AGRICULTURE (WINTER KEEP GRANT) (Hansard, 18 May 1972)

§ The Under-Secretary of State for Health and Education, Scottish Office (Mr. Hector Monro)
I beg to move, That the Winter Keep (Scotland) Variation Scheme, 1972, a draft of which was laid before this House on 2nd May, be approved. The scheme, which applies only to Scotland, gives effect to the decision announced in the White Paper on the Annual Review and Determination of Guarantees 1972 (Cmnd. 4928) to increase the winter keep acreage grants payable to Scottish farmers by 50p per acre. This increase and the increases in the winter keep headage payments also announced in the White Paper are intended, in the case of hill farming, to replace the reduction in the fertiliser subsidy.
Since the introduction of the alternative winter keep subsidy in 1967, Scottish farmers who qualify for winter keep assistance have been given the option each year of receiving subsidy either as headage supplements or as acreage payments on crops grown for winter feed. Those who choose acreage payments also receive a small supplementary headage payment on their sheep which qualify for hill sheep subsidy. The object of having two methods of paying winter keep subsidy in Scotland is to provide for the wide variations in Scottish conditions and enable each farmer to receive the assistance in the most suitable form. Since 1967 the number of applications for acreage grant has fallen each year, but about a quarter of the 13,500 eligible farmers in Scotland still choose acreage payments, and we consider this to be a reasonable level of demand.
We estimate that the increase in the rates of acreage grant provided for in this 844 scheme will benefit the farmers who choose assistance in this form by about £77,000 in a full year and that they will gain a further £13,000 from the increase in the special supplement payable on their hill sheep. Farmers who choose the headage option are expected to benefit by about £408,000 from the increase in the headage payments on cattle and sheep. These figures are, of course, estimates and the benefit to the individual will depend on the way in which he decides to take up the winter keep subsidy. I can say, however, that the estimated effect of the increases, which were agreed with the Scottish National Farmers' Union, will offset the reduction in the fertiliser subsidy for Scottish hill farmers. Crofters and occupiers of similar economic status will benefit from comparable increases in the crafting grants by an estimated £73,000 in a full year.
This scheme, as I said earlier, provides only for the increase in the rates of acreage payments. Orders giving effect to the increases in the headage payments for hill cows have been laid before the House, and the orders to give effect to the increases in headage payments for hill and upland sheep, which will relate to sheep in flocks at 4th December, 1972, will be laid later this year.
I commend the scheme to the House for approval.

§ Mr. Gavin Strang (Edinburgh, East)
The Under-Secretary has rightly explained that the purpose of the increased rates of grant to be paid under the Winter Keep Scheme is to compensate for the substantial cut in fertiliser subsidy.
The cut in the subsidy was debated earlier this week, and I have no intention of going over that ground again, but it is fair to point out that the farmers agreed to the cut in the subsidy in order to obtain the increases in the end prices which they obtained.
The general position in agriculture as a whole is that the cut in the fertiliser subsidy is compensated by the increase in prices. Hill farmers will also benefit from these increased hill Prices. The increased guarantee prices should be reflected in higher store prices for lambs and cattle, but the importance of the increase in this scheme lies in the fact that the Government are accepting that 845 these higher prices alone are not sufficient to compensate hill farmers for the cuts in the fertiliser subsidy.
In other words, the Government are admitting that hill farmers are a special case and therefore require special measures. It must be put on record that the Opposition hope that the Government will continue with this approach to hill farming in the next few years and that when cuts are made in other production grants as a consequence of joining the Common Market, they will see that compensatory measures are introduced specially for hill farmers.
This is not a controversial scheme and we support it, but there are a number of questions which I should like to ask the Under-Secretary. The first is simply whether he could explain in a little more detail how the Government came to decide on the increase of 50p per acre? Let me illustrate this point with a small example. Let us take a hill farmer who grows hay or silage for his hill sheep or cattle and applies 60 units of nitrogen and that fertiliser costs him about £40 per ton. According to my calculations, if we suppose further that the composition of the fertiliser is 23:11:11, the increased cost per acre to that farmer, I reckon, would be about 60p.
The Government have given an increase of 50p on acreage payment and in addition the hill farmer will get an increased price for the stores as a result of the increased deficiency payment and finally an increased supplementary payment per head, but surely the Under-Secretary should be prepared to give some criteria and considerations which led him to make this increase in price.
Now, my second question. The scheme is scheduled to run until the end of 1974. Although there has been a drop over the five years 1967–71 of about one third in the number of applications for these acreage grants, and a fall of about a quarter in the acreage, this is still, as the hon. Gentleman said, a valuable scheme and a substantial proportion of hill farmers in Scotland choose to receive their winter keep subsidies in this form. Since we are now almost in the middle of 1972, it is not unreasonable to ask whether the Government intend to allow the scheme to run its full course.
846 My third question relates to the Common Market. The Government's position has always been that they have received an assurance from the Community that it appreciates the problems of our hill farmers and it will allow the United Kingdom Government to take action to protect them. Some time ago, when I wrote to the Parliamentary Secretary to the Ministry of Agriculture to ask whether the Government had received a specific assurance regarding the various production grants——

§ Mr. Deputy Speaker (Miss Harvie Anderson)
Order. I hope that the hon. Gentleman will recognise that he is now going beyond the scope of the scheme. He ought not to continue on that subject in his speech, and, equally, the Minister would be out of order in taking the matter up in reply.

§ Mr. Strang
I am grateful for your guidance, Mr. Deputy Speaker. My question was simply this: have the Government received an assurance in the negotiations that the winter keep grant could be continued?
The Opposition much regret the substantial cut, the slashing cut, in the rate of fertiliser subsidy, but, given that cut, we welcome that the Government have at least taken these special measures to protect our hill farmers.

§ Mr. Deputy Speaker
I hope that the Minister will not accept the hon. Gentleman's invitation to leave Scotland for Europe.

§ Mr. William Ross (Kilmarnock)
Either now or at any other time.

§ Mr. Monro
I am grateful to the hon. Member for Edinburgh, East (Mr. Strang) for his welcome to the scheme. I feel that I ought to begin by declaring an interest—I declared it frequently in opposition—as a recipient of hill cow subsidy and hill ewe subsidy. That is still my position.
The hon. Gentleman asked how the figure of 50p per acre was arrived at. It was reached after negotiations. The increase, along with the increase in the special supplement payable on hill sheep on farms which qualify for the acreage grant, was agreed with the Scottish National Farmers' Union as providing broad comparability with the increases 847 in the headage payments. It is difficult to explain the detailed formula which was used, but it was done in agreement with the Scottish NFU.
Next, the hon. Gentleman asked whether the Government intended to let the scheme run to its end in 1974. I assure him that we have no proposals at the present time to alter it.
Third, the hon. Gentleman asked—I say just a brief word, Mr. Deputy Speaker, in view of your ruling—whether the grant will be continued following our entry into the European Economic Community. Hon. Members will recall the assurances given in the House by the Minister of Agriculture that we shall, after entry into the Community, be able to continue a system for the maintenance of the incomes of our hill farmers. The position has not changed since the Price Review.