Response 506523296

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Direct Payments (Pillar 1)

1. Do you agree with the stability approach described here? Please provide comments.

Do you agree with the stability approach described here? Please provide comments.
We agree there is justification and merit in providing stability in a period during which there may be considerable uncertainty and potentially disruption caused by exiting the EU and related events. Depending on decisions on the capping of direct payments, funds could be made available during Transition to test new agricultural, environmental and rural policy options or mechanisms for the post-Brexit period. Leaving the Common Agricultural Policy is an opportunity for Scotland to reshape agriculture and rural policy, and to reconsider how the public funds devoted to agriculture are spent most effectively. It will be beneficial to use the Transition to develop a meaningful set of alternative policy mechanisms, implemented on a scale that ensures their effectiveness can be evaluated directly rather than requiring extrapolation from isolated, and potentially unrepresentative, pilot cases. The monitoring of initiatives should be sufficiently intensive and transparent to quickly learn lessons, adapt measures to the circumstances of Scotland, and gain broad public and stakeholder support.

Studies suggest that Scotland is considered world leading in taking a more holistic approach to land (Waylen et al., 2015; Ring et al., 2018). The Transition period is an opportunity to reinforce this reputation. It is important that a strategy for agricultural support policy meshes with the other Scottish Government policies and strategies, such as the planned Environment Strategy. Any new policy proposals from March 2024 will respect the four EU environmental principles: polluter pays, preventative action, tackling pollution at source and the precautionary principle. From the consultation document, it is unclear if Scotland will have any form of environmental ‘watch-dog’, equivalent to that proposed by the UK government in their “Consultation on environmental principles and accountability for the environment”.

Future agricultural policy may benefit from being coordinated with other Directorates, particularly to tackle failings in markets and supply chains. Post-transition policy should address the root causes of market failures that can deny primary producers the opportunity to have a fair return for their endeavours or to farm in a more environmentally sympathetic way.

Reference

Ring, I., Sandström, C., Acar, S., Adeishvili, M., Albert, C., Allard, C., Anker, Y., Arlettaz, R., Bela, G., ten Brink, B., Coscieme, L., Fischer, A., Fürst, C., Galil, B., Hynes, S., Kasymov, U., Marta-Pedroso, C., Mendes, A., Molau, U., Olschewski, R., Pergl, J. and Simoncini, R. (2018) Chapter 6: Options for governance and decision-making across scales and sectors. In IPBES (2018): The IPBES regional assessment report on biodiversity and ecosystem services for Europe and Central Asia. Rounsevell, M., Fischer, M., TorreMarin Rando, A. and Mader,A. (eds.). Secretariat of the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem services, Bonn, Germany, pp. 927-1151.

2. How might the annual application process for direct payments be adjusted to deliver with a lighter touch for those with little year-on-year change in their business?

How might the annual application process for direct payments be adjusted to deliver with a lighter touch for those with little year-on-year change in their business?
No response

3. Are there operational changes in our delivery of Direct Payments that you would like the Government to consider during the transition period?

Are there operational changes in our delivery of Direct Payments that you would like the Government to consider during the transition period?
No response

4. Do you support the continuation of some or all CAP rules on inspections and compliance during the Transition period, bearing in mind that Scotland will still need to comply with the rules of the World Trade Organisation (WTO)?

Do you support the continuation of some or all CAP rules on inspections and compliance during the Transition period, bearing in mind that Scotland will still need to comply with the rules of the World Trade Organisation (WTO)?
Inspections and compliance processes are necessary to identify when, for whatever reason, the minimum standards of practice are not being met. They represent the legitimate protection of the public interest through a regulatory process. They are a key element in maintaining social license for activities and operationalizing principles such as a polluter pays. As the proposal intimates, enforcement of regulation alone is a very blunt instrument and can mean that minimum standards become, de facto, practice.

There are circumstances where punitive measures are undesirable, and where advice and support may lead to performance significantly above the minimum required. Active processes of engagement such as those conducted in the SEPA Priority Catchments initiative (with SEPA, SNH and RPID staff) have been effective, arguably: (i) though the provision of advice and support, and (ii) through land managers knowing that authorities are aware where compliance is weak. Where the achievement of objectives of policies (such as the Water Framework Directive) depends upon agricultural cross-compliance, changes to inspections and compliance will need to be carefully considered if opportunities for better integration in policy delivery are to be realised (e.g. between Good Agricultural and Environmental Condition and General Binding Rules 18, Blackstock et al., 2018).

Reference

Blackstock K.L, Juarez-Bourke A, Maxwell J.L., Tindale S. and Waylen K.A. (2018) Aligning Policy Instruments for Water, Soil and Biodiversity, Report, James Hutton Institute, Aberdeen, pp 24. www.hutton.ac.uk/sites/default/files/files/Aligning%20Policy%20Instruments_final.pdf

5. Do you have any suggestions for straightforward changes that would improve the environmental outcomes achieved through greening payments in Pillar 1?

Do you have any suggestions for straightforward changes that would improve the environmental outcomes achieved through greening payments in Pillar 1?
The CAP Greening measures initially enacted were the topic of a Review by The James Hutton Institute published in 2017 (Towers et al., 2017). Recommendations were made on how the greening measures could be improved to make them more relevant and beneficial for Scotland (Matthews et al., 2017).

The Review highlighted:

• the potential value of a soil testing regime (for nutrient and carbon management),

• the negative outcomes if more winter cereals were encouraged by crop diversification rules, and

• the desirability of varying the weightings applied to ecological focus area activities to reflect best available scientific knowledge and the priorities within Scotland.

The extent of Ecological Focus Areas (EFA) was 42k ha in 2015. This is larger than the area, 34k ha for all Designated Sites on Macaulay Land Capability for Agriculture classes 1-4.2 (broadly, all the higher capability land liable to generate an EFA requirement due to cropping or temporary grassland present). So the EFA, at least in area terms, has the potential to be significant in delivering environmental improvements in the more intensively managed areas of Scotland. To realize the potential benefits, better guidance and practical advice to farmers needs to be directly associated with the Greening measures so they are suitably located within holdings and managed to maximize the benefits generated from land taken out of production.

