Agriculture and Food (Government Support)
The next item of business is a statement by Richard Lochhead on a thriving rural Scotland: the future role of Government support to agriculture and food. The cabinet secretary will take questions at the end of his statement, which will last for 15 minutes, so there should be no interventions or interruptions during it.
Our countryside is special, as are the farmers and crofters who care for it and work the land to produce a range of public benefits. In the past few months alone, I have spoken to hill farmers on Mull and in Speyside, crofters on Lewis, and farmers in Fife and the Borders, to give just a few examples. Those people are the lifeblood of our nation. The Government's purpose of sustainable economic growth is vital to our rural areas, especially in these difficult economic times. Today, I am announcing the Government's position on three interrelated agriculture policy issues.
First, the less favoured area support scheme aims to deliver economic, social and environmental benefits that depend on active land management in the hills. LFASS expires in December, so we have to decide on successor arrangements.
Secondly, we now have the report on the independent review of the Scotland rural development programme by Peter Cook. The SRDP delivers support for a range of activities, from capital investment for businesses to environmental and community projects. Today, the Government is publishing Peter Cook's report and our position on his recommendations. I thank him for doing a tremendous job in a short timescale.
Finally, there is the recent common agricultural policy health check. Some parts of the health check are closely linked to LFASS and the SRDP, and we agreed with stakeholders that we would consider those issues at the same time.
The Government's vision for agriculture is based on optimising the use of Scotland's natural assets to produce food, other goods and services, and public benefits for which it is right that society should pay. Those assets include not just the land, but our world-renowned landscape, our rich biodiversity and our wealth in soil carbon and renewable energy sources. Therefore, the principles on which the package is based are optimisation of use of natural resources in Scotland; provision of public support for public goods, particularly social and environmental public goods; use of public money as effectively as possible to deliver the desired outcomes for our nation, while relying on farmers and crofters to produce for the market; and preparation of Scotland for the longer term. Most observers agree that, in all likelihood, the common agricultural policy will, after 2013, look very different from today's CAP.
The first part of the package concerns the future of livestock farming on the hills. Many people have highlighted the serious situation that is faced by beef and sheep farming on our hills. Livestock numbers are falling, and land abandonment is a reality in some areas. There is, of course, a complex set of issues. For instance, Peter Cook has said that hill farming matters more for community and environmental reasons than it does for food production, and that the fall in lamb production in the north and west since 2004 could be replaced by an increase of only 3 per cent in production elsewhere in Scotland. Moreover, farmers have told me that a reduction in flock size is not necessarily always a bad thing if performance improves.
However, it is recognised throughout Parliament that hill farming faces unique challenges. A Mull farmer told me how he expresses his stocking rate not in sheep per hectare, but in hectares per sheep. The costs of transport to and from islands and remote communities cannot be ignored. We need to strike a balance in addressing that difficult issue: we need to help businesses through the short term and offer investment support for the longer term. Both elements are vital to our getting farm businesses on to a solid footing for the future.
As we are all aware, there has been lively debate among stakeholders on support for the hills and how it should be funded. In our consultation on the health check, we received 50 responses and dozens of different suggestions. Perhaps the only consensus among stakeholders is that there is no easy answer to the difficult challenge that exists.
In taking our decision, the Government has paid attention to two key factors: our ability to target the different measures and the speed with which they can make a difference. Some people suggested new support for the hills through the land managers options part of the SRDP, but because of European rules, new LMOs cannot benefit farmers' bank accounts until mid-2011 at the earliest. The Government and, I am sure, Parliament wish to see action sooner. Therefore, we have decided on a staged approach, subject to approval from Europe.
First, we will make an immediate increase in LFASS payments for 2009 for the fragile and very fragile land categories. That increase of 19 per cent will mean, for example, an extra £1,300 for the average sheep producer in the Highlands, or an extra £1,600 for a beef producer in Orkney.
