- The Presiding Officer (Tricia Marwick):
Good afternoon. The first item of business is a debate on motion S4M-07892, in the name of Richard Lochhead, on the common agricultural policy.
- The Cabinet Secretary for Rural Affairs and the Environment (Richard Lochhead):
The debate on the common agricultural policy for 2014 to 2020 provides an opportunity for the Government to update Parliament on the state of play in the European Union negotiations and our preparations in Scotland and to explain the next steps. The debate is well timed, as EU-level agreement on the CAP package was confirmed only last week. Europe still has to finish the formal adoption procedures, which will take until November or December, but the content of the deal has now been decided.
This is a good time for the Government to update Parliament on that deal and its implications. Before delving into the detail, we should remind ourselves of the wider context. Nearly every country treats agriculture as a unique sector that often requires special treatment. Europe is no different. For 50 years, the CAP has supported European agriculture, initially to modernise it and recently to support its role in relation to the environment.
As we all know, here in Scotland, CAP funding is vital. At just under £600 million, last year’s receipts from the CAP were almost the same as the net income from farming, which was just over £600 million. In many cases, our industry’s survival depends on a successful CAP.
At the start of the process, one of our priorities was to bring new entrants and other excluded farmers into the CAP’s scope. We wanted to clamp down on slipper farming and to have sufficient coupled support to address declining livestock numbers. We supported greening the CAP, but we needed the details to be changed so that they would not affect farming operations disproportionately or have unintended consequences for the environment. We wanted to remove unnecessary red tape from the proposals and to have flexibility to tailor the new CAP to suit Scotland’s needs. Above all, we needed the United Kingdom Government to negotiate a decent outcome for us on the budget.
It is fair to say that we were successful on nearly all those priorities. We achieved changes that will put past and future new entrants on a level playing field. We secured the so-called Scottish clause to clamp down on slipper farmers and we resisted an ineffective active farmer test that would have tied us up in red tape. We got more flexibility, for example, to ensure that properly farmed heather will be eligible, to choose our own timescale for phasing out payments with a historical basis and to decide for ourselves whether to cap or reduce big individual payments—so-called degressivity.
We also achieved improvements on greening. The original proposals could have caused problems for farmers without commensurate environmental benefits. We secured a much more realistic version of the greening in the final text. Cropping records suggest that roughly 5,000 farmers will now be covered, but the majority already meet the rules. Only about 800 farmers will have to plant an additional crop under the cropping rules.
All those achievements are under pillar 1 of the policy, which relates to direct payments to farmers. There was perhaps less to play for under pillar 2, because the proposals were more for evolution than revolution. However, we still secured important flexibility in several areas. Perhaps the most important is on areas of natural constraint, which will replace less favoured areas under the new programmes.
Under pillars 1 and 2, our negotiating efforts were mostly successful. However, I was disappointed with the outcome on coupled support, which is the optional production-linked support, such as headage payments, to maintain types of farming in areas where that is particularly important. The original proposals gave Scotland 5 per cent coupled support, on the bottom tier of a two-tier system. In the final deal, we will have the option of 8 per cent, which is nearly double our existing coupled support under the beef scheme.
However, the system still has two tiers, which I and most farmers in Scotland believe is fundamentally unfair. The 8 per cent is also well below the 10 to 15 per cent that the Brian Pack inquiry recommended.
- Claire Baker (Mid Scotland and Fife) (Lab):
Has the cabinet secretary approached the UK Government to discuss the possibility of calculating the 8 per cent on the UK’s share rather than just the Scottish share?
- Richard Lochhead:
Yes we have, and I will talk about that now because this is a key area for Scotland.
Unfortunately, our negotiator, Owen Paterson, did not want any coupled support whatsoever, never mind the 5 or 8 per cent that we finally got. Given where we have ended up, I can tell Claire Baker that I have written to Owen Paterson to ask whether the 8 per cent limit can apply to the member state rather than to Scotland, because we have had so many mixed messages from different ministers during the past few months. This is all about damage limitation. Fundamentally, the deal on coupled support remains a major disappointment for Scotland, but the deal is now done and we must turn our attention to how we implement it.
The Government has been working on that with stakeholders for several years. We have run workshops, had various groups and done extensive modelling; we also held a major conference this April. As a result, a consensus is emerging about the way forward, which takes various concerns into account. One such concern is how the move to area-based payments will impact on farmers with high payments under the current historical scheme. For example, the more intensive beef and dairy farmers are concerned about that. However, it is inevitable that their rates per hectare will come down. By definition, below average rates will rise and above average rates will fall, but there are tools that we can use to mitigate the impact and, we hope, manage the transition.
In doing that, we must be aware of the impact on farmers who have been excluded from the single farm payment until now, such as new entrants and deer farmers. They must be put on a level playing field as quickly as possible, even if we give other farmers more time to adapt. Of course, we must also keep our eyes open for loopholes. We know that people like loopholes in agricultural legislation, and undoubtedly some people are already thinking that if they have an empty hillside with some deer on it, they can qualify for big CAP payments. The answer to that, incidentally, is no. However, there is always a minority who will try to exploit the system and we need to be aware of that.
Speaking of exploiting the system, under the Scottish clause we must find minimum activity rules that keep slipper farmers out of the system while letting genuine extensive hill farmers in.
We must also look at the impact of the greening measures. Greening presents a great opportunity. I want every farmer in this country to be getting greener over time. Consumers are paying increasing attention to how their food is produced, and Scotland has a great reputation for green and natural food that we can exploit in valuable overseas markets as well as at home. That means that we must be genuinely green. Scotland is not the worst in the class. For example, we do not have the extreme arable monocultures that the three-crop rule is aimed at tackling; other European countries have that. However, at the same time, we must be aware that we have competitors who want to be seen as green and they are catching up with Scotland.
Even in Scotland, we must accept that we face some genuine environmental challenges. Our index of farmland birds has gone down in each of the last three years of data. On water quality, only 60 per cent of our bodies of water are in good condition, which is below the long-term target of 98 per cent, and that has not improved in the past four years. There are many wins to be secured if we get things right. We must address our genuine environmental challenges. In doing so, we can stay ahead of our competitors and ensure that our fantastic natural products succeed in tomorrow’s markets.
To deliver those wins, we have to take many of the important decisions that lie ahead of us. Unfortunately, those decisions will be all the more difficult because of the budget that has been negotiated by the UK Government. In the new CAP, Scotland will probably have lower rates per hectare in both pillars than every other member state in Europe. That is even worse than what we get today. If Scotland had been a member state, we would automatically have got an uplift to €196 per hectare in pillar 1. As I have said before, that would bring in an extra €1 billion up to 2020. We could also have negotiated an uplift in pillar 2, in the same way as 16 other member states have done. Finland got a €600 million uplift, Portugal got €500 million, Slovenia got €150 million, Lithuania got an extra €100 million, and so on. However, the UK Government took the decision not to press Scotland’s case.
If the UK Government was not willing to get us a decent deal from Europe, the least that it could have delivered was a fair division of the funding within the UK. We urgently need agreement on that.
- Liam McArthur (Orkney Islands) (LD):
We have heard a lot about the UK Government not batting for Scotland. As I recall, the cabinet secretary was demanding an increase in the budget at the same time as his MP colleagues were voting with Labour for a reduction in the budget, at the same time as his MEPs were voting to freeze it. Which of those positions represents the Scottish National Party’s position on the budget?
- Richard Lochhead:
I am sure that the member is aware that only 38 per cent of the Europe budget is for CAP. That is one area in which Scotland gets an extremely raw deal. We deserve a greater share of the CAP budget.
The deadline for many of the decisions is approaching. We have to give notification of any pillar-to-pillar budget transfers that we would like by the end of the year. I have written to Owen Paterson to seek a fair deal for Scotland within the UK’s CAP allocation so that we can start to take those decisions.
In particular, the UK received an uplift under the external convergence mechanism, which will be worth more than €60 million per year by 2020, and a total of €230 million over the whole budget period. As that uplift was obtained only as a result of Scotland’s low payments under the current system, at the very least, Owen Paterson must allocate it entirely to Scotland. It is not a case of taking money away from farmers in England, Wales and Northern Ireland; it is about ensuring that money that belongs to Scottish farmers comes to Scottish farmers to help them through the challenges ahead.
The first challenge will be getting through 2014. In theory, the new CAP was supposed to start on 1 January 2014, but that was never realistic under Europe’s timetable. As I said, the main regulations will not even be adopted until November or December, after which the implementation rules will have to be developed. I was frustrated by how long it took Europe to recognise that 2014 will be a transition year, but it has now come forward with a transition regulation, which we are negotiating.
Despite all that uncertainty, I was able recently to set out a plan for 2014. Europe has made it impossible to avoid a gap between the current Scotland rural development programme and the new one, but our plan will minimise the impact on the ground and provide continuity where it is most needed—for instance, with less favoured area support scheme payments, agri-environment contracts and woodland creation.
We have more decisions to turn our minds to. To inform them, we will run consultation exercises on pillar 1 and pillar 2, which will start towards the end of this year. I do not want to pre-empt the results of those consultations, but we have to give as much certainty as we can to the industry.
I would like to outline my thinking. On the pillar 1 basic payment scheme, a consensus is emerging on the establishment of two or three payment regions in Scotland. That would be simpler than some other options, so I am pretty well minded to go with that.
On coupled support, if we are stuck with 8 per cent of the Scottish ceiling, I will give serious consideration to devoting all of that to the beef sector. I know that some sheep farmers will be disappointed to hear that, but their sector already stands to gain considerably from the move to area-based payments.
I am also keen to explore other options for weighting any future beef scheme. The current scheme gives higher rates to the first 10 calves per holding, but the data suggest a decline in slightly bigger herds, so we must review that aspect.
On greening, we will continue to look at the option of equivalence schemes, which we are allowed to put in place, but even the strongest supporters of equivalence are getting slightly cold feet as the details become clearer, and our analysis does not show huge benefits from equivalence schemes for biodiversity, for example. I will reserve my judgment on the issue, but it looks quite complex. However, I want to find out whether we can use equivalence schemes under greening to deliver carbon-reducing measures to help with the role that agriculture plays in our climate change efforts.
There are arguments for and against capping and degressivity, which is the reduction of big payments. I am keen to address the issue of huge individual payments, but we must consider what will happen to those payments in any case. The move to an area-based system should reduce big payments significantly, and we should take that into account when we decide whether to apply an absolute cap to payments. There is another measure called redistributive payment, which is the idea of giving a top-up on the first 30 or 50 hectares per farm. We should look at those options.
We also have decisions to make on pillar 2. I have said many times that the new SRDP must be simpler for applicants and better focused on key areas such as climate change, food and drink, and support for hill farmers and crofters. However, the SRDP is not only for farmers; we must bear in mind that it has a much wider role to play in supporting rural communities. Therefore, many people have a big stake in the decisions that we will take in the coming months.
With such crucial decisions ahead, I look forward to hearing members’ comments on the new CAP. I hope that Parliament will join me in welcoming our negotiating achievements, and that it will welcome our call for the UK Government to provide a much fairer budget deal so that we can work towards a successful new policy for Scotland and our farmers can continue to bring food to our tables and care for Scotland’s magnificent environments.
That the Parliament notes the importance of the EU common agricultural policy (CAP) for underpinning productive agriculture, delivering environmental and other public benefits and supporting rural development; notes that the EU reached an agreement on a new CAP and welcomes the Scottish Government’s success in negotiating provisions that meet Scotland’s needs on new entrants, active farming and increased flexibilities; looks forward to the Scottish Government’s future public consultations on implementing the new CAP in Scotland; notes that, as a member state, Scotland would have qualified for increased Pillar 1 payments worth €1 billion extra up to 2020 and been able to negotiate improved Pillar 2 rural funding; deplores the budget deal negotiated by the UK Government, which failed to address Scotland’s unacceptably low CAP funding, and calls on the UK Government to deliver a fair deal for Scotland through the UK’s allocation of CAP funds, including the full external convergence uplift to Scotland.
- Claire Baker (Mid Scotland and Fife) (Lab):
This is an opportune time to have a CAP debate, and we should not miss the opportunity to discuss the key issues. I welcome the cabinet secretary’s press release this morning and the way in which he has addressed the debate this afternoon. He began to lay out some of the key issues that face us in Scotland.
This morning, my daughter got ready for her school harvest service with the poem about all the farmers working hard. It is important to recognise the huge contribution that farmers make to our food production and security, land stewardship, and our rural and national economies.
There are significant on-going debates about food affordability and accessibility and how we reconcile impressive export growth figures with growing food poverty at home. Regardless of who receives more, or where Scotland is in a subsidy league table, farming receives significant public resources in return for a number of public benefits, some of which compete. It is important not to lose sight of that in this debate. Our focus is on how we implement the changes and try to get the best deal for those who receive the support, but we also need to ensure that we get the best deal for consumers and the wider community and economy.
At the start of the process, the European Parliament identified food security as key, but that was alongside rising energy prices, climate change, environmental protection, land abandonment and the economic crisis as the set of challenges that a reformed CAP must respond to. I am not convinced that what we have before us meets that challenge. If Scotland is to respond effectively to those issues, implementation has a lot to deliver.
Labour’s amendment focuses on the complex matter of the choices that we have to make in Scotland. In this phase, the decision making lies with the Scottish Government. After a pretty protracted period of negotiation, we now face a fairly tight timescale for introduction. The Scottish Government will soon consult on the issues but, as the Scottish Environment LINK briefing says:
“Government clarity on objectives and desired outcomes is essential here if a ‘bun-fight’ between different farming sectors—beef versus arable versus dairy—is to be avoided.”
At committee last week, the cabinet secretary laid out three options for the transfer from historical to area payments. I have previously cautioned about using the “Irish tunnel” model. We now have agreement on the principle of a new entrants fund. That fund is very welcome, and we should prioritise its introduction in Scotland. Perhaps in light of that, there is more room to have a more gradual approach towards convergence. However, there is a risk that the “Irish tunnel” model will slow reform too much and that, while it cushions the change for some, it will mean that others who are in need of support will have to wait much longer.
