Agriculture Bill: consultation analysis

Section A: Future Payment Framework

Context

The Future Support Framework proposes mechanisms should be incorporated into the new Agriculture Bill to enable conditional payments under 4 tiers:

• Tier 1 a ‘Base Level Direct Payment’.
• Tier 2 an ‘Enhanced Level Direct Payment’.
• Tier 3 an ‘Elective Payment’; and
• Tier 4 ‘Complementary Support’.

Quantitative Overview

Tables 1-5 (Appendix 3) provide the frequency tables and total response counts for Questions A to E of the future payment framework section.

· 62% of respondents agreed with the proposal set out in the consultation paper to include a mechanism to enable payments to be made under a 4-tiered approach while 23% disagreed. Individual respondents were less likely to agree (53%) than organisational respondents (73%).

· 74% of respondents agreed with the proposal that Tier 1 should be a ‘Base Level Direct Payment’ to support farmers and crofters engaged in food production and land management while 16% disagreed.

· 64% of respondents agreed with the proposal that Tier 2 should be an ‘Enhanced Level Direct Payment’ to deliver outcomes relating to efficiencies, reducing greenhouse gas emissions and nature restoration enhancement, while 19% disagreed. Organisational respondents (70%) were more likely to agree than individual respondents (59%).

· 64% of respondents agreed with the proposal that Tier 3 should be an Elective Payment to focus on targeted measures for nature restoration, innovation support and supply chain support, while 15% disagreed. Organisational respondents were more likely to agree (71%) than individual respondents (58%).

· 56% of respondents agreed with the proposal that Tier 4 should be complementary support as the proposal outlined, while 19% disagreed. Organisational respondents (65%) were more likely to agree than individual respondents (50%).

The four-tiered approach

Open responses demonstrated significant agreement with the use of a 4-tiered system for direct and future payments.

Supporters often cited that the use of 4 tiers would be appropriate in this context, adding needed flexibility to allow farmers/crofters to ‘opt-in’ to conditional payments and providing individualised support.

Given recent events, supporters envisaged a 4-tiered payment system as a suitable solution, with necessary, base support of the agricultural sector to promote food production, and incentivisation of climate sustainability.

However, supporters and opponents alike demonstrated concern that a 4-tiered system was too complicated or unwieldy. Many expressed concerns that the complexity of this system and its operation would require consultants to complete, disproportionately impacting small farmers and crofters – adding further strain to an already struggling group.

A large number of responses felt that the consultation lacked sufficient detail for comment on the 4-tiered payment system. These responses outlined that these details were critical and would inform their overall support of the Bill, particularly around whether payments were weighted towards base supports (Tiers 1 and 2) or tied to results (Tiers 3 and 4).

There were calls for Scottish Government to be clearer on the conditionality attached to each proposed tier of support and how funding would be delivered to each tier, together with the relative allocation of funding to each tier.

A few responses highlighted that the similarity of this system to the previous EU CAP would provide beneficial continuity between prior and future regimes in the agricultural sector. On the other hand, a few responses thought this was an opportunity to diverge from prior systems and devise a more climate-radical, Scotland-specific system.

Views on tiers

Responses for Tier 1 discussed the need for payments to be tied specifically to activity on the farm. Responses referenced previous systems that, in their view, acted as a subsidy given to landowners regardless of whether they take care of the land or not, rather than payments to those actively working the land.

Along these lines, many responses highlighted that these payments are often ‘unrelated to need’, with the bulk of payments going to the largest landowners on the most productive land, rather than with those struggling to make a living on a small acreage. To avoid this, some responses discussed the possibility of decoupling acreage and productivity from qualifications for Tier 1 support.

In discussing Tier 1, many supported payments conditional on environmental or land management standards. Of these responses, a few voiced concern that these conditions might not be sufficient to deliver on carbon emission reduction goals.

However, it is important to note that some responses for Tier 1 preferred payments without conditions tied to land or environmental management whatsoever, or with extremely limited conditions. Concerns were also raised in opposition to Tier 1 payments being conditional on the production of a Whole Farm Plan which was viewed to be complex and costly.

Many responses for Tier 2 outlined the need to incentivise best practice in reducing greenhouse gas emissions and nature restoration without competition. However, responses also emphasised that many businesses have already adopted good practice in these areas and should be eligible for payments. In their view, withholding such support would punish early adopters.

However, some responses demonstrated opposition to Tier 2, primarily on the grounds that tying payments to these efficiencies would detract or deprioritise food production.

Responses also highlighted ambiguity surrounding the term ‘efficiencies’, stating a need for concrete definitions of ‘efficiencies’, coupled with monitoring and assessment, to ensure additions were met. A few responses also mentioned that best practice would inevitably change over time, requiring a measure of adaptability.

In keeping with the theme of flexibility, many responses on Tier 2 and Tier 3 mentioned the different sizes and sectors of agricultural outfits, requiring an adaptable payment scheme that is responsive to the different abilities of different farms. Such adaptability was viewed as integral, for the scheme to be accessible to small farms and crofts.

While many responses for Tier 3 expressed support for elective payments, targeted to support specific populations within agriculture, most responses requested additional detail about who exactly would be eligible for these payments and how these decisions would be made. Many responses specifically mentioned a population that they believe is deserving of this support, such as smaller farms/crofts, younger generations, remote outfits, etc.

Additionally, the mention of supply chain support raised more questions about who would be eligible for elective payments, including large corporations, retailers and grocery outfits. These responses expressed concern that elective payments would be diverted away from agriculture and food producers and towards powerful and wealthy establishments, to the detriment of the agricultural sector and the public purse.

