Scottish Rural Development Programme 2014-2020: ex-post evaluation - main report

8. Focus Area 2B

Introduction

This chapter answers the evaluation question related to Focus Area 2B.

CEQ 5: To what extent have RDP interventions supported the entry of adequately skilled farmers into the agricultural sector and in particular, generational renewal?

Contribution to FA 2B

Public expenditure

Two SRDP 2014-2020 schemes were programmed to contribute to FA 2A - FAS and YFSUG. There were also some on-going commitments from the 2007-2013 Programme for the RP scheme.

Source: Scottish Government, Annual Implementation Report, 2023.

The AIR 2023 reports that circa €16.2 million (Table 8.1) was incurred under FA 2B and that:

• the committed and realised expenditure under FA 2B were very close or slightly greater than 100%.
• most expenditure was on Measure 6 (Farm and business development) and amounted to realised expenditure of €14.2 million (87%) - this was predominantly delivered through the YFSUG. It is marginally higher than the planned expenditure for the Programme period, with small differences likely to be a result of different exchange rates between Pounds Sterling and Euros being used for expenditure figures.
• for Measure 2 (Advisory services, farm management and farm relief services) realised expenditure was €2.1 million and this was delivered solely by the FAS - while committed expenditure was higher than the planned Programme expenditure realised expenditure was more in line with the planned expenditure for Measure 2.
• while exchange rate differences could also be a factor it is important to note that committed expenditure does not necessarily equate to realised expenditure.

Performance indicators

A summary of the outcomes achieved under FA 2B is provided in Table 8.2.

Source: Scottish Government, Annual Implementation Report, 2023.

Further, there is one target indicator under FA 2B - the percentage of agriculture holdings that have been supported with business development plans/investment for young farmers.

This support was delivered through the YFSUGS as well as on-going commitments from the 2007-2013 Programme made under the RP scheme. Points to note include that:

• 265 young farmers received support during the Programme period – most were supported by the YFSUGS prior to the scheme closing to new applications in 2018.
• this represents 0.51% of the total number of agriculture holdings against a target of 0.27%.
• the target indicator was therefore exceeded.

There was a much higher uptake of the YFSUGS than originally anticipated, in particular during the first few years of the scheme.

The original target was increased to 265 during the Programme period to reflect the available budget and level of demand more accurately for business development plans/investment among young farmers. The adjusted indicator is equivalent of supporting 0.51% of the total number of agriculture holdings, which was achieved.

The FAS was solely responsible for delivery against all training and advisory activities under FA 2B – 30 advisors were trained and over 8,000 beneficiaries were provided with advice. By the end of 2023, 0.51% of agricultural holdings had RDP supported business development plan/investments for young farmers (Result 3/Target 5 indicator). This is above the target value of 0.27%.

Wider commentary at scheme level

Farm Advisory Service

The FAS had realised expenditure of circa €2 million under FA 2B (12.7% of total realised expenditure under this FA).

The scheme supported skills development in several ways, including through:

• advice and mentoring.
• face to face events.
• the development of FAS Podcasts (FAS Sounds).
• the development of FAS TV.

FAS made use of an array of methods and mediums to support service delivery in order to reach and engage as wide an audience as possible, and to meet the different learning styles (and preferences) of its intended beneficiary target groups.

The AIR 2023 reports that a total of over 8,000 beneficiaries were provided with advice by the scheme under this FA the end of the Programme.

The FAS service delivered several skills development workstreams for new entrants to farming and crofting. This included a programme of targeted events as well as new learning provision and products developed and adapted as the farming policy and practice landscape evolved. The FAS team reported that a total of 1,752 (non-unique) new entrants received training by the end of 2020. A significant component of the FAS one-to-many activities is its ‘new entrants’ programme. This is a distinct and focused initiative that utilised around 7% of the FAS one-to-many budget.

As part of FAS there were 14 group activities aimed specifically at new entrants, spread geographically across Scotland, including the Western Isles, Skye, Orkney, and Oban. The intention was to equip new entrants with a broad range of business and technical skills to enable them to enter the industry fully equipped with knowledge and ability.

In addition, there was a New Entrants Network which hosted meetings and ran workshops on a range of topics. For example, some of the workshops were designed to increase business knowledge and decision making, increase technical skills and aid business succession. Although many of the workshops run included exercises and assessments to review whether principles and practices had been understood, there was no formal testing or certificates issued.

The annual new entrants’ gathering, ran for the whole of the programming period, and was at the forefront of helping new entrants, both those who were new to the industry as well as those who wish to enter the industry but have not yet done so.

While beneficiaries who participated in FAS one-to-many activities were not automatically referred into the one-to-one service, people were signposted accordingly when a specific need was identified which would benefit from targeted one-to-one support.

Any new entrants to farming could access support from the Integrated Land Management Programme, Carbon Audit support, or mentoring support. The only requirement was that they were a registered business. Four days of mentoring support was available for those who had been the head of the business for no more than five years.

The FAS one-to-many service explicitly provided advice to beneficiaries on succession planning and skills retention. In 2018 a planning for the future roadshow took place in collaboration with the NFU Scotland and the Scottish Land Commission. SG officials reported that this aided generational renewal greatly by, in the context of an informal lunch meeting, laying out the fundamentals of succession planning and introducing different options for retirement (for example, joint venture farming). Further, event feedback shows that some beneficiaries were actively putting wheels in motion for the next generation to succeed in the business.

