Hill Livestock (Compensatory Allowances) (Amendment) Regulations 1985

HL Deb 19 December 1985 vol 469 cc910-3

12.24 p.m.

Lord Belstead rose to move, That the draft regulations laid before the House on 2nd December be approved. [5th Report from the Joint Committee.]

The noble Lord said: My Lords, I beg to move that these regulations be approved.

These draft regulations which apply throughout the United Kingdom amend the Hill Livestock (Compensatory Allowances) Regulations 1984. They bring into effect the increased rates of hill livestock compensatory allowance to be paid from 1st January 1986 and the related increases in the financial ceilings, which my right honourable friend announced in a Statement on 28th November. They also make certain changes to the detailed rules under which the allowances are paid.

The European Community have this year adopted a new structures regulation—No. 797/85—which now provides the basis for headage payments on beef, cows and sheep in the less-favoured areas. However, the broad objectives of the payments remain the same—that is, to ensure the continuation of livestock farming in the hill and upland areas, thereby helping to maintain a minimum population in the less-favoured areas and to conserve the countryside. The Community continues to contribute 25 per cent. of eligible expenditure.

For some years now the agriculture departments have, each autumn, carried out a thorough-going review of economic conditions in the hills and uplands, in conjunction with the farmers' unions. This year's review was held against a background, in many areas, of exceptionally bad weather conditions in the summer, a situation which has left many livestock producers with serious fodder and cash flow problems. As a result, the Government have set aside some £16.9 million in the form of exceptional weather aid to assist the livestock farmers most seriously affected, and my right honourable friend gave details in his statement of 28th November of how this money would be paid. However, the economic review undertaken this year revealed an underlying picture which, in our view, justifies significant increases in the rates of compensatory allowances, despite the constraints on public expenditure.

The draft regulations now before the House therefore provide for increases for breeding cows and sheep in both the original less-favoured areas, referred to in the regulations as "severely disadvantaged land", and last year's extension to those areas, which is referred to as "disadvantaged land". Thus, in the original less-favoured area, the allowance for breeding cows will be increased by £10 to £54.50, for hardy breeds of sheep by 50p to £6.75 and for other breeds of sheep by 25p to £4.50. In the new less-favoured area the allowance for cows goes up from £22.25 to £27.25, and that for sheep from £2.12 to £2.25. In addition, we are increasing the maximum payment per hectare from £60 to £62.48 in the original LFA, and making a corresponding increase from £45 to £46.86, in the new LFA. These increases are in accordance with the revised maxima specified in Regulation 797/85.

We believe this to be a very fair deal in all the circumstances. The overall value of the HLCA award is some £10.9 million in a full year and amounts to a rise of about 11 per cent. on the existing annual HLCA payments, which are currently running at about £98 million per annum. And if the cost of the exceptional weather aid being given in many of the less-favoured areas about which I have spoken is added to the £10.9 million we arrive at a figure for the coming year to help farmers in the less-favoured areas, in excess of £25 million. These overall increases show clearly the Government's considerable commitment to the hill and upland livestock sector, and they have already been widely welcomed.

Furthermore, we recognise that many farmers in the less-favoured areas are facing cash-flow problems following the exceptionally bad weather in the summer. On 3rd December my right honourable friend therefore announced that, as a further measure to assist many farmers, all HLCA claimants in Great Britain will receive about 75 per cent. of their 1986 claim very shortly after submitting their applications, with the balance being paid as soon as possible after 1st April 1986.

I should like to make one reference to a change which is being made to the rules under which the HLCAs are paid. It is a new provision which affects an HLCA applicant, who, after 1st January 1986, afforests land previously taken into account for the purpose of calculating his allowance. This will enable newly-afforested land to continue to be counted in the HLCA calculations for up to 15 years. It is an optional provision in the new European Community Structures Regulation, but the consultations we carried out earlier this year showed that there was a good measure of support for its introduction. It means that farmers will have the opportunity to carry out afforestation while still having the land involved counted for the purpose of determining the overall financial limit of their allowance.

If I may say so, I think that these substantial increases in the rate of allowance, the exceptional weather aid, the arrangements being made to speed up payments under both schemes, coupled with the annual premia which many hill and upland farmers receive separately on suckler cows and sheep, will together add up to a very substantial package of assistance. I commend the regulations to the House.

Moved, That the draft Regulations laid before the House on 2nd December be approved.—(Lord Belstead.)

12.30 p.m.

Lord John-Mackie

My Lords, the spirit of goodwill which always pervades this place is very prominent today. My noble friend said earlier that he has no wish to alter it, and neither have I—especially when we are looking at an order which gives something to my fellow farmers. I thank the noble Lord, Lord Belstead, for explaining the order, most of which is very welcome indeed. The early payment is welcome because cash flow not only in the uplands but elsewhere is going to be difficult before this financial year ends.

There are two points I should like to make, I am no economist and I have no great knowledge of international payments, but the order says pounds or ECUs, whichever is the less. How does this work? If the ECU is of less value than the pound does that mean that we reduce? If it is greater do we not get the benefit? Is it always going to be the lesser, whatever the value of the pound? That would seem a little unfair.

The other point is on forestry, which the noble Lord mentioned last. If land is taken out for forestry after 1986 it still counts for the payments for 15 years. The peculiar thing is that it is after 15 years, when thinning begins to start, that the forest becomes more use to the arable land. In many cases farmers put sheep into these forested areas for shelter, and as the trees get bigger not only for shelter but for grazing. It seems strange to stop the payments after 15 years when at that point the land is becoming more used for grazing rather than the other way about. With these points, we welcome the order.

Lord Belstead

My Lords, on the ECU point I shall have to write to the noble Lord. I am sorry about that, but he has bowled me out on that point. I would simply repeat that so far as the maximum payments allowed per hectare—that is the absolute ceiling, as the noble Lord knows—we are now giving the opportunity for farmers to claim up to the ceiling in both the old less-favoured areas and the new less-favoured areas. I believe that this is right considering the difficulties there are in the hills at the present time.

I should also like to take away the point which the noble Lord put to me about thinnings and the 15-year period. The noble Lord has almost unrivalled experience in your Lordships' House of forestry, and clearly this is a serious point. I would say two things. First, of course this is a permissive power which we have made available to ourselves here in the United Kingdom. We need not have done so, but we felt it was again for the good of the upland areas. We have made it available, and of course it can run only for the period that this structure's directive lasts.

I must consult my papers to find out whether that is the reason for the 15-year period—I ought to know this, and I do not—or whether the 15-year period is something that we could have prolonged had we wanted to do so. Either way it is a factor that would need to be reviewed after a period of time. But in essence the noble Lord is saying to me that that may be so, but the 15 years may not be the right period of time because of the thinnings point. May I take that point away and look at it?

There is one other point about afforestation which is of some importance. I realise that there may be a reservation on the afforestation point: that it is possible that this provision could result in over-stocking densities in the residual grazing areas. If one says that a new area of 40 hectares is being afforested on a hundred hectare farm, and that is allowed in from the point of view of the ceilings which are being paid, I can see that worries might be expressed that this would lead to over-stocking. My right honourable friend has made clear in the Statement he made on 20th November that we shall be undertaking checks to prevent over-grazing in these areas, and various provisions are built into the rules to guard against over-stocking generally.

Lord John-Mackie

My Lords, I thank the noble Lord for the reply. He has a real point about the size of the area that is taken out rather than the size of the whole farm. That is an important point which I missed.

On Question, Motion agreed to.