Agriculture and Rural Communities (Scotland) Bill - Fairer Scotland Duty Assessment

Step 1 – Policy objectives

In 2018 the Scottish Government published a consultation setting out options to simplify and ensure the stability of support for farmers, crofters and land managers in Scotland in the period immediately after the UK leaves the EU. The proposals set out a transition period, with an initial period of "stability" for 2019 – 2020, during which no changes would be made to the Common Agriculture Policy (CAP), followed by a period of "simplicity" from 2021 to around 2024, during which the general structure and schemes of the CAP would be maintained.

After the UK withdrawal from the EU on 31 January 2020, our priority for agriculture and rural development was to provide stability and security for producers, land managers, and business. In 2020, legislation was enacted to allow the Scottish Ministers to ensure that EU CAP (Common Agricultural Policy) payments and schemes would continue for a period of stability and simplicity after EU-exit.

The powers in the Agriculture and Rural Communities (Scotland) Bill aim to deliver the Scottish Government's Vision for Agriculture, which outlines the intention to transform how we support farming and food production in Scotland to become a global leader in sustainable and regenerative agriculture. The powers also aim to enable delivery of wider rural development activity / support, such as support for rural communities or rural networking.

Congruent to specific commitments of the Bute House Agreement commitment, the Vision sets-out that "The Bill will be introduced in 2023 to deliver:

• a new support framework that will include delivering climate mitigation and adaptation, nature restoration and high-quality food production;
• integration of enhanced conditionality against public benefits, with targeted outcomes for biodiversity gain and low emissions production; and
• increased equality of opportunity, improving business resilience, efficiency and profitability."

Whilst in development, core elements of the Vision informed 2021 Programme for Government commitments, specifically that:

• "We will…consult on a future agriculture bill, setting out our vision for a new, post‑Common Agricultural Policy support payment system in 2025‑26";
• "legislation planned for 2023 to underpin: a new support framework that will include delivering climate mitigation and adaptation, nature restoration and high-quality food production; and, increased equality of opportunity, improving business resilience, efficiency and profitability."

The proposed new Agriculture and Rural Communities (Scotland) Bill for Scotland along with other legislation such as the Good Food Nation Bill, and the proposed Land Reform, Natural Environment and Crofting Bills, and the Climate Change Plan, Scottish National Adaptation Plan and Biodiversity Strategy will aim to coherently support the change in land use necessitated by the twin biodiversity and climate crisis. The proposed new Agriculture and Rural Communities (Scotland) Bill for Scotland will seek to ensure that all farmers, crofters, and land managers can capitalise on the benefits that come with the change in land use, and that a Just Transition is achieved.

With some provisions expiring and having published the Scottish Government's Vision for Agriculture, additional powers are required to ensure the delivery of the Vision.

Payments Framework

Currently Scottish government utilises rolled-over powers under assimilated law (formerly retained EU Law or 'REUL') to make support payments of the extended CAP schemes. In order to continue to be able to make appropriate support payments it is intended to take new powers under the Bill to make relevant support payments that will remain broadly aligned with the new EU CAP.

The main objective of the Bill is to take powers which will allow for the delivery of a payment framework broadly. The bill introduces enabling powers to provide support for a range of specified purposes including exceptional or unforeseen circumstances.

This will have a positive impact on the businesses who may benefit from support and in turn will have a positive impact on the wider community through the potential for economic stability and growth, and jobs.

The specifics of this will be elaborated in (for example) secondary legislation, and separate FSD impact assessments will be carried out during that period as appropriate.

Food and Drink

The Bill introduces modern, specific and flexible enabling powers to provide financial support to food and drink businesses for a range of specified purposes including in response to exceptional or unforeseen circumstances in the sector. This will have a positive impact on the businesses who may benefit from support and in turn will have a positive impact on the wider community through the potential for economic stability and growth, and jobs.

Climate and Nature

Through the support framework, the Bill enables the Scottish Government to deliver towards the outcomes of climate mitigation, adaptation and nature restoration and ensure farming in Scotland can continue to produce our food more sustainably and that the land is managed more sustainably. This in turn will increase the resilience of our food production, farming and crofting and rural communities more widely This will support delivery of outcomes and strategies, including the Climate Change Plan, Scottish National Adaptation Plan, Good Food Nation Act, and Biodiversity Strategy.

Payments Administration & Data

The broadly framed enabling powers set out in the Bill allow for the Scottish Ministers to make regulations about (1) accountability for and audit of new support payments and (2) the provision for the collection, processing and or sharing of data in respect of such payments.

These regulations and powers will enable the Scottish Ministers to enforce, monitor and evaluate progress to achieving the objectives of the bill and the Vision.

Successful achievement of bill and Vision objectives should have a positive impact on the businesses who may benefit from support and in turn will have a positive impact on the wider community through the potential for economic stability and growth, and jobs. The impact on the wider community has the potential to include the reduction of socio-economic disadvantage.

Support for Rural Communities and Rural Networking

The broadly framed enabling powers set out in the Bill will allow for continuation of support for rural communities and rural networking, and will allow flexibility for future changes to that support to meet future need.

Plant Genetic Resources

By providing support for plant genetic resources, the bill will support another tool to help Scottish domestic supply of food. Which has an equally beneficial impact on everyone.

Access

The powers in the bill enable Scottish Ministers to provide support to assist with the provision of public access over land. Where support is given, it will be based on the needs of that particular area with a view to ensuring improved public access and the ability of the public to exercise the right of responsible access as set out in the Land Reform (Scotland) Act 2003.

