Agriculture Reform Implementation Oversight Board minutes: 3 February 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 papers for noting and sign off (agenda item 1)

Co-chair welcomed all to the meeting, noting the full agenda and with a request for any comments on papers to be made via correspondence. However, he opened the floor to members who wanted to quickly raise any pressing matters. Members were positive in reception of the Academic Advisory Panel (AAP) paper but one member felt that redistribution for smaller units hadn’t been accounted for in relation to the work of the Disadvantaged Payments sub-group (agenda item 6).

Developing the future support framework (agenda item 2)

In order to stimulate discussion, officials provided a brief introduction and asked the board to give their views on how Government can best deliver towards the Vision for Agriculture. The paper associated with this item gives an overview on the Tiered system with associated questions and officials ended their opening remarks by reminding members that what is proposed is ambitious, up for review and can be adapted as it evolves.

Comments from ARIOB members:

Whole Farm Plans

• while members welcomed that this work was under review there was concerns that there are assumptions within the Framework about what will apply to Tier 1 base payments that are overly onerous and often unknown to farmers and crofters
• Whole Farm Plans (WFPs) were offered as an example of this and some members reiterated their views that the WFP as presented to the board last Summer was not fit for purpose and that urgent clarity is required as to exactly what they will contain
• co-chair agreed that while farmers and crofters would accept WFPs containing requirements relating to food production, biodiversity and emissions reductions, they would not stand for the “add-ons” as presented to the board in August of 2022
• officials sought to reassure members that feedback from the board on WFPs was heard clearly at their meeting in Dunfermline and that advice will be issued to the Cabinet Secretary which will include the proposal for a WFP working group
• it is hoped the working group will be able to shape what WFPs will look like in a way that is proportionate to the sector
• there will be no imminent announcement on WFPs
• co-chair mentioned that the Single Application Form (SAF) should cover most of what’s required in a WFP and there shouldn’t be a duplication of effort – with mixed farms potentially having multiple form-filling obligations (which would see any money potentially going to external agents for completion)
• while there was obvious concern over WFPs, others noted that hey could be a useful tool for farmers and crofters, that their abilities should not be underestimated (carrying out such Plans in one form or another anyway) and that any detail shouldn’t be defined now but appropriately consulted on as a point of principle
• a popular suggestion was made in relation to WFPs being presented differently than at present. The very concept was born of the Farmer-led Groups, not as a measure in and of itself, but a means of farmers communicating to Government what their intentions are for delivering climate and nature actions and, in return, Government provides funding.
• in addition to that, reviewing plans in their totality (circa 15,000) should allow us to project what will be delivered nationally, and therefore plan and set targets accordingly
• it was argued WFPs shouldn’t be a Tiered measure - a new SAF rather than an additional burden

Framework

• there was an expectancy that the Framework should be continuously reviewed and, where advantageous, expanded, with some agreement that a sensible, flexible review point would be between 3 and 5 years – mindful of the need to report to the Scottish Parliament. In addition, such reviews should be clearly signposted to be as transparent as possible and a way to further incentivise meeting targets
• incentivisation was further discussed, with a hope that both conditions and funding should increase progressively, subject to budgetary constraints
• governance and auditing were viewed as key to the success of this work and should be tabled for discussion by the proposed working group
• on budgets, there was consensus that the proportion split between Tier 1 and Tier 2 would be critical – especially as businesses adhering to Tier 1 must be allowed an opportunity for their businesses to remain simply viable
• there followed some discussion on Greening, with some members believing that it shouldn’t be featured in Tier 1 as it would disadvantage arable farmers by default
• members were reminded of the binding Net Zero and Biodiversity targets and, to that end, a plea was made to properly fund Tier 2, “the engine room”, to ensure delivery against intended outcomes – which won’t happen overnight
• others were confused by where payments sit, particularly in relation to Tiers 3 and 4 – noting that the entire tiered system should be as accessible as possible to as many farmers and crofters as possible and clear communication of the Tiers and what they offer will be invaluable

