Environment and Rural Development Committee,

Meeting date: Wednesday, May 18, 2005

Official Report 232KB pdf

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Subordinate Legislation

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Horse Passports (Scotland) Regulations 2005 (SSI 2005/223)

I welcome members and members of the public and press to the meeting. I also welcome three visiting members: Jeremy Purvis is here as a substitute for Nora Radcliffe; Janis Hughes is here as a substitute for Karen Gillon; and Brian Monteith is here because of his interest in the discussion that we are about to have on horse passports.

Brian Monteith has lodged a motion on the Horse Passports (Scotland) Regulations 2005 (SSI 2005/223) that invites the committee to recommend that nothing further be done under the regulations. I welcome Lewis Macdonald, the Deputy Minister for Environment and Rural Development, and his officials. As we have done previously, I propose to have a question-and-answer session to allow members to clarify issues and to ask for further information and explanations of detail from officials. We will not be able to ask the officials questions once we move on to the formal debate, so we will move on only when we are satisfied that we do not require any more clarification or explanations of detail.

The minister will make some brief opening remarks about the purpose of the regulations and why they are before us.

As the committee will know, the regulations were made on 21 April and came into force on 16 May. Horse owners will have until 16 June to apply for passports if they do not already have them. The restrictions on the movement of horses without passports will not apply until 16 August. The regulations meet our obligations under European law and our obligation under the Scotland Act 1998 to implement European Union directives and decisions.

The new horse passport scheme replaces an earlier scheme that was introduced by the Horse Passports Order 1997. That legislation applied only to horses—such as pedigree animals or racehorses—that were registered with a registered breed society or sporting organisation. The objective of the legislation was to facilitate trade in and movement of such animals by ensuring that they were accompanied by a passport when moved. Once traded, they would therefore be eligible for entry into the studbook or the register of the relevant society or sporting organisation in the country of final destination, wherever in Europe that might be.

The new horse passport measure is, on the contrary, primarily a public health measure that has been introduced to protect those who eat horsemeat. Although it might not be on many Scottish menus, the horse is a food-producing animal in European terms and, as such, is subject to European Union rules and regulations covering veterinary medicines that are administered to food-producing animals. Because the focus of the regulations is on public health, the need for a passport now applies to all equines—in other words, to crossbreeds as well as to thoroughbreds and to donkeys and mules as well as to horses and ponies.

The new regime effectively prevents any of those animals from being sold for human consumption if certain veterinary medicines have been administered, and requires owners to make a declaration on the passport as to whether the horse is intended for human consumption. The section where that declaration is made should also record the details of veterinary medicines that have been administered. The regulations also require each passport to carry a unique equine life number.

Owners will be required to obtain a passport and make a declaration for each animal the first time that it is moved for breeding or competitions, to receive veterinary treatment or, most pertinently, for export or sale, but they will be required to do so only once in the horse's lifetime. A declaration that a horse is or is not intended for human consumption cannot be reversed.

Passports will be obtained from passport-issuing organisations that are recognised in Scotland by the Scottish Executive Environment and Rural Affairs Department or from duly recognised passport-issuing organisations in other parts of the United Kingdom or other member states. There are currently nine such organisations in Scotland, including, for example, the Shetland Pony Stud-Book Society, the Clydesdale Horse Society and the Scottish Sports Horse Association, which covers sports horses. The PIOs will set and collect the charges that they need to cover their costs. We expect the average cost to be approximately £25 plus a veterinary fee—if required by the PIO—of perhaps an additional £45.

I ask for clarification from the minister and his officials on paragraph 3 of the note from the Subordinate Legislation Committee—I do not know whether the officials have that note—which says:

"The Executive has explained"—

I assume that that means "explained to the Subordinate Legislation Committee"—

"that, while the Directive also applies to wild horses, there is no need for the Scottish Regulations to make provision for this as there are no wild horses in Scotland."

How does that apply to Eriskay ponies?

I believe that, although Eriskay ponies run wild, they are privately owned. There is a recognised owner in each case and by putting an obligation on the owners of horses, the regulations place obligations on the owners of Eriskay ponies. Of course, my department recognises Comann Each nan Eilean and the Eriskay Pony Society as passport-issuing organisations.

I thank the minister for his clarification.

