HL Deb 03 July 1991 vol 530 cc1085-90

9.16 p.m.

The Earl of Strathmore and Kinghorne rose to move, That the scheme laid before the House on 10th June be approved [22nd Report from the Joint Committee].

The noble Earl said: My Lords, unless any noble Lords object, I intend to speak to all four instruments in my name on the Order Paper and will move the remaining three Motions formally at the end of the debate.

Your Lordships may recall that in July 1990, the farm and conservation grant scheme (or F&CGS) was amended in response to a package of structural measures which had been agreed by the European Council of Ministers in December 1989. This required us to make a number of minor adjustments to the scheme in order to reflect changes in the EC rules. One feature of the "structures package" not implemented last summer, was the addition of farm diversification works to the categories of investment eligible for aid under the terms of EC Regulation 797/85. To take advantage of EC aid, the farm diversification grant scheme (or FDGS) has to be brought into line with EC requirements. The Government decided that the best way to achieve that was to combine the FDGS with the part of the F&CGS which already complied with EC requirements. In order to avoid a major upheaval of grant arrangements so early in the life of the schemes, it was agreed to defer this change until the summer of 1991.

The principal aim of the instruments before the House today is therefore to merge the part EC funded improvement plan side of the F&CGS with the FDGS. We have also taken the opportunity to make other minor changes to grant arrangements including an amendment to the farm woodland scheme.

Before I explain the functions of each instrument I should like to describe briefly the current capital grant arrangements so that the changes may be seen in perspective. The F&CGS, which was introduced in February 1989, consists of two parts: an improvement plan side which attracts 25 per cent. reimbursement from Brussels; and a nationally funded non-plan side for ad hoc investments. The FDGS was introduced in January 1988 and, as I have said, is nationally funded.

The instruments before the House today will implement the following changes. The Farm and Conservation Grant Regulations 1991 extend the improvement plan side of the F&CGS to include grants currently covered by the FDGS. The maximum amount of investment on which grant can be paid over any six year period will be increased from£74,000 to £85,000. Diversification work may account for up to £40,000 of this limit. The recent extension of the less-favoured areas is implemented, enabling farmers in newly designated areas to claim some grants at higher rates and obtain some diversification grants which are not available elsewhere. The rule which currently prevents pig farmers with more than 800 pig places from obtaining grant is dropped. Finally, the regulations allow producers of beneficial organisms to qualify for glasshouse grants. Perhaps I may explain this final point. Beneficial organisms are insects reared for the purposes of biological pest control and I am pleased that this worthy initiative will now qualify for help.

The second instrument before the House today is the Farm and Conservation Grant (Variation) Scheme 1991. I am delighted to say that this instrument abolishes the prior notification rule which currently applies to grants for farm waste and traditional buildings under the non-plan side of the F&CGS. This means that farmers who in their eagerness to address farm waste problems bought equipment or started work before their notifications had been acknowledged, thus disqualifying themselves from obtaining grant, will be able to submit fresh claims for consideration without the application of this rule. We very much hope that they will. The instrument also implements the LFA extension, the raised investment ceilings and incorporates beneficial organisms as described for the regulations.

The third instrument, the Farm Diversification Grant (Variation) (No. 2) Scheme 1991, closes the FDGS to new applications and implements the LFA extension. This may benefit current planholders in newly designated areas who wish to vary their plans to include items aidable in LFAs only.

Finally, the Farm Woodland (Variation) Scheme 1991 simply implements the LFA extension. This change will not affect current participants in the farm woodland scheme. Farmers in newly designated areas who enter the scheme in the future will be eligible to receive payments at the lower LFA rates for improved land but will be able to apply for unimproved land for which grant is payable in LFAs only.

The four instruments that I have described will come into force on 18th July. Your Lordships will have gathered that the overall scope of the current grant schemes will change very little as a result of the amendments. The emphasis will continue to be on targeting aid at anti-pollution measures, enhancement of the rural environment and encouraging farmers to seek alternative sources of income through diversification. I am sure that your Lordships will welcome, as I do, the simplification of creating one scheme to cover both farm and conservation and diversification grants. This should ease paperwork for farmers while increasing awareness of the opportunities offered by diversification. I commend the regulations to the House.

