Scotland Rural Development Programme 2014-2020 - Consultation on Stage 1 Proposals : An Analysis of Responses

6 Delivering the SRDP: Programme Structure

6.1 This chapter provides an analysis of responses in relation to Section 7 of the consultation document which set out a series of proposals about the programme structure for SRDP 2014-2020. Views were sought on a range of issues: (i) possible changes in the source of support for small local businesses; (ii) whether Regional Project Assessment Committees (RPACs) should be replaced with a more streamlined assessment process; (iii) whether the Forestry Challenge Funds should be discontinued; (iv) how food and drink grants should be decided; (v) possible changes in support for crofting and, potentially, other small holdings; (vi) possible replacement of the Skills Development Scheme with an Innovation Challenge Fund; and (vii) possible changes in support for new entrants to farming.

Support for small local businesses (Q5)

6.2 The consultation document set out the Scottish Government's proposals for support for small businesses to be directed through the Local Development fund (LEADER in rural areas). This would see small local businesses applying to their Local Action Group (LAG) for a grant rather than to a national or regional organisation. Respondents were asked:

Question 5: Do you agree or disagree that support for small local businesses should be provided through LEADER? Please explain your views.

6.3 In total, 95 respondents (12 individuals and 83 organisations) answered Question 5. Of these, 73% agreed with the proposal to provide support for small local businesses through LEADER and 13% disagreed. See Table 6.1.

Table 6.1: Summary of responses by respondent type (Q5)

Type of respondent	Individuals	Organisations	Total respondents	%
Agree	7	62	69	73%
Disagree	1	11	12	13%
Other	4	10	14	15%
Total	12	83	95	100%

Percentages do not total 100% because of rounding.

Views in support of providing small local business support through LEADER

6.4 Those who agreed with the proposal thought that providing support for small local businesses through LEADER was a good idea because:

• LEADER has worked well in the past: It has provided good value for money and, over time, has acquired the experience and expertise to undertake this work, especially through the LAG structure and networks which provide access to relevant skills.
• Decisions about support for small local businesses should be taken locally: This enables investments to align more closely with local strategies and recognises that small businesses have different needs to large businesses.
• LEADER has been important in bringing rural communities beyond farmers into the SRDP: This had social as well as environmental benefits and helped to break down barriers between farmers and other local businesses.

Caveats and disagreement with providing support through LEADER

6.5 Caveats and disagreements with providing support to small local businesses through LEADER highlighted:

• The need for a sufficient budget to be available: The point was made repeatedly that an increased budget allocation for LEADER would be required for this proposal to be viable, otherwise support for other community projects would be compromised.
• The need to address a range of administrative and training issues: Respondents emphasised that in order for this to work effectively, the current application process would have to be simplified and improved in line with the recommendations from the SRDP Mid Term Evaluation. Improvements would be required to written guidance, audit processes, coverage, decision-making, community involvement, etc. LAGs would also need to be upskilled to cope with the new responsibilities.
• The role and remit of LEADER should be reviewed: Some respondents thought that LEADER should not focus solely on economic development, but should incorporate environmental and landscape projects. Others thought the current focus of LEADER in community-led local development was distinctive and should be retained.
• Links should be made to other relevant bodies and organisations: There was a view that LEADER should be coordinated with other services (including Business Gateway and Highland Opportunity Ltd.), and other programmes (European Structural Fund, European Fisheries Fund Axis 4, etc.). However, some respondents made a specific comment that the Business Gateway service was more suited to this task.

Other issues

6.6 There was a general call for more detail about the proposal. Many respondents commented that their agreement was conditional at this stage.

Regional Proposal Assessment Committees (Q6)

6.7 The consultation document set out the Scottish Government's proposals to disband RPACs as part of their efforts to streamline the targeting of investments. Respondents were asked the following question:

Question 6: Do you agree or disagree to the proposal to disband RPACs and replace with a more streamlined assessment process as explained in Section 8? Please explain your views.

