Agriculture Reform Implementation Oversight Board minutes: 8 December 2023

Attendees and apologies

Cabinet Secretary for Rural Affairs, Land Reform and Islands, Mairi Gougeon (Co-Chair)

Martin Kennedy (Co-Chair) 

Items and actions

Welcome and previous minutes (agenda item 1)

The Cabinet Secretary (Chair) welcomed her co-chair and members to the twenty-third meeting of the Board, and its seventh in-person gathering. Chair referenced papers supplied in advance and for any feedback to be sent via correspondence by 15 December 2023.

One member opined that, as per the draft ARIOB workplan, disadvantaged support should be scheduled sooner than Q3 as it requires more immediate clarity and includes common grazing considerations. Officials mentioned that the planned review of regions will take into account Less Favoured Area Support Scheme (LFASS) and Scottish Upland Sheep Support Scheme (SUSSS) as linked issues, noting the inherent complexities as part of that. Modelling work is being carried out to bring forward different options and co-chair highlighted the importance of demonstrating how this would work “on the ground”.

Further to that, co-chair hoped to see indicative modelling linked to the topics within the workplan which should reflect the different sectors, geographical areas and sizes of farms by mid-2024. While it may not be definitive, it will be helpful to have given interest in the changes will only increase when Tier budget splits are confirmed in February 2024. Officials responded that work has begun on personas (differing metrics including types of farms) but that much of this is wholly dependent on confirmation of budget splits and agreed to share with the Board when that work is further advanced.

With regard to the update on the work of the various sub-groups, some members raised the reframing of the Agicultural Rural Development (ARD) stakeholder group. It was felt this had previously been an important forum for two-way dialogue with the Government but there was now less meaningful engagement. Concern was expressed that this wider range of stakeholders may not now be sighted on what’s happening with regard to agriculture reform. There was a plea to reinvigorate the group with a renewed purpose.

Officials responded that the group had become unwieldy given the numbers involved and the decision was taken with the Cabinet Secretary to engage with the group outwith a boardroom format – which has been done successfully as part of Just Transition workshops earlier in the year. In addition, the ARIOB has filled that stakeholder engagement position together with other direct stakeholder engagement as part of the discovery processes and roadshows across the country. Ad-hoc meetings with specific stakeholder bodies were also being held. Officials stated that the ARD in its new form, a “panel of experts”, will continue for the foreseeable future, not least to maximise the purposeful use of supporting officials.

Chair agreed that we need to find a way to work better for everyone who wants a proverbial seat at the table, and that includes FAST (Food and Agricultural Stakeholder Taskforce).

Budget splits (agenda item 2)

Overview

Officials opened by reiterating the core messages that work continues to deliver across the whole of the Vision for Agriculture – the public commitment that there can be no cliff edge in support, that it be tied into a Just Transition and provide rural communities with the tools to thrive. A further public commitment was made by the Cabinet Secretary at the recent NFU Scotland Autumn Conference that vast majority of funding will be allocated within Tiers 1 and 2, the latter being the proposed engine room for change in a sustainable and regenerative context. Further details on allocations will follow in February and work is ongoing to calculate the most effective split to keep the activity against meeting net zero and climate targets.

Comments from ARIOB members:

