§ The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. John MacGregor)
I beg to move,That the Agriculture and Horticulture Grant (Variation) (No. 3) Scheme 1983 (S.I., 1983, No. 1764), dated 29th November 1983, a copy of which was laid before this House on 30th November, be approved.I have already outlined the background and indicated that one of the reasons for the changes being proposed —this order contains the major ones—is to enable the Ministry of Agriculture, Fisheries and Food to make its contribution to the overall public expenditure objectives.
Taken together, all the changes relating to capital grants which we are discussing tonight are fairly detailed. I should like to refer to one or two others which are outwith the main order but which are relevant to the overall concept of the changes we are making, although I shall not now refer to the co-operative ones, as we have already dealt with them.
Although there are a large number of detailed changes, I believe that there is logic in what we are doing. I should like briefly to refer again to the three objectives and then deal with the details. First, we have had firmly in mind the conservation needs; secondly, we have considered the changing priorities; and thirdly, we have had in mind in making the changes the importance of administrative savings where particular schemes have an unduly high administrative, bureaucratic or complex cost.
Let me now illustrate these themes by reference to the changes. First, on conservation, I hope that it will be as welcome to the House as it has been to the public at large that, within the comparative limits of this exercise, we have put the needs of environmental conservation firmly to the fore. It is for that reason that walls and hedges in the upland areas will now be eligible for a higher grant rate of 60 per cent. and I hope that this encouragement will further persuade farmers and landowners to build or improve good and attractive traditional walling and to establish hedgerows.
The same higher rate of grant will apply to shelter belts of trees provided in the upland areas. We have also taken this opportunity to end once and for all any grant payment for the removal of hedges in England and Wales. It has long been the policy not to give grant-aid for the removal of hedges where they formed field boundaries, but until now it has been possible to claim grant on the minimal amount of grubbing which may have been necessary to achieve the full benefit of the eligible operation — a drainage scheme for example. We have come to the conclusion that this is no longer justified and I can therefore state quite clearly that hedge removal for whatever purpose, if the order is approved tonight, will no longer be eligible in England and Wales for capital grants.
Secondly, I come to our desire to reflect our change in priorities. Here in particular we have decided to cut back on grant availability for those sectors which are in surplus and which we are particularly discussing in the post-Stuttgart proposals in relation to reforms in the Community regimes, while devoting additional resources out of some of these savings to agricultural sectors in particular difficulty. I believe that the House will consider that this, too, makes sense.
1273 I should like to take the first part of that proposition first —cutting back on areas in surplus or where there is no longer the same need. I am sure that there is a general view that agriculture cannot expect to avoid making its contribution to overall Government savings in current conditions. We have therefore concentrated on those sectors which we believe can most sustain such savings, and that is why we have decided to discontinue grants in connection with grain drying and storage facilities, where the grain is to be used off the farm. This is both because the cereals sector is undoubtedly more healthy than other sectors of agriculture and because there has been a considerable increase in the provision of such facilities in recent years.
That is also why the instruments provide that there should be no grant-aid of any type, apart from land works which directly benefit a dairy enterprise with 40 or more dairy cows or a pig enterprise with more than 550 places. In addition, to achieve the level of savings required, we have decided to reduce the basic rate of grant for building and land works excluding drainage from 22.5 to 20 per cent. Orchard replanting will remain at its initial level of 22.5 per cent.
In doing that we have resisted making substantial cuts in such crucial areas as field drainage in the less favoured areas of the country. Indeed, we have maintained a marked margin of preference in the LFA grant rates compared with those in the lowlands. We have always considered that land drainage is one of the most useful and rewarding activities a farmer can undertake, and I am sure that the House will be pleased to know that we have been able to maintain substantial grant assistance in this area. The standard rate for field drainage will now be 30 rather than 37.5 per cent., but this is still 50 per cent. higher than the basic rate of 20 per cent. and it will be 60 per cent. in the less favoured areas rather than 70 per cent.
I should like now to deal with the second part of the proposition, the areas where we have increased support.
The House will recall—certainly my hon. Friends will— that in our election manifesto we promised to help the glasshouse industry to make better use of energy for glasshouse heating. The instruments before the House provide for substantially increased assistance to glasshouse growers for investment in energy saving facilities.
In recent years our growers' returns have been seriously reduced by the competition, much of it unfair, which our industry has had to face until recently. The root cause of the unfair competition — the Dutch preferential state-aided gas tariff for horticulturists— has been removed. But the squeeze on profit margins has prevented our growers from matching the capital investment of for example, the Dutch, in modern methods of improving the use of energy in glasshouse heating.
