HL Deb 11 May 1976 vol 370 cc900-5

5.5 p.m.

Lord KIRKHILL

My Lords, I beg to move that the Hill Livestock and Young Cattle (Compensatory Allowances) (Scotland) Regulations 1976, a draft of which was laid before the House on 7th April be approved. Your Lordships may recall that when the order revoking the Winter Keep (Scotland) Scheme 1975 was debated on 18th December last I undertook to put proposals before your Lordships' House to provide for assistance to be given for a further period to certain farmers in Scotland who had been eligible to receive aid under that scheme. The Regulations now before you fulfil that undertaking.

Noble Lords will no doubt have observed that, while the draft Regulations now before this House are broadly the same as the Hill Livestock (Compensatory Allowances) Regulations 1975 which replaced the hill cattle and hill sheep subsidy schemes, they differ from them in three important respects. These are, first, they apply only in Scotland and to a restricted category of person; secondly, there, is provision for payment on young cattle between 6 months and 2 years old as well as on adult cattle and sheep; and, thirdly, the rates are lower than in the main Regulations. Your Lordships might find it helpful to have a brief explanation of these and the other main provisions of the Regulations now before you.

Let me deal first with the persons who will be eligible for compensatory allowances under these Regulations. There are three conditions which have to be satisfied. The Regulations apply only to persons who occupy eligible land—that is, livestock rearing land—within the boundaries of the less-favoured areas; applications will be accepted only from persons who received acreage grants in 1975 under the Winter Keep (Scotland) Scheme 1975 and who either do not qualify under the United Kingdom Regulations (because, for example, they have no adult stock) or opt to receive payment under the draft Regulations now before your Lordships' House instead of under the United Kingdom Regulations; and, lastly, in compliance with a provision of the EEC Directive, occupiers other than old-age pensioners must sign an undertaking to continue to use eligible land for a period of five years in order to qualify for payment.

As regards eligible stock, the Regulations provide for payment to be made on breeding cows and ewes, the former being defined on page I and the latter being defined on page 2, as female sheep which are more than one year old on the qualifying day. In addition, however, as provided for in the EEC Directive, provision is made for payment on young cattle not less than 6 months old and not more than 24 months old on 1st January in each of the years for which payment is to be made.

Let me turn briefly now to the rates of payment. As I indicated earlier, the purpose of the Regulations is to provide assistance to a particular category of farmer at about the same level as in the past, and the rates specified in paragraphs (2) and (3) of Regulation 3 have been fixed with that in mind. They are: £15 for breeding cows; £9 for young cattle; £2.40 for hill sheep; and, £2 for upland sheep. As in the United Kingdom Regulations, the higher rate for sheep will be payable on recognised hardy breeds which are maintained on the harsher type of livestock rearing land, and the lower rate will be payable on other eligible ewes. In the United Kingdom Regulations, in conformity with a provision in the Directive, payment is restricted to a maximum of 50 units of account per hectare of eligible land. This represents a stocking limit of about one cow per hectare at current rates. In the Regulations now before your Lordships the maximum is set at 30 units of account which, at the rates in these Regulations, will cover stocking at about one cow per hectare.

It will be clear to noble Lords from paragraph (1) of Regulation 3 that payment is to be made for two years only; that is, for 1976 and 1977, for this is a transitional arrangement. The number of persons opting to receive acreage grants instead of headage supplements has declined considerably in recent years and it is now estimated that fewer than 1,000 farmers will claim payment under these regulations, whereas a total of about 22,000 Scottish farmers and crofters will receive hill subsidies. The farmers concerned will be able to review their system of management during this transitional period and consider whether they wish to change their farming practice so as to qualify for payment under the Compensatory Allowances Regulations which apply generally throughout the United Kingdom. I do not think I need take up your Lordships' time in explaining any of the other regulations, which relate to management and other conditions and are in all essential respects identical with the corresponding provisions in the 1975 Regulations.

