I start with the press release that I have just received from the NFU Scotland, which welcomes today’s debate. In lodging the motion, the Liberal Democrats have made the Government respond to us. The NFUS announced that the less favoured area payments will start to arrive in bank accounts from Friday. I am sorry to be getting this in 10 minutes before Richard Lochhead can say it. The fact that Richard Lochhead has had to rush out the announcement shows our importance. Farmers across Scotland now know that when they get a parliamentary debate from the Liberal Democrats, the minister gives more money to Scottish agriculture. I commend the minister for that welcome approach.
In recent weeks, two constituents have come to see me about common agricultural policy reform. One has built up his livestock numbers. He breeds quality ewes for trade, he contracts fences, he shears, and he manages shipping of livestock across the quay in Lerwick every autumn. Despite all that hard work, he now faces the uncertainty of not knowing what single farm payment he will have in 2015.
The second constituent is the son of a good friend. He is a young farmer with enormous potential in the industry, and he has a route into farming through succession, although he has no entitlement. He needs certainty for his bank.
Scottish agriculture has notable opportunities. Crofters, farmers and growers produce quality goods. The Liberal Democrats support a pro-Scotland food policy and say all power to the minister’s elbow on his promotion of Scottish produce, and to Jim McLaren of Quality Meat Scotland for the same. Why the SNP voted against our local food procurement amendment last night is quite beyond me.
However, there are bigger questions about the day-to-day ability to farm and to produce lambs, calves or strawberries. After I left school, I worked on an American midwest cattle farm. At that time the farmers wanted the US Congress to pass the freedom to farm act
. When I speak to my adopted Kansan family today, I hear that little has changed except that fewer people are working, but they are working in bigger agri-businesses. Is that the future that we want for Scottish agriculture? I relish Shetland’s having hundreds of active crofters but, as in the rest of Scotland, numbers are falling. The paperwork and the fear of breaking Government regulations are driving many people away.
Surely CAP reform should be about something that is so much better. If public policy supports the provision of food from local markets with traceability, quality and provenance built in, that will cost. However, if politicians mirror short-term public opinion and support the cheapest of food, who knows what the future will hold for Scottish agriculture?
CAP reform must be tailored to Scottish needs, but we cannot pretend to be divorced from the English or wider European marketplaces. The Scottish Government’s own food policy proves that case. The most recent worrying development has been the closure of a major light-lamb processing factory in Wales. That facility bought hundreds of Scottish hill lambs and this year’s lamb crop will have fewer markets as a result.
Our motion, which is on behalf of every farmer, crofter and grower, is pressing the Scottish Government to state its position on common agricultural policy reform. Every farmer and crofter whom I have met of late—the cabinet secretary meets a heck of a lot more than I do—asked me one simple question: what will my single farm payment be in 2015? That is the question that the Government needs to answer. What will the Scottish framework of payments be?
The modelling work that the Welsh Government is doing is right. It published on 6 February proposals that bear some examination. They go into considerable detail about the different share of support under the coming arrangements, and how farmers across Wales are expected to gain. Page 12 of its report illustrates the modelling
“on how a single flat rate across the country would affect farm incomes”
“48% would gain but 35% would lose at least 10% of their current payment.”
In fairness to our colleagues in Wales, they are in no way ducking the serious repercussions of agricultural reform.
In the paper, the Welsh Government goes on to state:
“around 85% of farms with an historical payment of less than €1,000 would experience a gain of 10% or more from the change to a flat rate payment.”
It looks at differential rates and provides a regional assessment, which I would commend to the cabinet secretary here in Scotland. It also states that
“In terms of regional changes,”
the largest gains will be
“in the Southern region compared to its aggregate historical entitlement value.”
Interestingly—I also commend this point to the cabinet secretary—it recommends
“extending the modelling to consider the effect not just on the direct payments received by farm businesses, but on their entire farm incomes.”
That seems to me to be a reasonable and appropriate approach to a very difficult issue.