6.8 In total, 98 respondents (15 individuals and 83 organisations) answered Question 6. Of these, 74% agreed with the proposal to disband RPACs and 7% disagreed. See Table 6.2.

Table 6.2: Summary of responses by respondent type (Q6)

Type of respondent	Individuals	Organisations	Total respondents	%
Agree	11	62	73	74%
Disagree	1	6	7	7%
Other	3	15	18	18%
Total	15	83	98	100%

Percentages do not total 100% because of rounding.

6.9 In general, respondents' comments suggested that they were supportive of the principle of disbanding RPACs (because they were not perceived to have been successful), but that this support could only be offered on a conditional basis until more details of the replacement arrangements were available.

Views in support of disbanding RPACs

6.10 Those who agreed with the proposal believed that RPACs had not worked as originally intended and this had been clear from an early stage. They had been slow, bureaucratic and had not added value to the decision-making process. Therefore they should not continue as currently constituted.

Caveats and disagreement with disbanding RPACs

6.11 Many of the caveats and disagreements with disbanding RPACs related to comments about what would replace them. In this context, respondents raised the following points:

• A regional dimension to decision-making is vital: There was widespread support for some regional dimension to decision-making on rural priorities, as many environmental priorities operate at a regional level. This would require collaboration and integration between organisations, stakeholders, and structures operating at a regional (and national) level. One respondent suggested allocating budgets to individual EU articles.
• Local priorities must be taken into account: Whatever replacement is designed, local strategies must be integrated with regional priorities. The LEADER programme and the associated LAGs were mentioned frequently as a potential model which incorporated local priorities but also took a wider view.
• The Mid Term Evaluation should be implemented: Respondents commented that disbanding RPACs is not a solution in itself. Much work is required to develop a suitable replacement and the difficulties of streamlining should not be underestimated. The Mid Term Evaluation was suggested as providing a good starting point.
• Any replacement needs a clear remit and sufficient resources: There was a view that the remit of RPACs had not been clearly defined and the resources had not been sufficient. These issues would have to be addressed.

Other issues

6.12 There was a general call for more detail about the proposal. Specifically, respondents wanted clarity on:

• The expertise, knowledge and remit of case officers (including RPID officers) and the availability of (free) advice to develop applications
• The decision-making process of any replacement body.

Land Managers Options (Q7)

6.13 The consultation document set out the conclusion from the SRDP Mid Term Evaluation that the LMO scheme "has not to date delivered strongly evidenced transformative change, though some positive effects are intimated". The suggestion was made that, given this finding and the reduced resources available, this mechanism should be removed from the next programme. Respondents were asked the following question:

Question 7: Do you agree or disagree that LMOs should be removed from the future programme, given the spending restrictions we are likely to face and the need to ensure maximum value from our spending? Please explain your views.

6.14 In total, 93 respondents (19 individuals and 74 organisations) answered Question 7. Of these, 65% agreed with the proposal to remove LMOs and 25% disagreed. See Table 6.3.

Table 6.3: Summary of responses by respondent type (Q7)

Type of respondent	Individuals	Organisations	Total respondents	%
Agree	11	49	60	65%
Disagree	8	15	23	25%
Other	-	10	10	11%
Total	19	74	93	100%

Percentages do not total 100% because of rounding.

6.15 Agreement and disagreement with the proposal was equally balanced for respondents who identified their interests as being in farming, crofting, and land management. For these (22) respondents, 10 (45%) agreed with the proposal, 10 (45%) disagreed and the remaining 2 (10%) offered a response which could not be classified.

Views in support of removing LMOs

6.16 Those who agreed with the proposal supported the analysis set out in the document and thought that LMOs should be removed because:

• LMOs had been of limited effectiveness and had not achieved impact
• Take up of LMOs had been rather poor
• The uncompetitive nature of the LMO scheme could not be justified
• LMOs did not represent value for money.

