HILL FARMING BILL

HC Deb 20 July 1956 vol 556 cc1587-644

Order for Second Reading read.

12.50 p.m.

The Joint Under-Secretary of State for Scotland (Mr. Niall Macpherson)

I beg to move, That the Bill be now read a Second time.

This is a very small Bill which, I feel, will recommend itself to the House without much persuasion from me. It continues a policy initiated in the Hill Farming Act, 1946, introduced by the hon. Member for Hamilton (Mr. T. Fraser), who has expressed his regrets that he is unavoidably prevented from being here today. This policy received at the time the full approval of this side of the House and was further extended in 1951 by the Livestock Rearing Act.

There seems to be general agreement that the policy has been fruitful, but its main features—first, the financial assistance for improving upland livestock rearing farms and, secondly, subsidies for hill sheep and hill cattle—will end this year unless we extend them for a further period. So, we have had to decide whether to recommend to this House that the need for this help still exists, and if so, for how long it ought to be continued.

The case for assisting with the improvement for hill and upland stock rearing farms, and for encouraging the rearing of hardy sheep and cattle by the subsidies will be familiar to hon. Members on both sides of the House. Those who farm in these areas play a vital rôle in the farming economy of this country. They breed and rear the store sheep and cattle that are the raw materials of the other sections of the livestock industry. We are anxious to increase supplies of home-killed beef and mutton, and to do so we must strengthen the hill farming economy. Yet, because hill farmers produce few end products, they derive comparatively little benefit from the price guarantees, and the price guarantees represent the largest proportion of Government financial support in farming.

It follows that some other way of assisting the hill farmer must be found; for I am sure it will be agreed that hill farming stands at least as much in need of assistance as any other section of agriculture if it is to be brought up to modern standards of efficiency and full productive capacity. We think such assistance can best be given through the improvement grants and the hill sheep and hill cattle subsidies under the Acts.

The Acts allow Ministers to approve schemes for improving livestock rearing land up to 6th November this year. The schemes cover a wide variety of work; from the erection or improvement of farm buildings, houses and cottages, the making and repairing of roads and bridges, the provision of water and electricity supplies, fences, cattle grids and other kinds of fixed equipment, to various types of improvement to the land itself such as drainage, re-seeding of grazings and the planting of shelter belts. The Schedule to the Hill Farming Act gives a list of 23 kinds of improvements which are eligible for grant. The aim is to make holdings up-to-date and economic. It is for that reason that the schemes must be comprehensive in the sense that they must cover everything which is really essential to put a farm in good order. We do not insist on an improvement being made merely for the sake of perfection.

Schemes of this kind attract a grant of half their cost, thus enabling landowners and farmers who cannot afford the full cost to effect permanent improvements in their farms. I am glad to say that good use has been made of these facilities. When the Hill Farming Bill was under discussion in the House some doubt was expressed as to whether it was right to make the provisions voluntary rather than compulsory. The results vindicate the decision to make them voluntary.

Since 1946, the number of schemes approved is now approaching 10,000—nearly 8,000 in England and Wales, 1,400 in Scotland, and the remainder in Northern Ireland. These schemes cover some 11,000 farms comprising over six million acres and are estimated to cost just under £31 million. Over 1,000 more schemes, which are under consideration, are estimated to cost nearly a further £4 million, making a total of nearly £35 million, of which half will be borne by the Exchequer. As these schemes take some years to carry out, the amount of grant actually paid so far is very considerably less, just under £6 million.

Despite these results it is unlikely that the whole of the money provided by the present Acts—£20 million which could with the approval of the House, be raised to £22 million—will have been earmarked for schemes submitted by next November. So we have had to consider not only whether to extend the period in which schemes can be submitted, but also whether additional funds are needed and could be justified.

In this we have been largely guided by the recommendations of the Welsh Agricultural Land Subcommission which the House debated a few days ago and especially by an investigation undertaken by Professor Ellison of the University College of Wales, Aberystwyth, in collaboration with the Statistical Department of the Rothamsted Experimental Station—to whom we are very much indebted—into the progress of improvement on upland and hill farms in England and Wales. This investigation showed that the return to the nation on the capital from all sources to be invested in these schemes is likely to be in the region of 3½ per cent.

This was the return on all the improvements carried out, both the work on the land, which produces an immediate and direct return, and work designed to ensure that the farms remain occupied, such as the improvement of houses, cottages and roads and the supply of water and electricity. The continuation of this assistance is in line with the expectation of the Hill Lands (North of Scotland) Commission which clearly envisaged that these grants would continue to be made available.

Professor Ellison also sought to assess the scope for further improvement of hill and upland stock farms in England and Wales and the probability of its being undertaken if the grants were continued. Using his estimate and similar estimates made for Scotland and for Northern Ireland, we came to the conclusion that we should be justified in continuing the Acts for a further seven years, by which time it would be reasonable to assume that all those likely to undertake improvement schemes would have submitted their plans.

Mr. A. J. Champion (Derbyshire, South-East)

The hon. Gentleman is making frequent reference to a report by Professor Ellison. Is it the intention that that report should be made available to us in some form? I looked in the Library last night, and could not find a copy of the report, nor could I find the journal in which, apparently, it once appeared.

Mr. Macpherson

The report actually appeared in the Journal of the Royal Agricultural Society of England and Wales, Vol. 116, 1955.

Mr. Champion

It is not available in the Library.

Mr. Macpherson

We must see if that can be rectified.

To cover the cost of the extra work, the Bill provides for a further £5 million, raising the total available under the Acts to £25 million which could, if necessary, still be increased by a further £2 million with the consent of this House. Treasury approval, of course, would require to be obtained. We consider that this will make adequate provision for this purpose.

As I have said earlier, I have every confidence that the House will support us in continuing this help for our upland stock farms. But there may be some people who feel that we are not going far enough.

A great many people in the country as a whole—though not so many in Scotland—have been saying for some time that we ought to make these grants more freely available for improving small dairy farms in these hill districts. We do already help those milk producers whose main business is stock rearing, but it is urged that we should extend the grant to those who cannot hope to make a reasonable living if they switch over from milk production to cattle and sheep raising. Let me say at once that we have a good deal of sympathy with this view and have given it most careful and anxious thought.

But, whatever help may be needed to enable milk producers to bring their buildings and equipment up to date, we have come to the conclusion that an extension of these Acts is not the proper medium, for their purpose is to encourage the production of more beef and mutton. As my right hon. Friend the Minister said in the course of the debate in this House on 30th April: … in the longer term, much advantage would, I feel sure, result if the bigger part of the Government's financial support to agriculture could be channelled to grants towards permanent improvement."—[OFFICIAL REPORT, 30th April, 1956; Vol. 552, c. 58.] But this would, in any event, have to await the relaxation of the present restrictions on capital expenditure.

Before I come to the details of the Bill, may I say a few words on the hill sheep and hill cattle subsidies. Since 1941, when a hill sheep subsidy was first paid under wartime powers, the purpose of this subsidy has been to maintain the foundation flocks of hardy hill ewes by keeping hill sheep farmers' incomes at a reasonable level. The rate of subsidy has been fixed each year according to the economic circumstances of the farmers. This system proved of great value to the industry after the disaster of the 1946–47 winter, following upon which the rate rose to 16s. per ewe. On the other hand, after two exceptionally good years, no subsidy at all was needed in 1952–53 and in 1953–54. We think that this insurance policy for hill sheep farmers should be retained, so we are making provision for continuing the subsidy under schemes similar to those operating at present.

The hill cattle subsidy at present takes two forms. The more important, which is common to England and Wales, Scotland and Northern Ireland, consists of a subsidy on breeding cows and in-calf heifers kept on hill farms. Its purpose is to encourage the establishment of regular breeding herds of hardy cattle on hill and upland farms, with the object of rearing store cattle for sale to lowland farmers. We intend to continue this subsidy on present lines. The other subsidy is paid in England and Wales and Northern Ireland only. It consists of a small payment of £2 a head on cattle grazed on hill pastures during summer months. This is a survival of a wartime subsidy designed to relieve lowland pastures during the ploughing up campaign.

I would like briefly to refer to the detailed provisions of the Bill before sitting down. Clause 1 extends by seven years the period for the submission of improvement schemes and makes available a further £5 million for grants, making a total of £25 million, which may be increased with the consent of the Treasury by a further £2 million by Resolution of this House. Clause 2 prolongs by a further seven years the periods in respect of which Ministers may make hill sheep and hill cattle subsidy payments in accordance with schemes made by them, those schemes being subject to negative Resolution procedure.

There is a small point here which may have puzzled hon. Members. It occurs in the final words of this Clause, which refer to six years in the case of the hill sheep subsidy in Northern Ireland. The explanation is that, so far, the date to which the subsidy has been related has been a date in January each year. Northern Ireland, however, have altered the date of their agricultural returns and propose from this year onward to use a date in December like the rest of the United Kingdom. In short, if the Bill becomes law, for Northern Ireland there will be two relevant dates in 1956, one in January and the other in December, leaving only six more years to be accounted for. In brief, Northern Ireland now falls into line with the rest of the United Kingdom, and I can assure our Northern Ireland friends that they will be losing nothing in the process.

I feel sure that this short Bill will commend itself to both sides of the House. Although it is so short, it is an important Measure for our hill lands and livestock rearing areas. A lot has been said about the need for a long-term policy for agriculture. Here we have an excellent example of what the Government can do and are actually doing, and I invite the House to give it a Second Reading.

Mr. Deputy-Speaker (Sir Charles MacAndrew)

I think there are about a dozen hon. Members who wish to speak. There is less than three hours available, so that if they take more than a quarter of an hour each they will not all be heard.

1.6 p.m.

Mr. Sidney Dye ( Norfolk, South-West)

I will try to be brief to enable other hon. Members to have their say. I appreciate the way in which the Under-Secretary of State explained the purpose of the Bill. It is to extend for a period the first Measure dealing with agriculture which the Labour Government brought in following 1945. I think it was of some importance that the Labour Government, in bringing in the 1946 Act, sought to help, shall I say, the weakest links in agriculture, those who were at that time, and still are, in need of assistance from the State to enable them not merely to carry on but to improve their farms. We did then put in a sum of £20 million.

One of the outstanding things about the administration of this Act is the increasing cost of the schemes which have been carried out. Agriculture throughout the country, not only in the hills, is feeling this problem of the increasing cost of buildings, equipment and improvements of all kinds; but these works must be carried out if agriculture is to be modernised. We face the fact that we provide a certain amount of money, and then the money loses its value as the years go on, and the schemes in the hill districts drag slowly behind. We ought to have expected more schemes to have been carried out over the period of years since 1946. Ten years is a long time, and if it is to go on at the present slow rate, then I doubt whether the improvements which we need in the equipment of hill farms will be brought about in time.

This was, as I say, our first effort at really getting to the bottom of the problems of British agriculture. We followed it with other Measures, principally, of course, the 1947 Act, which put agriculture on a firm foundation for its future development. Without that, the Hill Farming Bill would not and could not have been a success. Now the doubts arise as to whether there is a future for the further development of these improvement schemes in the hills. The Minister of Agriculture, in answering a Question by the hon. Member for Westmorland (Mr. Vane) only yesterday, pointed out that he expected a considerable increase in the import of beef into this country in 1956 over 1955. The quantity in 1955 was 352,000 tons, and this year it is expected to be considerably more.

In introducing the Bill, the Under-Secretary said that the purpose was to increase beef production still further. Are the Government sure that they are on the right lines?

Mr. W. M. F. Vane (Westmorland)

If the hon. Member quotes my right hon. Friend, should he not also say that, even allowing for the increase in imports, the total available in this country and the total estimated consumption would be below the pre-war figures? I share with the hon. Member a certain amount of misgiving, but let us be fair and quote the position completely.

