§ 4.47 p.m.
§ Earl FERRERS rose to move, That the draft regulations laid before the House on 29th November 1979 be approved. The noble Earl said: My Lords, these regulations, which apply throughout the United Kingdom, consolidate the Hill Livestock (Compensatory Allowances) Regulations 1975 and the three amending regulations and give effect to the higher rates of hill sheep and hill cow allowances which my right honourable friend announced on 22nd November.
§ Last July, draft regulations were laid before the House for the purpose of implementing a 50p increase, for 1979 only, in the higher rate of hill sheep compensatory allowance. When they came before the House, I said that the Government recognised that many hill farmers, and particularly sheep farmers, had experienced serious difficulties as a result of the prolonged bad weather of last winter. But we firmly believed that a judgment on the need for further increases in compensatory allowances should be deferred until we could take account of the prices which were obtained by hill farmers during this autumn's main period for the sale of store lambs and suckled calves. It is indicative of the present very serious state of the hill livestock sector and also of the correctness of our judgment in deciding to wait for the autumn sales before taking a decision that the House is being asked today to consider a 1580 more substantial increase in the rates of compensatory allowances than could have been foreseen in July.
§ Hill and upland farmers play a particularly important role in the livestock sector of our agriculture. They provide, in the United Kingdom as a whole, some 60 per cent. of the specialist beef cow herd and 20 per cent. of the total beef and dairy breeding herd, while the hill sheep account for some 57 per cent. of the total breeding flock. The role of the hills is therefore fundamental to the cycle of renewing the national breeding flock and the production of suckled calves and store lambs.
§ We have carried out a review of the economic conditions in the hill livestock sector in consultation with the farmers' unions which has provided clear evidence that the prolonged period of bad weather last winter led to an above average loss of animals in some areas and greatly increased feed costs, particularly for sheep. We have also had regard to the relatively depressed state of store market prices this autumn. These factors are expected to lead to a substantial fall in net farm incomes in the year 1979–80. Because of this, and bearing in mind that the hills are such an important sector of livestock farming, we have decided that there is a need for a sizeable increase in the rates of hill livestock compensatory allowances to be paid next year.
§ The regulations now before the House therefore provide that the rate for hill cows should be increased from £29 to £35, which is an extra £6; the higher rate for hill sheep, from £3.60 to £5.50, which is an extra £1.90; and the lower rate for hill sheep, from £2.85 to £4.25, an extra £1.40. The increase in the higher rate for sheep includes and consolidates the 50p increase announced in July. The differential between the higher and lower rates of hill sheep allowance has been maintained at the level existing since the July increase of the higher rate, which accords with the wishes of the farmers' unions. These increases, which will be paid with the allowances due at the beginning of 1980, will be worth £20.6 million.
§ The regulations additionally implement a change in the maximum rate of allowance payable under the Less-Favoured Areas Directive. In terms of sterling, the new 1581 maximum is £40.58, which represents an increase of £6.53 per hectare. The increase in the maximum amount payable per hectare will benefit a comparatively limited number of hill farmers—only those who stock their land at a rate which is somewhat greater than one livestock unit, which is the equivalent of one cow or six sheep.
§ The higher rates of allowances which we have proposed will increase the amount paid to hill farmers through these allowances by 37 per cent. They have been welcomed by the farmers' unions, who recognise them as a substantial demonstration of the importance that this Government attach to the hill areas and of our belief that hill and upland farmers should enjoy a reasonable standard of living. I therefore ask your Lordships to express your support for the Motion. I beg to move.
§ Moved, that the draft regulations laid before the House on 29th November 1979 be approved.—(Earl Ferrers.)
§ Lord PEART
My Lords, I am grateful to the noble Earl for having explained this very important award, if I may use that term, of £20.6 million. That is quite a considerable sum of money and I am glad that the money is to be injected in the hill and upland farm areas.
When the noble Earl talked about his Government doing this, I would support them. I only wish they had given me the support when I brought in the Pennine Rural Development Board, which I had hoped would improve the money-earning capacity of hill farmers. Unfortunately, one minister was very doctrinal and as soon as there was a Conservative Government he destroyed that system. I regret it, but I do not in any way blame the noble Earl! May I say that this instrument has gone through the necessary committee. There is no difficulty there, and I welcome it on behalf of the Opposition.
§ Lord MACKIE of BENSHIE
My Lords, I, too, should like to welcome the increases and to endorse what the noble Earl has said about the importance of the hill areas. They are the source from which the final production of beef, mutton and lamb reaches the consumer in this country.
1582 I do not wish to appear ungracious or to look a gift-horse in the mouth but, particularly with regard to cattle, the noble Earl will be aware that the value of the hill cow subsidy has depreciated enormously over the years. When the subsidy intitially came on, a hill farmer could purchase the whole of his winter feed—say a ton of hay per hill cow—with the subsidy. Now, with £36 and with the cost of transport to the hill areas, he cannot purchase half a ton of hay with the same money. While I do welcome this increase—and obviously £20 million is a lot of money—I think we perhaps might look at indexing the support for the hill cow in the same way as we index support for retired civil servants and others. Surely the hill cow needs it a great deal more than do some of the others in receipt of indexed pensions.
