Scottish Government

6 Assessment of environmental effects and proposed mitigation measures

6.1 Introduction

As discussed in section 3.4, the nature of the SRDP is such that it is not possible to predict the exact location, nature and impact of the actions or, at this stage, the delivery mechanisms for the strategy. Therefore this SEA does not assess the exact environmental impacts of the programme, rather it provides an indication of that impact and suggests ways that negative impacts can be mitigated.

This section describes the assessment process followed during the undertaking of the strategic environmental assessment before detailing the results of the assessment and mitigation measures recommended to minimise or negate the impacts

6.2 Assessment of alternative options

As detailed in Section 3.2, four options were identified based on various levels of funding being awarded to each of the axes, or themes. Using the SRDPSEA objectives and criteria detailed in section 5.3, each of the four options, was assessed in a step by step process using the assessment system detailed in Table 6.1 below.

Table 6.1: Assessment system used during the undertaking of the SEA of the SRDP

Assumptions made during the undertaking of the assessment

There is considerable variation of practical measures within themes. Ffor example, if actions under theme 1 and/or 3 were to see a stronger emphasis on construction of hard infrastructure than on, say, promoting knowledge and innovative practices, this would make a big difference to the environmental effects identified during the assessment process. Similarly, there is a big difference between diversifying into wind farms and other forms of renewable energy production compared to eco-tourism. Given this breadth of potential impact, it becomes extremely difficult to make any sensible assessment of the strategic environmental consequences of the SRDP unless the focus of the themes is defined.

Consequently, during the assessment process, a number of assumptions were made. For all priority actions the worst case scenarios with respect to potential environmental impacts were considered and assessed with recommendations for potential mitigation measures or alternative actions proposed. For example, development of hard infrastructure was assumed to be the default position for the assessment process rather than potentially more environmentally preferable options such as the development of ecotourism where the action allowed this scope.

Another example of this relates to the assessment of the potential impacts of the SRDP actions to encourage the development of biomass cropping as part of themes 1 and 3. During this assessment it was assumed that this would involve the whole scale planting of large areas of monoculture biocrops and all crops in one area would be harvested at the same time. The impacts of this action on biodiversity (due to the planting of a monoculture crop), soil quality (due to increased erosion as a result of widespread harvesting at the one time), the water environment (as a result of increased fertiliser and/or pesticide usage, increased abstraction for irrigation purposes and increased soil run off) would be significant and negative. Mitigation measures such as the separation of these large areas of biocrops with areas of improved habitats including hedgerows and/or biodiversity crops and the introduction of a harvesting rotation plan for biomass crops could mitigate these impacts

Assessment of themes

As a result of the complex spilt of each option across three separate and conflicting axes, the first stage of the process was to assess the potential effectiveness of the actions within each of the priorities for each of the themes identified for the SRDP (see Appendix 3) against each of the objectives listed in section 5.3.

For each theme, each of the priorities, and there associated actions were assessed against each of the SEA objectives and a score according to the impacts (in line with the system detailed in Table 6.1 above) was awarded to each action. In addition to the score, text summarising the reasoning behind the score, as well as recommended mitigation where appropriate was given. The results of this assessment of the themes are recorded in Appendix 2.

Assessment of options

The next stage of the assessment process was to assess each of the options. At this stage, reference was made to the assessment of each of the themes undertaken previously and recorded in Appendix 2. Again the same assessment system was used (see table 6.1) and a summary of the justification of each of the options was recorded. For the first three options, the assessment was based primarily on the assessment of the predominant theme in that option. For option 4, the average assessment value was used. The results of the option assessment are recorded in tables 6.2 - 6.10 inclusive below.

In addition to the justification provided, recommendations for the implementation of measure to mitigate against the impacts of the activities, if required were provided. The types of mitigation measures and a methodology for ensuring these mitigation measures are implemented during the period of the scheme are detailed in section 6.3 below.

