§ The Minister of Agriculture, Fisheries and Food (Mr. Michael Jopling)
With permission, Mr. Speaker, I should like to make a statement.
I announced on 8 October that the Government intended to provide some help for those livestock farmers who had been most seriously affected by the exceptionally bad weather conditions earlier this year and, in agreement with my agricultural colleagues, I am now in a position to announce the details.
The Government intend to make exceptional payments to farmers with suckler cows and breeding ewes in certain specified parts of the less-favoured areas, and to farmers with dairy cows in certain more limited areas.
For suckler cows and ewes, the rates of payment will be £14 and 35p per animal respectively and the areas concerned will be the less-favoured area in Scotland and throughout Northern Ireland; in England the less-favoured areas in Cumbria, Durham, Lancashire, Northumberland, north Yorkshire, excluding the north Yorkshire moors, west Yorkshire and Tyne and Wear; and in Wales the original less-favoured areas in the counties of Gwynedd, Dyfed, West Glamorgan and Mid-Glamorgan and parts of the counties of Gwent, Powys and Clwyd. For dairy cows, the rate of payment will be £4.50 per animal which will be paid to dairy farmers in Cumbria, including the areas outside the less-favoured areas, in England; in Scotland, in the three regions of Strathclyde, Central and Dumfries and Galloway; and in Northern Ireland.
Those payments will be made to farmers in respect of the number of suckler cows, breeding ewes and dairy cows that they expect to have on dates which will be specified. The farmers concerned are being invited to put in their claims quickly. The agriculture Departments will endeavour to deal with them as rapidly as possible and will hope to pay a significant proportion before Christmas.
My colleagues and I recognise that the farmers in these specified areas are not the only ones badly affected by this year's adverse weather, but we believe that we have, in broad terms, selected for assistance those areas and enterprises where the situation is the most serious. In all, these payments are estimated to amount to about £16.9 million.
I am also in a position to announce the determination for hill livestock compensatory allowances for 1986. The agriculture Departments have now completed the annual autumn review of economic conditions in the hills and uplands and, in the light of that review, my colleagues and I are proposing, subject to parliamentary approval, to increase the rates of hill livestock compensatory allowances with effect from 1 January 1986. In the old less-favoured areas, the allowances for suckler cows will be increased by £10 to £54.50, for ewes of mountain breeds by 50p to £6.75 and for other ewes by 25p to £4.50. In the new less-favoured areas the allowances for suckler cows will be increased by £5 to £27.25 and the allowances for ewes will be increased by 13p to £2.25.
In addition, we are proposing to increase the maximum payment per hectare from £60 to £62.48 in the original less-favoured areas, in accordance with the revised maximum specified in the new EC structures regulations and to make a corresponding increase, from £45 to £46.86 per hectare in the new less-favoured areas. We are also 1032 proposing to introduce some changes in the detailed rules of the scheme in the light of the new EC regulation, including a provision which will enable an HLCA applicant, subject to checks to prevent over-grazing, who afforests part of his land to take the afforested area into account for the purpose of calculating his allowances for up to 15 years.
We shall shortly be laying before Parliament a draft statutory instrument giving effect to those proposals, which are also being notified to the European Commission.
The additional HLCA payments are expected to cost £10.9 million in a full year and will represent an increase of some 11 per cent. on the existing annual HLCA payments which are currently running at about £98 million per year. That represents a significant increase in the Government's support for the hill and upland areas of the United Kingdom.
The combined cost of the weather relief measures and the increase in HLCA rates in the current financial year will be £25.3 million; £5.3 million of this will be found from savings in programmes within my responsibility and that of my right hon. Friends the Secretaries of State for Scotland, Wales and Northern Ireland. Detailed changes to cash limits will be announced later. The remaining £20 million will be a charge on the reserve. Following an announcement in October that the Government were considering these matters, expenditure on such measures was in prospect and can therefore be met within the estimated outturn for the agriculture programmes in 1985–86. The cost in future years of the HLCA uprating will also be met within the totals for the agriculture programmes published in the Chancellor's autumn statement.
Because of the need to make payments to farmers urgently, expenditure for weather relief estimates at £16.9 million will be met by repayable advances from the contingencies fund pending approval of the necessary spring Supplementary Estimates.
I am pleased also to announce other changes which will help livestock farmers who are facing difficulties as a result of bad weather. In England and Wales, farmers in the areas where the special weather assistance will be payable will be exempted, until the end of March 1986, from the charges normally made by the advisory service for the analysis of hay and silage samples. In Scotland, the suspension of charging by the colleges will apply throughout the country.
