National Farmers Union Scotland AGM: Cabinet Secretary speech

Thank you Martin, for inviting me to join you. It is a real pleasure to be here to update you on our plans for the Agriculture Reform Programme. 

Firstly, I want to congratulate Martin, and the NFUS vice presidents Andrew Connon and Alasdair Macnab who have been appointed today. 

I would like to acknowledge, in particular, Martin’s tireless work to represent NFUS members and champion your concerns.

He ensures that your views are heard by this Government, which is vital as we approach significant changes. I would also like to thank all of you,  the members of NFUS, for the important role you have in Scotland, providing sustenance to our country and continuing to produce food in what I know are increasingly challenging times. 

It is great to be here in person as we were able to do with the return in 2022 of the Royal Highland Show.

I don’t think we can underestimate just how important occasions like that are in the opportunity they provide to for that social connection with your peers as much as anything else and I look forward to joining you there this year.

Reflecting on the last year, I know how difficult it has been for many of you.

Even with the pandemic being more manageable, there were many challenges that you faced as a sector – the cost crisis and implications of that for you, your families and your businesses, the continuing avian flu outbreaks and the pressure this puts on some of you, recent bovine TB outbreaks, significant ongoing challenges for fruit and vegetable producers with labour shortages and high input costs, and the continuing repercussions of Brexit, as well as the pandemic and the associated supply chain and export issues that these continue to bring to businesses in Scotland.

You have demonstrated incredible resilience throughout these many challenges in your commitment and ability to respond to change. I will continue to support you in every way I can.

Against these challenging circumstances, we have focussed on providing support where it is most needed, while also focusing on building a strong and sustainable future for agriculture in Scotland. 

In the immediate wake of the Ukraine situation, we established a dedicated Short Life Food Security and Supply Taskforce to work alongside industry leads within the food and drink sector, to understand potential disruption to the food and drink supply chain.

In the Programme for Government 2022, we committed to creating a dedicated Food Security Unit in accordance with the Taskforce's recommendations. The recruitment process for the food security function is now complete.

And in response to the cost crisis, I brought forward legislation that allowed the start date of the Basic Payment Scheme and Greening payments to be made in September, to really try and support farmers and crofters with the immediate cashflow challenges facing you. 

Supporting rural, coastal and island businesses and communities, who continue to bear the consequences of covid, EU Exit and now the cost crisis, is one of my key priorities.

I have once again ensured there will be economic security with a direct cash injection of £630m earmarked for the rural economy over the coming financial year.

£44m of the Rural Affairs and Islands Portfolio budget is also being provided to continue the transformation of how farming and food production is supported in Scotland and to enable us to become a global leader in sustainable and regenerative agriculture, helping to achieve our statutory emissions targets.

£20m of that funding is being provided for year two of the National Test Programme, part of our overall Agricultural Reform Programme which I’ll speak more about in a moment .  

While we work to support the sector today, we are also focussed on the future. 

The Scottish Government, like governments all over the world, has been faced with a really difficult set of choices.  In Scotland we are committed to a number of key priorities, these are: eradicating child poverty; transforming the economy to deliver a just transition to Net Zero; and providing sustainable public services 

It is against these priorities and particularly the transition to Net Zero and those of the agriculture sector, that last year I announced Scotland’s Vision for Agriculture - a vision with food production at its heart.

It makes clear our support for farmers and crofters in providing the country with healthy nutritious food, whilst also ensuring Scotland meets its world-leading climate and nature restoration outcomes.

I’ve said this before but I think it worth reiterating again, there is no contradiction between high quality food production and producing it in a way that works for climate and nature.

This was clear in the reports of the farmer led groups, which are our blueprint for our future policy.

Martin you rightly restated the importance of having food producers at the heart of our policy yesterday. Our Vision is rooted in that understanding.

It sets out proudly, our ambition, that our producers, and so our nation, are recognised as global leaders in sustainable and regenerative agriculture.

We are ambitious in what we want to achieve with you. Building on our Vision for Agriculture, we undertook consultations on the Land Reform Bill and Agriculture Bill, giving all of you the opportunity to respond on the proposals being made by this Government to legislation for change in these areas.

