HC Deb 14 November 1973 vol 864 cc176-8W
Mr. Tom King

asked the Minister of Agriculture, Fisheries and Food whether he is now able to make a statement about the Government's proposals for implementing EEC Directive 72/159 concerning the modernisation of farms and horticultural businesses.

Mr. Godber

The directive to which my hon. Friend refers requires member States to introduce schemes for the modernisation of farms and horticultural businesses on lines laid down in the directive in pursuance of the Community's policy for the improvement of agricultural structure. It provides for a 25 per cent. contribution from FEOGA towards Government expenditure under the scheme. A draft statutory instrument will shortly be laid before Parliament for approval.

The scheme covered by the main part of the directive will be called the Farm and Horticulture Development Scheme. It will be open to farmers and growers who at present have an income per labour unit of less than the national average income of workers in nonagricultural occupations, and who can submit a development plan showing that within six years their income will reach this level with the help of the plan. The present figure is £2,300 a year in England, Wales and Scotland, and £2,070 in Northern Ireland.

Applicants whose plans are approved will be eligible for grants on the capital investments necessary for the implementation of their plans. The general rate of grant for agricultural investment will be 25 per cent. but field drainage will qualify for 60 per cent. and certain other investments such as the purchase of livestock, plant and machinery, fencing and certain land surface improvements and the provision of facilities for freshwater fish farming will qualify for 10 per cent. The rates of grant for horticulture will be 30 per cent. for buildings except additional production buildings, and 20 per cent. for most plant and equipment; additional production buildings and minor equipment such as tractors will receive 10 per cent. Investments in poultry and egg production will not qualify for assistance and investments in pig production will qualify only if they amount to not less than £4,600 and not more than £18,500 and the farm unit is capable of providing 35 per cent. of the feed. For other investments the maximum will be £18,500 per labour unit.

Farmers and growers carrying out an approved development plan will also qualify for a grant towards the cost of keeping the farm records which must be submitted annually during the life of the plan. Farmers whose plan provides that more than half the farm income will be derived from the breeding or keeping of cattle or sheep suitable for the production of beef, mutton or lamb will also be eligible for guidance premiums totalling about £16 per acre subject to a maximum of £4,150 per holding.

Under the directive, member States may also within specified limits provide national aids for capital investment on holdings not subject to a farm development plan. We propose for this purpose to seek parliamentary approval for new Farm and Horticulture Capital Grant Schemes. In general the Farm Capital Grant Scheme will be similar to the existing scheme, but there will be some new features. As under the Farm and Horticulture Development Scheme, there will be no grants for investment in poultry and egg production and grants for investment in pig production will be subject to the limitations which I have already mentioned.

The maximum amount of investment eligible for grant on all holdings will be £18,500 for each labour unit. This will supersede the present limit of £100;000 per farm unit. It will be related to total investment attracting grant over a period of two years. The grant for field drainage will be a maximum of 55 per cent., but to meet an EEC requirement that grants should not exceed 25 per cent. of total investment it will be necessary to take into account all capital investment on the unit of a type eligible for grant under the Farm and Horticulture Development Scheme over the preceding two years. The amount of grant payable for field drainage work will therefore represent 25 per cent. of the cost of all such investment, less any grant already paid on that investment, subject to a maximum of 55 per cent. of the cost of the field drainage work.

The Horticulture Capital Grant Scheme will offer grants at five percentage points lower than for horticultural investment under the Farm and Horticulture Development Scheme except that those improvements grant-aided under the latter scheme at 10 per cent. will not be grant-aided under the Capital Grant Scheme.

Pending the adoption by the EEC of a Less Favoured Areas Directive, the capital grants for investments in hill land will continue unchanged.