Agricultural transition in Scotland - first steps towards our national policy: consultation analysis

5. Just Transition

The Farmer Led Groups discussed agriculture's contribution to the Just Transition, where Scotland's approach to achieving net zero carbon emissions delivers fairness and tackles inequality and injustice.^[4] This chapter presents an analysis of respondents' views on the opportunities and barriers for farmers, crofters and land managers in a Just Transition.

Q4.1: What do you see as the main opportunities for crofters, farmers and land managers in a Just Transition to a net zero economy?

Q4.1 received responses from 273 respondents, with commercial benefits, sustainable food production and environmental benefits were the most commonly identified opportunities.

Commercial benefits

Commercial opportunities arising from a Just Transition was the most prevalent theme across responses to Q4.1. Many respondents predicted that implementing more sustainable practices could enhance the profitability of farms and crofts by enabling them to charge a premium for goods produced to high environmental and animal welfare standards. Similarly, respondents felt there were opportunities for farmers and crofters to reduce their production and selling costs. This could be achieved through, for example, improved livestock health and efficiency, and a focus on local markets and shorter supply chains with lower transport costs and fewer intermediaries.

Several comments focused on opportunities for diversification into new markets such as green or agro-tourism or planting trees for timber or fruit production. Respondents suggested this could also bring previously unused or unproductive land back into use. A few observed that farmers might generate additional revenue by selling carbon credits to other businesses, but there was also opposition to this because it could support high-polluting industries.

"Biodiversity rich farms can attract recreational visitors and tourism which provides opportunities for farm business diversification." – Scottish Environment Protection Agency

Opportunities to access government funding were highlighted by several respondents who called for fairer and more equitable distribution of funds and a clearer link between funding and environmentally-friendly practices. There was a view among some that government funding could incentivise improved practices. Some identified opportunities to use funding to explore and test new practices focused on reducing carbon emissions, for example, dual purpose animals, circular agriculture methods, and alternatives to fossil fuels.

Sustainable food production

Many respondents highlighted that farmers, crofters and land managers have a crucial role in ensuring sustainable food production. Their comments typically centred on the potential for a Just Transition to reduce Scotland's carbon footprint and create opportunities for consumers to access affordable, healthy and local produce, with reduced reliance on imported goods.

"A Just Transition to a net zero and nature positive economy would help create a food system that works better for food producers, Scotland's natural environment and climate as well as consumers." – Scottish Food Coalition

Environmental benefits

Environmental benefits were highlighted by several respondents as a key outcome from a Just Transition. They reflected that farmers, crofters and land managers can contribute to environmental improvements including enhanced biodiversity, reduced greenhouse gases, cleaner water, more pleasant landscapes and climate change mitigation more widely. Respondents observed this will create a healthier living environment as well as more productive land for agriculture. Some respondents noted that working towards net zero would help make farms and crofts more sustainable and resilient to climate change, protecting them for future generations.

"Increasing biodiversity brings a much more healthy and productive environment which is very much better for us all." - Individual

Other socio-economic benefits

Some respondents noted opportunities for job creation, particularly in rural areas; and the potential to attract new entrants to the sector. A few explained that sustainable practices can be more labour-intensive, so farms will need more workers. Other job opportunities mentioned include hedge and woodland planting and maintenance, and employment in any tourism activities which stem from a more diverse farming sector.

The potential of a Just Transition to drive skills development in sustainable farming and land management practices was mentioned by some respondents. A few highlighted opportunities to diversify land ownership and promote more community ownership.

Agriculture's contribution to a Just Transition

Agriculture's contribution to a Just Transition was also discussed by some respondents. They described different approaches including: using agricultural land to promote biodiversity and contribute to carbon sequestration, and collaborating with other farmers to share learning and achieve a Just Transition. These themes have been covered in detail at other questions, and so a brief summary of these comments is provided in Appendix B.

Q4.2: What do you see as the main barriers for farmers, crofters and land managers in a Just Transition to a net zero economy?

There were 285 responses to Q4.2. Respondents identified the main barriers for agriculture in a Just Transition as: financial challenges and funding (see Chapter 3); ingrained attitudes and practices; and lack of knowledge and skills (see Chapter 9).

