ARD Stakeholder Group minutes: November 2019

Attendees and apologies

Attendees

• John Kerr, Head of Agriculture Policy Division – SG (Chair)
• Andrew Barnes, SRUC
• Andrew Midgley, RSPB/SE Link 
• Dave Miller, Hutton 
• Drew Ratter, Highlands & Islands Agricultural Support Group
• Eleanor Kay, SLE
• Ian Muirhead, AIC Scotland 
• Jamie Farquhar, Confor 
• Jeremey Moody, Central Association of Agriculture Valuers
• John Fletcher, Deer Farmers
• John Raven, Historic Environment Scotland
• Maria De la Torre, SNH
• Martin Morgan, SAMW                   
• Megan Welford, Soil Association
• Neil McCorkindale, NSA
• Peter Duncan, IAAS
• Russell Smith, Scottish Crofters Federation
• Alan Fraser, RPID - SG
• Alistair Prior, Sustainable Land Use and Rural Policy - SG
• Andrew Scott , Director for Sustainable Land Use and Rural Policy - SG
• Brendan Callaghan, Scottish Forestry – SG 
• David Anderson, CAP, GM & Agricultural Climate Change – SG
• Fiona Harrison, Deputy Director, Sustainable Land Use and Rural - SG
• Harriet Houlsby, RESAS - SG
• Helen Stanley, CAP, GM & Agricultural Climate Change – SG
• Joanna Storer, Rural Support Bill - SG
• John Brownlee, Rural Support Bill – SG
• Kirsten Beddows, CAP, GM & Agricultural Climate Change – SG
• Rachel Smith , CAP, GM & Agricultural Climate Change – SG
• Richard Haw, RESAS – SG 
• Tracey McIntyre, Deputy Director, RPID - SG
• Vicky Dunlop, Rural Support Bill – SG

Apologies 

• Central Ass. Valuers
• CONFOR
• Committee of Scottish Bankers
• Convention of Scottish Local Authorities
• Deer Farmers
• Highlands & Islands Agricultural Support Group
• JHI
• Linking Environment and Farming (LEAF)
• NFUS
• NSA
• SAOS
• SBA
• Scottish Enterpris
• SOPA
• SRUC
• QMS

Items and actions

1. Welcome and Introductions

1.1 John Kerr (JK) welcomed everyone and introduced Fiona Harrison (FH), one of the new Deputy Directors in Sustainable Land Use and Rural Policy Directorate, working to Andrew Scott (AS).  He said the new Deputy Director for RPID, Tracy McIntyre, would join for the afternoon session along with AS.  JK also introduced a new member, David Anderson who is working in the SRDP team.

2. Previous minute

2.1 There were no outstanding actions from the previous meeting.  Members didn’t have any comments on the previous minute.

3. Convergence update

3.1 JK updated members on the current convergence position.  Mr Ewing announced that the Scottish Government (SG) will distribute the first £80M CAP convergence funding by the end of March 2020.  A further £10m was announced after meeting with crofting representatives to listen to their concerns about farming and crofting the most challenging land.  The 2nd £70M tranche is due to be paid by March 2021.  Officials have had constructive discussions with several stakeholder organisations and further detail on the first tranche will be announced in the early new year.

3.2 JK stated that if Mr Ewing’s announcement seemed to be done quickly, it was because he was eager to announce how this money would be distributed before the pre-election period began.  The fact that Scotland is receiving some of the back-dated convergence money in the 2019/20 means SG has been working hard and to tight timescales to ensure the money is distributed as soon as possible. 

3.3 Mr Ewing tasked officials to work with stakeholders on the allocation of the additional £10 million – which Finance Secretary has made available this year.  JK told members a meeting had taken place that morning between SG and some stakeholder organisations, to discuss the additional £10 million convergence funds.  The general consensus from this meeting was the money should go to Region 2 (R2) and Region 3 (R3), predominately weighted towards R3.  Mr Ewing has also tasked officials to look at capping; what level SG might cap at and what could be done with the proceeds of capping.

3.4 A member who hadn’t been present at the convergence meeting said there was not enough information about the process and going forward, and sought more consultation and transparency.  JK acknowledged this and SG would look to communicate better with stakeholders in the future.  This led to a comment that there’d been a missed opportunity in where money is being distributed, and that it should be more focussed on climate issues.  JK reminded members that SG had to take into account what’s deliverable and what had previously been said the money would be used for. 