The results of that consultation and our response to it will be published in the coming months and we are looking forward to introducing the Agriculture Bill in Parliament later this year.

In the meantime, we are committed to progressing the Agriculture Reform Programme to deliver the future support framework.  

To deliver the ambitions set out in the Scottish Government’s Vision for Agriculture, Scotland needs to have a support framework that delivers high quality food production, climate mitigation and adaptation, and nature restoration.

I now have the opportunity to share more information with you on the Agriculture Reform Programme, to help you plan and prepare for change and to hopefully give you the clarity on the future support mechanisms that you, your businesses and our wider rural areas need.

Today, I am delighted to publish our route map for agricultural reform. 

Building on my statement to parliament in November last year, where I set out the phased approach to transition to the new support framework, the route map provides more detail on how we will deliver the transition process and the steps we will take to get there.   

This route map will provide you with greater clarity and confidence on key dates for guidance, support and how and when current schemes will change.

It includes information on the measures currently being considered; and the support that will be available to prepare for change.

I look forward to continuing to work collaboratively with you to  develop the detail and we will regularly update this route map to ensure you are prepared for the changes ahead.

In addition to the timeline, the route map contains, in a single new resource for farmers, information on the future tiered model of base, enhanced, elective and complementary support. 

It shows the phased implementation of the new framework from 2025 and demonstrates the transition from current to future schemes, the measures currently being considered for future support and the support available to help businesses prepare.

From 2025, support will be conditional – conditions will be based on meeting essential standards to ensure appropriate activity, climate, biodiversity and business efficiency outcomes are achieved, as well as safeguarding animal health and welfare.  

And as I said in November, there will be no cliff edge. We are designing a transition that will support you through these changes, while involving you in the development of the future support framework.

Today, alongside that route map, we have also released a list of the measures being considered and evaluated for inclusion as part of future agriculture support in Scotland.

This document, called ‘Guidance on the List of Measures’, contains information on the broad types of actions that this Government will likely expect from farmers and crofters who wish to receive enhanced tier agricultural support payments in future.  

This list of measures has been built on the recommendations of the Farmer Led Groups and academic research which will continue to be used as an evidence base as we develop policy.

We will begin testing these measures with a group of farmers and crofters this month to understand how they might work in practice from the people who will be asked to implement them.

This approach of getting feedback from those on the ground will continue as the support package is developed, and I would encourage you to discuss with your representative bodies as well as letting us know your views directly- in the publication there’s an email address where you can send us your comments.

I also know that there needs to be flexibility in our approach and that we must celebrate those already doing some of these measures. It’s important that actions that are already being taken are recognised, alongside providing an opportunity for everyone to do more to reach our collective goals.

I want to be clear that this is not a final list of measures, it is designed to be indicative and to help the sector to plan for future changes.  

There will be continued assessment  to understand how these and other measures will be applied within the future framework of support.

I recognise that these measures are broad and have a greater emphasis on certain sectors.

As we continue with our policy development we will ensure that all sectors of Scottish agriculture and other land based sectors will play their part in contributing towards nature and climate targets. 

Another important part of how we are helping farmers and crofters prepare for the future is through the ‘Preparing for Sustainable Farming’ programme, which is already helping businesses prepare for change and the future measures being considered.

The first part of the programme, that launched in 2022,  is helping businesses understand carbon emissions and sequestration; and helping lower emissions and increase efficiency.

This is done through carbon audits and soil sampling and analysis and I saw this approach in action when at Rotmell Farm where they have won awards for their approach to soil health as part of their approach to regenerative farming.

I think it has also been fantastic the work that’s being undertaken by the Soil Regenerative Group as part of Farming for a Better Climate Initiative and just seeing the work that they’ve done and the huge improvements that’s made for their farming businesses and the efficiencies that they’ve seen as part of it.

Businesses can claim a standard cost of £500 for an eligible Carbon Audit that will help better understand energy use and costs; use resources more efficiently; better understand their carbon footprint and highlight areas to focus on to achieve carbon emission reductions and opportunities to sequestrate carbon.

