SILO SUBSIDIES (ENGLAND AND WALES AND NORTHERN IRELAND) SCHEME 1965 (Hansard, 15 June 1965)

§ LORD CHAMPION
My Lords, I beg to move that the Silo Subsidies (England and Wales and Northern Ireland) Scheme, 1965, be approved. I suggest that it may be for the general convenience of the House if we discuss at the same time the Scottish Order which is in similar terms. Both Schemes require to be approved by a Resolution of the House. These Schemes are made under the authority of the Agriculture (Silo Subsidies) Act, 1956, and will enable silo subsidies to continue to be paid after the end of next month and so give applicants a final opportunity to apply for a subsidy. The present Schemes, 13 which were made in 1962, end on July 31 this year. The Schemes now proposed will allow applications to be made up to July 31, 1966, and approved up to the end of that year. The 1965 Schemes will run precisely on the same lines as those for 1962.
The Silo Subsidies Schemes offer grants towards the cost of constructing or improving silos for the ensilage of grass or other green matter. The first Schedule to the Schemes explains what the rates of subsidy are for the various operations in constructing or improving a silo and it will be seen that, as in previous schemes, there is a £250 limit to the amount of grant which may be paid on any one agricultural unit. Within this figure, there are separate maxima of £125 for work on silos, excluding the roof, and £125 for work on the roof. These limits were set because the object of the grant is not to provide a continuing support to the construction of all silage buildings, but to improve grassland management by encouraging farmers, particularly small farmers, to start making silage and to accept advice from the National Agricultural Advisory Service.
The subsidies have achieved a considerable measure of success in furthering this objective, and since they were introduced in 1956 no fewer than 50,000 applications have been approved in the United Kingdom at a total grant cost of over £8 million. Demand in the early years of the subsidy was high. In 1957 over 13,000 applications were approved in the United Kingdom involving grant of just over £2 million. But, as might be expected with a "once-only" subsidy of this nature, applications became fewer as the subsidy progressed, and in 1964 they had fallen to 2,000 a year in the United Kingdom at a grant cost of £300,000. We regard this as an indication of the success of the subsidy rather than the reverse, and we consider that the subsidy has now served its purpose and can be brought to an end with the one-year 1965 Schemes. This will give those who have not yet benefited from the subsidy clue notice of its termination and a last chance to put in their applications.

§ LORD FORBES
My Lords, the Silo Subsidy Scheme was an excellent scheme—unfortunately, the operative word is "was". To-day it still sounds as if it is a good scheme. In actual fact, it is nothing more than pure "shadowboxing". The scheme was originally introduced in 1956, as we have heard from the noble Lord. It was then introduced as a sort of education for farmers in the making of silage for winter feed. It has had the desired effect: it has aroused interest in silage-making, so that to-day there are very few farmers in the country who do not possess the knowledge of silage-making.
Agriculture in this country has advanced by leaps and bounds during the last ten years. What is wanted now is the construction of silos so that silage can be made not just in hundreds of tons but in thousands of tons. The more home-grown fodder can be conserved for winter the less imported foodstuffs we shall need. This surely must make a contribution to our balance-of-payments problems. I should have thought that it was something that even this Government cannot afford to ignore. Instead of farmers being encouraged to build silos and make silage, as they have already been educated to do, one finds that it is the Farm Improvement Scheme, not the Silo Subsidy Scheme, which gives up to a third grant and which has done so much to bring British agriculture to the forefront of world agriculture by assisting farmers and owners not only in carrying out improvements but also in erecting every type of farm building—except the very buildings which are wanted, silos. Silos can qualify under the Farm Improvement Scheme in only very limited circumstances. It is in this matter that the great anomaly, the sham, exists, and it should be brought to light to-day.
It is a well-meaning Scheme, but all that it is doing to-day is holding back the making of silage. It is being used to deny the farmer or the owner the opportunity of getting Farm Improvement Scheme grants. To-day a silo, especially a tower silo holding from 800 to 1,000 tons of silage for a 250 to 300-acre farm, can cost anything up to £3,000, and it can cost even more. For that the only grant is £250—well under 10 per cent.—from the Silo Subsidies Scheme, yet for 15 Dutch barns and all other buildings the grant is over 33 per cent. It just does not make sense.
I believe that there is another anomaly which should be brought to light. If two smallholdings are being amalgamated, which naturally means that more silage is required, and the grant under the Silo Subsidies Scheme has already been paid on one of the holdings, it is then impossible to get a grant on the enlarged holding. The solution must obviously be that silos should qualify at once under the Farm Improvement Scheme, and the Silo Subsidies Scheme could then be dropped—not next year but this year. I know the difficulty, as do many of your Lordships, in that the Farm Improvement Scheme is running short of money; but if it is judged to be a good scheme, then the answer is that more money must be voted for it. That, I am quite certain, is the only way to get round this blatant anomaly. I ask the Minister to give an undertaking that Her Majesty's Government will do what I have suggested as quickly as possible.

