Official Report 570KB pdf
Agenda item 4 is our fourth and final evidence-taking session on the Scottish Government’s draft budget 2015-16, in which we will hear from the Cabinet Secretary for Rural Affairs, Food and Environment. The committee has previously taken evidence from stakeholders on the themes of forestry and Scotland rural development programme climate issues, and we also heard last week from the Minister for Environment and Climate Change.
I welcome to the meeting the cabinet secretary and his Scottish Government officials. First of all, I must congratulate David Barnes, deputy director, agriculture and rural development, on his own promotion—we might not see him in this role again. I also welcome Jonathan Pryce, director of agriculture, food and rural communities, and Linda Rosborough, director, Marine Scotland. Good morning, all.
I refer member to the papers, and I will start the questioning. As you will know, cabinet secretary, it is often difficult to read across from one budget document to the next to find out what exactly has been spent and what is likely to be spent. For example, the spokesperson from RSPB Scotland said that, from how the figures in the budget have been presented,
“it is very difficult to understand that it did not include agri-environment spend under the new programme for 2015-16 ... It would help if the figures were better presented in the future so that we can understand what the expenditure relates to.”—[Official Report, Rural Affairs, Climate Change and Environment Committee, 12 November 2014; c 3.]
Can the presentation of the budget be made clearer to ensure that it is easier for stakeholders and the public to understand what is being funded and when that funding is being made?
This has been an on-going issue for this and no doubt for many parliamentary committees for several years now. In the past few years we have made some changes that I hope have been helpful but, in relation to your comments about non-governmental organisations’ views of spend on agri-environment schemes, I point out that the figures that we published at the time of the announcements on agri-environment budgets are already in the public domain. High-level budget titles are, by definition, at a high level. We make available figures below that level in order to provide further explanation, but I take your point and I will reflect on the comments.
It would help enormously. Given our interest in the climate change element of the SRDP, we want to be able to track it well.
One part of the budget document that is unclear is the statement on page 95 about changes to the European Union support and related services budget on page 95. It refers to
“An increase of £30.1 million of new money to fund the domestic part of the revised European funded Scottish Rural Development Programme (Pillar 2).”
Exactly how has that £30.1 million for the domestic part of the SRDP been calculated, and what will it be spent on?
When we looked at the wider interests of rural communities in our consideration of how the new common agricultural policy would be implemented, we had, as the committee might recall, some vigorous debates in our negotiations and discussions with stakeholders. Two particular issues led to this adjustment; first, the impact of moving from the historic to area-based agricultural support payments, which is, of course, the radical change in the new policy; and, secondly, the whole debate about the pace of transition in Scotland, given that we still have historic-based payments here.
Under the current arrangements, some significant Scottish beef producers receive relatively high payments. In some cases, those payments are deserved, because of the level of activity; in other cases, however, they are made simply on the basis of a farm’s historic activities. Because of our limited ability to link the new area-based payments to activity, we had to find other ways of helping the active beef sector in Scotland.
The beef sector is very important to Scottish agriculture; indeed, it is the jewel in the crown. As our beef farmers are often the engine of Scottish agriculture, we were concerned about how in the overall package we could make available more support for beef production in Scotland. After all, this is about not just primary producers but hauliers, livestock markets, the retail sector and all the other downstream jobs.
09:45The backdrop of the budget is the on-going debate about how we work with the beef sector to ensure that we do not rest on our laurels and that we are constantly improving the quality of Scottish beef and other brands. Other countries are making big investments in becoming more efficient, are looking at genetics and so on.
I have used the opportunity presented by the budget to inject under the heading that you have highlighted domestic money into pillar 2 for the new beef scheme, which will be delivered over three years with an unprecedented £45 million. Of the £30.1 million, therefore, £15 million is new money that has been put into the budget for the beef scheme. I think that it will have a significant impact on the quality of beef production in Scotland and ensure that we do not rest on our laurels and that we are up there with the best.
Another part of the decision making was the debate on the transfer of funds from pillar 1 to pillar 2. As the committee will recall, it, too, was a vigorous debate, with environmental organisations suggesting that we go for the full 15 per cent transfer and put the money towards agri-environment schemes. On the other side of the fence were the producers, who had clearly looked at the impact of transition, were nervous about the financial impact on the viability of many farms in Scotland and wanted to minimise the transfer from pillar 1 to pillar 2. Ultimately, I chose to transfer 9.5 per cent rather than less than that, as some wanted, or indeed the full 15 per cent. I thought that that was a good balance.
As part of the Government’s agenda of greening the CAP and at least ensuring that some resource was available under the agri-environment schemes—after all, all our budgets are tight, what with the bigger issue of the Scottish portion of the overall European budget—I decided to put some new money into that budget, too. The figure is made up of a variety of budget inputs, some of which are simple adjustments to other headings in the level 3 figures. Even the agri-environment uplift of—if I remember correctly—£10 million does not all appear in the first year, because our announcement related to the impact over the whole programme. In any case, it takes a while for the scheme to open for applications, for applications to come in and for money to go out.
Another impact on the budget figures between 2014-15 and 2015-16 has been the financial transactions budget. As the committee will recall, the UK Government created the financial transactions arrangements, which, although they mean more money for Scotland, also require the money to be paid back to the UK Treasury in future. Under that arrangement, money was allocated to my portfolio at short notice. It was a UK Government instrument, and the money had to be allocated to different portfolios.
At the time—and despite all the vagueness about how the money might be used and all the strings that came attached from the UK Government—I asked for a budget allocation in case our fishing industry faced a particular upheaval. You might recall that at the time the prawn fleet—one of our biggest fleets—was under pressure because prawn stocks had dried up for a few months, and I wanted a safeguard in case we had to introduce emergency restructuring measures. Thankfully, the stocks came back, and the health of the prawn sector improved dramatically.