Agreement has also been reached in Brussels on arrangements which will enable us to make early advance payments of sheep annual premium to less-favoured area farmers in respect of the current marketing year; and we shall hope to make most of those payments before Christmas. Advances will be paid to less-favoured area farmers who have 10 or more eligible sheep at the rate of £2.10 per ewe in Great Britain and £4.70 per ewe in Northern Ireland. This early payment will clearly be welcome to the farmers concerned.
In addition, we have been able to obtain the European Commission's agreement to some changes in the rules relating to the suckler cow premium scheme, which will help farmers who may find themselves in difficulties over maintaining their cow numbers throughout the winter because of fodder problems or abnormal losses. A separate announcement about this will be made shortly.
§ Mr. Brynmor John (Pontypridd)
I thank the right hon. Gentleman for his ready co-operation in making the statement. I know that he regards it as detailed, and, having heard it, I realise that we shall have some difficulty in taking in all the figures. However, the principles behind the statement are of great importance not only to the House, but to the many farmers who are desperately anxious to discover how they will feed their livestock this winter after the appalling summer. With the current bad weather, and snow coming early this year, the statement does not come a moment too soon. Indeed, the Minister should have acted earlier.
Last week, I accused the right hon. Gentleman of promising aid by the end of October. I apologise, because it was his noble Friend Lord Gray who gave us to understand that the aid would be available in weeks rather than months. We now know the converse to be true. The difficulties caused by the delay are mentioned in the final paragraph of the right hon. Gentleman's statement. He talked offarmers who may find themselves in difficulties over maintaining their cow numbers throughout the winter because of fodder problems".We are content with the geography of the bad weather assistance for suckler cows and sheep, but the selection of areas for dairy cows seems somewhat bizarre. Large chunks of England, the highlands and islands of Scotland and the whole of Wales are excluded. What is the reason for that? Did not the National Farmers Union of Scotland say that the rate of £4.50 per dairy cow means that in an average herd the farmer can feed two cows during this winter?
The right hon. Gentleman said that the £4.50 would be paid on dates to be specified. Will the Minister give us as much information as possible about the dates on which he expects that the livestock will be counted? The worst affected farmers this summer have already had to sell many animals just to keep going. It is important to resolve this matter as quickly as possible.
The HLCA increase is welcome—any increase is welcome to farmers in such a predicament. However, while the addition of suckler cows restores the HLCAs in real terms, the sheep categories are not restored to the real value of the payments in 1980 and 1981 when they were introduced. There has been an erosion of about 17 to 20 per cent. in the HLCAs for hardy and less hardy ewes.
The right hon. Gentleman said that expenditure would be met out of the agricultural programmes. That means that no new money is being made available, but that £20 million will be found from the reserve and £5.3 million from the budgets of Scotland, Wales, Northern Ireland and the Ministry of Agriculture, Fisheries and Food. Can the Minister tell us how that money will be divided up, where it is to be found, and why the Government have chosen to make this small economy on something that could not have been covenanted? Why does not all the money come from the contingencies fund?
At a time when the right hon. Gentleman asks the Agricultural Development and Advisory Service to be more commercial, who will pay for the costs arising from the suspension of the charges paid to ADAS for the analysis of hay and silage samples?
We welcome the announcement and consider that it will go some way towards reassuring farmers. However, the right hon. Gentleman must recognise that the delay, of 1034 which his Ministry is guilty, in responding to the exceptional weather, has led to much economic and structural hardship in the fanning community.
§ Mr. Jopling
The hon. Gentleman has asked many questions and I shall do my best to respond. I am grateful for his kind remarks at the beginning of his comments.
The hon. Gentleman said that we should have acted earlier, but, as I told the House last week, it was difficult to assess the areas that were hardest hit. We took much advice as we wished to make the best assessment of the areas for assistance.
I am glad that the hon. Gentleman believed that the arrangements for bad weather aid were satisfactory for sheep and cows, but he questioned the assistance for dairy cows and asked why those areas had been selected. The advisory service's advice was that the best formula was to put the money into the areas where the dairy industry had been hardest hit.
The hon. Member asked about the dates for applications. For hill cows and sheep, we would expect 1 January to apply and for dairy cows, 1 December.
I appreciate the hon. Gentleman's welcome of the announcement about HLCAs. I thought it was a little hot that he talked airily about restoring the figures in real terms to their 1980 level, although he acknowledged that some have been restored. That comes very strange from the spokesman for a party which, between 1976, when the present arrangements were introduced, and May 1979, when they were hustled out of office, increased the payment for mountain ewes by only 50p to £4.10. For all other ewes and suckler cows, the 1976 figures remained. It is a bit offside for him to criticise us for not being generous.