Under the measures, the grant rates for the replacement of heated greenhouses and improvements to existing structures, including thermal insulation, are increased to 37.5 per cent. under the agriculture and horticulture grant scheme, and to 50 per cent. under the agriculture and horticulture development scheme. Further, because of the exceptional circumstances of this sector, we are increasing the present six-year ceiling under the agriculture holdings grant scheme on the amount of investment which can qualify for grant by about £30,000, where this extra investment is wholly incurred for eligible energy-saving facilities. Grants will be retained at the previous levels on plant and equipment used for glasshouse heating, 1274 including boilers, although the ability to obtain grant-aid on similar items for heating general agricultural buildings will end with the removal of plant and equipment from the schemes. Here, too, we have preferentially singled out the glasshouse sector. We estimate that the increased help will be worth about £2 million a year to the industry.
Those measures demonstrate the importance which the Government attach to promoting the conditions needed to sustain a healty and prosperous glasshouse industry. The removal of the source of unfair competition, the encouraging initiatives which "Food From Britain" and the industry have taken to improve marketing, and the increased grants to encourage the better use of energy will give the industry a real opportunity to become fully competitive. I hope that growers will take full advantage of it.
In the same context of additional help to sectors in need, I refer next to another useful change made by the instruments before the House tonight—the payment of less favoured area benefits to the marginal areas. When my right hon. Friend the Minister announced the present changes, he said that once the marginal areas had been given less favoured area status by the Community they would become eligible for the less favoured areas rates of capital grants, with the exception of roads, grids, bridges and such like, for which the standard rate would apply. He also mentioned that we hoped to introduce headage payments at about half the rate of the present less favoured areas rate, although this would have to be determined in the autumn 1984 review.
We are looking forward to introducing the measures. However, to do so we must surmount the Community hurdles, and we have been arguing this case at every Agriculture Council meeting for the past few months. We cannot act until then, but in the meantime I am sure that this advance news of our intentions will be welcomed as firm evidence of our commitment to help marginal farmers as soon as possible.
The third general objective has been to make changes in grants where we believe that they are the least cost effective, or where the costs of administration and the complications can be out of relation to the benefits achieved. For that reason, we have decided to remove grant-aid for all machinery and fixed plant and equipment, with the exception of certain horticultural items.
At the same time, it seemed reasonable to exclude fixtures and fittings from the grant-aidable cost of a building or glasshouse, because the dividing line between equipment and fixtures and fittings is very fine and not at all easy to define. I know from experience of cases brought to my notice that there can be much argument over comparatively trivial items such as drinking bowls or feed hoppers. This change, which confines grant-aid to the roof, walls, floor and integral internal walls of a building, will dispense with such arguments and will, I trust, make this wide area simpler to understand and easier to administer. At the same time, we shall continue to assist farmers to provide good quality buildings which are capable of being adapted to changing needs and techniques. The House should not underestimate the benefits which can accrue from simplification. For example, I was astonished to find that the simplification of the farm capital grant scheme following the Rayner review was estimated to save £2 million a year at 1979 prices and to reduce staff numbers by about 400. I would 1275 not claim that the present changes will produce such dramatic results, but they represent sensible, modest changes and I commend them to the House.
In the same vein, the removal of some grants, such as those for grain storage facilities for sale off farm, and for large pig and dairy enterprises, will make administrative savings.
I realise that I have had to go into some detail, but unfortunately the grant schemes are extremely complex. Those are the broad themes which I have endeavoured to bring out. Perhaps I should now make it clear that the major changes in the package relate to the national grant scheme. Those to the two Community schemes and the cooperation scheme are mainly consequential, their amendments being confined to those necessary to ensure equality of treatment across the board.
In broad detail, that is what the statutory instrument and the other consequential changes do. They represent a fair deal in the context of public expenditure objectives, making agriculture's contribution to the need for overall savings, but in a way that does not harm the legitimate or crucial interests of the industry, and as a package sensibly reflecting changing priorities and needs. I commend the statutory instrument to the House.
§ 11 pm
§ Mr. Mark Hughes (City of Durham)
I apologise to you, Mr. Deputy Speaker, and to the House if anything that I have done has offended my right hon. Friend the Member for Wakefield (Mr. Harrison). I had assumed that when we came to discuss these instruments, we would discuss them together, and the major problem of the diminution of drainage grant comes up on this motion rather than on the previous one. That is why I did not seek to catch your eye, Mr. Deputy Speaker, on the cooperation motion, although I shall say something about it.
As the Minister has made clear, the first reason for these changes is to do with the Treasury, which wants a cut in the money being spent. Had the Treasury not wanted that, few, if any, of these changes would have been introduced, although there may have been minor modifications at the edges for administrative reasons. In many respects, the Opposition welcome the choices made by the Minister. For example, we welcome the improvements in walls and hedges in upland areas, and the the cessation of any grants for the grubbing-up of hedges. We welcome the removal of grant from grain storage from off-farm sales. If the Government are forced to make cuts, we accept the line that they have taken. Equally, we welcome the incentives and assistance given to the hard-pressed glasshouse industry to go in for investments.
However, the one thing that sticks in our craw is drainage. Major arterial work is being done that upsets the water table over many parts of Britain. Therefore, there is an essential consequential need for farm drainage to be encouraged because the rate of water run-off is being altered. On this, I am in complete agreement with my right hon. Friend the Member for Wakefield. At this point, the inter-relationship between the Department of the Environment, the water authorities and the Ministry of Agriculture, Fisheries and Food has become out of kilter.