Are there any statistics on how many horses in Scotland end up as horsemeat? Is it done openly or do people take their horses on holiday to France, let them have an accident and then sell them for sausages?

It can happen that, when a horse goes overseas—not for a planned accident but for competition purposes, for example—it can be destroyed because it has had an accident or for some other reason.

On traceable exports, there are no slaughtering facilities in Scotland for horses that are intended for human consumption, but there are two slaughterhouses in England that are specifically for horses that are intended for human consumption. They dispose of about 60,000 to 80,000 horses a year. Those horses end up mainly exported to European countries for consumption or, on occasion, for sale in delicatessens in the United Kingdom, which is perfectly lawful, although there is not a large market for horsemeat—certainly not north of the border.

Do we know how many of those horses come from north of the border?

No, although we imagine that some do, but because there is no tracing regime it is not possible for us to put our finger on a figure. However, we know that there is a significant export trade from England.

Do people get paid a lot of money for a horse that is for human consumption?

It varies a bit. I think that it would not be a huge sum. A large horse might fetch £400 and a Shetland pony might fetch £80, if it is for human consumption. That is the sort of price that we are talking about.

I would like to ask the minister a number of questions. Could he explain how the policing of passports will be made effective? I can well understand how it is easy to identify riding schools, where there will be a large number of horses, but what process will there be for spot checks on individuals who have their own horses? Will not that be rather expensive?

It will be the responsibility of local authorities to carry out the enforcement measures that are required, which are specified under the regulations. Guidance that has been issued to local authorities suggests that they should adopt a reasonable and pragmatic approach to the enforcement of the regulations. The regulations specify that a horse passport and declaration are required at the time of first movement, but we clearly would not expect that to be interpreted as moving a horse from one field to another on the same property, for example, or even to a neighbouring property. However, if veterinary medicines are to be administered to a horse, or if the horse is to be moved for sale or for competition, the passport and declaration would be required. That is a critical point, because it is the point at which the horse goes somewhere where it might suffer an accident or be sold or slaughtered. It is at that point that we would expect enforcement to take place.

I move on to the issue of burying horses, which is a matter of particular concern to those who keep just one or two horses and consider them family pets rather than horses for human consumption. The European Union animal by-products regulation allows member states to apply various derogations regarding the disposal of animal by-products, and the Government has applied the derogation to permit the burial of dead pet animals among other things. However, there appears to be some confusion or lack of clarity in the definition of pet animal. With the introduction of a compulsory passport for horses and a declaration on whether they are for human consumption, horses could be classified with sheep, cattle, pigs, goats and poultry, and might fall outwith the definition of pet animal. If that were the interpretation, it could be argued that, not being pets, horses, ponies, donkeys and all equines could not be buried on an owner's land. That is a concern to owners who would like to dispose of their horse or pony by burying it on their land, adjacent to their house or stables. Can you clarify whether horses with horse passports, even if they have been declared as not being for human consumption, could be buried on the owner's land and be considered as pets?

I think that the only impact that the regulations will have in relation to the questions that you raise is that the passport-issuing organisation must be notified of the death of a horse within 30 days of the death taking place. That is really the only change that will be introduced. The regulations do not attempt to provide any direction on the disposal of a horse. That remains at the discretion of the owner, except that the owner must make a declaration early on in the horse's life on whether it is intended for human consumption. What is done to dispose of an animal that is not intended for human consumption is not directly affected in any way by the regulations.

You may not be able to do so now, but is there any impediment to your being able to clarify that point in future with further regulations from the Executive if it becomes a cause of genuine concern in the light of experience?

That could be addressed should such a concern arise, but I do not feel that the regulations that are before the committee today should impact in a way that would give cause for concern. My department will keep a weather eye on that, as on other matters.

The minister said that the nearest slaughterhouses that slaughter horses for human consumption are in England. Do the regulations have animal welfare implications? If more horses are intended for human consumption, will more horses have to make long journeys to England before being dispatched?

Given the way in which the market currently stands, if more horses are used for human consumption, more horses will have to travel to England. However the regulations have no direct impact on whether there is an increase or reduction in the use of horses for human consumption. I suppose that a net effect of the regulations might be a reduction, because horse owners will be required to say, when the passport is issued, whether the animal is intended for human consumption. Therefore, an owner who initially does not intend that but who then fancies getting a price for their animal at the end of its life will not be able to send the animal for human consumption. However, the regulations have no direct impact on the matter.

