HL Deb 28 November 1985 vol 468 cc996-1002

4.36 p.m.

Lord Belstead

My Lords, with your permission I should like to repeat a Statement being made in another place by my right honourable friend the Minister of Agriculture, Fisheries and Food. The Statement is as follows:

"I announced on 8th October that the Government intended to provide some help for those livestock farmers who had been most seriously affected by the exceptionally bad weather conditions earlier this year and, in agreement with my agricultural colleagues, I am now in a position to announce the details.

"The Government intend to make exceptional payments to farmers with suckler cows and breeding ewes in certain specified parts of the Less Favoured Areas, and to farmers with dairy cows in certain more limited areas.

"So far as suckler cows and sheep are concerned, the rates of payment will be £14 and 35p per animal respectively and the areas concerned will be the Less Favoured Areas in Scotland and throughout Northern Ireland; in England, the Less Favoured Areas in Cumbria, Durham, Lancashire, Northumberland, North Yorkshire (excluding the North Yorkshire Moors), West Yorkshire and Tyne and Wear; and in Wales the original Less Favoured Areas in the counties of Gwynedd, Dyfed, West Glamorgan and Mid Glamorgan and parts of the counties of Gwent, Powys and Clwyd. So far as dairy cows are concerned, the rate of payment will be £4.50 per animal, which will be paid to dairy farmers in Cumbria (including the areas outside the Less Favoured Areas) in England; Scotland in the three regions of Strathclyde, Central and Dumfries and Galloway, and in Northern Ireland.

"These payments will be made to farmers in respect of the number of suckler cows, breeding ewes and dairy cows they expect to have on dates which will be specified. The farmers concerned are being invited to put in their claims quickly; the Agriculture Departments will endeavour to deal with them as rapidly as possible and will hope to pay a significant proportion before Christmas.

"My colleagues and I recognise that the farmers in these specified areas are not the only ones badly affected by this year's adverse weather but we believe that we have, in broad terms, selected for assistance those areas and enterprises where the situation is the most serious. In all, these payments are estimated to amount to some £16.9 million.

"I am also in a position to announce the determination for Hill Livestock Compensatory Allowances for 1986. The Agriculture Departments have now completed the annual autumn review of economic conditions in the hills and uplands and, in the light of that review, my colleagues and I are proposing, subject to parliamentary approval, to increase the rates of Hill Livestock Compensatory Allowances with effect from 1st January 1986. In the old Less Favoured Areas, the allowances for suckler cows will be increased by £10 to £54.50, for ewes of mountain breeds by 50p to £6.75 and for other ewes by 25p to £4.50. In the new Less Favoured Areas the allowances for suckler cows will be increased by £5 to £27.25 and the allowance for ewes will be increased by 13p to £2.25.

"In addition, we are proposing to increase the maximum payment per hectare from £60 to £62.48 in the original Less Favoured Areas, in accordance with the revised maximum specified in the new European Community Structures Regulation and to make a corresponding increase (from £45 to £46.86 per hectare) in the new Less Favoured Areas. We are also proposing to introduce some changes in the detailed rules of the scheme in the light of the new EC regulation, including a provision which will enable an HLCA applicant (subject to checks to prevent over-grazing) who afforests part of his land to take the afforested area into account for the purpose of calculating his allowances for up to 15 years.

"We shall shortly be laying before Parliament a draft statutory instrument giving effect to these proposals, which are also being notified to. the European Commission.

"The additional HLCA payments are expected to cost £10.9 million in a full year and will represent an increase of some 11 per cent. on the existing annual HLCA payments, which are currently running at about £98 million per annum. This represents a significant increase in the Government's support for the hill and upland areas of the United Kingdom.

"The combined cost of the weather relief measures and the increase in HLCA rates in the current financial year will be £25.3 million. £5.3 million of this will be found from savings in programmes within my responsibility and that of my right honourable friends, the Secretaries of State for Scotland, Wales and Northern Ireland. Detailed changes to cash limits will be announced later. The remaining £20 million will be a charge on the Reserve. Following an announcement in October that the Government were considering these matters, expenditure on such measures was in prospect and can therefore be met within the estimated outturn for the agriculture programmes in 1985–86. The cost in future years of the HLCA uprating will also be met within the totals for the agriculture programmes published in the Chancellor's Autumn Statement.