Mr. Dye

Had the hon. Member been patient, I was just coming to that.

What is the present trend of consumer choice? Is it for more beef or for smaller joints of beef?

Mr. Vane

Better beef.

Mr. Dye

Never mind whether it is for better beef. The present market tendency is for very low prices for large fat cattle. They are a drag on the market, because butchers say that they cannot sell them and that what they can sell are the smaller joints of beef. The demand, therefore, is not for an increasing quantity of beef, but for a different quality, and yet we are making provision for increasing the quantity of beef at the same time as imports are rising. Are we not likely very soon to find ourselves in serious difficulty?

During the early part of this year, we who produce beef, not only in the hill districts but in other parts of the country, caught the first full shock of the heavy fall in the market prices. Farmers in the eastern part of the country lost, not thousands, but millions of pounds in producing beef this year. If the autumn sales of the increasing quantities of beef coincide with heavy increased Argentine imports, what prices will they fetch in the markets? It is all very well to plan the development of the hill farms to produce more, but uncontrolled imports are bound to undermine the confidence of hill farmers.

The operation of the 1947 Act provisions having been so much altered, grave doubts exist whether the extended provisions of the Bill will really meet the situation. We have arrived at a serious position, but this is only one aspect of the problem that we have to face. The second aspect is that we surely cannot spend millions of pounds in improving the equipment of the hill farms without having the men living in the hills to do the work.

In the past year there has been a fall of approximately 30,000 in the total number of agricultural workers. What proportion of them left the hills? Is it the same proportion as left the rest of agriculture? If so, are we on sound ground in voting additional expenditure for the improvement of hill farms when we see, not the drift, but the flood of men from the land taking place at this rate?

This tendency of the men to leave the land, including the hill farms, will be stimulated by the statement made yesterday by the Minister in answer to Questions, when he made it clear, from letters which have now been published, that he began the doubt with the National Farmers' Union as to whether there should be an increase in the wages of farmworkers. The Minister initiated the discussion with the National Farmers' Union before the matter had been discussed by the Central Wages Board. If the policy of the Government is now to reduce——

The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. G. R. H. Nugent)

On a point of order. May I ask your guidance, Mr. Deputy-Speaker? I can find nothing in the Bill about agricultural wages.

Mr. Deputy-Speaker

I was able to link the hon. Member's argument with what the Bill proposes to do. I thought it was in order because of the subsidies.

Mr. Nugent

The Bill provides for capital grants for hill farms. The question of agricultural wages seems somewhat remote from that.

Mr. Deputy-Speaker

If the agricultural worker does not get enough wages, he will leave the hill farms, will he not?

Mr. Nugent

The grants are for the farmer and not for the farm worker.

Mr. Deputy-Speaker

Are the wages not taken into account in the make-up of the grants?

Mr. Nugent

The grants are capital grants to assist with buildings and the capital improvement of the farms.

Mr. Deputy-Speaker

Do wages come into it at all?

Mr. Nugent

No, Mr. Deputy-Speaker.

Mr. Deputy-Speaker

In that case, I was wrong. I beg pardon. It is therefore out of order to pursue that topic.

Mr. Champion

The grants are being given to the hill farmer that so he might improve his land and make better use of it. Obviously, if he cannot retain workers upon the land, it will be impossible for him to make use of any grants that the House might make to him.

Mr. Deputy-Speaker

That was what I thought originally, but having had the position explained to me, I find that I was wrong.

Sir David Robertson (Caithness and Sutherland)

Do I understand, Mr. Deputy-Speaker, that you are allowing the hon. Member for Norfolk, South-West (Mr. Dye) to continue with what he was saying? The point he raised is material. It was raised with me by large numbers of farmers in my constituency only a month or two ago. They were alarmed, not only at their own misfortunes in having to sell cattle beasts at a loss, because of imports, but were concerned at the huge sums of money that the taxpayer is being called upon to provide to subsidise the industry. The cost of beef production must be a material issue in this debate.

Mr. Deputy-Speaker

I was wrong originally in thinking that the grants were linked with wages. I now understand that they are not. That topic cannot, therefore, be discussed.

Mr. Dye

It seems to me, with respect, that my argument regarding the successful continuance of the Hill Farming Act must be linked with two factors: the output from the farms and the men who are there to work on them. If the men are leaving the farms so rapidly, it must be relevant to ask whether it is wise for us to continue to subsidise the capital development of those farms.

Mr. Deputy-Speaker

I understand the point quite well. The rules of order would probably be satisfied if we dealt with it in a vague way; but to go into what was said yesterday about the letters is beyond what is contained in the Bill.

Mr. Dye

I was making only a passing reference to the fact that the Minister had made a statement which, I thought, would as a consequence increase the number of men who are leaving the hill farms, thereby undermining the confidence of farmers in the future. For these reasons, the estimate given by the Joint Under-Secretary in introducing the Bill, which extends the amount of money to be spent, might be over-optimistic.

Mr. Vane

Let us now get on with it.

Mr. Dye

The Under-Secretary sent down a number of loose balls, and one has to try to hit them back.

If the programme is to be successful there must be confidence, there must be the men, there must be the capital equipment, there must be the output and there must be full confidence in the future of the industry on the part of the Government and of everybody concerned.

The Joint Under-Secretary of State referred to the possible consequence that, instead of getting more beef, we shall find the hill farmers wanting to change from beef to milk production. That would not meet the Government's purpose. That is a danger, of course, because milk production seems to be the more stable and more profitable. If it is likely to be more profitable, we may not get increased beef production, which is what is desired, but may instead get more milk, thus rendering the problem of the Milk Marketing Board greater than it is at the present time.

Grants similar to those payable to hill farmers would assist production in other parts of the country also, and the question arises, therefore, whether, if there is confidence in the future of the industry, the provisions of the Bill should be extended to farmers on some of the lower hills, who are in as great difficulties as those on the higher hills. Therefore, I ask the Government, when they reply to the debate, to say whether it is their intention to extend the operation of the Bill to areas which have not hitherto been included in the provisions of this legislation.

1.22 p.m.

Mr. David Gibson-Watt (Hereford)

I am very glad to have the opportunity to speak in support of the Second Reading of this Bill. In company with a number of my hon. Friends, I confess my interest. I have seen at close quarters the Hill Farming and Livestock Rearing Acts working successfully. I can vouch for the fact that they go some way to keeping part of the hill farming community in the hills, thereby leading to an increase in the stocks of hardy sheep and cattle.

When dealing with this problem we should remember that we are dealing with 34 per cent. of all the agricultural land of the country—16 million acres of mountain and hill grazings. In these days, when so much productive land is being taken from farming for so many other causes in the lower areas, most of them so worthy, production from our hill grazings is essential. They support about 5 million ewes and about 350,000 cattle.

The Bill continues the Hill Farming and Livestock Rearing Acts, 1946 to 1954, and it goes a long way to help to rehabilitate the hill areas. For me, the accent is on rehabilitation. Often, when a new occupier takes over a farm it is in a poor condition, and the scene before him is one of neglect. The buildings have holes in their roofs. There are inadequate water supplies, perhaps not coming to the house. The road to the farm is rough. The hedges have been killed, and the fences are down. I have no hesitation in saying that this Bill, which gives a 50 per cent. grant for all these items—for buildings, farm roads, bracken eradication, shelter belts—will help the owners and occupiers to rehabilitate and improve their farms.

By Clause 2 the periods for the payment of hill sheep and cattle subsidies are continued. I understand that the Clause gives the Minister power to pay a sheep subsidy after a particularly bad winter such as we had in 1947, when snow and ice lay deep and long. The House will remember its severity and the losses which were suffered in the hill areas. I remember it very vividly myself, when the bread came by train and had to be distributed on horseback, when hay was dropped by aeroplanes to isolated farms, and when, but for the supreme efforts of the shepherds, the losses would have been a great deal worse. To us, sitting here in this Chamber, the experiences which we in the hill areas suffered in that year and in similar years seem very far away, but they could come again in all their severity. They represent a picture which provides full justification for Clause 2 to give the Government powers to vary and increase where necessary the hill sheep subsidies.

This is a good Bill which should be welcomed by the country generally and by the hill farmers in particular.

1.26 p.m.

Mr. Clifford Kenyon (Chorley)

While I shall have some criticisms to make of the Bill, I give it a very warm welcome, because I think it is very necessary. The Hill Farming and Livestock Rearing Acts have done a very good job of work during the past few years. They constitute a long-term policy, and their results will be seen in future years. Their purposes have been fulfilled only in part.

As the hon. Member for Hereford (Mr. Gibson-Watt) has just pointed out, there are 16 million acres of rough grazing and hill lands, but this Measure deals with other land as well as those rough grazings in the hills. It deals with land lower down, which is marginal, so that the total area which the Bill affects is well over 20 million acres. So far we have dealt with only about 7 million, about one-third of the total, and to deal with those 7 million acres takes £20 million. So we have a tremendous job ahead if we are to deal with all this land.

The purpose of the Acts is two-fold. The first is to retain in the hills and the uplands the population bred there. That, to me, is vital indeed. We cannot make a hill farmer out of an urban dweller. The hill farmer develops his faculties within his environment. Even lowland farmers who go up to the hills to farm, to farm on a scale altogether different from that they have hitherto known, very often fail. It is the men who are bred in the hills, the men who know the hardships and difficulties of the hills, whom we want to retain, and I think that the purpose of the Bill is in the main to retain the hill population in the hills.

The contribution which the hills can make to the nation's economy is very valuable indeed. The hill farmer claims very little from the other resources of the nation, and he contributes to the economy. He uses very little foreign currency for anything on his farm. His contribution adds assets to the nation the whole time. His economic life is tremendously valuable, in addition to the contribution which the personality and character of the men of rural Britain make to the welfare of the nation.

Figures submitted to the Hill Farming Advisory Committee in January show that 50 per cent. of the grants made are in aid of farm houses, farm buildings and farm cottages. That shows the need for proper accommodation to retain the population in the hills. There are further percentages in respect of electricity and water supplies, which are not always available in these areas.

If I have a criticism to offer, it is that the application of the Acts is piecemeal and rather patchy. It is patchy because only those farmers and landlords who already have capital available or who are credit-worthy and can obtain capital, can make use of the Acts, as the farmer has to find 50 per cent. of the capital himself, in addition to finding the whole of the capital which is necessary to run the farm. When a newly-married young man takes a farm and has first to set up his stock, the tremendous burden of finding 50 per cent. of the capital cost in order to obtain the grant is very often beyond him. As a result, all over the country we have this patchy system applying only to those men who have capital or are credit-worthy and can obtain it.

It will be necessary for us to do some fresh thinking on this matter, and in a broader sense. Up to now, I have always been against giving these grants to milk producers. I do not know whether I have changed my view completely or whether I am in the process of weighing matters in my mind, but I think that if we are to retain the family farm we must help every part of it. We must help those who are producing milk to a certain extent, in order to unite the whole farm, working in one cause. I am afraid that I, too, shall have to do some fresh thinking on that point.

At the moment, the high Bank Rate and the credit squeeze are working against the full operation of the Acts. When a farmer wishes to take advantage of their provisions and finds that he has to operate with a 6 per cent. Bank Rate in operation, he hesitates and waits until interest rates fall. He knows also that banks are tighter on granting credit than they were formerly and that he may find himself in difficulties if the bank later starts to put the squeeze on him about his overdraft. Therefore, owing to the insecurity of the financial position because of the high Bank Rate and the credit squeeze, farmers are not taking as much advantage of the scheme as they would otherwise do.

Sheep flocks on the hills are exceptionally important, but I cannot agree that the sheep subsidy was introduced in order to keep up the standard of income. The subsidy was introduced in its present form to keep the pure hill flock on the hills. The big danger now, and a danger which has existed for one or two years past, is the tremendous temptation to the hill farmer to cross his ewes with one of the lowland rams, because the fat lamb market is so much better than the store market.