We are encouraging arterial land drainage by water authorities — quite rightly and properly — but as a consequence, we are causing unacceptable problems for 1276 farmers and ordinary householders. Faced with that, the Government are seeking to reduce the land drainage subsidy, and because of that, were we able to isolate that element in these instruments from the parts of them of which we approve, we should seek to divide the House. We are wholly dissatisfied with the reduction in grant for land drainage.
Like my right hon. Friend the Member for Wakefield, I shall adduce a constituency point. About three quarters to four fifths of the plastic agriculture land drains now produced in this country are made in my constituency by Waven Plastics. My constituency, therefore, is at risk of losing many jobs. I mention that only as a constituency interest. It is unimportant, compared with the national problem. We must many the relationship between agriculture drainage, arterial drainage and the water table in much of eastern England, if we are to avoid the Lincoln floods of which we heard at Question Time earlier today, or the Wakefield flood problem.
Although we believe that the Minister has made a skilled choice overall—with one exception—in meeting the demands of the Treasury for cutbacks, and we welcome what he said about walls, hedges, shelter belts, and grain silos for off-farm sales, I earnestly urge him to look closely—even though we cannot divide against it tonight—at the reduction in the drainage grant in the lowland area. Many hundreds of miles of tile drains which are obsolescent—if not obsolete—need to be replaced. With adequate drainage many new areas of land could be brought into more productive use. To reduce the grant for drainage not only causes the problems that were adduced by my right hon. Friend in the Wakefield area but does major mischief to the opportunities for British agriculture.
I therefore hope that the Minister, in the same spirit as that in which we welcome the instruments in general, will look again at the drainage problem.
§ 11.9 pm
§ Mr. John Farr (Harborough)
I welcome loosely what my hon. Friend said about these two schemes. I am convinced that sensible economies should be made. Nevertheless, I seek enlightenment from him on a couple of matters.
On the second scheme, can my hon. Friend tell me what happens to schemes that have been completed before the cut-off date of 1 December 1983, although the application for grant-aid went in after that date? If an applicant went ahead with a substantial drainage scheme or a farm improvement scheme or a grain drier improvement scheme and made his calculations on the former rate of grant, I imagine that, even although his application of grant was submitted after 1 December, provided that the works were commenced before 1 December, the old rate of grant would apply. I hope that my hon. Friend will comment on that.
I know that my hon. Friend has been in his Department for some time now, and that during those months he has paid close attention, to my certain knowledge, to all the inner workings of the Department. Therefore, he can tell me at once what the fate will be of a department within the Ministry that is called the Weed Research Department. My hon. Friend the Member for Norfolk, South-West (Sir P. Hawkins) laughs, but the department is an important one. It employs only a few specialists, but for many years it has done a great deal of sophisticated research work into weed problems. I can assure my hon. Friend that some of 1277 the Norfolk broads would not be as clean, fresh, pure and fast running as they are were it not for the continued research and work of the department. It employs six or eight specialists and I should like to know what their fate will be. Will the department continue, or will it at least be maintained at its present level. It will be of great help to my constituents and myself to know what fate holds in store for the department. Many of my constituents have learnt to respect the activity of a small but sophisticated department within the Ministry.
My hon. Friend the Minister has said that he is seeking to make agriculture more in line with conservation needs. We probably all think that that makes sense. Surely the day must be long passed when agriculturists sought to extract the last ounce of grain or, in effect, the last pint of milk from an acre. If the price to pay for that extraction is an environment which is lower in quality, that extraction is entirely wrong and out of tune with public opinion.
I welcome the proper emphasis that my hon. Friend placed upon conservation and some of the changes that he has made, such as abolishing the grant which was available for pulling up hedges. I must confess that I thought that the grant for the removal of hedgerows had been removed some years ago by my right hon. Friend the Member for Waveney (Mr. Prior), who is now the Secretary of State for Northern Ireland. Probably the grant crept back in like many of the bad things that accompany our membership of the EEC. I am glad to know that once again the problem has been tackled energetically and that the grant that was available for the removal of hedgerows, which we all thought was a bit of an abortion, will no longer be a possibility.
My hon. Friend the Minister has stressed the changing needs of agriculture and stressed, too—I was glad to hear this—the need for simplification. Surely both sides of the House are with him 100 per cent. on that score. I wish to emphasise what the right hon. Member for Wakefield (Mr. Harrison) said about land drainage and all its associated problems. We cannot tinker with one part of land drainage without having an effect on the entire chain. It is all very well to say that the land drainage grant should be reduced or that some change should be made in the grant which is available for land drainage for farmers and agriculture, but such changes have a great effect further down the line.