• there was some discussion about the current system and comparisons to the existing budget splits to provide context
• there was agreement that based on the funding attributed to LFASS (excluding forestry grant) this would account for 80-90% of the overall budget, and that would align to Tiers 1 and 2
• it was pointed out that the Agriculture and Rural Communities Bill financial memorandum states that base payments will match current direct levels of support and that should be reflected as part of messaging now and in February
• officials added that the Scottish Government remains committed to direct rural support payments
• one member reiterated that the plan for phasing in new payment structures before they were decided could be problematic and that, as a result, Tiers 3 and 4 should not receive a fraction of the total pot
• officials hoped to reassure that the region review will help tie the tiers together
• on the total budget, it was agreed that it is difficult to have high-level talks when there is a lack of certainty over the quantum of the funding after 2024
• currently, Scotland is in receipt of 17% of a decades-old UK Government budget allocation, while emphasis has shifted more towards climate action
• Scotland is arguably doing more of that in terms of UK delivery relative to other Devolved Administrations as and we should be doing more to increase that allocation – although others offered the opinion that the budget would only remain the same or decrease in future
• it was noted that Chair had written to the Secretary of State for Environment, Food and Rural Affairs seeking such clarity to help allow businesses in Scotland to better plan for the future
• further to that, comment was made that if Pillar 1 can be compared to Tiers 1 and 2 and Pillar 2 to Tiers 3 and 4, Pillar 2 has a history of being underfunded
• if Government is serious about a Just Transition and delivering outcomes for climate and nature there needs to be fundamental change to how funding is distributed across tiers, particularly if 80-90% of funding is going straight to Tiers 1 and 2
• tiers 3 and 4 need better planning and heavier investment than residual expenditure and there was agreement that they can’t be ignored or left until the end of the process
• are there perhaps unrealistically high expectations of what Tier 2 can do?  will all areas be able to access Tier 2 funding based on disadvantageous geographical and capacity factors?
• how do we best use public money to achieve a stable, prosperous and sustainable farming sector?
• co-chair replied that a lot of the funding as part of Tier 2 (“the engine room”) will enable actions and activities that haven’t taken place before and 50% of that pot will be conditional in any case, with a reminder that this is the best way to get the industry on-board and incentivised to change.
• a rapid reduction in essential income in marginal and disadvantaged areas could have disastrous consequences, the transition must be carefully managed
• an example was given that, if farmers were not adequately supported via Tier 1, it could mean more of a focus on intensification to address any financial shortfall as smaller farmers and crofters remain disadvantaged – in addition to the prospect of them not taking part at all if they deem it not worthwhile
• members welcomed the modelling personas, as without them, discussions are still largely anecdotal
• chair added that there would be flexibility to pivot in future if Tier 2 isn’t providing what is expected in terms of outcomes – that there will be scope to move money across tiers to deliver on the Vision exactly where it is most needed
• monitoring and evaluation work is taking place within ARE to advise on future model flexibility
• it would be helpful to define the reality of production in a high income nation as part of a Just Transition as well as what a cliff edge is (interpretations on the latter would differ depending on business size)
• if the overall budget is diminished, then that cliff edge will affect splits between tiers, which themselves may shift over time. Unintended consequences must be monitored
• it was discussed that the private sector supply chain is moving quickly, with retailers leading the way
• while different sectors are in different positions, we need to ensure policy is aligned to market desires – particularly given infrastructure and advisory capacity in the sector will need to increase exponentially, alongside existing cross-government commitments such as the Food and Drink Strategy

The Whole Farm Plan (with focus on Biodiversity Audits) and Scottish Biodiversity Strategic Framework consultation (agenda item 3)

Overview

Chair introduced this item by referring to the Board’s request from the last meeting (29 September 2023) to have a fuller discussion on the Whole Farm Plan, including a representative of NatureScot to discuss Biodiversity Audits. Additionally, the AAP provided a paper on Biodiversity Audits to inform discussions.

Following the ARIOB request, the AAP met on 6 November 2023 to discuss biodiversity audits. The panel’s key recommendation was that the purpose of audits are made clear and that the chosen tool should capture data to monitor patterns and data should be shared publicly. There are a range of tools available and the Panel’s view was that the SG should assess, in collaboration with farmers and crofters, and recommend the best available for wider usage. There should be early messaging to prepare for change and to allow stakeholders to familiarise themselves with the objectives.

In order to do that, pre-populated mapping data will help farmers and crofters to have accurate baseline data to support farm assessments and cross-check. The Whole Farm Plan (WFP) currently has four core audits, with the Panel recommending an additional one on integrated pest management (IPM).

On frequency of biodiversity audits, the optimal cycle can vary depending on practices but every 2-3 years would allow users to address any areas of concern, but this is dependent on geography and should ultimately be staggered across farm populations. International and UK comparators would also be beneficial, as well as appropriate training.

The Panel discussed whether there should be a focus on minimum requirements, which would be identifying main and other important habitats (area, age and condition, key flora and fauna species), with the presence of those at risk and non-native species.