The farmer is tempted to use his ewes to breed the fat lamb, which is a far better financial proposition than breeding the pure hill stock, but the subsidy applies in full only to the man who breeds the pure hill stock. If he starts to cross at all, the subsidy is halved or he loses it altogether. The advantage of having these hardy hill stocks is that they make no drain on the country's resources. They live entirely on the grass grown on the hills, and are a tremendous asset to the nation. I suggest for the Minister's consideration that the half subsidy should be cut out altogether and the full subsidy retained for the pure flock only, so that these farmers can concentrate on breeding the pure hill flock.

One of the difficulties facing the hill farmer recently has been the wintering of his hill ewe lambs. The lowland farmer, it has been said, has so great an income that he does not need the money derived from wintering hill ewe lambs. Certainly he has not been keen to take them. Hill farmers have had such great difficulty indeed in wintering them that they have had to sell some of their hill ewe lambs.

At the Ministry's experimental farm at Helmshore, Rossendale, experiments have been carried out on the wintering of hill ewe lambs. The results are most interesting. It is found that if the hill farmer is able to send his ewe lambs away to lower ground for wintering, on their return they are heavier in the spring and their fleeces weigh more in comparison with the ewe lambs retained on the hills at home. That is the advantage of wintering ewe lambs away, and their heavier fleeces partially pay for the cost of wintering them.

There is little nutriment in the grass on the hills in the winter and spring, although it provides subsistence food for the sheep, but on the lower lands there is more nutriment in the grass. The result is that the ewe lamb wintered lower down is better fed all the season. I hope, therefore, that the Ministry's advisers will press lowland farmers to accept ewe lambs for wintering where that is possible.

One of the difficulties of the Ministry in administering these Acts lies in the diverse conditions in different parts of the country. I am thinking particularly of those parts of the Pennines which are subjected to the smoke of the industrial towns. Wherever there is industry these conditions obtain. People fail to realise the difficulties which we who farm on the Pennines are up against. In a previous speech on this point I said that, from experiments made in these areas, the officers of the Ministry have been able to show that the loss of lime from the land due to its neutralisation by leaching through the smoke and acids in the air is the equivalent of half a ton of lime per acre per year.

I have here the Report of the Director of the experimental farm at Helmshore. On that farm of about 350 acres, the total solids deposited in twelve months over the area of the farm amounted to 72 tons. The normal deposit in a country district is 25 tons, so that there is two-thirds more pollution in these areas. The average of daily smoke in suspension is 10.4 milligrams per 100 cubic metres there whereas, in a normal country district, it is 1.5 milligrams.

Mr. Rupert Speir (Hexham)

Surely the Government's Clean Air Act will help considerably in that direction?

Mr. Kenyon

I think it will.

On that farm I saw in operation a small instrument which draws in the air, makes these records, abstracts the pollution, and also gives the percentage of sulphur dioxide every day. I am hoping one day to obtain the co-operation of the hon. Member for Kidderminster (Mr. Nabarro) to erect one somewhere in the Palace of Westminster, so that every hon. Member of this House will be able to appreciate the pollution that he breathes every day.

The amount of daily sulphur dioxide concentration in the area of which I am speaking is 3.8 parts per 100 million parts of air per year. In a normal country district, it is only .3. What is the effect on the grass? Experiments on that farm have shown that when a grass crop is sown and grown only 40 per cent. of the normal crop develops. This means that 60 per cent. is killed by the sulphur dioxide in the air. That is terrible, and if the Clean Air Act has any effect upon that, I hope it will work quickly. Certain grasses are exceptionally susceptible to smoke pollution and die in twelve months. Others are hardier, and the Nardus grass, which is indigenous to the area, continues to grow and is usable for about two months out of the twelve, but after that it becomes too hard.

I say to those hon. Members representing urban counties, who are always criticising subsidies, that many subsidies would not be necessary if those areas would clean up their smoke. Some time ago I had to meet the general manager of a large industrial concern in the North about smoke pollution and grit which was being emitted from one of his mills. From an area of five square yards in one day the residents cleaned up from their flagstones 3½ lbs. of grit. I showed it to him. He said, "Well, it would cost us £14,000 to alter the plant in order to clean this up." I replied that the concern could well afford that, because it had showed a profit that year of over £2 million. However, he would not agree to take the necessary action. I hope, therefore, that the Bill will compel such men to take the action that is so necessary.

The greatest problem of all is that of capital. Unless the farmer can get sufficient capital to develop the whole of his farm, these measures will not operate fully. It must be recognised that the farmer must concentrate his resources, first, on his stock—on sheep and cattle—and that very often he has nothing to spare for the rest of his farm. What has been the effect of the rise in the Bank Rate where a farmer has had to go to the bank for an overdraft? An increased interest charge is made, to meet which he must increase his stock. That compels him to put his money more and more in stock instead of taking advantage of these Acts. It is a vicious circle that operates to his disadvantage.

I hope, therefore, that the Government will look at the way in which the credit squeeze is compelling the small farmer with limited capital to concentrate upon stock when he needs more buildings and when he needs to take advantage of a Measure such as this one. If we are to keep the small farmer on the land, if we are to retain and develop the family farm which is the background of this country's agriculture, the financial position will have to be considered. The farmer must be able to avail himself of more capital in order, first, to build up his stock 100 per cent., and, secondly, to meet the obligations which will have to be met when he undertakes greater financial liabilities to improve his fixed assets, as he can do under this Bill.

1.50 p.m.

Major Sir Duncan McCallum (Argyll)

It is always an extremely interesting experience to listen to a speech by the hon. Member for Chorley (Mr. Kenyon), particularly when he is talking about hill farming matters, a subject on which he is so well informed. I am not able to follow the hon. Member in his researches into the destruction of grasses by pollution from urban areas, because in the area which I represent we are not bothered very much in that way.

We welcome this Bill as another answer to the eternal question, "Where is the Government's long-term agricultural policy?" It is in the production of beef and mutton, particularly on the hills, and I am glad to welcome an indication of another seven years' requirement for the hill country and the hill farmer to produce as much beef and mutton as possible. The statement made this week by the Minister about the decision to fix the fatstock prices for beef for the period 1957–58 gives confidence to the hill farmers who are breeding the store stock which will one day be sold at those prices. I am glad to follow the hon. Member for Chorley regarding the difficulty about providing cattle, but I think that the hon. Member left out one point.

In my experience, it is quite often that a small hill farmer is unable to take advantage of these improvement schemes, in spite of the fact that the local A.E.C. does its best to be helpful; because the schemes must be comprehensive, and therefore there is bound to be an expensive capital outlay which the small farmer finds great difficulty in providing. Not only the small farmer but all the farmers who take advantage of these improvement schemes have really to find not 50 per cent. of the cost of the scheme, but 100 per cent., because they have to pay before they get the grant. Sometimes it takes a long time for the money to be recovered. If the hon. Member for Chorley finds that difficulty in his area, I can reinforce his argument by saying that a large number of hill farmers throughout the Highlands find it impossible to take advantage of such schemes because they cannot provide the 100 per cent. of the capital necessary to pay for them.

Here I must declare a personal interest. I am myself a hill farmer. When a scheme was prepared for our farm, I found that I could not afford to put down the money. If even a Member of Parliament finds it impossible to put down the money for a scheme of that sort——

Mr. N. Macpherson

My hon. and gallant Friend will be aware that these schemes are phased and the farmer may be reimbursed as the scheme progresses.

Sir D. McCallum

I admit that is so, but the difficulty still remains, because a scheme cannot be phased from the point of view of finance. A farmer may be told that he can get ahead with his fencing, and if the scheme is approved by the A.E.C. he will eventually receive payment. But a farmer may not want to carry out the whole of his fencing programme at once. There may be other things he wishes to start. He may desire to do some liming, although of course there is a separate subsidy for that. But although he may want to do everything at once, he cannot afford to. It would be difficult to find a farmer able to carry out the whole of one phase of a scheme.

I am sure many hon. Members would agree that if we could arrive at some arrangement whereby a farmer does not have to pay 100 per cent. of what is due under such a scheme; if he could provide 50 per cent. and then, after the scheme was approved by the local A.E.C., he could ask for the other half to be paid for him, it would prove a great advantage. The difficulty about these comprehensive schemes is the necessity for the farmer to put down such a large amount of money. That difficulty, I have found, is responsible for preventing many hill farmers from taking advantage of these improvement schemes. For that reason, I ask whether it would be possible to solve the difficulty caused by the necessity for a small farmer to provide 100 per cent. of the capital.

1.57 p.m.

Mr. J. Grimond (Orkney and Shetland)

My views about this Bill are well known to the Scottish Office, and I wish to go straight to the points which have been raised during this debate. The hon. and gallant Member for Argyll (Sir D. McCallum) has once again drawn attention to the need for capital for farming and the great difficulty experienced by small farmers in finding the money which has to be put up for schemes under this Bill. I agree with him. In the areas which he and I represent, we have crofters and small farmers who find it impossible to provide the money. The question is what suggestions we have to make, and I wish to make three.

First, I think there is something in the idea of a land bank. Obviously it would be impossible to go into that matter this afternoon. But some form of credit to farmers is necessary, particularly in Scotland, where owing to Scottish law it is impossible to raise money on the security of moveables. I wonder whether, at any rate in the crofting areas, it will be possible to investigate new ways of getting the crofters to co-operate together. I know that the Department of Agriculture is willing to assist them to take advantage of these schemes jointly. I think I am right in saying that not so much advantage has been taken of that as the Department had hoped. It is a difficult matter, and again I suggest that it may be possible for the Crofters Commission to form a company or some such organisation which would include the small farmers and crofters.

I should like to follow up the suggestion of the hon. and gallant Gentleman for Argyll. I am not quite sure what he intended—whether it was that the Department might undertake some payment to the contractors involved so that the small farmer had not to find money in advance.

Sir D. McCallum

I meant in regard to those schemes where work approved by the A.E.C. had been carried out.

Mr. Grimond

In my constituency, at any rate, in spite of these excellent provisions, people are still leaving the remoter areas and a lot of the land is not being developed in the way we should like. Secondly, there is the comprehensive angle of this scheme which, in my experience, makes it very difficult for small farmers, and I have often pointed this out to the Scottish Office.

I remember in this House raising the question of the line rentals charged by the Hydro Electricity Board for electricity. One of the answers given by the Government is "You can get grants towards that under the Hill Farming Act." But to get such a grant one has to have a comprehensive scheme covering one's whole holding, and it is no help to say to the man who only wants electricity on his small farm, "To enable you to get a small grant you have to have a comprehensive scheme which you cannot possibly finance because you cannot provide the capital." I think that we want more flexibility and that the Government ought not to insist on too comprehensive a scheme, although I agree that there is an argument for saying that a holding has to be in proper shape.

The Joint Under-Secretary mentioned the suggestion that these grants might be available for holdings which were something more than farms for the raising of store beasts. He touched on the question, as did the hon. Member for Chorley (Mr. Kenyon), of giving some sort of grant in those cases to small dairy farmers. Here again, what we want today—and we have had experience of these cases over some years—is a little more flexibility of administration. I find in my constituency that there have been cases where a man has been told that he cannot qualify for assistance because he does in fact raise some fat beasts and from time to time sells milk. The Government need not be too strict about this and should do something to help these smaller farmers from the upland and rural areas and the poorer areas. We want them to make as much of their holdings as they can.

I think that it would be extremely difficult to lay down an exact limit, but I am asking that there should be discretion and that, where possible, the inspectors who investigate these schemes should be rather on the side of the man who is a good chap and enable him to take advantage of them.

