HC Deb 16 February 1989 vol 147 cc472-3
2. Mr. Kennedy

To ask the Minister of Agriculture, Fisheries and Food what assessment he has made of the knock-on effects of farming diversification on the sheep sector.

The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Donald Thompson)

The aim of the farm diversification grant scheme is to encourage the creation of new businesses rather than the displacement of existing farming activities, so the answer is none.

Mr. Kennedy

Is the Minister aware that that answer will only confirm increasing worry, not least among hill and upland farmers, about the knock-on effect of diversification? As the Minister will appreciate, if more producers opt for sheep production, the increase in the number of sheep will lead to a corresponding decrease in the level of support. Therefore, will he make sure that any new sheepmeat regime will take account of the need for generous headage payments, not least in areas such as the north of Scotland, where agricultural activity is already stretched to the margins, if not beyond?

Mr. Thompson

It is important that when, in a few years' time, my right hon. Friend renegotiates the sheep meat regime, he takes careful note of those areas of Great Britain which have traditionally, and so well, bred sheep and improved the quality by 77 per cent. since 1980. I am sure that my right hon. Friend will do just that.

Mr. John Greenway

Does my hon. Friend agree that the fact that the Government are continuing to pay farmers in the less-favoured areas through the hill livestock compensatory allowance scheme is a major factor in supporting sheep farmers in the less-favoured areas? May we have an assurance that when the Government negotiate the new sheepmeat regime—unlike in the case of the beef regime which was announced recently—we shall have a regime which reflects the different requirements for sheep farming in northern Europe as opposed to southern Europe?

Mr. Thompson

We already have a scheme which reflects the differences in Great Britain compared with the rest of Europe, although that does not seem to please all farmers. We must, of course, do what we can to ensure that the high quality that exists in this branch of farming is not disadvantaged in the whole of Europe.

Sir Hector Monro

Does my hon. Friend agree that the higher up the hill we go the harder it becomes to diversify? Will he therefore give every encouragement possible to increasing the hill compensatory allowance, to the suckler cow subsidy and to maintaining the sheep premium? That is essential if we are to keep a viable rural economy.

Mr. Thompson

The very basis of the rural economy is a strong farming economy, especially in areas such as that which my hon. Friend represents.