Rural Development Programme

– in the Scottish Parliament at 9:15 am on 27 April 2006.

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Photo of George Reid George Reid None 9:15, 27 April 2006

Good morning. The first item of business is a debate on the Scottish rural development plan.

Photo of Ross Finnie Ross Finnie Liberal Democrat

I welcome this opportunity to debate the public consultation on the Scottish rural development programme for 2007 to 2013, which will be important for rural Scotland in the next seven years. The new programme is a major opportunity to help to shape a rural Scotland that will deliver business competitiveness and public benefits for the environment and rural communities. Support will be available for land managers, businesses and communities throughout all rural areas. I know that many members have a clear interest in the content and implementation of the programme.

The consultation on the rural development programme follows public consultation on the strategic plan for the SRDP. That consultation closed at the end of March and we are considering the responses. The strategic plan will set out our policy priorities and objectives for the 2007 to 2013 programme which, in turn, will set out the measures and mechanisms for delivering those objectives. The formation of the two documents in the coming months will be governed by the new rural development regulation, which sets out the types of measures that can be funded by the new European agricultural fund for rural development.

As members are well aware, rural Scotland is renowned for the beauty of its landscapes, the diversity of its wildlife and its rich historic and cultural heritage. Just as important, however, is that it is a place where people live and work in land-based activities such as agriculture and forestry and in activities in the wider economy such as processing, tourism and other services. For many people, the dramatic landscape and remote setting present considerable challenges in running profitable businesses; for example, there are challenges in managing land in difficult physical and climatic conditions and in gaining access to markets and services.

However, rural Scotland also provides real opportunities for land managers and people in other businesses—for example, to build products and services around the unique nature of rural Scotland's natural and cultural heritage and the contributions and skills of its people and communities.

Adoption of the right strategic approach is critical to the success of the next Scottish rural development plan. We must focus on the outcomes that we seek for rural Scotland so that we can be confident that the measures in the programme will complement one another and align with our policy objectives. Our work on the strategic plan to date has helped to promote that approach and is based around three themes: underpinning performance and quality in the agriculture, food processing and forestry sectors; enhancing rural landscapes and the natural heritage; and promoting a more diverse rural economy and thriving rural communities.

An integrated approach to land management and rural businesses is essential to our achieving the outcomes that we desire. To that end, our policies must emphasise the links between farming, forestry, food processing, tourism, other activities and the natural environment. I therefore want the new programme to be founded on measures that will deliver multiple outcomes on water quality, biodiversity, tourism, nutrient targeting, air quality, business competitiveness and so on.

Photo of John Swinney John Swinney Scottish National Party

I agree with the objectives that the minister has outlined, but it strikes me—having read the document and while listening to the minister's speech—that that the issues are tremendously complex, so the need for integration is absolute. Will the minister therefore tell us how he intends to deliver that integration without creating an ever-expanding bureaucracy that will affect people who are involved in agricultural business or other rural business development activity?

Photo of Ross Finnie Ross Finnie Liberal Democrat

One of the starting points was the development of the land management contract, which seeks to prevent people who are engaged in land management and related activities from having to seek assistance through a range of different portals. The aim of developing land management contracts was to develop a single integrated approach. The test of that—the proof of that pudding—will be in whether we ensure that the bureaucracy that supports the individual entry points is also brought together. That is a key area in which we can contribute to the objective that Mr Swinney set out.

The objective of our approach is to meet the aims of the new rural development regulation, which encourages member states to integrate the delivery of objectives across the axes of business competitiveness, land management and the natural environment, and the wider rural economy.

I will emphasise two more points. The first is that farmers, crofters, foresters, estate managers and others play a hugely important role in maintaining and enhancing Scotland's environment. High standards of land management safeguard the quality of the natural environment and underpin other activities throughout the rural economy, as is shown by the large number of visitors who come to enjoy the beauty of natural Scotland and to take advantage of its opportunities for recreation. In other words, proper management of our natural environment makes good economic sense.

Secondly, in order that they can carry out that role, land managers must feel confident that their environmental and social contribution is built on viable land-based enterprise that gives them a firm and sustainable economic foundation. They must have viable businesses that deliver high-quality products that can compete in markets at home and abroad. It is clear that business success and the quality of the environment are inextricably linked.

One of the key elements of the programme is the funding that will be available. I regret to say that, following the European Union financial perspective that was agreed in Brussels in December 2005, we are still awaiting confirmation of the funds that we will receive from the new European agricultural fund for rural development. Discussions continue between me, my department and officials, the United Kingdom Government—at ministerial and official levels—and the European Commission. A decision on how a financial package will be put together for the new rural development programme has to await the outcome of the EU financial perspective. In the meantime, we are examining options for funding the programme.

It is important that the financial package be implemented in a way that maintains stability at farm level because a viable industry is essential to delivering the wider benefits that we seek from stewardship of our rural areas. In particular, it will help us to support a credible and effective scheme of land management contracts.

The consultation paper proposes three main schemes for the rural development programme: the less favoured areas support scheme; land management contracts; and the LEADER initiative, which has now been brought into the agriculture perspective.

The less favoured areas support scheme has played a major part in our support for rural Scotland: some 85 per cent of Scotland is classified as a less favoured area. Payments in less favoured areas are vital to active management of our upland and remote areas. They enable agricultural landscapes to be maintained and farming activities to support local economies and communities. Active management of the land is necessary for delivery of many of the outcomes that we seek from the three axes of the new programme, including the delivery of environmental benefits.

Photo of Jim Wallace Jim Wallace Liberal Democrat

On the minister's point that active management has a number of benefits including environmental ones, is he aware that, on the morning after the consultation document was published, a spokesperson for the RSPB Scotland expressed concern on Radio Orkney that the consequences could be fewer people being engaged in active management and farming, less livestock units and a consequential degradation of the environment? Will the minister respond to that?

Under the minister's proposals on the less favoured areas support scheme, greater weight will be given to fragile areas, such as islands, with regard to payments. For the record, does the minister accept that, when I am asked whether I agree

"with the proposals to give greater weight to 'very fragile areas' and to increase the minimum payment", my answer will be yes?

Photo of Ross Finnie Ross Finnie Liberal Democrat

I think that the member's first point is repeated in the RSPB bulletin which, no doubt, every member has read most carefully.

The issue in question is that, unfortunately, we are required to ensure that the new rural development programme complies with the principles of decoupling. That is extremely difficult in the context of Jim Wallace's point because the Executive's clear wish is to maintain livestock in our less favoured areas. We must resolve in the consultation the question of how we will construct that measure without falling foul of the situation by creating the inference that we might be linking production to that scheme. We have made that clear to the RSPB and others; I regret the RSPB's comments, although it is perhaps just firing warning shots, because it is working constructively with Executive officials to try to solve the problem.

My commitment to less favoured areas is clear. It is not just about financial support, but about ensuring that productive and active management of that land continues through the less favoured areas scheme. Notwithstanding the date on which the consultation closes, I am happy to repeat in response to Jim Wallace that the continuation and extension into remote areas will be improved.

Photo of Ross Finnie Ross Finnie Liberal Democrat

No. I will make a little progress.

The one problem of the LFASS is that, regrettably, the rural development regulation delays implementation of any major changes to LFA support until 2010, so we propose that Scotland should have an interim scheme from 2007 to 2009 and that only limited changes will occur before 2010. As Jim Wallace said, I have made it clear that even under that limited alteration, support to areas that are classified as very fragile will have to be improved to take account of the extreme disadvantage that is faced in those areas.

Photo of Alasdair Morgan Alasdair Morgan Scottish National Party

The consultation document makes it clear that that improvement will be cash neutral, so increasing support for such areas will decrease support for less favoured areas that are not classified as very fragile. What objective criteria will be used to determine how much money is transferred, other than simply whether some places are or are not islands?

Photo of Ross Finnie Ross Finnie Liberal Democrat

I cannot say; the consultation's purpose is to determine that. I am amazed that Alasdair Morgan did not anticipate that answer. To be fair, the issue is that objective criteria should be set. One principal reason why the LFASS as a whole has not been agreed throughout Europe is the failure to set truly objective criteria. Remoteness is one factor, but the meaning of objective criteria is another. I will speculate: could daylight hours be a criterion? If farmers have less opportunity to grow grass, does that mean that they have clear additional costs for feed in winter? Of course, I will welcome Alasdair Morgan's contribution on the objective criteria that he wants to be included in the measures.

Photo of Ross Finnie Ross Finnie Liberal Democrat

I will make a little more progress.

The introduction of land management contracts in 2005 placed Scotland at the forefront of integrated approaches to delivery in Europe and I am delighted by the enthusiasm with which the scheme has been embraced. In its first year of operation, 10,000 farmers entered tier 2 of the scheme. Land management contracts provide the opportunity to deliver a truly integrated approach to land management and to wider rural development in which business success accompanies sustainable environmental management.

Our major proposal for the new programme is to introduce the third and final tier of land management contracts. That tier will deliver a higher level of benefits that are better integrated across all land management activities and which are more closely tailored to local needs. I hope that the scheme will set new standards in innovation, and that it will assist people who work on the ground to maintain viable businesses and deliver the wider benefits that society expects from the countryside.

Another new different and exciting feature of the next rural development programme will be the embracing and inclusion of the LEADER initiative, which has been a valuable means of achieving innovation in rural development by supporting people's capacity locally to develop and manage projects that generate benefits for their communities. I welcome the inclusion of LEADER in the next programme and believe that its flexibility will play a key role in engaging communities to participate in actions that will benefit rural Scotland.

To give members a flavour of what the new programme can deliver, I will say a few words about the measures that the programme may fund. We have compiled a list, based on the work of the stakeholders in our technical working groups, of well over 100 measures that could be supported under the programme. The list contains measures on a wide range of subjects including product quality, forestry, climate change, water quality, renewable energy and biofuels, animal welfare, wetland management, flood prevention, the landscape, biodiversity, public access, tourism facilities and skills development. The breadth of measures demonstrates the potential for innovation in the new programme.

The combination of measures reflects not only the importance of environmental and social outcomes to the public and society, but the contribution to supporting product quality, business profitability and the capacity of communities to enhance their quality of life. All those elements are important at this time, when rural industries and communities are going through significant change.

Given our limited financial resources, we will have to make choices about priorities and the final number of measures that can be supported. I expect the responses to the consultation to help us to select the measures that can deliver the best outcomes for rural Scotland.

The consultation document makes it clear that another key feature of the programme is the importance that is placed on addressing regional and local priorities, although we will of course continue to ensure that we meet our national and international objectives and obligations. A regional perspective will be essential in enabling us to implement a programme that recognises the differing circumstances and opportunities that communities throughout rural Scotland face.

Photo of Maureen Watt Maureen Watt Scottish National Party

Does the minister recognise that local action group areas under LEADER are somewhat large for a small country such as ours? The minimum population for an area is 10,000 and the maximum is 100,000. Is not that prescriptive? Are those thresholds based on EU figures for larger countries such as Germany, Denmark and England?

Photo of Ross Finnie Ross Finnie Liberal Democrat

I am happy to consider that, if changes can be accommodated within the regulation. I hope that Maureen Watt accepts that it is generally welcome that LEADER will be brought under the ambit of the rural development programme. If the prescriptive numbers to which she referred are a barrier to proper progress, we will be happy to consider them as part of the consultation.

The rural development programme is of course part of a wider array of funding streams and programmes that can benefit rural areas. It is essential that we achieve consistency and complementarity between programmes so that we can be sure that resources are being spent wisely and so that we can maximise benefits. I am keen to ensure that the next programme properly complements funds such as European Union structural funds.

We propose to integrate some national support schemes with the programme, in order to ensure complementarity of approach and funding. We have proposed a regionalised approach, bringing together schemes will also provide an opportunity to involve local and regional interests. I hope that simplification of our approach will address some of the issues that Mr Swinney raised.

