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

7. Productivity

This chapter examines if and how agricultural businesses should receive financial support, linked to improved productivity over time. The consultation paper suggests productivity should be considered in relation to efficiency, with the aim of creating a sustainable agricultural industry that protects rural jobs, while decreasing greenhouse gas emissions, shortening the supply chain and increasing biodiversity.

Q6.1: Would incentives for farm plans specifically targeting flock/herd heath, soil health, & crop health (for example) demonstrate real improvements in productivity over time?

Among the 277 responses to Q6.1, key themes were: support for incentivising targeted farm plans; and concerns around a sole focus on productivity.

Support for incentivised farm plans

The most common theme was support for incentivising targeted farm plans. Many respondents highlighted the value of creating farm plans to improve soil, animal or crop health. They argued that these plans could generate efficiencies leading to greater productivity, while minimising the impacts of farming on greenhouse gas emissions and increasing biodiversity and sustainability. Respondents stated that farm plans should be integral to businesses and that those who were not using them should do so in the future.

"No doubt about this. And as new science emerges then these incentives can be tweaked. There is no argument that soils have been hit hard by increased mechanisation to improve productivity, however given the economic imperatives that ever-increasing costs and the clamour for cheap food generate it is understandable that things have gone this way. But we need to find a way to balance all of the competing pressures and balance financial and environmental sustainability. Implementing the correct programmes and incentives would, ideally, be about balancing these, often, conflicting pressures." – Meikleour Trust

Confusion about the term 'productivity'

Uncertainty about the definition of productivity was the second most common theme in responses to Q6.1 and the most prevalent theme in responses to Q6.2. Some respondents noted they were unable to answer Q6.2 due to confusion about the definition.

"There appears to be some confusion over the meaning of "productivity" in this context. It needs to be made clear that the reference is to the ratio between inputs and outputs, not to the quantity produced." - Rare Breeds Survival Trust

"Not clear what is behind this question. If productivity is defined in natural capital terms then the answer is emphatically 'yes'. If productivity is defined in terms of food and fibre, regardless of the environmental impact associated with its production, then the answer is emphatically 'no'."– Individual

Respondents were unsure if productivity was an indicator of profitability, higher production figures, or if it could also encompass environmental impact. Those who defined improvements in productivity as simply 'producing more' suggested such incentives would work against Just Transition targets. For example, focussing on increased output could encourage farmers to adopt practices such as increased agrochemical use or greater herd size, which are environmentally harmful and do not support animal, crop or soil health. Respondents mentioned the need to define productivity as 'quality over quantity'.

"I think we would have to be very careful not to fall into the old trap of improving productivity by scaling up. This tends to have adverse effects environmentally. Measures for productivity would have to be carefully thought out to include environmental and long-term benefits." – Individual

Other respondents suggested farm plans should consider profitability alongside productivity. A few cited studies which have shown a decrease in input may reduce productivity but increase overall farm profit. Others noted that if farm plans concentrated on profitability, it could increase uptake by farmers.

Importance of measuring, monitoring and implementing plans

Many respondents supported incentivising farm plans, but only if they are outcome-based, and measured and monitored to ensure recommendations are being implemented. There were calls for incentives to be linked to evidence of improvement.

A need for continued guidance

Support, specialist advice, training, 'farmed-led education' and Continued Professional Development were highlighted by several respondents as important to the successful drafting and implementation of farm plans. These are addressed in detail in Chapter 9.

Issues that could be addressed by farm plans

Several suggested issues to address in farm plans. These included: agreement with a minimum standards for soil, crop and animal health, shorter supply chains, support for a shift to organic farming, gene editing, better feed for lowered greenhouse gas emissions, rewilding and enhanced biodiversity, and new technological innovation.

"We would caution against a definition of productivity which does not consider animal health and welfare alongside efforts to increase economic or environmental outcomes. Agriculture cannot be considered productive if it is achieved at an unacceptable cost to animal welfare." – British Veterinary Association

Challenges around incentivising farm plans

Challenges around incentivising farm plans were raised by some respondents. Their concerns included: that some in the sector dislike and do not engage in data collection; a potential administrative burden; long timescales for improvement or change to be evident; impractical, unprofitable or unachievable plans; and that Scotland's diverse landscapes require nuanced plans. Some mentioned that many farmers are already implementing farm plans and may find it difficult to increase productivity further. They stressed that these farms should not be disadvantaged or penalised under any incentive scheme.