The Government was of course also pursuing other policies such as affordable housing, and as a result £22.5 million was removed from this budget line to pay for that.
That was useful, and I hope that that money will be seen in terms of rural development. It will be interesting to see whether you can track that—whether you notice affordable housing in any of the ways that the SRDP works. Do you have an answer to that?
In terms of?
You said that the money was withdrawn for affordable housing.
They were just budget headings in my portfolio, not part of our direct decision making on the SRDP. I had to put the money under a budget heading in my portfolio because of its potential use in some of my industries—although, thankfully, the money was not required. In any case, it was not part of what we would recognise as the SRDP; it simply came under the rural budget headings.
Thank you for that explanation. Claudia Beamish will now ask some questions about the budget’s relationship to the national performance framework.
Good morning, cabinet secretary, and I add my good wishes for your return.
The national performance framework has been taken forward not only through the work of the Cabinet Secretary for Finance, Constitution and Economy but with civic Scotland and on a cross-party basis. As I understand it, the indicators in the framework that relate to the portfolio are
“Increase people’s use of Scotland’s outdoors ... Improve the condition of protected nature sites ... Increase the abundance of terrestrial breeding birds”—
which includes that big complex word, “biodiversity”—
“Improve the state of Scotland’s marine environment”
and
“Reduce Scotland’s carbon footprint”.
To what degree have those indicators been taken into account in preparing the draft rural affairs and environment budget? It would be useful to hear your comments on that.
You have mentioned many issues, but I will touch on two or three specifically. I pay close attention to the indicators that you have highlighted; indeed, as the committee might recall, when I was making some decisions about particular budget uplifts under difficult budget settlements, I used the indicators as a reason for addressing particular issues. Members might also recall that we have recently had some pretty tough discussions with the agricultural sector about greening the new common agricultural policy. There has been a decline in farm bird populations in recent years, and I took that into account in considering how to implement the greening measures in Scotland.
Likewise, there are certain issues, such as mackerel in the pelagic sector, where the indicators appear challenging. Mackerel is Scotland’s biggest stock, and it might show a decline in relation to the indicators. That is largely because of the international dispute, as a result of which the Marine Stewardship Council’s sustainability status was removed from what is effectively our biggest and most valuable stock. Thankfully, with the conclusion of last year’s negotiations, the picture is brighter, and I hope that we will see a better indicator for fish stocks in future.
I have also been very conscious of the need to address the issue of support for using the outdoors, but I must return to the very difficult budget situation that we had with pillar 2 and the rural development programme, which includes some of those measures. I was able to protect some budget headings, such as the paths initiatives. If I recall correctly, we have allocated at least £1 million each year for that, but at one point I thought that we would not be able to afford it. We took those issues into account in seeking to encourage outdoor activity and healthy lifestyles.
You have highlighted a variety of headings, and we pay close attention to them. Indeed, I raised the issues directly with stakeholders to justify some of my decisions.
I want to mention a point of which you will be aware but in which the wider public might also be interested. You have highlighted the issue of mackerel stocks, but can you comment on the fact that progress on Scotland’s wider marine environment is worsening? The worsening indicators in this portfolio are
“the state of Scotland’s marine environment ... the condition of protected nature sites”
and the rather large issue of “Scotland’s carbon footprint”. What specifically is being done to tackle those issues?
In relation to the budget?
Yes. I am sorry if I have not been clear. I am talking about the national performance framework indicators that come under our budget and in which performance is worsening.
You have raised two issues: the marine environment, and terrestrial matters. With regard to climate change targets, I was conscious that a large part of the funding in the rural development programme supports agriculture in one form or another and, given that agriculture accounts for around a fifth of emissions, it was important for the rural development programme budgets to reflect that to a degree within our own limited budgets. That is why I introduced the carbon audits, and why we have a substantial programme of key greening measures, which I alluded to when I mentioned nitrogen management on farms. This is all about reducing the carbon footprint in agriculture.
It is also, as I have said, about biodiversity with regard to the protection of breeding birds. Some measures relate to activities that can be carried out in certain seasons, while others relate to buffer strips, hedges and so on that ensure that our farm bird populations can breed and have access to food at particular times of the year.
We can at least take comfort from the fact that the greenest common agricultural policy ever is being implemented in Scotland. I understand why people might argue that it does not go nearly far enough, but there is only so much that we can do with our very limited budget, which is a fraction of other countries’ budgets. At least we can now claim to have a greener agricultural budget in Scotland than ever before.
Can you also comment on the issue of the wider marine environment?
The Marine Scotland budget is effectively flatlining, but I have done my best to protect it because of the important work that is being carried out to implement the new marine protected areas in Scottish waters. We are currently working on the management measures for the MPAs, which are about restoring our marine environment to its proper health status. Under European directives, we have to achieve targets by 2020, and we are trying to take all the issues into account.
Good morning, cabinet secretary. You touched on biodiversity a short while ago. I do not want to labour the point, but are you able to say anything else about biodiversity in the context of the budget?
I should point out that because of the importance of agriculture activities in this debate, NFU Scotland and the Scottish Government have agreed on the need to put a lot more effort into environmental measures on farms in the coming years. We have agreed in principle a new environmental forum in Scotland to ensure that we can get everybody around the same table and agree—I hope—on how to further green agriculture in the years ahead. As you can imagine, there are often controversial issues to address.
