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Mr. Robert Jackson (Wantage): I congratulate my right hon. and learned Friend on pressing ahead with the selective cull. I hope that our partners in Europe will respond on their part of the deal. I put it to him that, until the tracing arrangements for the cull have been fully completed, we will not know what the impact will be on particular herds. On compensation, will he consider sympathetically any cases that may emerge of herds that turn out to be particularly badly affected?

Mr. Hogg: I am about to give details of the compensation. I suspect that my hon. Friend has in mind the problems that may be experienced by the closed herd and the suckler cow herd. I shall deal with that in the next few moments.

I shall briefly summarise the compensation provisions. For male animals, compensation will be at the market value. For female animals, it will be 90 per cent. of the replacement value or the market value, whichever is the higher. That is in recognition of the point put to us by farming organisations last year that replacements may cost more than the present value of the animal to be replaced.

In addition, a top-up payment will be available for herds that lose more than 10 per cent. of their productive animals. That is designed to meet the concerns of farming organisations, by recognising the dislocation to the business during the re-establishment of the herds. It will be available to suckler herds as well as to dairy herds. The top-up is subject to a ceiling of £250 per animal, which reflects a maximum deemed value for top-up purposes of £1,000.

Mr. William Cash (Stafford): Does my right hon. and learned Friend accept that this saga has caused enormous anxiety and concern among farmers, including many in my constituency? Will he explain why he has adopted such an arbitrary and artificial definition of a herd, and why the top-up calculations are so restrictive?

Mr. Hogg: We have to define a herd for the purposes of the regulations. In defining a herd, we have taken into account the productive animals. That seems sensible. I suspect that what is on my hon. Friend's mind is the inclusion in the definition of in-calf heifers. If we were not to include in-calf heifers in the definition of a herd, the compensation payable to a farmer would depend on the exact moment that the veterinary experts visited the farm. That would create a difference between a farm where the heifers had not calved and a farm where they had calved. That disparity would be impossible to justify.

As to the basis of the top-up, in the end we must make a judgment. There are two elements to the compensation that we will pay. First, there is the full value for the beast itself; and then there is the top-up in respect of the

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dislocation. We must strike a balance. I believe that we have struck it fairly, but clearly it is a matter on which people have a variety of views. I am persuaded that the balance is a fair one.

Mr. Christopher Gill (Ludlow): I listened carefully to my right hon. and learned Friend's explanation in reply to my hon. Friend the Member for Stafford (Mr. Cash). Surely the issue of in-calf heifers is just as complicated at one end of the scale as it is at the other. It is just as complicated for inspectors to adjudicate on whether the in-calf heifer is to be included as it is to decide whether the heifer has conceived or not. Does the Minister concede that it is most unusual--unprecedented, in fact--to include in-calf heifers in such an equation?

Mr. Hogg: There is much that is unprecedented in this matter, not least the slaughtering of healthy beasts, but we have done our best to be fair. My hon. Friend might consider this question: why should in-calf heifers not be included in the definition of a productive herd? I have had to consider the argument both ways, and I have concluded that it is fair to include in-calf heifers, for the reasons that I have given.

Mr. Tony Marlow (Northampton, North): Will my right hon. and learned Friend give way?

Mr. Hogg: I am going to make a little progress; then I will give way.

Mr. Marlow: It is on that point--

Mr. Hogg: I am going to make a little more progress; then I will give way.

I have been talking about the valuation for individual beasts, but I also mentioned the question of the top-up. Closed herds will receive one and a half times the normal top-up payments, which is intended to reflect the greater difficulties that are likely to be experienced by owners of such herds in obtaining replacement animals, and hence a longer period of disruption.

Mr. Marlow: May I take up the point made by my hon. Friend the Member for Ludlow (Mr. Gill), and ask how it is possible to know whether a heifer is in calf or is about to return to service? Must a pregnancy test be carried out, or what?

In the case of pedigree breeding stock of high value, in terms of thousands of pounds, will farmers be compensated to the extent of that value?

Mr. Hogg: A distinction needs to be made between the compensation paid in respect of top-up, and the compensation paid in respect of the individual beast. For top-up there is a ceiling value of £1,000, which means that each animal can attract a payment not exceeding £250. Compensation for the beast itself, however, will be at full value as at the date of valuation, in accordance with the formula that I have already outlined. As for whether or not a heifer is in calf, that will be a matter for determination during the visit to the farm by the veterinary expert, as a result of the consultation that will take place between the farmer and the expert.

Mr. Peter Hardy (Wentworth): Will the Minister give way?

Mr. Hogg: I will make a little more progress; then I will give way to the hon. Gentleman.

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We fully appreciate that, despite these measures, the coming months will be difficult for many of the farmers affected by the cull; so we will try to be as sensitive and flexible as possible in the general conduct of that cull. The hon. Member for Edinburgh, East (Mr. Strang) asked about that. The operation of the cull will be explained to and discussed with farmers, and veterinary officers will endeavour to keep them fully informed about discussions affecting their businesses.

It is clearly in our interests, and those of the industry as a whole, to complete the cull as rapidly as we can. Our aim is to complete it within six months, but, within that overall aim--

Mrs. Helen Jackson (Sheffield, Hillsborough): Will the Minister give way?

Mr. Hogg: I will finish this section of my speech, and then give way to the hon. Member for Wentworth (Mr. Hardy).

Within that overall aim, where it is reasonably possible, we shall try to take farmers' wishes into account when timing the slaughter on individual farms. For example, when a cow is in calf we may discuss with the farmer the possibility of delaying slaughter until it has calved, and the calf can properly be separated from its dam. If a farmer is to lose a large proportion of his herd, we could consider slaughtering in two groups rather than slaughtering all the cattle together.

Mr. Hardy: I may be wrong, but I suspect that the deep anxieties of dairy farmers may be more nearly met by these various arrangements than those of the beef producers, particularly the small ones. The Minister was kind enough to give way and allow me to make a similar point some months ago. Does he not appreciate that the smaller beef producer facing the "upper millstone" of the economic effect of the BSE crisis and the "lower millstone" of the disintensification policy that the Ministry is pursuing could threaten the smaller farmer, and imperil entry into, and maintenance of interest in, farming among such people? That itself would appear to contradict Government policy. Will the Minister re-examine the position of those smaller beef producers, to ensure that they are not ruined by the performances of the past year or so?

Mr. Hogg: I do not share the hon. Gentleman's pessimism. Leaving aside payments made under the 30-months scheme, which have gone a long way towards underpinning the market, we have made available about £265 million in direct support of beef producers. Markets have recovered somewhat over the past few months, although I accept that they are at a lower level than they were before the crisis.

Looking forward, it is clear that there will have to be a change in farming practice. The consumer is expecting a change from the past and I suspect that there is an imbalance between production and consumption that will have to be addressed. As I have said, I do not take the hon. Gentleman's pessimistic view.

Mr. Alex Salmond (Banff and Buchan): Over the holiday period, the Minister with responsibility for Scottish agriculture made an optimistic statement about

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the prospects for the return of Scottish beef to European markets. He even estimated the percentage of the market that could perhaps be recaptured when that return was allowed. I have been trying to work out the basis for that optimism. Will the Minister give his estimate of the date on which that return might be realised, as the Prime Minister has done? Given the measures that have been put in place, on what date does the Minister expect Scottish beef to return to European markets?

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