The Scheme is made under Section 41 of the Agriculture Act of 1967. It amends the principal Scheme, which came into operation in August of that year, which has given 50 per cent. grants for a wide range of land improvements, together with a supplementary 10 per cent. grant on drainage works benefiting hill land. The amending Scheme increases the rate of grant for two years to 60 per cent. Drainage in hills, which is so important, will continue to attract the 10 per cent. supplementary grant, and since the basic rate for drainage will be 60 per cent. drainage benefiting hill land will be grant-aided for two years at a rate of 70 per cent.
It is proposed that the higher grant should be paid on all applications received and all approvals given during the two years commencing 19th March, 1970, which is the date following the Minister's statement to the House, thus giving the earliest possible encouragement to further investment. Very good use has been made of the 50 per cent. grants available under the land improvement scheme since its introduction in August 1967. Throughout the United Kingdom, more than 30,000 applications have been approved at an estimated cost of almost £11 million. During the current financial year, 1969–70, applications have been coming in at the rate of more than 1,250 a month and claims for the drainage supplement at almost 400 a month.
The new rate of 60 per cent. applies to all improvements covered by the Scheme—improvements to land, reseeding, reclamation, fencing, water supply and so on. The 60 per cent. rate of grant proposed in the Scheme, together with the other measures which the Government are introducing, will give further help and encouragement to hill farmers so that they may invest in further improvements to their land. I am sure that they will do so and thereby increase the productivity of their land and the profitability of their businesses.
On behalf of my party, I should like to say that we are grateful to the Parliamentary Secretary for telling us in broad terms what is in the new Scheme, although there are several questions to be asked. Much of what was said in the previous debate applies to this. Why has it been possible to make this Scheme retrospective to this magic date of 19th March, 1970? I point out, in passing, that even if we had not passed the previous order, if the Government had wanted to make ex gratia payments, our refusing to pass the Order would not have stopped them.
Here we have another of these short-term panic measures which the Government have brought forward to try to tide them over the little time that they have left in the seat of power. They are just trying to see out their time before they cast off their responsibility and leave my party to pick up the bits, as it so often has in the past.
Agriculture, and particularly the hill farming sector, need long-term remedies. These short-term shots in the arm, of which this is only one, are not the right solution for the long term. The difficulty, as the order underlines, is that basically it is the system that has gone wrong. It is because the system is wrong that the industry has become run down and because the industry is run down, the Government are applying these short-term shots in the arm—in this case for two years—to try to tide things over for a little longer.
I know that I shall be out of order if I extol the virtues of the levy system of agricultural support, but although this 10 per cent. increase in the hill land improvement subsidies is welcome, it is a sign of the break up of the present system of agricultural support which the Opposition regard as out of date.
The National Farmers' Union has raised two matters with me. One of the improvements which the Scheme does not mention and yet which is vital for hill farmers is buildings. Apart from simple shelters on hills, building improvements are not eligible, but it becomes more and more important for the viability of hill farms for there to be facilities for wintering livestock. I wonder whether the Parliamentary Secretary will have another look at this. I hope that he will consider increasing the 40 per cent. building grant under the farm improvement scheme to 60 per cent. under this Scheme, for this would be a great help in the hill areas.
A minor point with which the union is concerned is that whereas for drainage improvements the creation of grips is a valid improvement, under the Scheme it is not possible to get grant aid for cleaning them out. This is a big and heavy job and, as I know from my own constituency, there is a great shortage of labour in the hill areas and the job is therefore hardly a paying proposition. I hope that the hon. Gentleman will look at the problem of cleaning out of grips, consulting the N.F.U. about it.
Under the Scheme, farmers are to get 60 per cent. grant on hill land improvement Schemes. The problem will be where to find the other 40 per cent. There is a grave depression in the hill farming areas. All hon. Members are aware of the difficulties farmers have got into and which have been vociferously expressed in recent months. The hill farming sector has been hardest hit of all British agriculture in the last few years. The Government have talked loftily over the year about the need to preserve the hill farming economy. The Leader of the House, when Minister of Agriculture, talked loftily about its importance.
