Rural Affairs and Islands Committee

Meeting date: Wednesday, April 26, 2023

Official Report 770KB pdf

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Future Agriculture Policy

Under the next item of business, we continue our pre-legislative scrutiny of Scotland’s future agriculture policy, focusing on food production and supply chain resilience. I welcome to the meeting Kate Rowell, who is the chair of Quality Meat Scotland; Joe Hind, who is the policy manager for Scotland Food & Drink; and Paul Flanagan, who is the stakeholder engagement director for the Agricultural and Horticultural Development Board.

We have approximately 90 minutes for questions and discussions. I will kick off the questioning. We know that sectors or points in the supply chain have experienced risk in the past and expect to do so in the future. What are the reasons for risks in the supply chain in Scotland? Will you talk about resilience, particularly in terms of farm profitability and processing capacity, which I believe is key to sustainability in Scotland? We will kick off with Kate Rowell on her experience on issues around profitability.

Thanks very much for inviting QMS to give evidence today.

There are a lot of risks. The immediate past risks are very obvious. The war in Ukraine has caused huge increases in input prices. That is one of the biggest risks that farmers have faced in the past year or so. Covid, too, has upset supply chains right the way through. We represent people from the primary producer to the processors, and Covid was a huge shock to them, as well. We were just recovering from that and then we got the war in Ukraine. There are also the longer-term risks of climate change, labour and skills and all related issues.

Throughout Covid, the red meat supply chain has shown how resilient it can be. There was a huge shock at the start, but a lot of people adapted very quickly. A lot of the businesses downstream pivoted to do business differently, and they showed huge resilience overall. However, as we know, there are huge challenges ahead, and we must invest in the supply chain to ensure that it continues.

The big problem that we face is the loss of critical mass in the red meat sector. If we lose animals and primary producers—farmers—we will not have enough animals to make the rest of the supply chain viable. If we cut back on cow numbers, the first thing that will happen is that we will lose a major processor. If there are fewer processors in the game, prices will go down, because there are not so many people competing for the product. If farmers go out of business, we will not have hauliers, because, if they cannot get work, they will disappear. If large-animal vets do not have the work, we will lose them. Feed companies will close down. All those things are downstream from the top level number of animals on the ground and the numbers of farmers and businesses that are out there.

You will, no doubt, have picked up on the letter that Chris Stark wrote to the committee about future agriculture policy and climate change. The Climate Change Committee persists in suggesting that the only way for agriculture to reach its targets is to cut our red meat industry and actively support farmers to leave the industry. Why is the message about critical mass falling on deaf ears?

The CCC has a job to do. Its job is to do with emissions and, when it writes a letter such as that, I suppose that that is it responding to its job. Your job and our job is to look much wider than that, at the unintended consequences from those proposals, and the things that I have just said are definitely a risk if we go down that route. The proposal does not take livelihoods or the rural economy into account. It is numbers on a spreadsheet; whereas, in your world and in my world, we deal with people’s real lives, their livelihoods and their businesses. There are so many things going on in the agricultural industry on mitigating emissions.

The science is not absolutely solid yet, either. There was a report recently in Nature Geoscience that said that the effects of global warming from methane have been overestimated by 30 per cent. That is one paper, but, if there are still question marks over the science, it would be incredibly damaging to even think about going down that route—which we cannot then come back from—only to discover in a few years’ time that we have done the wrong thing. Therefore, we need to keep making the point.

As I say, I am not here to get into an argument with the CCC. That is its job and it has done its job. I am here to try to explain the unintended consequences that would result from any intention to follow that route.

I agree with everything that Kate Rowell has said. Sustainability is not just about carbon footprints. The CCC has its job to do, but we are here to look at how to achieve resilient farming and land management systems. We want to look after the health of the people, the animals and the environment. That is a much broader view than the CCC has taken.

Some people should be consuming more meat and dairy, because that would be beneficial to their diet. Clearly, each individual group takes its own view on that, but we need to look a bit more broadly. There is climate resilience, of course. We need to look at economic resilience and the fabric of society. We need to take a much broader view. From an agricultural perspective, and almost being a little bit self-critical, we need to do more to demonstrate the progress that we can make towards net zero. We have to get away from the discussion about gross emissions; net zero emissions is what we must talk about.

From the Scotland Food & Drink perspective, does the agricultural sector do enough to show and evidence the efforts and changes that it has made on emissions and what will be available in the future? How can the food and drink industry as a whole add to that?

09:15  

We are grateful to be here and to have the opportunity to speak. We are quite fortunate in that we can look across the industry as a whole, from farm to fork.

Looking at the debate around this very important issue, it is clear that it will dictate the future of agriculture, land use and food—massively critical elements of society—for the foreseeable future. In the debate, nobody is arguing or advocating for the status quo; we all recognise that there are ways in which we can improve and things that we can do around processes. However, we must recognise—as Kate Rowell touched on—that livelihoods, economies and the viability of rural, coastal and island communities are at stake.

A topic such as meat is very contentious and polarised. Some people advocate for no meat and others advocate for more meat. We say that there is a balance to be made and a global context to consider when we think about the impact of meat and dairy. We have to think about unintended consequences in the global context. If we reduce production in Scotland but consumption levels remain the same, that will potentially displace production to a place where emissions are higher and welfare standards are lower.

For land that is potentially not useful for other forms of farming, there is a very strong argument for ruminant farming. That is advocated for by all parts of the spectrum of thinking on the issue, including non-governmental organisations that have called for agroecology, for example. Ruminant farming is an absolutely critical element of a sustainable food system. There is discussion around balance and, from our perspective, continuing to have the discussion and bringing in lots of people is a critical element of that.

I want to stay on the response from the CCC, because it is incredibly important. It would appear that the CCC does not agree that livestock production should continue in Scotland; it wants to see a dramatic cut. Given that most of Scotland is only good for growing grass, can we realistically have resilient food security without having livestock and red meat production at the heart of it?

Cattle and sheep production in Scotland is split into less favoured areas—LFA—and non-LFA at the moment. LFAs are the disadvantaged areas, and they make up a huge amount of the country. It is not just over on the west coast; a lot of the south of Scotland is also LFA.

The cattle and sheep from the LFA parts of Scotland account for £706 million of output, which is 26.5 per cent of the whole output of Scottish agriculture—one quarter of everything we do in Scotland agriculture-wise. From looking at the CCC letter, it appears that it is saying, “Forget about all of that; focus on the bits that produce lots of things and grow trees elsewhere.”

It is a huge headline figure, but we must also consider the number of people on the ground that it applies to. There are people up glens and out on islands, and there is the whole infrastructure associated with a farm or croft. There are all the people who feed into that—the feed merchants, the vets, the fencers and every single person who relies on those businesses to exist. If the farm and croft businesses go, and then all those associated people go, what do you have left? You are talking about the complete depopulation of some of those areas. We argue incredibly strongly that that is absolutely not the way that we want to go in Scotland.

The CCC is a statutory adviser to the Scottish and UK Governments. The Scottish Parliament signed off the Climate Change Act 2019, so it is clearly part of the equation. However, I take your earlier point about the science. When we had an evidence session with the CCC, it said that older grazed grass will probably sequester less carbon, but there is no actual science on that.

When we are talking about resilience, we must talk about whether there is a long-term future for the livestock sector in Scotland, given the numbers that you have just given us. Do you know of any work that is being done to look at the science that will probably tell us that old grass sequesters less carbon?