As is shown by the wide range of measures that I listed, the programme will contribute to the objectives in different sectors of the rural economy as set out in the strategies for agriculture, forestry and tourism, for example. We must remember that the rural development programme is part of a much bigger rural picture.

I look forward to development of a 2007 to 2013 Scottish rural development programme that recognises all stakeholders' needs and delivers a truly integrated approach in which business success supports sustainable environmental management and thriving rural communities. Consultation of the many stakeholders will be vital in helping us to develop that programme. In the coming weeks, we will hold a series of public meetings throughout rural Scotland so that we can hear the widest range of views and give explanations that will achieve the widest understanding of the programme's implications. That will ensure that we have a truly representative consultative process. Of course, I also look forward to hearing all members' views on the proposals.

Photo of Rob Gibson Rob Gibson Scottish National Party 9:34, 27 April 2006

The Scottish National Party welcomes the measures for the rural economy and environmental development that can support existing families, and hopes that they can lead to more people choosing to live and work in our rural areas. We all know that there are far starker challenges for people who attempt to make their living in rural areas than there are for many of the people who pursue career opportunities in our cities. This is an age of flight from the countryside to the cities, especially by young people, so it is vital that we reverse the population drain from the countryside. Determination of whether the Scottish rural development programme encourages that such a reversal should be one benchmark for the people who judge the suitability of the measures that the Scottish Environment and Rural Affairs Department proposes.

For my starting point, I take the truism that James Hunter uttered in the first evidence-taking session on the Crofting Reform etc Bill. He remarked that few crofters make a full-time living from agriculture and said that it follows that the viability of crofting communities at any point depends more on the health of the wider rural economy of which crofters are part than purely and simply on agriculture. A version of that statement could be applied to most parts of Scotland; few farmers nowadays rely solely on agricultural income. Many rely on the off-farm incomes of their spouses or partners, so the programme that we are discussing will be vital in enhancing the incomes of rural land holders. That has been widely agreed.

The SNP broadly agrees with the Government that several elements have to be in place in pursuing a development strategy. Of course, quality food production and forestry output must be underpinned. We must deliver enhanced rural landscapes and natural heritage for the public good, and we must diversify economic activities in the rural economy, which will underpin thriving rural communities. How such things are done will vary and will depend on soil quality, location, population sparsity, remoteness and climate of the areas concerned. There is a massive task for people sitting in the department in thinking themselves into the positions of folk who live in such diverse circumstances.

Europe has recognised that these are strategic aims. How we organise our schemes to meet conditions in Scotland will be key to the success of the structure from 2007 to 2013. Will we be allowed to secure funding from Europe that is untouched by the Blair-Brown clawback proposals? As the minister said, we are unsure about the reduction in the amount that will be available for the programmes. We would like an assurance from the minister that there will be no stinting on spending on the programmes in the period. Our having as much money as possible and that money's not being diverted to other purposes are vital for the future of Scotland's rural areas. I also seek ministerial discipline for the Scottish Executive Environment and Rural Affairs Department to create clarity of process and baseline data from which to work, and I seek transparent targets so that an outcome can be achieved in each element of the plan that we can debate in future reviews of progress.

The briefing from the Soil Association states that far greater importance should be accorded to monitoring progress towards desired outcomes and that that monitoring should begin with a comprehensive analysis of baseline data. I wonder whether members are presented with material that allows us to see what progress has been made and where we stand when we start to apply new forms of regulation to cover the next period. Such material will have to be considered.

Aims in the three axes that are outlined in the consultation—which are improving the competitiveness of agriculture and forestry, improving the environment and the countryside and improving the quality of life in rural areas—could all be delivered by organic agriculture, for example. There are sometimes uncertainties about the support mechanisms for organic agriculture—I see Tory members starting to fidget—but many people throughout the country believe, as the Soil Association does, that organic agriculture is vital. Further development of organic food and farming should be a key identified priority in the final document. I hope that it will be.

I am concerned as a result of meetings that I hold in rural communities that producers find that the overlapping and changing conditions of all the interlocking schemes create huge administrative burdens for farmers, crofters or foresters who are not accountants or professional form fillers, although many would qualify for degrees in agricultural administration by accredited prior learning. I suppose that the career that is most on the advance in rural areas is that of the consultant who helps people to fill in their forms—some benefits result from having a complex system. If forms are to stack up in the vaults of Pentland House, surely it is necessary to think about how greater integration can be achieved. The one-stop shop approach in various parts of the programme is to be welcomed, but inventing new paper streams will not make things simpler.

I turn to the less favoured area support scheme. I am concerned that the sustainability of many communities is on the edge. If the moneys that are made available by the programme are to be based on historical payments in 2006, that can disadvantage some people. On Monday, I heard evidence from a young crofter in Lewis who is trying to get a quota from the national reserve for this year—there are people who are mad enough to try to make a start in agriculture at the moment, but if they do not start at the right time, much of the base of the spending from the programmes may not be available to them. Such things are happening although sheep numbers have fallen by around 10 per cent in the past year. If people want to come into agriculture, there should be a flexible mechanism that will enable them to do so. I have not seen such a mechanism described in the documents that have been presented.

Cattle numbers are also falling, and they need to be supported through the SRDP proposals. About a third of the annual support of £61 million that is provided by the LFASS represents a significant environmental measure. The discussion about how the RSPB lobbied needs to be seen in the light of practical experience. In the fragile north and west of the country, removing top-up payments for keeping cattle is likely to accelerate decline. The minister has acknowledged that it is difficult to reach a definition because we must move away from headage, but it is essential that a definition be made. It was interesting to hear primary pupils at Rosehall last Friday talking about their environmental trip to Islay, where they were told about the survival of the rare chough, which relies on a beetle that lives in cattle dung. If the number of cattle is reduced, the potential for that bird to survive will be minimised.

Photo of Ross Finnie Ross Finnie Liberal Democrat

Rob Gibson makes valid points about the less favoured area support scheme, but does he accept that electing to implement the beef national envelope has been significant in keeping suckler cow herds on the hills and has been important for the remote areas to which he has referred?

Photo of Rob Gibson Rob Gibson Scottish National Party

The minister may be chuffed by the evidence that he has just led, but we must consider the programme in total. One element is not enough to ensure that the whole works.

The SNP welcomes the inclusion of LEADER in the plans, but we have concerns about the size of local action groups, as we have stated. They need to be constructed to meet area needs in a variety of sizes. I hope that they will meet the needs of areas that are as small as Harris or Lewis, for example, rather than the needs of 10,000 to 100,000 people, which have been mentioned. Colleagues will expand on that matter.

We are glad that the review of the land management contract tier 2 menu is under way. The one-stop-shop test is vital to make that work. However, can we be reassured about another element? The consultation document jocularly refers to

"SEERAD and its family of agencies" being deployed to help all aspects of countryside life. Some might say that that is the family from hell. Far too many real families have been forced to leave the land in search of work. The acid test for the programme will be whether that trend can be reversed. SEERAD and its quasi-autonomous children have yet to prove themselves to be real supporters of the countryside.

It is good to see that standard payments will be laid out for standard capital items at an early stage. I hope that all the supportive material will be in place in good time for land managers to formulate their claims. Far too often in schemes such as this we find that the closing date for applications precedes the time when the detail of the payments is laid out for people, which causes considerable problems.

As a representative of the Highlands and Islands, I am acutely aware of the need for community rights to make decisions as well as for plans to develop the best way forward. The LEADER programme, of course, helps people to think in terms of communities, but I hope that the Government will embrace the idea that it must try to help people do that. Although there is great commitment to community planning, there is not much commitment to enable people to take more decisions at the most local level.

In addition, there has been far too much evidence in recent consultations of ministers' ignoring much of the evidence that consultees produce. Two consultations that affected my area were on the bull-hire scheme and the crofting reform process. If people do not answer the questions that ministers ask, what they say is ignored, but some of the wisest remarks about the future are in comments that are triggered by the questions that ministers ask, but which do not necessarily answer ministers' questions. The result of the consultation will depend on how closed ministers' approach to the consultation document will be, and how open they will be to suggestions.

If the 2007 to 2013 Scottish rural development programme is to be effective and cutting edge, deskbound civil servants must listen to the practitioners and think carefully about real life in the countryside. The Environment and Rural Development Committee took evidence in Stornoway last Monday on the Crofting Reform etc Bill and afterwards I was presented, by a local consultant, with a recently written paper on lamb marketing for sustainable futures in the outer Hebrides. The stark truth is that all the current subsidies under the common agricultural policy contributed to a gross margin for flocks in Lewis of just 53p per breeding ewe in 2004. Fixed costs would need to be allocated before the true profit—or, in this case, loss—could be calculated. The fragility of our countryside is illustrated by that perhaps extreme example for people who come from leafier areas.

The proof of the success of the rural development programme will be in whether it encourages of producers and land managers in all the varied Scottish circumstances to combat the deeply unprofitable agricultural times in which we live with a new set of supports that are vital to keeping rural populations buoyant and, as I said at the start, which dare to increase the numbers who earn their living from our land.

Photo of Alex Fergusson Alex Fergusson Conservative 9:47, 27 April 2006

I am grateful that I am following Rob Gibson, but I am not so grateful to him for pinching the final line of my speech about the happy SEERAD family all coming together in an efficient grant management process—I hope I live to see the day.

I draw members' attention to my entry in the register of members' interests, if it still exists this morning.

Photo of Alex Fergusson Alex Fergusson Conservative

Indeed, subject to determination. In the register, members will see that I am a sleeping partner in a farming partnership in Ayrshire.

The Executive's consultation is indeed important. I do not disagree with NFU Scotland's view that it is perhaps one of the most important consultations in many years. I hope that the many and varied stakeholders involved have not grown so tired of Executive consultation exercises, which have been equally many and varied, that they do not treat this one with the seriousness that it deserves. All stakeholders need to make their views known and I will encourage them to do so at every opportunity.

The consultation document is large and many individuals and organisations, including me, are just beginning to get their heads round it. I want to focus my speech on three or four areas that I believe to be of particular concern—most of which have already been mentioned, so I cannot be far off the mark—on which eventual decisions could have serious implications for rural development.

The first concern revolves around axis 2 funding under the rural development regulation, which states that 25 per cent of the European agricultural fund for rural development funding should go towards

"Improving the environment and countryside through land management".

That is a perfectly laudable and agreeable aim, but my concern is that it perhaps allows us to take our eye off the importance of retaining profitability within the agricultural sector. I think that the minister acknowledged some of that importance in his opening speech.

As I see it, the problem is that funding that is delivered for environmental schemes through axis 2 tends simply to reimburse all or most of the money spent by the land manager on an environmentally suitable scheme; it does little or nothing for the profitability of the business concerned. The very fact that we have a rural environment in Scotland that so many people are so keen to protect and preserve is due to the fact that, with a profitable agricultural sector, come the environmental benefits that we all seek, even if those benefits occasionally need to be prompted and incentivised from the centre. It is because we have fostered and encouraged a reasonably profitable agricultural sector over the years that we now have a countryside that is so well worth preserving. If we lose the link between support and profitability, I believe that we will lose long-term sustainable environmental benefit.

Since the introduction of the single farm payment and the consequent breaking of another link between subsidy and production, the only remaining incentive to maintain stock numbers on hill and marginal farms has been the LFASS, which still pays out on the headage number of sheep and cattle and which falls within axis 2 of the rural development regulation. The RSPB, which is not a body with which I often agree 100 per cent, but which I commend for its speed in pointing out the danger in this instance, acknowledges that incentive, among the many benefits of the scheme, and I whole-heartedly agree with its view that the proposals in the current consultation for the LFASS would be a backward step for the environment. One of the acknowledged impacts of the single farm payment was that suckled calf production would most likely move down the hill, which has been the case to a degree. The LFASS is the only incentive to keep them on the hills, with the recognised environmental benefit that that brings—although I hear what the minister says about the beef envelope—yet there is no substitute for the LFASS incentive in the proposals.

