§ 2.51 p.m.
§ The Minister of Agriculture (Mr. Fred Peart)
I beg to move,That the Small Farm (Business Management) Scheme, 1965, a draft of which was laid before this House on 8th July, be approved.If it is for the convenience of the House, I should like to take with this Order the Scottish one:That the Small Farm (Business Management) (Scotland) Scheme, 1965, a draft of which was laid before this House on 8th July, be approved.The two Schemes are on the lines which were indicated in the Annual Review White Paper. Hon. Members will remember that, when I announced the Price Review and published the White Paper, I specifically mentioned a small farmers' Scheme. This Scheme is an important instalment in the Government's plan for increasing the productivity of farmers, particularly those with smaller farms. The present Schemes, which we supported, have done good work, but this Scheme has two new features which I am sure will commend it to the House. It is right that I should not take too long, but should try briefly to explain my purposes.
First, it brings in a new group of farmers who have been ruled out up to now because their businesses were too big. We think that this is the right course. We think that there is need to give help to farmers at the upper end of the small farm bracket. Those who work these farms, can, for their own and the nation's good, justifiably be given practical encouragement to raise their productivity. That is what this Scheme does. As hon. Members who have looked carefully at it know, it raises the acreage limit from 100 to 125 acres.
However, the more significant measure for the size of businesses is the scale of activity on these holdings, measured by standard man days, and we are raising the limit of these to 600. Because we have revised the scale of standard man days, we are, on the existing scale, raising the limit from 500 standard man days to 700 and the result—it is remarkable, when we consider the figures—is that, by these changes, we shall be making nearly 40,000 farmers eligible who have been ruled out up to now.
§ Mr. R. J. Maxwell-Hyslop (Tiverton)
I think that the Minister said that the limit has been raised to 700 man days. I think that he will find that it is 600 man days.
§ Mr. Peart
I said that we are raising the limit to 600. Because we have revised the scale of standard man days, we are, on the existing scale, raising the limit from 500 standard man days to 700. The result is that another 40,000 farmers will be included who were not previously eligible. This is a considerable number and I hope it shows that the Scheme can be extremely useful.
The second and much more fundamental change is this. Up to now the grant has been conditional on the farmers carrying out specific husbandry operations which have been agreed with the National Agricultural Advisory Service, our officials. In this Scheme, the basic requirement is that the farmer must work out a farm management programme for a three-year period and satisfy the N.A.A.S. that this is both feasible and likely to produce a worthwhile increase in productivity. The Government consider that this is a sounder approach to the objective of all Schemes designed to help the small farmer—to help him to increase the return from his farm.
In detail, the Scheme lays down these conditions. First, we may be dealing with some farmers who have already been keeping records of a sufficient quality and detail for them to set up programmes of tasks or activities for the three years ahead with confidence. Where that is so—though, of course, a real improvement in the expected profitability of the business must be demonstrated—a complete programme can be approved from the beginning.
The work or capital investment comprised in each programme will be agreed by the advisory officer in consultation with the farmer and will take account of all the factors affecting the farmer. This is not unreasonable. It is right that we should do this. There is no prescribed pattern for such a programme; we have some measure of flexibility. The aim in each case will be to increase the productivity and therefore the profitability of the business.
Secondly, many farmers will not have kept adequate records. Hon. Members 982 know from their own experience in rural constituencies and experience among the farming community that this is so. A small farmer in this group will have to work out a basic programme. This will specify the farm records which he must keep during the succeeding three years and will set out the tasks or activities which he agrees to undertake in the first year of the programme. At the end of the first year, he will supply to the advisory officer of the N.A.A.S. a summary of his records.
From this point, the educational aspect of the Scheme really begins to take effect, because the advisory officer will then help the farmer to evaluate the practical results of his farm operations over the previous year in the light of the records kept. He will be able to point out which are the strong points in the economy of the farm and how they can be further exploited.
§ Mr. James Scott-Hopkins (Cornwall, North)
Purely for clarification, may I ask whether the records will have to be kept on a prescribed form or will any type of record be satisfactory?
§ Mr. Peart
I am coming to that.
Where the records suggest weaknesses in particular directions, the advisory officer will be able to suggest ways to eliminate them in the following period. The important point is this—that the farmer will be learning, not in an academic way, but in practical terms which he can understand, how to apply modern management techniques to his own business. In my opinion this is the most valuable aspect of the Scheme.
When the advisory 'officer and the farmer have agreed the proposals for the succeeding year, these will be added to his programme and will enable the farmer to qualify for the full grant for that second year. Then, at the end of this second year the procedure will be repeated, for formulating the plan for the third year. However, if at the end of either the first or the second year the farmer decides not to develop his programme by agreement in this way, he will nevertheless be able to continue with his record-keeping and qualify for the minimum grant of £50 a year.
The grants which will be payable are set out in paragraph 8(1) of the Scheme. In the first year the grant is £50 plus 983 £2 an acre of crops and grass; in the second year £50 plus £3 10s. an acre; and in the third year £50 plus £3 an acre. The maximum qualifying acreage for grant purposes is 100 acres, which gives a maximum possible grant of £1,000. Grants will be paid at the end of each year as each annual plan is completetd satisfactorily. The total cost of the Scheme for the United Kingdom is estimated to be £22 million of which about £5 million is expected to be due for payment at the end of the first year. Hon. Members will appreciate the importance of the Scheme.
These, then, are the main provisions, but I should like to make three points about the farm records—I have been pressed on this—which, as I have explained, are a central and important feature. First—on the form of the accounts. In England and Wales there is, of course—as hon. Members know from practical experience—the excellent record book produced by the National Farmers' Union in co-operation with the National Agricultural Advisory Service, and farmers can use this if they wish. However, some may find it an advantage to use records which have been specially designed for them. To answer the hon. Member for Cornwall, North (Mr. Scott-Hopkins), my Department will therefore issue free to each applicant in England and Wales a record book designed by the N.A.A.S. especially for the purposes of the Scheme. Similar arrangements will be made in Northern Ireland and Scotland.
