To ask the Minister of Agriculture, Fisheries and Food if he will make a statement about the future of HLCA payments.
§ Mr. Gummer
United Kingdom Agriculture Ministers have completed the autumn review of economic conditions in the hills and uplands.
The review has shown that the average net farm income of livestock producers in the United Kingdom's hill and upland areas is forecast to show a significant rise for the second year running. Specialist sheep farmers in Great Britain are seeing a large increase in their incomes as a result of the strong market for store lambs and increased returns from the ewe premium and the special supplement payable on ewes kept in the less-favoured areas—LFA.752W
Hill sheep farmers' receipts will be further boosted by an increase in the annual ewe premium of about £1.70 per ewe under the 1992 scheme as a consequence of the green pound devaluations which have already taken place. Although this will be partly offset by higher input costs, any further devaluations at the beginning of next year as a result of revised agrimonetary arrangements would provide an additional boost.
As a consequence of these favourable developments, the rates of hill livestock compensatory allowances—HLCA—paid on sheep in the severely disadvantaged areas—SDA—of the LFA are considered to be greater than is necessary to compensate for the permanent natural handicaps of farming in those areas. These rates will accordingly be reduced by £2.25 to £6.50 per eligible ewe for hardy breed ewes and by £1.30 to £3.60 per ewe for other breeds in the SDA for the 1993 scheme.
We will, however, be sustaining HLCA rates for breeding cows at their current levels of £63.30 per eligible cow in the SDA and £31.65 per cow in the disadvantaged areas. The rate payable on eligible ewes in those areas will be adjusted upwards to bring it into line with the EC rules. The precise rate will depend upon the value of the green pound on 1 January 1993 and we will announce it shortly thereafter.
A statutory instrument giving effect to these new rates will be introduced early in the new year. Payments of claims will commence as quickly as possible thereafter.
The environmental initiative for the LFA which I announced last February is being sustained. A new definition of overgrazing has been included in the HLCA regulations to enable problems of serious overgrazing to be tackled more effectively. We shall be seeking powers from Brussels during 1993 to apply similar rules to the ewe premium. All HLCA applicants have been sent a free copy of the code of good upland management. Thirteen new upland environmentally sensitive areas in the United Kingdom have been announced, a focus of which will be the protection and enhancement of heather moorland. In addition, I secured in the common agricultural policy reform package provision for a livestock extensification scheme which we would expect to use primarily to deal with overgrazing in the LFA.
This series of measures is designed to tackle overgrazing in a cost-effective and equitable manner by focusing upon the areas where the problem occurs. The scaling of HLCAs remains a possible additional measure which we will keep under review.