Agriculture

– in the Scottish Parliament at 2:17 pm on 9th March 2006.

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Photo of George Reid George Reid None 2:17 pm, 9th March 2006

The next item of business is a debate on motion S2M-4081, in the name of Ross Finnie, on the agriculture strategy.

Photo of Ross Finnie Ross Finnie Liberal Democrat 2:56 pm, 9th March 2006

As members will be aware, I launched the updated agriculture strategy, as set out in "A Forward Strategy for Scottish Agriculture: Next Steps", on Friday. This debate is therefore timely.

Agriculture remains at the heart of life in rural Scotland. Its headline 1.3 per cent contribution to gross value added greatly understates its full contribution to our economy, our rural communities and our environment. It has important direct links with two other major industries—food manufacturing and tourism. As primary producers, our farmers provide 36 per cent of the total inputs to our food industry, and as custodians of the countryside, they are responsible for maintaining almost 80 per cent of the land. Therefore, they create the landscape in Scotland that is important for attracting tourists.

Our agriculture industry has a long history of facing up to challenges, as it must do now. We work increasingly in a global marketplace. Following the World Trade Organisation meeting in Hong Kong last December, we can expect further reductions in export subsidies by 2013. In Europe, there will be a ceiling on common agricultural policy funding from 2007. There will also be a review of the whole post-2013 European Union budget, including CAP funding, in 2008-09. We are working hard with the United Kingdom Government and other member states to ensure that the best interests of rural Scotland are reflected in the developing scenario and in negotiating positions to ensure that Scotland's position is put forward.

The WTO and the CAP provide an overall framework, but I have always believed that it is imperative that we in Scotland work to our own strategy, which we should try to mesh in with those overarching strategies. That is why we worked with the industry to produce our first-ever agriculture strategy in 2001. After five years, there is no doubt that that strategy needed to be updated to reflect progress and to respond to new developments, such as the 2003 CAP reform. As with the original strategy, we developed the "Next Steps" strategy in partnership with stakeholders, who represented farming, crofting, environment, food, research and business interests.

The "Next Steps" strategy reviews progress since the original strategy and the recovery that has taken place in many areas. It shows what can be done when we work together, but many issues are still to be addressed. Sadly, there are still big differences between the best performers in Scottish agriculture and those at the other end of the scale.

The very best Scottish farmers are already very good by any standards, but the challenge is to bring up the rest of the industry to that high standard. That means encouraging an enthusiastic and innovative spirit that is underpinned by technical expertise, encouraging a willingness to co-operate and learn from one another and increasing people's business acumen. Our ambition remains that we want to see a prosperous and sustainable farming industry that is competitive in markets, a driver of rural development and renowned for its high-quality produce and high environmental standards. It must also be a major contributor to key animal health and welfare and human health and well-being objectives.

Photo of John Swinney John Swinney Scottish National Party

With respect to the prosperity of the agriculture sector, I have a question on regulation. The minister is aware that the Water Environment (Controlled Activities) (Scotland) Regulations 2005 will be implemented on 1 April. Will any revised guidelines on the charging scheme be available before the reduced fee application period ends on 31 March? If not, what advice does the minister give to individuals who want to apply but do not know on what basis they can do so during the reduced fee application period?

Photo of Ross Finnie Ross Finnie Liberal Democrat

I am conscious of the issue that the member raises; the Deputy Minister for Environment and Rural Development, Rhona Brankin, and I have received many representations on it. I assure the member that the information to which he refers will be available. An announcement on the matter will be made very shortly. It will deal with the scale of charging and will provide what has been missing so far—a much more detailed explanation of the benefits that will accrue from the scheme. The announcement will be made in days, rather than weeks.

I have set out our ambition. Our first goal in "Next Steps" is to assist primary producers to work better and more closely with food producers, retailers and the food service sector to identify, inform and meet more successfully market demand. That means developing different and stronger relationships up and down the food chain, and working together to understand and meet consumer and customer demand and, as a consequence, to get a much better deal.

It is important that farmers benefit from sharing experience and ideas. One of the major successes of the previous strategy was the monitor farms initiative, which enabled many farms in Scotland to benchmark their activities and to make considerable progress. At present, there are only seven monitor farms across the country. An eighth is being developed, but under "Next Steps" we intend to roll out the initiative as far as possible throughout Scotland, because of the benefits that were accrued previously.

A second goal is that agriculture should contribute fully towards vibrant rural communities and stronger rural areas. Diversification in its many aspects plays a part in that. There is a need to understand better what can and cannot be done and what is and is not successful. The "Next Steps" group was absolutely clear about the need to increase the amount of information that is available, so that a range of intra-farm and extra-farm activities can take place.

There are close links between the strategy and the new Scottish rural development programme for 2007-13, which will be an important delivery mechanism for the strategy. Our aim is to build on progress that has been made since 2000 on business development and diversification, while delivering environmental goods and encouraging public enjoyment of the countryside. Recently, we launched a consultation on the use of resources in the new rural development programme, and in a month or so we will launch a consultation on the programme. I assure the chamber that that will include consultation on the less favoured area support scheme, which will remain a key element of the programme.

The third goal is that Scottish agriculture should continue to be a leading player in the protection and enhancement of the environment, with an increased emphasis on climate change and the promotion of a landscape-scale development approach. We will continue the good work that has been undertaken to implement Scotland's biodiversity strategy and will maintain our efforts to tackle diffuse water pollution.

Photo of Jim Wallace Jim Wallace Liberal Democrat

The minister refers to the importance of the environment. Does he acknowledge that in the past year many farmers were disappointed that they did not qualify for the rural stewardship scheme, although they had gathered points that in previous years would readily have qualified them for it? What encouragement does he give them that it will be worth their while to apply again in the future? Will he ensure that smaller farmers, who do not have as many activities on which to notch up points, will not be disadvantaged and that all the proceeds will not go to larger estates and farms?

Photo of Ross Finnie Ross Finnie Liberal Democrat

As Jim Wallace and others in the chamber are aware, the situation to which he refers was a direct consequence of the huge increase in popularity and attractiveness of the scheme, which resulted in a 57 per cent increase in the number of applications. With a demand-led scheme, we run the risk of setting a target level that has to be raised because of financial constraints, which results in serious disappointment, as Jim Wallace properly points out.

Photo of Ross Finnie Ross Finnie Liberal Democrat

No, I must finish the point that I am making.

As a consequence of what has happened, we will revise the procedures for allocation of points. However, I am bound to say that simply raising the number of points that is required is not always the answer. We will seek to address the issue in the guidelines that will be issued with subsequent schemes.

Photo of John Scott John Scott Conservative

What is the current points level? Did the minister make an announcement on that yesterday, or will he make an announcement on it in the near future?

Photo of Ross Finnie Ross Finnie Liberal Democrat

The announcement is imminent, by which I mean today or tomorrow. I will write to John Scott if he wants more information.

The "Next Steps" strategy has 22 specific action points, on some of which we will make progress immediately. "Next Steps" provides the strategic framework within which we operate, but we recognise that within the overarching framework—through which we believe we can make progress—there are always pressing day-to-day concerns. Those concerns include considerable worries about the operation of the marketplace. I welcome, as I am sure that every member does, today's announcement by the Office of Fair Trading that it will enter consultation on a possible reference to the Competition Commission.

I want to be clear about the issue. I have never said that the operation of the supermarkets works perfectly. What I have said consistently to the industry is that it should not believe that supermarkets are the only cause of the problems in the food chain. We need only consider what happened last week when there was a decline in the cream and butter-fat price, which resulted in a reduction in farm-gate prices. That had nothing to do with supermarkets, but was part of the complex relationship between supply and demand in the market.

There are concerns about how regulations work and the threats that are still posed by avian flu and other exotic diseases. All those issues must be taken into account.

The decision was taken in Brussels yesterday to lift the European Union beef export ban, which was imposed in 1996. I am sure that everyone in the chamber joins me in acknowledging what excellent news that is for our farmers, for rural Scotland and for the Scottish food industry. I pay tribute to the whole industry for its forbearance during those 10 years, but I pay particular tribute to those who have worked hard to put a case that was not only successful but unanimously successful in yesterday's vote. We must now work extraordinarily hard as we try to recapture markets that we had to give up 10 years ago, which were worth approximately £120 million to the Scottish agricultural economy. I hope that the lifting of the ban will also stabilise prices in that very important sector for Scotland.

On that optimistic note, I ask that the Parliament welcome those achievements and the publication of the strategy, which will form the framework within which Scottish agriculture will take its own steps to set its own pace and its own targets. Although the agriculture sector will be constrained in many ways by the CAP, the WTO and others, it will have its own agenda. We will try to ensure that the agriculture sector remains healthy and sustainable for the benefit of the whole of rural Scotland.

I move,

That the Parliament welcomes the Scottish Executive's commitment as set out in A Forward Strategy for Scottish Agriculture: Next Steps to secure a prosperous and sustainable farming industry in Scotland, focussed on producing food and other products for the market, contributing to sustainable rural development, protecting and enhancing the environment and contributing to improvements in animal health and welfare and human health and well-being, and approves the actions outlined in the strategy for achieving these objectives in partnership with other stakeholders.

Photo of Richard Lochhead Richard Lochhead Scottish National Party 3:08 pm, 9th March 2006

The SNP very much welcomes the debate and much of what is in the Government's strategy document. We all accept the need for a prosperous farming sector to continue to deliver benefits to consumers, our rural communities and Scotland's environment.

Our talented farmers and crofters throughout Scotland contribute a great deal to the nation, and the food that they produce enhances Scotland's reputation throughout the world. They operate in a challenging environment; they have done so for many years and continue to do so. Farm incomes are on the increase, but they are still playing catch-up with the incomes that were achieved in better times a few years ago. Given the recent reforms in agriculture policy, this is a challenging transition period for our farmers.

Many farmers whom we speak to in our constituencies are still not sure of their role at the beginning of the 21st century; in essence, they are not sure whether they are there to produce food for the nation or to act as guardians of the countryside. That issue will no doubt be the crux of today's debate.

The strategy that we are debating must deliver stability for our farming sector and it must allow farmers to plan ahead. They want to know that the support mechanisms that are in place will be there for some time to come. We welcome the minister's comments about the LFA support scheme being secure, because that has caused concern for many people in Scotland.

We do not want to see Tony Blair, the UK Prime Minister, go to Brussels and use our farmers as political pawns by raising, out of the blue, the prospect of further reform of the CAP just after our own industry has come through a period of transition. However, our farmers are resilient and will overcome any obstacles that are placed in their way.

We welcome this week's good news about the beef export ban being lifted. That is a great boost for the beef sector. We must now market our beef in Europe to ensure that it gets back on to supermarket shelves and dinner tables as soon as possible. As the minister said, we must recapture markets that may have been invaded by other markets from around the world through the increase in imports to the European Union.