Table 6.2: Assessment of Options against SEA Biodiversity objectives

Table 6.3: Assessment of Options against SEA water environment objectives

Table 6.4: Assessment of Options against SEA soil quality objectives

Table 6.5: Assessment of Options against SEA Air Quality objectives

Table 6.6: Assessment of Options against SEA Climate change objectives

Table 6.7: Assessment of Options against SEA Population, Human Health and Wellbeing objectives

Table 6.8: Assessment of Options against SEA Landscape objectives

Table 6.9: Assessment of Options against SEA Cultural Heritage objectives

Table 6.10: Assessment of Options against SEA Resources and Waste objectives

6.3 Summary of the Assessment process

The SEA identified actions within the two of the three themes which could have potentially negative impacts on the environment as well as those actions within all three themes which could have positive impacts on the environment. During the first stage of the assessment process, when the impacts of the actions which were identified to implement the priorities of the three themes were assessed, no major negative impacts were identified. Consequently it is not considered that there are any actions within the four options which would require to be avoided.

Although none of the actions were considered to have potentially major negative impacts, a number of the options were considered to have potentially negative impacts. Many of potential impacts are theoretical and have resulted as a result of consideration of the potentially worst case scenario for each priority (see section 6.2). The actual impacts observed following the implementation of the programme will depend on site specific issues as well as the proposed design and approach taken for individual activities and projects. These may be controlled through planning and/or other regimes (such as CAR) but the provision of potential impacts and associated mitigation at this stage will help guide the final SRDP and will enable decisions relating to funding of particular themes and activities at a later date to be determined in light of the information within the SEA.

Table 6.11 below shows the number of potentially negative impacts identified under each of the three schemes, as well as detailing the number of neutral impacts and positive/major positive impacts identified.

Table 6.11: Summary of potential impacts from each of the themes

Perhaps not surprisingly no negative impacts on any of the aspects of the environment considered were identified for theme 2 while a number of negative impacts for actions for in themes 1 and 3 were identified. However a number of positive environmental impacts for themes 1 and 3 were also identified and in both cases the numbers of positive and negative impacts were surprisingly similar despite the worse case scenario being assumed during the assessment process.

Negative activities were generally those which involved development or construction of new processing plants (theme 1) or housing and/or infrastructure (theme 3) and the initial view may be that these activities should not be permitted and more 'environmentally friendly' actions implemented under this theme. However, these types of activities are important to rural Scotland and may be particularly more important in Less Favoured Areas and there is a risk that significant environmental impacts could result if the new SRDP focuses solely on funding those actions which offer environmental benefits at the expanse of socio-economic factors.

The SRDP should not therefore focus simply on factors such as physical loss of "high quality" environment resulting, for example, from inappropriate diversification or the construction of new buildings. Loss of human capital and community infrastructure is a major issue which is why, despite the lack of initial environmental benefit, some of the actions under themes 1 and 3 are important in natural heritage terms, provided these actions deliver the conditions necessary to keep traditional and environmentally beneficial forms of land management viable (together with the sustainable communities needed to maintain land managers in fragile areas).

For example, investing in a processing sector which means quality Scottish produce succeeds in the market place could potentially be very good for rare breeds and habitats which depend on traditional management, none of which would happen if the socio-economic factors were ignored. However, if this investment resulted in lots new processing plants on high value land, accompanied by intensification of production this could have negative environmental implications.

Consequently, the identification of mitigation measures to minimise or negate the negative impacts of some of the actions in themes 1 and 3 is important to ensure that these actions can be implemented where feasible to ensure the long term viability of rural Scotland and this is discussed in section 6.4 below.

6.4 Identification of mitigation measures and strategies for the theme priority actions

When considering the need for mitigation, a hierarchy of mitigation measures should be considered. In this context this would involve:

• avoiding the implementation (funding) of the priority action (either completely or in certain areas which are considered to be most sensitive to the action);
• reducing the number of instances when the priority action is implemented (funded) and or the area over which this action is implemented;
• remedy or compensate for the negative impacts of the priority actions implemented by incorporating measures into the action (as a condition of the funding being granted) to prevent or minimise the impacts; and
• enhancing positive impacts.

In order to identify potential mitigation measures for the actions within the SRDP, the actions causing the impacts were assessed. While a number of differing actions were identified as having potentially negative impacts, five main actions were found to be responsible for the greatest number of potentially negative impacts across the range of environmental issues considered during the assessment process and these are shown in table 6.12 below.