The success of all these schemes is dependent on the skill of the farmer and his character. I heartily support what was said about that by hon. Members on this side of the House. If he is a good chap, we should be prepared to back him because he is our asset. We should always keep that in mind; but we do not want to load him with a lot of debts. That is why I am a little chary of advancing loans as well as grants. Nevertheless, the good chap can probably make a success of his holding, and I think that we ought to go out of our way to smooth his course and advance him money occasionally if he finds difficulty in keeping up his payments.

The inspectors who consider these schemes are extremely good people and we owe them a great debt. There have been cases in my constituency in which there has been, perhaps inevitably, a certain amount of delay. I hope that will be kept down to the minimum. A farmer gets a scheme going which he imagines will be approved. He starts on it, there are delays and, in the end, muddle and ill-will result. Subject to those criticisms, I personally welcome this Bill and the renewal of the schemes under it.

2.4 p.m.

Mr. William Whitelaw (Penrith and The Border)

I am glad to follow the hon. Member for Orkney and Shetland (Mr. Grimond), and I agree with much that he said. I should like to come back later in my remarks to one or two of the points which he raised. If there are any people today who wonder about the value of spending Government money on hill farms, they should visit some of our hill and upland areas at the present time. There they can compare the land and the farms on which money has already been spent under the Hill Farming Act and Livestock Rearing Act with those which have not benefited as yet.

I have had the opportunity, as no doubt most hon. Members here have had, of comparing one farm which has benefited with another adjacent to it which has not. Therefore, I have no doubt at all about the value of these Measures, and I give an enthusiastic welcome to the Government's determination, as expressed in this Bill, to continue these special grants and subsidies to farming in the hill and upland areas.

There is no doubt that this is a good investment from the Government's point of view, and I largely agree with those who have said that it shows a real continuity of our farming policy, which I consider to be of the utmost value. At the same time, while one welcomes in general the extension of these provisions, they give one the opportunity to consider, as no doubt nearly all hon. Members have, the operation of the previous two Acts over the last few years.

On the one hand, we all welcome the definite improvements which have been brought to land, buildings, fencing and, in particular, to the living conditions. I think that the hon. Member for Norfolk, South-West (Mr. Dye) referred to this specifically. It is surely of the utmost importance that we retain the really skilled men in our hill districts, and we shall do that only if we provide them with good cottages and modern amenities. These are all vital factors in increasing production.

On the other hand, like other hon. Members who have spoken, I have one general reservation to make. I am doubtful if we can do much about it, but still it is there. It is that those with capital resources of their own have, of course, benefited far more than the others from these Acts. This is satisfactory for the large owner-occupiers and, indeed—and I do not think that we should forget this—to the tenant-farmers who have benefited under their landlord's schemes; but, of course, the small owner-occupier tends to be neglected because, as everyone has said, he cannot find the capital to pay his share.

I should like to make a few points about this for the consideration of the Minister. First of all, there is the question of classification of land. Personally I welcome the extension of the original Hill Farming Act to these uplands areas not actually on the hills, because many small farms in such districts are badly in need of capital expenditure, particularly on their buildings. The difficulty, however, that arises is the very real one of drawing the line between those who are to get grants and those who cannot. We have all seen in our own areas the dissatisfaction which is caused by farmer A getting a 50 per cent. grant and, almost across the road, farmer B getting nothing at all. I do not know if anything can be done about that, but it is a very great difference between two people whose farms are comparatively the same. I know that in general the Minister and his inspectors make very sympathetic decisions about this. I personally knew of one case where this was so and I was most grateful for it. I hope that this is the general practice, particularly where the small man is concerned, and that small farmers are not ruled out, because they happen to be on one side of some imaginary line, which, of course, I appreciate, has to be drawn.

I now come to the very difficult question of dairying. I cannot feel happy in my own mind to advocate grants which would increase the production of milk at the present time when we have overproduction. At the same time, there are, of course, many small farmers in the hill districts who have always produced milk and who will always produce milk because they rely on the cash return, and it seems rather unfair that these people should not be allowed any grant at all under the Livestock Rearing Act for their dairy buildings.

I know that the Livestock Rearing Act in, I think, Section 1 (3, a) says that the grants may not be given for the carrying on to any material extent of dairy farming. Perhaps the Minister, when he replies, will tell us what number of cows in milk constitute generally "to any material extent." Secondly, perhaps he will consider—and here I agree with the hon. Member for Orkney and Shetland—introducing into the administration of this Section a widening of the interpretation of that definition.

Then there is the matter of the farmer's own work. I may be wrong, and I stand to be corrected, but I am told that a farmer cannot charge his own time when submitting schemes for grant. I can find no reference to that in the Acts, but I presume it is a principle which has grown up in administration. It seems rather unfair and certainly operates against the small farmer. I should be grateful if the Minister would indicate why such a charge is excluded. If there is no good reason, it might be possible to change the administration of the Acts in future.

Lastly, I want to refer to the hill sheep and cattle subsidies. Here the small man will certainly be helped if some form of graduated payment can be made, starting at a high level for ewe or beast and decreasing as the size of the herd or flock increases. I know that there are many difficulties in administering that idea, but I hope that at least it will be examined sympathetically.

Like every hon. Member who has spoken, I welcome the Bill. In administering the Acts, more should be done for the small farmer and for those with few capital resources, but I do not underestimate the difficulty of giving them special treatment. I hope that the problem of emphasis will be faced in the administration of the Acts in order that the undoubted benefits and improvements which they bring to our hill lands and uplands may be as widely shared as possible. It is certainly in the national interest that they should be.

2.12 p.m.

Sir David Robertson (Caithness and Sutherland)

A very interesting topic was raised by the hon. Member for Chorley (Mr. Kenyon), my hon. and gallant Friend the Member for Argyll (Sir D. McCallum) and the hon. Member for Orkney and Shetland (Mr. Grimond) about the lack of capital, a topic, which, of course, runs throughout the Report of the Hill Lands (North of Scotland) Commission. Many of those approached to develop the land said that they were unable to do so because of lack of capital.

We have heard about the small man who is so afflicted by lack of capital—and we know that that is true—but not only the small man is concerned. Many of the people to whom the Report refers are land owners. Why is it that those engaged in agriculture on the hill lands, in Shetland, in the far north of Scotland and elsewhere are short of capital? The answer is because farming there is unprofitable. These are not all small crofters with two or three, or four or five acres. They are farmers.

We do not have to look far for the cause. A man in the distant areas of hill lands can produce magnificent disease-free cattle and sheep and seed potatoes, but he needs a great many acres to produce them. The land is poor, but the cost of working poor land is just as high as that of working good land and in fact it may be more, because the yield per acre is so much less.

Such men have to pay the same wages and greatly increased transport costs—penal transport costs—on everything which is brought in and on everything which goes out. It is quite wrong to have a Price Review which fixes the price of produce for agriculturists outside London, in Bedfordshire, outside Birmingham and outside Glasgow, and then fix the same rate in the far North of Shetland, in Caithness and Sutherland and in north Argyll. Is that not the obvious reason for lack of capital? It is the universal complaint today of all Members who have spoken. It means that farming may be profitable in the good fat lands of the South, but very unprofitable in the North. These men are not wasters. They just do not have the capital to enjoy the schemes put at their disposal.

The Joint Under-Secretary referred to the Report of the Hill Lands (North of Scotland) Commission and spoke of the hill sheep subsidy being removed in 1953 and 1954 and restored in 1955, but he was not very frank with the House in not saying why it was so suddenly restored in 1955. It was restored mainly because of the plight of the hill farmers in Caithness, Sutherland and Orkney. They endured very heavy snowstorms for upwards of three months, when thousands of sheep were lost and they faced disaster.

The hill sheep subsidy of 5s. for every breeding ewe on the hill on 5th December was introduced. Was that fair to the men who suffered? The bulk of the men who enjoyed that subsidy had no snow at all. The farmers in the far North were resentful about the subsidy—I put it no higher than that. Paying 5s. to a crofter at Duncansby Head who lost three-quarters of his flock of sheep was not much good as a replacement of capital.

The question of imports was raised by the hon. Member for Norfolk, South-West (Mr. Dye). The unrestricted imports of beef cattle must be closely considered by a House of Commons which is supporting the Government in this welcome Bill to provide more money for cattle rearing. If these men are to rear cattle and are to be faced, as they were this spring, with a very heavy loss on every beast they sell, that must mean a waste of the taxpayers' money.

That seems to be a matter which should concern not only the Minister of Agriculture and the Secretary of State for Scotland, but the Treasury as well. Has not the time come to consider the suggestion that there should be a tariff on imported meat? That was resorted to before the war, when quotas were also imposed. The taxpayer is carrying an almost unbearable burden at present, and to tax him to help to improve the farming industry whose products are then sold at a loss because of excessive, uncontrolled and unrestricted imports seems to be wholly wrong. I will now leave that issue.

I want to say a few words about the Report. As the House may remember, the Hill Lands (North of Scotland) Commission was appointed by the Labour Government in September, 1951, but the Report was issued only last month. In January, 1953, after the Commission had been sitting for fifteen months, I asked when it would make its Report, and the answer was that a statement had been made to a newspaper. I had that newspaper at the time, but I have not got it now.

The Report has just been issued and must be one of the most disappointing which any Commission has ever produced. The Commission's term expired eighteen months or more ago, so that the Commission took more than four years before it reported. It had eleven major meetings in a period of forty-nine months. On average, the time between each meeting would be about 4½ months.

What is most disappointing is that the Commission achieved absolutely nothing. That was in no way due to the lack of competence or quality of the members of the Commission, but solely due to the fact that the great Highland lands, which the members of the Commission were surveying, were acknowledged to be able to carry considerable numbers of cattle and sheep, but were carrying very little of anything, except bracken, bog, weeds and deer. They are not available for development for two reasons, First, some of the owners say that they have not the capital to develop, and, secondly, some are not willing to develop in any case.

If we need beef cattle, as the Bill indicates we do, nothing should be allowed to stand in the way of that development. It is distressing for hon. Members who represent Highland constituencies to look at the wasted acres. Some time ago I was travelling with an Orcadian farmer who, I am told, was the leading agriculturist in Orkney. He talked about Caithness as the land of wasted acres. On photographs taken from the air an abundance of old plough marks show up through the heather. Caithness carried a much bigger population in the old days than it does now. There is a great area which, the Commission admits, can be transformed once again into a great cattle-breeding country. Just because some people are unwilling to undertake development and others have not the capital to do so, it seems that we are to allow it to remain like a desert.

Is it the intention of the Government to allow that state of affairs to continue? Are all the farmers, and the land-hungry men hoping to obtain farms or crofts, to be satisfied with the status quo? Are we to rely upon imports to make up the deficiency, or are we going to tackle conditions in our own country and make a job of it? The Highlands are half of all Scotland, from the Orkneys and Shetland to the the Mull of Kintyre.

If it is the Government's policy to leave things as they are, let them say so, because that is where the Commission has ended—bogged down, frustrated and with nothing to report after four year's work except what we knew before it began, namely, that this land can carry large numbers of cattle and sheep. That cattle would get rid of the bracken, which is one of our greatest blights, and the nation would benefit from the food we produced.

It will not do to pass the matter off by saying, "These fellows did their best, but it cannot be done." The world is full of "can't be done-ers" and "never was-ers". This Government have done very much for agriculture since the early 'thirties, but I beg the Minister not to be content with the fate that overtook this Commission.

2.23 p.m.

Mr. James Lindsay (Devon, North)

In rising to support the Second Reading of the Bill, I should mention that I am one of the many people in the West Country, who has benefited from the schemes provided under previous legislation. I want to add my welcome to what, with certain reservations, has been a very general welcome for the Bill from hon. Members on both sides of the House. The Bill sets out to carry on the good work of its predecessors, namely, to improve land in the hill country, and hill farming equipment, so that it can carry more stock for a longer period and so that the amenities of the countryside may be improved, thus bettering the lives of those who live there. In the South-west of England, at any rate, this has been a very great advantage. There is no doubt that better roads, better supplies of electricity and water and so forth, have been a great inducement to people to stay in these uplands and out-of-the-way hill farms.

