§ 3.58 p.m.
§ LORD BESWICK rose to move, That the Draft Ploughing Grants Scheme 1969 laid before the House on April 29 last be approved. The noble Lord said: My Lords, I think we can deal with this Order together with the Ploughing Grants (Scotland) Scheme 1969. As noble Lords will know, this grant is available for ploughing up grassland which is at least 12 years old and abnormally costly to bring into cultivation. It is designed to encourage farmers to reclaim land which would otherwise be unproductive. About 40,000 acres are reclaimed each year with the assistance of this grant, and I am sure we all get some satisfaction from the fact that this helps to offset the amount of good agricultural land which is taken over for—as one would say—less attractive purposes, such as urban development, roads and reservoirs.
§ The provisions of the Scheme are virtually unchanged from those of previous years, apart from one alteration in connection with the administration of the Scheme. First, however, I would deal briefly with a point raised by the noble Lord, Lord Nugent of Guildford, during the debate on last year's Schemes. He then asked if we would look at the rate of grant to see whether it was sufficient to encourage farmers to undertake the work concerned. I think that the fact that the land ploughed annually remains at around 40,000 acres shows that farmers do still find the Scheme worth while. In addition, figures available for the 1968 Schemes to date show that 76 per cent. of the approved acreage will attract grant in excess of half the estimated cost of operations. This is well above the rate for most other agricultural improvement schemes. The administrative change re 484 lates to the operation of the Scheme in Wales, for reasons of which I think most noble Lords will be aware. In other respects, apart from such necessary change as the revision of dates, the Schemes are as for previous years, and I trust that your Lordships will agree that they continue to serve a useful purpose in our agricultural economy and will agree to their approval. I beg to move.
§ Moved, That the Draft Ploughing Grants Scheme 1969 laid before the House on April 29 last be approved. —(Lord Beswick.)
§ 4.2 p.m.
§ LORD NUGENT OF GUILDFORDMy Lords, may I thank the noble Lord, Lord Beswick, for moving these two Orders and explaining their purpose to us. And may perhaps slightly out of order, congratulate him on his dialectical skill in dealing so effectively with the previous Order—somewhat helped by the bell from Northern Ireland. The noble Lord has explained to us the purpose of this Scheme, which is to encourage farmers to plough up old pasture, and has told us that as a result an annual acreage of 40,000 to 50,000 acres is being ploughed up, which is admirable and entirely to be welcomed and of course we are going to approve the Scheme. But the noble. Lord really has to answer a further question on this matter, because he and his right honourable friend the Minister have committed themselves to a major expansion programme for agriculture. They have adopted the target of the "Little Neddy" report which postulated an increase in the cereal tonnage of 3½ million tons per annum over five years, which would involve ploughing up an extra 1.7 million acres. That would be necessary in order to get this very major increase in the total yield of cereals in this country.
If we compare this modest annual increase, which, as the noble Lord says, is exactly the same as we have had in previous years, with that huge target at which the Government are now aiming over the current five years, we get a considerable contrast. If an extra 1.7 million acres are to be ploughed up over a five-year period, it means, if my arithmetic is correct, approximately an increase of 350,000 acres per annum. Most of this would be from old grassland. That is indeed what the "Little Neddy" report told us: that the extra acreage would 485 have to come from the Midlands and the West, outside the traditional arable areas—areas, I may say, which were ploughed up during the war years and could be ploughed up again if the incentives were there. These areas could be growing cereal crops and could be more productive than they are now; and therefore normally most of them would qualify for a 12-year ploughing subsidy.
What this point amounts to is that this modest target which the noble Lord, Lord Beswick, has so persuasively offered us, of 40,000 to 50,000 acres per annum, has to be compared with the target the Minister has adopted of 350,000 acres per annum; in other words, it is about one-eighth of the target which the Minister has adopted. It is lamentably short of what the Government have adopted and what we had all hoped they were going to do. This is not the moment to repeat what we said last month in the debate we had on agricultural affairs and the Price Review, but I really feel that the noble Lord, Lord Beswick, has to answer that question. How on earth does he square this extremely modest target, which has been rolling on year by year and has been satisfactory within its limits, with the great expansion programme which he and his right honourable friend the Minister have adopted? Before we approve this Order I feel he has an obligation to answer that question for us.