§ Sir Hector Monro (Dumfries)
I thank my right hon. Friend—and my right hon. Friend the Secretary of State for Scotland—for this valuable announcement. I thank him for dealing with suckler cows and breeding ewes and for bringing in dairy stock, which will be especially important to farmers in Dumfries, Galloway and Ayrshire. I thank him also for the addition to the HLCA and for his suggestion that there might be some flexibility on cow numbers, bearing in mind the severe losses caused by staggers as well as the fact that many farmers had to sell their beasts when they could no longer afford to feed them. I am glad that my right hon. Friend will consider paying the amounts as quickly as possible. Will he try to make the forms as simple as possible to speed payment?
§ Mr. Jopling
I am extremely grateful for my hon. Friend's generous remarks. I assure him that we intend to pay the funds as soon as we can. For that reason, w e shall try to keep the forms as simple as possible, remembering that we must ensure that the scheme is properly administered.
§ Mr. Donald Stewart (Western Isles)
If we may assume that representations were made by the National Farmers Union in the highlands and islands and by the North of Scotland college of agriculture, can the Minister explain the incredible omission of those areas from the dairy cow assistance? Those areas were also hard hit by bad weather. No one argues that Strathclyde and the other regions mentioned do not deserve the funds, but why were the highlands and islands omitted?
§ Mr. Jopling
The right hon. Gentleman will recall that I said that the farmers who will receive assistance were not 1035 the only ones who had to cope with appalling weather. However, we have had to try to discover those who were worst affected and to concentrate on areas where the excess rainfall was highest. I appreciate the fact that other farmers had difficulties, but I believe that the hardest-hit farmers are covered by my announcement.
§ Mr. David Maclean (Penrith and The Border)
My right hon. Friend will be aware that Conservative Members who have many fanning constituents, who contribute so much to Britain, will welcome his announcement not just of the increase in HLCAs, but of the exceptional weather payments, especially since the latter have been extended to dairy cows on lower land, not just in less-favoured areas. From the mass of figures that he produced today, can he tell the House what it means in cash terms to average farmers, of whom there are many in his constituency and in mine?
§ Mr. Jopling
I am grateful for my hon. Friend's generous remarks. Some of the figures are difficult to apply to the average farmer, but perhaps I could illustrate it by saying that a farmer with 40 hill cows and 500 sheep would obtain about £700 extra through the bad weather package.
§ Mr. Thomas Torney (Bradford, South)
Would not the adverse weather conditions have provided an opportunity to use some of our massive stocks of cereals as animal fodder, even if we had to give it away to the farmers? Does the Minister agree that that would have been a great saving to British taxpayers, who at present pay a colossal sum just to store the grain, which many people say is completely useless?
§ Mr. Jopling
Perhaps it has slipped the hon. Gentleman's memory that some time ago we made available some grain in Northern Ireland to meet exactly the point that he raised. The main difficulty in the areas that I mentioned is not a shortage of grain or of high-energy diet foodstuffs, but a shortage of fodder, or high-fibre products such as hay and silage. Therefore, we were right not to operate in the way that he suggested, but to have done what we did.
§ Mr. Albert McQuarrie (Banff and Buchan)
If the farmers of Banff and Buchan cannot have a loaf, I am sure that they will be happy to accept a crumb. Farmers in Scotland lost £150 million because of the severe weather, and a similar crisis exists now. However, I welcome my right hon. Friend's announcement on the HLCAs. Will he try to make the HLCA and less-favoured area payments sooner rather than later, bearing in mind the fact that we are about to enter the worst period of weather in Scotland?
§ Mr. Jopling
I do not know by what my hon. Friend sets his standards and how he would define a loaf and a crumb. All that I can say is that £16.9 million for bad weather assistance and a £10.9 million addition to the HLCAs is, in the view of most reasonable people, much more than a crumb. In reply to my hon. Friend's specific question, I recognise that farmers have cash flow problems. To help with those, we are considering making advance HLCA payments to eligible farmers in Great Britain early in the new year, and we shall announce details of that as soon as possible.
§ Mr. James Wallace (Orkney and Shetland)
I welcome the Minister's long overdue statement. Although it sounded complicated, does he agree that many of its provisions were what the farming unions demanded at the beginning, and that even the areas—with the notable omission of the highlands and islands—are those which were predicted? Is the delay partly attributable to the fact that the Minister lost his battle with the Treasury and obtained only about two thirds of the money that he sought, and is now seeking to dress it up by linking the statement with the annual hill farming review, which simply restores in real terms much-needed money to the HLCAs?
