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Lord Crickhowell: I believe that almost all the arguments advanced by my noble friend were persuasive. Indeed, I have no difficulty with most of them. I am also conscious of one of the penalties of hurrying into the Chamber after a debate has begun and then picking up one's papers. In those circumstances, one does not produce a very well-argued case. Certainly, my noble friend Lord Mills gave the Committee a much better example than I did. I believe that my contribution was well adrift of the point.

It seems to me that my noble friend produced quite a good argument for the pollution control duties currently exercised by HMIP under BATNEEC, and so on. Indeed, he produced a strong case. However, my noble friend did not extend that argument to apply to the pollution control functions that are at present operated by the NRA. I do not believe that the authority has ever had any difficulty; in fact, it has found it a great advantage to have such a duty. I do not believe that it would have been possible to carry out the functions described by my noble friend Lord Mills if the authority only had to have regard to the desirability of conserving. Because it was a duty, the authority was able to go further than would otherwise have been the case.

As there is a problem with the HMIP type of duty, it is said that we must weaken the duty which applies to the existing NRA functions. It does not seem to me that that is a logical or necessary conclusion because one could approach the matter by qualifying that duty so that the HMIP functions could take account of BATNEEC and all those other matters, but still make it possible to do the kind of thing that my noble friend Lord Mills described.

Listening to the argument produced by the Minister I confess that I am still not happy. Indeed he began to persuade me just by that one phrase that there was a gap here and that there really was a weakening of the existing NRA functions. But he was so persuasive in everything else he said on all the other amendments that I may have merely got him wrong on that point. I shall

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want to study extremely carefully what he said and to take advice on it and to see whether it is necessary at some later stage to look at the matter again.

7 p.m.

Baroness Hilton of Eggardon: I think the generality of the Minister's arguments were very persuasive, but I am disappointed that he is not willing to look at some of the detailed wording here and there which I think might be improved. As regards Amendment No. 70, Clause 6(1) states:

    "It shall be the duty of the Agency, to such extent as it considers desirable".

It seems to me that that is contradictory. If one has a duty one cannot then decide whether or not it is desirable. I believe that the wording in Amendment No. 70 which proposes that it would be the duty of the agency to further conservation etcetera is more logical. I urge the Minister to have a further look at the wording because if one can decide that something is not desirable, how can it be a duty upon one? It seems to me that that is inherently contradictory. I would ask the Minister to reconsider that wording. Otherwise I withdraw the amendments with the reservation that we may come back to some of them at the Report stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 70A and 71 not moved.]

The Earl of Lindsay: I beg to move that the House be resumed. In moving this Motion may I suggest that the Committee stage begins again at five minutes past eight o'clock.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.

Farm and Conservation Grant (Variation) (No. 2) Scheme 1994

7.4 p.m.

The Parliamentary Secretary, Ministry of Agriculture, Fisheries and Food (Earl Howe) rose to move, That the scheme laid before the House on 29th November be approved [3rd Report from the Joint Committee].

The noble Earl said: My Lords, we are today debating a short instrument which withdraws the grants available to farmers throughout England, Scotland and Wales for waste handling facilities from the Farm and Conservation Grant Scheme.

Before I explain the function of this instrument I should like to describe briefly the current capital grant arrangements, so that the change may be seen in context. These arrangements, referred to generally as the Farm and Conservation Grant Scheme (or F&CGS), were composed of two parts. The first, the Farm and Conservation Grant Scheme 1989, provides for one-off investments. The second, the Farm and Conservation Grant Regulations 1991, provided grant for investments undertaken in the context of an improvement plan and implemented the UK's capital grant measures under EC

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legislation. I should perhaps say at this point that until late last year it was mandatory to run a scheme under the EC regulation. The obligation was withdrawn following a proposal by the European Commission and this part of the scheme lapsed on 31st December 1994.

The instrument we are debating today, the Farm and Conservation Grant (Variation) (No. 2) Scheme 1994, which came into effect on 30th November 1994, removes the grant assistance for facilities for handling, storing and treating farm waste. We also introduced, at the same time, the Farm and Conservation Grant (Amendment) Regulations 1994, which remove that grant assistance under the improvement plan side of the scheme. The reason that we have two instruments is to ensure uniformity between the two parts of the scheme then in force.

Although the plan side of the scheme is now closed to new applicants, those farmers who submitted plans for approval before the deadline of 30th November 1994 will still be eligible for grant. We will also accept claims under the non-plan side of the scheme for waste handling measures where the claimant can demonstrate that there was a commitment to provide the facilities before 30th November.

Our decision to withdraw farm waste grants was taken against a background of an extremely demanding public expenditure round. But we feel also that the time is now right for farmers to accept the full responsibility for the costs associated with waste handling facilities. When the scheme was introduced in 1989 the then Minister of Agriculture announced a provision of up to £50 million over three years for waste handling facilities, in recognition of the need to tackle the problem of farm waste pollution. In fact since the scheme's inception over £150 million has been paid in grants to farmers in the UK for the installation or improvement of waste handling facilities, representing a total investment of about £300 million. In England and Wales 11,500 farmers have benefited. This clearly shows that we have succeeded in getting the message across to farmers that they needed to improve their efforts on pollution control. Even more significant is the fact that in 1988, the year before the scheme was introduced, there were 940 serious agricultural pollution incidents. In 1993 only 63 major incidents were reported.