Secondly, those farmers who do not wish to keep the records themselves are quite at liberty to arrange for their accountant or a local farm secretarial service to do this for them. One may be a good farmer without being good at keeping books. Of course, from the business point of view, younger farmers coming on in the business must be good accountants—not in the full professional sense, but they are involved in new business techniques, which affect farmers. I hope that farmers will make these arrangements, especially if they have any doubts at all about their own ability as book-keepers; and they will be able to use the annual grant of £50 as a contribution towards any expenses which may be incurred in this way.
984 Finally, I realise that many farmers will want to know whether very private information about their financial affairs may be made known locally or even used to check up on other information which they submit to Government offices. I want to remove any doubts about this. I want to give them a categorical assurance that except for the occasional need to look at samples of these documents for our own internal test checks—that is to see that the Scheme is being properly administered—the records and the summaries derived from them will be seen only by the advisory officers who are helping the farmer. I hope, therefore, that no farmer will be deterred from entering the Scheme by any fears that his financial affairs will be made known to other folk in the neighbourhood or to any other Department of Government. We shall take every possible step in the local offices of my Department to ensure that all this information is kept secure.
I wish to stress that I regard the Scheme as an important part of the longterm help which the Government are giving to the agricultural industry. This is not just a way of giving small farmers easy money. Far from it. Farmers who enter the Scheme will find that they will be called upon to think hard about the future of their farms and to take—and carry through—difficult decisions about the way their businesses are going to develop over the next few years. Those who accept the Scheme as a challenge to their abilities—not only as practical farmers, but as modern business managers—will, I am sure, derive great benefit from it. In the short term the benefit will come from the additional money they will get. But for the longer term, which, in the end, is much more important, these farmers will be able to exploit their new knowledge of farm accounting and business management to keeping up the higher productivity that they will have achieved.
The House may like to know that the details of these new Schemes have been fully discussed and agreed with the Farmers' Unions. I am sure that they will be welcomed by all who are concerned to ensure that the efficient small farmer not merely survives but really improves his position in the farming community. I therefore commend the Schemes for the approval of the House.
§ 3.8 p.m.
§ Mr. Alasdair Mackenzie (Ross and Cromarty)
I give a very cordial welcome to the Scheme which is a very important step towards improving the economy of the small farmer. For some years we have been hearing a great deal about the problems of the small farmer, and it has been pointed out in various quarters that it is the structure of that section of the industry that is wrong.
To me the satisfactory aspect of the Scheme is that it shows that the Government believe in the small farmer, and that they are prepared to go a long way towards improving his economy. The fact that 40,000 more units will be eligible under the Scheme shows what a great problem it is, and how important it is, apart from the food production aspect, that for the social side of it these units should be maintained and supported.
I should like to refer to the Scheme as it affects Scotland and, in particular, my own part, in the Highlands. It is true that we are not affected to the same extent in the Highlands of Scotland, because we have the Crofters Commission scheme which covers the seven crofting counties. But there is one section which is not benefiting through the Crofters Commission scheme, and I should like to draw the Minister's attention to that section They are, chiefly, the tenants of the Department of Agriculture. They are on the Crofters Commission's register but, because of the quality of their land, they do not qualify for most of the grants available under the Scheme. For instance, they do not get cropping grants, because the land is too good. They do not get the cow subsidy for the same reason. Because they are on the Crofters Commission register, they do not qualify for this Scheme.
We have an anomaly here which should be looked at, because I know that there are many of them who would qualify under the Scheme were it not for the fact that they are registered with the Crofters Commission. I hope that the Minister will consider this matter. I appreciate that it may be difficult for him to say much about it today, but I should be only too willing to discuss it further with him on another occasion.
When the Minister referred to the sum of £22 million I wondered whether that 986 was an additional sum or whether it had included within it the amounts paid to former recipients. I hope to receive an answer to that question although, in the main, we regard this as an important step forward and an indication that the small farmers, particularly those who manage small family farms, have a future.
It must be remembered that there are some extremely small units. There are many of these in my constituency, although, in addition to farming, many of them derive considerable revenue from tourism. The units between what we call "croft size" and farms of up to 125 acres are those which need assistance most. We cordially welcome these Schemes and hope that as many farmers as possible will avail themselves of the benefits available. It often takes some time before small farmers realise the benefits which are available to them under Government schemes.
§ 3.12 p.m.
§ Mr. Peter Mills (Torrington)
I welcome these management Schemes, the prime object of which is to improve business standards among small farmers. These provisions could be of considerable benefit to this section of the farming community, particularly when it is remembered that the small farmer, because of his position in the farming community, needs help probably more than any one else. These Schemes will make an important contribution towards making small farms viable.
Only those who are or have been small farmers know the true facts and difficulties which beset the small farmer, particularly in the South-West. His problems are sometimes extremely acute, particularly in a year like this one. These Schemes could be one of the life-saving ropes for the small farmers if—and it is a big "if"—he grasps this rope which is held out to him. I do not believe that help in the form of blood transfusions, so to speak, is enough. The small farmer does not want charity. He wants help to help himself. These Schemes fit that bill, for they require effort on the part of the small farmer, and that is why I welcome them.
Small farmers throughout the country will be required to make a real effort in future to keep themselves. They can be helped by these Schemes, by 987 amalgamations, by getting together to help each other, by forming co-operative movements and by sharing plant and gear. By these methods they can become viable and make their businesses profitable.
As we consider this matter we must ask ourselves whether the small farmers will take advantage of these Schemes. I hope that they will, but I confess that I have my fears. I do not want the Minister to think that I am criticising the Schemes when, from my experience, I raise three points which represent my fears and doubts about whether the Schemes will work.
My first fear is the difficulty of the small farmer to keep records. Most small farmers are not trained to do this. It is so easy when one comes in from a hard day's work on the farm to be tired and to say, "I am not doing that". I know how difficult it was when I was farming to fill in the ordinary returns and the other forms that we had to complete. Many small farmers will fight shy of what they call this "pencil work".
