The next item of business is a debate on motion S3M-5807, in the name of Richard Lochhead, on the Brian Pack inquiry into the single farm payment.
14:56
Today’s debate is in response to the public consultation on the interim report of Brian Pack’s inquiry into future support for farming in Scotland. The debate gives members an opportunity to express their views on the crucial issues that are covered by the inquiry. I am delighted that Brian Pack is here to listen to the debate. He will, of course, make himself available after the debate in case members want to speak to him. In the past few weeks, Brian Pack has travelled the length and breadth of Scotland with his roadshow of meetings that have so far been attended by more than 1,300 farmers.
With more snow bringing havoc to many parts of the country as we speak, we are all aware of how the extreme weather has caused some serious problems for the farm sector. Insurance companies are dealing with many more claims than usual for farm buildings that have collapsed under the weight of snow. However, the Scottish Government can also have a role with regard to costs, such as the cost of alternative housing for lambing and calving, which farmers could not have insured against, and which raise animal welfare issues. After listening to farmers and many MSPs, I was pleased to announce last week that the Government will make available up to £3 million to help the sector to cope with that kind of cost.
As well as exceptional weather conditions, we have also seen exceptional economic conditions in recent times. However, food production is a good business to be in during a recession, and the exchange rate has played a helpful role by making Scottish products more competitive and by increasing the value of European support. The value of output went up last year for sheep, for cattle and for horticulture. Scotch beef sales in the pre-Christmas period were up by 8 per cent, lamb exports increased by more than 10 per cent and the horticulture sector is now valued at a considerable £239 million. However, it was a less buoyant year for the cereals sector. Prices were down, and I know that there are concerns about what will happen in 2010. Tenant farmers have been affected by those issues and, of course, by some significant recent rent increases.
I am sure that most people will agree that it is important to put those trends into context. The long-term picture is that the global population is projected to rise to 9 billion by 2050, which will greatly increase the demand for food. Further, people are changing their eating habits, which will also drive up demand.
That is why, despite the weather and other challenges that farmers have to cope with, there is a mood of optimism in the sector. That was evident at two of the events that I have attended in recent weeks: last week’s National Farmers Union Scotland annual conference in St Andrews, which was also attended by many MSPs; and, before that, the Perth bull sales. Farmers are planning to invest and expand. There is a bright future for them to look forward to. However, the future will bring new challenges and, after 2013, we will have a new common agricultural policy. It is against that background that the Scottish Government set up the Pack inquiry. It will put us on the front foot, so that we know what we need to do for Scotland and can argue for it in London and Brussels and with other member states.
The biggest individual element of farm support is the single farm payment, which has been the subject of much recent discussion. We have the single farm payment because, when the original common agricultural policy led to the surpluses of the 1970s and 1980s, European Union policy changed and direct payments to farmers were introduced. Payments were originally coupled to production through headage of livestock or area of cropping. No one to whom I have spoken wants to go back to the system that we had before, in which farmers often produced simply for the payments. As I have said many times before, I believe that the future should involve farmers producing for the market, with the public providing support for farmers who produce. It is widely accepted—and I am sure that we all support the idea—that further evolution in agriculture is inevitable.
It cannot be right that next year’s payments for farmers should be based on what they produced between 2000 and 2002. During the past decade, some farmers have expanded their businesses, while others have reduced their farming activity but still receive the same payments. We estimate that, under the current rules, about 4 per cent of single farm payments may be going to land that is not supporting proper agricultural production, which I hope we all agree is unacceptable. Meanwhile, farmers who have entered the industry since entitlements were awarded, and farmers in sectors that were not supported under the previous regime, receive nothing at all.
Does the minister agree that some farmers, especially in the Highlands, have been asked to reduce their stock for environmental reasons?
I am not sure what Jamie McGrigor means by “asked to reduce their stock for environmental reasons”, but it is clear that farmers have to deliver a number of public benefits, of which environmental protection and safeguarding is one.
For some of the reasons that I have just outlined, the new EU commissioner, whom I am due to meet on 22 March, has reiterated that the historically based system will have to go. That will be a major part of the package of budget and CAP proposals for 2014 onwards.
This year, the commission will continue to gather views from Governments and various stakeholders throughout Europe and in Scotland. Towards the end of the year, it will issue an informal paper, and it will make its formal proposals in 2011. Those proposals will, under the new Treaty of Lisbon rules, be negotiated jointly between the Council of Ministers and the European Parliament, and the final decisions are likely to be made in 2012 or even 2013.
We face a lengthy process, and it is vital that we influence it from the beginning to ensure that, at the very least, our key principles are accepted at the earliest possible stage. The Pack inquiry will equip us to influence the policy agenda in Scotland’s interest in advance of the formal negotiations, and to take up detailed positions once the negotiations are under way.
The inquiry is a crucial piece of work, and many farmers have said to me that there is no better person to chair it than Brian Pack. I am extremely grateful to him—as I am sure we all are—for taking on that task, and to his committee of advisers: Wilma Finlay, Johnny Mackey, Davie MacLeod, Steve McLean and Professor John Grace.
The inquiry is at the halfway stage of its work programme, and the interim report sets out its initial thinking. The report is thought provoking; we know that more than 20,000 farmers are working out what it means for their individual businesses, but we in the chamber need to debate what it means for Scotland.
The closing date for written responses is 5 March, although farmers and crofters in the Western Isles have been given longer to respond—until 19 March—to allow for the fact that their public meetings do not take place until 15 and 16 March. I urge as many people as possible to contribute their views to the consultation.
The schedule is arduous and Brian Pack and his committee have a tough job ahead, which involves balancing the interests of Lowlands and Highlands, east and west, and the livestock and arable sectors, at a time when we do not even know the size of the CAP budgets. We all look forward to the final report, which will, I hope, be delivered in June. Scotland is certainly leading the way in addressing some difficult issues.
One such issue involves deciding on the type of payment system that should replace the historically based single farm payment. The interim report sets out one possible model for a future scheme, which uses area-based payments and activity-based top-up payments, but it makes clear that that is just one illustration. There is no doubt that the current debate will produce many other options. I am sure that we all wish to urge stakeholders to focus not simply on finding flaws in the interim recommendations, but on working out constructive ideas for what the new system could and should look like.
For instance, Brian Pack’s illustration uses the Macaulay Land Use Research Institute’s system as the basis for the area-based elements. Scotland is fortunate to have particular expertise at the Macaulay institute, which gives us options that may not be available elsewhere. However, some people might favour a different method for dividing Scotland up, and comments on that issue would be welcome.
Comments are also welcome on precisely how payments should be distributed under the new system. One thing is clear: if we accept that change is inevitable because the historical system is unsustainable, redistribution is also inevitable. Any new scheme that is based on avoiding change will be a non-starter. Redistribution is a big issue and I am pleased that the industry is taking it seriously. The interim report specifically asks for comments on ways in which to address the impact on particular regions or sectors. It also flags up the important role that is played by other support measures such as less favoured area support scheme payments.
There is a link between those issues and the question of timing. On the one hand, it is understandable that some people want an extended transition period to soften the landing but, on the other hand, the sooner we put the anomalies behind us, the better. The interim report proposes that we wait until the rules for post-2013 are known and that there is change fairly quickly thereafter. That has sparked heated debate and alternative ideas are doing the rounds—ideas that might or might not be permitted by the EU when the rules are agreed. Here, too, comments from stakeholders and MSPs will be extremely valuable and gratefully received by the inquiry team.
The interim report also seeks views on some short-term issues, one of which is the link between farming activity and support payments. The report sets out what is possible under the current legislation. That is quite limited, but we are determined to address that issue. We have already tightened the rules, for example in the changes to LFASS that we announced last summer, but the Pack inquiry will help us to determine what else can be done. It will equip us to negotiate for stronger rules in the future CAP while respecting the rules of the World Trade Organization.
What work has been done on the disadvantage that is faced by those who live in island areas, particularly those who are more than one ferry journey away from the mainland and the markets?
We are conscious of that. When we have a better understanding of what the options could be, we will want to model them to see what impact they would have on our farming communities on the islands and on the mainland.
We all agree—and the recent discussions in the agricultural press support the view—that there are no easy answers and no quick fixes. This is a key time for farming in Scotland. It is essential that we make the best possible use of the current regime and agree on what we need to argue for in Europe to ensure that Scottish agriculture continues to play its part in achieving our goal of sustainable economic growth.
I wish the inquiry the best of luck and urge all MSPs to express their views today and take part in the debate. I am happy to say that we support all the amendments, with the exception of the Liberal Democrat amendment, which I am afraid is poorly worded. It sets in stone the single farm payment, whereas we might want to have other options available, depending on the outcome of the review that is being conducted by Brian Pack.
I commend the interim report to the Parliament and look forward to the debate.
I move,
That the Parliament notes the publication of the Interim Report by the Inquiry into Future Support for Agriculture in Scotland; acknowledges the considerable work that has gone into producing this comprehensive and considered report, and welcomes the inquiry’s continuing commitment to extensive stakeholder engagement on the future application of the Common Agricultural Policy in Scotland.
15:08
We believe that it is a good time to debate the Pack report. With major changes to agriculture and rural support due to happen in 2013, we need to have the widest possible debate to enable all the key stakeholders to consider carefully and collectively what we need and how we should deliver it. The report contains a good analysis of the challenges that we face. Its analyses of food security, water supply, energy supply, biodiversity loss and climate change are spot on and provide a good overall framework. It is right to conclude that it is not just our country but the rest of the world that needs to address those issues.
To put the matter in context, there will be two billion to three billion more of us in the world to feed and the countries on which we currently rely for many of our agriculture products, often at the expense of their ability to supply local people, will struggle because of climate change. Water shortages and increased temperatures will make agriculture in some regions on which we currently rely much less viable, or even unviable. Food security is an issue. In the past, EU subsidies made it impossible for farmers in developing countries to compete on fair terms. As we are in the middle of Fairtrade fortnight, we need to join up the debates and think through the linkages. Fair trade has been a lifeline in enabling farmers to profit and to channel their profits into increased productivity, better local water and drainage infrastructure, better salaries and better local services.
The fact that a third of the EU’s greenhouse gas emissions come from food production and consumption raises another key issue. When we discuss the kind of agricultural and environmental support that we should have in Scotland, we should also ensure that other European countries are doing the right thing. Yesterday’s United Kingdom Committee on Climate Change report highlights the need for us and, in particular, the Scottish Government to provide more leadership in making these kinds of connections and helping our farmers to make the necessary changes to address the challenge of climate change. Although farmers are already making agricultural production more efficient as far as emissions are concerned, we really need to be leading from the front.
