§ 2. Mr. Hooson
asked the Secretary of State for Wales what is the latest information he has on the net income of Welsh hill farmers; if he proposes to take any further measures to assist them; and if he will make a statement.
§ Mr. Nicholas Edwards
In reply to a question from my hon. Friend the Member for Banff (Mr. Myles), my right hon. Friend the Minister of Agriculture, Fisheries and Food announced on 28 November 1980 that, subject to parliamentary approval, the rates of hill livestock compensatory allowances would be increased by £7.50 for hill cows and 75p for hardy hill ewes. This takes fully into account conditions in the hill farming sector in Wales and elsewhere in the United Kingdom and represents a further indication of the Government's intention to maintain the hill livestock industry, which is of vital importance to the social structure of our hill areas in Wales.
The latest net income figures for Welsh hill and upland livestock farms will be included in the annual review of agriculture White Paper to be published early in the new year.
§ Mr. Hooson
While the increases in hill livestock compensatory allowances are welcome and the benefits of the sheepmeat regime are beginning to be reflected in firmer sheep prices, will my right hon. Friend pay particular attention to the long-term decline in the profitability of hill beef? Does he accept that that is reflected in the worsening ratio of cattle to sheep in Wales, which has gone from one in 16 in 1973 to one in 20 in 1980?
§ Mr. Edwards
I understand my hon. Friend's concern. The beef breeding herd is still declining. Numbers are down 3 per cent. from June 1979 to June 1980. However, I believe that the recent increase in the hill livestock compensatory cattle rate and the introduction of the beef 4 suckler premium will provide greater incentive to beef producers to maintain breeding herds and thus arrest the decline. Both steps show the Government's determination to assist that important sector of British agriculture.
§ Mr. Geraint Howells
Is the Secretary of State aware that the hill farmer is dependent on the guaranteed deficiency payments for fat lamb? Is he satisfied with the present sheepmeat regime? What are his views on the clawback rule?
§ Mr. Edwards
I am sure that the new sheepmeat regime represents a major step forward and opens up a brighter prospect for sheep producers in Wales. Discussions are still continuing with the Commission and other member States in an attempt to alleviate the effect of clawback on the variable premium on our export trade. As the hon. Gentleman will be aware, special arrangements have been introduced to deal with exports to third countries, and others have been introduced to deal with some of the immediate problems. We shall continue working to iron out the inevitable flaws that are present in a new scheme of that kind.
§ Mr. D. E. Thomas
May I also associate my party with the good wishes sent to the right hon. Member for Rhondda (Mr. Jones)? Will the Secretary of State consider the variable premium for beef to ascertain whether it is adequate in view of the way that the market has been performing this year? Will he ensure that the level of variable premium set by the Government is adequate to compensate farmers?
§ Mr. Edwards
I shall consider the matter. The producers' returns have been supported by substantial payments under the beef premium scheme, which is £42 million in the United Kingdom, of which £1.6 million has been paid in Wales this year to date.
§ Dr. Roger Thomas
Does the Minister accept that there is little doubt that a further upward adjustment of hill livestock compensatory allowances will be needed two-thirds of the way through next year? Does he further accept that, unfortunately, the damage has already been done and assistance can be given only through a substantial cash injection, although the redundancies and the depopulation have taken place and we cannot rectify that?
§ Mr. Edwards
I certainly give no indication to the House that we can expect a further increase during the year. The fact that we have made those substantial increases in the past couple of years is an indication of support. Farmers in Wales will receive about £23 million in the coming year, compared with £19.7 million in 1980 and £14.6 million in 1979.