Moved, That the Farm Diversification Grant (Variation) (No. 2) Scheme 1991 laid before the House on 10th June be approved [22nd Report from the Joint Committee].—(The Earl of Strathmore and Kinghorne.)

9.23 p.m.

Lord Gallacher

My Lords, I thank the noble Earl for introducing the four regulations and speaking to them together. I shall deal with them individually because that is the basis on which I have prepared my comments. I hope that I shall deal with them in the order in which they appear on the Order Paper.

In general we welcome the regulations and are sensitive of the purpose underlying them. My comments are restricted mainly to the explanatory notes which the regulations carry. Many people such as myself rarely have the time or the inclination to plough through the details and, provided that the explanatory notes give the gist of what we are asked to agree to, that is normally sufficient for our purposes. It is therefore about the explanatory notes that I shall speak briefly this evening.

As regards the Farm Diversification Grant (Variation) (No. 2) Scheme 1991, my query is about the bringing forward of the closing date for applications from 30th November 1994 to 17th July 1991. No doubt the noble Earl will tell me that that is to make the whole scheme uniform. Nevertheless, in view of the change of date, will there be any disadvantage to certain applicants?

We welcome also the extension in this order of areas which qualify for grant and the addition of a grant for the ancillary business of the provision of horses and ponies for hire. We know that that is a growth industry, much to the chagrin of motorists. Nevertheless, it represents a useful form of diversification for farmers and the fact that it now qualifies for grant will no doubt please them.

The only query I have is on the vexed question of planning applications for change of use of, for example, an existing farm building to stabling or whatever in order that advantage can be taken of this extension of grant. I know that that is not the responsibility of the Ministry of Agriculture and that in a number of instances local authorities have been somewhat wary of sanctioning changes of use. I wonder whether the Department of the Environment knows of the change and will encourage local authorities to be as sympathetic as possible when applications for change of use are made.

Turning to the second measure, again we welcome the grant which the noble Earl described for producing beneficial organisms for pest control. I thank him, too, for the explanation he gave as to what those beneficial organisms can be. I am sure that horticulturists will be pleased that they will have the opportunity of applying for the grant if they have the capacity so to do.

The extension of land areas included in the measure is also welcome as is the easement in respect of prior notification of certain works. The increase in maxim um grants is also, I am sure, useful at this time and will be accepted with considerable pleasure by farmers.

To restrict the expenditure on dairy cows, which appears in paragraph (b), to the applicants' quota, seems to me to be an unavoidable limitation. However, since it now has an official place in a measure, we are entitled to ask whether that means that dairy quotas are here to stay. I should be grateful if the Minister would give us his view as to whether or not that is likely to be the position.

Also, there is reference to a change of term as regards qualification; namely, the term "ancillary farmer business" is now to be known as a qualifying business. I wonder whether that is purely terminological or whether it is of greater significance. Perhaps the noble Earl can tell us which it is.

As regards the third measure—the big brother of the four —looking at the very extensive explanatory notes which are attached to the measure—and I shall refer to them briefly by paragraph numbers—it is clear from the first paragraph that European Community regulations and directives now control the whole of our agricultural destiny. That is a fact which needs to be emphasised from time to time because speeches are still made as though, in agricultural terms, we are in charge of our own destinies. That is not so. I am one of those who would transfer the Ministry of Agriculture to Brussels and maintain a branch office in London. In terms of efficiency and economy, that would be a very wise decision to make.

We welcome especially the high rates of diversification grant promised to young farmers and partnerships including young farmers. That is a forward-looking move at this time, particularly when we understand that Commissioner MacSharry is thinking in terms of early pensions for farmers of the age of 55 and above.

The reference in paragraph 3 to grant aid is somewhat complex and I regard it, having read it most carefully, as a statement of intent. If it be so, I hope that it will be sympathetically interpreted. For example, the rather ominous statement that in order to qualify the plan must bring about a lasting improvement of that situation is very noble, very worthwhile and no doubt justified on the grounds of cost. Nevertheless, it applies a standard of assessment which could, if adversely interpreted, be of some disadvantage to certain applicants in certain circumstances.