FAS resources were also used for case-study work – for example, to disseminate ‘good news’ stories of the range of ways people got on to the agricultural ladder (for example, tenancy, purchasing, seasonal land, etc.). The FAS evaluation provides extremely positive feedback on this work and how it helps to incentivise people to enter and succeed in the sector. Several of the case studies produced involved farmers who had attended FAS group workshops.

SG officials told the evaluators as part of the ex-post evaluation that there has been no significant impact on the age profile of farmers in Scotland at the aggregate level, nor is this expected. Further, the budget is considered insufficient to result in major change for the sector. The farmer demographics reported annually are such that the share of activity that is being undertaken by young farmers is not increasing rapidly. The SRDP, and the FAS, sought to address this by providing skills and helping young farmers to identify opportunities. SG officials highlighted that there are many other factors that affect the entry of young farmers into the agricultural sector such as access to land and land tenure regulations. They added that the Farming Opportunities for New Entrants programme, initiated by the SG and Forestry and Land Scotland in 2016, aimed to facilitate entry by, inter alia, providing easier access to publicly owned land.

Young Farmers Start-Up Grant Scheme

The YFSUGS was aimed at those who were starting an agricultural business for the first time or who were taking over an existing agricultural business. It was targeted at higher output farms and was age restricted.

To be eligible for support applicants had to: be between the age of 16 years and under 41 years of age; be setting up as head of the holding of a new or existing farm business for the first time; have a suitable agricultural qualification (of at least National Vocational Qualification Level 2 or equivalent) or be able to demonstrate a minimum of five years’ agricultural experience; and have registered their business with the SG.

Similar to the NESUGS, the YFSUGS:

• was designed to help overcome barriers to entry and attract talented people into the agriculture sector.
• was designed to address concerns related to a growing ageing workforce and the lack of new entrants to the sector.
• capital grant funding could be used to help with the costs associated with starting up an agricultural business (for example, purchasing land, equipment, machinery, or livestock, or constructing buildings).
• paid grant recipients in two instalments, including an upfront instalment.

The YFSUGS first opened to applications in 2015 with contracts issued in 2016. The final round of applications was in 2017, and the scheme closed to new applications in 2018. The final co-financed payments were made in 2021. There was no budget for second instalment claims for YFSUG after 2020 so these were paid until 2023 using domestic only funds.

The aspiration was that supporting more young people into the sector would ultimately improve the economic output of the farming sector and promote the retention of young people in rural communities.

As noted earlier under FA 2A (Chapter 7), a joint evaluation of the NESUGS and YFSUGS (SG, 2022) was undertaken. Most of the findings from the policy review and beneficiary data review and survey, conclusions and recommendations presented under the NESUGS also apply to the YFSUGS and have not been repeated here. Wider findings are touched on below.

The schemes evaluation notes that the YFSUGS supported 205 young farmers into agriculture from a total of 626 applications (a low approval rate of 33%) – this suggests that demand for support from the scheme was strong. The schemes evaluation did not provide a breakdown of the characteristics of grant recipients (for example, age, gender, etc.) although some data was captured through the beneficiary survey. Points to note include that:

• 33 young farmers who received an award from the YFSUGS responded to the survey – a response rate of 16%.
• 62% of respondents were aged 39 or under at the time of completing the survey, of this, 16% were aged 18-29.

The schemes evaluation notes that there was significant interest in the YFSUGS (over-subscribed), the available funds were exhausted, and the scheme closed early. It goes on to add that the YFSUGS could have supported more young farmers had additional financial resources been available.

In summary, the schemes evaluation concluded that:

• no evidence was found to support the continuation of the start-up grants (in their current form), as a method of encouraging generational renewal in the farming sector.
• the NESUGS and YFSUGS had limited scope to encourage meaningful change in the age composition of the farming sector within the timeframe of the evaluation – not least given the considerable constraints of land availability and profitability.
• future efforts to support new entrants into the farming sector should explore methods to increase the circulation of farmland - facilitating more farmland going onto the market could, in turn, attract new farmers and businesses.

EKOS conclusions and recommendations

Realised expenditure of €16.2 million was achieved under FA 2B – the vast majority of this was delivered by the YFSUGS.

The existing evidence base shows that both the YFSUGS and FAS interventions provided a range of support to help support (young) farmers into the farming sector.

The YFSUGS provided capital grant funding for a range of purposes (for example, purchasing land and equipment, constructing buildings) – this scheme was less about supporting the entry of ‘adequately skilled farmers’ into the farming sector. The YFSUGS and NESUGS evaluation, however, found that beneficiary survey respondents were more educated than the wider population. Some of the young farmers supported may also have used the grant to purchase agricultural technology in the form of latest piece of machinery, equipment, or kit for their farming business. The medium to longer-term retention of supported young farmers in the farming sector is, however, unknown – the schemes evaluation reported that the young farmers’ main concern was profitability, and a relatively sizable proportion thought that the likelihood they would be managing their farm in five years’ time was at best neutral and at worst unlikely or very unlikely.

The FAS provided one-to-many (for example, workshops) and one-to-one support (for example, mentoring), including some dedicated support for new entrants. Some of this was aimed at skills development. FAS provided specialist advice and support for new entrants and young farmers. The FAS one-to-many service explicitly provided advice to beneficiaries on succession planning and skills retention and this is an area that needs continued activity to ensure new and young people enter the workforce and have the right mix of skills to sustain productive businesses.

While the SRDP interventions have supported additional (young) people into the farming sector, it has not had any real impact on encouraging generational renewal. The YFSUGS and FAS had limited scope to encourage any meaningful change in the age composition of the farming sector, not least given wider external constraints such as land availability. Further, the farming demographics are such that the impact on the skills levels of the sector can only be slight.