From next year onwards, the current LFASS will be replaced by a revised version—LFASS 2010. There will be three main changes. The first will be a further increase in payment rates in the fragile and very fragile areas, giving a total of a 38 per cent increase compared with 2008. The main beneficiaries will be sheep producers in the most vulnerable areas. We will also strengthen the link between payment levels and hill farming activity by updating the statistics on which payments are based. Finally, there will be reinforced rules to determine active farming, so that payments are focused on those who are genuinely active. We will consult stakeholders on precisely how to do that; it could, for example, include rules on stocking density and lambing rates.
Together, those steps should deliver £15 million of extra support over the next two years to active farmers in the fragile and very fragile regions. We will fund that partly from unspent money in LFASS, which has been caused by the decline in applications, and partly by linking payments to active farming. The remainder will be funded from increased European funding, which has been brought about by the weaker pound. We intend to deliver the extra support without reducing the budget elsewhere in the SRDP. To be clear: from now on, payments will be linked more closely to active farming. All those who are involved, including members, have told me that that is the right thing to do.
In addition, we will maintain the £20 million Scottish beef calf scheme, which is funded through the current top-slicing of single farm payments. However, after much consideration, I have for several reasons decided against any further top-slicing of SFPs under article 68. First, support can be delivered more quickly in the way that I have described. Furthermore, European Union rules limit how we can spend article 68 money, which makes it a bit more difficult to target. Ultimately, the most we can do via article 68 is redistribute 10 per cent of the single farm payment. However, the single farm payment needs to be reconsidered. That is an issue to which I will return.
The first steps that I have described will deliver short-term assistance to hill farming faster than any other tool, but I am also announcing two further stages. First, we will review the role of the land managers options in the SRDP. LMOs provide easy-to-access support for small-scale activities, such as small environmental schemes and minor investments. Peter Cook says that although the overall balance of the SRDP is right, there is, nonetheless, a gap—the absence of an entry-level agri-environment measure through which farmers who have not previously participated in environmental schemes can test the water. The Government accepts that recommendation, so we will, with stakeholders, consider the agri-environment measures in the SRDP—specifically, the role that LMOs can play in supporting grazing in the hills.
I am also open to the possibility of there being differential limits for LMOs on hill farms. European Union rules give the European Commission up to six months to approve any changes. We will therefore submit changes to the Commission in time for implementation in 2011. Following the abolition of set aside, we will also examine the role of LMOs in preserving any environmental benefits that might be lost as a result of that change.
Those short and medium-term changes will deliver substantial extra support for our most vulnerable producers, and supplement the many other ways in which Government supports the sector. For instance, for the sheep sector alone, we fund monitor farms and we support Quality Meat Scotland and its sheep strategy. We have also funded bluetongue vaccinations and a £3 million pilot project on electronic identification for sheep. Furthermore, we are working hard to resist the current sheep EID proposals.
However, there is a longer-term issue, which forms the final part of the livestock package. Farmers in Scotland receive more than £430 million each year through the single farm payment. The payments are based on support that was received in a reference period, which means that any link between the size of the payment and the farmer's economic need or the public benefits that he delivers is at best accidental and at worst non-existent. A quick analysis illustrates the case for change. At parish level, the highest payments in Scotland average £650 per hectare, and the lowest payment is £3 per hectare. At individual field level, the highest payment in Scotland is £3,950 per hectare, whereas the lowest is 6p—not £6, but 6p—per hectare. That situation is clearly unsustainable. Stakeholders agree and EU Commissioner Mariann Fischer Boel signalled only last week that she thinks the same. Until the health check, we had no choice but to keep our current system until 2013. The health check has provided the chance to revisit our system and to make changes voluntarily, if we wish, before they are forced on us later. We must seize the opportunity, and give serious scrutiny to how we use public money to support farming in Scotland, including distribution among sectors and regions.