Table 6.12: Actions resulting in potentially negative impacts on the SEA Objectives (by category)

For all actions, the majority of the impacts are inter-related and consequently individual mitigation measures and strategies could minimise and/or negate a number these impacts. In addition, two of these actions were ones which also offered positive environmental benefits, particularly to climate change. As a result of the inter-relation between the impacts, potential mitigation measures (considering both reduction and remedy/compensation measures) are discussed below under each of the actions for which impacts were identified. In addition there are a number of issues which are relevant to all options and these are discussed before action specific measures are identified.

6.4.1 General Mitigation measures for all actions identified as having potentially negative impacts.

Biodiversity Issues

As stated in section 4.2, Scottish Ministers have an obligation to consider the implications of any decisions they make on biodiversity in both its wider context and in relation to specific impacts on priority species and habitats identified in the species and habitats action plans and prepared to protect a natural asset in order to comply with the Convention of Biological Diversity to which Scotland, as part of the UK, signed up to in1992.

The implementation of any or all of the actions identified in table 6.14 could result in the loss of biodiversity; priority habitats and species; protected habitats, species and areas; and the further fragmentation of habitats if there is no consideration given to the locations in which these actions are planned. The conversion of woodland, peatland, Natura 2000 sites, SSSI's and priority habitats to other land uses would have a considerable negative impact on biodiversity and must be avoided.

In addition, any actions within the SRDP which could impact on a Natura 2000 site, SSSI, European protected species or species protected under national legislation will require to be evaluated. This includes the need to evaluate potential impacts which originate outwith the boundaries of a site. As a result, where any measures contained within the SRDP are likely to result in developments which may affect protected sites, or land which is essential for providing connectivity between sites, it will be necessary to assess the potential consequences of those measures in relation to the conservation objectives of the sites likely to be affected, as well as considering the implications for the wider site network. Where any action resulting from the SRDP would be likely to have a significant effect on a Natura site, a formal appropriate assessment will be required in accordance with the obligations arising under the Birds and Habitats Directives. The relevant procedures for appropriate assessment are set out the Conservation (Natural Habitats, &c.) Regulations 1994, and in guidance issued in June 2000 by the Scottish Executive which is available on-line ⁵⁸.

Climate Change

All key actions identified in table 6.14 above involve potential land use changes. If the proposed change in land use involved converting land currently used for woodland or peatland to other uses, this could result in increased climate change implications as a result of the loss of these habitats for carbon sequestration. In addition all these options may result in increased vehicle movements to a greater or lesser extent which can also impact upon climate change.

In the case of increased processing plants within rural Scotland, there may be an increase in the transport of raw materials to processing plants and/or the increased transfer of processed goods from the processing plants. However, increased businesses in an area could provide the potential to coordinate transportation of raw materials and processed goods ensuring that vehicles leaving on the return leg and where possible the Regional Project Assessment committees ( RPACs) ⁵⁹ should consider options to encourage transport coordination within businesses in their area. (see section 6.5 for more information on RPACs). Increased tourism may result in increased visits to rural areas but this could be minimised by improvements to the transport infrastructure which would result in benefits to both tourists visiting the area and local communities that would be less dependant on their cars.

Provision of advice to applicants and land managers

Information relating to the potential environmental impacts, including statutory obligations, legislation and guidance relating to the various actions for which funding will be granted under the scheme should be provided to land owners and managers to enable them to make informed decisions relating to the types of actions they wish to implement on their land. This information could be provided through information packs which would accompany application forms for grant funding under the SRDP 2007 - 2013 sent to land owners/managers.

Alternatively more detailed guidance packs could be provided to those officers providing advice to land owners/managers and those assessing the applications for funding to ensure that they can provide the best and most appropriate advice to land owners/managers during site visits. These latter information packs would include information relating to the differing funding streams of relevance to the SRDP (and other sources of funding) as well as all the relevant environmental information. This second option would provide a more holistic approach to the delivery of the SRDP and could be developed on a Regional basis in line with the proposal in the current SRDP consultation document for the provision of Regional Rural Development Guidance through the establishment of Regional Project Assessment Committees ( RPACs) ⁶⁰, and these are discussed in further detail in section 6.5.

