The next item of business is a debate on motion S4M-05898, in the name of Tavish Scott, on common agricultural policy reform.
15:45
I start with the press release that I have just received from the NFU Scotland, which welcomes today’s debate. In lodging the motion, the Liberal Democrats have made the Government respond to us. The NFUS announced that the less favoured area payments will start to arrive in bank accounts from Friday. I am sorry to be getting this in 10 minutes before Richard Lochhead can say it. The fact that Richard Lochhead has had to rush out the announcement shows our importance. Farmers across Scotland now know that when they get a parliamentary debate from the Liberal Democrats, the minister gives more money to Scottish agriculture. I commend the minister for that welcome approach.
In recent weeks, two constituents have come to see me about common agricultural policy reform. One has built up his livestock numbers. He breeds quality ewes for trade, he contracts fences, he shears, and he manages shipping of livestock across the quay in Lerwick every autumn. Despite all that hard work, he now faces the uncertainty of not knowing what single farm payment he will have in 2015.
The second constituent is the son of a good friend. He is a young farmer with enormous potential in the industry, and he has a route into farming through succession, although he has no entitlement. He needs certainty for his bank.
Scottish agriculture has notable opportunities. Crofters, farmers and growers produce quality goods. The Liberal Democrats support a pro-Scotland food policy and say all power to the minister’s elbow on his promotion of Scottish produce, and to Jim McLaren of Quality Meat Scotland for the same. Why the SNP voted against our local food procurement amendment last night is quite beyond me.
However, there are bigger questions about the day-to-day ability to farm and to produce lambs, calves or strawberries. After I left school, I worked on an American midwest cattle farm. At that time the farmers wanted the US Congress to pass the freedom to farm act
. When I speak to my adopted Kansan family today, I hear that little has changed except that fewer people are working, but they are working in bigger agri-businesses. Is that the future that we want for Scottish agriculture? I relish Shetland’s having hundreds of active crofters but, as in the rest of Scotland, numbers are falling. The paperwork and the fear of breaking Government regulations are driving many people away.
Surely CAP reform should be about something that is so much better. If public policy supports the provision of food from local markets with traceability, quality and provenance built in, that will cost. However, if politicians mirror short-term public opinion and support the cheapest of food, who knows what the future will hold for Scottish agriculture?
CAP reform must be tailored to Scottish needs, but we cannot pretend to be divorced from the English or wider European marketplaces. The Scottish Government’s own food policy proves that case. The most recent worrying development has been the closure of a major light-lamb processing factory in Wales. That facility bought hundreds of Scottish hill lambs and this year’s lamb crop will have fewer markets as a result.
Our motion, which is on behalf of every farmer, crofter and grower, is pressing the Scottish Government to state its position on common agricultural policy reform. Every farmer and crofter whom I have met of late—the cabinet secretary meets a heck of a lot more than I do—asked me one simple question: what will my single farm payment be in 2015? That is the question that the Government needs to answer. What will the Scottish framework of payments be?
The modelling work that the Welsh Government is doing is right. It published on 6 February proposals that bear some examination. They go into considerable detail about the different share of support under the coming arrangements, and how farmers across Wales are expected to gain. Page 12 of its report illustrates the modelling
“on how a single flat rate across the country would affect farm incomes”
and how
“48% would gain but 35% would lose at least 10% of their current payment.”
In fairness to our colleagues in Wales, they are in no way ducking the serious repercussions of agricultural reform.
In the paper, the Welsh Government goes on to state:
“around 85% of farms with an historical payment of less than €1,000 would experience a gain of 10% or more from the change to a flat rate payment.”
It looks at differential rates and provides a regional assessment, which I would commend to the cabinet secretary here in Scotland. It also states that
“In terms of regional changes,”
the largest gains will be
“in the Southern region compared to its aggregate historical entitlement value.”
Interestingly—I also commend this point to the cabinet secretary—it recommends
“extending the modelling to consider the effect not just on the direct payments received by farm businesses, but on their entire farm incomes.”
That seems to me to be a reasonable and appropriate approach to a very difficult issue.
As that paper was published on 6 February, I can only suggest that Wales has led and Scotland should now follow. The Welsh Government has tackled some of the things that farmers in Scotland are crying out for and has provided an illustration of what payments are going to look like. When will the cabinet secretary start to get around Scotland with a region-by-region breakdown of single farm payments and tell our farmers and crofters what his plans are? That is what his Welsh opposite number is doing. He is not holding one April conference, but is meeting farmers every night right across the country and talking about his plans.
Scotland’s agriculture minister has enormous discretionary powers to shape a Scottish CAP. Scotland has a different approach from England, Wales and Northern Ireland, and that is as it should be. In effect, there are four CAPs across the UK. We have less favoured areas, but England does not. We have coupled payments—that is what the beef and calf scheme is—but England and Wales do not and that, too, is as it should be. However, our ministers should tell farmers and crofters what their plans are within the huge discretion that they have from the European Union.
Mr Lochhead’s amendment cites the Pack report, which was produced back in 2010. However, I looked again this morning and I could not find any observation, any release or any Government statement on whether the cabinet secretary agrees or does not agree with the Pack report’s recommendations. Some of them were pretty challenging for any future support system for Scottish agriculture. The inquiry’s recommendations included:
“Future direct payments should be distributed in Scotland on the basis of distinguishing LFA and Non-LFA land.”
It also concluded:
“The change from the current historic base for”
single farm payments
“to the Inquiry's approach outlined here should take place as soon as possible after the European negotiations are complete.”
Again, I do not know whether the cabinet secretary favours that approach, with a transition of only one year as opposed to the much longer transition that many in Scottish agriculture are calling for. That is a fundamental decision that our cabinet secretary must take, and he must give Scottish agriculture an early indication of how he plans to proceed. Can he tell us how he plans to move from historic payments to area-based payments? Many people across the industry believe that that transition should take as long as possible. Does he agree?
Will he invoke what the Irish presidency of the EU now describes as the “Irish tunnel”? That means partial convergence so that half of farmers will see less change. That would ease payment changes and allow better planning, and it is seen to be a more stable approach. Does the cabinet secretary consider that to be the right option for Scotland?
