to make the earnest appeal that we direct our thoughts in that direction. We should do everything in our power to compensate the primary producer for the risks he takes, to compensate him for the work he does, to compensate him also for his contribution because his contribution is the axle round which the economy of the country revolves. There is no industry in South Africa which can flourish, or even carry on, if it has not got the primary products of the farmer at its disposal in order to feed its workers. It is absolutely essential that we give attention to this matter. Not only will it mean that we will restore the fertility of our soil, but it will be possible to go in for water conservation and scientific farming methods. Farming must be made profitable and I want to conclude by saying this: We must buy South Africa, we must live South Africa and we must act in the South African spirit.

Mr. PLEWMAN:

It is my privilege and duty to express the congratulations of members of this House to the hon. member for Harrismith (Mr. Rall) on his maiden speech. The hon. gentleman spoke with knowledge and conviction on the subject that he has chosen to address this House as a new member, namely the problems of the farmer under prevailing conditions. I am sure that he has demonstrated that his contributions to the debates can be of value.

I wish, however, to direct my remarks mainly to the hon. Minister of Finance. And in supporting the case made by the hon. member for Constantia (Mr. Waterson) in regard to the consequences that are flowing from the manifest faults in the Government’s present policies, let me commence by saying that the year 1961 seems to have opened rather ominously for the hon. Minister of Finance as the procurer of capital supplies for the public sector of the economy and as the custodian of the Government’s Capital Account. The hon. Minister’s inability to inspire confidence in the external markets in regard to the Union’s financial and economic potential because of the bad risk for capital investment which the Government’s racial policy has created, was demonstrated very clearly last year. This year that want of confidence has also entered the local money market.

The House will remember, Sir, the Government’s failure to borrow £5,000,000 on the London market last year (1959-60), when 78 per cent of the stock issued was left in the hands of the underwriters who had to subscribe and finance the 78 per cent. That indeed was startling evidence of the want of confidence that prevailed in the mind of the external investor. But almost more startling in that regard is the Government’s inability during the current year to raise sufficient money on the local money market to meet new capital outlay and to provide for the conversion of £18.7 million in respect of two maturing loans. There was so little enthusiasm in December 1960 that no more than £18.8 million could be raised. Now it is true that the hon. Minister told us to-day that the Government did not expect to get any new money. I accept that that might have been the position in the mind of the hon. the Minister, but that is not what he told the investing public. The prospectus issued in regard to the two loans which were raised in December said this: The purpose of the loans is to cover capital expenditure on the Railways and Harbours and other public works in the Union, as well as the conversion of two maturing loans. That puts an entirely different complexion on the result. But what is even more startling in regard to the matter of this stock issue in terms of ready cash (that is in terms of new money found), something the hon. the Minister did not tell us this afternoon, is that holders of some £8.4 million of the maturing loans declined to convert into the new loans. I believe that is correct. They therefore had to be paid in cash. But as the hon. the Minister has admitted, the amount of actual cash raised was only £8.5 million, so that really no new money became available, no money was provided in the form of new investment. What makes the position much worse, however, is that out of that £8.5 million in cash no less than £5,000,000 came from trust funds in the hands of the Government and held in trust by the Public Debt Commissioners. The hon. member for Constantia indicated that some of that money might have been partly conversion. On the figures given to us, however, that clearly is not so. That £5,000,000 was cash. The amount of cash received was £8.5 million and as only £3.5 million came from the investing public, therefore, the other £5,000,000 must have come from the Public Debt Commissioners. Now that money is trust money, held by the Public Debt Commissioners on behalf of beneficiaries and other financial interests. It is quite clear, therefore, and I think my premises are correct, that the £5,000,000 trust funds in the safe keeping of the Government, had to be used to redeem the maturing loans fully. What would have happened if there had not been that injection of cash into the loan, I leave to the hon. Minister to explain to us. But I say that it is a very sorry and very serious testimony of the want of confidence of the local investing public in the way in which the affairs of state are being conducted by this Government. I consider it a very serious matter, an indictment against this Government, that trust funds should have been applied, not to new capital expenditure, not to some new capital works, but simply to repay private investors who had made loans to the Government on some previous occasion. It will be interesting to know how much of that £8.4 million of private investment money has actually remained in the country. The hon. member for Constantia has dealt with the question of the outflow of capital funds from the Union. I do not want to go into that any further, but if any portion of that £8.4 million has in fact been drained off, it is quite clear where much of the ready cash came from to finance that capital outflow.

That brings me to another important matter in which in the final result it may also be a case where public funds are being put to a use in such a way that it may help the outflow of private investment capital from the Union. The matter I want to deal with in that regard relates to the Industrial Development Corporation. In this regard I am addressing my remarks to the hon. Minister of Economic Affairs. I want to indicate straight away that the matter I am concerned about arises primarily from the Industrial Development Corporations recent decision to participate with two other companies in the take-over by a new company called Bonofel Ltd. of an old established footwear business which operates, as far as I know, not only in South Africa, but beyond its borders in the Federation of Rhodesia and Nyasaland. I am referring, of course, to the proposed take-over of W. M. Cuthbert & Co., Ltd., a firm which has always been recognized to be a prosperous type of family business and the shareholding of which is held substantially, if not mainly, abroad. Cuthberts is reported to own about 150 shoe shops in Southern Africa. In the Union’s main centres at least the type of business carried on is known as “fashion wear I am well aware that this take-over transaction has not yet been completely finalized. There is also an understandable reluctance by the parties concerned to disclose what their interests really are, but the hon. the Minister of Economic Affairs, in reply to a question raised by me on 27 January, confirmed that the Industrial Development Corporation is in fact participating in the take-over and that the capital to be provided by that corporation will be something less than one-third of the total sum needed to finance the deal. Sir, the report is that the capital outlay involved is likely to be of the order of nearly £4,000,000. But I am here dealing not with the detail; I am concerned with the principle and the policy involved. I am also fully aware that technically and legally the Corporation may be acting within the scope of its powers in participating in a deal of this nature. I have not got the time to read the full text of the authority, but Section 3 (b) (ii) of the governing Act, No. 22 of 1940, empowers the Corporation to “facilitate, promote, guide and assist in the financing of schemes for the expansion, better organization and modernization of and the more efficient carrying out of operations in existing industries and industrial undertakings”. It then goes on to say that those powers can be exercised “to the end that the economic requirements of the Union may be met and industrial development within the Union may be planned, expedited and conducted on sound business principles”. I want to draw attention to the emphasis laid by the law on these words “industries, industrial undertakings and industrial development”. Now whether in practice there can be expansion, modernization and better organization in regard to the concern in question as a result of the take-over obviously remains to be seen. But it is certainly not clear to me how well equipped the I.D.C. is “to guide, promote and assist in” a retail commercial business of this kind. To participate to such a substantial degree in a business undertaking of this kind seems to be a new venture on the part of the I.D.C. It is true that the Corporation has other interests in footwear manufacture, but my concern, and I think the concern of the business public, is not only in regard to the ability of the I.D.C. to carry on this type of business but also about the justification of public funds being used in this way to finance the take-over of an old established fashion footwear business of this kind. As I understand it, it is a family type of business.

Mr. G. F. H. BEKKER:

What is the point?

Mr. PLEWMAN:

If the hon. member has not yet seen the point, he never will. This honourable House is naturally not concerned with the two private companies, Bonuskor and Sanlam, which are reported to be participating in this take-over. But as far as I know they too are essentially finance houses, and again it is not clear to me what skill or experience those two financial houses have of the conduct of a retail shoe business of this nature. What the business is, is really a chain of retail shops.

Mr. LAWRENCE:

They are trying to get in a foot somewhere.

Mr. PLEWMAN:

The hon. member is obviously correct. I raise this matter because I believe there is very genuine concern in financial circles about this new venture by the I.D.C. and about this new trend of activity by a corporate body which is wholly Government owned. As everybody knows, the share capital of the I.D.C. has come entirely from public funds through appropriations made by this House.

Now it so happens that the State Information Office saw fit last month in a supplement to the “Digest of South African Affairs” to draw attention to a policy statement which was issued by the Industrial Development Corporation.

Business suspended at 6.30 p.m. and returned at 8.5 p.m.

Evening Sitting

Mr. PLEWMAN:

Mr. Speaker, when the House adjourned I had mentioned that the State Information Office had seen fit to remind the country and this House of a policy statement which had been issued by the Industrial Development Corporation, in the following terms—

The function of the Corporation is not to find investments for its capital but to utilize its funds for the purpose of assisting industrial ventures in South Africa to become successfully established or extended. Once the Corporation has satisfied itself on this score it must, in order to fulfil its functions, make its holdings available for public investment thus releasing its own resources for further assistance to other industries.

I underline the words “successfully established or extended”. This is a very admirable policy statement, and obviously I have no criticism against it because it complies with the law and does what I think the Corporation was established for. The question, however, is whether that policy statement is now being adhered to in all respects. I raise the question because what is particularly disturbing to business and financial circles in regard to this take-over venture, is that it would appear that the Industrial Development Corporation, in doing so, is seeking investments for its unused capital in a business undertaking that is already successfully established and widely extended throughout the Union and beyond its borders.

One wonders what, for instance, the view of the Reserve Bank is in regard to this extension of operations. I hope that the hon. the Minister will not fall back on the old argument or excuse that the I.D.C. is a statutory corporation with autonomous financial authority and that the Government is powerless to intervene in its operations. In my view, circumstances have now arisen which make it imperative that the hon. the Minister should tell this House and the public in how far the Government, as the sole shareholder in I.D.C., agrees with and supports this apparent new development in investment policy. I want to make it perfectly clear that I am not criticizing what has happened in the past. My concern and, I believe, the concern of financial and business circles, is this change in policy. And the need for the Minister to make a clear public announcement on this matter becomes all the more important because report has it that this Corporation is about to go to the investing public in order to raise its first public loan. The Corporation is reported to be looking for about £3 million on an unsecured loan stock, which will presumably go into the market in the near future. It can, of course, succeed in borrowing from the public only if the public can be assured that it shall have confidence in the financial policy and in the financial enterprise which I.D.C. is entering into.

