Chamber and committees

It is not available at the moment, but, as George Burgess said, we are providing FAS with a slight increase in funding during the coming financial year, so I expect that that will still be the offering. It is my intention to run the PSF scheme in the coming year, but I will update the committee when I have more details on that.

Yes, it would, because we would have the security of knowing what we were going to receive and when. That would enable us to do it. If we had a multi-annual commitment, we would be in a better position to look at that.

Sometimes, how the budget is set out does not necessarily help, because it does not always cover the full extent of a scheme when it is under a more general heading and a number of different schemes are within it. The biggest element of funding is what we pay through the basic payments scheme and greening, which now have their own conditions attached through voluntary coupled support.

However, one of our key schemes, which you rightly mentioned, is the agri-environment climate scheme. It is probably the most key of the schemes that help us to achieve what we are trying to do with food production and working with the land in a way that also works for climate and nature. It is important to point out that, when it comes to the way that the funding for that is presented in the budget, it looks as though a fairly small capital element is allocated to the AECS scheme this year; however, as I touched on, a climate change fund is available, of which some has been allocated to AECS, so the full AECS funding is not listed in the RALRI budget. That other element falls within the net zero budget line; we are due to receive an extra £4.15 million, I think, in capital, to support the AECS scheme for the coming year. That would enable us to bundle the eligible applications that we received for last year’s round as well as fund the five-year contracts on which AECS runs, including all our previous contracts.

However, that is by no means our only scheme for doing that. Last year, we also used the agricultural transformation fund to support AECS, to help businesses on their way to adhering to the water environment regulations that will come into force at the start of next year. That involved slurry storage, irrigation lagoons and, a couple of years ago, slurry spreading equipment.

Within the business development line of the budget, too, we have a number of schemes—for example, the knowledge transfer and innovation fund, as well as a host of others—that people can apply to. Such funds are important in supporting and encouraging the innovation that we want in farming and crofting. Our key fund for achieving all our outcomes is probably the AECS, but it is important to point out the others.

Another thing that I have so far neglected to mention is the funding that we provide to NatureScot, which is helping us to pilot different approaches. Over the past year, we have supported its farming with nature programme, which has been piloting biodiversity audit and the app that is being considered. It has also been looking at piloting an outcomes-based approach for farming. We have provided funding to enable it to undertake that work for us, which has proved vital. Especially for biodiversity auditing, having such tools available is important.

Yes, I would be happy to set that out for the committee and show what will be available. On top of that, as you were speaking, I was reminded that we also provide funding for the Scottish dairy growth board. That is another example. We have a number of different funding schemes to help industry both directly and indirectly. I would be happy to set that out for the committee to provide transparency.

We have not as yet opened the round for the coming year, and we are considering that at the moment. Over the past couple of years, we have had to have more restricted rounds because of the capital situation that we have faced. It is all part of what we are considering at the moment, but, again, I would be happy to take that point away and consider it for future iterations of AECS.

The fact that the funding has now been Barnettised, in essence, means that we will be tied to that. I will hand over to George Burgess, who will be able to provide more detail.

Your characterisation of the position is absolutely right. As I have said to the committee previously, we were absolutely not where we had hoped to be in relation to woodland grants and support for forestry creation, because of the significant cuts to that budget over the course of last year. However, it has been really positive to see the increases in the budget that we have allocated to forestry, with an increase of 18 per cent this year.

As you have outlined, and as you have heard from different stakeholders in evidence, we will not meet the 18,000 hectares target. The peak of the planting over the course of last year was 15,000 hectares. We had been on such a positive trajectory, and it is really unfortunate that, because of last year’s budget cuts, we were not on track to meet the 18,000 hectares target and will still not be on track to do it this year. I go back to your characterisation of the situation as like trying to turn a tanker around, because it is going to take time to build that figure up again.

Even if there had been an even bigger increase in the budget for woodland creation or the funding available for Scottish Forestry, I do not know whether all of that could have been used. We have to match the funding to projects that we know can come through the pipeline. I hope that, now that there has been an increase in funding, we can continue on a positive trajectory and rebuild confidence in the sector, so that it can continue to plan and invest.

I am more than happy to provide further information on that, because it is the case across the portfolio. For example, we tend to transfer our allocation for peatland restoration to different agencies that deliver the work on our behalf.

I have been up front and honest about the impact. I have heard strong views in my engagement with different parts of the industry, including environmental non-governmental organisations, industry representatives and different businesses, and that point came across loud and clear.

It was particularly disappointing. As I have said to the committee, we were on such a positive trajectory and had planted 15,000 hectares—the highest-ever level—so to take that step back was bitterly disappointing. We had significant problems with capital funding right across Government last year. Every portfolio faced difficult choices, and the situation last year was particularly challenging. I never want to be in a position again of having to make such decisions and such significant cuts.

I must look to the future. We have to try to bring back or rebuild that confidence in the sector by ensuring that we maintain and increase funding in the years ahead, to enable us to reach our targets. You are absolutely right, and I was open about this last year: we were not going to meet the targets with the funding that we had available. We were trying to work within the funding that we had and trying to adjust it to maximise planting. About half of the funding applications that we receive through the forestry grant scheme come from smaller farms and businesses, and it is important to continue that support. I want to continue on that positive trajectory from here, so that we can rebuild towards the target and not be in the position that we faced last year.

You are absolutely right, and we recognise that as an area that needs focus and attention. I do not know whether the committee is aware of the UK task force that has been established to consider woodland creation, in which the different Administrations come together to talk about the work that is taking place, about where it makes sense for us to work together and about whether there are areas where we could consider collaboration. Skills is one of the key areas, and you are absolutely right to focus on that.

Around the start of last year, I think, I hosted a woodland creation summit at which a mix of stakeholders from industry as well as from ENGOs considered the key challenges and how we could work together to tackle them. It was a really productive session and a lot of actions were taken on the back of it. Work is now being undertaken to see how we can encourage people to consider forestry as a career of choice, because there is no doubt that we are going to need the skills.

We have a number of working groups, and the industry leadership group is bringing together another part of the sector, so I offer the assurance that a lot of work is under way to consider the matter. I will meet the chief forester in a couple of weeks’ time to discuss the plans and the key areas of focus. As I have said in previous responses, I hope that we are on that positive trajectory. I recognise that there is work to do in all areas—in woodland creation, on the timber and production side of things and, importantly, on skills—but we are taking action in each of those areas.