Rural Development Committee, 02 Oct 2001

Meeting date: Tuesday, October 2, 2001

Official Report 281KB pdf

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Subordinate Legislation

Rural Stewardship Scheme (Scotland) Regulations 2001 (SSI 2001/300)

Members have received copies of the Rural Stewardship Scheme (Scotland) Regulations 2001 (SSI 2001/300), along with further documentation.

I am pleased to welcome John Hood and Andrea Ramsey, who will answer any questions that we wish to ask. I suspect that questions will be asked on the regulations and I have no doubt that there will be discussion. I invite members to open the discussion.

Good grief—as members are silent, I ask Rhoda Grant, who has had correspondence on the issue, to run through her concerns and tell us how satisfied she is with the answers that she has had.

I think that everyone has had copies of my e-mail on the responses that I received.

My first concern was that the scheme is apparently competitive and that therefore small farmers and crofters with a smaller area of land will lose out because they will be unable to compete in providing the same number of habitats as larger farms can.

There were also concerns about the extension of the scheme if somebody takes on extra land. I have been involved in cases in which people have had to resume land from a sub-tenant because the sub-tenant's husbandry was failing and the land was in a bad condition. Transferring the scheme to such land could cause problems.

Thirdly, I was concerned about someone who is part of the scheme giving up land and then having to repay benefits given to them under the scheme. I was quite pleased with the answer I received, which said that if someone has to retire, for instance, that will be regarded as okay and that person will not have repay the money.

I am still concerned about the first problem, but I understand that there will be a review of the scheme—I would be interested to know how soon it will be carried out. A review will reveal how many people apply for the scheme and are turned down and will make it possible to determine which people are successful in gaining entry to the scheme and whether any areas appear to be excluded.

I am glad that you found the correspondence helpful.

The arrangements for ranking applications that we receive under the rural stewardship scheme are a development of arrangements that we have operated for a number of years with the countryside premium scheme. The change in the arrangements is that we now focus more on applications that will help to deliver national and international undertakings on biodiversity and nature conservation.

Since we began operating arrangements for ranking agri-environment scheme applications, concerns have been expressed to us by the Scottish Crofters Union and others that the arrangements may lead to the exclusion of smaller units. In each year in which we have operated arrangements, we have reviewed and modified them to ensure that the greatest possible spread of applicants is allowed into the scheme. Most assuredly, it is not our intention to keep out small farms or crofts.

Last week, I discussed with the Scottish Crofters Union what the timetable might be for review of the ranking arrangements for the scheme. I have invited the Crofters Union and the other organisations that have prepared conservation plans—the farming and wildlife advisory group and the Scottish Agricultural College—to provide us with information on the applications that they have submitted. Once decisions have been taken, we will, of course, examine the outcome of the first application round for rural stewardship funding.

I am not sure that we can devise a ranking system that will ensure that everyone is guaranteed access to the scheme. The reason that we have such arrangements is to ensure that the best applications receive funding. We are aware that the payments made under the scheme have wider economic benefits for rural communities, so we want to ensure the widest possible enfranchisement of farmers and crofters.

The arrangements for ranking will be reviewed after the first round of applications is complete. As I said, I have invited the Scottish Crofters Union and others to provide us with information on the outcome from their constituencies, which we will consider.

I would like to press you further on that subject. I understand that 476 applications have been made under the scheme and that the period for applications is now closed. Is that correct?

Yes.

The total cost of those applications, if all were approved, would be £28.5 million.

That is also correct.

It is likely that about £5 million will be available for the scheme, because of all the other schemes to which attention has to be given, such as the organic aid scheme, before funding is available for the rural stewardship scheme. Is the figure that I have given roughly correct?

The figure of £28.5 million is correct. I am the programme manager for the rural stewardship scheme, and I cannot tell the committee today how much money is available to applicants.

Is there not a similarity between this situation and what happened with the agricultural business improvement scheme? I do not doubt for a moment that it is your intention that the best applications should receive funding. However, in reality, will only the applications that can be afforded receive funding? That would mean that some of the more expensive priorities, which may be the most important, would have to be dropped so that funding could be available to the largest possible number of people.

