Small Producers Pilot Fund Steering Group minutes: July 2023

Attendees and apologies

• Helen Glass, Chair, Scottish Agricultural Organisation Society (SAOS)
• Fiona Leslie, Scottish Government (SG)
• Martin Beard, Smallholding Scotland
• Douglas Bowden-Smith, Scottish Agricultural Organisation Society (SAOS)
• Liz Barron-Majerik, Lantra Scotland 
• Rosemary Champion, Rare Breeds Survival Trust (RBST) 
• Adam Forrest, Scotland Food & Drink (SFD)
• Diana Garduño Jiménez, Nourish Scotland 
• Louise Hellyer, Scottish Government (SG)
• Archie Hipwell, smallholder and supply chain consultant
• Jo Hunt, crofter and Knockfarrel Produce
• Lucy McGillivray, National Farmers’ Union of Scotland (NFUS) 
• Jenna Mays, Scottish Government (SG)
• Abi Mordin, Hidden Veg and Propagate Fiona Richmond, Scotland Food & Drink (SFD) 
• Justin Orde, South of Scotland Enterprise (SOSE)
• Ceri Ritchie, SAC Consulting, Scotland’s Rural College (SRUC)
• Tara Wight, Land Workers Alliance (LWA)
• Emma Patterson Taylor, Scottish Agricultural Organisation Society (SAOS)
• Alan Stevenson, Scottish Agricultural Organisation Society (SAOS) 
• Rona Sutherland, Scottish Agricultural Organisation Society (SAOS) 
• Fergus Younger, Scottish Agricultural Organisation Society (SAOS)

Also in Attendance:

• Caroline Burgess, Scottish Government (SG)
• Michelle Colquhoun, Scottish Government (SG)
• Lynne Stewart, Scottish Government (SG)

Apologies:

• David McKay, Soil Association Scotland (SAS)
• David Michie, National Farmers’ Union of Scotland (NFUS)
• Debs Roberts, Scottish Organic Producers’ Association (SOPA)
• Scott Walker, Scottish Association of Meat Wholesalers (SAMW)
• Allison Watson, Scottish Agricultural Organisation Society (SAOS)
   

Items and actions

Welcome and introduction

The Chair welcomed everyone to the fifth Steering Group meeting.

Apologies are noted above. The Minutes of the last meeting on 27 June were adopted and approved for publication on the Scottish Government (SG)’s website.

All action points from that meeting are completed or are in progress. Some action points are still open to Steering Group Members to respond.

Action point 1 - action point M4.1 from the previous meeting 

Members are asked to consider whether they would want a stand at the Scottish Smallholder Festival on 14th October and, if so, who would be  willing to man it. Thoughts and volunteers to contact Helen Glass at the Scottish Agricultural Organisation Society (SAOS).

Action point 2 - action point M4.5 from the previous meeting 

Members to consider all the information on funding and advice that is out there and how that might be consolidated and communicated to small producers. Please contact Archie Hipwell with any thoughts for the Supply Chain subgroup to consider.

Action point 3 - action point M4.7 from the previous meeting

The draft capex paper will be revised by the end of August and posted on the SPPF eRDM Connect folder.

Dumfries & Galloway visits (Emma Patterson Taylor, Scottish Agricultural Organisation Society (SAOS)

The visits took place on July 21 and all Steering Group members who were able to attend found it a very valuable experience. One of the key take-away messages from the visit included the need for small producers to be able to attract and afford to employ more labour. Scottish Government (SG) stated that if the Steering Group wished to support labour within the Small Producers Pilot Fund (SPPF), it should consider this separately and State Aid/WTO Rules would apply. In practice, this may impact the approval process, therefore, should be considered for future years rather than as part of the immediate pilot fund.

Other options discussed included the potential for utilising the SPPF to support paid trainee and internships. The WWoofing programme was also suggested as a possibility for small-scale producers who are able to host volunteer labour (wwoof.org.uk)

Members were impressed by the Glenkens Food Hub which utilises a village hall as a food hub for distributing local producers’ products into the local community and wondered why there were not more food hubs in operation. In the ensuing discussion it emerged that some of the reasons for food hub closures included a lack of funding, lack of support by producers, the level of charges for producers, issues with the software hosting platform, or difficulties for the hubs in reaching financial sustainability. The Open Food Network, which is a global platform, is very well supported and this is the one used by the thriving Glenkens Food Hub.

Abattoir survey update (Fergus Younger, SAOS)

There have been 559 responses to the survey to date against a target of 500. The survey has been kept open a little longer than originally envisaged, as many of the abattoirs that were visited also sent the survey out to their customers. The survey will now close. There is still a postcode rationalisation exercise to undertake with the Sustainable Food Trust, which may put the final numbers up to around 600. The Abattoir subgroup will start to explore how the results are presented back to the Steering Group.