Our farmers seek an assurance that Government intervention will not simply amount to policing the common agricultural policy or implementing European directives. Our farmers want to be assured that ministers' interventions in the industry will be about increasing profitability and incomes for farmers the length and breadth of Scotland. Customers and consumers rightly demand quality food that is produced to the highest animal welfare standards. However, despite the fact that the farming community has been meeting those demands, the market is still failing our primary producers in Scotland. We know that from the poor farm-gate prices that we have witnessed in recent years.

We just have to look at the dairy sector for that to be confirmed. Over the past six years, one in four dairy farmers in Scotland has gone out of business. On our supermarket shelves, milk is cheaper than water. Currently, the farmers get only 18p or 19p a litre, but milk on supermarket shelves sells for 54p a litre. Today, Asda has announced that it will cut the price of milk and that it and not the farmers will take the hit. Of course, the farmers are expressing concern that Asda's cut could lead to a price war between the supermarkets and even more of a squeeze at the bottom of the supply chain, which is where the farmers find themselves.

When we debated agriculture in 2000, we discussed the fact that the farmer got only 15p of every £1 that was spent on groceries. We are now in 2006 and I think that few members would expect the situation to be much better six years on. We do not know what the figure is now; perhaps the minister can investigate that. We know, however, that the supermarkets in Scotland are abusing their power and taking more than their fair share of every £1 that is spent on groceries.

In recent weeks, Kettle Produce Ltd, which is a major customer for many farmers who produce vegetables, announced a loss of £800,000. In the past few days, Marks and Spencer has sent out a letter to all its suppliers announcing, out of the blue, a 5 per cent cut in what they are paid. There is no negotiation—the cut is being made on a take-it-or-leave-it basis. That is a straightforward abuse of power. Marks and Spencer is usually regarded as one of the better supermarkets in terms of its treatment of suppliers.

Of course, farmers are in a David and Goliath situation. They want to know that the minister will get behind David in this battle and do everything that he can to ensure that there is more fairness and transparency in the sector's supply chain.

We welcome today's announcement by the OFT about the likelihood of an investigation. Of course, that is not necessarily directly related to what we are discussing, but it could have an indirect benefit for our farmers should the supermarkets' powers and their dominance of the grocery sector be curbed in the future. However, our farmers must be able to give evidence privately to the OFT investigation because we know of the blackballing and other despicable practices that are undertaken by some supermarket chains in Scotland. For example, they cancel orders at short notice or demand two-for-one offers for the supermarket shelves at the supplier's cost—again, the supplier has no choice in the matter. Many of our suppliers do not even have a proper contract with the supermarkets and the contracts that they have can be cancelled at short notice, leaving the suppliers to carry the pain.

We must arm our farmers and that can be the purpose of the strategy. We must ensure that our farmers have information about what consumers want, so that there is a demand for their produce and they can produce the right kind of products. The supermarkets would then have to stock what the consumers want. We need a level playing field for our farming industry, which means that the imports on supermarket shelves must meet the same strict criteria that produce from this country must meet. Currently, the playing field is unfair. For example, beef that comes in from Brazil or elsewhere in South America does not have to meet the same animal welfare or quality standards that are laid down for beef that is produced in this country. That situation is unfair and it must change. Country of origin labelling would help; if such labelling were clear on products, consumers would be educated about what they are buying.

Addressing the issue of red tape would be another way of achieving a level playing field. Time and again, farmers come to our surgeries to complain about red tape and the amount of paperwork that they must undertake each day of the week. Indeed, the farmers say that one of the directives that the minister will implement will mean that they will not be allowed to keep field stones in their fields because they will be deemed to be commercial waste. The minister must ensure that that ludicrous directive does not lead to a ludicrous situation. I know that he is looking into the matter, but that is an example of the unreasonable red tape and regulations that our farmers have to deal with.

We can help our farmers by increasing the demand for local food. In its public procurement, the Government has huge influence over that. It can increase the demand for local food in our schools, in the public sector and in Government sectors. That would greatly help our farmers. Let us think global but eat local, as one witness said to the Environment and Rural Development Committee during its inquiry into the supply chain. Doing so would cut food miles and help the environment.

We have to help our farmers to access new customers and not only the supermarkets. We have to consider energy crops; that issue is now high on the agenda. Our farmers can be recruited to tackle climate change and global warming by growing energy crops. Biodiesel is an option for farmers. They can grow willow for co-firing in our power stations. It is said that one area of set-aside the size of a football pitch could grow enough oil-seed rape to power 20 cars. Set-aside in Scotland amounts to 100,000 football pitches, which means that 2 million cars could be supplied with biodiesel thanks to our farmers.

We agree with many measures in the strategy. There is a lot of motherhood and apple pie, and no one could disagree with much of what the minister said in his opening speech. However, the SNP will address three or four major challenges in our speeches in this debate. Those challenges, which must be the minister's priorities, include dealing with supermarket power, the need to improve local food, and the need to find new markets.

Our farmers contribute a lot to Scotland. We have to ensure that they play on a level playing field and have a prosperous future. We can do that if we tackle some of the challenges. We must ensure that the industry remains viable and attractive to new blood, so that it is around for generations to come. I urge members to support the SNP's amendment.

I move amendment S2M-4081.4, to leave out from "and approves" to end and insert:

"while approving many of the actions outlined in the strategy, regrets the lack of support and initiative from Ministers for the farmers' campaign to curb the power of the supermarkets and secure a more equitable trading relationship throughout the supply chain; calls for more effort to allow agriculture to compete on a level playing field by addressing the issue of inferior imports and costly red tape; further calls on Ministers to do more to promote locally produced food, especially through the use of public procurement, not only to boost the industry but to cut the number of food miles, and urges the Executive to accelerate the production of energy crops."

Photo of Ted Brocklebank Ted Brocklebank Conservative 3:17 pm, 9th March 2006

It has been a long time since Scottish agriculture had much to celebrate. We welcome the lifting of the EU's iniquitous ban on United Kingdom beef.

As everybody knows, Scottish beef is the best in the world. As the minister said, beef exports a decade ago were worth £120 million. With inflation alone, that figure would by now have reached some £200 million. That would have been a considerable amount of money for Scotland in exports. To European consumers who have been denied Scottish beef over the past decade, I say, "You have a gastronomic treat in store." To our beef cattle producers, I say, "Go forth and multiply your herds." I wish that I could be as positive about other aspects of the farming industry. Against a background of uncertainty and despondency throughout the sector, it brings no pleasure to report that average wages for Scottish farmers are currently £13,000 a year. For those who can do the maths, that is approximately a quarter of what members of the Scottish Parliament are paid. Of course, many farmers are funded at an even lower rate. Even more disturbing is the fact that the median age for farmers in Scotland is around 60. The next generation is simply not coming through.

At last week's NFU Scotland conference, the president, John Kinnaird, identified the factors that were driving the lack of confidence: poor farm-gate prices; uncertainty over the future of support payments; and the increasing and costly burden of regulation—we have been hearing about that. Although we can welcome and support the vision part of the Executive's, "A Forward Strategy for Scottish Agriculture: Next Steps", real leadership requires more than an industry-approved wish list in an expensively produced document.

Rural Scotland no longer knows what is expected of it. History shows that when the farming industry does not know where it is going, the result is confusion, misunderstanding and despondency. Nowhere has that been more apparent than in the dairy sector, where more and more producers have chosen to vote with their feet and get out of the industry. The industry can no longer afford to sell milk at farm-gate prices that are lower than the cost of production.

People who soldiered on under the old subsidy system in the hope that things would improve have seen their hopes dashed with decrease after decrease in the farm-gate price. The most recent decrease happened only eight days ago.

Photo of Mr Andrew Arbuckle Mr Andrew Arbuckle Liberal Democrat

Is the member aware that milk production in Scotland has increased? Although the number of producers has decreased, the amount of milk that is produced has increased. I would have thought that that was good Conservative policy.

Photo of Ted Brocklebank Ted Brocklebank Conservative

As a farming journalist, perhaps Mr Arbuckle would be happy to tell the producers who have had to get out of the dairy sector that it is good that they have had to give up doing the only thing that they can do.

Today's decision by Asda to slash its price by 9p a litre only proves how much room there is for cuts in the price of milk.

Photo of Ted Brocklebank Ted Brocklebank Conservative

No, I will carry on for a little while.

As we have heard, Asda's action could well trigger a price war as other supermarkets join in. Guess who the eventual casualties of such a war will be.

Photo of Tommy Sheridan Tommy Sheridan SSP

Does Ted Brocklebank agree that Asda cannot cut the price of milk at the expense of workers' wages and workers' representation? Asda is trying to derecognise the trade unions, which is not acceptable.

Photo of Ted Brocklebank Ted Brocklebank Conservative

I have a lot of sympathy with what Tommy Sheridan says. Asda says that it is funding the decrease in price out of its profit margin, but who knows how the other supermarkets will fund similar cuts. The price might be forced down to the detriment of workers in all sectors of the food production industry.

No one could fail to have been shocked by the fact that producers from all sectors recently gave evidence to a parliamentary committee under the cloak of anonymity because they feared what public criticism of the supermarkets might do to their businesses. We heard from vegetable producers who were tied to long-term contracts by supermarkets that could fix whatever price they wished to pay for the produce. We heard of farmers who were commissioned to produce and package food items for a particular supermarket, only to learn—days before delivery—that the order had been cancelled. Dairy farmers repeatedly pleaded with us to find out why the lowest farm-gate prices in Europe are paid to Scots producers when some of the highest milk prices in Europe are charged by Scottish supermarkets.

Whether the Environment and Rural Development Committee can provide the answers to those questions is yet to be seen, but it must be noted that the Westminster committee that carried out the same investigation over a far longer period failed to come up with any answers. The truth seems to be that there is something rotten somewhere in the supply chain between the producers, the processors and the retailers. Unless the committee can get straight answers to straight questions at the 11th hour, my fear is that our inquiry into the food chain in Scotland will come up with precious few answers. Notwithstanding what Andrew Arbuckle said, that will come as scant comfort to the milk producers in the south-west and elsewhere who cannot diversify because it is simply impossible for them to use the land on their farms for anything other than dairy farming.

Farmers have a responsibility to ensure that they deliver the right product to the supermarkets at the right time and to the right specification, but the supply chain and the Executive have a responsibility to ensure that the market does not fail farmers who do precisely that. Quite simply, the supermarket code is not working. I welcome today's announcement that, nationally, the Office of Fair Trading is to mount an inquiry into the supermarket dominance of the UK grocery market.

I will use the time that I have left to discuss diversification. In particular, I ask the minister what support and pump priming the Executive is prepared to offer farmers who wish to diversify into areas such as agri-forestry and, specifically, into the large-scale production and processing of oil-seed rape for biodiesel.

I have been approached by farmers in the part of Scotland that I represent who are keen to become involved in a major expansion of oil-seed rape, which, as the minister knows, grows well in Scotland, from the Borders to Orkney. Those producers need to be confident that the Executive recognises the market's potential, especially given the increase in fossil fuel prices and the environmentally friendly nature of the diesel that is made from oil-seed rape. They must also be confident that the Executive will work with the Treasury to ensure that the duty on biodiesel is reduced to make it competitive with traditionally produced diesel.

