Meeting of the Parliament

Meeting date: Wednesday, September 26, 2018

Official Report 1223KB pdf

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Common Agricultural Policy

The next item of business is a statement by Fergus Ewing on the common agricultural policy. The cabinet secretary will take questions at the end of his statement, so there should be no interventions or interruptions.

14:43  

For the whole of this Parliament’s lifetime, farm policy and support in Scotland have been determined by the common agricultural policy, and been part funded by the European Union. There is no doubt that the year ahead will be difficult, which is why the Scottish Government has made it clear that no matter what else happens, farm and rural businesses will receive their current payment entitlements largely as they currently are, and not just in 2019 but in every year until 2022. The commitment is at the heart of our transition plan, “Stability and Simplicity—proposals for a rural funding transition period”, which sets out the most detailed proposals of any United Kingdom Administration to provide certainty and stability on farm and rural support. I will return to the transition plan shortly.

However, I want to update Parliament on the progress that we have made on this year’s payments, and on improvements to our business and information technology processes.

A key objective this year was to help more farmers and crofters to get online. We undertook a campaign around the single application form application window to offer support to help more customers to switch from paper-based to online applications. Our approach has worked; the ratio of online to paper SAF applications has increased, and the online percentage has gone up from 78 per cent last year to 88.6 per cent.

In the coming year, we will continue to seek ways of further enhancing our business approach and payment system with a core purpose in mind: to improve our ability to make payments efficiently.

We have achieved the target of making 95 per cent of 2017 pillar 1 payments by the deadline of 30 June. We have now completed 99 per cent of basic payments, greening payments and young farmer payments, and 97 per cent of Scottish suckler beef payments and upland sheep support scheme payments.

We have started making payments on all 2017 pillar 2 schemes and are ahead of where we were at this point last year. Notably, we reached our 95 per cent land managers options payments target two months ahead of schedule.

To ensure that our most marginalised farmers and crofters receive their less favoured area support scheme support on time, in April we provided more than 8,000 farmers and crofters with 90 per cent of their entitlement through the 2017 LFASS loan scheme, which was worth more than £53 million to them and the rural economy. Since then, we have completed processing of more than 89 per cent of full LFASS 2017 payments. Furthermore, we are working hard to deliver all pillar 2 payments by the end of December—and before then, if possible. We will, of course, continue to update the Rural Economy and Connectivity Committee monthly on our progress.

One thing for which we had not planned this year was the adverse weather that impacted considerably on farming in Scotland. However, we have acted swiftly and, I hope, effectively to provide extra support. That includes the national basic payments support loan scheme to provide financial support early this winter for our farmers and crofters. Loan offer letters have now been issued to more than 14,500 businesses, and we expect to begin making payments from early October. Eligible farmers and crofters will be offered up to 90 per cent of what they are due as part of the 2018 basic payments scheme. A similar scheme in 2017 delivered payments of more than £317 million to more than 13,500 farmers and crofters, and to Scotland’s rural economy. I expect the new scheme to have a similar effect.

We know that there will be pressures on winter forage, so we have also sought and received approval from the European Commission to allow farmers and crofters flexibility in implementation of the 2017 greening rules regarding ecological focus areas. We have also made arrangements to extend to all farmers and crofters the planned beef efficiency scheme workshops on livestock nutrition this autumn.

With the potential disruption of Brexit looming, I want to give our farmers, crofters and land managers as much funding certainty as is possible. I am also determined that we will continue to pursue our aims for the current rural development programme.

I can announce today that we will launch a further round of the agri-environment climate scheme early next year. Since 2015, the scheme has provided more than £140 million of support for land managers to deliver environmental actions. We expect this round to allocate in the region of £40 million to successful applications, in line with previous years. Anyone who is considering activity to protect and enhance their land assets and our environment through, for example, improving water quality, managing flood risk and mitigating and adapting to climate change, should start preparing their funding application now.

This certainty is in stark contrast to the lack of clarity on key funding questions from the UK Government. One of the most pressing of those is the basis on which Scotland’s future funding allocation will be made. It cannot be made on the basis of the current low rate per hectare—the lowest in the UK. Since 2013, the Scottish Government, with the support of Parliament, has been trying to get that resolved. The failure of successive Tory Westminster Governments to honour their promises on convergence funding is problematic in two key ways. First, Scottish farmers have been short changed to the tune of £160 million. That amounts to about £14,000 for each hill farmer or crofter in this land.

