Rural Law

There has never been a more opportune time to discuss the future agricultural strategy for Scotland. We have read with interest the recent proposals made by the Scottish Government’s Agricultural Champions final report, Fergus Ewing’s paper “Stability and simplicity: proposals for a rural funding transition period”, and the NFUS Steps to Change paper. In a bid to compare and contrast these three policy documents, we have had a look at where the tensions lie and where the consultations may take the sector.

Agriculture Champions – no change is not an option

The Scottish Government appointed four Agriculture Champions to advise on the development of a strategy for the sector. They have been tasked with developing strategy to guide the long term sustainable future for Scottish agriculture by increasing profitability and boosting innovation, production and sustainability. Their report opens with the statement that “no change is not an option” and their recommendations ends with the stark reality that some farm businesses won’t survive even if the current policy were to continue.

Public value

The Champions summarised the past policies as leading to dependency, inefficiency and inequality. They are asking the industry to come forward to work with the Government and parliament to create a 10-15 year strategy for Scottish agriculture. A key question will be – what does the public value? The question of public value reflects UK government’s current thinking on reward for natural capital and public money for public services.

Sustainability, efficiency and skills

The Champions want to see a mind-set change around farm support. Guidance for farmers and crofters should be more progressive, entrepreneurial and resilient to reflect the culture in unsupported sectors and businesses. They are looking for Scottish agriculture to be given everything it is entitled to whether that be financing or policy-making powers. Future farm funding must involve a menu of schemes to boost production efficiency, improve skills and training and enhance natural capital and biodiversity. Funding is proposed to be capped per farm and tailored to regional and sectoral needs. Caps will be guided by current receipts for small and medium recipients and reduced for the larger recipients. Stewardship of the countryside (natural capital by another name) is recommended as being a key part of future policy and support should cover wildlife habitat and the reduction of carbon emissions – these public goods for which there is little or no market mechanism for reward.

Simplicity

Crucially, the support system should be kept simple. Having read the recommendations of the Champions, their direction for the support system are very interesting and, in places, bold but implementation appears to be by no means simple. Their recommendations include special rules for new entrants, a focus on rural stewardship, increased collaboration amongst farmers is expected to grow and schemes put in place to encourage retirement. One of the bolder suggestions is a digressive payment above a claimant age threshold where no successor has been nominated.

NFUS – Steps to Change 

The NFUS have been active in developing its own policy document. The key components are that the future support are (1) financial stability based on agricultural activity; (2) productivity; and (3) environmental measures. These measures are intended to give farmers and crofters choices. How does the industry become more competitive, resilient and profitable? NFUS see the key to this as being a dynamic and fair supply chain coupled with essential public benefits and note that environmental enhancement should not be at odds with improving productivity. What does increased productivity mean? For the NFUS, this is not just increased production. They want to see a more effective use of inputs with a greater return on costs incurred or a cost saving. Productivity can also be improved by tooling farmers and crofters with the right skills, training and knowledge.

The NFUS propose a future policy based on a tier system built on the foundations of a tier of financial stability payments – the safety net. These would be phased out over time with a focus on the second and third tiers – covering both competitive and non-competitive productivity and environmental measures. The competitive measures would be aimed at those looking to invest further, be more competitive and deliver further environmental priorities. The non-competitive tier will be aimed at giving all farmers and crofters pragmatic choices to reflect the varying farm practices and systems across the country.

Sitting behind this tiered system is the policy backbone devised by NFUS. They want to see a new agricultural policy which:

  • Is geared towards active and sustainable agriculture and encourages positive change;#Incentivises farm businesses to be dynamic, resilient and able to adapt to new opportunities and deliver good environmental management and productivity;
  • Provides financial stability; and
  • Underpins the social and environmental contribution of farming and crofting and the impact on the Scottish economy. NFUS point out that with 70% of Scotland’s land mass being under agricultural management, farmers and crofters are responsible for the stewardship of many aspects of the environment.

Stability and Simplicity – proposals for a rural funding transition period

Launched at the Highland Show this year, the Scottish Government’s “Stability and Simplicity” paper is the start of a consultation process to develop a new rural support policy for Scotland. The paper focuses on:

  • What might be done to provide stability in the period immediately after Scotland leaves the EU in 2019
  • Short term simplifications that could help current claimants of CAP-related support and improve or enhance the delivery of policy goals
  • How best to support and integrate agriculture into the broader rural economy over the transition period and beyond
  • How projects might be developed and used to test different approaches.

It is fair to say that there is a degree of tension between some of the more ambitious conclusions of the Agricultural Champions and some of the themes in the Scottish Government’s Stability and Simplicity consultation. There is further tension potentially with the direction outlined in the proposals set out in DEFRA’s Health and Harmony – the future of food, farming and the environment in a Green Brexit. The Green Brexit direction in England is in contrast at times with the Stability and Simplicity approach and economic arguments made by the Agricultural Champions and NFU Scotland. Responses are sought on the rural support policy by 15 August 2018.

Views will vary across the sector as to whether we should be embracing change or welcoming the stability of maintaining the status quo mean time – depending on where you are in the cycle of the sector – new entrant or established business, and which sector. New entrants may feel short changed by another period of stability to existing businesses. They no doubt want to grasp the enthusiasm for change proffered by the Agricultural Champions. The common themes of increased productivity, sustainability; environmental/public benefit cannot go unnoticed. With less than a year to go, this is only the beginning of the development of agricultural policy in a post-Brexit world. We anticipate further consultation on the subject and we encourage the sector to respond and be heard.

Rural Law

Rural Law

Confidence in the value of agricultural land and the wider rural economy in Scotland remains strong and at Brodies we have invested time and effort in ensuring that we offer our clients a dedicated rural legal service of the very highest quality. Find out more at http://www.brodies.com/business-sectors/land-rural-business
Rural Law