Let me now quote some of the comment that has been made publicly in regard to the present suggested take-over. I will not bore the House with much. The Rand Daily Mail, for instance, says this—

Some criticism has been levelled against the Industrial Development Corporation for its participation in the syndicate which is currently making a bid for the ordinary issued share capital of Cuthberts. This school of thought considers that the I.D.C. is stepping out of its role of being a fairy godmother to industry by embarking on enterprises which, on the face of it, appear to be somewhat remote from its charter objectives.

The article then goes on to point out that the I.D.C. has become—

… manager, underwriter, technician, banker, shipper and a general factotum to industry. Its participation in many fields has been criticized, but very often the I.D.C. has had to step in to provide facilities that were previously lacking or that had previously been inadequate to meet the demands of expanding industry. By building up a complex of service companies, associated with the industries which it has been weaning, the I.D.C. appears to be showing grave signs of becoming a massive empire—which certainly is not a charter objective.

Then there is also the criticism in the Financial Mail of 27 January. I will be very brief with this quotation which is as follows—

The participation of the I.D.C. in Bonofel, a company formed to acquire control of W. M. Cuthbert, an old-established footwear manufacturing and retail firm, has focused attention on I.D.C.’s interest in the footwear industry and canalized growing concern over the trend of activities of this organization.

Then it goes on to indicate that the reasonable assumption is—

that its venture into the attempted … of one of the most extensive shoe chains in South Africa is to secure sales outlets of its factories.

Then it says—

This has caused understandable anxiety among retail shoe stores.

But that is not entirely the end of the matter, because the I.D.C. is also reported to be extending its empire beyond the borders of the Union in a different direction. The proposal apparently is to extend its interests into the Federation of the Rhodesias and Nyasaland through one of its subsidiaries, Fine Wool Products. Sir, this Fine Wool Products is not an ordinary company, because being largely owned by I.D.C. it is really under Government control. Here again I am not concerned with the merits of the matter nor with the details; I am concerned with the question of whether this appears to be another instance where the Industrial Development Corporation is departing from its declared policy which I read out a moment ago; and that it is seeking investments for its surplus funds no longer just inside South Africa, but also outside South Africa. I think, therefore, the hon. the Minister owes this House and the country an explanation of how the Government views this expansion of I.D.C. interests.

I do not want to go into financial detail, but according to the latest accounts, the Corporation borrowed some £13.7 million from the Government and other sources as at 30 June 1960. Included in that £13.7 million is a loan of 8.5 million dollars from the Chase Manhattan Bank. That is quite apart from the ordinary share capital and from capital reserves. But of that £13.7 million, no less than about £9,000,000 appears to have been invested in Government and other gilt-edged securities. I pose the question: why borrow from the Chase Manhattan Bank if you are going to lend the money to the Government? That, again, does not appear to fall within the charter objectives of this Corporation. What the figures do show quite conclusively, however, is that there are, in fact, surplus funds available for investment. That lends support, therefore, to the concern of financial and business circles that the Corporation is now intent on seeking investments for its surplus funds and that it is no longer content to foster sound industrial development which is so essential in South Africa for the reasons set out in the amendment of the hon. member for Constantia (Mr. Waterson).

I therefore make the appeal to the hon. the Minister to take the House and the public into his confidence about this matter. The time has obviously come when there must be clarity about the position, and I hope the hon. the Minister will make it perfectly clear.

*Mr. HAAK:

The hon. member for Johannesburg (North) (Mr. Plewman) put quite a number of questions of a rather technical and specific nature to both the hon. the Minister of Finance and the hon. the Minister of Economic Affairs. I take it that they will reply to those questions at the appropriate time. The hon. member went on, however, to try to support the amendment moved by the hon. member for Constantia (Mr. Waterson) in an attempt to prove that there is no confidence in South Africa. The two examples which he mentioned were in the first instance that a loan which was floated in London about two years ago, I think, was not fully subscribed.

*Mr. PLEWMAN:

That was for the last financial year.

*Mr. HAAK:

It was not fully subscribed in the last financial year. But, Mr. Speaker, it was not only South African loans which were not fully subscribed in London at the time. Australia also floated loans there and the underwriters were left with 85 per cent. The Federation also floated a loan there, with which the underwriters were also saddled. I can only say that the example quoted by the hon. member for Johannesburg (North) as proof that there is lack of confidence in South Africa as a result of this Government’s policy, as stated in the amendment, is a very poor example and not one which proves his case in any way. But apart from that, when this particular loan to which the hon. member referred was floated, there were other loans on the London market which also failed, and amongst them there were loans by British corporations. The reason which was given at that time was that this was a bad time to float loans in Britain. Even the London Times, when that loan, which the hon. member says partially failed, was floated, said that the failure of that loan cast no reflection on South Africa. But if the hon. member says that that is an example of lack of confidence in South Africa, I can only say that it does not support his statement at all, because we find that other loans, which were floated at more or less the same time, also failed, as well as domestic loans in Britain —to which the hon. member’s statement could not have applied. Even the argument which he has advanced here now made no impression on a newspaper like the London Times because that paper stated that this was no reflection on the internal capacity of South Africa. But the hon. member mentioned a second reason. He says that the loan which was recently floated, was just about fully subscribed, and that it was not strongly supported by the public of South Africa. When we think of the stocks held by South African investors, it is certainly not necessary to refer to this loan which has now been fully subscribed or to refer to the way in which the public subscribed. We need only recall the confidence displayed by South African investors when they took up nearly £60,000,000 or £70,000,000 worth of foreign shares offered for sale on the Stock Exchange. There we have the finest example of their confidence. Those shares that were offered were all taken up here. There was no sellers’ pressure behind it. Nobody expected that such huge sums would be available here. Even the British and other newspapers aboard pointed out that the fact that these shares were being bought on such a large scale by investors in South Africa at least proved that they had confidence in the policy of this Government.

But, Mr. Speaker, I want to confine myself mainly to the hon. member for Jeppes (Dr. Cronje). Before doing so, however, I want to congratulate him on his promotion and the honour bestowed upon him. Since the last session he has become chairman of one of our banks in South Africa. I want to congratulate him on that achievement. I am convinced that he will be able to make a positive contribution. But I want to say that we expect the greatest degree of responsibility from the chairman of a bank, which is one of our strong financial institutions, and I hope that while he sits in this House he will succeed in reconciling that sense of responsibility which he has to display as chairman of such a bank with his actions in this House when he tries to attack the Government’s policy.

The hon. member said this afternoon that the economy of South Africa was retrogressing, and he referred in particular to agriculture because that is one of the four points in their amendment. He referred to 1956-7 and compared it with 1958-9, and he then stated that the national income derived from agriculture had dropped from £247,000,000 to £236,000,000. The year which he selected was a particularly good year for the purposes of his argument because during that year the price of wool was very high and it was low in the second year that he mentioned. We know that as far as wool is concerned there was that fluctuation.

*Dr. CRONJE:

The figures that you mention are entirely wrong. I said that it was £221,000,000 and that the figure in the last year was £236,000,000.

*Mr. HAAK:

What was the first figure?

*Dr. CRONJE:

£221,000,00.

*Mr. HAAK:

I am quoting these figures from the Bulletin of the Reserve Bank. I do not know where the hon. member obtained his figures. But that does not detract in any way from my statement that that was a year which suited the hon. member. Let us go further and take the same year. The hon. member talked about stagnation in industry. When we take the same year that he took, we find that industrial production rose from £477,000,000 to £498,000,000. There was an increase therefore. But the hon. member says that there was stagnation in industry. When we look at employment opportunities, however, when we look at the increased employment in private industry at that time, as well as in the mining and other industries, we find that there was an enormous increase in those years which he mentioned as years during which there had been stagnation. I do not want to weary the House with those figures but they are obtainable in the Reserve Bank’s statistics.

The hon. member went on to say that the progress in South Africa was too slow, that the standard of living should be raised more rapidly and that the tempo of development should be accelerated. I think basically we all agree with that. It is the policy of the Government to try to do this, and that is why the Government has taken all these steps which it has taken during the past twelve years to accelerate the rate of development and in an attempt to raise the standard of living. The hon. member then went on to refer to the review by the Stellenbosch University of the economic prospects for 1961. In that connection he referred to the fact that in the ten-year period from July 1950 to July 1959 the average net increase in the national income had been 1.7 per cent. He added that there were other countries where it had been 5 per cent or more. He did not mention the names of those countries, although he could have done so because they appear in the same return from which he extracted these figures. There we see that the countries in which that increase took place were the Netherlands, for example, where it increased by 4 per cent, Italy 4.2 per cent, and then France and Germany 7.8 per cent. We notice therefore that this increase since 1950 took place in those very European countries that were devastated during the war. This was a period of reconstruction after the war; capital was being pumped in, the Economic Market was established, and there was enormous economic activity. It is true that there was this increase. But let us now look at the figures of those countries in which the increase was lower than that in South Africa. We find that the average increase in the United States was precisely the same as in South Africa, namely, 1.7 per cent. Look at the United Kingdom, a country which after all has a great deal of capital. The hon. member says that South Africa saves a great deal and also gets capital from abroad, and that the increase should therefore be greater in this country. America not only has all the capital she needs for her own requirements but she exports an enormous amount of capital, and even there the increase has been no greater than in South Africa. Then we come to the United Kingdom and we find that whereas the net increase in the case of South Africa was 1.7 per cent, the increase in the United Kingdom was 1.6 per cent— in other words, lower than in South Africa. The hon. member can go further down this table. There is Canada, for example, where the increase was also 1.6 per cent—lower than South Africa therefore. In New Zealand the figure was not 1.7 per cent but only .4 per cent. Australia was one of the countries to which an enormous amount of capital flowed from abroad. She absorbed more immigrants, a policy for which the hon. member again pleaded here to-day. All the factors which make for prosperity were present, as he said, but in spite of that the average for these ten years, during which there was an average increase of 1.7 per cent in South Africa, was not an increase in the case of Australia but a drop of .3 per cent per annum.

