Livestock Improvement Scheme
The final item of business today is a members' business debate on motion S2M-877, in the name of Jamie McGrigor, on the livestock improvement scheme. The debate will be concluded without any question being put.
Motion debated,
That the Parliament recognises the considerable success over the last few years of the Livestock Improvement Scheme and, in particular, the Bull Hire Scheme in providing quality bulls to crofters at reasonable prices; notes with concern changes to the scheme that will require crofters to pay in advance for bull hire and wintering costs; fears that these changes will deter crofters from obtaining high quality bulls with quality assurance and thus run against the committed aims of both the Scottish Executive Environment and Rural Affairs Department and the Crofters Commission of increasing the quality of the Scottish beef herd, and believes that the Scottish Executive should improve the efficiency of the current scheme rather than introducing upfront payments for bull hire that would put a severe financial strain on scheme members.
I welcome those representatives of crofting communities who are sitting in the public gallery.
The whole matter was first brought to my attention by the Scottish Crofting Foundation at a meeting of the cross-party group on crofting and by the fury expressed to me by crofters all over Scotland that they are being asked to pay in advance for the hire of bulls under the livestock improvement scheme. I took that on board and wrote to the Executive, but events moved quickly and the unthinkable suggestion of the abolishment of the scheme has now emerged.
Yesterday, I talked to the Blackface Sheep Breeders Association, which informed me that neither it nor the North Country Cheviot Sheep Society, which represent the majority of the breeds of sheep used in the tup scheme, had been consulted on the effects of the withdrawal of the scheme. They are incredulous and wonder what the Executive is up to. The tup scheme is particularly valuable in aiding the national scrapie eradication scheme. The department tups are well researched and well sourced from safe sources. If the abolishment goes ahead, it will have serious implications for crofting communities.
The Deputy Minister for Environment and Rural Development, Allan Wilson, announced that the Executive intends to replace the bull hire scheme with a new grant scheme, close the ram purchase scheme and close the Shetland ram scheme. However, to soften the blow, he has said that he will explore the possibility of providing training in ram selection and purchase. It appears that the Executive's answer to the problems facing Scotland's crofters is to send them back to school. I find that extraordinarily patronising. Does the Executive really think that the practical crofters cannot recognise the finer points of a blackface ram or a shorthorn bull? They deal with them on a daily basis.
The benefits of the livestock scheme are many: high-quality bulls that sire the quality calves that the market requires are available to those who would not otherwise be able to afford them; crofters are not left with the costs and difficulties of having to winter bulls; bulls enter the breeding season in peak condition; replacement animals are always available; the crofter can choose between breeds every two years; and the scheme ensures that crofters do not run the risk of a bull siring from his own progeny. The scheme unites crofting townships and encourages community working and co-operation, which have always been important to the socioeconomic well-being of towns such as Stornoway and Lerwick.
The scheme does not benefit crofters alone. Many of the female calves of well-bred bulls in crofting communities go on to supplement the breeding herds of farmers in other parts of Scotland, thus ensuring quality from a clean, disease-free source, which is important nowadays. Cattle enhance the rural habitat and environment, both of which are strategic aims of the Executive's agriculture policy. Cattle are necessary for crofters to enter certain environmental schemes to maximise income under the less favoured areas scheme, which favours mixed-livestock units. The concern is that, if the livestock scheme is withdrawn, the quality of the bulls will deteriorate, which will lead to deterioration in the herd in general. Again, that would be contradictory to the Executive's stated aims. The bull is half the herd.
What are the alternatives to the scheme? Given that artificial insemination is impractical for beef herds and that there is a lack of bulls for hire privately, will crofters be expected to purchase their own bulls? That is an expensive business—good bulls can cost thousands of pounds—and although it may be all right for a farmer with a large herd of at least 40 beef cows, it makes no economic sense for a crofter with four or five cows. Add to that the expense of wintering and the cost of transport, which may be from Perth to the Western Isles or Shetland, and one can see why the bull hire scheme is so important. The fear is that those and many other knock-on effects will lead to crofters abandoning cattle production, which would have a devastating impact on income to the area, the local economy, supporting services such as the auction marts, the quality of the environment and the sustainability of remaining cattle units.
The Scottish Agricultural College highlights the potential loss of cattle numbers if the scheme is withdrawn, which would be contradictory to the stated policy of the Crofters Commission. The Scottish Executive document "The Way Forward: Framework for Economic Development in Scotland" includes the objective of supporting the return of cattle to crofting areas and a subsequent increase in cattle numbers. I well remember listening to Minister Ross Finnie speaking at the Scottish Crofting Foundation conference on the Isle of Skye some years ago, when he gave a full commitment to crofting communities and stressed the need for improvement in quality and to gain added value from farm products. I am sorry that he is not here this evening, but I ask him why he is abolishing a scheme that achieves all those things for the relatively low cost of £0.25 million. Minister Wilson has said that the changes, including the replacement of the current bull hire scheme, the closure of the ram purchase scheme and the reworking of the crofting counties agricultural grant scheme are
"interim measures to modernise the schemes and ensure they comply with EU state aid regulations."
Ross Finnie also commented on the issue in Saturday's edition of The Press and Journal.
What is most concerning is that—if you will excuse the expression, Presiding Officer—crofters appear to be being given a load of old bull. My colleague Struan Stevenson MEP has discovered that last December the Scottish Executive Environment and Rural Affairs Department contacted the agriculture directorate-general in Brussels to ask whether the bull hire scheme breached state-aid rules. What on earth was SEERAD doing? Surely it must have known that the scheme existed prior to 1973, before Britain joined the European Union, and had never been notified to the Commission. That is in compliance with article 1(b) of regulation 659/1999 and is standard practice.
