Agricultural Reform Implementation Oversight Board minutes: 25 November 2021

Attendees and apologies

Chairs:

• Cabinet Secretary for Rural Affairs and Islands    (co-chair)    
• Martin Kennedy (co-chair)    
   

Items and actions

Agenda Item 1: Welcome and introductions 

Cabinet Secretary for Rural Affairs and Islands welcomed everyone to the fifth meeting of the Agriculture Reform Implementation Oversight Board and confirmed there were no apologies for the meeting. Chair extended a warm welcome to guest speaker, Dr John Newbold, SRUC’s first Professor of Dairy Nutrition, who had kindly agreed to speak to the Board about methane inhibitors. 

Co-chair thanked attendees for their combined efforts so far, once again acknowledging the commitment of Board members.

Agenda Item 2: Minutes of previous meetings and actions arising 

Minutes and actions outstanding

Minutes were updated as required and an update on outstanding actions was provided.

Comms Crib Sheet 

An action from the last ARIOB was to develop a Comms Crib Sheet for ARIOB members to use to help them share accurate information about the National Test Programme. Chair emphasised how critical effective communications will be in ensuring buy-in to the new proposals, echoing previous comments from the Board, and that peer-to-peer dissemination of accurate information will be integral to that, so this sheet will allow members to share that “direct from Scottish Government” information with their stakeholders. Chair invited any comments on the crib sheet.  

General

Members agreed that it should be made clear that it is a living document, to be updated on a regular basis, particularly as the Q and A section states “further information will be available in due course”. Chair also noted that the document needed to include some of what had been announced at the NFUS Conference, and to make farmers aware that  biodiversity audits and animal health and welfare plans will be added in due course. It also needs to make clear that support will be available for nutrient management, including soil testing.

Carbon audits

Co-chair stressed the need to recognise those who have already carried out a carbon audit, eg, within the last year, and thereby fulfil the commitment to a full-industry approach with Track 1. There followed some discussion on the nature of that recognition and whether retrospective financial recompense would be appropriate.

In relation to payment, given that carbon audits and nutrient management plans need to be regularly updated, there was some thought given to mandating updates as a condition of financial backing, including what should be done with the information provided by the audit. The repeat process of carbon auditing is crucial to establish a baseline followed by monitoring progress over time to gather a solid evidence base. Other members pointed out that the issue is about incentivising taking further steps if you’ve already started on this path and that there should be a cut-off date for any potential funding, but everyone acknowledged the potential divisiveness of this issue.

Officials highlighted that many carbon audits carried out have already been paid for by the Scottish Government via the Farm Advisory Service so care must be taken not to contravene the Scottish Public Finance Manual. Recognition is important but not necessarily combined with a payment and the Policy Development Group (PDG) are working with Officials on a potential solution. 

Members also felt the need to make clear that people should be free to use any carbon auditing tool as long as the data/output remained consistent across the country and that tied in with the view of making the registration process as straightforward as possible. 

Some thought also has to be given to how we shift the perception amongst some farmers that carbon auditing is an administrative tool, rather one that can influence decision making on-farm, and using expert advice available to develop an action plan.

There was acknowledgement that most farming businesses operate to tight margins and will ultimately make decisions based on cost and seeing a financial return. Market drivers, such as the increase in cost of nitrogen fertiliser, were offered as an example of changing practices which would have an indirect environmental benefit. It was opined that retailer input may prove helpful, particularly in relation to data quality and verification, as well as uptake. At this point Chair suggested a specific session on carbon audits and an action point was taken.

Agenda item 3: Future farming support in Scotland – core purpose 

Further to the request from Board members to have a discussion on the core purpose of future farming support, Chair referred the Board to the Vision paper circulated just ahead of the meeting and hoped this would prove helpful in facilitating open discussion on the topic. Chair confirmed that the document sets out the SG overarching vision as specified in the Manifesto, and that, as an agreed position, it was not proposed to make any substantive changes, but ARIOB’s views would nonetheless be helpful to hear.

There was disappointment expressed at the late receipt of the paper and the lack of time to consider, but members were advised that they received a draft version, which was substantively similar, at the end of October, and could base their comments on that.  

Language

On the Vision itself, some members felt the language came across as negative, unclear and dictatorial, but others expressed the view on the contrary: that what was set out effectively captured the desired ambition in a way that was inclusive, positive and strategic. 

Some contradictions within the document will be addressed, specifically around food production. 

EU alignment

A point was raised about the prominence of EU alignment in the Vision but Chair reminded members both that that was stated SG policy, and that a new CAP had just been agreed (2023-2027). Officials followed that up by stating that the Scotland’s position is much closer to the EU than rest of the UK, noting the separate difficulty in UK alignment and what governments in England, Wales and Northern Ireland may do in terms of divergence. This is a complex and unprecedented position and Officials are keeping Ministers up-to-date.