Farm waste grants should not, however, be seen in isolation. While they have been withdrawn, free pollution advice and help in the preparation of farm waste management plans continue to be available. We have made widely available to farmers the codes of practice for the protection of soil, water and air. These give good practical advice and guidance on how to avoid pollution. Moreover we are continuing to invest around £2 million per year in research programmes designed to produce results to help farmers manage farm wastes. Furthermore it is our intention to provide assistance for waste handling measures in any area which is designated as a vulnerable zone under the EC nitrate directive.

Although grants for waste handling facilities have been withdrawn, grants for conservation items such as the provision, replacement and improvement of

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hedges, traditional walls and banks and the repair or reinstatement of traditional buildings continue to be available under the Farm and Conservation Grant Scheme. We will be providing around £8 million for these grants in Great Britain until February 1996 when the Farm and Conservation Grant Scheme will expire. We are currently reviewing the integration and focus of environmental schemes in the context of the transfer of Countryside Stewardship from the Countryside Commission to my department. We will consider how best to take forward assistance to farmers for planting and laying hedges and restoring stone walls and so on in the light of that review.

In summary, the instrument before the House results from a considered review of the F&CGS. In recognition of trends in pollution incidence we believe that it is now right to remove the grants offered under the scheme for waste handling and storage. I commend the instrument to the House. I beg to move.

Moved, That the scheme laid before the House on 29th November be approved [3rd Report from the Joint Committee].—(Earl Howe.)

Viscount Addison: My Lords, I trust that we are all aware that the farming community is subject to ever increasing pressure to become more sensitive to environmental concerns and indeed statistics show that it has risen to this challenge very well in recent years. The number of pollution incidents caused by agriculture has declined significantly and more and more farmers are taking their environmental obligations seriously. I fear that the clement weather of last year may indeed have created a false sense of security as regards lowering risks in certain areas.

The Farm and Conservation Grant Scheme has contributed much to this process by giving farmers a real incentive to invest in the substantial cost of installing or improving waste handling facilities. For this reason the news that the Government have decided to abolish totally the capital grants for effluent disposal has been received with considerable dismay by the farming community and in particular by those involved in the livestock sector. With the incentive removed, there can be no doubt that farmers will be less able to meet the expense of installing and improving the necessary pollution control facilities.

While I welcome the Government's commitment to the reintroduction of some form of assistance for effluent disposal when the nitrate vulnerable zones are formally designated next year, I remind your Lordships that the nitrate vulnerable zones will cover only a relatively small proportion of agricultural land—some 650,000 hectares out of a total UK agricultural land area of approximately 18.5 million hectares. Pollution incidents can occur in any part of the country and adequate controls are needed on all agricultural holdings to guard against such incidents. The Government's

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policy of confining environmental assistance to particular areas should not be at the expense of the wider countryside.

7.10 p.m.

Lord Beaumont of Whitley: My Lords, as we have heard, the scheme has been a good one, as long as it has lasted, and it has had considerable beneficial effects. As the noble Viscount, Lord Addison, said, the number of agricultural pollution incidents has fallen—from roughly 4,000 to roughly 3,000 over a period of five years. However, that is still a significant number of incidents and those which are attributable to dairy and beef enterprises probably amount to about 66 per cent. of the number involved. There is still, therefore, a major problem of disposal of animal waste as opposed to other sources which might cause pollution. I understand that the National Rivers Authority has concluded that poor containment of slurry or silage liquors and spillage when storage areas fail are the main problem.

The impact of excessive organic materials on aquatic habitats can be variable. The noble Viscount, Lord Addison, spoke from the farmer's point of view but I wish to talk more about the nature of conservation. Sudden inputs of organic materials can kill large numbers of fish and other animals. Long-term, diffuse inputs may cause slower but still significant changes in habitats and biological communities.

The scheme is one of a series run by MAFF which offer incentives to farmers to maintain and, where appropriate, enhance management of the countryside. Included in them are environmentally sensitive areas and schemes recently introduced under the Agri-Environment Regulation 2078/92. What the Government have been doing is all good stuff. However, it appears that now we have a situation where savings are being made, probably without the necessary attention being paid to the damage that might be done.

In the current review of environmental land management schemes, will the Government address the role of the Farm and Conservation Grant Scheme as a whole? In view of the still significant number of recorded agricultural pollution incidents, the high uptake of waste handling grants and the opportunity to review the effectiveness of the scheme in the context of all schemes, we suggest that the Government continue to offer those grants until such time as they cease to be effective.

