§ Mr. James Wallace (Orkney and Shetland)I am sure that hon. Members welcome the opportunity to debate this important topic, albeit at this early hour. People realise that this is a critical time for Scottish agriculture. Agriculture in Scotland and throughout the Community can be said to be at a crossroads. Those of us who have regular contact with the industry are well aware of people's concern.
For most of the past 40 years, the industry has been urged on by Governments, whatever their political hue, to increase home food production. The industry has responded, in terms of efficiency and productivity, when contributing to domestic food production. Such production made an important contribution during those years when we did not have the benefit of North sea oil to prop up our balance of payments.
The message to the industry is now different. Agriculture is clearly in transition. Governments and the public recognise the need to contain expenditure on the common agricultural policy. There has been control of production in commodities in the case of structural surpluses. Last year, the dairy industry had to go through a traumatic period of transition to accommodate the new quota system. Now cereal growers are uncertain about future moves to cut cereal production.
There are ever-increasing pressures on modern agriculture to take account of modern environmental interests. Those interests are quite proper, provided that those who push them remember that our rural areas are living regions. They are places in which people have been brought up and work and are not simply those parts of the countryside to which the urban dwellers retreat at weekends.
Generally, the National Farmers Union of Scotland has been responsive to these changes. It is clear from regular reading of press releases and the proceedings of the meetings of Scottish members with their officers that these new factors are in people's minds. If the industry is in a state of transition, we hope that the Government will be more responsive to its problems and more supportive of it. Last month when the Secretary of State attended the Royal Highland Show at Ingliston he said that the Government were the friend of the farmer, but many farmers to whom I have spoken say, "With friends like that, who needs enemies?"
All hon. Members will have received representations from the National Farmers Union nationally and locally about the anxiety of the dairy industry at the rumours that quotas may be transferred from Scotland to Northern Ireland. Scotland's full allocation of almost 30 million litres under the outgoers scheme has been taken up. There is considerable anxiety that a further sum will be made available to fund outgoers, but that the quotas so released will not be retained in Scotland, but transferred to Ulster.
The Minister will be well aware of the opposition that that has generated. It is feared that such a scheme will represent the loss of what may rightly be described as a Scottish asset, and will generally undermine those still engaged in dairying in Scotland. Above all, it is feared that if we lose any more milk production, the viability of many local creameries will be threatened. While that is the general case for Scotland, I am not ashamed to say that it 1271 is particularly true for the islands. Given the Under-Secretary's constituency, knowledge and background, he must share similar anxieties.
One must pay tribute where tribute is due, and the Government have acknowledged the particular problems faced by the islands. There was a lower percentage cut when the quota regime was introduced, and in the regulations laid before the House in March a specific provision was made for the allocation of outgoers quota in remote and island areas.
In some parts, such as Orkney where the creamery is highly dependent on sustaining a particular level of throughput, there is anxiety that, if there is further loss of production by individuals, that quota should remain within the islands. Certainly, if the Government are considering transferring quota to Northern Ireland, the entire Scottish industry will find it a bitter disappointment and will oppose it. Indeed, it has already voiced its opposition. It would be particularly grievous to the island economies if they lost any quota.
There has also been considerable consternation throughout the industry about the cut in capital grants. Initially a £5 million cut was announced last December, which was compounded by the announcement earlier this month of the new capital grant regulations. I am sure that the House does not need to be reminded that 87 per cent. of Scottish farms lie within less favoured areas. We use the term "less favoured areas" so often that we may forget what it means. They are less favoured because of the land, and for geographical and climatic reasons. The point of designating those areas as naturally less favoured is that they need more favour from Community and national agricultural support. Despite the high percentage of Scottish farms in less favoured areas, they have had to bear an equal, and some may argue a disproportionate, proportion of the cuts in agricultural spending. Field drainage grant support has been reduced within 12 months from 70 to 30 per cent. Farmers in those areas, especially hill farmers and livestock producers, are not contributing to structural surpluses and over-production. The grants which they seek were previously available at higher rates, for example for reseeding, field drainage and fencing, and are for works of necessary and routine maintenance. There is a great fear that, because of the cut in grant support, these very necessary investments will also be cut. That in the long term must spell danger, and it will be unsatisfactory in the context of future long-term prospects for agriculture.
