HL Deb 20 October 2004 vol 665 cc859-62

8.15 p.m.

Baroness Amos rose to move, That the draft order laid before the House on 16 September be approved.

The noble Baroness said: My Lords, the purpose of the order is to introduce enabling powers to permit the Department of Agriculture and Rural Development (DARD) to introduce a scheme in Northern Ireland in accordance with the Rural Development Regulation (EC 1257/99).

The regulation permits setting-up aid to facilitate the establishment of young farmers under 40 years of age in the form of a single premium payment or an interest subsidy on loans. As independent research commissioned by DARD concluded that the interest-rate subsidy option represents much better value for money, the scheme will be in that form. The scheme, which represents a substantial investment in the agrifood industry by government, will challenge young farmers to come forward with innovative projects that will deliver a positive impact on farming and the Northern Ireland rural economy. I beg to move.

Moved, That the draft order laid before the House on 16 September be approved.—(Baroness Amos.)

Lord Glentoran

My Lords, again, I thank the noble Baroness for bringing forward this order. I also thank the Northern Ireland officials for giving me time this morning to question some of the details of the orders.

This order is very much to be welcomed. Farming in Northern Ireland has always been a family business. It is quite different from other parts of the United Kingdom in that the scale and size of the farming process in Northern Ireland is much smaller, co-operations do not happen and a large percentage of farming is in family businesses. This assistance for young farmers, both those inheriting and, perhaps, younger brothers purchasing and moving into farming for the first time, must be a bonus. The farming industry in Northern Ireland has suffered dreadfully in the past 10 years with all the different things that have happened. I hope that this will be a boost.

In the paragraph in the Explanatory Notes on the financial effects of the order, I note that the scheme could lever an additional £17.9 million of investment into the sector at a net cost to the Exchequer of £4.7 million. That really is moving in the right direction and is to be welcomed. I support the order.

Lord Smith of Clifton

My Lords, I, too, thank the noble Baroness the Lord President for introducing the order. As the noble Lord, Lord Glentoran, said, agriculture remains an integral part of the Northern Ireland economy and will continue to be so for the foreseeable future. As in the rest of the United Kingdom, the children of farmers are becoming somewhat more reluctant to take over the family farm. It is important in that respect that young people who have a real desire to enter agriculture should be encouraged so to do. This is a welcome measure, designed to ensure a new generation of farmers. For that reason we support it.

Lord Rogan

My Lords, it gives me the greatest pleasure to see this draft order before the House. I, too, welcome it warmly. Judging from the comments made by the Agriculture Minister Ian Pearson at Committee stage yesterday in another place, the Government seem to have the right approach to the issue.

Northern Ireland's farming sector has long needed reconstructing. I must stress that the best place to start is by creating the incentive for young men and women in rural areas to once again view farming as an attractive business opportunity. What is more, this financial assistance scheme will be seen as a model for the rest of the United Kingdom, as many of the problems faced by Ulster's farming sector are replicated across the country.

If agriculture is to remain one of the staples of the Northern Ireland economy, confidence and financial support are prerequisites to any rejuvenation of the farming industry.

I wish to raise just a couple of points that the Government should be mindful of before bringing this order into force. First, I fear that the proposed repayment timeframe of five years will act as a deterrent and a disincentive to young people. It will give the impression that opening a farm will be viewed as a high-risk venture by the very people that the Government are seeking to attract to and maintain within the industry. Many in the field believe the scheme will have a small take up as this stands.

If the Government are not prepared to extend the five-year period, I fear they will send out all the wrong messages. Therefore, to ensure sustained growth, I suggest a period of ten or fifteen years would be more suitable. At the very least, any new farm's stage of economic development should be considered before the repayment date starts to come into effect.

Secondly, I would like to urge the Government to show flexibility regarding who is defined as the head of the farm holding. Young farmers should be allowed to apply for the scheme when or after they have taken over farms from their parents. It would be a mistake for the scheme to be open only to those who are setting up farms for the first time.

There is an urgent need to bring new blood into the farming sector. But, equally, it is absolutely imperative to maintain continuity within the industry. Furthermore, it would also be beneficial if the scheme was open to those wishing to take up farming on a part-time basis or even those people wishing to set up as a co-operative.

This financial assistance order can provide the initiative to help reconstruct the farming industry and bring modern methods to the sector. In the Minister's response in another place, I was pleased to see in his rhetoric the sort of flexibility that is needed for this legislation to be sensibly applied.

