ARD Stakeholder Group minutes: October 2020

Attendees and apologies

Attendees

• Dave Miller, The James Hutton Institute
• Grace Reid, NSA Scotland
• Eleanor Kay, Scottish Land and Estates
• Ian Muirhead, Agriculture Industries Confederation
• Neil Wilson, Institute of Auctioneers and Appraisers (IAAS)
• Patrick Krause, Scottish Crofting Federation
• Pete Ritchie, Nourish Scotland
• Ross Lilley, NatureScot
• Ross Macleod, Game and Wildlife Conservation Trust
• Serafin Pazos-Vidal, COSLA
• Steven Thomson, SRUC
• Stephen Young, Scottish Land and Estates
• Robin Clarke, Highland and Islands Enterprise
• Mags Granger, RSABI
• Mark Aitken, Scottish Environment Protection Agency
• Tim Bailey, SAOS
• Vicki Swales, RSPB and Environment LINK
• Deborah Roberts, SOPA
• Christopher Nicholson, STFA
• David Michie, Soil Association
• Julian Pace, Scottish Enterprise
• Keith Matthews, The James Hutton Institute
• Drew Ratter, semi-retired crofter and Investment Committee of Shetland Charitable Trust (Chairman)
• Sarah Millar, QMS

Internal

• John Kerr, Head of Agricultural Policy Division (Chair)
• Jen Willoughby, Head of National and International Regulatory Alignment
• Emma Glen, CAP Policy Team (Secretariat)
• Shirley Graham, SRDP Policy Team
• David Anderson, SRDP Policy Team
• John Brownlee, APD Rural Support Bill
• Brendan Callaghan, Head of Operational Delivery, Scottish Forestry
• Richard Haw, RESAS
• Louise Lang, Brexit Policy Advisor
• Marcus MacKenzie, RPID : Strategic Planning and Operational Performance
• Tracy McIntyre, RPID
• Sheetal Mehra, RPID    
• James Muldoon, Head of Agriculture Support Policy Development Unit
• Paul Neison, RPID – Mapping and Land Services
• Lynne Stewart, RPID : Scheme Management
• James Muldoon, Head of Agriculture Support Policy Development Unit
• Brian Nisbet, ARE EU EXIT Coordination hub team leader
• Sara Eccles, ARE EU Exit Co-ordination Team Leader
• Kirsten Beddows, Head of Agriculture Transformation for Environment and Climate Change
• Mary Ferry, Head of Delivery Management
• Harriet Houlsby, Assistant Economist
• Jackie Hughes, Deputy Head of SASA and Head of Agricultural Science Delivery
• Derek Wilson, Head of Agriculture Transformation in Productivity Unit
• Michael Wilson, SRDP Policy Team
• Nicola Kerr, SLR: Future Rural Policy Frameworks, Land Use and J Land Reform

Items and actions

Welcome and introduction

The chair welcomed everyone to the meeting of the ARD Stakeholder Group and confirmed attendance. A brief introduction was made to those who were new to the meeting. A written update was issued in advance of the meeting. 

The minutes and actions were approved from the previous meeting, with one issue around Brendan contacting people in forestry outlying. Brendan confirmed he has spoken with Jamie but that a meeting is yet to be arranged.

AP:

• meeting to be arranged

Farming and Food Production Future Policy Group

The FFP-FPG group met yesterday afternoon, having a very constructive meeting around the draft report, discussing areas which still need some work and most people in the group think it is nearly ready for publication. They are hoping to issue a final round of drafting changes, with one more meeting expected to sign the report off, and to work out the publication of the report. This will hopefully be done before the end of the year. When the group started we hoped it would be able to get deep into the detail, however this has not gone as far as we would have liked, so expectations may need to be tempered.

A stakeholder queried if the group will be recommending next steps and if there will be more groups or recommendations, with the answer being yes. 

It was also queried whether they were expecting agreement from the whole group or will we be expecting it to be a majority. Hopes are still for a consensus from the whole group, with a lot of commonality within the group. Mr Ewing did not attend the most recent group and is keen for the group to stay independent.

Contingency planning for businesses

We are in the consultation phase of the Covid-19 framework, and we have been in touch with people across all organisations to identify any issues. This consultation only runs until Friday 30 October. We are aware that there are insufficient business plans being made to allow businesses to operate and be flexible if there are further Covid-19 impacts or outbreaks. Some people have worked on a plan but haven’t trialled the plan and keen to make sure that everyone is geared up for the winter that is coming. We are preparing checklists, the FAS website also has plans available which can be downloaded for free.

