Agriculture and Rural Communities (Scotland) Bill

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This Bill is unsatisfactory.

Clearly, it’s not sensible to set out in primary legislation all the specific policies which will be needed to deliver the vision for agriculture, nor the details of every financial assistance scheme which may be introduced.

However, this Bill goes to the other extreme. Its core provision are Sections 4 and 13 which grants Scottish Ministers the power to provide support for agriculture in connection with a schedule which Scottish Ministers may modify by regulations using the negative procedure.

This Bill as introduced simply asks Parliament to give Ministers the powers to provide ‘support’ – which should be called what it is, financial assistance – to people engaged in agriculture, food and drink, or forestry and to people living or working in rural areas.

In 2020 Parliament passed the Agriculture (Retained EU law and Data)(Scotland) Bill which was seen as a holding operation while the new scheme was being developed. However, this Bill does not set out any details of that new scheme. For the most part, it simply replaces the powers Ministers have under the 2020 Act to modify CAP legislation with powers to make payments to a range of persons.

Little progress has been made on some issues, for example on capping payments. In evidence to the Rural Economy and Connectivity Committee in January 2020, the then Cabinet Secretary said:

We are looking to cap payments; Mr MacDonald and other members will know that that was stated in the “Stability and Simplicity” consultation, and there is a reasonable amount of detail in that document there anent. We confirmed it again in the programme for government by saying that we would develop substantive measures to be ready for implementation in 2021. That will include the level at which the largest direct payments to individual recipients will be capped in order to redistribute the funds within the CAP support.”

The current Bill has introduced simply enables Ministers to cap payments, but neither requires this nor sets out the ‘substantive measures’ which were due in 2021. This is significant, since capping allows for redistribution within or between schemes - which is essential so that more funding can be directed to delivering the Government's vision for agriculture, its commitments on climate and nature and its Good Food Nation ambition.

Similarly, during the debate on the previous Agriculture Bill, the Government proposed ‘pilots’ to test out aspects of new schemes before introduction. However, none of the evidence presented to accompany the Bill includes a description of, or the findings from, any pilot schemes.

We recognise that Government has been under significant pressure resulting from the pandemic and the subsequent illegal invasion of Ukraine. Nevertheless, the Bill as introduced is again asking Parliament to grant Ministers powers with little clarity over how they will be used in practice.

We would have wanted the Bill, alongside giving Ministers necessary powers also imposed clearer duties regarding the use of those powers in the long-term public interest. We would also want to see a clear long-term goal for agriculture in Scotland on the face of the Bill, drawing on the Scottish Government's vision for agriculture and mirroring the high level commitments on climate, nature and Good Food Nation. This long-term goal could be then reflected in the five year rural support plans with more specific targets and metrics.

For example: "To produce more high quality diverse food from our own resources while halving our greenhouse gas emissions, increasing the carbon in soils and trees on farmland, reducing dependence on imported feed and other inputs, restoring nature on farmland; improving incomes, health and safety for family farmers and farm workers; developing a stronger local food economy, and improving access to good food for all."

No. 

In terms of a clear foundation for financial assistance to agriculture, it provides a concrete floor of powers, but little clarity about what is to be built on that foundation. The financial memorandum sets out a ‘business as usual’ budget, which makes it unlikely or impossible that the objectives of the Bill will be achieved.

At least 75% of the financial assistance provided to farmers, crofters, food businesses, rural communities and others under this Bill must be spent on specific actions to mitigate and adapt to climate change and to restore nature.

The evidence paper produced by Scottish Government to accompany this bill makes it clear that spending 80% of the budget on direct payments won’t deliver change:

"most CAP funding under the 2014-20 round did not deliver the intended benefits or value for public money because:

o direct payments were not targeted or means tested

o the benefit did not necessarily go directly to the farmer

o direct payments were found to reduce innovation, structural development, and productivity growth

o direct payments had little environmental benefit, and in some cases may have had a negative impact "

It is almost entirely silent on rural policy. The policy memorandum is non-committal on the continuation of a scheme of community-led local development such as LEADER. In general, the conflation of ‘rural policy’ with ‘agriculture’ is unhelpful. Some agriculture takes place in and around cities (and this is likely to increase) while most of rural development and the rural economy is not about agriculture.

