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I have a strong sense of deja vu in opening a debate on nitrate vulnerable zones. Ten years ago I served on Sub-Committee D, of the European Union Committee, which produced a report on nitrates in water. That report remains the best and most authoritative analysis of the subject.
The Government's long-standing and ongoing commitment to farmers was demonstrated in our strategy for agriculture, Action Plan for Farming, announced on 30th March, in which we recognised that the grant rate under MAFF's farm waste grant scheme should be increased.
The current grant rate of 25 per cent is available to those farmers in nitrate vulnerable zones--which I shall hereafter refer to as NVZs--who are required to extend or improve their manure handling and storage facilities as a result of the mandatory NVZ action programme. Those measures, designed to reduce nitrate leaching from agricultural land, came into force on 19th December 1998 in the 68 NVZs designated in England and Wales in 1996 under the EU nitrate directive.
Under that directive, farmers are restricted as to the type of, amount and frequency at which manure can be applied to land. That can cause difficulties for farmers who have little or no storage capacity and therefore have to install new facilities.
In recognition of that mandatory capital investment, the scheme focuses 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, the take-up of the farm waste grant has been slow. Of the money available for 1996-2000, only £317,000 has been drawn down. That is 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 attempting to make do with their existing facilities and in some cases exporting their surplus farm waste to other holdings.
The proposed expansion of NVZs early next year will make it more difficult for farmers to continue with that method of exporting as the number of farmers subject to the NVZ restrictions increases. Those increases in the area of NVZ boundaries, and thus their eventual size, are still being defined, but it is anticipated that demand will increase dramatically for the grant as restrictions are enforced.
To assist with that forthcoming capital expenditure, the Government have raised the grant available to 40 per cent on eligible expenditure, up to an investment ceiling of £85,000. That is the maximum contribution permitted under EU state aid rules. The Treasury has given approval for the state aid notification, as notified to the Commission on 18th May 2000. As this is a demand-led grant scheme, it is not possible to ascertain accurately the total value of annual claims. However, through estimate profiles £4.5 million has been profiled for each of the next three years, beginning in 2001-02.
The Farm Waste Grant Scheme currently operates in both England and Wales. Following devolution, separate instruments are required in England and Wales, and the new increased grant rate at 40 per cent will be available only in England. The possibility of introducing a similar increase in Wales is under active consideration by the National Assembly for Wales Agriculture Department.
This scheme represents real assistance for farmers in NVZs and demonstrates the Government's commitment to balancing the needs of an efficient agriculture industry with the need to protect other water sources from pollution. I commend the scheme.
Baroness Miller of Chilthorne Domer: My Lords, we welcome the fact that the Government have increased the level of grant available for farmers from 25 to 40 per cent. However, I should like to ask the Minister about some of the difficulties that farmers are still likely to encounter and whether he feels that the designation of the new NVZs will increase the problem for farmers who currently are unable to afford to enter the scheme.
I gather that the Government are currently undertaking a study into the costs to farmers which have arisen in NVZ areas due to the new areas of designation. I wonder whether the £4.5 million which the Minister said has been set aside is a final figure. If it is, what will happen to the results of the government study? It is quite clear that the costs to farmers of entering the scheme are not small. Although it is difficult to come forward with an average cost, the NFU has suggested that a farmer might well expect to spend between £40,000 and £60,000. That is the NFU's best guess. If farmers must find 60 per cent of that then, frankly, in the current climate it is not surprising that the take-up is as low as 10 per cent. In these past years it will have been difficult to find that amount of capital expenditure.
Perhaps I may ask the Minister whether MAFF is ensuring that environmental measures are being taken by farmers which may lead to a different way of dealing with this problem rather than expending money on waste facilities? Might those measures also be subject to increased expenditure?Finally, perhaps I may ask what will happen if the £4.5 million which is made available each year is not taken up. The money is intended to deal with problems caused by nitrates. However, if it becomes clear that farmers do not wish to use the grant in that way, what is the possibility of the money being vired over into the over-subscribed Country Stewardship Scheme and Arable Stewardship Scheme, which often deal with the same problem but in a different way that also benefits biodiversity?