Caveats and disagreement with removing LMOs

6.17 Caveats and disagreements with removing LMOs were that:

• A broad and shallow scheme is attractive: Some respondents emphasised that the benefit of the LMO scheme is that it is simple, available to all, and provides important support especially to small land managers, hill famers etc. They felt that a 'light touch' scheme is attractive.
• The options available under LMO should be reviewed: Many respondents emphasised that the options that had been available under SRDP 2007-2013 had not been well chosen. If the options were reviewed and made more meaningful and appropriate, the LMO scheme would have achieved more.
• Access to the main Rural Priorities scheme for small units / crofts will have to be improved: The removal of LMOs would need to go in tandem with a commitment to improving access to the main Rural Priorities scheme for small units and crofts.

Other issues

6.18 There was a call for more detail about the proposal. Specifically, respondents wanted clarity on what, if anything, will be put in place of LMOs.

Forestry (Q8)

6.19 The consultation document set out the Scottish Government's proposals to continue forestry support with the Forestry Commission Scotland (FCS) as lead Delivery Partner. The suggestion was made that, within this, Forestry Challenge Funds would be discontinued, with WIAT (Woodlands In and Around Towns) areas being funded through Rural Priorities and LEADER being explored as a mechanism for Forestry For People (F4P). Respondents were asked the following question:

Question 8: Do you agree or disagree that the Forestry Challenge Funds be discontinued with WIAT being funded through Rural Priorities and F4P funding being provided via LEADER? Please explain your views.

6.20 In total, 70 respondents (8 individuals and 62 organisations) answered Question 8. Of these, 81% agreed with the proposal to reorganise forestry funding and 6% disagreed. See Table 6.4.

Table 6.4: Summary of responses by respondent type (Q8)

Type of respondent	Individuals	Organisations	Total respondents	%
Agree	5	52	57	81%
Disagree	1	3	4	6%
Other	2	7	9	13%
Total	8	62	70	100%

6.21 The figures in the table above should be treated with caution. This was a composite question, and it was not clear in every case whether respondents were responding to one or both parts of the question.

6.22 In general, respondents' comments to this question suggested that they were supportive of the proposed reorganisation of forestry funding. This agreement was, in large measure, linked to negative assessments of the current arrangements, which were characterised as overly complex with poor technical support.

6.23 Five of the six organisations directly involved in forestry responded to this question. The views of these organisations were diverse and not identifiably distinct to the views expressed by other respondents.

Views in support of proposal to reorganise forestry funding

6.24 Those who agreed with the proposal thought that this approach would:

• Reduce cost to applicants and result in better value for money
• Continue the support for forestry schemes which were valued
• Build on the model which had been successful in the past of delivering F4P through LEADER
• Provide a more natural and intuitive alignment for the delivery of WIAT and F4P.

Caveats and disagreement with proposal to reorganise forestry funding

6.25 Caveats and disagreements in relation to reorganising forestry funding as suggested were that:

• Sufficient budget and support were needed: It was argued that the transfer of any scheme would have to be accompanied by an appropriate budget. In particular, more funding would have to be allocated to LEADER to deliver F4P. Moreover, there would have to be substantial increase in the capacity for support available through LAGs.
• The reorganisation requires the Rural Priorities budget to be simplified: The point was made that simplification of the Rural Priorities budget would be necessary in order to improve on the current situation. This task should not be underestimated.
• WIAT might consume an excessively high proportion of the available forestry funds: The current WIAT is ring-fenced and it is not clear whether that will continue. There was concern that WIAT might squeeze out other priorities from remote communities and from other woodland funds.
• Geographical coverage of LEADER will have to be extended: At present LEADER is limited to rural areas. Coverage would have to be extended into urban areas.
• The effect on small woodland owners: There was a concern that the National Forest Estate could become a major, potentially overpowering, new entrant which could disadvantage smaller companies.

Other issues

6.26 Respondents asked that good links be established between the two funding streams to ensure there is no duplication of funding. They also asked that the schemes should relate to biodiversity, not just provide a recreational resource.

