WINTER KEEP (SCOTLAND) (REVOCATION) SCHEME (Hansard, 17 December 1975)

§ The Under-Secretary of State for Scotland (Mr. Hugh D. Brown)
I beg to move, That the Winter Keep (Scotland) (Revocation) Scheme 1975, a draft of which was laid before this House on 9th December, be approved. The revocation of the Winter Keep (Scotland) Scheme 1975 is consequential on the adoption of the European Economic Community's less-favoured areas directive, the implementation of the compensatory allowance provisions of which we have just debated very fully.
The Scheme provides for the payment, in Scotland only, of annual grants in respect of specified crops for the winter feeding of livestock. These acreage payments were introduced in 1964. Since 1967, farmers have had the option of taking acreage grants or supplements to the headage payments on livestock under the hill cattle or hill and upland sheep subsidy schemes.
There is no provision for payment of compensatory allowances on production other than livestock in the areas of the United Kingdom which have been approved as eligible for the purposes of the directive. It would therefore be illegal to continue to make such payments after the directive is implemented and it would set at risk the substantial contribution which the United Kingdom will be due to obtain from Community funds towards the cost of paying the livestock compensatory allowances under the directive. This is estimated at about £12 million for 1976. Hon. Members will 1596 note, however, that the Revocation Scheme safeguards payments which are still outstanding in respect of winter keep crops grown in 1975 The House will wish to know what effect the termination of this Scheme will have on the income of farmers who have been receiving the winter keep acreage payments. In 1975, about 1,800 of the 13,000 Scottish farmers eligible for winter keep payments chose to take them in the form of acreage grants. About 1,100 of these will be eligible for compensatory payments on adult livestock. Some farmers will receive a reduced payment because of the restrictions under the Compensatory Allowances Regulations, but in the majority of cases they should be minimal.
The remaining 700 farmers have enterprises which are based mainly on the rearing of bought-in young cattle, and they have few or no adult livestock eligible for compensatory allowances.
I had hoped that I would have been able to submit to the House, along with the Revocation Scheme, an alternative scheme for the payment of grants to farmers who were previously eligible for winter keep acreage grants and are not catered for under the Compensatory Allowances Regulations, but the arrangements are not yet finalised. I can assure the House, however, that it is our intention to continue to provide aid to the persons concerned for a further period and I shall be presenting proposals for that purpose early in the New Year.
With that explanation I hope the House will approve this Scheme.

§ Sir John Gilmour (Fife, East)
At first sight, it might seem right to accept with-out question what the Under-Secretary has put forward, but I was slightly alarmed to hear that 700 farmers would be excluded altogether, though he went on to say that he was hopeful that something might be done for them in future.
1597 Table 25 on page 41 of last year's Annual Price Review shows a forecast winter keep payment of £11.3 million in 1974–75. The hon. Gentleman has told us that 1,800 farmers chose to accept winter keep but that only 1,100 will be eligible. There seems to be quite a large amount of money in the difference between the estimated £11.3 million and what has been paid out to the 1,100 farmers who will qualify.
It is also right to question at this time whether we shall be able to help livestock farmers as adequately as we should be able to, because what we were doing with winter keep at a time of high transport costs was encouraging people to grow the food where it was needed and therefore to cut down the need to spend money on transportation. This is particularly important to the Islands. The effect on Mull, the Outer and Inner Hebrides and Orkney and Shetland of this change may be considerable.
Is it right, therefore, to say that the compensatory allowance should be exactly the same on the mainland and on the Islands? Would it be possible at some time to raise with the Commission whether the Island communities should not have some different amount of compensatory allowance?
I am also slightly worried that, when one looks at the reasons for how the amount is designated, one is told in the official document that one of the characteristics is either low or dwindling population. What happens in an area such as Shetland, where there is increasing population because of the oil industry, which is having no effect on improving the profitability of the farmer there? He is just as much in need of help even if the population is growing. If he is to make a living, he will need help in the same way.
The map with the document shows almost the whole of Scotland coloured green and therefore eligible for these compensatory payments. Earlier, my hon. Friend the Member for Dumfries (Mr. Monro) raised the question of which parishes are and are not included. We would like some idea how it is possible for people to appeal against the rota, as it were, as drawn up at present, and whether farmers dissatisfied that their part or part of a parish is or is not included have some right to take the matter up.
1598 There has been and is the difficulty of hill and upland areas which will be affected by the change. This was illustrated by an article in the Scottish Farmers' Leader for November. A Sutherland council member of the NFU reported on sheep prices in Sutherland and gave the example of a cheviot wether lamb sold at £9.54 in 1973 and £9.72p in 1975, a difference of 18p over a period of two years. But if one takes into account the changes in the retail price index—the effects of inflation—the price should have been £14. Thus, real hardship is being experienced by hill and upland farmers. I hope that the hon. Gentleman will be able to put some of the doubts I have expressed at rest.