I shall give a twofold illustration from my constituency. In one instance, a farmer drained a great deal of land and achieved a rapid run-off. In the following two years, until a flood alleviation scheme was introduced, a village downstream was flash flooded in the summer for the first time in living memory. The other point—and it must not escape the attention of the House— is that when the farmer did not get a grant for a drainage scheme and no drainage improvement work was carried out, another village was still flash-flooded twice in the summer months because of the run-off from a new development.
§ Mr. Geraint Howells (Ceredigion and Pembroke, North)
I endorse the sentiments of the hon. Member for Harborough (Mr. Farr) about the right hon. Member for Wakefield (Mr. Harrison), who made a most inspiring speech. He made a plea on behalf of many of his constituents which received a sympathetic hearing from hon. Members on both sides of the House. I hope that he will go back to Wakefield——
§ Mr. Howells
No, not born again. I am sure that the right hon. Gentleman will have been successful in helping those in need in his constituency.
Farmers, and those who believe in the countryside, will welcome many parts of the scheme. Many will welcome the increased help for drystone walling and hedge laying, which will help farmers to improve the environment in many parts of the country. The increases apply only to the less favoured areas. I wonder whether the Minister can comment on whether the Government will be willing to extend them to the marginal land area in 1984, when grants are to be made available to the marginal land, according to his forecast. I also welcome the assistance for glass houses.
The charges related to marginal land are important, but I stress the importance of the British application to have the designation accepted by Europe. I accept that the Minister spoke in good faith, but I am worried that he will not get the blessing of his counterparts in Europe, and I doubt whether the grant aid will be given to those in the marginal land area in 1984. Perhaps the Minister can give that assurance when he winds up, so that the farmers, when they hear the good news that he has given us, will farm during the next 12 months with the confidence that they are to get the extra aid from the Government in 1984.
Many farmers and members of the NFU and of the Farmers Union of Wales have expressed concern about the £30 million cuts in the agriculture and horticulture fund. Will the estimated figure of £30 million that has been bandied about be the net loss to agriculture and horticulture during the coming year?
§ Mr. Nicholas Winterton (Macclesfield)
I shall speak as briefly as the hon. Member for Ceredigion and Pembroke, North (Mr. Howells).
I welcome the general tenor of my hon. Friend the Minister's remarks. He has started a long overdue rationalisation of the grant system, and it will be generally very welcome. I am particularly interested in his emphasis on conservation. His announcement made it clear that the measures are to be limited at the moment, but, like the hon. Member for Ceredigion and Pembroke, North, I hope that, the measures about walls and hedges will be extended beyond what has been announced tonight.
Many of us are deeply concerned about the environment, both in the highlands and marginal land and in the ordinary agricultural areas. We believe that assistance should be given to people who are prepared to preserve walls and hedges for the benefit of the environment and wildlife. They maintain the balance of nature. Unfortunately, that balance has been greatly upset recently. The farming industry has a responsibility to retain, maintain and preserve the heritage of the 1279 countryside for future generations. My hon. Friend the Minister has gone some way to ensure that, and I commend him for it.
The right hon. Member for Wakefield (Mr. Harrison) made a speech which I thought was totally out of order, but you, Mr. Deputy Speaker, preside over the House and I entirely accept the discretion which you operated. As the hon. Member for Ceredigion and Pembroke, North said, the right hon. Gentleman did the House a service in presenting the problems of flooding that have affected his constituency. Hon. Members tend to overlook the problems associated with the development of land drainage in agricultural holdings and agricultural development. My hon. Friend the Member for Harborough (Mr. Farr) mentioned such problems and, from a sedentary position, I indicated assent to his point.
Permission to develop is often given by planning authorities without any thought for the land drainage problems which result from such development. If people put houses or tarmacadam roads on agricultural land, its natural drainage is upset — water is sent into a much narrower channel. Proper thought is often not given to such considerations. The result of such developments is flash floods, which my hon. Friend the Member for Harborough, the right hon. Member for Wakefield and the hon. Member for City of Durham (Mr. Hughes) mentioned.
It is unfortunate that the Government have reduced the amount of grant-aid that is available for responsible land drainage. It is one of the most important aspects of the instrument. I hope that, in response to the debate, my hon. Friend the Minister will be a little more forthcoming with regard to what the right hon. Member for Wakefield said. In my constituency, the planning authority and even my farmers, who generally support the Tories 100 per cent. at election time, have created drainage problems which affect urban areas. Such problems were dramatically illustrated by the right hon. Member for Wakefield.
Planners do not fully understand drainage and it is often not fully understood by farmers, who rightly want to create the circumstances in which they can get the maximum return and profit from the land which they farm. The Government and the EEC have urged them to do that. The water which comes off that land, whether by the plastic land drains which the hon. Member for City of Durham mentioned or by the system which created the problems in Wakefield, has not been considered when agricultural, industrial or housing development has taken place.
I make this plea to my hon. Friend, whose understanding of the situation is profound, as he demonstrated in his remarks. Will he give further consideration to the matter? The problems that have been highlighted may to some extent have been out of order in the debate, but they are relevant to agriculture and to the countryside. Will he look at these problems again to see whether any modification needs to be made to his statement? It has support from both sides of the House, but it may lack a degree of understanding, as was pointed out by my hon. Friend the Member for Harborough, the right hon. Member for Wakefield and the hon. Member for City of Durham.
