Fourth Standing Committee on Delegated Legislation
Tuesday 7 November 2000
[Mr Bill Olner in the Chair]
Farm Waste Grant (Nitrate Vulnerable Zones) (England) (No. 2) Scheme 2000
The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Elliot Morley): I beg to move,
That the Committee has considered the Farm Waste Grant (Nitrate Vulnerable Zones) (England) (No. 2) Scheme 2000 (S.I., 2000, No.2911)
I think that this is the first time that I have had the pleasure of serving under your chairmanship, Mr. Olner, and I am delighted to be under your guidance.
Members of the Committee will be aware of the Government's long-standing and on-going commitment to farmers. That commitment was demonstrated in the Government's strategy for agriculture and action plan for farming, which was announced on 30 March. The strategy recognised the intention to increase the grant rate from 25 per cent. to 40 per cent. under the Ministry of Agriculture, Fisheries and Food's farm waste grant scheme.
The current grant rate of 25 per cent. is available to those farmers in nitrate vulnerable zoneswhich I will henceforth refer to as NVZswho are required to extend or improve their manure handling and storage facilities as a result of the mandatory NVZ action programme. These measures, which are designed to reduce nitrate leaching from agricultural land, came into force on 19 December 1998 in the 68 NVZs in England and Wales that were designated in 1996 under the European Union nitrate directive.
Under the directive, the type and amount of manure that farmers can apply to the land, and the frequency with which they can do so, is restricted. That can cause difficulties for farmers with little or no storage capacity, who will have to install new facilities. In recognition of this mandatory capital investment, the scheme will focus assistance on a range of storage facilities for slurry and other manure. Fixed handling and disposal facilities, which form an essential part of farm waste systems, are also eligible for the grant.
Since its introduction in 1996, take-up of the scheme has been slow. Of the moneys available for the period 1996-2000, only £317,000 has been drawn down. That constitutes an average annual spend profile of only 10 per cent. It is likely that the relatively modest grant level of 25 per cent., coupled with the adverse economic climate for farming, has resulted in farmers ``making do'' with their existing facilities and, in some instances, exporting surplus farm waste to other holdings. The proposed expansion of NVZs early next year will make it more difficult for farmers to continue with this method of exporting, as the number of farmers subjected to the NVZ restrictions will increase. The increase in the area of NVZ boundaries, and thus the eventual size of the zones, is still being defined, but it is anticipated that demand for this grant will increase dramatically as restrictions are enforced.
To assist with this forthcoming capital expenditure, the Government propose to raise the available grant to 40 per cent. of eligible expenditure, up to an investment ceiling of £85,000, which is the maximum contribution permitted under EU state aid rules. As notified to the Commission, the Treasury approved the state aid notification on 18 May 2000, and the Commission gave its approval on 7 August 2000. Given that this is a demand-led scheme, it is not possible accurately to ascertain the total value of annual claims. However, £4.5 million has been profiled for the next three years, commencing 2001-02.
The farm waste grant scheme currently operates in both England and Wales. However, following devolution separate instruments are required in England and Wales, and the new increased grant rate of 40 per cent. will be available only in England. The National Assembly for Wales is actively considering the introduction of a similar increase in Wales.
This scheme represents real assistance to farmers in NVZs, and demonstrates the Government's commitment to balancing the needs of an efficient agricultural industry with the need to protect water sources from pollution. I commend it to the Committee.
Mr. James Paice (South-East Cambridgeshire): I echo the Minister's welcome to you, Mr. Olner. I have served under your chairmanship on previous occasions, and I am delighted to do so again, albeit, I suspect, for a fairly short time on this occasion.
Although I do not intend to detain the Committee for long, this is a useful opportunity to touch on the impact of the nitrates directive, and in particular the designation of nitrate vulnerable zonesor NVZs, as the Minister wisely describes themwhich are unique to the UK. Virtually every country that has done anything about dealing with nitrate pollution under the relevant directive opted for the whole-country approach. Before the Minister jumps up, I know that the decision was made by the previous GovernmentI am not being critical, but merely pointing out that Britain opted for a different approach.
That brings me to the worrying level of uptake. The Government are up before the European Court for infringement, and I understand that they have conceded the case, which I am not happy about. As is often the case, the British approach has been to apply the requirements of the directive far more vigorously than other countries. The Commission's report on the implementation of the directive reveals that several countries have done almost nothing. Belgium has done nothing at all, despite its high proportion of low-lying land and the serious potential for pollution that that involves. Only the UK and Sweden opted for the whole-country approach, and 10 of the 15 countries, including the UK, are subject to infringement proceedings.
Will the Minister say something about the enforcement of the directive? We are not advocating that Britain should fall down in its responsibilities, but it could be argued that we should not be rushing ahead to implement measures faster than other countries, given that that creates unfair competition in terms of costs to farmers.
What consideration has the Minister's Department given to the increasing number of environmental measures and the links across to NVZs? I am thinking, for example, of buffer zones and of the role of set-aside and arable stewardship with over wintered stubbles. A number of separate factors need to be brought together.
