Consultation on fees for seed testing, seed certification and associated seed functions

Title of Proposal

The Seed (Fees) (Scotland) Regulations 2017

Purpose and Intended Effect

Background

Seeds regulations implement European law, allowing certain kinds of agricultural seeds to be marketed. Only after official or licensed examination can the seed being certified as meeting specific minimum seed quality standards, and therefore be marketed. This process ensures that farmers and growers receive seed of a minimum known quality.

Objective

In their role as an official service provider / supervisor for seeds marketing, Scottish Government has an obligation to ensure full-cost recovery for all the services it provides, which includes field inspection of crops, testing of seed and the training and examination of people who undertake these activities. Within the Scottish Government, Science and Advice for Scottish Agriculture ( SASA) and the Rural Payments Inspection Directorate ( RPID) are responsible for carrying out the technical and administrative work associated with seed certification.

Rationale for Government intervention

This work contributes to the Scottish Government's Wealthier and Fairer strategic objective by creating a high quality public service, which we are continually improving and looking at way of make cost efficiency savings that still allows for sustainable future growth for the seed industry in Scotland. It also ensures that the cost of public services is met by those who benefit directly and the cost to Government is neutral.

Consultation

Within Government

Scottish Government's policy team have consulted with SASA; who working closely with RPID and the Official Seed Testing Station ( OSTS) Scotland, have reviewed the processes and procedures to provide the information contained within this BRIA. SASA have provided the cost for undertaking this work and predicted the increases required to make full cost recovery in seed certification year 2017/18.

Public Consultation

This partial BRIA will accompany the 12 week consultation which will be issued on the 3 March 2017. The consultation documents will be sent electronically and by post to all interested parties registered with Scottish Government (~130 businesses / individuals). An electronic copy will also be placed on the Scottish Government and SASA websites. No informal consultation has taken place.

Business

During the consultation period, Scottish Government are to meet with National Farmers Union of Scotland, Agricultural Industries Confederation ( AIC) Scotland and the Scottish Seed Trade Association ( SSTA). The review of seed fees is on the agenda. (24 April)

Further to this, in line with Scottish Governments Better Regulation practises, around 10 to 12 individuals / companies will be interviewed, in order for Scottish Government to establish what these proposed changes will mean to their business.

Fee Structure Options

To meet the stated aim of introducing a full cost recovery regime for the seed certification, seed testing and associated functions, we have considered the following options:

1. Maintain the status quo, no increases in fees.

No change, will not achieve full cost recovery and any deficits will continue to rise. Essentially, failing to make full cost recovery means the Scottish tax payers subsidising services that should be covered by the industry using it.

2. Increase fees to achieve full cost recovery in financial year 2017/18.

This option would deliver the Scottish Government's aims to recover the full cost of the service. Fees would increase so that those who benefit from the service ( i.e. licensed personnel within the seed industry) would be required to meet the true costs of providing a Scottish seed certification scheme.

Over the last 2 years SASA have implemented a number of cost savings, which last year lead to minimum or in some cases no increase in fees.

MySEEDS -

SASA has developed a new database SEEDS, which combines seed testing and seed certification data. As part of the development, SASA also launched a customer facing portal called MySEEDS, which allows certification applicants, to enter seed lots, crops, view seed test results and other functions online.

SASA have consulted with the seed trade and through the project have met regularly with a group of stakeholders to help develop and assess each phase of the build, to ensure that it delivers for both SASA and for the service users.

Since MySEEDS went live in 2015 there has been a good uptake of the system and over the past 6 months almost 75% of seed lot applications, notifications and crop entries have been made on line.

SASA are now in a position to begin to pass on savings in staff time accrued through this level of uptake by the industry, and in the first instance it is proposed that fees relating to these functions are held at 2015 levels.

Although SASA continue to review ways in which we can make savings, inflation and a slight increase in staff charges, means that there is a need to increase fees by 1.8% this year to allow for full cost recovery.

Preferred Option

Option 2 is preferred by the Scottish Government. A 1.8% increase in line with CPI to allow Scottish Government to make full cost recovery on the services provided.

Sectors and groups affected

• Professional Seed Operators
  • Seed Merchants
  • Seed Processors
  • Seed Packers
• Licensed Seed Testing Stations ( LSTS)
• Licensed Seed Samplers
• Licensed Crop inspectors
• Farmers

Based on the information we hold, an estimate of costs and the impact a 1.8% increase will have on a 30 tonne seed lot of cereal and a 10 tonne seed lot of Timothy is attached in ( Annex D).

Scottish Firms Impact Test

To obtain a better understanding of what these proposed increases will mean for Scottish individuals / companies, Scottish Government will need to speak to a cross section of the seed industry. Interviews will take place during April/May and our findings will be summarised in the Final BRIA, which will be published along with a summary of the responses we receive.