"Because of the need to make payments to farmers urgently, expenditure for weather relief estimated at £16.9 million will be met by repayable advances from the Contingencies Fund pending approval of the necessary Spring Supplementary Estimates.

"I am pleased also to be able to announce certain other changes which will be of help to livestock farmers who are facing difficulties as a result of bad weather.

"In England and Wales, farmers in the areas where the special weather assistance will be payable will be exempted, until the end of March 1986, from the charges normally made by ADAS for the analysis of hay and silage samples. In Scotland, the suspension of charging by the colleges will apply throughout the country.

"Agreement has also been reached in Brussels on arrangements which will enable us to make early advance payments of sheep annual premium to Less Favoured Area farmers in respect of the current marketing year; and we shall hope to be able to make most of these payments before Christmas. Advances will be paid to Less Favoured Area farmers who have ten or more eligible sheep at the rate of £2.10 per ewe in Great Britain and £4.70 per ewe in Northern Ireland. This early payment will clearly be very welcome to the farmers concerned.

"In addition, we have been able to obtain the European Commission's agreement to some changes in the rules relating to the Suckler Cow Premium Scheme which will be helpful to farmers who may find themselves in difficulties over maintaining their cow numbers throughout the winter because of fodder problems or abnormal losses. A separate announcement about this will be made shortly".

My Lords, that concludes my right honourable friend's Statement.

4.45 p.m.

Lord John-Mackie

My Lords, we are grateful to the Minister for repeating the Statement made in the other place. I should like to say that there has been criticism at how long the Government have taken to produce this Statement, but personally I appreciate the difficulty. It is very difficult in the circumstances to decide on areas etc. and who should get help in this very difficult year, weatherwise, for farmers. May I ask the noble Lord the Minister whether there was any survey made as to where the losses were greatest? It seems to me that there were areas of arable, particularly where people had gone out of dairying, and with lower grades of land, where in some cases there would have been lost 100 per cent. of the arable crops. Yet they do not come into this picture at all.

If the noble Lord had motored, as I did—and perhaps he did so—through northern England, southern Scotland and right up through the east of Scotland, he would have seen the appalling destruction of crops. There is no other expression to use but the "destruction of crops". It seems strange that the emphasis has been put on the less favoured areas and all, of course, on stock.

The losses there were summer losses of fodder; for it could hardly have been anything else. It was very wet, but there was no snow or anything like that. Quite frankly—though I do not want to criticise my fellow farmers in these areas—many of them have relied for far too long on hay and have not gone in for silage. I know one can make silage in wet weather, though the quality is not so good; but it can be made at least. Many of them relied on hay and in many cases, of course, just did not get any fodder at all. I should like to know whether there was any survey made to see whether these losses were any greater than in some of the arable areas that I know.

So far as the Statement is concerned the figures that it gives will be of considerable help in many cases. The increase in the 1986 payments will also be welcome to these farmers. I am interested in this question of afforestation in parts of the lands and so on which I think is a good thing for these farmers to do. Encouragement there is very welcome indeed. I do not know how far the £16.9 million will go. Of course they will not know until they get their claims in.

I note that they are going to claw back from somewhere the £5.3 million mentioned in the Statement; but I feel that the Minister has been very coy about from where it is to be clawed back. I should be interested to know from where this amount will be clawed back. I hope that it is not coming off some of the arable areas that I have been speaking about. Giving assistance in regard to not paying charges for analysing silage and hay seems a very small thing to do. Anyway, I hope that it is retrospective; because if they have not had their hay and silage analysed by now, they jolly well should have! However, that is by the way.

I would reiterate the point that I feel that these areas have been given this help to the exclusion of areas which I am absolutely certain suffered much greater losses. I am not talking about the east of England or the better parts of the east of Scotland, but about areas which may have gone out of stock and gone into cereals and crops. I know any amount of farmers who have lost 100 per cent. I should welcome the Minister's comments on that.