As a result, this debate must be about how we feed ourselves, not only affordably, but in a way that provides long-term environmental stewardship and maximum benefit to the communities on whom we rely for our primary produce. All those objectives must be tied in together; we must not simply aim at one objective alone, which means that shifting from current forms of support to new and fairer systems is an incredibly difficult challenge. We should acknowledge the excellent work that is being done both in many of our farming communities and on environmental stewardship. We must find a way of linking those issues while providing the best incentives for our farmers in our rural communities.
I echo the cabinet secretary’s comments about the current system’s flaws and point out, in addition, that it does not encourage or support new farmers; that we have gone from having too many sheep on our hills to having not enough; that tenant farmers are under huge pressure from rocketing rents; and that the dairy industry is, as we have made clear in the past year, under major pressure, with some key players deciding that it is no longer economic or worth their while to keep going. Even though it provides major benefits for our economy, biodiversity and landscape, farming in our tougher and more fragile areas still remains in the economic balance.
We should also play in to the debate the fact that our consumers expect strong and clear labelling, providing information about nutritional value, country of origin and so on. It is not good enough to say where the food is grown; we have to identify the whole chain, which will help to incentivise local food production and processing. Something that is grown in Scotland but processed somewhere else should not be described as locally produced, as it clearly is not.
Demand is growing for more sustainably produced food, whether it is genuinely produced locally, is less intensively farmed or is organic. That said, cost is still a huge issue for many people in Scotland. Yesterday’s parliamentary debate on tackling obesity stressed the need for healthier eating and exercise patterns, but the fact is that people in far too many of our poorer communities simply do not have a choice of affordable, healthy food. Until that situation changes, exhorting people to eat more healthily will make no difference whatever.
All those issues have to be tied together, and our amendment seeks to add to the Government motion the statement that the system of funding must meet those objectives and that we use policy opportunities to focus on support for not only the production side but the consumption side of land management and farming. That is why we have been keen to support moves in public and private procurement to source more locally. We have also supported the establishment of more farmers’ co-operatives to ensure that smaller farming businesses can band together, reduce costs and create economic efficiencies for their businesses. That is why we were keen for the supermarket ombudsman to be established; we want a fair playing field for our farmers and stable, fair prices for consumers. All those issues have to be tied together in any future system of support.
I accept the cabinet secretary’s offer to meet Brian Pack before he embarks on the next stage of his inquiry, because we want to tease out with him the funding options that he has identified. We agree that direct payments must be retained and that we should protect farmers from not only the risks of the market but climate change challenges; however, we need to be clear about how we link together the market risk and food security agendas. We should not use direct payments in the way that Europe has done in the past and end up with too much of the wrong product, and I am keen to hear about the measures that the cabinet secretary thinks would help to shape markets. Moreover, I would like to hear about the relationship between other European countries and developing countries.
We are particularly keen to hear about the cabinet secretary’s discussions at a UK level with Hilary Benn. After all, we cannot afford to wait until we reach the end of our process and dot every i and cross every t on our perfect solution. If parallel discussions are taking place in the UK or Europe, we must ensure that Scottish objectives and concerns are fully plugged in to the UK lobbying system.
Given that 2013 is only three years away, we should find out the cabinet secretary’s views on transition policies. What are the options for bringing in new entrants now? After all, we cannot have what might be called a falling-off-the-cliff model of change. What assistance will our farmers receive to get them through the massive changes that are being promoted for 2013? The cabinet secretary mentioned options; we would like to hear more about what they are and what his views are. His speech was very light on that.
We have looked at the issue of area-based or land capability analysis, and we have some concerns. We understand about targeting limited resources, but what are the measures of transparency? We are completely unconvinced about the transparency or credibility of the current Scottish rural development programme allocation process, and we want to see how choices will be managed in future. What will the safeguards be, and what does the cabinet secretary see as the necessary trade-offs?
Will the member give way?
I will not, because I have only a minute and a half to go.
We agree that there should be no support for naked areas or slipper farmers, but how would the cabinet secretary see flood management or biodiversity, for example, in places where we do not want the land to be intensely managed or farmed for specified periods? How would that fit into the new system?
We do not disagree with the principle of a top-up fund, but how will it relate to the core funding package? It goes back to the issue of balance. What is in the core package and how do the other support mechanisms link to it? It is difficult for us to comment on that in the absence of information on the rural development funding side. The issues are inextricably linked and, if we want to incentivise best practice, and to see diversification and the creation of jobs, those issues have to be tied together. We cannot see how one set of funding arrangements can be signed off without looking at the full picture. That would miss the opportunity of taking the vital joined-up approach, which is why we want to have discussions before the next stage of the Pack report goes ahead.
The Rural Affairs and Environment Committee should become involved in the process at this point, before we get to the final stage of the report. We would rather that discussions took place across all parties than everyone getting to the end of the process and throwing up their hands and saying that they do not like it. We would like to hear more about what the cabinet secretary currently thinks.
We hope that colleagues will support our amendment and see it as strengthening the Scottish Government’s motion to ensure that we keep the policy context alive and do not develop agricultural policy in a vacuum; it must be linked into our environmental, climate change and rural development policies. We cannot develop such issues in parallel; they must be developed together. We will not solve the problems that Pack identifies if we treat them using separate measures. I hope that we hear more from the cabinet secretary about his views at this stage, as well as get the chance to influence the future debate.
I move amendment S3M-5807.4, to insert at end:
“; recognises the need for any future framework to ensure a sustainable farming sector within vibrant rural communities; acknowledges the challenges posed by climate change and food security, and calls on the Scottish Government to ensure that there is a clear focus on the supply of healthy, affordable food produced as locally as possible with good environmental stewardship”.
15:17
I begin by declaring an interest as a hill farmer whose interests are very much affected by the contents of the report and the forthcoming reform of the CAP, and by welcoming the announcement of the £3 million storm damage fund. I congratulate Brian Pack on his report and commend him on his bravery in being the messenger who is telling the industry about the probability of fundamental change and, indeed, making us all think about the support structure that is likely to be in place after 2013.
The reform of the CAP is our starting point in today’s debate, and the Government is sensible in thinking about that reform early. The interim report is about the beginning of a process that will deliver change, possibly in three to four years, or preferably over a longer time. It has certainly sparked an industry-wide debate about how future support should be delivered in Scotland, where 85 per cent of the land is classified as less favoured area. One has only to look at the massive snow cover in Scotland as we speak to get an understanding of our disadvantage, with 200-day winters being the norm. I returned from Caithness yesterday, and I recognise the difficulties and costs that are attached to peripheral agricultural production in Scotland, on the north-western tip of Europe.
The Pack report notes that Europe recognises that there will still be a need for a common agricultural policy to ensure future food production and regulate common standards in the environment, welfare, and animal health. It further notes that, notwithstanding likely reductions in European Union budgets, support will have to remain in place, and acknowledges that it will have to be more targeted than in the past. Unsurprisingly, the Scottish Government’s objectives are broadly similar and, as we move cautiously towards area-based payments, the problem becomes about how best to equitably achieve the goals within available budgets.
The Scottish Conservatives believe that future support must go to those who are actively involved in the delivery of public goods, including food production and environmental enhancement. Secondly, those new entrants who were not farming in the 2000 to 2002 reference period must be recognised and supported after 2013. If a way can reasonably be found, they should be supported before then, as Sarah Boyack suggested.
The Pack report proposes a four-part model for the delivery of future agricultural support: the continuation of direct payments; the creation and use of top-up funds; the continuation of the rural development programme; and the continuation of less favoured area support. I will deal with a couple of those headings.
First, the industry in Scotland would like the continuation of direct payments through the single farm payment for as long as possible. Although it is recognised that, ultimately, that support will have to be delivered through an area-based system, the industry wants the historical system that is based on the 2000 to 2002 reference period to continue in some shape or form for as long as possible. Of course, that is naked self-interest, but when intensive livestock producers, such as those in the south-west of Scotland, the Borders and the north-east, hear college advisers predicting that returns per hectare will fall by more than 50 per cent when we move to an area-based system, it is no wonder that alarm bells are ringing and heels are being dug in. That is why NFU Scotland and the Scottish Tenant Farmers Association—although for different reasons—are calling for the current support to be re-based on active farming. Provided that that can be achieved within the EU rules and regulations, that must at least be considered as an interim measure in tandem with the development of an area-based system.
The intensive livestock sector, which forms the backbone of Scotland’s agricultural output, cannot be put at risk unnecessarily. Every effort must be made to maintain the status quo for as long as possible and until a satisfactory area-based system can be worked out. Given the fact that only two member states out of the original 15 have moved to an area-based system, re-basing makes sense. In addition, taking a recent year as a reference year and basing support on active farming could create a reserve entitlement pool for new entrants to access. Such a refinement of the historical model, if achievable, would give the industry some breathing space.
Secondly, I understand Brian Pack’s recommendation to create a top-up fund post-2013, but we do not yet know whether the EU or the WTO would regard that as being within the rules. Although we may have to consider the use of such a fund in the longer term, a lot of work will have to be done to find an equitable way of redistributing funds through that method. My view is that, should such a fund be created, the top-up amount should be moved from pillar 1 into pillar 2 and be distributed largely through the current LFAS scheme. That would have the benefit of causing the minimum upset while focusing on maintaining and compensating for farming in disadvantaged areas. I suspect, too, that the EU would regard that more favourably. Such a mechanism for redistribution could and should be targeted appropriately to deliver not only sustainable farming and socioeconomic objectives, but continued environmental enhancement, thereby delivering several types of necessary public benefits for each pound that is spent.
Scotland has started on the journey of considering CAP reform, which is to be welcomed. The interim report has, unsurprisingly, opened a can of worms that we all knew had to be looked into sooner or later. I hope that, by adding a political dimension, today’s debate will give Brian Pack and his team further pointers on the shape of the final report that will be produced later in the year and I, too, wish him luck in the enormous task that he has undertaken on the Government’s behalf.
I move amendment S3M-5807.2, to insert at end:
“, while noting that as Scotland moves to an area-based payment scheme there will be redistribution of existing support, and therefore encourages the Scottish Government to ensure that the process of redistribution is as equitable as possible and takes particular account of the Less Favoured Areas.”
15:23
Like other members, I acknowledge the efforts of Brian Pack and his team, and I welcome him to the public gallery this afternoon. The task that the inquiry team was set was far from straightforward, although there was a general recognition back in June last year that the cabinet secretary had at least identified somebody who was more than capable of rising to the challenge. I suspect that, as John Scott implied, Brian Pack has had occasion over the past eight months or so to wonder what on earth he allowed himself to be talked into—perhaps a tough lesson that one should always be wary of ministers bearing poisoned chalices.
An easy consensus was never likely to be achieved. Indeed, that was not the purpose of the exercise, and rightly so. Brian Pack made it clear last month that he intentionally created an Aunt Sally in order to prompt further debate, which throws up the possibility of casting the cabinet secretary in the role of Worzel Gummidge. It is to be hoped that he has his thinking head on.