The hon. member went on to say that the real national income in South Africa per capita had decreased in the past few years. That is correct; it decreased and then it also increased again. He says that with all the capital that we are getting we ought to be able to show much better results. But let us take Canada as an example and see how Canada compares with Australia. Canada obtained all the capital she could from America. She could not get it from Britain because there was the question of the dollar quota. Canada obtained all the capital she could get but in spite of all that capital her unemployment figure to-day is 8 per cent and her net national income is back to what it was in 1952. South Africa therefore is in a much better position. The hon. member also mentioned Australia, but, as I have shown, there was not even an increase in Australia.

The hon. member for Jeppes says that we should have fared better because we had the capital, and I refer him to all these young countries which had more capital at their disposal and which did not do nearly as well as South Africa. If his accusation against this Government is that there has not been the same degree of development here as in other countries, because of the policy of the National Party Government, then he is very wide of the mark. Because in the countries which I have mentioned, we find that there has not even been the development there which has taken place in this country—in spite of the Government, as he alleges.

Mr. Speaker, the first leg of the United Party’s amendment is that there is lack of confidence in South Africa, that there is an outflow of capital, that there is a lack of confidence which is causing capital to be withdrawn from this country. The fact that that capital is leaving the country is due mainly to the price of shares. The fact that share prices have dropped to such an extent proves that countries abroad no longer have confidence in us and that our economy is retrogressing. The hon. member for Jeppes, in his address as chairman of the Netherlands Bank, set out the reasons for this outflow of capital. Inter alia he said this—

The disturbances which broke out at the end of March 1960 and the declaration of a state of emergency which then followed, caused a new wave of oversea sales of local shares. The net amount involved during the first six months of this year, amounted to approximately £21,000,000.

In the first instance the hon. member said that it amounted to approximately £21,000,000. The statistics do not entirely support him, however. He is not very far wrong. But what I find remarkable is that here we have a report that was published of an address delivered by him on 29 November. The September issue of the Reserve Bank had already been published, and there I notice that the so-called £21,000,000 in shares was not £21,000,000 but only £19,400,000. The hon. member had the correct figure at his disposal when this report was drawn up. There is a difference of 8 per cent. He may say that it is not a great difference but, as I said a moment ago, he occupies a position of responsibility and one does not expect him to inflate this figure unnecessarily just to create effect.

*Mr. RAW:

Tell us why there is an outflow of capital.

*Mr. HAAK:

Don’t try to help the hon. member now. Let him take his own medicine. In the course of this same speech the hon. member for Jeppes stated in 1959 the net foreign sales of South African stocks amounted to approximately £20,000,000. That is quite correct. But the fact remains that even here it is mentioned that as far back as 1959—some months before Sharpeville and Coalbrook and even before Mr. Macmillan’s speech in Cape Town—there was a net sale of shares to the tune of approximately £20,000,000. That only goes to show that there were also other reasons for it. It was not due, as the hon. member says here, to Sharpeville and the state of emergency. The state of emergency was only proclaimed on 30 March. There was an outflow of capital through the sale of shares even before that time, and the reasons for that are perfectly clear. Let me quote from a circular from one of our well-known brokers, a circular dated 4 January 1960, which was three months before Sharpeville. This is what he says—

Germany has sold certain stocks, for example Anglo-Americans, which was not unexpected as holders there show substantial profits. Paris has been a seller for some time, not as a result of any lack of confidence in South Africa’s security, but rather on account of France’s economic recovery under the De Gaulle régime.

There he mentions the reasons for this outflow. The gold shares of South Africa reached their peak towards the end of 1959. These people sold because they were making a handsome profit, because they knew that at that time share prices were very high. The value of any possible increase in the price of gold had already been discounted on the Exchange. The increase in the production of our new gold mines had also been discounted already. They believed that this was the best time to sell. But the hon. member himself referred to this and stated that Europe was asking for capital. The Common Market there attracts capital and investments because they are anxious to biuld up industries within that Common Market. They want to build up industries within the protective wall of the Common Market and that accounts for the great influx of capital.

But there is also another reason for these sales. It is not only South Africa that lost capital. The hon. member himself pointed this out. He says that the general idea is that South Africa is just like Africa; when people think of South Africa and Africa they think of one and the same country and that conditions which obtain in the rest of Africa also obtain in South Africa. In that approach he is correct; in this particular respect he spoke like a business man. But when he came to deal with what happened in the year 1960, he linked up everything with what had happened during March 1960 and thereafter. Sir, the Netherlands Bank also publishes a monthly review and here they set out the correct reasons; they say—

A number of factors had a depressing influence on the Johannesburg Stock Exchange during March. In the early part of the month continued overseas selling and disappointing dividend declarations of Orange Free State gold mines took their toll of prices. Further selling pressure was caused by the Coalbrook mining disaster and the race riots.

There they mention other events which occurred before the happenings which according to him were the main cause. But, Mr. Speaker, when they say that share prices dropped as a result of the state of emergency and because of Coalbrook, let us see for a moment to what extent South African shares had already dropped, before Sharpeville and before the state of emergency. I notice here, according to the return of the University of Stellenbosch, that taking the share index as at 15 January 1960 as 100, industrial shares dropped by 6 per cent from 15 January to 15 March. Free State gold shares had already dropped by 16 per cent before Sharpeville. The leading gold shares had already dropped by 12 per cent. We notice therefore that even before these occurrences in South Africa, which are now being represented as the reason for lack of confidence, there had been a big drop in industrial shares as well as in gold shares. But, Mr. Speaker, it is interesting to note that even the Economist realizes this because the Economist of 2 April under the heading “Gale in the Market”, referred to the drop in the value of shares and said that it amounted to £500,000,000. They went on to point out that £125,000,000 of this drop had taken place after Sharpeville, but the drop of something like £300,000,000 had already taken place before Sharpeville.

*Mr. S. J. M. STEYN:

What does that prove except that before Sharpeville the Government was also worthless?

*Mr. HAAK:

I shall tell the hon. member what it proves. It proves that there was already a drop in share prices in South Africa from the beginning of that year, after prices had reached their peak in 1959. But I want to show the hon. member for Yeoville (Mr. S. J. M. Steyn) that it is not only in South Africa that there has been a drop. Let us look at the United States of America and see what happened there. What do we read in the U.S. News and World Report of 15 February? Here we have an article under the heading “A close look at the market decline”. “Drop in stock prices, measured from the highs of 1958 through early 1960 to February 3rd, 1960.” I notice under “Stocks down” that some dropped by 41 per cent, 29 per cent, 25 per cent. So we could go on and we find that they took the average drop in shares in the United States up to 10 March. Incidentally, it was shortly before Sharpeville, and here it is stated—

The longest bull market in history—stock prices quadrupled; then in two months the market went off 12 per cent.

During the same period therefore we had a drop of 12 per cent in American shares and here on the same page I find this, under the heading “It’s the same story in Canada”—

By early March the industrial average had fallen 11 per cent below the 1959 high, and more than 7 per cent below the high of January 1960.

That was the position in Canada. There is no apartheid there and there is no Dr. Verwoerd in power there. But let us look at the United Kingdom. According to the index of the Financial Times we see that during the same period British shares also dropped. They talk about “a 13 per cent decline since the beginning of the year which cannot be dismissed as being merely a technical correction.” There we have an example to show that share prices dropped throughout the world. Since our gold shares are held to a large extent by foreign investors, they are linked up with the decline in prices throughout the whole world. This is not something which has only happened in South Africa. The hon. member wants to know why there has been this decline. Our reply is that share prices here dropped from the peak prices of those days, just as they dropped in the rest of the world. That decline was attributable to factors entirely beyond our control. Reference is made to the decline in the price of South African shares. Even the Economist published an article which almost sounds like schadenfreude. It tells how South African shares have dropped on the London Exchange and points out that our loan stocks there have also dropped. But let us see how those of other countries have declined. Let us look at the peak and the lowest quotations for the loans of other countries on the London Exchange. Whereas the loans of South Africa dropped by 6¾ points, from 85 per cent to 79 per cent, we find that those of Australia dropped by 7½ points—more than in the case of South Africa. Those of New Zealand dropped by 10 points. In Southern Rhodesia there was a drop of 23 per cent. Then let us look at certain loans which are quoted on the Exchange and which were floated in Britain itself. We find that the South African Government loan dropped by 6¾ points while that of Birmingham dropped by 4½ and that of the City Council of Bristol by 91, and even the loan of the Corporation of London dropped by 8 points. The loan of the London City Council dropped by 10¼, and that of Middlesex by 11¼. We find therefore that the South African loan dropped by the lowest margin.