Businesses can also claim actual costs of up to £600 per 100 hectares of Region 1 land for Soil Sampling that will measure the nutrient content of the soil and identify deficiencies, reduce unnecessary maintenance practices and fertiliser applications, target application for crop production and build a nutrient management plan that has potential to save time and money.

Martin you set that out yesterday much more clearly than I could and I acknowledge your part in making this support available and accessible to everyone.

Additionally, a standard £250 Development Payment can be paid with the first Soil Sampling claim to allow farmers and crofters to spend time on things that will widen their understanding of Nutrient Management Planning and the associated activities.

Further support is available under Preparing for Sustainable Farming through the launch of MyHerdStats on the ScotEID website.

MyHerdStats, which was developed by Scottish Agricultural Organisation Society, uses statutory cattle registration and movement data to provide suckler producers with insights into their herd performance.

It is being provided free of charge to support the sector in enhancing its performance and environmental credentials. Without requiring any additional data MyHerdStats provides keepers with information on calving performance, herd replacement rates, youngstock sales and more. 

This has been made possible because of our transition to ScotEID as the home of Scottish cattle traceability data.

I would like to thank all of you who have already started to take up this support and urge you all to visit the Rural Payments website to find out how you can benefit.

Our Government is fully committed to supporting farmers to produce food sustainably and to help them make the transition to more sustainable farming. 

For livestock keepers, all the evidence says that sustainable farming includes optimising livestock health and welfare. 

Healthy livestock are more sustainable than their ailing counterparts.  Healthy animals are more productive, require less veterinary attention, need fewer antibiotics and have better welfare.  They are more efficient, with lower greenhouse gas emissions per kilogram of output. 

All of this makes health and welfare an essential foundation for sustainable livestock farming and I am delighted to announce today, the launch of further support for animal health and welfare interventions as part of Preparing for Sustainable Farming. Targeting animal health and welfare interventions at sheep and cattle farms will make a huge impact. 

The list of 7 interventions has been co-designed with experts, including the Agriculture Reform Implementation Oversight Board members.  At least some of the interventions will be applicable to every flock and herd in Scotland, regardless of size or location. I want to emphasise that the interventions will be available to all registered sheep and cattle keepers. 

The interventions are well-known disease prevention measures that pay dividends in terms of animal health and efficient production. 

Top-performing farms are already implementing some or all of them, and are seeing the benefits.  I want to see those benefits being experienced more widely throughout the sheep and cattle sectors. I hope that all sheep and cattle keepers will study the list published today, and consider which interventions will be most beneficial for their individual business. 

This is a 2 year transitional programme.  It has been intentionally kept as simple as possible, both for claimants and Scottish Government auditors. 

Farmers will consult with their chosen experts and carry out the 1 or 2 interventions that are most appropriate for their farm and then will be paid for up to 2 interventions this year and a further 2 next year. The payments will be a standard cost of £250 per option, which will cover a substantial part of the bill in each case. 

When it comes to changing the direction of any business, education and training are absolutely essential in making the best decisions for the future. 

I am serious about helping farmers to learn how to make their business more sustainable, so claimants will receive an additional £250 for learning and development when they make their first claim for animal health and welfare interventions.

Maintaining and improving animal welfare is an essential element of sustainable livestock farming, and  this goes hand-in-hand with good health.

There is no appetite for increasing productivity at the expense of animal welfare, and the animal health and welfare interventions will improve the health, the productivity and the welfare of our sheep and cattle.

Farmers who engage with Preparing for Sustainable Farming will see immediate rewards in terms of livestock health and welfare, but will also set-up their business for a more efficient future. 

I hope that all cattle and sheep keepers will be able to take advantage of the animal health and welfare intervention payments to engage with their vets and other expert advisors to achieve tangible improvements in their own flocks and herds.

In addition to the support and guidance in preparation for the future support framework as part of the Agricultural Reform Programme, we are continuing other schemes designed to support farmers and crofters.

The Agri-Environment Climate Scheme continues to play a significant role in our ambition to make Scotland a global leader in sustainable agriculture. I am pleased to say that Agri-Environment Climate Scheme, 2022, totalling £14m, were issued on 19 January 2023. This funding will support a total of 680 rural businesses to take forward projects that protect the environment and mitigate the impacts of climate change.

