Delivering our vision for Scottish agriculture - proposals for a new Agriculture Bill: consultation

Chapter 2: Wider Context and Alignment

"where this fits in"

Vision Context

On the 2^nd March 2022, the Scottish Government published the Vision for Agriculture. This consultation paper seeks views on a range of proposals which aim to support the values and principles contained in the Vision.

Legislative Context

Agriculture as such is devolved, and therefore is the responsibility of the Scottish Ministers. However, we do not operate in a vacuum and in the consideration of future policy it is important to be mindful of the wider context in which we sit. The Scottish Parliament has powers to pass legislation on agriculture, but the UK has (and can) enact legislation on reserve matters which affect how we deal with agriculture, such as the UK Internal Market Act 2020 and the subsequent Subsidy Control Act 2022. The new Agriculture Bill must provide the flexibility to ensure we can work within UK frameworks, and react to further changes while delivering the necessary reforms.

Future policy proposals must also be considered against a wider international context of membership, as part of the UK, of organisations such as the World Trade Organisation (WTO). We are for example under a duty to comply with the WTO Agreement on Agriculture, which sets out rules for domestic support.

It is also Scottish Government policy to ensure broad alignment to EU CAP objectives. The new EU CAP will be "based on a more flexible performance and results-based approach."The new Agriculture Bill will likewise focus on creating a flexible approach which will allow Scotland to adapt to changing social, economic, and environmental conditions.

The new EU CAP will support European agriculture to contribute to the ambitions contained in the European Green Deal. This will emphasise actions in pursuit of achieving environmental and climate ambitions whilst contributing to the Green Deal targets. It will also be a key tool in reaching the ambitions of the Farm to Fork and biodiversity strategies. The new Agriculture Bill similarly will contribute to wider ambitions such as the obligation to reach net zero emissions across the economy as a whole by 2045.

The new EU CAP is structured around ten specific objectives which are linked to common EU goals for social, environmental, and economic sustainability in agriculture and rural areas, and form the basis upon which EU countries design their CAP strategic plans. The proposals within this consultation are intended to ensure correlation to the 10 objectives (ANNEX A), which are:

• to ensure a fair income for farmers;
• to increase competitiveness;
• to improve the position of farmers in the food chain;
• climate change action;
• environmental care;
• preserve landscapes and biodiversity;
• support generational renewal;
• vibrant rural areas;
• protect food and health quality; and
• fostering knowledge and innovation.

The Agriculture Bill also fits into a wider legislative programme during this parliament including linked legislation of the:

• Good Food Nation Bill (recently passed);
• Land Reform Bill;
• Nature Environment Bill; and
• Crofting Bill.

The government is working to ensure the legislative programme is taken together as a coherent whole in order to drive forward our ambitions for the land, and the communities who depend on it.

Climate and Environmental Context

The industry has played a key role in deliberating on and proposing change. We know that many farmers, crofters and land managers are already farming more sustainably, adopting regenerative agriculture principles and approaches, and using tools such as carbon audits and soil testing to inform practice change.

Agriculture and food production affect the environment and consequently there will be a degree of greenhouse gas emission. However, to meet its envelope under the updated Climate Change Plan agriculture needs to, with urgency, reduce its emissions by 31% from 2019 levels by 2032. Agriculture also has an essential role to play in tackling twin emergencies facing our climate and biodiversity but also in supporting progress to the Land Use, Land Use Change and Forestry emissions envelope.

The Climate Change Committee's 2021 Progress report to the Scottish Parliament on reducing emissions in Scotland has a number of recommendations for agriculture and land use, land use change and forestry, including:

"Ensure options for future agriculture and land use support through the proposed Bill to replace the current Common Agricultural Policy in 2023 provide a framework to deliver climate mitigation and adaptation as well as wider environmental objectives. This should cover support for measures to reduce on-farm emissions and strategic land use change away from traditional agriculture to reduce and sequester carbon."

The recently updated (January 2022) statutory UK Climate Change Risk Assessment identifies several risk areas where locked in-impacts of climate change are likely to be detrimental to agriculture in Scotland, unless further action is taken to manage these through adaptation actions:

• Risks to soil health from increased flooding and drought.
• Risks to agriculture from pests, pathogens and invasive species
• Risks to crops, livestock and commercial trees from multiple hazards
• Risks to natural carbon stores and sequestration from multiple hazards leading to increased emissions
• Risks to supply of food, goods and vital services due to climate-related collapse of supply chains and distribution networks

The climate and nature crises are intrinsically linked – restoring biodiversity and rebuilding our natural capital will play an essential role in reaching net zero and helping land to adapt to climate change. The new Agriculture Bill will enable 'delivery of key outcomes' (Chapter 3) which includes 'nature restoration' mechanisms to incentivise activities which will preserve and increase biodiversity. The overall package of future support should be designed to support national efforts to halt and reverse biodiversity decline.

We recognise the important role that both public and responsible private investment in Scotland's natural capital has to play in meeting our climate change targets and delivering wider benefits from our land. A Green Finance Institute Report from 2021, outlined the nature finance gap of £20 Billion that Scotland is facing this decade. We also recognise that private investment in Scotland's natural capital needs to be responsible, which is why in March 2022 the Scottish Government published a set of Interim Principles for Responsible Investment in Natural Capital. These Interim Principles outline our ambitions and expectations for responsible private investment in natural capital to all stakeholders with a role in natural capital markets, including those involved in agriculture.