The cabinet secretary talked about securing the Scottish clause. It would be good to have some clarity on the Scottish clause. The end of slipper farming has been a key aim of the reform, but it looks as though there is a risk that other loopholes will be created. Unintended attractions could be created that encourage some land to become eligible for pillar 1 support. The flexibility of setting a minimum stocking level seems key to the policy being effective. Will the cabinet secretary say a bit more about what the current understanding is? His press release this morning talked about “minimum activity levels”. Is he confident that that will address the issue?
The cabinet secretary is fond of per hectare average comparisons. They are accurate, and I support a fairer distribution of funds throughout the EU and the UK and accept that that is the measure that is used, but those comparisons also fit the cabinet secretary’s preferred narrative. We know that the situation is much more complex than that.
We can recognise how the situation came about. The payments are historical. Scotland’s 1.5 million hectares present unique farming challenges and we have worked with a system that has heavily rewarded productivity, but has not sufficiently recognised what Scotland’s less favoured farming areas deliver. The Scottish Environment LINK briefing highlights the importance of high nature-value farming—I think that a few of us were at the RSPB Scotland parliamentary briefing earlier. Average per hectare calculations give a distorted picture. They mask significantly different payments. Therefore, when the cabinet secretary makes claims about farmers being £6,000 a year better off, that is really not the whole picture. The matter is not as simple as average per hectare payments. What does the figure tell us about recipients in East Lothian, who receive an average payment of over €125,000 per hectare, whereas the Highland region receives an average of just over €34? It does not tell us very much. If we look at other measures, such as per holding or per worker—that is surely an important measure if we are looking at public benefit—we will see that Scotland and the UK are much higher in the EU league tables. Scotland even receives more than the rest of the UK on some of those figures.
- Richard Lochhead:
The figures that Claire Baker has read out illustrate why we have to move from the historical basis for payments to a new basis for payments. That is why we are moving to area-based payments. We cannot reward people in activity in 2013 or, indeed, 2020 with what they had back in 2002. That is the explanation behind the figures that the member mentioned.
The formula that would benefit Scotland is the formula that Europe used to allocate the national pots of money to each member state. That formula would have delivered a greater national pot to Scotland as a member state, which we could then have decided how to distribute among the Highland farms, the East Lothian farms and so on.
- Claire Baker:
I accept that that is the formula that is used, but the story behind it is much more complex. It is not just about providing a fairer formula throughout the EU and the UK; it is about the decisions that Scotland will make to ensure that we have a fairer distribution within Scotland. The EU works with a per-hectare measure that one could argue is as valid as any measure, but it is not the only measure that we can look at and make comparisons with.
The UK uplift is largely down to the nature of historical payments in Scotland. We are behind England on that, as changes have already been made to area-based payments in England, which have had an impact on the figures. The questions now are about how we can get a fairer, more equitable distribution of funds throughout the UK; how we can achieve a commitment to convergence from the UK Government, with a clear timetable; and how we can get a level playing field operating throughout the UK. That debate would be of more benefit to Scottish farming than a protracted negotiation into the EU.
We often hear the assertion that we would see significant additional CAP funds from independence. In a debate before he became a minister, Paul Wheelhouse even claimed:
“when Scotland becomes independent, the full economic benefit of convergence between member states will be delivered to Scotland automatically.”—[Official Report, 18 January 2012; c 5396.]
Yet, increasingly, we see the terms of Scotland’s EU membership being questioned. The SNP claimed that it would be automatic, but it now acknowledges the need for negotiations.
- The Minister for Environment and Climate Change (Paul Wheelhouse):
I hope that Claire Baker acknowledges that, if we were an independent member state in our own right, we would have benefited from the new formula in terms of convergence on the national pot. That is the point that the cabinet secretary made. I would welcome clarification of whether she agrees with that principle.
- Claire Baker:
That is not the situation that we face. The SNP proposes that we go into the EU as a new member state and there are concerns about the negotiations that would have to take place. What would that mean for Scottish farming? Could the SNP guarantee that payments to farmers would continue during any negotiations? Recent examples show that new member states, including those that joined in 2007, have had their direct EU payments phased in gradually, which would be disastrous for Scottish farming.
I will move on to an area on which there is more agreement between us. I agree with the cabinet secretary that Owen Paterson needs to listen and respond positively to the debate. We need an equitable solution for the UK. I accept that it is a challenging negotiation for the cabinet secretary, but he will also have to deliver on the degree of redistribution that he argues for across the EU and within the UK. He must start to be clear about what level of support will be available to farming in Scotland’s more disadvantaged areas. There have been suggestions that the maximum degree of modulation from pillar 1 to pillar 2 will take place and, as the Liberal Democrat amendment highlights, that decision will have to be made quite soon. We support arguments for greater funding in pillar 2 to deliver an effective SRDP. Some people in the farming sector have raised concerns over the impact that that degree of modulation will have on pillar 1, but we need to consider our commitment to meet our environmental challenges. If we were to boost the agri-environment schemes, which have previously been cut, we could deliver benefits for both.
Last week, the Intergovernmental Panel on Climate Change report clearly set out the global challenges. We know that the farming sector in Scotland has a pretty significant environmental impact, with emissions from agriculture and related land use accounting for some 20 per cent of total Scottish emissions. The example this week of John McKenzie from Dingwall, who is running a carbon neutral flying business with all the energy generated from his farm, demonstrates the commitment and innovation that exists out there to improve performance. Currently, we have no statutory measures placed on the sector and there is some way to go. It is essential that we use incentives and good practice, but we need to see more action in that area. If we could boost the funds in pillar 2, that would go some way towards helping that.
The other significant area is how we implement degressivity. We need much more transparency around payments and a better explanation of how public benefit is gained from some of the large farm payments that are being made to profitable farms. The payments must be justifiable. I recently spoke to a senior figure in food and drink, and they said that the most innovative of produce, the most diverse business models and the most modern farming often come from younger farmers who have received no public subsidy but who are, nonetheless, growing businesses and have the potential to do more.
The new entrants scheme will ease matters—I know that the cabinet secretary agrees that part of the solution must be to look at land availability and tenancies if we are to improve the lot of new entrants—but we must also be prepared to focus resources on where they provide the greatest public benefit. On that issue, Alyn Smith MEP commented this week that he was
“disappointed the agreement didn’t go further on capping: we have simply not addressed popular concerns on this issue, and when everyone is having to tighten their belts it’s only right that the nation’s wealthiest farmers should as well.”
It is now up to the cabinet secretary to address the issue and to indicate where he thinks that the balance should lie and what is proportionate and fair.
We need to be clear about our priorities for implementation. We would be better spending our time today on that significant debate and sending a clear message to the UK Government about delivering a fairer funding deal throughout the UK than on making referendum arguments that have little reference to the CAP deal, which is determined now until 2020.
I move amendment S4M-07892.3, to leave out from “and welcomes” to end and insert:
“and believes that the focus must now shift to implementing the latest CAP agreement to best meet the needs of farmers across Scotland, including new entrants, reward active farming and support rural businesses and communities, as well as protect and enhance Scotland’s environment; recognises the tight timescale for introduction and calls on the Scottish Government to provide clarity on the transition from historic to area payments, the level of modulation from Pillar 1 to Pillar 2 and the future Scottish Rural Development Programme as soon as possible, and calls on both the Scottish Government and the UK Government to ensure that a mature dialogue is maintained in the implementation of the current agreement in order to deliver a fair outcome throughout the UK.”
- Alex Fergusson (Galloway and West Dumfries) (Con):
This is a debate on which I wish it were possible for the Parliament to speak with one voice. We have often managed to do so on this topic in the past, but I regret that it seems highly unlikely that that will be the case at decision time this evening. That is not just a great shame but a missed opportunity on the part of the Government, as there is much in the debate around which I genuinely believe we could have agreed. Surely the Government would agree that a unanimous vote from this Parliament would carry a much stronger message to both the UK Government and the EU than the fragmented result that, I fear, we will see later this afternoon.
Had today’s motion reflected the perfectly reasonable tone taken by the cabinet secretary in his speech this afternoon, we might have achieved such unanimity, but I do not think that that will be the case. In my view, the motion certainly does not reflect that reasonable tone. When I started to read the motion, I was filled with optimism that the debate would concentrate on the many really important issues that face rural Scotland in the wake of the CAP reform package, but, as I read on, my heart slowly sank as I came to what I can only call a remarkably self-congratulatory clause that asks us to welcome
“the Scottish Government’s success in negotiating provisions that meet Scotland’s needs”
in various fields. That phrase “success in negotiating” was penned by the same cabinet secretary who is forever complaining that he cannot negotiate anything because he does not have a seat at the top table. Well, I do not see how he can have it both ways.
I very much welcome the fact that the UK Government was clearly impressed enough with the Scottish Government’s arguments on these issues that it negotiated hard for them—often, I believe, against its own instincts—succeeded in those negotiations and returned with a deal on CAP reform that might not have given us everything that we wanted but that the cabinet secretary pronounced as a good deal for Scotland. So I find myself asking why the motion calls on us to “deplore” that agreement.
Let us get real for a minute. We all know that the overall EU budget has been reduced. How could it have been otherwise in these economic times? Let us also not forget that, as Liam McArthur reminded us, the SNP’s representatives at Westminster voted for that budget reduction, so it should surely have come as no surprise that there is less money in the CAP budget. The issue should be not how much blame and vitriol we can pour on the UK Government but how we can maximise the benefit of the smaller pot of money under the two pillars following CAP reform. As Claire Baker hinted, that may not suit the Government’s agenda on the outcome of next year’s referendum, but it is the question to which most people who live and work in rural Scotland want an answer.
I will focus on those issues. I have a lot of sympathy with the cabinet secretary as he faces the task before him because, as we all recognise, the changes that he must now implement will involve many winners and losers across the agricultural sector as pillar 1 support moves from historical to area-based payments. However, it is worth reflecting that Scotland has historically had a low level of CAP funding because our historical payments have always been based on stock numbers and productivity. As we all know, and are constantly reminded, 85 per cent of Scotland’s land is classed as less favoured. We are geographically less productive and therefore have historically received less support.
The change to area-based payments, as the cabinet secretary understandably hinted in his opening remarks, will inevitably have the broad effect of moving support payments up the hill. That presents the Government with a huge challenge: how to bring about the change without actually destroying the viability, possibly even the very existence of some agricultural businesses. In looking for the best answer to that question I cannot disagree with NFU Scotland’s priority of focusing pillar 1 payments on active, productive farming businesses in a carefully targeted way that will minimise the flattening effect of these reforms. That points us towards having three distinct payment regions rather than two.
I am pleased that the Scottish Government can use up to 8 per cent of the Scottish CAP budget for coupled payment, which I strongly support. I will also take the argument for increasing that amount by having access to the whole of the UK’s CAP budget ceiling for modulation to the UK Government, because I believe that we will probably need to go above that level of 8 per cent maximum if the necessary safeguards are to be put in place to sustain our hill farming sector without causing irreparable damage to the other sectors of agriculture.
It is also clear, as I think the cabinet secretary said, that there will be huge pressure on the pillar 2 budget, because yet again we will have the smallest pot of jam to spread over a much larger slice of bread from 2015. The reforms give the cabinet secretary the power to increase the amount that can be modulated from pillar 1 to pillar 2 from the current 4 per cent to 15 per cent, as Claire Baker has already mentioned, without match funding. I am sure that he will be sorely tempted and heavily lobbied to use that power.
Unlike Claire Baker—and I suspect that this is where I will lose some potential support for our amendment—I would urge him to resist that temptation because every percentage decrease in pillar 1 support will simply undermine what will be a very fragile agricultural sector that will struggle to come to terms with a very different support structure over the next few years. It deserves time to do so and, above all else, it surely needs to know what that structure is likely to be as soon as is humanly possible, to allow for effective forward planning.
I will argue for Scotland to have a greater share of the CAP resources within the UK and I accept the case for the external convergence uplift largely to come to Scotland. The cabinet secretary told the Rural Affairs, Climate Change and Environment Committee two weeks ago that this could amount to, I think, €60 million by 2019. I think he repeated that this afternoon. That is a considerable amount of money that would not come to the member state of the UK unless Scotland was in the position that it finds itself in.
There is a perfectly logical case to be made. I will do so using the language of persuasion and the arguments of logic. The cabinet secretary does not do his arguments any favour when he publicly accuses the UK Government, as he did at the Rural Affairs, Climate Change and Environment Committee two weeks ago, of stealing Scotland’s money. The rhetoric might fit the referendum agenda, but it does not do Scottish agriculture any favours. The simple reality is that the CAP reform package is now firmly in the hands of the cabinet secretary. As the headline of last week’s Scottish Farmer put it so succinctly:
“Over to you, ScotGov”
Indeed it is.
I move amendment S4M-07892.2 to leave out from “and welcomes” to end and insert:
“, which was welcomed by the Scottish Government as a good deal for Scotland; welcomes the Scottish Government’s success, alongside the UK Government, in negotiating provisions that meet Scotland’s needs on new entrants, active farming and increased flexibilities; looks forward to the Scottish Government’s future public consultations on implementing the new CAP in Scotland, and calls on the Scottish Government to negotiate responsibly with the UK Government to ensure the best possible outcome for rural Scotland and to inform Scotland’s farmers and other rural stakeholders without undue delay how these reforms will be implemented across the country.”
- Tavish Scott (Shetland Islands) (LD):
I draw members’ attention to my declaration of interests.
I spent last Saturday—as many of us do at this time of the year—at my local mart, in Lerwick. I heard two clear messages there. There was a third, but it is not important for this debate. The first message was about prices. The cabinet secretary is all too well aware that there is concern, especially in the sheep sector, about what is happening to livestock prices.