I do not think that the scheme will operate like that in practice. I cannot be precise about how much money is available for this year, but the figure of £28.5 million that the convener quoted is the cost of applications over five years, rather than over one year.

That is correct.

When deciding which applications can be funded, ministers must take account of the resources that are available in the year of approval and the effect on funding in future years of any commitments that are made. We are not in an ABIS-type situation, because we have an application window. We are not operating on the principle of first come, first served. In the farming community and among people who advise farmers there is widespread understanding of the fact that the scheme is competitive and that access to funding is not guaranteed. We are trying to manage funding to ensure that the maximum possible number of applications is dealt with.

The decision by the European Community to remove our ability to place a limit on payments may have a considerable effect on the number of plans that we are able to approve. As members may know, under the countryside premium scheme there was a limit of £30,000 per business over five years. Many organisations, including farming organisations and RSPB Scotland, argued for a long time that that limit should be removed. The EC has now done that. I have no evidence that it removed the limit in response to lobbying by the RSPB and others, but the result has been that we have received some applications that individually are worth more than £500,000. That will have an impact on the number of farms that can be covered by the scheme, given that we have a finite budget.

We have included in the proposals for the rural stewardship scheme arrangements that are designed to mitigate the effect of such applications. Where more than 100 hectares of inby land or more than 1,000 hectares of moorland are being managed, the rates of payment for all of the land will be abated to 80 per cent. We need to see how those arrangements work in practice. It is new for us to have to operate a scheme without a limit on the payments that can be made to any one business. We will need to consider carefully the impact that that has on uptake.

You said that there have been 476 applications, the total cost of which would be £28.5 million. Is that right?

That is correct.

By my rough calculation, that means that the average aid sought is about £59,900.

That is also correct.

Does that not really make a mockery of a scheme that is surely designed to help crofters and small farmers obtain a little extra income by looking after their smallholding or family farm? Instead, the money seems to be going to wealthy bodies. You mentioned a figure of £500,000. Will the Executive ensure that no such payment is made and that the scheme benefits the crofters, small farmers and hill farmers who need the money and who will almost certainly leave farming if they do not get it?

You raise a number of points. The scheme's purpose is not of itself to provide additional funding to crofters and small farmers, although we certainly want those agricultural practitioners to gain from the funding in ways that benefit them and their local communities. Although I have explained that we have no desire to exclude local farmers, we must operate the scheme in accordance with Community legislation, which prevents us from putting a cap on the payments that individual businesses can receive. We will have to see the impact of the last-minute steps that we took in our negotiations on the rural development plan to mitigate the effect I described a few minutes ago. We might have to revisit the issue.

Although studies have shown that agri-environment scheme payments are valuable to rural communities, we should not overstate their value. The total expenditure for such schemes is about £20 million a year, whereas the amount of subsidy that agriculture in Scotland receives is about £450 million—we need to keep a wee bit of perspective. Agri-environment schemes alone will not be the saviours of rural communities, but the Executive readily acknowledges that they have a part to play, which is why we have taken steps to make the schemes as inclusive as possible.

Will you publish a table of the top 100 applicants for aid in terms of how much money they are seeking? Will you disclose the identity of applicants and how much money they have applied for from the rural stewardship scheme? Such a league table would be very much in the public interest.

I am certainly happy to provide the committee with a top 50 or top 100 list of applications and the value of the payments that the applicants expect to receive. However, I am not sure that we can also disclose the identities of the applicants.

Why not?

Data protection considerations apply to the release of information about agri-environment agreements.

Well, we have to publish our expenses.

I am not saying that we cannot disclose identities; I am just pointing out that data protection may be an issue. I am happy to take your request away and if we can disclose identities, we will do so.

I am grateful for your response. However, I am totally shocked by the evidence that we have heard today.

I must declare an interest as I have a hill farm and am involved in a countryside premium scheme.

Given that much of the funding for the rural stewardship scheme comes from the modulation from other agricultural schemes, farmers feel strongly that it is unfair that designated sites have priority. How exactly would you define a designated site? How will such priorities achieve your stated aim of fairness in the scheme?

Priority is not simply given to designated sites, by which we mean sites of special scientific interest, special protection areas and special areas of conservation. The definition will also include national parks.