Some of the greening measures that we have put in place relate directly to biodiversity, while others are about reducing carbon emissions. We can be proud of our package. The test will come when we implement it in the months ahead, but we are confident that it will allow our farmers to produce food for the nation sustainably while at the same time protecting and safeguarding our environment. Of course, 30 per cent of the single farm payment is attached to the EU’s greening measures under the new greening of the CAP. In other words, from day 1, farmers will have to put in place greening measures to get 30 per cent of their single farm payment. That is another reason why the CAP is greener than before.
Good morning, cabinet secretary. It is good to see you back—continuity is a wonderful thing.
Picking up on greening, I have been told by local farmers that they perceive that there might be a problem. They have no objection to greening but have suggested that growing two different crops in a relatively small area might generate two products at such a sufficiently small level that it will be uneconomic to harvest them. Are you able to address that issue with your officials?
One of the debates that we had about the greening of the policy focused on ecologically focused areas and the demand that 5 per cent of qualifying land be put aside. As far as that land is concerned, certain conditions have to be adhered to. Many farmers had a slight misunderstanding about which crops could or could not be grown, and many thought that the 5 per cent applied to the whole of the farm. That is not the case; it is only the 5 per cent that is allocated for EFA status under the CAP. As more and more farmers have realised that, they have felt that they can perhaps manage the situation on their farm and maintain viable food production while at the same time having the EFAs.
It sounds as though there needs to be a communication exercise, because I have heard from people who feel that they might be asked to do things that are simply uneconomic on a small farm. That is clearly not in anybody’s interest. After all, a product that is not harvestable economically is not a harvest.
After discussions with the sector, we made some last-minute changes, and these were welcomed, particularly by the arable sector, which feels most affected by the measures. Of course, during the CAP negotiations, we managed to secure some concessions to what was being asked for in the first place. What had originally been proposed would have been, to say the least, quite challenging for Scotland. We managed to get some changes to the three-crop rule, who would qualify and so on, and we are now in a much better place than where we could have been.
10:00
Are you confident that we will be able to produce enough barley for the number of distilleries that are being planned and set up, especially given that, as was mentioned in last week’s food and drink debate, some markets for whisky are reducing? The situation is obviously fluctuating, and some developments in distilleries have been put on hold. Have we struck roughly the right balance between supply and demand for barley?
Your question is timely, convener, because tomorrow I will be hosting our first summit with the malting barley sector, and we will be bringing producers and people from the mills and the supply chain around the same table to look at that very issue. Clearly, demand for Scottish whisky is rocketing. Of late there have been some challenges in the Chinese marketplace and elsewhere but, overall, there seems to be a high level of confidence in the whisky sector.
There might be a big opportunity for our cereal growers in the times ahead and, for the very reasons that you have outlined, we have to understand what that will mean for supply and demand. I hope that tomorrow’s summit will be significant and pull out some of the issues that have to be addressed to ensure that we produce enough barley. We can then ensure that Scotch whisky that is produced in Scotland—where of course it has to be produced—has Scottish barley as a raw material.
Thank you for that. We will move on to the issue of legacy payments from the previous SRDP.
It is good to see you back in post, Richard.
As far as legacy payments from the previous SRDP are concerned, there is a budget of £21.8 million under the agri-environment measures budget line. What evidence of the effectiveness and value for money of the legacy schemes do you have, and what lessons that might have been learned from the previous SRDP about effectiveness and value for money can be applied to the next SRDP?
There are indeed legacy payments, some of which will be paid off in the first year of the new SRDP or, indeed, this year. With regard to the budgets that cover legacy payments in the coming year, it is worth bearing in mind that, because some of those payments will have been paid off and will therefore not be there next year, that money will not be available for investing in future environment schemes.
Clearly it is important that we carry out evaluation, and we have had evaluation schemes that Scottish Natural Heritage and others have been involved in. According to the evidence that we have received, the legacy payments have made a material difference and have benefited biodiversity in Scotland’s environments. It is always difficult to pin down exactly what impact the payments have had, but they are having a positive impact. I am happy to send the committee details about that.
Thank you for that answer. I note in the draft budget that the budget for rural communities and rural enterprise is dropping by about 98 to 99 per cent. In the past, legacy payments have supported projects such as monitor farms, which we have been quite supportive of, the rural leadership programme and so on. Meanwhile, the budget for technical assistance is going up by 1,540 per cent to £5 million and the budget for payments and inspections administration is going up by about 29.1 per cent in real terms to £45.4 million. How will those budget changes affect things such as the monitor farms and the rural leadership programme, which the rural enterprise budget has supported to some extent in the past? What will be the future for them?
The leadership programme has been very valuable. Indeed, those of us who have met some of the participants in Parliament have been struck by the talent that is out there, and we want to continue to support that.
In recent years, we have introduced the new monitor farms for climate challenge purposes. They are sort of climate change farms, which demonstrate best practice in reducing emissions, and we are going to increase them. Of course, the rest of the monitor farms have been successful, too, and we definitely see them as being valuable in the future.
Part of the budget is for knowledge transfer, which will cover those kinds of issues. Whether it is for tackling carbon emissions, improving profitability or general efficiency or whatever, we believe that it is important to support that.
I am sorry, cabinet secretary, but the rural enterprise budget is almost disappearing. My memory is that it was used substantially to help provide budgets for such projects. Are we looking at different ways of doing that?
I will ask David Barnes to come in here. I think that the issue is covered in other budgets, but I want to clarify that. The new SRDP is slightly different.
As the cabinet secretary says, there are changes to the positioning of various things in the SRDP budget. Monitor farms will in the future come under the knowledge transfer scheme. The monitor farms that are in place have multi-annual contracts, so they will continue. We cannot open the new knowledge transfer scheme yet, because the new SRDP is still with the European Commission for approval. However, the existing monitor farms are continuing and, once the new scheme can open, as the old monitor farms finish their periods, we will be able to approve new ones.