These cuts come at a time when there is little buoyancy among the livestock producers in the less favoured areas. The annual review of agriculture published earlier this year examined income developments by farm type, and concluded that on hill and upland less-favoured area farms, there was a general fall in income in 1983–84 following a more pronounced drop in the previous year. That report added:
In 1984–85 incomes in these farms are expected to show some recovery, except in Scotland where a further fall is forecast".Even though their own White Paper says that there is an expected fall in incomes, the Government nevertheless go ahead and cut the grants that were previously available.I wish to make two detailed points, to which I hope the Minister will respond. As I understand the new provisions, 1272 a farmer can no longer apply for ad hoc grants for such measures as reseeding, field drainage or fencing as was previously possible under the agriculture and horticulture grant scheme.
I further understand that, having regard to the monetary limits under the new scheme — the agriculture improvement regulations — a farmer could make applications for assistance up to a limit of two in six years. But that would require the submission of an investment plan.
Given that in the last week the Government have been trumpeting about lifting the burden on small businesses, how can they justify this additional bureaucratic imposition on those who are seeking to do routine maintenance that previously they were able to do more easily because of the ad hoc grant system?
Secondly, I wish to know the extent to which the reduced rates of grant might lead to reduced take-up. Investment plans will not now go ahead, because the money is not available to finance them. How does the level of take-up in April to June this year compare with the same period last year, when the grants were at the higher rate? Will the Minister look again at the rates of grant if it appears that during this financial year the savings to the Exchequer because of the cuts will exceed those that were budgeted for because of the lower rate of take-up? In the light of that, will he review the rate of grant?
Scottish agriculture is also concerned about the reduction in expenditure on the advisory services and research and development. That is a totally insensitive and illogical move at a time when agriculture is in transition. There are ever-increasing needs of the market to improve quality, as well as the need to reconcile farming interests with environmental concerns.
Much time has been spent in the House debating whether the rate of cutback in Scotland was the same as in England and Wales. The advisory services in Scotland do not always perform the same functions as those in England and Wales. But even if they are identical and we are comparing like services with like, that seems to ignore the fact that such a vast cut—41 per cent.—in one go must have a greater impact in Scotland, because of the greater area of Scottish agriculture that is part of less favoured areas, than in England and Wales.
Greater distances must be covered in parts of Scotland, and there is a need for advisory services in less favoured areas where agriculture faces difficulties caused by climate, geography and quality of the land. The great fear in constituencies such as mine is that, if funds are withdrawn or reduced, the type of services that will be cut —particularly for transport cost reasons—will be those to the outlying parts. As a result, the very necessary advice to those areas will be diminished. It was clear to my hon. Friends and me when we saw the Minister of State, the noble Lord Gray, that the sum of 41 per cent. referred to was not negotiable. Now we are debating where the cuts should fall. It is clear that there will have to be considerable rationalisation of the colleges of agriculture and the functions they perform.
§ Mr. Malcolm Bruce (Gordon)I think my hon. Friend will recognise that, having half of the north of Scotland college of agriculture in my constituency, the point he has just raised is of considerable concern to me. That college is talking about the redundancy of 350 experienced specialist advisers who are needed and who will almost 1273 certainly have to be re-recruited as and when the reorganisation has taken place. This decision seems to be wasteful of individuals as well as of a natural resource. Will my hon. Friend press on the Minister that, if he will not negotiate the 41 per cent., he must negotiate the timing —the speed with which the change is introduced—to avoid the redundancy and waste of time involved?
§ Mr. WallaceMy hon. Friend has made a valid point and has stressed the point clearly himself; the Minister will have noted it. He underlines the point, in saying that this will lead to 350 redundancies, that the cuts do not make sense. Indeed, no matter how these cuts are made, clearly parts of Scottish agricultural research and development and our advisory and investigative services — all of which in their own way are vital—will be unacceptably cut. We have already had an Adjournment debate on the valuable work done by the Scottish Institute of Agricultural Engineering, and the fears that it has about a cut in expenditure on research and development.