Secondly, it means that our farmers and crofters could continue to lose out in the future if the historical payment rates are used to determine funding allocations beyond Brexit. I welcomed the most recent promise from Michael Gove to review that situation, but I have been less welcoming of the unwarranted delay in getting that review under way. Let me make it clear that I will not stop pressing until it is under way, and until Scotland is guaranteed a fair funding allocation in the future.

We must also focus our resources on planning for the future. In June, I launched a public consultation proposing a five-year transition period for farming and rural support under the theme of the “Stability and Simplicity” document. The consultation closed on 15 August with more than 120 responses. I thank all who responded. The responses are currently being analysed carefully and a report will be published later this autumn.

However, I advise Parliament that we will get on with establishing a task force to produce measures that will simplify the farm and rural support payments system from 2022 onwards. The task force will be led internally and will involve external stakeholders and contributors. Crucially, we want to ensure that the future of farming is represented through the inclusion of young farmers on the task force.

I am acutely aware that we must also start to shape a longer-term approach to future rural support. We already have many thoughtful propositions and innovative ideas to work with from stakeholder organisations, the Government’s agriculture champions and Professor Russel Griggs’s greening group. The final report from the national council of rural advisers is also expected imminently.

It is important that Parliament is given an opportunity to contribute its views. I therefore undertake to discuss with all parliamentary groups how best to achieve that, and to lodge a motion that will allow us to debate and, I hope, to agree the principles that will underpin Scotland’s future farm policy.

We all face an uncertain future. The prospects, especially if there is a no-deal Brexit, are not great. That is why, in our programme for government, we committed to providing as much certainty and stability in the short term—a term of five years—as we can. This year, we have focused on improving our approach to the CAP, not least in order to make payments more efficiently. We have made significant progress and we will continue to seek to do more in the coming year.

By the end of this year, not only will the vast majority of farmers, crofters and land managers have received their 2017 CAP payments, but most will have received 90 per cent of their 2018 basic payments, too. In all, we have paid over £500 million into Scotland’s rural businesses and economy, which clearly demonstrates this Government’s determination to deliver for rural Scotland.

The cabinet secretary will now take questions on the issues raised in his statement. I hope to allow about 20 minutes for questions, after which we must move on to the next item of business.

I thank the cabinet secretary for advance sight of his statement, and I refer to my crofting and farming entries in the register of members’ interests.

I looked forward to the statement because I thought that, at last, we might begin to see some detail of a system of support for Scottish agriculture, so it was with a sense of deep frustration that I listened to the cabinet secretary again failing to outline specific policies in that regard. Instead, on the back of the several reports, expert groups and consultations that we have already had, we have now had the announcement:

“we will get on with establishing a task force”.

That can only mean further delay.

I listened with disbelief to the accusation that there has been a lack of clarity from the UK Government on funding. The real lack of clarity lies at the cabinet secretary’s door, and Scotland is being left behind among other nations in the UK when it comes to the future of farming support.

Let me be clear that we welcome the progress that has been made with payments this year and the various commitments in relation to the mitigation of poor weather and pressures on winter forage. We continue to want to play our part in assisting with the creation of a new support system and we are more than happy to meet the Scottish Government.

However, given the absence of an agriculture bill in this year’s programme for government, will the cabinet secretary tell us when we will see primary legislation in this Parliament to mirror the UK Agriculture Bill, or will he continue to keep Scotland’s farmers and crofters in the dark?

I am pleased that Mr Cameron recognises the progress that has been made. I had expected that he might welcome the announcement that I have made today of around £40 million for the agri-environment climate scheme—AECS—which I know some of his colleagues have rightly advocated. As I have already said, I welcome the prospect of our working together. However, I am afraid that I do not accept the premises that underlie his questions. In particular I do not accept that we have not set out a plan. We have set out a plan for five years, and it is the most detailed one in the UK. The documents that have been produced by the Department for Environment, Food and Rural Affairs say not what will happen but what it will stop doing.