I am sure that Scotland’s Rural College is working on that, but there is also quite a lot of work on soils from others, including Rothamsted Research. It has records going back 150 years on soil and its potential to sequester carbon. As far as I can see, the science is evolving and, as I say, we need to make sure that we do not go too quickly down one route based on one piece of science, which then turns out to be incorrect or incomplete.

That CCC letter referred to low-carbon breeds. As far as I am aware, that is not a thing. There are low-carbon genetics but not low-carbon breeds. That one little sentence said to me that the CCC does not really understand all this. However, as far as I can see, there is huge potential in the genetics of cows, in particular, because individual cows can vary in the amount of methane they produce by up to 50 per cent. If you can tie in the genetics and breed low-methane-producing cows, you will make serious inroads into the climate change targets.

There is some evidence—I will get it and pass it on to the committee—from a company called Devenish that is based in Northern Ireland; it has a farm in Ireland. John Gilliland, who works for AHDB as a consultant, has done a number of things working with livestock and with multispecies swards that include legumes. There is a process that I think is called light detection and ranging technology, which comes from archaeology, where you can look at the carbon in the hedgerows and the trees and get to the net carbon level.

The challenge on sequestration, especially right now, is that too often we are looking at tier 1 international level averages and then greenhouse gas emissions using tier 2 national levels, but we do not have information on tier 3, the individual farms. We need that baseline. Certainly, Devenish has done some very good stuff on sequestration and the interaction of livestock and forestry. I can find that and pass it on to the committee; it is really interesting.

Thank you. I am pretty sure that that is the company where Professor Alice Stanton did the work on the red meat supply chains. I think that the committee will look at that.

I want to talk about profitability. Kate Rowell, this is for you. Farmers can make money in two ways. They can either sell to the market at the cost of production plus, to get a profit, or they can sell to the market and be supported by the Government so that the price of the product is not beyond the consumer’s ability to buy it. That is my understanding of the two ways in which a farm can be sustainable. What role do supermarkets play in that equation?

One of our problems in the United Kingdom in general is that we have a very small number of very big supermarkets. That means that they can have disproportionate effects on everybody. I will not sit here and say that supermarkets are bad; they buy a lot of what Scottish farmers produce, so they absolutely are not bad. However, if they are in a price war with each other and they are focusing on their profits and their issues, the unintended consequence can often be that farmers, right down the line to primary producer level, are affected quite a lot by what is happening.

I am certainly not asking you to kick the supermarkets. I want to get to the factual position of how the farming community sells its products to be profitable. It is either through Government support or through the market or it is a combination of both. If the export market is constrained in any way, the supermarkets go to war with each other, and it is always the primary producer that pays the price for that, in terms of how much the supermarkets take out of the marketplace. Do supermarkets have a responsibility to play more of a role in making sure that there is food resilience for the people of the country?

Supermarkets have a role to play, but ultimately it is up to the Government to make the policy that they then have to abide by. Supermarkets are businesses. They will try to make money for themselves, as all businesses do. It is absolutely down to the consumer, as well as the Government, to put pressure on supermarkets and say, “This is what we want.” QMS tries to speak directly to consumers because they will then put pressure on the supermarkets. If we can get across to consumers how important it is to buy Scotch beef, Scotch lamb and specially selected pork, all of which is raised in Scotland, and they then go and put pressure on the supermarkets to say, “We want to see this on the shelves,” that will achieve it, as well as any Government policy. The issue with the whole supply chain is that processors, secondary processors and all the other people in the middle need to make a living. That is the problem.

We are traditionally a “stack it high, sell it low” economy, and people in this country are used to cheap food. The supermarkets tell us that they respond to consumer demand. The cost of production in this country is always higher because of the standards that we set—standards that we, as a Government and as consumers, expect from our producers—yet that cost is never reflected in the shelf price. How do we ask consumers to put pressure on supermarkets and demand that product when people are struggling to pay their everyday bills?

I know. People talk about food poverty, but my opinion is that there is no such thing. It is poverty. We have to separate these things. People need a proper return on the food that they produce, right the way through the supply chain, and people need to be able to afford to buy that food. We cannot have cheap food just so that people can afford it. We need to fix the poverty bit, not just the food poverty bit.

Our society has a different view of food from that of many other countries, where individuals spend a bigger percentage of their income on food. People value food more and value local food more. That is a societal feeling. In France, people are very much more into local food than we seem to be here. That is where we need to get to. That is a societal conversation that we have to have. We need to make sure that people understand how important it is to have local food, local farmers and local supply chains, without always bringing it down to the lowest common denominator of price.

At AHDB we look after the beef, lamb and pork for England only, so I give way to Kate Rowell on red meat in Scotland. However, we look after the dairy sector for Great Britain.

How do we square the circle? How do we get more money back to the primary producers? As Kate Rowell’s organisation and AHDB are doing, the route by which we do that is by selling not just to the supermarkets but pushing more and more into export markets. The advantage of that is that, not always but most of the time, you will get a higher price. You can talk about provenance—what has happened in Scotland—and really sell that and get a higher price. At the same time, you are tightening the home market and giving yourself more options.

When you say, “tightening the home market,” are you talking about reducing production?

No, I mean that if you are selling more to export markets, the supply to the home market will be less, if you can do that at the same time. Clearly, you cannot just switch by waking up on a Monday morning and saying, “Right, I am going to switch everything across.” That would be crazy. Getting a better balance between those markets and driving better returns is the best way in which we will get a better return for the primary producers.

Some of the other things that we will talk about today, such as areas for reducing climate impact, will also be financially beneficial, but exports are the main way in which we will get money into the top line for producers and get more money into the supply chain.

09:30  

Sorry, I am hogging the session. I apologise. With the convener’s permission I will ask one final question. If we are to get consumers in this country to demand Scotch beef, Scotch lamb or specially selected pork, surely we have to be looking for a point of differentiation. That cannot be just the badge. It has to be something else, such as eating quality, taste and all those kinds of things.

I have a problem with our grading system. Other parts of the world are looking at grading their beef, in particular, with a focus on eating quality. My view is that there is a much better eating quality with native breeds—Angus, Galloway, Highlanders—but we are not looking at the shape of the animal before it goes to slaughter. What is QMS’s view on the grading system?

I hear this all the time and have done for the entire five years that I have been in the chair. We are in the initial stages of a meat eating-quality project. As chair, I do not have the ins and outs of that, but I can get you the details on where we are going with that. A lot of work has been done on that in the past and we have definitely picked up on it. In fact, all our industry development work for next year is based on the meat eating-quality work, so I can come back to you on that.

There is one thing that would be an important signal. The public procurement sector in Scotland is worth £150 million and it would be a very good example if schools, hospitals, prisons, the Scottish Parliament—everybody—led the way on having as much local produce in their meals as possible. We have some figures that show that that has gone backwards since Covid, so we need to be pushing on that.

There is a lot of good work being done out there. The Soil Association has a food for life project with schools. We have heard anecdotally that local authorities are pulling out of that because of the cost. It may not be a huge amount of money in the grand scheme of things, but it is important that public procurement goes down that route as a good example and to show leadership.

I will stop there, convener.

We will have the opportunity to question the cabinet secretary on progress on the Good Food Nation (Scotland) Act 2022 at a session that is coming up very soon.

