I remind members that social distancing measures are in place in the chamber and across the Holyrood campus, and I ask that members take care to observe those measures over the course of this afternoon’s business, including when entering and exiting the chamber.
The next item of business is a statement by Fergus Ewing on providing financial stability for farmers and crofters. The cabinet secretary will take questions at the end of his statement, so there should be no interventions or interruptions.
The Scottish Government’s decision to move to home working for all staff as part of our national efforts to prevent the spread of Covid-19 came at the worst possible time for rural payments.
In mid-March, the rural payments and inspections division was about to ramp up its 2019 common agricultural policy payments schedule, ensuring that farmers, crofters and land managers got their pillar 1 and 2 payments. The work to process and make payments is undertaken by 385 staff working out of the 17 area offices that are located all over Scotland from Benbecula to Inverurie and from Lerwick to Dumfries, supported by a range of staff working in Edinburgh. In a matter of days, contingency plans were updated to take account of the unprecedented circumstances and to shift that operation, along with the entire information technology organisation, into a home working one.
Given the well-documented challenges that have been experienced in recent years with regard to simply making the bespoke CAP IT payments system fully operational, the scale of that task was immense. It is a testament to the talent, diligence and expertise of the RPID and IT teams that they not only came up with that plan but tested it prior to lockdown and were fully operational within days. Most important, there was not one glitch, no gap in service and not one blip created by home working arrangements. That was a quite remarkable transformation project.
Since lockdown began, the vast majority of RPID staff have been working to process payments and claims from home and continue to do so. I want to thank each and every official involved for making that happen and ensuring that Scotland’s farmers and crofters received their 2019 CAP payments. If ever there was a year to make CAP payments smoothly and timeously, this was it. Ensuring that our farmers, crofters and land managers received their payments would mean they had the funding that they needed to cope throughout the pandemic. Failure would have meant disaster for the rural economy. In making this statement today, I am able to announce that, at the earliest point ever under this CAP, we have met the European Union’s statutory deadline for pillar 1 payments.
I can advise Parliament that, on 12 June, 95.24 per cent of basic payment scheme, greening and young farmer payments were made to Scotland’s farmers and crofters, delivering £406 million to the sector. I can further advise that the statutory target has also been met for our coupled support schemes—the Scottish beef suckler support scheme and the Scottish upland sheep support scheme—delivering a further £46 million in support to our livestock producers.
However, those are not the only payments that we have made during this period of unprecedented challenge. When I made my statement to Parliament in January, I set out the intended approach to CAP convergence payments. Members will recall that that funding was won for Scotland’s farmers and crofters after a six-year campaign by this Government and a range of stakeholder organisations to right an historic wrong. I promised that that funding would be paid by the end of March and—again, thanks to RPID staff—it was. More than 17,000 convergence payments were made to farmers and crofters all over Scotland, injecting a further £87 million into the rural economy.
In addition, we have been able to make progress in other areas. This year, along with all other member states, for the first time the EU has required us to make a statutory target of 95.24 per cent for land-based pillar 2 rural development schemes. Those schemes are aimed at protecting and enhancing our environment, planting trees and woodland, supporting rural businesses and helping the farming industry to grow and modernise. The payment schedule that we set out last October provided for that. It did not, of course, factor in the challenge of trying to meet that additional target under the most extreme circumstances.
We met that target yesterday. More than £82 million in pillar 2 scheme funding has been paid, amounting to 95.7 per cent of total payments to be made. That amounts to nearly £49 million in LFASS—less favoured area support scheme—payments, or 96.87 per cent of the total due. With £5.4 million paid in total to claimants for rural priorities payments, we are at 96 per cent in that scheme.
There is a little further to go on the AECS—agri-environment climate scheme—at 94.83 per cent, but with close to £23 million already paid, a further £100,000 will take us over the target. A total of 97.8 per cent of forestry grant scheme payments have been made—a clear signal of our intent to meet our ambitious tree-planting target in the year ahead. All 2019 beef efficiency scheme payments have been made.
