New Entrants and Young Farmers Start-Up Grant Schemes: evaluation

4 Discussion and Policy Implications

As this evaluation indicates, research has consistently found that access to farmland remains a central barrier to new entrants into this market. This reflects a combination of factors and the dynamics of the market, and appears to be comparable to the situation in various European countries. Moreover, evidence suggests that establishing a financially viable farm is also challenging.

4.1 Land Supply

In this sense, the next steps should be understood relative to how we define the problem we are trying to solve. If the problem is defined as ensuring that young farmers are able to purchase land and proceed in traditional farming practices, then future work must find an effective way to address the structural barriers confronting new farmers. In terms of policy, it is likely that the macro-economics of land price and availability cannot reasonably addressed through the funding of applicants at anything other than a very gradual pace. Similarly, it would be valuable to explore the extensive policy issues concerned with land reform in addressing these concerns.

An extensive reviewof options was published in 2018 by the Scottish Land Commission, which similarly sought to understand the potential policy responses to the land access barriers facing new entrants. This also provides an analysis of four options, including joint venture options, tax intervention to increase land supply, a land matching service – now adopted and supported by Scottish Government - and the development of business incubators. A review of the legal framework governing land ownership and the options for pursuing a more equitable distribution of land is outwith the scope of the work here. However, the research here indicates that the goals of new entrants policy may, in the future, be a downstream benefit of land reform policy.

4.2 Conclusion

Between the two schemes, the Scottish Government has supported 254 new farmers, albeit in a context where the available data indicates that many of these farms struggled to be profitable at the time of evaluation. The aims of the grants, therefore, were partially achieved. As this represents less than 1% of the total number of Scottish Agricultural holdings and approximately 1% of the total number of farm businesses, it has not led to a change in the overall composition of the farming sector.

The grants were very popular and over-subscribed, resulting in their premature closure. Setting a target for a total proportion of farmland to be managed by new entrants going forward could result in a budget more adequate to this extensive task. This evaluation suggests, however, that an increased budget for grants such as these will not be sufficient to address the issues that prevent generational renewal in the farming sector. The extensive structural constraints facing new entrants, from land availability to the profitability of the overall pursuit, means that these efforts are blowing against the prevailing economic winds.

This evaluation has not found evidence to support the continuation of the start-up grants, as they operated in the 2014-2020 SRDP, as a method of encouraging generational renewal in the farming sector. This is not to say that supporting new entrants could not have this effect under any circumstances, but simply that this iteration of the grants had limited scope to encourage meaningful change in the age composition of the farming sector within the timeframe of this evaluation given the considerable constraints of land availability and profitability.

4.3 Next Steps

As detailed above, the Scottish Government continues to support new entrants through the FONE group, and has, since 2016, has facilitated 107 land opportunities over almost 7,000 hectares to 70 new entrants, as well as supporting the development of a land matching service. These efforts are likely to continue going forward.

However, in the longer term, efforts to support new entrants into the farming sector could potentially benefit from further research in the direction of exploring mechanisms to increase the circulation of farmland, from the perspective of facilitating more farmland going onto the market and, as a result, attracting new farmers and businesses.