We are also planning on having the supermarkets in front of us. Joe Hind, this is a question for you, and you can come in with your other comments as well. There is a groceries code adjudicator. We know that the adjudicator does not have the ability to control price but can bring sanctions against supermarkets that delist suppliers at short notice because of rises and falls in supply and demand and so on. Should there be provisions in the agriculture bill to give the groceries code adjudicator more powers to bring a little bit more resilience and certainty over the supply chain?

That is certainly a question to ask. We have a close relationship with the groceries code adjudicator and invited him up to Scotland to meet some of our producers and suppliers. He took away a number of issues.

That said, we must look at the issue system-wide. We have to look at our highly efficient food production and selling system. We produce premium produce in Scotland. We should be proud of it and of all the people in that system who produce the great food and drink that we all enjoy at home and abroad. That should be celebrated and championed. There is therefore a tension, which Kate Rowell alluded to, in the fact that, as households and communities, we do not spend as much on food as other countries do.

How we resolve that tension is important. Perhaps that is in diversifying markets, reaching out to become a trading nation as part of a national strategy for economic transformation and making sure that we have other routes to market. However, we absolutely cannot ignore the role of supermarkets in what they choose to buy for their customers. They are, of course, minded that we are in a cost of living crisis and they will seek good value for their customer.

Is consumer demand about accessibility, affordability and availability of the products, so that those of us who have the wherewithal can go into a store and choose Scottish produce for our meals, which we all should do where we can? Is doing that available to everybody and, if not, what is the solution? How do we resolve that?

My questions are about processing capacity and are directed to Kate Rowell initially. I noted in our papers that 50 per cent of abattoirs in Scotland closed between 1970 and 2000. What does that mean for the business resilience of livestock producers, especially in rural and island areas, and how can we better support short supply chains, bearing in mind the value of local food production and the end result: consumers using local food?

As you say, abattoirs have disappeared very quickly, and that is not necessarily all financial. It is down to regulation and other things, including labour and skills. There are not enough people out there who want to work in processing facilities, and that is a major issue, particularly in the more remote areas. I have the numbers somewhere. We have about 39 processors in Scotland but only a handful of very big ones, and a lot of them are all around the country; there is Shetland, Mull and out on the Western Isles. I am from Peeblesshire and we do not have an abattoir at all down in the south-east, which affects that local supply chain. The big processors work with the supermarkets and the bigger wholesalers, but any farmer who wants to sell directly is coming up against big issues in finding somewhere that can kill their animals. Then there is the butchery as well, although we are starting to see a few more butchers who are happy to do that and who are starting to see a gap in the market.

We need to change how we think about small abattoirs. The big ones are businesses. They obviously need support and help and we need to make sure that they continue because they have such a huge value to the economy. The smaller ones, however, are infrastructure and that is how we need to look at them. The comparison that I will make is that fishermen have piers and harbours where they land their catch, and that is infrastructure. I am not a fisherman, but as far as I know, those facilities were put in by local authorities or by Government to make sure that that industry could work and those facilities do not necessarily have to make a profit. When we look at island communities and more remote areas, we need to think of small abattoirs in the same way—not necessarily as profitable businesses, but facilities that have to be there to service the local area and ensure that primary producers have somewhere to take their animals. A definite mindset change there will be useful.

I know that there has been a lot of talk in the past about mobile abattoirs and there was a Scottish Government report on that. However, no one appears to have come forward to grasp that, which I think is mainly because of the regulation, rather than the financial side. It is both, but regulation would be so difficult with a mobile abattoir.

I have one or two figures here. The processing sector in general ranks high in the Scottish Government’s “Supply, Use and Input-Output Tables”. In the type II economic multipliers, it is ranked second out of 98 sectors; the processing sector is important. There is capacity to increase that, but people are often the factor that stops abattoirs from doing more because they cannot get in enough labour and skills.

My apologies, convener, for being late due to the train. The point about abattoirs is interesting, so I am glad I caught that.

I know from experience in my constituency in the Borders—I am not sure whether it is because of the geography—that a lot of farmers are having to take their cattle a fair way south, with increased input costs to do that, because of the contraction of the smaller abattoir sector in Scotland. What is your view on that? Considering what you have just said, would you rather that Scottish cattle—bred, born and reared in Scotland—were killed in Scotland, or are you agnostic about it?

No, Quality Meat Scotland’s brands are Scotch beef, Scotch lamb and specially selected pork. The guidelines for those brands include that the animals have to be killed in Scotland. Therefore, we absolutely do not want people going down south with animals, although, obviously, if that is their business decision we cannot do anything about it.

It is important to have a strong abattoir sector in this country and not just the primary abattoirs doing the first part of the process, but secondary processors as well. I think that we have only one packing facility in Scotland. For a lot of the other processes, the animal is killed up here but is then sent down south to a bigger facility to be processed further: cut up, packed and things like that. As an economy, we lose a lot of the value of the produce by sending it down south. Obviously, those are commercial business decisions and the companies have consolidated things to make their businesses more efficient. However, that has contributed to how much of the added value has gone out of Scotland, so it is very worrying.

Thinking system-wide, our processing facilities across Scotland are absolutely critical if we are talking about resilience. Resilience is not just, “Are you okay?” Resilience is not just about finances and who has the deepest pockets; it is about structure. It does not matter how much money you have if the labour is not there for you to recruit. Similarly, if processing infrastructure is not there, you have to spend more to process your goods and, as Kate Rowell rightly touched on, the value is lost. That includes processing across all sectors. The food processing, marketing and co-operation grant scheme is one tool that we have for that. We are conducting a review of the grant, which is great and will hopefully lead to more availability of funding in the right way to support the industry to grow responsibly through processing and production.

How significant is the risk to the Scottish beef industry from the number of livestock moving south because of supply and demand issues south of the border? How significant is the risk to Scottish beef in Scotland in that critical mass being lost?

Obviously, we are not very happy about that, but it is the result of a huge range of factors, including the fact that English agricultural policy has gone down the route of removing direct payments. That means that a lot of the suckler producers down south have decided that it is not worth their while, so the finishers, who need to make sure that they have numbers, are coming up to Scotland to buy store cattle to take down south to finish. In some ways that is a compliment—they are coming up because our cattle are so good—but the trouble is that that creates more demand around the ring. Although that demand has possibly helped to drive up the beef price a bit, the fact that they are then taking the cattle out of Scotland means that they are lost to our brands. We have put a lot of work into developing our Scottish brands and Scotch beef is so widely known in Scotland that it is important that we have enough cattle going into abattoirs in Scotland to keep up that critical mass.

If the direct payment were maintained in Scotland in the future, could there be, on the back of market demand, an increase in suckler herds here?

That is entirely possible if the suckler beef sector in Scotland is properly supported and investment is made in it. Think about how the climate is changing. Our climate is fantastic for growing grass, which is what we need. People are looking for grass-fed beef. We are in an ideal place and it is a huge opportunity for us in this country. We have the rain, the land, the grass and the skills in the farming community. We could grasp this, and I see it as a huge opportunity. However, we need support and not just financial support; we need regulatory support and everything to make that happen.

09:45  

Kate Rowell, I am interested in your comments about abattoirs and I want to pick up on what you said about mobile abattoirs, which interested me, as a Highlands and Islands MSP. You mentioned that the regulations are too difficult. Could you unpack that a little bit?

Abattoir regulations are incredibly stringent, for good reason; it is for food safety and nobody is arguing that we need to make it a free-for-all again. One of the biggest issues is how we get rid of waste from abattoirs. The mobile abattoir ideal is that a lorry would drive around each farm and kill the animals on the farm that they grew up on. That is fantastic from an animal welfare point of view. However, every single farm would then have to have the infrastructure in place to deal with that waste. They would need to have all the regulations in place.

