Scotland Rural Development Programme (SRDP) 2014-2020 Stage 2: Final Proposals

Section 8: Crofting and Small Farm Support Scheme

Introduction

160. During the SRDP 2014 - 2020 stage 1 consultation the Scottish Government highlighted the value-added benefits derived from the provision and maintenance of crofting systems in remote and rural Scotland.

161. Attention in particular was drawn to the fact that crofting tenure contributes towards the maintenance of sustainable agricultural systems that produce supplies of safe and healthy food, protect natural resources and enhance wildlife, habitats and cultural heritage. The economic and social inclusion aspects of crofting and the contribution it made towards the sustainability of remote rural communities was also highlighted.

162. We also asked whether small farms of a like status should also receive targeted support through the future programme. This would help to address the difficulties small farms have faced in accessing support to help them deliver projects that would benefit their business and the wider natural environment.

163. This section sets out our proposal to expand eligibility for CCAGS (renamed) to ensure the support available through the scheme is also open to small farms.

Legal basis

164. The proposals for crofting and small farm support outlined in this section of the consultation fall under article 18 of the RDR - "Investment in Physical Assets". Support under this measure includes tangible investments which improve the overall performance and sustainability of the agricultural holding and concern infrastructure related to the development, modernisation, improvement and/or adaption of that holding.

165. The proposals also extend to the provision of support to promote co-operative actions on Common Grazings under article 36 of the RDR.

Stage 1 consultation

166. In undertaking the stage 1 consultation consultees were asked whether a crofting specific sub-programme should be established (Q10) and whether crofters should be restricted from applying for other SRDP schemes if such a sub-programme was made available (Q11).

167. Some 73% of respondents favoured the establishment of a specific Crofting Support Programme but 45% of respondents to Q11 disagreed that crofters should be restricted from applying to other SRDP schemes (as opposed to 36% agreeing that there should be a restriction). In other words the majority of respondents to these questions felt that there should be both a separate crofting programme and a general programme that crofters should be able to access.

168. However, qualitative analyses on the descriptive responses revealed some common themes:

a) That many of the Rural Priority options under the current programme were undersubscribed insofar as crofters and small land holders were concerned (this was also highlighted by the SRDP mid-term evaluation; and independent research^[11]);

b) That access to Rural Priority options under the current 2007-2013 SRDP for crofts and small farms was challenging and that there was a need to make it more accessible;

c) That remote crofting areas faced other challenges and that alternative methods of supporting crofting needed to be considered rather than forming a separate crofting scheme - including provision of targeted advice and improved communication to crofters;

d) That support needed to be targeted to those areas that needed it most (possibly through ring-fenced budgets);

e) There was a need to avoid duplication across SRDP (this was a common theme across respondees to the stage 1 consultation as a whole).

f) There is a need for greater engagement between crofting and forestry sectors and that opportunities for crofter forestry should be further developed;

g) The Government should use the SRDP funds to redress the current situation whereby around half of all common grazings are currently unregulated or do not have a committee in office.

169. With respect to eligibility considerations, consultees were asked whether support for crofting currently provided under the CCAGS should extend to small land holders of like status. 60% of those responding to the question agreed and there was a strong consensus that support should extend to the whole of Scotland on the basis that small scale low-intensity farms play an important role in supporting rural employment and maintaining the social fabric of rural areas.

170. Together, crofts and small farms under 50 ha make up around 37,000, or 73%, of the total number of agricultural holdings in Scotland. Low intensity small farming units face very similar economic challenges to that of crofts and are generally under represented when it comes to gaining access to funding opportunities to improve their businesses, habitats and the environment within which they operate.

Proposed eligibility

171. On the basis of the feedback from the stage 1 consultation, the Scottish Government proposes to proceed with extending capital grant support for crofting to eligible small land holders located throughout Scotland. It is further proposed that qualifying small farms will be between 3 - 50 hectares (however we will need to take account of the final EU guidance on this issue).

172. There is no common EU definition for a small farm as they can be defined in terms of area of land, labour employed or the economic size of the farm^[12]. For Scotland we believe that setting the threshold at 3 - 50 hectares (representing around 6% of the total utilised agricultural area in Scotland) ensures that the smallest and most vulnerable farms can access targeted support to help them sustain and develop their business. Other forms of support for larger low intensity farms that are also in a vulnerable economic situation will be provided via LFASS and its successor, and potential changes to the future DP.

173. Farm size statistics:

Agricultural Holdings[13]	Number	Hectares	% Holdings	% Hectares
Less than 20 ha	31,553	159,700	61.1%	2.8%
Less than 30 ha	34,153	223,496	66.2%	3.9%
Less than 50 ha	37,550	356,784	72.8%	6.3%
50 ha and over	14,057	5,313,607	27.2%	93.7%
Total	51,607	5,670,391	100.0%	100.0%

Table 3: Farm size statistics prepared by SG RESAS Statistics (Agriculture)

Question 5

Should a scheme be expanded to provide capital support to small farms Yes/No/No opinion. Please tick the appropriate box in the online questionnaire.