Has the Scottish Government asked the European Union to allow a great majority of annual payments to be made in advance in December? That is a serious proposal that the NFU Scotland has made time and again. It would help with cash flow, it would mean fewer in-year changes, and it would also be administratively easier. I am sure that the cabinet secretary will reflect on that. What is his view?
What assessment is being carried out of the need for a safety net for extensive producers so that they do not get caught up by a well-meaning but hopelessly prescriptive activity test? That point was alluded to in last night’s crofting debate.
Does the cabinet secretary support the simplification of regulations, notably for small producers and crofters? He is rightly sympathetic to new entrants—people who have been kept out of the subsidy regime since 2005. What is the Scottish Government’s position on the size of the national reserve? At 3 per cent, is it big enough?
Farmers and crofters need answers to those questions. The EU budget, the framework of the common agricultural policy and the flexibility to tailor to Scottish needs are now all in place, yet our industry has no certainty. When does the Government plan to provide that clarity?
We believe that Scotland’s farmers and crofters need to see financial modelling, a region-by-region breakdown and an active minister-led discussion with firm illustrations of the policy options that could be pursued. On behalf of the industry, we want the cabinet secretary to be clear on his approach before the Easter recess. Farmers and crofters need to know that information and it is the responsibility of this cabinet secretary and this Government to show them it.
I move,
That the Parliament notes the crucial importance of a Scottish common agricultural policy (CAP) within the UK; believes that farmers and crofters across Scotland need to understand what decisions the Scottish Government plans; notes that the Welsh Government has modelled CAP reform into payments by region and commends a similar approach for Scotland, and calls on the Scottish Government to set out its plans for implementing CAP reform and to seek the agreement of the Parliament to this before the end of March 2013 so that farmers and crofters can plan for the substantial changes ahead of implementation on 1 January 2015.
15:55
These are crucial days for the CAP, what with the European Parliament agreeing its mandate as we speak and next week’s vital council meeting at which ministers will agree their negotiating position. We must use such opportunities to secure a future policy that works for Scotland, and I will be at next week’s meeting to ensure that our key priorities are covered. Perhaps even more important—and to answer Tavish Scott’s point about my getting round Scotland to speak to farmers, which I do regularly—tomorrow night I will attend an open meeting with Angus farmers in Brechin.
The priorities that I will be pursuing next week in Brussels include securing a simpler CAP that treats new entrants fairly, recognises the special needs of farming in a country with 85 per cent less favoured area status and gets right coupled support and greening, both of which are important to Scottish farmers and crofters. It has never been so important to ensure that the red meat supply chain is supported; coupled support is key to that, and from the start I have argued that Scotland must have the option to use 15 per cent of our envelope in that way or at the very least have the same ceiling as every other country.
Although greening is good in principle, it is still difficult to work out how it can be applied proportionately across Europe. However, Scotland has made good progress in discussions on the issue and things seem to be going slowly in the right direction. There is recognition of traditional grazing practices, including heather; moreover, the thresholds for crop diversification appear to be going in the right direction but to my mind they need to be nudged a bit more to ensure that there are no unintended consequences for mixed farming on the uplands. There also seems to be a recognition that permanent grass can be measured at a national level in countries where there is no evidence of significant loss of area. That leaves ecologically focused areas, on which much work still needs to be done before we can be sure that that will work in a proportionate manner.
Although the CAP negotiations are under way, we must think about what the CAP itself will mean for Scotland. The move from historic to area-based payments will be essential if payments are to be linked to recent activity rather than activity in the early 2000s; indeed, that is why back in 2009 I asked Brian Pack to consider our options. When he reported in 2010, he recognised the difficulties for countries such as Scotland with diverse agricultural landscapes in moving to area-based payments. For a start, arable farming takes place alongside livestock farming; farms have good land in valley bottoms but poorer land up in the hills; and our parishes often include land that is capable of producing different things.
All those factors create very special issues that we need to consider in the move to area-based schemes, and Brian Pack’s report and proposed payment regimes were based on extensive modelling by the James Hutton Institute. It is good to see that Wales is now catching up with Scotland and like Mr Pack is setting out its thoughts and possible scenarios. I point out that those are only preliminary thoughts, not firm forecasts because, as the Welsh consultation document makes clear,
“there are too many uncertainties”.
Many key aspects of the future CAP are still very unclear and new ideas are still going into the text. Only last month, ministers discussed what has been referred to as the Irish tunnel—which, before I lose members, I should explain involves moving from historic to area-based payments without going all the way by 2020. Last month, we discussed the French idea of a redistributive payment to top up payments for the first 50 hectares on farms, which, of course, will leave less money to be shared out in the basic payments. Those very recent examples of additional flexibilities were proposed just last month after the Welsh consultation document had been published and are not covered in it.
However, we do not even know the exact size of our future CAP budget and the main CAP regulations will not be agreed in Europe before June. Those key issues must be addressed before we can paint exact scenarios that reflect Scotland’s circumstances. We are in the middle of another round of modelling in Scotland and stakeholders, who have been involved in that process from the start, will help us to whittle down our options at a conference on 17 April and take forward further work over the summer. Until we have all the details of the future CAP, that must be an on-going process.
I said that we still do not know the exact size of our future CAP budget to be delivered through pillar 1, which funds direct payments to farms, or pillar 2, which funds the Scotland rural development programme, but we know that we have been let down in the multi-annual financial framework negotiations, despite Scotland’s budgets already being clearly iniquitous. The Scottish direct payments rate is less than half of the European average rate. On the other hand, England gets double the Scottish rate and roughly the average European rate. If Scotland was negotiating as a member state on our own behalf, we know that, by 2020, we would be better off to the tune of over €300 million per annum through pillar 1 alone.
The Lib Dems would, of course, like to see more pounds per hectare in Scotland, but does the minister not recognise that the payment that we currently get is directly linked to productivity in 2002 in Scotland and that, because Scotland is a hilly area, of course the payments would be less?
I am not sure how the member can ask for higher payments for Scotland on the one hand, and then defend the status quo by saying that we do not deserve higher payments somehow. We are in virtually the same position as many other small countries in Europe, but we get a much poorer deal.