The recently opened AECS 2023 round will target agri-environment support across a range of options including organics and slurry storage.

To support our ambition to double the amount of land under organic management by 2026, the area cap for organic conversion and maintenance has been suspended, this creates an ideal opportunity to move to organic, which I know is already being considered by a number of farmers. 

This year the £5 million Agriculture Transformation Fund will be used to extend support for slurry storage, helping farmers and crofters to meet regulatory requirements to improve the storage of slurry and digestate on farms.

Returning to some of the challenges you are facing now, I mentioned earlier the pressure that Avian Influenza has been causing. Unfortunately we continue to see cases of Avian influenza occurring.

In Scotland we’ve seen 20 cases since the new AI season started on 1 October 2022, compared to 144 in England. However, that is still too many.

We are aware that the current unprecedented outbreak of Avian Influenza has created problems for some producers in obtaining insurance. We are working with the poultry industry to identify how this can be addressed and I am grateful for their cooperation. 

I discussed the topic of insurance with NFUS in December and following that meeting, several options designed to support industry are being investigated.

The one message I would like to repeat to all poultry keepers is for everyone to ensure their premises, their staff, their visitors, all know about, and fully understand the need not just for good biosecurity, but to raise that bar and ensure they have excellent biosecurity in place.

Excellent biosecurity remains our number one defence against the virus.

Given recent media coverage, it is unsurprising that there is increasing concern around disease control and prevention, and what cases might cross our borders.

The UK Government are continuing to work on its new Target Operating Model for border controls and we continue to press for rigorous analysis of biosecurity risks in that work.

I expect that full pre-notification of goods from the EU will come into force from October 2023, on a new simplified Export Health Certificate, but nothing is finalised yet, nor have Scottish Ministers been sufficiently engaged. 

Until proper controls are brought in, I will ensure that we continue to bring in safeguarding measures when appropriate to maintain Scotland’s high biosecurity standards.

Looking at biosecurity within our own borders, I have recently approved funding to be provided to gather data on the prevalence of sheep scab on the islands of Lewis and Harris. 

The study that is currently underway could ultimately allow us to significantly reduce the prevalence of this disease in this island setting, which in turn may lead to eradication in the future.

I also want to focus on the livelihoods, skills and health and wellbeing of those who live in, and rely on, Scotland’s land and agricultural sector.  It is vital that there is a focus on maintaining and supporting diversity in thriving rural and island communities.

The independent Land-based Learning Commission was established to consider how we can attract and equip more people to work in our land-based and aquaculture sectors. The report from the Commission has recently been submitted and, as stated in the Programme for Government, we are committed to considering the report and will respond later this year.

We are acutely aware of some of the labour force issues being faced by business at the moment in terms of filling vacancies and attracting talent. I would agree with the comments you made yesterday on this Martin, the full consequences of Brexit are still unfolding for businesses like those represented in this hall today.

I think it’s also important to highlight another piece of work currently underway.

The independent Review of Skills Delivery Landscape is being led by James Withers, known to many of you, and will report to Ministers this Spring.   Among other things, the Review will look at areas such as the design and delivery of apprenticeship programmes, how well sectoral and regional skills planning is working at national and local level, and how collectively we can work together to design a system better suited for the future.

James is well placed from his previous roles in the NFU and Scotland Food and Drink to understand your needs and I look forward to seeing his recommendations when they are given to government.

With our continued focus on the future of the sector, responding to the challenges facing new entrants into the sector and recognising that supporting the next generation of rural workers is vital for the industry.  Supporting that generational renewal and ensuring they are equipped to deal with the challenges they face are at the forefront of our policy considerations going forward.

The Farm Advisory Service, the Scottish Land Matching Service, machinery rings’ pre-apprenticeship programme and the Farming Opportunities for New Entrants Group, continue to provide quality advice, opportunities, and support for new entrants, in addition to direct payments, and all supported by the Scottish Government.