As far as I know, only one abattoir has opened in Scotland since devolution, and that is down in the Borders. It is a very small micro abattoir. The owners gave me a tiny flavour of how difficult that had been. They said they were dealing with dozens of different public agencies. For example, on one part of the water system there had to be a valve. Scottish Water said that it had to be a specific kind of valve or they would not sign it off. Environmental health said that it had to be a different specific valve or they would not sign it off. It took months to get that valve. Things like that make development difficult. With a mobile abattoir, you would need that compliance at every single place it went to. The lairage would have to be up to the specification that you would demand at a static abattoir. You would have to have vets there, which is another issue that we have not touched on. There is a lack of vets and there is difficulty in getting vets to be at the abattoir. Food Standards Scotland does a good job, but there is a lack of vets for abattoirs. There is a whole host of different things. It is not impossible, but it is very difficult.

Having spoken to a lot of people about small abattoirs, I would say that if we wanted to invest in them, we would do better to look at a model such as Shetland, where they have a static abattoir that I think is community owned. It can be operated by one person. It has an extra room after the abattoir that butchers can rent and that has all the equipment that that they need to make sausages and so on. A model like that, in my opinion, would probably work better. Even though you would still have to take the animals to it, I think it is probably more realistic than a mobile abattoir.

Would we have a number of those around Scotland?

Yes, in the more remote areas. There are some. Mull abattoir does a fantastic job. I discovered recently that 70 per cent of what goes into Mull comes from the mainland; it is not just for Mull. It is being operated as a successful going concern, a good business. It is about making sure that we have facilities at the strategic points in the country where we need them.

I am hearing from your example of Shetland something about getting the right scale.

Yes.

I am aware that Orkney created an abattoir that was maybe too ambitious and there was a problem with it.

Going back to labour and skills, if you can have something that one or two people can operate, that is probably ideal. It can be seasonal or whatever and they can do other jobs, particularly in island communities. Mull was closed for a few months because they lost their slaughterman and it took them a while to get another one. That shows how key one person is in those smaller situations.

Thank you. It is helpful to get that detail.

I will pick up a point about haulage capacity. Do any of you want to say anything about where things stand? Concerns have been expressed in recent years about the availability of lorry drivers from other European countries, the difficulties of port crossings into Europe and more generally a labour shortage in that sector. Could you say anything about how that impacts on agriculture or whether there are any other factors around haulage that are relevant?

Hauliers are critical. I read somewhere recently that, like farmers, their average age is not in the lower bracket, so there could be a loss of them quite soon. Livestock haulier, in particular, is a specific role. It is not something that anybody can do. Most of the livestock hauliers that I have come across are Scottish. I do not think the Europeans and others who have come and driven lorries for supermarkets and things have made it into the livestock haulage business, as far as I am aware. However, I suppose that the lack of lorry drivers in other sectors could be pulling people out. Someone might not want to get up at 5 o’clock in the morning and load cattle on to a lorry in the pouring rain; they might prefer to go to a distribution centre. Lack of haulage capacity is a real risk. Again, there is regulation that is necessary, but hauliers definitely need support to help make sure that everybody is getting through it.

The real risk—I do not know whether this has gone away or not, because things have gone very quiet—is a consultation that the Department for Environment, Food and Rural Affairs put out about the transportation of animals. There has been talk of changing particularly the headroom that is required for animals and also temperature controls. I am not sure where they have got to, because it seems to have gone quiet, but, if those things were to be brought in and suddenly hauliers were being told, “You need to replace your £250,000 lorry with a brand new one that is five inches taller” because of the headroom, it would put a lot of people out of business. Things like that are done for good reason and people think that they are doing the right thing, but we need to be cognisant of the unintended consequences of that sort of change.

I will talk a little bit about hauling milk. There are a number of factors here, which Kate Rowell talked about, such as the average age of lorry drivers. Going back a couple of years there was pressure because there was not a pipeline of haulier drivers coming through. To get around that, a number of milk processing companies trained their office staff and people who are field based to drive lorries. I do not think that it has come to those people having to move jobs to do that.

I will go back to an earlier question from the deputy convener about the lack of processing facilities. From a milk perspective, a couple of creameries in the west coast have closed in the last 10 years and a milk-processing site in Aberdeen has closed in the last 10 years. Therefore, milk is being transported for longer distances, so more drivers are needed, and driving longer distances is an additional pressure on drivers. People are not screaming about that right now, but it is a risk for the industry.

Can we open up the topic of labour more broadly? Can I have your views on the current labour issues that we face in agriculture and horticulture, focusing on what can be done through an agriculture bill to alleviate some of the issues?

It is a known issue. We are launching a new national strategy for the food and drink industry in the summer. As part of that we have gone around the country to gather views from different people and businesses. One of the top priorities is labour shortages and labour skills. We know that some of those issues are being looked at by the Migration Advisory Committee, which is continuing its work on the shortage occupation list. There is movement there around who we can potentially bring in to Scotland to fill those labour gaps. There is also other work such as, for example, John Shropshire’s “Independent Review into Labour Shortages in the Food Supply Chain” for DEFRA. It focuses on England but will almost certainly have ramifications for Scotland. There are various pieces of work.

It is clear that there is an on-going issue with recruiting people, especially into rural areas. We have examples of members who are bussing workers from urban areas into rural areas to do a day’s work. Having to take such measures demonstrates the nature of the issue and the problem that we face. It is compounded, as I understand it, by a shortage of not just labour but accommodation, given things like Airbnb and how easy it is now to rent out accommodation that previously would not have been a viable economic input.

That presents the problems rather than the solutions, but work is under way to review the issue and see what can be done. Clearly, the bill provides opportunities to help businesses to fill those gaps and continue to produce. We know that, sometimes, businesses turn away orders because they do not have the labour. Automation also plays a part, but it requires investment. It is not feasible for an individual business to invest the amounts often needed to automate a particular production section.

Paul Flanagan, in the dairy industry we have seen some managers changing the working week for dairymen. We know that milking cows is a hard task—I have been there and done that—but we are seeing different practices. From your perspective, how can labour shortages be addressed in the future?

You are right—it is particularly challenging. A number of farmers are looking at different contracts to fit around the individuals they can bring in. We have challenges with farmers poaching people from the neighbouring farmer, which obviously causes some issues. A number of farms are almost solely relying on family labour. The challenge with that is that there is a knock-on effect on mental health.

Thinking about policy from a Scottish Government perspective, we want farmers to learn, and we know that farmers learn best from other farmers, so they need to get along to meetings with other farmers. If they are stuck on the farm and are not getting off it, then they are trying to learn about climate change mitigation or biodiversity online. Watching a webinar is fine, but the best way to learn is by seeing things in practice. That is causing a number of issues, and right now there is no solution.

Some farms go on social media a bit and do not have an issue with people coming through the door, but a number of other farms are finding that very difficult. With the average age of farmers increasing, it gets to the point at which people are wondering how long they can keep going on their own or with just family labour when they are having to milk two and sometimes three times a day. It becomes impossible.

Convener, you asked the panel whether we could do anything with the bill. Given that Brexit is clearly the biggest cause of the lack of labour coming into the country compared to what we had previously, how could the bill alter that, given that immigration is reserved?