At the moment, there are only 25 filling stations in the whole of Scotland at which biodiesel can be bought. What steps can the minister take to encourage councils and others to use environmentally friendly fuel in their vehicles—I understand that the Forestry Commission Scotland has adopted such a policy—thereby helping to build up the supply chain? I believe that if the Executive is to restore confidence to the agriculture sector, it must adopt just such a proactive, imaginative approach. I commend the Conservative amendment to Parliament.

I move amendment S2M-4081.1, to leave out from "welcomes" to end and insert:

"notes the aims for the Scottish agricultural industry set out in A Forward Strategy for Scottish Agriculture: Next Steps and acknowledges that the vision outlined in that document is one with which we can all agree; notes that under Scottish Executive stewardship, Total Income from Farming statistics show that returns are down by 11% and average net farm incomes have fallen by 34%, indicating that the agricultural sector is beleaguered by uncertainty and despondency, and calls on the Executive to act to restore confidence to the sector in order to reverse the current trend of young people deserting the land."

Photo of Maureen Macmillan Maureen Macmillan Labour 3:25 pm, 9th March 2006

I welcome the publication of the agriculture strategy. I note that although it is a strategy and not a definitive list of every single aspiration we have for farming and crofting, nor is it a detailed route map of how we can get from where we are now to where we want to be. However, it gives unequivocal signposts on the direction in which we wish to travel. Many of the issues that are highlighted in the strategy have been discussed recently in the Environment and Rural Development Committee.

We all realise that this is a time of transition for agriculture, from grant payments linked to production to payments linked to good land management, but we should not underestimate the uncertainty that many farmers and crofters feel about their future. The old certainties have gone and people are asking themselves what agriculture's purpose now is and what farming will be like in the future. Those are serious questions.

Nearly 80 per cent of Scotland is agricultural land of some sort; we have to use it in a way that will bring well-being to our rural communities and which will protect and enhance the environment. We have to grow food—we should grow it locally and the people who grow and produce it should get good prices for it. Public procurement must support local production. At the Environment and Rural Development Committee recently, neither Ross Finnie nor the Deputy Minister for Enterprise and Lifelong Learning were able to tell us how public procurement could be used to support local production. Surely there exists in the Executive expertise in finding ways of writing contracts that support local farmers and growers, but which would still be European Union compliant.

Photo of Stewart Stevenson Stewart Stevenson Scottish National Party

Is the member aware that the Welsh Assembly includes in its contracts conditions such as "Potatoes must have been harvested in the 24 hours before delivery", which promotes the use of locally sourced products? Could that be done in Scotland?

Photo of Maureen Macmillan Maureen Macmillan Labour

I am aware of that—it was one of the possibilities that was raised in the Environment and Rural Development Committee. To put the emphasis on freshness might not be enough, however, so we have to think of other approaches. One of the witnesses at the recent inquiry into supermarkets said that "local" should mean Scotland-wide and should not just apply to a small area.

Farmers need to know that they have markets for their produce. They need to be able to keep up to date with consumer demand and to work co-operatively with processors and retailers, but co-operative working has been difficult to achieve. As we have heard, there are issues about how the food-supply chain operates and where exactly the money sticks in that chain, but there are also issues to do with co-operation between producers and processors. We appreciate that that problem cannot be solved by the Scottish Executive either, and that it is a matter for the Office of Fair Trading, but we have to work with our colleagues in the United Kingdom Government to put pressure on the OFT to address it. I note the Executive's commitment on that.

I welcome, too, the commitment to encourage innovation and new product development. Farmers will have to be proactive and to work with one another. I am interested to see the proposals for an internet information portal for farmers, processors and so on. Internet sites are already being set up locally to connect producers with local shops and hotels. I would like to see that practice widened.

Support for diversification will be crucial for successful rural development. I welcome the inclusion of energy crops and biomass in the section of the document on rural development. I look forward to the swift development of policy in that, not all of which is in the gift of the Executive. Agriculture policy can play a key role in mitigating the effects of climate change, for example by making it worth farmers' while to invest in woodland. Growing woodland is a long-term commitment rather than a cash crop, but it has benefits that go beyond the provision of biomass; for example, there is potential for benefits to leisure and tourism. I would be interested to hear how the minister will encourage farmers to invest for the long term in woodland. Can that be done through land management contracts?

Land management contracts could be used boldly and flexibly to encourage farmers to embrace new ways of working. I am still waiting to hear whether the Executive will use those contracts to encourage farmers to restore wetlands to their original purpose of acting like sponges when rivers flood. That has been done on the Spey, but many other rivers could benefit from it—the Tay is a good example. As climate change progresses, flooding will be more prevalent and we will need such schemes. How are farmers to be encouraged to go down that road?

Protection and restoration of the environment are as important as—but not more important than—the social and economic dimensions of agriculture. Farmers like to think that they have always been the guardians of the countryside, but that is not necessarily true. Some farming practices have damaged the environment in the past. I hope that such practices are left firmly in the past.

The vision in the strategy is one to which we can all sign up and one that I believe will lead to sustainable farming and crofting, and to a sustainable wider rural community.

Photo of John Swinney John Swinney Scottish National Party 3:31 pm, 9th March 2006

Agriculture is an industry that has to be assessed for the long term so that we can determine the impact of particular changes and circumstances and develop a comprehensive picture of its prospects.

I will begin by talking about the industry in my constituency in the past 10 years. When I was elected to Westminster in 1997, the agriculture sector in my constituency was in a perilous situation in the immediate aftermath of the outbreak of BSE. That, coupled with the outbreak of foot-and-mouth in parts of Scotland in 2001, meant that the prospects for the sector were poor. I am glad that, from carrying out the long-term review, we can say that there are a number of points about which we can be more optimistic. The minister was right to speak on behalf of the whole Parliament about the impact of the lifting of the beef export ban and how that improves the prospects for Scottish agriculture. We have to consider carefully the issues that are of concern, but there are also issues about which we can be slightly more optimistic.

Photo of Alex Fergusson Alex Fergusson Conservative

Given that veal crates are on the verge of being made illegal throughout Europe, and given the much-improved conditions of transport, does the member agree that it is equally important that we try to reopen the live export market, which would bring huge financial benefits to the dairy sector, just as the beef sector has benefited from yesterday's announcement?

Photo of John Swinney John Swinney Scottish National Party

Mr Fergusson makes a fair point. Obviously, however, the animal-welfare issues have to be properly assessed and considered.

In considering the long-term perspective, to which the agricultural strategy document refers, we have to be aware of what has happened to agriculture in the past 10 years. The document states that over the past five years there has been an increase of about 40 per cent in income from farming. However, in the past 10 years, total income from farming in Scotland has fallen by 50.3 per cent. I see that members are questioning the figures that I have given: I state for the record that in 1995 total income from farming in Scotland was £878 million and in 2005 it was £436 million. There has therefore been a 50.3 per cent decline in real terms in total income from farming. That is the context of what has happened to the industry over the past 10 years.

I urge ministers to do all that they can to reduce cost burdens on the industry, which is having to deal with a host of cost burdens while trying to remain afloat. Producers in my constituency tell me that the cost of fuel for agricultural vehicles is rising by between 40 and 50 per cent. Electricity costs are rising—as they are for most people—by about 30 per cent, as are fertiliser costs. There are significant increases that are not matched by increases in income through producer prices, which will undermine the total income from farming in the period ahead. I urge ministers to minimise the additional burdens that they put on farming, which might impact on costs.

I turn to regulation. In an intervention on the minister, I raised some of the practical issues that are involved in the measures that the Government is to introduce in translating the European Union water framework directive into domestic legislation. Farmers want to co-operate with the Government in the process of compliance with the directive, but as things stand, they do not have access to the information that will allow them to complete the forms that they need to use in the application process. The deadline for applications is 31 March, but as at today—9 March—farmers do not yet have the information. Whatever their walk of life, people are entitled to reasonable time in which to access information that is critical to their needs. I urge ministers to publish speedily the documentation and to ensure that it is made available to farmers. That is only one example of the increased regulatory burden on farmers Already in the debate, the minister has discussed supermarkets and their dominance in the market: I welcome the announcement that the Office of Fair Trading has made today that it is to examine the issue. A detailed interrogation of the food-supply chain is needed if we are to guarantee that producers—who are largely being made to carry the can in this regard—are given a much fairer and better deal than they have been given to date. I urge ministers to look carefully at the way in which costs and regulation are treated, the aim of which should be to minimise cost burdens. I encourage ministers to operate with zeal in assisting farmers to strengthen their position in the supply chain and in marketing Scottish produce.

Before I close, I have one point of irritation to raise on the new regime. Maureen Macmillan also mentioned it. I refer to the single farm payment regime. I am glad that payments are now being made and that they are producing a bit of stability for people in the industry. However, one of the points of irritation that I have with the new regime is that farmers who have left the industry are able to claim single farm payments even if they rent only a very small piece of largely unproductive land. That practice is going on in my constituency and is prejudicing the abilities of good people to expand their agricultural enterprises. They cannot do so because the single farm payments are being held by people who are no longer involved in agriculture. In one constituency case—with which the minister is very familiar—two individuals who are in receipt of the single farm payment live in Canada and South Africa. It is an absolute obscenity that money is being spent in this fashion and that good and decent people who want to make a living and to build our rural communities cannot do so because the money that they need is going out of the country. I hope that the minister will do everything in his power to bring that obscenity to an end.

Photo of Mr Andrew Arbuckle Mr Andrew Arbuckle Liberal Democrat 3:38 pm, 9th March 2006

I congratulate the minister for his achievements and for his efforts in getting the beef ban lifted. The minister was halfway through his speech before he mentioned the lifting of the ban; until that moment, I thought that he had been overcome by a bout of shyness and reticence on the subject.

The reality is that we will never get back to the tonnage that we used to export a decade ago. We managed to export so much beef at the time partly because of the weakness of sterling under the then Tory Government. That said, the lifting of the ban has given a tremendous psychological boost to the industry: the tonnage may not be great, but the lifting of the ban is no less important.

A decade has passed since the doors banged shut. Throughout the intervening period, the perception abroad was that there was something wrong with Scottish beef. We knew that that was not true, but it still became the perception. The ban was not lifted not because of any question about the quality of the product but because of political manoeuvring and machinations abroad.

I also congratulate the Scottish Executive Environment and Rural Affairs Department on getting a large percentage of the single farm payments out to farmers. We are well ahead of the position in England. I share John Swinney's concern about the money that is being lost to productive farming. I am in the strange position of having two brothers who have retired from farming, one of whom is getting the single farm payment while the other, who retired two years earlier, gets not a penny. The single farm payment is causing a family problem for me.