Provision of checklists for funding application assessors

In order to ensure that all environmental issues (including but not limited to the need to consider the biodiversity obligations of the Scottish Ministers and the potential for the proposal to impact on priority and/or protected habitats and/or species) are considered when applications for grant funding are received, the use of a checklist (to be incorporated into the proposed guidance referred to above) containing a series of questions relating environmental issues should be considered. It is likely that an environmental assessment of the proposal (based in information within the guidance document) would be required and this would enable potential issues to be highlighted at the application stage and mitigate measures to be incorporated into the proposals. As discussed above, if a development is proposed within a protected area ( i.e. Natura 2000 sites, SSSI's and those areas with particular biodiversity interest) an appropriate assessment will require to be carried out to determine whether the development is likely to impact on the site and if so, the application should be refused.

Creation of a National Renewables Strategy

As discussed within this document, while the increased reliance on renewable energies would help towards the meeting the UK's agreed Kyoto targets, and is a key objective set by Scottish Ministers, there are other varying and significant impacts of renewable energies which require to be considered.

One of the key issues relating to the impacts of renewable energy production, either through the increased production of biomass crops (see section 6.3.2 below for further information) or the increased construction of renewable power plants (see section 6.2.3 below for further information) is the location in which these developments are sited. Power plants, particularly wind farms and hydropower schemes are commonly located in rural Scotland where there is a sufficient volume and velocity of wind and water flow respectively for maximal energy production. However, these remote locations result in a greater potential for these plants to require significant supporting infrastructure such as roads to allow access to the sites, and power lines to get the power generated from the site to the National Grid.

At present, the approach with relation the development of renewable energies is industry lead and therefore impacts on stakeholders and the environment is considered in a relatively piecemeal way. A more proactive suite of siting guidelines and a national strategy could deliver a more planned and sustainable approach. The introduction of a national strategy would identify sites where wind farms, hydropower schemes, biofuel plants (and associated biomass cropping sites) and marine and coastal renewable plants should be permitted and identify where, due a numerous reasons including remoteness from the National Grid and environmental sensitivities of specific areas these activities should not be permitted.

6.4.2 Potential mitigation measures for increased production of energy crops

Potential implications of the increased planting of biomass crops have previously been discussed and include impacts on: biodiversity due to the planting of a monoculture crop; soil quality due to increased erosion as a result of widespread harvesting at the one time; the water environment as a result of increased fertiliser and/or pesticide usage, increased abstraction for irrigation purposes and increased soil run off; and landscape due to large swathes of monoculture crops replacing diverse vegetation. Many of these impacts are inter-related and therefore mitigation measures to address one issue are likely to offer improvements in other aspects.

In addition, to the general measures identified in section 6.3.1 there are specific mitigation measures which will be required to ensure that the impacts of increased production of energy crops are negated or minimised and these mitigation measures could result in environmental enhancement.

The planting of biomass crop field margins with hedgerows would provide a habitat for a wide range of species and provide an opportunity to connect existing areas of varying habitats, increasing habitat connectivity. The provision of hedgerows would also minimise the impact of extensive areas of monoculture cropping on the landscape and would assist in the stabilisation of soils reducing its loss through erosion. Areas of biomass crops could be broken up by the planting of biodiversity crops or the creation of other habitats within the land area being managed for biomass crops to increase the biodiversity of the area, improve the landscape and prevent soil erosion.

In addition, agreement with land owners relating to the maximal areas of land which could be given over to biomass cropping and the development of a rotational cropping cycle would be required to minimise the impacts on the water environment, soil erosion, the surrounding landscape and biodiversity. This may require inclusion in a Renewables Strategy for Scotland which provides advice about the management of land for biomass crops as well as identifying sites where this may not be appropriate (see section 6.2.1 above).

