FARM CAPITAL GRANTS (Hansard, 11 December 1984)

§ The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead)

My right honourable friend the Minister of Agriculture, Fisheries and Food has today laid statutory instruments before Parliament modifying the Agriculture and Horticulture Grants Scheme (AHGS), the Agriculture and Horticulture Development Scheme (AHDS) and the Farm and Horticulture Development Scheme (FHDS). These will produce the savings of £40 million in 1985–86 announced on 12th November. The changes will come into effect immediately in respect of expenditure under the AHGS incurred after 11th December, and new applications or variations under the AHDS, and variations under the FHDS received after that date.

The changes, which are detailed in the schedule below, relate almost wholly to the AHGS. In the lowlands, the standard AHGS rate of grant will now be 15 per cent. We shall however maintain the enhanced rates for the replacement and improvement of heated glasshouses (37½ per cent.) and for apple and pear orchard replanting (22½ per cent.). For the planting of hedges and the construction of walls using traditional materials we are increasing grant rates to 30 per cent.

In the less favoured areas, the standard rate of AHGS grant will be 30 per cent. For buildings, electricity or gas supplies and waste disposal systems we are retaining the present rate of 20 per cent. We are reducing grant rates for roads from 40 per cent, to 20 per cent, in severely disadvantaged areas and from 20 per cent, to 15 per cent, in the marginal areas. The enhanced rates of 60 per cent. introduced last year for hedges, traditional walls and shelter belts in the LFA's are unchanged. We have however decided that in the interests of achieving a better balance betwen agriculture and conservation, grant should not be available for land clearance. Moreover land reclamation will now only be assisted in Northern Ireland, where it is essential to maintaining farm incomes. Operations such as the removal of tree stumps and other obstacles to cultivation, land levelling or grading and deep ploughing are no longer eligible for grant in Great Britain. These changes apply also for new applications and variations to approved development plans under 269WA the FHDS and AHDS. Grant will however continue to be available in the less favoured areas for other land improvement operations such as reseeding and regeneration of grassland, the laying down of permanent pasture, bracken control and the regeneration of heather.

For the AHGS alone, the ceiling on the amount of investment which may be grant-aided will be halved, except for the special aid for heated glasshouses and orchard replanting where it remains unchanged. The limit per labour unit will be £25,000 and the overall business limit over six years £50,000. These reductions will apply to expenditure incurred after 11th December 1984.

The only changes under the development schemes (FHDS and AHDS) will be the exclusion of the same land reclamation items now excluded under the AHGS and reductions in the rate of grant for field drainage from 70 per cent. to 50 per cent. in the less favoured areas and from 50 per cent, to 32½ per cent. in the lowlands.

SCHEDULE OF CHANGES TO THE CAPITAL GRANT SCHEMES
	Standard Rate (%)	Less Favoured Areas Rate (%)	Horticultural Business Rate (%)
A. EEC SCHEME (AHDS)
Field drainage	32.5	(50)	50	(70)	32.5	(50)
B. NATIONAL SCHEME (AHGS)
Provision of:
—agricultural buildings	15	(20)	20	(20)	15	(20)
—buildings for drying and storage of grain for consumption solely by livestock kept on land	15	(20)	20	(20)	NIL	(NIL)
The replacement of or other improvement to existing horticultural production buildings (including thermal insulation)	NIL	(NIL)	NIL	(NIL)	15	(20)
Waste disposal systems	15	(20)	20	(20)	15	(20)
Electricity or gas supply	15	(20)	20	(20)	15	(20)
Water supply and storage	15	(20)	30	(50)	15	(20)
Field drainage	15	(30)	30	(60)	15	(30)
Flood protection works	15	(20)	30	(50)	15	(20)
(In Scotland only—arterial only)	40	(50)	50	(60)	NIL	(NIL)
Land works:
—roads, paths etc.	15	(20)	20	(40)	15	(20)
—pens, dips, stalls etc.	15	(20)	30	(50)	NIL	(NIL)
—hedges; walls and dykes built of traditional, local material; and associated gates	30	(20)	60	(60)	30	(20)
—permanent fences; walls and dykes not built of traditional, local materials; and associated gates	15	(20)	30	(50)	15	(20)
—shelter belts	NIL	(NIL)	60	(60)	15	(20)
—grassland and heather regeneration	NIL	(NIL)	30	(50)	NIL	(NIL)
—In Northern Ireland only—
land reclamation	NIL	(NIL)	30	(50)	NIL	(NIL)
—orchard grubbing	15	(20)	15	(20)	15	(20)
—stakes and wirework for hop gardens	15	(20)	15	(20)	NIL	(NIL)
—watercress beds	NIL	(NIL)	NIL	(NIL)	15	(20)

Notes:

(a) Land clearance and reclamation works are no longer eligible for grant in Great Britain under the AHDS and AHGS. In Northern Ireland the reclamation only, including the removal of obstructions to cultivation, is eligible in the less favoured areas.
(b) The cumulative investment limit for eligible agricultural businesses under the AHGS has been halved from about £100,000 to about £50,000. For eligible horticultural businesses the rates of grant and the investment limits remain at £100,000 where the additional expenditure is on orchard replanting and £130,000 where the extra expenditure is for glasshouse energy conservation.

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In making these changes we are reflecting the Government's declared aim of achieving a closer integration of conservation and agricultural policies through high rates of grant for certain agricultural works of particular benefit to the environment and the exclusion of land clearance and, except in Northern Ireland, reclamation works. We are however maintaining the policy of paying enhanced rates of grant in the less favoured areas in recognition of the natural hardships which they suffer.

When the new capital grants schemes are introduced in 1985 to implement the new EC farm structures policy currently being negotiated in Brussels, we are determined to maintain a level of capital investment support which will enable the industry to preserve its competitive strength. This will take particular account of the needs of the livestock sector, especially in the hills. It is also our intention to introduce further measures to help conservation and to encourage farmers to diversify into non-farming enterprises.