The Executive's desire in effect to freeze LFASS payments on an historical basis will not just keep things as they are until 2010, the year in which the European Commission requires a full review of less favoured areas; some £20 million per annum that is currently payable to keep cattle in those areas will still be paid out without any requirement for the recipient to justify or earn that support. As I understand it, there is no need to bring in the proposed change until 2010. The less favoured area scheme does what it says on the tin; it supports less favoured areas. It works well, so why do we not just leave it alone until it has to be changed? The proposals in the consultation document would almost bring in change for change's sake and I believe that they should be resisted.

One change to the LFASS that I would welcome would be the inclusion of dairy producers. Such a change is long overdue, would take only £3 million to £4 million out of a total of some £135 million and would bring much-needed relief to that beleaguered sector.

As Jim Wallace pointed out, there is a proposal to redistribute the available LFASS funding by giving a heavier weighting to very fragile areas at the expense of standard areas. I agree with Alasdair Morgan that that would be completely unacceptable and believe that it falls into the trap of losing the link between support and economic activity. Any further support for the very fragile areas, which might well be justified, should not come at the expense of funding for fragile and standard areas.

Modulation is always a contentious issue. I am somewhat alarmed at a sentence in the minister's foreword in the consultation document, where he acknowledges that the budget will not be enough to achieve all the outputs that stakeholders seek. He goes on to say that that could be overcome by additional voluntary modulation from the single farm payment. In his language, additional voluntary modulation really means compulsory reduction in the single farm payment. I seek an absolute assurance from the minister that no such increase in modulation will be contemplated without an absolute guarantee of matched funding from the Treasury. It seems to me that the Executive tends to assess how much funding it has available through modulation before deciding how to spend it. Perhaps the consultation might improve the delivery mechanism by agreeing the objectives first, which would then determine the amount of modulated funding required.

I will say a brief word on forestry, although its current state, in the private sector at least, demands more than a brief word, frankly. The decision to bring forward the closure of the Scottish forestry grant scheme and the subsequent torrent of applications, which should surely not have come as a surprise given that there has been no word of a successor, have left the private sector in nothing less than a chaotic shambles—and a very angry shambles at that.

The handling of the scheme has been an unmitigated disaster. Many applicants now have unsubmitted, partially prepared schemes—prepared at considerable cost to themselves—and there has been no assurance that submitted schemes will be accepted. If this were a private business, heads would roll; but no doubt the only losers in this instance will be the highly efficient private sector, which is bearing the full brunt of public sector dithering. I trust that the outcome of the consultation will be a better system but, in the meantime, chaos reigns. The Executive should address that.

Many challenges are made in the consultation paper and many issues are raised. Some are eminently sensible; others less so. However, the overriding message to all who care about rural Scotland is that this is people's chance to shape the future. I trust that they will do so in their thousands.

Photo of Sarah Boyack Sarah Boyack Labour 9:55, 27 April 2006

In this short speech I want to raise points on different aspects of rural development from the debates that we have had over the past two or three years and test whether they appear in the rural development programme that Ross Finnie has put out for consultation.

Everybody is struggling with an overarching issue that has come through in the speeches this morning: how do rural communities deal with external forces that impact on the rural economy? I am thinking in particular of centralising forces in the public sector as we try to get better value for money for services, and I am wondering what that means for local communities. Private sector market forces are also centralising and changing. How will rural communities deal with those challenges? Part of the solution will have to be in the rural development programme.

Ross Finnie's foreword is good at saying that we have to join the dots between different issues. We are not dealing with just one issue, and joined-up thinking will be required as we face the different challenges. I must admit that I had expected Ross to talk a little more about climate change. That might be because I have spent the past couple of days in the Western Isles, thinking through the big challenges that communities there will face over the next few years. The updated climate change programme, "Changing Our Ways", has just been released and I had expected climate change to be a thread running through this morning's speech.

CAP reform is another issue that worries farming communities, which wonder how they will respond to external changes that are outwith their control. Our starting point has to be this question: how do we equip our rural communities with financial resources and people skills that will allow them to deal with challenges and turn them not into problems but into opportunities?

Real issues arise to do with the management of change and with leadership, and communities have to be involved in shaping the process. The consultation is important and I hope that we do not witness the consultation fatigue that Alex Fergusson mentioned. I hope that communities seize this opportunity to shape their future. The consultation has to come alive. The three themes in the document—underpinning performance in the agriculture, food and forestry industries; promoting and protecting our landscapes and heritage; and promoting a much more diverse rural economy with thriving communities—represent the overarching challenges. Communities should be helped so that they are equipped to face them.

Ross Finnie talked a lot about the different schemes that will help rural communities, and my colleague Alasdair Morrison will focus on the LFASS. Some progress has been made on land management contracts. The Environment and Rural Development Committee was very critical of the minister early in the process. However, when we read through the explanation of the changes that have been made—in particular, to the second tier of land management contracts—it seemed worth giving credit to the minister for moving in the direction that the committee hoped he would move in. Issues such as environmental quality and management, animal health and welfare and biodiversity must be part of the integrated mix of challenges. There has to be money for such schemes as well.

Alex Fergusson wondered whether environmental schemes were simply an extra that comes as part of the process. An issue perhaps arises to do with the way in which we value our rural environment and regard it as part of Scotland's economic wealth. We must ask how we can protect the environment for the future but also how we can obtain economic value from it. There is a debate to be had.

Ramblers have worried about what they regard as an overemphasis on business development. Unless protecting and enhancing our environment is an overarching objective, and unless we can link that to business and economic development, we will miss a trick and make life harder for our rural communities. The ramblers' comment was a single line in a document, but I suspect that there will now be a debate on what it really means.

We have to ensure that all the different stakeholders are party to the process and are not put in the position of only being able to send us a brief one-page document the day before we have a debate. As the consultation continues, a series of issues will arise.

Every time we have a debate in the Environment and Rural Development Committee, we come back to the issue of how we can add value, at local and regional level, to products that are created in rural communities. I very much welcome Ross Finnie's comments on the LEADER programme and on the need to have local and regional strategies. If value is not added at local level, communities are selling their products only for the benefits to be added somewhere else. We must change that.

In that context, I was disappointed that the minister did not raise the issue of co-operatives. The Environment and Rural Development Committee has considered how, in other countries, benefits have been captured for local communities because they have a much more co-operative framework. When we consider the challenges of CAP reform and the different financial structures, we must ensure that we secure benefits locally and do not simply export low-value food products. The maximum possible value must be added in the communities where the food products are made.

We have talked before about abattoirs and about local finishing. We have to support agricultural communities to develop their work in the food chain—and that is one of the issues that the Environment and Rural Development Committee will include in its report on the food chain, which we are still discussing. There are issues in that regard that I would like to have been stressed more this morning.

Public sector procurement is of direct relevance to farming communities. We have a huge public purse in Scotland, and I do not go along with those who criticise the amount of money that we spend on public services, because those services are of huge benefit to communities. However, I would like more value to be wrung out of the expenditure, and I would like there to be better food sourcing by local authorities and by health boards. That would lead to practical links between communities in urban and rural areas, which would be good for our farming communities. There are many such issues that must be added to the debate.

Photo of Ross Finnie Ross Finnie Liberal Democrat

I do not disagree with any of the last four or five points that the member has made; they are central to the development of rural communities. However, does the member accept that issues such as co-operation and partnership working are referred to in the recently revised agricultural strategy? The present consultation document is long enough as it is, and we cannot repeat everything. It is a little unfair to imply that such issues are not in our thinking. They are specifically referred to in the agricultural strategy.

Photo of Sarah Boyack Sarah Boyack Labour

But I was expecting those issues to come up today. I expected them to feed into the debate, because they are crucial.

At the start of my speech, I talked about climate change. The Executive's documents, "Changing Our Ways: Scotland's Climate Change Programme and "Choosing our Future: Scotland's Sustainable Development Strategy", are excellent, but I now expect to feel them, and to see them feed through into all speeches that ministers make. It is a challenge not only for ministers but for all of us. I say to Ross Finnie that I am not being excessively critical, but I do expect such issues to be part of the story of how we support our rural communities.

On climate change, the way in which we power and heat our rural communities will be crucial over the next few years. Those communities are overdependent on oil—a resource that will not be there forever and that is a source of carbon emissions that we are all trying to wean ourselves off. Renewables offer a massive opportunity.

In passing, Ross Finnie mentioned the 100 measures that the LEADER programme will support. This is an area in which we need more joined-up thinking. When we consider renewables, we should not simply be considering a new industry coming into the system; we should be considering how to support our agricultural and rural communities to have locally based industries.

The Environment and Rural Development Committee's recent report on biomass identified that 2,000 new jobs could be created in our rural communities. That represents a huge opportunity for rural communities to secure economic benefit in their areas, which would mean that they would not have to import highly expensive fuel and to export their goods at low value. We want to secure value in local communities by helping farmers to think about how biofuels can add value to their land and by encouraging the forestry industry to assess how to get the maximum value out of Scotland's forests. We have a huge resource and we should consider how our use of it fits into the rural development programme. Renewables must be part of that programme because they represent a massive opportunity, which we cannot afford to miss.

Yesterday I was at an energy conference in Tarbert on Harris, to which it was expected that about 60 people would turn up, but more than 100 came. New industries such as renewables are a live issue. At the conference, I met people whom I had met on Monday in Stornoway, where the Environment and Rural Development Committee took evidence on the Crofting Reform etc Bill. By Wednesday, they were all wearing different hats—whereas on Monday they had been representing crofting organisations, two days later they were representing bodies such as the North Harris Trust and community buyout organisations.

It is important to bring together the key local players. It is excellent that some of the LEADER work is being moved across from the enterprise side to the rural development side, but we must ensure that we do not lose the emphasis on local skills and leadership. I hope that the rural development plan will do that. A key issue that emerged from the Environment and Rural Development Committee's inquiry into rural development was that rural communities' skills and confidence in their businesses are crucial to the success or failure of those communities.

Photo of Sarah Boyack Sarah Boyack Labour

The provision of grants and financial support to rural communities is vital, but how the people who live in those communities can access that support and make the most of it must be part of the picture.

I welcome the rural development plan, which is a big step in the right direction. I have criticised aspects of it only because I want certain issues to be added to the picture. Most of the recommendations that the Environment and Rural Development Committee makes pop up in future ministerial decisions. If I sounded critical, that was because I want more to be done in the future, not because I do not acknowledge what Ross Finnie has done in the past.

Photo of Maureen Watt Maureen Watt Scottish National Party 10:07, 27 April 2006

As Rob Gibson said, we broadly welcome the consultation document, "Rural Development Programme for Scotland 2007-2013", and the chance to debate the future of the land of Scotland and the part that it plays in our overall economic development. As with any plan, the devil will be in the detail and in the funding that is available.

Much is said about the rural economy and the need to diversify so that the population in the countryside can be maintained and enhanced, but we must never lose sight of the primary aim of the land, which is to provide food for our people. In January of last year, I was horrified to hear a minister from the Department for Environment, Food and Rural Affairs say at a conference in Oxford that he no longer thought that it was important that food came from our own resources. We live in a time of global insecurity, which is mostly caused by Bush and Blair and by the UK Government's pursual of a disastrous foreign policy and failure in its duty to protect and defend the security of our citizens. Failure to recognise the importance in a hungry world of home-grown food and to protect food sources leaves us, as an island, highly vulnerable.

