PARLIAMENTARY DEBATES

HOUSE OF COMMONS

OFFICIAL REPORT

Second Standing Committee on Statutory Instruments, &c.

FARM DIVERSIFICATION GRANT (VARIATION) SCHEME 1988

Wednesday 9 November 1988

LONDON

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The Committee consisted of the following Members:

Chairman: Mr. Michael Latham

Carlisle, Mr. Kenneth (Lincoln)

Davies, Mr. Ron (Caephilly)

Godman, Dr. Norman A. (Greenock and Port Glasgow)

Jones, Mr. Martyn (Clwyd, South-West)

Livsey, Mr. Richard (Brecon and Radnor)

McCartney, Mr. Ian (Makerfield)

Macdonald, Mr. Calum (Western Isles)

Marlow, Mr. Tony (Northampton, North)

Nicholson, Mr. David (Taunton)

Quin, Ms. Joyce (Gateshead, East)

Redwood, Mr. John (Wokingham)

Ryder, Mr. Richard (Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food)

Speed, Mr. Keith (Ashford)

Stewart, Mr. Andy (Sherwood)

Sumberg, Mr. David (Bury, South)

Tredinnick, Mr. David (Bosworth)

Walters, Sir Dennis (Westbury)

Winterton, Mrs. Ann (Congleton)

Mr. D. J. Gerhold, Committee Clerk

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3 Second Standing Committee on Statutory Instruments, &c. Wednesday 9th November 1988

[MR. MICHAEL LATHAM in the Chair]

FARM DIVERSIFICATION GRANT (VARIATION) SCHEME 1988

10.30 a.m.

The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Richard Ryder): I Beg to move, That the Committee has considered the Farm Diversification Grant (Variation) Scheme 1988. I begin by saying a few words about my opposite number, the hon. Member for Caerphilly (Mr. Davies). When I began my job, he was kind enough to welcome me to the Front Bench, and I thank him for it. May I, in turn, say how sorry I was that he narrowly failed—it was a narrow failure—to be elected the Opposition Chief Whip. As a former Whip, I believe that the Government were lucky that the hon. Gentleman was not elected. I am sorry for him, but I am not sure that I should be sorry for my party. As some hon. Members may remember, when the set-aside regulations were debated in Committee on 20th July, the former Minister of State, my Right hon. Friend, the Member for Suffolk, Coastal (Mr. Gummer), made it clear that some small restrictions on eligibility for farm diversification grants would apply to set-aside land. He promised that the statutory instrument needed to apply those restrictions would be laid soon after the set-aside regulations were made. It is that order which we are considering. I am sorry that we must consider it separately from the main diversification regulations—it would have been more convenient to consider the two simultaneously. Alas, that was not possible because of the well-established legal principle that an order cannot refer to the provisions of one that has not been made. The order makes a tiny technical change to the farm diversification grant scheme to prevent overlapping payments to farmers who are also taking part in the set-aside scheme. I am sure that the main lines of the set-aside scheme are familiar to hon. Members, so I shall deal only with those aspects of it that are relevant to the order before us. Under the set-aside scheme, farmers who voluntarily enter the scheme agree to take at least 20 per cent. of the land that they use for growing arable crops out of agricultural production for five years. The scheme allows them to use the land which they set aside in three ways: they can leave it fallow; they can convert it to farm woodland; or they can put it to a permitted non-agricultural use. We must concentrate on the third possibility when considering the order. We have deliberately widely defined the permitted non-agricultural uses of set-aside land, with the creation of more rural jobs in mind. All activities that can qualify for grant under the farm diversification grant scheme are included. Only mineral extraction, industrial processes, 4 housing and hotels, offices and retail developments are specifically excluded. As the farmer is likely to make some income from the non-agricultural uses of set-aside land, annual payments have been fixed at £130 per hectare in less favoured areas, and £150 per hectare elsewhere. That compares with payments of £180 and £200 for permanent fallow from which the farmer will derive no direct income. Not only are we offering annual payments for land set aside for non-agricultural uses, but we have in place a farm diversification grant scheme which offers modest grants to assist capital investments on farms to set up non-agricultural businesses. Clearly, we have had to think carefully about the relationship between the two schemes and, in particular, whether farmers should be able to benefit from both at the same time. We concluded that it would be wrong for farmers to receive diversification grant payments for land works such as drainage, levelling and re-seeding on the set-aside land, in addition to payments made under the set-aside scheme. Therefore, a tiny technical amendment to the farm diversification grant scheme is required.

10.34 a.m.