I have therefore asked a leading figure in Scotland's rural sector to chair an immediate inquiry reviewing farm support in Scotland. That review will examine how the public money that we spend—more than £0.5 billion a year—contributes to the national outcomes that we have set for Scotland, and how it supports the Scottish Government's vision for a new contract between society and our farmers and crofters to support natural resource productivity with maximum impact and minimum bureaucracy. The inquiry will look especially at the single farm payment and make recommendations on whether we should use the option to revise our system. It will report by next spring, with an interim report in December. I am delighted to announce that Brian Pack, who is the former chief executive of ANM Group Ltd and is present in the gallery today, has agreed to carry out that vital task on behalf of the people of Scotland and this vital industry.
I have said many times that there is no magic bullet for solving the problems of hill farming in Scotland. There are complex issues involved. In helping a sector that is in genuine need, we must beware of inadvertently damaging other parts of the industry. Farming has its own side of the bargain to keep—it is not the Government's job to tell farmers how many sheep and cattle to keep or how to produce for the market. Against that difficult background, the package that I have described combines the quickest short-term benefit for hill farms with the most effective approach to support in the longer term. We will discuss these issues urgently with stakeholders.
Aside from the issue of hill farming, Peter Cook concluded that the overall balance of the SRDP is correct, but he made recommendations to refocus the programme in order to make it more effective. I can therefore announce further changes. First, to help attract new blood into the industry, we will introduce extra support for new entrants. We were the first Administration to introduce new-entrant support but—as Peter Cook acknowledges—European rules and the economic climate have limited that support's impact, which we accept. We will therefore use new flexibility to introduce an establishment grant of up to 75 per cent of the existing support for interest payments, bringing the maximum support for any new entrant up to €70,000.
We will increase support for slurry-handling projects from 40 per cent to 50 per cent or more for young farmers. That support will be of benefit to the pig and dairy sectors, and to farmers in nitrate-vulnerable zones in particular, and will be worth £5,000 on a £50,000 slurry-handling project.
Subject to the necessary approvals, we will increase the limit on renewable energy diversification projects from €200,000 to €500,000. Along with higher support rates for forestry, which we have already submitted for approval, that will help towards meeting our ambitious climate change targets.
Of course, the SRDP is not just for land managers but for all our rural communities. We will increase support for community projects from 50 per cent grant aid to 90 per cent grant aid, so that more communities throughout Scotland will benefit.
Many of the changes are subject to approval from Europe, but they show that the Government is listening to stakeholders and to Peter Cook. They will help the SRDP to meet the needs of rural Scotland even more effectively in the future.
As well as refocusing the content of the SRDP, we have taken a serious look at how it operates. Understandably, Peter Cook's review has concentrated on the rural priorities scheme. He acknowledges that uptake of rural priorities money has been very high in its first year, compared with previous schemes. In the four rounds, we have approved nearly £125 million for 1,800 projects throughout rural Scotland. In the same timescale, the previous rural stewardship scheme approved only £18 million for fewer than 500 cases. As Peter Cook says:
"… the potential level of funding for individual projects greatly exceeds anything under previous schemes."
This week, David Green of Cairngorm national park said in the press that the SRDP
"has made a real difference to the national park including the viability of those businesses".
However, there have been problems. Because of delays in Europe, implementation of this complex and ambitious programme was rushed. Some things should have been done differently and mistakes were made, which I acknowledge, but the crucial question is about how we move forward.
Many of the people who were interviewed by Peter Cook see the benefits of the computerised approach and are impressed by the breadth and range of available options. We agree with him that the existing system should be improved rather than replaced. We will reduce bureaucracy and streamline the system by making the first stage of the two-stage process optional. The first stage—the so-called statement of intent—was introduced because stakeholders asked for early feedback on their application, but the strong message now is that that should be optional, which we accept.
We will make it easier for smaller applications—under £10,000—by ensuring that applicants need only provide essential data, rather than the detailed outcome plan that is currently asked for.
