SMALL FARM (BUSINESS MANAGEMENT) SCHEME 1965 (Hansard, 27 July 1965)

§ LORD CHAMPION
My Lords, I beg to move that the Small Farm (Business Management) Scheme 1965 be approved, and I trust that it will be convenient if, at the same time, we consider the Small Farm (Business Management) (Scotland) Scheme 1965. The introduction of a revised Small Farmer Scheme was foreshadowed in the Annual Review White Paper last March. We said then that the upper eligibility limits of the Scheme would be extended from 100 to 125 acres of crops and grass, and from 500 standard man-days, on the old scale, to 600 standard man-days, on a new scale. We also said that the Scheme itself would be revised to place a greater emphasis on business management and the keeping of farm records.
The Scheme which we are discussing to-day implements those promises. The changes in the eligibility limits which I have mentioned will bring an additional 39,500 farmers in the United Kingdom within the scope of the Scheme. But the main difference between this Scheme and the existing Small Farmer Scheme is in the concept of a three-year programme based on the conclusions to be drawn from the regular keeping of farm records. Provision is made first of all for the 1165 Minister to approve a "complete" programme, covering a detailed schedule of work or activities on the farm for the whole three years. As each year's work is completed satisfactorily—and this will include the keeping of records and submitting a summary of them to the Ministry—an annual grant will be paid. In the first year this will be £50, plus £2 for each acre of crops and grass; in the second year, £50 plus £3 10s. an acre; and in the third year £50 plus £3 an acre. The maximum acreage eligible for grant is 100 acres, which gives a maximum grant of £1,000.
This facility for the approval of a complete programme is, however, available only to those farmers who at the time they submit their proposals have already been keeping adequately detailed farm records for a sufficient period to enable a firm judgment to be made about the most profitable development of their business over the following three years. Most small farmers, however, are probably not in this position, and for them we have a rather different approach. They will be able to have a basic programme which will set out in detail only the work which needs to be done in the first year. The rest of the programme, at the initial stage, will simply consist of instituting and maintaining proper farm records over the whole three years.
Upon satisfactory completion of the first year's plan, the farmer will be entitled to the grant of £50, plus £2 an acre; but before he can qualify for the full grant in the second year he will be invited to discuss with the Ministry's advisory officer the results of the first year's work, and in the light of the information given by the records they will agree on what needs to be done in the second year in order to make the farm more profitable. This agreed second-year plan will then be added to the basic programme and will enable the farmer to qualify for the second-year grant of £50 plus £3 10s. an acre. A similar procedure will operate at the end of the second year to enable the farmer to qualify for the third-year grant of £50 plus £3 an acre. If, however, the farmer decides not to develop his basic programme in this way, but to continue to keep the stipulated records, he can qualify for the flat rate grant of £50 a year in the second and third years. There are provisions in the 1166 Scheme which allow for the normal delays and accidents of farm life so that the three-year programme may be extended by up to two years and there are other provisions, to allow for a reduced grant to be paid to those small farmers who have already received some assistance under the existing Scheme.
My Lords, I have outlined briefly the main provisions of this small but important Scheme, but before I close I should like to say a few words about the existing Scheme and our reasons for introducing this new one. The existing Scheme came into operation in 1959 and, apart from the extension of the man-day limits in 1962, has remained unchanged. A total of 53,000 small farmers have had farm business plans approved under it, and up to May 31 this year some £30 million had been paid in grants. In many respects the Scheme has been a success, and I am sure that many of the small farmers who were assisted by its provisions have benefited permanently. But during the years over which it has operated, certain disadvantages have emerged. Perhaps the most significant is that the Scheme placed a great deal of emphasis on the traditional aspects of husbandry-ploughing, ditching and so on—not only as a way of increasing the efficiency of the business but as a means of earning grant. The small farmers of to-day—and more particularly those who occupy the rather larger businesses which we are now proposing to assist—are, however, well versed in the skills and arts of husbandry. What has not been emphasised, perhaps, in the past is the need for farmers to exercise the skills of modern business management. The farmers with whom we are now concerned need help and advice to acquire these skills. This Scheme is designed to give them that advice, and the payment of fairly substantial annual grants will help them to implement the management decisions which they take.
The Scheme will operate from September 1 next until August 31, 1968. Over its full life, which of course will extend for three years beyond this latter date, the total cost in the United Kingdom is estimated to be £22 million, of which about £5 million is expected to arise at the end of the first year. The details of this Scheme have been fully discussed and agreed with the Farmers' Unions, and I commend it to the House.

