HL Deb 21 February 1992 vol 535 cc1496-500

2.42 p.m.

Lord Cavendish of Furness rose to move, That the draft scheme laid before the House on 31st January be approved [12th Report from the Joint Committee].

The noble Lord said: My Lords, before introducing this draft instrument, as an owner of agricultural land and managed woodland, I think that it is appropriate that I should declare an interest.

The Farm Woodland Premium Scheme 1992 will replace the pilot Farm Woodland Scheme, which was introduced in 1988 for an initial three-year trial period. As I shall explain, the new scheme builds on what we have learnt from our experience with its predecessor. It will provide increased financial incentives to farmers to convert land currently in agricultural use to woodland. Equally important, the new arrangements will be very much easier for farmers to understand and simpler for the Government to administer.

The current Farm Woodland Scheme was a product of the ALURE review carried out in 1987.

For the benefit of noble Lords who may not recall this particular acronym, I should explain that it stands for, alternative land use in the rural economy. That review identified forestry as an important potential alternative use of agricultural land in the light of agricultural surpluses. The Farm Woodland Scheme was, therefore, introduced on 1st October 1988 following the passage of the Farm Land and Rural Development Act 1988.

The Farm Woodland Scheme applies to Great Britain and is administered jointly by the agriculture departments and the Forestry Commission. It will remain open to applications until 31st March 1992. It provides establishment grants to farmers for planting woodland on previously productive agricultural land. In addition, annual payments are made to farmers to compensate them for the agricultural income foregone from converting to woodland. Depending on the type of woodland created, these annual payments are made for a period of up to 40 years.

Up to the end of September 1991, applications had been received for some 16,000 hectares to be planted under the farm woodland scheme, of which 12,500 hectares of planting had been approved. Over 19 million new trees have been planted and three-quarters of them are broadleaved species. When one considers that forestry represents a significant new departure for most farmers, those figures can be regarded as encouraging. However, I shall not pretend that that uptake is as much as we hoped for when the scheme was launched in 1988.

A thorough review of this scheme was, therefore, undertaken last year. The main findings were that the objectives, structure and administration of the scheme are too complicated. Furthermore, the financial incentives which are available are insufficient and paid over too long a timescale.

The draft Farm Woodland Premium Scheme 1992 has been designed to take account of those findings. Careful account has also been taken of the views expressed by interested organisations which were consulted about draft proposals last year. Like its predecessor, the new scheme will apply to Great Britain and will be introduced in Northern Ireland by separate arrangement. The new scheme contains several important changes to make it more attractive to farmers and easier to administer while ensuring that environmental benefits continue to be provided.

The new scheme has more sharply focused objectives. Those are, first, to encourage planting of woodland by farmers who will remain in farming, thereby enhancing the farmed landscape and environment and, secondly, to encourage a productive alternative land use to agriculture.

Administration will be much simplified. There will be a simple two-stage application process. Farmers will apply to the Forestry Commission for establishment grants under its woodland grant scheme. Once they have received approval from the Forestry Commission, they can apply to the appropriate agriculture department for annual payments under the farm woodland premium scheme. That arrangement recognises that the Forestry Commission is the expert on planting trees while agriculture departments are the experts on farming.

Financial incentives to farmers are substantially improved. They will now be eligible for the full range of establishment grants under the Forestry Commission's woodland grant scheme, including better land supplement where appropriate. Furthermore, the annual payments by agriculture departments have been "front-end loaded" to provide for higher rates of payment to be made over shorter periods, which is what farmers would prefer.

The number of payment categories has been reduced. There will now be just two categories of woodland: those planting more than 50 per cent. by area of broadleaves will receive annual payments for 15 years, while those planting 50 per cent. or less broadleaves will receive payments for 10 years.

Revised maximum limits for areas to be planted will apply. There will be no limit on the number of applications which can be made in respect of each farm. However, planting must not exceed more than half the area of the farm unit. Furthermore, planting of unimproved land in the less favoured areas must not exceed 40 hectares on any unit. Common grazings in the Scottish crofting counties will be eligible under the scheme, but there will be a total limit of 100 hectares for each common grazing area.