As recommended by the earlier McRobbie report on the forestry sector, we will approve non-contentious forestry projects on an on-going basis. There will also be better support for applicants for whom the approval process's being online is a problem. We will provide access to broadband through our regional offices and, where possible, more locally. Help will be available in completing applications not just through better introductory guidance, but through the support of a member of the Scottish Government's staff or its partners. The customer service desk will be strengthened and other measures will be taken. Support through LEADER will be made available for businesses to establish a broadband connection. On the scale of grants, we will ensure that any grants of more than £250,000 are approved only if they meet the strictest criteria and our national outcomes.
The uptake of rural priorities shows that a massive amount has been achieved in a short time, to rural Scotland's benefit. However, improvements are needed, and the changes that I have announced will deliver them.
The Government has announced today a substantial package that will shape farm support in the years ahead in order to deliver food production and food security, a healthy environment, landscape and biodiversity, and flourishing rural communities throughout our nation. I commend my statement to Parliament.
The cabinet secretary will now take questions on the issues that were raised in his statement. As I have said, we have about 30 minutes for questions, after which I must move to the next item of business.
I would normally start by thanking the cabinet secretary for an advance copy of his statement, but we had considerably less than an hour to read his statement and the 55-page Cook report. It would have helped to have received at least the Cook report earlier, as it contains much useful detail, so we reserve our position until we have had a chance to study that report in detail.
I welcome the fact that the minister appears to have responded to some of our criticisms about support for hill sheep farmers, entrant farmers and the SRDP system's many bureaucratic failures. However, the regional proposal assessment committees are still shrouded in mystery. We are disappointed that the cabinet secretary has failed to dump the discredited online applications system. Does he not accept that that disadvantages farmers and crofters in our most fragile areas?
Overall, does the cabinet secretary see that his statement is a missed opportunity? We do not understand why he has yet again kicked into touch the big issues which we all know about and have known about, such as land managers options and single farm payments. We wish Brian Pack well, but does the cabinet secretary not see that he is just kicking the issues into the long grass again rather than making decisions and providing certainty?
How sustainable are the cabinet secretary's new funding proposals? Funding appears to come from underspends and currency fluctuations. Who are the losers in the package? The statement suggests that everybody is winning, but that cannot be the case. Some people have lost in the past and it is clear that some will lose in the future.
The statement relies on the EU's being able to approve all the measures. What discussions has the cabinet secretary had about the proposals that he has presented? How confident is he that Brussels will approve all the proposals?
I scanned the media from the past few months for coverage of the debate, in which many people in rural Scotland have engaged, but I found it difficult to locate any Labour Party comment. I concluded that Labour was reserving its position so that it could oppose anything that the Government said.
I will address Sarah Boyack's points. The SRDP is a success. I know that she meant rural priorities and not the whole SRDP, but even rural priorities has funded 1,800 projects throughout Scotland and has offered funding of up to £125 million in its first few months of operation. Peter Cook acknowledged that in his report. The evidence from many people who spoke to him was that much of the rural priorities scheme is working well.
However, we acknowledge that mistakes were made. The previous Administration designed the SRDP and left it in the current Administration's in-tray. No one had tested how the previous scheme could be put into practice, so we had to make decisions. I accept that perhaps some wrong and rushed decisions were taken, but the alternative was to delay the SRDP's implementation for another six months to a year. If that had happened, Sarah Boyack would have criticised me in the chamber for delaying the programme for a second year. Nothing that the Government could have done would have kept the Labour Party happy.
Sarah Boyack suggested dumping the online system. I have announced significant measures to improve accessibility for a number of people who feel that they cannot access rural priorities adequately because of the online process. Peter Cook did not recommend dumping the online system. He said that a dumping of the online system was the last thing that the people to whom he spoke wanted, because they had just got used to it and learned how to make it work. They did not want to have another steep learning curve.
The programme is big, ambitious and innovative. The previous Administration designed it and we have put huge effort and resource into making it work. If mistakes have been made, they will be rectified and we will improve the system.