When Brussels informed SEERAD that it had no record of the bull hire scheme, SEERAD realised that the scheme had never been notified and told DG agriculture not to bother with further investigations, as an internal review in Scotland was under way. Who was consulted during that internal review of the livestock improvement scheme? Why did SEERAD have to inquire about a scheme that had never been notified, when it should have known perfectly well that state-aid rules were not relevant in this case? I hope that the Executive was not looking for a reason to dump the livestock improvement scheme and blame it on Brussels. Given that further questions have been raised about the state-aid rules in Parliament, I hope that the minister will clarify the position.
The bull hire scheme has been a great success, with cattle numbers in Lewis and Harris alone more than doubling from 400 to 800 in the past decade, which meets the Scottish Executive's recommendations. I urge the Scottish Executive to rethink its decision to end the livestock improvement scheme and to listen to the NFU Scotland, which has stated that such schemes are more relevant than ever today. I also urge the Executive to listen to the Scottish Crofting Foundation, which has said that the bull hire scheme is particularly highly valued, and to the environmental organisations.
Unkind rumours abound in the north that the Executive wants to sell for profit and development the department farms near Inverness where the bulls in question are normally kept. I cannot think that an Executive that has said that it is so supportive of Highland agriculture could possibly be thinking of doing such a thing, but I would like the minister to confirm that. The Executive made a commitment to increase the number and quality of Scotland's beef herds, but removal of the livestock improvement scheme will have the opposite effect. It is not an expensive scheme; it is great value for money to the people who use it. I ask the minister not to get rid of the department bulls or the department tups.
I welcome the debate and I am grateful to Jamie McGrigor for securing it. I also welcome the briefing from the Scottish Crofting Foundation, of which I declare that I am a member. I listened carefully to Jamie McGrigor's speech and I welcome the fact that he has now converted and fully appreciates the importance of communal working in crofting communities and the fact that such communities would fail without the collaborative community spirit that courses through so many of them. However, it is a pity that his party is a consistent opponent of land reform and of crofting communities and other communities securing land. I appreciate what he said about the retention, development or refocusing of the bull and tup scheme. However, how can he reconcile such fervour and sincerity about that scheme with his position on land reform? I am sure that that is a debate for another evening.
I am conscious that a number of members will want to contribute, but I want to raise a number of points that crofters in my constituency have made. Last year, 50 good-quality bulls were brought to the Western Isles. Over the years, such bulls have greatly improved the quality of the stock that is reared in the islands and, more important, sold outwith the islands. The reputation and quality of the stock have improved year on year. Of course, that is a welcome change and crofters are now keeping more and more cattle, which is certainly good for the economy and the environment. The increase in cattle numbers in recent years is encouraging. The Lewis and Harris Cattle Producers Group, which I met on Monday morning, reliably informs me that it is usually crofters at the younger end of the age spectrum who keep cattle. I am sure that the Executive will appreciate that that is significant and will be keen to support them.
I stress that although I have been contacted by a great number of crofters and organisations, none has said that they fear change. What they fear is a situation in which inferior bulls or rams are sent to the Western Isles. If that were to happen, it would herald the end of quality cattle being bred there. I am sure that the minister will address those concerns when he sums up. I know that the crofters to whom I have spoken and those whom I have not met are only too willing to adapt, to work with any new initiatives that will maintain the standards that have been established in recent years and to help to build on recent successes.
I seek clarification on the following points. Will the minister assure me that the bull hire scheme, in whatever form it is eventually configured, will continue to be run for the benefit of crofters through community groups of crofters, ensuring that the responsibility and quality are shared by all? Will he assure me that, at the end of the process, we will still have first-class bulls being sent to the islands and other communities in the Highlands at affordable rates? Will he assure me that the process is not about downgrading the scheme or the quality of the bulls being sent, but about the refocusing and realignment of the scheme to ensure that we have continued improvements in our cattle stock?
I will end on a point that the Lewis and Harris Cattle Producers Group raised. I do not expect the minister to give me an answer to this tonight, but perhaps he could write to me in the next week or two on whether a heifer retention scheme could improve the quality of cattle. I am sure that he will answer the other points that I have raised when he sums up.
I congratulate Jamie McGrigor on bringing this important issue to Parliament. It is proof that Parliament is able to debate issues that are important, albeit to a relatively small sector of society.
What we want to learn from the debate is that the Scottish Executive is able to respond to the serious concerns that exist, some of which have been raised in the debate. I refer, for example, to a letter that I received from Mr MacKenzie of Dingwall & Highland Marts Ltd, who has been involved in the business for the past 40 years. He says that he believes that, during that period, the quality of stock has improved tenfold as a result of the scheme. He states:
"To withdraw this scheme would be turning the clock back to where inferior cross bred animals were being used for sires or no livestock would be kept at all."
Mr MacKenzie knows the real fears—and there are fears; I must disagree with Alasdair Morrison on that—better than most, if not all, of us.
I refer also to John Kinnaird, another person whose experience we should respect. He states that the withdrawal of the current bull hire and ram schemes and the introduction of a replacement grant scheme is "a draconian step". Mr Kinnaird is not a man given to hyperbole.
I have also noted that, in the Highland papers, many members of the Liberal Democrats have spoken out clearly against the scheme, and I hope that we will hear that criticism expressed tonight.