Interestingly, an editorial in The Scottish Farmer of 22 September asked Mr Gove whether he really thought that British—and especially Scottish—farmers could survive without financial assistance for producing food. The UK Government proposes to scrap direct payments to farmers for support for food production. I profoundly believe that that is wrong. I very much hope that Parliament will agree with me that such support, as well as support for the environmental role, is absolutely essential for the sustainability of our farming, as The Scottish Farmer argues—frankly, it is in a position to do so with some authority.

As to the question about publication of the bill, a week ago last Monday, my colleague Mairi Gougeon and I attended two further meetings with Mr Gove and other UK ministers. I made the point that, unfortunately, the current UK Agriculture Bill impinges on devolved powers in three respects. I did so despite the fact that we received a copy of the final bill only on the eve of its publication. Notwithstanding that, we have received very strong advice that the UK Agriculture Bill conducts a power grab over significant devolved powers. That is completely unacceptable to us, and we will continue to seek to reason with Mr Gove to amend the bill accordingly.

I, too, thank the cabinet secretary for advance sight of his statement.

Today’s statement is telling more for what it does not say to us than what it does. Although I welcome any progress on payments, and especially those relating to LFASS, will the cabinet secretary say exactly what progress the Government is making on pillar 2 payments, given that the most recent update earlier this month showed progress in some schemes as being as low as 30 per cent? There will be scepticism about his claim that payments will be delivered by December.

The cabinet secretary announced that there will be a further round of the agri-environment climate scheme, which is welcome. Will he tell us when applications for it will open, and whether there will also be a further round of the food processing, marketing and co-operation grant?

Finally, the cabinet secretary now says that he wants to have a debate on long-term reform. However, will he not accept that that debate should have happened a long time ago? The clock is ticking towards Brexit. The sector wants clear, detailed proposals from the Government for support for the rural economy—and it wants them sooner rather than later.

To answer Mr Smyth’s questions directly, across pillar 2 as a whole, we have now paid 81 per cent of claims and 70 per cent of total anticipated value. I continue to provide the Rural Economy and Connectivity Committee with details of every single payment, and I am very pleased that progress has improved significantly since last year.

Secondly, Mr Smyth asked when the AECS will open for applications. It will open early next year, and I repeat that we welcome submissions for that scheme, which has been undersubscribed in the past.

Thirdly, I will return to Mr Smyth about the food processing, marketing and co-operation grant. I know that there is still some funding left, but I will check the position. Again, I urge those who wish to make applications to contact my officials with regard to that.

I respectfully disagree with Mr Smyth’s final point. I repeat that our plan for the next five years, “Stability and Simplicity”, has been broadly welcomed. Its fundamental tenet is to continue to provide certainty and stability by continuing, so far as we can, with the current schemes as they are. Such schemes support farmers in producing high-quality beef and lamb, which I would have thought was an objective of this Parliament that was self-evidently beyond party politics.

There are no other plans in the UK. There is “Health and Harmony: the future for food, farming and the environment in a Green Brexit”, which sets out what the UK Government will not do, which is to continue to support farmers with direct payments. However, it does not say how much funding there will be, as has been pointed out by The Scottish Farmer, the reading of which I recommend to Conservative members, among whom there are lots of farmers.

We have set out a plan for five years. It is difficult to know what the plans of the UK Government are for five months, or even five days.

Eleven members want to ask questions and I have 11 minutes, so I can get somewhere with those questions only with your assistance.

Obviously, I welcome the £40 million for the agri-environment climate scheme and oppose any power grab.

We welcome that the cabinet secretary is finally committing to involving the Scottish Parliament in drafting the principles of Scotland’s future farm policy. In his statement, the cabinet secretary mentioned the various bodies that were put in place to look at that, which date back several years. Was it not within the remits of those groups to develop sound principles for farm policy? If not, what was the purpose of their being constituted in the first place?

I thank Mr Finnie for his support for the announcement on the AECS, which will make a substantial contribution to carrying out vital environmental schemes throughout the country, as, indeed, it has done. I am very pleased that we share common ground on that.

I turn to Mr Finnie’s comments on those who have been appointed to guide us all on the future of farming policy in Scotland post-Brexit—if Brexit happens: who knows about that? With respect, those who have done that have not done so for several years, as Mr Finnie said. They have done so at the express behest of the Parliament. A motion that was, I think, amended by Mr Rumbles called on the Scottish Government to appoint a group of people who would have the remit of considering those matters. That is exactly what we have done. We did exactly what Parliament asked us to do, and that group’s report will be published imminently.