We have been let down not only on direct farm payments, but on rural development funding. That funding is vital for our environment, our wider economy and the crofters to whom Tavish Scott referred. A number of Governments—16 out of the 27—fought for a larger rural development budget, but the United Kingdom Government did not. Therefore, there is no extra uplift for the UK, although Scotland started the negotiations at the bottom of the league and other countries are gaining even more funding for their rural communities. Scotland therefore has every reason to feel let down by the UK coalition Government.
Will the minister take an intervention?
The member is in his final minute.
I honestly suspect that this debate is a diversionary tactic by the Lib Dems to distract us from the fact that Scotland’s farmers, crofters and rural communities face losing hundreds of millions of pounds up to 2020 because the Conservative and Lib Dem Government refuses to make Scotland a priority. That is at the heart of this debate, and it is no wonder that stakeholders in Scotland are lining up to criticise the Department for Environment, Food and Rural Affairs.
These are very important times for the CAP. Scotland is ahead of the game on modelling and thinking about payment scenarios. The coming weeks are vital for Scotland, and we need the UK Government to take heed of our requests and secure the best deal for Scottish farmers and crofters.
I move amendment S4M-05898.3, to leave out from “believes” to end and insert:
“welcomes the fact that the Scottish Government, building on the early modelling work on direct payments published alongside its 2009-10 inquiry into future farm support, has been consulting stakeholders since autumn 2012 on a second tranche of modelling, the results of which are due to be discussed at the Scottish Government CAP conference on 17 April 2013; notes that Scottish stakeholders are currently calling on UK ministers to stop ignoring Scotland’s views during the current EU negotiations; further notes that, under the current CAP, Scotland receives the lowest rural development budget allocation per hectare and the fourth lowest direct payments budget allocation per hectare in Europe; notes that, in the multiannual financial framework agreement of 8 February 2013, a large number of EU member states negotiated special uplifts to their direct payments and rural development budget allocations; regrets that the UK Government seems to have failed to negotiate any such uplift for the UK or for Scotland; calls on the UK Government, in the remaining discussions on the EU and CAP budgets and in the forthcoming discussions on budget allocations within the UK, to ensure that Scotland’s low share of CAP spending is rectified in order that the needs of rural Scotland can be properly addressed, and recognises that Scotland as an independent member state of the EU would benefit from significant additional CAP funds for the benefit of its farmers and wider rural communities.”
16:02
I am pleased to be speaking in this debate.
There is widespread agreement that reform of the CAP is necessary. There must be greater fairness in distribution among European Union members; we need to recognise the environmental challenges that Europe faces; and we need to deliver public confidence and respond to the priorities of a changing world. The CAP budget is nearly 40 per cent of the total EU budget, and there must be greater public confidence and transparency in its use and priorities. With 85 per cent of Scotland’s farmed area designated as disadvantaged and less favoured, reform needs to recognise those challenges. I hope that the UK Government and the Scottish Government can work together positively on those matters. It needs to be recognised that farming in more remote and disadvantaged areas brings multiple benefits to communities.
We can agree that there needs to be a fairer distribution of support throughout the EU and within the UK, and not just for Scotland. The accession countries receive small pillar 1 payments, and agriculture is at the very centre of the EConomies of many of them. It employs many people, and those countries also deserve a fairer distribution.
Towards the end of the process, decisions will need to be made about how Scotland will distribute its payments in the move from historic to area payments. We have sharp contrasts in Scotland. The average payment in East Lothian is over €125,000, while Highland receives an average of just over €34 per hectare. Therefore, there is an opportunity for the cabinet secretary to deliver the degree of redistribution that he argues for across the EU and within the UK, provide increased support to farming in disadvantaged areas, and ensure a level playing field for new entrants.
The Scottish Government’s amendment argues for CAP spending to be rectified in order to address the needs of rural Scotland. Will the cabinet secretary take the same approach when he makes allocation decisions relating to Scotland’s direct payments?
Whatever decision is made on area payments, there needs to be greater transparency in the proposals as well as an opportunity for parliamentary scrutiny and engagement. The Government amendment says that more will be revealed on 17 April. Meanwhile, the Welsh Assembly Government, which is facing similar decisions, has been open about the changes that are being proposed. It even has a website that anyone can go to and do the sums. That is quite a contrast with the Scottish Government’s approach. It is inevitable that there will be winners and losers in the process, and farmers and crofters need to be able to begin planning for the changes.
Our amendment highlights the need to be clear about new entrants to farming and crofting and where they stand. New entrants currently get a raw deal from the CAP. While recognising that they get pots of money from the Scotland rural development programme and other targeted payments, they rightly ask why, when they are productive and growing new businesses, they do not get the support that other farms get. New entrants face lots of challenges in entering farming: financial barriers, rising land prices and lack of tenancies and starter units. The reform of the CAP must deliver for new entrants if we are to see a secure future for farming in Scotland. Greater clarity is needed on the timescales for reform and the support that will be available.
NFU Scotland and the Committee of Professional Agricultural Organisations—COPA—have signed a declaration in support of the Irish tunnel subsidy payment system. However, I think that we should be cautious about that approach, because it will slow reform and, although it will cushion change for some, it will mean that others who are in need of support will have to wait longer. For example, a farmer from Grampian recently tweeted me to say that it will mean that he will have to wait until 2025 for a level playing field. As Tavish Scott said, it would be helpful to know the cabinet secretary’s view on that.
I am short of time, but I want to address the Conservative amendment. We support the principle of convergence and the need for a fairer allocation within the UK, but I am concerned that the amendment is too prescriptive and does not address the issues around production and disadvantage. An average per hectare payment masks quite a lot of inconsistencies in Scotland, as the earlier East Lothian and Highland example illustrated. However, I will listen to Alex Fergusson’s speech with interest.
We hear again from the Government the assertion that we would see significant additional CAP funds from independence. During a debate in January last year before he became a minister, Paul Wheelhouse claimed that
“when Scotland becomes independent, the full economic benefit of convergence between member states will be delivered to Scotland automatically.”—[Official Report, 18 January 2012; c 5396.]
However, we increasingly see the terms of Scotland’s EU membership being questioned: the SNP claimed that it would be automatic, but it now acknowledges the need for negotiations.
