AGRICULTURAL AND HORTICULTURAL CO-OPERATION (VARIATION) SCHEME 1977 (Hansard, 2 May 1977)

§ Lord STRABOLGI
My Lords, I beg to move that the Agricultural and Horticultural Co-operation (Variation) Scheme 1977, a draft of which was laid before this House on 19th April 1977, be approved. Before I describe the effect of this Variation Scheme I should like to remind your Lordships that the Scheme which it varies was made in 1971 and provides for grants to be paid to co-operatives towards formation costs, studies and managerial salaries, and also for capital development. No applications can be accepted under the scheme after 14th May this year when the new order comes into operation, but an Instrument laid in another place has the effect of extending the period for another three years. The effect of the Scheme now before your Lordships is to reduce the amount of grant that can be paid in respect of capital development so that co-operatives and individual farmers are treated equally.
This has been a useful Scheme and has I believe helped the formation of cooperatives although it must be admitted that agricultural co-operation has not developed in the United Kingdom to the extent it has on the Continent. For much of the period during which the 1971 Scheme operated co-operatives had a slightly higher rate of grant than that available to the individual farmer. We thought this would encourage co-operative development but a recent review of the grants shows that the majority of grants go to long-established and successful organisations rather than to those newly established. It was felt moreover that successful co-operation would be most likely to flourish if co-operation was its own reward and while they certainly should not be treated less favourably than individuals it was difficult to justify a higher grant rate simply because of a co-operative constitution. The Instrument now before your Lordships will bring the rates of grant into line with those that can be paid to the generality of farmers and growers. However, the range of items on which co-operatives can receive grants is wider than that for the individual farmer, and, in addition, they have a range of non, capital grants as well.
843 It is intended to make some administrative change in the eligibility of non-capital grants. Launching aid for newly formed co-operatives and grants towards salary costs of key staff for the first three years of new ventures will continue to be provided but established co-operatives will be expected to finance costs in the normal way. This is in line with EEC thinking. The conditions for non-capital grants are not set out in the Scheme but are governed by administrative guidelines, and it is our intention to take account of developments in the EEC in any further adjustments that may be necessary.
Before I sit down, I should like to compliment the Central Council for Agricultural and Horticultural Co-operation on its work to encourage co-operation. The Council shares with the agriculture departments the administration of the grant scheme. The annual rate of grant is running at about £1 million and the changes should save about £300,000. This saving is, however, being returned to the industry in the renewal of the funds made available to the Central Council to encourage the development of those aspects of marketing from which agricultural and horticultural co-operative producers can derive most benefit. My Lords, I commend this order to the House. I beg to move.

Viscount LONG
My Lords, I am sure the whole House is most grateful to the noble Lord, Lord Strabolgi, for the information he has just given us on this Scheme. It was interesting to hear the noble Lord say that it was intended to bring it into line with the EEC. As I came into the Chamber, I wondered whether such would be the case, but now the noble Lord has mentioned it and obviously in the future alterations may have to be made to it. This particular Scheme has helped a great many people in agricultural and horticultural work and it is only right that it should now he brought into line.
We have little to criticise in regard to this Scheme because of its usefulness, but I should like to ask three or four questions, 844 and of course I understand that the noble Lord may not be able to answer them at a moment's notice. First, I should like to ask him what share of the market is now handled by the co-operatives. It seems to me there is probably room for more, but perhaps the noble Lord has more information on that matter than I have. My next point concerns the range of items on which co-operatives can receive grants not available to the individual farmer. I should be grateful if the noble Lord could give me some information about that. I have a feeling that when we are talking of the farmer here it should also include the horticulturist; they are both in need of this type of grant.
The third question I should like to ask the noble Lord, if I may, is what will be the effect on manpower of these changes. I think I am right in saying—I stand to be corrected—there is a reduction now of £300,000; I am wondering whether this scheme is going to affect manpower. I wonder whether he could answer that question. We do not want to hold this up. It has been extremely useful for those in the agricultural and horticultural world to receive a grant for different schemes. It helps them. They are not a very rich body of people. We gladly welcome this Instrument and hope that we will not delay it on its way.

§ Lord STRABOLGI
My Lords, I am grateful to the noble Viscount for what he has said and for the general welcome he has given this Scheme. He has asked me two or three questions which I will do my best to answer. If I understood him aright, the noble Viscount asked first what share of the market is handled by cooperatives. I could, perhaps, give him some typical figures from the various sectors. For example, the share of the market for wheat and barley is 17 per cent.; for oil seed rape it is over 50 per cent.; for all fruit it is 16 per cent.; for top fruit it is over 50 per cent.; which is very encouraging, and for eggs it is 18 per cent.
The noble Viscount also asked what is the range of items on which co-operatives can receive grants not available to the individual farmer. Of course, he also rightly said that the individual farmer must include the horticulturist as well. Items on which grant is available only to 845 co-operatives are potato graders, equipment in cereal stores, chilling equipment for peas, permanent fencing, and weighing machines for collecting centres for livestock. These items were added last year and grants will continue to be paid, though the rate of grant will be modified to that analogous to comparable investment under the FCGS Scheme. The scale of equipment which can be grant-aided for co-operatives is, of course, much greater than an individual farmer would need. Lastly, I was asked what would be the effect on manpower of these changes. I am glad to say that no increase in either Civil Service or Central Council staff is expected, and we would hope that the streamlining of certain procedures might result in some staff saving.
In conclusion, I should say that to some extent we are entering a transitional stage in producer organisation in which the implementation of Community policy, alluded to by the noble Viscount, is going to be increasingly important. This will present a challenge to the industry, but the Government remain convinced that there is an important place here for the co-operatives.