It is interesting to note that it is not only South African shares which have dropped. We find that those of the Federation have dropped even further. International Nickel and Riotinto have all dropped enormously—not only South Africa’s gold shares. There is not a single mining share that is quoted on the London Exchange which is not in the same position as South Africa’s mining shares. I mention this only to show that the drop in share prices has not taken place in South Africa only and is not entirely attributable to conditions in South Africa, or purely the outcome of Sharpeville and the state of emergency. However, shares have dropped in South Africa, and nobody denies it. I have here the average returns of the Exchange in South Africa showing to what extent shares have dropped, and it is interesting to see that the average drop in share prices in 1960 was 21 per cent. When that figure is broken down we find that the biggest drop of 38.8 per cent took place in metals and minerals. Free State gold shares dropped by 23 per cent, financial shares by 22 per cent and the industrial shares by 16 per cent, and diamonds by 15 per cent, which gives an average of 21½ per cent. But when we compare price movements in 1960 with those during the previous year, we find that there was a rise during the previous year. It has been said that the market value of South African shares has dropped by more than £600,000,000, but during the previous year there was an increase of £774,000,000. In other words, the drop this year has been slightly smaller than the increase last year. When we look at these gold shares, the market value of which has dropped by 38.8 per cent this year, we find that in the previous year the prices of the same shares increased by 74 per cent, which still leaves a big profit therefore. Diamond shares which have declined by 15 per cent, rose by 52 per cent the previous year, when the National Party Government was also in power. Free State gold shares have dropped by 23 per cent, but in the previous year they rose by 33 per cent. Our industrial shares have dropped by 16 per cent, but in the previous year they rose by 10 per cent. We notice therefore that although there has been a drop in the value of shares during the past year, there was a big increase during the previous year. The drop that was announced by the chairman of the Stock Exchange in Johannesburg was about £600,000,000 and this was attributed to the unpopularity of this Government, but the previous year when there was an increase of nearly £700,000,000 they said that it was “due to the buoyant conditions of the market”. There we have the contrast. When things go well it is due to the “buoyancy of the market,” but when things go against us it is the fault of the National Party Government. There was an increase again in 1960, but very little is said about that. At one stage it increased by £125,000,000. That increase is not attributed to the Government but to the buoyancy of the market or to some other factor. But we must bear in mind that even though there has been this drop in the value of shares, the people who sold even at these low prices, still showed an adequate profit. I notice that the Manufacturer of June 1960 has the following to say about these sales—

It is a fact which should be borne in mind when assessing all the reasons why foreigners threw so many of our shares on the market that from their own point of view it was good business.

They still sold at a big profit. The £1-shares of General Mining were then still more than £5. Union Corporation’s 2s. 6d. shares were still 62s. 6d., and Daggafontein’s 5s. shares were still being sold at 18s. 9d., and so I could go on mentioning many others to show that enormous capital profits were made on these sales. But we also know that the investors in South Africa who bought these shares, bought them at a good price, a price which was profitable to them, and the confidence that they displayed in buying those shares has been justified, because the prices of most of those shares have already risen considerably. But there are other reasons as well. I notice that one of the brokers writes as follows, amongst other things, with regard to the purchase of shares by South Africans—

It is therefore felt that it cannot be long before the majority holding in many mines will move from foreign into South African hands.

The fact is welcomed that the control of some of these big financial and mining institutions is going to pass into the hands of South Africans in the near future as the result of these large-scale purchases by South African investors.

We are told that there is no confidence in South Africa. The investment possibilities here are just as good as they have ever been, and when one thinks of investments throughout the world, one might almost ask, “where can one find safe avenues of investment in any part of the world”. If one wants to invest in America, one has to take into account the uncertainty of the dollar. If one wants to invest in Europe, one gets closer to the centre of future world conflicts. Even in Canada one finds oneself in that neutral field between America and Russia. This country offers very fine opportunities for investment. It has been said that there is no confidence in South Africa, and hon. members want to know where the hon. the Prime Minister gets hold of the idea that there is prosperity here. We need not dwell on that point very long. What does the Statist say?

Although South Africa has good reason to regret the financial consequences of this year’s unhappy turn in our racial problems, our economy must be said to have withstood this severe test remarkably well.

Even the President of the Reserve Bank has announced that there is a decided improvement in external economic conditions. And the Netherlands Bank in its monthly bulletin said—

There is no evidence of an economic recession in South Africa.

And on 1 January it was stated in the same bulletin—

Fortunately economic activity has not yet been influenced to an important degree, thanks to the strength and buoyancy of the national economy with its basic sound structure and ample natural resources.

When we look at the productivity of the Railways and the increase in investments in building societies, when we look at all these economic activities, we find that great progress has been made in every sphere, practically without any exception. There have been attempts in recent years on the part of business institutions and Chambers of Industries and Chambers of Commerce to predict a gloomy future for South Africa, but those prophecies co-incided with an election period. It was hoped that an atmosphere could be built up against the Government in South Africa, as there is overseas. Well, that election is over. South Africa’s economy is carrying on, and may I express the hope that in the future there will be more reasonableness on the part of those who try to oppose us. In spite of setbacks, there is ample evidence that there is confidence in South Africa, not only internally but also externally, and we can continue, to the best of our ability, to strengthen our economy and to raise the standard of living of the inhabitants of South Africa.

*Mr. SCHLEBUSCH:

Where I have the honour to address this House for the first time, I just want to say that I consider it a particular privilege to make use of this opportunity. I thoroughly realize the responsibility resting on me when making my humble contribution to this debate. Mr. Speaker, when a newcomer makes his first bow in this House it is obvious that he wants to express the deepest sentiments in his heart and select a subject about which he feels strongly. Therefore I want to discuss a subject which has not yet been discussed ad nauseam in this House already.

There is a particular state of emergency existing in one part of our country. Fifty years ago our beloved fatherland, and particularly the interior parts of South Africa, was populated mainly by a farming community, people who practised agriculture. But as development took place there was a steady migration from the platteland to the cities. This migration or urbanization formed part of the historical development of our nation. It was sometimes accompanied by painful uprooting, poverty and misery, and numbers of staunch Boer families were uprooted and forced to seek accommodation in miserable surroundings, sometimes in a small room in a slum. These people were completely demoralized. They were disrupted and humiliated, and in most cases their condition was caused by circumstances over which they had no control. After World War I, between 1920 and 1923, a large number of these families congregated around Bloemfontein in order to obtain employment on the Railways. In those days housing conditions were very miserable. Under those conditions these people built little hovels of hessian and galvanized iron behind the Bloemfontein railway station and established a shanty town there. They were erstwhile proud Boer families who first had had to endure the experiences of the Anglo-Boer War in which they were conquered, and thereafter they returned to farms which had been burnt down, in order to make a fresh start and try to earn a living. Some of them could not survive this struggle and eventually they had to give up. But we believe that this is part of the history of the moulding of our nation. We believe, in the words of the poet, that our Heavenly Father keeps a guiding hand over us and keeps in view the furthermost turn in the road. Therefore we believe that this sad episode in our national history also forms part of His plan, that the rural population we had had to be transplanted to the cities where they could also play their role in the tremendous industrial development which took place. I mention these matters because in view of these miserable conditions which existed and in which these people had to live, one can readily understand that they were anxious to leave those hovels and go and live on the small farms round about Bloemfontein, which were conveniently situated and near to their work, and where they could enjoy the rural background to which they had been accustomed. Therefore I want to say that these small farms or plots fulfilled a very important function in the development of our nation. They also played an important role in regard to housing and in regard to supplying labour to our large cities for our industrial development. Mr. Speaker, there are 3,500 such plots around Bloemfontein and 3,300 of them are inhabited. If one pauses to think for a moment one realizes that those people were put there under those circumstances, and at that time no precautions were taken properly to lay out these plots and plan them. Any man who wanted to cut his farm up into plots could do so, and was allowed to do it. Later a commission was appointed, the Tomlinson Commission, which investigated the matter, and we are grateful for that report, and these plots were further developed with the assistance of the Administration. All the necessary measures were effected to exercise proper control. Nice houses were built and school facilities were provided. In the vicinity of Bloemfontein there are 11 schools, of which four are high schools, with between 400 and 600 students. Power is provided by the Municipality of Bloemfontein, and the Municipality would certainly have provided water, but they saw the red light. Bloemfontein’s catchment area, the Rusfontein Scheme, has reached the lower water mark and therefore no assistance can be received from that direction. Then also the industrial development of Bloemfontein itself is a very important matter and I feel that in view of the expansion there something should certainly be done in the near future.

In regard to this picture I want to mention that we in South Africa are very fortunate. We are living in a rich country, with riches above as well as below the surface, a country with potentialities which have enabled us to experience great industrial development in recent years. Investors in the first place require raw materials, labour, transport and power, and I want to include this also in my plea. I believe that South Africa stands on the eve of further developments which will make great demands on the farming community, the producers. Therefore it is essential that we should develop every possible potential to provide facilities. South Africa’s greatest potential, our main water channel, the sponge and the vital artery of the country, from the peaks of the Drakensberg runs unharnessed right throughout South Africa, through very fertile ground, for 1,200 miles to the sea. This mass of water is lost to us. Here we have 2,900,000 morgen feet of water. To put it more accurately, it is 6,122,000 acre feet of water which annually runs into the sea, sufficient to irrigate an area of 350,000 morgen. Furthermore, the Caledon River with 600,000 morgen feet of water runs past the upper reaches of the Kaffir River, where the Kaffir River Scheme and the Riet River Scheme are, schemes which find themselves in an unenviable position to-day. It runs past the catchment area of Bloemfontein, the capital of the Free State, and is lost to those plots which might possibly have benefited from it. I am mentioning this position in view of the fact that I got up to talk about something which is close to my heart. The Orange River is the largest river in South Africa, our greatest national asset and water potential, the Kariba of South Africa, and it has a complex of schemes. It is impossible to sketch the scope of the potentialities of the Orange River. It offers us the opportunity of having the second biggest hydro-electric power station in the Southern Hemisphere. Here we have the opportunity to develop cheap power, so that the border industries can be developed there. Here one can build a canal running through the whole of the interior, and those areas where water is of the greatest importance can be changed into the most vital area in South Africa, offering potentialities for enormous development. Are we going to accept this challenge? Sir, I am glad to have had the opportunity of bringing this matter to your notice.

*Mr. STREICHER:

I should like to avail myself of this opportunity to congratulate the hon. member for Bloemfontein (District) (Mr. Schlebusch) most heartily on his maiden speech in this House. I think a few matters which he has raised here, such as housing and the problems of the owners of smallholdings and the possibilities of the Orange River, are of great importance. If the hon. member devotes his attention to matters of this kind, he will also get the appreciation of this side of the House. We can congratulate the hon. member on the nice way in which he delivered his speech.