On the rural enterprise budget, we have changed the balance of which parts of the programme deliver which things. For example, small rural business support and farm diversification will in the future be delivered through the LEADER scheme, for which we are working with the local action groups to produce new local development strategies. That explains part of the change.
The other element that we should not forget is one that the cabinet secretary announced about a year ago. He has referred to the decisions on the budget transfer from pillar 1 to pillar 2 and on the increase to the agri-environment funding. As part of the announcement on that, members might remember that the cabinet secretary had to announce that in order to make the books balance for the new SRDP, a targeted approach would have to be taken to capital investment. Therefore, as the published plans say, capital investment under the new SRDP will be focused on particular subsets of the farming industry—new entrants, crofters and other small farmers and slurry stores—because of the climate change link. The general approach of there being capital grants for every farmer in Scotland had to give so that we could live within the budget for the new SRDP. That explains part of the reduction.
Of course, those capital grants do not figure highly in the legacy, which generally relates to multi-annual contracts in which a land manager makes a five-year commitment to manage the land in a certain way. The payment therefore continues to flow for a number of years, whereas with capital grants the farmer makes the capital investment, receives the grant and that is the end of it. Therefore, there is very little capital in the legacy part of the on-going budget.
I want to pick up on that. Another concern that has come across to me strongly in talking to farmers recently is their feeling that, once the SRDP schemes open up, the window of opportunity will be really quite small. To be blunt, it will be challenging and difficult for farmers to get hold of the forms, get the right information, fill them in and get them back. Are you aware of that issue? How will we manage it?
We are awaiting the green light from Europe on the SRDP. Dozens of countries have submitted their RDPs. We are trying to find out this week whether we will get clearance before the end of the year. Failing that, it will happen at some point early next year. Unfortunately, farming businesses have been through this before. It is a five-year programme, and if for some reason they are not in a position to apply in the first year, there will be subsequent opportunities. I will pay close attention to that. We have a new information technology system, which we hope will help. It is more modern and, we hope, easier to use than the last one, so it should help.
The IT stuff is on a wing and a prayer.
Ease of access to agri-environment schemes and other CAP schemes is extremely important. However, there has been some discussion among stakeholders about the introduction of the CAP futures programme, not least by Audit Scotland, which has highlighted an increase in overall costs from the original estimate of £88 million in December 2012 to the latest estimate of £137.3 million. Will you update the committee on the current situation with the CAP futures programme? Can you also give the committee some comfort that the programme will provide ease of access to the CAP schemes and the funding that is required for the budget to be used efficiently?
We are doing our best to learn lessons about access from the last round. We will make greater use of local offices for farmers and crofters to make their applications. Broadband availability has improved dramatically in Scotland, but it is not at the same standard in every part of the country, so we are making the offices available for use.
We had to renew the IT systems; it was the most complex implementation that we could imagine, despite the promise of a simplified policy from Europe. Over and above that, we had an agreement with the industry to use some options that add significantly to the complexity.
We are on track to deliver the payments in good time. The payment window is open until the June following December. However, we are aiming for December so that we keep to our existing timetable. The industry has said that if we require a few more weeks for the payments to go out, as a cost of getting the policy right, it would much prefer an effective policy and a few weeks delay. We have that in our back pocket, although I hope that we will not need to use it. December was the payment deadline for the existing CAP that is being replaced, so we will do our best to maintain that in the new CAP.
However, we have to do things like mapping and inputting 460,000 fields for audit. That is a phenomenal exercise and we have a lot of people working on it.
Angus MacDonald referred to the budget, which was decided before we knew the European decisions, never mind the Scottish decisions. It appears that there has been an increase, but as the Audit Scotland report says, we have done our utmost to manage that, to get back on track and to make sure that the system is delivered on time. John Swinney and I have had a few meetings with CGI, which is the IT company that is delivering the system, and we have taken steps to ensure that the project has proper leadership. The system is very complex; I am not denying that for a second. I sweat about it at night sometimes, but the signs are that we are on track and I take comfort from that. However, we have to pay close attention.
That is good to hear. I am sure that a number of folk outside the committee will be glad to hear that you are on track for payment.
I do not want to dwell on operational issues, but there is concern about whether the introduction of mobile technology for field staff is deliverable. Do you have any information on that?
The matter has not crossed my desk, but it so happens that I have with me the recently appointed chief agricultural officer, who has not taken up his post yet. It is probably unfair to put David Barnes on the spot, but as I do not know the answer I am going to do just that. I will ask Jonathan Pryce as well. It is an office-level operational matter. Now that you have raised the issue, I will investigate it. Perhaps my colleagues have comments on that.
10:15
I can explain the story around the mobile technology. Audit Scotland highlighted in its report that certain elements of the divisional business-case scoping had been deferred, but not taken away completely, in order to ensure that we maximised our chances of delivering the payments on time, which is the most important part. The report highlighted mobile technology in relation to inspections but did not point out that we already use mobile technology in the field when we are doing land inspections. We still intend, after we have successfully made the payments for 2015-16, to extend mobile technology to livestock inspections, for which we do not currently have mobile technology support.
The committee can rest assured that the new IT system that we are producing will make use of the existing mobile technology. When our rural payments inspectors are out on the farms and in the fields, they carry a large rucksack on their back with a thing sticking out the top—a high-resolution global positioning system tracker that enables them to map the fields directly. They do that in the field using Toughbook laptop computers and tablets.
So, we are using mobile technology, and its extension to what is a much smaller part of the business will come, but not as early as we originally intended.
Progress is still being made, which is good. Thank you.