Alongside the producer survey, Fergus and his SAOS colleague Hamish have been visiting and interviewing small abattoirs offering a private kill service. Only three small abattoirs in the Western Isles are still to be visited – Lochmaddy, Barra and Stornoway and those visits will be taking place shortly. The visits so far have been very productive. Some of the abattoirs interviewed are under capacity, some are full; some rely heavily on private kill, while for others private kills is very much a peripheral activity for their business. SAOS is hopeful that it will be in a position to share the results of both the producer survey and abattoir interviews with Steering Group Members by mid-August.

Action point 4

SAOS will now close the survey and prepare a presentation for sharing with the Steering Group by mid-August.

Abattoir experiences from Skye (Jack Sayles, NFU Mutual)

Jake is a National Farmers’ Union Scotland (NFUS) and NFU Mutual representative for the Hebrides, covering crofting, small farms and small holders. He is also a crofter himself, selling his own produce for the last three years. He has been involved in the local abattoir meat marketing group for the last couple of years. The group itself has been attempting to establish an abattoir on Skye for around 35 years.

Skye is one of Scotland’s most popular tourist destinations and has a thriving foodie scene, but local producers are unable to finish, slaughter and market their animals in their own area. There used to be a part-time Council-run abattoir on Skye, similar to the one in Stornoway, which seems to run successfully. Stornoway has an additional benefit of three local butchers there, creating competition for local meat.

The project to establish an abattoir on Skye got to a fairly detailed point by 2018. A site was identified, planning permission was granted, a grant was received from the Prince’s Trust for the incinerator side of the abattoir, there was pledge funding in place from the local community and a detailed business plan for the £2.5m project. 

However, State Aid Rules require at least 60% of project funding to come from private sector funds and a maximum of 40% from the public sector. The group was unable to raise sufficient private funds to meet that criteria. The difficulty with private sector investment is that a return on investment is usually required within a reasonable timescale and it is very hard for this type of project to produce high returns for shareholders/funders.

It seems that many of the grant funds, such as the Food Processing, Marketing and Cooperation Grant Scheme (FPMC), award large sums to large businesses and it is difficult for small crofters and farmers to compete in that arena. A community owned and run abattoir with an incinerator plant could bring many wider benefits to the local community beyond the basic abattoir and/or butchery services. For example, the incinerator plant could be used to reduce land waste locally; there is no knackery service on the islands, so that too could be provided. As is the case in Lerwick, the incinerator plant could be used to heat local homes. It would be very helpful if projects with wider benefits for fragile, rural communities could be considered on those merits, rather than straightforward profit and loss.

Many crofters are unable to croft for profit but their activities help to maintain and improve the environment and they hope to at least cover their costs. For example, Jake has native Hebridean sheep that he wants to sell locally. He has been transporting them to the abattoir on Mull, involving round trips of around 24-26 hours’ driving time utilising four different ferries. He is now transporting them to Dingwall for slaughter and then to Inverness for butchery (around 11 hours’ driving time). A local abattoir and butchery facility would make an enormous difference to the amount of time he has to spend off the island.

It would be very difficult to co-ordinate all the animals on the island to be finished at the same time to enable a collaborative logistics system to be established, as there are different breeds involved and not all the crofters butcher in the same way (some like to butcher themselves, while others contract out).

Politicians are sympathetic and supportive of the argument for an abattoir and associated services on Skye, but no-one seems able to circumvent the State Aids issue with respect to public funding support. It would be useful if capital grant scheme criteria for assessing projects could recognise the importance of the wider community benefit and the impacts that these projects could have on reducing food miles and carbon footprint, encouraging biodiversity and truly local, fully connected supply chains and supporting remote rural economies.

Jake was also asked for his thoughts on what would make any grant application process easier for crofters and small producers. He felt that simplicity was key. Also, that a pre-application process would be very useful to give the producer an idea of whether a full and detailed application was likely to be successful or not. This could save a lot of time and money being wasted unnecessarily.

Some members suggested that perhaps other schemes such as Less Favoured Area Support Scheme (LFASS) and the Suckler Beef Support Scheme could perhaps have a greater proportion of their budget allocated to processing rather than more livestock production.

Jake also felt there was a need to be able to provide support to young crofters to develop added value products from their livestock, rather than solely rear them to sell as store animals and perhaps the new funding support regimes could consider that.

The SPPF is unable to offer capital support. The SG confirmed that the FPMC grant scheme, however,is being reviewed, so if any Steering Group Members would like to feed in their thoughts about the scheme, they should contact the SG rep.

Action point 5 

Steering Groups Members to contact the Scottish Government with any thoughts on how the FPMC grant scheme might be further developed.