I have experienced problems in my constituency which I do not wish to see recur. I hope that my hon. Friend will 1280 be able to give some assurances to satisfy me that the Government are appreciative of the problems that can be created by a lack of understanding of land drainage.
§ Mr. James Nicholson (Newry and Armagh)
It may seem incongruous that these instruments are not made by the Secretary of State for Northern Ireland also, but at the time of the parent Acts of 1967 and 1970, as I understand it, no such person existed. The Minister made orders for Northern Ireland also. It is, therefore, to him that I believe I am entitled to direct my remarks on the unhappy effects that the schemes will have on my constituency and on the Province.
In Northern Ireland, good use has always been made of such schemes to improve and expand the agriculture industry. Agriculture there is now primarily a grass-based industry and the proposals could have damaging and long-term effects.
I deplore the removal of grants for re-seeding in the lowland areas, and I ask the Minister, in the best interests of agriculture in Northern Ireland, to revise the decision. Coupled with the removal of the grant for land reclamation, this will hit the agriculture industry in Northern Ireland very hard. I cannot understand what possessed the Minister to allow such sweeping changes.
The Minister must appreciate the different situation in Northern Ireland. It is all very well to talk about conservation, the importance of which both I and the farmers in Northern Ireland accept without reservation, but to talk about taking a hedge out of a 20-acre field to make it into a 40-acre field is wrong. To talk about taking four hedges out to make three 1½ acre fields into one 4 or 5-acre field is right and good for agriculture. That is the problem facing some farmers in Northern Ireland. Agriculture has been greatly improved in Northern Ireland by taking advantage of the schemes, but in many areas improvements are still needed. There should be scope for such improvements.
If a young farmer starting out buys a rundown farm he will have difficulty in making the necessary improvements without the help of grant-aid. I should like to see aid and help given to such a young farmer.
As I understand it, the re-seeding and reclamation items will continue in Northern Ireland until 31 March under the AHD scheme. I hope that this scheme will continue for another year.
The reduction of grant-aid on permanent farm buildings will have severe effects, but the removal of aid for fixtures and fittings will mean that in some buildings the available grant aid can be reduced to almost 10 per cent. If grant-aid is given towards the building of, say, a cubicle house, why should it not be given towards the cubicles? This will hit farmers in Northern Ireland, especially small farmers, particularly hard.
As for limiting the grant to 40 cows, will the Minister explain why, on a farm with, say, one and a half or two labour units—a father and son working together, or two brothers working in partnership—it should be restricted to 40 cows? It will be most unfair. Perhaps the Minister will also say how he proposes to bring the agriculture and horticulture development scheme into line with the AHG scheme.
We have heard much about conservation and the environment. Throughout last summer in Northern Ireland we had a serious problem resulting from the leakage of 1281 silage effluent. This problem should receive special attention, and perhaps some incentive could be provided to improve catching facilities for the silage effluent of farms. I realise that the Minister may not be able to deal with that tonight. Perhaps he will bear it in mind.
One welcomes the help to be given to the glasshouse sector, especially in respect of thermal insulation, in these days of high energy costs.
The case for the extension of less favoured areas has long been exhausted, and I urge that an extension be brought into existence as soon as possible to alleviate, at least in some areas, the burden which the proposals will place on farmers. While one welcomes the extra help that is being provided for the less favoured areas in respect of the planting of shelter belts, the rebuilding of stone walls and the planting of hedges, the overall situation still gives cause for concern.
In the present state of agricultural incomes, particularly bearing in mind the uncertainties over the future of the CAP support arrangements, farmers will be extremely cautious before making financial commitments to projects, many of which are vital for the continuation of the excellent record of improved productivity in the industry. The Government are deliberately taking money out of the industry at a time when agriculture, especially in Northern Ireland, is under great pressure. Those who will suffer most, certainly in Northern Ireland, will be the small farmers.
We in Northern Ireland have mostly very small farms and many farmers rely on the conacre taking of land to exist. I hope that when the Minister discusses these matters with those responsible in Northern Ireland special consideration will be given to the points that I have raised. We are not asking for any handouts, but we have different problems and they require a different emphasis. I hope that the Minister will bear that in mind.
§ Mr. John Corrie (Cunninghame, North)
I declare my interest as a marginal farmer and dairy farmer. Two things above all else improve land. One is drainage and other is liming. Sadly, we do not have the kind of grants for liming that will improve much of Britain's marginal hill land. I hope that my hon. Friend the Minister will keep pressing that point in Europe, although I assume that it will have to be a European decision before we got something along the lines that we need.
I have just completed a large drainage scheme, and of course I got the higher rate of grant. Perhaps I can cheer my hon. Friend by telling him that even if I had not done so, I should nevertheless have been happy to do the work and take the grant that is now being offered, because it represents a reasonably good incentive.