The increased production of energy crops and feedstock for renewable energy production could result in an increased demand for water to ensure adequate growth of these crops and an increased use of fertilizers and/or pesticides. This could result in increased abstraction from watercourses and resultant reduced quantities of water within rivers and increased diffuse pollution from agriculture and forestry resulting in reduced water quality. Advice on the use of fertilisers and pesticides to prevent their overuse in agriculture is given in the Four Point Plan for Agriculture as detailed in the Prevention of Environmental Pollution from Agricultural Activities ( PEPFAA Code) and advice on their use in the forestry sector is given in Forests and Waters Guidelines and the UK Forestry Standard. Abstraction from watercourses and groundwater is controlled by SEPA under the provisions of the Water Environment (Controlled Activities) (Scotland) Regulations 2005 and licence conditions are set to ensure that water resources are protected.

The increased production of energy crops on newly cultivated land could result in a loss of organic matter and nutrients from the soil which will require to be replaced to prevent the loss of soil by erosion.

Despite these negative impacts however, as discussed previously in this document (section 4.4), the Scottish Executive, under the provisions of the Climate Change Programme, has set a target that the production energy from renewable sources ⁶¹ (hydroelectric (natural flow) and other renewables) should be 18% in 2010 rising to 40% by 2020. The increased planting of biofuels and the associated construction of renewable energy plants which will be fuelled by these crops will assist in the meeting of these targets as well as having positive impacts on climate change which has knock on benefits on a range of environmental issues including the water environment, soil quality, biodiversity etc and therefore this is an important priority action both for enabling the diversification of activities in rural Scotland and for the environment.

6.4.3 Potential mitigation measures for the construction of renewable energy plants

A number of impacts relating to the construction of renewable energy plants have been identified and these are the same for the differing types of renewable plants although the causes and the extent of the impacts may differ. Biodiversity can be reduced as a result of the loss of, or impacts on, habitats; the water environment may be altered as a result of engineering works, the presence of dams or the presence of culverts and bridges; increased erosion of soil may result due to vegetation removal for the construction of the plant and access tracks etc; and the impacts on the landscape may be altered as a result of the construction of large dams or wind turbines and the associated supporting infrastructure.

With regard to additional action (above the appropriate siting of the development to minimise its impact on biodiversity, landscape etc as discussed above) which could be taken to mitigate against the impacts of the construction of renewable energy plants, perhaps the main, and most effective action would be the development of a National Renewables Strategy as discussed in section 6.3.1 above. The construction of renewable power plants will require regulation under the planning regime and further regulation of hydropower plants is required under the provisions of the Water Environment (Controlled Activities) (Scotland) Regulations 2005. Measures to mitigate against the impacts of hydropower schemes on the water environment and consequently on biodiversity can be found in SNFFER (2004) ⁶².

The construction of renewable energy facilities, as with all construction projects, could result in a loss of soil (both as a result of erosion during construction and as a result of the loss of soil for cultivation purposes within the footprint of the scheme) and reduced water quality as a result of pollution of watercourses (primarily during construction when siltation of watercourses by contaminated run off from construction sites as well as access roads) could result. The negative impacts of these actions can be reduced by the careful selection of sites for development to ensure that areas of prime agricultural land or areas of high biodiversity, landscape or cultural heritage value are not sacrificed for the construction of the renewable energy facilities, and to ensure that best management practice measures are implemented to reduce the erosion of soils e.g. minimising the amount of vegetation clearance thereby reducing the area of bare soil exposed during construction.

As discussed in sections 4.4 and 6.3.3 however, the construction of renewable energy plants has significant environmental benefits as well as benefits for the diversification of rural Scotland and therefore this is an important priority action for the SRDP.

6.4.4 Potential mitigation measures for increased processing facilities

The loss of land for the construction of these processing plants could result in a reduction in biodiversity through the loss of protected and/or priority habitats and/or species which can be mitigated for by the careful selection of the site. Depending on the location of the processing facilities and the design of the buildings, the processing facilities could impact on the landscape and this impact can be mitigated as a result of the careful selection of sites and ensuring that the design is appropriate to the location. This is likely to be controlled under planning legislation and may also be controlled under the provisions of the Water Environment (Controlled Activities) (Scotland) Regulations 2005.

In addition soil erosion can result during construction and the implementation of mitigation measures detailed in section 6.3.3 above should be implemented. Processing facilities can also result in increased quantities of effluent requiring to be disposed of and this can result in increased pollution of groundwater and/or water courses if not carefully monitored. The discharge of effluent to groundwater and watercourses is controlled by SEPA under the provisions of the Water Environment (Controlled Activities) (Scotland) Regulations 2005 which should mitigate these potential impacts.