The cabinet secretary has suggested that the debate is intended to give Parliament an opportunity to respond to the interim findings in the Pack report and offer views. Although I feel that his offer is somewhat hamstrung by the lack of detail in some key areas, I will attempt to enter into the spirit of the minister’s invitation.
I have no difficulty with the Government motion and Liberal Democrats will also be able to support each of the amendments that have been lodged this afternoon, all of which acknowledge in different ways the wide contribution that agriculture can and must continue to make into the future. My amendment, however, seeks to make a broader point. I will try to reassure the cabinet secretary, who I know has reservations. We are busy deliberating how the cake should be divided up without assessing what size the cake should be in the first place. I am under no illusion about the pressure on agricultural budgets and indeed, on all budgets now and for the foreseeable future. The serious problems facing numerous economies in the EU at present give cause for concern and only help to reinforce the sense that cuts might be inevitable.
Notwithstanding that grim reality, we must accept that the UK as a whole, and perhaps Scotland in particular, has never been well served by the way in which funding is allocated under the CAP. That is particularly true for pillar 2 funding, on which we lag far behind most of our European partners. I am not saying that mounting a case for sustaining the CAP budget overall and direct payments in particular would be easy—there are good reasons for believing that finding allies elsewhere in Europe might be difficult—but there is a case to be made. By making that case, we would at least encourage some debate about the size of the cake that we are left trying to distribute, whether by the methods set out by Brian Pack or in some other way.
It would be helpful if the cabinet secretary would say when he winds up what work he and his officials have done or are doing to develop alternative models of how resources might be allocated at EU level. There is no doubt that such work is taking place in other national capitals throughout Europe. We need reassurance from the Scottish Government that it is undertaking a similar exercise. If it is not, we risk being left needlessly disadvantaged in the difficult negotiations ahead.
My amendment acknowledges the strong case that Brian Pack has made for on-going direct support for agriculture and food production. However, there is a general concern among the farming community, much in evidence at the excellent event in St Andrews last week, that there appears to be a serious risk of funding leaking out, potentially in significant amounts, from regions across the country. Without further detail on how the top-up fund might work, or indeed on the SRDP and LFASS, it is impossible to corroborate or accurately quantify that risk, but that does not invalidate the concerns.
Other fears have been raised, as is borne out by the briefings that we received from a wide range of stakeholders. I do not argue that moving from an historical basis for payments to one based more on area is not inevitable or even desirable. However, the NFUS is right to point out that such a system would bring with it a unique set of problems in Scotland, given our geography and reliance on livestock. I echo that sentiment, representing as I do a constituency that is heavily dependent on farming that has an excellent reputation for high-quality beef and lamb. It is hard to see how a flatter, area-based system would address Orkney’s needs, despite the fact that the local industry has responded at every turn to some of the issues that Sarah Boyack raised, such as consumer demands for higher quality and environmental and animal welfare standards. The harsh reality is that we have good-quality land, but it is a scarce resource. More pertinent, producers find themselves some distance from markets, accessible only by ferry and sometimes by more than one.
As I said in my intervention on the cabinet secretary, I am keen to see what conclusions are drawn about how LFASS rules might accommodate island status, not simply mountain regions and land types. Again, that is a case that only Scotland has an interest in building and only Scotland can be expected to build.
As the cabinet secretary highlighted, one of the most potent criticisms of the historical basis of payment is that it gives rise to so-called armchair farmers, which should be addressed. I note the argument from the NFUS and the STFA for a rebasing exercise to take place. As John Scott said, that should be considered, although I expect that, at this stage, the chances of success are limited. Certainly, any rebasing would have to be tied to strict time limits and a clear understanding of what more fundamental reforms were to follow in due course. It should not be overlooked that paying landowners for doing little or nothing is a risk that would not disappear simply by moving to an area-based system. Again, that is acknowledged by Brian Pack and his team and must be reflected in any future negotiating position.
I will touch on the short-term options identified by Brian Pack in his interim report. There have been calls by some, including RSPB Scotland, for a change to an area-based system immediately, and certainly before 2013. Although I respect its reasons for arguing that case, it is not one that I support. Nor would I support using article 68 in the ways suggested in the interim report; although the causes to which it could be put are worthy of support, I do not believe that the pain that would need to be caused would be justified by any consequent gain.
I appreciate that Brian Pack has long-held concerns about the beef calf scheme, but I urge the Government to hold fire. I think, perhaps in contrast to Sarah Boyack, that—as I said at the outset—there is a risk of Scottish ministers rushing to show their hand. This is an occasion on which the benefits of being the prime mover are not immediately obvious. Nevertheless, a balance must be struck. Ministers must ensure that the detailed preparatory work is done without boxing themselves into positions too early. In that context, I hope that I have reassured the cabinet secretary and other members, so that they will now be able to support the amendment in my name.
I again congratulate Brian Pack and wish him well in his further deliberations. Likewise, I look forward to continuing to participate in the debate on this crucial issue over the coming months.
I move amendment S3M-5807.3, to insert at end:
“; notes concerns over the possible removal of funding from active farmers and crofters; recognises, however, that the report makes a strong case for the ongoing direct support of agriculture and food production and therefore believes that the overall level of Single Farm Payment funding should be maintained, and opposes any reduction in agricultural spending through the CAP.”
15:31
I am pleased to speak in the debate on the interim report of Brian Pack’s inquiry into how support for Scottish agriculture can deliver on the key objectives for a sustainable, prosperous future for Scotland.
Agricultural support is a hugely complicated issue. Every time it is reviewed, the industry asserts that there are more losers than winners—I presume that the winners keep quiet.
I am delighted that Brian Pack is leading the inquiry. As someone who has had a close association with Aberdeen and northern marts all my life—and, in fact, never seems to be away from Thainstone these days at some event or other—I know that Brian Pack commands huge respect not only in the north-east of Scotland but all over. I have benefited from his sage advice on many an occasion.
I am sure that it is as a result of the high regard in which Brian Pack is held that the report is being given serious consideration by all those who have an interest in this field. Sitting in an audience of 250 farmers at a ring at Thainstone at the beginning of the month, I was impressed by the measured contributions from the farmers present. They are people who I know are not usually reticent and they can be raucous when it suits them.
As the cabinet secretary said, the inquiry team is holding an impressive series of meetings throughout the country. Indeed, the Rural Affairs and Environment Committee, in its consideration of the Crofting Reform (Scotland) Bill, and his team seem to be following each other around the country, as we have visited Benbecula and Stornoway, where his team are still to have meetings, and this week and next the committee is visiting Thurso and Shetland, where Brian Pack and his team have already been. He is getting a great feel for the life and work of a politician—I wonder whether he has caught the bug.
I welcome the fact that, as Sarah Boyack said, the review recognises that agriculture has a pivotal role in tackling the challenges of food security, water supply, energy supply, climate change and protecting biodiversity and that the beautiful countryside of Scotland is largely due to the sound land management of crofters, farmers, foresters and all the others who are involved in working the land. We must recognise that certain things that are done already contribute to sustainability and the mitigation of climate change—even just grazing the land soaks up the carbon.
Everyone knows that the common agricultural policy is up for review and Scottish agriculture is only one of the many voices that will be trying to influence the policy makers in Brussels. The CAP currently accounts for 41 per cent of the total EU budget, although it is falling and is likely to fall further as there are more pressures on the budget. When 10 new members joined the EU in 2004 and another two joined in 2007, it brought an additional 7 million farmers and increased the area of agricultural land in the EU by 40 per cent, so the pressure on the EU budget is great.
It is important that our negotiators from Scotland speak with one voice in Brussels. Farmers who have approached me hope that the issue does not become an election football in the elections this year and next. In that respect, I am pleased by the consensual nature of most of the amendments for the debate.
I was disappointed that union leaders did not agree last year to top-slicing to help with short-term changes to address immediate problems in our agriculture. I am therefore pleased that the inquiry team regards the top-up fund as a sensible way forward. It will of course mean reduced area payments, so we must take account of the serious concerns of people such as cereal farmers. We must also ensure that reduced area payments do not mean inflated rents for tenant farmers. I urge the Pack team to consider putting a cap on the total amount that can be paid out to individual farmers, estates, farming organisations and landlords in order to encourage them to let their land rather than take it into their home business.
Would that be a cap on payment per hectare or per holding?
I was going to say something about the hectare payment. Together with the use of top-slicing, that could go a long way to providing opportunities for new entrants. Top-up and a graded system of agricultural payments, dependent on the type of land, would help to promote the sustainability of sheep and cattle in marginal land and even out the volatility to which farmers are subject through market prices.
I am glad to see that slipper farmers will be no more because of the new basing in 2009 that has been recommended and welcomed by the STFA. The interim report provides a sound basis for further discussion. Most farmers want everybody to look at opportunities to secure the long-term future rather than focus on the threats to vested interests. Farmers have always been flexible and have adapted to changing circumstances. With the Pack inquiry, they have a fantastic opportunity to influence change, and I hope that they do so with relish.
15:37
First, I apologise to members, as I may have to leave before the debate concludes or may be in and out of the chamber during the debate as I try to sort out transport arrangements that are affected by the weather.
The Pack inquiry is clearly a very important piece of work, and its emerging conclusions are already proving controversial for many who see their particular interests potentially threatened by what might come about. I am very conscious of the immense complexity and interactions of the different forms of payment. The objective of the Pack report is obviously to have planned consequences from whatever emerges, but the danger is the unintended consequences. That is why the consultation phase is particularly important, because it will flush out the arguments and assess what the alternatives will be. As others have said, there is still a long way to go in the debate.
I speak from a Highlands and Islands perspective. The most marginal and least productive land is probably all in the Highlands and Islands, which holds the largest part of the less favoured areas. However, the area is also a key part of national sheep meat production and cattle production. It is also a key part of the stewarding of our national natural environment in vital habitat protection and delivering in biodiversity. It is also characterised by population sparsity, and it still has a fragile rural economy. In many places, it is still threatened by population decline. In recent times, we have witnessed significant declines in sheep and cattle numbers, although recent price recovery might stop that trend. The falls in sheep and cattle numbers also threaten the vital infrastructure that supports agriculture: transport, feedstuff suppliers, agricultural engineering and the like. That in turn brings further threat to population in these areas.
As I have said, many crofters and farmers see many threats in the emerging Pack report thinking. For example, they see threats from the area payments, with hard-to-achieve minimum stocking densities, and implications from the strong focus on food production for the least productive land area. That is why it is vital that we get the national objectives clear and right. The objectives need to accommodate the particular needs of the Highlands and Islands and the aspirations of the area to contribute more to the national objectives. Those objectives need to be much broader than just agricultural production; they must include wider rural development and the securing of public goods.