Here in Scotland, where agriculture is a devolved issue, we have an opportunity to take a different tack from our southern neighbours. Food production is immensely important to the Scottish economy. The beef cattle industry, which produces 167,000 tonnes of beef, is worth £450 million. Scotland has almost 30 per cent of the UK herd of breeding cattle and 4 per cent of the EU herd. The sheep flock is worth £98 million and Scotland has more than 20 per cent of the UK breeding flock. The pig industry is worth another £150 million; 63 per cent of the country's pigs come from my area in the north-east. Dairy is worth £230 million, poultry and eggs are worth £120 million, cereals—mainly wheat and barley—are worth £260 million and we should not forget the seed potato industry and our exports of fruit and oil-seed rape, for example.

In spite of that, we witness daily pressure on agricultural land, not just from housebuilding, as our towns and cities expand, but from the use of prime agricultural land to plant trees, which is ridiculous. Sustainable forestry must be on moorland rather than on prime agricultural land.

We have yet to experience the full effects of the single farm payment scheme, but I am not optimistic that it will encourage food production. The minister mentioned the beauty of rural Scotland, but that is a result of good land management. Nothing can be more distressing to a farmer's daughter than to see good productive land being set aside. That is a travesty in a world in which there is still widespread famine.

As people become more aware of the need for fair trade at home and in developing countries and of the need to reduce food miles, we must encourage food production rather than stifle it. We must welcome local farmers markets, which offer excellent benefits to farmers and the public, and recognise the advantages of shopping at small local butchers, bakers and delicatessens, which stock local produce, often at cheaper prices than the supermarkets.

It is regrettable that the minister glossed over how the achievement of the rural development plan's aims will be financed. In my view, he seems to be relying far too heavily on EU funding. In that context, I want to discuss the LEADER programme. In an excellent speech, Sarah Boyack spoke about equipping people with the skills to meet future challenges. LEADER has been very good at developing bottom-up community initiatives. Community LEADER agents have given communities confidence to seek funding from a variety of sources to supplement LEADER start-up money. In upper Banffshire and upper Speyside, for example, LEADER initiatives have enabled communities to start a children's drop-in centre, to refurbish a community hall, to open a visitor resource centre and to develop, with the Crown Estate, a footpath network, which stimulates tourism. Information on walking routes is the information most commonly requested by tourists in that area. In the expanding EU, we must ensure that LEADER money is still available to our upland areas.

The minister said a great deal about involving stakeholders, but local authorities are often forgotten about. There is no point in the Scottish Parliament encouraging people to live and work in rural areas if, at the same time, our local authorities are closing rural schools and—as is happening in Liberal Democrat-controlled Aberdeenshire—cutting rather than facilitating access to school transport. The joined-up government that is so often spoken about is far from being achieved.

Photo of Lord James Selkirk Lord James Selkirk Conservative 10:13, 27 April 2006

Any interests that I may have are registered in the register of members' interests.

A common theme that has emerged in this morning's debate is that we want to have a thriving, sustainable countryside in which sustainable development is encouraged. Scotland's countryside should be an attractive place in which to live and work, but its attractiveness relies heavily on a thriving rural economy and a healthy farming sector. Sadly, that is not what we have today. The figures for total income from farming for 2005 were worse than expected—they showed a fall of around 10.9 per cent from an already low base. The situation is particularly difficult for below-average farms. The incomes of farms in the bottom 25 per cent have fallen by 134 per cent in just one year. The dairy sector is struggling, too. Last year, six out of 10 dairy farmers failed to cover their costs. Over the past five years, some 700 family farms have gone out of production.

We now face the possibility of an outbreak of avian flu. It is a great relief that the death of only one whooper swan has been attributed to the H5N1 virus. We hope that that continues to be the case and that the final restriction zone can be lifted on 1 May, as planned.

The discovery of the bird exemplifies the delicate and unpredictable nature of the rural sector and the need for the Executive to be fully prepared to deal with the virus. It is crucial that ministers get information to the public to ensure that we are following the correct precautions and to minimise disruption at a vital time of year for our tourism industry, while keeping the public health of the nation paramount. In addition, if there is a risk of a pandemic, anti-viral agents should be available to everyone who needs them and not just to a favoured few.

We welcome the opportunity to comment on the Executive's consultation on its rural development programme for Scotland from 2007 to 2013. We agree with NFU Scotland, which has said that the consultation is one of the most important for many years. We urge farmers to respond to the document that lays the foundations for their industry for the next seven years and we commend NFUS for holding public meetings in co-operation with the Executive, to spread the news of the consultation throughout the countryside.

I agree with the concerns that members expressed about the Executive's proposals for major changes to three rural support schemes, which form the bedrock of the rural industry: the less favoured area support scheme; land management contracts; and LEADER. It is important that changes to the LFASS do not result in funds being taken away from farmers to be given to people in fragile areas. Support for less favoured areas should be found via another scheme, because the removal of funds from farmers would endanger the viability of some farms and could cause divisions in the sector, which I think we all want to avoid.

Photo of Rob Gibson Rob Gibson Scottish National Party

Does the member agree that if the LFASS is to work, the least favoured areas need more support than they have received recently? Those areas can produce quality produce, but do so in more difficult circumstances.

Photo of Lord James Selkirk Lord James Selkirk Conservative

I understand that such areas already receive extra payments. The minister will have noted the member's point.

I hope that the Executive will carefully consider the concern expressed by RSPB Scotland that substitute measures should be introduced to replace the headage-based top-up payments for cattle, which are no longer allowed under the new rural development regulation. Jim Wallace raised the matter and we were reassured by the minister's comments, but RSPB Scotland says that incentives to keep cattle numbers up are essential, because a number of Scotland's priority species, including red-billed chough, corncrake, corn bunting, lapwing, snipe and redshank have benefited from and depend on the continuation of cattle farming to provide the habitats that they need. The conservation of wildlife habitats is important to ensure that species are sustainable and not constantly under threat of extinction. I hope that the minister will find a meeting of minds with RSPB Scotland and Scottish Natural Heritage in that regard.

We agree with the comments by members that changes to land management contracts and LEADER must result in reduced bureaucracy and the simplification of the schemes. We are keen that any new advisory network that is created should be additional to the good work of the Scottish agricultural colleges and the Farming and Wildlife Advisory Group.

The consultation document refers to the £19 billion EU budget cut that was inflicted in December on rural development spending, which is expected to lead to a 20 per cent cut in funding for Scotland. I ask the minister quickly to provide precise figures to stakeholders, because it is unsettling for them not to know their fate.

The consultation on the rural development plan is welcome, but we should be under no illusions. The Scottish rural farming sector faces challenging new initiatives. We hope that the Executive will keep that in mind in pursuing its objective of supporting thriving rural communities.

Photo of Alasdair Morrison Alasdair Morrison Labour 10:19, 27 April 2006

I ask members to note my declaration in the register of members' interests, which bears no resemblance to that of Lord James Douglas-Hamilton but states my membership of the Scottish Crofting Foundation.

Lord James Douglas-Hamilton was right to say that a debate about issues that affect rural Scotland must make reference to the grave situation that faces rural communities not just in Scotland but throughout the world. For many people, avian flu is genuinely a matter of life and death. Although the issue is not a primary concern in England, we can empathise with friends in Norfolk who are dealing with the consequences of finding a suspected strain of avian flu. I want to put on record my appreciation of how recent events in Fife were dealt with by ministers and their officials, who calmly dealt with the rogue swan in an appropriate manner, which was reassuring. I am open to correction on this, but I suspect that that approach was adopted in the light of the handling of the difficult and fraught incident in 2001. We can contrast the professionalism of ministers and officials with the hysteria of the nationalists, who demanded, for example, that the First Minister return from New York, where he and others were busy doing the serious job of promoting the whole of Scotland. The nationalists' response represented infantile, silly and puerile politics. What the First Minister was meant to do on his return was not entirely clear. Was he supposed to don a scientist's white coat and sit in a laboratory to await the outcome of a blood test on a single whooper swan? The nationalists adopted a ludicrous position.

Photo of Alasdair Morrison Alasdair Morrison Labour

I suspect that the lunacy will be compounded by Mr Gibson's intervention.

Photo of Rob Gibson Rob Gibson Scottish National Party

Perhaps we need facts from the Government. Can the member tell us whether the budget for veterinary services has been increased so that services can cope with an outbreak or whether that budget has been reduced?

Photo of Alasdair Morrison Alasdair Morrison Labour

I am sure that Ms Brankin will ably deal with the member's point about the detail of the budget in her closing speech. I merely comment on the infantile position adopted by the nationalists' deputy leader in demanding the return of the First Minister to Scotland to deal with an incident that was being properly dealt with by the people who are paid to do so—the scientists, the vets and the ministers in charge of the Environment and Rural Affairs Department. If Mr McConnell had listened to Rob Gibson and his deputy leader and returned to Scotland, anyone who showed an interest in tartan week in the United States would have seen images of a First Minister flying home to deal with an incident that I am sure would have been reported as though it were on the scale of the foot-and-mouth crisis, which would have been regrettable. I am sure that those of us who were concerned about the incident were hugely reassured during the Easter recess when—I am open to correction on this, too—Ross Finnie was reported as saying that he was in "constant telephonic linkage" with the First Minister.

Photo of Ross Finnie Ross Finnie Liberal Democrat

And very beneficial it was, too.

Photo of Alasdair Morrison Alasdair Morrison Labour

The aims of the rural development plan highlight the need to ensure the viability of high nature value farming, in other words non-intensive agricultural activity, in line with international commitments on biodiversity. As a result of CAP reform, agricultural activity in marginal areas, which are often high nature value areas, faces particular challenges. If we are not vigilant, such activity could decline. Rob Gibson mentioned the less favoured area support scheme. It has been decided at European level to address the demanding need of such areas and any new arrangements must reflect the new circumstances of upland, peripheral and island areas. Grave concerns have been expressed by the Scottish Crofting Foundation and others in that regard. Ministers are well aware of those concerns and will remain engaged with the need to ensure that the LFASS is finessed to realise what we all want for people in the parts of Scotland where crofting takes place, such as the Western Isles.

My colleague Sarah Boyack referred to the successful renewable energy conference that was held this week in Harris. She ably contributed to the conference, which was attended by delegates from Shetland, Orkney, the mainland Highlands and the islands of Argyll. The conference was significant in that it was the first major get-together for people involved in micro-renewable energy projects. It was striking to everyone who attended that the people who were involved in recent land buyouts are at the forefront of the renewable energy revolution. Delegates from estates that are currently subject to buyouts are joining the queue and also want to play an important role.

Land buyouts have helped to release entrepreneurial energy in many communities. We fondly recall contributions from our friends on the Tory benches during debates on the Land Reform (Scotland) Bill, who prophesised that the opposite would happen. Bill Aitken's contributions were particularly striking during that era in Scottish political history. The people who were involved in that conference and many other people from throughout the crofting counties now look to the Crofting Reform etc Bill to augment and complement the huge success of the Land Reform (Scotland) Act 2003. I am certain that, when that bill completes its legislative journey, it will do just that.

Rob Gibson, rather characteristically and depressingly, said:

"This is an age of flight from the countryside".

I do not agree with Mr Gibson's sweeping analysis. He quoted Professor Jim Hunter—there is no better authority on the historical context of issues in the Highlands and Islands. Jim Hunter has rightly trumpeted the upturn in the economic fortunes of the Highlands and Islands in recent years. Rather than being a region that people are leaving in droves, as it is portrayed by the Scottish nationalists, it is enjoying a renaissance in many respects. Had the population of Scotland followed the population profile of the Highlands and Islands, we would have 6 million people living in Scotland today. Last year, for the first time in 30 years, the population in my constituency increased. When the new figures are published, which I believe will be later this week, I hope that we will see a continuation of that encouraging trend.