Will it include less favoured areas?

No.

It is important that you specify what such sites are. Your letter to the committee says that the money should go to farmers in priority areas, such as those covered by site designations.

The LFA designation is not a site designation. The types of site covered by that description are described in the scheme literature, which is in the public domain, and can attract points under the ranking system.

If a farmer's land does not have such designations, is he far less likely to get on to the rural stewardship scheme?

That would depend on the other habitats on the farm and on what the farmer chooses to manage. The designation attracts points only if the designated habitat is managed within the scheme. I know of cases in which the farmer has a designated site and has chosen not to manage within the scheme. In such circumstances, points will not be awarded. Only about a quarter of the total points available are linked to site designations. Around a third of the points are linked to the ability of applications to meet local biodiversity targets, as set out in local biodiversity action plans.

So it is not necessary to have a site designation to get on to the scheme.

No. That is not a qualifying criterion; it is simply part of the arrangements for ranking applications.

I said that all the elements of the ranking system will be kept under review. The rural stewardship scheme is a national scheme that is designed to meet broad conservation objectives throughout the countryside. We do not want the scheme to become a special protection area scheme, a natterjack toad scheme or any other type of specific scheme. The impact of qualifying criteria on applications will therefore be kept under review.

We piloted the arrangements for the final year of operation of the countryside premium scheme. We have not made a formal study, but the information on applications that I have received from the advisers is that the new arrangements made virtually no difference to which farms qualified and which did not. I am not sure whether that is good or bad news for the RSS arrangements, but that is the opinion of the farming and wildlife advisory group and Scottish Agricultural College advisers who were involved in drawing up plans for the CPS.

I, too, was a little concerned that applications for as much as £500,000 have been lodged under the rural stewardship scheme. I share Rhoda Grant's concern that some of the smaller applicants may lose out when the big boys put in such applications—particularly as fewer than half the applications to the countryside premium scheme seem to have been successful. We need to review how the scheme is working to ensure that everybody is getting a fair share of the pot of money.

The information that has been circulated to members from RSPB Scotland suggests that more money is available and a larger amount is available per acre of farmed land for agri-environment schemes south of the border. It also suggests that Scottish farmers do significantly worse out of the agri-environment budget than most European Union countries. Is that the case? If it is, should we not consider how we can improve access to agri-environment money in Scotland?

You mention the percentage uptake of the countryside premium scheme, but there is a danger in focusing on one scheme only. There is also an organic aid scheme and there were 10 environmentally sensitive area schemes until the end of last year. In 1999—the last year for which we have figures—we had to refuse funding for around half of the CPS applications, but more than 1,200 farms were brought into agri-environment schemes. That was the highest number ever in one year.

I am not sure that the amount of money per acre is a particularly meaningful indicator. Agri-environment payments are of necessity calculated in relation to income foregone. Around 90 per cent of Scottish land is classified as LFA and income from that land will be less than from land elsewhere. The amount that is paid per acre throughout Scotland is therefore not a particularly meaningful indicator.

It is true that there is more demand for funding than there is funding to satisfy that demand. The rural stewardship scheme is part of Scotland's rural development plan and the funding for that plan was allocated by Europe from the common agricultural policy guarantee budget on the basis of uptake of funding by member states in the previous funding round.

The upshot of that was that, because agri-environment schemes throughout the UK had consistently underspent over a period of years, the UK got a smaller allocation of funding from Europe than might otherwise have been the case. That was one of the factors that led agriculture ministers to decide that they should introduce arrangements for modulation, to bring more European funding into rural development plans.

Another factor that should be borne in mind is that agri-environment funding is the only measure included under the rural development regulation that has mandatory levels of co-financing. The EC co-finances agri-environment payments at the rate of 75 per cent in objective 1 areas and 50 per cent elsewhere. It follows that the amount of domestic money that can be put in is in part determined by the amount of European money. Outside objective 1 areas, if there is £10 million of European money, for example, the maximum amount of national money that can go in is another £10 million, because the co-financing rate is 50:50. The same applies in objective 1 areas, although the balance is different—it is 1:3. The funding is not quite as straightforward as some people might try to make it look.