The Government's reaction to the situation has been typical—to set up another board. Indeed, they set up two rural development boards which were supposed to do great things to improve the viability of hill farming. They have done no immediate good and there is still serious depression in the hill areas. One figure will demonstrate this with clarity. There has been a tragic drop in sheep numbers over the last few years. The national sheep flock is a good guide to the prosperity of the hill areas. British farmers have, since 1964, lost a large part of their share of the domestic lamb and mutton market. In 1964, they had about 43 per cent. of the market; today that share is about 33 per cent. Such a fall shows to what extent the hill areas and the hill farmers have been getting the hardest end of the Government's policies.
We welcome the scheme and hope it will do good, but we are not sure where these farmers will find the other 40 per cent. of the money. Many farmers could well improve their land, but even with a carrot of 60 per cent. they will still find it impossible to find the rest of the money needed. We hope the Scheme will do good but we have our doubts.
I am a hill farmer and a sheep farmer and therefore have considerable interest in this Scheme. I also represent the part of Scotland which has the largest number of sheep in that country. If I speak partly in my own interest, I am certainly speaking in the interest of my constituency as a whole. What my hon. Friend the Member for Westmorland (Mr. Jopling) has said is deadly true. He referred to this as being in some ways a panic measure. I do not believe that it is. I believe that it was carefully calculated, that it is part of a scheme which the Government have produced in order to give farmers in the hill and other areas a feeling of wellbeing which I doubt whether they can sustain.
There are a few people—I hope to be one of them—who will be able to take advantage of the grants and benefit from them. But the vast majority of hill farmers in Argyll will be unable this year to take advantage of the Scheme. I have spoken about this to all the N.F.U. branches in Argyll, and the money required to take advantage of the Scheme is not available. Nothing that the Government have done, either in the Price Review or in any other form, is making it possible for people to use this Scheme, admirable though it may be.
The Minister is blowing out his cheeks. He produces fat lambs—he is a pretty fat lamb himself—but my constituents cannot, and they get nothing out of the Review to enable them to benefit to any noticeable extent from the Scheme. I shall be delighted if the Minister is able to say to me in a year's time that the hill farmers in Scotland, and in Argyll in particular, have been able to take up their fair share of the large sum of money which he says is available.
This is a good Scheme. I am interested to see that it can be dated back to my birthday, whereas the other one could not. I look forward to knowing how the Minister explains this. It is no use telling the agricultural community that they will get an extra £20 million, if the hill farmers are not able to produce the other £20, £30 or £40 million out of their own pockets. This is pure dishonesty, and that is why I do not believe the Scheme will work as the Minister and I hope it will.
I welcome the Scheme, because the 10 per cent. increase will be a considerable help if the farmers can put up the rest of the money. This is where the trouble arises. No sector of the industry is in a worse position to put up the extra money required, and what is so disappointing is that one can see no hope of improvement in the immediate future.
It may be generally agreed that there is great potential for expansion in the hill and upland areas, but there are various question marks hanging over the industry. There is the question of whether we go into the E.E.C., which hill and upland farmers dread, and there is the difficulty of assessing the prospects if we go over to the levy system. Hill and upland farmers are worried about these points, and that is why they are reluctant to invest even the small amount of capital available to them.
There is also the question of forestry versus sheep, and this needs to be clarified. Some of the finest sheep grazings in the country are going over to trees. It is a different matter when poorer grazings and land of marginal grazing quality which has not been improved for many years go over to trees. It is entirely wrong that high quality grazings, where large sums of private and Government capital have been injected for drainage, fencing, reclamation and farm buildings in the last 20 years, should go over to trees. There is a definite imbalance if, on the one hand, we are paying out grants to improve units and make them viable and, on the other hand, units are allowed to go over to forestry. This matter should be seriously considered before launching out on large scale improvements. I appeal to the Parliamentary Secretary to look again at this question and to endeavour to produce something like a policy for the future use of hill land. It is clear that the time has come for there to be a fair apportionment of hill land as between sheep and forestry.