I want to ask more broadly about assessment of the schemes. My question relates to the IT, but is more about the personnel and the complexities of assessing applications and giving support to farmers. Given the multiple benefits that we expect from the agri-environment scheme, such as for biodiversity and climate change, are you confident that there is funding in the budget to support training and further training of field officers? I am not in any way disparaging what they do at the moment.
Jonathan Pryce is in close contact with people who are involved in that. All I can say is that there has been a huge amount of investment in training our several hundred staff around the country. It is a new policy and we are urging our officials to be as supportive as possible. They are limited by European regulations in what they can do in terms of advice. However, there has been massive investment in training for staff to familiarise them with the new policy and its implementation. The Audit Scotland report covered training and its costs.
Time will tell how things will go. The new IT system is replacing an outdated and outmoded 20-year-old system; it is modern and more flexible so that when changes have to be made in the future it will cope a lot better. With the current IT system, it is like taking parts from one old car and putting them into another old car when we are trying to do amendments for new schemes. Hopefully, we will not have to do that in the future. A huge amount of effort is going in to ensure that people are familiar with the new system. Jonathan Pryce might want to talk about the training aspects.
It is probably worth highlighting that the CAP futures programme is an IT-enabled business change programme, so the budgets that we have talked about and the business case for the futures programme include training staff in management of the schemes as well as the IT costs. The main increase has been in the IT costs, but there is increasing complexity in the schemes across the piece because of the requirements under European regulations. Some of that is picked up through the business as usual annual training scheme that we provide to all our agricultural staff on updates to schemes, but there is additional training within the futures programme budgets.
On the last topic, I am sure that the cabinet secretary will be aware of the recent campaign to provide appropriate support for dyslexic farmers. I mention that issue because it has been raised by a constituent of mine and it is something that I have a lot of sympathy for. I do not know whether the cabinet secretary can comment on what training is being given to field officers to provide such support to farmers.
My principal question, however, goes back to the Audit Scotland report, which highlighted that one of the main technical areas—that is, the mapping component—will not be included when the programme is implemented. The cabinet secretary understandably referred to the complexity of completing the programme. However, how do we implement a brand new CAP support programme that is dependent on mapping, when the mapping component will not be part of the IT programme?
The system will be tested before the end of the year and will open for applications in March, if I remember correctly. Work on mapping is on-going. The first payments will go out in December 2015—I hope. We must get the auditing requirements right in relation to the mapping. Jonathan Pryce is close to the subject, so he can respond to your point about the timescale.
Yes. It is not that we do not have a mapping system. As Audit Scotland explained in its report, we have deferred the development of a brand new mapping system—the land parcel information system—until at least 2016, simply to de-risk the programme and to maximise our chances of making payments on time.
However, we will launch a customer registration portal, which should go live in December and will be accessible to the majority of customers in January. We will ask farmers and businesses to go online to register their details, which will set them up for the application process in March 2015.
The system that will go live at the turn of the year will include online viewable access to the existing maps that we hold. In other words, the data that we hold on our land parcel information system will be accessible to farmers and viewable online. The new functionality was not available to them before, and we expect it to be enormously helpful for them.
Until we design the new land parcel information system, we will not have the ability to amend maps online. That work will follow. However, we have invested in our existing land parcel information system core in order to ensure that it is robust and stable for use for applications and payments in 2015.
That is useful. Thank you.
Will the minister comment on the dyslexia issue?
I pay tribute to the NFUS for raising the issue and for pursuing it with the Government. It is very much an equalities issue. We are keen that farmers with dyslexia should be able to apply, just as any other farmer can. We are doing two things: first, we have said to the NFUS that we will work with it to see what needs to be done to make application easy, for example by providing help at our offices around the country, and secondly we are discussing whether there is more that we should do. The SRDP is funding an advisory service, so we will ensure that the service is sensitive to farmers with dyslexia. It is a one-to-one advisory service—it does not directly involve our officials.
Thank you.
You mentioned the Scottish beef package that is being introduced and the new money that is being put into it. The document, “Beef 2020 Report: A vision for the beef industry in Scotland” emphasised
“the need to take serious steps to minimise the carbon footprint of every kilogram of meat produced”,
while arguing that production in the sector should be increased. I do not argue with the second part of that at all. Is there a quandary in trying to reduce the sector’s carbon footprint while trying to increase its productivity? How will the beef package help in that regard?
I gave a wee bit of background to the rationale behind the beef package. On how we reconcile beef production with carbon emissions, it is clear that the more efficient and productive our beef sector is—for example, through higher productivity from the same number of animals, because if we are more efficient the production level per animal increases—the more we help the environment and reduce carbon emissions.
I met the Quality Meat Scotland board a couple of weeks ago and we discussed parts of the beef 2020 package. Professor Julie Fitzpatrick of the Moredun Research Institute presented some eye-catching statistics, not only for Scotland but in general, on the amount of waste in livestock production through poor productivity, animals catching disease and farmers losing animals. Investment in animals is clearly wasted if the animals do not live healthy lives and are not productive.
The issues that we are discussing today are very important. With regard to reducing the cost of beef production in Scotland, if we have a better understanding of genetics and we capture data from all farms, we can put in place the right measures and produce more, but with a smaller environmental footprint. The overall environmental impact might not be reduced, but we will get greater production from the same number of cattle.
Europe pays close attention to things such as the impact on production and the number of animals, so we must do the same if we are to get permission to use support schemes. It is much better to increase production with the existing number of animals, to cut costs and to get more money from better animals going to the abattoir. One hopes that it is a win-win situation.
The beef 2020 scheme, for which we are still waiting for clearance from the European officials, is in the agri-environment part of the SRDP because there are some environmental issues associated with it. The more efficient we can make beef production in Scotland, the better it will be for the environment.
