§ Mrs. Angela KnightTo ask the Minister of Agriculture, Fisheries and Food whether the autumn review of economic conditions in the hills and uplands is complete; and if she will make a statement.
§ Mrs. Gillian ShephardThe incomes of hill farmers have risen for two years and are forecast to rise for a third. Figures produced for the autumn review and agreed with the farming unions show that the average net farm incomes 487W of cattle and sheep farms in less-favoured areas rose in real terms by 33 per cent. last year and are forecast to rise by a further 28 per cent. this year. This is good news for the hill farming community. It results from a combination of factors, but in particular total direct livestock subsidy payments to hill farmers are forecast to have increased substantially over the two years to 1993–94. This demonstrates the Government's firm commitment to farming in the hills and uplands. I have today placed in the Library of the House a copy of the statistical tables which formed the basis of the autumn review this year.
Hill sheep farmers have benefited through increases in the rates of sheep annual premium arising from the currency movements following the United Kingdom's departure from the exchange rate mechanism in September last year. Suckler cow producers will benefit from the agreed substantial increases in suckler cow premium which, taking into account the extensification premium, will total over £93 per head for 1993 compared with £59 per head under the 1992 scheme. These are very real benefits for the hill farming community.
The economic situation is such that I am able to reduce the rates of allowances for the 1994 HLCA scheme without adversely affecting the long-term viability or well-being of the industry. The rates of allowance for the severely disadvantaged areas will be reduced by £15.80 to £47.50 for cattle, by £0.75 to £5.75 for hardy breed ewes and by £0.60 to £3.00 for other ewes. Rates in the disadvantaged areas will be reduced by £7.90 to £23.75 for cattle and by £0.42 to £2.44 for ewes. I have today laid regulations before Parliament to give effect to these new rates.
The substantial increase in net farm incomes to which I referred earlier represents almost an extra £100 million a year overall to hill farmers in 1993–94. Even after the reductions in rates which I have announced, hill farmers will continue to be better off and will have achieved a net gain. This is partly accounted for by the fact that direct subsidies to cattle and sheep farmers in the less-favoured areas are estimated to total at least £550 million in 1994.
While I acknowledge that HLCAs continue to play a vital role in the viability of hill farms it is indisputable that the continued rise in the level of other subsidies available to hill farmers has reduced the relative importance of HLCAs. The Government remain committed to the future of hill farming in the United Kingdom and will act as necessary to ensure the viability of this vital sector of the United Kingdom agricultural industry.