The second message, which is more important in the context of today’s debate, was that the Government of the day, and politicians, not see the debate about the future of the CAP through the prism of independence, but through the prism of needs of Scotland’s farmers and crofters. I make that point in the reasonable tone that the cabinet secretary adopted in his opening remarks.
It is surely in all our interests to follow that approach. I say so because since 2001 Scotland’s sheep numbers have fallen by the thick end of 1 million. In 2012, 495 producers across Scotland came out of beef production—there are nearly 500 fewer beef herds in Scotland, out of some 7,000. For any of us, that is surely a worrying and significant trend, so the Government’s admirable food and drink strategy—which I support and which I believe is a genuinely positive aspect of Government activity—is being undermined because the building bricks of food production are being eroded.
That is what the new CAP should be about. Do we want active, financially viable farmers, crofters and growers throughout Scotland? Most of us would answer that in the positive.
As other colleagues have done, I suggest that the Scottish Government needs to take action in some areas. I acknowledge that the cabinet secretary set out some of those in his opening speech. The first is that the consultation that we understand is to be published in December should acknowledge the timescale to which the minister is operating. If, as is usual Government practice, he adopts a three-month consultation period, it will not finish until March. However, as he said in his speech, the timescale for approval of the implementation regulations by the European Commission puts an immense amount of pressure on the Government to have everything in place for 1 January 2015.
As far as I can see, and as a lot of farmers have said to me, if the Government rightly consults on many of the issues, we will not necessarily need to spend as long as we normally do on everything else, especially as the cabinet secretary set out in his opening speech a clear direction of travel on some issues. However, he needs to consult on ensuring that all the options are available to the Government in making the right judgments about how the new area payments system will work.
Coupled beef support to assist suckler cow herds is certainly one of those options, but I do not share Claire Baker’s concerns about the so-called Irish tunnel. The cabinet secretary should consult on that mechanism because of the really strong views about the transition that will take place over the coming six years from the current system to the new one.
For some, a fast drop into a new world will, without a shadow of a doubt, mean 25 per cent to 50 per cent cuts in single farm payments. Therefore, a system that clearly has some favour in Europe and that understands the length of transition that is needed in order for farmers and crofters to adapt to the new system must have some merit in it. I hope and ask that, in his closing speech, the cabinet secretary will acknowledge that that is an option that Scottish agriculture might wish to follow and that, therefore, he will include it in his consultation when it is published later in the year.
The cabinet secretary also acknowledged that moving towards an average payment system based on area might hit some producers—notably, intensive livestock farmers—very hard indeed, and I agree with him. That supports the contention about the Irish tunnel model.
Another area that the consultation that the cabinet secretary is about to publish must surely consider is areas of natural constraint. He mentioned that in his opening speech and I hope that he will clarify the situation for us in his closing speech. My understanding is that the ANC model can be used to help areas such as agriculturally productive islands that face real pressure because of the changes. Orkney, Islay and Tiree are all obvious examples. It would be helpful for the agriculture industry if the cabinet secretary could clarify whether he envisages ANCs being part of the system and, therefore, whether he will ensure that that is in his consultation.
The third aspect concerns the level of the area payments per hectare. I highlighted the decline in livestock numbers throughout Scotland. Many farmers and crofters, including in my Shetland constituency, want a high rate per hectare. As the cabinet secretary pointed out, that has significant issues for others and it is understandable that that would be so.
How the cabinet secretary’s two or three payment areas model fits into the assessment of how individual farmers and crofters will be affected is important. I encourage him—as we did in a debate some months ago—to publish modelling on that. I do not know where the Scottish Government’s modelling has got to, but it would be helpful to the industry to understand what modelling has been done and whether, at this stage, it is able to identify the differences that must already be becoming apparent, were a two or three payment areas system to be followed.
I want to make two other points. First, I very much agree with Alex Fergusson’s point on the balance between pillar 1 and pillar 2 spending. I hope that the cabinet secretary will clarify that in his closing remarks. I share the concern that were the heap of money to be moved across to pillar 2, then the budgetary pressures in pillar 1 in relation to what that would mean for farmers and crofters would be even more significant than they are already likely to be. I know that doing what Alex Fergusson suggested will not make the cabinet secretary any friends in the green non-governmental organisations, but that is the kind of horrible balance that any minister must strike.
My final point is on the mapping penalty regime for individual farms, which I have of course mentioned many times to the cabinet secretary. He has reassured me in the past that the new CAP system will be fairer in that regard. I simply hope that that is the case. I encourage him to keep making the argument on that and to ensure that the Scottish Government, as the responsible Administration for the new CAP, insists to Brussels that we must have a fairer and more proportionate system that will help—or at least not be so unfair to—crofters and farmers, not just in my Shetland constituency but right across the country.
- The Deputy Presiding Officer (Elaine Smith):
We turn to the open debate. Can I have speeches of six minutes, please?
- Rob Gibson (Caithness, Sutherland and Ross) (SNP):
There have been some suggestions that we would be better not having a fragmented approach, but the motion and the amendments show that the fragmentation comes at the point at which we are told that we should not look at the potential for Scotland were we negotiating for ourselves. That is where the fragmentation line splits and three parties are against the Government. The budget deal that the UK Government negotiated failed to address Scotland’s unacceptably low CAP funding. It is clear that Scotland’s priorities are not Westminster’s priorities, but Westminster’s ministers represent us in Europe.
- Alex Fergusson:
Will Rob Gibson take a brief intervention?
- Rob Gibson:
I have hardly started, but I will.
- Alex Fergusson:
It is better to take interventions early.
If what Mr Gibson said about the budget deal is the case, why did the cabinet secretary describe the deal that came back from Brussels as a good deal for Scotland?
- Rob Gibson:
The cabinet secretary was talking about the bits that we got into the deal in relation to dealing with active farming, the Scottish clause and so on—that is a win in a limited field of opportunity.
The UK Government did not fight for a better allocation of funding for pillar 1 and pillar 2 funds. Scotland has demanded an uplift in our rural development budgets; after all, we have the lowest budgets not just in the UK but in the whole of Europe. However, unlike how 16 other countries negotiated their deals, the UK failed to negotiate a special uplift or a fairer share for Scotland. That surely is a matter for deep concern across the Parliament.
To retain active agriculture and keep our land productive, maintain food production, safeguard our environment, remain competitive and maintain populations living in our rural communities, the settled view of Scotland is that we need on-going support from Europe. However the UK position is to end direct support for Scottish agriculture, in particular pillar 1 support. There is therefore a clash between the whole Scottish community and the way some parties in here wish to portray the motion. In order to reverse the decline in livestock numbers, to keep cattle and sheep on our hills, to protect our red meat supply chain and to produce for the domestic and export markets, Scotland wants the option of coupled support, but the UK position is that there should be no coupled support, so that is another fault line in the story.
Scotland is demanding that our cast-iron case for a fair share of the EU farming budget be recognised, but it has not been recognised in London. We receive the fourth-lowest level of payments in Europe, but the UK position is that the case has not been proved. Indeed, the UK is trying to invent other formulae to try to siphon away money that should be Scotland’s. When the cabinet secretary talked about stealing money, he was alluding to the danger that came from the mouth of Owen Paterson, the UK Secretary of State for Environment, Food and Rural Affairs. He came to the Rural Affairs, Climate Change and Environment Committee on 12 June this year and said:
“I came in in September with a clear remit from the Prime Minister to grow the rural economy ... and to improve the environment”.
If he is intent on doing that for Scotland’s rural economy, he must prove that he is going to put in place the mechanisms that will allow us to grow it.
Mr Paterson also said:
“Working with ministers in the devolved Administrations, we have a huge role in helping to grow the farming and food production sector”
but how can we do that if there are no coupled payments and no proper supply of red meat? He said:
“I think that we have pretty much got an awful lot of what”
I totally disagree. We did not get what we wanted because we still have the lowest payments in Europe.
Mr Paterson also said,
“The days of significant public support leading to the production of unwanted food products are gone, and my whole drive throughout the reform is to keep the CAP moving in the right direction”—[Official Report, Rural Affairs, Climate Change and Environment Committee, 12 June 2013; c 2369-74.]—
In other words, it is moving downwards and certainly not in support of the development of our rural economy. At a time when people are lining up to get food from food banks, the secretary of state in London is talking about “unwanted food” production. Surely there is an appalling disconnect in that respect. After all, this country would like to be able to feed all its people.
As I have said, Owen Paterson opposes pillar 1 support and thinks that we should rely on the market. However, he fails to see that coupled payments for cattle are key to protecting our biodiversity because they keep cattle on the hills and the machair. As a result, we need a strong pillar 1 alongside pillar 2 aims for public good.
Mr Paterson also recently described global warming as positive. That is incredible, particularly as our biodiversity is hugely threatened by global warming. Indeed, on Monday, The Guardian reported his praise of the alleged positives that will come from global warming. As the secretary of state in charge of tackling climate change at UK level, he should be well aware of the deeply damaging impact climate change will have at home and abroad, not least when it comes to our farming.
Unfortunately, Owen Paterson’s office has informed us that he will not be able to attend our committee as all his Wednesdays and Thursdays this side of Christmas are taken up. His diary is full. However, our demands remain unmet so I ask Parliament to support the motion, which gets to the heart of the matter and evolves a policy that can take Scotland’s food and drink forward.
- David Stewart (Highlands and Islands) (Lab):
President Dwight Eisenhower famously said:
“Farming looks mighty easy when your plow is a pencil, and you’re a thousand miles from the corn field.”
It is of course tempting to draw a comparison with the architects of the new CAP. Just when we all get to grips with the four-axis model, the European Commission comes along and abolishes them. However, complexity and timescale do not negate importance.
Although I welcome the final agreement on the new CAP, I share the frustration of many people—not least some members who have spoken before me—that the policy has taken so long to agree and we are still months away from completion. In fairness, however, I welcome the cabinet secretary’s £70 million allocation from his portfolio’s draft budget to fund effectively the transition between the two programs, which will up to a point mitigate the uncertainly of EU delays.
As we know, the new CAP is crucial for farmers and rural communities. The agricultural sector’s needs are in many ways critical to Scotland‘s future and it is essential that the SRDP be tailored to the reality of modern life in rural Scotland, with its rich diversity of individuals, enterprises and communities. The Scottish Agricultural College’s “2012: Rural Scotland in Focus” report reflected that diversity and called for Government policies to be tailored to the wider reality of rural Scotland. In a similar vein, the Carnegie UK Trust report, “Future Directions in Rural Development”, echoed views that were expressed by organisations such as the Scottish Council for Voluntary Organisations in calling for greater investment in capacity building and networking at community level.
As we have heard, the new SRDP has the potential to benefit not just the farming industry and Scotland‘s environment, but Scotland‘s rural communities. The toolkit contains community-led local development strategies such as LEADER and an extended and improved Scottish national rural network.
It is essential that when we address the CAP’s complex technicalities—which many members, not least the cabinet secretary, have referred to—we do not lose sight of the vital dimension of its being intended to be a policy that benefits all who live in rural Scotland.
I will focus my remarks on the pillar 2 rural development programme, but it is perhaps worth pausing for a second to look back into history. As we all know, agricultural support—more specifically, support for farmers in the development of agricultural produce for the export market—was, arguably, an early driver for the treaty of Rome in 1957. As members also know, the powerful dynamic between France and Germany, which is reflected in foreign affairs and defence, demonstrates the strength of the relationship between those countries. That presents major challenges for us all in review, reform and renewal of the CAP.
One of the bigger questions this afternoon, which Rob Gibson touched on, is the question about why we need public support for agriculture. We know the international picture, which is of a crisis in global food prices and inflation that has led to food riots in nearly every continent apart from Europe. In addition, instability in the middle east has hit the price of oil and has affected transport and fertiliser costs. The key point is that security of supply is not just about the energy markets; it is a key element in the CAP as well.
We would probably need the foresight of the Brahan seer to predict exactly what the Scottish allocation of the CAP is going to be, but we know, as has been pointed out in the debate, that there has been an overall cut in the EU budget and in the overall CAP budget, of 11 per cent and 12 per cent in pillar 1 and pillar 2 respectively. However, Scotland can gain, due to the external convergence mechanism, which is an EU-wide device for boosting direct payments for the recipients of the lowest amounts. The new deal allows much more flexibility for member states to move funds from one pillar to another through modulation, as Alex Fergusson touched on. That will support much-needed rural development. Perhaps the cabinet secretary, in his winding-up speech—if he is paying attention—could say whether he plans to use the full 15 per cent voluntary modulation from pillar 1 to pillar 2.
Pillar 2 rural development programmes must be linked to the six key priorities, which include enhancing competitiveness, promoting ecosystems, developing social inclusion and reducing poverty. The new arrangements will allow much more flexibility in how money is spent by individual member states. Pillar 2 has a crucial role to play in supporting and developing the delivery of public goods and services by agriculture, although as a number of members have stated—not least the cabinet secretary—the UK receives the lowest share of all EU member states, and Scotland has the lowest share of the four countries in the UK. The new arrangements allow for sub-programmes in a future SRDP, which could help to fund vital programmes that will help with existing and new crofter schemes, particularly those for new entrants.
After a recent meeting that I had with the Crofting Commission, it is clear to me that there are growing concerns in crofting communities about how much real money will be allocated to the new crofters programme. Perhaps the cabinet secretary could give some assurances on that when he winds up.
I want a future rural development programme that encompasses strong environmental stewardship, that works actively to secure biodiversity and manage landscapes and habitats, and that stresses the needs of people in rural and remote areas. Rural development needs people’s intelligence and individuality. The acid test will be how the CAP delivers for our most fragile and remote rural areas.
- The Deputy Presiding Officer:
I call Angus MacDonald, to be followed by Graeme Dey. We have a small amount of time in hand for interventions.
