§ 8.42 p.m.
§ LORD WALSTONMy Lords, I beg to move that the draft Hill Land Improvement Scheme, 1967, which was laid before this House on July 5 be approved. I suggest that, with your Lordships' permission, it will be convenient to consider the Scottish Scheme at the same time, that being on very similar lines. This Scheme is made under Section 41 of the Agriculture Act 1967, and provides for grants of 50 per cent. towards the cost of a range of improvements which will raise the productivity of hill land. There is also provision for making 10 per cent. supplementary grants for field drainage in the hills.
As your Lordships know, a large part of our total agricultural acreage consists of hill land, and altogether about 17 million acres out of a total of 48 million acres of agricultural land is hill land. So it is important, in order to help hill farmers to make the best use of their land, that there should be an Order on these lines. I think your Lordships will agree that special help is justified in this case, by reason of the special difficulties which hill farmers have to face. Their farms are remote; they are exposed; very often the soil is poor, and often, too, the holdings themselves are too small for efficient farming. The Agriculture Act 1967 provides for measures specially to help hill farmers, and it is under that Act that these Schemes are being laid before your Lordships.
137 Both of these Schemes are part of a comprehensive approach to give special encouragement to land improvements important to hill farming by providing grants of one-half of the cost. But buildings—apart from simple livestock shelters on the hills—are not included; for other types of buildings, grants at the high rate of 50 per cent. would tend to perpetuate the present imperfect farm structure, and that is the reason why they are excluded. But, of course, hill farmers will be able to put forward proposals under the Schemes concerning farm structure, which will shortly be laid in draft before your Lordships, and buildings which are needed as part of an approved amalgamation could qualify for a 50 per cent. grant under those provisions.
Under this Scheme we can give grants for all the land improvements set out in Schedule 1. The first item includes "the improvement of land by cultural operations", and this will cover, broadly speaking, all the operations which are carried out to make things grow; ploughing, discing, rolling, applying lime and fertilisers, sowing seeds, spraying with chemicals, and so on. The other items speak for themselves. The supplementary grant of 10 per cent. for field drainage is there because it is recognised as being of very special importance, particularly in this context.
The land which is eligible for grants under this Scheme is defined in sub-paragraphs (2) and (3) of paragraph 2. This is the type of land which was eligible for grants under the Hill Farming and Livestock Rearing Acts. Schedule 2 specifies the areas of England and Wales in which hill land may lie. Sub-paragraph (3) of paragraph 2 is of special importance. Improvement of hill land is a slow business, and therefore if it is to succeed there must be a long-term policy. Farmers cannot be expected to improve their land if they are afraid that they will no longer be eligible for special help, merely as a result of the improvements which they themselves have made. On the Second Reading of the first Agriculture Bill on November 30, 1965, in another place, my right honourable friend the Minister of Agriculture said that we proposed to prevent this situation from happening; and this is what this paragraph attempts to do.
It ensures that land in hill areas which is considered inherently poor enough to 138 qualify for these grants will remain eligible for the five-year period of this Scheme, even if improvement subsequently shows the land to be better than was thought. I hope that when the time comes to make the next five-year Scheme, the Government of the day, whatever Government it may be, will include a similar provision and in this way allow a period of ten years free from the fear of "improving out". If Ministers felt it necessary to exclude any farms on quality grounds after that, I hope that review of eligibility would take place during the second Scheme in good time for ample notice to be given to those farmers whose land had become too good to qualify.
Of course, farmers are also concerned about the income which they can expect from their improved land. If I may anticipate legislation which is shortly to be presented to the House, we propose to include a parallel provision in the Schemes governing the payment of hill sheep and hill cow subsidies for the next five years. I hope that arrangements similar to those for the improvement grants will be made in the next following Schemes also. I should perhaps add that under the definition of "hill land", the all-important factor is the suitability of the land for livestock-rearing purposes. If the land qualifies, the fact that the applicant is fattening sheep or carrying dairy cows will not disqualify him from grant.
An important difference between this Scheme and the grants which were previously given under the Hill Farming and Livestock Rearing Acts is that there is now no requirement that the improvement shall be "comprehensive". Farmers will be free to submit applications for one or more improvements and may submit any number of applications. The obligation under the old Livestock Rearing Acts to submit proposals for the comprehensive rehabilitation of the farm held back some small hill farmers from submitting schemes. Farmers may be unable or unwilling to embark on a comprehensive scheme, but may still carry out worthwhile improvements, and we want to encourage them to go ahead.