Food and drink grants (Q9)

6.27 Currently, support for the food and drink sector is provided through a ring-fenced grant scheme administered by the Scottish Government. The consultation paper indicated that ring-fencing would continue, but set out the option for food and drink grants to be dealt with by the Competitiveness, Innovation and Jobs Fund delivery partners, along with other business development applications. Views were sought as follows:

Question 9: Do you agree or disagree that Food and Drink grants be decided via the wider decision-making process for business development applications or should they remain separate and managed within the Scottish Government as is the current practice? Please explain your views.

6.28 Slightly less than half of all respondents (71 out of 150) answered this question. Respondents comprised 9 individuals and 62 organisations. Given the somewhat ambiguous wording of the question, the numbers of respondents indicating agreement or disagreement are not presented. Care also needs to be taken in interpreting the comments submitted.

6.29 Views on this issue were mixed. While the balance of opinion favoured the proposal for food and drink applications to be dealt with via the wider decision-making process for business development applications, a significant minority of respondents supported the current arrangements.

Views in support of transfer to Competitiveness Fund delivery partners

6.30 Those in favour of food and drink applications being dealt with by Competitiveness Fund delivery partners thought that this would support:

• An integrated, collaborative approach
• Greater consistency and scrutiny
• Fairness to applicants across all sectors. Some noted that the food and drink sector should be able to compete against other sectors
• Decisions based on commercial principles
• A process which could consider local circumstances and national priorities.

6.31 There were, though, some calls for specialist input and particularly for the Scottish Government to retain some role, e.g. providing specialist expertise as required or dealing with large applications.

Views in support of retention within the Scottish Government

6.32 The following views were offered in support of continuing the current arrangements:

• Satisfaction with current arrangements: Respondents were positive about the current FPMCS scheme and its administration by the Scottish Government and argued that change should only be introduced if clear benefits could be identified.
• Impact on rural food producers: There was a concern that smaller rural food producers would be disadvantaged in a scheme open to all business development applicants.
• Support for a government role: There was a view that the government's role was merited, given (1) the key significance of the food and drink sector to the economy, and (2) the linkages with other areas (e.g. health and wellbeing and the environment) which required a joined-up approach in order to take full account of wider policies and priorities.

Other comments

6.33 A range of more general points were also put forward, as follows:

• Ring-fencing of the food and drink budget should continue
• Ensuring that decisions were made by those with relevant knowledge and expertise was more important than the agency given responsibility
• Support for food and drink proposals (along with other business proposals) should come from structural funds not the SRDP
• Clear linkages between the food and drink scheme and other support to businesses were needed
• All applications (i.e. not just food and drink) should be assessed against sustainability and environmental criteria as well as competitiveness criteria
• Priority should be given to food and drink applications with public health benefits or innovative approaches.

6.34 Finally, respondents sought more information on how wider business applications would be dealt with, and how food and drink applications would be handled alongside those.

Support for crofting (Q10, 11, 12)

6.35 The consultation document highlighted the significant benefits to Scotland from small-scale agricultural systems. At the same time the challenges faced by crofters were acknowledged. The consultation document set out several proposals that were intended to support crofting and three related questions were asked:

Question 10: Do you agree or disagree with crofting stakeholders that a Crofting Support Scheme is established in the new programme that will fund all grants relevant to crofting? Please explain your views.

Question 11: If a Crofting Support Scheme is developed, do you agree or disagree that crofters (and potentially small landholders) be restricted from applying for other SRDP schemes which offer similar support? Please explain your views.

Question 12: Do you agree or disagree on whether support for crofting should extend to small land holders of like economic status who are situated within crofting counties? Please explain your views.

Should a Crofting Support Scheme be established? (Q10)

6.36 In total, 62 respondents (14 individuals and 48 organisations) answered Question 10. Of these, 73% agreed with the proposal to establish a Crofting Support Scheme and 8% disagreed. See Table 6.5. Eight of the 12 farming / crofting groups that took part in the consultation responded to this question, and all eight supported the proposal.

