PLOUGHING GRANTS SCHEME 1961 (Hansard, 15 May 1961)

THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE, FISHERIES AND FOOD (EARL WALDEGRAVE)
My Lords, with your Lordships' permission, I will deal with the Ploughing Grants (Scotland) Scheme at the same time as the Scheme for England and Wales and Northern Ireland, as they both cover virtually the same ground. We propose to make the Ploughing Grants Scheme, 1961, in the same terms as the 1960 Scheme, subject to the necessary advancement of dates This is the eleventh Scheme to be made under the 1952 Act.
Your Lordships would, no doubt, wish me to give a summary of results for the past year. The 1960 Scheme runs till the end of this month but we shall continue to receive applications until July 31. I cannot, therefore, give your Lordships the final outcome of the current Scheme, but what I can do is to give the actual figures for the financial year ended March 31. During that period we paid out £10. million, compared with £9.4 million up to March 31, 1960. The area of land ploughed, on some 180,000 farms, despite the prolonged wet conditions, reached the record figure of 1½ million acres, against 1.3 million in 1959–60.
I think that these figures are sufficiently interesting for me to break them down for each country, as noble Lords often raise this point. The figures are 858,000 acres for England, attracting £6.2 million of grant; 151,000 acres for Wales, attracting £1.1 million grant; 357,000 acres for Scotland, attracting £2.5 million grant; 161,000 acres for Northern Ireland, attracting £1.15 million grant; making a total of 1,527,000 acres, attracting grant of £10,950,000.
It will be evident from what I have said that this Scheme is still very widely and increasingly used throughout the United Kingdom. As I have previously explained to your Lordships in moving similar Orders, it is quite untrue to suggest that we renew these grants automatically from year to year without consideration of their purpose in present conditions. We have kept them repeatedly under review and believe they continue to serve a useful purpose. This production grant has three main effects; 388 first, it gives an incentive to rotational farming, which we believe is good husbandry; secondly, it keeps the land in good heart, and thirdly, it cheapens the cost of subsequent crops. But there are criticisms, and since last year my right honourable friend has caused a major review of the grants to be undertaken, which is now well advanced. I naturally cannot say at this stage what the outcome of this review will be, since it involves discussions between the Agricultural Departments and the Treasury and the industry.
Perhaps I should mention that, though a relatively small amount of the total acreage ploughed qualifies for the higher rate of grant under Part II of the Scheme, a very great deal of old grassland, of twelve years or more—in fact, about 250,000 acres in England and Wales alone—is ploughed out each year and either directly reseeded or brought into the rotation. As to Part I (£7 an acre grant), the Scheme is entirely flexible in its effects and significant areas of leys of all ages above the 3-year minimum are ploughed out every year. I beg to move.

§ LORD WISE
My Lords, first of all, I should like to thank the noble Earl for the detailed information which he has given this year in regard to these ploughing grants. In the House of Commons a few days ago there was considerable discussion as regards the continuation of these grants for this year and in future, and many different points of view were expressed, particularly by Scottish Members, but, on the whole, the grants have been supported. I understand from the noble Earl that before next year comes along there may be a different scheme altogether in regard to the payment of these grants or a scheme in substitution thereof. The noble Earl informed the House that the matter has been under review and that consideration is well advanced. From what I gather generally from the opposition which has been expressed to the payment of these grants, some alteration would receive favourable consideration elsewhere.
As to the grants, they form part of the Price Review which we have already 389 agreed to in your Lordships' House, and there cannot be any doubt as to the acceptance of them this afternoon. From many points of view, I think it is as well that we should accept them, because here is a matter of £10 million going into the agricultural industry. Whether or not definite arrangements could be made whereby that sum could be paid to agriculture in another way, it is certain that this £10 million finds its way to the pockets of those farmers who have already undertaken certain work and carried out certain obligations in ploughing up land, and does not (as it might do if different arrangements were made) go into other pockets. Also, £10 million is a great asset in regard to the spending of the farmers, and it eventually finds its way into the pockets of the tradesmen and the industries in those areas.
One point was made last year by the noble Earl which he has more or less referred to again this year, and that is the matter of the investigation of claims. Last year he gave us some figures for Scotland as to the claims of farmers in regard to these grants, which were almost infinitesimal. I hope that if he has any figures for England and Wales they will be as small as the Scottish figures. For the good of the industry, I think it is as well if claims should not be made by farmers for money to which they are not entitled. Personally, I favour the payment of these grants, in the present circumstances, and I support the Orders.