I am delighted with the extra grant for the improvement of drystone dykes and hedges on marginal land. Many youngsters in Scotland have been doing drystone dyking courses under the Agricultural Training Board scheme, more as a craft than anything else. This incentive to marginal farmers will mean that many broken-down dykes, which might not have been thought worth repairing, will now be repaired. If there is to be better management of that marginal land, it will be much easier if the land is properly fenced and dyked. I warmly welcome these provisions.
§ Sir Paul Hawkins (Norfolk, South-West)
I believe that my hon. Friend the Member for Cunninghame, North (Mr. Corrie) would have carried out his drainage scheme even if there had been no grant, because drainage schemes are essential.
I must tell the hon. Member for Newry and Armagh (Mr. Nicholson) that I would have thought that, by now, most two, three or half acre fields would have been put together. The grant has been available for a long time——
§ Mr. Roy Beggs (Antrim, East)
One point that is overlooked is that those best able to benefit from grants are those in a financial position to contribute in addition to the grants. Small farmers are not in that position. Older farmers do not have surplus cash to add to grants to make the improvements. The larger farmers with viable units have benefited most from past grant schemes.
§ Sir Paul Hawkins
I understand the hon. Gentleman's point because I live in an area with many small farms. If the grants had been worth while in the past, they should, by now, have cured most of the troubles referred to by the hon. Member for Newry and Armagh.
§ Mr. J. Enoch Powell (Down, South)
There appears to be some confusion in the hon. Gentleman's mind between small farms and small fields. In Northern Ireland, because of the history of land tenure and enclosure, there is a proliferation of extremely small fields—for which there is no parallel on this side of the Irish Sea.
§ Sir Paul Hawkins
I am grateful to the right hon. Gentleman for explaining that point. I agree with him, although I did not previously know that that was the position in Northern Ireland.
I agree wholeheartedly with the right hon. Member for Wakefield (Mr. Harrison) about the great difficulty in coordinating between the various authorities. I live within half a mile of the Fens, and within half a mile of Denver Sluice—the major drainage scheme undertaken by the great Dutch engineer Vermuyden during the time of King Charles. The flooding there every seven or eight years stemmed largely from the lack of co-ordination between the various drainage authorities. Some years ago. and at long last, a major scheme was carried out, and most of the dangers from flooding have now been removed. But it is the lack of co-ordination that causes so much trouble.
I wholeheartedly agree with the vast majority of the alterations to the grant system. I wish that I did not have at the back of my mind the feeling that the alterations have been proposed mainly to save money rather than to try to change the way in which grants are given. I believe that they should be aimed at helping the small and medium-sized farmers, rather than the larger farmers. I know that this has been done in certain cases and that the emphasis is changing a little in terms of the size of cow and pig herds and so on, but we do not go nearly far enough. We need a far greater differential in pricing, grants and everything else to enable smaller and family farms which are part of the lifeblood of the country to continue to exist.
On drainage grants, I agree with the comments of the hon. Member for City of Durham (Mr. Hughes) about making provision for certain types of area. My constituency contains a large area of black fen which has been sinking for a very long time so that the drains gradually become completely useless. In some areas the 1283 land has sunk between 20 ft and 30 ft in the past 50 years. Major drainage schemes have to be undertaken by the water authority every 10 to 15 years to keep the main drains going. Farmers then have to connect up with the new system. The average farmer should by now be able to bear the cost of ordinary drainage works himself, but I believe that linking up with a new system in the circumstances that I have described should continue to be grant aided. I hope that my hon. Friend the Minister of State will say something about that.
In passing, I must say that I should be grateful if my hon. Friend the Minister would not use so many initials in his speeches. Everyone has got into this habit nowadays and I find it difficult to understand what anyone is talking about. Even on the wireless one hears about "INFT" and the like. It would greatly help old-fashioned, out-of-date Members such as myself if we could be given a little more information.
I do not favour increased grants to co-operatives. I told my hon. Friend the Member for Torridge and Devon, West (Sir P. Mills) that I intended to mention this. One has only to think of what happened to Devon Meats not long ago. That co-operative made a hell of a mess and lost a great deal of money. The great National Farmers Union cooperative, the Fatstock Marketing Corporation, had to be sold after losing money for many years. I do not believe in these co-operatives at all. They are top heavy in administration, no one is really in charge with a duty to make the operation profitable and I am not happy about continuing to grant aid them.
Finally, I greatly favour giving grant aid for windbreaks in the least favoured areas, to which my hon. Friend the Minister referred. The parts of East Anglia that really need windbreaks are the black blowing fens. The provision of windbreaks there should be grant aided, as it will prevent the clogging up of drains. Anyone who knows the black fen from Ely to Downham Market will know that every time there is a blow in March all the dykes get filled up and have to be dug out again. Any assistance for farmers in that respect is therefore a very good idea.
§ Mr. Farr
My hon. Friend said that the land in Ely is sinking and that wind breaks are needed to protect the black soil from blowing into the dykes. Will he agree, on reflection, that the land is not sinking but that the level is falling by continual soil erosion? The land has been used generation after generation for crops and straw.