Budgets

• on the base payment, officials added that Government continues to explore all angles and that the current payments must continue to be delivered under the present system
• a point was raised that such use of public money should be to help both climate and nature while keeping businesses afloat and wondered if capped payments might be a way of helping the most disadvantaged, particularly as there are many larger businesses that do not need the base payment and there is obviously a finite budget – in other words, prioritisation
• the new EU CAP was referenced as utilising frontloading to help smaller businesses as they may be disproportionately impacted by some conditions – capping should be on the table
• however, it was suggested that bigger businesses have the potential to deliver more and can expectations of such operations be raised for the same level of funding? Businesses need a greater understanding of what the future is going to look like
• ultimately, it should be considered reasonable that as your move up the 4 Tiers, conditionality is ramped up, allowing businesses that want to grow space to do so – so not having too many conditions within Tier 1
• it was suggested that the industry expectation is that the budget will remain the same but this is unconfirmed
• the Cabinet Secretary confirmed that while she would like to provide more certainty, she is also uncertain of future budget allocations
• co-chair added that while the Scottish Government will make the final decisions on policy, it is incumbent of the board to input – not necessarily about the budget, but how that budget is split
• co chair agreed with others that the industry perception is that 50% of funding is conditional and 50% won’t be – even though that is inaccurate, so language and framing critical during what will be a significant transition period
• communications will need to be clear with consistent language and messaging

General

• the board cited previous discussions they’ve held in relation to actions versus outcomes and the difficulty that entails, i.e. people carrying out the same actions with differing outcomes through no fault of their own
• perhaps we should move away from a perceived fixed outcome towards demonstrable progress through a mixture of actions and outcomes
• one member enquired as to the status of the Agriculture Bill consultation and officials mentioned that the consultation analysis has been tendered to an external contractor and shared with the board in due course
• another member pointed out that what is being proposed may not necessarily be proportionate to the size of businesses and that some conditions which may be applied to smaller units won’t make sense
• others looked for clarification in relation to language previously used around a “minimum 50% conditional funding” and officials conceded that they will examine future wording to address such ambiguity, hearing the robust feedback of members
• ultimately, the aim is to support the industry to plan ahead, be sustainable and without a cliff-edge
• they added that between now and June 2023, the WFP working group would be proposed and a route map published which will accelerate the work of Government

Summary

Officials agreed to receive written feedback on the Framework and Chair was content that comments could be shared among members thereafter to ensure transparency.

Route map and future focus (agenda item 3)

Officials explained the thinking behind the route map, which had been requested by the board, as a means of knitting together the component parts of future agriculture policy. Officials sought further feedback from the board on presentational style, language and how the route map would land with farmers and crofters, with written comments requested by close of business on Monday 6 February.

Overall, the purpose of the route map is to deliver often disparate information already available in one place and ensure it is easier to understand. It provides clear programme dates – when current schemes transition, end and when guidance will become available to help farmers and crofters suitably plan and prepare for change

It was stressed that the route map is a living document, including more information as it becomes available and any changes will be made clearly. It can’t answer all questions on the detail right now but it will set out when that information is available in order for the process to be truly transparent

Officials provided a presentation on the route map and sought immediate ARIOB feedback, particularly in relation to whether there are there things farmers and crofters need to know that aren’t in chapter 5 (When will I get more information to help me plan?) and are there details that aren’t included that should be?