4. Pillar 1 update

4.1 Alan Fraser (AF) stated that SG is unable to announce anything during the pre-election period, which applies to the plans for the 2019 payment programme.  He told members that the 2018 payment round is substantially complete, RPID just have a few outstanding cases to finalise.  The loan scheme is in play, the money paid out under this is in line with previous uptake for the loans and approx. £340 million has already been paid out.  He said if any members had specific queries relating to casework, he would be happy to take these offline.  One member commented that the printed CAP payment update didn’t include the amounts for Pillar 2.  AF said this would be added and circulated to members.  ACTION. 

4.2 One member mentioned that letters to support payments are being sent to customers after the money has gone out, it would be helpful it letters were issued more timely as some people rely on the paper letter.  AF said this was a valid point, but due to limited resource the emphasis was on getting the money out as quickly as possible. 

5. Pillar 2 update

5.1 KB highlighted the printed scheme update table that were available to members, this was presented at the recent Rural Development Operational Committee (RDOC).  The SRDP is due to run until December 2020 and is committing and spending money well.  Over £1 billion of the £1.2 billion budget has been committed, meaning there’s limited flexibility for the remainder of the Programme.     

5.2 KB flagged the ongoing pressure of Scottish draft budget and UK budget, as both can have a bearing across the SRDP.  KB would report back at the next meeting if there’s any impact.  SG is doing a financial modification for the SRDP, to change the co-financing rates.  This is being done to ensure SG meets all forecast spend and can access all available EU money.  Previously EU money could be rolled over between financial years, however as the programme is nearing an end  SG want to ensure we draw down all the EU money before Programme closure.  No scheme is closing and SG anticipates it will spend all money by March 2021.  KB circulated  a paper showing the revised scheme allocations: 

5.3 KB updated members on the funding guarantees position.  Currently all contracts entered into by the end of 2020 (for lifetime of the contract) will be covered, but beyond that, for farm support, the guarantee states it would maintain the same level of funding until the end of the parliament.  This was only ever a UKG commitment, SG never had a written guarantee from HM Treasury.  SG is pushing UKG for clarity on what the support is and what it covers.  This is a crucial element and a key priority for SG.  

5.4 One member said the Beef Efficiency Scheme (BES) budget had been cut and asked whether when designing pilots, if SG would be taking any ‘lessons learned’ from the original scheme.  KB confirmed this was correct and Mr Ewing has committed to looking at something else around beef efficiency.  

5.5 She mentioned there’s a Project Assessment Committee meeting taking place later in the week to consider high value Agriculture Environment Climate Scheme (AECS) applications from the 2019 application round.  For AECS 2020, there won’t be a full round but SG is extending contracts.  Other Devolved Administrations (DAs) are also extending contracts as they’re in the same position.  AECS is not closed for good, this is just the current positon as a compromise was required. 

5.6 For LFASS, the payment rates are reducing and Mr Ewing has committed to looking at a replacement for LFASS - work is underway within SG, specifically looking at the technical side around designation. SG proposes to reinstate a technical working group for the LFASS replacement.  KB added that if Scotland were out of Europe it would want to align with an Areas facing Natural Constraint (ANC) type approach.  Some changes will be required to ensure schemes are World Trade Organization (WTO) compliant.  

5.7 There was a discussion around AECS, specifically around the challenging application process and disappointment that no new applications were being accepted.  KB stated that SG doesn’t know what funding will be available from 2021, it’s unsure about what commitments can be made.  JK added that discussions are taking place to look at what form of Multi-Annual Financial Framework will be in place, and how this will work in the future.  Conclusions have not yet been reached.  

6. Rural Support Bill 

6.1 Vicky Dunlop (VD) told the group the Scottish Farmer had recently incorrectly stated that Mr Ewing appeared in front of the Rural Economy Committee (REC) to give evidence when it was the Bill team who appeared in front of the committee.  John Brownlee (JB) told members that the Bill has been published and all documentation is available on the website.  Stakeholders should have received a letter from Mr Ewing setting out what the Bill does.  

6.2 JB informed members that the Bill amends EU retained law.  Without primary legislation, Scotland wouldn’t have powers to change CAP law.  He emphasised that the Bill can only make changes that align with current CAP architecture.  Any changes to policy would need to be made by secondary legislation.  It doesn’t deal with long term future policy.  The REC have asked for a call for evidence; JB encouraged stakeholders to respond.  The Bill team gave evidence last week; some stakeholders will be asked to give evidence, and it will end with Mr Ewing giving evidence.  Stage 1 of the Bill should be completed by 21 March 2020 and the Bill team are happy to meet with stakeholders to discuss any queries.