§ Sir Paul Hawkins
The land is sinking. If one drives through the Fens, the rivers are perhaps 15ft. to 20 ft. higher than the land on either side. Initially, the water from the dykes was piped into the rivers. It must now be pumped and stronger pumps are needed.
The soil is blowing into the dykes and must be returned to the land. The soil is also being eaten by microbes. I could talk about the black Fens for a long time. I shall not do so as the Minister, no doubt, wants to go home to bed.
I congratulate my hon. Friend the Member for Norfolk, South (Mr. MacGregor), who is also the Minister, on the fact that the vast majority of the changes have been well-thought out. I hope that he will examine some of the issues raised in the debate, especially main drain junctions which have had to be altered and have caused farmers tremendous expenditure not of their own causing.
§ Mr. Andy Stewart (Sherwood)
Much of what I wanted to say has already been said by hon. Members.
The agriculture industry recognises the fact that, for the country to get moving, it must play its part in reducing expenditure. While I have been associated with the industry, cuts and increases in grants have taken place. The industry has responded by increased production every other year without relevance to the grant.
The environmental protection grants are important. Our industry has received considerable flak in that the general public considered, quite correctly, that the industry was destroying our heritage. Will the farmers who have entered into the agricultural and horticultural development scheme and been approved, continue to receive their grants?
I agree with what my hon. Friend the Member for Norfolk, South-West (Sir P. Hawkins) said about the cooperative grants. They have not in the past been a model on which to plan the future. I hope that the Minister will not encourage that approach.
The industry in the past two years has welcomed the marketing organisation. I support what my hon. Friend the Member for Norfolk, South-West said about the differential in the grants for large and small farmers. Young farmers must also be helped. They are at a disadvantage when compared with the large farmer. The agriculture industry will have some difficulty in accepting the drainage grant. Much has been said about the reduction in the grant.
A phenomenon of the past 10 years, especially in my part of England, is that rainfall occurs more in the form of flash floods and heavy rainfall in shorter periods than in the past 40 years. That is a proven fact. That encourages greater flooding than we have experienced in the past.
On the whole, the agriculture industry will respond, and will continue to increase production for the benefit of the community in which we live.
§ Mr. MacGregor
With the leave of the House, Mr. Deputy Speaker, perhaps I might reply to the debate.
I begin by apologising to my hon. Friend and neighbour, the Member for Norfolk, South-West (Sir P. Hawkins) for using initials. It is rather late at night, and had I tried to spell out the full name of some of these schemes I should have got into considerable difficulty.
I am grateful for the broad, although not universal, welcome to the changes and general philosophy behind the schemes. I thank in particular the hon. Member for City of Durham (Mr. Hughes) for his comments on the broad mix of the changes. He said — I think I quote him correctly—that this was all about cutback. As I said in my opening remarks, given current economic conditions, it is necessary for agriculture to play its part in public expenditure savings, but I repeat that next year we shall spend in capital grants the same amount in money costs as we are spending this year—£205 million. That is partly the answer to the hon. Member for Ceredigion and Pembroke, North (Mr. Howells).
Although we have made certain compensating savings, the fact that we are spending the same amount is a sign of the increased investment in the agriculture sector. That money will come from Government sources, and £205 million in capital grants is by no means a small sum.
The hon. Member for City of Durham and my hon. Friend the Member for Norfolk, South-West will be 1285 interested to learn that we have reviewed the schemes or levels of grant to deal with those that may no longer be as appropriate or cost-effective. Although I do not pretend that this has been a major review of the capital grant schemes, we have tried to reflect changing priorities. There is, I believe, consistency in the way in which the changes have been made.
We thought long and hard about drainage, the only area about which the hon. Member for City of Durham was critical. The cut involved in the lowland rate for drainage under the agriculture and horticulture general scheme is from 37.5 to 30 per cent. The reduction in the less-favoured areas is from 70 to 60 per cent.
That still leaves a significant level of grant. Therefore, within the grant schemes, there is still a big incentive and aid for drainage. Although I have been unable to check this tonight, I suspect that I am right in saying that the net cost of drainage schemes could also be charged against tax for tax allowances. That is another incentive, and I repeat that considerable incentives are still available for drainage within the capital grant schemes.
My hon. Friend the Member for Harborough (Mr. Farr) asked about the dates from which the grant rate changes will apply. He was referring to the AHGS, but I shall also refer to one of the other schemes, as it is important that farmers should know where they stand. I fully appreciate my hon. Friend's concern.
Under the AHGS—the general scheme—the changes will apply to expenditure incurred on or after 1 December 1983. If a claimant can demonstrate that he incurred expenditure before that date, he may be eligible for the old and, usually, higher rates of grant.
Under the AHDS — the development scheme — the changes will apply to new applications or to variations to approved plans received on or after 1 December 1983. Therefore, where an applicant can show that he had incurred expenditure before 1 December 1983 in connection with a subsequently approved plan he, too, may be eligible for the old rate of grant.
