Farm Capital Grants (Hansard, 28 November 1988)

§ Mr. MacGregor

Since the agriculture improvement scheme was introduced in 1985 there have been many important changes in our agricultural policy. Among these, we have introduced a number of initiatives to assist farmers in conserving the countryside and controlling pollution.In the European Community we have also made good progress in dealing with the surpluses and bringing production more into line with demand. In consultation with my right hon. Friends, the Secretaries of State for the Environment, Wales, Northern Ireland and Scotland and the Chief Secretary to the Treasury, I have been reviewing the agriculture improvement scheme to see whether capital grants can more closely reflect these changing priorities.

As a result, I have decided to introduce a new grant scheme called "The Farm and Conservation Grants 101W Scheme" in February 1989. Its provisions have still to be negotiated with the EC Commission but, subject to obtaining that agreement, I plan to make the following changes.

First, I intend to increase the assistance we offer to lowland farmers to install facilities for the storage, treatment and disposal of slurry and silage effluent. Grant rates in the lowlands will be significantly improved and the coverage extended, for example, to include fixed disposal piping and safety fencing. I have agreed with my right hon. Friend the Chief Secretary a provision of up to £50 million over the next three years on these grants. This compares with £17 million spent in the first two years of the AIS. Reducing the incidence of farm pollution must be a top priority for the industry. By these means the Government will be further assisting farmers in tackling the problems.

Secondly, I plan to introduce three new conservation grants. These will encourage the regeneration of native woodlands and of heather moors and assist in the cost of repairs to vernacular farm buildings.

It is clear that certain grants which have helped to stimulate the productive capacity of the industry in the past are less appropriate in present circumstances. Grants for new farm buildings, roads and one or two minor items will be discontinued. Grants which help to keep grazing land in good heart will remain.

For horticulture, enhanced rates of grant for the replacement of heated glasshouses will also remain, with grants for orchard replanting being reinstated, both until the end of 1993.

I believe it is important that the grants, with their increased emphasis on pollution and conservation, should reflect the fact that these are priority areas for farmers in both the lowlands and the less-favoured areas. I plan therefore to narrow the differential for most grants to 10 per cent. I would, however, expect the grassland grants and the three new conservation grants to be of particular benefit in the less-favoured areas.

The arrangements recently announced by my hon. Friend the Parliamentary Under-Secretary of State for the Environment, under which national park authorities can offer additional grants on some items up to a maximum of 80 per cent. will now be adapted to the new grant scheme.

To ensure proper management of the transition from the current scheme to the new one I am closing the agriculture improvement scheme forthwith. Orders taking immediate effect have been laid before Parliament today. Farmers who have already committed themselves to investment in the expectation of claiming grant will now have until 31 May to deliver their claim unless they hold (or have applied for) an improvement plan. Grants already included in an approved improvement plan or one on which approval is awaited will not be affected by the closure. Two specific categories of grant will also be exempt from the closure orders. These are the special glasshouse replacement grants which I announced in July and those for growers in the Isles of Scilly, on which orders were laid on 16 November. In addition, in Northern Ireland only, my right hon. Friend the Secretary of State will be continuing the grants for waste disposal which have only recently been reintroduced there.