A stakeholder asked if non-essential retail in tier 3 and 4 such as farm-shops and country stores, would have to close or be allowed to stay open. It was confirmed that if they supply animal feed they are part of the critical national infrastructure so will be allowed to stay open. 

Checklists are expected to be ready for circulation tomorrow, and will provide a list for businesses to run through. Stakeholders asked for as much detail as possible on what is essential to avoid confusion, for country stores and wider retail. We committed to look into this.

AP: 

• checklists to provide as much detail as possible

CAP simplification and improvement

We confirmed that we have already made our position clear on the progress we have made with greening and that we intend to discontinue the three crop rule, but keep the other elements of greening for 2021, before then reviewing. For inspections and penalties we have made progress with officials and Ministers, and expect Mr Ewing will want to present this at an event soon. The other issue is capping and we are continuing to work through this.

A stakeholder questioned whether there was any timeline and process for the review of greening and whether the group could be provided with some data – such as that used to be published by RPID, farmers affected and how greening has been operated the last few years. We agreed to take this back to RPID and ask but we are aware that colleagues have done some work on this. 

AP:

• query with RPID whether data can be provided to the group

We had hoped to say more about the greening review at this meeting however, hope this will now be at the next meeting and will pick up the point around the data and internal discussions have started around the review. The scope of the review still needs to be approved and nailed down with Mr Ewing. We will issue broad statistics on uptake etc. and this will hopefully be out in the next few weeks, additionally this will be done as a package when the review will be started. 

AP:

• broad statistics to be issued on uptake etc

Capping

The Cabinet Secretary has made a public commitment that a cap for Pillar 1 will come into play and we are currently analysing the farm types and regions of Scotland that will be impacted by this. The Cabinet Secretary is clear that the funds recovered from it will help to promote jobs, and meet climate goals. We are still intending to bring this in for claim year 2021 and are looking to get this sorted as soon as possible, however this is subject to ministerial clearance.

A stakeholder queried whether there is any detail of the timeline on when we intend to go public in announcing this? It was confirmed that we are trying to do this as soon as possible and want to be sure of the analysis, and it is a public commitment that capping is coming into play. Mr Ewing’s expectation is that we will present him with options and once he is satisfied we will have a discussion with stakeholders, but we do realise the timelines. We expect to use the funds generated by capping to stimulate jobs in the rural economy, particularly due to Covid-19 and the rural economy. However, the difficulty is the way the EU legislation works, that we would have to shift money from pillar 1 to pillar 2 and envisage having to use the money in a pillar 2 way.

A stakeholder mentioned AECS is a critical issue and that it needs to be confirmed for the future and appreciates the issue over multi-annual contracts, but feels that the money from capping should be used to promote pilots and other ways we can help to support climate and biodiversity issues. It was clarified that with regards to AECS a decision is still sitting with Mr Ewing and Ms Cunningham and they are very much aware the importance of AECS, but are grappling with the multi-annual contracts and lack of commitment of funds for Pillar 2. 

It was also queried whether there would be a second year extension? Confirmed that this has been discussed this but have decided that another extension is not the way we expect to go and foresee significant difficulties with this.

Another stakeholder questioned if the requirement for Pillar 1 funding to go to Pillar 2 makes it difficult to use that funding to trial and test new approaches for an evolved ag support scheme? We had initially intended that the money received from capping would allow for pilot schemes, and could flex KTIF or FAS to allow for pilots. However, the question is, is this the right thing to do, given the Covid-19 situation and focus on employment. We do realise there are massive climate issues.

We are still engaged with the UK government over funding and are now having direct correspondence with officials in treasury over this, so hopefully we will start to make further progress and we expect something to fill in and continue to commit to agri environment priorities. A stakeholder stated that if nothing fills this gap it could be quite a big hit on farmers.

Inspections

It was confirmed that despite Covid-19, we are making good progress around inspections and payments. In terms of sheep inspections they are now in full flow, and have had procedures adjusted, to limit the time on the farm and limit the amount of animal contact. We intend to start cattle inspections before the end of the year, with similar adjustments. We have now successfully completed over 200 sheep inspections. With regard to land inspections, 85% of them have been completed and we are a lot further forward than where we were this time last year. We are always keen to hear from customers of any issues they feel may have.

Agriculture (retained EU Law and Data)(Scotland) Bill

A written update was provided on the Bill process. There were no questions from the group..

