Closed - Enquiry Completed in Dec 2010
The Inquiry into Future Support for Agriculture in Scotland invites interested organisations and individuals to respond to this public consultation as part its Inquiry.
Background
On 10 June 2009 the Cabinet Secretary for Rural Affairs and the Environment Richard Lochhead announced an independent inquiry to look into Future Support for Agriculture in Scotland. The remit of the Inquiry is to make recommendations to the Scottish Government on how financial support to agriculture and rural development can best be tailored to deliver sustainable economic growth. The Inquiry is chaired by Mr Brian Pack OBE, formerly Chief Executive of ANM Group.
After gathering information from the earlier Call for Evidence, meetings with officials from Scottish and UK Government, the EU and from various published papers and reports, the Inquiry has published its Interim Report.
Issues for Consideration
Respondents are encouraged to consider the interim report and to respond to the questions outlined below. (There is no need to answer all the questions).
Chapter 5: Future agricultural support
5.1 The Inquiry identified broad principles which future support schemes must follow - do you agree with these principles? (P34)
5.2 Are the objectives identified by the Inquiry as the underpinning rationale for future support valid and comprehensive? (P35)
5.3 The Inquiry identified four main streams for future support and believes that the debate about Pillars is distracting - do you broadly agree with these recommendations? (P35)
5.4 Is the goal of trying to achieve an objective system for the allocation of area payments using a constant criterion, which is not dependent on management, like the Macaulay Land Capability for Agriculture (LCA), worthwhile? (P37 - 38)
5.5 The Inquiry suggests that it is essential that the area eligible for direct payments changes annually to ensure it reflects the reality and is not an historic base. Do you agree with this concept? For you information it could have implications for administration costs and, possibly, the date by which the full direct payment is made. (P37)
5.6 What are your views on the "annual qualifying requirements" for future area based payments set out in the interim report? Are they sufficient to capture "active" farming? (P38)
5.7 An example is given in the report to illustrate what area payments might look like - area payments plus Top Up Funds (TUF) equals the current SFP budget. This example, has been chosen for illustration only and is in no way a working scheme. The example pays higher rates to the most productive land and to land on the margin of being most productive. (P38)
a) Whilst this model, as far as allocation between land types, is in keeping with the Inquiry's view on why direct payments are justified, do you agree?
b) If you accept the principle of higher direct payments going to the engine house of Scottish agriculture, do you accept the £/ha allocation between the land classes and, in particular, the division between LCA 5.1 and 5.2 or should all LCA 5 get the same payment?
c) If all LCA 5 land gets the same payment, then this rate could be £55 for LCA 5 land without changing the top rate (£130) or if it was £85 for LCA 5, then it would mean £115/ha for LCA 1 - 4 land.
5.8 Do you agree that the total agricultural utilisable area of Scotland should be eligible for inclusion in an area scheme and that as far as rough grazing is concerned, the area actually paid on, is land supporting more than 0.12 LU per hectare? It would be expected that the claimant would reduce the area claimed to meet the minimum stocking rate requirement. (P39)
5.9 The Inquiry's attention was drawn to a potential problem in that area based direct payments might drive up rents. It suggests that if the occupier of the land has to enter an annual contract with Scottish Government to deliver Good Agricultural and Environmental Condition (GAEC), including minimum stocking rate where appropriate, this might help.
a) Do you believe it is a real problem and, if so, will the route suggested help?
b) Do you have a suggestion as how to ensure the beneficiary of area payments is the working farmer? (P39 - 40)
5.10 The Inquiry believes that a constraint on the sustainability of farm businesses is market price volatility, with Europe, in order to satisfy WTO demands, having no effective price stabilisation mechanisms. (P40)
a) Do you agree?
b) Also, within WTO constraints, is there a mechanism (such as mutual funds or insurance) that you think the Inquiry should consider?
5.11 The Inquiry suggests establishing a Top Up Fund (TUF) which would be available to farmers in receipt of direct payments, in return for a commitment to transformational change which will improve their competitiveness and sustainability. Do you agree with this suggestion that a TUF be established? (P40 - 42)
5.12 As the TUF will provide money to help achieve outcomes at the expense of the direct area payment, deciding the size of the fund is critical. The Inquiry's view is that for the TUF to be meaningful it must be at least half the amount that would be paid out as new direct area payments, what is your view? (P40 - 41)
5.13 At this stage the Inquiry has identified the principle of establishing a TUF but, as well as developing its own ideas, is looking to canvass ideas on what the various measures might be and how they might be applied. Please provide your thoughts. (P40 - 41)
5.14 The Inquiry suggests that Top Up Funds might be directed at individual claimants in proportion to their direct area payment in return for certain specified outcomes with any unclaimed funds being used as a general pot. Do you agree with this concept of, in effect, having an individual area claimant's fund or should it be much more measure-specific for example, with some funding dedicated to supporting particular sectors? (P41 - 42)
5.15 If you believe that a proportion of TUF monies should be used for sector specific measures. (P41 - 42)
a) What proportion of the total TUF should be allocated?
b) Which sector or sectors should TUF support and why?