Sarah Boyack referred to the funding situation. The funding is available. She asked who the losers are. She and other members have asked the Government to ensure that the losers are the inactive people who have destocked their operations in recent years. Under the LFASS proposals that we have announced today, the losers will be people who have become inactive and who have destocked. Their portion of the resource will go to people who are active and who are committed to the industry's future. Therefore, I can assure the member both that the funding will be available and that the only losers will be those who have chosen to destock and reduce their commitment to the future of the livestock sector in Scotland.
I declare an interest as a farmer.
I thank the cabinet secretary for the advance copy of his statement. I welcome the 19 per cent increase in LFASS payments to fragile and very fragile areas. I also welcome Brian Pack's appointment to look into the future of support distribution. In addition, I welcome the fact that the cabinet secretary will not invoke article 68 to further top-slice single farm payments. I also welcome the fact that future recipients of the funding will need to be deemed to be actively farming. I further welcome the extra money for new entrants and I note his intention to deliver an entry-level scheme. I congratulate him on finding £15 million from exchange-rate benefits and unused money within the LFASS scheme.
Will the cabinet secretary define clearly for Parliament where the fragile areas are that will benefit from the extra payments? How will he sustain the additional funding package if the pound strengthens significantly against the euro? How much will the support to sheep and cattle producers cost? Can that be broken down to a per-head basis? How much extra funding will actually go into the new entrants scheme? Finally, how will the measures that he has announced support food security in Scotland and the United Kingdom?
I thank John Scott for his constructive comments. I agree with him that one of the biggest issues is the future of single farm payments. We all agree that the fact that such payments are currently based on 2002-03 activity levels is unsustainable, which is why we have asked Brian Pack to consider that issue.
The areas that will benefit from the new LFASS will be the existing fragile and very fragile areas as defined under the current LFASS. We received a variety of submissions from stakeholders. John Scott will be aware that there is no magic bullet and no easy answer for such an extremely complex issue. Therefore, we have taken the best route available to us—which will also deliver the quickest benefit—by sticking with the fragile and very fragile categories that exist under LFASS, which will target resources at the north-west of Scotland and the islands, where much of the concern about the future of livestock has been expressed.
I remind members that the Scotland rural development programme already has a £10 million budget line for new entrants. As I have explained, there are reasons why the number of applicants to that scheme was a lot smaller than might have been hoped for, but that resource is available for the new new entrants scheme that I have announced today, which we hope will attract more applicants. As we have said all along about all budget headings under the SRDP, we need continually to reprofile spending because the programme is largely demand led. We will keep a close eye on that resource.
John Scott's final point was about food security. The thrust of today's announcement is aimed at ensuring that we have a sustainable livestock and agriculture sector in Scotland. I believe that that is the key to ensuring Scotland's food security and to maintaining our nation's capacity to produce food.
After Liam McArthur's question, we will come to open questions.
I thank the cabinet secretary for the advance copy of his statement. I also record my thanks to Peter Cook, who consulted widely—including Jim Hume and me—to produce a thorough report. As Sarah Boyack does, I look forward to considering his report more fully over the coming days. His efforts have also enabled the cabinet secretary to extricate himself from a hole by announcing a number of positive proposals this afternoon.
I welcome the cabinet secretary's decision to abandon further use of article 68 to redistribute funds. As he has conceded, his proposal would have done enormous damage while doing little to address the problems that it was intended to resolve. I also congratulate the cabinet secretary on the proposed changes that will link LFASS payments for fragile and very fragile areas more firmly to activity.
Like John Scott, I wonder what effect there will be on the budget that is at the cabinet secretary's disposal if the pound recovers against the euro during 2009-10. Will the cabinet secretary clarify whether he intends to take advantage of further Commission latitude to allow single farm payments and LFASS payments to be made by the end of this year?
I, too, welcome the announcement about the appointment of Brian Pack to undertake the review of the SFP. However, the cabinet secretary referred to the dangers of "inadvertently damaging other parts of the industry" in seeking to help hill farmers. Will he clarify what he believes are the principal risks in that respect?