Analysis of the 2015 uptake of CAP Greening measures highlighted that farmer concerns regarding inspection and verification meant that fallows were the most frequent and extensive measures (48% of total area). While fallows can be beneficial, they lack the potential for more positive outcomes that would be delivered by more innovative and integrated management, for example the work at James Hutton Institute on ‘Magic Margins’ (multi-function field margins created as part of Ecological Focus Areas). Analysis of changes in uptake of greening measures in subsequent years would be a useful evidence base against which to assess any new proposals. Options for premiums payable when businesses cooperate together to deliver additional benefits by coordinating the types of measures undertaken and their locations within the landscape would also be desirable (and was foreseen as an option in the original CAP Greening regulations).

Reference

Matthews, K.B., Miller, D.R., Towers, W., Squire, G.R., Hawes, C., Pakeman, R.J., Brooker, R., Brown, I., Owen, J., Vinten, A.J.A. and MacLeod, C.J.A. (2017) CAP Greening Review, Summary. Report to Scottish Government. pp6.

6. Considering how funding is currently distributed across CAP schemes, do you have initial views about how the balance between these schemes should change in future to maximise outcomes?

Considering how funding is currently distributed across CAP schemes, do you have initial views about how the balance between these schemes should change in future to maximise outcomes?
The range of objectives listed in this part of the consultation is substantial and reflects the challenge of creating a policy regime that must be limited in its complexity yet is effective in delivering across multiple and contested outcomes some of which will involve direct trade-offs. It is not safe to assume that current policy arrangements and the balance of funding between, or indeed within, schemes are effective in delivering these objectives. Distributional and redistribution effects of the 2015 CAP reforms were analysed by The James Hutton Institute as part of CAP Pillar 1 impact assessments (Matthews et al., 2017). This analysis highlighted that, even after the implementation of fully area-based payments by 2019, the 10% of businesses receiving the largest direct payments accounted for 42% of the budget (down from 53%), and the lowest 50% accounted for just 9% (up from 6%). This raises questions of both the public and sectoral benefits derived from the largest payments and the effectiveness of thousands of very small payments.

Depending upon its implementation, the outcome of capping of direct payments could have an effect similar to that of the redistributive payment option available (but not implemented) in the 2015 CAP reforms. Such an approach could favour smaller, and possibly newer more innovative businesses. More detailed analysis would be needed of specific mechanisms, the characteristics of the businesses benefiting from such a measure, and their potential responses to additional funding.

The transfer of even small percentages of Pillar 1 budgets to Pillar 2, or within Pillar 2 from LFASS to other measures, would have the potential to substantially increase funding available to specifically targeted schemes, with well-defined requirements tied to expected outcomes. Examples of such schemes are the Agri-Environment Climate Scheme (AECS) measures. Although such schemes are more effective, they are costlier to administer, are not perceived as equitable or open, and in some cases are substantially undersubscribed (reflecting either rates that are too low or requiring measures that are too restrictive). Increasing funding to broad but shallow agri-environmental schemes that that raise awareness, increase engagement and potentially change attitudes may have value in encouraging public support. Further analysis of uptake and outcomes from Land Manager Options and CAP Greening schemes in Scotland and similar schemes elsewhere in the UK and EU may be valuable in this regard.

Payment “by results”, (e.g. see EU pilot on payment by results at http://ec.europa.eu/environment/nature/rbaps/articles/1_en.htm) rather than “by measures” could increase outcomes, as could the use of auctions rather than fixed rates for the undertaking of agri-environmental climate measures. However, these could be at the cost of additional monitoring and administrative complexity that could conflict with an objective of simplification.

During a transition period it is important that sufficient funds are spent on monitoring and evaluating the effects of the current, and any new, policy on the desired objectives, to ensure that the implementation is effective. Formative, utility focused, evaluation supports innovation and adaptation, increases the capacity of those involved to understand their business and the wider socio-ecological context. The social learning element can be very useful in attracting new entrants, retaining skilled workers and combating isolation (Flanigan, 2012). However, to date, monitoring and evaluation appears to have been used to satisfy reporting requirements to the EU. Monitoring used in this way misses the opportunity to generate an information resource that would help stakeholders learn and develop new strategies and which improves their sustainability (Blackstock et al., 2017).

References

Blackstock, K.L., Van Hulst, F., MacLeod, C.J.A. and Waylen, K.A. (2017) Monitoring and Evaluation for Ecosystem Management (MEEM) - Comparing theory and documented practice across Europe. Technical Report for Project, November 2017, 96pp.

Flanigan, S. (2012) Planning to succeed agritourism: Participants circumstances and expectations in year 1., Report to Scottish Enterprise, The Collection Limited and Planning to Succeed Group.

Matthews, K., Miller, D.G., Wardell-Johnson, D. (2017) 2015 CAP Pillar 1 Reforms: Analysis of the Outcomes, www.gov.scot/Resource/0052/00524821.pdf

7. Do you agree that changes to capping are a useful measure to enhance the positive social and environmental impact of agricultural policy?

Do you agree that changes to capping are a useful measure to enhance the positive social and environmental impact of agricultural policy?
In principal, the capping of payments has the potential to release funds that could be deployed more effectively by government in progressive schemes which are more likely to achieve social and environmental impacts (although the specifics of such impacts will have to be spelt out before definitive judgements can be made). A thorough understanding of the potential impacts, regionally and by sector will be needed, particularly where a small number of larger businesses may occupy key nodes in the network of farm businesses (e.g. beef finishing). There should be a strong evidence base on how to ensure that the wider network continues to function and to buttress any decision in the face of criticism.

If the capping proposals are used to transfer funds into new schemes, then an explicit logic chain model would be useful, showing how any policy intervention is expected to deliver environmental and social benefits.

8. Do you have any specific views on how capping should work including what a maximum cap should be?

Do you have any specific views on how capping should work including what a maximum cap should be?
The capping process needs to generate a fund that has the potential to allow for the meaningful testing of several options at a near operational level. Otherwise, there is the risk that any pilots will not generate the insights needed to make policies that are effective and robust across the diversity of Scotland’s farming systems. Analysis conducted by researchers at the James Hutton Institute on alternative capping levels suggests that, given this ambition, the threshold of £25k is probably too low, transferring 37% of the budget, and £75k is probably too high transferring just 8% of the budget. The £50k threshold could be an appropriate compromise, transferring 17% of the budget, which would be a strong declaration of intent that the Government wants to move beyond the current limits of the CAP. A minimum of 10% of the budget would be in line with a variety of theoretical models that seek to generate adaptive capacity by balancing experimentation with consolidation of knowledge.