§ LORD WALSTON
My Lords, I certainly do not want to oppose the payment of these grants, because I feel strongly that the agricultural community, as a whole, needs this £10.9 million in its general income. I may add that. personally, as a recipient of part of this sum—last year I received £1,359 under the scheme—I should be extremely happy to see it continue to come my way. Do not let me give the impression that I am being feather-bedded or that any of my fellow farmers are being feather-bedded. All that I am trying to put across to your Lordships is that I do not feel that this is necessarily the best way of paying out that money. We need the money—we need a lot more money but that is not up for discussion to-day.
390 But is this the right way of spending this considerable sum? Are we as taxpayers, and is the country as consumers, getting the maximum value from nearly £11 million? The noble Earl, Lord Waldegrave, said (I wrote down his words) that he and his right honourable friend have been investigating this problem and their experts have advised them —and I am sure that he himself is sufficient of an expert in this respect not to need advice—that this production grant, as it is called, encourages rotational farming, keeps the land in good heart and cheapens the cost of subsequent crops. That may sound a most impressive list of benefits, but what are they? What is the point of rotational farming? The point of rotational farming is to keep the land in good heart. And what is the point of keeping the land in good heart? It is simply in order to cheapen subsequent crops. So all those three points which are brought forward in support of this production grant add up to one and the same thing: that it helps farmers in their production.
I think we should look back a little to what happened originally with this ploughing-up grant. It started, so far as I can remember, either in 1939 or 1940, and I think the payment then was £2 per acre. That was a reasonable and admirable idea, because in those clays farmers had been brought up to believe that it was a crime to plough up old grassland; and there were, as your Lordships know, penalty clauses in agricultural leases. So some incentive had to be given to farmers to break with this old tradition. Not only did they need the incentive to get away from what they had been brought up to believe was the right way to farm, but they also needed, and particularly the grassland farmers in the Midlands and the West, quite reasonably, an actual cash payment to enable them to carry out the relatively expensive operation, to buy tractors and so on in order to do this ploughing up; and that needed a certain amount of insurance against the risk of ploughing up old grassland, which was then a new technique. But that has now been going for twenty years. Surely in that time farmers, who are not particularly slow at learning, will have learned the right techniques of how to plough up grass.
391 Why should we now need any particular incentive in order to encourage us to do something which not only all the experts but which all leading farmers and, indeed, the rank and file farmers accept as being the correct agricultural procedure in normal circumstances? I suggest to your Lordships that there is to-day no need to give special financial incentive to farmers to do what good farming practice tells them to do and what practically all good farmers throughout the whole country do to-day, and would in fact, in my opinion, do if they received no particular production grant subsidy, or whatever you like to call it, in order to encourage them to do so.
Having said that, I want to reiterate my firm belief that if in the Review which is likely to take place in the next twelve months these production grants were abolished and the money were removed completely from the total amount received by agriculture, I should be extremely unhappy and worried. It should undoubtedly remain in the payments made to agriculture—and, in fact, I think it should be increased, although, as I say, that is another story. I believe it is not too difficult to find different methods, even if it is purely direct payment of a higher price for the actual produce produced by the farmer. That is a simple form of subsidy, which I would remind your Lordships is a subsidy for cheap food to the consumer and not a subsidy to the producer. It might be made use of in this way, rather than in these indirect ways, the original reasons for which over the passage of years become masked and forgotten, and the original objectives for it no longer exist.

EARL WALDEGRAVE
My Lords, I am grateful to the two noble Lords who have spoken for generally supporting the schemes. The noble Lord, Lord Wise, asked me a specific question, and I can tell him that, so far in the cross-checking 392 we are doing, we are finding only some 0.5 or 0.6 per cent. (I am not sure which percentage it is) of cases which we investigate to be incorrect. I would point out that cases which are incorrect are not necessarily fraudulent. It is therefore a very small amount. The figures for Scotland and England, the noble Lord will be pleased to hear, are very much the same.
I am grateful for the support of the noble Lord, Lord Walston, and I would say only this. The points that he has raised are very much the points under consideration in the current review which we are carrying out of these grants. It is not an easy subject, and the basic thought must be that we should continue to support British agriculture by the two main methods of production grants and deficiency payments. It has been thought right so far that we should have these production grants, of which the ploughing grant has always been one of the major grants, and it is universally agreed that it cannot do any harm. Up to now it has been universally agreed that it does good. Therefore, as long as we are injecting into the industry money which is needed, by means that up to now have universally been thought a desirable way of doing it—nobody has ever suggested it was a harmful way—I do not think we are far wrong. But I cannot anticipate what will come out of this thorough-going review which we are now undertaking on the whole subject of grants.