Finally, does the cabinet secretary accept that, despite what he has said this afternoon, there are farmers and crofters in Orkney and other rural communities who will still be unable to complete applications online and, therefore, to access the vital funds?
I thank Liam McArthur for his constructive questions and response to the statement. I look forward to the many parliamentary questions that he will no doubt lodge in due course, once he has read Peter Cook's report.
I have every reason to be confident that funding will be available until we have the outcome of the single farm payments review. A new less favoured area support scheme will be introduced at the same time. The whole Parliament will accept that it makes sense for us to examine in the round the future of agricultural support, either in 2013 or before then. As long as LFASS 2010 is in place, funding will be made available for that.
I cannot predict exchange rates—all that I know is that, at the moment, thanks to the weak pound and the strong euro, funds are available for us to call down for the measures that I have announced today for the coming years.
I made the point that the implementation of article 68 could have caused inadvertent damage to other parts of the farming sector in Scotland. I did so because, over the past year or two, there has been much volatility in the sector. If we decided to implement top-slicing, we could not be certain about the impact that that would have on sectors that would have to give up a slice of the single farm payment.
Liam McArthur raised the issue of online access. I have outlined a number of measures that are aimed at the constituents to whom Liam McArthur referred. There will be dedicated Scottish Government staff to help applicants through the process. Staff cannot make applications on applicants' behalf—the audit process would not allow that—but the more help we can give, the more accessible the process will be to those who do not find online access easy. Dedicated terminals will be made available in regional offices and other measures will be taken to make the process easier for smaller applications, especially those for less than £10,000, which will not have to go through the whole process, as they do currently.
We come to open questions. Time is limited, so it will be strictly one question per member.
I welcome the cabinet secretary's statement and congratulate Brian Pack on his appointment. Brian Pack and I have had a number of robust discussions over the years. He is regarded as one of the brightest brains in the industry, and I look forward to the outcome of his inquiry.
I am sure that the cabinet secretary agrees that new entrants to farming are vital to the sector's long-term future. Will the forthcoming inquiry give careful consideration to the needs of new entrants in any reform of single farm payments and seek to build on the improvements that the Scottish Government has put in place to support new entrants?
I hope that Brian Pack will look at the wider issues to which the member refers, as they are directly related to how we will use farming support in Scotland in the years ahead. We must make efforts to attract new blood into the sector. Interestingly, in his report Peter Cook was sceptical about whether any measures under the SRDP could help new entrants. He believes that tackling bigger issues, such as tenancy issues, may be the way in which to attract new entrants or to give people the opportunity to enter the industry. Clearly, being able to access a farm and land is pivotal to the opportunities that are available to new entrants. I agree that the issue is central to the work that must be done in the future on how we use agricultural support in Scotland.
I was surprised to hear the cabinet secretary welcome the fact that we have a weak pound. I return to the issue of sustainability of LFASS payments. Will the cabinet secretary identify how he will fund those payments in 2010 and 2011 if the pound recovers against the euro? He has still not done that.
In opposition, the cabinet secretary saw local procurement as key to sustainability in farming. Twenty-five months on from the election, the Government has still made no commitment on the issue. What is taking the time? When will the cabinet secretary bring such a commitment to the Parliament?
I thank Karen Gillon for her usual negative contribution to the debate. However, she asked a couple of genuine questions that I will address.
If the issues relating to public procurement were so easy to resolve, I am sure that the Administration that Karen Gillon supported would have found a magic solution during its eight years in power. The Government is taking action. We have a Scottish Government catering contract, which will be an exemplar for other public sector contracts in Scotland. As the member well knows, we are developing our food and drink policy and Robin Gourlay of East Ayrshire Council has undertaken good work on recommendations about how we can take forward public procurement.
I see that Labour members are shaking their heads and I remind them that they had eight years in power, when they could have addressed public procurement but failed to do so—
You've had two years.
Order.
At last, we have a Government in Scotland that is addressing issues that are important to the future of the food and drink sector in Scotland.