But I should like to come back to the hon. member for Bellville (Mr. Haak). He stood up with just about as many newspaper clippings in his hand as I have, and he quoted one passage after another to show how well South Africa was faring, and where he could not say that we were faring well, he proceeded to quote something else to show that South Africa was faring better than any other country. But the hon. member contradicted himself completely. If things are going so well in South Africa, why should he compare South Africa with any other country? But for every quotation that the hon. member for Bellville can read out I can read out another to prove that things are not going very well.

In the first place, I want to quote what was said by Mr. Engelhard, a prominent member of the South African Foundation. Last year, according to the Burger of 28 May, he said that South Africa would find it difficult to raise loans abroad. He said—

From an economic point of view it is clear that definite and concrete steps will have to be taken to restore confidence. South Africa’s economic position is dependent on the development of a policy of co-existence between the races, a policy that is acceptable to the world.

And the heading is: “Engelhard says South Africa will struggle to raise loans.” If things are going so well in South Africa, why were the rates of interest of the Reserve Bank raised last year, and why was it necessary for Dr. de Kock as Governor of the Reserve Bank to say, according to the Burger of 11 August of last year—

In order to utilize the Union’s economic opportunities and potentialities to the best advantage, this country should exert itself to restore the confidence of foreign investors, particularly those who already have interests in the Union or who are considering the question of participation.

I can go back as far as 1959 and refer to a speech made by Mr. P. E. Rousseau in which he said—

South Africa has reached a stage where a new industrial climate must be created.

I can also quote from a speech made by the hon. the Minister of Transport. A few years ago he showed an enormous deficit on the Railways, and not long afterwards he announced that the Railways had an enormous surplus. The staff associations then went to the Minister and asked for 3d. extra per hour, in view of the fact that the Railways had this huge surplus, and they asked that they, the people who had to make these enormous sacrifices in order to improve the position of the Railways, should also be given a few of the crumbs falling off the rich man’s table. That is what happened according to the Burger of 8 July of last year. He replied that he could not accede to their request because—

The economic position may become difficult. We shall have to tighten our belts. We shall have to turn over every penny twice. Our economic position in the next six or seven months is an unknown factor.

Sir, that was said not by anybody on this side of the House nor by anybody who was out to harm South Africa. [Interjections.] The financial position of the South African Railways depends on the economic position of this country as a whole. [Interjections.] The hon. member for Bellville quotes what the Netherlands Bank says, but he does not go on to quote what the Burger says. On 5 February of last year the Burger said—

The position of commercial undertakings in South Africa over the past few years has greatly deteriorated, judging by a survey made by the Bureau of Census and Statistics. The increase in the turnover could not keep pace with the increase in the costs and the profit position has greatly deteriorated, particularly in the past few years.

I do not think we need take any further notice of the hon. member for Bellville because his whole speech consisted of quotations from newspaper clippings, etc. The hon. the Minister of External Affairs is not here at the moment and we wish him a speedy recovery, but I think the hon. member for Bellville has now taken the hon. the Minister’s place as far as newspaper clippings are concerned.

Mr. Speaker, under this National Party Government we cannot determine over financial and economic policy separately from the general policy of the country. We cannot separate it from the general policy and submit it as a separate issue to the electorate. It is to be deprecated that that is the position. This Government can never come forward with an independent economic policy. All their other policies have to be made subservient to their race policy. If therefore one wants to examine the economic policy of this Government more closely one must first remove the Iron Curtain— or granite curtain as it is now called—of their race policy.

*The MINISTER OF FINANCE:

Who said that?

*Mr. STREICHER:

No, that is what I say myself. When the Government’s economic policy is changed, that fact is also hidden; it is not allowed to see the light of day. The reason for that is this, Mr. Speaker, that if one removes the granite curtain one finds one cobweb after another, cobwebs of forgotten promises, made by them to the people of South Africa. They said to the public: “We shall see that the cost of living comes down; we shall give you undreamt of purchasing power; we shall give you increased salaries with reduced taxation; we shall give you a forty-hour working week; we shall consolidate the cost-of-living allowance with basic salaries.” What became of all those promises? The hon. member wants to know who said this. If he will go search amongst the cobwebs for that booklet that they wrote in 1948, “The Road to a new South Africa”, he will find all the promises there that were made in 1948.

I want to come now to an industry which is very dear to me and that is the agricultural industry. Mr. Speaker, there is no branch of our agricultural economy in South Africa which is going through such difficult times as this industry. And if this Government is not prepared to do something to eliminate those difficulties, a great catastrophe is going to hit this industry in South Africa. Eighteen months ago the hon. the Minister of Agricultural Technical Services said that there was a great need in South Africa for more prosperous farmers. According to the Burger of 21 October 1959, the hon. the Minister of Agricultural Economics and Marketing told us that the agricultural industry was in great danger. The mouthpiece of organized agriculture, “Organized Agriculture” said the following as far back as August 1959—

Farmers’ biggest problem; big disparity in prices.

Prof. C. H., du Plessis, an economist of standing, said the following in Merino, ia September 1959—

Great surpluses are mounting up.

But the best quotation that I can give hon. members is from the article which appeared in “Organized Agriculture” of December last year, in which it was stated—

The year now concluding was not a good one for farmers. Among other catastrophes there has been a further narrowing of farmers’ margins. In spite of their striving for greater proficiency in their calling farmers are worse off at the end of 1960 than they were five years earlier.

This is not United Party propaganda, Mr. Speaker. This was not said by somebody who stood up in this House just for the sake of saying something, as the irresponsible member for Vereeniging (Mr. B. Coetzee) might do. This is what organized agriculture says—

In agriculture farmer versus farmer competition has been eliminated to a large extent by means of price control. In its place we now have, as a deterrent to overproduction, the gradual narrowing of farmers’ margins. This is far from satisfactory. This is a far from satisfactory means because farmers invariably produce more when they find their incomes failing to meet their needs. Actually it is producing more at the same or even higher per unit cost which led farmers into their present predicament. Had they been content to produce the same quantities or less at the cost per labour unit employed, the position would have been vastly different.

This article is so simptomatic, so typical to me of what is now happening in our agriculture. The Farmers’ Assistance Board, the Land Bank and other institutions have spent large sums of money on the agricultural industry. The hon. member for Drakensberg (Mrs. S. M. van Niekerk) quoted figures. But every time when we examine the position of the farmer we find that it gets progressively worse. We quote the gross income from the annual reports, or even the net income, but we find an increase in the one and a decrease in the other. The farmers, however, are told that they are doing so well. When the farmer hears that he thinks to himself: Perhaps the farmers in another area are doing well, because I and my neighbour are not. Where is the Utopia in South Africa where things are going so well with the farmer? Mr. Speaker, I say that the majority of farmers I know, and hon. members opposite know it, too, to-day are burdened with debts and suffer from a decreasing purchasing power. We should not talk about the number of tractors, implements and ploughs which are being purchased. Of course the statistics show that there is a tremendous improvement in regard to these purchases, but the farmer has to buy these implements, he has to buy fertilizer, he has to buy oil and fuel; he cannot do without these things. Unless he has these things he can produce absolutely nothing. But if one wants to examine the man’s financial position one should not look at the stud sheep or stud cattle or the contour walls on his farm; he must have and do those things. Where should one look to see how prosperous he is? One should look at that man’s bank account, one should look at his house, and see whether he can afford to buy new furniture, or whether he has a new motor car. When we look at the living standards of the farmer we will find that there is a gradual deterioration. The income of the agricultural sector in relation to the income of the non-agricultural sector is steadily becoming more unfavourable and its capital burdens are continually increasing. [Interjections.]

The hon. member referred to wool. I am glad he mentioned it because that is the very subject on which I want to conclude. Instead of the hon. members opposite and the Government having devoted their attention to the real problems of the farmers of the country, what did we have during the past six months? Last year when we discussed the Wool Commission Act, the hon. member or Somerset East (Mr. Vosloo) and the hon. member for Kimberley (North) (Mr. H. T. van G. Bekker) said that a man like Dr. Jan Moolman ought no longer to be the Chairman of the Wool Commission. Instead of devoting their attention to the real problems of the farmers in South Africa, they preferred to devote their attention to Dr. Jan Moolman and advocated that the Wool Board and the Wool Growers’ Association should get rid of one of the greatest servants of agriculture in South Africa.

Mr. Speaker, I want to ask this question: Why did hon. members opposite give that guidance to the wool farmers of South Africa? They did so because a man like Dr. Jan Moolman dared to criticize this Government. It is quite clear that a man’s political affiliations count for more than his service to agriculture in so far as hon. members opposite are concerned, and that his services and efficiency are subservient to his allegiance to the Nationalist Party. [Interjections.] I ask the hon. member for Cradock (Mr. G. F. H. Bekker) how a large portion of those people who think differently are supposed to feel to-day in regard to a body like the Wool Board and the National Wool Growers’ Association? Surely they also pay for the maintenance of those bodies, and possibly their contributions are the largest. Sir, those people have no hope of serving on the directorates of those bodies because this dangerous precedent has been established by hon. members opposite. Unless a man is well disposed towards the Government, he either does not get there or he is kicked out. We ask them whether this will stem the criticism which is being voiced everywhere nowadays against the agricultural policy of the Government. Do they want these boards to consist of a number of yes-men who will protect the Government against all criticism? Have they made Jan Moolman an example so as to silence the voices of others? All of us in this House object if somebody abuses his position and weakens the administration of such a body. Then we will not object if such a person is dismissed. But, Sir, everybody in South Africa spoke with great praise about Dr. Jan Moolman. He started the wool stabilization scheme, so much so that the hon. member for Somerset East last year also trotted along behind like a puppy and said: “This is really the policy of the Nationalist Party.” Mr. Speaker, this is the most scandalous thing that has ever been done to a good servant of agriculture in South Africa. They knew very well that Dr. Jan Moolman also occupied international posts due to his position in South Africa. Regret was expressed throughout the whole world, but, Mr. Speaker, in the ranks of the Nationalist Party and amongst their flag-bearers malevolent laughter was heard because of the fact that another milestone along the road of the continued stability of the Nationalist Party, had been reached because there is one more tombstone from which a voice from the grave will in future utter no criticism. But I want to say this to the hon. member for Somerset East and his companion, the hon. member for Kimberley (North), that in this process initiated by the Nationalist Party in order to get rid of Dr. Moolman they also made enemies of many friends, and those erstwhile friends they had will undoubtedly rush to the assistance of those who fell on the battlefield because they voiced justifiable criticism of this Government.