Mr Ron Davies (Caerphilly): I thank the Minister for his kind remarks. It is ironic that our paths should cross when he was trying desperately to get out of the Whips Office and I was trying desperately to get into it. However, it is unlikely that that will happen, because the Minister's warm congratulations and compliments have undoubtedly spiked my chances of being re-elected into the Whips Office. I congratulate the Minister on his new appointment and welcome him to the Committee. He will have been briefed by his officials, and I have no doubt that he has read carefully the proceedings of debates on similar matters, so he will know that the Opposition's general view is to be helpful. Whether or not we support the Government's proposals, we try to make constructive criticism. The Minister has come to the Ministry at an interesting time. Many changes are taking place. The industry is facing an uncertain future. I have no doubt that our paths will cross again. I assure the Minister that our practice of being constructive in our opposition will continue—at least as long as I am the Opposition spokesman on such matters. As the Minister said, the amendment is technical. For that reason, I am sure that you, Mr Latham, and the Government Whip will be immensely relieved to know that we shall not press the matter to a Division. But we shall, of course, ensure that a quorium is maintained throughout our proceedings. Set-side and diversification were discussed in earlier debates, and it is on the record that we support both initiatives. Therefore, there is little point in my widening the debate, Indeed, it would be out of order if I attempted to do so. I understand the purpose of the amendment and I am grateful to the Minister for explaining why it is necessary. By and large, we support the proposal. I refer the Minister to paragraph 6 on page 9 original farm diversification grant scheme order No. 1949. I understand that the works listed in paragraph 7(a) to (d) in column 2 have been excluded from the scheme. What remains is the establishment of ponds recreational finishing. Will the Minister confirm that, when applications are received for diversification grants for the creation of 5 facilities for finishing, wildlife habitat, nature trials and so on, such grants will be available even if the land involved is subject to a step-aside agreement? I now refer the Minister to the other items that have been deleted from works that are eligible for diversification. Paragraphs 6(b) and (c) on page 9 of the original order mention. "(b) the clearance of obstacles (other than trees or shrubs); (c) the re-grading of land" I am not sure why the Minister wishes to make the amendment. Will he guarantee that if works such as the clearance of obstacles or the regrading of land are a necessary part of, for example, the creation of a nature trail or a wildlife habitat, or a necessary part of other works that would be eligible for grant under the diversification scheme, the amendment would not prejudice that other development which would be allowed under the scheme as it stands? Those are just a couple of technical points.

10.39 a.m.

Mr Ryder: I thank the honourable Gentleman for his kind remarks. I confirm that the establishment of ponds will still be possible under the scheme, especially for use in nature trails. In responding to the honourable Gentleman's second point, I shall give a brief explanation of why the amendment is necessary. Let us suppose that a farmer decides to clear, drain or level land to create a putting green or a football pitch. It is possible that in five years, he may decide to plough up the putting green or football pitch. The value of that land for putting down arable crops will be that much greater to the farmer if he has cleared and drained it properly. This in a sense, he will have been abusing the system. One purpose of the order is to exclude the cowboys from the system, as I am sure the honourable Gentleman recognises. As the honourable Gentleman said, it is important that trees, shrubs and ponds are maintained precisely for environmental reasons. I am keen that we should build 6 upon the environmental advantages of set-aside. As the honourable Gentleman knows, we are looking at environmental top-up schemes. I can confirm, therefore, that the order will not affect his environmental objectives or mine.

Mr Ron Davies: I ask the Minister to be more precise on the latter point. Will he guarantee that the provision which deletes 6(b) and (c) will not be used to disqualify an application for diversification grant for the creation of a wildlife habitat or a nature trail, even if it involves the clearance of obstacles or the regrading of land? In other words, if those two items are incidental to the development, will he confirm that it will still be eligible. If the Minister is anxious to catch the cowboys—I use his expression—would it not have been possible to require repayment, rather than have disqualification from the initial payment?

Mr Ryder: I give the honourable Gentleman a clear confirmation. In relation to repayment, page 9 of the set-aside booklet, which is available to farmers, under the heading "Farm Diversificaiton Grants", states: "You may enter set-aside if you have received a grant under the Farm Diversification Grant Scheme. However, you cannot receive diversification grant payments for land works, such as drainage, levelling and reseeding on the set-aside land." In this case, as the honourable Gentleman will see from the booklet, there will be no one to repay.

On put and agreed to.

Resolved, That the Committee has considered the Farm Diversification Grant (Variation) Scheme 1988.

Committee rose at seventeen minutes to Eleven o'clock.

THE FOLLOWING MEMBERS ATTENDED THE COMMITTEE:

Latham, Mr Michael (Chairman)

Carlisle, Mr Kenneth

Davies, Mr Ron

Jones, Mr Martyn

McCartney, Mr

Nicholson, Mr David

Quin, Ms

Redwood, Mr

Ryder, Mr

Speed, Mr

Stewart, Mr Andy

Sumberg, Mr