I am extremely grateful to all the members of the National Council of Rural Advisers, the agriculture champions and Professor Russel Griggs. The NCRA comprises people from all walks of life in rural Scotland, who have a wealth of knowledge and experience. I sincerely hope that, when the recommendations are available, they will be taken seriously by all colleagues around the chamber so that we are able to reach consensus on the best path forward for Scotland’s rural policy.

On 19 January 2017, my amendment called on the Government

“to provide advice as to the principles and policies ... for ... rural support beyond 2020”.

That amendment was agreed to unanimously—even the cabinet secretary voted for it. However, in his statement, he said:

“I ... undertake ... to lodge a motion that will allow us to debate ... the principles that will underpin Scotland’s future farm policy.”

Just how long is this taking?

I commend to Mr Rumbles a good reading of “Stability and Simplicity”, which sets out a five-year plan on the financial future. I speak to farmers, and they say that that is exactly what they want. They want to know where they stand, not for a period of a few months—they do not know that under the shambles or boorach of Brexit policy in the UK, of course—but for a long, sustained period in which they can plan for the future after that.

I will respond formally in due course to the NCRA report and the more than 120 responses to “Stability and Simplicity”, but I can say initially that there has been broad support for the fundamental plank of our document.

I mentioned Mr Rumbles and gave him credit for his amendment. Sometimes, I think that he does not take yes for an answer, which is a bit unfortunate. I am delighted that we did exactly what we all voted for and convened a group of people to do the work. For goodness’ sake, let us wait until the reports are published, which will be very soon, and have the debate after that. Surely that is the sensible approach.

I apologise to members for having to leave after my question.

Last Wednesday, at the meeting in the Parliament of the cross-party group on food, which was chaired by John Scott and attended by Peter Chapman and myself, the chief executive of the UK Food and Drink Federation, Ian Wright, painted a very bleak future for Scottish agriculture and for sheep farmers in particular as a result of Brexit. It appears that that is compounded—

I am sorry, Ms Watt, but please be disciplined and ask a question.

—by the comments of Carmen Hubbard of Newcastle University and Professor Wallace of University College Dublin on the proposals in the UK Government’s Agriculture Bill.

What reassurances, if any, can the cabinet secretary give sheep farmers in Scotland—those on the hills, in particular—who make a vital contribution not only to food production, but to our landscape?

That took less than a minute, Presiding Officer.

That may be, but I asked members to be fair to one another, so, from now on, let us just have questions, please.

Ms Watt is right to raise an extremely serious issue. We are absolutely committed to continuing to provide vital support to our hill farmers. The LFAS scheme is the one that they hold most dear. It is the most significant scheme for them, and it is absolutely essential. There is a growing volume of evidence that suggests that the impact of Brexit could be so great that it could result in modern-day clearances in rural and Highland Scotland. The situation is extremely serious. Report after report from bodies such as the National Audit Office, the Fraser of Allander institute and the Highlands and Islands agricultural support group—none of which is politically affiliated—says the same thing: the threat to our hill farming community in Scotland is very real indeed. I hope that the Scottish Conservatives will decide whether they stand on the side of the Scottish hill farmers or on the side of the UK Government, which plans to withdraw its direct support.

I declare an interest as a farmer and a food producer.

Farmers and crofters will welcome the cabinet secretary’s update and the further funding of £40 million for the AEC scheme, but the statement will do little to help to resolve the problems that they face as they go into the winter with animal feed shortages already looming and overdrafts growing to unsustainable levels; indeed, many upland livestock farmers and crofters are actively considering whether they have a future in farming in the face of the constantly reducing profitability of the red meat sector.

What immediate practical financial help that is different from the help that has been provided in years past can the Government give to the sector, before many more farmers leave the industry and Scotland’s rural landscapes become still more depopulated?

Mr Scott raises a very serious point. I agree that the impacts of weather—the heavy rain and snow in the first part of the year, and the drought in the second part of the year—have been extremely severe. I am acutely aware of that, as he is. I attended a great number of agricultural shows around the country, at which I had a number of lengthy conversations with farmers who were taking the issue very seriously. We take it seriously, too.