What is the difference between options I and II, which are set out in the regulatory impact assessment? According to the RIA, option II

"would not meet the legal requirements",

whereas option I would do so. Why was option II considered, if it could not satisfy the requirements of EU legislation? Given that option I met the requirements fully, option II did not do so and option III did not attempt to meet them at all, did the Executive have much choice about what to do?

There were clear, practical advantages to option I, which was for complete implementation in the way for which the regulations provide. The approach removes doubt, which is important. It is important to understand that a consequence of introducing the regime is that we can protect the ability of veterinary surgeons to administer medicines and the ability of horse owners to obtain medicines for their beasts. The regime is comprehensive and effective and allows a record to be kept of the veterinary medicines that are administered to all horses in Scotland, the United Kingdom and the EU. The advantage of that is that we need not worry that horses in which there are illegal residues of medicine will enter the human food chain at any point, which secures the future safety of the administration of veterinary medicines.

If we had gone for option II, in essence we would have said that horses that are bred for human consumption should be issued with a passport—that is the key difference between options I and II—but given that no horses are bred for human consumption in Scotland and many other parts of the EU, that approach would have been too narrow. The purpose of the exercise was to exclude from the human food chain all horses that contained illegal residues, and the comprehensive approach that we took provided the best way of doing that.

I seek clarification of regulation 17, on restrictions on the movement of horses without passports. I represent the area in which the Lauder and Selkirk common ridings are held, which I think are the two largest equine events in Europe. Regulation 17(a) provides that a horse that is not accompanied by its passport will not be able to be moved

"for the purposes of competition".

Are common ridings or the free racing that is associated with the ride-outs at common ridings excluded from the provision?

That is a good question, on which I look to Mary Bradley for an answer.

A common riding is a competition of sorts, at which an animal might become injured and be given medicines or be destroyed at the place of injury and their carcase taken away to be disposed of. In such circumstances, the options would be for the vet to administer the appropriate veterinary medicines or for the animal to be taken to the slaughterhouse if it is intended for human consumption. Therefore, we expect such animals to be accompanied by their horse passports.

May I pursue the implications of that? You will be aware of the way in which common ridings operate. The gatherings take place at various times of the week and can involve up to 600 riders. There will be a considerable bureaucratic burden on the licensing authority with regard to checking, and there could be movement of horses without passports, given that the majority of riders do not own the horses that they ride.

In practical terms, we expect it to be in the interests of all horse owners to have a passport for their beast whenever it is moved away from its original farm or stable. That applies to common ridings just as it applies to other reasons for taking horses off the premises. What you say is right, but the purpose of the regulations is to ensure that all horses are covered whenever they are in a situation in which they might end up requiring veterinary treatment, being sold or being destroyed as a result of an accident. Our intention is not that local authorities should overspecify or be overbureaucratic in their enforcement but that horse owners should take responsibility and ensure that their horse has a passport whenever they take it off their premises.

Regulations that state that common ridings would be viewed as a competition will cause alarm. A secondary issue is the fact that most riders do not own the horses that they ride. Will there be a duty on people who rent a horse—either for one event or for a week—to be in possession of its passport if it is taken on to the new keeper's land or on to common land?

It is important to understand that once a passport has been issued to an animal, that is all that it needs. It is a lifetime document. If the owner of a horse has obtained a passport for the animal, that passport is valid and would be expected to be available for inspection regardless of whether the owner or another person is the keeper of the horse at any given time.

For clarification, the implication is that there will need to be considerable communication at large events such as common ridings. Regulation 17 states that

"no person shall move a horse … for the purposes of competition … unless the horse is accompanied by its passport."

Anyone who rents a horse will have to be in possession of the passport for the duration of the rental period.

The horse owner should make sure that the passport is available whenever they lend the horse to another person. Clearly, if a horse is normally stabled at one premises but is at another premises for a weekend and is not engaged in the activities that we have described, we would not expect any requirement for enforcement. However, when the horse is away from the farm or premises, the owner should ensure that it is accompanied by its passport.