Of course, one cannot generalise. We know that the farmer's son today is being trained and has a better education, and so he will probably be able to help in this way. No one, however, can deny that it will be a real problem whether the small farmer, after he has done a hard day's work, is prepared to give the time to fill in the forms and to keep his records up to date.
My second worry is in the inbred fear of the small farmer to disclose details of his business. One has only to ask local bank managers in the small agricultural towns to be confirmed in this view. The small farmer's past might have been a struggle to live. In many cases he has had to scratch a living and he resents strangers interfering in his private business and accounts. The day of the trunk with his notes in it and the cubby-hole in the cowshed has not gone. There are still many farmers who have that type of mentality. It is the farmers with this outlook who are the hard core with whom we are trying to deal.
My third fear is what the Scheme will disclose after three years. This is an extremely important point. What the small farmer's accounts will reveal after 988 three years is that poultry does not pay, pigs do not pay, and that the farm is too small for the farmer to make a living out of beef only. Particularly in the South-West, the accounts will reveal that many of these small farms are not big enough to grow corn. Inevitably, the small farmer will have to return to milk production.
I pay great tribute to the work of the N.A.A.S. officers throughout the country, particularly in the South-West. They have been patient and have done a tremendous job. After they have studied a small farmer's accounts, however, they are bound to tell him that there is only one thing that he can do, and that is to turn to milk production. This could lead once again to an ever-increasing quantity of milk, with all the dangers that that entails.
In spite of the grant and in spite of being tied to the cow's tail, the farmer will have to be told that there is nothing else that is profitable that he can do. That is what will be revealed after three years of the Scheme and the keeping of accounts on many small farms. In other words, the small farmer, particularly in the South-West and the wet districts, has nothing else to which to turn. It must be milk production, and milk production only.
To me, the answer is fairly simple, and I hope that the Minister will be able to do something about this. Of course, he can only encourage; he cannot direct. What I hope will happen is that through the N.A.A.S. the Minister might well be able to say that the N.A.A.S. officers should encourage milk production in the areas where milk can be produced fairly cheaply and that perhaps corn and other crops can be grown in the drier and better soil areas. The Minister could well encourage this through his N.A.A.S. officers. I know that it is a dangerous subject and that people do not like being directed, but this is something which the Minister could at least encourage. My three fears, therefore, are very real. I do not want the Scheme to fail, but it is likely to do so unless these three fears are remedied.
It is easy to say that the small farmer must do this work in keeping the records if he wants the grant, and that is true, but who will help him? Let us get down to 989 brass tacks. We have been told that the N.A.A.S. officer will not be allowed to help him. Secretaries in the countryside are few and far between. It is not fair to turn to that maid-of-all-work, the N.F.U. secretary in the town, to whom I pay tribute. He does a first-rate job as a sort of mother to everyone by filling in forms and explaining things, but it is not fair to ask him to keep records or to teach the small farmer how to keep records. We shall have to find another solution.
We should encourage a sort of group secretary scheme with a secretary to look after 30 or 40 farmers in a group and to help them with their accounts. Such a group secretary should be trained and mobile. Most important—otherwise the scheme would not succeed—he must enjoy the confidence of the small farmer. Of course there will be difficulties about this. There is the reluctance of the small farmer, which also applies to the big farmer, which will have to be overcome. Such a scheme of secretaries for groups of small farmers could lead to co-operation on a wider scale. The secretary might suggest co-operation, buying in bulk, sharing of machinery and linking of various projects.
Let us not make the mistake, which is so prevalent and so easy to make, of thinking that all farms of 30 acres or so are not viable. That is not so. The majority of small farms, of course, are not viable, but many of them are. It is not a question of the acreage of the farm but of the man farming it, his outlook, the type of soil he is farming, and the area in which he is farming. It is most important when thinking about small farmers to look at the problem in that way.
This is one of the many Schemes which can help the small farmer and make his farm more viable. It may be that the small farmer may not have many more chances to carry out the modernisation which is essential. Time probably will catch up on him. Rationalisation is taking place very quickly. The hard economic facts of life in the agricultural world will catch up with him soon. I am determined in my small way to help to make this Scheme a success, for I believe that it is the way in which the small farmer can be helped to help himself.
§ 3.24 p.m.
§ Mr. R. J. Maxwell-Hyslop (Tiverton)
I welcome this Scheme so long as it means what I hope it means. On the first page of the Scheme, under Clause 2, we see the pregnant words:'Complete programme' means such programme, expressly approved as a complete programme, as is in the opinion of the Minister best calculated to increase the efficiency of the business to which it relates.It may seem that that is self-evident, but I wish to examine what the phrase,increase the efficiency of the businessmeans because manifestly it can mean completely different things. It can mean increasing the return for management per acre. It can mean increasing the output per acre. The interesting thing is that these two go in completely different directions. Wherein lies the national interest? The Scheme must be examined, not only from the point of view of the benefit to the recipient, but also from the point of view of the benefit to the nation.
There is an uniformed view that small farms are peasant agriculture, grossly inefficient, contrary to the centralising and larger unit trend of our economic society today, and therefore things which we may have to tolerate but which we should not encourage. That broadly describes one view of the small farm. It is therefore particularly relevant to examine what is the position of the small farm from the point of view of output per acre, because I understand that the Prime Minister is now coming round to the view that there is great national merit in increasing the proportion of our food that is produced at home rather than imported from abroad.
Figures published in an article by Mr. Wallace Day in the February issue of Farm and Country show that for mainly arable farms the average net output per acre is as follows: farms 0–50 acres, £66 per acre; 51–150 acres, it drops from £66 to £46 per acre; 151–300 acres, it drops from £46 to £41 per acre; over 300 acres, it drops from £41 to £37 per acre. For arable and mixed farms the figures are as follows: 0–50 acres, £64 per acre; 51–150 acres, it drops from £64 to £43 per acre; 151–300 acres, it drops from £43 to £38 per acre; over 300 acres, it drops from £38 to £29 per acre. These figures come from N.F.U. samples.