The purpose of the Bill as set out in the Policy Memorandum is to ‘enable the delivery’ of the Scottish Government’s vision for agriculture which was published in 2022. Part of ‘enabling the delivery’ is the creation of a payment framework to replace the CAP – but the payment framework is the means to an end, not an end in itself.

The Policy Memorandum refers to the 2023-27 CAP objectives and suggests that it would be helpful to align to these.

The 2023-27 CAP objectives are:

to ensure a fair income for farmers;

to increase competitiveness;

to improve the position of farmers in the food chain;

climate change action;

environmental care;

to preserve landscapes and biodiversity;

to support generational renewal;

vibrant rural areas;

to protect food and health quality;

fostering knowledge and innovation.


While agriculture policy in Scotland can and should define its own objectives, these provide a useful starting-point and are broader than those set out in the Bill.

This Bill is introduced alongside other key policies and legislation and at a time of rapid change in the supply chain, yet seems to be conceived almost in isolation, with a narrow focus on replacing CAP payment mechanisms.

For example, forthcoming legislation will set legally-binding nature recovery targets which will impact significantly on farming practices.

Along the supply chain, manufacturers and retailers are taking unprecedented steps to reduce their Scope 3 emissions, impacting not just on their expectations of primary producers but also in their offering to consumers – including a shift to plant-based protein. The EU deforestation regulation and the Corporate Sustainability Due Diligence Directive are requiring food businesses to improve environmental performance while investors are also pushing major companies in the same direction. The Bill should be helping Scottish agriculture to navigate this change.

The Good Food Nation Act requires Government to implement cross-cutting food policy, which includes primary food production.

The Scottish Government will shortly introduce a Human Rights Act which will bring the right to food into Scots law as part of wider economic, social and cultural rights. This has long-term implications for how the food system operates in Scotland.


We would therefore seek to sharpen and amend the objectives in the Bill along these lines:


For the purposes of this Act and other legislation and policy relating to agriculture, the objectives of agricultural policy are—

(a) the production of high-quality food, using organic sustainable and regenerative agricultural practices,

(b) the facilitation of on-farm halting and reversing biodiversity loss

(c) climate mitigation and adaptation

(d) ensuring a fair income for farmers and improving the position of farmers in the food chain* (note: this includes support for local food/short food chains)

e fostering knowledge and innovation

(f) supporting generational renewal and diversity in the farming community

(g) enabling rural communities to thrive

(h) to enable the realisation of the right to food in Scotland

(i) maintaining and enhancing the welfare of farmed animals

Finally the Bill should include a requirement for Scottish Ministers to act in a way which supports the delivery of the Bill’s objectives.

There is a clear need to balance flexibility in policy implementation with clarity for the farming and land management sector. A programming period of fixed 5 years duration, starting in 2025, would allow for four programme periods of policy leading to 2045. This ensures farmers know that there is a certain degree of constancy for a defined period. A programming period would align with the approach in the EU. It would not remove the ability to modify things within the period.

However, the term rural support plan is unhelpful. ‘Strategic plan for agriculture’ might be more accurate.

The provisions in the Bill are far too limited in their requirements on Ministers. Since this is a framework Bill, the delivery of its objectives rely on the subsequent policies and secondary legislation. In this context, the Plan must set out the means by which Ministers intend to deliver the (enhanced) objectives in the Bill – including (but not limited to) by the provision of financial assistance to farmers, crofters and other persons.

The Bill should therefore prescribe the content of the plan in some detail, as is the case with the Climate Change Plan (and to a more limited extent the Good Food Nation Plan). Section 2(2) c of the Bill only talks about a ‘description of each scheme.