Will the member take an intervention?
I am sorry, but I am just closing.
What could be more open to negotiation than CAP payments? We see a reducing budget with more pressures being placed on it. Recent examples show that new member states, including those that joined in 2007, have had direct payments phased in gradually. That would be disastrous for Scottish farming, and the SNP can give no guarantees on the future of farmers within the EU.
I move amendment S4M-05898.2, after “substantial changes” to insert:
“and that new entrants into farming and crofting can be clear on what support will be available to them”.
16:07
CAP reform is invariably traumatic. That is an inevitable and undeniable fact, which is due largely to the incredibly difficult task of trying to devise a common system of agricultural support across 27 different member states whose agricultural systems vary almost as widely as it is possible to imagine. It is a system that has to support subsistence farmers in southern and eastern Europe who have perhaps just a handful of sheep and a couple of cows, and the UK farmer with perhaps 1,000 ewes, 200-odd head of beef cattle and a couple of hundred acres of arable land. To have such a system in place at all is hard enough, but to reform it to the satisfaction of all member states, never mind the satisfaction of each individual farmer, has to be nigh on impossible.
The fact is that reforming the CAP will result, as I think Claire Baker said, in winners and losers not just among the member states but especially among the farming sector within each member state. That is particularly true for Scottish farmers under the current reforms. As we have already heard, the reason for that is in essence the change from historic-based payments to area-based payments, which any basic calculation shows will tend to shift huge amounts of financial support from the south and east of the country to the north and west—that is, from the most productive parts to the least productive parts of the country. Whatever measures are introduced to mitigate the more extreme impacts of the changes, there will be winners and losers—of that we can be certain.
As previous CAP reforms have taught us, farmers are remarkably good at adapting to change that is put in front of them. I have complete faith that our agricultural sector will adapt to the changes and challenges that the CAP reform will eventually introduce. However, one thing that every farmer needs to know before he or she can plan for such changes is how they will affect their business. That is why I think that the Liberal Democrat motion is absolutely right to highlight the action that the Welsh Assembly Government has been able to take to give Welsh farmers the information that they need to prepare for the changes. Surely that is the constructive, proactive approach that the sector requires if it is to be fully prepared for and supported through the changes that are to come.
However, what we get from the Scottish Government, if its amendment to the motion is anything to go by, is not a constructive or proactive approach but yet another whinge at the UK Government, as if the debate were just another opportunity to open up a divide that does not have to exist and should not do so.
Given that the amendment in Alex Fergusson’s name is at complete odds with UK policy, has he discussed it with his UK colleagues? What was the response?
I am coming to that. My amendment, which I must say, for Claire Baker’s benefit, is largely self-explanatory, shows that members on the Conservative benches are very willing to work with the Scottish Government to secure the best possible outcome for Scottish agriculture from the reforms.
I have already made and will continue to make representations to the UK Government about moving towards internal convergence and achieving the target rate of €196 per hectare by 2020. There is a perfectly good case for doing that—simplistic or not—and for making those arguments, but the Scottish Government is making it extremely difficult for us to do so. I urge ministers to drop their use of aggressive terminology, of which the Government amendment is a perfect example, so that we can all genuinely try to work together to achieve the best possible outcome for Scottish farming.
The Scottish Government must consider what it can do during the negotiations, as well as continually blaming others for what has not been achieved. It is far from blameless in some of the problems that the sector faces. It was not the UK Government that dramatically reduced the funding that it puts into the co-financing of the SRDP. It is not the UK Government’s fault that the SNP has not lived up to its manifesto commitment to
“work with communities to explore the creation of new National Parks”
in Scotland. It is not the UK Government’s fault that the whole structure of forestry grants is now so overly bureaucratic that many people who have spent their whole lives working in the private forestry sector now wish that they were not doing so.
I commend the Liberal Democrats for lodging the motion, which we will support. I wish that the Scottish Government had lodged an amendment that we could support, because that would have implied a real intention on the part of the Scottish Government to work with all members as the reforms are thrashed out. I fear that the Government’s priorities incline towards the divisive rather than the positive, and I cannot possibly support an amendment that takes for granted that an independent Scotland will automatically become the 28th member state of the European Union. The jury is very much out on that, just as it is on the motives that lie behind the Scottish Government’s amendment to the motion. We are keen to work with the Scottish Government; I wish that I was convinced that the Scottish Government is keen to work with us.
I move amendment S4M-05898.1, to insert at end:
“; believes that Scottish farmers should receive the same EU payments per hectare as their counterparts in the rest of the UK following reform of CAP, to ensure that Scottish farmers are not left at any competitive disadvantage; urges the Scottish Government to work constructively with the UK Government to move toward internal convergence across the UK to ensure that all British farmers are paid equally, and believes that all governments should work toward the proposed target rate of €196 per hectare by 2020, in accordance with the EU budget agreement.”
16:12
We can know only in outline what the CAP will deliver for us, given that the ink is not yet dry on the agreement—indeed, the votes are taking place only this afternoon. However, with a CAP budget that is down 13 per cent in real terms on the budget for 2007 to 2013, if Scotland was already a member state we would be better off to the tune of £304 million by 2020, because the budget deal lays down a minimum payment of €196 per hectare by 2020 for pillar 1 and Scotland currently gets €130 per hectare. Several members mentioned that.
Despite the Scottish Government’s arguments, the UK Government did not push hard for a better deal on the CAP. Sixteen other member states were able to secure more rural development money. It seems to me that the UK Government and the Scottish Government have fundamentally different views on the reform of the CAP. The Scottish Government thinks that direct payments must be retained to support food production; the Department for Environment, Food and Rural Affairs has taken the extreme position of wanting all pillar 1 removed.
Will the member give way?
Not at the moment.
Last week, NFU Scotland sent a message to the UK environment minister, saying:
“Defra statements regarding CAP Reform have focussed solely on an English farming agenda.”
NFU Scotland, the most representative body of Scottish farmers, said that, not the SNP Government.
Will the member give way?
No, thank you.
NFU Scotland went on to say, in relation to the need to find a way forward:
“The challenge is made greater by the diversity of agriculture and land use both within Scotland and the UK.”