The rural development plan indicates that about £85 million or so will be available for agri-environment schemes in the period up to 2006. That is in addition to the funding that is continuing for agri-environment scheme applications that were approved up to the end of 1999. There is a considerable funding stream, although I am not for a minute arguing that it is meeting all the demand. The funding stream for the pre-2000 applications includes an extra £12 million that the Executive put in as part of the comprehensive spending review; £6 million was put in over three years. As far as possible, steps have been taken to meet the demand.

We need to bear in mind the fact that we do not operate the same schemes as England does. Until recently, England did not have marketing and processing grants, whereas we have continued to operate such schemes in Scotland. We spend more on LFA support. There is a wider funding picture.

You said that there was an underspend in agri-environment schemes in the UK. Is that throughout the UK?

Yes.

Is Scotland just as bad as south of the border?

I cannot give precise figures, but we were all in the same boat. Until three or four years ago, the farming community did not show great interest in agri-environment schemes. Five years ago, we were spending about £2 million in Scotland; we are now spending £20 million. There may be many reasons why uptake has gone up. If someone had had a crystal ball five years ago and had foreseen that a low uptake might have meant a low allocation under Agenda 2000, things might have been different. However, that is 20:20 hindsight.

If, for instance, a landowner has made an application for £0.5 million, are the jobs that will be created or the other subsidies that the landowner has received taken into account in the criteria for the ranking of the applications and in determining whether that person is entitled to that £0.5 million?

There is one requirement that applicants must meet in order to apply to join the scheme, which is that they must be the occupier of agricultural land. If they meet that requirement, they are free to draw up an application and submit it. The application will be submitted on the basis of the published criteria, which do not include references to job creation or the other subsidies that they may receive.

So a farmer who gets a subsidy of £0.5 million could qualify for another £0.5 million subsidy from the scheme even if, for example, no new jobs would be created.

In theory, that is correct. However, the rural stewardship scheme is not a subsidy scheme; it is a scheme that pays farmers to undertake positive conservation management of the land.

I never said that it was a subsidy scheme. However, it still involves public money.

The scheme is such that the farmer has to undertake operations that he is not currently undertaking. He has to change his way of farming, which imposes a cost on his business. Study evidence has shown that expenditure that goes to farming communities has considerable effects on job creation—both upstream and downstream—in contracting and in supply, for example. There is therefore an impact on the wider rural economy. However, there are no criteria in the scheme that relate to job creation or to other subsidies that the farmer may be receiving.

It concerns me slightly that bigger farms, even though they already benefit from economies of scale, would be perfectly entitled to the grant—possibly of £0.5 million—without any socioeconomic factors being taken into account.

The socioeconomic impact of the rural stewardship scheme payments, and of all the other payments made under the rural development plan, will be subject to evaluation. If the study showed that the way that the scheme was operating offered only narrow benefits to rural communities, I guess that we would have a case for saying to the European Commission that we wanted to reimpose a limit on payments. It would be open to ministers to press for that.

So ministers could say to the European Commission that they wanted to impose a limit.

A change in Community law would be needed, which is not easy to achieve. However, the purpose of an evaluation would be to find out the effects of the expenditure. If we could point to effects that were markedly different and less desirable, from a rural development point of view, than the effects of expenditure on schemes prior to the removal of the limit on payments, we would have arguments that we could take to the European Commission.

Am I correct in saying that the scheme is open to any occupier of agricultural land?

Yes.

No matter what their status?

It is open to occupiers of land farmed in hand or land-tenanted.

I would like to continue Fergus Ewing's interesting line of questioning. We are talking about public money. Is information published on successful applications for other financial schemes that SEERAD runs?

Not that I am aware of.

I believe that the public are entitled to know where public money goes. Do you know whether the Freedom of Information (Scotland) Bill, which the Executive has just published, will make that information available to the public?

I am sorry, but I do not know the answer to that.

I can understand members' desire to go down that line of questioning, but it is a line of questioning for another occasion. We are here to discuss the rural stewardship scheme and we should stick to that.

The scheme is meant to deliver environmental benefits. For the large applications in particular, how will you measure such benefits during the five-year period?