Can you give a possible timeline for when the full details of the beef package will be made known?
We have announced a three-year package that consists of £15 million a year. As I said before, such investment in the beef sector is unprecedented. The first year of the package will be 2015, and it will run for two years after that.
The timeline very much depends on our hearing from Europe about any significant changes that we have to make. We are confident that we will get a scheme, but we have to wait for the detail from Brussels.
On a related issue, I have in my constituency a number of large-scale beef producers who are very keen to put in place farm-sized anaerobic digestion units. That would have a hugely beneficial environmental impact, but the farmers are being told by Scottish Power that there is no chance of a grid connection before at least 2022.
Although I appreciate that investment is required to upgrade the infrastructure before grid connection can take place, given the amount of renewable energy connections that are already in place or are planned to take place, can the Scottish Government do anything to encourage Scottish Power to bring forward the programme to allow faster connectivity?
The regulation of connectivity is a reserved matter. We have made representations in the past via energy ministers in this Parliament to the UK Government on grid connection issues. I urge the committee in turn to urge the Smith commission to look at the energy powers that can be transferred as part of the package of further devolved powers for this Parliament. I very much agree that, where possible, agricultural businesses should be looked upon favourably and that schemes that are attached to such businesses should be prioritised to a certain extent.
As food production and food security become big issues in the years ahead, other issues may have to be taken into account when applications are made, but priority for applications from agricultural businesses would be a good thing. Connectivity is part of the equation.
I would not delay, but we can discuss that some other time.
One could say that there are aspects of rural poverty that require community schemes to get hooked up to the grid too, which would strengthen the argument for parts of the south and north getting better grid connection. That is not a question, but it is a fact that it is not just farmers who require that connection.
It would be fairer if farmers were able to access grid connection on a reasonable basis rather than going through a planning system that seems to discriminate against some businesses.
It was my portfolio that set the benchmark of £5,000 per megawatt for community benefit. Of course, that now applies for schemes in general throughout Scotland. Last year, the energy minister progressed measures to make such schemes much more transparent. The aim is partly to share the benefits of onshore wind in rural communities with the wider community and for community benefit. That approach is delivering significant benefits for many rural communities, and it is part of the equalities agenda. If there is more that we could do, I am open to suggestions.
We had some questions about that from the point of view of the forestry part of the rural development programme. We will reflect on your remarks when we make our comments about the budget to the Finance Committee.
Dave Thompson will now ask about the less favoured area support scheme.
10:30
Good morning, cabinet secretary. Welcome back.
LFASS is very important for constituencies such as mine and for the Highlands and Islands generally. Maintaining people on the land and on crofts in difficult farming conditions is obviously beneficial for the environment. Crofting has a very high environmental value compared with some other farming methods. As less favoured areas are replaced by areas of natural constraint, would it be beneficial to attach a higher weighting to the environmental value of crofting and agriculture when consideration is given to payment levels under the areas of natural constraint system?
That is a good question to ask on behalf of your constituents. The issue that you raise is important to your constituents and those of other members. That is why we gave the budget commitment to continue the scheme in the new SRDP, which I remind the committee accounts for about a third of the budget in pillar 2, if my memory serves me correctly. When it came to the debate about the transfer from pillar 1 to pillar 2, I was quick to remind the agriculture sector that at least a third of the budget in pillar 2 goes directly into agriculture—and that is not including many of the other schemes that have been mentioned today.
There has been a call to better target the scheme. We have until 2018 to renew it. I am sympathetic to the idea of making changes to it, but I do not want to throw the baby out with the bath water. A big discussion will take place about how we should better target it. If there is a case for that, I will give it serious consideration.
We are pleased that we have managed to allocate budget funding to the scheme. Discussions are continuing with the European Commission about some of the fine detail, as you can imagine, because the way in which the scheme is delivered in Scotland is quite complex. We hope and expect that it will be in the new programme.
Thanks for that. I am pleased that you will be considering the better targeting of the scheme. When you think about changing the system, I ask you to keep in mind the fact that, for a relatively small additional cost, in terms of what crofters and small farmers in the north and west would get, you would get a disproportionate additional environmental gain.
I will keep that in mind. In the previous parliamentary session, I made some changes to the scheme that uprated the payments to the more severely disadvantaged recipients. That was warmly welcomed in a number of constituencies, including—I am sure—your own.
We have a track record of ensuring that we support the more fragile communities. It is premature to say what changes will be made in the future, but the committee will undoubtedly have a view, and I urge it to offer that view in due course.
We are concerned about being able to measure these things, which would allow us to prove that they provide value for money. We know that agriculture is very fragile in many of the areas that get LFASS payments. Can we expect to find out in some detail how you will measure that? To follow up on Dave Thompson’s question, it seems to me that we need to be able to demonstrate that the scheme provides value for money.
Yes, and I have had representations in the past year or so, as part of the implementation of the new policy, about making changes to LFASS. However, opening up that can of worms at the same time as trying to implement the new CAP would have just brought everything to a halt—I would have had to employ several hundred more officials, so there was just no going there.
We want to implement the new CAP first; we then have until 2018 to review LFASS. We will do that, but I have resisted the temptation to look at the scheme in the middle of implementing a complex CAP.
The good news is that Scotland generally fits into the criteria laid down by Europe for the successor to LFASS. As things stand, we are confident that we will qualify in the way that we want to qualify. It is ironic that, when you cross Europe, you see some countries that look much greener and wealthier but which qualify for LFASS. That is bizarre. There may be issues that need to be addressed in relation to LFASS across Europe.
We will keep that issue on the table, because we are interested to see how it develops.
Nigel Don will ask about farming for a better climate.