Lord Luke: My Lords, I thank the noble Lord, Lord Carter, for showing me a copy of his speech concerning this scheme. We on these Benches are grateful that in this case the Government have listened and acted to help our hard-pressed farmers. I am sure that he is right to point to the inadequacy of the previous 25 per cent grant and the fact that very few farmers have taken it up. I am also glad that the Government intend to spread the scheme to Welsh farmers through the Welsh Assembly. I hope that there will no undue delay in implementing that.
Lord Carter: My Lords, I am extremely grateful to the noble Baroness, Lady Miller, and the noble Lord, Lord Luke, for taking part in this debate. I apologise to the noble Baroness for not having provided her with
Lord Carter: My Lords, I stand duly and properly corrected and I apologise. The noble Baroness asked me a number of questions. Of course, one must remember that the grant aid is being increased to take account as far as possible of the difficulties faced by farmers who are not able to export. It is true that they will have to find 60 per cent of the average cost of between £40,000 and £60,000. As the noble Baroness knows, the grant aid is eligible up to a limit of £85,000.
The take-up of 10 per cent relates to the 25 per cent grant. Therefore, we expect that the increase in the grant aid and the legal requirement on farmers to deal with the waste problem will result in a further take-up. One can see that there has been a substantial increase in the amount allocated; that is, £4.5 million a year compared with £317,000 in total which was taken up in the years 1996 to 2000. I am not sure of the answer to the noble Baroness's ingenious question about viring over money to the Country Stewardship Scheme. Perhaps I may write to her on that point.
The Parliamentary Under-Secretary of State, Home Office (Lord Bassam of Brighton) rose to move, That the draft order laid before the House on 20th November be approved [32nd Report from the Joint Committee].
The noble Lord said: My Lords, this order enables the United Kingdom to press ahead with ratification of an agreement with Switzerland on the free movement of people. The agreement is one of seven bilateral agreements between the EU member states and Switzerland which are the culmination of several years of careful negotiation.
The agreements will lead to an approximation between Switzerland and the member states of the EU which will be of benefit to us all. The individual agreements are concerned with air transport, land transport, trade in agricultural products, elimination of technical barriers to trade, public procurement, research in science and technology, and free movement of people.
It is the latter agreement which concerns us today. This agreement is the only one of the seven agreements which requires individual ratification by each member state. The ratification process is necessary because the agreement combines Community and national competence.
The free movement of persons agreement was laid before Parliament as a treaty earlier this month. The draft Order in Council is the next significant step in the process. The order provides for the implementation of the agreement by specifying it as a Community treaty under the European Communities Act 1972.
The United Kingdom hopes to show its commitment to those agreements by early ratification. All seven agreements will come into force simultaneously once ratification of the free movement of persons agreement has been completed in all member states. So far as we know, only Austria and Switzerland are ahead of the United Kingdom in completing their ratification procedures.
Switzerland is a member of the European Free Trade Association--EFTA. It is not a member of the European Economic Area. Switzerland voted against joining the EEA in 1992. Instead, the Swiss have chosen to negotiate a series of bilateral agreements with the EU, including the free movements of persons agreement. That agreement was approved by the Swiss in a referendum earlier in the year.
The free movement of persons agreement will enable nationals of all contracting party countries to benefit from equal rights in relation to free movement in all the other contracting party countries. It extends the benefits of the single market to Switzerland and allows EU member states to benefit from the contribution which Switzerland can make to the single market.
Once the agreement is in force, nationals of contracting party countries and members of their families, regardless of their nationality, will have a right in the territory of all contracting party countries to enter, reside, work, provide services and set up as self-employed persons.
Nationals of each contracting party country will have equal living, employment and working conditions in all the countries concerned. For Swiss nationals, that will enable them to exercise the free movement rights accorded by the agreement in the United Kingdom. That includes the use of the EEA/EU channel at UK immigration controls.
We are pleased to be taking forward the ratification of this agreement. It will build on the excellent existing bilateral relationship between Switzerland and the United Kingdom. Switzerland is the UK's largest export market and our third largest market outside the EU. Switzerland invests more money in the United Kingdom than any other EU country. Swiss companies employ some 100,000 people in the UK. President Ogi has visited the UK twice this year, furthering these good relations and the Prince of Wales paid a successful official visit to Switzerland earlier this month.
We are keen to ratify the free movement of persons agreement as soon as possible in order to help maintain good relations with our EU partners and Switzerland. I am grateful to the House for its early consideration of this order. I beg to move.