Table 6.5: Summary of responses by respondent type (Q10)

Type of respondent	Individuals	Organisations	Total respondents	%
Agree	10	35	45	73%
Disagree	2	3	5	8%
Other	2	10	12	19%
Total	14	48	62	100%

Views in support of a Crofting Support Scheme (CSS)

6.37 Those who were in favour of a CSS thought that:

• Previous SRDP schemes had failed to adequately support crofting: In particular, CCAGS^[10] had not been well used by crofters, and there was a view that LFASS^[11] supported the most favoured in the least favoured areas.
• The public benefits of crofting justified a targeted scheme: Crofting was considered to have social, economic and environmental benefits and crofting methods were seen to be important in supporting biodiversity.
• Targeted ring-fenced funding could help to protect crofting: Better access to funding would encourage increased activity in crofting communities and on common grazing land, and could slow the decline in crofting.
• It would help to overcome the economic barriers faced by crofters: Compared to those with larger commercial holdings, crofters were perceived to be disadvantaged due to distance from suppliers and markets. It was suggested that payments under a CSS could be set to better reflect the extra costs involved in farming in remote, rural areas.
• It would make SRDP funding more accessible to crofters: A targeted scheme would enable advice to be tailored to the special needs of crofters, and would have more appeal for crofters who do not feel they can compete with bigger farms under other agri-environment schemes. It would also avoid confusion for crofters about which fund they should apply to.

Caveats and disagreement with a CSS

6.38 Some respondents agreed to the proposal, but voiced the following caveats:

• The scheme should also be open to smallholders: Smallholders face similar difficulties as crofters in competitive funding schemes.
• Crofters must remain subject to cross-compliance requirements: This should include heritage protection. This was a very strong view among conservation groups.
• The CSS should not be a one-size-fits-all scheme: It would need to recognise that crofts vary in size and include many different habitats.
• A CSS should not increase administrative costs or complexity.

6.39 The relatively small group of respondents who were not in favour of establishing a separate scheme for crofters thought that:

• Crofting is not a special case: There was a view that the significant benefits that crofting brings to fragile rural areas can also be delivered by other types of farms (both large and small).
• The challenges facing crofting communities are not solely about land use: Issues to do with remoteness, poor communications and small populations need to be considered separately from the issue of crofting tenure.
• CCAGS should be improved rather than creating a new scheme.

6.40 A few respondents made suggestions for alternative methods of supporting crofting, rather than forming a separate crofting scheme. These included providing targeted advice and support to crofters and weighting applications from crofters (because of the high value of their environmental benefits) to increase their competitiveness.

Other issues

6.41 It was common for respondents to make comments regarding the delivery of the scheme, if it were established. They emphasised that the focus of any funding scheme for crofters should be on outcomes, not on types of land tenure / management. The point was made that, "It is the public benefit in social and environmental outcomes that warrants support, not crofting per se". A range of specific suggestions was made about the delivery of the scheme, including that it should:

• Be simple and easy to access
• Provide advice / support to encourage take-up of funding. This could include specialist advice regarding different types of habitats.
• Provide both revenue funding and capital grants
• Be managed and delivered at a local level (e.g. via Agricultural Local Action Groups)
• Take into account common grazing groups and allow common graziers to apply. This was a strong view.

6.42 It was also suggested that crofters and their representatives (rather than farmers or farming representatives) should form the majority of any working group involved in developing the scheme.

6.43 Other points raised by respondents were that:

• There is a need for greater engagement between the crofting and forestry sectors, including opportunities for crofter forestry
• The Scottish Government should also create a separate fund to support the organic sector
• The Government should use SRDP or structural funds to redress the current situation whereby around half of all common grazings are currently unregulated or do not have a committee in office.

6.44 Respondents often requested further details about the proposal. In particular, clarification was needed about:

• What exactly the new scheme would support: There was a view that the support "should be for crofting, not for crofters". Another view was that it should be used to support traditional crofting practices only.
• Whether the CSS would be a competitive or non-competitive fund
• The definition of a 'croft': It was noted that crofts vary significantly in size and in relation to the habitats they support.