We are not yet over the line for every scheme, but I am confident that we will make it and that RPID staff will continue to rise to the challenge and deliver more success. That success matters, because it means that Scotland will not face payment penalties, but it also matters to our farmers, crofters, foresters and land managers. Prompt delivery of their payments, often ahead of the schedule that was published last year, has enabled them to keep working and delivering vital food supplies for our nation. In one other remarkable achievement, this Government and RPID staff have done all that we can to ensure they get their farm payments next year. Not only did we have to get money out to where it was needed, but we had to open and run the single application form window for 2020 payments.
Unlike some other Administrations on these islands, this Government, liaising closely with NFU Scotland, decided to adhere to the original SAF deadline of 15 May. That decision proved to be a good one, with submission rates on a par with last year, online applications increasing by 2 per cent and fewer late claims than in previous years.
We are now in the best possible situation for delivery of 2020 payments. Again, our support staff played a critical role. In particular, the customer support that was offered throughout the recent 2020 SAF application window showed creativity and commitment to excellent customer service. Again, I thank the staff, knowing that their efforts made a difference for many claimants. I also offer my appreciation for and thanks to the nation’s farmers, crofters and land managers, who heeded our calls and worked with us to submit their applications on time.
When I was appointed as Cabinet Secretary for Rural Economy in 2016, the First Minister made clear that my number 1 priority was to fix the CAP payments situation. The results that I have set out today suggest that that has been substantially achieved. That has been my focus since 2016, and I assure farmers and crofters that I will continue to make maintaining payments a priority, no matter what uncertainties we face in the future. In the months ahead, I will continue to focus on providing Scotland’s farmers and crofters with certainty, clarity and, above all else, financial stability, because they deserve nothing less.
Scotland’s farming community has worked hard, putting in long hours and days throughout lockdown to keep food on our plates. I thank everyone—farmers, crofters, workers, families, businesses and employees—in all the key agricultural industries in the supply chain for their tireless efforts. The global impact of the pandemic has highlighted the importance of food supply chains and should remind us not to take food or food security for granted. Perhaps the best way for us to show our gratitude for our farmers and crofters is to buy Scottish produce and support local food producers, now and in the future.
We have about 20 minutes for questions. Quite a lot of members are going to ask questions remotely, so I might factor in a little more time, because I appreciate that there are delays when members are working remotely.
I thank the cabinet secretary for providing prior sight of his statement. I echo his thanks to the key workers in agriculture who have kept us going through the pandemic and to the staff in rural offices across Scotland who have worked tirelessly through the past few months in extremely difficult and challenging circumstances to deliver the payments on time.
I note that progress is still to be made on the agri-environment climate scheme payments. I trust that the cabinet secretary will provide me and my Scottish Conservative colleagues with the clarity that the payments will be fulfilled on time, so that farmers get what they rightly deserve.
I turn to the future direction of travel on agriculture policy and providing certainty to Scotland’s farming community. The Scottish Conservatives have long argued that a well-researched and consultation-based approach is urgently required to give farmers certainty, to build resilience, to drive efficiency and productivity and to contribute to new climate change targets.
The cabinet secretary said that the farming and food production future policy group would report before the end of June 2020. Sadly, the Royal Highland Show did not go ahead this year due to the Covid pandemic. I suspect that the cabinet secretary had every intention of using the show as a platform to launch the future policy group’s findings. Will he confirm when he will report to Parliament on the group’s findings, in order to give the agriculture sector a clear vision of the shape of farming and crofting in Scotland? In the light of the update on payments, when will he set out details on how the Bew review funds will be allocated?
As I said, the value that has been paid under the agri-environment climate scheme is at 94.8 per cent, and a remaining £100,000 of payments is needed to meet the target. I would be surprised if we had not met the target by the end of this month.
I am grateful for Rachael Hamilton’s recognition of the key work that farmers and others in the farming community provide, and of the good work that is done in the RPID offices. That will be appreciated by them.