The retention of the population in rural Scotland in areas such as the Western Isles needs a multifaceted strategy that involves supporting crofting, communities that are involved in land buyouts and aquaculture. The introduction of the minimum import price for salmon was a triumph of political lobbying. That protectionist measure was secured and advanced by the Scottish ministers and United Kingdom Government ministers to protect us from the ravages of cheap imports of salmon from Norway and other parts of the world.

The retention of the population also involves supporting our fishermen. We can but fondly recall the contribution from the nationalists on the important issue of protecting scallop fishermen. The nationalists portray themselves as the friends of the fishermen but, two and a half years ago, rather than put the interests of Western Isles fishermen at the forefront of their actions, deliberations, thoughts and words, they were busy taking instruction from Mr Salmond on the east coast of Scotland. When we hear hand-wringing tales of woe from Mr Gibson and his colleagues, we should reflect on his and his party's record in the Scottish Parliament when it comes to putting sound legislation on the statute book.

Mr Gibson was right to highlight that very few people in the crofting counties are now dependent solely on crofting for their livelihoods. However, crofts and croft land will increasingly be used to provide produce for the ever-increasing number of crofters and farmers markets. As opportunities increase for biomass energy, the need for biomass crops will increase.

The consultation document will play its part in consolidating life and work in rural Scotland and will help to shape the delivery of our rural strategy. It gives us an opportunity to consider new approaches and to take important decisions for the future.

Photo of Eleanor Scott Eleanor Scott Green 10:28, 27 April 2006

I welcome the chance to comment on the consultation document on the rural development programme, although I must say that I do not feel that I have got to grips with it—I certainly could not write an essay on its contents. I have many questions, the answers to which might be in the document, but I have not had long to read it and there is a lot to take in. However, the document gives us a chance to talk about the vision for rural Scotland, which is for a place in which we protect and enhance biodiversity and habitats; increase food production and production of non-food crops such as those for biofuels; and, crucially, increase the rural population.

As members have said, the rural environment and landscape have been created by people, who have their place in it, but many factors act against people living and working in rural areas. There is much in the document about joining up government, which I hope does not mean only within the Environment and Rural Affairs Department. A couple of important bills are proceeding through the Parliament—the Crofting Reform etc Bill, which has been mentioned and which I will talk about later if I have time, and the Planning etc (Scotland) Bill. Big planning issues prevent people from making their homes and living in the countryside. Some people might want to live and work in rural areas and do countryside-based activities, while others may have a job that can be done anywhere with modern communications but which they choose to do in the country. I am not talking about people who commute from the country into towns; I am talking about people who live, work and have their family life in the country and who therefore contribute to the wider community in rural areas. Planning constraints make that difficult. I hope that the joining-up that is mentioned will allow those issues to be tackled.

I said that I had trouble getting to grips with what is a fairly weighty document. Shortly after I was elected, I had to try to get to grips with the issue of CAP support and its reform. At that time, we argued about the basis for the single farm payment. Some of us felt that an area basis was better than an historical one, but the historical basis was chosen. However, we must now look towards an exit strategy for that historical basis, because, as we get further from the reference year of 2001, the relevance of that basis lessens. The single farm payment, or tier 1 of the land management contract, makes up the bulk of the support for farming and rural areas—a sum of about £450 million per annum.

The historical basis might tend to perpetuate historical practices. We had a vision from Alex Fergusson about the beautiful countryside that agriculture and farming practices have created, which is true, but that beauty can mask problems. Greenhouse gas emissions, pollution from pesticides and nitrates and habitat loss are aspects of agriculture that everyone would like to be reduced and reversed. On climate change, the consultation document mentions the restoration and protection of natural carbon stores such as peat bogs and woodlands and the enhancement of soil organic matter, which are important in that regard. Other proposals are for targeted fertiliser applications and measures to help agriculture and forestry to adapt to change.

Photo of Ross Finnie Ross Finnie Liberal Democrat

In advocating, as the member appears to be doing, a radical redistribution of support through the early abandonment of the historical basis for the single farm payment, can she say what financial impact that would have on the agriculture sector in Scotland, which is already fragile?

Photo of Eleanor Scott Eleanor Scott Green

I understand that the change would have an impact, which is why I said that we need to consider the exit strategy for the historical basis; I did not say that it would be easy or that it would not be controversial. At some point, the basis will have to change, so the sooner we start considering that, the better. The historical basis of payments could mean the continuation of public funding for diffuse pollution, which could result in our failing to meet the requirements of the European water framework directive. We need to refine the proposals in the consultation document so that we get best value from the overall pot of money.

I am interested in knowing the minister's thoughts on modulation. My feeling is that we need more cash for agri-environment measures. I understand that the Department for Environment, Food and Rural Affairs is considering higher rates to prioritise environmental concerns. Paragraph 69 of the consultation document states that EU rules allow up to 20 per cent voluntary modulation. I am interested in whether the Executive has a level in mind. Paragraph 71 mentions a "stepped increase", but how big will the steps be and how much will the eventual total increase be?

I agree with the theme that runs through the document on simplifying support and having one gateway for the various schemes, which at present are greatly complex. However, I have concerns about how that will work, particularly for the organic sector. Organic farming has an holistic whole-farm approach. I am not clear whether aggregating the support mechanisms will mean that organic farmers have to disaggregate the elements of their holistic approach in order to tick the boxes to claim payments. I am not sure how the process will work or what the role of the organic certifying bodies will be in it. I would be grateful for ministerial clarification of that. I would also be grateful for clarification of the comment on page 8 about bringing in some forestry grant schemes

"in whole or in part".

I am not sure what that means and I want it to be clarified, because we need to enhance forestry for timber and for biomass, as members have said.

I welcome the proposals for the LEADER programme, which has been valuable in encouraging ways of making rural life better. However, I am not clear from the document, although I have probably just missed something, whether the programme will bring its own money or become a competing use for what used to be called pillar 2 funding. I am not clear whether LEADER will bring any more money into the pot.

I am interested in knowing how the bit about local stakeholders in part 3 would work. How would local stakeholders be chosen, how would accountability be addressed and how would agreement on local priorities come about? How would the proposed regional project assessment committees work? Whose priorities would they reflect? Would they hold a budget? How would they be accountable to the local areas? On the issue of local versus national priorities, rather than national priorities feeding down to local areas, local priorities should feed up to the national level. I will be interested to see how that will work and what the balance between local and national will be.

Would the business development schemes just be for on-farm businesses or would they be available to the wider rural community? I would support the latter, even if that meant less cash for farmers. That might be controversial, but business needs to add value within rural communities so that they produce more than just commodities and the raw materials of agricultural products. Sarah Boyack talked about that. She also mentioned abattoirs in rural areas—a subject that has always been dear to my heart. Such abattoirs are crucial for getting local food networks going. There is a thriving Highlands and Islands local food network, which addresses small-scale, local production for local needs. Local food networks are a real winner and should be supported, not only because of the local jobs that they create but to reduce food miles and for the quality of the product for local use and for the use of visitors to the area.

Processing grants are crucial. Under the previous rural development regulation, I am not sure whether we made full use of all the possible ways in which we could add value to products. I hope that we will give more consideration to that and to keeping people in rural communities—not just on the farm but next to the farm, processing what is produced.

The LFASS has been mentioned. I add my voice to those who say that it is crucial to retain the cattle element of the LFASS. I am very much echoing what is in the SRDP, but it is also recognised by the Scottish Crofting Foundation that cattle are not economically viable in their own right but are essential for environmental reasons. It would not be beyond the bounds of possibility to have, rather than a headage payment for cattle as cattle, a payment for keeping cattle as tools for environmental management. The non-productive capital investment part of the document has some quite descriptive measures, for example

"Woody vegetation control ... involving mechanical cutting and chemical stump treatment" and rhododendron control by

"cut, rake & burn using excavator".

If we can have those sorts of things, why can we not have habitat assessment by use of cattle? That seems perfectly reasonable and I am sure that it can be devised without being in breach of any rules.

On crofting, we need to join up the other legislation that is going through Parliament. The Crofting Reform etc Bill is the big one at the moment. How would the integration of measures fit with the proposal in the bill to make the Crofters Commission a non-departmental public body, which would arguably have more autonomy and the ability to start its own schemes? How would that fit in with the one-stop-shop approach that runs through the rural development plan? Finally, on the LFASS, it is crucial that something that is supposed to be for less favoured areas ends up targeting the truly less favoured areas.

Photo of Andrew Welsh Andrew Welsh Scottish National Party 10:39, 27 April 2006

Eleanor Scott's comment about placing the people who live and work in the country firmly at the centre of policy was good advice about where the focus of policy should be. The principles that are found in the consultation paper draft proposals are both welcome and refreshing in their wish to devolve power and decision making, but no matter how good the SRDP is, if such devolution of power is not embedded into an overarching policy framework that addresses the unique needs of rural communities, it will fail in its stated objectives. One of the problems is that achieving agreement on such overall objectives is coloured by different perspectives within a massively diverse Scottish rural population, with its range of industries and needs. To succeed, the LEADER programme has to satisfy that diversity and the vastly different outlooks of profit-driven, rural-based small and medium enterprises as well as voluntary local groups based on altruism, which have no profit motive.

There is an inherent danger of diffusion and confusion in merging existing rural groups into such a wider, larger project. The minister should tell us exactly how he will create the necessary cohesion and by what criteria the Government will judge the schemes and their outcomes. I welcome the strategic approach of combining strong economic performance with sustainable use of natural resources, as well as the three main themes and three axes on which they will be built and funded. However, as usual with European documents agreed by negotiation, although the theory may be on the right lines, everything depends on the delivery and on the LEADER approach, through locally driven innovation and partnerships.

This aspirational document requires co-ordinated Government support schemes, fuelling and encouraging innovation on a sustainable basis. Practical measures must be combined to produce outcomes that are complementary. In other words, if encouraging words are to be turned into rural progress and prosperity, actions must be interlinked, complementary, targeted, practical and environmentally friendly. The real question for the minister is how he will achieve that. Does he have the required and essential mechanisms for measuring outcomes, preventing duplication and ensuring value for money? if so, we would all like to hear about them. Do the baseline figures and methodologies exist? We would like to hear about those because they will be the basis of future progress and for checking whether the plans are working and delivering for Scotland.

LEADER is at the centre of those proposals. Although I welcome its local approach, there are problems. The European Commission guide maximum of 100,000 people for individual local action groups does not fit easily into traditional Scottish counties and may hinder any mapping together of those new administrative units with older, organic communities. Indeed, the minimum level of 10,000 does not cater for island communities, for example. Perhaps a more fluid and logical arrangement is required. The minister must open European eyes to the reality of Scottish needs. Responding to an earlier intervention, the minister skipped over those points, but I seek a Government response to that point when the minister sums up. Based on DEFRA estimates, the Executive believes that Scotland's allocation of EU moneys will be reduced by around 20 per cent compared with 2000-06. Scotland cannot rely on future European funding, especially with the addition of so many new—and welcome—EU members. What reassurances can the minister give regarding security of finance for rural development plans? Plans without appropriate corresponding funding will be little more than a cruel deceit.

The idea of strengthening rural communities is found throughout the consultation document and is implicitly stated in its third theme and third axis. Meeting the economic needs of rural communities must also reinforce their social and cultural cohesion. Central to that are village and community halls, which highlights the inconsistency of the Executive's overall rural strategy. Where in the plan is there any cohesive effort to sustain Scotland's voluntary village hall network? For the average hall, with an annual income of around £5,000, even modest VAT liabilities have a disproportionate impact. Most damaging of all, though, are the compliance burdens. Halls have to change their operating procedures, enforce training on volunteers and spend their valuable monetary resources to comply with reams of new Government legislation and regulation. That is the responsibility of the minister in the Cabinet. Will the minister think again about the future role of village halls as centres for high tech, local services, small business centres, medical services, agricultural information and other activities that will fit into that development? In other words, will he plan and create a 21st century role for Scotland's village halls?