Pack’s interim report highlights the need for clear objectives, so let me dwell on those for a minute. Future support regimes can and must deliver a wide range of public goods. In the Highlands and Islands context, the national objective of greater food production to deliver greater food security for the nation means that the Highlands and Islands area needs to be enabled to play its full part in that process. The objectives should also be about building stronger local food markets for environment, tourism and local-value-added reasons. They should also be about managing land in such a way that it contributes to climate change mitigation and increases biodiversity, so that, for example, there is compensation for the loss of set aside. They should be about managing land for its landscape value as a wider part of tourism and domestic leisure strategies.
The national objectives should also be about bringing new entrants and new ideas into land management and food production. They should be about helping to sustain local and rural infrastructure for other industries, such as leisure, tourism, renewables and education. The objectives should be about helping to diversify the rural economy by providing other earning opportunities for people in rural communities. The objectives should be explicitly about securing vibrant sustainable rural communities and should explicitly mention population retention. In that regard, before the Pack inquiry issues its final report, it would do well to reflect on the Royal Society of Edinburgh’s worthwhile recent report on those and other matters.
The policy mechanisms need to ensure a good and fair distribution of resources into the rural economy. In that regard, I believe that direct payments to crofters, farmers and other land managers are an effective form of distribution that will remain a vital part of policy well into the future. For me, the Pack inquiry’s interim report is strong on that point while also emphasising food production as a core objective. However, I want the inquiry’s final report to be much stronger on the need for environmental stewardship, securing biodiversity and managing landscape and habitats. I also want the final report to be much stronger on the need to retain the human population in remote areas.
The interim Pack report suggests four different streams of support. As usual, the devil is in the detail. For example, different balances of funding among those four streams of support will result in different outcomes being achieved. As I have said, I support the continuation of direct payments. I note that Pack says strongly—and I think that this must be right—that we need to move away from historical payments as the basis for those. However, moving to area-based payments will not be without its own challenges. I can see the logic for minimum stocking levels to address the weaknesses that existed in previous area-based systems and to reduce the prospect of slipper farmers, but it will be much more challenging for those on more marginal land and for crofters with extensive common grazings to meet the proposed levels than it will be for those who are on better land. The tenanted farming sector believes that, depending on the level at which they are set, area payments might also have implications for the release of land for tenancies and for new entrants.
I can see the logic of having a top-up fund, but it also poses difficulties—I concur with what Liam McArthur said about article 68. Many questions need to be answered about that.
The interim report proposes that we should continue with the SRDP, which is an important mechanism for securing public goods. However, the report is disappointingly light on details.
The Pack report will feed into the discussions on the less favoured area support scheme, but Pack is limited on what he can say about LFASS because of considerations that are going on elsewhere. I hope that the cabinet secretary can say what he will do to ensure that we dovetail the outcomes of the LFASS debate into the wider debate on agriculture support so that we have a whole picture of what is happening.
I see that the Presiding Officer is frowning at me, so I will sit down at that point.
15:43
The future of farming, including crofting, is crucial not just for Scotland’s rural areas but for the nation as a whole. Agriculture has a pivotal role to play in tackling the challenges of food security, water supply, energy supply and climate change and in protecting biodiversity. That is why the Pack inquiry into future support for agriculture in Scotland is so important. Mr Pack is to be congratulated on giving us plenty of food for thought.
As we move down that road, there is a heartening sense of optimism in the farming and crofting industry, which was elucidated by NFU Scotland’s president, Jim McLaren, as he entered his final year in post. In his keynote address to the union’s annual general meeting in St Andrews last week, he highlighted the considerable progress that has been made in key policy areas over the past 12 months, which has given him a sense of optimism both about NFU Scotland as an organisation and about agriculture as an industry.
That is a good starting point for the debate, and it shows that after just three years of Scottish National Party government, things are very much moving in the right direction for our agricultural communities.
I do not want to break the political consensus, but it is a pity that we have to go through Westminster to influence the EU. Of course, the solution to that problem was announced this morning, and I encourage all members to support our referendum bill, so that we can properly champion our farming and crofting communities in our rightful place at the top table in Brussels.
The Pack report is an interim report that has sparked much discussion, but I think that everyone will agree with its conclusion that there is an on-going need for direct payments to farmers and crofters to provide some financial stability against a background of market volatility, and to compensate them for the increased costs that stem from regulation.
Although I am sure that not all will agree that deer farming should be included as active farming, because that would further dilute the money that is available to be paid out, I think that deer farmers have a legitimate claim for support, provided that the definition of deer farming is drawn tightly, so that wild deer are not included. That proposal should be looked at closely.
There appears to be strong support for the report’s conclusion that any future direct support system should include an activity requirement, so that people who collect payments for, in effect, doing nothing are taken out of the system. However, the proposed solution of having a minimum stocking rate needs to be given careful consideration, in case it has unintended consequences for farmers on sparse, marginal land, particularly in the north and west Highlands.
Another area of major concern is the effect that the proposed area-based system could have on tenant farmers. Angus McCall, who is chairman of the Tenant Farmers Association of Scotland, has gone as far as to say that the proposal to move towards area-based payments could sound the death knell for tenant farming in Scotland, and I have a great deal of sympathy for his position.
Mr McCall maintains that the proposed level of area-based support will act as a direct disincentive to landowners to rent out land. He believes that the area payment that is illustrated in the report is set too high at £130 a hectare. To illustrate the point, he gives an example of a 240-hectare upland farm that supports 150 suckler cows and 300 ewes, and which employs one man. It will require to stock only 24 cows and 150 ewes to satisfy the minimum stocking density needed and draw in the basic area payment of £130 a hectare.
That compares extremely unfavourably, from the landlord’s point of view, with rental levels of just £86 to £100 a hectare, not to mention the associated costs of providing and maintaining suitable buildings, fences and so on for a new let.
Mr McCall believes that rather than rent out land, landowners will prefer to carry out minimum activity and use short-term grazing or contract farming arrangements, and that that will have an impact on the existing tenanted sector, as tenants come under increasing pressure to quit their farms. He believes that the solution to the problem would be to set the area-based support at 10 per cent of the average single farm payment, according to land grading, which would give about £20 to £25 a hectare on arable and grazing land, with the balance of the SFP being made up through a dynamic top-up payment, according to the level of activity that was taking place on the land, which he thinks must reside with the tenant and not the landlord. I believe that his views warrant serious consideration.
Change is never easy and a sudden massive change is even more difficult, so we must be extremely careful about how the proposals are implemented. A smooth transitional phase over a few years is an attractive proposition and should be considered as a way of minimising disruption for agricultural businesses. I am sure that all those points and many others will be considered fully by Mr Pack and the minister, and I look forward to Mr Pack’s final report, which will be published later this year.
15:49
I welcome the debate. It is right that we think about what happens after 2013. Subsidies have protected our farmers and crofters to the point at which they are now dependent on them. They have skewed the industry’s direction, and in many cases that has been detrimental.
It was not so long ago that overgrazing was a big problem in the upland areas of Scotland, because of the headage payment. Then, the LFASS was moved to an area-based payment, which gave big landlords money for nothing, whereas those in need received even less. Then came the single farm payment, which was based on historical payments—and stocking levels have collapsed in the Highlands and Islands. Tinkering with the system and trying to make it easy for bureaucrats to administer simply does not work. I am concerned that Brian Pack talks about a simplified system. We need simplified systems for the people who farm, but we also need to ensure that the systems are complex enough not to skew the direction of farming.
Back when single farm payments were first discussed, they were linked to single farm contracts. My understanding of the thinking behind that at the time was that people would be able to change the way in which they farmed, moving away from maximising headage to attract subsidy. However, the simple decoupling has led to a huge decline in stocking levels, which has now reached such a point that the knock-on effects will be hard to deal with or redress.
Rural communities are interdependent. One job lost on a farm or croft means that one family will lack spending power in the local shops. They might even need to move away, leaving the school roll too small to sustain. How do local auction marts work without throughput? How will the supply chain work, at a time when we are trying to promote local food? We need local slaughter facilities, but those will be much more difficult to pursue when numbers fall. The situation not only affects the viability of fragile rural communities, but has the same catastrophic effect on our environment that overgrazing had. When communities are no longer viable, who will look after the environment?
We must ensure that whatever scheme is put in place is underpinned by public money for public goods. To my mind, there are a number of public goods that could underpin a scheme: food production, environmental benefit, climate change targets, the creation of sustainable rural communities and job creation. For any scheme, capping must be determined in line with the number of jobs that are provided. Ultimately, people need livelihoods, and the industry must be economically viable. It needs to be based on quality and environmental sensitivity.
Had single farm payments been married with single farm contracts, which can take public goods into account, they could have worked. Challenges arise when the bureaucrats cannot cope. Individual single farm contracts would need to be drawn up, taking into account the land and the circumstances of each unit. The overall public goods provided—such as environmental benefits and food production—must also be gauged.
Our farming industry is interdependent, too. Those who farm the poorest-quality ground in fragile rural areas are at the mercy of those who buy and finish their stock, as they are unable to finish the stock themselves. That means that upland farmers need to co-exist with a stable lowland farming industry, but it does not mean that both should be treated in the same way, as they face different challenges. It is wrong that 85 per cent of Scotland’s land is graded as less favoured. The support must go to those who farm and croft in areas where doing so would otherwise be unviable. We need farming in those areas to provide local food and environmental and social benefits. Those are public goods, and they must be paid for if we wish to protect those areas.
The supply chain is too long to make farmers and crofters in the most fragile areas market orientated. Only by helping them to provide for local or specialist markets will the supply chain be shortened. We need public bodies to purchase locally to make that work.
The Parliament is scrutinising the Crofting Reform (Scotland) Bill, which, in my opinion, does nothing at all to help crofting. What will save crofting is ensuring that the schemes that are in place now provide support to crofters and their communities. The bill piles on further costs through bureaucracy while doing nothing to make crofting more viable. To make all agriculture in fragile areas work, we must consider all schemes in the round, agree on what we want from them and then draw up complementary schemes, along with an overarching policy for rural areas. Farming and crofting form but one element of the rural economy, and policies in other areas should not adversely affect what we are trying to do in agriculture.
We also need understanding in Edinburgh of the restrictions in rural communities. The idea that applications for funding should be made online, when the areas that are most in need of funding have no broadband, is bizarre. Such a suggestion shows an extreme lack of knowledge and understanding of the areas concerned. If we are to get over that lack of knowledge, we must ensure that rural policy decision makers are rooted in their communities and are not just faceless urban bureaucrats.