But we also want to see the farm structure in these hill areas improved. Paragraph 4(2) of the Scheme provides a safeguard against grant-aiding improvements on the smaller farms which might be 139 wasted in the event of an amalgamation. I do not think this necessary safeguard will, in practice, prevent many farmers from carrying out the improvements they want. The paragraph provides that if the farm is not capable of providing a sufficient livelihood (and "sufficient livelihood" is interpreted as the agricultural worker's minimum wage), either before or after improvements, then the proposed improvement may still be approved if it would subsequently benefit any larger farm which might be formed by amalgation. In most cases, I feel sure, the proposed improvements would meet this condition, but the safeguard is needed for those cases—the making of a road, for instance, or the renewal of a fence—which might not be worth while if the farm were amalgamated.
A general condition of these grants is that, as is mentioned in paragraph 4(3), the cost of the improvement should not be unreasonably high in relation to the benefit to hill land. But if it is, perhaps because it includes ineligible work or unduly expensive materials, then subparagraph (4) enables the Minister to pay grant on part of the cost. The first few lines of paragraph 5 refer to the payment of grant on the basis of "standard costs" in accordance with regulations which may be made under Section 36(1) of the Act. Consultations on the "standard costs" are now in progress with the industry, and my right honourable friend intends to issue regulations on "standard costs" in the next month or two. Applicants under this and other schemes will then be able to choose to have grant based either on the actual costs or on the appropriate standard costs under the regulations, whichever they consider to be most convenient to their own purposes.
Paragraph 7 contains the usual safeguards concerning work which would frustrate an improvement previously grant-aided and concerning payments which would duplicate a grant already paid. Sub-paragraph (3) provides that where assistance is also available under another scheme, grant at the higher of the two rates shall be allowed. Assistance under the Lime Subsidy Scheme and the Ploughing Grant Scheme may exceed 50 per cent. of the cost in some cases. Applicants submitting proposals for 140 liming or ploughing under the Hill Land Improvement Scheme will therefore be advised to apply for assistance under these other provisions. If payment exceeds 50 per cent. of the cost, no grant will be paid under the present Scheme: if it proves to be less than 50 per cent., then the present Scheme enables us to make it up to 50 per cent. So in no case will the farmer be the loser.
We have consulted the National Farmers' Union, the Country Landowners' Association, the Chartered Land Societies Committee, and also the corresponding Scottish organisations, on all the proposals in this Scheme. I think I can say that they all gave a general welcome to the proposals, and we are most grateful to them for their constructive help. They suggested that the list of eligible improvements should be extended to include buildings, but I have already explained to your Lordships why we have decided not to do this—apart, of course, from the exceptions that I have already mentioned.
My Lords, this Scheme is the first exercise of the powers given by Section 41 of the 1967 Act. The cost of the two Schemes together—that is, this one and the similar Scottish Scheme—is expected to be about £1 million a year. I am sure it will be of very great benefit to hill farmers; and, because of the importance of the hills for our breeding flocks and herds, I believe it will also benefit our agricultural industry in general. By giving special encouragement to improvements that will raise the productivity of hill land, it will make a useful contribution to the programme of selective expansion, and it will also help hill farmers to increase their incomes. My Lords, I beg to move.
§ Moved, That the Draft Hill Land Improvement Scheme 1967, laid before the House on July 5, 1967, be approved.—(Lord Walston.)
§ 8.55 p.m.
§ LORD NUGENT OF GUILDFORDMy Lords, may I thank the noble Lord, Lord Walston, for his interesting and detailed account of this Scheme, and say a word of welcome to it? It seems to follow lines similar to those laid down in previous Schemes under the Livestock Rearing Acts, with one or two useful amendments to which the noble Lord called our attention. These Schemes, of 141 course, have been very valuable to hill farmers in the past, and I should think that the particular amendment that the noble Lord mentioned, of allowing the hill farmer to make a piecemeal approach rather than a comprehensive one, will be one of practical value.
As the noble Lord explained, the object of these Schemes is to meet half the capital cost of improvements to a range of features on these farms with a view to increasing their stock-carrying capacity, and to assisting the breeding and rearing of cattle and sheep on the the hill—which is, of course, virtually the only form of farm husbandry which this hill land can support. Both economically, in the interests of food production, and sociologically, in the interests of keeping farmers living on the hill land, this is sound national policy which has been followed by Labour and Conservative Governments now for many years. Of course, to be sitting in the hill land of England, Wales or Scotland at this moment on a hot July evening is an attractive thought. We should all rather like to be there; but in the middle of winter it is pretty rugged, and unless we make conditions as helpful as we can people just will not remain there.