§ Mr. Hector Monro (Dumfries)
This scheme has done a very good job for the uplands farmers for 11 years. We should put on record that it was a good scheme which was introduced for a particular purpose, to help provide winter keep in areas where it was not easy to grow hay and even oats.
I agree with what my hon. Friend the Member for Fife, East (Sir J. Gilmour) said about the areas that will be eligible for the new Scheme and those that will not. The Minister may have heard what I said in the previous debate about the difficulty of understanding why some parishes are in and some out.
In a more general context, will the Minister give a broad indication where the farms which will lose out altogether are situated? He may tell us, for instance, that a great many farms in Banff will not get the grant. If he could tell us about the East coast or the South-West it would be of interest. I am genuinely seeking information.

§ Mr. Hugh D. Brown
I shall need to do a little research to trace the two missing parishes, but I assure the hon. Member for Dumfries (Mr. Monro) that I shall do so with due care and diligence, because it must be a matter of great importance. As usual, the hon. Member for Banff (Mr. Watt) is completely wrong. My information is that only a handful of farmers in Banff will be adversely affected.
I remind the hon. Member for Fife, East (Sir J. Gilmour) that the original 1599 Scheme was an option. It has been declining over the years. The new Scheme, together with the normal subsidy arrangements will replace it. We are satisfied that only a tiny minority of farmers will be adversely affected. We still hope to be able to do something to compensate those who are adversely affected under the new Scheme.

§ Mr. Norman Buchan (Renfrewshire, West)
In his earlier speech the Minister said that he hoped that some of the 1,300 would receive compensation for a further period. Has he in mind an interim period, or a continuous scheme?

§ Mr. Brown
My hon. Friend cannot tempt me on that. We hope to be able to submit a scheme in due course for the payment of grants to farmers who were previously eligible for the winter keep acreage grants and are not catered for by the new compensatory allowances. I cannot go further than that, except to say that in general it will be an attempt to make sure that those farmers are no worse off than they are now.

§ Mr. Russell Johnston (Inverness)
In response to a question asked by the hon. Member for Fife, East (Sir J. Gilmour) the Minister said that only a handful of farmers in Banff will be adversely affected. That presumably means that he has a rough idea of the dispersal of the farms concerned. Will he give me a rough idea of the dispersal of the farms in the Highlands that will be adversely affected?

§ Mr. Brown
Crofts are covered not by the Scheme but by separate provisions. As it is a headage payment it is mainly the better-off farms—probably mostly in Aberdeenshire—the more prosperous hill farms that will be adversely affected. This is so for obvious reasons. They are carrying a stock well above the level which it is intended to assist. In spite of that, since it is taking something away, which we think is undesirable, we are proposing to do something about the position.
We are talking in terms of 700 possibly being excluded. The amount of money involved in that exclusion is about £200,000, but the total payments are £21 million. I think that that gives some idea of the small number of those 1600 excluded—which, I repeat for the third time, we intend to do something about.
I think that I have answered most of the questions. I hope that with that brief explanation, the House will accept the Scheme.

§ Mr. Andrew Welsh (South Angus)
Before he sits down, will the Minister answer the question about appeal mechanisms?

§ Mr. Brown
I did not realise that I had been asked such a question.

§ Mr. Welsh
Yes—by the hon. Member for Fife, East (Sir J. Gilmour).

§ Mr. Brown
I thought that the system was well understood. The farms will still be working on the same classification system. There is no change in that or in the machinery. The areas have been agreed in the less-favoured areas directive.

§ Sir J. Gilmour
What I think I wanted to ask the Minister was how people aggrieved about being left out could appeal to get themselves put back in.

§ Mr. Brown
The hon. Gentleman means, how do they make their views known to the Government? That is what hon. Members opposite have been doing. The NFU has already made these representations. In due course, I think that we shall be able to satisfy those who have made representations.