A few moments ago, in response to Richard Lochhead, I mentioned that there would be arrangements for evaluating the impacts of all the measures in the rural development plan. In the rural stewardship scheme, the evaluation will cover not only the socioeconomic impact of the expenditure through the scheme, but the environmental changes that come about because of the changed management that we are paying for.

During the five years, how frequently will you evaluate the outcomes for individual farms?

The evaluation will be undertaken by independent consultants and we are working on arrangements for that. We will ask those consultants to suggest how often farms should be visited.

Some types of vegetation—heather moorland, for example—will respond slowly to changes in grazing pressure, so one might not want to go on to heather hills every year to see what changes are taking place. Changes in water margins might happen more rapidly; different types of vegetation and shrubs might respond more quickly there. Arrangements are in place for monitoring the impact of the environmentally sensitive area schemes. There are 10 separate schemes, which are all being evaluated. The chosen sites are visited every year, which is an expensive exercise.

The answer to your question is that the sites will be visited as often as is necessary to enable us to be satisfied that change is taking place. That is part of the formal evaluation process. There are also in-house arrangements for periodic inspections of farms that are participating in schemes that are part of the rural development plan. We do a fixed percentage of those every year; we would not inspect the same farms every year. At that stage, we are establishing whether the requirements of the scheme are being complied with. That would include an assessment of whether the change that we were looking for was beginning to take place. The approach is a two-pronged one.

Regulation 12 refers to breaches of undertakings. If the large applications are approved, what additional undertakings might you impose on grants in excess of, for the sake of argument, the previous limit of £30,000?

No additional conditions would be applied. The same conditions apply to an agreement for £30,000 as apply to one for £5,000 or to one for £500,000. The same standards would also apply in ensuring compliance.

Do you accept that large sums of money that are disbursed to large interests should be monitored differently from grants that might be made to, for example, a crofter with a few acres?

Where large tracts of land are being managed, it might make sense to pre-select some of them in the sample for the environmental evaluation exercise. Some conservationists would say that there is greater benefit in managing a large area of land than in spending the same amount of money managing a number of disparate smaller areas. I am not qualified to comment on that, but the view has been expressed.

One factor that would be taken into account in selecting farms for inspection to ensure compliance would be the amount of payment involved. Such requirements already apply to the integrated administration and control system subsidy regime and similar requirements will apply to the rural stewardship scheme.

You made the point that the benefits to be derived from managing large areas might be greater than those from managing small areas. Would you therefore accept that, if we apply that criterion, large applications are likely to be successful at the expense of small applications under the scheme?

I did not say that the benefits would be greater; I said that there was a view that that might be the case. Large applications and small ones will be assessed on the same basis, in accordance with the published criteria.

What weight will you give to the view that others have expressed?

No weight will be given to it. The ranking process is mechanistic. It is designed not to discriminate against small farms by saying, for example, that if someone has 50 hectares of wetland, that is better than having 1 hectare. It says that any designated wetland is of equal value. There are no references in the ranking criteria to the proportion of land that the farmer is bringing in. The ranking is on the basis of the designation and the local biodiversity action plan species that might benefit from the management that is proposed. There are also other criteria.

It is fair to note that most designated sites in Scotland are north of the Highland line. I do not know to what extent that might benefit crofting areas. We must wait and see the result of the first round of applications. I assure the committee that we will examine the outcome closely.

When you face one application for £500,000 and 500 applications for £1,000, it is obvious that the 500 applications will spread the benefit of the moneys from the scheme to more people and to a greater number of habitats. Given the need for rural development, is such a comparison relevant when you decide whether to approve an application?

No. Applications are assessed on their merits. Larger units would probably score more highly than smaller units would, but that should not be taken as an absolute. For example, some large arable units would have great difficulty in finding habitats. Most arable units would not have a nature conservation designation. In the scheme, we have included several creation options that would bring biodiversity benefits. We have tried to find several routes that would allow farms to find their way into the scheme. We thought about small farms and arable farms and tried to produce arrangements that gave them all a reasonable crack of the whip.

Would it be useful to establish a separate budget? Will the Executive do that? You said that you do not know what the overall budget will be for the applications that you have received. Would it be more helpful to have a separate budget that allowed everyone to know how much will be spent on the scheme every year? That would enable people to decide whether it was worth their while applying to the scheme, instead of hoping for the best.