If that is the case, we must ask ourselves why we have had thrust in front of us diversionary stuff on the way in which Wales is doing things, when it is doing things on the hoof. Modelling exercises in Scotland that are fit for Scotland have been talked about for the past four years. We are talking about the adoption of the CAP in 2015. We are getting on with the job of inquiring about that in the Parliament and elsewhere.
Will the member take an intervention?
I am sorry, but I do not have time.
It strikes me as being completely two-faced for supporters of the UK Government such as George Lyon to bemoan the fact that a huge area of concern is that
“Scotland still languishes near the bottom of the league table in European handouts per eligible hectares. While the UK average per ha is €220, the figure for Scotland is €136.”
Tavish Scott rose—
The member is in his final minute.
Those remarks are two-faced, because George Lyon believes that the UK Government is looking after us, while the NFU says that it is not.
My feeling about the whole debate is that an English agenda is dominating what Owen Paterson is saying. Owen Paterson has not even bothered to come here to discuss with Scottish farmers what their situation is. Once again, we have been presented with a situation in which, as Robert Cunninghame Graham said in 1893,
“The Tories we know to be the enemies of all change and reform, the Liberals are known to be loud protesters out of office and poor performers when in office.”
They are now proving that in coalition in London.
16:16
In Mid Scotland and Fife, the diversity of Scotland’s farming is encapsulated in one parliamentary region. Although we have the larger arable farms in Fife, the region also includes huge swathes of highland Perthshire and Stirlingshire, with their relatively fragile hill and upland livestock farms.
As Claire Baker outlined, the issues of CAP reform are complex. We know that in many of Scotland’s rural areas CAP payments can have a major impact on the surrounding community, whether through the employment opportunities that are created by farming or through activities and projects that are developed under the Scotland rural development programme.
In the present set of CAP reforms, the SRDP comes to the fore as proposals are put forward to make changes to the rural development regulations. Given that SRDP payments can support a range of initiatives in rural areas, including diversification, woodland creation and community projects, it is clear that for the sake not just of our farmers but of our wider community we must get the reforms right.
We know that there is not a one-size-fits-all solution. That is why I hope that Labour’s amendment, which seeks to protect new entrants into farming and crofting, will be supported across the chamber. The negotiating position that UK ministers from DEFRA take at a European level is of vital importance to Scotland, especially given that the majority of our farming land is designated as disadvantaged and less favoured. I believe that the Commission’s proposals for convergence of payments would result in a UK-wide solution for the support of fragile farming systems in less favoured areas.
It is too easy for debates in this chamber to turn into the usual argument that all will be rosy post-independence. Even on payment convergence for farmers, the Scottish Government claims that an independent Scotland would suddenly receive a huge uplift in direct payments per hectare, but given that an independent Scotland’s position in the EU is not automatically guaranteed, it seems a bit presumptuous to make suggestions about the level of subsidy that farmers would receive under independence through the reformed CAP. Indeed, it would be difficult for farmers to receive direct payments from the European Commission when their Government was still negotiating the country’s accession terms, so I would prefer us to fix our focus on the realities of the system that we are in.
As is evident from the Welsh model of regionality, having a system that splits payments by regions could more effectively reflect the diversity of our Scottish farms, and I would welcome our taking a more detailed look at that.
It is up to each member state to subdivide its allocations once they have been awarded by the EU, therefore it is vital that the Scottish Government takes a strong position in the UK-wide discussions and does not just focus on the European-level talks.
I welcome the recognition of the crucial importance of a Scottish common agricultural policy in the UK and I look forward to hearing from the Scottish Government how it will spend its £2 million per year to support new entrants until the CAP reforms are introduced in 2015.
16:20
I am pleased to have been called in this debate on the CAP. Of course, it is not the first time that CAP reform has been debated in Parliament and it most certainly will not be the last.
We are at a crucial point in the CAP reform negotiations. We have heard today from the cabinet secretary that we expect the European Parliament to vote this afternoon on a series of amendments and we expect the council to reach a position next week. Further negotiations between European institutions are expected to go on for some months.
All that is happening under the excellent stewardship of the presidency of Ireland, an independent country of some 4.4 million, with a key agricultural sector—a point that I believe will not be lost on many farmers and crofters in Scotland.
Where stands Scotland in the negotiations? It has been clear from the start that the UK Tory-Liberal Government in London has fundamentally different views on CAP reform. Although farmers in Scotland believe that pillar 1 must be retained to support food production, the UK Government has taken the extreme position of seeking to abolish the entire pillar 1 budget.
Will the member give way?
I am sorry; I do not have time.
That is a perverse position for the UK Tory-Liberal Government to adopt, as far as the interests of farmers in Scotland are concerned. Indeed, as recently as last week, NFU Scotland wrote to the UK Secretary of State for Environment, Food and Rural Affairs, Owen Paterson—a man who has been in the job for six months and yet has still not managed to find his way north of the border. That can be contrasted with the European agricultural commissioner, who has managed to find his way over the North Sea.
Will the member take an intervention?
I am afraid that I do not have time.
The letter from the president of NFU Scotland, Nigel Miller, to Owen Paterson said:
“The next weeks and months will require intense effort by all of the UK’s farming ministers, their officials and key stakeholders to drive forward a CAP Reform package. That package must genuinely sustain production, enable rural communities to thrive, and support the delivery of a flourishing environment across the whole of the UK. That challenge is made greater by the diversity of agriculture and land use both within Scotland and the UK. Recent Defra statements appear to focus solely on English farming priorities only. However, UK ministers represent all UK farmers, and have a duty to represent Scotland’s interests in CAP negotiations.”
It is curious that none of the other parties have yet managed to quote that letter.
Although I know that the cabinet secretary here in Scotland will strain every sinew to defend and promote the interests of Scottish farmers, the sad fact of the matter is that his voice can be heard formally in the Council of Ministers only if he aligns his position with that of the UK Government, but of course that would be a betrayal of the interests of our farmers and crofters.
The fact that we are reliant on the UK Government, despite its vagaries, to deign to promote Scotland’s interests is sadly not a new problem. Indeed, it must be recalled that, under the neglect of successive UK Governments, Scotland languishes at the bottom of pillar 2 funding in the entire EU and fourth bottom of pillar 1 funding. What rotten deals the UK has struck for Scotland over the years. Indeed, it must be asked where the union dividend is there.