LFASS payments will not be funded just as a result of the exchange rate. We are rebaselining the figures that determine to what extent LFASS recipients are active, to bring the figures up to date. Stocking levels will be used. If people fall out of the system because they have destocked, the contributions that they used to receive will be available for recipients who stay in the scheme.
We have an underspend of £2 million in LFASS, irrespective of the exchange rate, which will be part of the extra money that we will pay in 2009—an increase of 19 per cent in the first year. There is also money that we can call down, due to the changed exchange rate. We cannot put an exact figure in the public domain, because we do not know what the exact figure will be in the course of the programme, given that it will depend on future exchange rates. However, funds are currently available.
The decline in cattle and sheep numbers in the Highlands and Islands is well documented, so I am pleased that the cabinet secretary has announced extra support of £15 million for fragile and very fragile areas. Will he elaborate on what that is likely to mean for the average beef or sheep producer in the Highlands and Islands?
It will vary from farm to farm. Two factors will influence the LFASS payments that producers in the Highlands and Islands receive: first, the impact of the rebaselining of activity to bring it up to date in 2009; and secondly, the extent to which producers will qualify for the new rates. In my statement I talked about an extra £1,300 for the average sheep producer in the Highlands and Islands and up to £1,600 for the average beef producer. Those are average figures; the circumstances of each farm will determine the extent to which the farm is a winner or a loser.
The cabinet secretary placed much emphasis on the linking of farming activity with payments—we can understand why he is doing that when we consider the slipper farmers. He talked about rebaselining, to update the statistics.
There is concern in the crofting counties about the potential use of information on the Agriculture Industry Advisory Committee form, which could be interpreted as showing that a crofter was inactive. The statistics refer to common grazing, as opposed to in-by land, but if common grazing is removed from the size of the holding the croft size might be reduced to less than 3 hectares, which would make the crofter ineligible for payments. Will the cabinet secretary assure me that crofters will not be classed as inactive or lose payments—let alone increased payments—just because of the pattern of use of common grazings?
Many members have called on the Government to tighten the criteria that define activity on farms and crofts throughout Scotland, which determines the level of public support that they receive. That is why we have introduced a measure to consider activity on a field-by-field basis. We must be as accurate as possible.
The measures that I announced today should have a positive impact on any crofter who has not destocked, because rates will increase dramatically—by 19 per cent in the first year and a lot more thereafter. I cannot understand why any active crofter should suffer as a result of today's announcement, but I will investigate the matter that the member raised, to ensure that there is no technical reason why that might happen. We have no evidence to suggest that a crofter who continues to be active will not enjoy the substantial benefit of increased LFASS payments.
The cabinet secretary said that he will respond to the Cook report by meeting stakeholders to consider agri-environment measures in the SRDP. Will he guarantee that the environmental benefits that have been attained from the SRDP will continue?
A working group with stakeholders is considering the impact of the loss of set-aside, which has been abolished. That is just one example of work that is taking place. The group is also considering how new LMOs could reintroduce benefits that might be lost. Much analysis is taking place to ensure that we do not lose the agri-environment benefits that schemes have brought in the past.
I, too, welcome the dropping of article 68. It would have been a case of robbing Paul to pay Peter—and I do not mean Peter Cook.
The cabinet secretary mentioned an increase in LFASS payments in fragile and very fragile areas. Will he confirm that there will be no decrease in other less favoured areas where there is active farming?
The cabinet secretary also mentioned new entrants. Will he consider reintroducing modern apprenticeships for rural industries to get new blood in? We need not only to get farmers in to farm, but to get a vibrant workforce in.
Jim Hume refers to LFASS recipients in the standard areas. Those who have not destocked should have nothing to fear. The basis of the new arrangements is ensuring as strong a link as possible between the level of payment and the level of activity. That will apply to all LFASS recipients in Scotland.
I agree that apprenticeships are a fantastic way to encourage new skills for the future in the agricultural sector. As Jim Hume may be aware, some good discussion about the potential for new apprenticeships on Scotland's farms is taking place in the sector. The Scottish Government is supporting that discussion. Such apprenticeships would be an exciting development that I am sure would attract cross-party support in the Parliament.
