§ 3.12 p.m.
§ LORD BESWICK
My Lords, I beg to move that the Draft Ploughing Grants (Emergency Payments) Scheme 1968, laid before the House on January 22, be approved. Under this Scheme, farmers who have had their livestock destroyed because of the foot-and-mouth epidemic will be able to obtain grants of £10 an acre towards the cost of ploughing up their grassland. Noble Lords will be aware of the various ways in which the National Agricultural Advisory Service and the N.F.U. are planning to assist farmers in the steady replacement of their lost livestock. As I indicated in our debate on Monday, this special ploughing-up grant will help to ease the pressure for replacement animals and help to maintain stability of prices by assisting farmers to provide an alternative source of income from a cash crop, such as wheat or barley. Farmers may decide to switch to cereals only temporarily, but, even so, it will provide a breathing space during which they can rebuild their flocks or herds in a planned and orderly fashion.
Particular care has been taken to make the conditions of this Scheme as simple as possible, but at the same time we need to ensure that the grant is available only to those who it is intended should benefit from it. I do not think your Lordships will wish me to detail the terms of this Scheme this afternoon, apart from explaining the conditions of eligibility. The majority of farmers affected by this epidemic will have had their animals slaughtered because of an outbreak on their own or an adjacent farm, and these will, of course, be eligible for grant-aid; but others whose animals are slaughtered whilst on agistment or grazed on common land will also be eligible. In the latter case, however, farmers with more than one holding are limited to grant-aid for ploughing-up only one of their holdings, which must be one from which the animals came before being grazed out. I think noble Lords will agree that it would be unreasonable for a farmer who had livestock destroyed on, say, the Welsh Hills to obtain grant for ploughing-up more than one of his other farms in a 1272 part of the country far removed from the infected areas.
Perhaps I can touch briefly on the other main conditions of the Scheme. The land ploughed must be agricultural land, suitable for ploughing and cropping, and must have been down to grass since before October 25, 1967, which, of course, was the date of the first outbreak of the epidemic, and also at the time of ploughing. Grant is payable on completion of ploughing and of one of the subsequent operations listed in the Schedule to the Scheme, as under earlier Ploughing Grants Schemes. My Lords, I am sure from what was said during our debate on Monday that there will be a general welcome to this special form of aid for farmers who have suffered as a result of this most disastrous epidemic. I beg to move.
§ Moved, That the Draft Ploughing Grants (Emergency Payments) Scheme 1968, laid before the House on January 22, be approved.—[Lord Beswick.]
§ LORD NUGENT OF GUILDFORD
My Lords, I thank the noble Lord, Lord Beswick, for describing this Scheme to us. I suggest that it is a Scheme which we should certainly welcome for the value that it gives, but I should like to make a point about the very limited help which it will give to this hard-pressed section of the farming community. The estimate of the acreage which is likely to qualify is something of the order of about 250,000 acres. That is assuming an average 100-acre farm for the 2,300 or 2,400 farms which have been affected. I notice that in a debate in another place the Parliamentary Secretary gave the Ministry of Agriculture's estimate of the number of acres which are likely to qualify when applications are made for this grant as being something of the order of 25,000 to 30,000 acres; in other words, my Lords, something like one-tenth of the total acreage concerned. If that acreage is in fact applied for, the value of the grant given would be about £250,000. That would add about 1 per cent. to the total value of the compensation given.
Whilst I recognise the point that the noble Lord, Lord Beswick, made that this grant has a secondary value in so far as farmers who take it up will thereby postpone the purchase of their replacement stock and that will to some extent 1273 have a benefit to all in easing the demand on the market, I would nevertheless make the point that this assistance to the 2,300 stricken farmers is really no more than marginal. I am looking the gift horse in the mouth, and not the noble Lord, whose mouth I know is more than generous; but I want to make the point that I hope his right honourable friend the Minister will take note that some of these dairy farmers, principally, who had not got private insurance policies to cover them against consequential damage and therefore have only the compensation money, will be out of production for at least six months, and probably partially out of production for another twelve to eighteen months after that. They are going to be desperately short of money over the next year or two, and I believe they will need more help than this to help them through and to get them back into production again. Whilst welcoming this grant as a valuable, sensible measure so far as it goes, I would ask him to put it to his right honourable friend that something more is almost certain to be needed, and would he please watch the position very closely to see what further, specific help can be given to these very hard-pressed farmers?
My Lords, I, too, welcome this Scheme without any very great enthusiasm. I welcome it more because I think it is a token of the fact that the Government are aware that rehabilitation is a very important matter than that I think the measure will do very much good. It is not always easy to change your policy of cropping at the last moment—and so far as farmers are concerned, six months is the last moment. Very often, if you are a small man, you have not the equipment, and you may well live in an area where there are not many agricultural contractors. Nevertheless, I think it will give some small measure of help—it is a pretty small one—and I echo very much what the noble Lord, Lord Nugent of Guildford, has said, and hope the Government will find ways to do something more.