As we have heard, Scotland, as Scotland, with her own voice in the corridors of power, would be on track to receive some €304.5 million per year by 2020 in pillar 1 alone. That would be the independence dividend. It is instructive that the other parties gathered here today are content to see our farmers and crofters lose out on hundreds of millions of pounds, which is unacceptable to the SNP Government.
It is clear that the UK Government must discharge its duty to Scottish farmers to put their interests on the agenda. It is quite clear that in the longer term the only way that we will see the interests of Scotland’s farmers placed automatically at the top of the agenda, where they should be—
You must close, please.
—is by voting yes in the 2014 independence referendum.
16:24
Just for safety, I declare that I have a registered farm holding of three acres. I get no income from it; my neighbour keeps some sheep on it.
Perhaps, like others, Alex Fergusson should read more and more often: the 28th member of the European Union will, of course, be Croatia very shortly. The Croatians have been attending various council meetings for something like a year.
The debate is important and I congratulate the Liberals on securing time for it. If anything, it illustrates that the time allocated is not sufficient to cover all the issues in sufficient detail. However, it is better than not talking about the matter at all: it is better to discuss the subject without deciding than to decide the subject without discussing.
Our focus is on appropriate support for farmers and for the communities of which they are part. A rather unhelpful part of the debate in Europe, to which the UK in particular but not alone has contributed, has concerned the cost of supporting farming communities throughout the EU. The reality is that—I know that members across the chamber will agree—significant benefits derive from supporting our farmers and the communities in which they are embedded.
The Scottish Government has undertaken significant consultation and has a programme of significant engagement. The key point is that we are very different. That is simply a matter of geography, not a matter of politics. Therefore, we need different solutions—we need a different approach.
One thing that emerged from the consultation is broad support for the principle of greening. Of course, the principle of greening is one thing. After all, farmers, by their nature, are engaged in green issues, understand them and depend on the quality of the environment in which they operate. When I was Minister for Environment and Climate Change, it was a delight to visit a climate change demonstrator farm to see some of the real hands-on action that is taking place. However, there is a danger that inappropriate use of greening can damage the interests of some of our farmers, so the matter needs to be treated with great caution.
Almost every speaker has said that Scotland is different. I hope that what I have said reinforces that point. Claire Baker said that 85 per cent or thereabouts of our land is classified as less favoured area. That is quite different from elsewhere in these islands. It is precisely because we are different—rem acu tetigisti, or touching the point—that we need our cabinet secretary not simply to be part of the UK delegation but to be able to participate directly in the debates in the environment council and elsewhere. We get to influence, but we do not get to contribute to the decisions.
The difficult issue of capping payments seemed to have some support in the consultation. As there is a mix of very large and very small farming businesses in the north-east, I will watch that subject with great interest indeed.
There is absolute certainty on the current EU rules. If we were independent, we would have more under the existing rules than we do at the moment.
I will track this reform with considerable interest.
We move to the closing speeches. I call Murdo Fraser, who has up to four minutes.
16:28
CAP reform is a serious issue that is of great importance to our farming constituents. I commend the Liberal Democrats for bringing this timely debate. It was an opportunity to build consensus, so it is a pity that many SNP members saw it as an opportunity to sow division, grandstand and make constitutional points in the context of a seemingly never-ending referendum debate that has already gone on for too long.
Will Murdo Fraser give way?
No, I have only four minutes and would like to make some progress.
I say gently to the cabinet secretary that, although he is generally well regarded by the farming community in Scotland, he need not think that that will continue if he adopts the confrontational approach that we have seen from some of his members today. Farmers want to hear that the Government in Scotland is working constructively with the Government in the UK to pursue their interests.
The SNP’s amendment states as fact that an independent Scotland would have “significant additional CAP funds”, but that is simply assertion. As Jayne Baxter pointed out, we do not know what the terms of accession would be for an independent Scotland seeking to join the EU. The SNP has admitted that that would be a matter of negotiation, and it is dishonest to suggest otherwise. We do not know what the position of an independent Scotland would be, and it is wrong to suggest that it is clear cut.
I say to Annabelle Ewing that she knows well that Owen Paterson was due to come to Scotland to speak to the NFUS annual general meeting but that his participation in the pan-European discussion on dealing with the horsemeat crisis meant that he was unable to attend. Perhaps she thinks that the horsemeat scandal was not an important matter for the UK secretary of state to deal with. I do not think that that view will be shared by the Scottish agricultural community.
Alex Fergusson’s amendment makes a serious point about the divergence in the rate of single farm payments received in Scotland by farmers compared with those in the rest of the UK. We recognise that Scottish farmers are at a competitive disadvantage due to historical reasons. The way forward is for the UK and Scottish Governments to work together to ensure that that gap is bridged. Rather than simply try to score points and blame the UK Government for the difference in payments, we want the Scottish Government to engage constructively with Westminster in order to secure equal benefits for Scottish farmers. We will support it if it adopts that approach.
In Perth and Kinross, the average single farm payment stands at €115 per hectare compared with the European average of €196. That pattern is repeated across Scotland, which is why we are calling for a more equal distribution of subsidy across the UK.
There are a number of other key areas in the proposed reform that will cause concern. I agree with Stewart Stevenson that greening is one such aspect. Scottish farmers are supportive of commitments to make farming more environmentally friendly, but that must be done correctly. We must The result of the division is: For 0, Against 0, Abstentions 0.ist moves to take productive land out of active use given its scarcity and value. In an era of food shortages, fertile land must be put to the best possible use, and that means producing food for Europe.
Scottish farm incomes are in decline—they declined by £111 million last year. We must be careful in these difficult times not to make the position more difficult.
There should be a great deal of consensus in the debate; we should be united in fighting for Scottish farming interests. What a pity that the SNP would rather divide us for their own narrow partisan interest.
I call Claudia Beamish, who has a very tight four minutes.
16:32
This is indeed a timely debate with the European Parliament finalising the new CAP today and the agriculture and fisheries council meeting next Monday. I hope that the whole of the UK will work together to get the best deal for all parts of it.
