AGRICULTURE PAYMENTS (EXTENSION) (NORTHERN IRELAND) ORDER 1974 (Hansard, 28 March 1974)

§ THE PARLIAMENTARY UNDER-SECRETARY OF STATE, NORTHERN IRELAND OFFICE (LORD DONALDSON OF KINGSBRIDGE)
My Lords, I beg to move that the Agriculture Payments (Extension) (Northern Ireland) Order 1974 be approved. The purpose of this Order is to renew the special assistance grant to Northern Ireland agriculture for a further three years at the current rate of £1.9 million per annum. The Order was made by the previous Administration on February 7 and laid before Parliament on March 12. Under the provisions of Section 32 of the Agriculture Act 1957 the Order will not be effective unless approved by Resolution of each House of Parliament. It was approved, I think I am right in saying, two days ago in another place.
The grant was introduced in 1954, following the changeover from fixed prices paid by the Ministry of Food to a system of deficiency payments based on the average market for the whole of the United Kingdom. It was recognised at the time that this would create special problems for Northern Ireland producers because of the disadvantages from which they suffer by comparison with producers in other remote areas in the United Kingdom. Northern Ireland market prices tend to be lower than in Great Britain for a number of the main agricultural commodities, so that even including deficiency payments the total returns for Northern Ireland farmers tend to fall short of guaranteed prices. In order to compensate Northern Irish farmers for this disadvantage, the Government decided in 1954 to make a grant each year for the purpose of assisting agriculture in the Province. The statutory authority for the grant is Section 32 of the Agriculture Act 1957. This provides for the grant to be extended, and for the amount of the grant to be varied at the time of its extension—subject to Parliamentary approval. The current rate of grant, under an Order which expires on March 31 this year is £1.9 million per annum. Under the Order before the House it is proposed to extend 744 this grant at the current rate for a further three years.
Finally, I should just say a word about the way in which the grant is used. The Department of Agriculture in Northern Ireland devises schemes that will help farmers there to overcome the disadvantages which they suffer as a result of their remoteness. These schemes are financed out of the grant. Those in operation at the moment are aimed mainly at encouraging better marketing and better quality production, particularly of livestock and particularly, in fact, of beef. Under the provisions of the Act, a statement has to be laid before Parliament before the end of each financial year, describing the substance of the schemes funded out of the Special Assistance Grant. The statement for the current financial year was laid before Parliament on February 4.
The schemes which are financed out of the grant are the responsibility of the Department of Agriculture in Northern Ireland, subject to general approval by the Agriculture Ministers for the United Kingdom and the Treasury. This general approval is needed because the grant is part of the total assistance given under the annual review system, and it has therefore to be used in ways consistent with the Government's agricultural policy. Subject to this proviso, the administration of these schemes is a matter for the Northern Ireland Department of Agriculture. My Lords, I beg to move.

§ LORD BELSTEAD
My Lords, I am grateful to the noble Lord, Lord Donaldson of Kingsbridge, for explaining this Order. As he reminded the House, the origin of the grant under this Order lies in the financial difficulties imposed on agriculture in Northern Ireland by the distance of farms from markets in Great Britain. The Statement which accompanied the Order, describing the schemes for encouraging greater efficiency of production and better marketing, makes it clear. I think, that the sum of £1.9 million is not by any means just a sum for supplementing the incomes of farmers. But, obviously, cost increases 745 must affect requirements for this grant, and I would ask whether the Government believe that the £1.9 million will in fact be adequate for the forthcoming year. I should have thought that the last year in farming has shown that it is going to be virtually impossible to predict with accuracy the movement of animal food prices in the forthcoming year; and of course this is especially true of Northern Ireland farmers, who it is considered face something like £4 million extra in the costs of their feedstuffs compared with equivalent prices for Great Britain.
I may not have read the Order correctly, but I cannot see in the accompanying Statement a mention of any schemes to support pig production. The noble Lord will know better than I do that pig farmers in Northern Ireland have been experiencing particular difficulties. I listened while my noble friend Lord Ferrers referred to the more advantageous arrangements which have been made for beef production in Northern Ireland compared with Great Britain, and I think I am right in saying that under the negotiations concluded in Brussels recently by the right honourable gentleman the Minister for Agriculture the arrangements for pig producers in Northern Ireland are the same arrangements as for pig producers this side of the water, in Great Britain. I believe that the Department of Agriculture in Belfast supports a pig improvement breeding scheme, with considerable effect, and I know that there are other grants for Northern Ireland agriculture. May I ask whether pig producers have any specific share of this grant, and may I express the hope that, if the answer is "Yes", their share is more substantial than I have noticed.
One further reason, I think, for questioning the adequacy of this year's grant is that the Order, as the noble Lord reminded us, was made on February 7 and indeed it bears the name of my right honourable friend the former Secretary of State for Northern Ireland. This means that the effect of the Chancellor's Budget of two days ago was obviously not considered in the drafting of the Order, and for agriculture, of course, the effects of the Budget are going to be quite formidable.
My Lords, after it was decided and announced in another place in December of last year that the intention of the 746 previous Government was that this Order should be continued for another three-year period there was a sharp increase in animal food prices. As a result, stock farmers have been working on desperately slim profit margins, or perhaps no profit margins at all; and they are now going to be required to absorb increased costs, including an immediate increase of 25 per cent. in the price of steel, a 30 per cent. increase in the price of electricity and, of course, the higher employer's share of the national insurance stamp. I say those things only because the noble Lord will know that, before he went to serve in Northern Ireland, the Northern Ireland Executive, in their statement of economic and social aid presented to the Northern Ireland Assembly, affirmed that the future of agriculture in Northern Ireland should depend on the development of grassland and the raising of livestock. I hope therefore that there will be opportunity for the size of the grant under this Order to be kept under review and that the Government will undertake to see that this is done.

§ LORD DONALDSON OF KINGSBRIDGE
My Lords, I thank the noble Lord for accepting this Motion in the spirit in which he has done. He has asked me three questions which, if I may, I will answer in reverse order. This grant has not been tailored to suit the Budget. It was arranged before the Budget, and it would be quite wrong to suggest that any effects which come from the Budget have been taken into account. That would hardly have been possible. Secondly, on the question of pigs, this grant has never applied to pigs and it does not apply to pigs to-day. The position of pigs in Northern Ireland is worrying everybody, and the position of the pig producer in England and the United Kingdom, including Northern Ireland, has been dealt with recently by my right honourable friend the Minister of Agriculture in Brussels. As a result, a considerable mitigation for the pig breeders' job has been achieved. The differential between producers in Northern Ireland and this country is under discussion between the Ministers and no decisions have yet been made. This matter is in the Minister's mind, however, and the Minister of Agriculture in Northern Ireland is in contact with my right honourable friend here on the subject. I cannot say more than that at the moment.
747 As to the adequacy of the grant, the noble Lord will know from past experience that it has never been fully taken up. The estimate for the take-up last year is between £200,000 and £300,000 short of the grant given, and it is not expected that it will be fully taken up this year. Without suggesting that Northern Ireland agriculture does not need its assistance looked at—I do not want anybody to think that we are trying to cut them down—this does not seem an appropriate place to do any more. We are giving, under this particular provision, rather more than they will in fact use.