9. Should there be a maximum cap on the total funding a business receives from all schemes, or a scheme-by-scheme approach?

How can the aims of LFASS be better achieved/would you prefer to see alternative methods of providing support?
In terms of the overall efficiency and equity of agricultural support, we consider there is a case for a maximum cap, and not calculated scheme-by-scheme. A priori and based on analysis of options for capping payments (e.g. per payment region) the capping of total funding is the simplest option and generates fewer edge, or threshold cases where otherwise similar businesses can receive quite different rates of payment. A caveat to this would be those schemes which have a very specific aims (e.g. young farmers or new entrants) which are less likely to be the types of businesses subjected to capping. Coupled support, if it were to continue, should be subjected to capping.

10. How can the aims of LFASS be better achieved/would you prefer to see alternative methods of providing support?

How can the aims of LFASS be better achieved/would you prefer to see alternative methods of providing support?
There is clearly a catch-22 in wanting to avoid the administrative burden of introducing a new ANC system if it were to be superseded within a year. Yet given the potential for EU rules to mean there could be a year within the Transition in which LFASS payments were only at 20% then an interim solution would be to draw on the ANC designation and scenario analysis presented in 2016 (see papers and presentations: www.gov.scot/Topics/farmingrural/SRDP/ANC2018/ANCworkshoppapers), with redistribution that would be less disruptive than the loss of 80% of funding.

In terms of future options or alternative methods, the current LFASS system suffers from a variety of deficiencies and has been challenged by the EU and independently evaluated as not being effective or efficient in the delivery of the outcomes sought. The key criticism is that while the aim of supporting smaller farms with limited natural resources which are trying to actively farm has merit, LFASS as an area-based payment regime can deliver support only by also subsidising businesses that are well adapted to the less favourable conditions by operating at very large scale. A future payment system that can differentiate based on the impact of conditions on net farm incomes or include a degree of means testing (beyond simple degressivity) would thus be preferable. The latter would help in ensuring that support is targeted at those regions with the greatest fragility due to their lack of opportunities for pluriactivity.

A future system of payments should, as far as possible, seek to overcome issues of peripherality. This should be either directly in the targeting of support, through encouraging cooperation and the sharing of resources in the most peripheral regions to maintain or gain access vital services.

The consultation refers to LFASS supporting high nature value (HNV) farming systems (p12). This is a more specific justification than is contained within the EU regulations. These only state that the LFASS/ANC scheme will “contribute to maintaining the countryside as well as to maintaining and promoting sustainable farming systems” (originating in EU 1257/1999 and repeated in many details in EU 1698/2005 and EU 1305/2013). The reference to HNV farming is a potential improvement on the EU justification but one which will depend on ensuring agreement and understanding of its definition. It should be rewarded though specific systems of payment-by-results to avoid undermining the credibility and legitimacy of the payment.

The EU requirement for the use of administrative units (parishes) as a basis for fine tuning areas in or out of the LFA designated area results in windfall benefits for businesses in LFA parishes in which the quality of land is no different from that within the non-LFA areas.

Any new system of designating regions, if it includes bio-physical criteria, should take advantage of the high quality spatial data on natural resources available for Scotland, much of it enhanced over the years as part of the Scottish Government Strategic Research Programmes.

11. Would you see value in directing future LFA support through other existing Direct Payment Schemes?

Would you see value in directing future LFA support through other existing Direct Payment Schemes?
There is merit in recognising that if LFA support continues in its current form then it should be accounted for as part of Pillar 1, as an income support. In the short term, opportunities could be taken for simplification in making top-ups to Basic and Greening payments. However, given the comments in our response to Question 10, our view is that LFASS should be replaced by schemes that deliver more effectively against each of the specific objectives cited.

12. Do you think there are administrative and operational simplifications that would benefit current or future LFASS claimants?

Do you think there are administrative and operational simplifications that would benefit current or future LFASS claimants?
No response

13. Would you support a simplified approach to scheme use of map information or to the land mapping system and, if so, do you have views on where the main opportunities for doing so would lie?

Would you support a simplified approach to scheme use of map information or to the land mapping system and, if so, do you have views on where the main opportunities for doing so would lie?
We agree that any system of policy tools and schemes is likely to require an underpinning mapping system. Note that the data within such mapping systems has considerable value beyond its primary purpose, both within government and its agencies, and particularly to researchers tasked with supporting the development and evaluation of agricultural and rural policy. Understanding the patterns of land use, ownership and management are some of the fundamental building blocks in the evidence base and serve to ground deliberations in the breadth of a national perspective rather than relying on potentially unreliable extrapolation from individually chosen cases.

The proposals for an easing of the EU prescribed tolerances between claimed and recorded area is defensible, as some of the phenomena in semi-natural systems cannot be defined meaningfully to such tolerances. It is unlikely that such errors would combine to affect either individual payments or the higher-level outcomes of the policy. That said, it is always desirable to sense check decisions against other datasets, and in this regard there are benefits to gain from interactions with mapping experts from other organisations already engaged in a technical working group. Since the Scottish Government Strategic Research Programmes have a significant mapping component, these are a resource that could be drawn on more fully.

14. Do you support the use of regional pilots to help tailor schemes to local circumstances?

Do you support the use of regional pilots to help tailor schemes to local circumstances?
In terms of the regionalisation of schemes, there is a trade-off between the ability to ensure schemes are relevant, practical and effective and their maintaining their simplicity. Since both are declared aims of this consultation there should be a detailed analysis of specific proposals to make the judgement. There is also the need for a strategic judgment on the proportion of funding that can be devoted to monitoring, ongoing advice to improve outcomes, and evaluation of the longevity of any initiatives. This may require government to make the case for active partnership working.

15. Do you have views on how the inspections regime could be made more efficient while retaining existing public benefits?

Do you have views on how the inspections regime could be made more efficient while retaining existing public benefits?
We refer to our repose to Question 4, highlighting the benefits of an inspection regime that is integrated across agencies, and has a significant component of advice included within its remit.