Finally, noble Lords may wish to know that we estimate that the cost to the Exchequer of payment of compensatory allowances under these regulations will be about £460,000. The EEC Commission have been informed of our proposals and have not raised any objections, and Esc expect to obtain a 25 per cent. contribution from Community funds towards the cost of this scheme. With that explanation, I hope your Lordships will see fit to approve these Regulations.

5.12 p.m.

The EARL of MANSFIELD

My Lords, first may I thank the noble Lord, Lord Kirkhill, for his clear exposition of these regulations. Basically speaking, one can say immediately they are broadly acceptable, and one could go further and say that they will be welcomed by that portion of the farming community in Scotland concerned with the rearing of cattle and sheep on hill areas. It is fair to say that the threatened termination of the old winter keep acreage scheme has been a source of anxiety for some little time, and the various interests concerned have been pressing the Government to announce what their intentions were to be in the future.

The old scheme indeed played an important role in helping to stabilise stock rearing operations on the hill areas. I am sure the noble Lord and the Government will agree that it is vital that these areas should have continued support. As I understand it, the number of farmers we are talking about is comparatively small. I am informed that only a proportion of those eligible will indeed take advantage of the proposed regulations—a matter of something like 700 is my information—and the remaining 1,100 who will be eligible will probably find it advantageous to stay with the main hill livestock compensatory allowance scheme. As the noble Lord pointed out, for anybody not concerned with the rearing of young stock the payments are rather more generous so far as the latter keep scheme is concerned.

The only question I have of a slightly technical nature is this: will the noble Lord confirm that farmers who have units of less than three hectares in size will still be able to claim the flat rate £40 for 1976 and 1977 which I think was announced earlier this year? Other than that, the only regret—and I would not have the noble Lord think it is a carping regret—is that the Government are not in a position to give a more extended plan for the future than these regulations which, as the noble Lord pointed out, last for only two years.

So far as the rearing of cattle is concerned, perhaps the general public does not realise how far forward farmers have to plan if they are to have confidence and to put their money into the rearing of stock. There has been a considerable lack of certainty as we have gone over from the old system of deficiency payments to the new payments which are likely to have the blessing of the European Community.

The proof of the uncertainty may be gauged—if I sink to a personal level for one moment—in my own part of East Central Scotland. The proportion of store cattle coming forward to the markets in the past three months, as compared with two years ago, has fallen by about a third. I hasten to add that we are not particularly near a hill in our part of the world. It is a fact that where there is an absence of confidence, or where farmers are uncertain how the future lies, they do not take a risk and produce the creatures which will form the basis of our beef for some years ahead. I hope, therefore, that the Government will give continued thought to the proposals—as I am sure they will—and will soon be in a position to go some way to satisfy the farming interests that there will be a continued support scheme beyond 1977. Save for those words by way of a caveat, my Lords, we welcome these regulations.

Lord KIRKHILL

My Lords, the noble Earl has kindly and generously welcomed the main provisions of the regulations for which I thank him. I was specifically asked about the position of farmers with less than three hectares of eligible land. I am able to tell him that the position is this: the EEC Directive on Less-Favoured Areas precludes the Government from paying compensatory allowances to farmers with units of less than three hectares. Farmers who do not satisfy these requirements and previously received hill livestock subsidies, will be eligible to apply for special flat rate payments of £40 in 1976 and 1977, as announced on 13th February last by my right honourable friend the Minister of Agriculture, Fisheries and Food.

As to the noble Earl's more general question posed to me—namely, what was the Government's intention in the years which would succeed 1978?—I can draw his attention to the purpose of the regulations now before your Lordships' House which is to provide compensation for a relatively small and diminishing number of farmers; to give them time in fact to adapt their system of husbandry, should they so desire, so as to qualify for assistance under the 1975 regulations which implement the EEC regulations in less favoured areas over the United Kingdom as a whole.

I do not think that it would be right to provide for aid on a continuing basis which is designed specifically for, and limited in application to, a special group of farmers. If there is evidence at the end of the two-year period that the termination of the scheme would cause serious hardship to a substantial portion of the farmers concerned, we shall be prepared to review the matter. It would be misleading and harmful to give the impression that this is other than a transitional measure ending in 1977.