When will the Government harness the vast economic and social potential of Scotland's equine and ecotourism industries or, indeed, address the present insecurity of Scotland's agriculture industry, which is at the heart of our rural economy?

A guiding principle of land management contracts is that they should

"provide the basis for moving towards a 'one stop shop' for land managers and other rural actors and a joined-up approach to the administration and delivery of rural funding by the Scottish Executive".

What does "moving towards" mean? How and when will that happen?

There are plenty of good examples of excellent projects that are run by Scottish local councils. I commend the Tayside rural development facilitator project, which supports 70 such initiatives, and the Angus countryside initiative, which introduces urban schoolchildren to farm life and involves more than 3,000 students. I also commend community projects such as Kirkmichael community hall, Lethnot hall community group and the Aberfeldy community cafe, which do not impact on jobs but are important with regard to the creation of sustainable communities. I hope that that will be a major part of what the Executive delivers in implementing this plan. Sustaining rural communities matches employment creation because it builds and maintains strong local links and social networks.

The challenge of the rural development plan is to match rhetoric with reality in order to deliver a viable and vital future for our rural communities.

Photo of Jeremy Purvis Jeremy Purvis Liberal Democrat

I agree with him in many regards, but the first regard in which I agree with him is in relation to his point that rural Scotland is diverse. There are about the same numbers of occupiers and workers in areas that are designated as less favoured areas as there are in areas that are not and five times as many people work in agriculture outwith the Highlands and Islands as in the Highlands and Islands. The Environment and Rural Development Committee did good work on the question of the definition of accessible rural areas as opposed to sparsely populated rural areas.

Photo of Andrew Welsh Andrew Welsh Scottish National Party

Rural Scotland might be diverse, but the commonality is community spirit and community action. I hope that the member will join me in doing something to ensure that the members of the vast volunteer army who man the community halls throughout Scotland are not driven out of them because of Government policy.

Photo of Jeremy Purvis Jeremy Purvis Liberal Democrat

Indeed. Mr Welsh has pre-empted me somewhat, as I was going to say that I agreed with him on a second aspect. I will do so in due course.

The diverse nature of rural Scotland requires a broad response. The minister's strategy is designed to ensure that rural Scotland is dynamic about harnessing its traditions and its appetite for change; provides opportunities for young people; offers a high quality of life for all citizens, with access to quality services, which is crucial; and that it sustains and makes the most of its natural and cultural heritage. Those four aspects of the strategic priorities are absolutely right.

Rural Scotland covers 98 per cent of the land and contains 20 per cent of the population. It is integral to all parts of the country's economy, environment and culture. The goals that are set out in the consultation document are right. Key to the plan is the further development of contracts, which has been discussed this morning. Those contracts are all about making farming and forestry more sustainable. Through its three main axes—competitiveness, land management and wider rural development—the EU's rural development regulation covers all the key elements of sustainable development. The aim is to create a rural development policy that capitalises on our assets in rural Scotland.

I hope that the consultation process will touch all parts of Scotland, from the Highlands to the Borders. Even though the budget is not yet known, I am glad that the minister is already planning for how it will impact on the work of turning the strategy into real actions on the ground. I hope that my comments and those of others will shape the minister's thinking in that regard.

I am pleased that the Executive's investment will be in the shape of payments to sustain the environment and other rural infrastructure that provides public value for people and businesses, which can capitalise on a good environment, and in the shape of one-off investments in rural development projects. That will help to overcome market failure in many of our constituencies and will enable businesses to move away from long-term dependence on Government funds.

I wish to record my admiration of many of my constituents who are hill farmers in the Borders. Many of those families have been farming in the Borders for generations. Sometimes, we fail to understand that those farmers and their families are stewards of the land that they have been farming for centuries and that sustaining the environment and rural infrastructure is as important to them as it is to the Government.

I wish to focus on four aspects: rural living; rural working; diversification and innovation; and leisure. Through those aspects runs the thread of communities, which Mr Welsh spoke about.

Rural living is important with regard to young people living and working in rural communities. That requires good schooling, health services and retail opportunities. Housing is also increasingly important. Maureen Watt was right to point to issues in Aberdeenshire in relation to rural schools. This is a cross-party issue. Angus Council and Scottish Borders Council—respectively Conservative led and independent led—are tackling the issue of providing a schooling infrastructure that is sustainable and responsive to parents' requests.

Presiding Officer, I know that you take a particular interest in housing planning in extremely rural areas. Communities Scotland does not sufficiently understand that in many of our communities the requirement for housing is such that housing policies must be creative. Housing grants should be made available to extremely small-scale developments and the updating or conversion of farm steadings, which can create valuable assets. Indeed, Communities Scotland should work in partnership with some of our local estates as well as our local authorities. It is important that we get this policy correct. The asset value of some farm steadings is incredibly high. In areas in the south of Scotland and those that are connected to a city region, it is vital that we release those steadings for housing, rather than just for commercial gain. The overall value of agricultural assets has risen from £415 million in 2004 to more than £14.5 billion. However, as the value of the assets increases, the investment in farming activities is falling. In 2000, farmers invested £196 million in farming and provisional figures show that, by 2003, that had fallen to £143 million. It is expected that the figures for 2004 will show that, although the level of investment picked up during that year, it did not reach previous levels. Of course, many of our rural areas are dependent not only on public sector but on private sector investment. A third of the gross domestic product of my constituency derives from agriculture and land-based industries and private sector investment in farming enterprises is important.

On working in rural areas, salaries are lower than the average income across Scotland. For example, in relation to shepherding—of which there is a long tradition in my family—and labouring, employers involved in those activities are, realistically, competing against Tesco and Asda. In my constituency, Tesco and Asda will double their presence in Galashiels, which will make the environment even more competitive. Young people who might have thought about going into land-based agriculture industries might, instead, be attracted to other types of employment.

The employment trend is worrying for Scotland as a whole, as the average age of males who work on main holdings is increasing. Between 1993 and 2003, the proportion of farm workers who were aged between 35 and 65 rose from 48 per cent to 59 per cent, and the proportion of males under the age of 35 who worked on main holdings fell from 47 per cent in 1993 to 36 per cent in 2003. There is little indication that that trend is changing.

The charts detailing the occupiers, spouses and employees on main and minor holdings between 1995 and 2004, which were published in the interesting economic report on Scottish agriculture, also show a clear trend of falling numbers of full-time employees and an increase in the numbers of both part-time employees and casual or seasonal employees. I hope that the Executive is studying that. It would be interesting to know how many workers in the growing areas of casual and part-time labour are immigrants, whether in the fruit-picking industry in the north-east or in the fish-processing industry in the Borders. The increase in the number of immigrant workers—especially those from central and eastern Europe—is a new and, I think, growing issue in Scotland's rural development. It brings its own issues although, by and large, it is extremely welcome. One of my concerns about the growing trend of farmers employing immigrant workers is that, in many cases, the workers are exploited. We must ensure that immigrant workers in the agricultural labour force are protected.

With regard to diversification and innovation, it is welcome that there are relief schemes for agricultural land and buildings that are used for non-agricultural purposes. The document "A Forward Strategy for Scottish Agriculture: Next Steps" is good and makes some concrete suggestions as to the way forward. The strategic group that the minister has established, which includes the chief executive of Scottish Enterprise Borders, who is to take a lead through the enterprise network for rural Scotland, is also very good. I hope that the group will address the procurement issue that Ms Boyack mentioned and on which the minister responded. The current procurement method for school meals is not the way forward for Scotland. Food procurement at the Edinburgh royal infirmary is absolutely hopeless: frozen food is driven up the M6 from Wales and reheated in the hospital. I know that it is a difficult issue and that the Executive is considering it closely, not only in the context of procurement from local suppliers, but in the context of EU procurement rules and Scotland's role within those. However, if we are to persuade Tesco and Asda to procure from local suppliers, the public sector should take a lead in its own areas of responsibility.

Crucially, there are steps for Scottish agriculture to take in renewable energy, from using biomass on farms or in industries to growing biofuels such as oil-seed rape or coppice. There is also potential for the small-scale incineration of local business waste. However, I am wary that the changes from the Treasury will mean that there will be more importing of processed products rather than the promotion of the indigenous biofuels industry. That is another area in which the Executive is taking a close interest and in which the public sector can take a lead, whether through the provision of incentives in Scotland, under devolved powers, or through having far more of our public services using biofuels.

Small communities and new developments could also make use of small-scale renewable technologies, from micro-hydro to micro-combined heat and power technologies. That will be important in rural Scotland as well as in our agricultural industry. I recently hosted an energy summit in the Borders to which more than 500 members of the public came, including many farmers. That open day was arranged by the Southern Uplands Partnership to enable people to learn not only how micro-hydro techniques can be used on their land, but how they can benefit the local communities of which they are an integral part.

Finally, I turn to leisure. The subject has not come up much in the debate, but I think that it will be important. Mr Welsh mentioned the need for support for equestrian tourism—that is the third aspect of his speech with which I agree. I hope that he recognises the symmetry in my speech of agreeing with him at the beginning, in the middle and at the end. There is rich potential for equestrian tourism throughout Scotland and in the Borders in particular, as it has by far the best traditions of equestrian leisure activities in Europe.

There are many other leisure opportunities across rural Scotland, from mountain biking in Glentress and Fort William to the long salmon fishing season on our wonderful rivers. Many rural areas both qualify for less favoured area status and are connected to the city regions and will benefit from the growing affluence in those regions through a focus on leisure. There are rich opportunities in that for our land-based industries, and the Borders region is well placed, in the key area between Edinburgh and Glasgow and Manchester and Newcastle, to benefit from such tourism opportunities.

At the heart of rural development, as Mr Welsh said, are our communities. We should not forget that our farming communities are integral to many of those and that, if they decline through not investing, the communities that we represent will decline with them. I am sure that the Executive's policies and the strategy are the right way forward. As Mr Welsh said, we need to see the action that those policies propose; however, I know that the minister is committed and I am sure that he will respond positively to the results of the consultation process that he has announced.

Photo of Ted Brocklebank Ted Brocklebank Conservative 11:01, 27 April 2006

The debate has been interesting and far reaching. Too often, the Parliament does not pay enough attention to rural Scotland and to the difficulties of those who live and work in our farming sector and countryside—especially the remoter parts. That is why I welcome the Executive's consultation on the rural development programme for Scotland for the next six years. I hope that it will be a real chance for farmers and other stakeholders to engage in the discussion process, so that the people who know the industry best will have the major say in its future. Andrew Welsh was right to say that people must be at the heart of the plan. The minister seeks written contributions, and it is to the credit of the NFUS that meetings are already being organised throughout rural Scotland to encourage people from the countryside to voice their concerns about their future. I have held meetings with farmers in north-east Fife and I am pleased to say that I will meet a similar group in Perth tomorrow.

Several members have spoken about the parlous state of farming in their areas. In the part of Scotland where I live, north-east Fife, we have seen a further fall in farm incomes of around 12 per cent from an already historically low base, and the average age of local farmers is now over 63 years. Farming has seen bad times before, but morale in farming—once a thriving and prosperous sector and the major employer in Fife—has seldom been lower. As Alex Fergusson reminded us in his excellent speech, it is only by securing a profitable farming sector that we will secure the future of the environment. Maureen Watt, who is no longer in the chamber, also paid tribute to the land management skills of our farmers over the years, and I agree with that.