Restricting crofters from applying to other SRDP schemes (Q11)

6.45 In total, 64 respondents (13 individuals and 51 organisations) replied to Question 11. Of these, 36% agreed and 45% disagreed that crofters should be restricted from applying to other SRDP schemes if a CSS is established. See Table 6.6. Of the 12 farming / crofting groups that took part in the consultation, eight responded to this question. Of these, most (n=6) disagreed with the proposal, one agreed and one made comments which could not be classified.

Table 6.6: Summary of responses by respondent type (Q11)

Type of respondent	Individuals	Organisations	Total respondents	%
Agree	5	18	23	36%
Disagree	7	22	29	45%
Other	1	11	12	19%
Total	13	51	64	100%

6.46 The figures in the table above suggest that there were divided views among respondents in relation to this question, with a slightly larger proportion disagreeing with the proposal. In fact, respondents' comments indicated that there were very similar views between those who agreed and those who disagreed. Both groups supported the general principle that duplication of funding should be avoided.

6.47 Thus, those who agreed that crofters should be restricted from applying for other SRDP schemes did so because they thought this would prevent the duplication of funding by different schemes. Similarly, those who disagreed thought that crofters should be able to access funding from other schemes so long as the activity was not also funded through the CSS.

6.48 Some respondents did not believe a single scheme could fund all the requirements crofters might have, and did not think the Government should seek to create a scheme that would do this.

6.49 Others suggested that the Government should make every effort to devise a CSS that would make it unnecessary for crofters to have to apply to multiple schemes (e.g. the support offered through a targeted CSS should, at the very least, be equivalent to that offered through other schemes). Some who advocated this view were less concerned about the issue of duplication, believing that crofters would "stick with the simplest solution" and apply to crofting-specific scheme unless they had to do otherwise.

Other issues

6.50 Respondents stressed the need to ensure that the CSS is well integrated with other SRDP schemes. However, respondents also often made the point that, until further detail was available about the scope of the proposed CSS and other SRDP schemes, it was not possible to answer this question.

Extending CSS to small land holders of like economic status (Q12)

6.51 In total, 60 respondents (12 individuals and 48 organisations) replied to Question 12. Of these, 60% agreed and 27% disagreed that, if a CSS were established, it should be extended to smallholders of like economic status in crofting counties. See Table 6.7. Eight of the 12 farming / crofting groups that took part in the consultation replied to this question. Farming groups (n=5) supported the proposal whereas crofting groups (n=3) disagreed.

Table 6.7: Summary of responses by respondent type (Q12)

Type of respondent	Individuals	Organisations	Total respondents	%
Agree	7	29	36	60%
Disagree	4	12	16	27%
Other	1	7	8	13%
Total	12	48	60	100%

Views in support of extending the CSS to smallholders in crofting counties

6.52 Those who agreed with the proposal to extend the CSS to smallholders in crofting counties gave the following reasons:

• Fairness and equity: All small-scale, low-intensity farms provide important social, environmental and economic benefits in fragile areas, irrespective of legal status. There was a strong view that, since smallholdings deliver the same outcomes as crofting, the same support should be available to them.
• Similar circumstances: All small units face the same challenges in relation to lack of economies of scale and difficulties in competing for funding with larger commercial holdings.
• Smallholdings help to support crofting: Smallholdings were considered to play a key role in keeping neighbouring crofts active, providing machinery, labour, handling facilities, etc.
• Administrative efficiency: It would more efficient to have all small land holders (crofters and non-crofters) applying to the same scheme.

Caveats and disagreement with extending CSS to smallholders in crofting counties

6.53 A strong theme in the responses to Question 12 was that small landowners of like economic status should be eligible for funding under the CSS, irrespective of whether they were situated in crofting counties. As stated above, if small-scale, low-intensity farms can deliver the Government's priority outcomes, there is no reason to limit ring-fenced support to crofting counties only.

6.54 Alternatively, if a crofting-only scheme was set up, then:

• This should focus on the specific issues of crofting land tenure regulations and the unique circumstances of common grazing committees.
• Special provision should be made in the main scheme for small units, and application processes and assessment criteria should be designed so as to favour smallholders over larger landowners.