EARL FERRERS
My Lords, I was interested in the figures which the noble Lord, Lord Champion, gave of the number of applications for silo subsidies, which he said had been gradually decreasing. I think that is perfectly true, and the appearance throughout the country is that there are far fewer people applying for the silo subsidy. Half the reason is that nowadays one can get a farm improvement grant on a silo which is placed underneath a covered barn, and that is the way in which a number of farmers are making their silage. What my noble friend Lord Forbes has said is perfectly true. There is a very strong case for incorporating the Silo Subsidies Scheme in the general Farm Improvement Scheme. This Scheme was produced before the Farm Improvement Scheme was brought out and was excellent for its purpose, but I think there is now a strong argument for bringing it in with the Farm Improvement Scheme. Would the noble Lord be good enough to say whether, when the Silo Subsidies Scheme comes to an end, the provisions of it will be incorporated in the Farm Improvement Scheme?

§ LORD CHAMPION
My Lords, I agree with the noble Lord, Lord Forbes, 16 that this Silo Subsidies Scheme has done precisely what it was initially intended to do by the Administration which passed the original Act; and that was to serve an educating purpose. That has been done. But I noticed in a farming paper over the weekend that even now there is not sufficient silage made in Wales, where it clearly ought to be, as that is a country which has a lot of rain and does not get good haymaking weather. There is still a lot to be done on this business of education, but we are not ignoring the comparative success of the Scheme up till now. We are continuing it for a further period—only a short period, it is true—but in the meantime, as I told the noble Lord, in answer to a Question which he put down to me some time ago, this matter is being reviewed in conjunction with the preparation for the Annual Review. I can tell him that consideration as to whether we include silos, and in what form, in the Farm Improvement Scheme for the future is still in progress. The Department hopes to conclude its consideration of this matter long before this Scheme comes to an end. Does the noble Lord wish to interrupt?

§ LORD FORBES
My Lords, the noble Lord said that there were still farmers in Wales to be educated. May I suggest that the quickest way of educating them is to give them a 33⅓ per cent. grant, rather than £250?

§ LORD CHAMPION
My Lords, I am not too sure that grants always educate, although they can help in some respects. But this is really a matter for the benefit of the farmer himself, and he ought to learn, even without the benefit of a subsidy. It is a bad farmer who does not know that making silage is the right thing to do with a wonderful crop such as grass can be.
Tower silos were not excluded by this Administration from the Farm Improvement Scheme: they were excluded by a previous Administration. We are considering whether they ought to be brought into this Scheme, which would enable them to get on with more expensive things. But I am not making any promises here. All I am saying is that it is being considered, and a decision will be taken upon it before this Scheme actually comes to an end. At this time I cannot say more than that.
17 The noble Lord, Lord Forbes, made a point about two units coming together into a single unit and not being able to qualify for a subsidy, because one of the two units had already had a £250 subsidy when they were separate. As I have said, the object of the silo subsidy is to encourage farmers to improve their grassland management and to start making silage. Once it has done that, its job is done. The subsidy is not meant to provide continued support for the construction of all the silage buildings, wherever or whenever they may be erected. That is why the agricultural unit plays such a part in the administration of this subsidy, which came in under an Act of the noble Lord's own Government—indeed, I am not sure that he was not in the Government at the time when the Act was placed upon the Statute Book.