They spoke out for the scheme.
I have seen some comments to the effect that George Lyon and John Farquhar Munro are not enamoured of the Executive's policy in that regard. If I am wrong, I am willing to be corrected, but I hope that there will be cross-party support for Mr McGrigor's message, which I endorse.
I will raise two concerns in particular. One relates to the widely held beliefs that the farms at Beechwood and Knocknagael are to be sold off and that that is the motivation behind the policy. We have seen some active consideration of that proposal in papers that have come before us, and I ask the minister point blank whether he has received advice on that issue and whether he will make it public to everyone concerned. I have constituents on both farms and I have visited them. I have had concerns about the proposed eviction of a constituent of mine at Knocknagael, although my dealings on that were with Mr Finnie.
My second concern relates to the state-aid rules. I have read the correspondence that has passed between the NFU and a Mr Perrett on the matter, and it seems to me that the state-aid rules are being raised as a pretext on which to withdraw the bull hire scheme. It is surprising that only now, three decades after accession to the European Union and 100 years after the inception of the bull hire scheme, the Executive has discovered that the scheme somehow contravenes state aid.
I ask the minister—I see that I now have his attention, for which I am always grateful—to engage in debate with the NFU. The NFU argues that there is no contravention of state aid and that the 50 per cent rule is not breached. It also argues that, in the computations that Mr Perrett sets out in his e-mail, he has inflated the costs of the existing scheme. He has brought out figures that state that the subsidy element is nearly two thirds. The NFU states that, in other comparisons—for example, the nitrate-vulnerable zones scheme—no account has been taken of administrative costs.
Will the minister engage with the NFU and, because of the widespread concerns, will he withdraw the plans to replace the current scheme until there has been a full and thoroughgoing consultation with all the people involved, almost all of whom will have experience and knowledge to bring to bear on the topic, which is vital for the Highlands and Islands of Scotland?
A considerable number of members wish to speak in the debate and I am of a mind to accept a motion without notice to extend the debate by around 15 minutes. If a member wishes to move that, I would be happy to put the question.
Motion moved,
That, under rule 8.14.3, the debate be extended by 15 minutes.—[Rob Gibson.]
Motion agreed to.
I declare an interest at the outset: I am one of the poor crofters from the less favoured areas who constantly makes use of the bull hire scheme.
I thank Jamie McGrigor for securing this important debate. It is opportune that we are holding it this evening, because tonight we are holding a meeting of the Parliament's cross-party group on crofting. The group meets at 6 o'clock and I invite any interested members to come along and listen to its debate, at which they will be able to hear at first hand the concerns of crofters, who are most directly affected by the proposal.
The proposal that is being made is controversial. Among other things, it suggests drastic changes in the support mechanism for the bull and ram hire scheme, which has, as we have heard, encouraged and supported crofters in their efforts to improve the quality of their stock over many decades. As a consequence, it has enhanced the market value of the animals that are produced. Unless the existing scheme is retained and supported, I can see that the health and quality of sheep and cattle in the crofting townships will fall to a critical level.
SEERAD is now suggesting that it wants to replace the scheme with one that it considers to be more appropriate and which it suggests will offer more value for money. That might be the perception from Pentland House—or perhaps from Castle Wynd, Inverness—but it is certainly not the considered view of crofters and townships throughout the Highlands and Islands, whose view has been expressed to me pretty strongly. Those crofters have struggled to survive through the difficulties and restrictions that have been imposed not least by the operation of the less favoured areas scheme. They have had to live through the scourge that was BSE, which was followed by the foot-and-mouth disease outbreak. They also have a constant problem with integrated administration and control system forms, British cattle movement service forms—IACS and BCMS forms—and a plethora of other forms that they have constantly to fill in. If they tick the wrong box, there can be tremendous penalties. Crofters feel that the current proposals will pull the proverbial rug from under their feet at a time when they are feeling at their most fragile and vulnerable.
Crofting communities are not aware of the details of the new proposals, so they would welcome consultation and debate prior to any major changes being implemented. The existing bull and ram hire scheme has provided an excellent and viable service to those communities over the years, so if the scheme could be improved—as SEERAD has suggested—let us consider that possibility in co-operation with crofting customers, who are the important individuals at the end of the line. That way, we can arrive collectively at an agreement that will have the overwhelming and enthusiastic support of those concerned and which can help to create a buoyant and vibrant future in all our crofting communities.
I suggest to the minister that, before any further legislation is implemented, due consideration be given to serious consultation of the crofting communities.
I congratulate Jamie McGrigor on securing the debate and I hope very much that the minister will take on board the concerns that are being expressed this evening, especially those about the decision to withdraw the bull hire scheme. The minister should listen not just to the voices of members here this evening, but to those of the organisations that directly represent the people who will be most affected by the Executive's decision. The Lewis and Harris Cattle Producers Group claims that the bull hire scheme is "vitally important to crofting", and that it delivers significant benefits to the crofting community.
If we talk to people from crofting communities, we are told that the number of cattle in a community and whether the number is growing or declining can be used as a measure of the strength of the community. It is a matter of real concern that anything might be being done that would further disadvantage communities that can be seen to be disadvantaged in the first place. As has been stated earlier in the debate, Lewis and Harris have seen an increase in the numbers of cattle as well as in the numbers of people who keep cattle. That is a good news story in which the bull hire scheme has played a significant role.