I was glad that my right hon. Friend and others stressed the importance of these uplands. They are the source of the raw material of the cattle and livestock fattening areas and the rich pastures, and without the contribution of these uplands our supplies of meat would greatly deteriorate. Results of previous legislation have been very good in the South-West. More and more good quality beef cattle are being produced. It is necessary that these subsidies should continue, because there is not a very great margin of profit. Without them the supply would be reduced, because some farmers would cease to operate.

As hon. Members know, the tendency now is not so much for a heavy beast, two or three years old, as for a smaller and younger animal. The tendency now is to produce 8 cwt. beasts, at 18 months. The paying of this £2 subsidy for animals of 18 months tends to keep them on the hills, whereas it would be better if they were brought down and finished off in the lowlands. The Minister might consider whether it would not be a good thing to confine this subsidy to animals one year old and divert some of this subsidy to the other direct subsidies for animals.

My hon. Friend the Member for Penrith and the Border (Mr. Whitelaw) raised the question of the personal work put in by the farmer himself. He was not quite sure whether or not that was provided for in the Bill. I am not sure myself, but I know that in Devon it is the practice not to make payments for the work carried out by small farmers themselves. As a great many of the farmers in Devon work on a very small scale, they invariably do much of the work themselves and rather resent the fact that they receive no grant. The Minister should consider that point. Perhaps he can make some reference to this matter when he replies.

I echo what has been said by so many other hon. Members, namely, that these schemes are apt to be too elaborate. We recognise the advantages of comprehensive schemes and would like them all to be comprehensive, but if a scheme is so large that it is not undertaken by anyone, it is surely better to bring forward a less ambitious one on the principle that half a loaf is better than no bread. Any improvement is better if it is for the benefit of the country as a whole.

The question of the extension of these improvement schemes was also raised. My right hon. Friend said that there could be no question of extending them to milk producing farms, but I wonder whether the Government would consider extending them to the fattening and finishing of beasts. A great deal of experiment is being carried out with regard to buildings for cattle and pigs, and we are now turning our attention to the improvement of such buildings. Many such improvements are just round the corner, and if farmers could be allowed to take adavantage of them under this scheme it would be a very great help. It would also provide a very good incentive to farmers to adopt the Government's policy of moving away from milk towards beef. If, rather than cutting down the guarantees for milk grants were given for the improvement of buildings for beef cattle, it would be a very real and helpful incentive.

These improvement schemes have done a great deal to give the farmer confidence in the future. We should probably all agree that that is one of the most important of their features. It is better that the farmer should rely less upon what he hopes to get out of next year's Price Review and more upon himself, his farm and his ability to produce economically and efficiently. He should rely not so much upon an annual review as upon something which he will have permanently. I am therefore very pleased to welcome the Bill. Previous legislation has done a great deal to help farmers in the South-West, and I am sure that this continuation will be a great help to them in the future.

2.30 p.m.

Mr. W. M. F. Vane (Westmorland)

I am glad of this opportunity to speak briefly in support of the Bill, and I recall, as no doubt do hon. Gentlemen opposite, the general welcome which we gave to the 1946 Bill when, just the same as today, there were no major party divisions of opinion. I think that this whole series of Bills is evidence of Parliament's care for agriculture and for the less vociferous elements in the farming industry, because hill farming people are long-suffering, hard-working and, on the whole, not very talkative. The hon. Member for Chorley (Mr. Kenyon), who has made the longest speech of the afternoon, is probably an exception. They are not a powerful political lobby in any sense. We have done as much for the hill farming elements as for any other.

During the last few years I have heard some criticism from people who live and work in the south and east of England. They have asked whether the country really gets the best value from this continuing subsidy in support of the hill land, and whether it would not be better to put more money into the good low land and improve that further. It may be that one would get a quicker first dividend from subsidising the good low ground, but we must not think only of that quick dividend. Farming on the low ground depends on farming on the high ground for good cattle and good sheep and also, I think we can say, for good farmers, all of whom tend to move down the hill.

One of the biggest temptations in agriculture today is to talk about long-term policy without first thinking what one means by that. When we talk to people in the industry about long-term policy, we sometimes find that they are not really thinking of agricultural policy at all except in the narrow sense of prices. They may be thinking as far ahead as next year's prices, but, possibly, no further ahead than next month's prices. So in supporting this whole series of Bills which constitutes an important part of long-term policy, Parliament can probably show that it has been thinking further ahead than many farmers, and, for that matter, than many of their spokesmen.

It is pleasant today to think that we are doing something which is welcomed by nearly all farmers. I have in my hand the memorandum prepared by the National Farmers' Union. It records recognition of the value of these schemes, but I think that it might have been a little more generous. It criticises some of the ways in which the schemes have worked. That is very right and proper, but when it argues that the subsidy should be given on a bigger scale to those engaged in milk production, I think it should also indicate where the extra milk is going when we already have more milk in the country than people are prepared to drink.

Mr. Kenyon

Is not the point that there are a number of small farmers in milk production at the moment who would be better engaged in rearing and doing other work, but that they cannot get out of milk production because they need the capital? I think that the point which the N.F.U. intended to make was that if these farmers were assisted in milk production at the moment they could get out into rearing.

Mr. Vane

I should like to think that was so, and in some cases it may be, but I rather doubt whether it is so in all. We all know the advantages and attractions of trying to produce milk even on land not ideally suited to the purpose. But this series of Bills was never designed to increase milk production in the country. It was designed rather for those not in a position to get the advantages which milk production gives.

As I have said, we have the position at the present time of more milk being produced than people are prepared to drink. As soon as the milk drinking taste of the public has increased, then I think we should consider relaxing the restrictions which today must necessarily be enforced in the administration of these Measures.

Instead, I should like my right hon. Friend to consider whether it is possible to arrange some system of advance payments for those who rear and fatten cattle, because the great attraction to the milk producer at present is that he gets something every month. The man who is rearing cattle or fattening them lower down has a very long wait. The Minister and his advisers have shown immense ingenuity over the last few years, and I should like to think that they could find something which would help to solve this problem and help the sort of man whom the hon. Gentleman opposite has in mind.

The other criticism is on the question of capital and credit. It is easy to talk of cheap credit, but I think one should go on to define a little more clearly the particular form of credit one has in mind and to give some sort of estimate of what it would cost. Presumably, what is in mind is just one more subsidy. I think that the right hon. Gentleman and his predecessors have been right to date in not adding subsidised credit to the long list of subsidies.

Yet when we review the whole field of credit agencies, we find that there are gaps. The main difficulty is that of the small man, probably a tenant farmer, who has not the security of his land on which to borrow and would rely on his chief maybe only security, his personal character and ability as a farmer.

I suppose it is true to say that in nearly every country in the world that particular credit problem has been met by co-operation. We in this country are a little slow to enter into co-operative groups for credit purposes, and I imagine that the hill farmer, with his particular independent trait of character, is not going to be among the first to rush into such an organisation. I should like my right hon. Friend to see whether we cannot take the example of the Isle of Man and develop something on their lines. The Isle of Man has a credit system on a small scale for doing just the sort of things which hon. Members who have spoken today have in mind. I know that we cannot copy its every feature, but I should like to think that we could adapt the principle.

It would be wrong for those of us who have talked about credit this afternoon to leave the impression that the more credit and the cheaper the credit we have, the better for all concerned, because that is certainly not so. Cheap credit is not necessarily helpful and can very easily be a millstone round the neck of the borrower. The ability to use credit is not easy, and there are many people who never learn how to take advantage of credit.

Where new capital is needed—new capital is, of course, needed throughout British agriculture, but probably most of all in the hill areas—it is wrong to think that we can depend solely on grants. New capital only flows freely where the existing capital earns a fair return. Although grants are very useful in times of re-development such as we are living in today, grants are only part of the story. The bigger part is that we should earn a fair return for what is produced on all our land, and on our high land in particular, and I hope that my right hon. Friend will always keep that point in the fore front of his mind.

2.38 p.m.

Mr. John MacLeod (Ross and Cromarty)

I apologise to the Minister and to hon. Gentlemen opposite who have already spoken for not having been present at the opening of the debate. I wish briefly to add my voice in welcoming the Bill. I think it is appropriate that the Bill should come at a time when the Report of the Hill Lands (North of Scotland) Commission has just been produced.

Like my hon. Friend the Member for Caithness and Sutherland (Sir D. Robertson) I am a little disappointed with the Commission. I think it has taken far too long to make its Report, and that now that the Report has been made there is not much in it. However, the Commission points out very truly that beef cattle numbers in the North of Scotland are steadily increasing, though not spectacularly. Though there is a long way to go, the trend is in the right direction. I think that is because of the Acts which were passed before the Measure now before us, and now this Bill comes along to extend the good work already done. Nevertheless, there is still a tremendous amount to be done in the North of Scotland and it is on that that I have one or two points to make.

There is a great lack of co-ordination in the various works that go on in the Highlands area. I should like to ask the Minister what co-ordination is taking place under this hill farming scheme. We all know that the high land areas throughout the country, and particularly in the Highlands of Scotland, which I represent, should be used as breeding areas. That should be encouraged as much as possible. Today there are far too many lowland farmers breeding cattle which should be bred on our hills.

One of the difficulties is the lack of grass, and in that respect provision for co-operation with the Forestry Commission would greatly improve this Bill. There is a suggestion in that regard in page 18 of the Report. It is headed "Shelter for Grazings." All over the Highland areas we hear talk of the good work that is done by the Forestry Commission, but the Commission will not go up into the more uneconomic areas to build shelter belts. As the Report says: Small sheltered belts such as are grant-aided under the Hill Farming Acts, are unsuitable for timber production and of no interest to the Forestry Commission. That is very true, but they are of very great interest to the hill farmers.

The building of shelter belts in these areas would increase the period of growth of the grass. One of the drawbacks in the high lands is the shortage of the period of growth of good grass. There is a prolific growth over a few months and then it is over. These farmers, therefore, must make full use of that grass, and the extension of grants for the making of silage pits is a very important move. Still greater use could be made of that provision if we had more shelter belts in the high lands throughout the whole country, as the period of growth would be increased by the shelter given. I hope that the Forestry Commission will co-operate more, and do much more in the building of these belts, even if only for that purpose, although, of course, in any case, they are of inestimable value in the wild weather.

Mr. N. Macpherson

My hon. Friend will be aware that the planting of shelter belts forms part of comprehensive schemes and is eligible for grant.

Mr. MacLeod

Yes, I know that, but I still think that there is not sufficient drive by the Forestry Commission to bring that about. In that connection I would agree with previous remarks which have been made about the comprehensive schemes. They are apt to be too comprehensive, and a policy of a little done, piece by piece, would greatly assist those farmers who are unable to cope with a complete comprehensive scheme. It is a pity if any scheme is held back by being too comprehensive.

Here, again, we should have more co-operation and co-ordination. The North of Scotland Hydro-Electric Board at present has schemes in the most remote areas of the Highlands of Scotland and there are to be similar schemes in Wales and elsewhere. Surely, when all the men, machinery and materials are on the spot we should try to do something, before all the men and equipment disappear, to bring them all into schemes which we know are to be undertaken at a future date. That sort of dispersal happens time and time again, just as it does in relation to some of the road works of the Forestry Commission. There is still a great lack of co-ordination. The Forestry Commission naturally goes on with its own schemes, but with proper co-ordination greater use could be made of the Commission's works.

