§ 6.50 p.m.
My Lords, I beg to move, That the Draft Agriculture Act 1967 (Amendment) Regulations 1973, laid before the House on July 11, 1973, be approved. At the same time perhaps we may also consider the other two Orders which are standing in my name on the Order Paper. All three Orders are tied up with amalgamations of farm units.
They deal with annuities or lump sum payments to outgoers, and also payments of grants for amalgamations. There are some differences in the new Scheme from the one which is in current use. I am perfectly prepared to explain those differences to your Lordships if you wish it. On the other hand, your Lordships may feel that it would be more desirable to take these formally in each case. I beg to move.
§ LORD CHAMPION
My Lords, I think we ought to have some explanation. Up to now, with the existing Act we have had schemes for the amalgamation of farms to make them viable units. This still will be the case, I gather, under Orders that are now before us; but they introduce a number of new features consequent upon our entry into the E.E.C. It would be right to place on record what those differences are and how they will apply to 1615 those people who will be seeking amalgamations in order to bring about these viable units which are so badly needed. I do not know the extent of the differences to be made. The fact is that on the Continent as a result of the laws of inheritance they have been cursed in having too many too small units which have been completely unable to produce a decent standard of living for the people who were trying to make a living from them. It was right that on the Continent they should do something about this, but I wonder to what extent the fact that we are fitting these schemes into the E.E.C. schemes will affect, either badly or to their advantage, the farmers in this country. I think the noble Earl should explain this. I am sure he has the material with him, and I think it ought to be on the Record.
My Lords, I am entirely happy to explain the provisions of these three Orders because they contain new details. If I could refer to the first one which is the Agriculture Act 1967 (Amendment) Regulations 1973, we have always thought it right that a helping hand should be given to the occupier of a one-man farm who wants to resettle or retire and is willing to release his land in order to create or expand the farm large enough to provide work for two men. This particular scheme alters the powers of the Agriculture Act in three ways. First, it enables payments to be made for amalgamations which are carried out by leasing extra land as well as for amalgamations by purchase. This extension to leasehold amalgamations is not likely to have a material effect on the predominance of amalgamations by purchase, but it is expected to be of value in some cases where there are obstacles, such as trusts, to transfer of ownership.
Secondly, these Regulations enable payments to be made to an outgoer who gives up land for afforestation or public use, as well as in cases where all the land goes for farm amalgamation. There have in the past been cases where it is clear that the best use for all or part of the outgoer's land was not agriculture but afforestation. In such cases the outgoer will now be able to receive payment in respect of that land. As a safeguard against undesirable afforestation, para 1616 graph 9 of the outgoer's scheme makes it clear that payment will not be made on land released for afforestation unless the land is more suitable for forestry than for agriculture. Land released for public use would cover cases where, for example, the landowner acquires an outgoer's land mainly for planting, but proposes to use some of it for a public car park or a picnic place. It will facilitate the use of land for recreational activities or nature reserves, where appropriate. But grant will not be given for the release of land for public use where it would merely duplicate the provisions made under the Acts on land compensation.
Thirdly, the amending Regulations extend the factors which can be taken into account in deciding whether an outgoer is what one might call a full-time farmer. They enable a test to be based on his income from agriculture in general rather than just from the land he is giving up. This will widen the field of eligibility. These are Amendments which will enable the Community Directive to be implemented; but they are also desirable changes in their own right.
Now if one could look at the Farm Amalgamations Scheme, this gives effect to the changes announced on November 8, 1972. The existing scheme affords amalgamators a special rate of grant under the Farm Capital Grant Scheme if there is a need for new buildings, roads, or other "remodelling work". Instead of the special grants, paragraph 8 of the new Farm Amalgamations Scheme provides that the amalgamator will receive an acreage payment of £12.50 on the additional acreage obtained from the amalgamation up to a maximum of £1,250. The purpose of this is to assist farmers, many of whose needs are not so much for fixed equipment, but working capital for such things as livestock and farm machinery. Amalgamators will, as they are now, be required to maintain the amalgamated unit and not change its agricultural use without the Minister's consent for five years. In future, under the powers conferred in the Agriculture (Miscellaneous Provisions) Act 1972, the requirement will be personally binding on the amalgamator as a condition of grant instead of being registered as a land charge. The scheme no longer offers grant for boundary adjustments. We have found that this 1617 provision attracted very few applicants —in fact fewer than 200 since the inception of the scheme.