I find the tenor of the debate to be extraordinary. Mrs McNeill, the chairman of the Scottish Crofting Foundation made a good point in The Press and Journal:
"The bull hire scheme is particularly highly valued, not only by crofting communities, but also by environmental organisations who value the important role of cattle extensive high nature value systems".
We are engaging in another debate at the moment about whether the national beef envelope can be applied in a way that will directly affect the sorts of communities that we are discussing this evening; however, this debate seems to be about removing one of the ways of supporting those very communities.
As my colleague Fergus Ewing said, the NFU Scotland has described the removal of the ram schemes and the replacement of the bull hire scheme as a "draconian step". There are real concerns that the accounting practices that are employed have led to the concerns about the scheme's compliance with state aid regulations. Again, Fergus Ewing went into that issue in greater detail.
When Ena McNeill expressed her concern about the withdrawal of the scheme, she referred to the empty rhetoric of the Executive, when it talked about wanting to support remote and fragile crofting areas and to keep livestock in the north and west. That is the sort of rhetoric that we heard throughout the debate on reform of the common agricultural policy. Ena McNeill's statement is one with which all members in the chamber would agree. In essence, she is saying that the Scottish Crofting Foundation wants to know whether the Executive means what it says.
I believe that plenty of figures are available to suggest that the bull hire scheme is cheaper and more efficient, both for its users and providers. I urge the minister to listen to the people whose livelihoods and very way of life will be seriously and negatively affected by the proposed changes. If the Executive claims to have the interests of crofting communities at heart it should, as Ena McNeill said, show those communities that it means what it says.
Like Fergus Ewing, I received a letter from Kenny MacKenzie of the Dingwall mart. Those of us who know Kenny MacKenzie would say that he is a man who is neither given to breaking into print—he is not easily pushed that way—nor is he a man for purple prose or hyperbole. When Kenny MacKenzie writes something, one reads and listens to what he says and thinks about it.
Although I will speak briefly, I want to make several points. I echo the point that cattle are good for the land; that is true. For members who have not yet read it, I recommend strongly Sir John Lister-Kaye's publication "Ill Fares the Land" in which he sets out in very clear terms the difference to the land of grazing sheep and cattle on it. As Roseanna Cunningham said, the grazing of cattle is good for the environment, as it is for biodiversity and long-term sustainability.
In the scheme of things, we are not talking about a great deal of Scottish Executive money. When one considers the cost of doing up a stretch of the A9 in my constituency, for example, one is talking about £10 million. The same could be said for any bit of road improvement or an improvement to a railway line. In talking about the scheme, we are talking about small beer or small change and yet, as has been so rightly pointed out, the scheme underpins and impacts on crofters' lives, particularly on the beef front. I know what I am talking about: I was brought up on a small farm on which there were shorthorn cattle.
It is with no great pleasure that I spell out a clear message to the minister and I do not undertake it lightly. I hope sincerely that the minister will consider the issue and move on it. There comes a time in the Parliament when an issue is debated that crosses all party divides; the subject of this evening's debate is one such issue. It is fundamental to our precious way of life in the Highlands and we should unite on it. The issue poses the question: "Does the dog wag the tail or does the tail wag the dog?" There comes a time when the Parliament must speak with one voice.
Secondly and finally, it is perhaps apposite that "Yes Minister" has recently reappeared on our television screens. I have the greatest respect for Her Majesty's civil service, but sometimes civil servants are keen to follow their own agenda and do not consult the sectors that they should consult or keep ministers informed as they should do. I say this just once: when the matter has been done and dusted and, I trust, the right conclusion reached, I recommend that the deputy minister and Mr Finnie privately and discreetly examine the mechanisms in their department to establish how the hell—I hope that that will not be ruled out as unparliamentary language—the situation came about.
I congratulate Jamie McGrigor on securing the debate and I am happy to add my voice to the concern and dismay that is felt in crofting circles at the proposed withdrawal of the livestock improvement scheme.
I give a flavour of some of the comments that are being made by quoting from the newsletter of the North West Cattle Producers Association, which is based in Assynt. An article in the newsletter says:
"For over 100 years crofters have been relying on the SEERAD controlled Bull Hire Scheme. For small producers buying a bull every two years is neither practical nor financially viable. A reliable hire scheme is what is wanted.
In the past 50 years the quality of crofting cattle has improved immensely as a direct result of access to Scheme bulls. This is a well known fact which those in charge of the Bull Hire Scheme find it incredibly hard to grasp."
The article continues:
"It seems now that this confidence in what has been one of the basics of crofting was severely misplaced. The Bull Hire Scheme has been withdrawn and only vague promises put in its place.
Without bulls for hire cattle numbers and cattle quality will start to decline at a pace."
I pick up on a point that Roseanna Cunningham made. There has been much talk during the past year about the need for clear strategic aims for agriculture, the opportunities that CAP reform will bring, the need to keep cattle on the ground for the good of the ground, the importance of grass-roots action and the need to encourage young people to get started in agriculture. However, what is strategic or sensible about consistently ignoring the needs and opinions of the crofting community?
Jamie Stone recently lodged a written question:
"To ask the Scottish Executive when it will publish the review of the livestock improvement scheme and what plans it has for the continuation and improvement of the scheme"
Allan Wilson replied that
"the Crofting Counties Agricultural Grants Scheme"—
Jamie Stone had not asked about that, but never mind—
"and the support for livestock improvement have been in place for a long time. We recognise that there are opportunities to refocus crofting support to provide better value for money. That is why the Crofters Commission has consulted comprehensively on the future of these crofting support schemes."—[Official Report, Written Answers, 5 April 2004; S2W-7131.]