Agri-environment schemes have a separate budget. We have had to contend with the fact that a plethora of schemes exists.

That is what I was referring to.

Until about four years ago, we had five schemes. We are now down to two. We will always have to balance demand against available funding. Even if funding were sufficient to meet all demand, we would still want to have arrangements to ensure that money was granted to applications that were likely to deliver conservation benefit. The ESA scheme since 1987 and the organic aid scheme have operated by funding all eligible applications. If we started from scratch now, I am not sure whether we would establish such an arrangement.

You said that there were many reasons for the huge increase in take-up of the scheme. Have any lessons been learned from the embarrassing ABIS situation and the over-take-up in that scheme, which resulted in many applications not being honoured?

I do not think that we are talking about anything that bears any similarity to ABIS. We have a scheme that operates in the Scotland rural development plan. The funding for agri-environment schemes is set out in that plan for up to 2006. We must do our best within the resources that have been made available by Brussels and the Executive to manage demand within those totals. With ABIS, an industry that was apparently in dire financial straits produced £22 million of development proposals in a few weeks.

Do you think that the take-up has been big because the agriculture industry is in an appalling state and has lost other forms of income through the decreases in the sheep annual premium and LFA payments?

That may be one reason, but the farming community also recognises that those in an agri-environment scheme have a guaranteed income stream for five years. When we consulted on the arrangements for the countryside premium scheme, the farming unions thought that one year was long enough for an agri-environment agreement. The unions are now very happy with a five-year term.

On that note, I thank Mr Hood and Mrs Ramsey for their time and for the full and open way in which members' questions have been answered.

An unfortunate aspect about the procedure that we are using is that the statutory instrument has come to us fairly late in the day. I find that unsatisfactory, especially as we have to report on the instrument by 22 October. Given the recess, that means we have two choices today. We can declare that we are content with the instrument and comment on it in our report to the Parliament, or we can move to annul the instrument. If we choose the latter course, we will have to meet either on Friday morning or next week; the option is open to us, however, and it would be wrong to pretend that it was not. I sense a great deal of unease about the scheme. I ask members for their comments.

I agree. I feel a great deal of unease about the scheme, but I do not feel that we should seek to annul the instrument, because people are applying for the scheme at the moment and they are depending on successful applications. We should report that we are concerned about the scheme and that we would welcome an early review. We should review the scheme as soon as possible and look at where the money is going and what rural development benefit it is having.

One of my big concerns is that the money will go to large landowners rather than to small farmers and crofters. We need to examine the applications as soon as possible. We do not need to know who is getting the money, but we should know what kind of holdings are involved, their acreage, and the amount of money that they are getting from the scheme. That would help us to come to a conclusion and, if required, ask for a new scheme to be drawn up.

I entirely agree with Rhoda Grant. I would go one step further: I do not have a problem with asking who gets the money, because it is public money. When people apply for public money and do not get it, that is a different matter, but the public should have access to information on people who successfully apply for public money. The issue is much wider than that single point, however. There is unease among committee members and I concur with Rhoda Grant.

The unease is not about the purpose of the scheme; it is about the way in which it operates. I support Rhoda Grant's suggestion that we should press for an early review. In particular, we should gain as much information as we can on who is successful in obtaining money under the scheme.

I will not move that we annul the instrument, but I would like to know the purpose of reports from the Subordinate Legislation Committee. The committee often comes to us with drafting issues, for example. What can we do with those reports? Apart from the fact that this report has taught me a word that I did not know before—which I look forward to dropping casually into conversation—what is the purpose of Subordinate Legislation Committee reports? Unless they are used as a reason to annul a statutory instrument, not a lot happens to them after the instrument has been to us.

That is a perfectly valid question, which worries me, too. However, I am told that the purpose of the Subordinate Legislation Committee is to advise us as the lead committee.

I am not sure whether the Subordinate Legislation Committee is saying that we should move to annul the instrument because it is defectively drafted or whether it is saying what it says for our interest.

I think that the Subordinate Legislation Committee is just noting the facts. It is not asking us to annul the instrument, so I presume that it does not feel that it is important for us to take that action.

