asked Her Majesty’s Government:

What consideration they have given to extending the period for hill farming allowance payments for a further three years after 2006-07.

My Lords, we previously announced that the hill farm allowance for England would continue in 2007. A further announcement regarding scheme operation from 2008 onwards will be made before the end of next week. We remain committed to rewarding upland farmers for the environmental and landscape benefits they provide.

My Lords, I gather that that is a considered reply. What hill farming in England needs at present is stability. There are cuts in Natural England’s budget, as we know, and a delay in environmental schemes coming on stream. Rather than descending into the kind of delays and problems that we have experienced with the Rural Payments Agency, which, even now by Defra’s own admission, will not be resolved until 2008, I hope that the Minister’s decision will be to continue this scheme to give that necessary stability to those remote areas that will depend on hill farm allowances in the future.

My Lords, I am grateful to the noble Lord. Yes, I gave a considered Answer. Before the end of next week we will make an announcement to Parliament, probably through a Written Ministerial Statement.

My Lords, I am grateful to the Minister for that. I know he appreciates that the income of hill farmers is crucial because many do not have an option to diversify. My question is slightly wide of the Question, but the noble Lord, in his answers, has not been very forthcoming. On 16 October, a Question was asked about the single farm payments which were due. Is the Minister in a position to update us on those few outstanding payments?

Yes, my Lords, but that is not relevant to this Question. I freely admit that I have figures available but I am here to answer questions on the hill farm allowance. I have to leave immediately after this Question: I had hoped to get it over quickly, so that I can visit a chicken farm. There are still a few single farm payments to complete. Of the 40-odd major claims of more than €1,000 that have not been paid, the top 10 involve cases relating to probate. Frankly, the position is no different from what it would have been under the old IACS system. That is the latest position.

My Lords, I do not wish to detain the Minister any longer than I have to, but will Defra be influenced by the fact that in the north-east many Defra front-line officials have been taken off measuring farms for Entry Level Stewardship and Higher Level Stewardship to fulfil the task of the Rural Payments Agency? That has caused a great deal of unhappiness among hill farmers because their ability to join these schemes, which would give them finance for environmental schemes, has been put on hold.

My Lords, I make the same apology for the delay in payment of the hill farm allowance as I do for the single farm payment. Obviously, we have made commitments in a Statement about what we expect to happen early next year regarding single farm payments. I fully accept that it is no good people suggesting that hill farmers, particularly in severely disadvantaged areas, should diversify or grow other crops. You cannot do that. In my Answer, I said that we remain committed to rewarding the upland farmers. I want to see that whatever adjustments are made, the money stays as much as possible in the upland areas. But that cannot be done on the old basis. It has to be done on a landscape and environment basis.

We have paid 10,188 full or partial claims for hill farm allowance for this year and 168 claimants have not received any payment, which means that we have dealt with 98.3 per cent of claims and have paid out £23.2 million. There is more to pay out. We will probably be under budget and I am looking at that situation.

My Lords, I appreciate the fact that the Minister has acknowledged the need to keep hill farmers in business. Has he seen the figures recently produced by the English Beef & Lamb Executive showing the losses sustained by farmers, particularly hill farmers? The figures are £300 for a beef animal and £60 for a lamb. Does the Minister recognise the importance of farmers getting a decent price for their stock when it comes to marketing and can he do anything to help raise that price?

My Lords, the short answer is no, because the same applies to the dairy industry. Ministers cannot interfere in the price. We want people to get as close to the market as possible. It is our job as the Government to provide a good playing field for farmers so that their businesses are sustainable and profitable. The chances are that unless they are profitable they will not be sustainable, so we need to do everything we can. But we cannot interfere with the market because we would have the competition authorities down on us like a ton of bricks.

In answer to the first part of the question, I have seen those figures and we have discussed livestock in some detail at the highest level in the department in order to find ways in which we can assist. However, we cannot assist by artificially affecting the price in the way that people might want.