*Mr. M. J. VAN DEN BERG:

When the hon. member who has just sat down, replied to the hon. member for Bellville (Mr. Haak) he tried to refute the quotations which the hon. member for Bellville had made and he said that he too could boast and give quotations, and in making those quotations he referred to the Burger inter alia. It has become the fashion amongst Opposition members to say “the Burger says this” and “the Burger says that”. I want to teach the hon. member, who is still young, this: If he wants to quote, his quotations should at least be such that they support the point he is trying to make, he should not quote the way he did this afternoon in an attempt to reply to the hon. member for Bellville. I want to teach the hon. member and the hon. member for Drakensberg (Mrs. S. M. van Niekerk) and quite a few hon. members opposite how to quote. I too want to quote from the Burger and it has a great bearing on the whole discussion we are having here to-day. When the hon. the Prime Minister visited King William’s Town the other day the mayor, Mr. Galloway, who is not a member of the National Party as far as I know, said the following, inter alia

To-day South Africa is one of the biggest small countries. From every corner of the world the communists are looking at South Africa with greedy eyes, because we have had industrial development here as no other country in the world has had.

Hon. members often argue, Mr. Speaker, about whether or not we have progressed in the industrial field but here the mayor of King William’s Town says that we have had industrial development in South Africa on a scale unparalleled in the world.

*Dr. STEYTLER:

He is an expert!

*Mr. M. J. VAN DEN BERG:

The hon. member for Queenstown (Dr. Steytler) says he is an expert. In that case he should know what he is talking about. Let me tell you, Sir, what more he said. I repeat that this is the sort of quotation which has a bearing on the subject we are discussing at the moment. The hon. member for Drakensberg wanted to now where the hon. the Prime Minister got his information from. Mr. Galloway also said this inter alia

Dr. Verwoerd has also earned the respect of his enemies …

That is not something which we hear very often from that side of the House—

… and when he goes to London shortly, our earnest prayers will go with him and he will have the best wishes of everyone in King William’s Town.

It would have been a good thing, Sir, had we heard that language from the other side of the House as well. He goes on to say—

I go so far as to say that the earnest prayers and good wishes of everyone in South Africa will go with him.

That is the kind of thought that we should send into the world, Sir, with the same measure of trumpet blasting that hon. members opposite indulge in when they undermine South Africa abroad, something they are so fond of doing. If they would only show the same enthusiasm and say to the world outside that when the hon. the Prime Minister goes to London their earnest prayers and blessings will go with him, it would be much better. Mr. Galloway went on to say this—

The Prime Minister will find more friends in London than he expects.

I trust he will find many more in London than we sometimes find on the side opposite. I say, Mr. Speaker, that this is the sort of quotation that is worth while quoting.

I want to quote from the speech made by the Secretary for Bantu Affairs in Durban. He was referring to a matter which we are always arguing about in this House. He showed that since 1936 up to to-day, particularly during the past four years, the income of the Bantu had risen by 600 per cent and that of the White section by 300 per cent. If those few words do not emphasize the fact that South Africa is making good headway along the road to progress, I do not know what else you can prove with figures.

*Mr. LAWRENCE:

Now you are talking nonsense (kaf).

*Mr. M. J. VAN DEN BERG:

Very good feed for political donkeys, if they would only eat it.

Seeing that the Opposition pretend to know such a great deal about farming and about those persons who work for a salary you would have expected them to try to find out in this debate, Sir, what the reasons for these problems were, but not one of them tried to do that. What did we get from them? We got vague compositions, but not one single speech in which criticism was levelled at the policy of the Minister of Agriculture, or against the policy of the Government in general or the policy of the Minister of Railways; we got ordinary vague compositions, compositions which an ordinary Std. VI child would write in order to create the impression in the mind of his teacher that he also knows something about a certain subject. That is the trouble with hon. members opposite.

I want to associate myself with what hon. members on this side of the House have said, those gentlemen who spoke about the difficulties of the farmers. The question which affects every man and woman in this country is the question of food distribution. I am afraid there are some of them who sometimes use the word “over-production” too loosely to the detriment of the whole of South Africa. Every time we make out that there is an over-production of any product in the country, we are wittingly or unwittingly, harming South Africa. We should realize that the welfare and prosperity of the labourers, of the workers, depend on the welfare and prosperity of the primary producer. If it does not go well with the primary producer, it does not go well with the ordinary consumer. Mr. Speaker, there is no over-production. The question that we should concentrate on is the question of better and more effective food distribution. In spite of all the measures which are adopted there are still certain parts in the country which are not properly fed as far as food in general and fruit are concerned. Our distribution system in South Africa leaves much to be desired. My hon. friend over here says there is a scarcity of hanepoot grapes. I know that, nor is there a decent type of grape in either the Transvaal or in the Free State which is not scarce. The distribution system in our country leaves far too much to be desired to permit us of talking about over-production. There is great room for improvement in so far as the consumption of grain, meat and all dairy products in this country are concerned, Mr. Speaker, but we have to analyse the position as regards distribution if there is anything to be analysed. In passing, I want to make this suggestion. The Opposition talks very glibly and tells us that one way of increasing the consumption in this country is to increase the salaries of the lower income groups. Allow me, Sir, to say this to the Government with all respect: In most cases an increase in salary will benefit the lower income groups, but not in all cases. For that reason I want to suggest very earnestly that the question of the subsidization of food should receive greater attention—subsidization is always beneficial. The subsidization of food has two advantages; firstly it stimulates production, and secondly it places those people who need it, in a position to buy those products at a reasonable price. We have the example of dairy products in South Africa. During the years 1934 and 1935 when butter cost 7d. per lb. in South Africa we subsidized that same butter on the London market but when it penetrated our minds to subsidize food locally the consumption of dairy products increased in South Africa to the value of nearly £70,000,000. My hon. friend knows better than I do that that was the position. We would never have managed that had we not subsidized those dairy products. The best method that we can adopt in this country to help the dairy farmer is to place the lower income groups in a position to afford those products. We must therefore concentrate on the question of subsidizing food and by doing that we will ensure that the method we are applying is having the desired effect, whereas in the case of an increase in salary or wages the benefits which accrue to those people are not always utilized for the purpose of purchasing those products in respect of which there is over-production. That increase in salary is often utilized for the acquisition of other luxury articles—it gets wasted. But if we subsidize food no wastage can take place: it can have one effect only, it will benefit the consumer in the first place and it will benefit the producer in the second place.

Another point I want to make is this Mr. Speaker. We sympathize with the farmer who finds himself in difficulty; and the farmer who finds himself on the brink of insolvency year in and year out, but we have to look for the cause of his trouble. In all humility, Mr. Speaker. I now want to tell you who is the cause of that and who will be the cause of the insolvency of a number of our farmers. It is not the policy of the Government, nor low prices, nor the profit margins. That small farmer, whether he be a small mealie producer, or a small fruit-grower or anything else, will be ruined one of these days by the sellers of machinery and agricultural implements in the first instance and in the second instance by the sellers of oil and fuel. That is the root of the trouble, that is the reason why we find farmers in every sphere of agriculture on the brink of bankruptcy. We may go along and increase the prices of their products, but what is the use of that if the oil becomes more expensive. Of what use is it if we increase the price of the farmer’s product if the price of that piece of machinery which he has to buy goes up as well? Of what use is it if you increase the price every year but whenever you do so the price of his requirements goes up as well? We are told, for example, that the high prices of land is one of the reasons why the farmers find themselves in difficulty. That is true, but we must not forget, Mr. Speaker, that when a farmer owns a farm of £10,000 to-day and he wants to develop it properly, you will most probably find that the implements, etc., that he has to purchase for that purpose will cost him more than the price he paid for the farm. And that is recurrent expenditure, Sir, it does not come to and end; there is always some expenditure connected with it. Every one of us knows that imported implements simply do not last in this country. After you have used them for four or five years you find that your spare-parts account is just as high as the original price paid for the implement itself. In other words, the farmer is being ruined and he is placed in the position where he continually has to ask for increased prices, but he himself does not get the benefit of that increase. This is a matter which I recommend with all the power at my command to the Government for their consideration. I do now know what can be done. I am not suggesting that I have a solution, but I do say that that is the cause of the farmer’s difficulties. That is what I say, and once we know what causes the difficulty we may perhaps be able to find a solution.

Mr. Speaker, then I want to emphasize this: We have had various motions in this House on the subject of water conservation. I want to ask the Government something again—I have already done so on previous occasions. I am not pleading for any scheme in particular but there is one respect in which nature will continue to punish us unless we come to our senses. Our approach should be this that in order to place South Africa in a position to carry a larger population we should evolve a positive water conservation scheme. I am not asking for one particular scheme but it is absolutely essential that we undertake something of that nature for the benefit of the whole country. I also want to emphasize that such a scheme should not be undertaken by the Government alone. What I have in mind is that more effective assistance should be given to the individual farmer who shows the initiative to conserve water. We subsidize the building of dams, etc., to-day, but when we come to the actual question of water conservation we find that those subsidies are subject to so many conditions that only a small percentage of those farmers who show the initiative to embark upon a scheme of water conservation, avail themselves of those subsidies. Those subsidies should be given to the individual farmer who shows the initiative on a more effective basis.

In view of the fact that the Opposition has hitherto failed hopelessly in its criticism on the Government and have always come forward with destructive criticism, I make no apology for coming here as a member of the House of Assembly, and raising matters which I regard as being of the utmost importance to South Africa and to the nation as a whole and bringing them to the notice of the Government.