Claire Baker highlighted environmental issues, greater transparency and a focus on the public good. Stewart Stevenson raised the important greening issue. It was helpful to hear some of the remarks made by the Cabinet Secretary for Rural Affairs and the Environment on related developments. We must keep pushing forward on that.
The cabinet secretary stated his belief, in evidence to the Rural Affairs, Climate Change and Environment Committee on the draft second report on policies and proposals, that carbon reduction should be a central factor of any greening but that, at the present time, it is uncertain what will be involved. Will he explain in his closing remarks to the chamber how to input at the EU level to progress the issue?
It was helpful to hear the cabinet secretary in the same committee meeting speak about the SDRP and how carbon measures could be a strong focus. In addition, we must ensure that the SDRP is, in part, focused on the supporting the development of vibrant rural communities, as Jayne Baxter highlighted.
Claire Baker stressed the serious challenges related to ownership and the tenanted sector that new farm entrants face. The facilitation and establishment of the next generation of farmers is, of course, essential. The commitment of £2 million a year to support new farm entrants who will be affected by the delayed introduction of the CAP reforms until 2015 is welcome. Will the cabinet secretary provide more detail, if possible, about how the money will be spent in order to reassure the new entrants?
We must get the area-based payments right for Scotland. Modelling is indeed key, as Tavish Scott highlighted. The Welsh Government has modelled CAP reform into payments by region. We cannot wait for the exact details in order to model and check various possibilities that would at least give farmers some understanding of how the CAP reform will go forward. Exact scenarios could be tested and then we could see where we get to in the end.
The cabinet secretary has recognised the importance of coupled payments, and some level of direct support for the beef systems is essential.
It is significant and important that there is an option in pillar 1 to give more support to areas of natural constraint, to supplement the area-based payments that may well be necessary.
The Scottish Government motion talks of independence, which is somewhat divisive given the imminent negotiations in the European Parliament. It makes it difficult for other parties to join together and work with the Scottish Government within the UK, to take forward the best deal for our farmers now and in the future. Although that is disappointing—
Please bring your remarks to a close.
Although that is disappointing, this has been a helpful debate. We must all gather together, in this chamber and beyond, to support farmers in Scotland.
Ms Beamish, my apologies—you could have had another 20 seconds. I am sorry.
I call Richard Lochhead to wind up. Cabinet secretary, you have six minutes.
16:36
An important dimension of the debate is that we all accept that Scottish agriculture is diverse, and it is unique in many ways as well. That is why we need a CAP deal that is good for Scotland.
We need to know the EU framework before we know what decisions are best for our diverse agricultural sector. Tavish Scott made many good points, but he seemed to urge me to take decisions on behalf of Scotland by the end of March. We will not have an agreement by the end of March. We need to understand what the European framework will be before we can take final decisions on what the CAP will look like in Scotland.
As I said before, even the Welsh document has been overtaken by events, because last month the French and the Irish proposals came forward. Only today, the European Parliament has been adopting its position on the new policy, and next week the ministers will be adopting their position on the policy. A lot of water needs to go under the bridge before we know exactly what the framework will be in which we have to live.
I want a CAP in which we support productive agriculture in Scotland and do not simply give support or urge farmers to produce for support. We want to support production. There is a big difference between the two, especially when it comes to coupled support. There is a case for limited coupled support, as I said before, specifically given the importance of the livestock sector to Scotland—particularly in our more vulnerable areas, where there is a good case for targeted support for our livestock sectors. As regards the nature and extent of that support, we will have to make decisions in consultation with the industry in due course, once we know the final budgets and the wider framework.
We cannot justify any farm payments that are based on 2002 levels of activity. However, we do not want the most productive farms in Scotland to fall off the edge of a cliff in the transition from where we are just now to where we want to get to. That transition is important and we have to plot it carefully in the years ahead, but going beyond 2020 to 2025, as some stakeholders and some individuals have suggested, is quite indefensible. The fact that anyone could be given a payment in 2025 based on what they were doing in 2002 is indefensible, unjustifiable and untenable, and it would attract no public support whatsoever. There is only a certain length that we should all be prepared to go in that debate.
I have also said that we need support for new entrants from day 1 of the new policy. Once we get that assurance, it will help us to make decisions on the transition for other farmers. However, whether someone has been active for 50 years or five months, their support should as much as possible be based on their level of activity and how productive they are.
On greening support, I have said that I support the principle of greening but it has to be practicable and it has to be capable of being implemented in the Scottish context, again taking into account our unique environment and geography. That is important.
We all agree that we want a common agricultural policy that is flexible and has a regional approach in its implementation and its transition. However, it will be incredibly complex. We should not fail to understand that it will be difficult to implement. All member states called for a simplified CAP and the Commission promised it, but it is no closer to being delivered. However, we have to get the implementation right for the sake of food production and our environment.
The issue of the budget is incredibly important. We went into this budget negotiation with the fourth-lowest level of direct payments in the whole of Europe. There is now a formula for all member states, but Scotland is not a member state; we are part of the UK. For that reason, we are not going to receive the uplift that other member states will receive.
We have an average payment of €130 per hectare and we do not have the ability to gain from the formula by getting to €196 per hectare by 2020 because we are not an independent country. It is a fact that, if we were an independent country, we would get to the position in which we would be delivering an extra €300 million to Scottish rural communities by 2020. Because we are part of the UK, we are not getting that uplift. That is a fact: there is a fixed formula.
The briefing note from European advisers states:
“‘all Member States should attain at least the level of €196/hectare in current prices by 2020’. This is targeted at Estonia, Lithuania and Latvia – the bottom three of the EU27 in terms of direct payments per hectare – which should lift them up to reach the same level of payments received in”
other countries. We do not have anyone negotiating on our behalf, so we are losing out because we are part of the UK. It is as simple as that.
It is no wonder that the NFUS president said last week:
“Recent Defra statements appear to focus solely on English farming priorities.”
Similarly, it is no surprise that the president of the National Sheep Association, John Cameron, criticised DEFRA ministers for not recognising the case for coupled payments, given the challenges that the Scottish livestock sector faces.