I wish to make a point to the noble Lord which is a critical one: that the value of these grants to the hill farmer will be frustrated if the price for his stock when he sells it off the hill is too low. Last autumn there was a calamitous slump which hit hill farmers very hard—and they are mostly small men, with small pockets. In the main, they sell store stock, which is then fattened by the Lowland farmers. Thus they do not get the cushioning effect of the guarantee price and the deficiency payment. And the market has collapsed again this year. Last week the average price for fat cattle had fallen to nearly the lowest price of last November. One market, I believe, actually broke below £5 per hundredweight. Of course, the store prices follow the fatstock prices, and if the fall continues for the next four months the prospect for these small hill livestock farmers is really grim indeed. This Scheme would have no more than academic value in those circumstances.
I say to noble Lords opposite, and particularly to the noble Lord, Lord Hughes, who is to reply to this debate, 142 that if the Government mean to help these hill farmers they really must take more effective action than this. Another one or two autumns like that of last year and there just will not be any stock farmers left on the hills to help. The noble Lord, Lord Walston, with his great knowledge of agriculture, well understands this situation, although I am glad to think that he does not live on the rugged hillside but on the lush lands of East Anglia. I will therefore not make more than a passing reference, which I acknowledge goes outside the scope of this Order, to what is happening; but it is so germane to the life of these people whom we are trying to help that I feel it deserves a mention now.
The fact is that the closing of the Western European markets to meat imports by means of the Common Market levy system has the effect of making the British market the sole open market for meat, practically speaking, in the world, with the result that this market becomes the repository for every parcel of meat which is moving about in the world meat market, whether it comes from South America, Australia, New Zealand, or indeed from Eire—and I hear that there are even threats that France may be exporting meat to us. This severe imbalance of our meat market has been exacerbated by Her Majesty's Government actually paying a subsidy to Eire farmers who send their cattle and lambs here. This really is the last straw. It is the most astonishing piece of mismanagement. May I ask whether noble Lords opposite will please take a message to their right honourable friend the Minister of Agriculture that it is small help to these little hill farmers to give these improvement grants if, at the same time, the Minister makes arrangements which knock the bottom out of their markets?
The simple answer to this is to adopt the Common Market levy system of import control and so protect the home market for the home producer, at the same time preparing our country for entry into the Common Market—to which the Government are pledged, and very much with my personal support. In giving my support to this Order, may I ask the noble Lord, Lord Hughes, who is to answer, to take this message to his right honourable friend the Minister of Agriculture: that there is really the most 143 urgent need to take the kind of action I have suggested to control the import of meat into the country if we are to keep these farmers on the hills. The benefit of these schemes will be completely lost unless they are to get a sufficient return from selling their stock to get a reasonable living. With those rather anxious words of warning I give my support to this Scheme.
§ 9.1 p.m.
§ THE JOINT UNDER-SECRETARY OF STATE FOR SCOTLAND (LORD HUGHES)My Lords, my noble friend Lord Walston has explained the purposes of both Schemes so well that my task in replying is comparatively easy. I say "comparatively easy", because although the noble Lord, Lord Nugent of Guildford, offered no criticism of the Schemes he raised a formidable matter on behalf of those whom the Scheme seeks to benefit. I think we must accept it that people must continue to be in business if they are to get benefit from these proposals. I think it is accepted that the proposals will be helpful to those in the hills if they are allowed to continue in business. I should like to confirm what my noble friend Lord Walston said, that the proposals to which he spoke apply with one or two minor differences also to Scotland. I do not propose to say anything specifically about the Scottish proposals.
I should like to make some comment on what the noble Lord said about the difficulties which face these farmers in the present cattle market situation. The information I have been given is that until recently the market has taken up considerably more beef than a year ago, and at comparatively good prices; but over the past three or four weeks prices have fallen rapidly. We do not dispute what the noble Lord said in that connection. The Minister has not waited for any advice which may be tendered either by my noble friend Lord Walston or myself in this matter, and he has recently had a full discussion of the problem with the unions. I think it would be right that I should give some indication of the situation as it is seen. The causes of the market weakness would appear to be; first, an increase in home fed marketings; Secondly, many poor quality cattle are 144 now coming on to the market; thirdly, exports to the Continent have fallen from the high level of a few weeks ago; and, fourthly, the warm weather to which the noble Lord referred, with some longing to be on the hills at this time, has its disadvantages for the hills in that it reduces the demand for week-end joints. We expect the market to be well supplied over the next six months, mainly because of the increase of home-fed marketings. The very high cattle prices of 1964 to 1966 reflect a comparative shortage of beef and the Government's policy, with the fullest support by the unions, has been to encourage expansion of beef production. Somewhat lower market prices must be expected to follow from the success of this policy of some-what higher deficiency payments.