Before I proceed, I want to say to Stewart Stevenson that what he said about the potatoes that the Welsh parliamentarians eat being harvested 24 hours before they were eaten is total mince. Stewart Stevenson is a former pupil of Bell Baxter high school, so he should have been taught that if potatoes are not lifted by the end of October they will freeze or become waterlogged. Unless the National Assembly for Wales does without potatoes from the end of October until May, Stewart Stevenson's information is wrong.

I think that I am the only person present—apart from the minister—who attended the official launch of the Executive's forward strategy for Scottish agriculture in 2001. At that time, farmers were still receiving production subsidies and the reform of the common agricultural policy was far from complete. In that context, the strategy document set out a radical agenda for the future of what was, and still is, one of Scotland's largest industries. The launch generated comment in the agricultural press because the photomontage of Scottish agricultural products on the document's cover showed a pig, not in a field or a sty, but against a blue background, which led one cynical journalist to wonder whether it was supposed to represent pigs flying.

Five years later, it is obvious that pigs do not fly in the Scottish agricultural economy and that financial rewards have to be earned in the marketplace. Some sectors that were traditionally outside the support system have received a return from the marketplace for many years: the soft fruit, potato, poultry and pig sectors have long known about the demands of exacting customers, especially supermarkets.

I agree with John Swinney that the increased costs of fuel and fertiliser are a big issue for agriculture. People who are used to working in a market economy are suddenly facing increased costs of production but can do nothing about that.

Photo of Richard Lochhead Richard Lochhead Scottish National Party

The member mentioned higher transportation costs. Does he agree that one of the beauties of growing energy crops is that farmers might become self-sufficient in their energy needs in a few years' time?

Photo of Mr Andrew Arbuckle Mr Andrew Arbuckle Liberal Democrat

The Executive's strategy document mentions energy crops. There is support for biofuel crops.

Traditional sectors such as beef, lamb and cereals have taken more time to change from the old system of subsidies to the new one. Currently, many farms' returns are lower than their costs of production. However, the minister was right when he told the National Farmers Union Scotland last week that the top 25 per cent of the sector is doing well and is operating on the plus side of the balance sheet. That is important. As the minister said, we must raise standards. It is inevitable that the changes that the industry is experiencing will cause pain. Those who are less able are leaving the industry, perhaps at a higher rate than is generally known.

Change is on the way and it will be helped by the recommendations in the strategy document. The monitor farms initiative, which the minister mentioned, allows neighbours openly to compare their efforts and to identify areas in which they can trim costs. The NFUS was right yesterday to support the strategy document's call for more and better communication within the industry. I am pleased that the Executive wants to promote the production of green energy crops—I agree with Richard Lochhead on that. Scottish farmers would readily support a biodiesel initiative and the forestry industry is equally enthusiastic about biofuel.

The strategy document says that a quarter of farms in Scotland generate an income from sources outwith crop production. Such diversification is welcome.

The industry faces hurdles, such as supply to the big supermarkets that have massive purchasing power. I am glad that the Executive promotes collaborative supply chains to achieve sustainable contracts for primary producers and I welcome the minister's news that the OFT has taken up the issue.

I agree with John Swinney that bureaucracy is a bugbear for farmers. The bureaucracy that is associated with the Scottish Environment Protection Agency's implementation of the European water framework directive is a particular problem. I am glad that there has been a shift of position from the approach that SEPA first proposed—the question to whom credit is due for that is irrelevant—but further moves are required to bring the approach into the realms of common sense.

If we in Scotland want a successful and enterprising agriculture industry, we must help it to achieve that by ensuring that it is not overly burdened by bumf. I support the proposals in the "Next Steps" document.

Photo of Alex Fergusson Alex Fergusson Conservative 3:45 pm, 9th March 2006

It is interesting to follow what sounded like a winding-up speech, even though we are not yet at that stage of the debate. As a former farmer—I draw members' attention to my entry in the register of members' interests in that regard—I welcome every opportunity to discuss agriculture in Parliament. It is more of a pleasure to do so following yesterday's joyous news that the beef export ban has at last been lifted and today's news that the OFT is to reopen its investigation into supermarket activity. Those are two rare pieces of good news for an industry that is desperately in need of more—it has been agonisingly short of good news in recent years.

As our amendment states, the aspirations that are set out in the updated forward strategy document are hard to disagree with. However, we also highlight the reality in the farming world that there is despondency and uncertainty about the present and future prospects for agriculture, which are at a level such as I have never witnessed. The situation has been brought about by a lack of profitability in almost every sector. On that subject, the document is mischievously devious. It trumpets the fact that, since 2000, net farm income has risen by 202 per cent, but the truth is that a 202 per cent rise from practicality nothing equates to net farm income in 2004-05 of just £13,122. According to the strategy, net farm income

"measures the level of return to the farmer and spouse for their manual and managerial labour".

A return of £13,122 is pretty scant reward for that input and, although it may be 202 per cent up on the 2000 figure, it is down 11 per cent on the previous year. That points to the real damage to the rural economy, which continues to deteriorate under the Scottish Executive.

Photo of Alex Fergusson Alex Fergusson Conservative

I do not think so. Mr Arbuckle has just spoken, and very well.

As I have said before and will no doubt say again, when a farmer stops spending, he is the last to suffer, because all the suppliers, tradesmen and contractors who depend on him suffer first. When they do not get work, the economic chill enters the village shop, pub, post office and local microbusinesses, which contribute greatly to the rural economy. That is why I agree totally with the second bullet point of the vision on page 1 of the strategy document, which is that the farming industry should be

"a major driver in sustaining rural development" and in "helping rural communities prosper". That is exactly right, but the problem is that practitioners in the industry are not being made to feel that they are major drivers of anything; they are too busy trying to ensure that they do not make mistakes when they fill in the massive array of forms to which members have referred. I note in passing that, although the Executive established a committee to cut red tape and bureaucracy, it has in fact presided over a massive increase in it.

Farmers must concentrate on filling in forms, because if they make the tiniest mistake in doing so, they are penalised ferociously. The imposition of massive penalties, the levels of which grossly outweigh the supposed crime that has been committed, has done more to undermine farming morale than any strategy can ever correct. The Environment and Rural Affairs Department has stooped pretty low lately in withholding, until the farmers have paid the penalties, single farm payments from farmers who are appealing such penalties. None of that leaves any farmer feeling that their political masters believe that he or she has a major role in driving the rural economy. Farmers are too concerned with surviving to be driving.

In an effort to be positive, which I always try to be, I will in my remaining time focus on one little ray of sunshine in the strategy. Action point 12 refers to the planning to succeed initiative, which was one of the few positive things to emerge from the foot-and-mouth disease disaster of 2001. It should be a matter of great concern to all members that the average age of farm managers is 58 in Dumfries and Galloway and 56 in Scotland. The planning to succeed initiative was developed by Scottish Enterprise Dumfries and Galloway along with the original farm business steering group in order to encourage more young people to take effective management roles in the industry and to drive it forward.

The initiative has been successful and I welcome the plan to expand it, but I ask the minister whether its remit could be expanded to include rural business leadership courses. Last Tuesday, I hosted a visit to Holyrood by representatives of a south of Scotland rural leadership pilot project, which is aimed at developing leadership skills in the rural community. It aims to equip future leaders with a set of leadership tools that are designed to help rural businesses to lead the way to success and to enable them to continue to contribute to the local economy. It is based on an American model that has enjoyed considerable success. Although it is not wholly agriculture related, I believe that it would sit well within the planning to succeed programme. I hope that the minister will consider that possibility.

I take this opportunity to put on record my thanks to the cross-party group of MSPs who spoke to the group of people who came to Parliament and gave of their time to make the day valuable.

The aspirations of the strategy are fine—no one is arguing with them—but will they deliver to the agriculture industry the clear and decisive pointer that it desperately needs? I rather doubt it. The document is subtitled "Next Steps". Let us hope that those steps are in a forward direction for the sake of our agriculture industry, which remains the single most important driver of our rural economy.

Photo of Trish Godman Trish Godman Labour

I call Alasdair Morgan, to be followed by Eleanor Scott. Sorry—I meant Alasdair Morrison. I was just testing you, Alasdair.

Photo of Alasdair Morrison Alasdair Morrison Labour 3:50 pm, 9th March 2006

I accept your apology, Presiding Officer.

This has been an important seven-day period for all who are involved with agriculture in Scotland. Last Friday, the strategy document that is under discussion today was published, as was the Crofting Reform etc Bill, which was launched by Rhona Brankin in Inverness. Yesterday, as other members have mentioned, we learned that the 10-year export ban on Scottish beef has been lifted. That is a welcome, although overdue, announcement. I am sure that Ross Finnie, Rhona Brankin and the department will do their utmost to assist farmers and crofters to reclaim lost markets and exploit new ones. It is especially good news for those who used to be involved in the live trade with European countries. I agreed with Alex Fergusson's intervention on John Swinney's speech.

Speaking of John Swinney, I cannot recall the last time that I applauded a John Swinney speech. Indeed, I cannot recall ever applauding a John Swinney speech; however, I applaud the points that he made in relation to the single farm payments being given to people for non-activity in agriculture. That nonsense is amplified when money is being wired across continents—I think that he mentioned Canada and South Africa. I assume that both ministers are addressing that issue as a matter of urgency.

Photo of Alex Fergusson Alex Fergusson Conservative

Does Alasdair Morrison not see that there is a case for single farm payments being made to some farmers who are of an age and need to retire? Such payments would allow them to remain on holdings where they may have lived all their lives and enable young entrepreneurs to take over the tenancy of their farms at a low rent, thus expanding their businesses.

Photo of Alasdair Morrison Alasdair Morrison Labour

Although that is a valid observation, it is not the point that John Swinney raised. I am sure that both ministers are aware of those issues.

Yesterday's announcement was important for crofters who sold pedigree cattle at excellent prices to buyers throughout the European Union. With some legal formalities to be finalised, I hope that resource and political capital will be put at the disposal of those who wish to resume trading across the continent.

I want to mention a few matters of importance to the thousands of crofters who live in the Western Isles. One of the phenomenal success stories of agricultural support was undoubtedly the crofters building grants and loans scheme, which provided support to enable many families to build their own homes. The scheme ensured that people continued to live and work in the crofting counties. It was recently revised, and I was pleased to learn from Rhona Brankin that, in the past year, 88 individuals have secured a grant of £22,000 to build homes on crofts. I hope that ministers and the department are monitoring closely how that system of support is working.

I serve notice of the fact that, when the system is formally reviewed in January next year, I will press for an uplift in the amounts that are available to crofters and their families. The level of support has certainly not been tracking the rise in building costs—a rise that is far more pronounced the further people are from large centres of population. I hope that the review of the croft house grant scheme will also examine the issue of the loan that used to be a feature of the old system. I know that the minister will have an open mind when it comes to the review, and I have served notice of what my contribution will be to that review in the early part of next year.