Crofters do not think that they have been consulted comprehensively—or at all—on the matter.
Saturday's edition of The Press and Journal contained an exclusive interview with Ross Finnie, in which he talked about the bull hire and ram purchase schemes. The words that I quote are those of the journalist, rather than Ross Finnie, so I do not attribute them directly to the minister. The article says:
"The bull-hire scheme was ridiculed in a specially-commissioned report by the Scottish Agricultural College. It said the scheme did not represent good value for money in terms of genetic improvement. It also said the objectives appeared out of date."
That report was commissioned by the Crofters Commission and I have with me the report's summary and conclusions. Under the heading, "Overall Conclusions", paragraph 2.1.1 starts by saying:
"The Bull Supply Scheme does not at present represent good value for money in terms of genetic improvement of crofters cattle alone."
It goes on:
"However, when wider benefits of the scheme are included—the maintenance of cow numbers, environmental benefits and local economic activity—we believe it has a positive impact from a national point of view."
Paragraph 2.1.4 of the report says:
"In relation to the current Bull Supply Scheme, the best alternatives, as ranked against a wide range of criteria, are a grant scheme linked to a beef quality programme or devolving the scheme to the most fragile regions where the benefits of genetic improvement and the environmental and social losses of cattle reduction would be greatest."
Has the Executive read the entire report? Has it considered devolving the scheme and targeting it at the most unfavoured areas?
In conclusion, I support the Scottish Crofting Foundation's call that whatever scheme replaces the livestock improvement scheme must be designed to support crofting co-operatives, crofter-run hire schemes and other local livestock-development ideas that will enable crofters to keep cattle on the land. That can be achieved only if crofters and livestock producers from the Highlands and Islands are at the heart of the process of designing the new scheme.
An outside consultant dreaming up an idea followed by a paper consultation just will not do. First and foremost, I ask the Executive to read the Scottish Agricultural College report again and to tell me whether it agrees with the conclusions. We can then examine other ways to keep the scheme going.
Like everyone else, I declare an interest in a healthy, vibrant Highlands and Islands in which the traditional industries are given a fair chance to survive and thrive. That strategy is key to the area's long-term success and balanced future development. It is also fair to the people who have stuck at the traditional industries in tough times and maintained the attractiveness and evocativeness of the Highlands and Islands. Countries such as New Zealand point the way for us, in that they have transformed their economies and their competitiveness by focusing on their basic industries and taking care of the babies in the bath water.
I am keen to take part in the debate—and I congratulate Jamie McGrigor on securing it—because it is an opportunity to voice and ventilate the genuine concerns of many crofters about the Scottish Executive's proposal to close the ram scheme and scrap the bull hire scheme, replacing it with an as yet undefined grant scheme. Users of the bull hire scheme cannot see how a breeding scheme that is designed to improve the cattle gene pool in the Highlands and Islands can be successfully and uniformly devolved and delegated to individual crofters, many of whom have only a few animals. Surely it makes little economic sense for crofters who have small herds to go out and buy a bull, and surely that was why the subsidised bull hire scheme was introduced in the first place.
Given the popularity of the scheme and its undoubted effectiveness, it is hard to understand how downgrading a livestock quality improvement scheme conforms with common agricultural policy reform, which emphasises the need to improve farm product quality. However, that is not the only aspect of the proposal that causes concern. The secretiveness that surrounds the deliberations, and the resultant uncertainty, might undermine confidence and produce a scheme that does not meet the needs and aspirations of the crofting community.
The Executive's protestation that the subsidised bull hire scheme might infringe European Union rules on state aid further undermines confidence and is likely to make change happen for the wrong, and perhaps invalid, reasons. That is similar to the tactic that has frequently been used to threaten the Gourock to Dunoon car ferry service; limiting the frequency of the Caledonian MacBrayne service undermines confidence in it. However, the case of the bull hire scheme is worse, in that the Government has not even specified the nature of the infringement or tendered a possible defence. In similar situations, other Governments, such as those in Ireland or France, would fight tooth and nail for their producers, especially when the case is there to be made.
On state aid, the treaty of Rome states:
"The following may be considered to be compatible with the common market:
(a) aid to promote the economic development of areas where the standard of living is abnormally low or where there is serious underemployment."
That is significant, given that under-employment in the Highlands and Islands is material and should be calculated as follows: the official unemployed, plus the reluctant retired, plus the economically inactive, who would work if a decent job was available, plus, let us say, the total of the past 15 years of net out-migration.
In conclusion, I am not saying that the scheme is perfect, because I have evidence that it has been managed down by making the deadline for inclusion easy to miss. However, without the scheme, or an equally effective and more accessible substitute, many adverse effects will ensue.
I too thank Jamie McGrigor for the chance to put across the concerns of crofters in my constituency. There are two issues, and we should separate them out at the beginning. The first is that of the ram schemes, and I have to say that I am not persuaded that those schemes provide value for money for crofters, so I will not argue tonight that they should be retained. The second issue is that of the bull hire scheme, which is the most important issue for me. We have announced that it will cease, but what is it to be replaced with? There is a vacuum; no one seems to know what might replace it, so there is all sorts of speculation about what will happen. To me, that is the fundamental mistake that has been made.