- Angus MacDonald (Falkirk East) (SNP):
As we have heard from the cabinet secretary, the long-drawn-out saga of CAP reform is finally reaching a close, with a vote in the European Parliament in mid-November and, finally, adoption by the Council of the European Union at the end of November or in December. I am sure that every farmer and crofter in the land will breathe a sigh of relief when that happens.
Last week, The Scottish Farmer welcomed the CAP agreement on the finer details with the headline “Over to you, ScotGov”, as Alex Fergusson has already mentioned. That is fair enough: it is indeed now up to the Scottish Government to get the best fit for Scotland’s agricultural and rural needs. It is not fair, however, that the Scottish Government is having to do that with one hand tied behind its back. Despite the Scottish Government’s success in negotiating provisions that meet Scotland’s needs on new entrants, active farming and increased flexibilities, without a seat at the top table Scotland has lost out.
We fare badly in both pillars of CAP spending. In pillar 1, we receive €597 million a year, which equates to €130 per hectare, compared with the UK average of €229 and the EU average of €268. In comparison with all EU member states, we have the fourth-lowest pillar 1 payment per hectare, above only Estonia, Latvia and Romania. If Scotland was a member state in its own right, we would have qualified for increased pillar 1 payments worth €1 billion extra up to 2020, and we would have been able to negotiate improved pillar 2 rural funding.
In pillar 2, Scotland fares even worse. Scotland receives about €360 million over seven years, which is only €9 per hectare—the lowest rate in the whole of the EU. The rate is €15 per hectare for the UK and €115 per hectare for the EU.
We do not yet know what Scotland’s share of the UK rural development budget will be for 2014 to 2020, but the UK allocation of €350 million in 2014 will fall to €306 million by 2020—only €20 per hectare in 2014, which is the worst rate in Europe. If that is the best that better together can do, you can keep it.
- Claire Baker:
Will the member take an intervention?
- Angus MacDonald:
Sorry. I have a lot to get into my six minutes.
Ireland gets €70 per hectare, Finland gets €138 and the Czech Republic gets €83.
With friends like the UK Government negotiating for us at the top table, members would be forgiven for wondering who needs enemies.
Of course, it gets worse. As we heard from UK environment secretary Owen Paterson when he appeared before our RACCE committee before the summer recess, there is little chance of our getting the full £60 million that the UK Government will receive as a result of CAP convergence, because of Scotland’s figures in relation to the uplift in CAP funds. Of course, the UK Government will receive the money only because Scotland remains, for now, part of the UK.
Perhaps the cabinet secretary can give us good news on that front in his closing speech. However, given Owen Paterson’s pronouncements in recent days, which ranged from welcoming the benefits of global warming to talking about ending direct support completely, I do not hold out much hope of that.
The UK Government is not only representing us poorly in Brussels but withholding funding that is rightly Scotland’s. It has a track record on that, given its point-blank refusal to return the £1.4 million red meat levy that Scottish livestock producers pay annually in relation to stock that are killed south of the border.
It is clear that Scotland’s priorities are not Westminster’s. However, Westminster ministers negotiate on our behalf and have singularly failed to fight for a better allocation of funding in pillar 1 and pillar 2.
I do not want my speech to be a moanfest. On a more positive note, I was pleased to hear my colleague and RACCE committee convener, Rob Gibson, mention crofting. We must ensure that crofters’ voices are heard when the finer details of support in Scotland are being decided. It is important that crofters are fully consulted on the detailed plans for pillars 1 and 2 when consultations with stakeholders take place later in the year.
In my speech in last year’s debate on the CAP, I warned that Scotland’s beef farmers were facing a challenge that could lead to a beef exodus. According to the most recent figures from Quality Meat Scotland, every suckler cow loses £130 per year before support payments are accounted for. If that continues, we will reach a stage at which no cows graze the hills and uplands and no calves come forward to supply lowland beef finishers. That will cut the supply of Scotch beef to consumers.
It is clear that the best way to ensure a viable future for suckler beef production is to channel support into production of beef calves. That, with proper stocking rates, will maintain the upland environment and rural communities.
The problem is not just with suckler herds. If members travel around the outer Hebrides, they will see common grazings that are bereft of sheep, on hills where flocks of sheep would have been grazing 20 years ago. Tavish Scott talked about that.
The Scottish Crofting Federation, at its recent conference in Stornoway, considered how the CAP, including the SRDP, and developments such as community renewable energy projects, could help to revive the use of common grazings and realise their huge potential for crofting communities. Common grazings make up nearly 600,000 hectares of land under crofting tenure, but they have been underused and even abandoned in some areas.
That trend must be reversed. Grazing such land in a controlled way protects the land, increases biodiversity and keeps the land accessible. There is an opportunity to reverse the retreat from the hills through imaginative initiatives, and I look forward to the crofting communities and organisations putting forward ideas in the coming months.
I had other comments to make, but time is running out. The Scottish Government is doing what it can do, but it is clear that the Westminster Government could not care less about Scotland’s farmers. Only with independence will Scotland have the powers that it needs to secure a fair deal for our Scottish farmers.
- The Deputy Presiding Officer:
There is a bit of extra time for members who want to take interventions.
- Graeme Dey (Angus South) (SNP):
I begin my speech by focusing on pillar 2 and how, from a greatly reduced funding pot, it will be made to work to deliver for rural Scotland. By rural Scotland, I do not just mean the farming sector, because there is more—much more—to rural Scotland than farming or indeed forestry, hugely important though both are. We are told that only about 17 per cent of people who live in rural Scotland make their living from farming, and 16 per cent from forestry. That means that up to two thirds of the rural population—at least, those who are in employment—may be engaged in activities that are not necessarily traditionally rural.
- David Stewart:
I strongly support the point that the member is making about rural development, but does he share my view that a maximum modulation of 15 per cent from pillar 1 to pillar 2 is something that we should be aiming for?
- Graeme Dey:
I think that there is a balance to be struck in that regard.
Within that figure will be people who commute to towns and cities to earn their living but, given the huge investment that is being made in delivering an acceptable standard of broadband to rural parts of our country, we must ensure that SRDP funding continues to encourage people to set up all sorts of businesses and helps to sustain existing businesses in a rural setting, thereby supporting local economies and reducing carbon dioxide emissions through lowering car miles.
Pillar 2 is there to support things such as LFASS and new entrants and much of it will go to the farming sector but, contrary to what some in agriculture seem to think, it is not exclusively for supporting farming. Pillar 1 is there exclusively to provide support for farming, but pillar 2 is there for a wide range of activities. However, perusing the latest edition of the NFUS’s Scottish Farming Leader, I was struck by an article on the CAP that insisted that, if the Scottish Government was to transfer funds from pillar 1 to pillar 2, that should be matched and the combined sums channelled towards accessible and practical measures that underpin farming and crofting.
I entirely appreciate that the NFUS is going to fight its members’ corner, but I cannot help but feel that those demands betray a belief that pillar 2 is—if not quite lock, stock and barrel, then not far off it—there for farmers to access. Actually, it is also there to support programmes such as LEADER and other lifeline funding for rural areas. The situation regarding transition arrangements for LEADER is concerning given that it gave out, I think, £12 million in the last financial year.
The nature of what the SRDP is for was reinforced in the Parliament building on Tuesday evening, when the cross-party group on rural policy received a briefing from Mike Mackenzie of the European Commission’s directorate-general for agriculture and rural development, who works within the unit that deals with the fundamental principles and structures of the EU’s rural development policy. He made it clear that the rural development policy from 2014 to 2020 must
“achieve a balanced territorial development of rural economies and communities including the creation and maintenance of employment”
and that included among the six Union priorities is
“economic development in rural areas”.
I speak as an MSP for just such a rural area—one where farming is hugely important, but one that has also seen vital support given to non-agricultural businesses. They include the prospering quarrying company whose £1.2 million new processing plant and offices I had the pleasure of opening. As the only source of quarried Angus sandstone, it employs about 20 full-timers and it is looking to develop a training programme. We also have a small architectural business that, with the help of grant aid from the SRDP, is building a brand new headquarters in a rural setting and aiming to double its workforce, keeping young, newly qualified architects in the rural communities that they come from.
The Scottish Government has spent the past 18 months consulting stakeholders on the next SRDP, and a second, more detailed consultation will follow. I welcome the cabinet secretary’s confirmation in opening the debate that the SRDP has a wider role than simply supporting farming. However, it would be helpful if, in his closing remarks, he could shed some light on how he will seek to ensure that we continue to encourage and support non-farming and non-forestry businesses to locate or remain in rural settings.
There are so many important aspects of the CAP that each member who participates in the debate could choose just one or two to cover in their speech and a number of aspects would be left untouched, but we cannot get away from the fundamental issue of funding. By any determination, the position in which Scotland finds itself is unacceptable. The facts are there. The funding situation and, in particular, the prospect of Scotland not receiving the full external convergence uplift that the UK received only because of Scotland—it would be worth about €11 million in 2014, rising to €60 million in 2019—are gross wrongs.
It is not only SNP members of the Rural Affairs, Climate Change and Environment Committee who have recognised the inherent unfairness that is at work here. Alex Fergusson reiterated his worries today. However, it seems that Mr Paterson is not listening. When he was in front of the committee, his message was essentially to tell Scotland that it would get what it was getting and it should concentrate on how it would spent that.
In winding up, I want to look over the horizon to the next CAP, because it is possible to look beyond 2020 and see what the future holds if we remain within the union—the union with England, that is. In considering the forthcoming CAP, one should not lose sight of what is coming down the track beyond that if Scotland remains in the UK and the UK remains in Europe. I recognise that I am speculating, but let us assume that the Conservatives, maybe propped up by the Lib Dems and maybe not, are still in power at Westminster. The Scottish Parliament, just a few months ago, was given a telling insight into what the future would hold for our agriculture sector when Owen Paterson appeared before the committee.
The secretary of state—let us give him credit for candour—was quite clear in his view on direct support for Scotland’s farmers. If the UK remains part of Europe, he at the very least wants to reduce that support greatly, which would be seriously bad news for Scotland. Claire Baker suggested that any hiatus in direct payments would be problematic for Scotland’s farmers. How damaging would removing them be when, as Alex Fergusson pointed out to Owen Paterson at the committee, pillar 1 spending is incredibly important to Scotland?
To be accurate, Mr Paterson believes that there is a role for continuing to compensate farmers for environmental benefit, and he has indicated that he would direct some of the money saved to research and marketing. Specifically, he is on record expressing the belief that a proportion of the money saved by slashing support to Scotland’s farmers would be better deployed supporting England’s wine industry, of which he is a fan. The truth is that slashing direct support would be hugely harmful to Scottish farming, although his honesty is welcome in the context of the independence debate.
In agriculture, as in so many other walks of life, the situation is evidence based and clear. Scotland’s best interests are not served by remaining a part of the UK.
- Jayne Baxter (Mid Scotland and Fife) (Lab):
It does not seem so long ago that we were gathered here to discuss the common agricultural policy reform proposals, but it has in fact been more than six months since we last debated the matter. Then, as now, discussion around the detail of the CAP negotiations engaged all sides of the chamber, as we worked towards pinpointing the best outcomes for farmers and for the agricultural sector in Scotland.
As dry and technical as the common agricultural policy can be, it underpins a number of issues of fundamental importance to Scotland’s future, namely the production and sustainability of our food and drink supply, the need to protect the environment for future generations, and the need to maximise the opportunities from all those things in the context of sustainable economic development and the climate change challenge.
Those points were put to me again last week by the Game and Wildlife Conservation Trust. The reality is that we need modern agriculture and increased productivity from our farms to meet the demands for feeding our population. However, without due care and attention, large-scale farming can lack the biodiversity that we need to support wildlife, water conservation and carbon storage, as the Game and Wildlife Conservation Trust has pointed out. The Parliament also considered such matters of biodiversity when we took time to discuss the consultation document “2020 Challenge for Scotland’s Biodiversity” before the summer recess, so I hope that the same attention is paid to those issues as the Scottish Government begins to implement the finer points of the CAP agreement in future.
A few weeks ago, the Rural Affairs, Climate Change and Environment Committee took evidence from the Cabinet Secretary for Rural Affairs and the Environment, Richard Lochhead, on a number of issues, including CAP reform. In his opening evidence to the committee, the cabinet secretary was able to highlight some of the potential issues for farmers around the changes to pillar 1 payments, and he has revisited that topic today.
We are talking about reforms of complex subsidies, and the cabinet secretary has highlighted the concerns of farmers from the beef sector about the move from historical payments to area payments and the potential that they may miss out as a result of future changes. Conversely, however, such a move to area payments under the new process would seem to be good for farmers who have previously been sidelined from single farm payments, such as deer farmers. I know that members on all sides of the chamber have assiduously pursued the case for those farmers in the past.
Previously, we expressed concern that the changes to pillar 1 payments coming into force in 2015 would leave some farmers in limbo for the year in between, so it is good to have confirmation that 2014 will be a transitional year, before the changes come into play. The Labour amendment recognises the extremely tight timescale for the introduction of the new payment systems, especially for pillar 1, so it is important that the changes that will come into force are clearly explained to all in the farming communities and beyond, so that we know where we stand.
There will always be tensions between different sections of the same industry when competing for support or funding, but I recognise some of the concerns that have been raised by many bodies, including the National Sheep Association in Scotland, about the uncertainty of the changeover from single farm payments to area payments. I would be grateful if, in closing, the minister could address concerns from hill farmers about potentially huge disparities in payments between lowland arable farms, and hill farms and crofts, under the switch to area payments.
I also look forward to seeing how the Scottish Government will support the new greening requirements being placed on farmers, which are such an integral part of the reforms, given that 30 per cent of the allocation under pillar 1 payments is to be spent on practices that support environmental improvements.