This action could also result in increased volumes of waste being generated in rural Scotland as a result of processing of goods in this area that would have previously been manufactured elsewhere. However, the volumes of waste being produced can be minimised by the incorporation of waste minimisation strategies including recycling. In addition, the processing of goods in the area in which the raw materials are produced could reduce transportation costs and reduce 'food miles'..

6.4.5 Potential mitigation measures for increased recreational and tourism attractions

While the creation of recreational and/or tourism facilities could negatively impact on biodiversity, the development of those facilities which actively promote the biodiversity of Scotland could also prove beneficial to the biodiversity of rural Scotland. These benefits could be direct, such as the creation of a 'biodiversity centre' where a number of priority habitats and protected habitats (which should increase the number of priority species and protected species in the area) are created. This would also have indirect benefits as it would provide education facilities and information on these species and habitats raising awareness of biodiversity within the community.

Increased recreational and tourism facilities can result in accelerated rates of erosion as a result of increased walkers, cyclists, off road vehicles, quad bikes etc in a concentrated area and this can also result in the loss of soil during the construction of new facilities, through the loss of high quality soil (for example in prime agricultural land) for cultivation within the footprint of the construction site and the loss of soil by erosion during construction. In addition, increased use of rural Scotland by off road vehicles and quad bikes could result in increased noise impacts and disturbance to wildlife and a loss of wildness within these areas. The concentration of visitors in once area can concentrate the impacts and therefore careful planning (through the Planning Departments of Local Authorities and the Regional Project Assessment Committees ( RPACs) proposed to facilitate the delivery of the SRDP and discussed in section 6.5) within a local and national framework is important.

In addition to the impacts of construction discussed in section 6.3.3 above, the construction of facilities for increased access and tourism can result in increased quantities of effluent requiring to be disposed of and this can result in increased pollution of groundwater and/or water courses if not carefully monitored as discussed in section 6.3.4 above.

6.4.6 Potential mitigation measures for changes in the infrastructure of communities

Alterations to the infrastructure of rural communities such as increased available housing can result in impacts on biodiversity, water resources, soil quality and landscape and can be mitigated against as outlined in the sections above. In addition, there are environmental benefits to be gained from changes in infrastructure which could include improved public transport reducing the emissions of greenhouse gases from private vehicle travel and the updating of sewerage systems, or the first time provision of sewerage facilities which could improve groundwater and/or surface water quality as a result of less polluted discharges.

6.4.7 Population, human health and wellbeing

The only environmental objective criterion in which there no negative impacts were noted for any of the options was 'population, human health and well being'. This is because all options contained actions which would result in improvements in this area. For example, increased diversification in rural Scotland could result in increased jobs in the rural community. In addition, the activities to increase the quality of food and to provide affordable housing in rural areas would have human health impacts. The actions to develop ecotourism could result, either directly or indirectly in increased jobs in these areas as well as providing increased recreational and access opportunities.

6.5 Assessment of the proposed LMC objectives against the SRDPSEA objectives

While the Consultation Authorities indicated that they were content that the four options assessed in section 6.3 were appropriate, it was recommended that in addition, an assessment of the proposed Land Management Contract was undertaken. Given the high level strategic nature of this SEA, the number and range of measures that have been proposed to date for the LMCs (39 measures and well over 100 sub measures) and the fact that many of these measures are already in place, it was considered that rather than attempt to assess all of these measures, it would be more appropriate to assess the objectives of the LMCs against the objectives of the SRDPSEA.

There are 8 main LMC objectives split into three main headings: natural resources, countryside issues and business development. Within each of the objectives there are a number issues and it was these measures and their relevant issues which were assessed. The assessment process was undertaken in a similar manner to that described in section 6.3 and the results of the assessment can be seen in Tables 6.13 - 6.15 inclusive.

Further information relating to the LMC Objectives, issues, objectives and delivery mechanisms can be found in can be found in Appendix 3 and further information about the proposed types of measures for land management contract and the proposed list of individual tier 2 and tier 3 measures for LMCs can be found in Annex D and E respectively of the draft SRDP Consultation document ⁶³.