The plan should be seen as analogous to the CAP strategic plans developed by EU member states – see for example Ireland’s 2023-2027 plan here

The ‘rural support plan’ should therefore include as a minimum:

Indicative budgets for the programming period, both for each ‘tier’ and for individual schemes within tiers. (Given that Scotland is going through an agricultural transition to sustainable and regenerative agriculture, some of these budgets would increase or decrease during the programming period)

Description of each payment scheme, including objectives, rationale, expected uptake and expected impact including on climate and nature

The maximum direct payment which can be received by any individual or farm business. We suggest aligning with Ireland to cap direct payments at €66,000

Overall targets for delivering on objectives during the programme period – including for example reducing greenhouse gas emissions in line with the Climate Change Plan, reducing nutrient pollution and the use of pesticides, increasing farm incomes, restoring biodiversity, increasing land farmed organically and so on.

Other policy and regulatory measures to be adopted which support the delivery of objectives

The plan should be developed through a transparent and inclusive consultation with stakeholders, including the seeking of independent advice from relevant bodies.

The plan must align with and complement related legislation and policy, including the climate change plan, the biodiversity plan, the Good Food Nation plan, the Circular Economy plan, land reform and the forthcoming Human Rights Act.

The plan should be laid before Parliament for a number of sitting days to allow for Parliamentary scrutiny and debate.

Progress in delivering on the plan should be reported on at two year intervals, with a review of the current plan being an integral part of developing the subsequent plan. These processes of reporting and review should involve external stakeholders and independent expertise.

The plan should include a strategic environmental assessment.

Given that the plan provides the rationale for the spending of public money on the proposed tiers and schemes of the new agricultural policy, it should be in place when Parliament approves secondary legislation to establish those tiers and schemes.

Section 2(1) b requires Scottish Ministers to exercise their functions under the Act having regard to the ‘rural support plan’. Those functions include those set out for example in Sections 13-17 of the Bill to make regulations about support.

In terms of powers to provide financial assistance to agriculture, it’s not clear if the powers under Section 13 allow Ministers to vary intervention rates, for example by paying a ‘peripherality/disadvantage’ or a ‘co-operation’ uplift on any payments.

While Section 5 includes the powers to make payments to third parties to operate schemes (which would include local authorities), the policy memorandum does not foresee any implications for local government. Our view is that part of the agriculture and rural development budget should be administered by local government for community led local development. This should extend beyond the previous LEADER+ scheme to allow all local authorities to support community-led food growing and related projects.

The Bill sets out few new powers in relation to wider rural development. This reflects the fact that the 'rural' element of this Bill is under-developed. To deliver on wider rural development objectives, Ministers need powers to do the following (they may have these under existing legislation):

Planning powers to support new low impact housing for new entrants earning much of their living from working on the land (similar to the One Planet Development Policy (OPD) in Wales which enables people move to protected areas to live ecologically sustainable lifestyles)

Compulsory sales order powers to enable for example acquisition of land for housing, the development of community assets or the remediation and use of derelict and vacant land

Powers to support on-land (closed loop) aquaculture to provide a more resource-efficient and less polluting approach to farming salmon and trout

Powers to require landowners to maintain deer numbers at science-based levels to allow regeneration

Powers to require land managers to remediate peatland or exclude stock from peatland/areas at risk of erosion

Powers to support village shops and community shops in remote rural and island areas to stock local food

Powers to support ‘generational renewal’ – for example combining exit/handover payments to existing farmers/crofters with long-term support for new entrants

Powers for Government or its agents to enter into long-term (50 year plus) leases with farmers and crofters to undertake woodland creation and management directly

Other powers – such as the power to create new forms of tenancy (including crofting tenancies outside the crofting counties, woodland crofts) are being taken forward as part of the land reform legislation, and could have a significant impact on rural development.

While Schedule 1 is incomplete Section 1(3) of the schedule allows for additional persons and activity. For example, insect farming is not included in 2(1) while 3(3) omits products such as mushrooms and other fungi as well as eggs, pigs and poultry

The Government should have taken this opportunity to ‘delink’ payments and do away with the unhelpful concept of ‘entitlements’ in section 15. We would see this as part of the move away from area-based payments.