I know that the extra money under this Scheme will be welcome, and I hope that it will be taken up. However, I am still convinced that the hill farmer will find great difficulty in finding the rest of the money, even though this amount would appear to be generous. We must first do something to put our hill farms into better shape.
I, too, welcome this Scheme. Anything that helps the hill farmers must be welcomed. In my part of the country in the Peak District, there have been many problems for the farmers. Although this used to be a great sheep area, in recent months the sheep population has sadly declined. These farmers will find difficulty in finding the remaining 40 per cent. of the money that is needed to carry out these improvements.
Does the Parliamentary Secretary know how the Scheme has been progressing? Is a check being kept on whether land in the Scheme is being maintained as to drainage, fencing and so on? One has felt that nobody has needed help more than the hill farm schemes, but it has been difficult to ensure that maintenance has been carried out. The forces of nature soon take over and one is back to where one started. How far up the hill will these improvement schemes operate? They should cover the whole of the hill area in regard to fencing, drainage and so on, and presumably there is no limit as to how far up they may go.
We all know that there is a great deal of hardship in the hills. My hon. Friend the Member for Westmorland (Mr. Jopling) gave a figure relating to the drop in numbers of sheep. I can quote the drop in income of one small hill farmer in the Peak District, whose income has fallen from £834 to £510. This is an appalling figure. I do not know how that man, who has a wife and child, is expected to live on such a sum. I do not know how he will be able to pay the remainder of the sum. Nevertheless, I conclude by welcoming the Scheme but wishing that it went further.
While I welcome the new Scheme and the increased rate of grant at 60 per cent., I wish to make it clear that the complaints which have been made by hon. Members are not confined to their areas.
It was impressed on me strongly, in advance of the Price Review, that of all sectors of farming—I know this to be true from my experience of the Scottish Border—the hill farmers have suffered the most as a result of their income having dropped over the years. Given the present level of interest rates, it is doubtful whether they will be in a position to take advantage, in an appreciable way, of the 60 per cent. scheme. Not only will many of them not be able to afford to do so, but some will not be able to obtain credit to meet the remaining 40 per cent.
I am glad that my hon. Friend the Member for Ross and Cromarty (Mr. Alasdair Mackenzie) spoke of the comparison with forestry. This matter has affected the Scottish Border areas more than any other part of the country. There is great disquiet among the hill farming community about the financial incentives given, I admit properly given, to private forestry. As a result, however, there is a direct incentive for the hill farmer to sell his land to private forestry companies, which can take advantage of the financial incentives.
The taxpayer—the person who will be paying the extra 10 per cent. which the Government are offering under this Scheme—is entitled to ask, "How do I know that the Scheme will be effective and will enable hill farmers to remain in business?" In the recent past advantage has been taken of the Hill Land Improvement Scheme at the taxpayer's expense, only to be followed, within a year or two, by the sale of land. In one case in my constituency trees were planted right up to the door of a cottage which had been built but which was never occupied.
Are the Government really serious in their intention to keep the hill farm as a viable part of home agriculture? I suspect—although I have not had a chance, since the publication of the price Review White Paper, to check with my local N.F.U.—that the extra 3d. on sheep which is given in the Price Review, while being excellent, may not find its way in sufficient quantity to make an appreciable difference to the hill farmer.
In other words, I fear that we may be going through a shadow exercise of approving a Scheme which, on paper, is excellent and appears to make the position of the hill farmer improved, but which, in reality, will not go to the heart of the matter because it will leave the hill farming community in the same state of uncertainty as it has been for the past few months.