I have read the SAC report, and I hope that everyone else has read it. It is not a damning indictment of the bull hire scheme—indeed, the crofters, the environmental organisations and the marketing organisations all sing the scheme's praises. However, the report is a critical endorsement of the scheme and raises a large number of issues that need to be tackled. It calls for the rationalisation of the three farms by selling Beechwood, first to release capital for investment at Knocknagael and Balrobert and secondly because of the severe health and safety issues raised by Beechwood's location close to the town centre.
The SAC report also calls for a review of the scheme's purpose. Is it about sustaining cow numbers in the crofting areas? Is it about the environmental benefits of keeping cows in the crofting areas? We need to think through exactly what the rationale is for continuing with the scheme, but that has still not been done.
We need to improve the genetics of the bull stud. It is clear from the evidence in the SAC report that the bulls leave much to be desired in terms of their EBVs—their estimated breeding values. That reflects the quality of the bulls that are being used in the scheme. The report also states that 27 per cent of bulls are not hired out because they are in poor condition. There is something fundamentally wrong if 27 per cent of the bulls—roughly 50 out of 150 bulls—are unfit for work. Someone is making a huge mistake and poor management is taking place if the bulls are not fit to get out the door in the spring. There is something seriously wrong and questions need to be asked.
The report also calls for a segmentation of the crofting areas to separate out the crofting townships from some of the bigger crofts that, to all intents and purposes, are now farms. However, it still maintains that the bull hire scheme is essential and calls for better value for money because of the rising deficit. Those are all legitimate criticisms of the operation of the current scheme, but they are not a reason to abandon the concept and move to a new scheme. That would be like throwing the baby out with the bath water.
I am sceptical about the grants scheme on its own. It could lead to a rapid decline in the quality of calves coming out of the crofting areas although the whole purpose of putting the bulls in those areas in the first place was to make sure that the quality of the calves that were presented for sale at the end of every summer improved year on year. To a large extent, the scheme has been successful in that objective, but more needs to be done to ensure success in the future. It might be appropriate for a grants scheme to be used for bigger crofts of 50-plus cows, but I would need to be persuaded of that argument. There is also a question about how it could be linked into the quality argument. I do not believe that the grants scheme will work for crofting townships. If they buy a bull, there will be the problem of who keeps it over the winter. They will need to house it over winter, otherwise every heifer in the area will be bulled, and winter feed is extremely expensive.
The announcement is ill timed, to say the least. The feasibility study on the replacement scheme has not even started. Last week I spoke to Peter Cook, who is going to be one of the people who will look into the new scheme. The work has not even begun. No thought has been given to the rationale that will underpin any new scheme. The Executive appears to be a long way from making any final decisions, yet it is announcing that the previous scheme is going to cease. I want to hear from the minister that there is a commitment to the bull hire scheme and its replacement and that bull supply will be a fundamental part of that. I want nothing to be ruled in or out until the study is complete and proper consultation and debate have been had about any possible replacement scheme.
I declare my interest as a member of the NFU and a farmer. I congratulate Jamie McGrigor on securing the debate and I support his motion.
The loss of the livestock improvement scheme will be a huge loss to crofters in the Highlands and Islands and will, in effect, drive cattle off the hills in those fragile areas. For many years, in my previous job as the NFU's hill-farming convener, I championed the scheme, which allowed crofters to keep herds of cattle, and the ram hire scheme, which made sheep flocks viable as well.
At a time when Scottish Natural Heritage is trying to increase the number of cattle with a view to helping the environment, it is utterly bizarre that the minister is withdrawing the scheme for hiring bulls, the effect of which will be to reduce cattle numbers in fragile areas. Furthermore, following the mid-term review, many cattle producers are considering the future of their beef herds, and this may be enough reason for them to stop farming and just take the support.
It is interesting to find so much support for the motion tonight. It was suggested at the Parliamentary Bureau last week that the motion would not receive cross-party support, but if that is so, why have so many members suddenly decided to support the motion although they were not prepared to do so before? Could it have something to do with the fact that the Scottish Crofters Foundation is present in the public gallery?
A question was raised at the bureau this week about the criteria for members' business debates, but no one voted against this matter being debated tonight. I am unsure what John Scott is trying to say.
Opprobrium was expressed that the Conservative party had lodged the motion and it was suggested that that was not the proper thing to have done. None of the coalition members who are present tonight signed the motion. Why not? I rest my case.
I urge the minister to consult more widely than he has done on the new scheme. Nobody knows what his proposals are about, so how can there be anything other than fear and dismay in fragile communities at the proposals? For the NFU to describe the withdrawal of the scheme as draconian is, indeed, strong language, but I have to say that I agree totally with John Kinnaird on that. From my understanding, there is no EU imperative to withdraw the scheme. The proposal is symptomatic of the Lib-Lab coalition's inability to do anything for agriculture or crofting.
I welcome Jamie Stone's apparent offer of support and I hope that he and George Lyon will be as good as their word and will, indeed, use the pressure of the coalition to turn the decision on its head, otherwise, we may have to give credence to the rumours that the move has been driven by the Executive's desire to sell off for building development the farm that is home to the animals. The Conservatives would certainly not want to believe that and I look forward to hearing the minister refute that rumour categorically.
I am a little surprised at John Scott's attitude to the debate, because it seems from the logic of what he said that he would have preferred that none of us had turned up.
As a member of the Scottish Crofting Foundation, I declare an interest in the continued development of that body's activities and of benefits to crofters. However, we need to dig deeper to uncover the politics of the issue. The Crofters Commission may well have a wish to change the crofting agenda. Where does that push come from? If the livestock improvement scheme is an impediment, is the aim to reduce the amount of cattle production in our remote mainland and island areas? If it is, that is a startling revelation. Are the tenets of the forward strategy for agriculture, which are so well met by the north-west Sutherland cattle producers, and the public goods that are already delivered by Shetland crofters, as acknowledged by the common agricultural policy mid-term review, to be set aside because many of those things are helped by the bull scheme?