For clarification, the Subordinate Legislation Committee would not ask us to do that anyway. That is our decision.

Yes, that is correct.

I would express my feelings more strongly than my colleagues have, but with the same sentiment. Were it not for the fact that it is impossible for timetabling reasons to do so without disadvantaging the smaller applicants, I would have asked that we hold on for a further week and obtain the information on large applications before we approve the instrument. It is very disappointing that we are working to a timetable that makes that option unavailable to us. If that view is shared by my colleagues, we should reflect it back up the line. However, given the timetable and the need not to disadvantage the small applicants, regretfully we must proceed.

The use of the money cannot be influenced by the committee. I presume that the environmental benefit will be static. There is nothing that we can do about that. There seems to be a lack of control over the social benefit of any of the successful applications, which is a common concern among members that should be conveyed by the committee.

I am concerned that every time statutory instruments come before us we are stuck between a rock and a hard place. We moan and groan about them, but we cannot do anything about them. The committee should do something about the legislative process, perhaps by instigating a debate in the Parliament. Getting these pieces of legislation, finding lots of flaws in them but being unable do anything about them because that would disadvantage the farming industry, the fishing industry or whomever makes a mockery of the committee system. Perhaps, for once, we should do something about this.

I agree. I find a striking similarity between this scheme and the decommissioning scheme with which we were presented at our previous meeting. By the time we are able to discuss these matters, it is too late. If we hold back the legislation, we will disadvantage individuals, businessmen and everyone else who is involved.

If we moved to annul the regulations, many crofters and small farmers who have waited a long time for some additional income would lose out. On that basis, it would be wrong for us to move to annul the regulations. Nevertheless, the evidence that we have heard today shows that the regulations are flawed. I feel that there should not only be a review, but that an amending statutory instrument should be produced to tackle the obvious flaws.

First, although I understand that the scheme is discretionary and that regulation 7 allows ministers discretion to say no without facing an action of a judicial review, I do not think that that fact is made sufficiently clear. Secondly, Richard Lochhead's points about the economic benefits, jobs and so on should be taken into account—after all, people are part of the environment too. Thirdly, it would be sensible to rule out from receiving the benefit people who do not need the money. Wealthy bodies such as the RSPB, which I understand is the wealthiest voluntary organisation in Europe, should not be entitled to receive money that might otherwise help people to keep their farms or crofts.

In evidence, we heard the civil servants say that the scheme is not intended to be the saviour of farmers. No one was suggesting that. As was pointed out, there is so little money that the scheme could not possibly be the saviour. Nonetheless, it should be a help and it should provide assistance for crofters and small farmers in doing what they have been doing extremely well for a long time—being the real stewards of the environment. I hope that the Executive will not just review the regulations, but produce an amending statutory instrument to address all the defects.

Finally, I would like us to ask the Executive specifically to deal with the issue on which Mike Rumbles, Richard Lochhead and I have canvassed. The principle that the identities of the individuals who receive benefits under any scheme should be made public, as happens in all other areas of public expenditure, must be established and accepted by the Executive.

These regulations came into force four days ago, yet here we are discussing them. It is one of the worst practices of Westminster that we seem to have inherited. Ministers lead very busy lives—that is true—but I am fed up with their practice of laying regulations before us in the expectation that we will simply rubber-stamp them. It is important that the committee sends a message to ministers that this is not an acceptable way in which to proceed.

I am also getting fed up with the argument that we have to agree the regulations because delaying their introduction would cause people harm in the rural environment. The scheme came into force four days ago. We could have discussed it. Its introduction could have been delayed by a few weeks, which would not have been unreasonable. We must change the way in which we handle subordinate legislation.

Some of the statutory instruments that come to us are not as complex as, for instance, new schemes. The scheme was drawn up over a period of time and people expressed their concerns to me during that time, although I did not know what would be in the scheme.

Might the way forward be to say to the Executive that the committee should be involved in the consultation process on new schemes? That would take away the last-minute presentation of schemes to which the committee has had no input. If we were involved at the beginning, with consultation on new schemes, by the time the scheme was due to be considered by the committee it would have worked through the process and there would, I hope, be no problems.