6.55 Those who disagreed with the proposal to extend the CSS to small holdings in crofting counties gave the following reasons:

• The regulatory demands placed on crofters: Crofting regulations are intended to deliver public good. Therefore, crofters should be given additional support to do this. It was acknowledged that smallholders can provide similar benefits to crofters and that they face similar difficulties to crofters, although not in relation to the issue of land tenure and control.
• Targeted funding would encourage crofting: Some respondents thought that a programme targeted specifically at crofting would encourage crofters to remain in the regulated system rather than decroft. It might also encourage some smallholders in crofting counties to (re-)register their land as croft land. There were concerns that, if CSS funding were also available to non-regulated smallholders, it would result in more decroftings as there would seem to be no advantages to remaining in the crofting system only disadvantages from the burden of regulation.
• The economic circumstances of crofters and smallholders were different: Some described smallholders as "hobby farmers", stating that many had other sources of income. Thus there was a view that they should not receive support from public funds.
• A crofting-only fund (at least initially) would be more effective: Given the limited funding available, it would be best to target that funding to crofting. Extending provisions to non-croft holdings would dilute its effectiveness. However, in time, the scheme could be extended.

Other issues

6.56 Other points made by respondents were that:

• CSS funding should not only be for crofters and smallholders, but also for a wide range of other community groups, social enterprises and small businesses 'of like economic status' in crofting counties (e.g. market gardens, allotments, equestrian liveries, etc.).
• A proliferation of schemes with low compliance requirements could have a negative impact on the ability of SRDP to deliver public good.

6.57 Respondents wanted clarification about a number of points, including:

• The definition of a smallholding: The point was made that some crofts are larger than some smallholdings and are farms in every way but legal status.
• The definition of 'like economic status': There were questions about the eligibility criteria for funding. Some suggested a means test would be fair, others saw it as heavy-handed. It was suggested that the small units prescriptions in Rural Priorities, or the criteria formerly used in CCAGS (alongside a means test), could be used. Another suggestion was for eligibility to be based on size of unit and whether the unit is the individual's primary source of income.
• The level of support that would be provided under the proposed CSS.

Innovation Challenge Fund (Q13)

6.58 The consultation document set out the Scottish Government's proposals to build on the success of the current Skills Development Scheme (SDS). One suggestion was that the SDS might be replaced by a broader based Innovation Challenge Fund which would offer finance for projects looking to implement a new way of working. Respondents were asked the following question:

Question 13: Do you agree or disagree with the proposed replacement of the Skills Development Scheme with an Innovation Challenge Fund? Please explain your views.

6.59 In total, 80 respondents (13 individuals and 67 organisations) answered Question 13. Of these, 74% agreed with the proposal to replace the SDS with an Innovation Challenge Fund and 14% disagreed. See Table 6.8.

Table 6.8: Summary of responses by respondent type (Q13)

Type of respondent	Individuals	Organisations	Total respondents	%
Agree	7	52	59	74%
Disagree	4	7	11	14%
Other	2	8	10	13%
Total	13	67	80	100%

Percentages do not total 100% because of rounding.

6.60 In general, respondents' comments to this question suggested that they were in favour of building upon the existing SDS and making it more holistic by broadening the range of opportunities available. Many specific suggestions were made for the additional areas to be covered, environmental and agro-ecological innovation were particularly highlighted.

Views in support of the Innovation Challenge Fund

6.61 Those who agreed with the proposal thought the Innovation Challenge Fund would:

• Focus on training and skills development
• Aim at a wider constituency than was currently the case and provide a broader range of opportunities
• Build on the Monitor Farm programme which had been a useful approach and could be adopted more widely.