An additional section is required setting out the matters to be taken into account by Ministers when devising financial assistance schemes. These should be congruent with the provisions of the Subsidy Control Act 2022 as well as the Scottish Public Finance Manual.

These principles should include for example value for money; equity; accessibility; flexibility and differentiation and expected environmental impact.


In Section 9, Ministers should be required to limit the overall amount of support that a person may receive. As this limit may change over time, it makes sense for this figure to be included in the ‘rural support plan’, with the proviso that this plan is published ahead of secondary legislation being passed.

In Section 10, greater clarity is needed on what constitutes the public interest. Part of the public interest is transparency and in this respect it is important that the ultimate beneficiaries of financial assistance are identified. This could be for example through the Register of Controlled Interests, the People with Significant Control Register, or the Register of Overseas Entities. As well as preventing the use of land in Scotland for money laundering, this allows the public to see who is benefiting from taxpayer assistance.

In due course, the issue of land ownership by overseas residents, land taxation and eligibility for subsidies should be part of wider land reform.

We support the production of a Code of Practice. Development of the code in partnership with stakeholders (including NGOs and academics as well as farmers, crofters and others) will be a useful process in clarifying the vision and building a consensus on good practice.

We would also point out that there are existing third party certification schemes - specifically organic certification but also Pasture for Life - which deliver on the Government's objectives for sustainable and regenerative agriculture. These are likely to set a higher - and independently verifiable bar - than this code, which is more likely to set a floor.

It is important from the outset when developing the code of practice that Government is clear about the purpose (which relates to Section 7 below). If there are penalties (financial or otherwise) for being in breach of the code of practice then adequate systems of monitoring compliance have to go alongside it.

Given the range of farm types, soils and climatic conditions across Scotland and it will be a challenge to define universal regenerative and sustainable practices which should or should not be adopted by all farmers and crofters. However, for the code to have impact it must be specific enough to determine if a farm or croft is following it. So the code may need to be tailored to different contexts.
There may also be issues relating to tenancies, so that tenancy conditions do not prevent tenants from complying with the code of practice.
The code is not a substitute for provision of tailored advice and CPD for farmers and crofters on organic, sustainable and regenerative agriculture.

Not as drafted.

Section 7 should be strengthened to require Scottish Ministers to make regulations in relation to the guidance, if the code is to have any serious impact on practice

Adherence to the code could in due course be a requirement for receiving financial assistance - say initially at Tier 2 and eventually at Tier 1.

However, it's important to acknowledge the multiple expectations being placed on farmers. Our view is that development of the code should be a multi-year process - a 'codification' of good practice (which is evolving rapidly) which starts to underpin agricultural curricula, CPD, advice and so on

Over time, the code could become more about who farmers are, not just what farmers do.

We rely on farmers and crofters to look after the environment and farmed animals on our behalf, and to produce safe and healthy food for us. We can expect that in doing so they work to high professional standards.
As with other professions, CPD should be an accepted element of professional practice. It is important however that CPD is relevant, effective and timely – and that it respects and draws on existing farmer and crofter knowledge.
CPD should be aligned at a fundamental level with the code of practice on organic, sustainable and regenerative agriculture. This code should underpin the professional identity of farmers and crofters including core values of respect for nature, soils, livestock and wildlife.
The role of women in agriculture has rightly been a focus of attention in recent years in Scotland. It is essential that CPD is designed and delivered in a gender responsive way

1 Elements of Scottish Government’s vision
The Bill is intended to deliver the Government’s vision for agriculture. However some key elements of that vision highlighted below are not reflected in the Bill.

One of the key elements in that vision was  

“we will support and work with farmers and crofters to meet more of our own food needs sustainably”

We believe this policy goal should be on the face of the Bill. It is entirely possible for Scotland to produce more protein and calories for human consumption (including humans living in and visiting Scotland) while at the same time improving human health, restoring nature, mitigating and adapting to climate change and reducing imports of unsustainable feed.