The consultation paper for the rural development programme for the next six years asks for views on the Executive's goals for sustainable rural development. As we have heard, one of the main planks of the Executive's policy is the less favoured areas support scheme, to which Ross Finnie referred in his opening speech and which Alex Fergusson and others have dealt with at length. I echo what other members—particularly Alex Fergusson and Alasdair Morgan—said, and I share their view that we do not want resources to be diverted from standard areas of farming to fragile areas. In our view, that would be bankrupting Peter to buy off Paul with a vengeance. Alternative means must be considered to sustain all sectors of the industry.

I am encouraged by evidence that the Environment and Rural Development Committee has heard recently about biomass. There are exciting opportunities in biomass, especially in agroforestry and the growing of oil-seed rape to produce biofuel. The Executive must act on the committee's excellent report. Too often, other countries have surged ahead because we have not grasped the opportunities that have been presented to us or because we have not put the right support in place at the right time. I hope to return to that point later.

The next proposal that needs to be examined is the suggestion that several existing schemes be merged into the land management contracts by bringing together varied schemes such as the organic aid scheme and the rural stewardship scheme. I hope that that will reduce bureaucracy. The contracts are to be welcomed as long as the scheme does not become an unmanageable leviathan.

I am also cautious about the setting up of regional project assessment committees. In no way should those be allowed to undermine the excellent work of the Scottish Agricultural College and the farming and wildlife advisory group, both of which already provide support and information for farmers, land managers and all those who work in rural Scotland. Another quango with added layers of bureaucracy for the farmers is in no one's interest.

I agree with Sarah Boyack, Jeremy Purvis, Eleanor Scott and others that one of the key issues that ministers must tackle urgently is the weeping sore that is the food supply chain. It is a national scandal that farm-gate prices are often barely above production costs while, only this week, we saw supermarket profits continuing to soar. The supermarket code of conduct simply is not working and suppliers such as Kettle Produce Ltd—one of the biggest employers in north-east Fife—are being forced to lay off staff because of skewed contractual agreements with the retail multiples. Ministers must get an urgent response from the Office of Fair Trading so that they can take action. Sarah Boyack was also right to raise the issue of co-operation and partnerships to achieve some kind of unity in dealing with the multiples.

Several speakers mentioned the case of avian flu at Cellardyke in my region of Fife. I am pleased to read press reports that tourism—such a vital sector of rural Scotland—has not been adversely affected. We are all relieved that it appears to have been an isolated incident. It would be churlish not to praise the minister and his officials for what appeared to be a prompt and appropriate response. On the avian front, I echo the hopes of various speakers that the minister will respond to the hopes of RSPB Scotland and others that cattle will continue to be reared on upland areas to allow the continuation of our richly diverse range of wild birds that contribute so much to tourism in Scotland.

Sarah Boyack was also right to ask us to check whether the consultation document really joins up the dots. She was right to highlight the future role of climate change and, no doubt, we will also have to consider seriously the requirement for investment in the most effective renewables for rural areas. All those issues will have to be dealt with against a background of changing financial circumstances and the need for sustainable rural communities. Nowhere is there a more urgent need for all the dots to be joined up.

I do not want to challenge the spirit of consensus—that would be so unlike me—so I say that I hope that the rural development plan is one of the Executive's more successful initiatives. However, through seven years of this coalition, rural Scotland has had to endure some of the Parliament's most damaging legislation, from access reform to tenancy reform.

Photo of Ted Brocklebank Ted Brocklebank Conservative

I am coming to the end of my speech.

The Executive has failed to address the continuing problems in the dairy and arable sectors, and has failed to stem the decline and loss of traditional family farms. Judging by the responses to the Crofting Reform etc Bill that we have heard so far, there is much work still to do. I was, however, encouraged to hear from Alasdair Morrison that those issues can be worked through, although that is not the public profile that he has adopted thus far.

We can only hope that this new rural development plan is the first step of a new Executive approach to rural Scotland. On past evidence and experience, and given my well-known predilection for pessimism, I will end by quoting the bard:

"forward though I canna see, I guess an' fear".

Photo of Alasdair Morgan Alasdair Morgan Scottish National Party 11:09, 27 April 2006

It is a pity that Ted Brocklebank reverted to type in his closing remarks and came away with some of the nonsense that we have heard from the Conservatives in previous years. When he talked about the damage that is caused by the legislation on access, I was going to offer him a chance to list objectively some of that damage. When the Land Reform (Scotland) Bill was going through the Parliament, he said that that would happen but some of us are hard-pressed to see that damage; we pointed that out at the time.

However, Mr Brocklebank did me the favour of referring to the past seven years. In his opening speech, the minister laid out the positives and negatives of working and living in rural Scotland. It struck me that the problem is that he could have said all that six years ago. He probably did; I have a copy of the speech that he made when the Parliament met in Glasgow in May 2000, when he launched "Rural Scotland: A New Approach May 2000". I criticised that document for being glossy, and I notice that the new document has no photographs in it, so my remarks must have got through. I am glad that the minister took my advice.

The final paragraph of the May 2000 document is worth mentioning. It talks of

"acknowledging, understanding and tackling issues so that we are in a position to measure progress against the aims set out in this document."

Perhaps I have missed it—there are a lot of Government documents—but I have not seen the analysis that was referred to in that May 2000 document. Some reference to the success and failure of what was promised and planned in May 2000 might have been useful in the formation of our approach to the next six years. We are in a not-dissimilar situation now and, again, I do not necessarily know that the new document contains the objectives and measures that those of us who are lucky enough to be here in six years' time—although hopefully not in this room—will have to come back and analyse. Andrew Welsh made the point about the need to set objectives so that we can measure progress. If we do not do that, we will be in the same straitjacket in six years, with the majority of funding being preordained because of decisions that are made by our masters in London and Europe and any targeting that we can do being very much at the edges of Government expenditure.

Rob Gibson mentioned SEERAD and its family of agencies. It was amusing to think that that is at least one family that is moving into rural Scotland as opposed to the others who are moving out. It is, however, a very serious point. John Swinney made the point that all the issues and improvements that the minister talked about in relation to farming, the environment, water and so on, are accompanied by bureaucracy. I admit that I do not think that anyone has cracked that problem and, in the meantime, as John Swinney pointed out, we struggle to get one quango to appreciate the difficulties that it causes to people in other areas.

An example of that is the charges that are about to be introduced for private water supplies in small businesses in the tourism sector. It is not clear to us that there has been any interaction with regard to the environmental needs that are allegedly driving those charges—although I have no evidence of a great deal of sickness being caused by bad private water supplies in bed-and-breakfast accommodation in Scotland—and there seems to be very little recognition of the costs or the problems that will be caused by that environmental requirement on the tourism industry. The lack of joined-up activity between Government and its agencies is a major issue in rural areas.

Post offices are another example. This morning, I received through the post a helpful article that contains a quotation from Stephen Byers, another one of Mr Blair's lost ministers—the list seems to be growing. When he was in power, he said:

"We have a vision of a network of post offices equipped with the latest technology in every high street and rural area, offering an increasing range of services for an ever greater number of clients."

How many rural post offices in the areas that are represented by the members present could be described in that way? Very few, I suspect, particularly when the Post Office card account appears to be going down the tubes. A great part of that vision is under threat.

In May 2000, Ross Finnie said:

"The closure of a bank, a shop or a post office can often be seen as a major threat to that community's future."—[Official Report, 25 May 2000; Vol 6, c 1081.]

That is correct, but it seems to us that there is no coherent strategy or objective standard across rural Scotland on the appropriate level of provision, whether it be commercial, educational or medical. I suspect that the minister might respond that objective standards are impossible to achieve and that I should submit to the consultation exercise my suggestions on what those objective standards should be, but it seems to me that whether rural services survive or cease to exist is currently due more to accident than design. That issue needs to be addressed.

Following the setting up of the Rural Affairs Department, which we all agreed would be a step forward if it were to deliver what it set out to do, the minister said:

"we needed to move from the traditional departmental approach to policy making to a more cross-cutting style of government."—[Official Report, 25 May 2000; Vol 6, c 1078.]

We all agreed with that, but I am not convinced that the change has happened to the extent that is required. For example, are the village halls that Andrew Welsh mentioned recognised as important? Is there a strategy for village halls? Does Scottish Water know about that strategy? Does anyone in central Government actually care? Does anyone centrally know how many village halls Scotland has? I suspect that they do not.

Another area in which Government can play an important role is procurement. In that context, Jeremy Purvis raised an issue about the supermarkets. It is strange that we all have a hang-up about supermarkets given that we live in a capitalist society. It seems that it is good for a company to be capitalist until its profits reach a certain size, at which point it becomes bad. Perhaps some of us need to sort out our ideas on how successful we want our businesses to be. However, leaving that aside, I agree that there is an issue about how the supermarkets obtain some of their profits.

Photo of Jeremy Purvis Jeremy Purvis Liberal Democrat

The member will recall that I said that we need to persuade Tesco, Asda and others. Going down the compulsory or statutory route is not the only answer. To some extent, we need to persuade the supermarkets to work closely with local farming communities on procurement. The answer is not simply to force businesses to do things, but to work with them.

Photo of Alasdair Morgan Alasdair Morgan Scottish National Party

I quite agree. We live in a democracy. If we start telling one business what to do, where will things stop? We do not want to go down the route of Soviet-style planning. We need to persuade the supermarkets of the advantages of buying produce from the people who will be their customers. They need to see the benefit of that for themselves.

However—I think that Jeremy Purvis also made this valuable point—how can we expect the supermarkets to do that if the Government does not set a lead in its own procurement? Are those of us who think that other EU countries carry out procurement in a different way simply wrong? Are other countries allowed to get away with more than we get away with? That charge is often made in the chamber, but I do not think that it has been rebutted. I certainly think that supermarkets in France tend to provide more local produce than supermarkets in Scotland do.

Another issue that I will mention briefly seems, strangely enough, almost tangential to the debate because it is not covered in the rural development programme. The strategic plan does not mention pillar 1 funding, which is the most substantial element of support that goes to rural Scotland. We never seem to analyse just how successful or unsuccessful our expenditure on rural development and agriculture has been in Scotland over the past 50 years. It might be useful to have a debate on that at some stage, although I realise that our debate would not have as much influence as we would like over the final decisions, which are taken at increasingly higher levels.

Jeremy Purvis made a valid point about the vast reduction in employment in agriculture that has taken place over the past 50 or 100 years. Since the common agricultural policy was introduced, that rate of reduction has continued. Of course, as that decline has continued, the leakage of funds out of rural areas has also proceeded. For example, I received an e-mail yesterday from a dairy farmer, who writes:

"for us there is no point in Dairying or farming for that matter and we have decided to cut our losses and run. Our animals were valued this morning by a dealer and as we expected are not worth a great deal, however the gentleman valuing our stock was able to tell us of 3 dairy herds in close proximity that are resigning from milk production and farms are up for sale."

Clearly, all is not well with whatever system we have at present.

It is clear that rural Scotland is changing and, unfortunately, declining in many ways, at least in terms of the services that it provides and the youthfulness of its population. Alasdair Morrison may like to claim that certain rural areas are growing in population, but such growth depends very much on how we draw the boundaries. If we draw a boundary that includes Inverness as part of a rural region, the figures will suggest that the rural population is increasing, but I doubt that that is a meaningful statistic. Certainly, in terms of the numbers of people who live outside the major settlements, the population of rural Scotland is declining.

However, while Scotland's rural areas seem to be declining, they are probably becoming more important for Scotland as a whole. They are an important economic resource for agriculture and for tourism businesses, which are often run by people who were, or still are, involved in agriculture. Rural areas are also important for smaller businesses and industries that, thanks to modern technologies, no longer need to be located anywhere near urban, or even for that matter rural, centres.