I meant the indirect consequence. If we are talking about an agriculture policy for Scotland, and if, as part of that, you need farmers to understand what they can do from a climate mitigation perspective or for biodiversity, the best way for those farmers to learn that process would be to come to meetings. My specific point was that, if they are stuck on the farms because they do not have labour, they cannot attend the meetings and therefore their ability to pick up the intelligence and the learnings and implement them back on their own farm will be restricted.

From my point of view, it is two different things. There are the more intensive sectors, like dairy and soft fruit, where you need seasonal workers to come in and that is the point—

10:00  

We also need capacity in processing and slaughtering. A lot of those lads came from eastern Europe, went home and have not come back. If we are talking about resilience and profitability, we need people in those jobs. However, the Scottish Government has no locus in any of the immigration policies, so how does the bill rectify that?

From my uninformed point of view, the bill cannot rectify that because immigration policy is reserved. However, apart from needing people to come in and help our processing and other intensive sectors, we need people in this country who want to go into food and farming. The bill could promote confidence in those sectors to encourage more people from this country to go into them.

It is not just those sectors that are struggling. I was up in Caithness in the summer, and farmers there were telling me that they were giving up and selling up their cattle. It was not all to do with financial issues. It was to do with the fact that they were getting older and there was nobody they could get locally to help them to do a tuberculosis test or a pregnancy diagnosis on their cattle or whatever they needed. It was about the skills that were not there on the ground. That is not about eastern Europeans or Filipinos coming in; it is about people in this country. We have to start from the bottom up. We have to work in schools to let kids know that farming is an option for them. We need to be as welcoming as possible to try to get people to come in from outwith the farming sector. We also need to make it as easy as possible for our own children in the farming sector to carry on and to make them want to carry on, so that we have people coming through.

We need to make sure that things like skills and education are designed around rural communities as well as being designed around going to university, so that, if you do not want to go off to university, there is an opportunity to go somewhere local and learn. That is about colleges like Scotland’s Rural College and things like monitor farms, which is what Paul Flanagan was talking about and which QMS has. It is giving people opportunities with the Farm Advisory Service to get out there and learn in the community that they are in and not saying that they have to go off to university.

To me, they are two different sides. You are right—I do not know what the bill can do about the Brexit side, but we can certainly do something about promoting confidence in the whole sector using the bill.

The new food and drink industry strategy is looking for responsible growth. Responsible growth is about economic prosperity and having vibrant, viable communities across Scotland with food and drink at the heart—food and drink productivity, profitability and sustainability. If we achieve that, it should become more attractive as a sector for our domestic workforce. That does not solve everything, but the bill could support that.

I want to pick up on what Kate Rowell said about local employment. I think that it was NFU Scotland that ran an event at Border Union Showground last year. All the local schools came and they had big fancy tractors and sheep shearing. It was to get local children interested in the farming sector more broadly. Borders College also had a stall. Did you know about that? I do not know why you would not know. Would it be worth going back to the NFUS, which I think was promoting it, to ask what the outcome was, and also whether the college had any feedback from the event? It was a good day.

The Border Union Agricultural Society runs the day. It has been doing it for a while. Every primary 6 or primary 5 child in the Borders is invited to go to the countryside day. My daughter is now 24 and she went, so they have been doing it for a good long time. The Royal Highland Education Trust is also very involved. QMS and NFUS also go along. It happens in the Borders; I do not know whether it happens elsewhere, but it is a good introduction.

I am asking about the outcome. It is an interesting day, but do people take up careers in agriculture and horticulture as a result? I am interested in seeing what impact it has.

I do not know whether they have any information on that, but it would be interesting to follow that up. I suppose you are talking about 10-year-olds and then you need to speak to them again in probably 10 years’ time to see whether that had any effect on them.

If it has been going all that time, we must have some uptake already. Your daughter is now 24.

There must be. We could certainly see whether there is any.

Convener, could we do a follow-up and see whether there is an audit of what happens at the end of the day, what follow-up there was from Borders Union and from Borders College, which also had a stall there? It seems to me that that is an interesting thing for local employment. You employ people locally, they spend locally.

The Developing the Young Workforce programmes across Scotland are seeking to hold those sorts of engagement events and have engaged with Scotland Food and Drink on how to get more people, processors and primary producers involved in those sorts of events. That is absolutely an opportunity for us to improve the level of awareness and understanding of the opportunities for careers in this sector.

RHET, ourselves and QMS do a number of things, including speaking to teachers about the role of meat and dairy and talking about the careers in the industry. We also run a consumer campaign, we eat balanced, which talks about the role of meat and dairy and which is aimed at anybody who watches TV or looks at social media; it is also in retail environments. We raise awareness of careers in meat and dairy in a number of places. It will be interesting to see what the Border Union says, and particularly what RHET says, because it would be the leader in that work.

Yes, the Royal Highland Education Trust does a huge amount of good work and I am pleased to say that it will be coming to the Parliament some time soon to educate MSPs. I will not suggest that they need to be educated, but it would open their eyes to some of the issues that we face in the rural agricultural sector.

I want to talk about natural impacts such as weather, pests and things like that, from a livestock producer’s point of view. A couple of years ago, the Galloway Cattle Society used a phrase, “The future is traditional”, to promote native breeds and their ability to outwinter—there is resilience and profitability. I go back to the question that I asked you earlier, Kate, about whether we are judging on eating quality or shape—my question is focused on cattle and sheep again, I am afraid. What role do the traditional native breeds have in ensuring that we have long-term profitability?

Breeds are very much an individual decision for each farmer to make. However, in the national picture we are seeing the number of native breed sired calves increasing. The numbers of Aberdeen Angus, Shorthorns and Herefords are going up. If you go back in time, we sent those genetics around the world. All the cattle that you get from South America are from those genetics, so it is very important.

Quality Meat Scotland cannot tell people that they should have this or that breed, nor can the Government. We can show farmers the benefits of the characteristics that different breeds have and then they can make up their own minds depending on the situation on their farm. I absolutely agree that native breeds are a great selling point. Aberdeen Angus, in particular, is recognised worldwide, and the number of Aberdeen Angus-sired calves is going up year on year.

I am very disappointed that you do not mention Galloways. I do like my Galloway cow. I know that I was very specific in that. Is there anything else that others want to talk about on natural issues? I go back to traditional breeds wintering out better, rather than needing to be in sheds. Is there anything else that the rest of the panel wants to add to that?

No, not at this point.

We wanted to get your views on whether you can see anything in the future around natural impacts—the change in weather or increase in pests—that we need to be aware of and potentially consider as part of the bill.

Risk management requires capacity to understand and measure and mitigate that risk. The bill could presumably provide some of that capacity systemwide, because the risks exist across all points of the supply chain for all produce, processes and so on. Climate change will probably drive different weather patterns and we will have to respond to that. There are also geopolitical and environmental risks. All those risks have to be monitored, managed and addressed. The capacity for that is probably one of the key elements of resilience.

That takes us nicely on to geopolitical and environmental risks.

I want to look at geopolitical and environmental risks in the future. Joe Hind, given the risks of trade deals like those with Australia and New Zealand undermining food production to the higher environmental standards that we have been discussing—those in place in Scotland—is there a need for something like a carbon border adjustment mechanism, which the EU is bringing in, to increase the price of imported goods from countries where carbon taxes are not in place? Do we need a similar mechanism to increase the price of meat and other food products imported from countries with lower environmental and animal welfare standards?