991 For farms which are mainly dairying the output per acre is as follows: 0–50 acres, £51; 51–150 acres, it drops from £51 to £43 per acre; 151–300 acres, it drops from £43 to £30 per acre; over 300 acres, it drops to £26 per acre. Hon. Members can read for themselves in the same article the other figures. I will ask them to take my word that for the other types—dairying and mixed, mainly livestock, and livestock and mixed—there is precisely the same trend.
§ The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. John Mackie)
The hon. Gentleman used the words "net output". Would he explain what he or Mr. Wallace Day means by "net output"?
§ Mr. Maxwell-Hyslop
To do that, I should have to go into this article in very great detail. I do not have the time to do that now. The Minister can read the article for himself. The figures indicate very broadly the same trend for every product; that is, the value from each acre when the produce is sold—this has nothing to do with costs—decreases as the size of the enterprise increases. From the point of view of making the most productive use of each acre of a declining number of acres of agricultural land, there is little doubt but that the smaller the unit of the farm, the better the use, from the point of view of maximum output, that is made of it.
If the measure of efficiency is profitability per acre, then, as one is not surprised to learn, there is to some extent a similar pattern. The idea that the larger the holding the greater the profit is perfectly correct, but not the profit per acre. This is where so much confusion often arises. The same article gives figures of profit per acre. Incidentally, "profit" here means net farm income, which includes unpaid family labour, interest on capital, and reward for management. The three are not split. The average profit per acre in the 0 to 50 acre group is £15.69. In the 51 to 150 acre group it is £9.22, in the 151 to 300 acre group it is £7.08 and in the over 300 acre group it is £5.16.
I would call the attention of the House to the introductory phrase which I used about what is included. If we look at the actual return on management, that is 992 taking out from the figures the reward which should go to the wife and son for work done on the farm and the interest on the value of the land, assuming that it is paid on the mortgage or alternatively we compute it on the basis of alternative use of capital, we shall find that after a dip in the middle the larger the farm unit gets the greater is the reward for management.
We would have to have a long debate if we were to examine the validity of each of these figures. I am far more concerned about the trend than about arguing about a plus or minus 5 per cent. on any one figure. My object is to show that the phrase… to increase the efficiency of the business …is not nearly as confined in meaning as one would like it to be in a Statutory Instrument. I do not blame the Minister for that. It may have been the phrase used in the previous Instrument. I merely invite the Joint Parliamentary Secretary to tell us what criteria of efficiency will be used.
I suggest that it will mean the greatest net profit to the owner of the enterprise. I have no quarrel with that, because although the return per acre is comparatively great on a small unit, nevertheless the actual amount of money on which the unfortunate person has to live is often pitiably small. Therefore we would wish to see the quantum of money on which the family exists increased. This is not just a psychological exercise, because not only is there here a group of the community which is living on well sub-average gross incomes to meet all their expenses, but the small farm unit plays a very valuable part in food production. It is in the smaller units that one has the logic of the high farming policy carried out to just about its ultimate conclusion.
§ 3.34 p.m.
§ Sir Henry Studholme (Tavistock)
I would always welcome any measure which succeeded in helping the small farmer, and particularly the small livestock farmer. I was interested in the remarks of my hon. Friend the Member for Torrington (Mr. Peter Mills), and particularly in what he said about milk production with which I entirely agree. I hope that the Joint Parliamentary Secretary will take heed of the very helpful suggestions which my bon. Friend put forward because they are practical ones 993 coming from a practical man who has had experience of small farms.
I welcome the Scheme and I sincerely hope that it will have the beneficial effects about which the Minister told us. I am very glad that he has introduced it.
§ 3.35 p.m.
§ Mr. J. E. B. Hill (Norfolk, South)
We have had an extremely good debate conducted by the small farm experts from the West Country on this side of the House. Coming from the east, I wish to make clear that by no means all the farms in East Anglia are large. In my constituency there are many small farmers, some of whom will, I hope, benefit from the wider provisions of this Scheme. Will the Minister tell us to what extent potential applicants under the old limits have come forward? In my experience, it is often the small farmer who, perhaps, most needs advice who is sometimes the slowest to seek it. I hope that that he will give much publicity to the opportunity to come in under the wider limits.
Now, one or two points of practical detail. Like my hon. Friend the Member for Torrington (Mr. Peter Mills), I am somewhat worried about the nature of the expansion which will take place on the farms. There will be difficulties about more pigs and more poultry to make them competitive, and I agree that the likely direction of expansion is in milk. The Minister should not only regard milk producing as working for the liquid milk market alone but should begin to regard it as an agricultural complex supplying the liquid market, supplying the milk products market and also being the mainstay of further expansion of beef production.
In considering what is, to my mind, the more striking addition to the Scheme, namely, the encouragement for the keeping of accounts, I hope that the Minister will encourage farmers to do the all-important thing in keeping accounts, that is, to have an accurate record of the physical transactions at the time they are made. There is some danger in reconstructing accounts ex post facto. The accounts may look all right but they very often do not accord with reality and may be misleading. Accountants may do the actual sums and, perhaps, the 994 costings at the end, but an essential factor in farm accounts is accurate recording of the amounts, yields, payments and so forth. Any accountant then has the material on which to construct not merely convincing accounts for grant aid purposes but accounts which are really accurate and give worth while costings. Just as in military matters time spent in reconnaissance is seldom wasted, so in agriculture time spent in accurate costing is seldom wasted.
Very often, in dealing with a small farm's budget, husbandry and farming expenditure becomes somewhat mixed up with domestic expenditure. I hope that the advice, even if it cannot officially go beyond agricultural matters, will nevertheless informally spill over into matters of domestic budgeting. Very often, a small farm's agricultural progress can depend on a correct choice being made between, say, the purchase of a new tractor or a better motor car. Advice of this kind is given in great detail in America because it is realised there that to keep a small family farm economically viable it is essential that the overall budget be well balanced and soundly worked out.