The regulations will inevitably put greater burdens on some local authorities than on others, especially as the Borders, Dumfries and Galloway, South Lanarkshire and East Lothian have ride-outs. I presume that the Scottish Executive will consider financial support for areas that have such events, including, for example, equine events that are the largest in Europe.

If difficult issues arise around enforcement, we would need to look at them, but I expect that the vast majority of horse owners will take a responsible approach and that there will not be a major challenge in enforcement.

I have a question about the definition of a keeper. Is somebody who borrows a horse and temporarily looks after it on behalf of the owner regarded as its keeper? I am driving at the point that Jeremy Purvis asked about. I presume that, whenever a horse is moved off its original owner's land, it needs a passport. Is that interpretation correct?

Yes. In line with Jeremy Purvis's questions, when AN Other uses a horse for the purpose of a show, racing or common riding, they will be regarded as the horse's keeper and will be asked for a passport if that needs to be asked for.

That has inspired a series of questions.

When a horse is stabled at a place that makes its money from stabling other people's horses, who is responsible for keeping the passport—the owner of the stable or of the horse?

Responsibility for the passport lies with the horse's owner, but the circumstances may differ when a horse is stabled regularly elsewhere.

The owner would probably want the passport to stay with the keeper for inspection if that was required.

The responsibility would remain with the owner.

In essence, the passport accompanies the horse.

It is sensible to keep the passport where the horse is. The passport will interest an enforcement officer only when an animal receives medical treatment or is put down.

Can we be more definite than saying "probably"?

Which "probably" was indefinite?

It was said that the passport would probably stay with the stable owner. Will it stay there?

The passport should be with the stable owner—probably because we expect stable owners to be responsible and to abide by the rules.

I was asking not about that use of the word "probably" but about the previous use. However, that is fine.

Regulation 18 refers to the situation in which

"a veterinary medicinal product is administered to a horse in relation to which a passport has not yet been obtained or is not available".

Do you envisage that such situations might arise? In such cases, the owner or keeper will have to enter the information on a passport as soon as possible and sign a declaration that the horse is not intended for human consumption if the medicine would make that impossible. What prevents an owner or keeper from not complying with that? The owner or keeper is told to put the information on the passport, but the passport is unavailable. The owner or keeper may sign the declaration even when a horse is for human consumption and not do their duty afterwards. How do you check that?

That is another enforcement issue, for which responsibility lies with enforcement officers. A passport-issuing organisation will exist.

You asked in what circumstances veterinary medicine might be administered when a passport did not exist. That would happen when a horse that required treatment—probably in an emergency—had not been moved off its owner's premises or had not otherwise required a passport. Medical treatment would not be delayed for a passport to be obtained, but the requirement to have a passport because veterinary medicine had been administered would be recognised. Having a passport is an obligation, so it has the same status as other obligations on the owner. Regulation 19 lists duties on owners, which apply in those circumstances as in others.

To avoid doubt, rather than clarifying which equines should have a passport, will you say which will not need a passport?

The short answer is hardly any. If an animal has moved off its original premises, it will require a passport.

I suspected that that would be your answer. I asked the question because it is still possible that an equine might receive veterinary medicine on the premises, without being moved off, and therefore not have a passport.

That is possible and relates to Maureen Macmillan's question about regulation 18. Whenever an animal is to receive veterinary medicine, it should have a passport. In some emergencies, a horse will require treatment before a passport has been obtained. Maureen Macmillan asked what follows from that. One trigger for requiring a horse passport is movement, but others are sale and the administration of veterinary medicine.

I do not see anyone else bursting with questions, so we will move to the formal debate. I invite Brian Monteith to speak to and move motion S2M-2781.

I lodged the motion that is before the committee because I believe that we can meet our obligations without these compulsory passports. As committee members' questions have shown, the passports will clearly pervade the ownership of horses.

I have no particular objection to the existing passport system. The minister spoke of a public health measure to deal with the reasonable concern that veterinary medicines administered to horses and other equines could pass into the food chain. I am sure that members know that pigs, chickens, turkeys, sheep, lambs and ducks do not have passports, even though they can have various medicines administered to them and can pass into the food chain. Members will also know that there are passports for cattle, but they may not know that those passports contain no record of the drugs that may have been administered to the cattle. Therefore, for cattle—an obvious part of the food chain—there is no control equivalent to that which is proposed for horses.