Forestry

The purpose of the powers under this Act are to allow, in the short term, the continuation of the Forestry Grant Scheme ("FGS") in its current form, so far as possible. In the medium to long term these powers, and subsequent regulations, will provide the flexibility to change and enhance future forestry grant support.

The power to provide support under section 4 of the Bill, in relation to the purposes set out in schedule 1, will allow the continued delivery of forestry grants. Forestry grants are available nationally and affect various land managers such as farmers, crofters, and estate managers, covering a range of forestry interests and rural development from forest nurseries to forest management and timber processing.

Forestry grants play a significant role in contributing to a wide range of Scottish Government policies, including policies relating to: reducing net emissions as a contribution to climate change mitigation; tackling the biodiversity (habitats and species) crisis; deer management; peatland restoration; Atlantic rainforests; rural development; community development; public access; and, ensuring future timber supplies.

Forestry grants also support the sustainable management and restoration of Scotland's forests, in line with Scottish Ministers' duties under the Forestry and Land Management (Scotland) Act 2018 ("the 2018 Act").

The FGS is a strategic rural support package that often runs within a broader rural support programme, however the powers within this Bill are intended, in the short term, to provide continuity to the existing FGS and it is therefore unlikely to have any impact on inequalities. Further consideration will be given, when developing secondary legislation, to determine where changes might be possible to reduce inequalities.

Knowledge, innovation, education and training

The Vision for Agriculture sets out that it will ensure that farmers, crofters, and land managers have the right support to identify and develop the skills needed for regenerative and sustainable farming, changes of land use and adaption to the changing climate.

To provide this support the Bill includes new powers in respect of courses of training and personal development relating to agricultural, forestry, land management or related sectors and other forms of learning and sharing information as well as the provision and obtaining of advice. It also includes new powers relating to innovation and other research and development activities which may improve or support rural communities, rural land or land use. There is also power to support these activities through the development and maintaining of resources, digital tools or databases.

The Bill also provides the Scottish Ministers with powers to make provision for continuing professional development (CPD) for farmers, crofters, land managers and other persons.

Existing evidence

The Bill aims to provide a series of powers which will help the Scottish agricultural sector. Furthermore, these powers will ensure farming in Scotland can continue to produce our food more sustainably and that the land is managed more sustainably.

Rural areas vary across the categories of SIMD (Scottish Index of Multiple Depravation), in some cases between neighbouring areas (though this is also the case in cities). However, land used for agriculture is not always in rural heartlands but can be adjacent to cities. The Rural Scotland Data Dashboard which presents data on a range of issues that impact rural Scotland. The report synthesises the data included in the dashboard into a broader picture of successes, challenges and trends in rural Scotland.

The lack of detail in the data on specific industries was raised by the Commission for the Land-Based Learning Review, and they have recommended improving data collection to inform skills needs more effectively. They noted there are career opportunities across the sector, but that the perception that the sector is poorly paid, is not unfounded. They concluded that increasing training opportunities, attracting more entrants to the sector and widening the workforce pool is needed for the sector to continue its role in producing food and to contribute to addressing the nature and climate crises.

The Scottish farm business income (–BI) - gov.scot (www.gov.scot) provides estimates of average incomes from commercial farms in Scotland. The income of all farms will vary depending on what is produced, the land use, local, national, and international circumstances, level of grant support, or if they achieve additional income through wider diversification activity. Some may therefore make higher profits year on year, others could break-even, fluctuate form profit to loss year on year or make losses. The Scottish Agriculture Census provides an overview land use, crop areas, livestock and the number of people working on agricultural holdings.

There is therefore limited bespoke direct evidence of inequalities of outcome caused by socio-economic disadvantage in farming and rural communities, given the way statistical information have been gathered.

It is, however, acknowledged that specific policies empowered through this Bill could generate land based and broader rural employment opportunities as well as providing opportunities to learn new skills. This Bill could enable specialist training to support the transition to new and more sustainable and regenerative practices.

At this stage it is not possible to quantify this potential and specifics of support would, of course, to be co-developed alongside those likely to be affected. It can be said though that such opportunities would arise in areas presently deemed deprived. This could further enable tenants, small-holders and crofters, who are more likely to be on lower incomes, to be provided with further opportunities to diversify said income streams.

We do acknowledge there is likely be positive indirect impacts in addressing inequality, but this would be considered as part of the ongoing implantation of these policies through the Agriculture Reform Programme (ARP). Further research could be commissioned later once powers are enacted to see if they are having any impact on inequality (both in the sector or any wider society wide) and consider if anything further could be done following any results.

However, the ongoing uncertainty surrounding the consequences of Brexit means that the future environment in which long term rural policy and support (including for agriculture) will need to operate in, is still relatively unknown, even in broad terms. Until there is greater clarity around issues which could constrain or affect future Scottish rural policy, such as the UK Government plans for future funding, and the future trading relationship with the EU (and beyond) etc., any development of long term future policy with agriculture would either need to be very general, or would need to be heavily caveated, either of which would negate the advantage of trying to address any issues of indirect inequality.

In addition, there is general agreement between stakeholders, industry and government that change to the agriculture sector is required to contribute towards climate and biodiversity outcomes through a Just Transition. Working with farmers, crofters, land managers and those impacted by the legislation is critical to delivering a Just Transition and a future rural and agriculture policy that works for all.

We know the constraints of the current uncertainty mentioned above, the complexity, cost and risks involved, including the present challenge of lead in times. Improvements in addressing inequality will be a shared responsibility of all policy areas but short, medium and longer term evidence of the impact of change for all parties will be important in the years ahead.