A new, more practical definition of "improved grassland" is being introduced. It will be based on the content of productive grass species in the sward. That has the advantage of being easily checked and puts no restriction on the methods used to improve grassland. Equally important, it will ensure that environmentally-sensitive sites are protected.

A three-year rule will apply for land to be eligible. Arable land or improved grassland must have been in that condition for at least three years prior to application. In addition, unimproved land must have been in agricultural use for at least three years beforehand.

What will this new package mean for farmers? I give two examples: first, a farmer in Lincolnshire wishing to plant six hectares of broadleaved woodland on improved grassland would receive some £10,500 in establishment grants from the Forestry Commission and annual payments of £1,500 for 15 years from the Ministry of Agriculture, Fisheries and Food; that is, a total of over £33,000. Secondly, a sheep farmer in a disadvantaged area in Wales seeking to plant six hectares of conifer woodland on improved grassland would receive some £7,500 in establishment grants from the Forestry Commission and annual payments of £1,140 for 10 years from the Welsh Office agriculture department: a total of nearly £19,000.

The scheme will not be subject to any planting targets or quotas. However, it will be subject to cash limits. We envisage that sufficient funds should be available to meet all applications but if this turns out not to be the case, we may have to defer approval of some until a later date.

I should explain the position of woodland used for agroforestry or for the production of short-rotation coppice. Woodland to be used for these purposes will be eligible for establishment grants from the Forestry Commission under its Woodland Grant Scheme. However, such woodland will not be eligible for annual payments under the Farm Woodland Premium Scheme. Because the income loss from these forms of production is potentially less than from traditionally managed woodland, it makes sense to target Farm Woodland Premium Scheme funds on traditional woodland. However, the Government recognise that these forms of production hold promise for the future and we are funding research and development on them.

To summarise the position, the Farm Woodland Premium Scheme will build on experience gained from the pilot Farm Woodland Scheme. It will be more attractive to farmers, simpler to understand and operate, and environmentally beneficial. The bringing forward of this measure demonstrates the Government's commitment both to assisting farmers to finding alternative uses for agricultural land, and to improving and enhancing the environment. I commend it to the House.

Moved, That the draft scheme laid before the House on 31st January be approved [12th Report from the Joint Committee]. —(Lord Cavendish of Furness).

Lord Carter

My Lords, the House will be grateful to the Minister for explaining the order so clearly. Obviously from this side of the House we welcome it. We have always supported the idea of woodland grants. We particularly welcome the front-end loading, which is sensible, as well as the encouragement for broadleaved species.

There is only one question I wish to put to the Minister, but before doing so I should say that I was intrigued by the reference to "grazing constables". I did not know such things existed, but presumably this is a Scottish term. Whether the "grazing" refers to the constable or to the land on which he walks it is not quite clear.

The Minister said that the Government are disappointed with the uptake under the scheme. He referred to applications for 16,000 hectares, of which 12,500 hectares have been approved. How does that compare with the targets the Government gave us at the beginning of the scheme in 1988? From memory, it is only one-third of the figure we were hoping to achieve by this time over the four years. Perhaps the Minister will confirm the target figure and indicate the reason for the lack of uptake which we hope will be put right by the change in the scheme. Other than that question, we welcome the scheme from this side of the House.

Lord Cavendish of Furness

My Lords, I am grateful to the noble Lord, Lord Carter, for the welcome he has given the scheme. I believe that it will hold greater opportunities for woodlands. I am also grateful to him for giving me notice of his question on the amount of planting under the various woodland schemes compared with the Government's target figures. As he said, we expressed disappointment with the previous take-up.

The Government have an indicative target of 33,000 hectares per annum for new woodland planting in Great Britain and that is the overall figure. In 1991 almost 12,000 hectares were planted. In addition, a limit of 12,000 hectares per annum was set for planting by farmers under the Farm Woodland Scheme. Some 16,000 hectares of new planting have been approved since the scheme was introduced in October 1988. I expect that the substantially improved incentives available under the Farm Woodland Premium Scheme, together with the better package of grants under the Woodland Grant Scheme, will have a positive impact on planting levels. I expect planting under any scheme to improve as and when the economy shows an upturn. I commend the measure to the House.

On Question, Motion agreed to.