15:55
I very much welcome this debate and the interim report, which raises important issues. I am pleased by the focus on food security, water supply, energy supply, climate change and protecting biodiversity. Peter Peacock and Rhoda Grant referred to public goods. Agriculture is not simply about food production, and, as the interim report says, we are likely to ask more and more of the sector in the near future.
I think that we all agree that the current support structure contains many serious flaws, one of which is the way in which the structure has often encouraged and rewarded environmentally unsound practices that have caused severe damage through biodiversity loss. It does not have to be that way. Agriculture can and must be part of the solution.
I lodged an amendment to the cabinet secretary’s motion, which called on the Parliament to acknowledge
“the many environmental benefits that sustainable agriculture can deliver”,
especially in the context of
“tackling climate change and increasing biodiversity”.
The cabinet secretary need only look through the report that the UK Committee on Climate Change issued yesterday to see how reliant we are on the agriculture sector to help us to meet our climate change targets. Sarah Boyack said that at least a third of our greenhouse gas emissions come from agriculture and food production. Globally, if we planted trees on land that is currently used to grow unnecessary surplus and wasted food, we would offset a theoretical maximum of 100 per cent of man-made greenhouse gas emissions. In Scotland, we have 17 per cent forest cover, on the most recent measure, and I am sure that the proportion is moving towards 25 per cent, but there is room for at least 40 per cent forest cover.
Will the member give way?
No, I am sorry.
There is huge potential in Scotland, but public goods will not simply follow from the restructuring of support for food production. Future support mechanisms will have to be structured in a way that requires and encourages our farmers to take account of wider societal demands and rewards them for doing so.
Much of the rhetoric in the interim report, especially the first half, seems to acknowledge that, but I have grave concerns that the currently proposed approaches might not deliver. The approach in the interim report still relies too heavily on direct payments. The three other funding streams—the top-up fund, the rural development fund and the less favoured area support scheme—hold the keys to a more sustainable framework of financial support, but the report contains far too little detail on how they will work in practice. I would also like specific mention to be made of the support that organic farmers and producers require—I should have mentioned my membership of the Soil Association. We need a vision of low-impact farming in 2050. We need to know what that will look like.
A crucial aspect is the role of the supermarket in the supply chain. Part of the reason why our farmers need financial support is that they are not paid a realistic price for their commodities. We must achieve greater equity between what the farmer is paid and what the consumer is eventually charged. Because of the ridiculously strict cosmetic standards that supermarkets impose, some 20 to 40 per cent of all UK food and veg is rejected before it even reaches the shops—but we do not have a measure of that. We also know that between 20 and 30 per cent of the food that we buy ends up in skips for one reason or another, much of it still in plastic wrappers, which is another cruel waste of resources.
Although food security is clearly a challenge that we must address, it is not simply a question of producing more. Around 4 million people in the UK suffer from food poverty, but the bread and other cereal products that are thrown away by UK households alone would be enough to lift 30 million of the world’s hungry people out of malnourishment.
The answer is not to continue funding in a way that simply encourages increasing levels of food production.
Will the member give way?
I am sorry, but I am approaching my last minute.
We need to be smarter about how we produce, market, store and use food. Future support must discourage wasteful and environmentally damaging practices while encouraging sustainable, local and equitable use of our agricultural land. The supports must be designed to complement and enhance biodiversity and climate change policies. They must also be specifically constructed so as not to undermine policies on climate change and biodiversity.
16:01
I refer members to my agricultural interests in the register of members’ interests.
As a Highlands and Islands MSP, I am pleased to be able to speak in the debate, which is incredibly important for crofters and farmers in my region. Achieving the most appropriate future agricultural support system from 2013-14 is crucial not only for farmers and crofters but for businesses in some of the most remote and fragile rural and island communities in Europe.
Agricultural subsidy is enormously important for three reasons. First, it is important for the industry itself, all those it employs and the subsidiary industries that go with it. Secondly, it is important for the social angle, where it plays an important role in supporting remote rural communities. Thirdly, it is important for the distribution of public goods regarding the environment and our scenic, natural and wildlife heritage.
Like other members, I put on record my thanks to Brian Pack and his team for generating much debate within the farming community. It is long overdue. A review of the cross-compliance rules for farmers and crofters is also long overdue. A draft report that I have seen from the European Parliament’s Committee on Agriculture and Rural Development suggests that the basic aim of cross-compliance inspections should be to advise farmers and put them on the right track to better meet legislative requirements. The draft report calls for only those who continuously infringe and show reluctance to adhere to those requirements to be punished. It also calls for simplification of the cross-compliance rules and for a telephone helpline for farmers to be set up in each member state.
I mention that because farmers have become fearful of breaking rules that they do not fully understand, and the gap between the farming community and the Scottish Government inspectors has unfortunately widened. Those barriers impede progress. When I was a young farmer in the 1970s, the culture in the agriculture department was to advise rather than restrict. Let us hope that a simplification and clarification of the CAP will bring with it a simplification and clarification of the cross-compliance rules, which will instil a better relationship between Scottish Government officials and working farmers. Recent enforcements, such as those on electronic identification, have left farmers terrified of losing their single farm payments through no fault of their own.
The Scottish Conservatives are pleased that Brian Pack’s report has generated debate. Future support for our crofting and farming sector through direct payment is vital, both for food security—a subject that my friend John Scott has worked effectively to highlight in recent years—and for encouraging a vibrant, working countryside with all the environmental benefits that go with it.
Such support is especially important in the peripheral areas of our country, where distances from market, transport costs, land quality and the small-scale nature of many enterprises mean that conditions are even more challenging, not least when markets are volatile and regulations are ever increasing. The single farm payment is simply the bedrock upon which many of the farms and crofts in my region base their continued survival. That must not be forgotten, and I am sure that Brian Pack will not forget it.
Any move towards an area-based single farm payment as suggested by Brian Pack needs to achieve an incredibly challenging balance between supporting new entrants, reversing the decline in stock numbers on our hills and not unduly penalising producers in the most densely stocked parts of the country—or, for that matter, the most sparsely stocked areas.
That will be no easy task. For that reason, it is necessary that we have a transition period after 2013 that is as long as possible so that future plans can be properly laid and thought out as we move to a clear and simple CAP solution that is understood by farmers and appreciated by the public. The status quo may not be perfect, but it has sufficed, and 2014 may be too early for a change to the area-based payment.
The Scottish Rural Property and Business Association has stated that a
“blanket flat rate payment per hectare would not be any fairer than the current historic system”.
Therefore, Brian Pack’s suggestion about an activity requirement, which would require producers on pasture land to maintain stocking density, seems to be a solution that merits support, although it will take much negotiation to get the details right, and achieving consensus will be hard. In the report, Pack suggested a minimum of 0.8 livestock units per hectare, but he went on to suggest a limit of 0.12 units, under the Macaulay land capability for agriculture classification for inactivity. Will the minister clarify which rate he thinks is right? Too high a stocking rate will be difficult for some areas in the Highlands and Islands.
Much work will also have to be done on the top-up fund, which, it is suggested, will replace current special provisions through article 68. I am in favour of that, but I do not have much confidence that it will happen, because I do not think that it will be politically acceptable. In the UK, the agreement of three other regions will be required, and I wonder whether that will happen.
I am pleased that the report recognises the strong support that exists for the LFASS and its importance to Scotland. The LFASS is crucial to my region, and the European Union rightly remains keen to prevent land abandonment through the LFASS mechanism, although it is likely to become more strictly defined and auditable.
16:07
With all European budgets under pressure, there is little doubt that the common agriculture policy will have to change. As members have said, the CAP comprises 41 per cent of Europe’s budget, so it is obvious that it cannot be immune to change and scrutiny. Brian Pack’s report is therefore an extremely welcome contribution to the debate about how to direct and cope with changes in the years to come.
As Brian Pack does, I make the case unashamedly that we must in the future continue to offer some sort of European assistance to agriculture. A host of reasons, which members have mentioned, can reasonably be given for such investment. The environmental and social reasons in Scotland include the need to avoid land abandonment, the need to develop our agriculture to cope with our own food needs, and the need to cut down on our food miles. If, for instance, the landscape of my constituency had not been grazed, it would have been almost entirely abandoned many decades ago, not just by its native bird species, but by its human population.
It is not fashionable to make the case for subsidies: perhaps the harshest criticism of agricultural subsidies has come from international aid agencies, which point to the advantage that the CAP arguably gives to some wealthy European farmers over small farmers in developing nations. However, there is probably more common ground to be found on that than is thought, at least if we take the perspective of Scotland’s hill farmers and crofters, to whom the imbalance in how European moneys are distributed remains a source of continuing unhappiness. I do not wish to enter a dispute with Scotland’s wealthier arable landowners, but it must be said that crofters and hill farmers look with surprise at the levels of support that a relatively small number of Scotland’s farmers receive under the system that Europe operates.
For that reason, I will concentrate on elements of the Pack inquiry interim report that consider less favoured area status. As members would expect, the recommendations relating to that most interest my constituents. I urge all crofters and farmers in the Highlands and Islands to engage in the consultation on the report before the closing date. One instance of the unease that hill farmers and crofters feel about the present system is understood when we look at the map of less favoured areas in Scotland. On one level, we should be pleased by the recognition of Scotland’s terrain. Apart from one or two small pockets, the only land that is not under less favoured area status is a relatively thin coastal strip from the Black Isle to Berwickshire. The remaining bulk of Scotland’s land is classed as less favoured, with virtually all of it earning the severely disadvantaged, rather than the disadvantaged, classification.
As ever, I appreciate the risks of special pleading and I understand that there is a limit to the number of classifications that we can have, but it strikes me that the agricultural disadvantages that are faced in places such as Wester Ross or Harris are of an entirely different magnitude from those that are faced in West Lothian or East Ayrshire, but all those places currently have the same classification. I say that not to diminish the needs of agriculture in lowland Scotland, but to point to the dramatically different travel costs, distances to markets and fuel prices, and the sheer physical difficulty of the landscape in many remoter parts of the country. I believe that those issues will emerge in the consultation. I believe also that Pack’s analysis of the situation is fair.
The system of historic payments, through which, as others have said, payments are in some cases based on what land was used for 10 years ago, will not be tolerated for much longer. Agriculture that, shall we say, reaps where it does not sow will not enjoy public support. I welcome the Scottish Government’s evident determination to fight Scotland’s corner in Europe to ensure that the future shape of the single farm payment reflects Scotland’s needs. I am happy that the Government recognises the importance of the relationship between the single farm payment and the LFASS.
Farmers and crofters in Scotland are conscious of the risks that are posed by the likely decline of the single farm payment budget after 2013. There is a growing understanding that historic payments will not be around for ever. The options that are set out in Brian Pack’s interim report are not without controversy. They are based on a four-strand option: area-based direct payments, a top-up fund, SRDP funding and less favoured area funding in some shape or form. The interim report’s suggestions on how a top-up fund could be spent will doubtless attract debate. However, the fact that reviews of the SRDP and LFASS are taking place in another context does not mean that they can be divorced entirely from the debate.