General comments from ARIOB members

• members were broadly very receptive to the route map, noting its work in progress status but praised its logic and that it would provide a significant amount of clarity to the industry at what is an uncertain time
• the board made some general suggestions on language (plain English), presentational style (green to orange graph, chapter 4) and the need of a key for acronyms and a glossary for commonly used terms (payments, measures, conditions etc.). Officials were thankful for this feedback and will liaise with specialists familiar with using visibility tools for public consumption
• one member suggested a change to, “appropriate use of lime” rather than reduction as currently suggested in some examples (chapter 6)
• some members cited concerns in relation to new scheme elements, particularly the current anomaly that some work within tier 3 is paid beneath tier 2 levels and that that could be potentially resolved with regionalisation
• in no particular order, disadvantaged areas, crofting, biodiversity, organics, supply chain support and new entrants were topics raised as either not being adequately represented or indeed represented at all within the route map – officials noted that in the balancing act of creating the document, it may not be practical to mention everything
• officials noted this and, that while they will seek to resolve, parallel delivery of both enhanced and regionalisation models would have been too much of a significant change and bring about a huge element of risk
• there Is still a lot of internal work to be done on the tiered mechanisms and such feedback on the particulars is invaluable
• one member suggested that some simple amendments to the Scottish Upland Sheep Support Scheme (SUSSS) would mean conditionality aspects would fit better and be done in a cost neutral way to Government and references within SUSSS within the route map should be amended
• co-chair, part of the Hill, Upland an Crofting Group confirmed they took no decision on SUSS conditions or mechanisms to deal with the scheme
• however, he does believe that the Less Favoured Area Support Scheme (LFASS) and regionalisation questions are interlinked
• on both LFASS and Voluntary Coupled Support (VCS), some felt that it is implied within the document that it will become disadvantaged support by default and Government should be aware of creating unintended industry assumptions – officials added that no decision has been taken as yet to halt either scheme and the assumption is a fair one purely as Government is yet to commit either way
• one member opined that efficient or efficiency should be used in the context of food production as this will ultimately be required to lead to business efficiency
• chair agreed that the economic wellbeing of the industry is critical to the new process
• there was some discussion on the pros and cons of case studies, and that while often useful for providing a rural life context, can often lead to more questions than answers but others argued that now is the time to be asking and attempting to answer questions from the wider public and that even negative feedback should be seen as positive as part of stimulating conversation
• in relation to that the idea of videos or vlogs were proposed by one member, believing they would be more impactful while others suggested benchmarking and infographics to supplement such comms
• additionally, the AAP are measuring propose outcomes within their workplan - top down, across the country, and they will report on that

Summary

The board were broadly receptive to having tangible timeline and officials hope to add more detail for June (2023). Officials issued the board with revised copies of the route map (plus presentation) and list of measures during the meeting for further comment by the aforementioned deadline.

Announcement at NFUS agm on 10 February 2023 (agenda item 4)

Further to the detail provided earlier on the route map, officials alerted members to the two other elements to the planned announcement at the NFU Scotland AGM – the list of measures, which are complementary to the route map, and the Animal Health and Welfare (AHW) interventions as a result of work carried out by the related working group.

As well as the announcement on 10 February, guidance will be published on the SG portal which will include a suite of communications (“stakeholder toolkit”) for the benefit of farmers, crofters, vets and other stakeholders about what’s available as part of the AHW interventions, of which there are seven options.

Animal Health and Welfare interventions

• one member of the board who also sits on the AHW working group added that the seven measures selected were chosen to give best value and be widely applicable in the most simplistic way, so they should already be recognisable to users as a means of promoting health and productivity within herds
• as long as a claimant has a VRN, they are eligible to claim and there should be an option for all, regardless of where they are on their “journey”
• the interventions were widely welcomed among the board with a hope that they could be widened based on the success of the first set of options
• there were some differing views on the engagement of vets as part of this work, with some arguing that the measures should be able to be done “in-house”, where others cited the accuracy of vets would be hard to replicate – the board were in agreement that the application process must be as a straightforward as possible
• a note of caution was offered in relation to automatic funding of such work rather than examination of the root cause of why the majority of farmers aren’t already carrying out these measures
• it was added by another member that there is a learning and development precedent in relation to CPD for soil sampling, which has encouraged and enabled farmers to take the time to learn more on sustainability measures most appropriate for their own units. Education is a key pillar of a Just Transition
• as an initial two year programme, it won’t be heavily audited, so officials are hoping to receive as many applications as possible

List of measures

• many of the board welcomed the progress made with the list, noting the ambition of some of the measures, but cited some concerns on the detail and hoped to see a wider press release for the benefit of a wider audience than the NFU Scotland AGM
• in relation to the list of measures, one member argued that some are not currently commercially available and officials need to be prepared for feedback from industry on the detail where it’s lacking – especially as a failure to deliver is a huge risk to farmers
• on regenerative grazing, it was felt the suggestion that this is only relevant on permanent grassland isn’t true
• managed grade habitats and supplementary feeding is beneficial to all manner of species and removing this could damage species-rich habitats
• another noticed that the sheep section from the original list of measures has been removed and asked for this to be reinserted
• in respect of genetic improvement in cattle, there are a number of factors to take into consideration, including what counts as the inventory
• officials attempted to reassure members that specific language changes would be incorporated where possible, repeating that the document is not set in stone
• discussion turned to payments and capital expenditure in particular
• officials noted that colleagues in forestry are aiming to improve the way we get trees on farm as part of the landscape
• government currently pays for the establishment of woodland on farms and that won’t change
• there was some pushback on compliance and maintenance costs being a barrier and that a transition fund may be of benefit for farmers and crofters to take those next steps

Summary

The board welcomed both the animal health and welfare interventions and revised list of measures but are keen to provide further feedback on the latter and keen to see more detail as it is developed.