5.16 Currently the EU allows 3.5% of National Ceilings to be used for trade distorting measures (including coupled support) with the target very much being vulnerable areas and production. In any new regime the Inquiry believes that it is essential that Scotland achieves a right to direct 15% of its ceiling to trade distorting measures as 85% of Scotland is Less Favoured Area and 65% is rough grazing utilised by livestock. Do you support this stance? (P41)
5.17 Do you agree that the area of forest created from 2009 should be eligible for payment?
5.18 Do you have any further comments you wish to make on the issues set out in this chapter?
Chapter 6: Short term issues
6.1 Do you accept the Inquiry's position that a move away from the current historic basis of SFP to an area base should await EU agreement on the post 2013 regime and allow time after the decision is made, for developing how the scheme would be implemented including the necessary data processing - i.e. that a scheme should not be implemented before the 2014 scheme year? (P44 - 45)
6.2 As the Inquiry envisages that current SFP entitlements will be paid for the next four years (2010, 2011, 2012 & 2013) and it received strong arguments for the immediate implementation of a phased change, the Inquiry recommends that any new basis should be implemented in the 2014 scheme year without a further transitional period. Do you agree with this view and, if not, what arguments would you offer to influence this position? (P45)
6.3 The Inquiry has identified with regret that under the Health Check regulations there is no route available to provide historic SFP to new entrants who have started farming since 2004. Do you have any views on how such new entrants, within EU rules could be helped? (P45 - 46)
6.4 The Inquiry is of the opinion that the only way to ensure that only land which supports some agricultural production is used to claim SFP entitlements is to introduce new requirements into GAEC. In particular the Inquiry thinks that for livestock production, a minimum stocking rate of 0.08 LU/ha should be applicable from the 2011 scheme year. In the interests of equality, the Inquiry has also suggested an equivalent measure requiring minimum arable activity. (P46 - 47)
a) Given the low penalties, certainly in the first year (2011), of breaching these new GAEC requirements and the relatively high costs of implementing the livestock regulation, do you believe that what is proposed is sensible?
b) Do you have an alternative suggestion (within EU rules) as to how to exclude barren hillsides from validating entitlements or should it be treated as unimportant?
6.5 To better define GAEC, the Inquiry has also considered introducing a maximum stocking density (2.5 LU/ha). What is your view on this suggestion? (P46)
6.6 Do you accept the principle of top slicing all Scottish entitlements to finance measures designed to address some of Scotland's emerging issues? The reasons for your view would be appreciated. (P47 - 48)
6.7 Do you believe that an Article 68 measure to help stabilise beef production should be seriously looked at for implementation and, if so, which of the three outlined would you support and why? (P49 - 51)
6.8 Is the Article 68 measure to support sheep production in the North West worthy of pursuing despite the expected disproportionate costs of running the scheme? (P51 - 52)
6.9 If you recommend trying to implement one or more of the Article 68 measures do you wish to offer comment on what you see as the essential criteria of the scheme(s)? (P49 - 53)
6.10 Should the conversion of the Scottish Beef Calf Scheme from an Article 69 measure to an Article 68 (will not be identical) scheme under the Health Check regulations be pursued? Is your recommendation dependent on what else might be pursued under Article 68? (P53)
Responding to the Consultation
The Inquiry invites interested organisations and individuals to respond to this consultation, responses should reach the Inquiry team as soon as possible and no later than 5 March 2010.
All responses submitted become the property of the Inquiry and may be printed and published. Respondents may publish their own evidence but in so doing should indicate that it was prepared for the Inquiry.
This is a public consultation and you are encouraged to draw it to the attention of others who may wish to respond to the Inquiry.
E-mailed responses in Word format are preferred to enable analysis. It would be helpful if responses could be set out to address the questions posed above either by using the attached template or by cross referring your responses to the question numbers e.g. to Question 6.4 and where appropriate to the part (a or b).
There is no need to answer all questions.
Please make it clear in your response whether you are responding as an individual or on behalf of a group/organisation.
Responses should be sent to the Inquiry as follows;
By email to BrianPackInquiry@scotland.gsi.gov.uk
By post to the Inquiry Secretariat:
John Brownlee
Inquiry into Future Support for Agriculture in Scotland
Room 259
Pentland House
47 Robb's Loan
Edinburgh EH14 1TY
Tel: 0131 244 6357