16. Do you have views on how the penalty regime – particularly around fairness, transparency, the maintenance of standards and compliance burden – could be improved in the short-term?

Do you have views on how the penalty regime – particularly around fairness, transparency, the maintenance of standards and compliance burden – could be improved in the short-term?
No response on immediate priorities, whilst recognising that penalties are a necessary part of the overall approach and consistent with maintaining the social licence for farming practices.

17. Are there specific issues you think the SimplificationTask Force should prioritise for review?

Are there specific issues you think the SimplificationTask Force should prioritise for review?
No response on specific issues. However, we note the potential for researchers within the Scottish Government Strategic Research Programme (2016-21) to contribute analyses across a wide range of domains.

18. Do you agree with the proposals to set a timescale of up to five years for transition? Please provide comments.

Do you agree with the proposals to set a timescale of up to five years for transition? Please provide comments.
As above, the timeframe suggested for a Transition of five years is pragmatic to enable a replacement policy regime to be up and running, and recognises the need to move carefully in a changing economic and political landscape. There is a need to avoid changes that result in disruption to the efficient operation of payment systems and that can undermine the agriculture sector and public confidence in the overall value of schemes. The Transition period is a unique opportunity for a vigorous and transparent debate on the future or agriculture, environment and rural policies and their interactions. Transition should not mean postponement or avoidance of such deliberation and analysis.

19. If new schemes seek to encourage collaboration, enhance skills development, help with capacity building, facilitate wider integration into the supply chain, promote carbon audits and monitoring of the soil health, how might pilot projects be best designed to help test and develop new approaches?

If new schemes seek to encourage collaboration, enhance skills development, help with capacity building, facilitate wider integration into the supply chain, promote carbon audits and monitoring of the soil health, how might pilot projects be best designed to help test and develop new approaches?
Considerable research has been undertaken on farmer collaboration and capacity building through social learning (e.g. Schiller et al., 2014) on which to build. There is potential for collaboration between farmers with objectives of achieving a range of outcomes in addition to those of soil health and carbon sequestration. For example, farmers applying for the Environmental Co-operation Action Fund favoured conservation of priority species, habitat restoration, control of non-native invasive species or water quality management (Prager and van Hust, 2018). To be effective, these are issues likely to require working at the landscape scale. Farmer collaboration is likely to have benefits in terms of improving contiguous cover of habitats, and sharing knowledge and investment to reduce implementation costs. It would be desirable to distinguish between: (i) schemes where collaboration between businesses in a spatially defined locale (e.g. catchment or landscape) is necessary to manage public goods that extend beyond individual property boundaries; and (ii) schemes promoting social learning and peer support, which benefit from collaboration that generates a community of interest or practice.

There is an important distinction to make between coordination (where individuals interact with a coordinator but not necessarily with each other) and collaboration (where individuals work collectively as a social group). Whilst any collaborative scheme builds capacity for local self-organisation, research shows that even where capacity is built it likely to require some form of ongoing active co-ordination by a trusted neutral third party to be sustained at a large-scale over the long term (Westerink et al., 2017). Overall, comments from stakeholders at the Scottish Forum for Natural Capital Working Groups, and participants in the research, suggest there is strong support for incentivizing collective action for multiple benefits in Scotland. The lack of a scheme dedicated to supporting landscape-scale agri-environmental management has been identified as a policy gap.

There is potential to design such a scheme building on lessons learnt from the Environmental Co-operation Action Fund (ECAF) and the ongoing Countryside Stewardship Facilitation Fund in England. From the outset, pilot schemes should be required to include monitoring of the processes of collaboration and implementation, and the outcomes in social, economic and environmental terms. Research at the James Hutton Institute suggests that social and systems level ecological outcomes are rarely monitored in projects (Waylen and Blackstock, 2017; Waylen et al., 2015; Blackstock et al., 2017). The monitoring requirements should be coordinated across individual schemes to maximise comparability. We recommend using a common objective, but consider comparing a scheme that supports co-ordination against a scheme that supports collaboration to understand the different costs and benefits involved. This will allow constructive learning about these new schemes, which will facilitate updating and improvements to existing as well as future schemes and enabling programmes.

References

Blackstock, K.L., Van Hulst, F., MacLeod, C.J.A., Waylen, K.A. (2017) Monitoring and Evaluation for Ecosystem Management (MEEM) - Comparing theory and documented practice across Europe. Technical Report for Project, November 2017, 96pp.

Prager K and van Hulst F (2018) Facilitating collaborative landscape-scale land management for environmental benefits in Scotland, Confidential Research Report to Scottish Government, James Hutton Institute, Aberdeen, 42pp.

Schiller, S., Gonzalez, C., Flanigan, S. (2014) More than just a factor in transition processes? The role of collaboration in agriculture., In: Sutherland, L-A., Darnhofer, I., Wilson G. A. & Zagata, L. (eds.). Transition Pathways towards Sustainability in Agriculture: Case Studies from Europe. CABI, Wallingford, Chapter 6, pp 83-96.

Waylen, K.A., Blackstock, K.L., Holstead, K.L. (2015) How does legacy create sticking points for environmental management? Insights from challenges to implementation of the ecosystem approach., Ecology and Society, 20, Article No. 21.

Westerink, J., Jongeneel, R., Polman, N., Prager, K., Franks, J., Dupraz, P. and Mettepenningen, E. (2017) Collaborative governance arrangements to deliver spatially coordinated agri-environmental management., Land Use Policy, 69, 176-192

20. Many of the measures described in this consultation will have co-benefits for both agricultural productivity and for reducing Scotland's Greenhouse Gas Emissions. Are there other practical and feasible measures that would have similar co-benefits that you feel should be considered?

Many of the measures described in this consultation will have co-benefits for both agricultural productivity and for reducing Scotland's Greenhouse Gas Emissions. Are there other practical and feasible measures that would have similar co-benefits that you feel should be considered?
Recent research on implementing policy instruments for multiple benefits (Blackstock et al., 2018) found that climate change mitigation or adaptation was often not actively considered in the design or implementation of other environmental instruments, yet it could be included through training and awareness for RPID staff implementing cross-compliance. Increasing awareness of evidence of co-benefits from multi-objective land uses which offer synergies with agriculture (e.g. agroforestry; Martineau et al., 2016; Khomik et al., 2017; Saunders et al., 2016) could be used to design appropriate means of support or encouraging uptake. This would be in line with recommendations by the UK Committee on Climate Change (2017).