We have clearly set out our vision for Scottish farming. In “Stability and Simplicity: proposals for a rural funding transition period”, which was consulted on, as is correct, in 2018, we clearly set out our continuing support for productivity, efficiency and innovation and for farmers producing high-quality food and looking after the countryside. We said that we would support farmers with a reasonable income in rural communities and as the pillars of those communities. There is common ground on all those issues.
In politics, the vision is often the easy part; it is delivery that can sometimes let us down. Therefore, I am delighted that today we can report very solid and successful delivery to our farmers and crofters in Scotland.
We will publish the outcome of the various work that is in progress as soon as we can. In February, I was pleased to announce the agricultural transformation programme and to explain to the Rural Economy and Connectivity Committee the good work that we are doing in the simplicity and improvement field, not least of which is that we are looking to introduce measures to alleviate the hugely harsh and disproportionate nature of the penalties that can be exacted on some farmers for a simple clerical error.
We are dealing with the points that farmers and crofters wish us to deal with, and we will carry on doing just that.
I thank the cabinet secretary for the advance sight of his statement and for the update on CAP payments. I add my appreciation to the staff involved in ensuring that payments are made in difficult circumstances, and I place on record my thanks to our farmers and crofters for the way in which they have stepped up to the mark during the current crisis by helping to keep Scotland fed.
However, this remains a challenging time for agricultural businesses, many of which have not been eligible for recent support to mitigate the impact of the current pandemic. For example, given that agriculture is exempt from non-domestic rates, agritourism operators did not qualify for the business support fund. Many missed out on the creative, tourism and hospitality enterprises hardship fund due to the short application window during the lambing period. There are also concerns about eligibility for the coronavirus bed and breakfast and small serviced accommodation hardship fund. What further support will be made available for agricultural businesses that have suffered losses during the current crisis but have not been able to access existing financial assistance?
I appreciate Mr Smyth’s thanks and recognition, as I did Rachael Hamilton’s.
Yesterday, I engaged with a large number of farmers from across the country who provide agritourism businesses. There has been a great deal of success in that area, but we can do an awful lot more. Therefore, I fully intend that the tourism task force should not neglect to consider the vital role that agritourism can play.
In response to the main thrust of Mr Smyth’s question, I say that we are looking at how we can ensure that as much support as possible can be provided to businesses to mitigate financial hardship. Kate Forbes, Fiona Hyslop and I are engaged in doing that daily. Some farmers who are involved in tourism have received various payments.
Generally, farms do not pay businesses rates. There has been an issue about business rates, not least on bed and breakfast premises, which do not pay them, so we have extended the support through the creative hardship fund for them and for those who do not have a business bank account. However, each application is considered independently by the agencies involved. Nonetheless, I accept that Mr Smyth is right that that task is not finished, and we are working on that daily.
Yes, I share those concerns. A recent survey indicated that only a quarter of the farming community in Scotland do not share those concerns or, in other words, that around three quarters of farmers and crofters are concerned about various aspects of Brexit.
The issue with seed potatoes is one example of the practical issues that we face. Scottish seed potatoes are world renowned for their high health status but, as matters stand, come 1 January 2021, we will no longer be able to export our seed potatoes to the EU or Northern Ireland. Had the UK Government applied for equivalence with the EU, I am confident that it would accept our seed potatoes, but we are yet to hear about any clear progress on the application that would allow trade to continue.
That matter will be raised by Mairi Gougeon, who is the minister responsible for it, on Monday of next week at the meeting of the inter-ministerial group for environment, food and rural affairs for the UK and devolved Administrations, to ensure that the sector does not become a Brexit casualty.
I remind members of my registered interest in a farming business.
I welcome the cabinet secretary’s statement and congratulate all the officials in our agriculture office for getting money into farmers’ bank accounts in short order. Given that all businesses, including farming, are under huge financial strain, does he plan to run another loan scheme this autumn to get this year’s BPS payments out as soon as possible, or is he content that the IT system is now robust enough to achieve that without a loan scheme?