Question 6

Is a 3 to 50 hectare range appropriate for defining a small land holding? Yes/No/No opinion. Please tick the appropriate box in the online questionnaire.

Proposed scope and approach

174. On examining the various measures that fall under the respective articles of the draft RDR, it is apparent that crofters and small land holders have direct interests in a number of the RDR articles and the measures they aim to deliver. These include:

• Article 15 Knowledge Transfer
• Article 16 Farm Advisory Services
• Article 18 Investment in Physical Assets
• Article 20 Farm and Business Development
• Articles 22 - 27 Forestry
• Article 29 Agri-Environment and Climate Change
• Article 30 Organic Farming
• Article 32 Areas of Natural Constraint
• Article 36 Co-operation

175. A number of the respondents to the stage 1 consultation did not believe that 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. The Scottish Government agrees with this viewpoint and considers that any attempt to deliver crofters' and small land holders' needs through a separate sub programme would be complex and would add a disproportionate administrative burden.

176. Accordingly, the Scottish Government proposes to proceed with plans to take forward the undernoted suggestions to address principal concerns:

a) Develop a tiered application process with smaller applications for funding being dealt with at local level;

b) Development of new, improved online services with better guidance for customers to make it easier to apply for funding;

c) Development of the full range of agri-environment type options suitable for crofting as part of a package of measures made available to all land managers, with some specifically targeted at crofting and small landholdings as well as certain geographical areas. Some options are exclusively targeted at crofting;

d) Providing better information and sign-posting to the package of measures that will be particularly suitable to crofters and small landholders;

e) Development of funding options under article 36 of the RDR (co-operation) to incentivise the establishment for the first time of Grazings Committees and under article 16 (advisory services) to assist with the production of Common Grazing Development Plans under the Integrated Land Management option;

f) On-going provision of a capital grant scheme under article 18 of the draft RDR (investment in physical assets) (currently CCAGS) but extending eligibility to small land holders. It is also intended to develop, and make available, as far as possible, standard cost items e.g. fences;

g) Provision of extended support to Crofters and Small Land Holders under the Advisory Service (article 16) and allowing continued access to the Skills Development Scheme for organisations representing the interests of crofting and small land holdings (to be renamed the Knowledge Transfer and Innovation Fund or similar to better reflect a revised scope) under article 15 of the draft RDR. Amongst other things this will extend to provision of advice on opportunities for forestry on crofts and small farms.

Scope of funding for capital support for crofters and small land holders

177. Items of eligible expenditure shall include the full range of eligible expenditure items listed under the Crofting Counties Agricultural Grant Scheme including:

a) Agricultural buildings;

b) Offices and IT equipment;

c) Slurry stores and related equipment;

d) Investment in land management;

e) Investment in ditching and field drainage systems;

f) Provision of improvement of equipment for organised feeding of livestock;

g) Cattle crush; and

h) Mobile stock handling facilities.

Co-operation

178. It is proposed that a small amount of financial assistance (£500) is provided to assist prospective members of Grazings Committees to apply to the Crofting Commission to constitute themselves and produce Common Grazing Regulations using standard templates and guidance. It is envisaged that this would allow prospective Grazings Committees to contract a facilitator to assist Grazings Committees in establishing themselves.

179. Funding will be made separately under advisory services (article 16) to assist Common Grazings Committees to engage with accredited consultancy support to produce Integrated Land Management Plans for Common Grazings.

Question 7

Do you agree with the proposal for grants of £500 to be available to assist the establishment of Grazings Committees? Yes/No/ No opinion

Please tick the appropriate box in the online questionnaire.

If No please explain why (in the space given in the online questionnaire).

Financial allocation

180. It is proposed that the combined total budget for capital grants for crofters and small land holders together with the co-operative element described at paragraph 178 above be set at £20 million. This is based upon knowledge on uptake of the current CCAGS and factoring in an uplift to take account of increased numbers of eligible beneficiaries resulting from extending the scheme, as proposed, to small farms under 50 ha.

181. Grant rates under the new scheme will be limited to a maximum of £25,000 over a two year period for individuals or £125,000 for co-operative projects, again over two year period.

Intervention rates

182. It is proposed to offer grant on the undernoted basis:

• Up to 40%, or 50% if located in a Less Favoured Area (LFA);
• Up to a 20% uplift if beneficiary meets the definition of young farmer;
• Up to a further 20% if project is part of a co-operative effort.

Question 8

How would you rate your broad satisfaction with the proposals for the Crofters and Smallholders Scheme? Please tick the appropriate box in the online questionnaire.

Very satisfied
Quite satisfied
Neither satisfied nor dissatisfied
Quite dissatisfied
Very dissatisfied

If you are dissatisfied please briefly outline your reasons (in the space given in the online questionnaire).