Lord Walston

My Lords, I thank the Minister for the Statement and, perhaps somewhat to his surprise, congratulate him upon it. In spite of the complaints to which the noble Lord, Lord John-Mackie, referred, I think the department has acted relatively quickly in what is a very complex matter. While it would be nice to see the help spread to others who undoubtedly have suffered very much, particularly the arable farmers in certain parts of Scotland and in the north of England, I accept the fact that Government finance is limited. What is more, at the risk of making myself unpopular with my farming friends, I would say that the weather is one of the hazards that farmers have to take into account themselves. They cannot always look to the Government to help them out.

Having said that, I think it absolutely right that on this occasion the Government should help those areas which are most severely hurt. I think that they have in general picked up those areas. I should like to ask the Minister two questions. How have these areas been selected? Have they been selected by a pretty detailed survey of damage that has been done not only in these areas but in adjacent areas, or is it simply for administrative convenience a matter of taking those which are already classified, as they have been classified in the Statement?

The second question is: on what basis has the rate of compensation been worked out? As the noble Lord must know well, the price of hay delivered to those parts is now astronomical, and by my very rough calculations a farmer with 500 ewes, who is going to be in receipt of 35p per ewe, is going to receive something like £175 which, according to my information, is barely sufficient to cover the purchase and transport of one extra tonne of hay. That does not give very many pounds per ewe to help them throughout the season. Is the noble Lord satisfied that in fact this is going to be of significant help to those farmers who undoubtedly have suffered a great deal, or is it simply a small palliative which will make the hurt rather less severe than it otherwise would have been? I note, too, that suckling cows are also to receive a certain amount. The same questions apply to them as I have put to the Minister with regard to ewes.

Lord Belstead

My Lords, I am grateful to both noble Lords for their reception of this Statement. May I first try to answer the question asked by both noble Lords, as to whether the payment was based on any form of survey. It is the case of course that there has been some time in which the farming community, which has suffered so terribly in the North of England and especially of course in Northern Ireland and in Scotland and parts of Wales, has been waiting because some of them are literally facing a crisis, for the reasons which both noble Lords deployed in their remarks. My right honourable friend, together with my right honourable friends the Secretaries of State for Northern Ireland, Wales and Scotland, during that time consulted very seriously indeed with the advisory services in all four parts of the United Kingdom in order to try to see where, as the noble Lord, Lord Walston, quite rightly said, the available resources—because obviously there is a finite amount of money, although a very great deal is involved in this package—could best be brought to bear. We felt that the areas which have been chosen were the places where the situation was most serious.

The noble Lord, Lord John-Mackie—and I in no way contradict him when he says it—made the point that there are arable areas, not only in the North of England but in Scotland as well, which have suffered very much indeed. I think I must simply say that we are trying, with the weather part of the package, to deal with a crisis. That was more or less what the noble Lord, Lord Walston, said: I think he referred to bringing resources to bear where they were most needed. But so far as some livestock owners are concerned it is literally a crisis as to whether they will have enough fodder to take them through the winter. We have tried to help. We bore in mind of course that cereal farmers, although they have suffered in places very grievously indeed this year, have had perhaps a better crack of the whip in previous years than the livestock men have had.

Both noble Lords asked: how far is this going to go? The losses will vary from area to area. In some areas the extra costs of feed could be as high as £140 to £200 per cow and £18 to £20 per sheep. There will be other losses as well. But I must be absolutely open about this. The Government cannot be expected to make good all the losses. We can only give help which will be of real help, and in that context a very rough estimate is that somewhere between 50,000 and 100,000 farmers may benefit and the average could be—this is again a very rough estimate—in the range of £170 to £350 per farmer. However, may I just point out to the noble Lord, Lord Walston, that a LFA farmer with an enterprise of, say, 40 cows and 500 sheep would be receiving around £700.

Finally, the noble Lord, Lord John-Mackie, asked about the reference to £5.3 million, which he felt was in some way going to be clawed away. May I say that the measures referred to in this Statement were in prospect at the time of the Autumn Statement and can be accommodated within the estimated out-turn for the agricultural programmes which were part of the Chancellor's Statement a few weeks ago.

Lord Grimond

My Lords, would the noble Lord allow me to ask one further question? I fully appreciate that the Government cannot make good all the damage that was done by the summer's weather but would he bear in mind the enormous cost of importing freight into the part of the world where I live, in Orkney and Shetland? If we have to import large quantities of feed, the price really becomes astronomical. Would he look at whether it would be possible to give any help over freight charges on the import of hay and suchlike feeds, if it is essential in Orkney? I am not quite certain yet how far we are affected but no doubt he will have figures in his survey, and if he could bear that in mind I would be grateful.