We have not decided whether to proceed with the loan scheme as yet.
As Mr Chapman is almost certainly aware, the loan scheme that we had in October last year enabled us to pay most farmers 95 per cent of their entitlement at the beginning of October. That is relevant, because the normal time for payment is not actually until later than that; payments are mostly received in December but can be received even in January.
In other words, we were able to pay most of their entitlements to most of our farmers and crofters around a couple of months earlier than happened elsewhere in the UK, which is surely a benefit. We were able to circulate 95 per cent of pillar 1 money in the rural economy earlier, which enabled the supply chain to benefit and enabled investments at events such as AgriScot, with which Mr Chapman is familiar. A loan scheme is desirable for that purpose alone. I will weigh that up with all other factors and will, of course, report to Parliament as soon as a decision has been made.
I recognise the great work that farmers and land managers are doing across Scotland. NFUS states that climate change is
“one of its top priorities”.
Farmers always need time to adapt, as we all do, and Government support and advice is needed in advance. When will the cabinet secretary give us an update on plans for transition pilot projects to ensure that our farming is done in the public interest, in the climate change and biodiversity emergencies, recognising the increasing importance of sustainable food production and accessibility of local produce for consumers?
I am pleased to say that we are slightly ahead of the game, because work has begun on the development of a transformation programme that is intended to support the move from the CAP support regime to meet our longer-term needs. The fund, which I announced in February at the NFUS annual general meeting, will include various measures for the environment— which I know that Claudia Beamish will welcome—namely, more tree planting; delivering the benefits of good grassland management to more livestock farmers; investments in renewable energy, including bio-energy; taking an evidence-based approach to crop production; and demonstrating models of, and promoting, carbon-neutral farms.
That work is in hand. A lot more needs to be done. We are happy to work with everybody in Parliament in order to do that and look forward to carrying on the work that we initiated earlier this year.
I thank the cabinet secretary for early sight of his positive statement and commend the diligence of staff who have delivered, not least, 17,000 payments of convergence money, which was woefully withheld by the UK Government.
The cabinet secretary has mentioned that 97.8 per cent of forestry grant payments have been made. Has there been an assessment of the impact of those payments on forestry targets—which were sadly missed this year but will hopefully be met and, indeed, surpassed in the coming year?
Mr Finnie is correct in saying that the forestry payments have almost completely been made, through the tremendous effort of those who administer them. However, I take issue with his comment, because, this year, we had Covid. Covid has meant lockdown, which prevented trees from being planted because people could not carry on the work. Contractors had to stop working because of Covid, which occurred right in the heart of the tree-planting season. Despite that, we planted 10,860 hectares of trees—the target was 12,000 hectares. That is a remarkable result. Just four years ago, that figure was around 4,000. Despite Covid, the lockdown, the difficulties and a very wet February, we made a tremendous effort. Mr Finnie’s comment is a bit grudging, given that we have achieved so much for forestry and climate change this year.
I join the cabinet secretary in thanking all those in the farming and food and drink sectors, and also rural payments and inspection division staff across the country, including in the local office in Kirkwall, for their exceptional efforts. It is encouraging to hear that we are finally back to where we were when Mr Ewing picked up the farm payment mess left by his predecessor, Richard Lochhead.
What assurances can the cabinet secretary offer that LFASS will continue in its current form and budget to provide farmers and crofters in our more remote rural and island areas with much-needed certainty and stability during these uncertain times?
I think that the problems were largely attributable to the overcomplexity of the regime—that really was at the root of it. That is in the past now, happily.
On the LFASS scheme, I am determined that we continue to provide a reasonable sufficiency of financial support for our hill farmers—our farmers in remote, rural parts of Scotland and on our islands. It has a social purpose of maintaining communities in those parts of Scotland, and that in itself is a good thing.
