§ The Earl of Dundee rose to move, That the scheme laid before the House on 16th August be approved. [35th Report from the Joint Committee.]
806§ The noble Earl said: My Lords, first I must apologise for the fact that we are having to consider these small restrictions on eligibility for farm diversification grants on set-aside land separately from the main regulations on set-aside. It would of course have been more convenient to consider the two at the same time. Unfortunately, this was not possible because of the well-established legal principle that one order cannot refer to the provisions of another which has not yet been made. In other words, while the set-aside regulations were still awaiting parliamentary approval, we could not bring before you another order referring to the set-aside regulations as if they were in force.
§ That said, the order before us today makes a very small change to the farm diversification grant scheme. I need not detain us for long. The main lines of the set-aside scheme are, I am sure, familiar to us all. Today I will briefly mention only those aspects of it which are relevant to the order before us. Under set-aside, farmers who enter the scheme—and of course it is voluntary—agree to take at least 20 per cent. of the land they use for growing arable crops out of agricultural production for five years. The scheme allows them to use the land which they set aside in three ways. They can leave it fallow. They can convert it to farm woodland or they can put it to a permitted non-agricultural use. It is on this third possibility that we need to concentrate in considering the order before us.
§ We have deliberately defined the permitted nonagricultural uses of set-aside land very widely. All of those activities which can qualify for grant under the farm diversification grant scheme are included. Only mineral extraction, industrial processors, housing and hotels, offices and retail developments are specifically excluded. Given that the farmer is likely to make some income from the non-agricultural use of set-aside land, annual payments have been fixed at the level of £130 per hectare in less favoured areas and £150 per hectare elsewhere. This compares with payments of £180 and £200 for permanent fallow from which the farmers will derive no direct income.
§ As I have mentioned, not only are we now offering annual payments for land set aside for non-agricultural uses but we also have in place a farm diversification grant scheme which offers modest grants to assist capital investments on farms needed to set up non-agricultural businesses. Clearly we have had to think very carefully about the relationship between those two schemes and whether, in particular, farmers should be able to benefit from both of them at the same time. I do not, I am sure, need to remind the House that it is a well-established principle that farmers (and indeed everybody else) should not receive government payments from more than one source for exactly the same thing.
§ In considering this we have come to the conclusion that the objectives of the two schemes are both complementary and different. The set-aside scheme essentially compensates producers for the short-term withdrawal of their land from cereals production. The farm diversification grant scheme, on the other hand, encourages the establishment of new on-farm businesses by grant-aiding capital facilities with a long life.
807§ If we take as an example a farmer who decides to use his set-aside land to put up a farm shop and install a car park next to it, it is clear that he is unlikely to put that land back into agricultural production at the end of his set-aside agreement. He has thus not only met the objectives of the set-aside scheme in that his land has come out of cereals for five years, but he has also met the rather different objective of the diversification scheme in that he has successfully established a long-term non-agricultural business on his farm. We therefore see no reason to deprive him of eligibility for the modest FDGS grants which are available to help him make those long-term investments in what I might describe as hard facilities.
§ There is, however, a small category of work which is eligible for grant under the diversification scheme but which does not produce changes which would be difficult to reverse in the short term. I am thinking here of grants which help in the preparation of farmland for conversion to a sports pitch or recreational area. Those include field drainage, land levelling and grading, reseeding and regeneration and the laying of turf and other surfaces. Another category which can attract grant is the clearing and landscaping of land in preparation for a nature trail.
§ Those are activities which, although they would make it easier to install a football pitch or set up a nature trail, would certainly not prevent the land going back into agricultural use at the end of the five year set-aside agreement. Indeed, they might even have the effect of enhancing the agricultural potential of that land. In those circumstances we concluded that it would not be right to offer a grant towards the capital works at the same time as the set-aside payment was available.
§ To make the position clear, a small amendment to the farm diversification grant scheme is required. That is the origin of the order now before us. I must apologise if my explanation of it has seemed a little technical and complicated. Matching together the fine detail of our various schemes is inevitably a complex matter. Therefore, I commend the order to your Lordships. I beg to move.
§ Moved. That the scheme laid before the House on 16th August be approved [35th Report from the Joint Committee]—(The Earl of Dundee.)
§ Lord John-MackieMy Lords, I thank the noble Earl for explaining this order. As he said, it is a simple measure, but it required some explanation, which he did very well. I see no need to say anything other than that I cannot imagine anyone who has put down a golf course ploughing it up after five years. Apart from that, I am content.
§ On Question, Motion agreed to.