Lastly, with regard to the confidential nature of the figures, it is essential, of course, that farmers should feel that their business remains secret between themselves and the advisory officer. None the less, if the Government are to encourage a widespread degree of farm accounting in a stratum of farms about which we naturally have considerable anxiety, I would hope that the figures would be used on a confidential basis to provide accurate costings of typical small farm problems. I should have thought it worth doing that.
I have in mind the experience of the Milk Marketing Board's low cost production scheme. Each person taking part has a code number, and, therefore, confidentiality is preserved. None the less, farmers have the advantage of seeing comparative results of similar production in their own district. I should have thought that it would be a very valuable stimulus to production if farmers could be told not who was doing better than they were but that other people, unnamed, in the district were producing given results. It encourages people if they realise that better results can be 995 obtained in similar conditions. I think it also encourages them to recognise their own weaknesses and gives them an incentive to correct them.
I am talking of the farm up to 125 acres, and now 700 man days. That is the optimum size of the farm—a two-man, fairly intensive family farm, which all the fairly heavily industrialised Western countries still maintain to be the optimum viable small farm for the next 10 years. To that extent, the degree to which the Scheme is taken up will be an important pointer to the success of the small farm in future.
§ 3.43 p.m.
§ Mr. James Scott-Hopkins (Cornwall, North)
We have indeed had a very interesting debate. It has not been a very long one, but we have covered some extremely important ground. I am very glad that we have had the debate at a reasonable time on a Friday afternoon and been able to bring the full powers of our minds to bear on these very important problems.
The Minister said that this Scheme flowed from the Price Review. It does. The Price Review mentioned that the Scheme would be brought forward. But at the time of the Price Review and since then other things have been mentioned. Since the Price Review there have been increasing rumours—I must not put it higher than that—and I understand that a statement is to be made by the Minister next Wednesday about some future agriculture policies.
§ Mr. Alfred Morris (Manchester, Wythenshawe)
The Minister gave a Written Answer yesterday on the timing of his statement.
§ Mr. Scott-Hopkins
I was saying that it has been announced that there is to be a statement on Wednesday. The point about the rumour is not whether there will be a statement but what the statement will contain. Obviously, we shall not know until we hear it, but I understand 996 that the Prime Minister mentioned that it would concern amalgamations. If we are to have plans announced by the Government about amalgamations—they were foreshadowed by the Minister in the Price Review—it is a little difficult to understand how they tie in with pumping in more money to the people the Minister wants to amalgamate.
This point was raised in another place on Tuesday when the Order was being discussed there. The Government stated that the same people would not be involved. Obviously I cannot go much further on the point now, but it seems a very strange reply for the Government to have made. Surely the Order will apply to those very people to whom the Government's plans for amalgamation will apply. I do not expect the Joint Parliamentary Secretary to tell us today what will be in Wednesday's statement, but I hope he will address his mind to the problem of how he can reconcile this Order with what is to come. It is a contradictory position, to say the least.
§ The Minister of State, Scottish Office (Mr. George Willis)
That is all out of order.
§ Mr. Scott-Hopkins
How can the hon. Gentleman, in a sedentary position, say that, bearing in mind his record when he was on this side of the House? Talk about the pot calling the kettle black!
The Minister said that this would bring in more farmers. Neither I nor my hon. Friends are sure how many more farmers it will apply to. How many farmers who could still apply under the existing small farmers schemes of 1959 and 1962 but have not done so are eligible for this scheme? Is there anyone who has applied under those two schemes and is still eligible for this scheme?
The position as to dates is a little complicated. I reckon that there are four months from the end of August to the 31st December in which people eligible under the old Schemes will be in a position to be able to apply under both, or either, or none—I am not sure which. If the hon. Gentleman could explain that, it would be of great help. I am not trying to be destructive. It is confusing not only for me but for the farmers as well.
What is the position of small farmers who have already received grants under 997 one or other of the original Schemes of 1959 or 1962? It is stated that, under this new Scheme, a farmer will not be in a position to receive any further grant if he is already in receipt of a farm management grant. We must be clear about exactly how this applies, to whom and to what categories and how it is to be made clear to the farmers.
This Scheme, if properly carried out, will be of value to the small farmer and any thing we can do to help them is to the good. As my hon. Friends have pointed out, we have small farmer problems in both the South-West and in East Anglia. As long as we can do the right thing for the small farmer, anything that can be done is to be welcomed, but we want to be quite clear exactly what we are trying to do and whether it will achieve its object.
The Minister said that the N.A.A.S. officers would be carrying out the administration. The Parliamentary Secretary would be fully aware that the N.A.A.S. is extremely stretched and has been for years. I know that recruitment has gone up and I am delighted that it has. These officers are doing a splendid job, but they are extremely strained. As my hon. Friend the Member for Torrington (Mr. Peter Mills) said, in the South-West they have done tremendous work and on an increasing scale. However, if this burden is to be added to their work, I hope that they will be able to bear it, but there will probably have to be a further increase in staff. I suppose that that increase is accounted for in the £22 million over a period of three years, but does the Parliamentary Secretary know that there will have to be an increase, or is he satisfied that enough staff is available to implement the scheme?
Another and extremely important issue concerns the confidentiality of the records, documents and so on. My hon. Friend the Member for Norfolk, South (Mr. J. E. B. Hill) emphasised the importance of this matter. I have never doubted that there has never been any case of the private affairs of a farmer being leaked or disseminated to those who should not know through the Ministry's officers. I should like that to go or record. So far as I know it is true and I have no doubt that it will continue to be true, and I am sure that 998 the industry need have absolutely no doubts about it. However, that does not apply if the complexity of the forms is such that the farmers have to employ other people.
In an interesting speech, my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) asked what the Minister meant by "efficiency" in paragraph 2 of the Order? My hon. Friend gave various interpretations. This is a substantial consideration because a purely subjective judgment will be made about whether a farmer should receive the complete grant or the basic grant. This subjective judgment will be made by the advisory officer who will advise the Minister whether to accept an application for grant.