Financial considerations and government funding

The most prevalent barrier by far in response to Q4.2 was the financial cost of a Just Transition to net zero. While respondents identified the potential to reduce farmers' costs, comments in response to this question pointed to the funds required to incorporate cleaner fuels, invest in low carbon machinery, introduce new cattle breeds, and finance training for farm workers. A potential loss of productivity and income if farms reduce the proportion of their land used for production was also highlighted. Several noted this could negatively impact farmers' profits and present a risk to farms' financial viability and existence.

"The small and decreasing profit margins in agriculture leave farmers feeling that they have no choice but to undertake less than ideal practices in order to survive. Major transitions are too risky to consider unless there is an urgent need; when there is an urgent need, they may not have the financial resources to attempt something new." – James Hutton Institute

To address these financial challenges, several respondents highlighted the importance of financial support from the Scottish Government to fund a Just Transition. Most comments related to funding for farmers, although a few suggested alternative financial incentives such as tax breaks or low interest loans.

While government funding was identified as an important resource for farms, some respondents expressed negative views of funding arrangements. Criticisms included a perception that the criteria for Scottish Government payments encourage intensive farming methods, which focus on maximising production rather than sustainable practices. Other views included that the area-based payment system disproportionately favours large landowners, and that funding application processes can be bureaucratic and confusing.

"The best encouragement is financial, hence subsidies for arable, forestry and turbines should be greatly improved while reducing subsidies to livestock farming to zero and recognising that global greenhouse gas emissions is a major externality associated with livestock farming." - Individual

Ingrained and established attitudes and practices

Many respondents identified difficulties in persuading some farmers to move away from traditional or conventional methods towards sustainable practices. This was the second most prevalent theme in response to Q4.2. Respondents felt that farmers may be reluctant or unable to change from methods that have been in place for generations.

Knowledge and skills

The sector's lack of knowledge and the skills required to achieve a Just Transition was another common theme. Respondents reflected on the need for enhanced knowledge of climate friendly practices and for farmers to improve or gain the skills to implement these. Many called for more advice and training opportunities to support farmers and crofters to make the transition to net zero, particularly given the scale and pace of change required.

Government policy

Several respondents including individuals, agriculture and food organisations and environmental organisations noted perceived shortcomings in the Scottish Government's agriculture policy which could act as barriers to a Just Transition. These included concerns and uncertainty over the broad direction of agricultural and Just Transition policy, conflicting policy priorities, and a need for long-term planning. There were also calls for the Scottish Government to place more value on the sector and engage more with farmers to increase understanding of the issues facing the industry.

Tenant farmers and issues around land ownership

Challenges faced by tenant farmers in achieving net zero were discussed by several respondents from individuals, agriculture and food organisations and environmental organisations. Their comments explained that these farmers may be unable to change their practices or land use under the terms of their tenancy agreement, even if they wish to. Some respondents raised other issues related to land ownership more widely. There were suggestions that the concentrated land ownership in Scotland by a small number of landowners could act as a barrier to achieving a Just Transition. A few specified that more community ownership or control of land could aid a Just Transition.

Carbon trading was a barrier identified by some individuals and food and agriculture organisations. Respondents noted that large businesses can purchase land at high prices, then plant forestry to offset their carbon emissions. This reduces the amount of land available to existing farmers and individuals looking to enter the agriculture sector. It can also inflate land values, potentially making the acquisition of land more difficult for farmers. The Law Society of Scotland suggested a legal regime for measuring and trading carbon units could be useful.

Consumer attitudes

Some respondents commented on challenges posed by consumer attitudes, expressing concern that the public does not fully understand the changes required to achieve a Just Transition, nor the importance of doing so. Respondents voiced fear this will be reflected in continued preferences for cheaper food and a lack of willingness to pay more for goods to cover the costs of high environmental standards.

Less commonly mentioned barriers

A list of less commonly mentioned barriers is provided in Appendix B. These included: A perception in the agriculture sector that it is being blamed for climate change more than other sectors; the increased workload associated with implementing changes, and a perception that there is a disproportionate focus on tree planting at the expense of other actions that can be taken to contribute to a Just Transition.