As that paper was published on 6 February, I can only suggest that Wales has led and Scotland should now follow. The Welsh Government has tackled some of the things that farmers in Scotland are crying out for and has provided an illustration of what payments are going to look like. When will the cabinet secretary start to get around Scotland with a region-by-region breakdown of single farm payments and tell our farmers and crofters what his plans are? That is what his Welsh opposite number is doing. He is not holding one April conference, but is meeting farmers every night right across the country and talking about his plans.
Scotland’s agriculture minister has enormous discretionary powers to shape a Scottish CAP. Scotland has a different approach from England, Wales and Northern Ireland, and that is as it should be. In effect, there are four CAPs across the UK. We have less favoured areas, but England does not. We have coupled payments—that is what the beef and calf scheme is—but England and Wales do not and that, too, is as it should be. However, our ministers should tell farmers and crofters what their plans are within the huge discretion that they have from the European Union.
Mr Lochhead’s amendment cites the Pack report, which was produced back in 2010. However, I looked again this morning and I could not find any observation, any release or any Government statement on whether the cabinet secretary agrees or does not agree with the Pack report’s recommendations. Some of them were pretty challenging for any future support system for Scottish agriculture. The inquiry’s recommendations included:
“Future direct payments should be distributed in Scotland on the basis of distinguishing LFA and Non-LFA land.”
It also concluded:
“The change from the current historic base for”
single farm payments
“to the Inquiry's approach outlined here should take place as soon as possible after the European negotiations are complete.”
Again, I do not know whether the cabinet secretary favours that approach, with a transition of only one year as opposed to the much longer transition that many in Scottish agriculture are calling for. That is a fundamental decision that our cabinet secretary must take, and he must give Scottish agriculture an early indication of how he plans to proceed. Can he tell us how he plans to move from historic payments to area-based payments? Many people across the industry believe that that transition should take as long as possible. Does he agree?
Will he invoke what the Irish presidency of the EU now describes as the “Irish tunnel”? That means partial convergence so that half of farmers will see less change. That would ease payment changes and allow better planning, and it is seen to be a more stable approach. Does the cabinet secretary consider that to be the right option for Scotland?
Has the Scottish Government asked the European Union to allow a great majority of annual payments to be made in advance in December? That is a serious proposal that the NFU Scotland has made time and again. It would help with cash flow, it would mean fewer in-year changes, and it would also be administratively easier. I am sure that the cabinet secretary will reflect on that. What is his view?
What assessment is being carried out of the need for a safety net for extensive producers so that they do not get caught up by a well-meaning but hopelessly prescriptive activity test? That point was alluded to in last night’s crofting debate.
Does the cabinet secretary support the simplification of regulations, notably for small producers and crofters? He is rightly sympathetic to new entrants—people who have been kept out of the subsidy regime since 2005. What is the Scottish Government’s position on the size of the national reserve? At 3 per cent, is it big enough?
Farmers and crofters need answers to those questions. The EU budget, the framework of the common agricultural policy and the flexibility to tailor to Scottish needs are now all in place, yet our industry has no certainty. When does the Government plan to provide that clarity?
We believe that Scotland’s farmers and crofters need to see financial modelling, a region-by-region breakdown and an active minister-led discussion with firm illustrations of the policy options that could be pursued. On behalf of the industry, we want the cabinet secretary to be clear on his approach before the Easter recess. Farmers and crofters need to know that information and it is the responsibility of this cabinet secretary and this Government to show them it.
That the Parliament notes the crucial importance of a Scottish common agricultural policy (CAP) within the UK; believes that farmers and crofters across Scotland need to understand what decisions the Scottish Government plans; notes that the Welsh Government has modelled CAP reform into payments by region and commends a similar approach for Scotland, and calls on the Scottish Government to set out its plans for implementing CAP reform and to seek the agreement of the Parliament to this before the end of March 2013 so that farmers and crofters can plan for the substantial changes ahead of implementation on 1 January 2015.