It is difficult to talk about specific mechanisms. I do not fully know all the consequences of each one, but it is true to say that, if you produce a premium product and the price of that product is undercut by imports due to trade agreements, you threaten the viability of the domestic production. Some form of protection would be needed. What form that took could differ depending on what decisions were made.

The trade agreements that are being made are of concern, in terms of understanding them. They are complicated. We do not yet fully understand the opportunities that they might present or the threats that they might present. We are engaging with the Scottish Government on that specifically, because there are a lot of them happening and a lot are in discussion. When we were a member of the European Union, we had a very effective trade agreement. That has obviously been dismantled and unpicked, and there are complications and challenges around supplying our nearest neighbour—that is a critical factor that we need to monitor; it presents a threat. Diversifying markets is one of the potential solutions, in that that ensures that we have a diverse range of people and places that buy Scottish produce.

Thanks very much for that response. Kate Rowell or Paul Flanagan, do you have any thoughts, not necessarily specifically on carbon border adjustments but on trade agreements or anything that you think we need to be aware of that could be coming our way?

It is important that carbon mechanisms are on a level playing field. It would be absolutely wrong of us to cut down domestic production and bring in food from somewhere else and pretend that it did not matter because it was somebody else who was producing it. That is very important. It is also very important that we have mechanisms in place to make sure that disease is not brought into this country. There needs to be a huge investment in that. That is not necessarily this Parliament’s issue, it is maybe for the UK. It is all very well to say that we have checks in place, but they need to be done for them to matter. There was a recent case of lorries coming in and only one out of 22 being even looked at. The big current issue is African swine fever. If it came into this country, it would be absolutely devastating for our pig industry. However, as the climate changes, there could be any number of different diseases. We need to make sure from a biosecurity point of view that checks are made.

On an export level, there are huge opportunities out there in the world for our producers. I echo what the other two witnesses have said about how that can help our domestic market and the primary producer. We do international trade shows, and it helps international export trade to balance carcases with red meat. There are a lot of things in an animal that we, in this country, do not want to eat. I have seen some things that they like to eat in places like China and Indonesia that we would not touch with a bargepole, so it is very important that we have that carcase balance. We can sell the things that other people want and we can bring in anything that we need extra that we do not have the capacity to produce. Lambs have only two back legs and you have to make sure that the balance works. Exports are important, but they have to be done on a level playing field.

10:15  

My organisation is a non-departmental public body, so I would be skating on thin ice if I talked about policy. However, from an evidence perspective, the question about carbon border adjustments and the policies of different organisations is interesting. I could commit to doing some analysis on that and sharing it with the committee.

In talking about future geopolitical risks that we face, everybody quite rightly points to the shock to the agricultural economy worldwide that the illegal invasion of Ukraine has represented, but we have to be prepared for other potential shocks in the future. Despite the fact that, regrettably, this Parliament cannot legislate on some of the problems that we have been talking about, can you say a bit more about how resilient Scotland is to future shocks, what those shocks might look like and where the role of the labour shortage is in being resilient to future shocks?

The risks and resilience issue is complicated. Risks exist almost everywhere across the supply chain. We are talking about a natural product and variants in weather being hugely critical to that, and we have to provide protection for our primary producers and for the rest of the supply chain. As an island nation, we also have to recognise that industrial unrest will sometimes cause blockages at ports. For perishable goods, that is a short-term acute situation that we have to have some form of mitigation against.

I echo what I said previously, which is that you need a risk capacity within the country to understand what is happening—we are part of a task force that has been set up to look at things such as food security. Such mechanisms are important in ensuring that there are eyeballs on the situation and something there to call upon for support to overcome any headwind. We have had major headwinds for some time and they continue. We need to build resilience in the short term across the industry, and then we can look forward to a future that is bright.

Should Government underwrite the production of certain crops? Some crops are more risky to grow but should form part of our future food supply. Should Government underwrite those like an insurance policy against the more frequent natural weather patterns that make growing some cereals more difficult? Is that something that the policies should consider?

Policy probably has to consider all forms of investment from the public fund into agriculture and where that lies. There is not a limitless pot and difficult decisions have to be made around what support we provide. We support what the NFUS has been quite clear about—the cabinet secretary has also said this—which is that we can all get behind and be proud of active and productive farming in line with our environmental constraints and our social aims and ambitions for vibrant communities. All those things are possible, but there is a difficult balance in deciding what we use the public funding that we put into that to achieve. That partly comes down to decisions made at United Kingdom Government level as well. Unfortunately, we have to live with uncertainty.

You mentioned uncertainty and the UK Government; they are often mentioned in the same sentence. As organisations, are you making representations to the UK Government about preparing for geopolitical shocks in the future? Would it be useful if some of the relevant powers were exercised here? That is a hopeful last question, but I will put it anyway.

As an NDPB also, we are not a lobby organisation but we absolutely are speaking to people at both levels of Government to provide information and make sure that they know the facts about red meat production in Scotland. That is all that I can say.

Likewise, we have conversations with a wide range of stakeholders. We have a membership group. We are also a leadership body. We co-ordinate the Scotland Food and Drink Partnership and are responsible in part for driving forward the new industry strategy. For some of that strategy to be successful requires decisions to be made at UK Government level. We will engage around that to try to ensure that the sector and the industry as a whole can grow responsibly. Both parts of that—growth and responsibility—are important.

It is the same for us. We provide evidence to the Government, rather than lobbying.

My question follows on from what has just been discussed. What should the priorities be for agriculture and food policy in order to mitigate some of the risks and to ensure long-term resilience?

We have three priorities, which I have already gone through. We would want local and public procurement—those are two different things, I suppose. There are various things that could be done in relation to public procurement. It would be really useful to have a streamlined process and a framework that everybody works to. The infrastructure that you need for local procurement is an important aspect. Labour and skills are hugely influential in how we go forward. We also need help with international exports. Those are what we see as the priorities.

We want to ensure that Scotland maintains its international reputation as a producer of world-class food and drink. We need to work together, collaborate and continue the dialogue if we are to achieve that and help to protect that position.

Sometimes, difficult decisions will need to be made, and we, across industry, recognise the need to act swiftly to address the climate challenge and nature crisis. However, one thing that is absolutely clear to us is that food production must be at the heart of the industry and at the heart of agriculture. That is how we can protect the jobs, the communities and the ecosystem that support, and that is supported by, the food and drink industry.

The only thing that I will add, which may be related, is how policy lands with farmers and how engagement with them, particularly on this issue, is done. We did some analysis on sustainable farming incentives. I appreciate that that related to DEFRA. The key message was that higher payment rates were needed to incentivise farmers to take part in some schemes.

When considering new policy development, the key things for us would be the ease of application for farmers; the ease of operation of the scheme; the attractiveness of the payment rates; the confidence of the participants in the audits and expressions; and any additionality gained from participation.

In the same way as QMS has, we have expertise in engaging farmers. That is primarily around farmer-to-farmer learning through the groups that we have done. It is about using that expertise and industry so that we can come together with one voice. From a dairy industry perspective—the sector is probably further ahead than other sectors—there is a lot of learning to be had from the environmental road map that has been in place in terms of getting farmers to move along certain lines.

I will direct my question to Kate Rowell. What are the risks to meat production—we have talked about the processing issues—specifically from climate change?

At the moment, the biggest risk is that we go down the wrong route in our efforts to tackle it. As we said right at the beginning, nobody is arguing that we do not need to do something. However, we need to ensure that we go down the right routes and that—I have said this several times—we do not end up with unintended consequences.

