HL Deb 19 February 1991 vol 526 cc410-1

3.8 p.m.

Viscount Massereene and Ferrard asked Her Majesty's Government:

What action they are taking to prevent hardship among Scottish hill farmers following the fall in the price of store lambs by over 50 per cent. since 1989.

The Parliamentary Under-Secretary of State, Scottish Office (Lord Strathclyde)

My Lords, on 12th February the Government announced an increase in hill livestock compensatory allowances. This will provide a welcome boost of £7 million to Scottish hill farmers. In addition sheep farmers in the hills and uplands will benefit from the green pound devaluation agreed last year which has raised the guide price for sheepmeat by over 12 per cent. from January this year and from the new supplement of 4 ecu payable with the sheep annual premium from this summer to farmers in the less favoured areas.

Viscount Massereene and Ferrard

My Lords, I thank my noble friend for that satisfactory Answer. I have been away for a while and I did not realise that that was the situation. I hope I may ask my noble friend a question although I have not given him prior notice of it. Therefore I do not expect him to answer me. I wish to draw attention to the prices that butchers are now charging for lamb. I believe that the public are being overcharged. There was a slump in 1989–90 in the price of lamb. However, butchers are charging the public the same price now as they did before the slump.

Lord Strathclyde

My Lords, I fully understand the point that my noble friend has made. I am aware that there is substantial concern that the retail market has not lowered the price charged to the consumer in line with that being paid to the hill farmer. The retail sector is a very competitive market and reacts to market forces.

Lord Grimond

My Lords, while the Government's proposals are extremely welcome, will they bear in mind that they do not make up for what has happened to small farmers in the past year or two? Have they noticed that many people in this country who do far less for the economy than small farmers have received salary and wage increases far in excess of inflation? Are the Government aware that small farmers last year suffered an increase in costs of at least 15 per cent. and a decrease in the prices they receive for their products of at least 15 per cent.?

Lord Strathclyde

My Lords, I am aware of the situation in the hills and the uplands and the islands. The Government have not been sitting on their hands and doing nothing. Apart from the increase in the HLCA payments, we raised the level of the suckler cow premium to its maximum amount in the LFAs. We also brought forward payment of the sheep annual premium. To cap that, since April last year £270 million has been spent on intervention in the beef price. We are all concerned about the hill farmer, and the Government are doing their bit.

Lord Carmichael of Kelvingrove

My Lords, on the question of competition and the consumer, competition does not seem to be working. Does the Minister's department have any mechanism for recording prices paid by the consumer? Is there any mechanism by which the hill farmer can be made aware that he should perhaps get more money from the consumer and should hold out until he gets it? Is the Minister aware that many of the consumers are big buyers and are monopolistic?

Lord Strathclyde

My Lords, I do not accept that most people believe that the retail sector is essentially monopolistic. I am very glad to tell the House that the NFU in Scotland is launching a quality lamb assured scheme on the farm which will raise the quality of lamb sold to the consumer. The scheme will provide exactly what the consumer wants and will almost certainly attract a premium price. That will be of direct benefit to the hill farmer.

Lord Cledwyn of Penrhos

My Lords, I apologise for taking the noble Lord marginally outside his brief, but is he aware that hill and sheep farmers in Wales have suffered considerably over the past two years? Will the benefits which are now to come to Scottish sheep farmers also accrue to Welsh sheep farmers?

Lord Strathclyde

My Lords, the hill livestock compensatory allowance scheme is a UK measure for the less favoured areas, which include a large part of Wales.

Lord Parry

My Lords, the House will hear that with great relief. Is the Minister aware that the difficulties faced by hill farmers in Wales have been compounded not only by the common agricultural policy of the EC but by the specific problem arising from the very heavy fall out from Chernobyl? Is he aware that that has affected the income of sheep farmers on the small hill farms of Wales specifically over the same period as they have suffered from the general economic decline?

Lord Strathclyde

My Lords, I am aware of that. Some farms in Scotland have also been affected. Compensation was provided and as each year goes by the problem decreases.