Consideration should also be given to reducing emissions associated with farms and farm practices through:

i) designing mechanisms that support infrastructure and the encourage the use of digital technologies on farms (e.g. virtual fencing to enable flexible management of livestock, grassland management, and reduce use of resources for physical fencing, e.g. www.sruc.ac.uk/info/120580/smarter_farming/1887/virtual_fencing);

ii) link investment in digital tools with plans for mitigating emissions, such as virtual fencing to manage livestock in peatland areas to control scrub and tree regeneration (as noted in Scotland’s Peatland Plan), e.g. through agri-environment climate scheme;

iii) support for rural communities and agricultural businesses with investment in infrastructure that will prepare them for the uptake of electric or hydrogen vehicles (e.g. charging points, conversion of agricultural vehicles).

See also response to Q38, Q41 and Q42.

References

Blackstock K.L, Juarez-Bourke A, Maxwell J.L., Tindale S. and Waylen K.A. (2018) Aligning Policy Instruments for Water, Soil and Biodiversity, Report, James Hutton Institute, Aberdeen, 24 pp www.hutton.ac.uk/sites/default/files/files/Aligning%20Policy%20Instruments_final.pdf

Committee on Climate Change (2017) Meeting Carbon Budgets: Closing the policy gap 2017 Report to Parliament Committee on Climate Change, Committee on Climate Change. June 2017, pp 203. https://www.theccc.org.uk/wp-content/uploads/2017/06/2017-Report-to-Parliament-Meeting-Carbon-Budgets-Closing-the-policy-gap.pdf

Khomik, M., Perks, M., Bathgate, S., Chapman, S.J., Yeluripati, J. and Morison, J., (2017) Agroforestry in Scotland: potential benefits. Report for CXC (ClimateXChange). pp 19.

Martineau, H., Wiltshire, J., Webb, J., Hart, K., Keenleyside, C., Baldock, D., Bell, H. and Watterson, J. (2016) Effective performance of tools for climate action policy - meta-review of Common Agricultural Policy (CAP) mainstreaming. Report for European Commission - DG Climate Action, Ricardo-AEA Ltd. pp 287.
https://ec.europa.eu/clima/sites/clima/files/forests/lulucf/docs/cap_mainstreaming_en.pdf

Saunders, M., Perks, M., Slee, B., Ray, D. and Matthews, R. (2016) Can silvo-pastoral agroforestry systems contribute to Scotland’s emission reduction targets? Report for CXC (ClimateXChange). pp 5. https://www.climatexchange.org.uk/media/2020/cxc-woodlands_agroforestry_policy_brief.pdf

21. Do you agree to expanding the number and role of Monitor Farms or similar during the transition period? Do you have any ideas as to how Monitor Farms could be refined or adapted to better meet future needs?

Do you agree to expanding the number and role of Monitor Farms or similar during the transition period? Do you have any ideas as to how Monitor Farms could be refined or adapted to better meet future needs?
No response

22. Do you agree with the proposal to look at moving towards a more performance based approach to compliance, using key performance indicators and better information?

Do you agree with the proposal to look at moving towards a more performance based approach to compliance, using key performance indicators and better information?
Research at the James Hutton Institute on participation and environmental governance (e.g. Blackstock et al., 2012) highlighted how monitoring and evaluation processes can be used to manage outcomes, and build consensus around outcomes and create support for policy objectives. Transparency regarding how well systems are performing following the investment of public funds helps to increase public understanding and support and increase the legitimacy of farm support schemes.

Reference

Blackstock, K.L., Waylen, K.A., Dunglinson, J., and Marshall, K.M. 2012. Linking process to outcomesinternal and external criteria for a stakeholder involvement in river basin management planning. Ecological Economics 77:113-122.

23. Do you have views on the types of indicator that should be used or areas of priority action within the operation of current CAP schemes?

Do you have views on the types of indicator that should be used or areas of priority action within the operation of current CAP schemes?
Research (Blackstock et al., 2017) on use of monitoring and evaluation data from agri-environmental schemes across 9 EU case studies suggests that there is a need for a more consistent dataset across time; and that indicators should be selected in ways that allow the assessment and reporting of how the measure has led to changes in the state of environment, including monitoring wider contextual variables that may explain unexpected outcomes.

The James Hutton Institute and partners are working on the development of indicators of social innovation that could be used in the evaluation of measures in rural development programmes in the CAP post-2020 (EU SIMRA project, Social Innovation in Marginalised Rural Areas; www.simra-h2020.eu; Secco et al., 2017). One such indicator is of social capital, based upon analysis of actors in social networks. The research team can provide further information as findings become available.

References

Blackstock, K.L., Van Hulst, F., MacLeod, C.J.A., Waylen, K.A. (2017) Monitoring and Evaluation for Ecosystem Management (MEEM) - Comparing theory and documented practice across Europe. Technical Report for Project, November 2017, pp 96.

Secco, L., Pisani, E., Burlando, C., Da Re, R., Pettenella, D., Nijnik, M., Miller, D., Slee, B., Gezik, V. and Kluvánková, T. 2017. Guidelines to Identify and Analyse Existing Methods to Assess Social Innovation and Impacts. Deliverable 4.1, Social Innovation in Marginalised Rural Areas (SIMRA). pp. 45.

Scottish Rural Development Programme (Pillar 2)

24. Given the importance of continuity of support for the forestry sector and that the target for new woodland is to increase to 15,000 hectares by 2025, should the current the Forestry Grant Scheme continue broadly in its current form until 2024 or can you suggest other short-term changes that would better achieve these policy aims?

Given the importance of continuity of support for the forestry sector and that the target for new woodland is to increase to 15,000 hectares by 2025, should the current the Forestry Grant Scheme continue broadly in its current form until 2024 or can you suggest other short-term changes that would better achieve these policy aims?
An increase in target planting area without an increase in budget would meant a de facto cut in the rate of support per ha. This would have two potentially undesirable consequences. First it may undermine participation in a scheme that has not yet reached the planting targets, leaving a shortfall of planting. Second, it may alter the nature of the proposed plantings.