People have extremely strong views about the move in the areas affected by the scheme and ministers must listen carefully to the experts in the marts, to the farmers and crofters and to the people who run the bull hire scheme. They know that they need to have a large number of bulls available to meet the conditions of transport to remote areas. They also know that, over the years, we have seen a steady improvement in all that has been produced. It worries me intensely that we are left with an SAC report that comes down to issues such as value for money and the need
"to assess whether the objectives of the schemes are still valid and relevant to the Commissions agenda",
as it says at the start of the report. What is that agenda? I think that the minister had better clarify whether he wants to reduce the number of cattle in the remote areas or is opposed to that.
I cite one example from the SAC report. It states:
"There is some increase in group buying of bulls. There may be a trend towards both increasing use of the Commission hire scheme and buying of bulls for specific uses e.g. breeding replacements. Once again this points to a segmentation of the crofter market with some groups becoming sophisticated in terms of bull selection and others heavily reliant on the scheme."
That suggests to me that the actual conclusion is not about sophistication or otherwise, but about basic need in the most remote communities. Therefore, there is a definite need for a review of the debate with a cool head. People must take the issue away and think again about the fact that we used to have a partnership among the Crofters Commission, the Government and the crofters that ensured that the most remote areas were helped to service their economy by the scheme. At present, we have a big question mark.
Five Liberal Democrat and three Labour MSPs represent the Highlands and several of them are ministers. Surely they can put their heads together and get Ross Finnie to withdraw his remarks about the scheme being axed. The decision needs to be reconsidered. Across the parties, there is a belief that there are many ways forward by which we could ensure that the scheme meets the needs of remote and fragile communities. Indeed, the experts recognise that the scheme is the best way forward for the improved livestock of those areas. We must get away from talking about value for money and move on to the issue of value for sustainable communities.
I welcome the opportunity to debate the livestock improvement scheme and I congratulate Jamie McGrigor on securing the debate.
However, I must deprecate the last two speeches, which attempted to introduce an element of party-political discord into what should be an important members' business debate on the future development of the crofting counties. Presiding Officer, I respectfully suggest that, in that objective, I take second place to no man or woman in the chamber.
It is fair to say that the motion has been somewhat overtaken by my announcement on 5 April. Nevertheless, it might be worth making a couple of points. We made the changes to advance payment because our auditors pointed out that—as some members mentioned—the previous arrangements imposed unnecessary costs and losses. Many crofting groups took too long to pay their bills and we had to deal with some bad debt. The Crofters Commission also wasted resources trying to recover money.
The hire fee for a bull is £160 and the maximum wintering charge is £350. Those are not large sums of money. As members will know, bulls are hired to groups of crofters, so the burden of meeting the charge is shared. Consequently, far from being unreasonable, the hire charge is extremely low given the quality of animal that is supplied. I make those points for the record.
The responses to the Crofters Commission's consultation on its proposals for a crofting development programme demonstrated that the livestock improvement schemes were highly valued by the crofting community. The quality of the bull hire scheme was highly regarded. However, popularity alone does not necessarily mean that a scheme is successful; it could simply mean that the scheme is generous.
The most important point, which should not be lost, is that my announcement committed us to continuing support for cattle improvement. That should be welcomed by everybody who has the crofters' interest at heart. We have undertaken to replace the bull hire scheme with a new grants scheme that will deliver genuine improvements to the cattle stock in crofting areas. We have also undertaken to honour existing hire contracts. I can tell those who are interested that our intention is not to compromise on quality or standards, so we will not give assistance to cheap substitutes. Rather, we wish to create a scheme that will deliver both value for money and—this is the more important objective—genuine improvement in stock quality.
We have commissioned an external consultant to do that work. He understands the existing scheme because he has helped the Crofters Commission to run it over the past few months. After conducting a scoping study and engaging with the main stakeholders, he will develop a set of proposals that will be discussed with a focus group that will be drawn from that body of stakeholders. He will also consider the existing stud farm operation to see whether the farms can be streamlined and made more efficient. If that is possible, the farms could continue to play a role in the improvement of crofters' cattle. I hope that the preliminary proposals will be ready by early September.
We are also looking after those who use the current schemes. In my announcement, I made an offer of training for those who will be affected by the loss of the ram purchase scheme. On that issue, I agree with George Lyon that we should differentiate between the two schemes. Bulls for 2004 are already out in the crofting townships and the existing hires will continue to their natural end.
At the same time as I announced the closure of the livestock improvement schemes, I announced major changes to the crofting counties agricultural grants scheme, which was mentioned by Eleanor Scott. That scheme has a budget of £3.2 million and is of far greater benefit to a much greater number of crofters. The changes to the livestock improvement schemes are taking place against a background of significant and increasing support for crofting. Our proposals are in no way about saving money. We intend to maintain current levels of support for crofting, but to ensure that that support is focused where it is needed, in a manner that will deliver better results from a crofting perspective.
I am glad to hear that the minister is committed to producing something that is better, but he has not really explained what was wrong with the bull hire scheme. Why did it need to be changed? The scheme seems to have been very popular with the people who know about livestock.