It is interesting, but not surprising, that all the amendments before us, although varying slightly in form and content, seek to revise the section of the motion that makes assumptions about the money that Scotland could have been able to qualify for, had it been an independent member state. We are of course used to the Scottish Government telling us that the grass will be greener on the other side of the independence referendum, but it seems an unnecessarily speculative detail in this debate as it is too dependent on the unresolved issue of what would happen to Scotland’s EU membership post-independence. As I said back in March, it is difficult for farmers to receive direct payments from the European Commission when their Government is still negotiating their country’s accession terms. I would prefer to fix our focus on the realities of the system that we are in.
I am pleased that we are in the final stages of the CAP discussions. As I said before, I hope that we are able, as the Labour amendment suggests, to approach the implementation of the new agreement fairly while maintaining a mature dialogue on this issue.
- Nigel Don (Angus North and Mearns) (SNP):
I will start by looking at the Scottish Government’s objectives in the CAP process. As the cabinet secretary has already alluded to, those are to continue to support active and productive agriculture so that we can continue to produce food, which I think we would all sign up for, and to meet our environmental obligations, which I think we would also regard as the absolute minimum. The more we can do to improve our environment, surely the better things will be for all of us who live here and, in particular, for those who live in rural environments and those involved in tourism and the other industries that depend on it.
As the cabinet secretary has already alluded to, the negotiating stance has been to get flexibility, so that Scotland can provide a fairer distribution of the money that comes here, to end slipper farming, to allow new entrants to get money earlier and, as far as possible, to protect coupled support for livestock, for the reasons already given.
What would also have been nice would have been to negotiate a fair share of the European pot for Scotland. I want to tackle this head on, hopefully in terms that will not raise too many hackles. Early in the debate, Alex Fergusson rightly pointed out that we really should be talking about what we can do with flexibility and how we can use it wisely. I have no doubt that the cabinet secretary and his staff will endeavour to do so and I have no doubt that the consultation that they will be going through will enable them to get the view of those who are involved and that they will implement things as best they can.
What I would like to reflect on is the process that we have just been through and on what might have been slightly different. Of course the distribution of what we now have matters, but so does the total. The total amount of money that comes into the Scottish economy is, one way or another, money in the Scottish economy.
Let me go back to the political environment in which we are operating. As a region of the UK we have six MEPs. Were we an independent member state, such as Denmark, which is of comparable size, we might have 13 MEPs. Does that matter? Yes it does, because they would be on committees and they would be able to talk to people; they would actually exercise some influence, as MEPs do. We would be in a better place. As members are very well aware, we would of course have a seat at the council table and we would periodically have the opportunity to have the presidency, which means that we would be setting the agenda. It seems to me that that is very important.
Let me compare that with the United Kingdom’s stated objectives. When the Rt Hon Owen Paterson MP came to talk to the Rural Affairs, Climate Change and Environment Committee he said, as well as the other things that have already been quoted, that his objectives were
“to grow the rural economy and to improve the environment”.
That is exactly the same kind of idea that the Scottish Government has. We do not fall out at that point. As Graeme Dey and perhaps others have said, Owen Paterson is not so keen on pillar 1 direct payments.
On pillar 2 payments, Owen Paterson said:
“I am an enthusiast for the benefits that our pillar 2 schemes bring. I think that we can look the British taxpayer in the eye and say that we are bringing them environmental benefits that would not normally be provided through a market mechanism and which have real value.”—[Official Report, Rural Affairs, Climate Change and Environment Committee, 12 June 2013; c 2639 and 2386.]
All of us—Tory or otherwise—can say aye to that. Even in Owen Paterson’s economy, pillar 2 payments have a clear benefit. There is a clear benefit from money going into the rural economy.
Given that, why did Owen Paterson not join 16 other countries in getting an uplift of the pillar 2 payment? I do not know. In paragraph 72 of EUCO 37/13, which was produced in Brussels on 8 February, I find big nations among the 16 countries—the cabinet secretary referred to some of them and I will not name them all, although that is tempting. I find France negotiating €1 billion, Italy €1.5 billion and Spain €500 million. There is certainly no difficulty in being a big country when negotiating, but the UK appears not to have thought that it was a good idea to bring more money into the UK, never mind Scotland. That is astonishing. To echo Angus MacDonald, all I can say is that if that is the UK’s approach, the faster we are independent, the better.
The point has been made that, as a member state, Scotland would—like any other member state—get an uplift to €196 per hectare in direct payments by 2020. We have heard that that would be worth about £1 billion over the period between 2015 and 2020. If we assume that my mathematics is half decent, that would be about £140 million per year.
I leave members with a statistic. Current figures suggest that about 68,000 people work in the Scottish agricultural sector—that is not the number of farms but the number of people. If I round that up to 70,000, and if the other figure is rounded to £140 million, elementary arithmetic tells me that that would be worth £2,000 for every person in the industry in Scotland every year. We do not seem to have got that money, but we should have had it.
Claire Baker and Jayne Baxter talked about uncertainties in relation to the European Union. I make the point to them that they and I are European citizens. That European citizenship will not go away because of constitutional change in the UK. It is clear that negotiation will have to go on, but we will not be new entrants to the European Union. That is a complete myth and the sooner people stop peddling it, the better.
- Mike MacKenzie (Highlands and Islands) (SNP):
I am glad to have the opportunity to speak in the debate, as farming remains a crucial part of the economy of the Highlands and Islands. In many of our most isolated and remote communities, farming is still the only mainstay of the economy.
Farming is important not just for economic reasons; in many ways, it has defined and shaped rural life and it is deeply embedded in our culture. Most importantly, our farmers have been the custodians of our landscape for thousands of years. They have shaped and maintained it for all of us to enjoy.
We have recently debated wild land in the Parliament. Interestingly, a few months ago, I asked Andrew Thin of Scottish Natural Heritage to tell me where the wild land is. Despite knowing the Highlands and Islands well, I am unaware of any land that has not been worked over in some way by the hand of man in the past 10,000 years or so. His reply suggested that what I suspected was correct: there is no wild land in Scotland. The vast majority of our land is fully tamed and in the care of our farmers.
I know a few isolated and desolate spots that are uncared for. They are inhospitable and desperate places of impenetrable undergrowth or impassable bogs that are virtually impossible to traverse. Anyone who knows much about our history will understand that we do not have to go far back to find a time when much more of our countryside was like that.
It is thanks only to our farmers that it has been tamed into something that now looks good on postcards and offers opportunities for recreation. Anyone who has doubts about that has only to consider the rampant and unfettered growth of trees and undergrowth along many of our rural roadsides that has sprung up in recent years. Across much of the Highlands, many of our best views and vistas are screened by this untrammelled growth, which is, ironically, much worse when tourists are about in summer and the undergrowth is in leaf. I see Mr McGrigor nodding; he knows exactly what I mean.
The one scenic railway journey from Glasgow to Oban predominantly offers views of the rampant growth of willows and birch. As sheep numbers decline, we have seen in some areas an explosion of bracken, which is a noxious weed that cannot be controlled unless there is an economic reason for doing so. That is what happens when land is not cared for, and it is part of what is threatened if our farmers are not supported.
The difficulty that our farming industry has faced in recent years is perhaps most accurately expressed by the high levels of suicide among our farmers. Few rural communities have not been touched by the dreadful spectre of suicide and all that it entails. There is no doubt that we need to support our farmers, and there is no doubt that farmers in Scotland face many challenges undreamt of by the UK Government that purports to represent them.
Thanks to the remarkable energy of the cabinet secretary, our farmers at least have a partial voice in Europe. Thanks to our cabinet secretary, we now have a very successful food and drink strategy that significantly adds value to our farmers’ produce and to our rural economies. Thanks to our cabinet secretary, we now know that Scotland’s farmers would be much better off if we were independent within Europe, with subsidies between 2015 and 2020 worth more than €1 billion more than if we continue as part of the UK. The supporting arithmetic for that calculation is straightforward and compelling.
We in Scotland understand our farming industry and what it requires to make it thrive so that our farmers can continue to play their part as the backbone of our rural economies and the custodians of our landscapes. That accords well with that self-evident principle that decisions are best taken by those who understand them and are closest to them, and that all decisions about Scotland are best taken here in this Parliament with proper representation in Europe and the full powers of independence.
- Alison Johnstone (Lothian) (Green):
Scotland gets a bad deal from the common agricultural policy. Many members have already expressed frustration at that and I share their concerns. It is patently unfair for Scotland to receive such low funds relative to others in Europe. Relative to others in the UK, we also receive less. Scotland’s high percentage of rough grazing is part of the reason.
CAP subsidy is geared towards farms that already have the best chance of being profitable. If the CAP continues to reward those on the best land, Scotland will continue to lose out. Scotland, in contrast, is in an excellent position to argue that subsidies should be delivering profitable farms in tandem with the marginal and most biodiverse land. That is a big shift away from the argument for ever more direct payments and towards a CAP that delivers subsidy that is based on the public good.
I am pleased to say that the Scottish Government follows much of that argument. Area-based payments and the eradication of slipper farming are clearly sensible moves. The continuing modulation from pillar 1 to pillar 2 allows more targeted support and will deliver more public good for the public subsidy. At the European level, the principle has finally been established that pillar 1 subsidy should depend on outcomes that benefit the public good.
However, Green colleagues in Europe describe the reform as a massive missed opportunity that failed to deliver a fairer distribution of funds and does not deliver all that it might for the environment. Although 30 per cent of pillar 1 will be tied to greening, the measures are modest. They mean that most farms in Scotland will not have to do anything additional. It was important to ensure that a one-size-fits-all approach to greening did not hit Scotland’s diverse sector, but biodiversity is in critical decline and CAP greening measures should be one tool to help reverse the trend.
Scotland will be allowed to use 8 per cent in coupled payments, but I agree with the Government that there should be scope to do more. Coupled payments could also be tied more closely to agri-environmental outcomes. The lack of a real cap on large payments means that funds will not be available to help smaller farms and new entrants. Despite receiving support, they will continue to find it hard to break through and make a success of new enterprises.
I mentioned Scotland’s large percentage of rough grazing. I wanted to link back to that as I talk about crofting. There is no crofting in the region that I represent—Lothian—but colleagues in the Independent/Green group have asked me to speak on the issue. Crofting is extremely important to the Highlands, where it maintains the communities in our most remote areas.
The crofters’ conference that was held in Stornoway last month highlighted the plight of common grazings—rough grazing land that extends to half a million hectares. Many people feel that common grazings are ignored by the CAP and that they are underused or are being abandoned in many areas because the support that is available to livestock producers is too small. It is important that more attention is paid to common grazings and to crofting in general. Managed grazing can promote biodiversity, maintain the peatlands and enhance the land’s high nature value, as well as provide profitable high-quality livestock. The move to area-based payments is an opportunity to ensure that rough grazing, high nature-value farming and extensive livestock production are supported, because they are vulnerable but environmentally important.
A significant pillar 1 move to supporting farms on more marginal land leaves open an opportunity to use funds that have been allocated to least favoured areas to support more spending on agri-environmental and organic measures. I urge the Government to look at that. I support Scottish Environment LINK in its calls for 50 per cent of the SRDP fund to be allocated to agri-environmental, organic and forestry schemes. A move in pillar 1 to more marginal land support would allow that happen.
Scotland has great potential to produce more diverse, local and organic food. While we continue—rightly—to campaign for improvements in CAP, we must continue to do all that we can under the current arrangement to encourage and increase such production, as the benefits that it brings to local communities and local economies are significant.
I thank Scottish Environment LINK for its briefing and its calls to ensure that the move to regionalised payments improves the level of basic payment support to high nature-value farming and extensive livestock production, which are economically vulnerable but—as I have said—extremely environmentally important; and to improve the prioritisation and targeting of the SRDP, with increased funding being allocated to advice.
The Parliament may not vote as one at decision time, but I am absolutely certain that we all recognise the need for a sustainable future to be provided for our rural communities, our world-renowned countryside and our environment.
- Clare Adamson (Central Scotland) (SNP):
I was born in the decade of the inception of CAP, which brings to mind the old Benjamin Franklin quotation about there being nothing surer than death and taxes. Perhaps it should be, “There is nothing surer than death, taxes and calls for CAP reform.” I suppose that we should put on record that we are thankful that an agreement on CAP reform was reached in June of this year.
However, the question that we should be asking is whether that agreement is the best that we can do for our farmers. Claire Baker was right to commend farmers. To continue the theme of my colleague Mike MacKenzie, I would like to talk about farmers and what they mean to us. Given that the debate is a technical one that relates to an extremely complicated piece of European policy that is full of pillar 1 and pillar 2 jargon, and which alludes to slipper farmers and sofa farmers, it would be easy to become detached from the issue.
Therefore, I want to talk about the humanity of farmers, which I have been reminded of twice this week. At a Scots Language Society event, I had the absolute pleasure of hearing a great young folk talent, Kirsty Law, singing one of her own compositions, in which she told the story of the horrendous impact that the winter had on hill farmers, shepherds and crofters. That took me back vividly to the heart-rending news reports of broken-hearted farmers and crofters who were losing their livestock. I fully concur with her message in that song that people like me who live and work in sanitised, centrally heated homes and offices can have no understanding of the hardship and rigour of farming life during weather extremes, floods and disasters.
Yesterday evening, I chaired a meeting of the cross-party group on accident prevention and safety awareness. During one of the excellent presentations on accident statistics, Alistair McNab of the Health and Safety Executive highlighted the improving trends in work-related accidents and deaths, but reminded us that the agriculture sector still has the highest incidence of deaths and accidental injuries in Scotland. There are eight deaths per 100,000 workers in that industry, and the sector is proving to be the most difficult in which to deal with the issue. We must improve on that, and make substantial and measurable improvements.
That hides the fact that many children of farmers and farm workers live and work in those challenging environments. Those environments are their homes. All too often, we have heard of children’s tragic accidents in farm environments. Farmers and their families pay a huge price for us every day of their lives, so we should hold our farmers who live and work in the sector in our hearts as we ask the question: is this the best we can do for our farmers?