Perhaps I did not hear the Minister correctly, but I understood him to say that the dates at which the livestock will be counted are December this year and January next year. Does he agree that that will not properly compensate farmers who have had to sell cows and sheep to solve their cash flow problems, and are not they the people whom the measures should help?
§ Mr. Jopling
The hon. Gentleman must not indulge in wishful thinking and try to read into the arrangements what he hoped would happen. We were right to consider the problem of hill land and the difficulties caused by the overall profitability, which was part of the autumn review, with the effects of the appalling weather. It was right to assess those together, so that we could get the whole picture and to give us a little time to evaluate the weather later in the autumn before we made this announcement. When we had a broader picture, we could provide a better solution.
§ Mr. Hugh Brown (Glasgow, Provan)
While recognising the many problems associated with the special schemes, may I ask the Minister how much weather relief is likely to go to Scotland, how many beneficiaries there will be, and what the average payment will be? In view of the Government's philosophy on selective assistance, will a means test be applied?
§ Mr. Jopling
I am afraid that I cannot tell the hon. Gentleman without notice how much will go to Scotland. My right hon. Friend the Secretary of State for Scotland is here and if the hon. Gentleman puts a question to my right hon. Friend, I am sure tht it will be answered.
§ Mr. Richard Holt (Langbaurgh)
My right hon. Friend the Minister recounted a long list of areas, but I did not hear Cleveland mentioned. I wonder how wet it has to be in Cleveland before that area is added to Durham, Northumberland and all the other areas mentioned in the statement. Farmers in my constituency have suffered just as much as others and there is no reason why they should be overlooked merely because Cleveland is a small county.
§ Mr. Jopling
I admitted in my statement that there would be some hon. Members whose farmers have suffered weather difficulties and that my colleagues would claim that they should have assistance as well. I recognise the difficulty expressed by my hon. Friend the Member for Langbaurgh (Mr. Holt) but I believe that the Government have to face my hon. Friend's potential criticism in an endeavour to help those farmers who have been worst hit.
§ Mr. Ron Davies (Caerphilly)
Can the Minister clarify the policy to extend payments to areas that have been forested and can he say whether any acreage limits will 1037 apply to HLCA payments? Will he confirm that the new arrangements will mean that HLCA payments and forestry commission grants will apply to the same area?
§ Mr. Jopling
I cannot go further than the comments that I made in my earlier statement on afforestation. That is a technical matter and the hon. Gentleman should reread my statement and study the words that were very carefully chosen. He will then realise what their effect will be.
§ Mr. Teddy Taylor (Southend, East)
The Minister has been successful in giving £17 million of extra money to the home livestock industry because of the exceptionally bad weather. If there is exceptionally good weather next will it be the Minister's policy to reduce subsidies? Can he say whether the Government have any plans to extend this new, generous policy to the ice cream salesmen of Southend and to the landladies of Blackpool, who are suffering severe cash flow problems and have had a disastrous year because of the inclement weather?
§ Mr. Jopling
It crossed my mind that my hon. Friend might be in the House when I made my statement. I confess that I was bemused as to what form of question he might have put to me, if, instead of finding another seat in the House representing Scotland, he had been re-elected to the House in a constituency with many upland hill farmers.
§ Mr. Robert Maclennan (Caithness and Sutherland)
Does the Minister's answer to the question of my hon. Friend the Member for Orkney and Shetland (Mr. Wallace) about the date of eligibility for payment mean that farmers who have already had to dispose of stock will not receive compensation or assistance? If the Minister has difficulty in understanding the difference between a crumb and a loaf, he should consider the view of the National Farmers Union of Scotland that the loss caused by the bad weather amounted to about £200 million. The Minister's additional money for the industry is only one tenth of the sum for the whole of the United Kingdom.
§ Mr. Jopling
I do not think that I have ever pretended, and nor have farmers asked, that the assistance that we were able to offer in these circumstances would fully make up for the losses that have been suffered. Farmers recognise that the commercial business of farming is hazardous and depends much on the weather. All that the payment is intended to be is a contribution to those farmers in the most difficulty.
§ Mr. Eric Forth (Mid-Worcestershire)
Can the Minister explain to the House and to the taxpayer why those who expect to be helped by the taxpayer in adverse times should not equally be expected to repay that money to the taxpayer when times are more favourable?