The 2015-16 budget for farming for a better climate appears to be £400,000. Is it more than that? Are there other parts of it that are labelled under some other heading?
Last week, we heard evidence from those who generally support the scheme. They wondered whether that budget would be sufficient to generate the carbon dioxide savings that are attributed to the scheme in the second report on proposals and policies. Will you reassure us that this is all going to work as well as it must in order to reduce our carbon footprint?
Farming for a better climate is a good initiative of which I am very proud. I have visited some of the farms that have taken part in the scheme—I recommend members do that, too, if there are any in their constituencies. It is great to hear how, sometimes, reluctant farmers got involved—which was brave of them—and saved X per cent of their energy bills or reduced their emissions. There are good-news stories, and the initiative is catching on.
There are also carbon audits in the SDRP. We hope to encourage farmers right across Scotland to get involved in such measures.
I may have not picked up your question correctly, but I am not sure that I understand how revenue could be generated from farms that have made savings. The SRDP’s purpose is to invest in rural Scotland and to encourage transformation where possible. The whole of agriculture will then reap the benefits. Perhaps one day there will be no need for agriculture subsidies—we do not know. I am not sure how that would work or how you would capture the revenues from farms that have benefited, but I am open to suggestions.
Forgive me—I may have put my question badly. I am picking up on the comment made by RSPB Scotland the other week. In their view, 90 per cent of our farms would need to take up the benefits that we are identifying in order to achieve the carbon dioxide savings that we need under RPP2. Therefore, the question is whether we believe that that level of uptake will happen. If we do not, how will that work?
I am keen to change the mindset of the agriculture sector in Scotland. As I said, we want to balance delivering food security with sustainable production. A huge scientific debate is going on about how to do that. I referred to the carbon audit in the SRDP and, as part of the CAP greening measures, there is a requirement to record on-farm management of nitrogen. Those are pretty big changes compared with what was there before. Some are mandatory and some are in the SDRP, which people can apply to, and there are advisers to encourage 90 per cent of holdings to get involved somehow.
On the carbon audits, you cannot run a business without having your tax issues audited. How soon will it be before farms will not receive public money unless they do a carbon audit?
All the debates in Europe are being held against the backdrop of what should be voluntary and what should be mandatory. For the first time, we have mandatory measures—30 per cent of the payment, which is a substantial amount, relies on those measures being adopted. That is a step forward. However, the options that were brought forward were not necessarily the best ones for Scotland. We therefore support a review of the greening measures, which I want the new Commissioner for Agriculture and Rural Development, Phil Hogan, to undertake as soon as possible. He has given us some sympathetic noises but, unfortunately, when I was in Brussels a couple of weeks ago, the UK Government did not let me join in its meeting with him, so I could not put the point directly. However, I am hoping to secure a meeting with him in the near future.
Through such an early review of the greening measures, we would want to ensure that what we do in Scotland makes a difference and is effective, while being appropriate for Scotland. At the moment, that is not quite the case with some of the mandatory measures, and we are trying to get round that. I want to encourage a change of mindset, so that such issues are taken seriously.
The farming for a better climate farms are scattered around the country. I do not know whether there are any in the crofting areas. I raise that point because, although it is a diverse area, it would be interesting to have models for crofting for a better climate, and it would be interesting to see whether farming for a better climate farms could be included as places that crofters could visit and pick up some things.
Can you tell me whether the number of farms will increase, or whether we are covering the parts of Scotland that we mentioned earlier, where crofters might have to do an audit themselves for the money that they get under LFASS and its successor?
I will ask Jonathan Pryce to discuss the detail of that, but I am very sympathetic to the point as part of taking crofting forward.
David Barnes wishes to comment.
As the cabinet secretary mentioned, we are increasing the number of farming for a better climate farms. We are working with the industry—the tranches of demonstration farms that we already have were selected jointly by Government and the industry. We will take the same approach and work with the industry to work out the best coverage, both geographically and sectorally.
The content of farming for a better climate is not entirely made up of farms: there are also farm walks, demonstration days, material on the website and so on. Apart from the demonstration farms, there is a lot of material that can be accessed.
Government has an interesting prioritisation decision to take. The convener mentioned assessing value for money for all our expenditure. The scientific backdrop to the RPP, and therefore to the Government’s policy, is that the most important thing that we need to get farmers to do is, as the cabinet secretary and members have said, manage well their use of nitrogen fertiliser, both organic and inorganic.
We want geographic coverage across the whole of Scotland. Scientifically, however, it would make sense to concentrate efforts where the most nitrogen fertiliser is used, because that is where we can bring about the most benefit for the climate by reducing emissions.
Those two considerations both play into the Government’s decisions, but we will be working with the industry to pick the farm locations and sectors.
My question has largely been answered, but I seek further explanation, although everybody else may know the answer. Could you identify for me the areas where the most nitrogen fertiliser is used? Are there specific geographical areas where it is used more?
As part of the nitrate vulnerable zones legislation, we publish maps that show where nitrates are a big problem for watercourses. Those maps therefore indicate where the big areas are. I am not sure whether there are other maps, but the ones that we have published will be the best source of that information.
Can you tell me whether any particular part of Scotland is affected, or should I just go and look at the maps?
I would get some headlines if farmers in the areas concerned thought that they were about to be hit with NVZ legislation, so I had better not guess. There are pockets that are much worse than others, but the situation in many parts of Scotland is improving, which is good news.
Obviously, there is significant use of nitrogen fertilisers in areas where there is arable farming. That is what we are thinking about, rather than the crofting areas, where there is not such significant use.
There are also issues around the livestock sector, with slurry and so on. That is all part of the equation.
Okay—we look forward to some developments there.
We now move on to equalities issues. Cara Hilton will start.