From the point of view of my constituents, I am greatly concerned about the possible impact of the cuts on the veterinary investigation service, in particular the laboratory at Thurso, which does very valuable work. The veterinary surgeons in my constituency were full of praise for the work done and the service provided to the agricultural community in Caithness, Sutherland, Orkney and Shetland. When the Rayner review looked into this matter in England — Scotland was excluded from its deliberations—it concluded that
the absence of a sophisticated diagnostic and investigational service would represent a serious loss to the industry as a whole. A laboratory based diagnostic service is necessary to support statutory disease eradication schemes and for the identification of new and emergency disease conditions. The private sector would not find it worthwhile to offer the full range of diagnostic and investigational services currently available from the Veterinary Investigation Service.I can see no reason at all why a similar conclusion should not be applied to Scotland. We will create long-term problems for animal health and welfare if the future of institutions such as the Thurso laboratory and similar laboratories in Scotland is not safeguarded.The cumulative effect of the cuts will be less assistance in areas where incomes are accepted by the Government to be falling. If investment help is down, that will force the farmers concerned more and more to increase their debt and to have to service debts. In addition, some funding will inevitably be required from the industry to support advisory services, funding from incomes that will be smaller anyway, and in some cases just not there.
How do the Government see the future of Scottish agriculture, when the cumulative effect of their policies are considered? I have no doubt that in his response the Minister will tell us how much the Government is spending on agricultural support in Scotland. One could ask how much would have been spent had these cuts not been made. It sounds almost like a great achievement by the Government that they have not actually cut out agricultural support altogether.
The Minister will also tell us of the increase in amounts payable for hill livestock compensatory allowances, increases which I acknowledge, in particular the supplement in the Highlands and Islands area. I have gone through the figures with NFU representatives in my 1274 constituency. It is clear that, if one considers the interrelationship of the increases with the decreases in grants, there is no net benefit at all to the industry. In fact, it is worse off.
I should like to make a constituency point. The grades of land that are used for the payment of allowances in the Highlands and Islands area were based on classifications for winter keep and bear no relation to the problems caused through additional transport and fuel costs or the problems in the remoter parts of Scotland. I think that my hon. Friend the Member for Ross, Cromarty and Skye (Mr. Kennedy) will accept that grade A land in Easter Ross is a slightly better proposition when it comes to things such as transport costs and accessibility to markets than grade A land in Orkney. We wish the Minister to reconsider the classifications to see whether they are fair and to ensure that the support is properly going where it is needed.
It is clear that agriculture in Scotland is important not only on its own terms but for the part that it plays in the whole rural economy. If one cuts grants, it is not just the farmer who suffers, but the small contractors who have been undertaking his fencing and drainage work. That has a pervasive effect throughout the rural community. It could put in jeopardy the rural school and other services.
We wish to see a total tun-1round in Government policy. Support should not be withdrawn. We should be looking forward to such things as an agriculture development programme for the Highlands and Islands, which seek to regenerate the rural economy. There have been signs in the past few weeks that the European Commission is anxious to talk to the Government about the matter. I hope that the Minister will say that the Government will take a more positive approach than in the past. That would be welcome news, because the news over the past 12 months has not been of encouragement and support for Scottish agriculture.
§ Mr. John Home Robertson (East Lothian)I congratulate the hon. Member for Orkney and Shetland (Mr. Wallace) on his good fortune in raising this important subject. I am grateful for this opportunity to register the strong feelings of the Labour party about the decay of rural Scotland in recent years and indeed about the Government's abject failure to give a proper lead in assisting the Scottish rural economy to come through this time of drastic change and great uncertainty, which everyone acknowledges to be the case.
Apart from agriculture, we have seen the impact of other aspects of Government policy on housing and transport, to name but two, in rural Scotland. the Government must stand condemned for that. As the hon. Member for Orkney and Shetland said, we need a proper rural development policy not only for the Highlands and Islands but for other rural parts of Scotland. That must include an agriculture policy.