I welcome the cabinet secretary's statement—in particular, the announcement of extra support for new entrants. How many new entrants does he expect will benefit from the scheme over the next two years and to what extent will it help to revitalise Scotland's agricultural sector?
I thank Kenneth Gibson for that challenging question. I would not dare to put a figure on the number of potential applicants to the new scheme for new entrants in the SRDP, as we have learned our lesson from the initial scheme. We are making every effort possible under the existing regulations to introduce new levels of support, and the new scheme will offer support of up to €70,000 for a new entrant.
We are reducing the level of farm activity that any individual must have to qualify for some of the new entrant measures in the SRDP. That means that a part-time farmer who needs to get a foothold into agriculture will be able to qualify for some of the new entrant measures, albeit at a reduced rate. One of the issues that Peter Cook raised with us was the fact that people sometimes find it difficult to get a foothold in agriculture. Therefore, someone who is only 25 per cent full-time equivalent will be able to qualify for some of the new entrant measures.
I draw Kenneth Gibson's attention to the fact that we need to address the tenancy issue if we are to attract new entrants into agriculture. Capital cost is one thing but, if there are simply no parcels of land being let in any parts of Scotland or if there is an inadequate supply for people who want to start farming, the issue will not move forward. It is in the hands of the various stakeholders—the landowners and tenants—to come up with as much of a consensus as possible to break the logjam and give people who want to enter the industry the best opportunity to do so.
As the cabinet secretary is aware, there has been heated discussion elsewhere in the Parliament about the method of increasing forestry planting. He stated that he has accepted the McRobbie recommendations, but is he also considering giving the Forestry Commission the authority to process applications without going through a regional proposal assessment committee and fast-tracking forestry grants by bypassing the statement of intent, as suggested by the Confederation of Forest Industries, to make progress towards the target of 1,000 hectares per annum?
I can give Elaine Murray some positive responses on that. We are already increasing the rates of forestry grants. As she may be aware, that is in the pipeline. As I mentioned briefly in my statement, we are also introducing measures that will allow the forestry sector to bypass the full application route—basically, to bypass the RPACs as she suggests. We are considering how to implement that, but it is one of the announcements that we are making today.
In the Highlands and Islands, it is normal practice to express stocking rates in hectares per sheep, rather than the other way round. I welcome the news of an increase in the LFASS payments, for 2009-10, which will give an average sheep farmer in a fragile area an extra £1,300. However, does the cabinet secretary accept that that falls far short of the extra £8 per ewe that the NFU Scotland wanted and that the money will be wiped out by the cost of electronic identification tagging in sheep if it is implemented?
I fear that Government announcements always fall short of what stakeholders demand. However, I am sure that the farming sector stakeholders in Scotland will welcome today's announcement as an effective contribution to the future of agriculture in Scotland.
One measure that we are taking to help the sheep sector in Scotland is to resist the European proposal, as it stands, for sheep EID. We hope to get some new concessions and are pursuing, as we speak, the maximum number of concessions that we can get under the current regulation. I cannot predict what the outcome will be, but we know that, if the regulation goes ahead as it stands, it will have a serious impact on the viability of many sheep farms in Scotland; we want to avoid that.
I am a less than bucolic member, but I am interested in what the cabinet secretary said about the availability of funds. He suggested that there was enough money in the pot to meet all the Government's obligations just now. What happens if the euro implodes?
The member is being a bit pessimistic. We hope that the euro will not implode in the next few weeks. However, even as things stand, with the SRDP funding expressed in pounds, funding is available for the Government to reprofile in terms of our new priorities. Therefore, I do not think that what the member implied will come to pass. Clearly, we must adapt to changing circumstances but, as I have said, only one element of the increased support for LFASS is dependent on the exchange rate. However, as I have also said, the money is sitting waiting for the Government to call down.