My hon. Friends and hon. Members of the Liberal Party have made some interesting contributions to the debate. It is regrettable that not one back bencher is present on the benches opposite to speak for sheep farmers, particularly those in Caithness and Sutherland.
It has been pointed out that hill and upland farmers face a real difficulty, despite the Price Review. Whatever the Review does by way of putting something into the end product that they produce, there will be no extra money for these people until the late autumn of this year.
The fertiliser Instrument has come too late this year to help them. Hill and upland farmers face the difficulty that if the weather goes against them at harvest time, there will not be a market for stores, with the result that the extra 3d. will not reach them. Is the Minister certain that the extra 10 per cent. is all that is needed to make hill and upland farming viable?
The points that have been made about sheep farming versus forestry underline the fact that there is not sufficient profitability from quite good land, let alone bad land, for the continuation of sheep farming. As good land is going, the Minister must show how this 10 per cent. increase will be enough. I should
like to underline the point which my hon. Friend the Member for Westmorland (Mr. Jopling) made about buildings. I understand that this Scheme refers back to the 1967 Act, which in Part III, Section 41(2), says:
the … Minister may prescribe
in the scheme as being in his opinion improvements which will improve the productivity of hill land used for agriculture.
If, as a result, a hill farmer puts buildings on his land which allow him to rest the land, to alter the time of grazing, thus assisting him to support a larger number of stock, does this fall within Section 41(2)? The Parliamentary Secretary has been making play with the fact that he can make ex gratia payments under another Scheme. Surely he could do this under Section 41? Is this so?
The Minister gave us to understand that about 1,250 applications were coming forward under this Scheme at present, and this presumably means possibly about a month's or two months' delay between the putting forward of the schemes and starting them. Possibly, something like 1,000 schemes have been approved. In the light of the change in the rate of grant, is it open to farmers to withdraw their schemes and to resubmit them?
If we can make ex gratia payments from 1st May to the date of the birthday of my right hon. Friend the Member for Argyll (Mr. Noble), which appears to be the witching date in this debate, is it not possible for those people who have applied in good faith to reapply? It is like the story of the wise and foolish virgins, but in this case it is the foolish virgins who get the best of it. That is basically wrong and the wise virgins should get something out of it as well.
This is always an interesting debate on hill land farming. I should answer the point as to why this can be back-dated unlike the fertiliser Scheme. This is a Scheme where there is simply a question of approval and there is no question of buying anything. The farmer puts in an application and gets an approval.
The hon. Member for Westmorland (Mr. Jopling) and other hon. Members suggested that hill farming was run down, but it is the one side of the sheep industry which has shown a rise in numbers. The drop in the numbers of sheep has been in the lowlands and not the highlands. Incomes for sheep farmers have been a little up compared to others, but not where there are hill sheep and cattle. These are down 10 per cent., and compare with farming incomes in general for which 1968–69 has been a bad year.
The hon. Member for Westmorland made an extraordinary statement: that if only he could use the levy system he could support hill farming today. If only he had seen the horror on the face of the hon. Member for Ross and Cromarty (Mr. Alasdair Mackenzie). How much would he have to raise the price of beef to allow the hon. Member for Ross and Cromarty to get £35 10s. on his hill calf? That is the amount of subsidy on the cow and calf. The hon. Member for Westmorland should go home tonight and it will take him all night to work it out. Then he will be horrified.
What is the Hill Land Improvement Scheme but a production grant? It is the same system. The hon. Gentleman can go home and work out also how much the price would have had to have been increased to pay for the Hill Land Improvement Scheme.
The hon. Gentleman also talked about maintaining grips. I have been asked this by farmers in his area, notably by Mr. Allen in Cumberland. The Government having made a grant for the putting in of drains, it is the farmer's duty to maintain them. It is not reasonable to give maintenance grants when grants have originally been given for installation. We have worked on the principle that maintenance is the farmer's job after the grants have been made.