Last Friday, in Inverness, Rhona Brankin published the Crofting Reform etc Bill. I am delighted to serve on the committee that has been charged with examining the bill. Yesterday, at the Environment and Rural Development Committee, we discussed how, when and where we will hold our evidence-taking sessions. Many welcome and needed changes are proposed in the bill.

Regrettably, however, in spite of repeated attempts to secure changes to the principal area of contention—allowing a free market in croft tenancies—the bill, as drafted, proposes that we legislate to allow just that: a free-for-all. Like any other piece of land, crofts will be bought by and sold to the highest bidder.

I have no doubt that the proposal to allow a free market in croft tenancies will be the most contentious aspect of the bill that we will debate over the next few months. It will be not only the focal point of my efforts; it will be the issue that will ultimately determine how I vote on the bill. I can assure the ministers that I will not be party to, or involve myself in any way, shape or fashion in, the promotion of legislation that would dismantle a system that has protected the interests of crofters and families for generations—a system that has helped underpin many of the villages and communities that I represent.

After Labour came into government in 1997, a green paper was prepared that outlined what was needed to reform the system of land ownership here in Scotland. After this Parliament was established, we were to develop that document and place on the statute book legislation that generations of highland socialists had campaigned for. However, the first draft of the Land Reform (Scotland) Bill that we discussed bore little resemblance to the document that had been left to us by Labour ministers in the then Scottish Office. It had been sanitised by cautious and unsympathetic civil servants. It took months to restore to the bill the radicalism that had featured in the document that had been produced by the ministers, Brian Wilson and Calum MacDonald. However, we restored that radicalism, and we ensured that sound legislation was passed.

Why do I make that historical footnote? Because I believe that the same forces are at work in relation to the Crofting Reform etc Bill as were at work in the abortive attempts to sanitise the Land Reform (Scotland) Bill. Some people in the civil service obviously do not understand, and do not want to understand, what the crofting system is. In their eyes, it is an irritant.

It will come as no surprise to both ministers that this MSP will not sit idly and nod in agreement to proposals that will destroy our precious crofting heritage. I am looking forward to engaging positively with Rhona Brankin in both formal and informal committee sessions. I am also looking forward to engaging with people who will help inform and, ultimately, transform, the Crofting Reform etc Bill that is now before us. Once that job is done, we will genuinely have a forward strategy for agriculture and a forward strategy for the future generations who will continue to live and work in the crofting counties.

Photo of Eleanor Scott Eleanor Scott Green 3:57 pm, 9th March 2006

As other members have said, there is little to disagree with among the aims of the strategy document. It is a pity, however, that those aims are not backed up by targets or firm commitments. The document is not a full review of the Executive's agriculture strategy: it was produced by the agriculture strategy group and was not consulted on more widely. I will be interested to hear whether the Executive intends at some point to conduct a full review.

I recognise that the minister must make difficult choices, particularly with respect to agri-environment schemes. He has already made it clear in response to questions that if the organic aid scheme runs out of money, which seems likely judging by the budget as it is currently presented, he will top it up from the rural stewardship scheme. I am pleased that the minister has pledged to meet any commitment to the organic sector, but I note that the RSS has been successful in delivering environmental goods in many areas. I would be concerned if that scheme ended up being underfunded.

We have heard from the minister today about the increase in applications. If there are two, competing, demand-led schemes, that seems to be a recipe for disappointment. That highlights the problem with the current subsidy arrangements. I argue that the single farm payment delivers little in terms of public good. The only stipulation—

"keeping land in good agricultural and environmental condition"— merely avoids deterioration. The historical basis on which the single farm payment was decided will become untenable the further we get from the reference year. I hope that, sooner rather than later, we will move to a different system, which reflects current needs and adequately funds the pillar 2 measures that are so important for maintaining our landscape and biodiversity.

Like everyone else here, I want a sustainable future for our farming industry. Where political support and leadership are needed, I think the Scottish Executive should provide it. I think it is clear—even the Office of Fair Trading seems to be admitting this at last, to judge from today's announcement—that there is a gross imbalance of power between producers and some sections of the market. I do not believe that the Scottish Executive has fought hard enough for farmers in that respect, and I look forward to the Executive's response to the Environment and Rural Development Committee's inquiry on the subject.

The CAP reforms were supposed to encourage farmers to produce for the market. I believe that the Scottish Executive has a role to play in directing that market where it can. It could do much more in the way of public procurement to ensure a market for high-quality local produce. Public bodies should be encouraged to source local produce where possible, and the Executive should give a clear lead on that.

The report has a section on sustainable development, which is at least a start. Under the sub-heading "Using sound science", the report mentions the need to take into account the precautionary principle. I agree with that, but I was given cause for concern by the recent report that the First Minister's office had issued a letter that appears to concur with the UK's recent shift on terminator technology. Such a shift threatens to undermine what has, since 2000, been a global moratorium on this manifestation of genetic modification. That is a retrograde step.

A system of organic production would deliver better than any other the objectives that are laid out in "The Vision" section at the start of the document. On producing food for the market, the demand for organic produce is growing and our producers should be able to reap the benefits of that. On sustaining rural development, organic production employs more people and keeps people on the land and in our rural communities. On the protection and enhancement of the environment, organic farming is about much more than just avoiding toxic chemicals as it means truly sustainable stewardship. On contributing to animal and human health and welfare, organic systems have stringent welfare standards for animals and they do not involve human handling of potentially dangerous chemicals.

With the lifting of the beef export ban, today is an auspicious day for this debate, but let us not forget that the whole sorry BSE episode was fuelled by practices that would be unthinkable under an organic regime. The strategy document envisions an industry that is keen to embrace change and market opportunities, but the opportunities already exist for organic farming. We just need the supports in place to get people through the conversion process so that they can reach the stage at which they can reap the full benefits. We need not just direct organic aid support for farmers but more investment in infrastructure, such as small local abattoirs.

I will conclude with a general point. I do not believe that our farming subsidies can continue as they are, but the forward strategy's objectives could be achieved by making better use of the money so that we invest much more in rural infrastructure and in processing and marketing. If our rural areas are to thrive, they need to have much more going on than primary production. Some of the added-value activities need to take place close to where the food is produced so that employment is created that will underpin our rural communities.

Photo of Stewart Stevenson Stewart Stevenson Scottish National Party 4:02 pm, 9th March 2006

Perhaps I may respond to Mr Arbuckle's comments at the outset. I confess that one of my sins of omission as a pupil at Bell Baxter high school was my failure to cross the road to Elmwood College for the course on potato roguing, which would have equipped my purse with sufficient money to do more things than I was able to do as someone who could howk but could not rogue. I stand corrected by Mr Arbuckle who is a fellow Bell Baxter alumnus—as is Mr Smith who represents that part of Fife.

I draw attention to my entry in the register of interests.

It must be acknowledged that farming practice is affected by nature as well as by the actions of the Scottish ministers and others in other jurisdictions. When I left home in rural Banffshire on Monday, the snow was above my eyeline on both sides of the road as I sat in the driving seat of the four-by-four. The vehicle in front, which had had to be scraped off the edge of a snowdrift, had lost its front bumper and number plate. But the first of the season's lambs were already in the fields. Not everything is under the control of the minister, so I will not attempt to blame him any more than farmers would for some things that directly and critically affect farming, although the rules that come from other jurisdictions can often hit us much harder.

Whereas weather changes are part of the usual cycle of things, the rules that come from the minister and from other jurisdictions—no matter how daft those rules might be—seem to be incapable of being dislodged. That point is illustrated by an e-mail communication that I received last night at 6.43 pm. The e-mail highlights the difficulties that one farmer in my constituency is experiencing.

Before I read the e-mail and put the matter that it contains to the minister, I draw his attention to the forward strategy's action number 21, which states that the Executive will

"Encourage farmers to make greater use of electronic information sources and on-line facilities for communication with SEERAD."

The fact that this correspondence was delivered by e-mail perhaps illustrates the rather different characteristics of broadband in rural areas.

I will read from the e-mail. I have, of course, passed a copy to the minister. I hope that, when he puts a response on the record, it will not be as intemperate as the one he gave me in the coffee lounge. Anyway, the farmer writes:

"The chiels at DEFRA ur suddenly and maist unexpectintly siccin tae withdraa the eese o' Cypermetherin sheep dip. He is awaar that there micht huv been a wee bit o' a clamjaffrey fin some o't fun' its wye intae a wee bit burnie in Wales - bit that did'na get a' the wye there fae the Buchan - as ye micht hiv jelused fur yersel. The scunner is that there is a gye shortage o alternative efficacious medicaments for the dousing o' scabby yowes - the ither being organo-phosphates and they're real coorse buggers - far waar nor cypermetherin."

I will leave a bit out there. [Laughter.] He continues:

"there's nae muckle by wye o' chemist billies tryin tae concoct ither options forbye - which leaves injectin' - bit aat's rael fichery syne, an nae muckle eese uvva."

He goes on to say that he

"his nae doot ataa that Ross Funnie 'ill nae be ower hard tae persuade that withdraan cypermetherin wis a gey ill-tricket thing tae dae - in fact, it wis doonright feel".

I hope that the minister will be able to respond in the appropriate way later in the debate, or perhaps the Highland origins of the deputy minister will allow her to do so. Of course, that is precisely the sort of language that farmers use in their local dialect when something happens out of the blue, intemperately and without consultation. That happens far too often.

Ted Brocklebank made the valid point that the median age of farmers is now 60—an age at which they will receive their bus pass from the Executive, which will be a blessed relief, I am sure. That illustrates the big problem with getting youngsters into farming and the significant barriers that prevent young people from working in the industry. I know that the minister agrees that the age profile of the agriculture industry is simply far too high.

Other countries have schemes to help new entrants to go into farming. The Department of Agriculture and Rural Development in Northern Ireland launched such a scheme on 5 June 2005. It supports the establishment of young farmers under 40 by providing an interest rate subsidy on loans. In my submission to the rural development consultation, I made the point that the minister has an opportunity to address the age profile of the agriculture industry in Scotland. I hope that the matter is still on the agenda, notwithstanding the fact that no scheme has been introduced yet.

The issue of local produce should undoubtedly be mentioned again. The Executive, in its many arms, buys a lot of food. It buys food for civil service canteens and for the 7,000 prisoners whom it houses. It can make a significant contribution both financially and by setting an example. It can show other institutions and commercial ventures that there is value in buying locally. After all, as commercial operations, the supermarkets can hardly be criticised for not buying locally and not supporting local suppliers if the Government does not do that. The minister should address that point in his future deliberations.

Agriculture continues to be at the core of the local economy in much of Scotland. Rural areas are defined as local authority areas where the population is less than 1 person per hectare. In those areas, agriculture accounts for 5 per cent of the economy, but, of course, many hamlets and small villages depend on agriculture for their survival. Too many communities become commuter shells or holiday-home shells when people have no realistic opportunity to work in agriculture. That affects agricultural engineers, veterinarians, the smithy, the mart staff and so on.