A further risk of reduced payment rates per hectare with respect to the aims of the Scottish Government Climate Change Plan is that new plantings are proposed on more marginal lands which will store less carbon in timber and see greater losses of soil carbon at establishment and for many years subsequently. Note that, to date, there has been a strong preference for planting trees on the poorest quality land (Land Capability for Agriculture [Soils Survey of Scotland, 1981] class 6.3 has 45% of the planting from 2004 to 2013). This means that, even with a presumption against planting on deep peat, the new plantings may fail to realise the expected carbon storage benefits. One way to reconcile the need for carbon storage with a fixed financial budget is to define explicitly a carbon storage target for new woodland, in tonnes per annum, and allow for variation in the rates of support to encourage productive farm woodlands on higher quality land using systems of production delivering higher rates of carbon storage per hectare.

In the longer term it may be desirable to define a cap and trade system for carbon in the land-based sector as a whole. Cap and trade could provide a strong incentive for efficiency both within the more GHG intensive part of the sector and could mean that offset afforestation as a service could be delivered via a market-based mechanism rather than depending on limited public finances.

References

Soil Survey of Scotland Staff (1981). Land Capability for Agriculture maps of Scotland at a scale of 1:250 000. Macaulay Institute for Soil Research, Aberdeen'.

www.hutton.ac.uk/learning/exploringscotland/land-capability-agriculture-scotland

http://soils.environment.gov.scot/maps/capability-maps/national-scale-land-capability-for-agriculture/

25. In considering the current Forestry Grant Scheme, are there opportunities to improve the administrative efficiency of the scheme?

In considering the current Forestry Grant Scheme, are there opportunities to improve the administrative efficiency of the scheme?
No response

26. Given the importance of continuity of support for environmental outcomes, should the current Agri-Environment Climate Scheme continue broadly in its current form until 2024 or are there short-term changes that could be introduced to i) simplify and streamline the scheme, ii) improve customer experience and/or iii) enhance the delivery of environment and climate change objectives?

Given the importance of continuity of support for environmental outcomes, should the current Agri-Environment Climate Scheme continue broadly in its current form until 2024 or are there short-term changes that could be introduced to i) simplify and streamline the scheme, ii) improve customer experience and/or iii) enhance the delivery of environment and climate change objectives?
Q26 i)
The James Hutton Institute has looked at this question as part of its work in the Scottish Government Strategic Research Programme, and published a report

www.hutton.ac.uk/sites/default/files/files/publications/Identifying%20Gaps%20in%20the%20current%20Agri_ver4.pdf

and a briefing document on the subject

www.hutton.ac.uk/sites/default/files/files/Identifying%20Gaps%20in%20the%20Current%20Agri-Environment%20and%20Climate%20Scheme%20%20Policy%20Brief(1).pdf

The work combined a desk study of options available in other EU countries and one looking at the coverage of species in the Scottish Biodiversity List.

From this work, we suggest that to simplify and streamline the scheme, there could be integration of the white-tailed sea-eagle and goose schemes into the wider Agri-Environment Climate Scheme which would benefit biodiversity and simplify applications.

Q26 ii)
Based upon the research identified in response to Q26 (i) ...

• Scoring should focus on the quality of the application rather than its breadth of coverage, which biases funding away from small farms.
• The scheme should include training for farmers and other land managers in assessing opportunities for conservation action.

Q26 iii)
Based upon the research identified in response to Q26 (i) ...

• More focus on supporting ecological networks at appropriate scales.
• Local priorities could be used to develop local ecological networks but also to vary management to cope with local constraints such as weather and the availability of livestock to graze.
• Upland options should focus on wide ranging management rather than specific species or habitats because of the mismatch in the scale of intervention with the scale of the target.
• Options for wading birds needs to account for both breeding and feeding requirements that cross the enclosure line (often requiring collaborative working) and options need to take into account variations between species and regions.
• Options need to take account of future climate and potential land use changes.
• A more flexible approach is needed to develop appropriate management for habitat mosaics.
• A holistic approach for wetland management that integrates ditches, ponds, wader scrapes and other wetland types.

Note that two new EU funded projects (UNISECO [https://twitter.com/projectuniseco; www.uniseco-project.eu] and LIFT [https://twitter.com/lift_h2020]) in which Scottish research teams are partners (James Hutton Institute and University of Aberdeen in UNISECO; SRUC in LIFT) are studying improvements in the sustainability of agro-ecological farming systems in the EU. Amongst issues being considered by these projects are the links between measures such as agri-environment climate and the value chains from farm household to consumer, incentives and practicalities of soil management. Engagement in the research process (2018 to 2021) by teams from policy and practice would help inform the identification of changes in priorities, and how the delivery of environment and climate change objectives can be enhanced.

27. Are there new emerging environment or climate change priorities that need particular focus under the Agri-Environment Climate Scheme in the next three - five years?

Are there new emerging environment or climate change priorities that need particular focus under the Agri-Environment Climate Scheme in the next three - five years?
Scottish Government and public agencies highlighted potential gaps around soil health under climate change, air quality and habitat conservation in lowland areas (Blackstock et al., 2018). Given Scotland does not have an existing policy specifically designed for the protection of soil (McKee, 2018), and noting the recommendations of the UK Parliament Environmental Audit Committee report on Soil Health (House of Commons, Environmental Audit Committee, 2016) it is important to ensure that the Agri-Environment Climate Scheme recognises the significance of soil protection and management in any future schemes.

Other options which could be quickly adapted from those already in use elsewhere are:

1) Pollinator specific options designed to provide nectar and pollen through the summer, which may benefit other invertebrates as well.

2) More emphasis on winter stubbles to shift growers to spring-sown crops to benefit biodiversity and reduce erosion and nutrient loss.

3) Payments to manage coastal systems through grazing (dunes, grasslands) to combat shrub/tree encroachment and the impacts of pollution.

4) Widen the options available to manage peatlands based on knowledge gained from SNH’s Peatland Action project.

5) Adapt options to benefit invertebrates through leaving areas of bare ground.

6) Adapting arable options, such as field margin management and pollinator options for fruit growing areas.

References

House of Commons, Environmental Audit Committee, 2016. Soil Health, Final Report of Session 2016-17. pp49.
https://publications.parliament.uk/pa/cm201617/cmselect/cmenvaud/180/180.pdf

McKee, A. (2018) (2018) Soil Governance in Scotland – Mapping the Institutional Architecture, A report for CXC, James Hutton Institute, pp74.