EARL FERRERS
My Lords, the noble Lord, Lord Champion, has given us interesting details about this scheme and your Lordships will be grateful to him for doing so. I am bound to say that my own reactions are only lukewarm, because I cannot help wondering how much real good will be done by this scheme, which the noble Lord has outlined. The noble Lord will remember that his Government have all along, hinted and implied—indeed they have put their words into print in the annual determination White Paper—that many farms are too small and must amalgamate and join together to make small farms into bigger farms. I wonder therefore whether it is not an anachronism for the noble Lord to come forward with a scheme designed solely for the continuation of small farms. One wonders how to reconcile the two points of view.
I feel that before long the noble Lord's Government will have to take a very far-reaching decision about the future of the small farmers. At the moment, if I may so put it, they are rather like a hen scratching around on top of a stack. They come forward with small schemes like this one which do not have any great impact, and at the same time they suggest that small farms must be joined to make bigger ones. It should be pointed out to the noble Lord that this is a matter of paramount interest not only to small farmers but to all farmers who wish to know exactly what is wanted of them now, and in five, ten and twenty years' time. I hope that at some time in the near future the noble Lord will be able to tell the House precisely what are the Government's intentions regarding this matter.
Some months ago I asked him a Question on the subject and he said that the future of the small farmers was being discussed. So far we have heard no results of the discussions. Perhaps they will be announced in line with the announcement to which the noble Lord alluded in his reply to the question put 1168 by my noble friend Lord Hurd. I am aware that a scheme for small farmers may prove of assistance in individual cases, but taken as a national plan it can be received, I would say, with only lukewarm enthusiasm, because we wish to know precisely what are the Government's intentions with regard to small farmers.

§ LORD FORBES
My Lords, I would support any scheme designed to improve the business efficiency of farmers, especially small farmers. Like the noble Earl, Lord Ferrers, I wonder whether the Government realise what problems they are creating for themselves over small farms in general. Do the Government realise that 50 per cent. of the farms In this country are under 50 acres in extent, and only 5 per cent. (I think it is) of the farms are over 200 acres? Every other European country is dealing with this problem. Is it not about time that this country began to deal with the problem presented by the small farmers? What is going to happen if we think again about entering the Common Market? We shall be on a very bad footing compared with other countries.

LORD INGLEWOOD
My Lords, may I ask the noble Lord, Lord Champion, one question about administration? The administration of this scheme would seem to be fairly complicated. If my memory is right, it will be more complicated than the scheme which it amends. Can the noble Lord assure us that this scheme will not place an undue burden on the resources of the N.A.A.S. and will not take the Service off other work which some of us think more vital? I remember that when the original scheme came in it was considered a pretty heavy load. This amended scheme may well be an even heavier load? Can the noble Lord enlighten us on that point?

§ LORD CHAMPION
My Lords, the noble Lord, Lord Inglewood, is quite right about the load on the N.A.A.S., but it has been found that the Service has been able to carry the load, and it is thought that the further extension of this Scheme into business management aspects will still be capable of being carried by the N.A.A.S. We think that preparations have been such that the Service will be able to carry on the Scheme. One reason why we have not gone up to the full 150 acres provided for in the Act of 1959 1169 is that we regard the 125 acre farm as the limit which the N.A.A.S. can assist at this stage. I think we shall have no difficulty on that score.
The noble Lord, Lord Forbes, and the noble Earl, Lord Ferrers, referred to the situation in which we appear, on the one hand, to be helping the small farmer and, on the other, to be saying that it is time he disappeared. I recognise the difficulty that we are perhaps getting into here. We hope and expect to assist those farms which could become viable and useful economic units. I would never say that every farm must be 200 or 300 acres in extent, or over. I believe that that would be quite wrong. In our view, many farms in the range we are considering may be made really sound economic units, and I believe that it would be to the advantage of the country to make them so. We recognise that there is what one might call a dichotomy—I think that is a nice word for this occasion—and I think that is the answer here. So far as other things are concerned, as I said to the noble Lord, Lord Hurd, when replying to his Question, we shall, I hope shortly—that is, within a very few days—be making an announcement of our proposals on farm structure which, of course, includes amalgamation and the merging of smaller farms.