*Mr. VOSLOO:

The alleged political cub of the former Minister of Irrigation in the old United Party Government who now represents Port Elizabeth (West) (Mr. Streicher) has seen fit again to drag Dr. Jan Moolman into this debate to-night. What he hopes to gain by doing that he alone knows. What I find so peculiar is that he has so little information about the working of the Wool Board and of the Wool Commission and of the National Wool Growers’ Association that he now says that the Nationalist Party kicked Dr. Jan Moolman out of the Wool Board. I cannot imagine anybody coming to this House with a more ridiculous argument than the one advanced to-night by the hon. member for Port Elizabeth (West).

In so far as the case concerns Dr. Jan Moolman, I think it has been disposed of, but let me say this for the edification of the hon. member for Port Elizabeth (West): With reference to the political speech made by Dr. Jan Moolman in Queenstown last year, the hon. member for Kimberley (North) (Mr. H. T. van G. Bekker) and the hon. member for Cradock (Mr. G. F. H. Bekker) and I raised this matter in the House. We make no excuse, as wool growers and on behalf of wool growers, for having taken exception to the fact that an organization of the wool growers was dragged into politics. It was proved that the three of us were not the only people who took ecxeption to it. There was proof that the wool growers as such took exception to it. It was proved that the Wool Board as such took exception to it. That is why the Wool Board issued a statement. The hon. member need not shake his head.

*Mr. STREICHER:

May I out a question? I want to ask the hon. member whether he is aware of the fact that because of the statement that was issued a member of the Wool Board, Mr. Hugh Connan, resigned as a member out of sympathy for Dr. Moolman?

*Mr. VOSLOO:

The Wool Board itself issued a statement after this particular speech by Dr. Jan Moolman. Then Dr. Moolman objected to the statement made by the Wool Board. The Wool Board then said that it was not prepared to retract that statement, and under those circumstances Dr. Moolman resigned his position. Is the hon. member not aware of that? But now he sees fit to lay the body of Dr. Moolman down at my door as well as that of the hon. member for Kimberley (North) and of the hon. member for Cradock. No, Sir, the wool growers are not prepared to allow their industry to be dragged into politics, neither by Dr. Jan Moolman nor by the hon. member for Port Elizabeth (West). The hon. member would be doing the wool growers and Dr. Jan Moolman a favour if he would leave the matter there. He need not come and tell me what Dr. Jan Moolman did for the wool growers. I myself told the House that last year already. He can look up my speech and he will see that there were other hon. members who supported me there. We all spoke appreciatively of what Dr. Jan Moolman had done for the wool growers.

It struck me as significant that members of the United Party who hitherto have participated in this debate have merely complained about how badly the farmers are faring. It now seems to me that they are attempting to regain the lost ground amongst the farmers, the ground they lost throughout the years because of the manner in which they treated the farmers at the time when they were in power. You know, Sir, it is often said that we farmers are very fond of complaining, but this debate reminds me very much of someone who on a Sunday afternoon sits in the sun and complains about all the plagues and droughts and the other troubles we have without recognizing the good things which agriculture gives to us.

But I want to come to a few more specific points. The hon. member for Drakensberg (Mrs. S. M. van Niekerk) also became very loquacious here about how badly the farmers are faring. She pretended to have all the wisdom in the world in regard to the citrus growers, and she wanted to ridicule me when I made an interjection while she was speaking. Let me tell her that one single farmer in my constituency, the Amanzi Estates, produces more citrus than is produced in the whole of the Drakensberg constituency, and then I am not even talking about the Sundays River Valley and the Gamtoos Valley. She pretends that the citrus growers are finding things so difficult as the result of the policy of the Government. What I am now going to say will also serve as a reply to the hon. member for Gardens (Mr. Connan), who also said last Friday that it was due to the policy of the Nationalist Party that we are being boycotted and that that is the reason why the citrus growers receive such low prices on the market. It is peculiar that they are still imitating Dr. Jan Moolman when he said last year: “The Government must change its policy, or else …” Let me give these hon. members a little information. I have before me a report of the Citrus Board, which was sent to all the exporters of citrus, and it is headed: “Reasons for the serious fall in prices obtained for South African citrus overseas during July and the first two weeks of August 1960.” This report is marked “Confidential”, and therefore I do not want to read the whole of it, but I am prepared to make it available to any of those hon. members who want to see it. I will quote a few extracts from it. There is not a single word in this report to the effect that prices fell as the result of Government policy. I want to read this extract—

Just when a return to normal supplies would have remedied this position in the United Kingdom, the docks strike in Liverpool commenced and more than 100,000 cases in the United Kingdom had to be withdrawn after a delay of a week in the off-loading port of Liverpool, whilst negotiations were being initiated with the dock workers. The result of this was that the whole distribution scheme became completely confused. Steps were immediately taken to divert a transatlantic ship, which was at that time on the high seas, in order to increase the supplies in the United Kingdom as fast as possible.

It is not, as the hon. member for Gardens wanted to intimate, because they no longer want to buy our oranges in Switzerland because of the boycott, but to increase the supplies in London—

As can readily be understood, the effect of this delay could not be fully remedied. Therefore, summing up the position, originally a lack of supplies in the United Kingdom was caused as the result of the late rains, and thereafter the strike caused a further delay of approximately two weeks.

So we can continue reading various extracts from this official document sent to the exporters of citrus by the Citrus Board, but nowhere is it stated that it was due to the policy of the Government, due to our policy of apartheid, that prices fell.

Now I want to deal further with this slogan which has become so hackneyed that even the Cape Times this morning said that it had become worn out, the slogan that if we change our policy we will be able to do more business with the outside world. This slogan was used by the United Party and by every person who saw fit to try to bring us into discredit. It is said that if we change our policy we will benefit financially. That is a very easy way in which to create dissatisfaction. We know that every man is most vulnerable when his pocket is touched, and when somebody thinks that as the result of the actions and the policy of the Government he may lose money he will be concerned and ask whether that is the right policy to apply. But the Opposition, in adopting this method, is over-doing it, just as they did in the referendum when they said that if we became a republic we would be kicked out of the Commonwealth and would lose the preferences we enjoy in regard to certain articles we export overseas. You can realize, Sir, that it will disturb producers if they are told that the price of their product will consequently drop. But now I want to ask those hon. members and also that lady in the United Party: What is the alternative? Do they want to adopt Dr. Moolman’s alternative? Do they also want to say that the Government should change its policy? Should we abandon the policy of apartheid in order to do business? If we are to abandon the policy of apartheid of the Nationalist Party and adopt the policy of the United Party which now wants to give the Natives eight White representatives in this House and six in the Senate—and I do not know how many representatives they would want to give to the Indians—what will the position be then? Those hon. members still want to apply the same racial discrimination, but they want to give the non-Whites a few representatives here. Do they think that we will then recieve higher prices for our citrus? Do they consider that if they do that our own people will begin to eat more and will consume the surpluses, as the hon. member suggested when he said that we should get rid of our surpluses by eating those products ourselves? Will that send the sharemarket up? Will it give the farmer a better price for his meat? And there are many other products. The hon. member for Drakensberg mentioned a long list of them this afternoon when she was referring to all of these people who find things so very difficult. The tears almost ran down our cheeks. What on earth will bring about that change in respect of our economy? The hon. member for Queenstown (Dr. Steytler) will, I am sure, agree with my proposition, because for a long time already he has been saying it will make no difference. But if the policy of the Progressive Party were to be adopted, how would our economy fare then? If the policy of the hon. member for Queenstown is adopted and we have a multi-racial state in South Africa, as he advocates, we will get the position now proposed for Rhodesia, and where Rhodesia is now compelled to mobilize its forces. Will that improve our position? Will it not land us in a position where there will be less confidence in our political stability than in the past? And then the question still arises in my mind: If we can adapt that policy so as to fit in with the policy of the hon. member for Queenstown, will we not simply land in the position in which Rhodesia finds itself, or even the position in which the Congo finds itself, where chaos rules? I do not think that these arguments have any value, and I do not think that the farmer will allow himself to be misled by them, by this sort of cry we now hear: “Change your policy because it is costing us millions.” I want to mention a few other people who are also beginning to talk that way. The hon. member for Port Elizabeth (West) took great delight in quoting the Burger to-night. He quotes the Burger just when it suits him. I want to quote this morning’s Cape Times, where it refers to the vice-chairman of the London Stock Exchange, who is now visiting our country and who also warns us and says that trade is not merely a matter of how sound our economy here is, but that our political activities here also count. He also mentioned other reasons. Then I also do not want to lag behind the hon. member for Orange Grove (Mr. E. G. Malan) and the United Party. I also want to quote the columnist “Dawie”, who writes in the Burger, who last Saturday complained strongly about a German teacher whose residential permit was withdrawn, something which, it is supposed, will cost us £5,000,000 in loss of trade because he has to leave the country because we would not allow his children to spend their holidays with their Black nurse girl. And then this columnist mentions other incidents too, which he alleges cost us even more millions of pounds, and then he says that it reminds one of the days when we similarly, used to play with our own servants on the farms. I know that will be quoted here, and that the hon. member for Orange Grove, inter alia, will try and make use of it. But let me now say this: We so often hear these days about “the British way of life There is also a South African way of life which we cherish beyond everything else and which cannot be measured in terms of pounds, shillings and pence. Even if in our childhood we might perhaps have played with the little Coloured boys we were still told how to keep ourselves apart. It was hammered into us, this feeling that the White man should keep himself apart in order to preserve his identity in this country. If something like this should happen, that the children of a White family (the ages were given as being from 4 to 9 years) spend their holidays in the house of one of the Bantu— and I have the greatest regard for the Bantu —then it undermines that in which we believe, what we believe to be the correct way of life in South Africa, and that which we believe will preserve White civilization in South Africa. We can well imagine what would have happened if these children had spent their holiday with that nursemaid. If one of the members of the United Party should perhaps get that idea, or if some of their friends or acquaintances thought of sending their children to such a place, would it have their approval? No, there is nobody in this House who agrees with it, and therefore I conclude by saying that these things cannot be measured in pounds, shillings and pence.