§ Mr. Jopling
My hon. Friend will know that there is an annual review of the incomes of hill farmers. We conducted that inquiry at the end of October and the beginning of November in the normal and traditional way, and all matters are taken into account.
§ Mr. George Foulkes (Carrick, Cumnock and Doon Valley)
Does the Minister accept that many of the Ayrshire farmers, whom I have the honour to represent—many of whom are not as well off as Southend ice cream salesmen—have lost at least a quantifiable £20 million? Ayrshire farmers will consider £16.9 million— 1038 which is, after all, only 10 days' expenditure in the Falkland Islands at the present rate—to be too little, too late.
Will the Minister admit that there will be cuts in his budget and in the budget of the Secretary of State for Scotland to pay for this aid?
It is all very well for the Minister to say that claims will be met quickly, but the red tape of the Department of Agriculture and Fisheries for Scotland and the Ministry is well known to the farmers. How will the Minister ensure that the bulk of the money is paid before December, before some of my constituents go bankrupt?
§ Mr. Jopling
If the hon. Gentleman had listened to what I said, he would realise that the Government are intending to make weather assistance payments as early as we can and we hope to pay a substantial amount of this aid before Christmas. He would have heard also that we are hoping to make advance payments on the hill land compensatory amounts.
If the hon. Gentleman considers the part of my statement in which I told the House that the Government are hoping to make early advances on the annual ewe payments of £2.10 per ewe, I think that he will realise that it is unfair to suggest that the Government are not fully aware of the cash flow problems that beset farmers. We are taking positive steps to remedy the problems in the three ways I have mentioned.
§ Mr. Michael Forsyth (Stirling)
Will my right hon. Friend say what help will be provided by his statement for the primary producers, fodder producers—[HON. MEMBERS: "What about steel?"]—and hay producers who are producing an unsubsidised crop—unlike steel producers? Primary producers are facing the greatest cash flow problems of all.
§ Mr. Jopling
I suspect that my hon. Friend is speaking on behalf of his constituents in Stirling, and I am aware of their problems. As I have said, it has not been possible to satisfy all farmers. The Government have had to concentrate on the worst hit and I believe that under the terms of the statement, a good many farmers in Stirling will receive assistance.
§ Mr. William McKelvey (Kilmarnock and Loudoun)
Is the Minister aware that the rainfall in Ayrshire was exceptional and was 250 per cent. above average? As a result, much of the harvest remained unharvested and that which was harvested resulted in the ground being badly cut up. Will the Minister consider, at this late stage, a one-off reseeding, drainage and liming grant?
§ Mr. Jopling
I think the Government have done well considering the difficulties we have faced. I have heard what the hon. Gentleman has said, but I can make no promises that the Government will move in that direction.
§ Mr. Nicholas Fairbairn (Perth and Kinross)
As my right hon. Friend the Minister knows, I represent the underprivileged housing schemes of Perthshire and Kinross-shire. I congratulate the Minister—this is meant to be a compliment—on the surprisingly generous, although disappointingly small, sum. I suggest that the Minister takes action to ensure that most of the weather fund goes to Scotland as that was the worst hit area. Much of that fund should be spent on transporting, and not necessarily paying for, the ground crops of hay and other commodities which were grown in England, upon which 1039 God smiled more kindly. I ask my right hon. Friend to ensure that that is done before farmers find themselves caught in the appalling spiral of the sale of beasts at low prices with consequential and damaging effects on ploughing, seeding and agricultural machinery for years to come.
§ Mr. Jopling
I am surprised that my hon. and learned Friend has not heard the loud pleas of my hon. Friend the Member for Penrith and The Border (Mr. Maclean), who has been drawing our attention continually to the problems of farmers in his area. I am surprised, too, that my hon. and learned Friend should say that all the aid should be directed to Scotland. I believe that we have dealt with the problem fairly. Those who represent seats in Northern Ireland, for example, have been drawing our attention to the difficulties that farmers are facing in the Province.
§ Mr. John
I am authorised to say that all the hill farmers of Glasgow, Cathcart, the constituency which the hon. Member for Southend, East (Mr. Taylor) formerly represented, are ecstatic at the aid which the Government are making available.
It is important to know how the Departments will slice up the £5.3 million of programme savings between them, what programmes will be hit and how ADAS is to be compensated for forgoing the charges that it makes normally for the tests that it carries out.
§ Mr. Jopling
I think that it would be better to answer in detail the hon. Gentleman's question about the finding of the £5.3 million, and I am not able to do so now. For the current year, my ministerial colleagues and I will be contributing some modest savings. As I explained in my statement, £20 million of the costs of the package will be a charge on the reserves.