Comments from ARIOB members:

• the first comment related to promoting soil biodiversity as the building block to halting biodiversity loss and driving the functionality of the soil, noting the training offered by the Farm Advisory Service on the subject
• the AAP representative agreed that it was a key issue, and this would ideally align with the soil testing process as part of the audit
• an opinion was offered that most arable farmers have programmes and mapping systems and that there should be a focus on linking all data for the benefit of the farmer, which in turn would see the delivery of the Vision
• a note of caution was advised with respect to the definition of active farming, that is it vital that active food production is at its core, with others hoping that the definition would give equal footing to environmental outcomes
• there was some discussion on the negative associations with the term ‘audit’, that it had unhelpful connotations with being reviewed or monitored by an external body, looking to avoid repeating history (as with carbon audits)
• it should be communicated as a way of providing a picture of how things are now, opportunities for the future and what funding can be unlocked via the Tiers
• consistency of approach is essential, setting a broad principle with an entry-level audit that most farmers and crofters can complete
• that messaging should also feature tangible examples of what farmers and crofters can do to mitigate against the likes of storm Babet and increase farm viability, building their resilience while delivering for carbon sequestration and biodiversity improvement simultaneously
• the comms point was expanded and recent issues with Red Tractor raised, where attempts to bring forward sustainable production standards had suffered a backlash believed to be largely down to comms rather than the substance of the proposed changes
• we must be cautious on messaging or else people may leave assurance schemes
• audits and the WFP more generally must align with quality assurance and the advantages to farmers and crofters of this approach need to be set out clearly and carefully
• proportionality was raised - some businesses could take this on with relative ease but many would find it challenging and inevitably require the services of advisors
• it was highlighted that there are obvious actions that can be taken quickly, on range of habitats, without a detailed audit but acknowledgement that Government should be limiting any administrative burden
• an idea to use co-ops to test the process and reach people on the ground was suggested, with geographical clusters perhaps being the most effective way to do this in the way that some produce schemes have producer groups
• compulsory schemes such as this are required as part of the supply chain and would need to avoid duplication – markets and banks are increasing their demands and Government must align to bring about the desired changes
• common grazing was mentioned with a plea for clarity on how this will work on a practical level, particularly as 500,000 hectares and a fifth of BPS claims include a common grazing share
• there was further discussion on farmers and crofters changing mentality with a view to promoting pride within the farm, as done in Northern Ireland, where they have given farmers and crofters detailed information on wildlife corridors (for example) to promote positive change
• as a way forward on the concept of supply chain mapping, this is unlikley to have been actioned already because the market isnt necessarily paying for biodiversity outcomes when compared to animal welfare standards
• for example, clearer supply chaiin reward for these actions would means less need for public sector income
• one member added the majority of supply chain mapping has been done for Scotland Food and Drink Partnership delivery workstreams and utilised for Food Security Task Force work and supplementing that mapping work with this additional information was taken as an action point.
• some of plans that we’re talking about in Tier 1 have the ability to deliver a lot more value than others so should be prioritised while the initial objective is to get a lot of people to do a little
• we can’t lose the confidence of farmers and crofters by going too fast, too soon and so investment in advice will be essential

Officials moved on to the Whole Farm Plan itself to provide a short update on developments since the Board last met. On that note, as there was found to be consensus at the last meeting on the topic, foundations will be mandated from 2025. There is still concern about sectoral capacity and a 5-year cycle was discussed as perhaps being the most appropriate timescale. Officials had a positive meeting with FAST and came away with a commitment from them to look at cross-equivalence with assurance schemes to avoid duplication. We need to take that first step to bring the near-18,000 farmers and crofters on the journey and sell it as a positive step, not additional red tape.

While not yet signed off by the Cabinet Secretary, the current proposal will mean a menu of options added to the Single Application Form (SAF), which had previously been suggested by co-chair and this has already been through internal processes. On sequencing, every applicant for public support in 2025 will need to confirm that they have two live baselines with a view to four by 2028. As crofting and common grazings had been mentioned earlier, it remains a live consideration. Officials have learned via the WFP steering group that small producers and crofters don’t want to be excluded so there may be some scope for a wrap-around with the small producers scheme pilot.