I think that there is general agreement about the urgent need for a drastic review of the European common agricultural policy. However, the Minister of Agriculture, Fisheries and Food is clearly hopelessly out of his depth in addressing himself to the problems. In Scotland, we have the additional problem of having a Minister whom one can only describe as the invisible man responsible for the agriculture industry. In this instance, I am talking not only about the Secretary of State for Scotland himself, but about someone who is even more invisible—Lord Gray 1275 of Contin. Perhaps the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) can tell us something about him because I have not seen him since he lost his seat at the last general election.
The Government have conveniently identified a case for cutting expenditure, which they are always keen on doing, and they are turning both their blind eyes to areas of Scottish agriculture and the Scottish rural economy that require extra incentives. Let me give a couple of examples. I start with one mentioned by the hon. Member for Orkney and Shetland. There is a massive attack on the budgets of the Scottish agricultural colleges—a 41 per cent. cut over less than two years. That approach to the research and advisory organisations under present circumstances seems to us to be little short of criminal.
Those organisations can help the industry to adjust itself to the new climate of reduced production, increased emphasis on environmental issues and the general need for diversification and change. If anything, one might think that those colleges needed more resources, but the Government are hell-bent on cutting expenditure regardless of the consequences. We know what is happening to those colleges at present. It has been suggested that money to sustain research and advisory services could be raised from the industry. On the principle of he who pays the piper calls the tune, I suspect that the bigger farmers would be able to benefit from advisory services' research while smaller enterprises, which have the greatest need of it, might not.
Capital grants to agriculture in Scotland, as elsewhere, have been halved in three successive years. For redrainage of land on low ground, capital grant is now 15 per cent. That is not an adequate incentive, even under present circumstances, for vital capital improvement work. Quite apart from the impact that the cuts may have on agriculture, there is cause for acute concern about their disastrous effect on agricultural contractors, who are an important source of employment in rural areas.
We should pay special attention to the most fragile parts of the agricultural economy in Scotland—the hills and uplands. It is essential to sustain employment in those remoter areas. We should consider additional means of protecting existing enterprises in the remoter areas and of creating more smaller farms when possible. To give credit where credit is due, I must add that the Government have responded to pressure to maintain the hill livestock compensatory allowances and the beef and sheep variable premium. That general level of support must continue to guarantee the long-term future of hill livestock farming. I hope that all parties acknowledge that need.
As for the pig industry, we deplore the fact that the Government have refused to accept the recommendation of the Select Committee on Agriculture on the funding of the scheme to eradicate Aujeszky's disease. The Government's failure to underwrite the eradication scheme will make it much more difficult to institute voluntary eradication schemes for animal diseases in future.
The dairy industry will not forgive the Government for the shambolic manner in which production quotas were introduced last year and I do not understand why the Republic of Ireland is getting additional quota of 58,000 tonnes when there is a serious threat of badly needed 1276 Scottish milk quota being transferred to Northern Ireland. We must press the Minister for a specific reply and an assurance that Scotland's milk quota will be protected.
We know that there are massive and costly surpluses of cereals in the European Community. We have the grotesque embarrassment of having huge carry-over stocks from last year's harvest still in intervention stores as we begin the 1985 harvest. That is a direct consequence of the distorting effects of the intervention buying system and the common agricultural policy in its present form. We require a massive overhaul of the CAP, not the timid tinkerings that we have had with cereals.
Savings must be made, and there is a need for urgent steps to reduce production and encourage alternative use for land. I suggest that the 1.8 per cent. reduction in prices being imposed by the Commission as a means of circumventing the veto put in by the Germans on the original agreement, will probably be worse than useless. Such a marginal cut in cereal prices is likely to be interpreted as an incentive to increase production, which must be the last thing that we should do.
If the Minister pursues his policy of cutting prices as the means of reducing the production of cereals, he will have to make much bigger cuts, and such substantial cuts could well lead to bankruptcies among smaller producers. That policy is unlikely to succeed. We need a combination of incentives to change patterns of production by the introduction of alternative crops. Price restraint is needed. We must also consider the introduction of quotas. I do not like the idea, but rather than being stampeded into the imposition of quotas, as happened over milk quotas, there should at least be contingency plans for a quota system for cereals.