Interactive session: ‘What would a successful small producer landscape look like in 2028’

Steering Group Members shared their thoughts and ideas which will be consolidated by SAOS and used to inform discussions at the next Steering Group Meeting in August.

Action point 6

SAOS to summarise the discussions from the interactive session and share with the Steering Group in advance of the August meeting. The summary will be posted on the shared eRDM Connect portal.

Update from subgroup 2: monitoring and evaluation (Emma Patterson Taylor, SAOS)

Zoe Meldrum from South of Scotland Enterprise (SOSE) has been providing some support and expertise to this subgroup. There was some discussion around the Women in Agriculture evaluation and the usefulness of the Network Analysis approach. It was felt a “light touch” version of this might be useful for the SPPF, because of the value the Women in Agriculture participants placed in having a network.

The issue of funding for monitoring and evaluation was discussed and the SG are considering how this could work.

Zoe Meldrum also suggested that it might be worth looking at developing a group from a cohort of both successful and unsuccessful applicants to the fund who are engaged with on an ongoing basis to track how the fund is progressing, share learning and experiences, etc.

In terms of traditional methods of monitoring and evaluation, it was felt that a light touch approach was important, such as surveying of participants on training workshops to find out how useful these have been, flag any issues, etc.

Update from subgroup 3: training and skills (Liz Barron-Majerik, Lantra Scotland)

The key themes and recommendations are that the training and skills development support should be relevant, flexible (including opportunities for peer-to-peer learning) and available to existing small producers with a Business Registration Number (BRN), or business plan, as well as new entrants.

Challenges were acknowledged around training versus knowledge transfer projects in that they are different and funded differently.

There is a need to increase access to training. Support routes to existing schemes need to be made more accessible to small producers and schemes should be reporting on numbers of small producers applying and those which were successful/unsuccessful to ensure that there is a fair proportion. If there is an imbalance, then the funding guidance should be changed to address the imbalance and if that is not possible and there is a gap, then that gap needs to be filled. 

There were also challenges around the support for new entrants and apprenticeships. For an apprenticeship you need to be employed to access the funding for training and currently the only way in to be a small producer is to be mentored, not employed, therefore new entrants can’t access apprenticeship funding.

It was felt that the training pilots underway should be externally evaluated to identify best practice and any barriers/issues to be addressed. An external evaluation that identifies the benefits and impacts will be given more credit than an internal evaluation.

Some funding could be made available to small producers willing to employ a new entrant to the sector.

Other recommendations:

• applicants should not be means tested
• the scoring system for applications should include a higher weighting for multiple individual applications from one collective
• all funding should be made directly to the training provider
• a steering group/external panel should be formed to manage delivery, queries, decisions around non-standard applications, etc. The costs of non-agency staff would need to be covered
• a decision needs to be made as to whether there should be a lower level of funding available to a larger number of applicants, or a higher level available to fewer

Members discussed the current definition used when public funding support is provided for skills and training. The definition does not include mentoring, knowledge transfer, or peer to peer networking. Members felt that these other methods of learning were equally important in developing skills and expertise to undertaking defined training courses. It may be that the SPPF operates a separate fund for the more narrowly defined skills and training courses and other methods of learning are supported as part of projects funded through the main SPPF.

While there is no time to establish another subgroup to discuss the opportunities for knowledge transfer and these softer forms of learning specifically, informal learning is already being recognised as a very important component of activity within the existing subgroup discussions.

The SG stated that the SPPF can support both the formal and informal approaches, but it is important to recognise that the type of funding, monitoring and evaluation and KPIs would be different for each. The SG is willing to chair an evening meeting to discuss the opportunities and funding mechanisms for both, to ensure that everyone has an opportunity to put forward their views on what formal and informal learning opportunities the sector requires.

Action point 7

The SG to invite interested Steering Group Members to an evening online meeting to discuss further.

Action point 8

The presentation will be posted on the shared eRDM Connect portal.

Update from subgroup 4: supply chain (Archie Hipwell)

The subgroup is focusing on 5 key areas: cooperative/collaborative working between producers; mentoring, expertise and peer support; training, trainees and apprenticeships, non-production expertise; education and outreach; and knowledge hub and insight. A one-pager of the subgroup’s proposals will be ready by the 14th August. 

Update from subgroup 5: horticultural demonstration activities (Jo Hunt, Knockfarrel Produce)

This subgroup has had one meeting so far. It agreed that horticulture products are generally in high demand and the issues are more related to production and lack of supply. The group is also looking at some of the agritech opportunities. 