§ Baroness ELLIOT of HARWOOD
My Lords, speaking as a hill farmer and one of those who, I am glad to say, will have something coming to them out of this regulation, I should like to thank the noble Earl and the Government very much for having come forward now with an appreciable increase and with sympathy, which we all appreciate, for our plight.
It really has been the most disastrous year I can remember in 40 years of farming. While this is something which will help a great deal, I should like to point out that it will take certainly two or three years to make up for disasters that have resulted from the appalling weather and the desperate conditions. Nevertheless, this is Christmas-time and there is goodwill towards everybody ! I should particularly like to thank the Government for having now brought this out—a little later than I had hoped for, but anyway it is here—and I thank them very much indeed for their contribution.
§ Viscount BROOKEBOROUGH
My Lords, I should also like to welcome these regulations very much. Last week, I drew attention to the fact that the beef herds in Northern Ireland have gone down by 30 per cent. and an awful lot of beef conies to this country from Northern Ireland. There are a great many farmers in Northern Ireland who depend entirely on it.
As my noble friends have said, the past year has been disastrous as regards 1583 weather. With us, it has been the last 18 months, because since 12th July last year—I do not know whether or not that was a symbolic date—it has not stopped raining. Last year people fed expensive concentrates to their animals, hoping that prices would pay for them; but prices have been disastrously low and people are not prepared to do that now. I should like to ask my noble friend why, when the EEC, as I understand it, allowed a slightly higher subsidy to be paid in view of the disastrous situation that has arisen, they have not gone a bit further. I know that £20.6 million is a lot of money but to a farmer, certainly in my part of the world where hay is £2 a bale, what we have in fact got is the price of three bales.
Since I last spoke in this House there has been another review of the slaughterings of female animals, which are after all the absolute lifeblood of the herd. In the last six weeks, slaughterings of female animals are now 94 per cent, higher than they were in the same period last year. I do not know whether we have found this more disastrous in my part of the world than has been the case in other parts, because I do not know other parts of the world; but may I ask the Government very urgently to take another look at this, to receive representations from people and to see whether something cannot be done? What we are doing is not only crippling farmers as regards their expansion later but also crippling the future of our very important beef industry, together with the employment which goes with it. On these particular farms there is no alternative—you cannot go back to anything except milk and we do not want any more milk—so I feel that this is a very serious situation and I urgently ask the Government to take another look at it. At the same time, I welcome what they have produced.
My Lords, I am very grateful to your Lordships for the welcome which has been given to this statement. The noble Lord, Lord Peart, had the advantage of being both succinct and brief. He simply said that he supported these regulations and I am grateful to him for that.
The noble Lord, Lord Mackie, tried to equate this allowance with the price of a bale of hay. I think it is always dangerous to start equating one thing with another. 1584 It may be that the price of hay is excessively high, but I thought he was really rather shooting off at a tangent when he suggested that we ought to index a cow instead of a civil servant. That was a fairly rash observation by any standards, and I think he might well regret having made it because the Directive sets out a maximum that is payable as well as a minimum, and we have to operate within the Directive. Even if we did not operate within it and even if there were no maximum there would still be the problem of public accountability and of persuading the Government of the day that, where public funds are concerned, it was correct to pay out more money on one item, which would inevitably mean less money on another. We think that we have got it about right—"generous" is not the right word—and we have tried to give the farmers almost the maximum, but not the total maximum, allowed within the EEC Directive.
My noble friend Lady Elliot said that, because of the disaster which they had last winter, it would take three years to get the situation right on the hills. I agree with her that it will take a long time. When disasters happen to animals and breeding stock, you do not get over them in the course of 12 months or by a form of immediate payment. All I would say to her is that we recognise the problem and hope that this payment will go some way—I put it no higher than that—towards helping hill farmers over the difficulties which they have encountered.
I take the point of my noble friend Lord Brookeborough about the situation in Northern Ireland and we will certainly be prepared to consider that problem. He asked why we did not pay more under the terms of the Directive when this allowed us to pay more. The answer to that is that one has to make a judgment as a Government as to what is the right thing to do, and, just because there is a maximum which may be paid, that does not mean to say that in the judgment of the Government it is the right amount. We consider that by these compensatory allowances we have made a fairly substantial payment. In reaching that conclusion, one has to judge the severity of the problem and to take into account, as I said earlier to the noble Lord, Lord Mackie, public accountability and the public availability of funds. At a time when, as everyone knows, the Government are under constraint in 1585 regard to funds, the hill farmers and those in Northern Ireland, too, have had a fair result. I hope my noble friend will agree with that, and I am grateful for the observations which your Lordships have made.
§ On Question, Motion agreed to.