As regards imports, supplies of fresh and chilled meat are currently running at a level comparable with last year; but imports of frozen beef are considerably lower. The present weakness cannot therefore be attributed to an excessive level of imported beef. There has been criticism of imports from the Republic of Ireland, but there has in fact been some improvement this year in the pattern of Irish supplies to our markets. In the first six months, imports of stores and carcase beef were considerably higher than last year. These were absorbed at reasonably good prices. Much of the increased potential known to exist in Ireland may have been already absorbed. The main fear felt by farmers seems to be that the Irish Republic may again this autumn flood our markets with fat cattle with the help of the export subsidies to which the noble Lord referred. We are alive to this possibility and to the importance of better phasing of Irish supplies generally. My right honourable friend the Minister of Agriculture has had several meetings with the Irish Minister of Agriculture, and they are continuing to try to secure greater regularity and an increase in the proportion of cattle sent as stores. Since talks are still going on, noble Lords will appreciate that it is not possible for me to say anything definite at this stage about their outcome.
At times of market weakness producers of store cattle are going to suffer more than the fattener who, as the noble Lord, Lord Nugent of Guildford, said, has the 145 benefit of the protection of the guaranteed payments. Nevertheless, the rearers do receive direct help in the form of calf subsidies and the hill cow and beef cow subsidies, all of which were increased in the last Annual Review. There is also this point, and I think this could be helpful. The break in the market last year coincided with the autumn store sales which made things quite difficult for the rearer. The break this year has occurred earlier, and there is time for recovery before the starting of the store sales. So far the stock markets are remaining reasonably firm, and it is important therefore that neither the farmers nor ourselves should do anything to have the effect of talking the market down. I appreciate that these matters must always include a great deal of imponderables. But in so far as the situation differs from last year, the difference would appear to indicate a better prospect for the man on the hill than the situation which developed last year. The talks which) my right honourable friend is having will be in an endeavour to make that still more likely. We must all hope that he will succeed in that.
The noble Lord, Lord Nugent of Guildford, will forgive me if I do not follow him in the question of what will happen when we are in the Common Market and the way in which we might best at this stage prepare for our entry. That is a matter very much wider than the Schemes we are discussing and I think that the degree of unanimity which exists between us on the merits of the scheme might well disappear if we started to debate this wider aspect.
LORD INGLEWOODMy Lords, before the noble Lord, Lord Hughes, sits down, will he tell us something about the market for fat sheep? He has not mentioned sheep or mutton, and, of course, hill farmers, large and small—and not least my noble friend Lady Elliot of Harwood—depend a great deal more on sheep than on cattle. As it is so important, could the noble Lord say just a word of encouragement to hill farmers in that respect?
§ LORD HUGHESMy Lords, I do not think the noble Lord need have undue fears on this matter, and while I accepted 146 that what was said by the noble Lord, Lord Nugent of Guildford, was really outside the actual Schemes which we were discussing, at least it had the merit that it was topical, and there had been this sudden break in prices during the last three or four weeks. If the noble Lord, Lord Inglewood, wishes to give an indication that a similar situation has taken place in relation to the sheep side of the industry, I shall be surprised and dismayed—surprised because I have not had that indication, and dismayed because it would compel me to have to stray still further from the purpose of the Scheme.
LORD INGLEWOODMy Lords, would the noble Lord take it from me that I was not just filling in time, I was making what I thought was a serious point? The store lambs of Scottish farmers like my noble friend Lady Elliot of Harwood were selling in the North of England last autumn at least at £1 less than in the previous autumn, and the market has not recovered yet. It is the sheep prices far more than the cattle prices that have caused general weakness. I should not like to encourage the noble Lord to stray out of order this evening, but I would ask him to consider this point when he has conversations with the Minister of Agriculture, Fisheries and Food.
§ LORD HUGHESMy Lords, I think I can give this assurance to the noble Lord, Lord Inglewood: that I shall be no less anxious to encourage my right honourable friend to help Scottish sheep farmers than to help English and/or Scottish cattle farmers.
§ On Question, Motion agreed to.