I worked it out that, taking a 70-acre farm, which is probably the easiest example, over and above the figure of £50 the difference per annum is £210 for the basic grant as opposed to £245 against nothing for the basic after the first year. That is a great deal of money and the farmer must be quite clear about what he has to do to receive the higher rate of grant. As hon. Members will see from paragraph 8 of the Order, after the first year if it is only on a basic programme the grant is £50 and if it is a complete grant it is £3 10s. an acre up to 100 acres. A considerable amount is at stake in this subjective judgment. I do not object to that judgment being made by N.A.A.S. officers, but the farmer must be quite clear about what the position is.
Under the old scheme, if the Minister thought that a business could be brought up to an efficient level with, say, 275 man-hours after application of the Small Farmers Scheme and business grant, a farm could be allowed to be included in the scheme. Under the existing new Scheme which we are discussing, this is left out. There is a flat bottom to the Scheme. If someone is outside it because they are below it on man hours, then they have no chance whatever of getting inside it by using the business efficiency grants. Even though they might have a smashing plan to be able to go over the barrier and qualify after perhaps a year or so, they will not be allowed to do so. I think this is a pity, and I regret that the Minister has dropped the old provision. I hope that he will look at this again.
999 One thing which confuses me is that in paragraph 7, dealing with the amount of time given to complete this scheme, it is said that there are going to be three yearly payments. Paragraph 7 reads:… it shall nevertheless be a condition of payment of grant under this scheme that the plan to which the grant relates shall be completed within two years of the said date:It seems that the only time when one gets the extra year is if conditions beyond the control of the farmer inhibit him from completing his plans in two years rather than three. I am sure that there is an explanation for this, probably a very simple one. At the moment I fail to understand why this is so contradictory. I would like the Parliamentary Secretary to explain whether the farmer has three years. Does he have to have it done within two years? If it is two years, how does he get his three years' payment? If he is not to get his third year payment, why is it put in here, and if he is not going to get his third year payment, how does he get his £1,000 payment? It does not make sense, and I think I have misread it.
I hope that the Parliamentary Secretary will tell us about the man hour days. In the Schedule on pages 6 and 7, there is a list of standard man days. I am told that this is different, and the Minister said that it was different from what it was in the 1959–64 scheme. Looking through it I can only find marginal differences. I cannot find enough differences in it to allow the Minister to say, as I gather he did, that this is going to bring in a whole lot more farmers who were excluded beforehand. I hope that the Parliamentary Secretary will explain to us where these changes, which are so radical, are. What is the percentage change? Is this going to bring in extra people? How does he work this one out?
As a matter of interest on page 6, paragraph 5 says:A cow of a dairy type which suckles calves shall be classified as a beef cow.Does this apply even if part of the milk is sold? Perhaps the Parliamentary Secretary will tell us. There are various other points to which one could refer, concerning the limits of acreage and so on. The Parliamentary Secretary will be 1000 aware that there are lots of special acreages mentioned in the draft scheme, 150 acres overall limit, 125 acres top limit for the scheme, and 100, top limit for payment of the Scheme. Why must there be three? Why particularly the top one?
I hope that the Parliamentary Secretary will not say it was in our scheme. I know it was, but why has he continued it? Is it not rather confusing when there are tree top limits, 150, 125 and 100? As I understand it the 100 is a payment. 125 is to bring in more farmers, but what the 150 is I do not know. Can we get a reconciliation between the declared aims of the Government to amalgamate the small farms, together with their now avowed intent, through this scheme to keep the small farms in being? I hope that if there is to be an amalgamation of farms that that will apply to viable as well as non-viable farms.
Otherwise I hope that this scheme will work successfully. It is a follow-up from those which we brought in ourselves, 59 and 61, and which did a great deal of good for the farming industry. Then, they were relevant to farmers' needs but, as we have heard from the speeches of my hon. Friends today, one wonders whether this is as relevant to the needs of today as were those of 1958, 1959 and 1962.
§ 4.0 p.m.
§ The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. John Mackie)
The hon. Member for Cornwall, North (Mr. Scott-Hopkins) said that this has been a fairly wide, though not too long debate and I should like, if possible, not to take too long at this time on a Friday afternoon. But the hon. Member, although he mentioned that the debate was commendably short, gave me enough material to go on for the next hour if I cared to do so. I should like straight away to deal with the points as they came from hon. Members and to answer them as clearly as I can. I am glad that the hon. Member for Ross and Cromarty (Mr. Alasdair Mackenzie) welcomes the scheme and that he felt that it would help his area. He mentioned the problem of the small crofters who were inside the crofting scheme. I have consulted with the Minister of State, Scottish Office and he is to look into this point for the hon. Member.
1001 He asked me about the figure of £22 million and whether that was additional to what was already paid under the old scheme. That is correct. He said that he would now deal with his own constituency and continued to use the word "we". I presumed that he was using the word "we" in regard to the Liberal Party as a whole when he said that he welcomed the scheme.
The hon. Member for Torrington (Mr. Peter Mills) made a very good point when he said that this scheme is to help this class of farmer to help themselves. I could not agree more with those sentiments. He was worried about how many farmers would actually take advantage of this. He had doubts about the figure of 40,000 and thought that it was too high. This remains to be seen, but we hope that the publicity which we shall give to the scheme will have an effect.
The hon. Member for Tiverton (Mr. Maxwell-Hyslop) quoted figures given by the N.F.U., but if farmers are in the state which we have been led to believe by the N.F.U., they will not sit back and ignore what we have all commended as something which will be of tremendous help to them. I do not think that those who need this will not take advantage of it.
The difficulty of keeping records was another point. The hon. Member for Torrington mentioned how hard it was working on a small farm, that a man came in tired at night and the last thing he wanted to do was sit down and write what he had been doing that day. I was in the same position and I agree with him. But most of them have been educated, and we hope that most wives of farmers nowadays have been at school and have gained a little education in bookkeeping so as to help. It is amazing how many of the wives of small farmers do that.
There is no question that a secretarial help system such as he mentioned is necessary. Perhaps he knows that some of the commercial companies are starting this sort of system to help farmers. He knows that a considerable amount of advice is given to farmers by some commercial companies, feeding stock companies and so on. I noticed one advertising help for this purpose. I do not 1002 think that, if a farmer wants to go into the scheme he would fail to get this type of help.