It is important that we keep people in rural areas, not only from an economic and a societal point of view but from an environmental point of view, because without people in those areas, there will be no one to take the actions that we need to be taken.

I know that you have spoken to Martin Kennedy from the NFUS. He has started talking about funding as investment; he is no longer calling it subsidy or support. That is absolutely what it is—any public money that is going into agriculture is an investment. It is an investment in society, in rural economies, in our future health and in our food security. It is so important that we keep that investment going to ensure that the sector has the confidence to continue.

Confidence is another big risk. As I said a few weeks ago when I was here, farmers feel absolutely browbeaten. That lack of confidence is a huge risk to the sector.

Last week, we had Ian Boyd-Livingston on our panel. He talked about the need for investment—I will start using that word—for livestock farmers who want to diversify their income streams or transition to low-stock or no-stock farming. What investment is needed to enable those farmers who want to to transition to low-stock farming or to move to different forms of environmental land management?

Not many farmers I know want to leave livestock production. They want to continue with it, they want to be able to do it profitably and they want it to work not only for their business but for their farms.

Lots of farmers are diversifying. That is a newish word, but it is not a new concept. Farmers have always done everything it takes to be able to make a living and to stay on their farm. Fifty years ago, my dad had a trout farm on our farm, which gave us a little bit of extra pocket money. It is long gone now, because of regulation. We need to help farmers if they want to diversify into agritourism for example. All those things should be supported.

However, at the bedrock of it all is the farming life and the business that they have. It is a very emotional subject because, as I said before, farmers love their farms and they love farming. We are there because we love it. We love producing food for people, we love being in the countryside and we love looking after nature. We just need to make sure, policy wise, that people are enabled to do that. Farmers have always adapted and they have always done extra things. They will do that if they are given that help. It is about education, support, investment and the policy direction to show that they are valued and are important for the rural economy.

I am picking up from that passionate response your love for the work that you do—I certainly meet farmers who also express that love. I also note your earlier comments about peer-to-peer learning, the monitor farms and those things where people can get out and learn from each other about new practices or different ways of doing things.

Yes. That is so important, because it is an isolating industry. I have just gone through four weeks when I have not left the farm at all. You do not see people. There are lots of farms out there where that happens most of the year, not just at this time of year. It is very important to share skills and education. Peer to peer is the best way to do it; that has been proven. We work very closely with the AHDB to run the monitor farms and to make sure that we facilitate that wherever possible.

10:30  

Unfortunately, we are running out of time—we have only five or 10 minutes left. I ask that we try to keep the questions and the responses as succinct as possible.

I will continue with the topic of mitigating risk and promoting food resilience. How is your organisation modelling for the future? It is expected that the use of new technologies and innovation in agriculture will increase gross domestic product and reduce emissions. The Scottish Government is seeking to reduce emissions in agriculture by 31 per cent by 2032. So far, not much progress has been made towards meeting that target.

The best route to do that is through the road maps. As I indicated earlier, the dairy road map is probably the most established—it has been around since 2008. Our organisation, the processor organisation Dairy UK and the farming unions are working together on that. Underneath that is a whole range of stakeholders working with one aim.

I acknowledge that it is easier in the dairy industry because it is more consolidated. You can work with a smaller number of processors—the two largest processors probably handle more than 50 per cent of the milk in Great Britain—so getting farmers and our organisations to work through the processes together is easier. That will be the main route through which we will achieve progress so that everybody is behind one plan and understands what we are doing from a climate perspective and from a biodiversity point of view. However, at its base has to be the economics. If that does not work for farmers to produce milk, we will not have milk and we will have to import it. There is also Kate Rowell’s point about society to consider.

I know that that is happening in the beef and sheep sector as well—there are road maps and various working groups are coming together. That is the way that we will create progress. Of course, Government has a role in that, but industry needs to lead on the road maps and on driving that forward. That will give us the confidence in having and delivering on the risk maps and the mitigation techniques in the road maps, as well as having efficient road maps and allocating the required level of resources behind them.

Do you realise that you looked as though you were milking some cows just then? [Laughter.] I ask Kate Rowell to respond.

Much like AHDB has for dairy, we have a red meat net zero road map in production. That covers everything from primary production through to processors, and there is life-cycle analysis to see where the gaps are in what we know and what we need to know.

The other part of what QMS does is help to share science and research. We do not do that—the SRUC is among many organisations that does that. We try to share new practices—some would say that they are old practices coming back into use again—get them more widely understood and ensure that farmers know exactly what they are doing as well as what they are being asked to do and how they do that.

That is part of our work, and the monitor farms are a big part of that sharing of information.

I do not know whether I mentioned that we have a new industry strategy that is being launched in the summer. There are key pillars of work in that, one of which is net zero and sustainability. All elements of the industry, including agriculture, have signed up to and are supporting the industry strategy. A delivery plan—a pathway—will follow that will allow us to reduce emissions.

On emissions as a whole for Scotland, renewable energy is a massive issue for the industry. We are energy intensive as a necessity. If we can reduce the carbon footprint of our grid energy, we will massively move towards net zero. It is very complicated with meat, but if we displace those emissions to other countries’ production, we will shoot ourselves in the foot.

None of you has answered the question specifically about what organisations are doing to support farmers to work out how we reach that point. So far, we have anecdotal information about route maps and a strategic review. Unfortunately, farmers are being asked to put all the eggs in one basket and we are scrutinising that. Farmers are feeling under pressure from the expectation that they are to be part of meeting net zero by 2045.

As far as I can see from the pre-legislative scrutiny so far, we have not reached the stage at which there is a clear indication of what farmers can practically do, with support from organisations and the Government, to get to that point. It seems as though, as I say, they are under pressure and that everyone expects a lot of them to get to that point. Do you understand where I am coming from, Kate Rowell?

Yes, I do. The farmer-led groups have, in particular, put together a lot of measures. However, no one has said, “If you add A, B, C, D and E together, you will get to F.” That is the problem.

Is the point that you are trying to articulate that we do not know what the position will be if we do all those things?

Yes.

A big part of it is how things are accounted for. Sequestration has already been mentioned. It is not necessarily all being counted. If it is being counted, it is in different parts of the inventory. Government can bring all that together at an individual farm level and set out what good, positive things the farm is doing. It can also set out what things can be done better and highlight the different savings that that would make. Furthermore, it can set out not only where targets are being hit or going beyond what is required, but where the action is not quite there yet and offer some other options for the farm. Is that what you mean?

For me, that needs to be at a farm level. We need people who know what they are talking about to help farmers with that. There have been a lot of accusations about consultants’ charters. We definitely do not want that. On the other hand, we need the expertise to help farmers. We would have to get that balance right somehow.

I will come in briefly on that. I agree with Kate Rowell. The baseline needs to be at the farm level.

We have done that on a number of our farms. We have strategic dairy farms. We use Agrecalc—that is an SRUC tool. We get somebody in to do that, and then we look at the mitigation measures underneath that.

I can send a whole heap of information—I am trying to be succinct—on what we, as AHDB, are doing and what we are doing at individual farm levels on that. It really must be at individual farm level rather than at national level or international level. That is the way that we will make progress. A number of years later, we then go back and test, to see what progress we have made.

That information would be helpful. We are running out of time. It would be hugely useful if you could, in writing, provide real-life examples of what farmers are doing on the ground right now.