In his Royal Highland Show address this year, the cabinet secretary said:
“To retain active agriculture, keep our land productive, maintain food production, safeguard our environment, remain competitive and maintain populations living in our rural communities, the settled view of Scotland is that we need ongoing support from Europe.”
I absolutely agree with him on that, and it was really good to hear that his priorities of new entrants, stopping the decline, removing red tape from the process and reducing the number of slipper farmers have by and large been achieved in some of the pillar 1 areas.
I want to talk about coupled support, which is one of the partial successes. Coupled support will be at 8 per cent for member states with previously low coupled support. In his Royal Highland Show address, the cabinet secretary said:
“To reverse the decline in livestock numbers, keep cattle and sheep on our hills, protect our red meat supply chain, and to produce for the domestic and export markets, Scotland wants the option of coupled support.”
We should welcome that partial success but, as Alison Johnstone said, it is simply not good enough.
Many of my colleagues have talked about the potential of independence and what it could mean if Scotland were a member state. Angus MacDonald listed how badly we have performed compared with some member states. Sixteen countries—Scotland not included—have managed to negotiate an uplift.
Research and development funding in Europe is structural funding. That is another area in respect of which we are constantly told that we are stronger in the UK, but where the UK leads at the moment, Scotland follows, by and large because of the Barnett formula. The UK spends 1.7 per cent of its gross domestic product on research and development. Research and development are crucial in all the areas that Jayne Baxter mentioned. They are crucial in biodiversity, carbon capture and animal husbandry. We could go on and on about how important diversity and innovation are. The European target for research is 3 per cent of GDP. We are hugely underperforming in that area. We often compare ourselves with the Nordic countries, and Sweden spends 3.4 per cent of its GDP on research and development. This is not just a matter of what happens within CAP funding; it is about every area in Europe in which we are underperforming and in which we could do much better as an independent Scotland. Jayne Baxter was living in the real world.
I return to the cabinet secretary’s Royal Highland Show address, in which he said:
“many businesses tell me that the biggest threat to our food and drink industry is indeed a forthcoming referendum—but not the one in 2014 but the UK’s proposed referendum on EU membership in 2017.”
I ask again: is this the best we can do for our farmers? I think not. Independence could do so much more.
- Elaine Murray (Dumfriesshire) (Lab):
Some people—nobody in the chamber, I imagine—might think that the CAP is of peripheral interest, but I was struck by the statistic that 77 per cent of the European Union landmass is defined as rural. Of that, 47 per cent is farmland and 30 per cent is forest, and half the European Union’s population lives in those rural areas. The CAP may involve huge sums of money and, either directly or indirectly, it affects a large proportion of Europe’s residents.
The European Parliament, commissioners and Council of Ministers announced agreement on reform of the CAP post 2013 on 26 June. According to the Commissioner for Agriculture and Rural Development at the time, the reformed CAP will
“make direct payments fairer and greener, strengthen the position of farmers within the food production chain and make the CAP more efficient and more transparent”.
Let us hope that that is, indeed, the case. As members have mentioned, aspects of the reform are welcome. However, experience of the previous CAP and the common fisheries policy suggests that we will not be able to make a judgment until we see how it works in practice.
The two pillars of support—direct support and rural development—will remain, despite earlier suggestions that direct support should be discontinued. I think that everyone in the chamber welcomes that. By 2019, no single member state will receive less than 75 per cent of the EU average, and subsidies will be levelled by subsidising acreage farmed rather than production. As the cabinet secretary informed us, member states will be able to offer further help to small and medium-sized farms by allocating higher levels of subsidy to the first hectares of a holding. By 2019, no farm will receive less than 60 per cent of the EU average subsidy disbursed in a single administrative area.
Unlike the current system of subsidy, which is based on land area and past subsidy levels, the new income support regime will be available only to active farmers. We all think that that is a welcome development. The suggestion is that landowners who engage in other, specified, non-farming activities should be excluded, but the problem with that is the potential for loopholes. I share the concerns that other members have expressed that that needs to be tightened up. We have also heard that measures can be taken to encourage young farmers to set up in business with a 25 per cent aid supplement for the first five years.
I welcome the fact that 30 per cent of direct payments will have to be linked to environmentally friendly farming practices such as crop diversification and the maintenance of permanent pasture. I also welcome the fact that 5 per cent—increasing to 7 per cent—of land will have to be left fallow to encourage wildlife and biodiversity or be subject to measures that deliver similar environmental benefits.
As David Stewart and Graeme Dey have said, for many in Scotland’s rural communities outwith those who are involved in active farming, the development and implementation of the Scotland rural development programme will probably have a greater impact, so that is what I will now focus on. Thirty per cent of the rural development programme will have to be allocated to agri-environmental measures, which will have to set and meet higher environmental protection targets. However, as the cabinet secretary will be aware, at the Convention of Scottish Local Authorities convention on 28 June, it was agreed that local government should be allocated at least a third of the 2014 to 2020 EU funds in order that councils can better decide how those funds might be prioritised for the benefit of their rural communities. Some members may dismiss that as COSLA always asking for more money, but I think that a genuine case can be built around that argument.
The reasoning behind that request from COSLA is that a reduction in CAP direct payments will have a particular impact on rural areas. Local authorities believe that one of the best ways to mitigate the effects of that reduction would be to ensure that the SRDP has sufficient flexibility to support economic and social programmes that are designed to address the needs and priorities of specific regions. In previous years, local communities have had limited access to rural and maritime programmes, which constitute 50 per cent of EU funding in Scotland. The current discussions offer an opportunity to reassess how spend could be reprofiled to address development and diversification needs and priorities in individual local authority areas and their rural and coastal communities. Structural, rural and maritime funds could complement one another in supporting activities in rural communities, such as community-led development, tackling deprivation, skills and training provision, and the provision of business support and other locally focused programmes.
For example, the EU specifies a 5 per cent minimum threshold for the LEADER initiative, but Governments can choose to allocate a higher percentage. I am told that €30 million of SRDP moneys that have not yet been allocated could be used to expand LEADER or to support rural business development through the business gateway.
Local authorities argue that, if too much EU funding is channelled through national agencies, the result will be uniform and inflexible arrangements that are unable to address the specific needs of different and diverse rural and coastal communities. Devolution to local authorities, COSLA argues, would deliver more tailored solutions, complement the community planning approach and accord with the Scottish Government’s own approach to its partnership agreements with local authorities.
I understand that early meetings are to be sought between COSLA spokespeople and the relevant cabinet secretaries Mr Lochhead, Ms Sturgeon and Mr Swinney. Therefore, I would be grateful if the cabinet secretary or the minister—I do not know which of them will sum up today’s debate—could advise whether any such meetings have been arranged to discuss the Scotland rural development programme.
Perhaps whoever is responding to the debate could also clarify what consideration is being given to a greater devolution of responsibility for administering the SRDP to local authority level. Obviously, any such change would need to happen within EU rules, but COSLA argues that its proposal would offer a more focused approach to addressing the differing needs of our rural and coastal communities. From Dumfries and Galloway to the north of Scotland, we have diverse rural communities with diverging needs. Local people could probably address those needs better than large national organisations or agencies, which may not reflect the needs of particular areas.
- Roderick Campbell (North East Fife) (SNP):
For those of us of a certain age, early debates about the common market were often bedevilled by discussions about the common agricultural policy and its inadequacies. The fact that the policy was designed to benefit poor peasant French farmers rather than efficient British farmers was a frequent claim, but we have not heard much about that in this afternoon’s debate. Today, Eurosceptics on the right of politics seem primarily concerned with the threat to the City of London from financial regulation and from Frankfurt itself. However, in reality we all know that the CAP still swallows up a substantial part of the EU budget and remains an important issue in the European debate.
We know of the cabinet secretary’s concern that, although he has had a reasonably high profile in fishing negotiations at European level, his position for agriculture has been significantly weaker. Giving evidence to the Rural Affairs, Climate Change and Environment Committee in June, Owen Paterson defended that position. With due respect to Mr Paterson, I think that I can do no better than to quote from the Official Report of the meeting. Mr Paterson said:
“Fishing is a bit different because the interests of all four parts of the UK are similar. In agriculture, all four parts are bit different.
Also, the agriculture issues are quite contentious. Without being brutal, the sheer physical circumstances of a bilateral mean that, when we are talking to the French or Germans in their languages, we do not have very long. There is not time to go into translation and I get more done by talking to them direct and then reporting back, as I do with Richard Lochhead. If he is there, we have a meeting back in the office of the United Kingdom permanent representation to the European Union and I will tell him what has happened.
All the ministers are very busy and there is not time to go into translations with some of them. We have to crack on, have a direct conversation with them and then come back. You must not underestimate the trouble to which I go to keep Richard Lochhead informed.”—[Official Report, Rural Affairs, Climate Change and Environment Committee, 12 June 2013; c 2383.]
Those words say it all. The approach adopted is not so much active participation as—dare I say it—a slightly patronising approach to sharing information. There is certainly not active engagement with Scotland’s cabinet secretary. I am aware that Owen Paterson was generally considered to have had a not unsuccessful time in his previous job as Secretary of State for Northern Ireland, but I am not sure that he has displayed that talent in dealing with Scotland in his current portfolio.
- Alex Fergusson:
If Owen Paterson was so neglectful of the needs of Scotland, why was he happy to negotiate 8 per cent for coupled payments, although he personally preferred not to have any coupled payments at all?
- Roderick Campbell:
I would not say that Owen Paterson was completely neglectful, but I was just highlighting the approach or style that he has adopted.
Agriculture remains of vital importance to Scotland, and changes to the CAP need to be properly addressed. Getting CAP reform right is important to the continued success of Scotland’s food and drink industry.
Others have drawn attention to the substantial difference that independence would make to pillar 1 funding, but I want to look principally at pillar 2. Over the past seven years, Scotland has received approximately €360 million in rural development funding, which is about €9 per hectare per year as against €15 per hectare for the UK as a whole. We are right at the bottom of the European league, as others have suggested, and we receive much less than the Czech Republic, Denmark and Ireland.
I accept, of course, that there may be historical reasons for our position. When the first EU multi-year rural development programme was worked out for 2000 to 2006, national allocations of spending were based on what national Governments spent at the time. In the case of the UK that was very little, especially for agriculture environment schemes and rural development. It is also true that, in order not to impact on the UK rebate, the UK has traditionally been keen on voluntary modulation from pillar 1 to pillar 2.
Mr Paterson was keen to tell this Parliament in June that the figures were settled and that how they are carved up—including the geographical areas in which they are distributed—is a matter for the Scottish ministers, but, with all due respect, if the pot is not big enough in the first place some of these choices may prove not to be real choices. Given the extent of less-favoured areas in Scotland, how much flexibility is there in that choice? It is to our great disadvantage that the UK failed to negotiate a special uplift or fairer share for Scotland.
The negotiations on a transfer from pillar 2 to pillar 1, under which the UK may have the potential for a 25 per cent transfer, might have been a success for the UK—and I accept that Owen Paterson does not favour such transfers—but it is hard to see that it is of benefit to Scotland; quite the reverse is the case. As Rob Gibson said, we know that 16 member states used the need for unanimous agreement to negotiate top-up funds for pillar 2. If it is good enough for Slovenia and Ireland, it is good enough for Scotland.
In respect of transition agreements, while I welcome the extension of agriculture environment contracts, the position on forestry payments and the extension of the less-favoured area support scheme, they do not detract from the big picture, which is that an independent Scotland could have done better. I am less than clear on where we are with the LEADER programme. I accept that the Scottish Government has an important role in negotiations and, like many members, I hear criticism of the bureaucracy of the programme, some of which may lie in Scotland. It does, however, represent a very small part of the overall budget for pillar 2 and should not detract from the overall argument that for Scotland’s best interests to be served it should have its own seat at the top table.
Our opponents take great delight in talking of the uncertainties of independence—let alone the uncertainties of the in-out referendum by 2017—while failing to acknowledge the certainty that in this area an independent Scotland could do so much better.
- Dennis Robertson (Aberdeenshire West) (SNP):
I have a great deal of admiration for the cabinet secretary and for other members who understand the complexities of CAP.
I have great sympathy for our farmers and their families who probably went into farming to make a livelihood, not to understand the complexities and red tape that are foisted on them by CAP. Some of our wealthier farmers can probably employ accountants and farm managers to look after that side of the business, but many farmers simply have to come to terms with its outcomes. Our farming community wants to know what will be there for it at the end of the day, to ensure that it can continue to farm and to help production by our food and drink industry.
I am fortunate to be in quite a diverse constituency, within which there is a great deal of farming. I have heard farmers ask whether it is right that decisions are made in Europe in the small hours of the morning when probably the last thing on negotiators’ minds is how to achieve the best outcomes for farmers rather than when they can get out of the room and to their beds. When in the future we consider the review of the CAP, we should perhaps think about how negotiations take place in Brussels and try to ensure that, when member states discuss the best way forward for our farming industry, they do so at a time that would be more productive for our farmers.
I smiled somewhat when Rod Campbell read from the Official Report of Owen Paterson’s evidence. I started to feel a little sorry for Mr Paterson because, although he was working so hard and was so busy, he managed to find just a little time in his schedule to inform—or was it to tell?—our cabinet secretary what was going on. I wonder whether, in that busy schedule, he found time to listen to what our cabinet secretary was asking for in terms of a fair deal for Scotland.
It appears that members present in the chamber are all supportive of a fairer deal for Scotland. If so, perhaps we should unite behind the cabinet secretary at decision time, because the only way that I can see for us and our farmers to get a fairer deal is for Scotland to be at the top table in Europe, making the decisions there and working with the other member states—not sitting outside the office of the UK secretary of state, waiting for him to return so that we can be informed of how the negotiations are going.
Our food and drink industry is extremely important to Scotland, but we must ensure that production continues and does so for the good of the people—I take that term from Alison Johnstone’s comments earlier—not only in the farming industry but in the wider communities of Scotland.