I have one last word, my Lords. It has been suggested that this aid might encourage farmers who have been in milk farming to go into arable farming instead, which is not what we want. I understand from various people, include- 1274 ing bodies that I have consulted, that this is not very likely to happen and that there is no danger in this connection. As say, I welcome this Scheme in a rather lukewarm way.
§ LORD CHAMPION
My Lords, I, too, welcome the Order that is now before the House. I certainly think it is something that we might well do. I would say one thing about the speech of the noble Lord, Lord Nugent. I hope that the farmers will have the good sense from now on to insure against possible losses of the sort he mentioned. Having regard to the fact that we have had these outbreaks from time to time, it was very bad policy for farmers not to take upon themselves the responsibility of insuring against the losses which inevitably they suffer when their animals are slaughtered. The question I would ask my noble friend—I am a little out of touch—is this. Is this special grant in addition to the ploughing grant already in existence for ploughing arable grassland?
§ THE EARL OF SWINTON
My Lords, before the noble Lord replies, may I just support what was said about farmers' insuring against the losses? It used to be a very small premium. I think we were paying something like 7s. 6d. per cent. It may be more now. Surely it ought to be made a condition of their getting the ploughing grant that farmers should insure against consequential losses. They should be able to do this at a modest premium. I hope the noble Lord will be able to include that in the regulations or, at any rate, give an undertaking that he will make it a condition when action is taken under these regulations.
§ 3.22 p.m.
§ LORD BESWICK
My Lords, may I thank the House for the general welcome given to this Scheme? It is only a small Scheme, as the noble Lord, Lord Nugent, has said, but it is a generous token in its way—although the amount involved, some £250,000, is possibly small in relation to the total amount of compensation directly paid, which is of the order of £30 million, nevertheless to those who do avail themselves of it, it can be very useful. I should just like to make the point that the figures of £250,000 and 25,000 acres are the Department's estimate of the farmers who will wish to avail themselves of the scheme. More 1275 could qualify and it would be a matter for them to apply, if they come within the terms of the Scheme. That would mean that the amount of compensation would be increased to that extent.
The noble Lord mentioned the losses suffered not only by farmers but by other service industries during this wretched period. We debated this subject thoroughly on Monday and I do not think we need go into it again. I emphasise the fact that no Government so far have accepted any liability for consequential losses. I think it would be impossible so to do. Although I am loth to appear to be preaching to the farmers, if I might I would echo the wise words of my noble friend Lord Champion who pointed out the benefits of insurance. I hope it will be possible for others, from this time on, to take out insurance against consequential losses.
A point was made about credit facilities and the need for money in the period before farmers again get their milk cheques. The banks and the various credit organisations are being very helpful in this respect, and so far we have had no particular complaint about that. My noble friend Lord Champion asked about the scheme being additional to the other Ploughing Grant Schemes. If farmers have benefited under the Part II Scheme they can do so again (if they so qualify) under the terms of this Scheme. But they cannot benefit under the 1967 Scheme and draw the £10 under this Scheme. I hope with that explanation we shall be able to agree to this Order.
§ LORD ALLERTON
My Lords, before the noble Lord sits down, may I ask whether or not this grant will be subject to tax?
§ LORD BESWICK
My Lords, the grant itself is not taxed as revenue, but the whole proceeds will enter into the financial returns of the farmer.
My Lords, could the noble Lord make it clear about the 1967 Scheme? I thought that only the Part II Scheme now applied—which means that the land must have been under grass for a period of over 12 years and that there must be conditions of especial difficulty. Is this not the case?
§ LORD BESWICK
Yes, my Lords. What I tried to say to my noble friend was that if any farmer had benefited under the Part II Scheme in the past, but now (at the time of this foot-and-mouth disease) had returned to grass and was grazing a herd which was slaughtered, then he can claim again. But he cannot claim as well under the 1967 Scheme.
My Lords, may I ask that the point about taxation be made clear? I am sure that this is the sentence to which publicity will be given in the agricultural Press, and many farmers will want to be clear about it. I do not think the reply that the noble Lord gave was entirely clear. Surely it would be easier in the end if it were cleared up now.
§ LORD BESWICK
My Lords, I am not sure that in taxation affairs it is wise for me to go into technical language; but what I said was that this £10 per acre will not, itself, be liable to tax; but the net proceeds of the workings of the land so improved will of course be liable.
§ On Question, Motion agreed to.