HL Deb 23 July 1985 vol 466 cc1159-62

7.15 p.m.

The Earl of Swinton

My Lords, I beg to move that the Agricultural Products Processing and Marketing (Improvement Grant) (Amendment) Regulations 1985 be approved.

In producing that sentence, I should like to point out an error on the Order Paper. These are the Agricultural Products Processing and Marketing Regulations, and not the Agricultural Productions Processing and Marketing Regulations.

The amending regulations are a modest measure. They simply extend until the end of 1994 regulations previously extended in 1983. The further extension is necessary to ensure that they run concurrently with the Community measure to which they are linked; namely EEC Regulation 355/77, which has itself been extended to the end of 1994. The purpose of the amendments is to enable United Kingdom projects seeking Community aid to obtain the necesary national grant.

EEC Regulation 355/77 is, therefore, central to these amendments and your Lordships may find it helpful if I briefly explain its main provisions. Some noble Lords will already be familiar with the regulation as a result of the 1982 report on Socio-Structural Policy by the Select Committee on the European Communities. That report included a valuable summary of the operation of the regulation and its aims and objectives.

The regulation provides for common measures to improve the conditions under which agricultural and fisheries products are processed and marketed. It was due to expire on 31st December 1984 but the Council of Agriculture Ministers adopted an amending Regulation 1932/84 in June 1984 to extend it until 31st December 1994.

The regulation provides for a fixed sum of money each year, disbursed in the form of FEOGA grants to individual projects, for which applicants from all member states compete. The usual level of an award is 25 per cent. of the total cost of a project, though there are certain regional exceptions. The awards are announced in June and December each year. The Commission is alone responsible for selecting the projects to be aided. Their selection is based upon how well they judge projects to meet the aim of the regulation. That aim is to improve the incomes of farmers, growers or fishermen through improved marketing and processing of their produce.

One of the main conditions to be met by applicants is that any investment must fall within the scope of an approved investment programme. These are drawn up by the member states and set out their assessment of the priorities for investment in marketing and processing on either a regional or sectoral basis. We have a number of these programmes in the United Kingdom covering pigmeat processing, livestock markets, potatoes, horticulture, cereals, seeds, fish processing, eggs and poultry, and there are other programmes designed specifically for the particular needs of Scotland, Wales and Northern Ireland.

Examples of the type of investment aided under this measure are: the installation of modern quality control facilities, improved storage, grading and handling facilities, the rationalisation and relocation of livestock auction markets, investment in modern techniques for fish smoking, curing and further processing, and generally investment in developments which maximise the use of modern technology leading to improved returns to the farmers, growers or fishermen.

It is a condition of the scheme that individual projects must qualify for a national grant of at least 8 per cent. of the eligible costs if they are to be eligible to receive Community assistance at the full rate of 25 per cent. In the United Kingdom there are a number of grant schemes which qualify as a national grant for this purpose. Most commonly these are grants made to co-operatives under the Agricultural and Horticultural Co-operation Scheme, Regional Development Grants from the Department of Industry and occasionally grants from local authorities. However, not all applicants with projects which are otherwise eligible for consideration under Regulation 355/77 can qualify for these grants and it is in such cases that the improvement grant regulations apply. However, if projects do not receive FEOGA aid, they do not receive grant under the regulations.

About one-third of the projects awarded aid under Regulation 355/77 have received grant under these regulations. We wish to ensure that United Kindom projects will continue to benefit in this way in the future and the amendments under debate today are therefore designed to extend the arrangements. It is estimated that expenditure under these regulations may amount to about £1.5 million per annum.

To recapitulate, this is a continuation of a modest measure which enables United Kindom companies to take maximum advantage of FEOGA aid in the marketing and processing sphere. I commend the regulations to the House. I beg to move.

Moved, That the draft regulations laid before the House on 27th June be approved.—(The Earl of Swinton.)

Lord John-Mackie

My Lords, we are very much obliged to the noble Earl for explaining this scheme. If one listened carefully to the noble Earl going through all the various regulations, numbers, dates and one thing and another, one understood how really one would need a research assistant to research everything properly, which I am afraid I did not do. So I am obliged to the noble Lord the Minister for doing it for us and for explaining how all the various regulations tied together over the years. Anything that helps marketing, and of course processing, is very welcome, as anybody would know who listened to the noble Lord, Lord Sieff, when he opened the Royal Show appealing to farmers to make their marketing better. Of course, as he pointed out, they cannot do that unless they process their goods much better than they do at present, and he gave some instances which were very interesting indeed.

I should like to ask the noble Earl whether this measure applies to external marketing from the EC? There has been a considerable mooting of schemes to start what one might call the equivalent of the Wheat Boards of Australia and Canada in order to try to dispose of our surpluses in the EC which are becoming very embarrassing at the present moment. I wondered whether such a thing would be feasible on an international basis or on a country-wide basis here. I notice that the late chairman of the Cereals Committee of the NFU is suggesting a body in this country alone, but, as I have said, there is an idea that it might be better to have an EC body to try to market this produce abroad.

These grants for processing, and so on, are of a very wide scope. The Minister detailed them, and I had not realised that they were quite so wide. He said that fishing was included in the regulations, and I take it that he is right. I did not realise that, as we shall be dealing with fishing grants again in a moment. I can assure the Government that on this side of the House we welcome the grants for processing and marketing and would agree to the amendments.

The Earl of Swinton

My Lords, I am grateful to the noble Lord for the way in which he has accepted the regulations. I am glad that I was able to educate him a little. Perhaps when I am out of a job and he is looking for a research assistant he might bear me in mind.

The noble Lord was more fortunate than I was. I am afraid that with my job I was not allowed to go to the Royal Show, so I missed the opening and indeed all of it, though incidentally my noble kinswoman managed to win a first prize with one of her ponies.

I am still waiting hopefully for an answer to the noble Lord's first question. Yes, the external marketing is entirely EC, but a small percentage of non-EC input is allowed in projects. But it is for EC countries only and an internal Community measure. I think that I am right in saying that fishing is involved in that it is food processing—smoking fish and that side of it—rather than actual fishing. It is what is fished out rather than the people who are fishing. I commend the regulations to your Lordships.

On Question, Motion agreed to.