28. Considering the current New Entrants Capital Grant Scheme, are there opportunities to improve the administrative efficiency of the scheme?

Considering the current New Entrants Capital Grant Scheme, are there opportunities to improve the administrative efficiency of the scheme?
No response

29. Considering the CAGS in its current form, are there opportunities to improve the administrative efficiency of the scheme?

Considering the CAGS in its current form, are there opportunities to improve the administrative efficiency of the scheme?
No response

30. Should the scope of what can be funded be reviewed, for example in terms of adding in new elements and restricting total spend on some projects?

Should the scope of what can be funded be reviewed, for example in terms of adding in new elements and restricting total spend on some projects?
No response

31. Do you have initial views on the proposal to close the Small Farms Grant Scheme?

Do you have initial views on the proposal to close the Small Farms Grant Scheme?
The limited uptake, suggests there is a need to revise how support for small farms is delivered. Going forward it is perhaps important in policy to differentiate issues relating to “small farms” and be more specific in designing schemes that address barriers to societally desirable outcomes, e.g. setting up new farms, enlarging holdings, diversifying or adding value locally to on-farm enterprises. While area-based payments have been differentiated based on land quality, a case can be made that such payments, as they are currently implemented, are not effective or efficient in delivering the range of outcomes identified as objectives within this consultation.

Size in geographic terms is a poor indicator of societal value delivered by a holding so collecting data that would support the monitoring the objectives as stated in any intervention logic should perhaps be considered (e.g. changes in productivity, value added, or natural capital).

32. Would there be customer benefits if the CAGS, small farms capital grant scheme and the new entrants capital grant scheme were combined?

Would there be customer benefits if the CAGS, small farms capital grant scheme and the new entrants capital grant scheme were combined?
If administrative simplicity is being sought, then there may be limited gains by creating a single scheme. However, separate schemes have the benefit of being clearer, both in budgeting terms, and on the balance of priorities. As with Question 31 the key may be to differentiate future schemes which are clearly based on the issues addressed, mechanisms and outcome sought rather than sub-populations of businesses.

33. Considering the current FPMC scheme, are there opportunities to improve the administrative efficiency of the scheme?

Considering the current FPMC scheme, are there opportunities to improve the administrative efficiency of the scheme?
No response

34. Would you wish to see other aspects of this scheme changed in the short-term?

Would you wish to see other aspects of this scheme changed in the short-term?
No response

35. Do you have views on priority issues to be considered by any pilots during the transition period?

Do you have views on priority issues to be considered by any pilots during the transition period?
No response

36. Is the LEADER approach something that you could support?

Is the LEADER approach something that you could support?
The consultation identifies the trade-off between the benefits of central co-ordination and those of regional differentiation to meet local needs. There is no single answer to how best to make this trade-off as it will vary depending on the capacities of the individual Local Action Group (LAG). It is likely that the effectiveness of individual LAGs could be enhanced by mechanisms and funding that promote cooperation and sharing of good practice

37. Considering LEADER in its current form, are there other opportunities to improve the administrative efficiency of the scheme?

Considering LEADER in its current form, are there other opportunities to improve the administrative efficiency of the scheme?
A practical issue identified by researchers at James Hutton Institute in their research on Innovations and Societal Transitions (Dinnie and Holstead, 2017) related to regulations ensuring no commercial advantage gained from public funding, the ‘State Aid’ rules. Amongst funders there was often uncertainty around what counts as State Aid and how it should be applied. The possibility of breaching State Aid regulations was enough to lead some funders (and community groups) to be risk-averse and register all public income as subject to State Aid rules, even if it was well below the minimum threshold. State Aid, and the worry of reaching ‘de minimis’, was a concern for groups in receipt of multiple grants or those involved in funding capital asset purchases with funds from LEADER, the Scottish Land Fund and Big Lottery. Therefore, EU state aid regulations have potentially limited entrepreneurial innovation for community-led groups and activities.

Reference

Dinnie, E. and Holstead, K. L. 2017. The influence of public funding on community-based sustainability projects in Scotland. Environmental Innovation and Societal Transitions. (https://doi.org/10.1016/j.eist.2017.08.003).

38. Do you have initial views on the proposal that SRDP broadband support would cease?

Do you have initial views on the proposal that SRDP broadband support would cease?
While on the one hand there are examples of rural communities which have had great success with community broadband schemes and initiatives, there are others which have had less success, due to issues of failing to attract funding, lack of relevant skills, time or drive amongst the members of the group, or problems of access to necessary support and advice of various kinds. Some communities are better equipped to succeed in these kinds of initiatives than others, due to a range of factors. Not least of these is the social mix within the community and the presence of a “social entrepreneur” who is typically well educated and skilled in topics areas such as applying for community funding, and interfacing with industry and internet service providers. Not all communities possess the optimal mix of individuals to drive this forward. Therefore, although some communities may succeed in coming together to drive demand and develop broadband solutions, others are highly unlikely to do so.

Although a lack of broadband uptake is disappointing, it does not follow that areas with lower uptake should not be prioritised for broadband delivery. Broadband access is now a key utility impacting on the viability of businesses, schools and local services; it drives up (or down) house prices and its absence contributes to rural outmigration and ageing rural populations. For rural areas to remain economically and socially viable and sustainable, broadband connectivity is crucial. For this reason, Scottish Government should not withdraw SRDP broadband support to remote rural areas simply because they are more challenging to get connected – arguably these fragile remote communities are the ones that will need these services the most.

For more information, see the following references:

[1] Roberts, E., Beel, D., Philip, L. and Townsend, L. (2017) Rural resilience in a digital society: Editorial. Journal of Rural Studies 54 pp. 355-359.

[2] Townsend, L., Sathiaseelan, A., Fairhurst, G. and Wallace, C. (2013) Enhanced broadband access as a solution to the social and economic problems of the rural digital divide. Local Economy 28 (6) pp. 580–595.