There will be the ability to collect baseline data, anonymise it and share with academia as well as using it to help with the proposed Agriculture and Rural Communities Bill Code of Practice for regenerative and sustainable farming.

Comments from ARIOB members:

• in terms of biodiversity baselining, will this be via POBAS? What will have to be done afterwards to inform baseline discussion? Officials responded in the affirmative
• the proposal from 2025 is a baselining of all habitats across farms, crofts and common grazings – in other words, an accurate map to establish existing habitats
• this exercise will be based on a self-selected basic condition attached by farmers and crofters themselves to get a better idea of future interaction with payment system
• there was a further request for WFP clarity - is it demonstrating your respective baseline and thereafter improving from that baseline or more of a signposting to ensure you pick up appropriate options in T2?
• if looking at two audits immediately, does that become a BPS requirement? Ultimately, this will require proper comms, requisite capacity, free advice and training and we’re only 18 months away
• it was said that 30 hectares of Region 3 land is very different to 30 hectares of Region 1 land and this will have to be factored in. Officials interjected that the app will show the farm boundary as a starting point and this can be amended by farmers at farm level
• it was broadly agreed that the WFP serves two purposes: providing baseline now and providing information to farmers and crofters on funding streams that can be accessed within Tier 2
• there was some speculation that many high biodiversity farmers may not include everything if their returns are to be used as a baseline or benchmark to be improved upon over the years, so some thought should be given to recognition and reward to those doing this already and the capacity gap be addressed by focussing on who needs the most help to action this
• however, it was also mentioned that low vet availability and high costs can be unavoidable and that we may look to Ireland whose government maintains a portal where farmers can input the minimum amount of relevant information about their land, and it uses data from other existing sources to provide a carbon audit, listing what improvements can be made with single point of advisory contact
• this was widely viewed in the room as the ideal scenario in the context of the WFP
• one member asked if the POBAS app will work and officials believed that it should, while give an indication of progress
• following a Board request and agreement from Chairs, an action point was taken to have an interim online meeting on the NatureScot biodiversity app
• a further action point was taken to provide members with a revised overview of the Enhanced tier and the Secretariat will reflect that in the Board’s workplan
• in response to a request about measuring uptake and progress, officials added that businesses are not obliged to set a target and government has no plans to do that as part of this work
• in response to a query about Fair Work First being removed from the WFP and where it now sat in the context of Agri reform, officials said that this would be for the Agricultural Reform Programme to determine as the policy develops

Finally as part of this agenda item, Chair asked officials to provide an overview of the live consultation on Scotland’s Strategic Framework for Biodiversity. The proposals as part of the consultation are anchored in the Cabinet Secretary’s Vision for Agriculture, that we can improve biodiversity and maintain food production levels with no contradiction between the two and is framed around resilience and the benefits of doing it (decreasing the risks of drought / flood).

Redressing the biodiversity balance is considered to be a generational effort and that is reflected in the 25 year strategy to halt Biodiversity Loss by 2030 and restore and regenerate biodiversity by 2045.

As Chair mentioned, the consultation has been published and remains open for responses until 14 December 2023. Part 1 sets out what good looks like, including our vision and outcomes; Part 2 is the delivery plan which details how we will get there; and Part 3 is the Natural Environment Bill and this provides an overarching framework for new statutory targets needed to underpin the Delivery Plan.

The Delivery Plan contains over 100 actions which build upon the significant steps Scotland has already taken to address the biodiversity crisis and reflect the complexities and challenges of landscape and seascapes. Agri reform work goes hand in hand with the wider effort and officials will continue to work with farmers and crofters to transition to practices that will enable the desired biodiversity benefits.

The SG’s regenerative farming principles, published in June, aligned with the biodiversity strategy and delivery plans while being promoted as administratively simple and actions which make sense at farm-level: being as simple as possible and appropriate to a range of settings, through trials and testing and an incremental approach. There can’t be penalisation of progress, as was mentioned earlier.