As set out in our 2021 election manifesto, further work on options for further new entrants' support continues, and will enhance the diverse range of support already available.

As well as encouraging new entrants into the sector, we also want to support women in agriculture and see greater diversity.

Supporting women living and working in Scottish agriculture to develop their skills and increasing their role in Scotland’s rural economy and business innovation has been and continues to be a priority.

In the current financial year, the Scottish Government is providing £400,000 to our Women in Agriculture Development Programme, to fund practical solutions to improve the lives of women living and working in agriculture and support building  more resilient businesses.

As part of this we have funded the ‘Be Your Best Self’ personal development course; supported by the Women in Agriculture Scotland Group to run events.

We have also assisted the Scottish Association of Young Farmers to support their new board members to increase their leadership skills; undertaken research and provided more funding for practical training too. 

Transformational change can be challenging - but also offer tremendous opportunities.

To support rural wellbeing, RSABI and the Rural Mental Health Forum are supporting land managers, building rural networks and resilience at an individual, local and national level.

I want to take this opportunity to thank them for the truly incredible work they do under increasing pressure and the huge and positive impact they make.

I am keen to ensure that your health and wellbeing continues to be supported; you have a right to be given tailored support when you need it so, to that end, I have continued support RSABI, the agricultural charity providing assistance to those living and working in Scottish agriculture who need practical, emotional and financial support.

While I couldn’t attend the conference yesterday, I know from following the day’s events on social media and from speaking to many of you at the dinner last night, how powerful the session on health and wellbeing with Farmstrong was.

I was delighted to meet Marc Gascoigne and speak to John Scott yesterday and I’m keen to continue that engagement and to see how we can support the vital work you’re doing going forward.

Turning now to innovation. We must continue to work together to contribute to the urgent actions needed to reach net zero emissions and protect our biodiversity in Scotland.

But I am consistently impressed by the innovation I see in the farming businesses I visit across the country.

I saw that most recently on a visit to Saughland Farm, where I could see how their use of technology was being utilised to boost their performance as well as improving the health of their livestock ad making their business more efficient.

Innovation is a cornerstone of growth, so I am delighted to announce that, from today, the Knowledge Transfer and Innovation Fund will be accepting new applications for funding of up to £200,000 per application. Further details of this can be found on the Rural Payments website.

This continued support, for knowledge transfer and innovation, already includes the 5-year investment of £1.8 million in the Monitor Farm Programme, that I announced last November at AgriScot.

This further funding increases the focus on supporting the agricultural sector to make climate mitigations and addressing the biodiversity crisis.

Let me now turn to adding value to the farm, as I know you had a session on this as part of your conference yesterday.

I hope you enjoyed the session on agro-forestry and hearing from Andrew Adamson, a member of the Integrating Trees Network.

While I haven’t been to visit Andrew, I did visit another Andrew, Andrew Barbour, at his farm last month, seeing first-hand how the trees he has integrated to his farm have made a real difference.   

The current forestry grant scheme has been highly successful and has supported the creation of over 69,000 hectares of new woodland since its introduction in 2015 and has also supported the sustainable management of Scotland’s existing woodland resource.

However, forestry support measures have to continue to evolve to ensure that they are fit for purpose, cost effective and deliver for the climate and biodiversity emergencies. 

So Scottish Forestry will undertake a public consultation exercise to inform further developments to the current scheme to ensure its continued success and more details are coming forward on this shortly.

Another aspect of your session yesterday that I want to touch on is agritourism, a truly exciting area that is continuing to grow in success in Scotland.

It is helping sustain our valuable family farms with self-generation of farm income, keeping multiple generations of farming families on farm and in employment.

It is also a vehicle for getting more women into Agriculture too. It is brilliant to see that 13 out of 15 of our Destination Leaders playing a key role in leading the sector throughout Scotland are women, with agritourism leading the way in getting more women involved with agriculture.

The Scottish Government provided Scottish Agritourism with £35k funding over this financial year to provide a leadership role in relation to delivering the Scottish Agritourism Strategy.