But the Government must be careful in their definition of farming. It is young farmers that this legislation seeks to support and not every single business that could loosely be defined as agriculture. The purpose of the order is to breathe new life into traditional farming activities in Northern Ireland and secure them for the long-term future. The Government should hear that point in mind. Again, I welcome the order.

Lord Lyell

My Lords, I should like to take one minute of your Lordships' time to add my earnest and strong support for the order so ably presented by the noble Baroness. Indeed, my noble friend Lord Glentoran virtually made my speech. My noble friend and the noble Lords, Lord Smith and Lord Rogan, pointed out that agriculture is at the heart of the life of Northern Ireland.

I was lucky enough to spend five years as the Minister in charge of DANI, as it was then called—the Department of Agriculture for Northern Ireland. The new name is indeed covered by some of the remarks made by the noble Lord, Lord Rogan, in that the department is putting new life into what I call the rural life of Northern Ireland.

I was fascinated when the noble Baroness in her introduction gave us the indication of the European order, which I think she said was EC 1257/99. I was astonished that it has taken five years for the normally ever vigilant department to pounce on this. But I enjoyed my noble friend paying me an unintended compliment perhaps. The noble Lord, Lord Glentoran, said, "For the last 15 years". It is exactly 15 years since I ceased purportedly to be in charge of the department with responsibility for agriculture.

I am delighted to see Regulation 3(1)(a) refers to, for the purposes of, or in connection with … agriculture". That is beautifully defined. I am just a bit curious about the age of 40, but I am sure that there will be flexibility in that. There might be some youngish man or even young lady who is just a little older than that when fitting the circumstances, as spelt out by the noble Lord, Lord Rogan.

I was a bit curious about the remarks made by the noble Lord, Lord Rogan, in respect of the timescale. I would have thought that five years was adequate. I hope that your Lordships will forgive me for recalling that in 1988 I was under very severe restriction and, indeed, reprimanded for quoting what had been repeated on downtown radio—"Act fast while grants last". The department was jammed with everything on wheels and without wheels.

Do not worry: the families of the farming industry will not be slow to take up these opportunities. They will be very grateful for them.

I hope that the noble Baroness will be able to reassure me in due course, or during the course of her reply, that there might be some new money and that some of the old schemes that perhaps are falling into disuse will be replaced.

Certainly from my recollections of 1984 to 1989, this order will be greatly welcomed and be of enormous benefit to Northern Ireland. I am very grateful to the noble Baroness for bringing it forward today.

Baroness Amos

My Lords, I thank all noble Lords who have spoken and for the welcome that they have given to the order. Indeed, I sat on the Front Bench wishing that all our debates on Northern Ireland achieved the same degree of consensus. But perhaps then I would become too complacent.

The noble Lord, Lord Rogan, asked about the time-frame for the repayment of loans. The period of five years is the limit over which public money is committed. The Government believe that it will provide a much needed stimulus to investment. Scheme participants will be free to negotiate loans over a longer period of time, but they will then be responsible for the payment of all interest beyond five years. So it is possible to negotiate a longer loan.

Scheme beneficiaries must become either the sole owner or a partner in the farm business, but to conform to the EU regulations they must be setting up the business for the first time. As to the point of the noble Lord, Lord Rogan, about those who are already engaged in business, this order would not apply to them.

As regards widening the scope of the assistance, the scheme is essentially for agricultural purposes as defined under UK legislation. Diversification of schemes not related to agriculture would not be eligible. However, schemes which are innovative and firmly related to on-farm activities will be judged on their individual merits. So there is a degree of flexibility there.

As to the question of joint applications and farm cooperatives, applications will be considered from joint applicants as long as they are setting up in farming for the first time.

The noble Lord, Lord Lyell, asked about flexibility in terms of being aged 40 and being described as a young farmer. I realise that "young" is a relative term in your Lordships' House, but 40 is required by the EU regulation.

I think I have addressed all the points that have been made. I hope that the noble Lord, Lord Lyell, will allow me to get back to him on the point that he made about replacing old schemes. I do not have the answer at present.

On Question, Motion agreed to.

Baroness Farrington of Ribbleton

My Lords, I beg to move that the House do now adjourn during pleasure until 8.35 p.m.

Moved accordingly, and, on Question. Motion agreed to.

[The Sitting was suspended from 8.29 to 8.35 p.m.]

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