The starting point was to look at segments within the horticulture sector that intervention might be suitable for and the subgroup came up with four groupings. It was felt that these would all have the same aims of increasing production and distribution of horticultural products, but that the actions they took to achieve those aims would be different:

• umbrella, national groups (e.g. small farm networks)
• local producer groups working together with wider partner networks
• individual producers
• new entrant producers

Peer-to-peer networks were discussed as a key way to transfer horticultural skills and expertise from innovators to adopters. It was felt that there was a gap in the Farm Advisory Service in this regard, as they don’t have horticultural specialists within the team and there isn’t an agronomist. There was a question as to why there wasn’t a degree in sustainable food production in Scotland when these exist in countries like France and Italy. It was also felt that mentoring networks in local areas were important, as small producers often work in isolation.

The subgroup also discussed the need for long-term solutions beyond the pilot. Is there a need to use the pilot fund to think about recommendations and solutions and test actions this year which would hopefully be taken up in the 2026 post-CAP funding landscape? There is £56m of support for LFASS, but this is only applicable to beef and lamb and £60m for the Beef Suckler scheme, so there should be similar levels of support made available for the fruit and vegetable sector.

On research and innovation needs, the subgroup was agreed that it’s not about robots; it’s about adoption rather than invention and testing and sharing knowledge. There is a need for new small-scale production equipment and new seed varieties to be tested and the knowledge to be shared amongst producers in Scotland and for that process to be de-risked. This would create an adaptation opportunity for climate change.

Cooperation and working in groups is seen as very important and the subgroup also talked about how we value food and why we are not growing more fruit and vegetables. Imports were felt to be a key reason and Scotland is not as far ahead as other countries in reducing its reliance on imports. The UN uses a value chain methodology, i.e. if you’re producing food that reaches people with health needs, it has a higher value; if you’re reaching people and having a lower carbon footprint, the food has a higher value, but the market in Scotland does not reward small producers for having that higher value food.

There were four specific questions for the steering group:

• how do we link into both the climate and health agendas? We should be designing a scheme for 2026 onwards that includes the delivery of climate and health benefits 
• do we want to go narrow and deep or shallow and wide? E.g. £500 to every small farm to buy a strimmer or significant investment to 20 farms to achieve impacts of scale
• do we support the idea of a specific sectoral fund for fruit and vegetables?
• how do we use the year ahead and the SPPF funding to test and work with others to expand fruit and vegetable production?

Members felt that knowledge transfer, peer to peer learning and sharing of new knowledge, leading to better business growth and development is very important in terms of the type of projects that could come through the SPPF. There was also support for a separate fruit and vegetable scheme along the lines of those in place for beef and lamb and a recognition that the SPPF might provide an opportunity to gather evidence of the need for such a scheme which would help in putting forward a case. 

There are opportunities to collaborate and partner with research institutes on trialling and testing, e.g. University of the Highlands and Islands, using blended learning techniques. The SG stated that its Science & Advice for Scottish Agriculture (SASA) undertakes seed testing and trials so will discuss this proposal with that team. 

Other Members suggested that the SPPF should also be used to develop demand – educating people to understand the benefits of local food to the local community. 

Action point 9

The SG will discuss the potential for running seed trials and testing with SASA and feed back to the subgroup.

Update from subgroup 6: application process (Fiona Richmond, Scotland Food & Drink, (SFD)) 

The main principle that the subgroup is operating from is to make the whole process as simple and clear as possible, with a real person available behind the scenes to answer any questions. 

The process for the entire applicant journey is being drafted, i.e. what happens when, timelines, the assessment process, etc. The subgroup is currently scoping the parameters and is confident that it can meet the deadlines of having a draft available by August.

There are a few questions and one was around the application deadlines if the SPPF opens on the 1st December. The SG stated that the fund must be spent by the end of March 2024, so there may need to be rolling applications for some activities, (e.g. possibly training) and fixed application windows for others. The Steering Group may want to ringfence some/most of the SPPF prior to December (e.g. in support of abattoir access, routes to market, trialling and testing work, etc.), leaving the remaining funds for individual or group applications. 

There are strict protocols in place governing financial expenditure that need to be met. The SG would also be concerned that any grant approved was claimed quickly, as the fund is annual and there is no commitment beyond that period. The window between the fund launching in December and being spent by end of March 2024 is very short, so the Steering Group agreed to think carefully about the type of impactful activity that can be completed within that timeframe.

Another question was where the applications would be hosted and what system the applicants would use. SFD has a system and capacity to do this, so this may be put forward by the subgroup as one option for consideration. Any proposal would need full costings. Information is also required about the assessment panel – how it would work, who would be on it, associated costs, etc.

Date of next meeting

Tuesday 29 August, 10am – 3pm at the Science & Advice for Scottish Agriculture (SASA) offices: Roddinglaw Road, Edinburgh, EH12 9FJ Tel: 0131 244 8890 www.sasa.gov.uk.