Official Report 267KB pdf
Organic Aid (Scotland) Amendment Regulations 2005 (SSI 2005/619)
Under agenda item 3, we have a negative instrument on organic aid to consider. We considered the organic aid scheme briefly as part of our budget scrutiny in the autumn and agreed that we would take evidence from the minister when the regulations came before us, so we will have an opportunity to hear from the minister before we formally decide on the regulations, which are part of the agri-environment schemes. Each committee member has a copy of the regulations. We have had no comments from the Subordinate Legislation Committee, but we have received quite a few sets of comments from other organisations. Committee members have those comments in their papers.
Thank you very much. I am accompanied by Ron Vass and Ingrid Clayden, who both have responsibility for the agri-environment schemes. Ingrid Clayden in particular has responsibility beyond that into the rural development programme.
Thank you. I think that Mark Ruskell has a few questions.
I certainly welcome the introduction of payment rates that are competitive with those in the rest of the UK, but I want to ask where the money will come from. As I understand it, the total area given to organic farming in Scotland over the past couple of years is around 300,000 hectares. The Executive's target is to ensure that a third of that—about 100,000 hectares—is improved grassland arable area. Given the competitive maintenance rates of £60 a hectare that are being offered, some £6 million will be required to provide for the maintenance of just those 100,000 hectares. In addition, we will need budgets for hill farming and for conversion to organic farming. The budgets that have been set for the next three years are hovering at around £2.5 million, which appears, at least on paper, to be grossly inadequate to meet the Executive's target, given the important generous payment rates that are being provided for in the amendment regulations.
I hope that my response will be identical to that which I gave Mark Ruskell during the committee's consideration of the draft budget. The figures in any budget are always—and rightly—constrained by the performance and the actual spend under that heading in previous years. As Mark Ruskell will know, the two principal reasons for the decline in the conversion budget are a decline in the number of entrants wanting to convert to organic farming and the loss of a number of people from hill farming and the attached subsidy. As I said in my response when the committee was considering the draft budget, if the new rates induce a higher uptake among new entrants, I will clearly need to review the schemes under that part of the budget heading and reallocate funds. I do not have infinite resources and I have to balance those that I do have. I hope that there will be a higher uptake of entrants to organic farming, although that will mean a squeeze elsewhere. That is the nature of budget decisions.
As I understand it, the maintenance payments apply to all organic land. As I have just said, even the £60 payments—which are the reduced payments after the initial payments of £120 in the first two years—will amount to £6 million. I am sitting here staring at a budget allocation of £2.5 million.
You are assuming that absolutely everybody in our target total will apply this year. That would require a remarkable change. I have no control over who will or will not apply. All that I can do is promote organic farming and the scheme and publish our payment rates. As I have said, the budget line that you are looking at includes other expenditure on rural development. Clearly, if there is a dramatic uptake and we head towards our target figures for organic farming, other elements of expenditure on rural development will have to be curtailed.
If you offer all the organic farmers in Scotland a payment of £60 a hectare, they will take it up. They will have to take it up in order to stay competitive with other organic farmers in England and Wales and the rest of Europe. If a third of the organic area in Scotland is to be improved grassland or arable land, the expenditure will be £6 million. I am still having trouble equating the payment rates that you have presented with the budget allocation, which—just for those two categories of land—is less than half of what is needed.
You are ignoring the rest of the rural development budget. Money does not grow on trees. When I gave evidence on the budget to this committee, I accepted that an uptake in organic schemes would be at the expense of other headings within the rural development budget.
That is on the record, but the concern is that we do not slacken off in our promotion of organic farming just because we think that someone else will suffer. A reassurance from you that organic farming remains a central part of the Executive's farming strategy would be helpful.
The only constraint on me is exactly the one that I described to Mark Ruskell when he asked an almost identical question during my evidence on the budget. The budget lines in rural development will simply have to be reallocated. I will be happy if there is a hugely increased uptake in the organic aid schemes, but that will mean—as it always does—that some other budget lines will suffer.
My final question is about targets. There are two targets in the organic action plan, but they are both proportions of a total—the total land area and the total amount of organic produce marketed in Scotland. Is it not the case that the targets could be met even if the amount of land farmed organically went down and the amount of produce consumed went down as well? Would you be happy to meet the targets through, in effect, a collapse in the organic sector?