Good morning, cabinet secretary. What changes, if any, were made to the SRDP budget as a result of the equalities statement that accompanies it?
10:45
I take equalities issues into account across my farming, fishing and other responsibilities, such as the general economic development of rural communities. For instance, the LEADER programme has been successful in tackling disadvantage in some parts of Scotland through targeted schemes and programmes on agriculture. We put huge effort into trying to get new entrants into agriculture included in the new CAP, which was a big equalities issue. No doubt, some new entrants will say that they are not totally equal with other farmers, but they will become so in the course of the new CAP, and we have gone as far as we can to ensure that that is the case.
The Government has a duty to publish an equalities statement. John Swinney, as the Cabinet Secretary for Finance, Constitution and Economy, publishes one as well. We take the matter seriously across our portfolios.
How will the budget assist young people to remain in rural areas? What will it do to improve information technology skills, in particular to reduce the isolation of disabled and older people in rural communities?
The digital economy line sits in my budget as well, in terms of connectivity to address inequality in Scotland in a spatial way. The roll-out of broadband connectivity is a very important part of our strategy.
At the launch of the Scottish rural parliament about three weeks ago, there was an insightful video by rural communities from Argyll and Bute—I think that there was cross-party representation in the audience for that. About 400 people came together for the first rural parliament meeting, and some equality and rural poverty issues came out in some of the contributions. One comment was that the internet was a lifesaver.
We are doing our best to roll out internet connectivity. We do not control its regulation, but we have a joint project with the UK Government and the providers to fund it. That is an equalities issue that is very much part of the budget.
I have already mentioned attracting young people as new entrants to fishing and agriculture and giving them opportunities in those sectors. Despite all the stick that I take from certain young farmers or new entrants, a young farmer said to me last week at an event that he felt that he would now have an opportunity for a career in agriculture because of some of the support schemes that are being implemented. It was heartening to hear that. Some of the people who class themselves as new entrants but who perhaps do not quite fit the description under the European regulations might not be as happy as that young farmer, but new entrants will benefit a lot from the new policy in Scotland.
The cabinet secretary has obviously been talking to some of the not-quite-so-new entrants to whom I have been talking, who feel that they are seriously disadvantaged relative to everybody else because they do not quite qualify for support. They got into farming just a fraction too soon and feel that they will be seriously disadvantaged for some time. Can he do anything to nuance the payments so that folk who got in just too soon can receive rather more and have a more equitable playing field?
There are new measures in the SRDP, and as part of the CAP negotiations, that help new entrants. Clearly, we will hear only from people who define themselves as new entrants but who do not qualify for support. However, there will be hundreds of new entrants throughout Scotland who qualify for the SRDP support and will be covered by the new CAP, albeit that we took the decision—which many parties supported—to have a transition between the historical scheme and the introduction of the area payments. Of course, that is just one part of the overall payment, and there is a level playing field for the other parts from day 1.
We are talking to those who are aggrieved. The position is difficult. Europe has told us who qualifies and who does not in relation to people who had entitlement under the previous SFP and whose business has expanded. There are lots of people in that position, and it is difficult to say that, under the new legislation, this person is a new entrant, but that person is not. Europe has said that we must not differentiate. If we do it for some, we have to do it for everyone, which means that a farmer who is already getting the regional average, or a high payment, would get even more money out of the system because his business has expanded slightly since last time.
Every time we decide to give new categories of help, we have to take money out of the pot, which affects every other farmer in Scotland. That is why such decisions are difficult.
I am grateful to you for explaining that on the record. Some people probably just need to be told that, unfortunately. Thank you.
The committee was keen that the starting point for the new CAP should be the acreage farmed and claimed in 2013, but I understand that the Commission has said that we cannot do that because it would create a false limit or suchlike—no doubt it used more technical language. Am I right in saying that, if Europe insists that the start point be 2015, genuine new entrants between 2013 and 2015 will be ineligible for support?
Discussions are under way with the European Commission. You are right to say that it has raised the issue with us, and we will have to make an announcement shortly on the final position. It has suggested that those who have expanded can be included only if we choose 2015, and that there would be limitations on who could be included in the new CAP if we chose 2013, which could have a counterproductive impact on some farmers. There are mixed views out there on whether we should move to 2015 now, but we will make the position public soon.
How soon, if I may ask that?
We have to meet various timescales for getting the final changes to Europe. However, the Commission is still looking at the issue, and we will not know the exact situation until we get a clear steer from it.
Okay. Thank you for that.
I have a final question. The CAP futures programme is being designed with the age profile of farmers—which is currently quite high—in mind. Is that aspect on track given the risks associated with it, which we have discussed? Is it dealing with matters related to sight or physical capacity to continue farming and so on, given that people in the farming world are obviously ageing?
I will bring in Jonathan Pryce as it is clear that he wants to say something, but the answer is that we are ensuring that the local offices have a bigger role in helping people. As I said, we have to be careful in terms of advice. An advisory service is being funded through the SRDP. Advice will not necessarily come directly from our officials in local offices, but we recognise that it is important for people to be able to access computers and get some guidance on the on-screen options and how to fill in the forms.
The area offices will be available, as they are at the moment, to support applicants. I also emphasise that, while we are encouraging an increase in the use of IT systems so that customers apply online, we are absolutely maintaining the option of paper applications. We are not taking away anything that people already have. We hope that the new IT interface will feel so good that more people will use it, but those who choose not to use it or who have issues that mean that it is not easy for them to use IT will still be able to use paper.
Good. That concludes the range of questions that we wanted to ask. I thank the cabinet secretary and his officials. We will review our report to the Finance Committee after this meeting.
We will have a brief suspension for a comfort break.
10:54 Meeting suspended.