If I could now refer to the Payment of Outgoer's Scheme, I should like to draw attention to the alterations here. The annuities available to those of 55 years of age or more have been increased to a new minimum of £250, plus an annual payment of £2 per eligible acre, up to a maximum of £450. The lump sum which is available to those under 55, and also to those between the ages of 55 and 65, who have the choice but who prefer a lump sum to an annuity, has not been changed at the minimum, but the acreage payment has been increased from £10 to £20, while the maximum available has been raised to £3,000.
There are three other main changes to the schemes which will enable more farmers to benefit than hitherto. Under the existing scheme an outgoer must have occupied his unit on or before August 5, 1965. This scheme alters the date to January 1, 1973. The income tests have been modified to take account of the applicant's earned income only. Under the present scheme the total incomes of both husband and wife are taken into account. The next test requires not less than 50 per cent. of the applicant's earned income to have been derived from farming during a period of five years, and where other income does not exceed that from farming by more than £500. We do not wish to exclude from the main grants those people who, while they are occupied mainly on their farms, nevertheless supplement their income from other part-time employment.
A further condition is that outgoers should have spent not less than 50 per cent. of their working hours in farming during the five years prior to application. This requirement ensures that the main grants go to full-time farmers. Those who are not full-time farmers, however, will also be able to benefit from the Scheme which provides some incentive to part-time farmers. There are many uneconomic holdings in the United Kingdom where the occupier undertakes other forms of work in order to improve his income. Such a man will not qualify for the main grant if his income from other employment is more than £500 1618 above that from farming. But the Scheme provides an acreage payment for these cases at the rate of £10 an acre, subject to a maximum of £1,000. In all cases the first 10 acres do not count for the purposes of the acreage payment which is made on the area above 10 acres up to a maximum of 110 acres; but even below 10 acres full-time farmers are entitled to the minimum payment.
With these new conditions and the wider scope of the grants and improved incentives which are being offered, it is hoped that applications will have trebled by 1977–78, rising from the present level of about 1,000 a year to 3,000 a year or more in five years' time. Taking this into account, the changes which are now embodied in the new Scheme will cost an estimated additional sum of £11 million by 1977–78. This means that during the first five years of the Scheme we expect to incur a total cost of something approaching £27 million. There will be a contribution from FEOGA as a result of our membership of the European Economic Community, but it will be very small in relation to this expenditure—we estimate about £½ million in all over the next five years.
We hope that these Schemes will encourage more farmers to increase the size of their farms and therefore their incomes by undertaking amalgamations. When drawing up these proposals, the agricultural Departments have kept closely in touch with the organisations representing the agricultural industry who have welcomed the improved arrangements for outgoers, and there is every reason to hope for a good response from farmers and landowners. I hope that I have been able to explain to the House and to the noble Lord, Lord Champion, some more detail of these Schemes.
§ 7.3 p.m.
§ LORD CHAMPION
My Lords, by leave of the House, I would thank the noble Earl for having placed that information on the Record. There is just one point that still worries me. He tells me that compensation is going to be paid for farmers who leave their land for public use. This seems to me to be right outside an agriculture scheme altogether and ought to be included in some compensation provisions under other Acts of 1619 Parliament rather than under Regulations of this kind. This seems to be entirely new. I know that the afforestation is something new in this connection (at least, I think it is), but to talk in terms of an operation of this kind in relation to farmers who get out of their land in order that it can be used, say, for roads or something of that sort—I take it that public use must be involved—would seem to me to be rather strange if it is to be done in this way, having regard to the fact that we have Acts which provide for compensation for that type of situation. I wonder whether the noble Earl could help the House on that point.
My Lords, if I may be allowed to clarify that point, the noble Lord, Lord Champion, is quite right to be concerned about it. The point that I would make is that where there is any form of compensation under other Acts, then this will not be duplicated in this particular instance. The type of public use which could be exampled is, for instance, where a small unit may be joined on to another unit and part of that small unit may, for instance, be made into a picnic place or something for some other public use for which there is no outside grant or outside compensation under an Act. Up to now it was impossible to allow compensation to outgoers whose land was not specifically given to further agriculture. This scheme is designed first to bring it into line with the European Economic Community's organisation and, secondly, to enable cases such as this to be allowed to be undertaken. But I can reassure the noble Lord that there is no possibility of a grant's being duplicated and where land is subject to compensation as a result of other Acts there will not be a possibility of this being taken twice.