This fits with Scotland’s role as a global citizen in a net zero, nature positive world.

However this does require a change in how we use our land, and a shift away from feeding human edible food to animals, in particular ruminants.

It requires using more of our land for market gardening, both in remote and island communities and in and around towns, and the development of a new glasshouse sector for Scotland, using our abundant renewable and waste energy.

It requires the rapid adoption of low methane breeding technology (where Scotland already has world-leading science). It requires the production of green ammonia rather than the import of nitrogenous fertiliser produced with fossil fuels – along with much more limited and targeted use of nitrogen to reduce nitrogen waste and pollution.

It requires much more care for our soils – which is why we have called in the past for a Chief Soils Officer and the inclusion of soils in the circular economy plan

It requires valorisation of resource streams now treated as waste – whether that’s extracting the nutrients from broccoli stalks, producing algae from pot ale to feed livestock, or growing insects on food waste

It requires adoption of new resilient, high health crops such as hemp, buckwheat, black barley for human consumption

It requires growing cereals and legumes together, and integrating trees on farms – in both cases to produce more yield per hectare, typically with less inputs

It requires more production of renewable energy on farms

It requires innovation, knowledge exchange and a spirit of enquiry and co-operation.

All this is possible while at the same time enhancing animal welfare, creating more jobs in and around agriculture, increasing farm profitability and ensuring a just transition.

Financial assistance to farmers and crofters is one of the levers for achieving this change. But it is only one – and continuing business as usual in the way we pay farmers will deter rather than encourage innovation and change.

In particular, money must be moved to Tier 3 – supporting farmers to convert to organic, install renewable energy systems, establish agroforestry systems, restore habitats, change business models – and to Tier 4 – the horizontal measures which support the sector as a whole: advice and knowledge exchange, support for innovation, support for co-operation, support for new entrants, supply chain development, genetic and health improvement programmes.

The vision goes on to say:
To achieve this vision, we will work with and alongside farmers, crofters and land managers to ensure that they have the right support to:

continue delivering high farming standards, including to enhance animal health and welfare
contribute to our Good Food Nation ambitions and Local Food strategy, particularly to create more localised supply chains, enhance producer value and cut food miles
deliver emission reductions in line with our climate targets
contribute to the restoration of nature through biodiversity gain on the land they farm
support land use change that contributes to our climate and biodiversity goals in line with the recommendations of the Just Transition Commission
encourage more farmers and crofters to farm and produce food organically
improve business resilience, efficiency and productivity, including through adoption and deployment of technology and innovation
take a whole farm approach to reducing emissions and environmental impact
accelerate adoption of approaches and measures which minimise, reduce and remove the use of agrochemical inputs and increase the use of non-chemical related actions
enable more local employment on the land, more women to enter farming and more new and young entrants into farming
identify and develop the skills needed for regenerative and sustainable farming, changes of land use and adaptation to the changing climate.
encourage co-operative approaches to optimise collaboration and knowledge exchange

All these elements should form part of the rural support plan.

2 High quality food
We would seek to define ‘high quality’ food within the legislation or the ‘rural support plan’ . While some aspects of ‘high quality’ food are subjective, some objective criteria should be developed, eg:

Animal health and welfare – eg access to pasture, minimal use of antibiotics, no mutilations
Positive environmental impact – or minimal negative impact – within Scotland and internationally (in terms of the sourcing of animal feed and food ingredients)
Nutrient composition – so for example meat from grass-fed systems has a healthier balance of fatty acids, while organic vegetables may have higher antioxidants and better soil health can lead to greater nutrient density in wheat and other crops
Absence of contaminants including pesticide residues and harmful additives
Labour standards and fairness of transactions along the supply chain
Way in which ingredients are processed, preserved and packaged for sale to maintain quality and with minimal environmental damage
Transparency of labelling – places of origin, production methods, ingredients

3 Fairer Scotland duty
We expected to see a reference to the Fairer Scotland duty in the Bill.

To fulfil their legal obligations under the Duty, public bodies must actively consider how they could reduce inequalities of outcome in any strategic decision they make. In order to demonstrate how they’ve done this, we recommend public bodies should as a matter of good practice publish a written record of their decision-making process. This will be a key way in which public bodies can evidence their compliance with the Duty.