I am unclear as to what you mean. I am sorry; I am not trying to be awkward.
Your target for land is that 30 per cent of the total area should comprise improved grassland and arable land. The target is a proportion, so if the total land area goes down, it could result in the target being met. Would you consider that a positive outcome?
No.
In effect, are you presenting a budget for the organic aid scheme, and a payment rate, that will lead to an increase in organic land area in Scotland.
I hope so.
Do you still feel that the payment rate is covered adequately in the budget and reflects the different priorities that you have for the rural stewardship scheme and the organic aid scheme?
We are now back to the very beginning. As I said to you in evidence on the budget, when drawing up the budget I have a finite sum of money. The allocations are based on the demand for each scheme under each heading—on actual performance. However, if there is an absolute increase in the organic aid scheme, which is not subject to any other control, we will have to meet that demand. That is the same for all the headings, but it is particularly the case for the organic aid scheme. We will meet that demand by trimming back the other budget headings.
That is quite clear. We welcome the fact that the organic sector has been enthusiastic about the new level of payments. The key point is to encourage more people to enter the scheme and ensure that we meet the Executive's targets. The message in agreeing the regulations should be that here is a new opportunity for people, more of a level playing field and that we hope to see an expansion of organic produce. All the other comments about marketing and support for the sector need to be taken in that context. Does anyone else want to say anything desperately?
The only thing that I want to say desperately is, let us move to agree the regulations.
I am trying to get us to that point.
I thank the minister and his officials and invite them to leave. As they do so, we will crack on with our agenda.
Plant Health (Scotland) Order 2005 <br />(SSI 2005/613)<br />Rural Stewardship Scheme (Scotland) Amendment Regulations 2005 <br />(SSI 2005/620)
Avian Influenza (Preventive Measures) (Date for Identification of Poultry Premises) (Scotland) Regulations 2005 (SSI 2005/625)<br />Products of Animal Origin (Third Country Imports) (Scotland) Amendment (No 2) Regulations 2005 (SSI 2005/645)
Avian Influenza (Preventive Measures) (Scotland) Amendment Regulations 2005 (SSI 2005/646)<br />Avian Influenza (Preventive Measures in Zoos) (Scotland) Amendment Regulations 2005 (SSI 2005/647)
There are six further Scottish statutory instruments to consider today under the negative procedure.
Yes, I have a brief comment on the Rural Stewardship Scheme (Scotland) Amendment Regulations 2005. It is clear in the light of what the minister just said that there are substantial issues about the payment rates for the different management options laid out in the regulations. I am content to agree the regulations, but serious total budget implications are being completely overlooked.
The minister made it clear that he would have to meet the budget requirements for all the schemes, so that is his call. I presume that we will be able to scrutinise that in the next budget round. There has always been fuzziness around those headings, as there was about common agricultural policy reform.
I make the point, almost on behalf of the Executive, that we have to cut our coat according to our cloth. There is no point in having money lying in a budget that will not be used. Budgets change from year to year. If there is an obvious upswing in the uptake of the organic aid scheme, I presume that it will be reflected in future budgets. However, why have £6 million sitting in a budget that will not be used? It would be far more sensible to use it for something else in the meantime, when there is an option to rejig it in a later budget.
The issue with the Rural Stewardship Scheme (Scotland) Amendment Regulations 2005 and the Organic Aid (Scotland) Amendment Regulations 2005 is not about whether there will be an uptake of the scheme; rather, as with the organic maintenance payment, the scheme should be a right for all organic farmers to take up. Therefore, it is not dependent on the total land area; it is almost a fixed cost that farmers will expect to buy into. For that reason, there is a financial implication for the rural stewardship scheme and the budget that will be available for it, and indeed to implement the regulations.
That is the minister's job, is it not? He will have to allocate funds to meet the provisions that he proposes. We have been negative about aspects of the budget when we have felt that it has not been an accurate reflection. I expect next year's budget to reflect a much higher level of support for the organic aid scheme than formerly. The minister will have to juggle his figures over the next few months.
Our next meeting will be next Wednesday.
Meeting closed at 12:54.