It should also continue for the good of our countryside. We need to ensure that our farming is supported so that we can ensure that our countryside—our Scotland—is a better place to live in, that it has diversity and that we achieve our climate change targets. However, to do that, we must ensure that the appropriate supports are given to those who look after our land.
Mike MacKenzie gave a picture-postcard image of Scotland in its full ruggedness and scenic beauty. That is Scotland. We have what we have and our farmers make the best of what we have. Our sheep farmers ensure that we make the best of our rugged Scotland. We have our cattle, deer and crops. Our whisky industry thrives on the production of good crops in Scotland and our exports to the rest of the world bring money back into our economy.
We support a huge rural society. Our rural communities are dependent on good farming for the future, and the future of our farming is dependent on a good future for our nation.
I do not believe that we have a fair deal. The best has not been done with the CAP. I welcome Alex Fergusson’s comments that he will do what he can to ensure that we get the appropriate uplift in the coupling. That is fantastic and I welcome it, but will Owen Paterson listen to Alex Fergusson when, at the end of the day, he is prepared only to tell our cabinet secretary the outcome from negotiations?
- Tavish Scott:
The external convergence fund has been a notable feature of the debate.
Not that long ago, the First Minister asked Iain Gray, Annabel Goldie and me to join him in the delegation that he led down to the Ministry of Defence on the issue of jobs at Lossiemouth. That was a successful cross-party campaign that was led, rightly, by the Scottish Government. We made what I hoped was—and I think that it was subsequently discovered to be—a reasonably coherent cross-party case against a change that was going to be damaging to Scottish interests, particularly those in Mr Lochhead’s constituency. Not only did we do that, but we all joined Mr Lochhead in his own patch to make the case in front of a football crowd at the stadium in Elgin. I do not regret doing any of that, which I thought was a good way in which the Parliament could work.
I make an offer of similar cross-party action to Mr Lochhead today on the issue of external convergence. I share the concerns of the cabinet secretary, Alex Fergusson and Claire Baker about what is happening on the issue. There is no question but that the minister’s argument in relation to the funds coming to Scotland based on equal payment share is the right argument, and others have made it as well. If Mr Lochhead wants to construct a way in which we can all come together to support that argument and make the case to the UK Government, even to the minister who has been subject to some criticism during this debate, then I would certainly join him in that. If he thinks that doing that would help, he can take it from me and from—I suspect—my colleagues on the other front benches that we would be delighted to play a constructive role in making the right argument. I hope that he can take that in the spirit in which I intend it.
I accept that a debate on Scottish agriculture just before a referendum on Scottish independence is bound to feature references to independence. We had Rob Gibson’s and Angus MacDonald’s speeches to behold in that context. They certainly failed the test that I got at the Shetland marts last Saturday, which was to stop talking about independence and start talking about what we need out of CAP reform. However, so be it: if that is how colleagues in other parties, but particularly the nationalists, wish to conduct their affairs, that is of course their right.
All that I would say to Nigel Don on EU negotiations is that he is right that it is not a matter of whether Scotland could be independent and a member of the European Union; it is about the terms of such membership. I agree with him on that point, which is the sensible and only way in which to look at that issue. I do not worry so much about agriculture and the rural economy, though; I worry a lot more about the fishing argument, because the Spanish would love a negotiation on fish with an independent Scotland. We can therefore agree on something at least, which is that it is about the terms of negotiation rather than whether there would be a negotiation.
On the EU budget, it is often the case that the nationalists attack the rest of us for lack of consistency on the budget. However, I say to Roderick Campbell and others that it is not consistent to go on and on about the budget when the nationalists have had three positions on the EU budget during the course of the past year: in here they voted for an increase; in Westminster they voted for a cut; and in Brussels their MEPs voted for a freeze. If they are going to make the consistency argument about the budget, they must do so having been consistent in their own voting record in the different Parliaments here, in London and in Brussels.
- Angus MacDonald:
It ill behoves the Liberal Democrats to suggest that MPs, MEPs and MSPs are not singing from the same hymn sheet, given the Lib Dems’ track record on fishing issues in Europe.
- Tavish Scott:
I do not even begin to understand that one, but if it makes Mr MacDonald feel better, then so be it.
I will move on to some of the better arguments and more considered thoughts in this debate. David Stewart, Graeme Dey and others made very important arguments about SRDP. Frankly, I do not envy the cabinet secretary on this one, because any assessment of what budget movements from pillar 1 to pillar 2 will mean will make life incredibly difficult for active agricultural producers. On the other hand, as Graeme Dey eloquently described, there are good businesses in his constituency and, no doubt, right across our constituencies and regions that have benefited from SRDP funding.
All of us who have been involved in and around this industry for a long time know that direct moneys into farming bank accounts mean that the money is recycled into the local economy, whether through payments to suppliers, machinery shops, fertiliser providers or the local shop for the cornflakes for the kids. That is the way in which the rural economy genuinely moves; it is sustainable and is the case for both rural and island areas. Mr Lochhead has a frankly horrible dilemma in that context—I say that in a genuinely positive spirit—in trying to get it right.
The only other observation that I would make is that I guess the cabinet secretary has some choices around, for example, forestry, which I think Graeme Dey rightly mentioned. The Scottish Government has in a Scottish policy decision made a very big commitment to covering 25 per cent of productive Scottish land with trees by planting—I think—10,000 hectares a year for the next 10 years. I apologise if I have got those numbers wrong. That very big and significant financial commitment is coming from the SRDP budget, and my only observation is that it is for the cabinet secretary to decide whether the right priority is to meet what he has described as his climate change targets through that measure rather than through other routes.
- Dennis Robertson:
Does the member acknowledge that the cabinet secretary has negotiated with farmers that there will be no tree planting on any arable land and that trees will be planted on land that is designated as being best for that use?
- Tavish Scott:
That, too, is my understanding, but I am sure that Mr Robertson will agree that the target remains and that land will have to come from somewhere in order to meet it.
I will finish with a couple of minor points. Mike MacKenzie and Alison Johnstone made a very good point about crofting and scattalds; indeed, it was at the heart of my point about the million breeding sheep that we have lost from Scottish agriculture over the past decade, which, I hasten to add, happened not under one Government but under different Governments and different CAP regimes. The fact that I can walk a large chunk of the Shetland scattalds and see no active production at all suggests that some really fundamental questions have to be asked.
Finally, I do not believe that a one-size-fits-all policy for area payment rates or, indeed, the detail of what happens can be appropriate given Scotland’s geography. The challenge for the cabinet secretary is to recognise that, in the Highland area for example, the Black Isle is very different from Wester Ross and that the system has to deal with that in some way.
- Jamie McGrigor (Highlands and Islands) (Con):
I refer members to my agricultural interests in the register of members’ interests.
In an excellent speech, Alex Fergusson set out our approach to the reform package and I want to pick up on some of those themes and other themes that are of particular relevance to farmers and crofters—especially those in my Highlands and Islands region.
In what I thought was also an excellent speech, Dennis Robertson talked about outcomes and people, and I agree that that is what the subject is all about. Crofters and farmers all over Scotland are holding their breath and crossing their fingers and, as a Highlands and Islands MSP, I must emphasise the need to regenerate hill farming in the remote areas. Lately, masses of jargon have emanated from Europe but—I am sad to say—one cannot feed cattle and sheep on it. More of the money should, as the EU intends, go uphill.
I note, however, that EU payments used to be called the hill livestock compensatory allowance, but the fact is that the current payments are dreadfully inadequate to tackling the fall in livestock numbers in the Highlands and Islands, which leads to a fall in the number of farming families and therefore to depopulation. An Argyll farming constituent pointed out to me that there used to be a solid week of cattle sales in Oban in October; now the sales take place on one day and are often over by early afternoon. The same is true of the sheep sector. Despite last year’s improvement in prices, the sector is still very vulnerable because many people think that the job is just not worth the effort.
Although the subsidies seem to be very big, they get used up very quickly on repairing buildings, on maintaining fencing, on drainage and on fertilisers. Of course, they cannot be targeted because the monies would then be classed as production subsidies. Unlike in the late 1960s and 1970s, when farmers got a 90 per cent grant for drainage, 70 per cent for spreading lime on the hills and 50 per cent for fencing, a good mixed farm can take in £350 per acre while a Highland hill farm is lucky to take in £35.
In addition, the hill farm has to buy in most of its winter feed and usually has to outwinter its ewe lambs away from home, which costs at least £15 per head. Although expensive, it is necessary for quality stock in the future. Moreover, hill farmers with hefted breeding stocks are forced to keep their young breeding stock all year round for replacements; they cannot simply buy and sell them as a commodity. Therefore, I ask the minister to consider seriously the addition of ewe lambs for breeding stock to the number that is used to calculate stocking density, because they are, for a hill farm, just as much part of the picture as breeding ewes.
With the current desire for rural areas to support the public good, there is no doubt that a well-managed hill farm produces tremendous biodiversity and access to the public for walking and other sports and recreation—a point that Mike MacKenzie made exceptionally well.
When I started having an interest in farming in the Highlands in the late 1970s, the primary industries of agriculture, forestry and fisheries provided very significant employment. Unfortunately, that is no longer the case. I would like that situation to be reversed and, apparently, that is the EU’s intention; we are told that it is. Most family farms now no longer employ a shepherd or a cattleman, and most of the villages that were built for forestry workers no longer house them. More than 100 families were employed on Lochaweside, where I live, in connection with the Forestry Commission. That has gone. Despite the EU subsidies, employment in the primary industries of farming, forestry and fisheries has fallen.
I accept the reality of the move to an area-based system of direct payment, but I very much agree with the comments of the NFU Scotland that how Scotland is mapped will be crucial. The effects of the three-region and two-region models should be assessed. Accurate mapping is of particular importance to those who farm in our hills, glens and islands, where small areas of productive land must be captured by the mapping system in order to ensure that payments adequately reflect those areas. I am insistent that the system should deliver more money up the hill, where the seedcorn of the sheep industry is bred, and where agricultural employment should be much higher, as it used to be.
I am very much aware of the concerns of some producers in my region, including Orkney beef producers, those with breeding hill flocks and farmers of the more productive areas on islands including Islay, some of whom voiced their concerns to me when I met them last week. They fear that they will be losers in the new area-based system. Their anxieties should be addressed. If we have an area-based system, the move must not be so dramatic or fast as to throw current farming systems into chaos or insolvency. Farmers need time to adapt to the new system.
The option to couple payments in order to sustain vulnerable sectors will become an extremely important feature of the support. As the NFUS has suggested, targeting payments at active livestock units reduces the possible flattening of area payments. However, the area payments in the hills must be big enough to stop the current decline in livestock numbers; otherwise, the current depopulation, which is particularly evident in Argyll and Bute, will just continue.
On rural development funding, the challenge for the Government is to have a system that does not take so much money from pillar 1 that the whole farming sector is put at a competitive disadvantage compared with other nations. We are clear that LFASS must remain the first priority in the new SRDP. It should bring in new entrants who were excluded by the 2009 base year. I am told that the old LFASS will remain until 2017, before it becomes the ANC scheme. The payment is a sheet anchor for farmers in disadvantaged areas. Please let it remain so.
Other SRDP funds that are available must be channelled into rural development measures that are accessible and practical, and which underpin our crofters and farmers. Too many of them in the past have simply been put off applying by the complexity, labour or anticipated time that is required, or they believe that the options are not appropriate for smaller-scale producers. As my friend John Scott said recently at the cross-party group on rural policy, Scottish food and drink has never been more popular, but we need to keep producing the basic ingredients. Rob Gibson made that point very well. If we are going to take Scotland’s food and drink forward, the sector must be sustainable.
Further consultations of stakeholders will take place this autumn. The point was made strongly to Government officials at last week’s cross-party group—including by the NFUS’s regional manager for Argyll and the islands, Lucy Sumsion—
- The Deputy Presiding Officer (John Scott):
You should be drawing to a close, please.
- Jamie McGrigor:
I am just finishing.
As was pointed out, stakeholders need early notice of such meetings so that views can be gathered and passed on to Government. As with the last—
- The Deputy Presiding Officer:
- Claudia Beamish (South Scotland) (Lab):
I am taken aback by how much I agree with what my Conservative colleague has just said. What a surprise—but we are better together as well as Labour united, so there we go.
However complex the intricacies of CAP reform, we owe it to rural Scotland to grapple with them, and the debate has shown our determination to get it right. We need to find the right way forward for farmers of all types, with a sustainable approach that takes account of climate change, biodiversity and land stewardship. We need to find the right way forward, as Claire Baker said, in relation to the significant current debates about food, which range from local accessibility of affordable food to our proud record on exporting our produce. We need to get it right for our rural communities and businesses, and we need to get it right for urban Scotland, with rural dwellers ensuring that everyone is made welcome.
As David Stewart said, the wait for EU agreement on CAP has been frustrating, but agreement has at last arrived. In a broad-ranging historical and geographical analysis, he put forward an argument for public support for agriculture that I commend to members. Mike MacKenzie talked about how farmers have been custodians of the landscape for thousands of years.
In recent months, much time has been spent on securing the best possible interim arrangements. That time could have been spent elsewhere. However, we are where we are, and the interim arrangements that we have been debating are essential. The Scottish Government’s funding for support during the transition period is welcome. Will the cabinet secretary say whether any groups are still at risk during the transition?
After I had taken on the environment brief, I spoke in the debate on CAP reform in January 2012. I had taken soundings from friends who are Clydesdale farmers, in my region, about the modelling of the basic payment options. The matter was a cause for concern then for farmers on the Clyde valley floor, just a field away from hill farmers in the shadow of Tinto hill, Scotland’s highest hill.
As Alex Fergusson said, there will be winners and losers. The stakeholder group and on-going consultations have moved the arguments on a long way, and we must achieve a coherent way forward. Whether the final choice is a model with two or three land types, it is essential that the budget is shared as fairly as possible.