Rural Scotland is very diverse; Andrew Welsh made a good point about that. One disappointing thing about the debate has been that certain speeches gave the impression that rural development should simply be about agriculture. It is not. Rural development is also about non-agricultural industries and organisations within the rural community that have no profit motive. It is perhaps not surprising that the debate took on that tone given the context of the document on which the debate was based. However, as the document's description of axis 3 makes clear, rural development is about

"Improving the quality of life in rural areas and encouraging diversification of economic activity".

That is an important point, although it is not clear to me how the proposals in the document will achieve that aim and simultaneously maintain a sustainable agriculture.

I hope that I have left the minister sufficient, but not too much, time to respond to all the points that have been raised.

Photo of Rhona Brankin Rhona Brankin Labour 11:22, 27 April 2006

I thank all members present for attending the debate despite the other pressing matters that might have called them away today. I also thank members for contributing a great number of insightful and informed comments on the wide range of issues that are relevant to the rural development programme for Scotland. I will take a few minutes to sum up the debate and to provide some observations on and responses to the issues and discussions that have taken place.

The new rural development programme for Scotland offers a landmark opportunity to reflect on the challenges and opportunities that face our rural areas. It also allows us to consider how the support that we provide for rural development can best deliver benefits, both for those who live and work in rural areas and for the wider population of Scotland and beyond, for whom rural Scotland is a hugely important asset.

Many members highlighted the importance of an integrated approach to rural development and we absolutely agree with that. The new rural development plan will of course sit firmly within our sustainable development strategy. I can assure Sarah Boyack and others that our climate change strategy has major implications for the way in which we use land in Scotland. A strategic environmental assessment of the rural development programme is also being conducted and will be put out to consultation in mid-May. Given that every action that we take now will have an impact on future generations, we believe that the plan provides us with a unique opportunity to build a sustainable rural Scotland for the future.

We believe that the schemes that are proposed for the new SRDP will show our aspiration to implement just such an integrated approach, in which the competitiveness of rural businesses is supported alongside the delivery of public benefits for the environment and the improved well-being of rural communities. Clearly, we have an opportunity to develop measures under the land management contract scheme that will contribute to multiple objectives. That is an attempt at the joined-up thinking to which many members referred. As Ross Finnie demonstrated when he opened the debate, that is an important aspect of our proposals that I would like to underline. For example, we are keen to see the further integration of agriculture and forestry and for forestry to play a full part in delivering multiple objectives on, for example, business diversification, biodiversity, recreation and tourism, biomass and climate change.

Members will have seen the importance in our proposals of forming a programme that delivers measures that are tailored to the needs of local areas. Many members mentioned that point. At the same time, we must meet our national and international objectives and obligations. As members are aware, it is essential to deliver a programme that recognises the diversity of Scotland's farming and forestry systems, environment and rural communities. We believe that our proposals for regional guidance for applicants and for a network of regional assessment committees will allow land managers and others to develop high-quality applications that reflect local circumstances and will allow funds to be directed to projects that address local needs and opportunities.

Photo of Jeremy Purvis Jeremy Purvis Liberal Democrat

The minister will be aware that, in general, structural funds have an important impact on agriculture and rural development, especially in the Borders and the south of Scotland. Does she share my concern that there are proposals that would mean that there was no longer a south of Scotland programme area for structural funds, which would reduce the considerable value that is added by the kind of co-operation that she has eloquently outlined? Will the Scottish Executive Environment and Rural Affairs Department argue forcefully for a south of Scotland programme area, so that we can have the very local delivery that she has indicated with regard to the future of structural funds?

Photo of Rhona Brankin Rhona Brankin Labour

I am aware of the importance of structural funds and the difference that they have made to many areas of Scotland, including the south of Scotland. As the member is aware, no final decisions have been taken about the new structural funds that will be put in place. I am sure that the member will be more than able to make his concerns known to Ross Finnie, other ministers and me, as he has just done.

The strategic plan for the new programme makes clear the importance of adding value locally to Scottish products. Many members have recognised the importance of that. The current consultation proposes measures to address the objective. We want to see further development of processing and marketing of Scottish products to retain income and employment benefits in Scotland. We have major opportunities to build on our strengths in order to provide distinctive, high-quality products. Key factors in such success include entrepreneurship, co-operation and innovation among Scottish producers, our renowned high standards of animal health and welfare and the development of market opportunities associated with the high quality of Scotland's natural heritage.

Many members have emphasised the need for local people to be involved in local rural development plans. The introduction of the LEADER initiative into the SRDP will provide scope for flexible approaches to development that are based on the knowledge of local communities and the distinctive natural and cultural assets that exemplify rural Scotland. Ministers look forward to seeing a wide range of innovative projects emerging through the LEADER approach. LEADER has the potential to add a new dimension to the SRDP that will build the capacity of rural communities to improve their well-being.

Several members mentioned crofting. I reaffirm the importance that the Executive attaches to crofting and to communities in remote and island locations. Crofting communities are an essential part of our system of land management, our community life and our cultural heritage. The Crofting Reform etc Bill that was introduced earlier this year is an important piece of legislation that will bring important changes for crofting and crofting communities, for wider rural development and for the Crofters Commission. It is a central piece of legislation on land reform as well as a key element in the Labour-Liberal Democrat partnership's commitment to crofting and the Highlands and Islands.

I remind members that we have already created a major new right to buy specifically for crofting communities in the Land Reform (Scotland) Act 2003, which the Conservatives have again criticised. That is a massive level of commitment that demonstrates how much we value crofting. In his speech today, Alasdair Morrison was right to talk about the entrepreneurship that has been unleashed by land reform. I recognise that the continuation of land reform will be important. The new Crofting Reform etc Bill supports that, by allowing new crofts such as woodland crofts to be created. The facility to create new crofts in Scotland is hugely exciting. There is potential for hundreds of new crofts to be created.

The consultation document on the SRDP includes a proposal to redistribute some LFA funding towards very fragile areas. Clearly, there is concern about that issue. We take cognisance of the various views that have been expressed today, and I urge members to make their views known in the consultation. The proposal to redistribute LFA funding is in recognition of the particular difficulties that are faced by farmers and crofters in very fragile areas and of the important environmental contribution that they make on land that is highly valued for its natural heritage. Our commitment to crofting's environmental contribution was recognised by the decision this year to allow applications from common grazings committees to be eligible for measures under tier 2 of the land management contracts.

We must ensure that the new programme meets the requirements of the new rural development regulation. However, it is essential that our proposals minimise bureaucracy and achieve streamlined delivery of the measures that are proposed. Many members made reference to the need for that. People who work on the land or who are involved in land management do not want to sink under a weight of bureaucracy. Bringing together wide-ranging measures under land management contracts is designed to achieve greater streamlining. I would welcome views in the consultation on how we can ensure efficiency in implementing the programme.

Forestry will be a key part of the integrated approach to the new programme. The new rural development regulation recognises forestry as a key land use, and I welcome the fact that forestry is integrated throughout the regulation. That will bring new opportunities for support—in the area of business development, for example. We are reviewing the Scottish forestry grant scheme—a public consultation will be launched shortly—and we want to ensure that incentives for woodland creation are maintained. Reference has been made to the recent unprecedented demand for support through the Scottish forestry grants scheme. As has been said, the Forestry Commission Scotland has been required to bring forward the closing date of the scheme from August. I look forward to the key role that forestry will play under the new programme. I remind members that forests and woodlands now cover 17 per cent of Scotland. Our focus now is on targeting investments in planting and sustainable forest management on areas in which the greatest public benefit will be delivered. As members have recognised, the climate change strategy commits us to increasing the proportion of land under forest in Scotland.

Members have referred to organic farming. As members know, the Executive is committed to organic farming. We have worked and continue to work closely with industry stakeholders to develop a strategy, targets and support mechanisms to encourage and help farmers to enter the organic sector. Our commitment is demonstrated by the inclusion of organic targets in the partnership agreement. Our support for organic farming and progress towards meeting our targets are set out in the organic action plan, which was published in 2003, and in the two annual reports that have been published since then. Rightly, the targets are ambitious, but we have delivered substantially on them by significantly increasing the finance that is available to farmers who wish to convert to organic farming. For example, since 2003, the payment rate for conversion of arable land has more than doubled. We have also helped to develop the infrastructure that is needed to increase the proportion of Scottish organic sales that can be supplied by home-grown produce from 35 per cent in 2003 to 70 per cent in 2005.

The integration of the organic aid scheme into land management contracts will allow us to continue to support and enhance organic production in Scotland. Ross Finnie stated that we propose to integrate some national support schemes into the programme. A wide range of schemes have been proposed, and it will be important for local and regional interests to make judgments about what is most important to them. We must ensure that the important contributions of the schemes to our desired policy outcomes and obligations are sustained. We very much welcome views on the proposals in responses to the consultation.

A key requirement for the next SRDP to be truly effective is that it complements other funding streams that are available to support the environment and communities in rural areas. It is essential that consistency is achieved between the SRDP and other programmes, so that we can be confident that the available resources are put to most effective use. For example, the effectiveness of measures in the SRDP that provide facilities for recreation and tourism will depend, in part, on the achievements of other programmes of assistance that underpin the wider infrastructure on which the tourism sector depends. I emphasise, as many members have done, that we must see the SRDP as part of a much bigger rural picture.

We know that we will receive a reduced amount of EU funding for the next SRDP although, as Ross Finnie indicated, Brussels has not yet notified us of our allocation—we hope to receive that notification in May. Meanwhile, Scottish Executive officials are examining options for bringing adequate resources into the SRDP.

The level of voluntary modulation during the new programme will depend on the final allocation of EU funds from Brussels and the resources that are available from the Scottish Executive budget. It will also, of course, depend on the resources that are required to meet policy outcomes. I emphasise that the budgetary arrangements must be implemented in a way that respects pressures on the stability of farm incomes.

Photo of Alex Fergusson Alex Fergusson Conservative

Can the minister give us an assurance that any further increase in the rate of modulation will be match funded by the Treasury? I raised that point in my speech.

Photo of Rhona Brankin Rhona Brankin Labour

Of course, we cannot give members that reassurance now, but we are working closely with our colleagues south of the border to ensure that we get the funding package right. I am sure that Alex Fergusson will continue to make his views known during the consultation. We hope to be able to bring information to the Parliament as soon as possible.

Photo of Rhona Brankin Rhona Brankin Labour

I would like to get on, as I want to touch on a couple of other issues.

We think that the current less favoured area scheme recognises the additional costs of farming in fragile and very fragile areas and the important environmental contribution that is made by farming in those areas. Cross-compliance under the new rural development regulation means that the statutory management requirements and good agricultural and environmental condition requirements will apply to less favoured areas.

I will have to close, but I would like to mention one matter.

Photo of Murray Tosh Murray Tosh Conservative

You have just over two minutes left.

Photo of Rhona Brankin Rhona Brankin Labour

Thank you. I recognise that.

Rightly, several members have raised the important issue of how we evaluate the process. I reassure members that we are working on a baseline analysis of economic, social and environmental issues. The new rural development regulation sets out a common EU monitoring and evaluation framework. We will add indicators that are specific to Scotland and which reflect our own priorities in Scotland. I urge members to give some thought to how we can best do that.

I remind members that the consultation process has almost nine weeks to run. We want there to be a fruitful discussion of the many important issues that are raised in the plan. To that end, we will hold a series of public meetings in late May and June in locations in south, central and northern Scotland and in the islands. Arrangements for the meetings are currently being made and further details will be advertised in the local media. I urge all those with an interest to take the opportunity that will be provided by those meetings to make their views known.

I thank members once again for their contributions to the debate.

Photo of Murray Tosh Murray Tosh Conservative

I suspend the meeting until 11.40.

Meeting suspended.

On resuming—