Paragraphs 4(a) to (j) of the regulations are specific to an almost frightening degree in my experience. Having read them carefully, I ask myself whether the small farmer will be able to cope unaided with all those qualifications if he wished to make application. We are in danger of delivering the small farmer into the hands of professional advisers. If that be so it means that the advice he receives will have to be paid for. The value of his funding will be diminished to the extent that he incurs professional charges in order to take advantage of the new scheme. That prompts the thought that it may be that the Agricultural Training Board, which performs useful work across the whole spectrum, may consider a distance learning course for farmers so that they, like me, may more easily understand the regulations that are now stemming from Brussels.

The final paragraph in the order again includes an extension of eligible land areas, which we welcome. The improved maximum limits of expenditure under the Farm and Conservation Grant Regulations are also welcome. A query again arises whether the earlier closing date of 17th July for the receipt of applications is not disadvantageous to certain applicants.

Turning finally to the fourth order, the Farm Woodland (Variation) Scheme, we give a welcome to the extension of areas of land to be treated as disadvantaged or severely disadvantaged. That said, should the noble Earl choose to reply to my remarks this evening, perhaps he will consider à propos farm woodlands in general—I emphasise farm woodlands —that there might be merit at some time in your Lordships' House being given the opportunity for a short debate on the future of farm woodland schemes and possible changes to build on the results achieved by farm woodland schemes to date.

All that said, we support the four orders.

9.30 p.m.

The Earl of Strathmore and Kinghorne

My Lords, I am grateful to the noble Lord, Lord Gallacher, for what he has said. He asked me a number of questions, to which I shall attempt a reply. Should I not give the noble Lord satisfactory answers I shall certainly endeavour to write to him.

The noble Lord began under the Farm Diversification Grant (Variation) (No. 2) Scheme asking whether the new closing date would disadvantage anyone. The answer is no, with one minor exception; that is. grants for letting. All the grant available under the FDGS will he available under the Farm and Conservation Grant Regulations. The latter scheme opens as the FDGS closes. Therefore continuity is ensured. Farmers already holding approved plans under the FDGS are unaffected.

The noble Lord asked also whether the instrument would affect planning prospects for equine hire. I happen to know that that is of some interest to a number of noble Lords in this House. The only change with regard to grant in connection with horses for hire is the extension of the less favoured areas. The grant is only available to farmers in less favoured areas. Planning issues are not affected by that instrument.

I move on to the next scheme. The noble Lord asked whether dairy quotas are here to stay. The existing quota system ends on 31st March 1992. It is overwhelmingly likely that the EC Council will extend it for a further period.

The next point raised by the noble Lord related to ancillary farm business, as opposed to qualifying farm business, and the differences between those two terms. Ancillary business was changed to qualifying business because of the introduction of diversification grants into the Farm and Conservation Grant Regulations. Ancillary business covers the range of diversification activities which attract grant. Qualifying business is a wider definition which includes non-aidable activities. That definition is used in the eligibility test and its wider scope enables more farmers to meet the eligibility requirements of the regulations. That is mirrored for the scheme but only applies to farmers who wish to obtain grant on traditional farm buildings.

The noble Lord, Lord Gallacher, brought up the subject of whether grants would be sympathetically administered. If a farmer qualifies he will be paid a grant; if he does not, he will not.

The noble Lord referred to rules A to J, which are complicated. He asked whether the Agricultural Training Board would be able to give guidance about the regulations. I assume that the noble Lord is referring to the restrictions of payment of grant in Regulation 6. Most of these rules are EC requirements. They are explained in the explanatory leaflets about the scheme which were issued to farmers. If farmers do not understand them they can ask for help from their local Ministry office. The ATB has no role in this particular issue.

The noble Lord also raised a point on planning. The DoE is familiar with diversification grants. There is no change here as far as concerns planning. The noble Lord asked about pensions. Again, there is no change to grants to young farmers. Young farmers already get higher grants under the existing schemes. Finally, the noble Lord asked about a debate in your Lordships' House on the farm woodland scheme. I can only say—I think he will expect me to say—that this can only be arranged through the usual channels.

I am sure noble Lords will agree that the instruments before the House today represent a welcome rationalisation of capital grant arrangements. The creation of a single scheme to cover both farm and conservation and diversification grants will present to the farmer a simpler method of obtaining aid together with the opportunity of including both types of work under a single improvement plan. This move will also ease administration of these grants and, of course, will enable us to claim reimbursement from Brussels on future plans which include diversification work. I hope that I have answered all the noble Lord's points. I commend these instruments to the House.

On Question, Motion agreed to.