I should also like to ask what co-ordination there is with the Crofters Commission in its reorganisation schemes. Incidentally, though the Commission has produced reorganisation schemes, no action has yet been taken, though the Commission has been at work for a year now. That, however, is not my point. I want to know what co-ordination is taking place as between schemes which would come within this Bill and the reorganisation schemes in crofting areas which the Crofters Commission is trying to bring about. I hope that there is the closest co-operation there.

Another important matter is the ravaging of crops by deer. It is very disheartening in some of the high lands when in winter the deer ravage all the crops, and it is too expensive for the small man to fence his crops adequately. I have had instance after instance of that in my own constituency. I hope that the Minister will look very seriously into this matter, and see whether greater co-operation between the landlords and the small farmers and crofters could not be encouraged. It should be obligatory on the landlord to play his part, and I am sure that the landlord does not wish to see the small farmers' crops ravaged in this way, after all the hard work that has been done, by not having adequate fencing. As I say, it is impossible for these people themselves to enclose their land adequately with high fences.

I welcome the Bill, and I hope that we will see a great deal more co-ordination to make this Measure the real success which we all hope that it will be.

2.48 p.m.

Mr. Rupert Speir (Hexham)

Hon. Members on both sides have already dwelt on two aspects of hill farming to which I myself would wish to draw attention. The first is the danger of the drift from the land, particularly in the upland areas. I am quite sure that but for our Hill Farming Acts, we should have had a far greater depopulation of those areas in the North of England; fortunately, those Acts have led to a tremendous rehabilitation in the Northern counties, and I am sure that, as a result, the younger generation is prepared to remain in these hills and valleys.

In Northumberland alone, some 500 upland holdings have already benefited under the provisions of the existing Acts, and I believe that a total outlay of over £2 million has already been agreed to in that county alone. I agree with those hon. Members who have said that lack of capital is preventing a number of people from taking advantage of the provisions of the existing Acts. I am confident that in Northumberland there are still many who would like to benefit under the provisions of these Bills if only they could find the necessary capital. It is more lack of finance than lack of will which has prevented half the eligible farms in the area taking advantage of improvement schemes and this is another argument in favour of reducing excessive taxation.

I certainly hope the Minister will have a word with the Chancellor of the Exchequer and make sure that the credit squeeze does not discourage the fullest possible use being made of the provisions of this Bill. I hope that in that connection the banks will also be co-operative. I believe it was the hon. Member for Orkney and Shetland (Mr. Grimond) who stressed the desirability of flexibility in the administration of this Bill, because it is desirable that local committees should be given every opportunity to administer the provisions of the Hill Farming Acts in a way which is suitable to local conditions. We want as much flexibility as possible.

I also support the hon. Member for Orkney and Shetland in hoping that there will not be too great an insistence on the comprehensive nature of the schemes put forward. Otherwise, with the credit squeeze and the difficulty of finding capital for these schemes, it might well be that full advantage of these Acts may not be enjoyed by those who otherwise would take advantage of them.

There is only one other aspect upon which I wish to touch. That is to emphasise that at a time like this, when it is of the utmost importance to reduce our imports as much as possible, it is obviously desirable that we should produce as much mutton and beef at home as we can. In Northumberland we are producing vast quantities, but the fact remains that, owing to the activities of the Forestry Commission, which now has more than one-tenth of the whole county in its possession—more than 130,000 acres—much of possible sheep-bearing land has been taken out of production. It is important that we should now reassess our forestry policy. Naturally, after two world wars in one generation during which much of our timber had to be felled—and felled in a hurry—it was desirable to replace our forestry and woodlands, but the result is that we are now having to import more wool, more mutton and more beef than otherwise would have been the case.

I agree with my hon. Friend the Member for Ross and Cromarty (Mr. John MacLeod), who said that agriculture and forestry can be complementary. He emphasised the advantage to stock of having adequate shelter belts and also that the timber is useful on the farm. Nevertheless, immediately land is taken over and prepared for tree planting it goes out of production for wool and mutton and it creates an additional demand for imports of wool and mutton, or their substitutes. Any more afforestation now will mean we shall not reduce the need for importing timber for at least twenty years. I suggest that in this atomic age when strategic considerations are utterly different from what they were ten years ago, we ought to have a further look at our afforestation policy and consider whether, in the national interest, it would not be better to concentrate more on producing mutton, wool and livestock.

It is obvious that this Bill will encourage further production in livestock rearing areas. I believe that, as such, it is in the national interest and ought to have our whole-hearted support.

2.55 p.m.

Mr. Edward du Cann (Taunton)

I will endeavour to be brief, and to that end rapid. I should like to add my voice in so welcoming most warmly the decision of the Government to continue and extend the provisions of these old Acts. I am very glad that on both sides of the House there has been support for this decision. It is the continuance of the policy which is so important, not so much the extension, which is a minor matter. I think that hill farmers throughout the country will be delighted at the great interest the Government take in their problems.

The improvement of land on which livestock is reared in the hill areas and the payment of subsidies for raising hill cattle and hill sheep are a fundamental part of our drive to raise food production at home and to reduce our dependence on imports. The policy and the principle are right. I was very much impressed by what the Joint Under-Secretary of State for Scotland said in opening the debate when he referred to the number of schemes put through since the first Act was passed. It is a most impressive list.

I suppose it is possible to argue and to take the view that we are getting more or less maximum production from easily farmed land. I know that production will continue to increase. There will be increases in techniques and productivity, but my hon. Friend the Member for Hereford (Mr. Gibson-Watt), in an interesting speech, made the point that the hill areas are vast and that if we seek to increase food production to any appreciable degree that increase has to come from the new acres which are not being fully cultivated at the moment.

I hope that the new Bill is a harbinger of other things to come. In the debate on agriculture a month or two ago it was suggested that perhaps the principle behind this Bill might be extended to other areas. No doubt that will be considered by my right hon. Friend in due course. At present production is 155 per cent. of pre-war, and we are all most anxious to see it expanded as quickly as possible. In Bills like this and in Acts like the Hill Farming Act and the Livestock Rearing Act lie the best hope of success for the future.

When I knew that this Bill was to be debated on Second Reading I made a particular point of consulting as many hill farmers in my constituency as I could, and also of seeing representatives of the National Farmers' Union. From those consultations and discussions, three main points emerged. We all know that the hill farmer has a particularly difficult existence. We have only to see what they get out of their farms to realise that. It is the sort of remuneration which a skilled industrial worker would consider derisory, but those men, as the hon. Member for Orkney and Shetland (Mr. Grimond) said, are some of the finest characters. They work in very great difficulties, their land is never of the best and often, because they are working in the upland areas, they are working very much against the weather—as, for instance, on Exmoor. They do not have the amenities which most of us, certainly Members of Parliament, consider to be necessities.

Calling on some hill farmers, what I noticed particularly was that newspapers are delivered late and they have not got electricity and so forth. All that drove me to the conclusion, as it must have done in the case of many other hon. Members, that they are not always as well-informed as they might be, even on matters which affect them intimately. I know that the Ministry's representatives in the country as well as the National Farmers' Union officials do their best to see that they are fully informed about the benefits they can get under current legislation but I am really not sure that enough is done yet. I am certain that many of them do not claim the benefits to which they are entitled. This matter of publicity is most important and must be constantly watched.

The second point, which has already been emphasised, is this matter of capital. Certainly, our hill farmers are among the least wealthy, to put it no higher, of all our farmers. It is true to say, as the hon. Member for Chorley (Mr. Kenyon) so rightly said—he was the first person to mention it today—that many of our hill farmers just cannot find the first 50 per cent., so to speak. A number of very interesting suggestions were made by the hon. Member for Orkney and Shetland as to what might be done to provide capital for them; and I have no doubt that my right hon. Friend has this matter much in mind.

I was very glad that a note of caution was sounded by my hon. Friend the Member for Westmorland (Mr. Vane). It is all very well to say that capital must be available, but one has to calculate how much will be wanted, how it is to be applied, and so forth. I feel that the more we can do to encourage farmers, as my hon. Friend the Member for Westmorland said, to co-operate between themselves in this connection, the better.

The third matter is this question of the conditions under which these grants are made. I take it that the conditions which will apply, if this Bill becomes law, will be the same as those which apply now. I know my right hon. Friend does his best to keep in touch with farming opinion, but I would like to emphasise a point which has already been made, that there is very considerable resentment among some hill farmers when they find that they are not able to charge for their own time in the costs of these schemes. They are running what are, after all, very largely "one-man shows", so to speak; and if they cannot charge for their own time, it means that they cannot charge their wages at all. I very much hope that that matter will be looked into.

Continuing on the subject of conditions, the situation now, as has been pointed out, is that if dairy farming is carried on to any appreciable extent, the farmer is not eligible for grants under these schemes. In fact, so I am informed, eligibility is decided on the basis of whether or not a farmer derives more than 40 per cent. of his income from the sale of milk. Of course, that is a perfectly logical provision at a time when we are trying to ensure there is no waste of milk and when there is so much production. At the same time, we must remember that nobody is more dependent upon that monthly milk cheque than is the hill farmer.

The situation is very difficult, and it is tied up with the general problem of payments to farmers and trying to ensure that their efforts are directed into producing the kind of things we want them to produce. We all fully realise that the climate is necessarily unfavourable to an increase in milk production, and I know the Minister is watching it. But the position is that some hill farmers cannot help themselves to get the bene- fit of this excellent legislation—which is a pity—because the conditions are so rigid.

In conclusion, I would say that, in the context of our current economic situation, this is a good Bill, and I hope very much that it will receive very warm support from both sides of the House. Most important of all, I hope that, when the economic situation of the country improves, as we all pray it will, there may be an opportunity for an extension of this principle and an increase in the benefits to be derived from the Bill itself.

3.3 p.m.

Mr. A. J. Champion (Derbyshire, South-East)

Like others, I welcome the Bill. It extends the provisions of the Hill Farming and Livestock Rearing Acts. We are grateful to the Joint Under-Secretary for the way in which he introduced it; he gave us some very interesting figures, and delivered his speech in a manner which will enable us, when we read it afterwards, to derive something of value from it.

I do not even complain that the hon. Gentleman should regard this Bill as the Government's long-term policy, though it seems a little strange that he should claim that the mere carrying on of Acts which were passed under the Labour Government is the Government's long-term policy today. But who am I to bring a party note into this atmosphere this afternoon, which has been so pleasant, and, indeed, so valuable, in our examination of the working of these two Acts—I must refer to the two Acts—and the provisions which are now being made for carrying them on and providing additional money.

In company with those who have mentioned this matter previously, I believe that we must look to the rehabilitation of much of our hill lands for the savings in imports which will increasingly have to be obtained if we are to live in this world.

As industrial competition increases even more, we shall have to look to our own lands to provide us with food and to prevent the need to import as much as we might otherwise require. Temporary surpluses of food which appear to be available in the United States are a snare. We must not drop the task of rehabilitating our lands, for world population is increasing all the time.

I was tremendously impressed by the forceful speech of the hon. Member for Caithness and Sutherland (Sir D. Robertson). He has looked at those broad acres which he knows so well and he sees that so much should come from them. I have read the Report to which he referred and I share his disappointment in it, but I must be careful not to tread too heavily into Scottish acres or I might find myself in difficulty.

The Acts that we have on the Statute Book do not, of course, attempt to solve all the problems of the hill and marginal farms. One of the criticisms, which has been made again today by my hon. Friend the Member for Chorley (Mr. Kenyon) and others, is that the hill dairy farm is excluded from their operation. While this appears to be a valid point to the hill dairy farmer, I think that, when the matter is viewed from the national angle—these Statutes, after all, deal with the use of national capital—it would be quite wrong to stimulate milk production from the hills and more remote areas, so many of which, surely, should not be attempting to provide something which requires a ready and easily reached market.