Several hon. Members raised a point about buildings. There are more farms in the hill areas that should come under the Government's farm structure scheme than in any other area. If grants were given for the erection of permanent buildings, many of them might be wasted. Hon. Members must know that cattle and sheep shelters come under the terms of the scheme but not permanent buildings.
R.D.B. has been mentioned. It has been going for only 6–8 months in the hon. Gentleman's area. He should give it a chance to operate before criticising it.
Nearly every hon. Member who has spoken has said that farmers will not have the cash to take advantage of these grants of 70 per cent. for drainage and 60 per cent. for other things. For drainage only 30 per cent. of the necessary money must be found by the farmer; and for other schemes only 40 per cent. The figures do not show what hon. Members have alleged. In the last three months there have been 3,440 applications. In the comparable period for the previous year there were 3,370. So in what everybody has been saying has been a bad year the number of applications has risen.
I will write to the hon. Gentleman and give him that information.
From February, 1969, to January, 1970, out of a total of about 17,000 applications received, 15,987 were approved, at an estimated cost of about £6 million. I was asked whether a farmer who had had a scheme approved could withdraw and start again. He can. We cannot prevent him from doing so, providing that he has not yet started work on the scheme. Any farmer who has had a scheme approved can withdraw and start again, and get the extra 10 per cent.
We have repeatedly told hon. Members opposite that they talk fanners into thinking that they cannot afford things. But the figures do not show this. Hon. Members should study the figures. There is money to be found—15,987 hill farmers are finding it. The number of applications received in the last three months showed an increase of 70 over the number received in the corresponding period of 1968–69.
I turn to the difficult question of hill farming land going to forestry. The taxation position is to the advantage of private forestry. These people are obviously able to pay more for the land, and it is attractive to farmers to sell it to them. I am sure that the hon. Member for Ross and Cromarty would not like any Government to take sufficient control—I gather that is what he wants us to do—to stop this kind of thing. We cannot do that.
I know the point that the hon. Gentleman will make. He will say that he does not want us to take control, but to give enough money so that forestry and sheep farming can hold their own.
The point is that large sums have been spent in the past 20 years to make hill farms viable units. It therefore seems wrong, when a man has fenced, drained and reclaimed land and put up buildings, that it should go to forestry.
I agree it is a pity that that should happen. But if we are to have private ownership of land and allow people to please themselves, it is difficult to stop it happening. There is enough land. Forestry is complementary to agriculture. If not, it should be. It is in many countries which I have visited, and I should like it to be so in this country. I know how keen the hon. Gentleman is on stock. He, probably rightly, thinks that in some cases this should not happen.
Derision has been poured on the 3d. a lb. on the fat sheep. The hon. Member for Roxburgh, Selkirk and Peebles (Mr. David Steel) did not seem to think that it would trickle back. He must agree, because he is a Common Marketeer, that with a levy it will trickle back. I know that the hon. Member for Aberdeenshire, West (Mr. James Davidson) is not of the same opinion, but I cannot answer for divisions within parties.
The hon. Member for Fife, East (Sir J. Gilmour) raised many "ifs" about things happening. We all know that things happen in farming. The industry has good and bad years. If this and that happens, said the hon. Gentleman, sheep farming would stop altogether. He was being very depressing.
The hon. Gentleman raised a point about buildings, which I have answered. He also asked whether a farmer could withdraw, and I have answered that point.
The only point that I have not answered was that raised by the hon. Member for Derbyshire, West (Mr. Scott-Hopkins) about whether we will follow up the Scheme with another. The Scheme has only been going since 1967 and we do not know whether the improvements will be maintained. However, we will look at this point. Like the hon. Member for Ross and Cromarty, I think that it is a pity to spend a lot of money on a Scheme and not see any return.
I hope that the House will accept the Scheme. I think that, generally speaking, most hon. Members approve of it.