Pillar 1 and Pillar 2 updates

The group were informed that 17,135 farmers and crofters have now received a loan offer and that is worth £364m. Around 13,500 payments have been processed which worth over £300m. 

The Scottish Upland Sheep Support Scheme is now open and closes 30 November 2020. We’d like to encourage people to remember to apply. 

The Sustainable Agriculture Capital Grant Scheme has had over 2,500 applications which is positive uptake and worth around £16.9m. Uptake was higher than anticipated in this area and applications could exceed 3,000. The uptake is good, but exceeds the initial budget. 

The payment strategy for 2021 has been approved but won’t be publically communicated until sometime in November 2020. A stakeholder queried the figure provided for the number of BRNs still to be paid. SG commits to clarify the numbers in the papers issued before the meeting and expects it is an error.

AP:

• SG to clarify numbers in the written document and re-issue if incorrect

There was a query on whether loans have become the default position and we confirmed we are keeping this under review. We do still have discussions with the agricultural lending banks and are taking comments from them in order to continue to review.

Covid-19 Recovery and Green Recovery 

A written update was issued in advance of the meeting but nothing further was raised. The Climate Change Plan update is underway and will be an agenda item at the next meeting.

AP: 

• Climate Change Plan to be added as an agenda item for December

Brexit 

The deadline of 15th of October for EU negotiations, has passed, however talks are still ongoing, the key areas of divergence are on fisheries, the level playing field (State Aid) and governance. SG are preparing for a potential no deal due to the overrun talks and the fact there is no agreement. In terms of legislation, there are 59 SIs which need laid before 31 December 2020. These fall into 4 categories, essential, NI protocol, Business as Usual and Contingency SIs. The percentages of the SIs that have been consented are: Essential SIs 61%, Northern Ireland Protocol SIs 50% and Business as Usual SIs 40%. There are 15 Contingency SIs that may be required but we will not know whether we need to take action until the outcome of UKG/EU Negotiations on an Free Trade Agreement. 

SG colleagues still working with UKG to look at common frameworks. There are eight common frameworks within the ARE portfolio; Agricultural Support, Animal Health and Welfare, Chemicals, including Pesticides, Fertilisers, Organics, Plant Health, Plant Varieties and Seeds and Zootechnical Standards, 
and we are moving into phase 3 review of these. The reviews are planned to take place before the end of 2020. Full parliamentary scrutiny of the frameworks will take place after the end of the transition period.

A stakeholder stated that he was grateful for the update and indicated that it was helpful to know the calendar for the Common Frameworks. He queried whether the people in this group will be contacted for the frameworks consultation period. 

AP:

• SG to raise with policy officials to let those in the group know and allow feedback

It was queried if there any update on the organics framework? The only update is that the stage 3 review will take place on 9 November with SG officials and others from the other devolved DAs. The consultation is likely to be early 2021, due to the complexity of the framework.

A stakeholder raised an issue about lack of clarity on third country status and said that this raises equivalence issues.  This is starting to have impacts on businesses on cost of labelling and also on loss of markets.

AP:

• Debs Roberts to feedback issues to the secretariat of the group and SG commits to raise this with the relevant policy officials

QMS stated if there are any issues related to the red meat sector they would appreciate if anyone wanted to raise this with them and can have discussions on this and how it may impact and work together to go to SG or DEFRA.

Brexit team would like suggestions on what people want to hear about in these meetings to prompt as good a discussion as possible. 

AP:

• stakeholders to feedback areas for discussion

A stakeholder questioned whether the agricultural modernisation programme from the last PfG had been launched or has it been subsumed into the green recovery? It was clarified that in response to these commitments we did bring out the Sustainable Agricultural Capital Grants Scheme. The modernisation process as a whole we view as a package of measures that we would want to introduce etc. and somethings we may want to test. Some money was also allocated to forestry. The modernisation fund is a package of features that will happen over a multitude of years.

AOB

The Jim Walker Beef Group published their report earlier in the week. It is now published on the SG website as a report received. This is an opportunity to invite any early comments - however officials are still considering this piece of work. The group was chaired solely by Jim in the end and became more independent from SG. https://www.gov.scot/publications/suckler-beef-climate-scheme-final-report/ 

QMS think it is a tremendous piece of work that has been put together and shows a good way forward for the suckler beef industry, this was echoed by other stakeholders and felt that this this is a good way to move forward.

Another view was that although it has some very good points in it, it is hard to see how a lot of the parts fit together and would be interested in peoples thoughts on how issues around adoption have been thought about in this report. 

