§ 24. Mr. Nicholas Bakerasked the Minister of Agriculture, Fisheries and Food if he will make a statement about the current state of distribution of milk quotas between landlords and tenants.
§ Mr. Soamesasked the Minister of Agriculture, Fisheries and Food if he will make a statement about the position of tenant dairy farmers in respect of milk quotas when they leave their farms.
§ Mr. JoplingUnder Community rules, when a tenancy ends, the milk quota passes to the new occupier. There is at present no provision under which the outgoing tenant can claim any compensation for the money, time and effort174W which he may have put into building up the level of milk production on which the quota is based. Tenants' representatives argue that this is unfair. Against this, it has to be recognised that landlords' interests have also been directly affected by the introduction of quotas.
I have had intensive discussions about this problem with representatives of both landlords and tenants. It has not proved possible to find an agreed solution. Individual circumstances range from the case where the tenant has started dairying and done everything to build up the enterprise, through to the situation where he has taken over an established dairy farm and let the level of production run down. With the introduction of quotas, tenants' potential profits and landlords' expectation of future rents have both been diminished and there is no ready-made formula to determine their respective rights.
My colleagues and I have decided to introduce a measure of statutory compensation for tenants and I am today tabling amendments to the Agriculture Bill which make provision for this. So far as England and Wales are concerned, the arrangements will be as follows:
Compensation will normally be payable at the end of the tenancy and if there is a statutory succession will be deferred until the end of the chain of such successions.Tenants will be eligible if they occupy the land to which the tenancy relates when the proposed arrangements come into force and have been allocated quota already. Landlords will he free to recover the payment from incoming tenants who know what they are accepting.The calculation of compensation will be based upon the concept of a standard quota. This is the quota which a tenant of reasonable competence might have been expected to achieve. Therefore, any quota allocated over this figure will be credited entirely to the tenant. This will recognise the special efforts which some farmers have made in maintaining a high level of milk production and attracting quota.The standard quota will have been earned both by the tenant and by the landlord. The tenant's share will be based on the value of tenant's improvements and the rent will provide the measure of the landlord's contribution.If the tenant has less than standard quota, his share of the value will be reduced proportionately. The purpose here is to avoid over-compensating those who failed to maintain, before the introduction of quotas, the level of milk production that might reasonably have been expected.I have listened carefully to the arguments of all parties and believe that this is as fair an arrangement as can be devised.
Where the landlord and tenant do not agree on the compensation payable, the question will go to arbitration. The amount of compensation will then be a matter for the arbitrator's professional judgment, within the framework of the general rules laid down.
My right hon. and learned Friend the Secretary of State for Scotland will be laying comparable amendments in time for consideration in the other place.