6.3 There was a discussion around how the Bill sits alongside the UK Agriculture Bill.  JK explained that the Scottish Bill is in isolation and is not dependent on Westminster legislating on our behalf.  It means current EU legislation can be amended in Scotland.  KB added that underneath legislation, there’s been discussions around working level agreements (WLA) at official level.  The WLA could be agreements set up that complement legislation.  SG would continue to engage with stakeholders and keep updated on process. 

7. 2021-2024 work update

7.1 KB said that SG previously reported that internal work is taking place looking at schemes and where changes could be made to improve and simplify, and considering the stability and simplicity consultation responses.  There’s a challenge around funding as SG doesn’t know what funding will be available, therefore this could have an impact.  

7.2 Since Stability and Simplicity commenced, there’s been other announcements such as the climate change emergency and several Programme for Government (PfG) commitments.  SG needs to sense check these to ensure all aspects are aligned for consistency, and to check against what’s been committed.  There’s been a delay in publishing the Simplification Taskforce report, SG hopes to have more detail on this in the new year which officials will share with the group.

7.3 Members asked whether SG had consulted with stakeholders, to which KB responded that it had through the Stability and Simplicity consultation which has steered the work.  The Simplification Taskforce also includes a number of external stakeholders who are looking at more immediate changes.  SG had hoped it would have been in a position to share more with the ARD SHG, but a lot of time and resource has gone into dealing with the convergence funding and assisting with the Farming and Food Production Future Policy Group. 

7.4 There was a discussion around the climate emergency, members wanted confirmation that SG was making this a priority.  SG confirmed it was at the forefront if it’s agenda and a lot of work has been done around how Scotland farms in a climate smart way.  Much of SG’s PfG commitments are focussed around climate change and a lot is already possible within the current legal framework.  JK added that SG has commenced the development of an Agricultural Transformation Programme. 

8. AIC Scotland Future Policy 

8.1 Ian Muirhead (IM) provided an overview of AIC Scotland’s future policy document.  AIC Scotland represents the agriculture supply trade in Scotland and UK which includes a diverse range of companies.  The policy document sets out clear, practical options to contribute to the debate on future policy.  It provides ideas on pilot schemes which will form an important part of working out what’s deliverable and looking at the outcomes that SG has set out to achieve.  It has been structured around the themes that were set out in the introductory paper to the future policy group; sustainability, simplicity, profitability, innovation and productivity.  Also tried to focus the document on the justification for continued levels of support for rural Scotland – but recognises the pressures on Government funding and understands there’s other priorities.  

8.2 The document includes the need to deliver climate change outcomes to reach net zero and has set out specific ideas around sustainability.  AIC Scotland has built good working relationships with farmers and understands their needs.  Therefore, feels there’s an opportunity for ARD SHG members to contribute through their organisations - knowledge transfer is key.  AIC wants SG to adopt a science base for making decisions – there’s products that are more disease and weather resistant that could be beneficial going forward.  Change is coming and AIC Scotland wants to help industries through this transition.  

8.3 There was a discussion around new technologies and some members felt the current position put too much emphasis on the precautionary principle.  They feel decisions should be based on the benefits and whether it is safe.  Some members believe the current system is too one sided and that new products should be looked at on a case by case basis.  There’s room to become more efficient through the use of new technologies.  

9. Farming and Food Production Future Policy Group update

9.1 Alistair Prior (AP) updated members on the most recent meeting of 22 November.  The general themes emerging are the need to be clearer on what the collective objectives are; to think more radically when looking at technology; and the need for knowledge transfer.  Discussions are focussing on an options-based approach and understanding where evidence gaps are.  The group is thinking about how to engage with external groups and looking to develop communications.  The outputs from the second meeting have been published online; hope to publish the third set of outcomes soon. 

9.2 There was a discussion around sustainability; members think there’s strategic work for SG to do looking at sustainable livestock production, this would require scientific analysis.  They felt it could be an opportunity for red meat production and the possibility around having a sustainability criteria – what Scotland produces and imports.  SG understands the urgency of this work, and is working hard internally on something that is meaningful, has substance and is deliverable. 

9.3 The expectation is the group will report on their work at the Highland Show next year –  a challenging timetable

10. AOB

10.1 Under this item, Maria De La Torre (MD) offered to speak about Scottish Natural Heritage (SNH) pilot work at a future meeting, which is more customer focused ways at delivering agri environment schemes.

10.2 No future meetings for the new year have been organised yet, but the first one of 2020 will most likely take place January/February.