Q6.2: Should future support be dependent on demonstration of improvements in productivity levels on farm? If so, how would this be measured?

Just over half (56%) disagreed that future support be dependent on improvements in productivity levels. One fifth (21%) agreed and just under a quarter (23%) were unsure or did not answer. A majority of individuals and organisations disagreed (53% and 63% respectively), and the percentage of individuals in agreement was almost double that of organisations (24% and 13% respectively).

A clearer definition of 'productivity'

The most frequently identified theme in responses to Q6.2 was a request for a clearer definition of productivity, as covered in the analysis of the previous question. This included a majority of the respondents who agreed with the proposal to incentivise the use of farm plans, but caveated their agreement with a nuanced definition of productivity.

Measure environmental impact over productivity

A preference for support based on positive environmental impact over time was the second most prevalent theme in comments. Respondents highlighted specific support for farms who are enhancing biodiversity and working toward climate targets.

"Future agricultural support should aim to protect and enhance biodiversity, address climate change and foster social equity for food producers, rural communities and consumers." – Multiple individuals and organisations

While these respondents believed that productivity could be used as a measurement alongside environmental goals, several argued productivity was a 'red herring', and could cause long term environmental damage to those farms who focused only on output.

"Productivity is a key factor in the current system for dishing out subsidies. This needs to be replaced as the world has moved on and productivity cannot come "at any cost" to the environment or biodiversity or carbon or greenhouse gases. it may well be necessary for farms to decrease productivity in the near future as they move away from chemicals, artificial fertilizers and industrial farming." - Individual

Productivity and other measures

Other measurements to consider alongside productivity were also suggested. Several respondents noted the need for a nuanced definition of productivity that includes integrated and holistic approaches and considers productivity as social, economic and environmental. It was suggested that: productivity needs to be financially viable, specifically in relation to the impact on rural livelihoods; support for improved productivity needs to consider the time it takes impacts to become measurable; and productivity as a measurement needs to be scalable to reflect different farm sizes and geography.

Several respondents suggested categories of productivity to measure. A full list of suggestions is in Appendix B, but this included: crop output, quality and health, reviewing farming techniques being used and assessing efficiency measures.

Some respondents highlighted measurements to consider instead of productivity. These included: efficiency; profitability and financial viability (including consideration of the Maximum Sustainable Output^[6]); increased environmental benefit including greenhouse gas reduction and enhanced biodiversity; health and welfare of crops and animals; farmer and employee satisfaction; and future resilience.

Challenges in measuring productivity

Respondents noted challenges farmers may face in demonstrating improved productivity to receive support. Some suggested that if improved productivity was the key metric for support, the farms already using best practice would be disadvantaged as further improvements to productivity would be difficult or impossible.

"As long as those farmers who have been working hard to make improvements over the years (as any good businessperson would do) do not get penalised for not being able to make as large a measurable improvement as someone who is not farming productively. Credit should be considered for those who have already made the improvements and to encourage others to reach the same level." – Individual

"Using ongoing productivity targets may encourage bad practice to meet them. Farms running at full productivity for good practice, e.g. rotation that involves a mix of pasture, crops and fallow land…and those already farming with nature should also be rewarded, not excluded because they can't improve as they are at the top of their game." – Individual

Some respondents at both questions noted the unforeseeable impact of external factors on productivity. Weather, disease, predation and market factors like global commodity prices and free trade agreements were shared as examples of forces that could negatively impact productivity, even among those attempting to meet targets.

The challenge of adopting a standardised approach to measurement was mentioned by some respondents. They described the impossibility of comparing productivity improvement across different types or sizes of farms, or geographical areas. One suggested financial support should be based on comparisons to industry averages.

Respondents suggested support should be based on measurable changes in outputs and would require agreed methods to observe, measure and record improvement over time. A small number of respondents suggested all measurements and reporting be conducted by an independent body of researchers to ensure transparency and accuracy.