LORD HENLEYMy Lords, I do not think this Order ought to be seen in relation to the Government's whole agricultural policy; therefore, for that reason I do not want to enter into a discussion on the Government's policy which we have previously debated. This Scheme can be seen only in isolation. I think it will be useful, as it has been useful; but again it is one of those subsidies which might well be phased out, partly because it is wrong to subsidise an actual action rather than the end price, and partly because we are. I have a sneaking feeling, perhaps ploughing too much and need not encourage people to go on ploughing. Where ploughing is suitable, farmers are already encouraged to plough, because of the increase in the price of cereals and so on. I do not feel that it is a very valuable operation to encourage people to plough out old grass. I firmly hold to the view that there is 486 a great deal of land which should not be ploughed, and I think that this grant does encourage people a little to plough. We ought to look at this matter much more in terms of subsidising the drainage of land and the rehabilitation of old grass. Be that as it may, so far as it goes I welcome this subsidy. Nevertheless, I should like to see this also phased out.
EARL WALDEGRAVEMy Lords, I should like to follow my noble friend Lord Nugent in this matter much more than the noble Lord, Lord Henley. It seems to me that there are two ways in which you can support agriculture: either by high end product price, or by subsidy and deficiency payment. What I think is doubtful is that you can support an agricultural expansion programme by constantly cheese-paring and saving candle ends on the subsidies without altering the system and giving a larger end price. The fertiliser subsidy has now passed. There was an intervention about Northern Ireland; otherwise I mould have spoken on that Order.
The noble Lord, Lord Henley, made the same point—that he is not quite sure whether this is the right subsidy to give. That is rather immaterial. The point is that at the moment we are running on a system whereby agriculture has the end products low and the subsidies and the deficiency payments are made up by the Government. It is penny wise, pound foolish, to cut ploughing subsidies which make for good husbandry, and fertiliser subsidies which make for modern agriculture, unless you alter the system and give a larger end price. Therefore the Conservative Party is going to alter this system and give a larger end price. The present Government are not going to do that, and so I should have thought were precluded by their own philosophy from cutting the subsidies, as they so frequently want to do. I think this point should be taken into consideration.
LORD NUNBURNHOLMEMy Lords, I take it that this ploughing-up grant deals mostly with marginal land. What I should like to emphasise is that although to get more cereal production from this country we must plough up about ten times what is being achieved by this grant, to get the end product not next year but in five years' time we have also to put land back to grass. I 487 cannot emphasise this point too much. I do not mind good grassland being ploughed up, but I should like to encourage the better use of the remaining grassland. This year I put my sheep population on 25 acres. I have gone from 200 to 300 sheep, plus nine cattle, per acre on those 25 acres. That is purely by putting fertilisers on the grass. Therefore, it does not matter: we can plough up on our grass, but we must farm the remaining grass better.
LORD INGLEWOODMy Lords, may I ask the noble Lord one question about the reasoning behind these two Orders. To a greater or less extent they must, I think, be associated with the expansion programme, which I feel is not going to make much progress so long as interest rates are as high as they are; because there will be no inducement in £12 or £14 for ploughing out old grass. I gather that it need not be all marginal land. The test is when it was originally sown down to grass, good or bad. Having done so, the farmer, on checking over, discovers that he would be a fool to borrow money at the present rates of interest, and that if he were such a fool and went to his bank manager, the bank manager would tell him that he was not allowed in fact to lend it to him.
The point I want particularly to make is this. Under this Order the noble Lord is apparently satisfied with a stable annual turnover of acres ploughed out and the subsidy remains the same as the previous year. Under the previous Order, in fact, the need is for an increased use of fertiliser, which the noble Lord appears to think he is going to achieve by reducing the grant.
§ LORD BESWICKMy Lords, after the rather tricky contribution from the noble Lord, Lord Inglewood, I am afraid that I rather need another sort of break crop in the form of another Statement, but I will do my best to answer the points that have been made. Again I am grateful to the noble Lord, Lord Henley, for to some extent replying to what was said by the noble Lord, Lord Nugent. I am rather surprised at the noble Lord suggesting that this scheme is a major part of the expansion scheme. The noble Lord, Lord Inglewood, said that to a greater or less extent it has to be related 488 to the expansion programme. I should have said to a lesser extent.