There are a number of answers to that question. I was going to come to one of those when dealing with the issue of state aid, which was raised by a number of members, including Jamie McGrigor. It is hoped that the new arrangements will enable crofters to get the kind of stock improvement that they want, unlike at present, when they have no real say in deciding which animals are allocated to them. This is an attempt to make a step change and to improve the existing scheme.
Later I will quote from the summary of the evaluation to which George Lyon referred. It demonstrated that most crofters did not have high regard for the quality of the rams supplied by the scheme and that it was not delivering measurable improvement. Support for cattle improvement is continuing, but we are aiming to make it much more effective and to focus on delivering stock improvements that crofters themselves want. That is the point of the consultant's involvement.
In this context, success is difficult to quantify, but I argue that it is best measured by results. In the livestock improvement schemes, there is no clear mechanism for assessing outcomes. However, as members know, we commissioned an independent evaluation by the Scottish Agricultural College, which has been available in the Scottish Parliament information centre since 5 April. The evaluation pointed to deficiencies in the schemes and its conclusions indicate that retention of the ram purchase scheme cannot be justified. The evaluation also pointed to deficiencies in the bull hire scheme. However, it suggested that there is a continuing strong case for supporting the improvement of cattle in crofting areas—that is the direct answer to Jamie McGrigor's question.
Overall, the value of the schemes to crofters and to the public was much less than the £600,000 that they cost. I respectfully suggest that there is nothing to be gained from going over the areas of concern, which are there to see for anyone who cares to read the evaluation report. The summary states:
"In relation to the current Bull Supply Scheme, the best alternatives, as ranked against a wide range of criteria, are a grant scheme linked to a beef quality programme or devolving the scheme to the most fragile regions where the benefits of genetic improvement and the environmental and social losses of cattle reduction would be greatest."
That seems to be a logical conclusion to which I think we can all subscribe.
The summary continues:
"Even a strategy involving improvement of the status quo through simplification of the stud, introduction of a tighter selection policy, increased charges to allow purchase of better bulls and building a beef improvement programme around use of the scheme could lead to a significant improvement over the current situation."
Those are the objectives that I have set out.
I welcome the response that the minister has made to the debate so far. However, when I return to the Western Isles on Friday, can I go with an assurance from him that the refocused bull hire scheme is not a downgrading of the current arrangement and that it will not eventually turn out to be a more expensive version of that arrangement?
The scheme is intended to provide quality and real improvement. It is also to be accessible to the groups that have access to the current schemes.
The evaluation is not the only issue. The Department for Environment, Food and Rural Affairs, which is responsible for ensuring UK compliance with the European Community guidelines for state aid in the agricultural sector, has expressed concerns about the schemes. Indeed, I have said as much publicly. For example, it points out that the guidelines prohibit the granting of operating aids and limit the level of permissible support. We did not simply accept those concerns without questioning their basis carefully. No minister likes to take actions that he knows will be unpopular—I certainly do not. For the record, DEFRA has its legal advisers and so do we. As a result of the legal advice that we have received, we share DEFRA's concerns. I cannot be any clearer than that.
Jim Mather's analogy with New Zealand was perhaps not the most appropriate, given that it has withdrawn agricultural subsidies and the current debate centres on retaining such subsidies. That said, I would argue that subsidy is a side issue. The concern is whether it is an operational aid. With respect to Fergus Ewing, what SEERAD or NFU Scotland thinks does not matter. The trading accounts are available for everyone, including the EC state-aid units, to inspect and it is what they think that matters.
If that is the case, why have objections to the scheme been raised only now and not in any of the previous years in which it has been operating?
That is a fair point. All I can say is that the rules and the schemes have changed over time.
We cannot now conceal what we are doing, because that would be improper and illegal. I know that some people outside this Parliament argue that, since other countries do it, so should we, but such an approach is neither long term nor sustainable. After all, we cannot argue for a fair deal in Europe on fisheries and at the same time turn a blind eye to concerns over state aid.
Is the minister suggesting that the scheme contravenes state-aid rules? I have it on good authority from Brussels that it does not.
I repeat for Jamie McGrigor's benefit that it does not matter what SEERAD, the NFUS or—with all due respect—his good authority thinks. The trading accounts are available for everyone to see and for the EC state-aid units to inspect. It is what they think that matters. DEFRA's legal advice in this respect is categorical—as is our own. As a result, we will move forward in the way that we said we would.
With respect to colleagues, we need to examine this issue in a less emotive manner. We have closed the Shetland rams scheme, which was created to encourage high-quality wool production and is no longer appropriate. We have also closed the ram purchase scheme, because the evaluation showed that it delivered no measurable improvements. There seems to be consensus in the chamber about that decision. The scheme was not well used—after all, it supplied just over 6 per cent of the rams in use in the Highlands and Islands—and was not regarded as a source of quality rams.
We used UK public money to deliver public benefits. A necessary requirement of any assistance scheme is that it should deliver the benefits that it was created to provide, which is why we are proposing to replace the bull hire scheme with a more effective alternative. I, more than most people, appreciate the worries that have been expressed on behalf of crofting interests. However, concerns over value for money and state-aid rules meant that the status quo was not an option.
It is important to note that we are not, as has been alleged, giving up on cattle improvement—quite the contrary. We are working hard to develop an alternative scheme that must be effective, an improvement on what went on before and state-aid compliant. I cannot put it more succinctly than that.
We hope to have firm proposals, worked up in close consultation with the industry, by the autumn. Those proposals will prove to be an improvement for the crofting communities concerned.
Meeting closed at 18:15.