The report recommends basically 2 things, 

• conditionality for all participating businesses to raise the bar, and continued professional development, involving external professionals to make improvement type change
• specific measures that are designed to reduce emissions across each production step

It tries to address the divergence in performance across all businesses. Jim has provided a blueprint for best practice, but how to get this into an operational scheme is much more complex and some of the measures that they talk about are the route to the end result. How you operationalise this is a massive question. Stephen has calculated a beef envelope across Scotland and highlights a big divergence in payments across Scotland and huge variation in performance of CTS even across large herds. It is a challenge to get those who are performing badly to join up to a scheme.

The report focused mainly on herd management  not on nitrogen emissions, and more on reduction of methane.

A stakeholder pointed out that this is a long report, and it does identify steps that need to be taken by the beef sector, however, it is not clear how this fits into a bigger picture of where we want to get to in Scottish Agriculture and supporting climate change and biodiversity targets. There is a concern that we may go into developing a scheme before we decide where we want to get to. There is thought that it does not focus enough on biodiversity, it mentions it, but does not give a full whole farm approach or address all of the total issues from this and worries about a piecemeal sector approach. This is not just environmentally, but on farm market returns and that it is maybe a bit piecemeal and we need to see the FFP-FPG report and identify where we want to go in the future.

Taking a sub-sector based approach, to look at suckler beef, versus dairy beef, milk and sheep etc. is something we are alert to and something the climate change committee also raised. There is thought going on about where we are going with climate change policy. Mr Ewing’s desire is that we want to bring sectors with us, and bringing changes that come from the industry is a good way of ensuring buy in and helping us to meet targets and support the industry being sustainable and viable. However, we are alert to the fact that this could be piecemeal. There is also the pressing nature of the targets that we need to meet in SG on climate targets and these are pressing issues that are in law for the whole of the Scottish Government. 

The main focus of this group was on climate and a focus for SG going forward is how to implement these recommendations going forward across various sectors and common conditionality is key to tying farmers in and then having bespoke parts to these.

We need to have a clear idea into where sustainable livestock fits into across SG schemes and to actually do this so that we can then bring the public with us as we need to do what we are saying we do to bring the sector and public along. This scheme brings forward the marking and IP to highlight the cattle that are efficient and low emissions to bring forward a standard and brand on this. A stakeholder felt that it was not the intent of the report to intensify the beef sector, but to instead keep into as a more environmental approach where intensification is not part of it.

Another stakeholder disagreed that this report is piecemeal and feels that it could be cross sector and have used some of the suggestions in a dairy project. There is a fear that this report will not be read by the whole industry and we need messages to be communicated clearly. We need to balance the demands of retailers and consumers with this report.

A Stakeholder stated that Nature Scot had some involvement in this report and have had discussions on biodiversity issues. Nature Scot have highlighted to Jim that just reducing emissions alone is not enough but it is a place to start and to bring the industry forward. To really properly deliver on biodiversity as well, there needs to be nature based solutions and habitat restorations which support climate and biodiversity measures. They also highlighted the use of a Natural Capital approach which we are piloting now.

Stakeholders discussed the way of labelling in Denmark and has committed to provide information in email to the secretariat and Sarah at QMS so this can be considered further.

AP:

• information to be provided to SG and Sarah at QMS

We proposed a change to the scheduled date for the next meeting, moving this from December 8th to December 3rd. There were no issues with this change.

AP:

• new meeting invite to be issued

Actions

• stakeholders to be contacted to set up workshop/request contributions: SG  - in progress
• checklists, containing as much detail as possible, to be issued to stakeholders: SG    
• query with RPID whether data on greening can be provided to the group: SG - 2/12/20 (and at meeting)
• greening review – broad statistics to be circulated: SG - 02/12/20
• pillar 1 / Pillar 2 documents to be looked at and re-issued if incorrect: SG - 28/10/20
• Climate Change Plan to be included as an agenda item for December: SG - 12/11/20
• SG to raise with policy officials to let those in the group know and allow feedback: - 3/12/20
• Debs Roberts to feedback issues to the secretariat of the group and SG commits to raise this with the relevant policy officials: Debs Roberts - 28/10/20
• stakeholders to feedback areas for discussion at next meeting to Brexit team        
• information on labelling in Denmark to be provided to SG and Sarah at QMS: Pete - 29/10/20
• new meeting invite to be issued: SG - 28/10/20