One is bound to recognise the attraction of the monthly milk cheque to the small farmer. I share the view of the hon. Member for Westmorland (Mr. Vane) that we have not done enough thinking about the problem of offsetting that attraction by something else which would appeal to a farmer and keep him to beef and mutton production. I hope that the hon. Member's suggestion will be considered by the Government, and that the Joint Parliamentary Secretary will tell us something about it when he replies.

Mr. John MacLeod

There are great difficulties in distributing milk in the remote areas. Would the hon. Member not agree that in the remote Highland areas there is an advantage in having milk available locally, and that it should not be brought by lorry from the south for distribution?

Mr. Champion

That is a slightly different point.

I do not think that we should use these Measures to stimulate milk production in those areas. We should use the Acts for the purposes for which they were originally intended. We must look to the hills as the great rearing ground for the country's stock and sheep. The desirable pattern for meat production would be to breed and rear in the hills and to fatten on the rich lowlands. Only in that way, I believe, can we tackle the job of cutting down our imports of meat and using to the full the acres which are ours.

Many of the problems of our hills cannot be solved by these measures. The Mid-Wales Investigation Report makes that clear. I would draw attention to its conclusion on the examination of the amount of work done in the area concerned, to the effect that the Acts have not resulted in any marked improvement in fixed equipment because most of the farm units are too small in area to respond satisfactorily to the Acts.

I know that the Government, in their reply in the White Paper, say that the Livestock Rearing Act and the Hill Farming Act have already assisted and, if administered on sound principles, can assist still further the process of amalgamating some of the small farms. I should like to know whether they are to use the Bill, which continues the provisions of the other two Acts, in any way to further these amalgamations, which are absolutely necessary.

In that connection I warn the Government that one of my Welsh colleagues has stressed the fact that these Measures must not be used to effect compulsory amalgamations. That would be undesirable. I accept, however, that we should encourage in every way the steps which will enable these farms to become really economc units. Only in that way can we get the best out of them.

I want to make one reference to the criticism made in the Arton Wilson Report. I shall read from paragraphs 112, 113 and 114, in which the Committee refers to the administration of the Hill Farming Livestock Rearing Improvement Schemes. It says: Grants under these schemes are intended to make good many years' neglect of upland livestock rearing farms, to keep them in production and to encourage their greater use for raising store sheep and cattle. The cost of schemes averages £2,500 each, and grants of 50 per cent. are made towards them. Because of the range of improvements eligible for grant and the amount of money each scheme involves, the procedure is inevitably complicated. Nevertheless, we were concerned to find that every scheme has to pass through at least four different offices of the Ministry (county, district A.L.S. office, provincial A.L.S. office and Headquarters) in addition to receiving a thorough vetting by members of the C.A.E.C. As a result delays are greatly increased and there is a lack of clear definition of responsibility for some aspects. We also found considerable variations of practice and interpretation in a number of the counties we visited. The proposal that these schemes should in future be administered in Divisional Executive Offices, and the recommendations we make in Chapter VII for reorganising the A.L.S. should, we think, remove the worst of these difficulties and provide a basis for a clear devolution of responsibility to local officials. I think it is absolutely vital that public money should not be thrown away on unsuitable schemes. It is right that there should be a "thorough vetting" of proposed schemes to ensure that there will be the possibility of increased production flowing from whatever work is undertaken. It does appear to me that there has been established—perhaps, we on this side of the House are partly responsible for this—a silly duplication which has nothing to do with really essential safeguards. I hope that the Minister will look at that because I think the Arton Wilson Committee has put its finger on something which ought to be attended to, and I hope that the Minister will do something about it.

I must say that the only criticism of the Hill Farming Act which came to me personally was that of a farmer in North Devon, in the constituency of the hon. Member for Devon, North (Mr. J. Lindsay), and he complained that he did not and could not get assistance under this scheme because his plans and proposals were not sufficiently comprehensive. They did not, in the eyes of the local official, go far enough to do the job which was intended under the Act. I must admit that I felt considerable sympathy for that man when I was discussing the matter with him, but we have to keep in mind the fact that this is public money and that it is being used for a definite purpose, and I would support the Minister in his endeavour to maintain that these schemes shall be reasonably comprehensive. I very much support the Minister despite the fact that I sympathise with anyone, like that Devon farmer, who may be in difficulties on that score.

The schemes begin with the vetting by the farmers themselves, the district com- mittee. It is an instance of control by one's peers, for they look at a scheme through the eyes of those who know something about it and who can truly assess its comprehensiveness. Therefore, I hope that the Minister will not be moved by pressure from the National Farmers' Union and others too far in the other direction. There are so many other ways in which grants can be given under other schemes which will make up for some of the losses where people do not come within these comprehensive schemes.

My last point has been made already by many hon. Members. It concerns the small hill farmer's difficulty in obtaining capital to enable him to do the job that is required of him. I agree that these hill farmers make up the bottom of the pyramid which supports the farming industry. Many of them come down from the hills and make good lowland farmers. The hills are a first-class training ground, but these farmers are often young men who have to put all their capital into their cattle and sheep and have nothing left over for fixed capital investment. They are the people who find it difficult, for that reason, to make use of these schemes.

The short time during which I had anything to do with hill farming was in the years between 1922 and 1927 on a small hill farm 1,000 feet up in South Wales. My difficulty was not to consider how I could obtain capital but how I could get hold of eighteen pence to buy a halter. It is not as bad as that today, thank goodness, but these young hill farmers are the people who have difficulty in obtaining capital to carry on the job and to take full advantage of these subsidy schemes.

Some of us who recently visited Germany and studied agriculture there in relation to the State did not learn a great deal from the Germans except that to some extent they have got over the difficulty of the high rate of interest charged in Germany by halving it for essential uses within the agricultural industry by means of a special grant. It would be worth our while to have a look at that scheme.

Credit facilities and interest rates certainly deserve early consideration and helpful action by the Government. I welcome the Bill. This has been a first-class debate, which I hope will be helpful to the Government and certainly helpful to the farmers.

3.18 p.m.

The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. G. R. H. Nugent)

This has been a very helpful debate indeed to the Government, and, I am sure, to all concerned. I should like to thank the hon. Member for Derbyshire, South-East (Mr. Champion) for the felicitous manner in which he wound up for the Opposition and to thank him and hon. Members on both sides of the House for the many valuable suggestions and comments which they have made. If I am not able to pick them all out in the course of my speech, I assure the House that we shall give careful consideration to the many points that have been made.

I was interested in the statement of the hon. Member for Derbyshire, South-East that he was unable to find eighteen pence with which to buy a halter. He did not tell us what the halter was for, but if it was for a dangerous purpose concerning himself we are only too glad that the hon. Member did not find the eighteen pence. His contribution today has been most helpful.

Now I will pick up one or two small points. On the question of advance payments for cattle, a point made by the hon. Member for Derbyshire, South-East, we have done something quite substantial to meet this need in giving the calf subsidy, which is £7 10s. for heifers and £8 10s. for steers. That is a substantial advance payment which the farmer receives when the animal is eight months old and does something in this direction. Whether it is possible to go further I would not like to say, because it would be most difficult to do. But let us not despair, perhaps some day we shall find the means, and certainly we realise the practical implications.

On the point raised by the hon. Member about the Mid-Wales Investigation Report on the amalgamation of holdings in Wales. I think the White Paper giving the Government instructions on the Report is fairly specific as to what the Government intend. We intend to encourage amalgamation, which is clearly the right development. However, we certainly do not intend to use any compulsion or any measure to oblige that to come about.

In deciding what applications for grants under the hill farming schemes will qualify, we shall be guided by the usual definition that after completion of the scheme it must be an economic unit, and we shall follow the definition laid down in the White Paper. However, we must insist that the holding then provides at least the equivalent of a farm worker's wage. I am sure everyone will agree that we cannot go lower than that level if we are to achieve a satisfactory result.

On the point made in the Arton Wilson Report, we have looked closely at the recommendation about the working of the hill farming schemes and the procedure there. As the hon. Gentleman will recognise, inevitably the procedure is bound to be long and fairly complicated. Large sums are involved, and the farmer applicant himself wants to make many inquiries before he decides, and he usually needs a good deal of advice, consultations, visits and so on. We have taken note of what that Committee said, and my right hon. Friend will shortly be making a first announcement on the action he proposes to take in the light of that Report. This point has been carefully borne in mind.

My hon. Friend the Member for Hexham (Mr. Speir) raised the question of the co-ordination of forestry and agriculture. The general policy of my right hon. Friend and, through him, of the Forestry Commission, is to bring about the greatest measure of co-operation possible. It is certainly not to plant out land which is potentially sound agricultural land. I hope that my hon. Friend will have seen that in the Report of the Mid-Wales Investigation the Forestry Commission have expressed themselves as willing to take a number of useful practical measures which will assist the co-ordination of forestry and agriculture, and possibly this will be of considerable help to farmers living in those districts where the Commission is operating.

Mr. Speir

That refers to mid-Wales. Will the new policy refer to the whole country?

Mr. Nugent

Yes, indeed, it will be applied generally in those upland regions. Not only are the measures valuable for their own sake, but also as a solid indication that the Forestry Commission is most anxious for its part to bring about the maximum co-operation.

The question of credit was raised by the hon. Member for Orkney and Shetland (Mr. Grimond) and was commented on most felicitously by my hon. Friend the Member for Westmorland (Mr. Vane) and afterwards by the hon. Member for Taunton (Mr. du Cann) and, finally, by the hon. Member for Derbyshire, South-East. Although naturally we are always anxious that none of these schemes should be held up by lack of credit on the part of the farmer, we feel that it is difficult for the Government to intervene in the provision of credit.

Although we should not like to be didactic about it, we do not feel that schemes are being seriously held up by a lack of credit for farmers who are credit-worthy. I profoundly agree with my hon. Friend the Member for Westmorland that borrowing money is a very onerous business. When one has borrowed, it is not enough to get a sufficient living out of the enterprise. It is also necessary to make at the same time sufficient to be able to pay back what has been borrowed. It is useless to made credit available except to the most enterprising and energetic members of the community.

I listened with interest to the comments of the hon. Member for Orkney and Shetland and the hon. Member for Derbyshire, South-East about the arrangements made on the Continent. Recently I studied the arrangements in France, where there is what really amounts to an agricultural bank. But essentially that is financed by the money of the farmers. It is assisted by the State, but the basis of it is the farmers' own money. Farmers, weak and strong, have come together and provided their own money as a basis for the bank. For one reason or another the mentality of our farmers does not cause them to think in that way, either for banking or for any other purpose. Therefore, we do not have the same mental attitude among our farmers or the same structure through which the State might be able to assist in that way. While expressing a general sympathy for the needs of these men, the Government feel that there is at present no evidence that schemes which otherwise might come to a useful fruition are being seriously held up by lack of credit.

A number of hon. Members referred to the definition of farms qualified for this help. In the last few years we have made determined and conscientious efforts to achieve precision in this definition in all areas, in order that, so far as possible, a uniform definition shall be applied throughout the British Isles. That has caused difficulties in one or two areas, but eventually we have established a satisfactory definition of what is hill farming land. As was said by my hon. Friend the Member for Penrith and The Border (Mr. Whitelaw), inevitably there are cases where one farmer qualifies and his next-door neighbour is just out. But that must happen wherever we draw the line. We have tried to limit the application of the schemes to land primarily suitable for fatstock rearing, and which is not, by the nature of the soil and the altitude, land which could be used for other purposes. That has meant that sometimes even in the high altitude areas land has not qualified for livestock rearing purposes because it was too good. But we have tried to bring precision to this difficult matter.

We have been asked by several hon. Members to consider extending the range down the hill. While we have considered that, we have reached the conclusion that it is not possible to define an extension down the hill which would not, broadly speaking, include everybody. We do not feel that at present we can contemplate so big an extension.