• Competition Assessment

We do not anticipate any impact on competition; however we will update this section after interviews with industry.

• Test run of business forms

No new forms for business to fill in will be introduced as a result of our proposals.

Legal Aid Impact Test

Having consulted with the Legal Aid Team, we do not anticipate that the contents of this BRIA will impact the Legal Aid Fund.

Enforcement, sanctions and monitoring

The Scottish Government Accounting System ( SEAS) team, SASA & the OSTS Scotland all work together to insure invoices are issued timeously. The normal action for non-paid invoices is used by the SEAS team for any statutory services not paid for by an individual or company after the time allotted.

Non-compliance result in companies or individuals being put on a client blacklist. Failure to pay for a service means no further work is carried out by the Certifying Authority or by the OSTS.

Implementation and delivery plan

Any increase will be implemented by way of The Seed (Fees) (Scotland) Regulations 2017, with the exception of the seed testing fees. Section 24(4) of the Plant Varieties and Seeds Act 1964, provides Scottish Ministers with powers to allow the Official Seed Testing Station for Scotland ( SASA) to make charges.

The proposed increase of 1.8% fees would come into force on the 1 July 2017.

Post-implementation review

Scottish Ministers have given their assurance to the Rural Affairs, Climate Change and Environment Committee, that the statutory fees charged for seed testing, seed certification, and associated licensed activities should be reviewed on an annual basis.

Summary and recommendation

Scottish Government preferred option is Option 2 - A 1.8% increase, which will reduce the deficit that SASA/ RPID currently have for providing seed certification and seed testing services. The proposed increase is anticipated to bring full cost recovery.

Summary costs and benefits table

This section will be updated at Final BRIA stage

Declaration and publication

I have read the impact assessment and I am satisfied that, given the available evidence, it represents a reasonable view of the likely costs, benefits and impact of the leading options. I am satisfied that business impact will be assessed with the support of businesses in Scotland.

Signed:

Date:

Minister's name, title etc*

Scottish Government Contact point:

Carol Scott
Ext. 49504

Statutory Service/Function	Fee - 2016 Fees	Cost per tonne of Seed (assuming 30 tonne lot)	Fee - 2017 Fees	Cost per tonne of Seed (assuming 30 tonne lot)	Fee - 2017 Fees Using MySEEDS	Cost per tonne of Seed (assuming 30 tonne lot)
Initial Fees	£4.25 per Hectare	£0.85	£4.33 per Hectare	£0.87	£4.25 per Hectare	£0.85
Crop Inspection Fee	£18.80 per Hectare	£3.75	£19.14 per Hectare	£3.83	£19.14 per Hectare	£3.83
Seed Lot Fee	£33.00 per seed lot	£1.10	£33.59 per seed lot	£1.12	£33.00 per seed lot	£1.10
Sampling Fee	£50.12 per seed lot	£1.67	£51.02 per seed lot	£1.70	£51.02 per seed lot	£1.70
Seed Testing – HVS test, 100 Seed STZ and moisture content	£73.68	£2.46	£75.01	£2.50	£75.01	£2.50
Labels		£1.00		£1.00		£1.00
Seals		£1.00		£1.20		£1.20
Bags		£8.00		£8.00		£8.00
Fee Cost per tonne		£9.83		£10.02		£9.98
						Saving £0.04/tonne
Total cost of Certification per tonne		£19.83		£20.22		£20.18

Grasses

Grasses costings example (only Scots Timothy grown and Certified in Scotland)

Statutory Service/Function	Fee - 2016 Fees	Fee (per tonne, assuming 10 tonne lot)	Fee - 2017 Fees	Cost per tonne of Seed (assuming 10 tonne lot)	Fee - 2017 Fees Using MySEEDS	Cost per tonne of Seed (assuming 10 tonne lot)
Initial Fees	4.25 per ha	3.19	£4.33 per Hectare	£3.25	4.25 per ha	3.19
Crop Inspection Fee	18.80 per ha	14	£19.14 per Hectare	£14.26	£19.14 per Hectare	£14.26
Seed Lot Fee	33	3.3	£33.59 per seed lot	£3.36	33	3.3
Seed Lot Re-Entry Fee	35	3.50 (not applied)
Sampling Fee	50.12	5.01	£51.02 per seed lot	£5.10	£51.02 per seed lot	£5.10
Seed Testing	75.60	7.56	£76.96 per seed lot	£7.70	£76.96 per seed lot	£7.70
HVS verification	7	not applicable
Fee cost per tonne		£33.06		£33.67		£33.55
						Saving £0.12/tonne