Academic Advisory Panel – 7 August 2023 - Advisory Note

Items and actions

This advisory note has been prepared by the Academic Advisory Panel (AAP) as a response to a request from the Agricultural Reform Implementation Oversight Board (ARIOB). The note is a summary of the AAP meeting of the 7 August 2023 at which Agriculture Reform Policy officials asked the panel four questions about the role of the Agriculture Reform Programme (ARP) in food production in Scotland.

Summary of the AAP’s Discussion

The AAP set out that the Scottish Government should continue to build on the Vision for Agriculture to clarify in detail how financial support balances food production with production of other private goods such as timber or biofuels, and public goods like nature, soil health, and carbon storage. Climate change will lead to major changes in food production in Scotland. The ARP should support business adaptation and business readiness during the transition period, through climate shocks, and link to future initiatives for sustained change.

1. What are appropriate measures to determine if we are meeting the vision for food production in Scotland?

• the vision for agriculture should be supplemented, with a logical framework to trace ambitions through appropriate measures. Such a framework should map progression from agreed baselines to tangible SMART targets, with in-depth levels of detail. Scottish food production from farm scale to national scale should be assessed against measures that indicate if it is:
  • climate positive (supporting Net Zero)
  • nature positive (supporting thriving nature and positive impacts on the environment)
  • dietarily positive (supporting healthy eating and good nutrition), and
  • supports the Just Transition.
• the approach set out for delivering the vision for agriculture should consider impact and outcomes beyond individual farms to a landscape scale, taking account of factors to ensure rural sustainability. Agricultural reform should support multiple benefits in rural areas, recognising the range of ecosystem services delivered by our land, and potential trade-offs between these. Land can deliver private goods including food, fibre, fuel, feed, and inputs for the drinks industry. But these are dependent on generation of public goods, including carbon storage, soil creation, actions of pollinators, and provision of sustained water supplies. Meeting the vision for food production requires demonstrating sustainability and supporting these public goods at landscape scale both on farms and on other land uses
• agricultural policy cannot address all issues related to food production. Joined-up thinking between agricultural, food and trade, and other policy areas such as rural housing, rural transport and reskilling of displaced workers is important to address wider aspects of food supply chains and food security. Equally, active consideration needs to be given to measures that help farming and other land uses adapt to climate change, and the role of novel food production techniques, such as vertical farming and precision fermentation

2. Should the future support framework seek to influence the balance of what we produce in Scotland

• the future support framework should focus on increasing diversity of food production. Consideration should be given to what type of food production we want, need and are willing to support as a society. The future support framework should aim to achieve better value for public spending and a better balance between food production, provision of public goods, nature, climate and just transition outcomes. Diversification is likely to support climate resilience
• the role of the market, consumer behaviour, supply chain and green finance are all critical. These all have a major impact on farmer decision-making processes and will continue to be a stronger driving force than government policy. Volume and types of current food production is not fully aligned to domestic consumption needs nor domestic customer demands, although this in part reflects the produce that can be produced in the Scottish climate
• agricultural reform is aiming for a transformation of the farming and food production system in order for Scotland to become a global leader in sustainable and regenerative agriculture. A change which may inadvertently lead to a change in the balance of production. The message of the need for transition of the production system needs to be the spotlight of the agriculture reform framework
• the agricultural sector should be incentivised to adapt to changing food production and demand, and to promote healthy diets rather than being directed by policy. Overly directive policies could hinder land use transformation, misallocate resources, decrease the competitiveness of the farming sector, create unintended consequences such as barriers for new entrants, and potentially conflict with international trade agreements like the WTO
• differences between the main factors influencing global trade of food and local emission reductions and biodiversity goals can lead to policy conflicts and higher costs. Global context considerations, such as demand for more meat or cost of water for imported commodities, need to be considered
• nutrition and its link to human health need to be taken into consideration when discussing food production. Local production may not create the required shift in nutrition, food and production choice
• while concerns about global food availability due to climate change are valid, striving for higher levels of domestic self-sufficiency might not always be the most effective response. Instead, focusing on generating higher incomes from complementary agricultural and nature/climate focused objectives can lead to better food security outcomes by making production more sustainable and resilient to shocks associated with climate change and supporting farmers financial sustainability

3. Does providing underpinning financial support to farmers and crofters maintain food production capacity in rural Scotland. Should it be targeted to supporting food production which otherwise be economically unviable?

• financial support for economically unviable production should be driven by additional benefits or services provided. This shift should make it clear which specific services are being supported, aiming to move away from the expectation of unconditional subsidies. There is also a need to align the framework with societal values, considering global context and human health implications
• agricultural policy is seeking to work with private land managers to deliver on public policy objectives; therefore, it should primarily incentivise the types of land management required to achieve objectives, rather than providing direct support via basic payments.. Targeting support toward environmental and social public goods has the potential to improve outcomes for many farmers, for the environment and for taxpayers
• costs of food production do not incorporate costs to the environment and human health. Future support should recognise the value of producing nature and climate benefits. Farm support should also be targeted towards carbon sequestration, nature restoration, and human health impacts as markets do not correctly account for their value and cost. Support for skills development and advisory support are needed

4. How do we strike a balance between the need for direct support via basic payments and linking support payments to improvements in business efficiency and innovation?

• the focus of farm payments should be on transformative changes in agriculture and land management, as well as reducing farm inefficiencies and increasing business effectiveness. Emphasis should be placed on supporting succession planning, enabling major transitions and fostering innovation. The nature of modern farming and crofting is complex; making an accurate assessment of household income is challenging. We need a flexible and adaptable approach to provide support using a range of approaches that avoids dependency on annual payments and stifling business innovation
• support for farmers via direct payments should evolve into a more targeted and innovative approach. For example, a transformation or income stabilisation fund could encourage adaptation, address market fluctuations or crop failures linked to climate extremes or disease and support essential services like crofting in rural communities
• there will be variation in the range and severity of climate change effects experienced in different areas of Scotland. Future support should consider future predictions and target those areas and activities which are affected negatively by changes