I welcomed the downright assertion of the hon. Member for Derbyshire, South-East that we should stick to the present definition regarding milk. That was also roundly supported by my hon. Friend the Member for Westmorland; and it must be right when already the milk supply is in excess of the demand of consumers in this country, and through progressive improvement in technique and production, is showing every sign of rising further. It cannot be right to be spending substantial sums of public money in order to assist milk producers to produce even more.

I feel that I should make a brief comment on the merits of the case because, although there has been a very large measure of agreement here today that that would be the wrong thing to do, there have been expressions of opinion outside this House, from the farmers' union and the Milk Marketing Board, that we ought to extend these grants to farms that are predominantly dairy farms.

At present the line is drawn at 40 per cent. I can certainly assure my hon. Friend the Member for Penrith and The Border that that is not an excessively rigid interpretation. It is applied in a reasonable way and where dairy farms have a stock rearing side to them, provided the stock rearing side can be differentiated from the dairy farm, a scheme can be promoted for the stock rearing side, so long as it is kept to that side and will not be for the benefit of the dairy. So we do our best to interpret the present definition reasonably.

On the main issue, the same considerations apply today as applied in 1946 and 1951—that we are getting enough milk, that we are in fact in danger of getting too much milk from other sources, and we really cannot justify putting public money into dairy farms in those areas. I say that fully realising that there are many small dairy farms in those areas which would be extremely glad to have some capital assistance towards their buildings and strengthening their farms, particularly the small dairy farms which are making a poor living. But, in considering this particular Measure, we have to bear in mind—and it is quite clear that the House does today—that this is not simply a sociological Measure but is also an industrial Measure.

Certainly we are concerned to maintain the population of those uplands, but we are also concerned, as it is an industrial Measure, to assist the agricultural industry in order to see that from those farms is produced the food which the nation wants. Judged by that second consideration, we simply cannot justify using large sums of public money in order to stimulate further production in those areas.

I should say, however, to the dairy farmers of those areas that, while we cannot assist them under these schemes, we do assist them substantially under other schemes, particularly under the marginal production schemes. For Wales, in particular, I recollect that we have substantially increased the allocation for marginal production schemes, and those schemes give them very substantial help on that sort of farm. I hope that we may leave the impression with the small dairy farmers, many of whom are certainly hard pressed, that, while we cannot help them with this Measure, we have done our best within the range of production grants and particularly the marginal production schemes to ease their difficult lot of getting a living in those areas.

I was also asked whether it was possible to extend the scheme to fattening. I am afraid that the answer is really the same. We would not normally accept for grant farms which had land good enough for fattening. Normally, under the definition, the land would not be good enough for fattening if we accepted the application, so I am afraid that we cannot contemplate fattening, if it is a farm which is predominantly in fattening stock, as qualifying within the terms of the Bill.

Several hon. Members were anxious about the subject of comprehensiveness. We have tried to interpret that in a reasonable way, but the whole object of the exercise is, of course, to ensure that at the end of the day the farm is really a sound economic unit where the farmer will get a decent living. Provided it can meet that standard, then naturally our officials will be as flexible as they can, but we feel that it is essential to insist on everything that will be needed in buildings, the farm's access road and so on which will bring that about. We would otherwise be wasting the large sums of public money which are involved.

The matter of the farmer's work was raised by several hon. Members, particularly by my hon. Friend the Member for Taunton. The parent Act, the Hill Farming Act, 1946, governs this and, in Section 2 (1), defines what can qualify for payment. That is quite specific, and it is only the costs that the farmer has incurred. The operative words are in the last line: … by the appropriate Minister as having been reasonably incurred. It is true that that sometimes bears rather hardly. We have listened very carefully to what has been said on the subject today, and we will give further consideration to the point to see whether it is possible to move from the position which has been held for the last ten years. We take the weight of the point so ably put by my hon. Friend the Member for Taunton.

I now turn to a subject with which the hon. Member for Norfolk, South-West (Mr. Dye), my hon. Friend the Member for Caithness and Sutherland (Sir D. Robertson) and others dealt, that of the future prospect for beef. It is perfectly true that unless the prospect in livestock production of both beef and sheep was sound and profitable for a number of years, it would not be right and proper in the nation's interests for us to be committing these large sums of money in capital expenditure on these farms.

My hon. Friend the Member for Caithness and Sutherland and the hon. Member for Norfolk, South-West referred to imports. I must not stray too far into that subject, but I should like to reassure my hon. Friend and the hon. Member that the fact that the level of imports today has risen over the past year or 18 months does not in any way weaken the Government's policy to encourage a high level, an increased level, of beef production and, to some extent, of mutton and lamb production in this country.

Nor does it weaken our intention to ensure by means of guarantee payments and a high level of guaranteed prices that that beef production is profitable. We certainly intend to ensure that the primary production, which will come from those farms which are essentially stock rearing, shall continue to be profitable. Of course, we are also concerned to see that we have enough meat to meet the nation's demands at this time and, indeed, at any other. Therefore, we allow imports freely to come into the country in order to meet, when combined with the home supply, current demand.

The present arrangement for paying the guarantee payments by means of deficiency payments allows a free market, where supply and demand can meet and equate. At the same time, in addition to the market return, we pay a deficiency payment which will ensure that the home producer gets a fair return. It is true that the higher guaranteed price of 151s. for this year has taken some time to become effective. This is because the deficiency payment is calculated upon the difference between the guaranteed price and the average of market prices over a previous 12 months. But the size of the deficiency payment is increasing month by month, and in order to make it quite plain that the Government intend to continue with a high level of guaranteed price my right hon. Friend announced earlier this week that the guaranteed price for next year will be no less than 151s.

That is in order to make it quite plain that, despite the fact that the market price is lower, the Government firmly stand by their previous declarations that they intend to encourage beef production at a profitable level. I hope that what I have said has reassured my hon. Friend and any hon. Members opposite who have any doubts about the matter. We certainly want to ensure that the men in the hill areas continue to get a fair living from rearing livestock just as do those who fatten cattle in the lowlands.

I should add that, in order to give further evidence of this intention, my right hon. Friend has also decided that the present level of hill cow subsidy—the authority for which derives from the 1946 Act—of £10 per cow for cows kept on the hill shall be paid for the next seven years, so that hill farmers will know from now on that they have seven years in which they can be certain of £10 a cow. In making that announcement, I also announce the end of the hill cattle subsidy, which was referred to my hon. Friend the Member for Devon, North (Mr. J. Lindsay), and which has far outlived its purpose. It was a war-time transitional Measure, introduced in order to encourage grazing in the hills, and was discontinued in Scotland long ago. The time has long passed when it was needed here.

I hope that my announcement about the continuance of the hill cow subsidy for the next seven years, at £10 a cow, will be further evidence of the Government's solid intention to ensure that stock rearing and beef production shall continue to be profitable for years to come.

The Report of the Hill Lands (North of Scotland) Commission was commented upon by a number of my hon. Friends from North of the Border. My hon. Friend the Joint Under-Secretary of State for Scotland has taken particular note of those comments. I, as a mere Sassenach, do not propose to put my feet too heavily across the Border—as I remarked sotto voce to hon. Members opposite, I might find myself in a bog if I did—but I have taken careful note of the comments which have been made, and in so far as action needs taking upon them we will carefully consider them.

Sir D. McCallum

Surely my hon. Friend does not want me to go back to Scotland tonight saying that the Government could not care less about the difficulties of the small farmers. They have to produce 100 per cent. of the grant in order to get back 50 per cent. in some months' time. Has my hon. Friend no suggestions to make that some means of helping the small farmers to pay this money will be considered?

Mr. Nugent

I must apologise to my hon. and gallant Friend the Member for Argyll (Sir D. McCallum) for omitting to answer that point. I did take note of it at the time. The answer is that the farmer can make arrangements with his authority for the Government's part of the expenditure—that is to say, the grant—to be paid direct to the contractor. Therefore, he does not himself have to find 100 per cent. of the grant. He can do that now. Provided he asks for that arrangement, he will always be met unless there is some special objection. At the same time, I think that my hon. and gallant Friend knows that all these operations in the scheme can be phased to suit the circumstances and the finances of the individual farmer. Indeed, many of them are phased for as long as five years, so that the farmer can pay as the money comes to hand, thereby avoiding financial embarrassment. We are certainly most anxious to do all we can to help him in the difficulty which we know he experiences.

In conclusion, I wish to make a short comment on the merits of the Bill as a whole and, particularly, to make a reference to the very interesting exhibit which the Ministry arranged at the Royal Agricultural show at Newcastle this year. This exhibit was a really admirable example of what can be done under this scheme. I am not saying that it was typical, because, obviously, it was above the average. The exhibit showed a Cumberland hill farm called Langmer belonging to a Mr. H. J. Hetherington with 133 acres of inbye land and with 450 acres on the fell. It is bigger than some, but not a big farm as hill farms go.

The record of this man is not very complete—he did not come into the Income Tax bracket—but, as far as anything could show, in 1950, before he started his scheme, his income was about £5 a week, the barest possible living. He then inquired about a scheme under these Acts. His total scheme has cost something like £5,000 with a grant of a little under £2,500, rather more than the average of a scheme. The average of a scheme is just over £3,000.

As a result of the completion of the scheme, Mr. Hetherington's income for last year went up to £1,275. The picture there is of a struggling hill farmer who was barely making a living and who, as a result of this scheme, is today making a very decent living, which means that in the transformation we have not only got additional food production of the kind we want, but have achieved the other aim of the agricultural policy. We have ensured that the output per man and the rewards in terms of cash are high enough to compare favourably with men engaged in other forms of industry.

Of course, Mr. Hetherington had a comprehensive range of improvements made to farm buildings, drainage on the fields, of improvements to the fields, reseeding, fertilisers, and so on. My hon. Friends who know this kind of land will know how much depends not only on rehabilitating and erecting new buildings, but on renovating the pastures and bringing them into a really good state of production.

Our exhibit at the Royal Agricultural Show was greatly concerned to demonstrate what could be done, and what were the various methods which could be used starting at one end with the complete ploughing up and reseeding which was very expensive, costing £20 or £25 an acre, to the relatively simple renovations which can be done very much more cheaply to the indigenous pastures. This man had used all these methods most effectively, both in improving the pastures on the ground and in conserving what he did not actually use so that he had adequate sileage and hay to carry his stock through the winter, and, finally, he achieved the result which I have mentioned.

As has been very rightly said by hon. Members on both sides, the character of these men who live in the hills is something of great value that we all wish to preserve. There is no doubt about Mr. Hetherington's character. If he had the guts to engage in this enterprise which must have been an enormously terrifying enterprise for him to engage in, and I expect, and suspect, largely financed on his side of it out of his extra earnings as he went over the five years, he must be an man of energy, enterprise and resolution.

I believe that Mr. Hetherington is typical of hundreds, indeed thousands, of these farmers who live and work in these hill areas throughout the British Isles. Those are just the men we want to help, and we want to enable them to continue to live there, not just scraping a pittance as so many have done, but really getting a good living out of it, which gives them a reasonable reward for the immense labours they put in, for the great hardship they endure and the very long hours they work.

There is no doubt that these Acts, stretching over the past ten years, have already done much to bring that about, and this extension which is before the House today will ensure that we have enough money to go on and complete the task. We have been greatly helped, as my hon. Friend the Joint Under-Secretary for Scotland has said, by Professor Ellison's support, so that we have a reliable survey of just what is needed. This Bill before the House now will enable us to have sufficient money and sufficient time to complete this very valuable rehabilitation in the hills, to enable the men who live and work there to get a good living and to continue to supply such a useful part of the nation's food.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Committee of the whole House.—[Mr. Wills.]

Committee upon Monday next.

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1. HILL FARMING [MONEY] 435 words