Brian Pack’s interim report has sparked a necessary and valuable debate and I look forward to it developing further in a way that sets out clearer solutions to the problems that he has so perceptively diagnosed.
16:12
I draw members’ attention to my entry in the register of members’ interests. I thank Brian Pack and his colleagues for a courageous and very necessary interim report. John Scott referred to the issues as
“a can of worms that we knew had to be looked into”,
which was a pretty apt description.
I associate myself with what the cabinet secretary said about the good news, particularly on lamb and beef. He also acknowledged some of the problems that our cereal producers face. However, that good news is set against the railway train that is coming straight at us in 2013 and the reform of the policy.
My remarks will be broad, but I regard the debate as a broad one, as was reflected in the tone of Sarah Boyack’s speech. We have heard a great deal of expert comment on the detail of what might lie before us and the issues that we must tackle when reform is upon us, but I want to carry out almost an audit of the mechanisms that we already have. The questions about what we have already and what will happen in the future go somewhat wider than the issue of payments of EU funding, but that is an issue for ministers when they come to consider the interim report and the report that will be produced later.
I am keenly aware of the variety of agriculture in the large constituency that I represent. That variety reflects the nature of the land and what can be done with it. It is no accident that, historically, barley was exported from Easter Ross and the Black Isle, because some of the best barley can be grown there. That is why malting barley is grown there today. It is also no accident that seed potatoes are still grown in Easter Ross, as well as in other parts of Scotland, as they are relatively disease free and make for good seeds for other parts of the country.
The interest that I declared earlier involves my small number of shares—which deliver no dividend—in a family cheese-making business. It has been some years since I talked about this topic, so I think that some forbearance on the part of fellow members might be expected.
The quality of the milk from which one makes cheese dictates the nature of that cheese. Therefore, my family business is very much associated with the local source of the milk that it uses. I was brought up on a small dairy farm, but the situation in Scotland is very different from how it was when I was a child, as there are now only two dairy farms in my entire constituency, both of which are in Caithness. In John Farquhar Munro’s constituency, there is only one. There has been a flight from dairying, which I find concerning because Caithness and other parts of Britain grow extremely good grass, which is ideal for milk production. There is something grotesque about seeing a milk tanker coming up the A9—it would be lucky if it could manage it tonight, of course—when we could be producing milk ourselves. That is an issue for the minister to bear in mind when he considers the Pack report. I recognise, however, that it is a difficult issue.
What happens in other parts of agriculture impacts on what the minister can and cannot do with European Union funding. The funding for Highlands and Islands Enterprise is crucial because that agency can help in diversification and in adding value to farm products. However, if it is unable to fund that work as effectively as it has done in the past, the best efforts and intentions of the minister will be hindered, as will the intentions behind the EU funding.
Rhoda Grant mentioned the importance of our auction marts. Unfortunately, Dingwall and Highland Marts Ltd has received notice of revaluation of its annual rates from £66,000 to £105,000. Despite the best efforts of Brian Pack and the minister, if the only full-time mart north of Stirling goes down, what we are trying to do via EU funding will be completely undermined.
We must consider the whole of the farming sector and put the final report from Brian Pack in that context, as the issues cut across departments. I think that I am pushing at an open door with regard to the minister’s views on these matters, but there will have to be co-ordination with other ministers if we are to maximise the impact and the potential of EU funding in the future.
16:18
The Pack inquiry’s interim report rightly recognises the role of agriculture in providing solutions to global challenges such as food security, the need to tackle climate change, the mitigation of extreme events such as flooding, the need to provide sources of renewable energy and the need to enhance biodiversity; it has already been recognised that the goal to stop the loss of biodiversity across Europe by 2010 will not be achieved.
Agriculture is entitled to public financial support for a number of reasons. EU legislation imposes burdens on farming—generally for good reasons, such as animal welfare or environmental sustainability—which increase costs to the producers. Subsidies should promote the production of healthy, environmentally sustainable, locally produced food and, hopefully, should reduce costs to the consumer.
Agriculture delivers public benefits in addition to healthy local food. It contributes to the economy nationally and locally in rural areas, it sustains the economies of some remote rural areas and it is essential to managing the countryside in an environmentally sustainable manner. The decline in numbers of sheep and cattle on Scotland’s uplands, for example, has seriously compromised some valuable but fragile habitats.
There is general agreement that the current basis for direct support is well out of date. It is based, of course, on the annual average payments to each farm between 2000 and 2003 and—as others have said—it has continued to provide subsidy for some land that is no longer producing. In considering how to move on from that model of support, difficult choices will need to be made regarding priorities, some of which have already been flagged up.
The interim report suggests that there will be an on-going need for direct payments in Scotland—a conclusion with which I fully agree. The report further argues that an area-based system of direct subsidy should be developed post 2013, with a top-up fund to support practices that improve competitiveness and sustainability, and a continuation of the SRPD and LFASS.
The definition of the type of land that qualifies for the LFASS may well change as a result of discussions elsewhere, but it is debatable—as others have suggested—that 85 per cent of Scottish agricultural areas would qualify for the LFASS, which would suggest that it is perhaps too blunt an instrument.
I would be interested to hear how Brian Pack and other stakeholders respond to the suggestion from some environmental non-governmental organisations that the LFASS should be replaced with a high nature-value payment. I am not quite sure how those organisations envisage such a system operating, but that will be an interesting discussion.
The report contains an example of a possible area-based system for direct payments, which is based on the Macaulay land capability for agriculture classification, annual qualifying requirements of good agricultural and environmental condition and minimum cultivation and stocking rates. That example is included
“as a basis for discussion only”,
but, as John Scott said, it has opened a can of worms that has, to a certain extent, obscured some of the other content in the report.
There is discussion on how the top-up fund could be used in addition to the rural development programme as—in the meantime—a redirected pillar 1 fund supplementary to direct payments; for example, to provide transitional support while sectors adjust to area-based payments.
There seems to be general support for the idea of area-based payments, but there are a number of areas of disagreement with regard to how and when such a system should be achieved. NFUS would prefer the updating of the historic model in the short term, and a more gradual transition to an area-based system. The Scottish Tenant Farmers Association is concerned that an area-based system with a high base payment would discourage the letting of land, and suggests that payments should be no more than 10 per cent of the average SFP, with top-up payments linked to a rebasing of the historical payment, which the association argues should be given to the producer rather than the landowner. RSPB Scotland, however, would like progress towards area-based payments to start as soon as possible, rather than being left until after 2013.
It is rather disappointing that, although the section on meeting Scotland’s objectives links agriculture to several environmental objectives including climate change policy, land use strategy, water supply, biodiversity, flood risk management and renewable energy production, there is little discussion of funding support for those benefits in the interim report.
In contrast to the detail of a possible mechanism for direct support, there is little discussion on the future of other funding streams. The rural development programme is envisaged as continuing to be the
“prime delivery mechanism for public good benefits from agriculture”,
and there is a suggestion that in the future, all the funds that are currently modulated from Scotland’s pillar 1 payments should be redirected to the SRDP. However, there is little discussion about its possible shape. I understand that that may be fleshed out in the final report, but we need further discussion on it, as we need it on improving cross-compliance and on how the environmental challenges that face Scottish agriculture might best be tackled.
Today’s debate is part of the consultation, which closes on 5 March. I suggest that we further consider how agriculture is supported in the round in its contribution to public benefit. The report is currently a bit asymmetric. The principal purpose of agriculture must be the production
“of healthy, affordable food produced as locally as possible”,
as our amendment states.
There is a clear case for supporting efficient and productive agriculture, provided that it is environmentally sustainable, and every effort should be made to reduce its carbon footprint as much as possible. There is also, as others have said, a strong case for supporting agriculture where it sustains remote communities and rewards farmers and crofters for good management of ecosystems.
I urge that in future considerations with stakeholders, some of the areas that have been less considered and less fully debated in the interim report should move to centre stage so that we get a fuller view of the totality of support for agriculture in the future.
16:24
I am delighted to take part in the debate. It is important not only that we recognise how valuable Brian Pack’s work has been so far, but that we acknowledge the other imperatives that impinge on the issue as we move forward, not least, as has been mentioned earlier in the debate, the report by the UK Committee on Climate Change—”Scotland’s path to a low-carbon economy”. We will somehow have to take account of the rural aspects of that report in the support payments that come out at the end of the debates. I want to point out what those aspects are.
On emissions reduction potential, the report includes, under “agriculture, land use and waste”, which it states are relatively more important to Scotland than they are to the rest of the UK,
“Changed farming practices and use of new technology on farms to reduce emissions (in particular improved resource efficiency to reduce N2O from fertiliser use, improved feed conversion for livestock to reduce CH4 emissions and increased take-up of anaerobic digestion)”.
It also includes increased afforestation and changed waste management and collection processes with the aim of having
“emissions reductions of the order up to 8 MtCO2e in 2020.”
The report also suggests that the levers for unlocking the emissions reduction potential in agriculture are to
“Provide support for farmers to improve resource efficiency, including advisory services and voluntary agreements, with the option to extend instruments currently aimed at reducing other nitrate pollutants (but also relevant for N2O)”
and to
“Provide support for increased woodland cover and improved forest management.”
Those have all been contentious issues in farmers’ responses to Brian Pack’s inquiry so far, but they must be taken into account in the development of sustainable policies.
Others have mentioned that food sovereignty and food security are issues that impact on Scottish farming. We must reduce our reliance on imported animal feed and instead substitute local alternatives. I would like to see farmers showing more enthusiasm for crop rotation, projects such as the green pig project—although that is outside the current support systems—and nitrogen fixing crops. We must consider what effect imported food is having, such as soya on the pampas of Argentina and so on. It cannot go on. Consideration of how our farmers provide the feed for our animals must be part of the solution, as well.
The greenhouse gas mitigation issues for farmers and crofters, which are also mentioned in the UK Climate Change Committee’s report, can be taken forward through, for example, a moderated form of the Maitland Mackie proposals. Far more farmers could be producing their own renewable energy and could gain more income from that. We should consider their ability to do that in relation to the point about subsidies.
Maitland Mackie argued that producing renewable energy could provide more income than the subsidies would. I am not suggesting that it is an easy change to get from the current position to there, but we will start feed-in tariffs for renewable energy production from domestic and community sources on 1 April, and in the interest of supporting the delivery of answers through Brian Pack’s inquiry, I suggest that we have to get farmers doing such things, which fit the climate change agenda.
On environmental goods with regard to woodlands and how less favoured area support scheme payments are made, it is essential to ensure that people get a fair return. Graded land use can work to some extent in that respect, but we also need to pay special attention to island needs.