Conditionality

Members noted the uncertainty with regard to direct payments, particularly in light of new conditionality aspects from 2025. With at least half of all payments being made conditional, it is envisaged that work being carried out as part of Track 2 will help flesh this out. Members concurred that continuing the current method of payments is unsustainable, and that moving to a baseline of direct payments with further conditionality linked to emissions reductions is a pragmatic approach. Chair added that the Vision will underpin any future design alongside commitments upon which the Government was elected.

Food production

Following some discussion on food production in Scotland, Chair confirmed the objective to maintain food production at current levels but in a more sustainable way, especially if Scotland is to be a world leader in this area. It was also pointed out that the Vision will assist the localised supply chain in tandem with the Good Food Nation Strategy. It was also viewed by some members that there is a lack of recognition of food security problems and increasing populations,  and that we have an obligation to produce food with a lower carbon footprint - a cultural vision, not just environmental -  although others said that the primary function of this Group is making agriculture more sustainable in the first instance. In addition, some thought was given to pulling together data on Scotland’s self-sufficiency and food security status, and an action point was taken. 

Sustainability and regeneration

Further clarification was sought by members on what is meant by sustainable and regenerative farming and Chair felt this was an opportunity to define the terms and what they mean for Scotland. There was a call for a future session on definitions and an action point was taken.

There was some concern over wider rural issues, particularly around land acquisition for carbon offsetting, and though we have had the Land Reform Act and Agricultural Holdings Review, the tenancy sector needs more support to survive. Officials advised that the Scottish Land Commission are doing some work on this.

Natural capital

It was pointed out that markets have an influence over the direction of travel, and the lack of reference to them within the Vision could be considered an omission as they could plug some gaps. The Regional Land Use Partnerships (RLUPs) / Natural Capital approach to fund aspirations from communities on carbon and eco markets should be considered as a way to fill any gaps and an information paper on Natural Capital will be presented to the Board in the new year.

The Vision includes the line, “adopt a natural capital approach to land use change” and it was hoped this could be clearer. This approach typically refers to economic valuation of the natural environment using natural capital accounting methods. RLUP pilots are evaluating how this approach could be used to develop place-based ecosystem markets, and there are currently no principles around how agriculture might interact with these markets. Given the extent to which soil carbon markets and other ecosystem markets could shape the sector, this is could be made clearer with the addition of, “including the development and regulation of high-integrity environmental markets”. This wording would emphasise the need to facilitate but also carefully regulate these markets as part of a natural capital approach.

Economics

Discussions moved back to finance and the overall shape of how the Vision is supported, utilising both public and private investment to help achieve our targets, although we mustn’t lose sight of the fact that farmers should also be supported in ways other than financial. Undoubtedly, collective support is required from industry leaders for the Vision as economic resilience will be critical to its success, particularly as focus turns to outcomes.

Industry change

Some members wanted further detail on more circular methods of production, reducing waste, recycling nutrients and moving away from silo-based systems, especially as this could be tied into an outcomes based approach. The Board felt it imperative to get check on where farmers stand on interpreting the Vision – is this information, and the associated changes, filtering down to people on the ground? A suggestion was made to establish a focus group of farmers to test this out and an action point was taken. Co-chair added that while the industry know change is afoot, it is important to take the pulse of those operating in the field.

Agenda item 4: Next steps  

Chair invited the Board to note for information the Highlight Report contained in their meeting pack, and made them aware that they will receive a Highlight Report at each meeting and a fuller update on work underway will be scheduled at the next meeting on 16 December. A query was raised on timescales – Chair confirmed the intended rollout of the National Test Programme from spring 2022 but more detail will be provided at the Board’s next meeting.

Agenda Item 6: Methane inhibitors 

At the last meeting on 27 October, the Board requested to hear more about methane inhibitors. Dr John Newbold, Professor of Dairy Nutrition at SRUC gave a short presentation on the subject. 

Dr Newbold provided some context and an overview of the ruminal methane biochemistry production process, and summarised the feed supplement approval process – data, regulatory restrictions, certification, supply chain, verification and market acceptance. He also outlined some specific product journeys including, topically, seaweed. In relation to the role of feed additives to achieve short-term goals, he noted they do have a place, but in the longer term it is advised that users should attend to animal nutrition first and use additives to complement.

Officials advised that there is SG analysis on additives available and, pertinently, how much methane is likely to be captured. 

The point was also made that nitrate inhibitors are already in common use in the Arable sector and contributing to reductions. It was requested that low methane breeding be added as a future agenda item and an action point was taken.

AOB 

In closing the meeting, Chair reminded members that the next meeting of the ARIOB will be on 16 December, and that from January 2022, meetings will move to a monthly basis. Secretariat have issued invitations for meetings up to June 2022. Chair concluded by thanking members and reassuring them that officials will endeavour to issue papers in a timely fashion.