I have referred to the need for incentives to change production patterns in the rural areas of Scotland. We must encourage people to stop producing commodities that are in surplus. The new agricultural improvement grants that were debated last week in Standing Committee included a new provision for grants and incentives to plant broadleaved shelter belts. During the debate in Committee I raised this point with the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food. She reiterated the Government's refusal to implement article 20 of the European Community's structures directive which would have provided a very substantial incentive to plant broadleaved trees.
Yesterday the Secretary of State for Scotland said in a written reply that through the Forestry Commission he intended to institute a new planting grant scheme. At first sight this appears to be at least as attractive as the article 20 incentives proposal of the European Community. At least that will be the case for areas of up to three hectares. After that the article 20 incentives would be more generous. Why not implement article 20 in full? European Community cash could then be used to encourage the substantial planting of trees not only in the Highlands but on low ground. The extra planting of trees would not only improve the landscape; it could lead to a significant reduction in the production of cereals and other surplus crops and it would lead to an increase in the production of much needed timber.
There is an urgent need to restrain the production of surplus crops in the European Community. The hamfisted cuts in research and in general support for the industry are typical of this Government's approach, but they are wrong. We should redirect this budget towards 1277 restructuring the industry. If savings can thereby be achieved, so much the better. However, our top priority should be the revitalisation of the Scottish rural economy. Scotland contains a high proportion of remote rural areas. Its special case demands special attention in the review of agricultural and rural policy. I fear that that may be too much to expect from this discredited and unrepresentative Government.
§ Mr. Charles Kennedy (Ross, Cromarty and Skye)Conscious though I am of the time, I want to place just a one-minute contribution on the record before the Minister replies to the debate. I echo the congratulations to my hon. Friend the Member for Orkney and Shetland (Mr. Wallace) on having been fortunate enough to introduce this debate and for the manner in which he did so. I fully endorse the thrust of his argument.
There is great concern in the Ross, Cromarty and Skye constituency and in the Highlands and Islands generally about the envisaged level of cuts in the capital grant scheme and in the agricultural, scientific, research and general support services. My hon. Friend said that it will have a severe impact upon those who farm in the less-favoured areas of the Highlands.
Secondly, an application has been sent from the Highland Regional Council to Lord Gray of Contin requesting 100 per cent. Scottish Office support for the necessary funding of the work that has to be done after the flooding of the River Conon just over a year ago. I hope the Government will seriously consider that request.
Thirdly, may I back up my hon. Friend's plea that there should be a full agricultural development programme for the Highlands of Scotland. Optimistic signals are coming from Europe. There is a clear indication that the European Commission wants to talk to the Scottish Office. I hope that it will respond constructively. It would go a long way towards reversing some of the indebtedness and general difficulty which the agricultural community in the Highlands is experiencing.
§ The Parliamentary Under-Secretary of State for Scotland (Mr. John MacKay)I congratulate the hon. Member for Orkney and Shetland (Mr. Wallace) on his first appearance as the Liberal party spokesman on agriculture in Scotland. In the time available to me, I doubt whether I can cover every point made, but I hope to cover the main ones.
At this early hour—it is almost mid-morning for a farmer—I am pleased that the hon. Gentleman managed to slip his debate into the last of the 12 hours available. It gives me the opportunity to put on record the state and future of Scottish agriculture, and to re-emphasise the Government's excellent record of support to agriculture in Scotland. The industry is in reasonably good shape. Last year, net farm incomes increased by about 32 per cent. to £141 million. Although I am delighted with that improvement, we were careful to say when the figures were published that one should not read too much into single year-on-year comparisons. Many variable factors in agriculture, not least the weather, have a bearing on farm incomes. This year, the weather has been less than kind in many parts of the country.
Since we took office in 1979, the upward trend has become clear. We halted the decline in net farm incomes 1278 which we inherited, and then reversed the trend to enable the industry's financial position to recover. The Government can legitimately take the credit for helping the industry to pull itself out of the trough, because we continue to inject large sums of public money into its support. In 1985–86, about £106 million will be paid in direct financial assistance to Scottish farmers. The 1978–79 equivalent was only £73 million. When one considers that, one realises that the remarks this morning of the Lib-Lab alliance were not well-founded.