It has been a very interesting session. As the witnesses know, collectively, we have faced a perfect storm with Brexit, Covid, the Ukraine war, climate change and food inflation at about 18 per cent. However, I am going to cheer you up. Out of adversity comes opportunity, and there is a big opportunity across the sector to drive consumers towards more seasonal local produce. I heard what was said about the supermarkets—I understand why you might be cagey about them—but supermarkets are key. Consumers can have an influence, but supermarkets are very clever at influencing consumers. What should we ask the supermarkets to do? Are you going to be frank about it?

I think that that question is for Joe Hind.

Thank you. [Laughter.] It is very difficult to tell a major retailer what to do, is it not?

No, it is not. Please do it. I am a consumer and I want this to happen. Normally, I can afford to pay inflation prices but, when I look at the prices on the shelves at the moment, even I say that I am not paying £1.50 for a cauliflower.

Our members include retailers, too. We work across the whole food and drink sector, and we run programmes in which we meet buyers and suppliers, bring them together and encourage them to form a relationship. That helps to ensure that we have local products on local shelves. Retailers will always be mindful of the end price, as will consumers, so the work relating to the cost of living and the availability, accessibility and affordability of food among our communities is paramount in resolving the situation. We have touched on the issue of resolving symptoms rather than resolving root problems. One of the root problems that we have to resolve in this country is inequality and the lack of resources among communities to afford the things that we would like them to afford.

Yes, but I want to get back to the point about seasonal produce. There is no point in buying tomatoes that are rock hard, which they are, or plums that are rock hard. If we go back to promoting Scottish or UK seasonal foods, we will educate the palate of the consumer once again. You should not be eating strawberries in January—there are the food miles, and they also taste crap. What discussions are you having with supermarkets that BOGOF on non-seasonal products, whereas Scottish mince, cauliflowers and other things that are grown here are quite dear? I do not mean to have a go at them, but—

It is a collaborative effort. Our food and drink system is what it is. We are starting from this point, but we hope to move towards more resilient supply chains. We need a strong domestic market, a UK market and international markets. We need to diversify and produce these things. If we need to look at the balance of what we produce to ensure that we can supply those markets seasonally with the volumes that we need and at the right price, we all have to play a part in that. It comes down to the funding that we put in place, the structures and regulations that we have in place and the decisions that consumers make about what they eat and drink. We believe that, if we get that right, we have the opportunity to be genuinely proud of the food that we produce and consume.

Public procurement, which Kate Rowell touched on, is a huge part of that. We have been trying to crack that issue through Food for Life Scotland, but local authorities have public procurement systems that are still weighted towards cost. If we chase the lowest cost, we are unlikely to drive up the supply of Scottish produce. How do we fix that? In the public sector, we probably can fix it. In the private sector and the commercial world of supermarkets, it is more challenging, but we absolutely want to champion Scottish produce.

I am a member of the Scottish Parliamentary Corporate Body, and we push for local produce to be served in what I call the canteen, as well as in the dining room.

Supermarkets do not push local produce. It is available, but it is not pushed in the same way as other items are. How can we get supermarkets to appreciate that the price of cauliflower—which, I think, is in season just now—is so dear? Why is that the case? How do we get them to say to people that it is better to eat local produce than it is to spend their money on imported stuff that is out of season?

That is probably the million dollar question. You are talking about food culture and the decisions that people and private businesses make. We hope that the new industry strategy will drive a conversation so that we can improve the situation. We want to improve the situation, but I am not going to hammer supermarkets in this forum to drive them to change how they operate. Those discussions will need to continue, and we will, of course, continue to support local domestic supply for retailers. At the moment, retailers are critical to providing food and drink to our people and communities.

We will probably get a chance to look at that issue again when we consider the good food nation.

Last but not least, I will bring in Karen Adam.

10:45  

A lot of my questions have been answered during the session, so I might throw in a wild-card question—it is not too wild, convener.

Having heard all the evidence thus far, I want to touch on what Kate Rowell said about France spending a bit more on food. That got me thinking that energy costs and commuting costs in France might not be as high as they are in our everyday lives. A report might need to be commissioned to find out why more is spent on food there and why we often cannot pay more.

The constant dichotomy between profitability and affordability keeps coming up all the time. We might want to focus more on a health and wellbeing economy in which low-carbon foods are encouraged, perhaps with a levy on produce with a high-carbon footprint. That would mean that imported produce that would generally be cheaper might cost more because of its higher carbon footprint, whereas local produce would have a lower carbon footprint. Perhaps some Government support could be provided for low-carbon produce. We could flip the position around and focus on a health and wellbeing economy in which we consider the environment, good mental health and local food production with great employee benefits.

Fishing and ports were also mentioned. There are quite high costs for people landing their fish in the north-east—

Can you focus on agriculture, please?

I am sorry—I am trying to wrap things up. If we focused on a health and wellbeing economy rather than just profits, would that make a big difference to the industry and to what we do?

I see where you are coming from, but we would have to think about how we modelled that. My concern relates to what percentage of the population would be able to pay for that when we are going through a cost of living crisis. When we sell stuff, it would be nice if we got twice the money for doing certain things, but we need to be able to serve the needs of consumers. It is worth thinking about what you have said, but we would have to do some modelling on how we would segment the population to pay for that.

We focus on responsible growth, both parts of which are important. Responsibility encompasses sustainability. With meat and dairy, it is a contentious topic, with very intelligent people arguing, from different perspectives, for different solutions. There are sustainable food systems and models that use ruminants as part of the system, and we advocate for farming to support productive agriculture. If we get those decisions right, that will affect how we use our land and how we farm and produce, but it will also touch on how we sell and trade internationally and what we eat as a country. The demand for different foods from different consumers at the retail level is an important part of that mix.

Putting a carbon price on something would involve viewing the issue through a single lens. There are other factors. We touched briefly on the fact that, in Scotland, meat and dairy agriculture takes place on land that is unsuitable for many other forms of agriculture. That is part of the mix. We should consider that and the fact that, if we took away fossil fuel use, which is obviously driving climate change, that would involve our energy and transport sectors—we probably would not look at agriculture at all in relation to its climate change impact, because it is part of a methane cycle and, by and large, does not use fossil fuels.

A lot of factors are at play, and we need to consider them. However, if we get it right, we can all be rightly proud of the food that we produce and eat in Scotland.

Karen Adam is right in saying that we, as a society, need to focus on health and wellbeing, which are core, but the health and wellbeing of farmers is largely dependent on being profitable. The two things are completely entwined. Farmers do not just need their farms to be financially profitable; they need to ensure that the environment and society are in the profitable category, too.

I want to end by talking about the French example. At an NFU conference a few years ago, a French lady from the ministry of agriculture spoke about all the things that are done in France in relation to food. One farmer put up his hand and asked, “How can we get our society to value food, particularly local food, in the same way as you do in France?” She did not understand the question because, to her, it was not something that you got people to do. It was just how you were—it was part of you, so that is what you did. That is how you do it. She did not understand the question, not because of the language barrier but because that is part of French society and their psyche. That is where we need to get to, and it all starts with children’s education and moving slowly in the direction of a health and wellbeing economy.

I thank the witnesses for joining us this morning and for their extended but hugely valuable contributions. It has been a fascinating discussion, which will certainly help us in our deliberations when the bill is before us.

I suspend the meeting until 11 am.

10:50  

Meeting suspended.

11:00  

On resuming—