A 40 per cent. grant is fairly generous in anybody's language, and is especially welcome because uptake has been disappointing at the previous figure of 25 per cent. However, I should like to press the Minister on the figures. He said that a £4.5 million budgetary allocation over the four years would cover the measure. My arithmetic tells me that that would require at least a doubling, if not a trebling, in the uptake of grants, even allowing for the increased percentage. Does he feel that that is realistic, given the desperate financial situation in which most intensive livestock producers find themselves? Will he also clarify why the action plan refers to £3.5 million, and how that fits with the figures that he gave?
Finally, what could conceivably be the maximum in terms of demands on the budgetary allocation? The Minister has made provision for £4.5 million over four years. What would happen if a large percentage of farmers in NVZs applied for grants at significant levelsif not the maximum per farmand how would he handle that given that the Government have already made plans for the next three years through the comprehensive spending review? Would he envisage holding back on grant approvals, or would he be able to find the extra resources from elsewhere if the sum were to exceed the £4.5 million to which he has referred?
Mr. David Heath (Somerton and Frome): I, too, would like to express my pleasure at serving under your chairmanship, Mr. Olner. I think that this is the first time that I have done so in Committee.
I thank the Minister for his statement, and I do not intend to detain the Committee for long on matters relating to the order, which I broadly welcome. I share many of the views expressed by the hon. Member for South-East Cambridgeshire (Mr. Paice) on the merits of the proposals, as well as on some of the serious questions that have to be asked. I believe that 40 per cent. is not an ungenerous figure.
I should like to task the Minister on the matter of one of the restrictions on the making of the grant. I refer to article 4(1)(a), which covers
any agricultural business which is not at least partly carried out on land situated in a nitrate vulnerable zone.
Has any consideration been given to the question of an agricultural business that is situated adjacent to, or abuts, a nitrate vulnerable zone, in which slurry spreading or any form of storage might affect land that is within the nitrate vulnerable zone, even though the business is not carried out within the zone? I hope that I am making myself clear to the Minister.
A similar position has been explored in a Bill currently passing through Parliament, which refers to the effect on sites of special scientific interest of activities that occur adjacent to the SSSI, but whose effect is within the site. Perhaps the Minister will be able to reassure me that no such circumstances could arise. However, it seems to me that the circumstances could arise in which it might be appropriate to make a grant. Would the Minister have the capacity to set aside that restriction in order to address this issue, if it seemed reasonable to do so in order to prevent the additional pollution of a nitrate vulnerable zone?
Mr. Morley: I thank hon. Members for their contributions and for their broad welcome for the scheme. I shall try to deal with the points that have been raised.
On the approach being taken in the United Kingdom, there is logic to the areas chosen. The hon. Member for South-East Cambridgeshire is right to say that we have to extend the area included in the nitrate vulnerable zones. That is partly what the proposals are about. He is also right to say that there is an issue of European Union enforcement. A number of countries have been threatened with the European Court because they are in infraction, and the United Kingdom was one of them. We cannot, therefore, hold our hands up and say that we do everything by the rules and that no one else does.
The circumstances vary, and some countriesHolland, for examplehave an extremely rigid regime in relation to manure control and manure spreading. However, there are reasons for that, given the nature of that country, which has a low water table and a high density of livestock. The picture is, therefore, not always clear. However, the Government expect enforcement to be applied to all member states, and if we abide by the regulations, we expect other member states to do so as well. It is one of the Commission's roles to ensure that people do that, that audits and checks are carried out, and that, if necessary, action is taken. By and large, that is what the Commission does.
The hon. Member for South-East Cambridgeshire is also right to point out that there is a wide range of agri-environment options. Most of those options are voluntary, and farmers and landowners can choose whether to opt into them. However, in many cases, they can use those agri-environment options as part of their management in relation to nitrates. There could be environmental benefits as well. I would certainly encourage landowners and farmers to do that. We are increasing the budget significantly for our countryside stewardship scheme, which means that there will be increased opportunities in that area.
I was asked about new money, and I can confirm that about £3.7 million of the £4.5 million is new money. There is £800,000 available in this financial year, and £4.5 million will be available in the next financial year. That represents an increase on what was originally budgeted, which was announced in the farming action plan, and also in relation to the increase in the grants. As to whether that is enough, it certainly seems to be, given the present levels of uptake, and the projected increase in those levels. However, as hon. Members will know, if the uptake increases beyond the projections, the matter will have to be dealt with by the Ministry, and there are opportunities for moving resources around to meet new priorities and new demands as they arise. I am sure that we can deal with that.
In response to the question raised by the hon. Member for Somerton and Frome (Mr. Heath), at present the grants apply only to those people who have some land within a nitrate vulnerable zone. They do not have to have all their land in the zone. Someone on the border, who has a bit of land in the zone and a bit of land outside, may be eligible to apply for the grant, because the restrictions would fall in relation to the land within the zone. However, at present, the grants do not apply to those whose land is completely outside the zone. I hope that I have been able to answer all the questions raised by hon. Members, and I commend the scheme to the Committee.
Question put and agreed to.
That the Committee has considered the Farm Waste Grant (Nitrate Vulnerable Zones) (England) (No. 2) Scheme 2000 (S.I., 2000, No.2911)
Committee rose at fourteen minutes to Five o'clock.
The following Members attended the Committee:
Olner, Mr. Bill (Chairman)
Campbell, Mr. Alan
Campbell, Mr. Ronnie
Heath, Mr. David
King, Ms Oona