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Session 2005 - 06
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Standing Committee Debates

Hill Farm Allowance Regulations 2006 (S.I. 2006, No. 225)

The Committee consisted of the following Members:

Chairman: Mr. David Wilshire
Binley, Mr. Brian (Northampton, South) (Con)
Crabb, Mr. Stephen (Preseli Pembrokeshire) (Con)
Cryer, Mrs. Ann (Keighley) (Lab)
Dorrell, Mr. Stephen (Charnwood) (Con)
Ennis, Jeff (Barnsley, East and Mexborough) (Lab)
Farron, Tim (Westmorland and Lonsdale) (LD)
Foster, Michael Jabez (Hastings and Rye) (Lab)
Gardiner, Barry (Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs)
Godsiff, Mr. Roger (Birmingham, Sparkbrook and Small Heath) (Lab)
Kilfoyle, Mr. Peter (Liverpool, Walton) (Lab)
Norris, Dan (Wansdyke) (Lab)
Raynsford, Mr. Nick (Greenwich and Woolwich) (Lab)
Rosindell, Andrew (Romford) (Con)
Watts, Mr. Dave (Lord Commissioner of Her Majesty's Treasury)
Wiggin, Bill (Leominster) (Con)
Williams, Mr. Roger (Brecon and Radnorshire) (LD)
Wright, David (Telford) (Lab)
Glen McKee, Committee Clerk
† attended the Committee

Second Standing Committee on Delegated Legislation

Tuesday 16 May 2006

[Mr. David Wilshire in the Chair]

Hill Farm Allowance Regulations 2006 (S.I. 2006, No. 225)