My hon. Friend also referred to the Weed Research Institute. This is an independent institute and not part of the Department. Therefore, whatever is done in relation to it must be a matter to be decided by the Agriculture and Food Research Council.
The hon. Member for Ceredigion and Pembroke, North referred to marginal land areas. Perhaps I may say a little more about the position in relation to the EC. My right hon. Friend the Minister of Agriculture and I have spent a great deal of time in recent Agriculture Councils pressing the case for an extension of the less favoured areas. We think that there is a watertight case, because we are not asking for any change in the Community scheme, but simply saying that after further work has been done in this country we believe that these additional areas, for which we are pressing, are eligible for the LFA assistance that is available under the Community scheme.
The case is accepted by the Commission, which agrees also that we are not asking for any change in the rules. It is also accepted by the majority of member states, but three member states are still resisting that extension, for reasons of their own. Because of that, it is not yet possible to get the changes through. One of the reasons given is that the Commission is proposing changes for the structures. It is already clear to us that those changes will not come in quickly. Therefore, we believe that there remains a strong case for the extension for which we have been pressing.
1286 I assure the hon. Member that we will go on pressing the case. My right hon. Friend has made it clear that additional resources will be available as soon as the changes are made but obviously he must await the details.
The hon. Gentleman also referred to stone walling on marginal land. Once the Community has agreed to the extension of the less favoured areas, these grants will be payable on marginal land areas. My right hon. Friend and I are giving this top priority and putting heavy efforts into achieving the acceptance of this by the other member states.
I am grateful to my hon. Friend the Member for Macclesfield (Mr. Winterton) for his support for the changes on conservation. I accept that they are limited, and I said so in my opening remarks. Nevertheless, I think that this is the right step to take.
My hon. Friends the Members for Macclesfield, for Norfolk, South-West, for Sherwood (Mr. Stewart) and one or two others spent some time, following the lead given by the right hon. Member for Wakefield (Mr. Harrison), talking about the relationship between the agricultural land drainage scheme and arterial drainage on the one hand and planning and flooding problems on the other. I shall ponder what has been said. Hon. Members will recognise that other Departments are involved. I had perhaps better say to my hon. Friend the Member for Macclesfield that that is not an assurance of change, but I hope he will agree that it is a thoughtful response. I shall think further about it.
I should like to respond to the invitation of the hon. Member for Newry and Armagh (Mr. Nicholson). I shall discuss his comments with my noble Friend the Minister of State, Northern Ireland Office. I have two comments on other points that he raised of more general impact. He asked when we would be bringing together the AHGS and the AHDS. These are separate schemes. As he knows, one of them is a Community scheme. Therefore, it is not possible to bring them together entirely, but there is a great deal of correlation between them.
The hon. Gentleman also referred, as did my hon. Friend the Member for Norfolk, South-West, to the importance for small farmers of capital grant schemes. This is recognised. A number of the changes that we have made will have more impact in terms of less grant for large farmers. Also, as my hon. Friend and the hon. Gentleman may well know, there are financial limitations, often over a six-year period, on the total amount of grant that can be given to any one business or farmer. That, too, therefore, is a limitation on the larger farmers.
Finally, I should like to comment on the point made by my hon. Friend the Member for Norfolk, South-West about fen land, and on the importance of windbreaks and the need for hedges. I am sure that my hon. Friend knows well, but it is always worth stating so that his farmers recognise it, that the planting of hedges remains eligible for grants at 20 per cent. We appreciate the importance of windbreaks. The Agricultural Development and Advisory Service does a good deal of development work, evaluating different types of windbreaks. My hon. Friend's point is well taken.
§ Sir Paul Hawkins
I understood my hon. Friend to say that certain areas would get grants for windbreaks. He spoke about grants for hedges in fen lands, but I am talking about grants for belts of trees, which must be wide to be of any use.
§ Mr. MacGregor
I said that ADAS does a good deal of development work on windbreaks, which I hope will be helpful to farmers everywhere, but the specific grant to which I referred at 20 per cent. is for hedges. My hon. Friend is referring to increased grants for this general area. I do not know whether he has in mind the change that we have made to increase the grant from 50 to 60 per cent. for walls and hedges, but that is in the upland areas.
We have had an extremely useful and constructive debate, and many helpful points have been made, but what to me comes out of it is that, overall, apart from the point made by the right hon. Member for Wakefield about drainage, there is a general welcome for the changes that have been made under the instruments. There is a recognition that agriculture must play its part and that it makes sense to examine all the grant schemes to ensure that they still remain cost effective because, after all, taxpayers' money is involved.
It is in that sense, and in the belief that we have put together a package that is acceptable, that I commend the scheme to the House.
§ Question put and agreed to.
That the Agriculture and Horticulture Grant (Variation) (No. 3) Scheme 1983 (S.I., 1983, No. 1764), dated 29th November 1983, a copy of which was laid before this House on 30th November, be approved.