Table 6.13: LMC Natural Resources Objectives assessed against SRDPSEA objectives

Table 6.14: LMC Countryside Issues objectives assessed against SRDPSEA objectives

Table 6.15: LMC Business Development Objectives assessed against SRDPSEA objectives

As with the assessment of the four options in section 6.2, the main potentially negative impacts identified from the assessment of the LMC objectives against the SRDPSEA objectives relate to the diversification of rural Scotland and the mitigation measures of these are similar to those identified in section 6.3. The measures within the LMCs are more focussed and therefore while they could have potentially significant positive impacts on the aspect of rural Scotland on which they are focused, they could potentially have limited impacts across other aspects of rural Scotland and may have less scope for modification to enhance other aspects than other schemes.

6.6 Environmental implications of proposed changes to funding

It should be noted that all 4 of the proposed options and their associated funding allocations are likely to represent a loss of support for the environment in relation to the current funding streams available. Consequently, even option 2 (which is best for the environment) will almost certainly mean that money moves away from Axis 2/agri-environment measures, as compared to the current SRDP. Given that context, it becomes all the more important that mechanisms under other options deliver maximum environmental benefit. This is significant factor in any SEA-driven decision-making process.

At present it is proposed ⁶⁴ that the investment approach to be taken will comprise of the following elements:

• Assistance to farmers up to 2013 as they adjust from the previous commodity grant schemes and plan for a future when less money is likely to be available from the state (the single farm payment in Land Management Contracts Tier 1);
• Payments to farmers and crofters in recognition of the structural disadvantage of operating in remote areas designed to sustain traditional agricultural landscapes and local communities (the Less Favoured Areas Support Scheme ( LFASS));
• Payments for modest economic, social and environmental measures at the choice of the individual farmer or crofter (the menu scheme under Tier 2 of the Land Management Contracts);
• Larger investments in targeted activities contributing to national objectives under one of three headings: improving the competitiveness of the agricultural and forestry sector; improving the environment and the countryside; and improving the quality of life in rural areas and diversification of the rural economy (the competitive scheme under Tier 3 of Land Management Contracts);
• Investments in social, economic or environmental schemes worked up through local community development (the LEADER approach); and
• Specific grant schemes, where justified, delivering outputs than cannot be achieved by use of the Tier 3 approach.

Of these approaches, LFASS, offers the least obvious potential for environmental enhancements and proposed changes to this scheme could result in less potential for environmental improvement. Currently, LFASS offers potential for environmental enhancement as a result of an area-related payment system based on 'grazing categories' that are derived from former stocking levels. The payment can be enhanced (in two stages) for producers who have cattle and this incentive constitutes a significant incentive for at least some producers to retain cattle and appears to account for approximately a third of the current LFASS budget.

In hill and upland areas which predominated less favoured areas, cattle are better than sheep (or sheep alone) at maintaining a suitable balance between the essential components of moorland plant communities if managed properly. Under the arrangement proposed by SEERAD, for the three years from 2007 producers will continue to receive the same level of payment they received in 2006. They will not be required, however, to maintain a proportion of cattle in order to qualify for the cattle-related part of that payment. The incentive for retaining cattle in these areas will therefore disappear, and the environmental benefits will be lost and environmental impacts on moorland habitats and their associated species may result. However, as discussed in section 6.3, there is a risk that significant environmental impacts could result if the new SRDP fails to deliver sufficient support for peripheral communities and land managers in the more fragile less favoured areas and LFASS appears to offer the support to protect these areas.

At present, agri-environment schemes ( ESA's and RSS) provide for environmental management in rural Scotland. Agreements made under these schemes are continuing to expire with 250 RSS agreements due to expire in 2005 and a considerably larger number of ESA agreements and this number will increase during the first few years of the programme. The money which is freed up as a result of these agreements ending should be transferred to fund those aspects of the LMC which provide environmental enhancements to ensure that the environmental benefits of these schemes are not lost. A full-scale review of Agri-environment support is planned in the early stages of the Programme and an environmental appraisal of the options considered should be included as part of review process.