If the cattle passport is to be considered as an example of how the horse passport might be administered, we should also consider this: according to the Public Accounts Committee at Westminster, one in five cattle is officially missing. That is 1.2 million cattle, and the committee described the situation as "chaos".

The Westminster Government previously had a different proposal for horse passports. By the admission of the Department for Environment, Food and Rural Affairs, the present proposal will cost £17.5 million a year to administer; the previous proposal, which did not go as far as the regulations that we are now considering, would have cost only £300,000 a year. It would have required passports only for horses that were to be slaughtered for human consumption. That proposal could have met with unanimous support.

Some groups and organisations that are involved with horses have welcomed the move towards horse passports, but members should bear in mind that those people have a financial incentive in the administering of the passports. Therefore, the objectivity of their support is lost.

In their questions to the minister, committee members elicited some answers that led to even more questions. Any Government of any colour that proposed these regulations would be gold plating a European Union decision—and it is a decision, not a directive. There is no need for gold plating. It will lead to significant costs and disruption. It goes too far and it could be avoided by introducing less demanding regulations. I ask members to support my motion.

I move,

That the Environment and Rural Development Committee recommends that nothing further be done under the Horse Passports (Scotland) Regulations 2005 (SSI 2005/223).

The clerk has asked me to ask everyone to check their mobiles. A strange noise has been coming through the sound system and somebody's mobile might be affecting it.

I invite the minister to respond to Mr Monteith's motion.

As I have said, it is important to recognise that the regulations are being introduced as a public health measure and will provide a degree of certainty for all those involved with horses, such as owners and those who use or keep horses.

It is also important to acknowledge that the situation in relation to horses is different from the situation in relation to some of the other animals to which Brian Monteith referred. Many of those other animals are kept primarily as food-producing animals and so certain requirements are in place for them that are not in place for horses. In the United Kingdom, horses are not normally food-producing animals and most medicines that have been authorised for use on them here have not been through the necessary tests to show that they are safe to be used on food-producing animals. Around three quarters of veterinary medicines that are used in the United Kingdom carry a warning that they should not be administered to a horse that is intended for human consumption. The purpose of the regulations is to provide a degree of safety and the guarantee that passports can provide that animals have not been administered those veterinary medicines. That is the reason for going down this road.

The suggestion has been made that horse societies and associations that are responsible for maintaining records of horse pedigrees and so on have a financial incentive to support the scheme, but that is not why they support it. The costs that they will charge a horse owner are intended simply to cover their costs and are not intended to do anything else.

It is worth noting that the cost of a horse passport for an animal's entire lifetime in most cases will be in the order of £25. That compares with the typical cost of keeping a horse for a year of £2,500—indeed, costs are considerably more than that in some cases. The £25 cost of obtaining a passport for an animal's lifetime—plus perhaps the £40 cost of vet fees—is infinitesimally small compared with the overall cost of keeping a horse. The benefits that the horse owner and the horse-owning community at large will obtain and the benefits to public health in countries in which horsemeat is eaten will far outweigh the costs that are associated with the scheme.

I support the regulations and understand that they are an attempt to stop veterinary medicines that are not cleared for consumption getting into the food chain. The chain may be predominantly French rather than Scottish, but the protection of consumers is the issue. The argument has been made that the regulations will not be particularly onerous on horse owners or horse keepers. Therefore, I support them and will vote against Mr Monteith's motion.

I support the regulations, understand the benefits that will accrue and recognise that horse owners are responsible. Horse owners care not only for their animals and their communities, but for public health. In my constituency, the common riding season is approaching and I do not want there to be unnecessary burdens on the local authority or on responsible owners and users of horses at those historic and culturally extremely important events for Scotland. I see the minister nodding and appreciate that that is certainly not the Scottish Executive's intention. With that caveat, I support the regulations.

On what Mark Ruskell in particular said, I, too, realise that the purpose of the regulations is to ensure that veterinary medicines that render horses unsuitable for human consumption when they are administered should not enter the human food chain. However, as Brian Monteith said, the Government has considered alternative routes that would have much the same effect but would cost less and would have less impact on people who traditionally use horses for a range of purposes but do not intend them to go into the human food chain. There is a viable alternative, so I support the motion.