The allocation of around £700m of public money to a range of businesses and individuals is a strategic decision which has the potential to increase, maintain or reduce socio-economic inequalities, and the overall payment scheme requires an assessment under this duty.

4 Removal of the area threshold
While details of financial assistance schemes will come with secondary legislation, we would have liked to see a commitment in the Bill to removing the existing 3ha limit for financial assistance through direct payments. Small producers who typically are among the most productive and generate the most jobs per hectare have been excluded from the scheme to date in Scotland, unlike in many other member states where there is a lower, or no, limit in terms of holding size.


5 Frontloading of payments for small farmers
The Common Agricultural Policy 2023-27 includes a mandatory redistribution of income support, with EU countries required to dedicate at least 10% of their direct payments to the redistributive income support tool, increasing the income of small and medium sized farmers. This would be possible through the tapering powers contained in section 9 which should be strengthened to clarify this as a policy intent. 

6 Capping
Section 9 currently allows but does not require Scottish Ministers to cap payments. This provision should be strengthened, with an indicative cap on base payments on the face of the Bill

7 Targets
The Bill should establish a duty on Ministers to set and achieve targets in the rural support plan for the delivery of the objectives in the Bill – for example on reduction of pesticide use and nutrient waste, on reducing imports of protein for animal feed and on increasing the area of organic farmland and the use of organic food in the public kitchen

8 HNV scheme
We would encourage the Scottish Government to introduce a High Nature Value scheme setting out common farming standards which are already in place or could be adopted across thousands of holdings, particularly in the LFA areas of the north and west of Scotland. This would benefit many farmers and crofters by providing a ‘passport’ to Tier 2 payments and could reduce the administrative burden on Government through third party assurance.

9 Procurement of organic food
Scottish Government provides funding for Food for Life under this budget. This funding should be extended to include support for local authorities to purchase organic food for the public kitchen (schools, residential homes, prisons etc) both to support the expansion of the organic farming sector in Scotland and to normalise organic food for all.

While the CAP has many flaws, including at times a cumbersome system of audit and compliance, it also operates as a coherent system – including transparent reporting on progress.

The Bill as it stands contains no equivalent provision for reporting on progress. This is particularly concerning given the policy context which calls for a transformative change in food and farming. Without a robust and transparent system of monitoring implementation and outcomes, it will be hard to see if this Bill and the new payment system are delivering the change required.

Other UK nations are also progressing CAP replacement schemes. It is disappointing that as part of the Bill, Parliament has not been provided with information on progress in those nations as a point of comparison and learning.

Scottish Government is engaged in a complex process of moving forward legislation and policy in a number of related areas – agriculture, natural environment, circular economy, just transition, good food nation, climate change, land reform.

It would be helpful for Parliament to be briefed in an ongoing way on how Government sees and is ensuring the synergies between these policy developments

There is a clear interaction with the UK Subsidy Control Act 2022 and less directly with the Internal Market Act 2021. Parliament should be advised on the steps taken to date to ensure compatibility.

Overall:
The Bill provides the ministers with extensive powers but places few duties on them. It does not set out a clear enough plan for redirecting financial assistance in order to deliver the Government’s vison for agriculture and meet Government’s commitments on nature and climate.

Detail:

Section 16 should make provision for grant/loan recipients to report to Scottish Government on how money received was spent and to submit business accounts

Section 17 should make explicit provision for public reporting on who has received public money under which scheme (with a possible de minimis exemption).

Schedule 1 Part 2 Section 3(1): Ministers power to assist producers should be qualified to include a statement such as ‘when this is in the public interest’ or ‘when the public benefit significantly exceeds private gain’