Several points have come out of the discussion, one of which concerns the procedural aspects of the regulations, which we will discuss first. The view that has come across is that we should discuss with the Executive—I presume that the Executive handles the timing of such matters—our dissatisfaction at the two recent examples. I like Rhoda Grant's suggestion that when a new scheme is discussed it would be appropriate to bring the committee in on the discussions so we can to some degree influence the thinking, rather than simply react when it is too late to do anything. Is the committee happy that we should take that course of action?

We should get the matter correct technically. The committee has been asked to approve the regulations, but we should approve them in a proper time scale and with consultation.

Yes, we still have to approve them.

We should approve them in a proper time scale—not after the event.

Are members happy with the course of action that I suggested in terms of procedure?

There is the option of involving the Procedures Committee. I am sure that this committee is not alone in suffering the phenomenon. The conveners liaison group also might want to discuss the matter.

The Subordinate Legislation Committee might also want to discuss it.

The Parliament should change its procedures—it is young, so if something is not working we should change the system.

Are members content to wait for the Executive's reaction before it decides what to do?

The issue is for the Parliament.

I ask the convener to put the matter on the agenda for the next meeting of the conveners group.

I want to clarify that the issue is not for the Government, but for the Parliament.

I would be happy to put the matter on the agenda for the next conveners group meeting, if other members agree.

Can we have a report back from you, convener, and from the other member of the committee who is a convener—Mike Rumbles—after you have persuaded the conveners group to discuss the matter? Will you come back to the committee and report triumphantly?

We will do that with glee. We know where we are going on the procedural issue, so we now must decide what to do with the instrument. I assume that we are not going to move to annul and that therefore we are content with the instrument. Do members wish to make points other than the ones that we have agreed to make when we report to Parliament?

We should make a point that is along the lines of the debate that we have just had: we believe that the scheme is flawed because it might benefit wealthy land occupiers and not the people who should be receiving the money—by and large, crofters, small farmers and tenant farmers. Also, the scheme should have a mechanism to allow the socioeconomic factors that Richard Lochhead mentioned, such as job creation, to be taken into account. Ministers should be entitled to have regard to the financial standing of an applicant to assess whether the applicant needs the money or, in the case of wealthy applicants, whether they might be able to do what is necessary for stewardship of the environment without state aid.

Are you suggesting that there should be a limit to the size of business that can benefit from the scheme?

The Executive should be able to have regard to those aspects. At the moment, as we have heard, the termination of applications is dealt with in regulation 7.

The committee should say that we are not happy with the scheme and that although we believe it would be wrong to annul it we think that it should be amended. The points that I have just made should be included in a letter to the minister indicating that we believe that an amended instrument should be brought forward and that we should be involved in the consultation process on it. That would not be unduly prescriptive. Perhaps some of the other arguments could be referred to as bullet points. It is important that we say not just that there should be a review, but that there should be a better scheme and that an amendment should be brought forward quickly—in a matter of weeks, not months—to put in place a better scheme.

Given that the applications that have been made will be decided on quite soon, it is important that we get a breakdown of what has been approved. That would give us a better idea of how the scheme is working and whether only large landowners or several smaller units are benefiting. That would be an important step to take before we consider drawing up a new scheme. Unless we know what is currently happening we might end up developing a scheme that is no better than this one.

In his evidence, Mr Hood said that he is prepared to give us such a list—the farmers may not be named, but the size of the grants and the approved schemes would be given. I would not be happy for the committee to recommend that the size of an individual business should determine whether it receives a grant—if the proposed scheme fulfils the necessary criteria.

The minister should be entitled to have regard to the financial standing of the applicant. That is not the same as saying that such an applicant should be automatically disentitled. At the moment, the minister cannot consider the financial standing of an applicant, which seems perverse.

Just for clarification, the point is that if a scheme is oversubscribed—as one such as this is bound to be—and some schemes will create jobs and achieve the same environmental benefit as other schemes that will not create jobs, surely that should be a key factor in deciding which applications to accept.

Thank you for clarifying that. Do members agree that the clerks should draw up the report as soon as possible along the lines that have been discussed?

Members indicated agreement.

Are members content with the instrument?

Members indicated agreement.