Caveats and disagreement with the Innovation Challenge Fund

6.62 Caveats and disagreements with the Innovation Challenge Fund were that:

• The Innovation Challenge Fund should be fully integrated with other sectors and schemes: Respondents specifically wished to be assured about integration with other initiatives in the further and higher education sectors. Moreover, respondents highlighted the fact that LEADER has a specific focus on innovation and wanted reassurance that the new fund would not duplicate this or any funding available through the Competitiveness, Innovation and Jobs themed Fund.
• An appropriate budget would have to be available: Respondents emphasised that the budget would have to be large enough to cover both the existing SDS options as well as the extension into other areas.
• The Innovation Challenge Fund should be widely accessible: Specific mention was made about the accessibility of the scheme to third sector organisations, small businesses on the edge of urban areas and crofters.

Other issues

6.63 There was a call for more detail about the proposal. The description of the Innovation Challenge Fund was thought to be rather sparse. Specifically, respondents wanted clarity on the application process, the eligibility criteria and the assessment mechanisms.

6.64 Respondents commented that there was a wider context that was relevant to this question. There was a recognition that the Mid Term Evaluation had reported poor uptake of the SDS. Respondents were also aware that a recent Audit Scotland report had identified issues with LEADER and the availability of training opportunities. These reports would need to inform any development of the Innovation Challenge Fund.

6.65 Finally, respondents thought that Challenge Funds, by their nature, create uncertainty and this should be acknowledged and appropriately managed.

New entrants to farming and young farmers (Q14)

6.66 The Government established a New Entrants Panel in 2012 to explore what can be done to remove barriers to entry and / or incentivise new entrant young farmers. This Panel made a number of suggestions, outlined in the consultation document, for possible interventions. Respondents were asked:

Question 14: Do you agree or disagree with the measures proposed by the New Entrants Panel to encourage new entrants to farming? Please explain your views.

6.67 In total, 68 respondents (12 individuals and 56 organisations) answered Question 14. Of these, 76% agreed with the measures proposed by the New Entrants Panel and 10% disagreed. See Table 6.9.

Table 6.9: Summary of responses by respondent type (Q14)

Type of respondent	Individuals	Organisations	Total respondents	%
Agree	6	46	52	76%
Disagree	3	4	7	10%
Other	3	6	9	13%
Total	12	56	68	100%

Percentages do not total 100% because of rounding.

6.68 In general, respondents' comments to this question suggested that they were broadly supportive of the measures proposed by the New Entrants Panel. This support was equally strong among those with a primary interest (both individuals and organisations) in farming and crofting, and others.

Views in support of measures proposed by the New Entrants Panel

6.69 Those who agreed thought that the proposed measures would help to remove the substantial barriers to entry and incentivise new entrant young farmers to the industry. Respondents stressed the importance of incentivising the younger generation to take over from the older generation and to modernise farming methods to ensure a more sustainable approach.

Caveats and disagreement with measures proposed by the New Entrants Panel

6.70 Caveats and disagreements with the measures proposed were that:

• Support should be tailored separately for intergenerational transfer versus new entrants: It was suggested that these two groups had quite different needs and would require individually tailored schemes. In particular, it was suggested that new entrants would require higher levels of support.
• It is not appropriate to use public funds to support the intergenerational exchange of a farm holding within families: It was suggested that some means testing of new entrants might be appropriate. In any case the assessment and monitoring of these grants should be rigorous.
• The New Entrants scheme should be extended: It was suggested that the scheme should cover those involved in forestry and should also consider the case for retrospective support.

Other issues

6.71 Respondents did not see the age limit for a young farmer (required to be under 40) as appropriate. Whilst some respondents specifically acknowledged that this threshold had been set by the EU, many thought it was misplaced and should be challenged. Specific mention was made of this issue within crofting, where new entrants were likely to be older. Moreover, respondents thought it was more important to focus on criteria associated with the new-ness of the entrant rather than on their age.

6.72 Respondents repeatedly stated that the strongest disincentive to new entrants was the "historic basis for Direct Payments" (which is not part of the SRDP). Many respondents thought that there was no "level playing field" from which to move forward.

6.73 Finally, there was a call for more information about the definition of a 'new entrant'. It was suggested that this label should attach for a number of years.