Conditionality in existing schemes (agenda item 5)

As a result of discussions on conditionality at the last in-person board meeting in Dundee, guest speakers, Steven Thomson (SRUC), Keith Matthews (James Hutton institute) and Andrew Moxey (Pareto Consulting) brought forward some conceptual discussion points on conditionality in existing schemes and how it might work in practice in context of RPID delivery.

Tiered conditionality is not a new idea but universal recognition that any measures need to be understood by farmers and easily administered. The measures proposed broadly align with five categories: cropping, livestock, grassland, CPD/planning and rough grazing. They referenced the earlier discussion on maintenance and money required to cover ongoing management costs.

They added that measures could be attributed different weightings, allowing Government to vary the incentive(s) to land managers – noting the conceptual nature at this stage, particularly in relation to structure.

General comments from ARIOB members

• members agreed that measures need to be pragmatic, deliverable and what farmers already have a broad understanding of (not duplication of existing obligations) while also acknowledging the unavoidable complexity for officials and academics behind the work;
• the idea of weighting was a popular one and which would give farmers some room for manoeuvre and freedom to target any problem areas within their own units – it should not be too prescriptive but tailored to the region. Government could also ensure that a higher weighting is given to priority areas to encourage uptake as well as combinations with a view to efficiency of process
• broadly speaking, this will be an evolutional process as better systems and metrics are developed to truly encourage farm practices that are nature friendly. Testing will also be crucial as we must monitor any unintended consequences and examine peer-to-peer farmer co-operation – CPD again critical to making this successful
• it is clear that climate change’s priority area is livestock, but unclear as to what the equivalent is for biodiversity. It was felt that one of the reasons for that is there has been much less research in this area but we do know areas for examination and species decline relating to intense farming. One member offered to share a recent Agriculture and Horticulture Development Board (AHDB) presentation on biodiversity
• there was also some discussion on the roll-out of a biodiversity app in 2023/24 and an ask that the board be updated on it and potentially built into the overarching timeline
• the topic of regionalisation was raised, with some members believing it was intrinsic to the conditionality approach while others suggested that providing the industry with actions was a logical first step, noting that not everything can be done at once – Regional Land Use Partnerships (RLUPs) offered as a potential linkage at any pilot stage

Peatland and wetland

The guest speakers moved on to a segment on peatland and wetland, outlining the rationale of targeting one of the biggest emitters with a view to potentially adding across the tiered system. The speakers acknowledged the geographical differences at play, with definitions making a big difference – this is mostly region 3 land and higher density. Again, it comes back to the potential anomaly that region 2 and region 3 land managers, in different parts of Scotland, could end up doing the same things but being recompensed differently. There are 311 businesses with more than 1000ha and that extends to over one million across the piece, so a big opportunity among a few land managers.

General comments from ARIOB members

• members welcomed the presentation, concurring that it is essential to consider tackling such restoration if Scotland is going to meet its ambitious climate targets and the earlier issue of biodiversity improvement – with officials adding that there is internal work on claims in relation to peatland
• officials interjected that we need to be clearer on our targets, mindful of the different policy changes across such swathes of land (forestry, agriculture, sport, large-scale tenanted, unclaimed etc.) and the difficulty in managing effectively
• on unclaimed, stocking rates are not always the most accurate statistics and so how often is rough grazing needed? A lot of land is not agricultural but part of an historical system. Others said that if a piece of land sits within an agricultural business, then it should be classed as such.
• one member stated that this makes sense, particularly for common grazings and another referenced the Land Management Plans requirements for larger estates (over 3000ha) as a start for this type of work
• a question was raised into how wetland is defined, with the speakers replying that modelling has been done on morphology of land and soil, as well as habitat and land cover, with specific mapping of flood plains
• a note of caution was raised into the need for further CPD and that restoration requires heavy equipment with too few contractors, especially for more remote areas – but could be an opportunity for businesses to diversify further
• officials agreed with that point, noting that officials with policy responsibility for peatland are alert to the issues, but hopeful that this could lead to long-term employment in rural areas as a result