Now that provision of grant aid for waste handling facilities is being withdrawn, what steps do the Government intend to take to ensure a continued downward trend in the number of agricultural pollution incidents? That is a very serious question, to which we need a direct answer if the order is to be accepted. What assistance, if any, is now available to farmers to install waste handling facilities? Would the Government consider reinstating financial assistance under the Farm and Conservation Grant Scheme for waste handling facilities on a discretionary basis where financial hardship could be proved? It seems to me that that last point is very important; in the present agricultural climate, there will be farmers who cannot afford to do what needs to be done. If that is so, from the point of

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view of the farmers themselves, the health of the countryside and the health of the wildlife, the farmers must be helped.

7.15 p.m.

Lord Carter: My Lords, I wish to thank the Minister for his usual lucid exposition of, I am afraid, a rather disappointing order. From what he said about the impetus behind it, it is clearly Treasury driven. I understand that the order was approved in the other place only 10 minutes ago, so we shall not have the benefit of looking at their deliberations. However, on this side of the House we take it extremely seriously, as may be seen from the presence of my noble friend Lord Peston in full fig.

What I find hard to understand is that, in the explanatory note attached to the order, we see that, as the Minister said, the order varies the farm and conservation grants and complies with Article 12 of the European Council regulation on improving the efficiency of agricultural structures. It is a little hard to know how a scheme which removes the provision for payment of a grant in respect of facilities for handling, storage and treatment of agricultural effluent and waste and related fixed disposal facilities actually improves the efficiency of agricultural structures. Perhaps the Minister will comment on that when he replies.

We are, of course, aware of the reduction in the grant rate over four years. From 1989 to 1993 it was 50 per cent. for a year, from 1993 to 1994 it was 25 per cent. and it is now to be removed altogether. It would be helpful if when he replies the Minister could expand a little on the Government's intention, which he mentioned, to deal with the nitrate vulnerable zones in 1996.

The capital grants have obviously been a great help in the livestock sector and have helped many livestock farmers in all areas of the UK to install and improve pollution control facilities to meet their environmental obligations. They have been an important incentive for farmers—I speak from experience here, having heard from a number of farmers—to make a serious contribution to reducing pollution risk, and they have contributed to a significant fall in the number of pollution incidents caused by agriculture.

The figures which the Minister quoted of grant aid of £150 million relating to a total expenditure of £300 million and the fact that the number of incidents dropped from 940 to 63 from 1989 to 1993, illustrate the size of the problem and how quickly it could get out of hand again. That is put against a small saving of the order of £8 million in 1995-96. It would be helpful if the Minister could indicate the actual savings to public expenditure from the ending of the grant scheme.

We are debating the Environment Bill at the moment and obviously we are all aware of the anxiety that there is about pollution and the general wish to enhance the environment. It seems to be an odd way to go about meeting that public anxiety with what I believe is a fairly small saving in public expenditure. Ending the grant scheme will undoubtedly reduce the incentive for farmers to invest in proper effluent storage and disposal facilities. I am sorry to say that if, as a result of the

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order, there is an increase in agricultural pollution incidents, the Government must bear their share of responsibility for those incidents.

7.18 p.m.

Lord Crickhowell: My Lords, I fully share the aims and objectives of the Chancellor of the Exchequer to produce a strong economy and reduce public expenditure. I have sat through too many public expenditure rounds not to be sympathetic to the problems that inevitably flow to individual departments. However, in a sense it is a little ironic that we should be debating this scheme in the middle of our discussions on the Environment Bill. I felt that I must stay behind in the Chamber to hear the Minister put the scheme forward, bearing in mind the huge importance for the environment of the expenditure that has taken place in recent years because of the existence of the grant scheme.

The trouble with farm pollution is that it is particularly lethal. When it occurs, it has a devastating impact upon the water environment. There have been many cases and when they occur they could wipe out the ecology of large stretches of our rivers. The problem will not go away. Farmers will continue to need to produce new storage facilities. Indeed one of the problems is that old storage facilities both become out of date and deteriorate, and sometimes they become dangerous. The whole business is now extremely costly. I had responsibility for agriculture in Wales for nearly eight years. I represented a constituency with almost more milk producers than any other. So I understand the problems of the farming industry and I know the difficult times through which it is going, as does my noble friend the Minister.

There can be no doubt at all that there will be a reduction of investment in this very desirable preventive work. I can understand that that may perhaps be necessary for a short time, but I have been warned as to the effects by a number of people whom I have met. Only two or three weeks ago I met a consultant who advises farmers on the Welsh border who told me that in his view for a time it would bring investment of this kind almost to a standstill; he feared very greatly as to the consequences.

I hope therefore that the Government will look very carefully at what happens. I hope that in the course of the next 12 months they will take the advice of the NRA, and after that of the new environment agency, about what the impact may be. If there is a deterioration, or if the voluntary investment that they hope for does not take place and the environment is threatened, I beg my noble friend to keep an open mind, and to be ready to come back and look at the matter again.

As I say, I entirely understand the need for this measure. I do not wish in any way to challenge the Chancellor's objectives. We have all as Ministers had to make this kind of saving. It is not with any sense of criticism but with a sense of concern that I utter these words. I fear that there will be a consequence, and I

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believe that before very long the Minister or his successor will have to come back with some revised scheme.

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