This funding has helped to make a start in promoting Scotland as a future world leader in Agritourism and I would like to acknowledge the incredible contribution Caroline Millar my co-chair in the Agritourism Implementation Board has made in leading work on developing and growing Agritourism in Scotland. I can quite honestly say that we wouldn’t be where we are if it hadn’t been for Caroline and the work she’s driven forward.

In addition, following the success of the previous Agritourism Monitor Farm Programme, we are providing £440,000 of support to Scottish Enterprise to run the new agritourism monitor farm programme.

We expect this will involve 4 new agritourism monitor farms distributed across Scotland, involving a wider community of at least eight rural businesses around each of the farms ,and participation by a minimum of 400 individual rural businesses in meetings and discussions.

With covid recovery still being at the heart of Government focus, it is exciting to look to the future and think about the benefits that Agritourism will bring, not just to Scotland’s Agriculture sector, but to the Scottish economy too, with a wide range of benefits to support our rural areas and remote communities – not to mention that vital role it plays in connecting people to our land and food, helping to meet our Good Food Nation ambitions.

Our Good Food Nation Act, passed last year, places a new duty on Ministers to set out a comprehensive Good Food Nation plan. That will cover everything from farm to fork and beyond, and really draw together what can often seem like a disparate set of policies. It will also require key public bodies, particularly local authorities and health boards, to set out their plans. Do get involved in the development of these plans.

As set out here, paying grants to you is a key focus of the Scottish Government’s ARE directorate; doing this efficiently and effectively is important. Moving to a digital approach is vital for that efficiency.  2022 saw further momentum in our ambition to move Single Application Forms to an online only system with 99.6% of applications being submitted online.  Thank you to all of you who have made the move to digital.

One of the main advantages of the online process is that it provides the most up-to-date information available on our mapping system, which you can utilise and benefit from as you or your agent complete your application. 

Our Area Office network will continue to support online submission and the remaining small number of paper applicants will be encouraged to submit their 2023 form online. 

Delivery of the 2022 Payment Strategy is progressing well.

As mentioned earlier, in 2022 the start date of the BPS and Greening payments were brought forward from October to September to support farmers and crofters, as best we could, with the immediate cashflow challenges facing them. 

The payments were successfully started in September with over 70% of the anticipated expenditure issued in the first tranche. 

By the end of 2022 over 98% of anticipated expenditure had issued.  To date payments of over £417 million have issued to 17,341 businesses, this represents over 99.48% of anticipated expenditure issued 2 months ahead of previous payment performance. 

In addition, Less Favoured Area Support Scheme payments have also successfully been brought forward with over 90% of anticipated expenditure issued in December 2022, one month ahead of schedule. 

To date £58.8 million has been paid to 10,293 farming businesses – representing more than 96.6% of eligible applications.  This is 3 months ahead of previous payment performance.

The remaining scheme payments for Voluntary Coupled Support and Rural Development are also on track to issue over the coming months.

I know that this year many agricultural businesses continue to deal with financial challenges and uncertainty. In publishing the 2023 Payment Strategy timetable today I hope to provide you with some certainty over when your payments will start to arrive.

Taking into account the improved performance for 2022, our 2023 payments strategy aims to maintain the 2022 payment timings for Direct Payments and funding under the Scottish Rural Development Plan.

You’ll be delighted to hear I am drawing to a close. There has been a lot of ground to close and a lot of information to impart to you. But, in drawing to a close, I want to reiterate my commitment to engaging with you and supporting all of you as we progress the Agriculture Reform Programme and build a Future Support Framework.

With the package of support and the route map that I have announced here today, I hope you can see that we are listening and are responding to your feedback and providing a clear goal for the agriculture reform in Scotland and the route to get there.

I also want to again make clear my commitment to supporting food production in Scotland – that’s why we committed to maintaining direct payments. This can be done while working for climate and while working for nature, while creating more efficient and profitable businesses. It’s up to us to develop and deliver a framework that supports and enables that to happen.

Thank you all for your ongoing engagement with this Government on legislation and on this change programme.

I want to encourage you to continue this dialogue, to take advantage of the support available and work collaboratively with us now, and in the future, to deliver fit for purpose support for Scotland’s farmers, crofters and landowners in the future.