Support for agriculture is vital. It will preserve rural life, which many people who live in towns value highly. It is their countryside as well as the countryside of farmers, but the countryside of people in towns will not exist in a form that they recognise and appreciate unless we support farmers to the maximum degree. I hope that the amendment in my colleague's name will attract widespread support come decision time and I look forward to hearing more about the Executive's response to cypermetherin.

Photo of Nora Radcliffe Nora Radcliffe Liberal Democrat 4:11 pm, 9th March 2006

I wonder what the Doric word for cypermetherin is—I do not think that there is a Doric word for it.

The original document "A Forward Strategy for Scottish Agriculture" was welcome and the updated next steps document has been equally welcome, particularly because farming is at a threshold. Agriculture has come through really hard times—the nadir was perhaps foot-and-mouth, but the industry has recovered from that low point.

Until recently, the industry operated largely in an externally applied and pretty rigid framework, but those constraints have gone. Freedom is heady stuff, but it is pretty scary, too. The future is opening out ahead with all sorts of potential and opportunity, but exploiting that potential and grasping those opportunities require confidence and the courage of one's convictions. The single farm payment provides a financial safety net, but that will not last for ever, as the industry realises. The single farm payment needs to be used to fund transition into and out of the industry and transition into and out of different sectors, crops and activities.

At one time, society asked farmers simply to be food producers. They are now asked to fulfil a much wider and more complex role—as custodians of the countryside and as the backbone and foundation of the rural economy, which contributes hugely to the economy as a whole.

The occasion of the debate is the update to the agriculture strategy, which was launched last week and which the NFUS welcomed. I will pick out some of the comments that John Kinnaird made. First, he welcomed the Executive's commitment

"to work with UK authorities to address competition issues".

He has pinpointed the crux of the matter. Much concern is felt about inequities in the food supply chain. The issues are complex, as Ross Finnie is right to say. There is no use in pointing the finger at one link in the chain; it is not that easy. However, one body has the remit and the authority to investigate and sort out such issues—it is the Office of Fair Trading, which has bottled it. If the OFT is now to get to grips with delivering on its responsibilities, I am delighted to hear it.

John Kinnaird mentioned environmental regulation. I have been dismayed by how regulations under the water framework directive have been applied, at least initially. The water framework directive can deliver huge benefit, but that depends on all the stakeholders working together constructively. I sincerely hope that the process will recover from a less-than-constructive episode.

John Kinnaird also highlighted the importance of communication, which includes matters that have been mentioned, such as proper labelling and telling the public that they must look for and interpret those labels. Communication means educating people about their food, about how farming works and about the fact that the countryside is a workplace. If people are to access the countryside, they must do so responsibly.

Communication is about sharing best practice. On that subject, it is instructive to look behind the averages when discussing farm incomes. The difference in performance between the best and the worst is telling. The best show what can be done; the less good must be helped to improve to reach the standards of the best.

Climate change concerns all of us, but the resources that are deployed to combat it can offer farmers good opportunities. Some of those opportunties have already been rehearsed in the debate. Fuel crops and local energy projects represent economic opportunities that can offer good returns.

Increased access to the countryside, especially as core path networks develop, means that there will be many more people in the countryside who should be seen as customers who need services and business opportunities. The general public's increased awareness of food mile issues will deliver more local customers and more support for farmers markets and will perhaps lead to more people checking labels of products on supermarket shelves. Such awareness will also put pressure on the public sector to brush up its procurement practices.

"A Forward Strategy for Scottish Agriculture: Next Steps" has been widely welcomed, and its action points will be helpful and productive. Again I quote John Kinnaird, who said:

"It is a time of significant change for Scottish agriculture, which presents both challenges and opportunities."

The strategy offers help in finding the way forward.

Photo of John Scott John Scott Conservative 4:16 pm, 9th March 2006

I must begin by declaring my interests. I am a farmer, a council member of the Scottish Agricultural Organisation Society, a regional committee member of the Moredun Research Institute, a member of the National Farmers Union and chairman of Ayrshire Farmers Market Ltd.

Photo of Ross Finnie Ross Finnie Liberal Democrat

And a structural engineer, too.

Photo of John Scott John Scott Conservative

I thank Ross Finnie. I made a mistake.

It is important to welcome the lifting of the beef export ban, as other members have done. That is the best news that our beleaguered industry has received for a long time. I also welcome the latest Office of Fair Trading inquiry into supermarkets.

As the minister said, it is almost 10 years to the day since BSE struck in 1996. The price of fat cattle with market-ready beef has not returned to its 1995-96 levels in that time. I ask the minister what other industry in Scotland could survive in the face of constantly rising costs and regulation with incomes that are lower than they were 10 years ago. The answer is that no industry could and none has done so in that time. Regrettably, prices are not depressed only in the beef sector; dairy farmers are being forced from the industry in droves and sheep farming incomes are horrifically low. What is to be done?

First, the Government must note that, as a result of declining agricultural production, self-sufficiency in United Kingdom food production is now heading back to a level of 70 per cent, having peaked in 1984 at 82.6 per cent—I am sure that the minister is aware that it peaked at that level. That is making the country strategically vulnerable. Recently, we have seen what will happen to gas prices when the ability to produce our own gas runs out. I have huge concerns about the UK's declining ability to sustain the self-sufficiency in food production that there last was in the 1930s—I suspect that the minister is not quite old enough to remember that.

That said, I welcome in principle the Government's next steps strategy and its 22-point action plan. I accept that if all the action points were implemented, the industry would thrive and be prosperous. However, it is regrettable that many of the action points form little more than a well-intentioned wish list. Again, I ask the minister what is to be done. It is regrettable that the industry is slowly disintegrating, on his watch and before his eyes, and that he is apparently powerless to help significantly from the sidelines, notwithstanding the upbeat and optimistic tone of "A Forward Strategy for Scottish Agriculture: Next Steps".

Before the minister makes a possibly good-natured intervention, it is only fair to say what should be done and to talk about what is already happening to some extent. First, farmers and landowners must take a critical look at the likely ability of their businesses to continue with declining incomes. Such evaluation needs to assess methodically all the unused attributes of the land, the geographical location, the family that is involved and the people who farm the land. Self-sufficiency—which is ever the expected way of life of the farming and rural communities—must increase while Governments casually reduce support. That means finding other sources of income to sustain businesses that are currently subsisting on an average net farm income of £13,000 per holding.

Photo of Mr Andrew Arbuckle Mr Andrew Arbuckle Liberal Democrat

Is the member aware that that net farm income figure includes rental? The majority of farmers are owner occupiers and do not pay rental, so the figure does not indicate the true picture.

Photo of John Scott John Scott Conservative

I thank Mr Arbuckle for his helpful intervention. Is he aware that net farm incomes are no higher today than they were 10 years ago?

Farmers markets, catering and, indeed, politics have helped me to diversify. Every family that is left in mainstream farming has a duty to future generations to see now where other income streams can be found. In these times of adversity, co-operation has a huge role to play in supporting people with entrepreneurial and business ideas, so that they can take them further, initially often in a part-time way, with neighbours and other like-minded people. Farmers markets are the best and most recent example of such co-operation. We now need to consider the next step in developing such markets. In Ayrshire, a farm shop has just been opened at Auchincruive. I understand that it is the first farm shop to be operated and run by a farmers market co-operative.

Although farmers markets have been a huge success, as yet they are only a small part of the answer. Each farming business must work out for itself, perhaps with the help of advisers, what the critical path to sustainability will be. A different solution will be arrived at for each farming unit. Such solutions will range from direct selling, adding value locally and environmental enhancement to moving off the farm for part-time work. There is no point in my taking time to enumerate more of the possible opportunities, because they are infinite. However, it is important that the minister plays a role in facilitating the realisation of those ideas, which will need to be developed to allow future generations of farmers to survive.

At the same time, it is important that the unique skill set of farmers and farm workers is maintained, should the country again need to increase food production from its own resources. We must not lose that strategic capability, as we are currently in danger of doing because of the exodus of young people from the land and the aging profile of those who remain. In the meantime, Government must support unique and tailor-made diversification packages. I hope that the minister will consider putting further appropriate mechanisms and resources in place to do so. If the minister actively sells his willingness to help in that regard, farmers will respond positively. Active engagement in the process by farmers and Government is vital. The minister is uniquely placed to drive forward an enhanced diversification agenda, which is the best way of describing what I see as one of the critical paths to industry survival.

Local food procurement, which Maureen Macmillan discussed, needs to be developed further. The minister and his officials are well aware of my interest in developing the concept. That is now a matter of urgency, because every day lost is a market opportunity lost in an industry that is fighting for survival and is desperate to find outlets other than commodity selling to supermarkets.

I urge Parliament to support the Conservative amendment, which, as one would expect, offers the only reasonable way forward for Scottish agriculture.

Photo of Sarah Boyack Sarah Boyack Labour 4:24 pm, 9th March 2006

I hope that the minister has got the message that Labour members support the new strategy. We welcomed its publication last week, want it to be implemented and want opportunities to be brought to farming and rural communities in Scotland.

Ross Finnie started his speech by talking about the importance of a healthy, sustainable agricultural community for the whole of rural Scotland. We concur with that view. We must recognise and acknowledge that uncertain times are ahead for many farming communities, but I hope that the document provides a clear framework of policy support from this Executive for the farming communities. It is important to put that on the record at the start, because I was disappointed by the tone of the nationalist and Tory amendments, and by the tone of some of their speeches; I will not say all their speeches, because positive and constructive remarks have been made by members on both sides of the chamber.

I was surprised by the lack of reference—particularly by the nationalists—to consumers. Little reference was made to consumers, yet they are the people who must be persuaded to buy our farmers' produce. I was also surprised that so little reference was made to developing countries around the world and to the historical unfairness of the trade agreements and subsidies that we have lived with in the west since the second world war. That historical unfairness is what is driving the CAP reform process. It is important that we understand that political process and ensure that our farmers are equipped to respond to it.

Procurement must be a central plank of the Executive's response. The Environment and Rural Development Committee raised that issue with the minister last month and his response to the committee made it clear that the Scottish Executive is beginning work on the procurement process. Seminars are being held to work with local authorities so that they can meet EU procurement rules, but we do not yet know about the results of the seminars. It is important that the minister reports back to us on the responses of those who are involved in the seminars—such as public purchasers, caterers and their customers—about the key blockages to their buying not only local produce but, as was said during the debate, Scottish produce.

There must be appropriate, practical advice from the Executive before the national health service, local authorities and, as was mentioned, the Scottish Prison Service will buy Scottish products. There is nervousness about breaking procurement rules and guidelines, so the advice must be clear and strong. I ask the minister to give a commitment this afternoon that he will come back to Parliament—be it to the committee or to the chamber—to let us know how procurement advice and guidance is being developed. The Scottish public sector is a huge potential source for good in ensuring that we support our agriculture sector and our rural communities; I hope that we will see positive responses to the process in the future.