Jayne Baxter acknowledged the positive move to include deer farmers, who have been sidelined in the past. She also highlighted the concerns of the National Sheep Association Scotland. Members talked about other sectors, and the arrangements must be fair to all. As Angus MacDonald said, we must also avoid a retreat from the hills. The fact that even Alison Johnstone, who is a Lothian MSP, talked about crofting, demonstrates the issue’s significance for all members.
The comments from Nigel Miller, the president of NFUS, must be listened to with care as the modelling moves forward. In The Scottish Farmer, he said that
“Fine mapping will be vital”,
and he went on to say, of the integrated administration and control system, that
“the IACS land use approach may be more robust and more finely tuned at farm level.”
What happens at farm level will be essential.
Decisions on CAP spending should bring benefits to not just the farmers who receive funding in pillar 1, but the public in general. That could be achieved if we follow England’s example, where the maximum modulation from pillar 1 to pillar 2 has been agreed. Benefits could be realised through measures to increase biodiversity, such as planting for bees, or through funding for landscape and heritage projects.
Alex Fergusson and Tavish Scott argued for less modulation. We disagree with them, although we agree that the process should be slow and carefully monitored. There will be further discussions before the significant decision is made. I hope that the cabinet secretary ensures that everyone is part of those discussions.
I think that the cabinet secretary said that the pillar 2 arrangements represent evolution more than they do revolution. Pillar 2 funding agreement at EU level enables us to move forward on the organisation of relevant schemes and enables support to be directed at strengthening development, not only in the agriculture sector but in the rural economy more generally, so that communities can flourish.
David Stewart put forward compelling evidence from academia and the voluntary sector, who have called on Government to tailor policies to the wider realities of rural Scotland. Graeme Dey, too, stressed the importance of such an approach. Elaine Murray talked about COSLA’s call for up to a third of EU funds to be allocated to local authorities. That might seem to be an odd request, but the point was well made about the need for help with skills and training in our diverse rural and coastal communities throughout Scotland. I hope that the cabinet secretary will comment on the issue.
There are many calls for support from rural Scotland, and I wish the cabinet secretary well with the decisions to streamline and simplify the application process for the SRDP. I offer our help, where it would be useful, to ensure that the process embraces the aspirations for the future of rural Scotland. That said, it is slightly disappointing that the press release that the cabinet secretary issued today through the Scottish Government focuses almost exclusively on the agriculture sector, although I appreciate that the timescale is a factor. I hope that, in his closing speech, he will make some remarks about the SRDP as well.
On the issue of SRDP funding, I have been made aware of a number of applicants who are experiencing difficulties in applying for funding, with many having to seek professional help with filling out the forms, which are indeed complex. Will the cabinet secretary update us on how the application process will be simplified?
Nigel Don stressed the importance of tourism. Lee Musson, who is the centre director of Rock UK in Newcastleton in my region, has highlighted how inflexible he found the application process. It may be that the system was designed for farmers and agriculture-type projects, but it is not well suited to rural development programmes for tourism in remote areas. The applicant whom I mentioned was applying for tracks and a bridge, and the application had to be done field by field, which was extremely difficult. That is just one example from my region; no doubt there are others.
I move on to environmental concerns and the broader aspects of the CAP in that regard. The decision to reform the CAP provides a great opportunity to move towards a more sustainable form of agriculture. Scottish Environment LINK, among others, contacted me to highlight the issues that I will raise. My contention is that there is not as much conflict as some see between the priorities and the future of Scottish farming. The blunt instrument of the greening of pillar 1 presented challenges for Scotland, but they have been resolved to some degree. We have worked together on them, through our committee and in other ways, to find a resolution relative to our climate and our farmland.
The Scottish Wildlife Trust has called for meaningful equivalence of greening measures that deliver environmental benefit and, as the cabinet secretary has stressed to Scottish Environment LINK, see
“all of Scotland’s farmers behaving in a greener way.”
There are many examples of good practice in Scottish farming. In the committee’s recent round-table discussion about behaviour change and climate change, we heard about the focus farms such as the organic Torr Farm in my region, which is owned by Ross Paton. That is one example, and there are many others. It is vital that such good practice is widely shared. I add that I was pleased to hear the cabinet secretary raise the issue of climate change.
Scottish Environment LINK has strongly advised that funding be put towards supporting an improved advisory service on environmental issues that covers pillar 1 cross-compliance as well as encouraging actions in pillar 2. Requests for support have also been made by farmers in relation to a range of aspects of farming, not least the form filling. Will the cabinet secretary tell us whether there will be further advice and support under the new arrangements?
The mature dialogue that our amendment calls for between the Scottish and UK Governments has, to be frank, been somewhat hampered by the disappointment that we will not see Owen Paterson again until next year. It would have been helpful if he could have come before our committee before then.
- Alex Fergusson:
Will the member take an intervention?
- Claudia Beamish:
I will if I have time.
- Alex Fergusson:
I understand the member’s disappointment that Owen Paterson has not been able to find time in his diary to come in front of the Rural Affairs, Climate Change and Environment Committee and hear all the vitriol to which he has been subject in the chamber this afternoon. Does she accept and agree that it is good news that he is in Scotland today, meeting NFU Scotland and learning more about Scotland’s desires and needs?
- The Deputy Presiding Officer:
Ms Beamish, you must close shortly, please.
- Claudia Beamish:
I certainly acknowledge that that is a step in the right direction, but at this important time, dialogue with our committee would have been helpful as well. I hope that he is visiting some of the crofting communities on his journey.
- The Deputy Presiding Officer:
You really should draw to a close, please.
- Claudia Beamish:
I will, Presiding Officer.
There is a strong case for the uplift to come here, and we in Scottish Labour will work with the cabinet secretary and other parties to try to achieve that. Within Scotland, it is vital that we all work together to ensure that we get the best deal for our farmers and our rural communities.
- Richard Lochhead:
I should probably start off by welcoming the many expressions of sympathy for the decisions that lie ahead of me over the next few months. I felt daunted before I came into the debate and now I feel an ever greater weight on my shoulders. However, I guess that those expressions of sympathy illustrate that members of all parties recognise that the issues that we are debating today—and I feel that we have debated them well—are important ones for the future of Scotland in many different sectors, particularly in our rural communities.
Starting out in the CAP reform process, I was always at pains to make it clear that we must do what we could to ensure that we have men and women in this country producing food for the nation, as well as looking after the environment and delivering other public benefits. That is a precious thing that we must hold on to as a country—men and women with the skills to produce food, especially in a world with a growing population and less land on which to grow food for that population. In the decades ahead, as a people and as a country, we will have to be more self-sufficient and more careful about food security, so these issues are important.
Clare Adamson, Mike MacKenzie, Jayne Baxter and others mentioned the importance of underpinning the economic contribution of our food and drink industry, because the raw materials that are produced by our farmers and crofters underpin that hugely successful industry, which, just a few weeks ago, during Scottish food and drink fortnight, celebrated achieving its growth targets six years early.
Another point that I have been at great pains to highlight over the past few months, as we have negotiated with the UK and other member states in the European Union, is that we have a distinctive agriculture sector with unique issues, challenges, opportunities and features, and that that is why we need the right policy coming through the CAP reform process for this country. Our climate, the fact that many of our farming communities and food producers are a great distance from their markets, and the diversity of our industry—hills, lowlands, north, south, mainland, islands and everything else in between—means that we have a challenging policy to implement. It is not a one-size-fits-all policy, but it must deal with that diverse agriculture sector. The fact that 85 per cent of land in Scotland has less favoured area status, compared with exactly the opposite situation south of the border, where it is only 15 per cent, also highlights why our case is unique for agriculture policy.
- Liam McArthur:
The cabinet secretary has pinpointed one of the concerns about the transfer from less favoured areas to areas of natural constraint and that is clearly a principle that he is signed up for. What is the likely coverage of areas of natural constraint, and does he share my belief that islands are clearly areas of natural constraint that will fall within the new scheme when it comes into force?
- Richard Lochhead:
I was going to come on to the need to give certainty to our farming communities and crofting communities as soon as possible. That is why it was important to put the transition arrangements in place for 2014, during which LFASS payments will continue. On the long-term future of LFASS, we have until 2018 before the designation of areas of natural constraint replaces the existing scheme. We are confident that we have got most of the details right for that, but there is still some time between now and when the new scheme comes into play.
For the transition period, which many members mentioned, we are putting in place arrangements for new entrants schemes, for woodland creation and for agri-environment schemes. Where we are unable to plug the gap is in capital expenditure, which is something that Claudia Beamish asked about. As we know, many capital projects in rural Scotland are funded through the SRDP in pillar 2, the rural development regulation, and unfortunately Europe would not listen to us and has not made it possible to have transition for capital projects, which is a pity for the rural economy, because there are many good projects.
- Alex Fergusson:
Given the amount that has been committed to the forestry sector for 2014 to ensure on-going plantings, is the cabinet secretary quite content that there will be enough left in the kitty to cover the agri-environmental schemes and other things that also need to be funded through the transition?
- Richard Lochhead:
I hope that there will be. We have clearly looked at the projected demand over the gap year and at what would have to be paid out in that financial year, so I hope that we will be able to deliver that.
As far as the need for certainty for our farming and crofting communities is concerned, we have to look at the big changes in the new CAP as compared with the CAP that we are moving from. The big change, of course, is moving from historical payments to area payments, and I hope that we are all united in the view that we cannot pay out payments in 2020 based on the level of activity that farmers were undertaking in 2002. That would be unjustifiable and untenable, especially at a time when new entrants are frozen out of getting support for their genuine activity.
I am very pleased that we have made the fundamental breakthrough that, from day 1 of the new CAP, new entrants will be on a level playing field. That is important for attracting new blood and new generations into agriculture and maintaining the food-producing capacity that I talked about. It is really important that we attract new blood into agriculture.
Of course, it is important to make sure that, under the new CAP, there are no slipper farmers—those who have exploited the loopholes in the current CAP to get large payments even though they are not conducting much genuine activity on their farms. Thankfully, under the new CAP we will make that history.
I hope that we all accept that the impact of agriculture on the environment has to be taken very seriously. That is why I welcome the commissioner’s determination to make the new common agricultural policy greener than the existing policy. As many members alluded to and as I said in my opening speech, we are looking at how we can use the greening measures to make sure that every single farm in Scotland becomes that bit greener and hopefully cuts its carbon emissions to help us to achieve our climate change targets and to protect biodiversity, where we know that there are significant challenges that we have to address. Of course, the SRDP plays a big role in delivering such measures.
- David Stewart:
On the SRDP, when does the cabinet secretary expect to make a decision on the voluntary modulation between pillar 1 and pillar 2?
- Richard Lochhead:
As the member knows, we have to take that decision over the coming months—before the end of this year. I will be conducting a mini-consultation on that specific aspect, on which we have to take an early decision.
We have concerns about the pace of change from the existing system to the new system. Many members have spoken about the impact on the beef sector which, to a large extent, is the engine room of Scottish agriculture. That is about not just the beef producers on the ground—the farmers who produce fantastic, world-famous beef—but the thousands of processors, hauliers and people working at the marts. We have to protect those jobs. That is why I am giving close attention to the pace of change for beef producers, whose sector is the engine room of Scottish agriculture, as they move to the new payment regime. We have to pay close attention to that.
The budget has featured in just about every single speech in the debate. My job is going to be made 10 times harder because of the very poor and scandalous deal on the agriculture budget that the UK Government signed up to. I listened to the contributions from many members. I listened to Alex Fergusson and Jamie McGrigor, who both said that it is really important that we do not transfer money from pillar 1, which is the direct payments to farms on the ground, to pillar 2, which is the wider rural development regulation. They said that it is really important that we protect direct support under pillar 1. Meanwhile, their Conservative colleague in London who was negotiating on behalf of Scotland in Brussels wants to scrap pillar 1. That is sheer hypocrisy and double standards.
- Alex Fergusson:
Given that the UK Government has committed itself to pillar 1 until at least 2020, surely the cabinet secretary would admit that he is basically talking out of a hole in his head.
- Richard Lochhead:
I say to Alex Fergusson that I have had to sit opposite Mr Paterson in negotiation after negotiation in which he has argued to reduce pillar 1 direct support for Scottish agriculture and said that the free market will deliver all and that it is okay to have imported food or whatever. I understand from Mr Fergusson’s speech that he totally disagrees with that. It is time for a universal declaration of independence by the Scottish Tory party.
Tavish Scott said that we should see the debate about the future of farming
“not ... through the prism of independence, but through the prism of”
what is best for farmers and crofters in Scotland. Quite frankly, I cannot do one without the other; they are absolutely tied together. The size of the budget that we get as a country will determine how we can deliver for our farmers and crofters throughout Scotland.
People on one side of the debate say that we should vote yes in the referendum next year and people on the other side say that we should vote no. I have been dealing with Owen Paterson, and his predecessors for that matter, for the past few years and I can say that they have been running their no campaign for quite a few years now. The no campaign from Westminster is not a new thing. I asked Owen Paterson to deliver support in Europe for Scottish agriculture—he said no. I asked him to ensure that the levy paid by Scottish producers that is currently lost south of the border comes back to Scotland—he said no. I asked him to give Scotland a fairer rural development budget because we get the lowest in the whole of Europe—it is not just a poor budget and not just less than our fair share; we get the worst rural development budget in the whole of Europe—and he said no.
- Claudia Beamish:
Will the cabinet secretary give way?
- Richard Lochhead:
I have taken enough interventions.
- The Presiding Officer (Tricia Marwick):
You need to wind up.
- Richard Lochhead:
During his negotiations, I asked Owen Paterson to please make the livestock sector a priority. He gave more time to talking about a sugar plant in London than to talking about Scotland’s livestock sector at the negotiations, and he said no. The best way for Scotland’s farmers and crofters to deal with all the “No, no, no” from Westminster is to say yes next September.