I turn to the tenant farming sector, which has been mentioned several times. We cannot have a system in which land is taken out of agriculture by landowners. If a third of our farms are still in tenancies and people who are trying to get started want tenancies, we have to find ways to allow that, otherwise we will have to revisit the land reform legislation and reconsider the issues. As crofters have a right to buy, it might be necessary—unless something is sorted out quickly in the next session of Parliament, or even sooner—to give tenant farmers more rights so that they can produce with some certainty in the future.
The other issue that might inhibit success is the current attitude of the banks. The fact that they are lending on swingeing terms is a huge inhibitor to investment in farming. Indeed, it takes the definition of usury to new heights. Banks are demanding pounds of human flesh—not pounds of sheep flesh or beef—from farmers for their money. Unless we are able to take a cross-cutting approach to supporting farmers in the ways that I have suggested, Brian Pack will not succeed. We wish him every success and look forward to dealing with the details of his report, but the fact is that these areas cannot be ignored.
Thank you. This is one of these debates in which I am horribly tempted to call myself, but I had better not. I will stick with convention.
16:30
I hope, then, that I can speak for you, Presiding Officer. First, though, I declare a farming interest.
We have had a good debate on an important issue for Scotland as a whole and agriculture in particular. As many members have noted, agriculture is a most important industry for our nation and we rely on it for our milk, meat, vegetables and, of course, that important ingredient, whisky, to which Jamie Stone referred and which is grown in many parts of the north and south of Scotland.
Not only is agriculture important for feeding ourselves, it has many environmental spin-off benefits. Thanks to much good practice, agriculture is, as Robin Harper pointed out, in a prime position to help us to tackle climate change and to promote food security in an ever-growing world.
The CAP budget has recently decreased, but some have even questioned whether such support, which, as Alasdair Allan pointed out, makes up 40 per cent of the EU budget, should be available at all. It is no surprise that the budget is so large, but I point out that each person in the EU pays only €80 per capita per annum to secure food supply and look after the environment. Perhaps, in that light, the CAP does not seem so expensive. That is why the Liberal Democrats are pushing to retain the CAP budget and we hope that the other parties will consider supporting our amendment.
It is not just the Liberal Democrats who consider continued support to be important; the fact has also been highlighted in the Pack report, in recent reports by the Scottish Agricultural College and the NFUS and, indeed, by the much-accredited and non-biased Royal Society of Edinburgh in its report on its inquiry into Scotland’s hill and island areas. Moreover, all those reports noted the importance of less favoured area support schemes to the survival of rural communities throughout most of Scotland.
We have heard a lot about the New Zealand approach of providing no support, but we should also remember that, in that country, support is available for developing markets and all the farming debt was written off. Those facts are not so widely heard.
There is little doubt that, due to its historical nature, the existing CAP support system must be changed. I believe that we can work with the Macaulay land classification to a certain extent, but it must be reviewed and tweaked as the present classification itself might be slightly different from the reality on the ground.
Although Mr Pack’s interim report is very welcome and represents a starter for discussion, I must say that I have several concerns. Like other members, I am a bit puzzled about why we are debating the subject before the consultation finishes on 5 March. I certainly recall being criticised by Tories and the Scottish National Party for seeking to debate the forestry sell-off while it was out to consultation, but there we are.
I find it questionable that a farmer on good-quality land should get paid more per hectare than a farmer with land on a high hill if both have exactly the same number of stock or are carrying out exactly the same activity on that land. Furthermore, how can we police minimum cultivations? How will such practices be balanced against someone who, for example, puts an expensive crop such as potatoes into the ground? The Liberal Democrats fear that such moves might encourage less activity, which, I am sure, is not the intended consequence of the CAP changes that Peter Peacock referred to. I must sound a note of caution: we do not want to fix the problem of the very few landlords who carry out next to no activity for their single farm payment by positively encouraging all land users to do the same.
As I say, we welcome the report as a starter for discussion but hope that it is not a starter for implementation. A learned farmer in Dumfries and Galloway has already reckoned that the area could lose £30 million if implementation follows what is set out in the Pack report, so care must be taken on this matter.
It is argued that rebasing the payments by taking into account current or recent activity would be a good way of encouraging active farming, and would take away the problems of the current historical model. Perhaps a base area plus a top-up for livestock would be workable, and a good use of public money, and arable units would be freer to plant what suits the market and consumer. There must be certainty that actual work occurs on the farmed land, otherwise we might see landlords take back their land in hand to do minimal cultivation with contractors. That would not be good for communities and would be unhelpful in encouraging new entrants.
We must address as a matter of urgency the encouragement of new entrants to farming, which was not mentioned by many today. That has been left out of the system at the moment because of the high cost of buying single farm payment entitlement on top of all the other entry costs. I am a little concerned about all the money going to one area in particular, to support the lambs in the north west. A quarter of sheep have been lost in the past decade, so I hope that we can have a one-tier support system throughout Scotland and a level playing field for all. I fear that not to do so would divide rural communities, never mind the nation.
We have had a good debate. The subject is of the utmost importance, especially to Scotland as a whole. There will be change and some redistribution, as the cabinet secretary said. For the points that have been made today, we need to do a lot more work; whatever the results, any changes should be phased in if possible, as was done after the review south of the border a few years ago. That would give businesses and communities the opportunity to adjust and secure our future rural industries and, of course, Scotland’s proud countryside.
16:36
This has been an interesting and useful debate at the start of a long and potentially arduous journey towards 2013 as we try to achieve the best possible deal for Scotland’s farmers when changes to the CAP are put in place. Although NFU Scotland recognises that work needs to be done to identify the best means of delivering support to Scottish agriculture from 2013 and beyond, it reminds us that any recommendations made by the Pack inquiry, and any subsequent position taken by the Scottish Government, will have to be taken forward to European negotiations in which Scotland is one region within one European member state, and the UK is one member state among 27. That puts Scottish discussions into context, and it must be recognised during negotiations that Scottish farmers operate in a UK, European and global marketplace.
Tasked with making recommendations on how support for agriculture and rural development can best be tailored to deliver the Scottish Government’s purpose of sustainable economic growth, Brian Pack and his small team of experts have produced a well-argued interim report, with some innovative proposals for the agricultural industry to consider. However, when the report was published, Brian Pack stressed that the proposals are not written in stone; they are suggestions to guide discussion and comment and, hopefully, to engender fresh evidence to help to shape the final report, which is expected in June this year.
At the outset, the report states that the purpose of the inquiry is not to rethink the CAP. Rather, it should identify the key issues that we face in Scotland and consider the sort of support that might be appropriate to help us to address them. It should also consider how best to implement the CAP, what direction we should be travelling in within the CAP health check and, given our preferred direction, what we should be arguing for in European debates about the future of the CAP.
Does the member support the Liberal Democrats’ view that we should retain the common agricultural policy at the European level?
Yes, I do, but not at any price, as my colleague John Scott has just said to me.
The proposals in the interim report have stimulated discussion, with some proving to be more controversial than others. I, for one, look forward to seeing what appears in the final report once all the issues that have been raised during the almost-complete public consultation phase are collated and considered by the expert team. There is a general consensus that, as the report argues, direct support for agriculture must be continued in one form or another to ensure a productive and sustainable agricultural sector in Scotland, to help the industry to adapt and improve, to maximise the delivery of public goods, and to mitigate the disadvantage that Scottish farming experiences, with 85 per cent of its land in the LFA category as we know.
There is also acknowledgement that the CAP budget is under pressure. Currently, it accounts for 41 per cent of the total EU budget but it is likely that, in the long term, the level of support for agriculture will fall and the available funds may have to be more closely targeted than hitherto. There is agreement that future support should be targeted at active farmers, with the so-called slipper brigade losing their entitlement to support, and there is a recognition that the current system of entitlement has made it difficult for new entrants to make their way in the industry, although there does not seem to be a consensus on how we should deal with that.
Brian Pack’s conclusion, backed by emergent thinking from the EU, is that the current, historic system of entitlement to the single farm payment should be replaced with an area-based system. That seems to be generally acceptable, although how and when we should progress to that system is proving controversial. The resultant redistribution of support between regions and between farms of the same type will undoubtedly result in winners and losers. The more intensive livestock farms such as we have in parts of Aberdeenshire will be the worst hit—hence our amendment, which encourages the Scottish Government to ensure that any redistribution process is as equitable as possible and takes particular account of less favoured areas.
NFU Scotland suggests that the first step towards changing the Scottish single farm payment system should be the updating or rebasing of the historic model, which it says would better recognise the activity that is currently taking place on those farms that are likely to benefit from support. John Scott elaborated on that in his speech. Tenant farmers, too, have concerns about the proposed move to area-based payments, about which Dave Thompson told us in detail. They feel that that would discourage landowners from letting out their land.
The report deals with many complex issues, including top-up funds, a new rural development programme, continued less favoured area support and others issues that I, as a layman—one of the few in the chamber just now—rely on the farming community to explain to me in detail. No doubt, the north-east NFUS will do that when it briefs MSPs at our next meeting at Thainstone, which was due to take place tomorrow but has been postponed because of the wintry weather. Getting a consensus on how we can best support our farmers into the future will not be easy. However, I have no doubt that the various concerns and points of view that were put to Brian Pack and his team during the consultation will be considered seriously as they work towards making their final recommendations.
The Scottish Conservatives recognise that, although a market-driven approach to providing a sustainable future for Scottish livestock production is the ultimate goal, continued support for agriculture throughout Europe is vital for the foreseeable future. The way in which that support is provided beyond 2013 must reflect Scotland’s unique difficulties, given that most of our land is classified as LFA and given our peripherality in European terms. We very much welcome Brian Pack’s interim report, with its realistic and complex analysis of the issues that Scottish agriculture faces, and we look forward to seeing the final report in the early summer. We will support the Labour amendment, but not the Liberal Democrat amendment.
16:43
It has been an interesting and, on the whole, positive debate, therefore I will resist the temptation to have a go at Dave Thompson.
Go on.
Well, maybe later.
There are strong views on all sides of the chamber, reflecting the interests of the constituencies of those members who are involved in the debate. We need to decide what we want agriculture to be about. What are the principles underlying that? What are the opportunities and the threats to achieving those objectives? How can we realise the opportunities and minimise the threats? As Sarah Boyack said, the interim report gives a thorough analysis of many of those issues.
There is support across the chamber for the retention of some form of direct payment, although there will be differences among us about the form that that payment should take. Labour members are supportive of the principle of moving away from a historically based payment to an area-based payment. The historically based payment has encouraged the emergence of slipper farmers, as we have come to know them, for whom there has been no incentive actively to farm the land that they own. At a time of increasing food insecurity, we cannot afford viable agricultural land going unused, never mind the obscene situation in which people are paid for not farming it.