I suspect that many farmers forget —perhaps some hon. Members have forgotten it, too — that Scotland benefits substantially from the £1.2 billion that is likely to be spent this year in supporting United Kingdom farm prices under the common agricultural policy. Scotland's share of the sum is difficult to quantify but, on the basis of a special exercise carried out in 1983–84, we can place it at about £135 million. Agriculture tends to forget that those sums are part and parcel of the Government's support for the industry. In addition, we spend about £50 million on research and development and education, which benefit agriculture, although less directly.
I am glad that the hon. Member for East Lothian (Mr. Home Robertson) mentioned forestry. The Forestry Commission estimates that about £27 million will be spent in Scotland in 1985–86. As my noble Friend Lord Gray noted at the annual general meeting of the Scottish NFU in March, Scottish agriculture now receives about £300 million a year in support. By any yardstick, that is considerable support from the Government and, ultimately, from the taxpayer.
Despite the difficult and protracted price-fixing negotiations this year, the outcome was good for farmers, as the Scottish NFU publicly acknowledged. It is never easy to secure all that we want in those negotiations, and this year was no exception. The continuation of the beef variable premium scheme was especially important to us, and that was certainly recognised by the NFU. The sheepmeat provisions are largely unchanged from previous years, thanks to significant negotiating achievements by the Government. We have resisted attempts to tinker with these schemes. I know that the producers were relieved at the splendid Government achievement in the negotiations.
The real disappointment this year was the failure of the Community to take the right course on cereals. As the House knows, the Germans blocked a proposal to cut cereal prices by 1.8 per cent., and even that proposal had to be seen as a rather weak compromise when related to the 5 per cent. cut due in the light of the Council's sensible 1984 decision on guarantee thresholds.
It is interesting that the hon. Member for East Lothian seemed to be more realistic in facing up to the problems that agriculture will face, and is facing from the problem of surpluses than the hon. Member for Orkney and Shetland. He rather skidded over the problem of surplus production in the Community. not just on cereals but other products.
It might be interesting for the hon. Member for Orkney and Shetland if I read out to him what one one of his leaders said in a debate in January. The hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) said—[Interruption.] I am glad that lion. Gentlemen are cheering the hon. Member. Perhaps it is the selection of leader that brings a cheer. He said:
It has been clear for the past five years that a continued open-ended system of agricultural support was bound to lead to 1279 trouble, compounded by the seldom mentioned fact that the problem is not just open-ended production with the need for subsidy capping, as it were, but the rapid and expensive result of advances in agricultural technology, as the support system was devised without the expectation of full production or production in balance with demand."—[Official Report, 25 January 1985; Vol. 71, c. 911.]That simple truth does not seem to have penetrated to the hon. Member for Orkney and Shetland, although the hon. Member for East Lothian has got the message, which is particularly relevant to cereals. In a report published by Agra Europe, published on 12 July 1985, it was said:Budgetary costs could be trebled by what is a conservative forecast of cereals production of 154 million tonnes by 1990 if present trends in support prices and productivity improvements are permitted to continue. The Commission's own forecast is of a 163 million tonne harvest in 1990, which would mean over a 40 million tonne surplus. Even taking the more conservative figure of 154 million tonnes this would result in EEC support of at least £5,000 million in 1990, roughly 50 per cent. greater than the level which in the milk sector forced farm Ministers into the dairy quota scheme.The surplus in cereals is a serious problem that we must face up to, and there was more recognition of that in the contribution from the hon. Member for East Lothian than in that from the hon. Member for Orkney and Shetland.The Scottish NFU was clear in all its representations to Ministers about milk quotas. They saw milk quotas as the way ahead. They have got that, and I pay tribute to them and to the Milk Marketing Board for the way we have managed to introduce milk quotas in Scotland, with the minimum trouble, although there are real problems with some milk quotas.
The hon. Member for Orkney and Shetland asked about milk quotas in Northern Ireland. I believe that he is to see my noble Friend later today, as is the president of the Scottish NFU. This matter is under discussion and I am not able to pre-empt the outcome of these discussions.