39. Do you have any thoughts on the form, content and delivery methods for future advice?

Do you have any thoughts on the form, content and delivery methods for future advice?
Research conducted by Scottish Environment, Food and Agriculture Research Institutes (SEFARI; https://sefari.scot/) as part of the Scottish Government Strategic Research Programme (2016-21), on policy instruments (Blackstock et al., 2018) has shown that most delivery is via a hybrid approach that combines regulations or incentives with advice. Advice should be seen as an essential component of any regulatory regime. This will require increasing the range of skills held by inspectors to include providing information and raising awareness. Participants also reported that many advisors are not skilled at a recognising the opportunities for delivering co-benefits alongside the main benefit of a particular Agri-Environment Climate scheme. They recommend a combination of training and the provision of interactive IT tools that illustrate that the options to realise multiple benefits.

Reference

Blackstock K.L, Juarez-Bourke A, Maxwell J.L., Tindale S., Waylen K.A (2018) Aligning Policy Instruments for Water, Soil and Biodiversity, Report, James Hutton Institute, Aberdeen, 24 pp. www.hutton.ac.uk/sites/default/files/files/Aligning%20Policy%20Instruments_final.pdf

40. Do you have any views on the balance of advice delivered by one-to-one and one-to-many methods?

Do you have any views on the balance of advice delivered by one-to-one and one-to-many methods?
No response

41. Do you have any views on how delivery of advice can be better linked to delivery of results?

Do you have any views on how delivery of advice can be better linked to delivery of results?
No response

42. Considering the Knowledge Transfer and Innovation Fund (KTIF) scheme in its current form, are there opportunities to improve the administrative efficiency of the scheme?

Considering the KTIF scheme in its current form, are there opportunities to improve the administrative efficiency of the scheme?
No response.

43. Do you have any views on the effectiveness of KTIF and how the aims of the scheme could be promoted in the future?

Do you have any views on the effectiveness of KTIF and how the aims of the scheme could be promoted in the future?
Investing in, encouraging and enabling innovation in agriculture are identified as key elements of the proposed innovation programme of the Common Agricultural Policy and the Horizon Europe research framework to 2027. The KTIF Scheme is planned to be aligned to the European Innovation Partnership (EIP), to form partnerships between farmers, advisers and business working on the ground. To date, Scottish involvement in the EIP has been very effective, notably in the Focus Groups, in which the number of Scottish researchers participating has been amongst the highest level of any region of the EU.

Benefits to Scottish stakeholders of continuing such alignment post-2020 are gains from the insights from the pool of EIP Operational Groups and Focus Groups, and potential business benefits of innovation that aids utilisation of resources that are international, or contribute to shared standards. The Rural Innovation Support Service (RISS) provides a valuable new route for achieving the overall aims, the profile and capabilities of which have been raised with European Commission DG Agri and the EIP, together with the knowledge exchange and innovation (SEFARI Gateway; https://sefari.scot/) from the Scottish Government Strategic Research Programme, facilitated by Scottish Government (e.g. ‘Enhancing Innovation in Rural Areas: The Experience from Scotland’ Brussels, May 2018). There are considerable collective benefits from further development of the translation of the strategic research to delivery of innovation, using mechanisms such as RISS and farmer or farm business led innovation.

Identifying new means of collaboration between research and industry (e.g. SEFARI Gateway with AHDB and QMS), and high quality communication, offers the potential for effective translation of innovation into practice, which would help delivering on aim of the KTIF of promoting skills development and knowledge transfer in the primary agricultural sector.

44. Would you support a similar type of scheme going forward?

Would you support a similar type of scheme going forward?
The intervention logic for the beef efficiency scheme, and the balance of benefits between public and private sectors, is not clear. It is not evident whether the public benefits of reductions in GHG emissions are best achieved through this scheme or by other, more targeted measures. The least efficient farms, where the biggest gains could be made, may not be participating in the scheme at all. Since efficiency of production would in most industries be a matter of self-interest and pursued vigorously as part of normal business practices, the question arises as to why such behaviours are not happening within the Scottish beef industry. If there are reasons why businesses choose to operate in ways that could be viewed as inefficient, then these need to be understood as otherwise any intervention will not address the root causes of the behaviours. Where businesses desire to become more efficient but cannot, then the barriers understood. It is possible that the barriers are not within businesses but rather in market failures, unequal relationships within the supply chains, or other issues that require intervention of a different nature to those of the beef efficiency scheme.

Soil testing (referred to on page 29), if combined effectively with advice and other forms of support, could be effective in raising awareness of inefficiencies in the use of nutrients that lead to issues of water and air pollution. There is some evidence from catchment level studies that lower than ideal pH values may be an issue in catchments with a higher proportion of permanent grasslands (e.g. Kerr, 2013). For pH testing, the costs were out-weighed by either the savings in inputs or the additional grass yields achieved. The soil samples taken as part of such an initiative would have a potentially significant value for research and monitoring programmes utilising high throughput physical, chemical, microbiological and genetic methods. The large number, and geographic coverage, of such samples could underpin new analyses to better characterise the functioning, health and natural capital in Scotland’s soils. If implemented, a soil testing regime should consider how the samples could be collected, stored and analysed to maximise their societal value as well as the value to farmers.

Reference

Kerr, G. (2013) Getting the most from your soil. Advice and Training on Nutrient and Soil Management to Improve Water Quality in two catchments (Water of Coyle and River Pow), SAC Consulting.

45. Would you support a future approach that aims to deliver similar increases in efficiency through the direct payment support mechanisms?

Would you support a future approach that aims to deliver similar
Clarity is required regarding how such an efficiency can be delivered through direct payment mechanisms, both in theory and how it would be monitored in practice. There is a need for a clear mechanistic pathway of the linkage between direct payments and efficiency. Surveys of public attitudes appear to indicate that agricultural support should predominantly be about the delivery of public goods (i.e. non-market goods), excluding provisioning services where markets should operate to deliver efficiency.

46. Do you see a continuing role for the Scottish Rural Network (SRN) and, if so, do you agree that its current aims and objectives should be maintained during the transition period?

Do you see a continuing role for the SRN and, if so, do you agree that its current aims and objectives should be maintained during the transition period?
We consider the Scottish Rural Network valuable, particularly the weekly updates/round ups. However we feel more emphasis should be given to a broader range of rural issues (housing, transport, services, rural poverty, crime, regeneration, tourism) rather than over focusing on agriculture.

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Keith Matthews

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