*Mr. MOORE:

Rand and cents.

*Mr. VOSLOO:

I comply with the request of the Minister of Finance to show my respects to the dead pound, therefore I am still, for the last time, talking about £ s. d. It is not to be bought, even in rand and cents. Some sections of the farming population are finding matters difficult. I want to mention just one reason for it. I have here the rainfall figures of one of my voters who live in the Somerset East district. This is not a figure which comes from the Kalahari or the Sahara, but from an area where the average rainfall is approximately 15 inches per annum. During the past year, 1960, 4.55 inches of rain fell on that farm. But I want to analyse this a bit. In January 56 points fell, but that was on three rainy days, and the highest rainfall on one day during January last year was 36 points. In February no rain fell. In March there were two rainy days which together gave 47 points; in April there were four rainy days which gave one inch, 62 points being the highest rainfall for one specific day. In May there were three rainy days with 66 points, in June two rainy days with a total of 12 points; in July one rainy day with four points, in August three rainy days with a total of 80 points, in September two rainy days with a total of 80 points, in October three rainy days with a total of 48 points, in November one rainy day with 15 points, and in December there was no rain. One can understand that there are people who get discouraged and who despair in such circumstances. This specific person lives in the catchment area of Lake Mentz. He is one of the people who has to use the water from Lake Mentz, and Lake Mentz must provide the citrus growers with water from irrigation. One can therefore understand what the position is if there is no water in Lake Mentz, and why the citrus growers and the cattle-farmers find things difficult. But these tactics of trying to prey on discouraged and desperate people and of telling them that things are difficult as the result of the policy of the Government and that we should change our policy so that things can go better with the farmer will be treated by the farmers with the same contempt as that with which they treated the slogans of the United Party in 1948.

Mr. HOPEWELL:

The Minister of Finance when he introduced this Bill indicated quite clearly that the Bill had a lot to do with £ s. and d. The hon. member who has just sat down tried to dismiss that argument and tried to suggest to us that all is well in the country. The other day the hon. the Prime Minister said that throughout the country without one single exception, progress was evident. Yet, practically every member on the Government side has indicated to us that there are difficulties particularly among the farming community. One expects them to say that in no way is the Government responsible. The last speaker has blamed the weather, and has said that the Government cannot be blamed in any way. However he admits that the citrus farmers are in difficulty.

Before I go on to the main point of my argument, I want to deal briefly with the hon. member for Bellville (Mr. Haak) who quoted from various papers arguments to suit his case. The hon. member for Bellville completely missed the argument of the hon. member for Jeppes when he argued that the rate of investment in South Africa of over 15 per cent should have led to a rapid increase in the national income, 5 per cent and higher. The hon. member for Bellville then selected certain countries and compared the position in the United Kingdom and the position in the United States of America and he referred to this survey of contemporary economic conditions and prospects, a survey done by the University of Stellenbosch which shows South Africa as 1.7, the United States 1.7 and the United Kingdom 1.6. Surely the hon. member for Bellville knows that the United Kingdom is far from satisfied with this increase and the hon. members knows too that the United States of America is far from satisfied. Does he want South Africa to be the worst case? Does he want to remain in the same position as the United States of America and the United Kingdom? Both those countries have a much higher standard of living than that which obtains in South Africa. The hon. member knows that only this year the President of the United States of America has asked for a figure of 5 per cent and better. Here the hon. member for Bellville tried to destroy the argument of the hon. member for Jeppes and he tried to indicate that because the figure for South Africa is 1.7 per cent, we must be satisfied because it compares well with that of the United States of America and that of the United Kingdom.

Mr. HAAK:

That was not the argument at all.

Mr. HOPEWELL:

The hon. member instead of examining properly the position in the United States of America and in the United Kingdom and realizing that those two countries he has chosen are particularly examples, where on their own admission those countries are not satisfied and therefore he has damned his own case when he tried to destroy the argument of the hon. member for Jeppes. He did not, conveniently read from the survey this extract which says—

During the whole of the period under review, January 1956 to June 1960, South Africa has experienced two years of net private inflow and 2½ years of net capital inflow. It would appear that the net inflow during 1956 and 1958, although partly occasioned by developments on the overseas market have been more of a genuine investment than of a speculative nature. The net outflow during 1957 on the other hand, can largely be explained in terms of higher overseas money rates. Although overseas money rates were again higher during 1959 and the first half of 1960, the greater part of the net outflow of capital was not activated by speculative considerations. In other words, for the first time since the war there has been a net outflow of funds from the Union, not because of conditions in overseas money markets in relation to those in the Union but because of the foreign appraisal of investment prospects in the Union.

Does the hon. member suggest that this is a party propaganda document, or does the hon. member accept the Bureau of Economic Research of the University of Stellenbosch as a responsible body?

Mr. HAAK:

And the 1959 increase? How do you explain that?

Mr. HOPEWELL:

It is quite clear, Mr. Speaker, that the persons responsible for this survey are satisfied that the net outflow of funds from South Africa did not occur because of conditions in the overseas money markets compared with that of the Union, but because of foreign appraisal of investment prospects in the Union. That supports the case ably made out by the hon. member for Jeppes and the hon. member for Johannesburg (North) that the investment position in this country, the economic position is such that instead of attracting investment capital, there has been an outflow of funds from this country. But I am not only concerned with the capital position. If we are going to get any improvement in this country, we must be concerned with the development of markets.

I wish therefore to direct the attention of the hon. Minister of Economic Affairs, the Minister of Finance and the Minister of Bantu Development to the development of markets. I think it is agreed that there are three general branches of markets that we would like to see developed: The internal market, the market on the African Continent and the market overseas. I want to deal firstly with the internal market and the market in Africa, and I think the hon. the Minister will agree that both the farming community and the industrialists are very materially concerned, primarily with the development of the African market. The hon. member for Drakensberg has already indicated the necessity of increasing the consumption of the primary products of the farmer. The hon. Minister knows that certain of these primary products are processed by industry, and we are concerned with the attitude of the Government with regard to the development of the local market. Industries will tell you, Mr. Speaker, that they have the greatest difficulty in developing the potential African market.

This Government will admit that it has embarked on extensive housing schemes near our large towns. Now I am sorry that the hon. Minister of Bantu Administration and Development has chosen this moment to leave the Chamber. He will assure the House that it is the policy of his Department to discourage any market survey in any Bantu township. I know of leading overseas firms who had been encouraged by this Government, being encouraged by the efforts of the Minister of Finance and the Minister of Economic Affairs to invest in this country. The State Information Department has made propaganda and officials of the Government have made propaganda and these people have established industries in this country, and some have endeavoured to increase their industrial potential, and as hon. members know, the best way to increase your industrial potential is to ensure that you have an adequate market, and the best market is that at your doorstep. So they have sent travellers and representatives, and some have gone further and sent African representatives to call at these townships and to canvass their wares, and in many cases to embark on market surveys. I know of more than one leading organization processing food products (I am not talking of luxuries) which have endeavoured to survey the market in order to extend their range, in order to increase the consumption of their industrial products in the South African market, and they have been met by a total prohibition by the Department of Bantu Affairs. The various industrial housing schemes, like Kwa Mashu, near Durban, and Meadowlands and others near Johannesburg have been closed to them. The managers of these undertakings have been informed that it is contrary to the policy of the Minister to allow house to house canvassing. The argument frequently given is that these canvassers might be disseminating communist literature. I have never heard such an absurd argument in all my life. If we are going to raise the standard of living in the whole of the country, we have got to encourage people of all races and of all colours to wear better clothes, to eat better food, to consume more of our primary products, to consume more of the products of secondary industry, and how can we distribute these products and encourage the consumption of these products, how can we create the new wants in the minds of these people, settling to a new form of life in these townships, if we don’t let them see what industry has to offer. It is no good just sending a few goods to a local store. Hon. members know very well that those days are gone and that organized selling is to-day a highly developed science; organized selling whenever it has been applied in a closely settled community has always resulted in increased consumption, particularly where the housewives have been shown that it is to their advantage and the advantage of their families to stock quality goods. Yet, the possibility of encouraging the housewives in the Bantu areas to extend their range, to get new products, is met with total frustration. I know of more than one organization which has said that conditions are quite hopeless in South Africa, that they cannot develop the market, and that it would be better to carry out experiments in Rhodesia, and to make surveys in Rhodesia. More than one organization has established branches in Rhodesia and has extended its activities to Rhodesia because the possibility of progress in South Africa is thwarted by the policy of the Government.

The hon. the Minister of Finance, the other day, when speaking at the opening of the Stock Exchange enjoined overseas investors to come to this country, and he said that he hoped that they would stay in this country and that they would hitch their wagon to our star. Mr. Speaker, when the hon. Minister of Economic Affairs goes overseas, does he tell the prospective overseas investor that the ordinary marketing techniques are denied to the overseas investor when he comes to South Africa, that we have two different techniques, one to be operated on by the industrialists in the European field and another, subject to officialdom in the non-European areas? Does the Minister tell the overseas investor, who shall we say wants to can South Africa’s milk that when he wants to sell his product in the European market, he can have a market survey with all the modern technique of a market survey, and house to house canvassing, a survey of the potential demand and a survey of the requirements of the households, but that as far as the non-European households are concerned, that market is denied to them? He must first of all go to the Minister of Bantu Affairs and the Minister of Bantu Affairs will, if he requires that information, furnish it to his officials. I can assure you that the overseas investors will not readily accept that and they will not be bothered with the kind of information dished out by officials.

At 10.25 p.m. the business under consideration was interrupted by Mr. Speaker in accordance with Standing Order No. 26 (1), and the debate was adjourned until 14 February.

The House adjourned at 10.26 p.m.