As the hon. Member for Orkney and Shetland recognised, the Government are anxious about the future of the small island communities, whose dairy base is dependent on the local creamery. We have looked after the dairy farmers on Islay, Bute, and Kintyre, South of Tarbert, which, for the purposes of the debate, is considered an island. Added on to that is Orkney and Shetland. The hon. Member will know that in Shetland the quotas were not cut last year and will be exempt from the 1 per cent. cut this year.
In Orkney, as in the islands of my constituency, my noble Friend has certainly given an assurance that the quota removed from the islands by the outgoers scheme will be returned this year. We are mindful not just of the needs of individual producers in these areas, but for the need for the cumulative amount of milk in the area to be able to sustain a viable creamery. We have certainly done that and I was pleased to hear the hon. Member acknowledge that fact.
Capital grants have been mentioned and the new grants scheme which was announced by my right hon. Friend the Minister of Agriculture on 8 July. The hon. Member expressed concern about the proposed rates of support and asked for them to be increased. It is extraordinarily easy for the hon. Gentleman to say that his party can promise more money here, there and everywhere, safe in the knowledge that it will never have to keep the promise which, if kept, would in any case mean higher taxes.
1280 Of course the hon. Gentleman wants more help for his constituents, as we all do, but we also have to recognise that it is those same constituents who have to pay the extra tax, and they will not be too keen to do that. At a time of great pressure on public expenditure, we all have to cut our cloth accordingly, and the farming community understands that. The hon. Member has failed to look at some of the positive features of the new scheme. I stress that these are schemes which not only reflect the decisions of the Government, but stem from our obligations to implement community regulation 797/85.
Among the positive features, I include the proposal to introduce the new schemes on the basis of a clean slate. In other words, farmers will be allowed to spend up to the permitted ceiling regardless of the substantial support which many have received under the AHGS and AHDS schemes. From the representations made by many farmers in my constituency, I know this will be welcomed. Eligibility under the principal new scheme will be extended to small and part time farmers. Aid will be provided for craft and tourism projects in the less favoured areas, and this will permit farmers to augment and diversify their income.
Additional support will be provided for young farmers entering the industry. In addition, we are taking the opportunity to increase standard costs. These provide the basis on which grant is calculated where farmers undertake eligible projects using their own labour. These various measures coupled with general rates of grant of 30 per cent. and 15 per cent. demonstrate not only our continuing commitment to the farming industry, but, with the higher rates of grant — double that in the lowlands — the continuing priority which we are according to the less-favoured areas.
The hon. Member for Orkney and Shetland mentioned plans. Compared with the previous FHDS scheme, the redevelopment plans will be much simpler and less onerous on farmers. I do not consider it unreasonable that farmers applying for grants paid for by the taxpayers should be required to place their applications in the context of a plan, and we are satisfied that two plans in six years will adequately accommodate all the worthwhile developments.
Hon. Members expressed concern about research and development and about the advisory services. As I said the other night, considerable changes are taking place in agriculture. I have mentioned some of them, and there will be more in future as we face the problem of surpluses. There is concern not only about surpluses, but about the environment and its interface with agriculture. There is also pressure to improve the welfare of farm animals, and considerable interest in the relationship between diet and health.
Against that background, it is essential that we review our strategy for research and development, assess the priorities, and see to it that the taxpayer is getting value for money. It is not unreasonable to expect the prime beneficiaries from the fruits of agricultural research and development to make a contribution towards its cost. My Department recently issued a consultation paper in relation to all this which was widely distributed and comments are now being considered.
We recognise the important work carried out by the college advisory service, but we take the view that farmers should make a contribution towards the cost of a service from which they benefit. Even after the reductions are 1281 made, the majority of the money, the lion's share, will still come from the public purse. The colleges and the Department are consulting various interests, not least individual farmers. The Department will produce a consultation paper in the early autumn seeking reactions to proposals for implementing the changes which flow not simply from the decision to reduce public funding, but also from the reviews which go along with that.
Of course, I agree that less-favoured areas have particular needs and problems to which we must continue to have special regard. We shall certainly be doing that in all our consultations and considerations.
§ It being Nine o'clock, the motion for the Adjournment of the House lapsed, without Question put.