§ LORD BESWICKYes; it does not purport to be a major element in the expansion scheme. When I said that the amount of the land which was ploughed up remains fairly stable it was really answering a point which has been made by others, not in this House but in another place, that the grant was not sufficient to encourage ploughing at present costs. The fact is that the 45,000 acres or so remains fairly constant, which rather indicates that it is an inducement to plough up, not marginal land but derelict land, and land which has not been put under the plough for at least 12 years. We are here dealing with a marginal part of the farming scene, although it is not marginal land. I hope that is not too subtle for the noble Lord, Lord Inglewood. The noble Lord, Lord Nunburnholme, said—and I must agree with him—that if we are going to get—
§ LORD NUGENT OF GUILDFORDMy Lords, may I interrupt the noble Lord before he leave; that point? I was not on the point of lack of incentive to farmers to meet the expansion programme; I was on the point of the matter of physical fact, that the noble Lord would not be able to reach his expansion programme of an estimated 350,000 acres per annum without ploughing up large areas of old pasture, and that his own estimate allows for only an extra 45,000 acres.
§ LORD BESWICKMy Lords, I was about to come to that point. I was not suggesting that the noble Lord himself would say that there was an inadequate incentive here for this subsidy to help the purpose for which it was intended. I am saying that it is adequate for that particular purpose. But I was also saying to the noble Lord that it is not intended to be a major weapon in the expansion programme. I was about to go on to say that I thought that the noble Lord, Lord Nunburnholme, was on a better point when he spoke, not entirely with relevance to this Order, about the work that was necessary in ploughing up other land. He rightly called attention to that. It was necessary 489 to do so much more: it was necessary to have better husbandry, it was necessary to put under plough good land. I would agree with him. But that is part of the farming job, and the farmer is helped in carrying out that kind of work by the increase in the awards under the Annual Review. I was about to make that point.
Do not judge the expansion programme by this Scheme. This is a Scheme which is intended to carry on a certain needed job but it is a comparatively minor job and it would he a mistake to suggest otherwise. There are, of course, other schemes, such as the Hill Land Improvement Scheme and the Farm Improvement Scheme; but mainly one is dependent upon the price which the farmer gets for his end product. Certainly we made some economy on the fertiliser so that we could concentrate assistance on the end product support price. Most people seem to think that that is the best way to go about it. That indeed was what the noble Earl, Lord Waldegrave, was saying in his intervention, that the end product price is important. But he appeared to be under some misapprehension because, as I understood him, he said that it is no good cutting ploughing subsidies unless you have a higher end price. But there has been no cutting of the ploughing subsidies and there has been a higher end price. This is what we were discussing a little time ago.
LORD HAWKEMay I ask the noble Lord a question on that point? It is not clear to the lay mind. Suppose the farmers do plough up 350,000 acres instead of 40,000. Will any of the 260,000 acres be eligible for this subsidy or will the noble Lord have to come for a supplementary Vote for it?
§ LORD BESWICKMy Lords, I am not sure which 350,000 acres the noble Lord is referring to.
LORD HAWKEMy Lords, I was referring to the 350,000 acres that my noble friend says will have to be ploughed up in order to fulfil the Government's target.
§ LORD BESWICKMy Lords, I am saying that I do not know to which 350,000 acres of marginal land the noble Lord is referring. Here we have tight restrictions; the qualifications are quite narrowly drawn—
§ LORD BESWICK—and it is not thought that land of the amount suggested would qualify.
§ LORD NUGENT OF GUILDFORDMy Lords, may I say this to elucidate a point? The" Little Neddy" report explained that the 1.7 million acres of new land which would have to be brought under the plough would have to be found outside the traditional farming areas; that is to say, mostly from permanent pasture, and therefore it would qualify for the 12 year qualification in this grant. That is what I was talking about.
§ LORD BESWICKYes, I see. That is not my understanding of the position. I should not have thought that that acreage was eligible as derelict land.
§ LORD NUGENT OF GUILDFORDThis is not intended.
§ LORD BESWICKNo, it is not; but it is very likely to be if it qualifies for this particular grant.
§ LORD NUGENT OF GUILDFORDTwelve years.
§ LORD BESWICKAnd it has to be derelict or similar grassland. But I will look at the point which the noble Lord has made. will check my own wider standing of the Scheme. If he is proven to be right, then he can find ways and means later of showing to the House that he was right and I was wrong. In the meantime, I rather think that, small as it is, he would like this Scheme to go forward, and I hope that we can now approve it.
§ On Question, Motion agreed to.