As no other members have comments, Brian Monteith may now make a brief summation.

A great deal has already been said. There is certainly an issue of public health, but, yet again, heavy-handed regulations are being introduced to deal with it. Further, decisions are being taken about whether to put VAT on top of the horse passports. The instrument is an example of overregulation and overtaxation. The measure is incremental and there is no necessity for it, given that the Government had less invasive alternatives. Therefore, I press the motion.

The question is, that motion S2M-2781, in the name of Brian Monteith, be agreed to. Are we agreed?

No.

There will be a division.

For

Johnstone, Alex (North East Scotland) (Con)

Against

Boyack, Sarah (Edinburgh Central) (Lab)
Gibson, Rob (Highlands and Islands) (SNP)
Hughes, Janis (Glasgow Rutherglen) (Lab)
Lochhead, Richard (North East Scotland) (SNP)
Macmillan, Maureen (Highlands and Islands) (Lab)
Morrison, Mr Alasdair (Western Isles) (Lab)
Purvis, Jeremy (Tweeddale, Ettrick and Lauderdale)
Ruskell, Mr Mark (Mid Scotland and Fife) (Green)

The result of the division is: For 1, Against 8, Abstentions 0.

Motion disagreed to.

Therefore, the committee is content with the regulations and will make no recommendation to the Parliament. We will record the result of the division in the committee's report to the Parliament on the regulations.

There has been much discussion of what the regulations will mean in practice, and it has been useful to draw out the issues. The real challenge for the minister is to make all horse owners aware of his interpretation of the regulations so that people can follow them properly.

Members may be interested to know that one of Mr Monteith's colleagues has lodged a parliamentary question, which will allow me to say a little more tomorrow about how we intend to advertise the impact of the regulations.

I thank Brian Monteith, the minister and his officials. I suspend the meeting briefly to allow them to leave.

Meeting suspended.

On resuming—

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Land Management Contracts<br />(Menu Scheme) (Scotland) Regulations 2005 (SSI 2005/225)

The Land Management Contracts (Menu Scheme) (Scotland) Regulations 2005, which are subject to the negative procedure, relate to policy issues of which the committee has been aware for some time and to work that we did on the reform of the common agricultural policy. The Subordinate Legislation Committee has considered the regulations and drawn our attention to several points. Members have an extract from the Subordinate Legislation Committee's 19th report of 2005. Paper ERD/S2/05/14/3c is a response that we have received from the Minister for Environment and Rural Development to questions about the regulations that we raised at last week's meeting.

Do members have any questions or comments on the regulations?

I will follow up briefly on the comments that I made last week. My interpretation of paragraph 1 of the minister's response—although others may interpret it differently—is that while, as the minister makes clear, the regulations relate to schemes that will run for up to five years beyond the current year, there is an opportunity to fine tune the regulations. I have been contacted by farmers who believe that certain aspects of the regulations require fine tuning. Given my interpretation of paragraph 1 of the minister's letter, I am content with the regulations. When the scheme is up and running, I will take up any issues that are raised with me directly with the minister, in writing, and will ask him to consider any changes that are requested. In general, I would have liked a more extensive and better-funded arrangement, but that is a policy issue that can be taken up at a later date. Therefore, I believe that we should simply note the regulations.

The paragraph to which Alex Johnstone referred in the minister's letter also states:

"The research should also identify potential improvements to the measures and the scheme design."

I hope that those who deal with the scheme will have the opportunity to suggest amendments that the minister can consider.

The minister's letter is helpful, so I am glad that last week's meeting allowed colleagues to raise issues such as organics and what tier 3 implementation will mean in practice. With those words, I hope that we can agree to the regulations. Are members content to make no recommendation on the regulations to the Parliament?

Members indicated agreement.

We now have a 15-minute gap because the minister has to attend a Cabinet meeting and cannot be with us until half past 11. That is slightly longer than our usual gap, but I suspend the meeting until then. Members may go away and use the time for other business, as long as they are back here for 11.30.

Meeting suspended.