A strong sense of gloom and despondency came from the Tories. That tone features in the amendment and although it did not totally dominate Ted Brocklebank's speech, John Scott's speech was the gloomiest that I can remember him making in the chamber. As Nora Radcliffe said, the NFUS—the representatives of the farmers—are very positive about the strategy. They see it as an opportunity for change and as an opportunity to support the changes that the industry is going through and will have to go through in the future. I will not repeat Nora Radcliffe's comments, but it is important to make that point.

There are core messages in the agriculture strategy. It is not fair to say that, as Ted Brocklebank suggested, farmers do not know where the industry is expected to go. A clear framework is laid out in the agriculture strategy, if people work to it. The strategy is about producing food and other products for market, about seeing agriculture as a major driver in a sustainable rural economy and about how we help rural communities to ensure that agriculture remains an important industry for Scotland in the future.

I welcome the minister's announcement today that he is about to consult on the rural development strategy. I would like to see more reference in that strategy to agriculture. In particular, I would like more reference to support for agricultural diversification, for finishing at a local level, for farmers to work together to develop and market new products, and for farmers co-operatives. Farmers co-ops come up time and again at the Environment and Rural Development Committee as a key issue on which other European countries are way ahead of us. One of the disappointing facts that we came up with in our recent inquiry on the food chain was that, in the milk industry in particular, the opportunity for integrated and co-operative development is being frustrated by current rules. I hope that we see a response from the minister and from his UK colleagues on that issue.

We need to move on some issues. I did not agree with all of John Swinney's speech, but he was right to raise the unfairness in how single farm payments are currently being administered. I take Alex Fergusson's point that single farm payments must be part of the process in order to let some farmers leave the industry and encourage new farmers to arrive in the industry. I think that we would all agree on that.

Photo of Sarah Boyack Sarah Boyack Labour

No. I must move on.

Can it be right that there is a loophole that means that it is possible for an ex-farmer to receive single farm payments when there is no use of the farm or stewardship of it for environmental purposes? If there is such a loophole, it must be closed. There is clear support across the chamber for that.

Photo of Sarah Boyack Sarah Boyack Labour

That might be a pleasure that I am unwisely forgoing, but we will never know.

One issue that has been mentioned in the debate needs more emphasis. It is the process of drawing in new people and skills to the farming community. As we go through the major change that is ahead, there will be an increased emphasis on training and support for new farmers. Several colleagues around the chamber have made that point. What new markets and opportunities will be available in the future? What skills will be required to seize such opportunities?

During a recent biomass inquiry, I was struck by how many of us suggest that energy crops are a clear opportunity. The challenge of climate change is bringing such opportunities and they must be grasped. Somebody who is currently in agriculture might be thinking of converting their crops to biomass, particular biofuels and the new energy crops, and raising money for that investment, which might take three to five years to develop. However, will there be a market for them? We all talk about the fact that there will be a market. It makes sense that there will be and we need it to happen. However, there is also a need to ensure that, as part of the encouragement for farmers to take the financial risk, there is a coherent strategy for that sector of the market. We need to ensure that there are sufficiently accessible processing facilities so that we do not raise new, environmentally-friendly energy crops only to produce CO2 emissions to get the products to where they can be processed. There is a real challenge there and we must ensure that it is addressed.

Crucially, we also need a market for the end product. It would be crazy to encourage people to produce a product when we do not have a market in place for it. Again, I come back to the public sector. Parts of the public sector are clearly responding to this agenda. For example, Forestry Commission Scotland has set itself a target for the use of biofuels. Why do we not encourage other public sector organisations to do the same? Why do we not make that part of the targets across the Executive, so that we are not just talking the talk, but thinking about how markets can practically be created? There will also be an issue about the duty that is levied. That will need a joined-up approach in Scotland and at a UK level.

The debate has been interesting, but it has perhaps been dominated a little too much by people who are involved in the process themselves. It is important that we get the views of farmers and others who are involved in the agriculture sector, but we need to make links to those who will buy the products, such as consumers—as Eleanor Scott and Nora Radcliffe rightly said—who demand high animal welfare and environmental standards and want to know from where the products come.

There is a real opportunity for our farming communities and we need to ensure that they get the support to work together to deliver. However, in discussing the forward strategy for agriculture and where we take it next, let us ensure that we have a joined-up approach that goes right across the Executive and which listens not only to what the farming community is telling us, but to what the consumers are telling us. We must ensure that we get a real market for the future. This is a challenging time for agriculture. It could also be an exciting time, but only if we seize the opportunities.

Photo of Alex Johnstone Alex Johnstone Conservative 4:34 pm, 9th March 2006

I begin by drawing members' attention to my entry in the register of members' interests, where they will see that I am still a partner in my family's farming business. To add greater detail to that, it is a business that relies mainly on the dairy industry. It is also my duty, therefore, to apologise to Sarah Boyack for the fact that, as a farmer, I may well continue the doom and gloom that we have experienced so far in the debate.

There is cause for that, but not exclusively so, in the motion that lies before us. In effect, we have had two debates this afternoon: a debate on the forward strategy and a debate on the industry—an industry that unfortunately seems to be dying an untimely death. The new forward strategy document is based on a strategy that Ross Finnie, the Minister for Environment and Rural Development, has followed for a number of years. It sets out all the basic means by which the industry can be defended and can make progress. That is done against the backdrop of Executive decisions last year and the year before. In many ways, those decisions corresponded with what we were encouraging the Executive to do, which has allowed us to move our farming industry significantly closer to the marketplace than it has been for many years. However, on the darker side, that change to market reality has coincided with a series of events that have led to what I fear may be market failure. That is why any verdict on Scotland's farming industry would have to be that, if it dies, it may have been death by misadventure.

Let us consider what the minister said in his speech. He made all the right noises. He said that farms are still very important to rural Scotland. As Sarah Boyack said, nobody in the chamber will argue with that. Farming should be the bedrock of our rural economy. Whether it is in primary production or in secondary food processing, there should always be opportunities to create jobs in rural Scotland through the farming industry.

Ross Finnie also mentioned partnership with stakeholders; the whole process that he has gone through reflects that. He wants farming to be competitive in markets; but there we find the difficulty beginning to arise. He gave us the good news that the less favoured area scheme is likely to survive the current round of negotiations. He also mentioned the rural stewardship scheme—which is something of a concern to me, because, as has happened in previous years with predecessor schemes, there is not enough money to go round.

Some in the farming industry are gravely concerned that money that is largely raised through the modulation of pillar one measures is then used in such a way that some get money back but others do not. The Executive must take steps to do what Conservatives have been asking for many years; it must ensure that pillar two schemes can deliver the same money to the same people, but for doing radically different things. The shortfall in the funding for the scheme this year means that that has not happened. As a result, farmers will be less and less willing to accept modulation in years to come.

One of the best bits of news that we have heard for some time is the lifting of the beef export ban. However, as Andrew Arbuckle pointed out, the news is perhaps not as good as it might have been. The successful days of beef export were when the value of our currency made us strong exporters. If we are to regain that export market, it will be with one hand tied behind our backs if our current currency values continue. I therefore ask the minister to take the opportunity, either today or soon, to outline the advice and assistance that can be given to people who are seeking to establish export markets within the liberalised regime that is now available to them. That will allow us to set about restoring our markets, even if we find ourselves going up a hill in our efforts.

Members have raised subjects that are worthy of support. I liked Richard Lochhead's defence of the dairy industry—I will thank him for that every time he mentions it. In a very good speech in support of an amendment in which I find nothing to disagree with, he spoke about regulation. John Swinney also spoke at some length about regulation. Both of them did us a service. It is time that regulation in the farming industry and in rural support mechanisms was considered very closely— especially the recent imposition of the regulation of water through SEPA.

Ted Brocklebank raised the subject of biofuel. When I go around talking to farmers, biofuel is one of the subjects that they want to talk about the most. It is not something that has been widely produced in Scotland in the past, but it is something that Scotland's farmers are ambitious to produce in future. It is important that the Executive and the minister take every opportunity to streamline the process by which support—whenever it is available—can be made available to farmers and farmers co-operatives to underpin the development of biofuel. The production of biofuel will be a major industry in future. Although it may not produce the massive profits that we would like, it will provide a welcome floor in grain and oil-seed rape markets.

I support those members who called for the return of live exports. I understand why many people disapprove of that practice but, as a young man starting out in the farming industry, my experience—which I have mentioned to members on previous occasions—was that every life was precious and that every calf that was born on the farm was to be protected. A generation later, when my own son was the same age, he took every second calf that was born round the back of the steading, shot it and buried it in a hole. If that is animal welfare, it is not the kind of animal welfare that I want to support. The reinstatement of the export of live calves is something that everyone who understands its importance will be keen to support.

The debate has been difficult and, in some respects, dark. The situation that Scottish farming faces is dangerous. We desperately need market reality. I urge the minister to take the earliest opportunity to encourage the OFT to conduct a serious examination of how our markets are working.

Photo of Rob Gibson Rob Gibson Scottish National Party 4:41 pm, 9th March 2006

Members should note my entry in the register of members' interests, which states that I am a member of the Scottish Crofting Foundation.

It is hard to disagree with the aims of the strategy that has been presented to us today, but it is not, as some members have suggested, a policy support document; it is a set of aspirations. Policy support documents contain solutions to problems, not just aspirations. As far as I can see, the country's hopes and wishes can be met if we travel in the direction in which the minister wants us to go, but if we are to make any progress, the Executive's approach to agriculture must have a higher profile that is reflected in ministerial activity.

It should be the role of the Minister for Environment and Rural Development not to congratulate farmers and crofters on keeping going, but to put in place the supports that the farming industry needs so that it can make advances.

I am concerned that the strategy contains little discussion of how we can increase the amount of co-operation. At present, the Government gives about £300,000 to support the Scottish Agricultural Organisation Society; in contrast, the Scottish Agricultural College gets around £17 million of support. There are lessons that we can learn from abroad. Farmers in Denmark, France and New Zealand cope with modern market conditions better than our farmers do because they get major Government support to create co-operatives. In the United States of America, farmers are given significant assistance to become more market oriented and are educated in how co-operatives work and can help them. There is no sign of the provision of such help in the strategy and I do not think that the detail will come along.

I am worried about the fact that a consultation will soon be held on separation distances between genetically modified crops and conventional or organic crops. The danger is that the commercial or commodity end of agriculture is being favoured over the needs and wishes of consumers.

It seems that Sarah Boyack did not pick up on some of the important points that Richard Lochhead made at the beginning of his speech about the benefits to the consumer that a stronger farming sector would bring. If she had listened, she would have realised that the Scottish National Party's interest is to ensure that a farming strategy serves local consumers—for example, by strengthening local markets. We expect the minister to take cognisance of the barriers to stronger local markets for food. Public policy should provide far more specific signals, help and incentives to meet local demand than it does at present. We need to aim produce at local markets to a greater extent. There is a need for more local processing facilities—local abattoirs were mentioned in another debate. Economies of scale hamper small producers. The expense of entering the supply chain for supermarkets does not benefit small producers, yet such producers are an essential part of what we are trying to achieve in Scotland.