I should now like to turn to the effect of disclosing his position. The Minister of Agriculture made it clear that every effort would be made. As the hon. Member for Cornwall, North, said, he has so far never heard of any figure being disclosed by the N.A.A.S. or any other body. Many universities get these figures and there have been no disclosures. We shall make it as public as possible how big an effort will be made to see that none of these figures is disclosed. He went a little further when he said that the accounts would reveal, first, that poultry did not pay. I doubt this, but I want to make this point later. He said they would show that pigs did not pay and, third, that the whole thing does not pay unless the farmer went back to milk. He suggested that this might create a situation in which we had too much milk. We have never said that we were against too much milk. We said that we were against too much milk on an open-ended subsidy. There is plenty of scope for milk. The hon. Member said that although we did not want to force anybody to do anything, we at the Ministry or at N.A.A.S. could suggest that milk production should be encouraged in the West and discouraged in the East.
§ Mr. Peter Mills
I did not use those terms, which are misleading. I said that milk production could be encouraged in the areas which can produce milk efficiently. I did not say "West and East". There are areas other than in the South-West which can produce milk.
§ Mr. Mackie
I agree that the hon. Member did not use those words. One is inclined to think in terms of West and East. I am farming in two areas, and over the last few years I have sold my cows on two farms, at any rate, so that I am doing my best to help the farmers in the West. We will look into the point which he made to see whether we can put the suggestion to the farming community.
I could not agree more with what he said about co-operation but, like the hon. Member for Cornwall, North, I must try not to tread on next week's business. We will leave the hon. Member on tenterhooks until next Wednesday.
1003 I also agree with him that we are not determining anything on the size of the farm. A 30 or 40-acre farm in one area can be equivalent to a 120 or 150-acre farm in another area. The climate, the soil and the quality of the farmer all come into it, and we are certainly not suggesting that there is any particular size which requires this help or does not require it, as the case may be.
The hon. Member for Tiverton put me in a difficulty, more or less because of the time factor, in going into details. He gave me warning that I should read two articles half-an-hour or an hour before the debate started, but I am afraid that I have not had time to do so. I suspect—I may be wrong—that this turns on net output. The net output used here is a figure which does not include the subtraction for the amount of feeding-stuffs used on small farms. I have seen some figures. I have nothing against the N.F.U. figures but I prefer the figures from the various universities. I will look at them all, but I would only comment at this stage that it is a question whether it is a net output figure. If it is not a net output figure, then the hon. Member's argument is flattened straight away. If it is, then I will speak to him privately later. Until we settle that point, I cannot deal with the argument.
Of course, we do not intend simply to pin-point net profit, in other words, return to the farmer; we must look for a certain amount of production for it. But one thing which we must look at is the profitability of the farming, although production will come into the picture, too.
§ Mr. Scott-Hopkins
Surely if a farm is not productive now, they will not get the Small Farmers' Scheme. The purpose is to make them more efficient and more productive.
§ Mr. Mackie
That is not what I said. The hon. Member for Tiverton asked me what was meant by efficiency. I think that we should tie the two together to a considerable extent. It is useless without profitability. The hon. Member seems to suggest by his figures that the two could not be tied together and spoke of a lower production per acre and a higher profit. That is certainly not the case, and they need not be separated at all.
The hon. Member for Tavistock (Sir H. Studholme) did not say a great deal, 1004 except to agree with his hon. Friend the Member for Torrington, I presume on all points, and I will leave it at that.
The hon. Member for Norfolk, South (Mr. J. E. B. Hill) did not take up the point of the hon. Member for Torrington about shifting dairying to the dairying areas and growing cereals in the cereal growing areas. He left that one alone, no doubt having in mind the district from which he comes. However, he did ask me for figures of the potential applicants under the old Scheme. I have the figures here, though I will not read them all, but I will give him a picture of the situation. When the Scheme was introduced in 1959, there were just about 66,000 holdings in the United Kingdom which were eligible. The figure was extended by 13,000 to 79,000 when the maximum labour requirement was increased in the 1962 Scheme. I will not give the distribution of the holdings, but on 31st May there were, in round figures, 34,000 plans approved, 15,000 completed, 5,000 abandoned, and there are 13,800 still current. Those are in England and Wales, and the United Kingdom figures are in roughly the same proportions. I hope those are the figures that the hon. Gentleman wanted.
He, too, felt that accountancy was a tricky subject, and, unless it was accurate—and it could be very inaccurate—it was not much good. I could not agree with him more. The importance lies in the initial construction of the accounts, so that they can be handed to someone else to work out. They must be accurate, I agree, and it would be a job for the N.A.A.S. to see that the initial construction or reconstruction of the accounts was accurate, so that whoever worked them out would know; because there is nothing worse than finding that the original figures are wrong. I agree that the time spent on costing out and making a plan is time well spent, and that is what we want to do. It was what was wrong with the old Scheme, though I am not criticising it, because it is easy to be wise after the event. It was not a worked out plan.
I do not think that we should enter into an argument about mixing domestic accounts and farming accounts. We all know that that takes place a little on 1005 farms, but, again, a good accountant can deal with it.
The hon. Member against emphasised the question of secrecy, which I mentioned before. We know that many universities, the N.F.U. and the Ministry get a tremendous number of figures from farmers to use in various agricultural surveys. Everyone who gives those figures could be asked whether there is any reason why, when the Scheme gets going, the information should not be put into a computer and conclusions based on them.
I am afraid that I did not get his point about the aim of Continental governments about the two-men family farms. I have been accused of saying that the smallest farm in the country should be a farm employing two men, but I said nothing of the sort. I was talking about a piggery employing labour. I think that there is a very strong case for the genuine family farm big enough to employ the farmer with family help and part-time labour and then, as the farmer grows older and the boy grows up, the farmer becomes the boy and the boy becomes the farmer.
