Loans (Hansard, 19 February 1981)

§ 6. Mr. Kenneth Lewis
asked the Minister of Agriculture, Fisheries and Food whether he will seek to set up a special agricultural loans board to make finance more easily and cheaply available to farmers.

§ Mr. Wiggin
No, Sir. Farmers' organisations have always supported our system of capital grants in preference to other forms of support such as subsidised loans.

§ Mr. Lewis
Does my hon. Friend agree that during the past two years fanners have found that there has been a considerable reduction in their income simply because of the high cost of borrowing due to the level of the minimum lending rate? Is my hon. Friend aware that if the farmers took a leaf out of the book of the miners and went on strike there would be no food and the miners would have to eat their coal instead of burning it? When the Chancellor provides special facilities for small businesses in the Budget, will my hon. Friend ask him to consider cutting in the farmers on that because, although their farms are worth a great deal of money, many are small businesses facing a difficult time with the high cost of borrowing money and of farm machinery?

§ Mr. Wiggin
I shall not get involved in arguing the merits of different sections of the community. I am sure that my hon. Friend will join me in saying that our farmers have nothing to be ashamed of about their productivity since the war years. Of course, they have had to bear the burden of high interest rates, but my right hon. and learned Friend the Chancellor has dropped the minimum lending rate by 3 percentage points since the middle of the summer. It is his firm intention to make further reductions as soon as the monetary conditions and prospects allow that. The issue in the original question is one of method. I hope that my hon. Friend accepts that the farmers' organisations approve of what the Government are doing.

§ Mr. Geraint Howells
Will the Minister consider setting up a land bank so that financial aid can be given to young entrants?

§ Mr. Wiggin
As I said in my original answer, that is not the Government's intention. The fanner's organisations believe that the method of paying grant, which has been going on for many years under all Governments, is satisfactory. We do not close our minds to changes but we have no plans to alter the method at present.

§ Mrs. Kellett-Bowman
Is my hon. Friend aware that his answer about the farmers preferring a grant to a loan was not borne out at the recent National Farmers Union general meeting? Will my hon. Friend comment on the Barclays Bank booklet—

§ Mr. William Hamilton
Reading.

§ Mrs. Kellett-Bowman
Only the title. The booklet is called "Farm Finance in the EEC", a copy of which has been sent to my hon. Friend. Will he comment on the unfair combination of grant and cheap credit that is available to the French, the Germans and the Dutch, and which is crucifying our farmers?

§ Mr. Wiggin
As my right hon. Friend said earlier, he has made that point to the Commission, which is investigating the matter. It is being dealt with in the way in which the EEC provisions allow. The question concerns the method of assistance. As I said in my last answer, we are prepared to look at changes, but when different methods are examined there are considerable benefits in capital grants because those who do not borrow can benefit as well as those who do.

§ Mr. John Home Robertson
Does the Minister agree that one useful way of reducing the credit crisis in agriculture is to encourage the industry to employ more youngsters as apprentices through the auspices of the Government's special employment schemes? Will he discuss that idea with his right hon. Friend?

§ Mr. Wiggin
I understand from a considerable number of my farmer friends that they are taking advantage of the excellent schemes that the Government are producing to help young people with employment.