On resuming—

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Farm Business Development (Scotland) Variation Scheme 2005 (SSI 2005/219)

Item 4 on the agenda is also subordinate legislation. We have one affirmative instrument to consider. I welcome Ross Finnie, the Minister for Environment and Rural Development, and his officials.

Parliament must approve the instrument before it can come into force. A motion in the name of the minister invites the committee to recommend to the Parliament that the instrument be approved. The Subordinate Legislation Committee was consulted and has made no comments on the instrument, which is worthy of record.

Before we have a debate on the motion, we have the opportunity to clarify any purely technical matters or to allow the minister and his officials to clarify any points of detail. We cannot do that once we go on to the formal debate.

I ask the minister to introduce his officials and to make opening remarks on the instrument.

Good morning. Thank you, convener. I am joined this morning by Russell Hunter, from the solicitors division and by Henry Snedden, who has more to do with the day-to-day implementation of the grant scheme.

The farm business development scheme is, as members will be well aware, a capital grant scheme that is funded by the Scottish Executive budget. Its legal basis is SSI 2001/259 and it operates within the ambit of the EU rural development regulation, Council regulation EC 1257/1999.

The changes that I propose will be introduced with effect from 1 June, subject to the committee's approval. They comply fully with articles 4 to 7 of the rural development regulation, which cover support for investment in agricultural holdings.

When the scheme was designed, it was agreed that the priority for the farming community was to generate additional income for farming families. For that reason, until now, the scheme has focused exclusively on promoting and supporting diversification. However, from the outset we agreed with our partners that the list of eligible measures would be reviewed throughout the lifetime of the scheme. We have done that and, following the latest review, I plan to extend the range of eligible measures that are supported by the farm business development scheme.

In the light of the recent common agricultural policy reforms, and following detailed consultation with partner and stakeholder organisations, I believe that the time is now right for coverage of the scheme to be extended to provide support to eligible farmers who plan to restructure or reorient their agriculture business. The new measures will enable farmers to invest in capital projects such as new or improved waste management facilities, livestock accommodation, infrastructure and technology. In parallel, the farm business development variation scheme will continue to promote and support farming families that want to diversify. The new measures are additional to and not instead of diversification measures; they support such measures. The higher grant ceiling of £30,000 will apply to diversification measures as well as to the new measures. The changes will offer farmers in lowland Scotland similar opportunities to those that are available in the counterpart agricultural business development scheme in the Highlands and Islands area.

In summary, the scheme will include variable rates of grant support for specific capital investment measures related to the restructuring or reorientation of an agriculture business; an increase in the grant ceiling from £25,000 to £30,000 for single applications and £35,000 for collaborative ventures; and the provision of limited financial assistance of up to a maximum of £400 towards the cost of the preparation of a business plan.

The FBDVS budget of £26.9 million will be spread over this and the next two financial years. The sum will cover both investment in holdings and diversification measures. However, I emphasise that the scheme is cash limited and competitive, which means that not every applicant who applies for FBDVS grant will be successful.

I hope that my statement summarises the position and will enable the committee to support approval of the instrument.

Thank you, minister. I open up the floor to questions and points of clarification from colleagues.

In the list of consultees, the minister has not included the Scottish Agricultural Organisation Society. Why is that, given that the scheme very much relates to collaborative ventures?

The Scottish Agricultural Organisation Society, to which we provide considerable funding, is very much in the business of helping farmers to develop their business plans. The organisation seeks opportunities to give assistance on an individual basis, for which there is a charge. Perhaps the SAOS should have had some say on the provision, level and extension of grants for diversification at an earlier stage, but it was aware of the SSI. I appreciate that the SAOS perhaps should have been consulted formally, but we talk to its chief executive and its officers regularly, and they were well aware of what we were doing. We have not had any comments from them on the operation of the scheme.

If there are no other questions, we move to the debate on the motion.

Motion moved,

That the Environment and Rural Development Committee recommends that the Farm Business Development (Scotland) Variation Scheme 2005 (SSI 2005/219) be approved.—[Ross Finnie.]

Would any other colleagues like to speak on the motion?

No.

We do not need a summing-up speech. I think that the minister can take the lack of comments as assent, but I will test that by putting the question.

Motion agreed to.

We will report that decision to the Parliament. I thank the minister for bringing the SSI before us this morning.