Lord Belstead

My Lords, may I say to the noble Lord, Lord Grimond, that I will draw his remarks to the attention of my right honourable friend the Secretary of State for Scotland. However, may I make it absolutely clear to the noble Lord, Lord Grimond, that this is a very long and complicated Statement and I know he will perhaps wish to look at it more closely. In the early part of the Statement it does make it clear that for suckler cows and ewes the rates of payment will be £14 and 35p per animal respectively and the areas concerned will include the whole of the less favoured areas in Scotland as well as throughout Northern Ireland; and of course Scotland is covered to a very considerable extent by LFA status.

Lord Stanley of Alderley

My Lords, I wonder whether my noble friend can explain how this arrangement can possibly be fair, farmer against farmer. For instance, why is it that the new less favoured areas in Gwynedd are not receiving help? So far as I was aware, the rain fell on my head as much as on those 10 miles away. I would ask my noble friend: will not this Statement cause just the same problems as the unfairness of the recent designation of the new marginal lands has caused? Would it not have been far better had this money been put towards the long-term restructuring and guidance of agriculture? It is just not good enough for my right honourable friend the Minister of State for Agriculture to say, as he did yesterday, that all is well in the farming scene.

I, like the noble Lord, Lord Walston, thought it was the farmers' job to cope with the weather; but what we cannot cope with is the politician, and a French one in particular. What is needed is help there. In particular, I would ask my noble friend whether he is aware that the recent loss of the special export certification of ewes is far greater than the 13p he has just offered in the Statement to certain less favoured areas.

Lord Belstead

My Lords, I must say I am disappointed by the reception which my noble friend has given to the Statement, although I do realise that he has suffered along with the rest of the farming community throughout the United Kingdom, and not least in Wales. I think I am right in saying that my noble friend comes from a part of Wales which will benefit.

My noble friend has said that it is wrong to draw lines to decide who is to get the special weather package and who is not. I really think that if we had not taken the decision to draw some lines as to who would benefit under the special weather package, there would not have been realistic amounts of money coming to those most in need. May I remind my noble friend that all those who are in the less favoured areas and in the extended new less favoured areas which, despite my noble friend's remarks, were widely welcomed throughout the United Kingdom as being a very good piece of negotiation by my right honourable friend, are now going to benefit to the tune of an increase of an 11 per cent. improvement on HLCA rates not only for this year but for years to come.

Lord Kimball

My Lords, may I thank my noble friend for this prompt and generous help to the less favoured areas? As one who very nearly lost all his hill cow subsidy, because of a little local difficulty of the number of one cow, may I particularly welcome the flexibility that he is introducing into the hill cow subsidy scheme? This is a year when many people will not be able to maintain their numbers as the scheme demands. The noble Lord, Lord Walston, mentioned the hardship inflicted on the corn growing areas. I hope my noble friend agrees that the lesson we have all learned from the bad weather is that people will soon have to stop growing corn in unsuitable areas. May I ask my noble friend whether we could have a debate on this subject? I think that he touched on a very important issue. He started to stray in his statement into the whole question of land use. Does my noble friend realise that there may well be a case for more afforestation in grade 3 land, but there is certainly no case for more afforestation in moorland?

Lord Belstead

My Lords, I am grateful to my noble friend Lord Kimball for his references at the end of his question to its now being possible to retain the suckler cow premium, even though cow numbers may have fallen away on an individual farmer's holding through no fault at all of the farmer, but because of fodder problems or abnormal losses. Indeed, do not let us forget, too, that the sheep annual premium in the less favoured areas is to be brought forward to the tune of 30 per cent. of the payment, as a payment, we hope, before Christmas. I hope that that will be helpful, too. I was interested in what my noble friend said about farm woodlands. The Ministry of Agriculture, together with the Departments of Agriculture in Scotland and in Wales produced about two months ago a report called Woodlands as a Farm Crop, and that might form part of any debate which my noble friend is seeking. This is something which we ought to pursue through the usual channels.