§ Mr. J. E. B. Hill
The optimum size of a small farm, to be really toughly viable, is that which provides two full-time jobs for a father and son, or with one hired man if the father has retired or the son is under age.
§ Mr. Mackie
As I say, it is arguable what the viable size of a family farm should be. We feel that there is definitely a place for this size of family business in the farming economy of the country.
Those were all the points made by the hon. Member for Norfolk, South, and I turn now to those of the hon. Member for Cornwall, North. He could not resist a crack about the Price Review statement, rumours, and so on, but I would be out of order if I were to trespass too much on what will happen next week.
The hon. Member for Cornwall, North said that the arrangements might be slightly contradictory. I do not want to go into this matter in detail. I do not think that we are being contradictory. One Scheme is basically short-term—it is carried over three years—while the other will be very much longer-term. It 1006 is really ridiculous to suggest that the two are contradictory. Perhaps a lot of people will not accept one Scheme but will accept the other. However, if I go on much further in this vein I will be taking the sails out of the hon. Gentleman next week, so I hope that my right hon. Friend will allow me to pass to his next point, which he dealt with in rather more detail than I am prepared to do today. I will write to him giving him the particulars for which he asked. He began by saying that it was all a little complicated. That is a move in the right direction for him because he has accused me on several occasions of bringing forward Schemes without having given sufficient study to them. Since my remarks were found rather complicated by him, it seems that we are getting somewhere.
He then asked when one Scheme stopped and the other started. I will inform him further on this subject but, in the meantime, suffice to say that the proposals for farm plans under the 1962 Scheme will be approved only provided that they are submitted before 31st December this year. Farmers eligible under both Schemes can submit proposals for plans under the 1962 Scheme only if they make application for admission to the Scheme before 31st August, 1965, and such applicants will have had rather less than two months, from the announcement of the details of these arrangements, in which to submit applications for assistance under the 1962 Scheme. I appreciate that this will require the hon. Gentleman's study and, as I said, I will let him have any further information he requires.
The hon. Gentleman then asked how many people who came under the old Scheme could benefit under the new one. I will let him know the answer to that question.
§ Mr. Scott-Hopkins
If one has benefited under the 1962 or 1959 Schemes can one come back and benefit under the new Scheme? I accept what the hon. Gentleman said about applications and I will study his remarks in the OFFICIAL REPORT. In the meantime, it is important for farmers to know whether or not, if they have already come under one Scheme, they can apply again. I think that the answer is no, but would the hon. Gentleman find out for sure?
§ Mr. Mackie
I agree that the answer is basically no, but there could be some occasions when that might not be the answer—perhaps because of there having been a difference in the size of the farm or an addition to the farm. This raises the whole question of the abatement of the old Scheme, which is mentioned in the document, although I agree that it is somewhat complicated and I will, therefore, write to the hon. Gentleman.
On the subject of N.A.A.S. being stretched, I agree with the hon. Member for Cornwall, North that N.A.A.S. has a big job to do. I have had discussions with regional controllers and members of N.A.A.S. I agree that it is sometimes much more interesting to tackle a scheme on a large farm. It is easier to carry out such a task on one 500-acre farm than to have to work on five 100-acre farms. However, N.A.A.S. appreciates the importance of these Schemes for the smaller as well as the larger farms and it should not be thought that its members will neglect the small farms. We are still recruiting for N.A.A.S. and we hope that it will be able to tackle the job which is before it and that the work will not come in too much of a rush. We have mentioned the figure of 40,000 farms and we hope that by that end of the first year there will be about £5 million available in grants. We feel that N.A.A.S. will be able to handle this job. The hon. Member was quite right—and another hon. Member mentioned this also—in suggesting that we will insist that N.A.A.S. does not do the job of book-keeping. Although it may do the "bones" of the Scheme, it will not do the whole job. The hon. Member recognised the confidentiality of the work and I hope that he will be satisfied that this is respected.
The hon. Member asked also about paragraph 8. This, again, is complicated and the best thing I can do is to read out the details. It is the intention to schedule in the approved programme the dates on which yearly plans should commence. The first of these dates will be agreed with the farmer and the second and third will be the anniversaries of the first. This rigid framework will not be subject to subsequent modification. The effect of the paragraph is that the farmer will enjoy automatically a period of one year's delay over the three years of the programme and may be allowed up to a 1008 further year if any further delay is due to circumstances outside his control. In other words, we are trying to make the Scheme reasonably flexible, but we have to fix dates to get out of the difficulty.
The hon. Member has asked questions on a number of points of detail on which I will write to him. I conclude by—
§ Mr. Scott-Hopkins
Will the hon. Gentleman deal with the figure of two years in paragraph 7? Is he ignoring that?
§ Mr. Mackie
I am not ignoring it. It is a slightly complicated calculation in giving flexibility to the Scheme and I will give the hon. Member details in the Schedule in due course.
I should like to point out shortly what will be the advantages to farmers. A farmer with 100 acres or so will get the grant of £1,000 over a period of two, three or four years under the Scheme. At the same time, if it is agreed, he is in no way inhibited from getting all the other grants and the rest that he can get in the way of improvement grant and everything else. None of these is cut out. Therefore, a farmer with 100–150 acres could probably be getting also £1,000 in grant for buildings to carry more stock. By way of subsidy for that size of farm, he could get up to £400 in lime and fertiliser subsidy as well as ploughing grant, for one-seventh of his land, of £90 and any of the other livestock grants if he is feeding cattle; and he has guaranteed prices. All this adds up to a considerable help to the farmer with the size of farm or farm business that we said in the Price Review requires this help.
That is why I commend the Scheme to the House. It carries out our promise concerning the type of help that we want to give to the agricultural industry. It will represent a tremendous advantage and we hope that the farming community will take full advantage of it.
§ Question put and agreed to.
That the Small Farm (Business Management) Scheme, 1965, a draft of which was laid before this House on 8th July, be approved.
That the Small Farm (Business Management) (Scotland) Scheme, 1965, a draft of which was laid before this House on 8th July, be approved.—[Mr. Willis.]