Tier 4: Agricultural Knowledge and Innovation System (AKIS)  (agenda item 4)

Overview

Officials were at pains to stress that Tier 4 was as important as the other Tiers and shouldn’t be viewed as an add-on at the end of the process. Tier 4 (Complementary) is an essential, cross-cutting component of the framework to address Continuing Professional Development (CPD), advice, knowledge exchange and linkages to wider land management support from the Scottish Government.

Specifically on the Agricultural Knowledge and Innovation System (AKIS), its aim is to support the flow of knowledge and innovation via individuals, businesses, organisations and institutions. AKIS is central to the new CAP (2023-27) and the version as part of the Scottish framework will be similar.

The SG remains committed to continued co-development, or a service by design approach, to develop future policy. ClimateXChange undertook research to develop a research and evidence base on what we could include in Scotland. As part of that, a series of stakeholder workshops took place with a view to creating options with sectoral engagement (rather than recommendations) to allow for flexibility in future. The resulting report was published in June 2023 and is a useful document for providing a starting point.

In terms of the current state of play, officials have issued a thorough discussion paper (38 questions under 6 themes * as part of the pack to a large list of agricultural organisations to continue the stakeholder engagement process into 2024, obtaining more detailed views on how Government can develop Tier 4. There is also Parliamentary interest in this work as the Rural Affairs and Islands committee specifically asked about CPD.

* Creating a unified AKIS, Regionalisation and specialisation, Supporting peer-to-peer learning and farmer collaboration, Promoting diversity and generational renewal, Digital opportunities and upskilling, AKIS capacity building. 

Comments from ARIOB members:

• One member again highlighted capacity issues that the Board have been concerned about since its inception. There are echoes of the discussions from Scotland Food & Drink and the latest iteration of project management through fund recovery and governance would be well worth examining to help bridge the gap and pull on existing strings at minimal expense
• A member who had been part of an early workshop welcomed this progress but was disappointed not to see the wide range of stakeholders involved in that work be reflected in the paper as it focusses on the main players
• There is a huge amount of work around agroecological and regenerative workstreams that would benefit Tier 4 and hasn’t yet been captured
• Peer-to-peer support remains invaluable and this process shouldn’t be top down
• geographical clusters tie in well with the ethos behind restorative work, more impactful than disparate connections
• Members welcomed this work as a foundational piece. Tier 4 suggests a hierarchy (Presentational issue? Potential renaming of Tier 4 and/or AKIS?) but this is cross-cutting as advice and guidance is going to be as vital as where you allocate funding.
• there is, however, and evidence-base required on what farmers know already and what they need to know in future
• officials agreed that there is a lot of knowledge about how the Farm Advisory Service is being used currently, but what are they going to need in future in terms of knowledge?
• there was a feeling that some of this was disjointed – the immediate requirement should be to identify key gaps in knowledge amongst land managers in Scotland that need to be addressed over 3-5 years
• this could be a potential consideration for the AAP and an action point was taken
• it needn’t require a set of detailed research as it was considered relatively easy to identify what we need to see as part of our agricultural landscapes over the next few years and how we propose to bring it to fruition
• it was considered that CPD may need to become mandatory at some point as monitor farm work shows that many of those most in need don’t attend
• officials reiterated that no decisions had yet been taken, and any question on the compulsory nature of CPD would be included as part of a consultation
• government is aware of the land managers who don’t engage, but must work out how to best enable them to do so
• there were conflicting views on making it mandatory but consensus that this should empower businesses to improve upon their practices and the point was made that the supply chain expects its businesses to engage in regular CPD training
• on staff and recruitment, there is likely to be an increase in the need for specialist over generalist advice as the big level for the necessary generational change required
• advisors need to have accreditations to drive the change that’s required but need to be fully accessible, Scotland-wide, and open to all
• that point was reinforced with an example of the difficulty in obtaining the necessary veterinary advice in rural parts of the country
• in addition, college training needs to be better integrated rather than viewed as a “bolt-on” to the existing agri educational programme
• there was a suggestion to consider on-farm trials to establish better connections between researchers and farmers, with a plea that any written material take into account those with reading difficulties
• modelling in relation to regionalisation may help target specific regions, geographies, farm and land types that require specific guidance but that will inevitably be dependent on further investment

Nourish Scotland’s Agri Bill workshops report (agenda item 5)

Overview

For the final substantive item, an overview of Nourish’s workshops as part of the Agri Bill development process was provided.