Suckler VCS conditionality

Finally, as part of this agenda item, the guest speakers touched on Suckler VCS conditionality, opening with the fact that suckler accounts for 41% of agricultural herd emissions. Northern Ireland has gone from 0% coupled support to 17% to incentivise a reduction in the suckler emissions profile, conscious that beef is behind the dairy sector in this space, with support payments having been historically a cushion to the beef sector.

The proposed focus would shift to mortality and target money on successful growth which could change eligibility. The aim is to calf every 365 days with the median at an acceptable 371. However, the average is 400 days – a long and problematic tail. This could start the discussion of conditionality in the beef sector, and potentially dairy, heifer calving or replacement ages can lower emissions.

General comments from ARIOB members

• there was unanimous agreement that this was a really positive measure - tightening up the calving process makes huge difference to the efficiency and profitability of herds, with fertility viewed as the best indicator of good herd health
• members also felt that there would be no reason to exclude heifers and that the measures are simple to execute, tying in the associated AHW intervention which makes it more inclusive as long as accompanied with fertility-related CPD
• co-chair praised MyHerdStats as a helpful tool to examine herd health and associated data, demonstrating outliers and areas for improvement
• a view was offered that VCS is ready-made to apply conditions to
• it was hoped that geographical differences would be factored in (mainland and island), particularly as keeping smaller herds in more remote locations provides land and socio-economic benefits alike
• there was a request for more specifics on regional data around VCS to aid the discussion
• another member also hoped that breed-specific gestation periods are considered (native breeds longer). In addition, reactive factors should be explored (where a replacement bull is required and the clock remains ticking)
• issues around the current scheme (calves at 30 days) suggest that an increase to 3-4 months would hopefully encourage farmers to address pneumonia and other issues - should we also have a condition of calf to slaughter (or store sale)?
• there were differing opinions offered on the interventionist logic and type of support to achieve this, whether it should be Government led/funded. Do public policy choices for intended outcomes always need to be linked with funding?

Disadvantaged payments sub-group update (agenda item 6)

A member of the sub-group provided an overview of their first two meetings. This is familiar territory to the majority of board members and the wider industry with a perennial debate about how disadvantage can be tackled. Some areas of Scotland have disadvantages (haulage costs) and while we currently have LFASS, as policy looks to deliver a wider range of agri-eco services, how do we best support land managers in disadvantaged areas?

There is a school of thought that the term “disadvantaged” isn’t helpful and should be more positive. Essentially, costs vary across the country and this needs to be targeted to allow all agricultural businesses to thrive. The sub-group would welcome official support as the AHW equivalent has benefitted from. Thereafter followed a brief discussion on the social and cultural element of the problem – noting the need to support such areas of disadvantage as support conditions increase. Additional haulage costs to the islands and peripheral areas can be enormous so the rationale behind supporting this work remains valid as ever.

Agenda item 7 - summing up, horizon scanning, actions raised and any other business

Officials sought to summarise the meeting as follows:

• the board provided useful feedback on developing the future support framework, particularly around Whole Farm Plans
• the route map was positively received but with much still to be done around differently advantaged areas, new entrants and small producers
• the list of measures saw a good discussion with members valuing demonstrable progress based on feedback
• the discussions on conditionality, peatland/wetland and calving gave further food for thought without total agreement

Any other business

A member raised an issue in the Arable Area Payments Scheme (AAP) minutes for further discussion, however, discussion did not go into detail as a number of oard members had since left the venue.

Chair thanked members for their participation. The date of the next meeting is to be confirmed and the meeting was closed.

Summary actions arising from ARIOB: 

• ARIOB to submit comments on list of measures and route map to officials
• circulate NFUS AGM announcements publication timeline to ARIOB and PDG
• accelerate Whole Farm Plans working group

• Framework:

  • officials to develop appropriate mechanism for ARIOB feedback on updated Framework
  • secretariat to circulate collated Framework feedback
  • secretariat to set up follow-on Framework-specific ARIOB meeting