A sustainable food and drink strategy for Scotland would be one that allows producers on family farms and small farms to take part in the process and not to be cut out. It is smaller farms that are threatened by commercial farming. Talking of small farms, Alasdair Morrison mentioned the Crofting Reform etc Bill. Let us remember that the bill will deal with how crofts are organised. It will not deal with the problems that crofters face with transport, with getting winter feed at reasonable prices or with exporting their crops. It will not deal with planning issues and many other matters that crofters, like farmers, require to help them to diversify. Alasdair Morrison may criticise the bill for the danger that it might create a free market in croft tenancies, but it is high time that those who voice such criticism came up with an amendment to prevent that. Instead, we get rhetoric from some sections of the Labour Party in the Highlands against the ministers on the front bench. That division in the Labour Party is extremely marked.

There has been quite a bit of discussion about biodiesel and biomass. I reiterate the SNP's view that there is a lot of set-aside land—and a lot of agricultural land—in the north-east of Scotland, where we could be growing a lot more. As Richard Lochhead pointed out, if we covered all the set-aside in Scotland with oil-seed rape, we could produce enough biodiesel to fuel about 2 million cars. Nobody wants that to happen, but the industry is hindered at the base by the fact that there is no crusher plant in Scotland for oil-seed rape. That is the kind of support that the minister could give.

There should be much more advocacy from the UK Government, which could try to show how Brazilian beef, for example, gets to Scotland without any scrutiny of its origins. The Amazon rainforest is being cut down to create cattle farms in Brazil, but none of that is taken into account in the way in which the World Trade Organisation considers free trade in agriculture. One of the SNP's major concerns is that standards in agriculture should favour Scottish local producers and not the free market, which allows people to have lower standards. It is up to our Government to ensure that that happens.

Getting young entrants into farming has been discussed by one or two members. If we are going to bring down the average age of farmers and follow the lines of a loan subsidy, we should perhaps consider an all-age subsidy for farming. We have to think about how retirement fits in and about training. We have to get support from the Government to encourage farmers to come into the industry. The SNP's criticisms are an attempt to firm up the policy; indeed our amendment says so. I commend our amendment to the chamber. I hope that members will support it and that the minister has some answers for us on the points that we have made.

Photo of Trish Godman Trish Godman Labour

As the acoustics are rather good in this building, a lot of the background noise carries somewhat. I would be grateful if members would allow the minister to close the debate uninterrupted.

Photo of Ross Finnie Ross Finnie Liberal Democrat 4:49 pm, 9th March 2006

This has, not surprisingly, been a wide-ranging debate on a very important topic: agriculture and its role in the wider rural community. It was interesting that Richard Lochhead and Ted Brocklebank, who made the opening Opposition speeches, spent a lot of time on the supermarket issue. I understand that. There will be no argument from me with the proposition that the supermarkets have considerable powers, which there are examples of them abusing. However, as I said earlier, we must be careful not to believe that simply beating the supermarkets with a big stick will solve all the problems of Scottish agriculture.

I was somewhat disappointed that, although Richard Lochhead appeared to welcome some of the content of the strategy, his conclusion was that it was largely motherhood and apple pie. That is interesting. I hope that he will tell all those who work for the Scottish Agricultural Organisation Society, the Moredun Research Institute, the National Farmers Union, the Scottish Agricultural College, the Royal Bank of Scotland and the Scottish Crofting Association and who helped to write the document that that is his considered view of the fruit of their deliberations on the future of Scottish agriculture.

Photo of John Swinney John Swinney Scottish National Party

The minister has cited many of the people who have participated in the agriculture strategy group, one of whom is a representative of Asda. Would the minister enlighten Parliament as to the sort of robust discussions that the ministers had with the representative of Asda or any other supermarket about the contribution that supermarkets could make to improving the competitive position of Scottish agriculture?

Photo of Ross Finnie Ross Finnie Liberal Democrat

That is why those representatives are there. It would have been stupid and foolish not to have had them on that group. There is no point in taking part in megaphone diplomacy with those with whom we have to engage if we are to improve the whole process.

Ted Brocklebank, who almost raises doom and gloom to an art form, managed to surpass himself this afternoon. He talked a lot about whom he talks to but, clearly, he did not attend the NFUS's annual general meeting or the event that it held last weekend. Although there are undoubtedly huge problems facing the industry, it is simply not true to say that the doom and gloom that he portrays is typical in the NFUS.

Photo of Ross Finnie Ross Finnie Liberal Democrat

No. Mr Brocklebank has made his point in that regard. He can intervene on a more substantive matter.

Richard Lochhead and Ted Brocklebank talked about the important role that energy crops can play in the future of Scottish agriculture. Ted Brocklebank raised the question of incentives. As we know, the UK Government has recently adopted the European standard that requires that, within a few years, 5 per cent of all our fuels should include a biofuels content. Therefore, there is a market incentive for us to proceed in that regard.

As I am sure that Richard Lochhead knows, although he did not mention it, those who use set-aside for energy crops can also receive additional European subsidy for that purpose.

Photo of Ross Finnie Ross Finnie Liberal Democrat

I want to finish this point.

Therefore, energy crops are in the strategy and are part of the future of how we deal with this issue. The issue of biomass and biofuels creates that situation. Someone in the SNP suggested that the Government should be building a crusher. The time to do that would be after our consultation on what the minimum levels are. Although rapeseed is efficient, it is also expensive. That has market implications.

Photo of Richard Lochhead Richard Lochhead Scottish National Party

The minister will appreciate that there is a danger that we might encourage a greater use of biofuels and then have to import them from other countries if we do not make them in this country with our crops.

Photo of Ross Finnie Ross Finnie Liberal Democrat

Indeed. That is why the Scottish Executive gave support to the construction of the one biofuels project that we have in Scotland. We gave financial support for the construction of that plant. We now have to make use not only of tallow and by-product but rapeseed oil.

Maureen Macmillan made constructive points, particularly about land management contracts and flood plains. I assure her that the wider environmental dimension and the integration of the rural stewardship scheme and the agri-environment schemes into practical and pragmatic issues are at the forefront of our thinking.

Undoubtedly, John Swinney's approach, which took a long-term view, was constructive. I thought that his deep concerns about burdens, particularly those that the water framework directive places on people, were interesting. I assure him that ministers are concerned that the regulations should be introduced in a proportionate way and also believe that we should do more to explain to farmers—[Interruption.]

Photo of Ross Finnie Ross Finnie Liberal Democrat

—why we are implementing the framework and what benefits will accrue to the agriculture industry as a result.

I assure Mr Swinney that we have been in extensive discussions with SEPA, both on reducing its original proposals on cost and also on getting it to explain better to the farming community what the whole project is about.

Photo of Trish Godman Trish Godman Labour

I wonder whether I could persuade you to take a breath, minister. I remind members, particularly those who have entered the chamber recently and who therefore did not hear what I said a little earlier, that the acoustics of the chamber do not permit 100 people to sit and have a conversation during the minister's closing speech. Some members have sat through the entire debate and are anxious to hear what the minister has to say in response to their contributions and to the debate. It would be a courtesy to the minister if the conduct of those members who have arrived only recently permitted him to proceed from this point entirely uninterrupted.

Photo of Ross Finnie Ross Finnie Liberal Democrat

I am grateful, Presiding Officer, particularly for your remark that some members in the chamber are anxious to hear my response. That remark is a welcome commentary on the state of members present.

Photo of Ross Finnie Ross Finnie Liberal Democrat

No.

John Swinney concluded his speech with an important point about persons residing overseas who remain capable of receiving single farm payments. I make it clear, as I did earlier—I think in response to a question—that the payments are governed by European regulations. However, we are concerned about the clear anomalies that have arisen, although I think that they may have existed in relation to previous agricultural subsidies too, which may be why we did not immediately pick up on the issue. I see that John Swinney is shaking his head, but I say to him that it was possible for someone to rent out their land and go abroad.

I agree with John Swinney that we have to address the issue. However, we should not get the matter out of perspective. At the moment, around £200,000 of subsidy has been paid to such persons, but that is in the context of overall subsidy payments of some £400 million. We must keep the matter in perspective, but that is not to diminish the importance of the point that John Swinney raised.

Photo of John Swinney John Swinney Scottish National Party

I am grateful to the minister for giving way a second time. I accept that we may be talking about a sum of money that is in the order of £200,000—I have no reason to dispute the figure. However, surely some discretion should be introduced into the design of the single farm payment regime to allow the circumstances of those who are trying to create strong agricultural businesses in Scotland to be addressed. Farmers are suffering because the single farm payment is being paid to others who are living outwith the country.

Photo of Ross Finnie Ross Finnie Liberal Democrat

I accept the proposition. John Swinney referred to one of his constituents whose case I am familiar with. I am grateful to John Swinney not only for raising the matter with me but for progressing it. In effect, a new entrant to farming is not getting into the national reserve. I accept that there are problems with that.

Alex Fergusson properly drew attention to the planning to succeed initiative, which is being promoted in Dumfries and Galloway. I am grateful for his proposals for the expansion of the initiative. I assure him that, along with the enterprise network, the Executive intends to roll out that strategy across Scotland. The planning to succeed initiative is a very important development.

Alasdair Morrison opened his speech with some constructive comments on the strategy. However, I was disappointed at the tone and tenor of his criticisms of the Crofting etc Reform Bill. Ministers had very many meetings with back benchers who have particular concerns about crofting. We have introduced a bill to reform the definition of crofting and the definitions of occupier and owner-occupier, and to place requirements on those who own crofts to use them as a croft. Serious encumbrances have been put on the use of a croft and that will have to be reflected in the valuations. I hoped—indeed, I would have thought—that those measures would have met with a more positive response.

Eleanor Scott made it clear again that she is not unhappy for pillar 1 funding to be wound down. What on earth would we be left with? We would have no agricultural industry. I do not see how she is going to achieve her aims and objectives.

Sarah Boyack made important points about procurement, which we support, and about the integration of the rural development strategy.

I turn to the way in which we approach the whole subject of our rural economy. Many members have suggested that we should direct and govern our farmers. That has not been the approach of the Executive. During the past seven years our clear aim has been to work with the industry to create a better relationship between Government and the agricultural community and to promote the co-operation that now exists among the many players in the industry who can come together and produce a forward strategy for agriculture. Of course that does not solve every problem or take away from the need for Government to ensure that, as we have a role in the disbursement of some £450 million to the industry, we provide the industry with a framework that will help it to be more cohesive and to sustain the pressures that it faces in the context of globalisation of the food industry. Local produce and local solutions are a strength. We must play to our strengths: we have a strong and highly skilled agricultural community, we have first-class research institutions that can support that community and we have a reputation for high-quality food produce. I ask members to support the motion.