I appreciate fully the concerns that have been raised by the Scottish Tenant Farmers Association, which others have mentioned, regarding the way in which the current proposals in the Pack report may act as a disincentive to landowners letting land for tenant farming. I encourage Brian Pack to look again at that issue, in particular. For many, tenancy is the only way into farming. We should look to increase the availability of tenant farms, instead of doing things that will reduce the opportunities that are available for that.
One of the real challenges facing the Pack inquiry is the fact that there is no simple, one-size-fits-all solution for Scotland. What works for the islands will not necessarily work for the lowlands. Even in a constituency such as mine, there are a variety of farming types that are looking for different things from the common agricultural policy and from the review.
I hope that we all want to see a sustainable future for farming. We need to look at exports and possible markets overseas, but we must also look closer to home. I find myself in the fairly unusual place of agreeing with almost everything that Robin Harper said. Why do supermarkets insist on sheep or pigs being a certain size, so that their chops fit better in a nice packet? Animals, like people, come in all shapes and sizes. So do potatoes, carrots and apples, although anyone who goes to some of our supermarkets today would not realise that.
I am pleased that many supermarkets are moving away from buy-one-get-one-free promotions for fresh produce, which simply led to much greater waste, but more can be done. Only yesterday I was in a supermarket where I could buy four apples in two nicely packaged pieces of paper for 30p. In the same shop, if I had chosen to buy one apple loose, it would have cost me more than those four apples together. That means more waste, but it also acts as an incentive for old-age pensioners to buy more than they need, want or can use. We can do more to encourage moves away from that in our supermarkets.
We can also do more to encourage local production, supply and purchasing in a joined-up way. We have talked about doing that for a long time, but surely it is not beyond the wit of us all to bring it together. I know that making it fit within the rules is challenging, but if we are serious about tackling obesity and climate change, we need to find a way of making production and procurement fit together much better in the local situation. I do not know whether we can use the Pack inquiry process to make that easier, as I do not know enough about European procurement rules to know whether that is possible, but how we link up local production and procurement in the future is worthy of further consideration by the Pack committee.
We all want to see vibrant rural communities. I recognise the role that the SRDP has played, but in my constituency there has been concern that the decision-making process has not been as transparent as we had hoped. If the Pack inquiry is to consider the matter before it publishes its final report, there are a couple of issues that I would like to raise. In my area, there is evidence of applications, especially for environmental improvements, being submitted and being awarded points, but failing to reach the level that would secure support. The applicant goes away, looks at the areas of weakness, does more to make their case stronger and resubmits the application, to find that they get more points in the areas in which they were previously weak but, bizarrely, that their points are reduced in the areas in which they were previously strong, so that again they fail to make the standard. That is not transparent or fair. Farmers put a great deal of work into such applications. For there to be confidence in the system, it must be fair and be seen to be fair.
I want to see some form of SRDP in the future, because that is vital to improve biodiversity, to provide environmental improvements and to support vibrant rural communities. However, the process must be clear, transparent and equitable across Scotland. In my experience as a constituency MSP, that does not seem to be the case at the moment.
This debate is important for us all. All the members who are currently in the chamber have constituencies that, by and large, are farming constituencies. Farmers are looking to the future. Many have come through very difficult times over the past few years. Whatever form of support we introduce from 2013 must ensure the viability and sustainability of farming. It must also ensure that here in Scotland, in future generations, we have the food supply that our country needs and that we can use it effectively to tackle our issues around obesity. However, we must also ensure that we have a vibrant farming sector that will last long into the future. I do not envy Brian Pack and his team the task that is before them. As some would say, “It’s a plague on all your houses,” but I am sure that between them they will come up with a system.
The Cabinet Secretary for Rural Affairs and the Environment and the Rural Affairs and Environment Committee must engage, perhaps before the final inquiry report, so that we can all have an input into the process. We must find a way of coming forward with a final report that, as a Parliament, we can unite behind. If we can do that, our case will be much stronger when we negotiate with others on behalf of the farming community in Scotland.
16:51
I know that this subject is close to your heart, Presiding Officer, but I assure you that everything I will say is what you would have said in any case. There is no doubt about that.
First, I will respond to the point Jim Hume, who wound up on behalf of the Lib Dems, made. He wondered why we are having this debate, given that other consultations take place in other portfolios and there are not always debates in the middle of the consultations. The key difference is that there has been an interim report and it has sparked a massive public debate, which is taking place throughout Scotland and involves our rural and farming communities. It is only right that Parliament should have the opportunity to reflect on the interim report as we look ahead to the final report. Karen Gillon made a good point about ensuring that there are opportunities for the Parliament to engage with that final report. I assure members that that will be the case. Sarah Boyack’s point about the Rural Affairs and Environment Committee engaging on the issue was also good—but that is a decision for the committee. I hope that it will, in some shape or form, address some of the issues that we are discussing.
I am pleased that all the members who have spoken in the debate, from all parties, recognise the important role of agriculture in Scotland’s future and the roles that our crofters and farmers play within it. I am also pleased that we have generally recognised that Brian Pack is the right man for the job as far as this inquiry is concerned. As many members have said, he has taken some difficult messages across Scotland and exploded some myths at the same time—but despite that we have not had to allocate bodyguards to him as he has gone around meetings with farmers. They have all engaged thoroughly on this complex issue, which is important for the future of their livelihoods. It is important that they engage.
Brian Pack is dedicated to his role. I heard that his blog on this subject recently showed that when he went on holiday to Tenerife he was on the beach reading his evidence papers on the future of Scottish agriculture. I suspect that he was the only person on the beach in Tenerife who was reading about the future of Scottish agriculture. Robin Harper asked me to paint a vision of the future. Perhaps the vision that we can all paint today is of Brian Pack in his swimming trunks on the beach in Tenerife reading about the future of Scottish agriculture.
I can assure members that when I glanced at the public gallery today, Brian Pack was taking copious notes on their speeches. I hope that that shows us all that this has been a worthwhile debate.
Will the cabinet secretary take an intervention?
Yes, on that topic.
Brian Pack may be interested to know that I read the Pack report during my ski holiday in the Alps last week.
I am sure that that will be reflected in his final report when it comes out in a few months’ time.
One key issue has been the need to target the support that is provided in Scotland for public goods, which I will come on to shortly. The debate takes place against the background that we do not know what the CAP budget will be. Negotiations are to take place on the size of the EU budget, then negotiations will take place among the member states on the size of the CAP budget within the EU budget, so there is a degree of uncertainty. Although I agree with the Lib Dems’ statement in their amendment that we hope to have a substantial agriculture budget available to Scotland, we cannot look into the future and we must recognise that while farmers understandably want direct support to continue—we all support that—we would rather live in a world where it was not required, so we should not cement it as something that we want to have in place indefinitely in the decades ahead.
Has the cabinet secretary had exploratory discussions with the UK Government about ensuring that the Scottish issues that we want to see in the agenda for support will be taken on board?
Yes, the discussions have been taking place to some degree, but of course they are largely for the future. Negotiations and discussions between ourselves and the UK, which will include the Brian Pack report once it is published, will largely be for 2010 onwards. Discussions are therefore at an early stage.
Sarah Boyack, Robin Harper and others mentioned the contribution that there must be towards what Brian Pack refers to as the five securities that we face: food security, climate change issues, energy security, biodiversity and water security. The backdrop is the pivotal economic role that agriculture plays, particularly in some of the most fragile communities in Scotland.
Because we will have declining budgets in some shape or form and because we must prepare for that, it is more important than ever that Scotland’s farmers produce for the market. We also have an opportunity to influence the market, which is where the national food policy and demand for Scottish produce, which some members mentioned, kicks in. Let us not forget that our two most powerful food and drink brands are underpinned by Scottish farmers. Our Scotch beef brand is in the livestock sector, which is fed by the arable sector, and Scotch whisky is dependent on Scotland’s arable sector. That is why we can increase demand for Scottish produce. There has been a 21 per cent increase in demand for Scottish produce since the Government came to office nearly three years ago, so we are making good inroads. Only last week, Simon Howie Butchers Ltd recorded a 20 per cent increase in butchery sales; sales of potatoes by Albert Bartlett and Sons (Airdrie) Ltd are up by 15 per cent; and 40 per cent of Scots visited a farmers market last year compared with only 25 per cent as far back as 2004.
Members have raised a variety of complex issues, but let us be very clear: if there was a silver bullet we would not have needed the Pack inquiry. We are faced with a complex issue. We must acknowledge that. I want to touch on the tensions involved, some of which members have mentioned. First, we want a link between direct support and genuine activity, but we do not want to return to headage payments. How do we do that? We need some answers. We want to get rid of the anomalies to which many members referred, such as no support for new entrants through the single farm payment, but then we hear that we do not want too much change. That is a tension that we must somehow reconcile. [Interruption.]
Order. Can I have a bit less noise in the chamber, please? I am having trouble hearing the cabinet secretary.
We also hear that we want to support the most productive parts of Scotland to maintain Scotland’s ability to produce food and other public goods. By the same token, we must bear in mind the challenges that face some of our more fragile communities. We must balance that.
We want an adequate CAP budget to deliver all the outcomes that we want, but we know that the EU is potentially facing financial issues, and we do not know what the size of the budget will be. Again, that is a tension that we must face. We keep hearing the call to make the CAP simple and less bureaucratic, which we all support, but by the same token we hear demands from different sectors and different parts of Scotland that the CAP should be tailored to their particular circumstances. Again, that is very difficult to reconcile.
I have already explained that we cannot support the Lib Dems’ amendment, but we support all the issues that are raised in the amendments of the Labour Party, the Greens and the Conservatives. Robin Harper asked us to lay out a vision. I did that last week when I spoke to the farmers at the NFUS annual conference. I would like to plagiarise my speech last week to lay out that vision again, because if we want to paint a picture for agriculture in the 21st century we should paint one that gives Scotland an outstanding reputation. [Interruption.]
Order. I repeat that there is too much noise in the chamber.
We all want an agriculture sector and a Scotland that has an outstanding reputation for food and drink that commands a premium in the marketplace, at home and abroad. We want to combine that with our unspoilt landscapes, which are home to a rich variety of flora and fauna that attract millions of visitors to Scotland each year. We want all of that delivered by productive, profitable and efficient agricultural businesses that have adapted to a low-carbon future.
I believe that if we work together and get the support of the other member states and the UK Government, whoever that may be—of course, if we had our own voice it would be a lot easier; we have launched a consultation on the referendum today to help us achieve that—and ensure that this nation’s voice is heard, we can make our vision a reality. I therefore ask the whole Parliament to rally round the Government’s motion and some of the amendments.
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