Farm and Conservation Grant Scheme (Hansard, 6 February 1989)

§ Mr. MacGregor

With the agreement of the Secretaries of State for Wales, for Northern Ireland and for Scotland, I announced on 28 November my intention to introduce a 577W new capital grant scheme giving greater priority to the control of pollution and support for conservation. After consultations with the EC Commission orders were laid before Parliament on 2 February which if approved will introduce the farm and conservation grant scheme on 20 February.

In my earlier statement I said that I had agreed with my right hon. Friend the Chief Secretary to the Treasury a provision of up to £50 million over the next three years on grants for pollution control. This means that we are now able to set a grant rate of 50 per cent. for this type of investment. In the lowlands where, because of the predominance of dairy farms, the potential for pollution is particularly acute, this will be the highest rate of grant ever offered for effluent facilities. We understand that it is also the highest rate in Europe. This substantial increase in the lowland grant rate underlines the Government's commitment to dealing with on-farm pollution and will strengthen the case for heavy penalties against those who continue to pollute.

The farm and conservation grant scheme also includes new conservation grants for heather, native woodlands and traditional barns. Farmers will receive grants of 50 per cent. in the LFA and 40 per cent. elsewhere for fencing stock out of heather moors and woodlands for a period in order to promote regeneration. In time the result will be better grazing and shelter as well as the restoration of important environmental features. Grants for the repair and reinstatement of agricultural buildings made of materials traditional in the locality, will be available at 35 per cent. provided that the farmer undertakes to keep the buildings in agricultural use.

At the same time, we are increasing the grant rates for heather burning and bracken control from 15 to 40 per cent. in the lowlands and from 30 to 50 per cent. in the LFA. These new rates will also apply to other familiar conservation grants on hedges, stone walls, shelter belts, stiles and footbridges. All told, these changes give a greater priority to conservation than ever before.

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Support for agricultural improvements under the new scheme will be confined to those investments which keep existing farmland in good condition without increasing surplus production. Grants will not be available for new buildings and roads. Drainage will be aided only where it is necessary to renew existing facilities on previously drained land. Grants for this and for fencing, reseeding and regeneration, lime and fertiliser, energy-saving facilities and flood protection will be provided at 25 per cent. in the LFA and 15 per cent. elsewhere.

In retaining these grants, we have been particularly conscious of their importance to farmers in hill and upland areas. The Government's commitment to agriculture in these areas is reflected both in the scope of the scheme and in the fact that grant rates in the LFA will continue to be higher than elsewhere for all items except waste handling and traditional buildings.

In the horticulture sector we intend to reintroduce grants for orchard replanting at up to 35 per cent. Rates of 40 and 35 per cent. will be available for the replacement of heated glasshouses and installation of heating systems from 1 December 1989 when the current rates under the agriculture improvement scheme come to an end. The closing dates for horticultural claims will be 31 March 1994 for orchard replanting and 31 December 1993 for the two other grants.

As under the agriculture improvement scheme grants for agricultural improvements will be available only under an improvement plan. Grants for other types of investment will also be available without a plan but subject to prior notification in the case of waste facilities and traditional buildings.

Public expenditure provision for the new scheme is reflected in chapter 4 of the public expenditure White Paper (Cm. 604). The cost is forecast to reach around £55 million a year.

Leaflets and forms for the new scheme will be available from local Ministry offices on 20 February.