The representative set out that Nourish had a reporting mechanism as set by the SG to host workshops on the Bill to ensure that there was as broad consultation as possible. This led to 21 workshops with 300 people from across the country, including those who had an interest in the future of farming but who weren’t necessarily farmers. This included a wide range of people from the Western Isles to urban areas.

The key question posed to participants was, “How can we best use public money to help farmers and crofters to deliver the Scottish Government’s vision for agriculture?”. Nourish’s approach was that of neutrality, reflecting what was in the Bill, with minimal props and no explanation of the current system (due to its inherent complexities). Participants were also shown a visions wheel, distilled from the Cabinet Secretary’s Vision for Agriculture speech, asking them what they liked and what was missing. They were also shown the Tiered framework using the metaphor of a house and its levels to get people thinking, particularly with a view to budget allocations.

The member gave a brief overview of the main takeaways from the feedback per tier and as below:

Tier 1 headlines

• producing food (for people) key
• nature
• animal welfare
• compliance
• living wage
• baseline/measure/plan

Tier 2 headlines

• biodiversity
• soil/regen/organic
• trees
• carbon emissions, renewables
• local food production
• less pesticide, less fertilizer, more seaweed

Tier 3 headlines

• local food, supply chains
• community engagement, access
• co-operation, diversification
• biodiversity – at scale
• trees and hedges
• organics

Tier 4 headlines

• local food, processing, abattoirs
• new entrants, succession, diversity
• training, CPD
• advice
• policing of standards

In conclusion, participants felt the proposals made sense and had a natural progression over time, with an overall view that food and nature were more important than climate and carbon to people – with some members commenting this was because the former are often more tangible than the latter.

Comments from ARIOB members:

• a question was posed on the demographics of workshops attendees and the reply was that it was mixed but mainly but rural stakeholders and predominantly farmers and crofters
• polls carried out in Scotland are consistent with these messages, and when explained correctly, people understand and more often than not pick out the same issues: sustainable food production, nature and climate
• that fully aligns with the Vision for Agriculture so it’s now important to deliver on it as that’s what Scotland’s people want from their Government

Tier 4: AOB (agenda item 6)

Chair was asked about the current membership position given that over the life of the Board there have been four resignations and no replacements as yet. Chair offered reassurance that this is being examined with a view to a refresh of the membership base;

Co-chair raised the value of data and while audits and baselines are being pulled together, they should be industry owned while still accessible to Government. Can ScotEID be involved to help create an accurate Scottish picture to aid delivery? Co-chair continued that the collation of this date shouldn’t be used for commercial advantage over its worth to “Scotland PLC”. Co-chair asked if the Board were happy for this work to be commissioned?

There were some conflicting views, mindful of ensuring the accuracy and robustness of the data. Others felt it would be more beneficial to bring a paper (on data and functions) to the Board and discuss in more detail in the near future and paper back to board about the purposes of data and functions, as well as requiring a research viewpoint from the AAP.

Officials added that there needs to be expectation management given the complexity of collecting data of the magnitude being discussed and the difficulty of interpreting and using the data to make significant decisions, particularly when many sectors are at different stages of the journey. Government has been giving some thought to this challenge and while it shares the aspiration officials agreed that further discussion was necessary in the first instance and, as an action point, would add to the workplan.

One member raised the increasing problem of farmers trading carbon credits that they will likely need in future to produce food and this will have an increasing impact on Scottish agriculture, particularly where it is sold to markets outwith the country and how that balances against Scottish targets (double counting, public vs. private).  An action point was taken to add to the AAP’s workplan for discussion and to revert back to the ARIOB with its findings.

Chair thanked members for attending and confirmed that dates for Q1 and Q2 2024 meetings of the Board would be confirmed via the Secretariat in early course.