Under the funding proposals in the SRDP consultation document, it is proposed to incorporate a number of the current funding streams into LMCs. As the majority of these relate to schemes which incorporate environmental enhancements, care should be taken to ensure that the actions incorporated into the final SRDP are those which will result, either directly or indirectly (with or without the need for mitigation) in environmental improvements.

An example of this is SNH's Natural Care programme. This will result in a gradual increase in the cost to the LMC programme as existing agreements with SNH expire and are replaced by LMCs. There is the potential that rising costs of the LMC's could result in the diversion of EAFRD funding from wider countryside management actions into more specific actions to ensure that the special features of SSSI's are brought into favourable condition (the purpose of the Natural Care programme). This could result in localised improvements to SSSI's but deterioration or failure to maintain the natural heritage and amenity value of rural Scotland as a whole.

If the proposal to incorporate these various and varying funding streams in to the LMC system is taken forward, care should be taken to ensure that where possible funding is awarded to those activities which will fulfil the environmental improvement criteria of current funding streams as well as the requirements of the LMC. Taking the example of the Natural Care programme, where funding to improve the special features of an SSSI is being awarded, consideration of the impacts of this action on other environmental aspects should also be considered to determine whether the grant funding can achieve, with or without changes to the activities proposed, benefits to other aspects of the environment.

6.7 Options for the delivery of the SRPD 2007 - 2013

Within the SRDP consultation document ⁶⁵, options are presented for the delivery of the programme. In rural Scotland there are a range of different landscapes from mountainous regions to lowland and coastal areas and these will having differing environmental needs. In addition there are differing rural communities, ranging from remote communities in island and mountainous regions of Scotland to those rural communities lying close to towns and cities which will also have differing requirements of the SRDP.

There is a need to consider these regional and local perspectives as well as considering the existing networks which help support with rural communities such as the SEERAD regional offices, SNH areas, the Forestry Commission Scotland conservancies, Community Panning Partnerships and LEADER Local Action Groups, those of other agencies ( e.g.SNH) and local authorities. The approach taken should ensure that a consistent approach to the granting funds to schemes is taken while ensuring that local needs are adequately met and ensuring that there is the knowledge available at the local level to make valued judgements on the schemes proposed and funded.

The establishment of Regional Project Assessment Committees ( RPACs) to deliver the SRDP and the production of guidance (Regional Rural Development Guidance) to guide implementation of the SRDP is proposed within the consultation document. The guidance will help to inform decisions taken in relation to applications for funding, taking into account these regional differences. The boundaries of the RPACs have not yet been determined and there are a range of regions and areas defined by a range of organisations' activities from the Local Authority boundaries to SNH area to river catchments as operated by SEPA and which will form the sub-catchments within the Scotland River Basin identified under the provisions of the Water Framework Directive.

In addition, the scope of the Regional Rural Development Guidance requires to be determined although work has begun to develop guidance in relation to the main environmental considerations identified as part of the SEA including: biodiversity; the water environment; landscape; the build and cultural heritage; forestry; and recreation and access. The SRDP consultation document indicates that consultation with stakeholders will be undertaken to consider these options further in light of the consultation responses and it is recommended that once a series of potential options relating to the potential regional structure have been identified, an environmental assessment of each option be undertaken.

In addition to the establishment of the boundaries for the RPACs there is a need to consider the most appropriate geographical areas for regional guidance. If the RPACs are established in take account of river catchments boundaries within the Scotland River Basin area then the obvious solution would be to use river catchments as the geographical areas for the guidance. An added advantage of this approach is that the guidance would feed into the development of the River Basin Management Plans, and this could address issues relating to monitoring which are discussed in section 7.2.

However, if an alternative structure of the RPACs boundaries is established, the development of geographical boundaries on a natural environment basis would perhaps be more appropriate particularly these boundaries cross river catchments as this would result in the need for catchments wide guidance to be made available to more than one RPAC each of which may have identified differing priorities for their region. This approach is similar to the former natural heritage zones system developed by SNH which is no longer in operation and consideration of this former system and the reasons for its decline should be investigated to help develop guidance based on natural environment basis.