I was very pleased when, a couple of years back, Michael Gove recognised that that was a shared value. I think that it is a shared value across this chamber, which is a good thing, because we do not need to argue about everything.
The answer to the question is that, yes, we will maintain the real levels of support under LFASS next year. Looking beyond that, Mr McArthur will know that we might have some decisions to make, but we will make them together. I say that to try to give confidence to farmers in places such as Orkney, Sutherland, Lochaber and the Scottish Borders, for whom LFASS might be the main element of their payments—more than pillar 1. Across this chamber, there is almost universal support for continuance of a scheme that serves the purpose of rural cohesion and support for farming activity on the less-favoured land, where it is very difficult to have as much financial success as on the more productive land in some other parts of Scotland.
I note that the cabinet secretary planted more than 22 million trees last year, which was more than his English counterpart, who missed their target by more than 7 million trees. Well done you, cabinet secretary.
Has the United Kingdom Government provided any more clarity and certainty on future funding—[
.] The Tories do not like it when the truth comes out. Has it provided more clarity on future funding, particularly for tree planting and environmental works, which are important for our green recovery and climate change commitments?
I should say that I did not physically plant the 22 million trees myself. [
.] I am sorry about that—and it was 22 million additional trees; the figure does not take account of the restocking. The total number of trees that were planted in Scotland is therefore much higher, but it has not been properly recorded in the data. I am sure that that is an interesting detail that I have regaled members with.
My Lyle is quite right, as always. I have written to George Eustice to seek clarification, because we do not have clarification beyond the end of this financial year about continuation of the funding. Yes, there have been statements in the newspapers, but can we rely on things that are said in the newspapers? From where I am standing, we cannot.
We need that clarification. I have a constructive relationship with Mr Eustice, and I will be pressing him again on Monday on that very point.
This question is from Edward Mountain. He has asked me to remind the Parliament of his interest in a farming partnership.
He, too, would like to thank staff for all the work that they have undertaken to process the payments. He would like to ask whether the cabinet secretary can confirm that he will ensure that the less-favoured area payments, which are so important to farmers and crofters, will continue and will not be reduced due to the financial pressures that are caused by Covid-19.
Certainly, for this year’s payments, we will maintain at its current level the LFASS payment that is due to recipients next year. We will do that by using some of the convergence money, as I have explained. In future years, as I have said to Mr McArthur, we want to find a different way of supporting farmers in constituencies in the most rural parts of Scotland and in the islands.
I would also like to thank everyone who works in our rural sectors for all their hard work over the past few months, and for their hard work in general.
If the pandemic has shown us anything, it is the importance of local produce, local short supply chains, and shops and supermarkets stocking Scottish-branded produce. I agree with the cabinet secretary that we should all be buying Scottish where we can. Can he tell me what support the Scottish Government is giving to the sector to ensure that that happens?
We have been pressing the retail sector with a number of specific asks, including a commitment to a “Scottish first” policy and 100 per cent sourcing of Scottish produce, with the Scotch beef, Scotch lamb and specially selected pork brands being at the top of our list. We have good relations with retailers, some of whom do an awful lot for the sector. However, others could do an awful lot more, so we are working with them positively to secure that.
Let me also put in a word for our independent butchers, who, as many of us will agree, supply products that are particularly well prepared, attractive and tasty. I do not want us to neglect that fact.
We support the good work that is done by Scotland Food & Drink and through Quality Meat Scotland’s make it marketing campaign, which encourages more consumption of our excellent Scottish products.
Following on from that answer, will the cabinet secretary ensure that practical measures to support our farmers and crofters—such as requiring the public sector to use local procurement and establishing a plan to implement the good food nation principles—will be included in the bill on agriculture? Will the Parliament have early sight of the proposals to replace LFASS and CAP, which he mentioned earlier, so that our farmers and food producers can have certainty in the period ahead?
Farmers and crofters already have such certainty. They know that they will get their payment next year, which will be their immediate concern. In the longer term, we have already given a commitment in principle—with which I think Ms Boyack and her party would generally agree—that we wish to continue to do that by one means or another.