The European briefing note that I quoted from notes that 16 of the 27 EU countries got an uplift in rural development funding, which funds village halls, environmental schemes and so on. Again, no one was there negotiating for Scotland, because we are part of the UK, which attaches no priority to rural Scotland. Austria received a €700 million uplift, France received €1,000 million uplift, and the list goes on.
It may be a case of “better together” on the part of the other parties in the chamber, but for Scotland’s crofters, farmers and rural communities it is a case of “better off in an independent Scotland”.
16:42
This debate has highlighted the importance of agriculture not only to our rural economy but to the economy of Scotland as a whole. Jayne Baxter noted that well. The total income from farming in Scotland is around £3.5 billion, an increase of more than £1 billion in the past 10 years. Unfortunately, costs have increased by a similar amount in the same time, but it is important to note that those costs—which include things such as fuel and feed costs, bank interest charges and repair bills—are exactly what circulates money from agriculture into the wider economy.
We should thank Stewart Stevenson for raising the quality of his party’s debate and noting that agriculture is the mainstay of the rural economy. Of course, agriculture has led to food security in our country. Gone are the days of rationing that some of us might still remember.
Agriculture has also led to a buoyant food export business. Malt and barley, the basic ingredients of whisky—our biggest export—are grown on our arable farms. Sheep exports from our grass hills are a favourite in Spain, Italy and other parts of south Europe. Further, our Scotch beef, with its protected geographic status, delivers a premium for its producers.
Those factors, along with changes in the CAP and the fact that our rural land has been well managed, gives Scotland, in this year of natural Scotland, a countryside to be proud of. We would not have heather without careful management—it would soon turn into impenetrable scrub. We would not have our hedgerows, copses and dry-stone dykes, either. As the SNH website for the year of natural Scotland notes, we have a great outdoors with stunning landscapes. I know that they are manmade, and they can be secured for the future only if there is economic activity on the ground to maintain them.
I am painting a rosy picture, but of that £3.5 billion, at least £600 million comes through support mechanisms from the EU, in the form of the CAP. That support is rooted in the EU.
On the issue of support from Europe for Scottish rural communities, does the member accept that, if we were an independent country, under the current deal that has just been signed as part of the budget negotiations, we would receive a dramatic uplift in CAP funding for Scotland—yes or no?
I will come to that point directly in a second.
Without doubt, unfortunately, our food and drink industry and rural economy depend on the CAP, but that position is not unique in the world. Stewart Stevenson and Claire Baker highlighted the costs of the CAP, but it is worth while noting that Europe is not alone in funding agriculture and food. The USA has its own form of farm subsidies or farm income stabilisation of around $20 billion a year, although that system lacks our focus on the environment and is more about guaranteeing an income. Japan also pays out subsidies, which amounted to some $46 billion back in 2009.
New Zealand is often thrown up as an example of a country that survives without farm subsidy, but that is not the whole story. In New Zealand, livestock is intensively farmed in a way that I doubt would go down well with those here who have an interest in animal welfare. When New Zealand reformed farm support in the 1980s, the Government wrote off all farmers’ debts while continuing to put significant funds into research and marketing. New Zealand funds a primary growth partnership, which is worth 70 million New Zealand dollars, for farm research.
In addition, New Zealand has a sustainable farming fund, which can give individual businesses up to 1 million New Zealand dollars for socioeconomic environmental projects, as well as a community irrigation fund and a sustainable land management hill country erosion programme. Farmers near the Bay of Plenty were paid 190 million New Zealand dollars for loss of income after flooding. The New Zealand Minister of Social Development provides rural assistance payments after adverse events to help farming families to meet essential living expenses. The New Zealand Government also provides 11,000 New Zealand dollars per year to vets who work in practices that have agricultural animals as part of the customer base.
Of course, New Zealand also puts a large amount of funding into marketing its products across the world. [Interruption.]
Order. There is too much chatting. I can hardly hear the member speak.
Therefore, it is incorrect to say that New Zealand does not aid farming—it does so in the knowledge that that will help its economy, food security and environment. Most of the developed world does that, too.
Our rural economy is at a turning point with the reform of the CAP, which plays an essential part in our rural economy. Existing CAP payments are based on historic payments from 2002. That was what the farming industry requested of the then Lib Dem minister, Ross Finnie, and that is exactly what he delivered. That approach prevented gross redistribution in this country and allowed farming businesses to adjust to not having headage or acreage payments. That was what the NFUS wanted after consulting its 11,000-odd farming business members, and that was exactly what the Lib Dem minister delivered.
I find it distasteful that SNP colleagues have attempted to make much of how Scotland gets less per hectare than other areas of the EU. That is because what is paid now relates directly to what was produced a decade ago. The majority of Scotland’s land is hills and highlands, which will of course attract lower historic payments than vineyards in France, olive groves in Italy or tracts of arable land down in the fens. It is ridiculously misleading for SNP members even to suggest that.
More worrying is whether, if Scotland became an independent country, we would be part of the EU. If we were, what negotiating power would we have? What deal would we get under the CAP? Would there be a time when no CAP payments came to Scotland while negotiations occurred? [Interruption.]
Order.
Frankly, it is laughable for the SNP members to state that an independent Scotland would get more and more and more. Rob Gibson called us two-faced, yet SNP MEPs voted to keep the budget the same. The cabinet secretary has stated that we would get more and more and more, yet SNP MPs down at Westminster voted to slash the budget.
They are three-faced.
Yes, the SNP is three-faced. [Interruption.]
Order. Let us hear the member.
Agriculture is devolved, and Scotland has the powers to shape the CAP to suit Scotland. However, we have heard little detail from the Government on its vision for what the revision of the CAP would look like at the micro level. I have suggested previously that we need modelling to be made available to all farming businesses so that they can plan for the future and adjust their business. An amendment on that issue in my name received agreement from across the Parliament.
The Welsh have done that already. There is a simple calculator on the Welsh Government website that is available for all to use. I do not know why the Scottish Government has dragged its heels on the issue, but perhaps it is frightened of the bad news that there might be for rural Scotland before the independence referendum as a result of a large redistribution of funds in Scotland. We should let the industry decide. We should provide the information and allow our agriculture, food, drink and nature industries to plan for their future.
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