In fact, it was after meeting a group of farmers at the Black Isle show, that, on 13 August, I made the early announcement that we would bring forward to as early a date as possible payments as part of the national loan scheme at a rate of up to 90 per cent. Of course, that is money that farmers are due, but I thought that enabling them to get it as early as possible was the most practical thing that we could conceivably do. If it had been possible to introduce the scheme earlier than the week commencing 8 October, we would have done so, but we have not been able to do that because the payments cannot be calculated until the euro exchange rate has been calculated, and that is based on a basket of figures for the month ending on 30 September. The earliest date on which we can make payment is 8 October, and I am hopeful that payments will start to go out then. More than 14,000 loan offers have been issued and 81 per cent of eligible claimants have had loan offers. That is the most concrete thing that we can do.

In addition, we have had the agricultural weather advisory panel meet regularly. It has provided very useful advice, as has the NFU Scotland in its excellent campaign on such practical matters. Other specific measures are being taken, about which I undertake to write to Mr Scott, because I am probably going a bit over my time.

I take the issue very seriously indeed. I understand that it is not over yet and that more problems might be experienced down the line early next year with animals that are not as well nourished as they should be in ordinary circumstances.

I declare that I have a small registered agricultural holding.

I sat next to Michael Gove at the Turriff show, and he promised me that the Scottish Government would be consulted on the UK Agriculture Bill and that the convergence review would go ahead—

It is interesting to hear that you sat next to him, but I want to hear your question.

Does the cabinet secretary have any information on who in the Conservative UK Government is blocking the very honourable promises that Mr Gove made to me and to the rest of us?

I am reminded of an old saying: just because we are sitting side by side does not mean that he is on our side.

I have sat opposite Mr Gove at numerous meetings and called on him to implement his publicly made pledge—a pledge that was welcomed by the Conservatives; indeed, they claimed credit for it. However, he has not delivered yet. There is substantial support from stakeholders, including the NFUS, tenant farmers and the Scottish Crofting Federation, for the review; I believe that they continue to support it.

The review must look back at what happened about our claim for £160 million, which our farmers and crofters should have received—they have been denied £14,000 per head. It is essential to allocate Scotland’s future share of funding, if Brexit goes ahead.

Next year, when we compare the amounts paid per hectare to farmers all over the European Union—we will include Scotland and the UK in that for the time being—we will see that the amount paid to Scottish farmers will be the lowest, not just in the UK, but in every single one of those 29 countries. Therefore, the review is essential. It is time that the Tories in London started to implement their promises, not break them.

I call Claudia Beamish, to be followed by Angus MacDonald. They will have to be brief.

As the cabinet secretary knows, agriculture is one of the heaviest greenhouse gas emitters in Scotland. Will he reassure the chamber today that future plans will tackle that issue, which the UK Committee on Climate Change highlighted this week, by having a just transition to agroecology with a clear advice and support system for innovation, which must play a big role in sustainable farming in future?

I am happy to confirm that we will continue to encourage and, in some cases, require farmers to carry out measures that will contribute to reducing their overall carbon footprint. A great amount of work has been done, which I acknowledge. Sometimes, farmers and crofters do not get the credit for the things that they do. In many cases, such things—using less fertiliser, for example—can be not only good for the environment but good economically. As I understand it, carbon testing, for example, is mandatory in the beef efficiency scheme and in other areas.

The direction of travel is to encourage farmers to do even more. I am very happy to discuss the matter further with Ms Beamish, as I know that she takes a close interest in it.

The further round of AECS funding is very welcome. However, those are long-term grants, as are those for tree planting. Will the cabinet secretary assure grant applicants about the long-term sustainability of the proposals? To put it simply, will they get their grants post-Brexit.

Cabinet secretary, please be brief, too.

We would not launch a further round of the AECS or continue to encourage forestry grant applications if we were not committed to paying people the grants over the long term.

I welcome the UK Government’s commitment to continue to make payments for pillar 2 applications for a further year. It was only after that decision was intimated to us, which was relatively recently, that it was possible for us to announce that, as a result, we were able to go forward with the AECS.

The answer to Mr MacDonald’s question is yes.

Thank you. I am sorry, but I must conclude questions on the statement. I apologise to Peter Chapman, Alasdair Allan, Iain Gray and John Mason. The ability to get through all the questions is, to some extent, in members’ own hands and in the hands of front-bench members.

I move straight on to the next statement, so that no more time is wasted.