FARM AMALGAMATIONS AND BOUNDARY ADJUSTMENTS SCHEME 1967 (Hansard, 26 October 1967)

§ LORD BESWICK

My Lords, I beg to move that the Farm Amalgamations and Boundary Adjustments Scheme 1967, a draft of which was laid before this House on July 26 be approved. It might be convenient to noble Lords if we were also to discuss the next Scheme on the Order Paper which is related to it, the Farm Structure (Payments to Outgoers) Scheme 1967 at the same time.

The two Schemes have two main aims. First, to offer incentives to farmers who want to increase the size of their farms to enable them to make more efficient use of farm buildings and equipment, and at the same time to make a better living; and secondly, to help farmers who wish to leave their small and often uneconomic farms. Naturally, we hope that many farmers will avail 1779 themselves of these opportunities. But I want to emphasise what has already been said elsewhere, that the decisions to be taken are quite voluntary by the farmers concerned.

The Amalgamations Scheme is made under Section 26 of the Agriculture Act 1967, and it runs for seven years. It applies to the whole of the United Kingdom, and provides for grants of 50 per cent. of the cost of a wide range of expenses arising from the amalgamation of small farms and the reshaping of farms to give more satisfactory boundaries. To qualify for grant an amalgamation must combine an uncommercial unit with other land to form a commercial unit or, exceptionally, if a commercial unit cannot be formed in one step, to form an intermediate unit as the first stage.

A commercial unit may be defined as one that can provide full-time employment for the farmer and at least one other man. An uncommercial unit is one too small to qualify as commercial, while an intermediate unit must be capable of providing full-time work for one man. The size of each is assessed on the basis of how much employment it can provide, assuming a system of husbandry suitable for the district, and that the greater part of the livestock feed is produced on the farm. This means that a unit is assessed on the potential of the land and not necessarily on its current use.

There is no upper limit to the size of a commercial unit, but the tests in paragraph 5 of the Scheme of whether proposals are prudent, reasonable in cost, and effective, will prevent the creation of unwieldy units. To exclude farms which are essentially part-time the Scheme does not apply to uncommercial units which are not big enough to provide at least 100 days work a year. If an applicant proposes to form an intermediate, but not a commercial, unit, the proposed unit must satisfy the tests in paragraph 5(2) to show that the new unit will be a real step towards a fully commercial unit. The Scheme provides that the potential required of commercial units, which must provide full-time employment for not less than two men, is at least 600 days work a year; and that the potential 1780 required to qualify as an intermediate unit is 275 days work. In assessing the potential of existing and amalgamated farms, the current list of standard man-days as set out in the Small Farm (Business Management) Scheme will be used. These are not, however, written into the Amalgamations Scheme since it is intended to keep it as flexible as possible.

It would, of course, be wrong to provide grants for the reconstitution of any commercial units which have been deliberately split up into uncommercial units since August 4, 1965, the date these proposals were first announced. To safeguard against this, paragraph 3 of the Scheme makes such units ineligible unless the applicant can show a good reason—such as the death or bankruptcy of the owner—for the splitting up. The works or improvements eligible for grant are set out in the Schedule. As noble Lords will see, it covers a very wide range of items. The remaining provisions are reasonably self-explanatory.

May I now turn to the Outgoers Scheme. This Scheme is made under Section 27 of the Agriculture Act 1967. It applies to the whole of the United Kingdom and will run for seven years. It provides for the payment of lump sum or annuity grants to anyone who gives up occupation of an uncommercial unit so that it can be incorporated in an amalgamation. To qualify for this grant an applicant is required by paragraph 4(1) to have occupied the land he proposes to give up throughout the period from August 4, 1965, the date these grants were announced. This is to prevent people speculatively buying farms just to get a grant. People who have inherited farms or taken them over from members of the family may, however, qualify under paragraph 5 provided they have worked on the farm for at least two years by the time they submit their proposal to give up occupation. A surviving wife or husband need only have lived on the farm or occupied it for two years.

Both tenants and owners of farms are eligible under the Scheme, but tenants must hold full agricultural tenancies. They must give up their land for an amalgamation under the Amalgamations Scheme or on sale to the Minister or to a rural development board. The provision in paragraph 4(2) is to stop people 1781 deliberately reducing a unit in size in order to qualify under this Scheme for grant. But we do not wish to inhibit farmers from carrying out amalgamations of very small farms outside the scope of the Scheme. Under paragraph 6, therefore, a farmer may qualify for grant if he has added land to his farm. He must have occupied all the land he proposes to give up for at least two years, and sufficient of the land to form an uncommercial unit during the whole of the time from August 4, 1965.

Her Majesty's Government have always made it clear that the outgoer's grant is intended for those mainly dependent for their livelihood on the farms they want to give up. This is why we have the income test in paragraph 7. It will enable a farmer to qualify under the Scheme if the annual income of himself and his wife from sources other than farming does not exceed £400. And in these cases it does not matter whether they get a lot or little from the farm. But if a farmer and his wife have more than £400 from sources other than the farm, then they must have an income from the farm of £3 for every £1 over £400 from other sources. This test will enable farmers to derive a reasonable amount of income from outside their farms but it will, at the same time, exclude from the scheme those for whom farming does not represent their chief source of income.

Paragraph 3(1) empowers the Minister to impose conditions in paying grant. One of the conditions we propose to make is that the recipient of an annuity and his wife must give up farming. As the idea of the annuity is to ease the farmer's retirement he must not expect to get the grant and go back into farming. We realise, however, that a retired countryman may wish to "farm" on a small scale as a hobby or to meet family needs, and as long as the activity does not provide him with work in excess of 100 standard man days he can do this. Moreover, the farmer's wife (or husband) is entitled to receive the half annuity after his or her death. No similar condition will be imposed on outgoers who take the lump sum.

My Lords, these are small measures, but they should make a real contribution towards a lasting improvement, both in the structure and in the efficiency of the agricultural industry. They should 1782 also be of help to some of those who have struggled hard in the industry to make a living. The rate of grant has been improved since the discussions on the Agriculture Bill. They now offer, as I think most noble Lords will agree, an attractive incentive and will, I believe, evoke a satisfactory response. I invite the House to approve these two Schemes.