4.30 pm
Bill Wiggin (Leominster) (Con): I beg to move,
That the Committee has considered the Hill Farm Allowance Regulations 2006 (S.I. 2006, No. 225).
How nice it is to serve under your chairmanship, Mr. Wilshire. I welcome the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for Brent, North (Barry Gardiner), to his new role My series of questions on this important subject is a gentle introduction.
At the beginning of March when we prayed against this statutory instrument, despite our warnings the Department for Environment, Food and Rural Affairs was still promising that farm payments would be made and that problems would be resolved. The Opposition have prayed against these regulations because we are not convinced by the benefits that are offered to England’s hill farmers in the long term. We are also concerned about the future support to hill farmers and, following on from the Rural Payments Agency and the single farm payment fiasco, have reservations about the administration of the hill farm allowance.
Those of us who are familiar with hill farms, along with the rest of the farming community, would be grateful if the Minister could assure us that in England we will not see a repetition of the closure of the less favoured area schemes, similar to the Tir Mynydd scheme in Wales, which his Labour colleagues in the Welsh Assembly recently decided to terminate. Regulation 5(a) states that the hill farm allowance should not be paid unless a claimant undertakes a five-year commitment to use it for agricultural purposes. Is the Minister able to make a five-year commitment to hill farmers that they will receive a decent payment?
We are all aware of the benefits offered by hill farmers. They can help to preserve the land and support the environment as well as generating vital revenue into the economy. What discussions has DEFRA had with the Treasury regarding the continuation of the £27 million currently available for hill farmers? Considering the value offered to the taxpayer, can the Minister also give assurances that the Government’s domestic share of the scheme costs will not be reduced? Last year, hill farmers earned on average £14,000, which represented a 15 per cent. fall compared with the previous year. It is £3,000 lower than the average net farm income. Does the Minister share my concerns that without sufficient support the benefits of hill farming will be lost?
Staying with payments, which are dealt with in regulation 7, when will hill farmers receive their hill farm allowance payments? As I am sure the Minister is all too aware, hill farmers are suffering from the low lamb prices over the autumn and winter and are desperate for their single farm payments and for hill allowances. They need their financial support and they need it now. Hill farm allowances are not included in the partial payments. That is unacceptable.
Given that the consultation on the future for payments to hill farmers will be closing only on 22 May, does the Minister think that from then until the end of the year is sufficient time to propose and prepare a new payment scheme? What changes will be made to the RPA before the new hill farming payment scheme is implemented? What role will there be for Natural England under any future arrangements for hill farm payments?
At the weekend the Secretary of State for Environment, Food and Rural Affairs, the right hon. Member for South Shields (David Miliband), was quoted in the Western Daily Press as saying:
“Increased priority will also be given to making outstanding payments under the Hill Farm Allowance (HFA) scheme in recognition of the importance of HFA payments to those concerned.”
He then went on to blame the delays on previous estimates of payment timetables going missing. How did these payment timetables go missing and what will the Minister do to ensure that they do not go missing again? Does the Minister share the concerns of the Country Land and Business Association that the failure to make hill farm allowance payments will lead to a cash flow crisis? Will he pilot any new proposed hill farm payment schemes prior to a nationwide roll-out? Does he think that the new agri-environmental policies for the period 2007-13 will be drafted and be approved by the Commission by the end of the year?
These points relate to the hill farm allowance and this year’s payment. I want to move on and probe the Minister on the future arrangements for the hill farm allowance. Regulation 9 and schedule 4 make provisions to deal with circumstances in which hill farms are only partially situated in England. Considering the problems that cross-border farms have had receiving single farm payments this year, does the Minister think that a more robust and consistent system is needed so that a farm will not be split in two for payment purposes?
The present scheme will be concluded at the end of this year, and there is currently no replacement ready to come into force on 1 January 2007. Considering the disastrous implementation of the single farm payment changes by the previous Minister and Secretary of State at DEFRA and by the RPA, what representations will the Minister make to ensure that the same mistakes are not made again and that England’s hill farmers are not left penniless?
The farming community now has no confidence in the Government’s ability to push through the desired reforms over the next few months. DEFRA’s handling of the single farm payment and RPA situations has not changed that view. Does the Minister therefore agree with the National Farmers Union that the hill farm allowance should continue to be given to farmers over a two-year transition period, until such time as a new payment system is fully functional and without fault? What safeguards will be put in place to ensure that the payment delays witnessed this year will not happen in the new HFA system? Moreover, does the RPA have the resources to deliver a new system?
While we broadly welcome much-needed changes to funding arrangements, we cannot let the present situation remain unchecked and allow our hill farmers to wither away into terminal decline. Paragraph 7 of the explanatory memorandum refers to the future rural development programme. Will hill farmers be fully supported during its period? Financial assistance available to hill farmers has plummeted from about £60 million to £27 million today.
Mr. Peter Kilfoyle (Liverpool, Walton) (Lab): On the point about financial assistance, I did not quite catch the amounts that the hon. Gentleman mentioned earlier. Did he say that £14,000 was the amount paid to hill farmers?
Bill Wiggin: That is the average income of hill farmers. Hill farmers were receiving a total of £60 million; they are now getting only £27 million. That is a significant drop. I am not sure whether the hon. Gentleman has many hill farmers in his constituency, but I am grateful for his intervention.
4.37 pm
Mr. Roger Williams (Brecon and Radnorshire) (LD): It is a pleasure to serve under your chairmanship, Mr. Wilshire. Our short debate must be set against the background of an increase in farm borrowings from £9.5 billion to almost £10.5 billion in one year. Much of that increase can be attributed to the Government’s failure to deliver the single farm payments scheme, the support to hill farmers and the various environment schemes that were combined with the payments. The figures give some indication of the dependence that agriculture still has on support to provide this country with decent food to eat and to protect the environment and enable people to enjoy its appearance and recreation opportunities.
Although the regulations provide less support than hill farmers have previously enjoyed, they are very welcome and we support them. We wish to make the point of how important continued support is to hill farmers. The average age of farmers in this country is about 58 years, and is probably a good deal higher in the hills. It is difficult to encourage young people to take up an occupation that is not very well rewarded financially and in which people have come not to trust the Government to support them in the future. They do not know what the situation will be around the corner or next year.
Support for hill farmers is widely valued by the population, who value the appearance of our hills and mountains and the designation of national parks and areas of outstanding natural beauty that often goes with the landscapes that hill farmers provide. Those landscapes are there not by chance but because people have put effort and investment into them not only in this generation but for many generations. One thing is sure: if that energy were to be dissipated or wrongly directed, we would see quick changes. For example, one farmer in the Llanthony valley in my constituency decided not to graze sheep on the hill any more and it has become so overgrown and dilapidated that people can no longer go there on foot. A farmer told me that when he was a boy they used to shepherd there on horse back, and now they cannot even go on foot.
Bill Wiggin: It is important that people understand what the hon. Gentleman means when he says “overgrown and dilapidated”? Do they realise what the gorse is like? Will he say a little more about what happens when grazing stops?
Mr. Williams: Yes. When the sheep are not there and do not graze, there is scrub growth. By anyone’s judgment and evaluation the effect on biodiversity is great. Some of the rare birds found on upland moors and hillsides cannot exist and reproduce when the scrub takes over.
Although we understand that there will be changes in the support system for upland farmers, we urge the Minister this day to guarantee to start off on a good footing with hill farmers and say that the regulations will be replicated in 2007. That would put some certainty into the system and into the lives of the people who do this wonderful work for the country, who are becoming less and less likely to continue living and working in these areas.
The point made by the hon. Member for Leominster (Bill Wiggin) was so pertinent: the confidence that the Government can introduce a new scheme on top of single farm payments and all the changes that have taken place in the RPA is very uncertain. The previous Minister put out a consultation document about future support. Option 1 is not really an option because we understand that things are going to change and option 4—doing nothing to support hill farmers—should not be an option for the Minister. We should be interested to know his views on options 2 and 3. Option 2, to link hill farming support entirely to environmental schemes, could put some hill farmers in difficulty as they may not be able to comply with all the requirements in order to be eligible for that support. Some might not want to put the whole of the farm into an environmental scheme; there is an agricultural and food production element to hill farming and some farmers might not want to take that course. I urge the Minister to let us know his thinking on these matters so that farmers have some idea how to go forward in future.
I congratulate the Minister on his appointment to the post, and I hope to have the opportunity in future to make my final point, on food security, to him. Given climate changes, it is not entirely clear where in the world food will be produced and whether it will be produced in the same quantities as it is at present. Political instability and the increased use of agricultural land for biofuels and biomass also have an effect on food production. How will those considerations be balanced with the continual need for food to be produced?
It is not prudent for the UK to depend on the world market to access its food to the extent that it does now. The hills of this country proved during the second world war that they can produce a significant amount of food; the Minister would do well to recognise that and not forget it.
4.45 pm
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