As regards the particular questions that Ms Boyack has raised, I am absolutely determined that we should continue to see success in procurement of as much locally produced and Scotland-produced food as possible. The food for life programme has led to a marked increase in the number of primary schools that source food locally—not least in my area, where the butcher John M Munro Ltd of Dingwall supply all the meat for primary schools throughout the Highlands. Such success is often down to local authorities doing good work with producers. There is scope to do much more—[
.] With respect, I think that we need to do that not through legislation but by means of collaborative working by everyone who is involved, including Scottish local government, the private sector and various other supply-chain companies.
As the cabinet secretary will be aware, in the crofting community there is serious apprehension about the prospect of a no-deal Brexit. Earlier this month, the Scottish Crofting Federation added its voice to calls for a Brexit extension. We are now eight days away from the deadline for the UK Government to seek an extension from the EU to avoid our crashing out of it at the end of the year. In the cabinet secretary’s view, what would be the impact on Scotland’s crofters of our leaving without a deal?
I recently met representatives of the federation via videoconference. I respect and share their concerns about the need to extend the transition period. There is now simply not the time or the capacity to deal with all the issues that are involved. That is so blindingly obvious that one is surprised that the Prime Minister has not reached that conclusion. Be that as it may, the worries are most acute for Dr Allan’s constituents, and in particular for sheep farmers who rely on income from EU markets as an element of their livelihood and who now face the loss of that income because of the imposition of tariffs. As Dr Allan will remember, that was a worry in the Brexit negotiations; it is still a worry now that such matters are back on the table, because of doubts over reaching a deal before the end of the transition period. The issue is therefore of real concern to our farming sector, and I also heard about it from representatives of the National Sheep Association, who reiterated it when I met them last week.
I will again raise the matter with George Eustice when I speak to him on Monday. It will be a long meeting.
The cabinet secretary mentioned the convergence payments from the money that the Scottish Government was successful in extracting from the UK Government, which had attempted to hold on to it. When does the cabinet secretary plan to make the second tranche of historical convergence payments, and what difference does he think that that additional funding has made to the rural economy?
We are working on that at the moment. I will bring proposals to the Parliament, but in the meantime I expect such payments to be made fairly shortly before the end of the financial year—indeed, possibly earlier than that.
As far as Ms Martin’s second point is concerned, such payments have made an enormous difference. For example, I have already heard that, now that the forestry sector is back at work, there has been a tremendous uplift in the provision of agricultural fencing. Work in the forestry sector has been boosted by the money that was provided by the convergence funds to individual farmers and crofters who have decided to invest in much-needed fences—no doubt, the decisions to build those had been deferred for several years. That is just one example. All of that money goes into the rural community, and it came just at the right time—a couple of weeks before lockdown.
The loan scheme has been a success. The cabinet secretary said that it goes out in October; however, the scheme does mean that there will be a duplication of work for everyone involved, because the loans have to be reconciled with the payments. Does the cabinet secretary intend to do away with the loan scheme, if he can, and go back to the traditional single payment to farmers in December of each year? That would be very helpful to everyone concerned.
That question was raised earlier and I think that I gave a reasonably full answer. I should not name the individual, because it is not fair to do so, but I will say that the individual who runs the loan scheme has got it down to a tee. The scheme is no longer challenging to run because they have now run it five or six times. In terms of the administration of IT schemes it works very well indeed—I hesitate to say that it is running “like clockwork”, because I could be signing a death warrant for a future occasion. I do not think that running it is a huge administrative issue. As the member says, it involves the recalculation of claims and some extra work, but that is not the main issue. I think that the main issue is that farmers have been able to get money earlier—that is surely a good thing—so that they can then put the money into the rural economy. We will, no doubt, come back to the matter in due course.
Thank you. That concludes questions on the statement on providing financial stability for farmers and crofters. I will wait until members take their places on the front benches before moving on to the next item of business.