Although Tier 4, Complimentary Support, discusses the support of a wide variety of agriculturally related activities, responses primarily emphasised the importance of education and advisory services. This was framed within the wider conversation about attracting young people and marginalised communities to farming, but also as a means of providing current farmers and crofters with the necessary information to upskill.

Responses underscored the need for accessible advisory services to assist farms in adopting sustainable practices. Such services were viewed as helpful, but generally costly, leading to the emphasis on accessibility. However, accessible services could work with businesses to tailor sustainable practices around their unique characteristics.

Responses also suggested education/training as a potential replacement to costly advisory services, which would endow small farmers with information to make sustainable adaptations on their own, without paying for costly advice services.

“The provision of advisory services and support to enhance skills, knowledge sharing and innovation are necessary to support change” [Organisation, Public sector]

Outwith education, some responses discussed the need for nature restoration to extend beyond tree planting, recommending promoting other ways to restore biodiversity like floodplain and wetland restoration.

Linked to this theme, some responses were wary of the unattended consequences of incentivising tree planting, which could affect the land available for agricultural production and the cost of land for new entrants.

A ‘Whole Farm Plan’

Table 6 (Appendix 3) provide the frequency tables for Question F of the future payment framework section.

49% of respondents to this question agreed that a ‘Whole Farm Plan’ should be used as eligibility criteria for the ‘Base Level Direct Payment’ in addition to Cross Compliance Regulations and Greening measures, while 33% disagreed. This varied by type of respondents with 41% of individual respondents agreeing compared to 61% of organisation respondents.

Many open responses expressed concern with the requirement of a ‘Whole Farm Plan’ as eligibility criteria for the ‘Base Level Direct Payment’. Responses suggested that the requirement of a Whole Farm Plan would further complicate an already complex payment system, becoming another layer of red tape that needs to be sorted before it is possible to receive support. This issue was brought up most frequently in relation to the cost for small businesses, by a few supporters of a ‘Whole Farm Plan’ requirement as well as opponents.

Some also worried that the requirement of a Whole Farm Plan for payments would attempt to be a one-size-fits-all solution and not sufficiently ‘relevant and proportionate’ to small businesses.

Responses also highlighted that the requirement of a whole farm plan would increase the need for outside assistance, with farms potentially needing to pay a consultant to assist with such a plan. Linked to this theme, some responses were wary of the unattended consequences of incentivising tree planting, which could affect the land available for agricultural production and the cost of land for new entrants.

Additionally, if payments are tied to successfully meeting a Whole Farm Plan, then there are additional administrative costs to measure and monitor Whole Farm Plan criteria which would increase costs to the public purse.

However, many responses still strongly supported the ‘Whole Farm Plan’, particularly favouring its inclusion of planning for nature restoration as well as productivity.

“A ‘Whole Farm Plan’ approach to eligibility has the potential to capture the broad range of activities and outputs and so goes beyond food production to include environmental and social ‘public goods’. The application of this approach does need to be proportionate and inclusive, with support available to farmers, crofters and land managers of all sizes to develop plans which are appropriate to the scale and nature of the business.” [Organisation, Public sector]

Payments to ensure a Just Transition, flexibility for emerging best practice and support in a crisis

Tables 7-9 (Appendix 3) provide the frequency tables for questions G to J of the future payment framework section. The quantitative results among those who responded to these questions are summarised below:

• 73% of respondents agreed that the new Agriculture Bill should include a mechanism to help ensure a Just Transition, while 10% disagreed. Respondents from organisations (83%) were more likely to agree than individual respondents (65%).
• 86% of respondents agreed that the new Agriculture Bill should include mechanisms to enable the payment framework to be adaptable and flexible over time depending on emerging best practice, improvements in technology, and scientific evidence on climate impacts. 5% disagreed.
• 88% of respondents agreed that the new Agriculture Bill should include mechanisms to enable payments to support the agricultural industry when there are exceptional or unforeseen conditions or a major crisis affecting agricultural production or distribution, while 3% disagreed.

A majority of responses were supportive of the new Agricultural Bill including a mechanism to ensure a Just Transition, citing this mitigation as ‘critical’ to avoid ‘leaving people behind’ while promoting sustainable behaviours.

However, other responses demonstrated confusion with the idea of a Just Transition. For some, this centred around the term ‘Just Transition’ itself, which was unfamiliar. Others were suspicious of who would be the main focus of a Just Transition and what these proposals would look like concretely.

Many respondents felt apprehensive with the Just Transition as it relates to this Agricultural Bill in particular. This took many forms; some believed a mechanism to ensure a Just Transitions was completely unpractical and not fit for purpose, while some felt the addition was too much all at once.

Among those that believe that the focus of this Bill should be on food production, responses viewed elements of a ‘Just Transition’ in the Bill as another area that detracts from food production.

Similar to views on a ‘Just Transition’, many voiced the need for flexibility in the payment framework, especially as scientific consensus on best practice is subject to change over time.

However, responses also requested more detail on how such flexibility would be incorporated into the new agricultural Bill. Many highlighted that the agricultural sector requires consistency and certainty to increase its longevity, which could be compromised if the payment framework was too flexible. To minimise disruptions from adaptations, responses recommended that the agricultural Bill considers changes, but only after a fixed number of 5-7 years, as in the previous EU CAP. This programmatic element was also thought to add to the quality of ‘best practice’ recommendations, as interventions would be based off longer-term, robust evidence bases.

Additionally, some responses discussed ways to ensure that these changes are beneficial, rather than disruptive, to the industry, favouring assurances that changes would be made only after length and substantive consultation with the industry through this process.

Most responses were supportive of mechanisms to enable support payments when there are exception or unforeseen conditions or a major crises affecting agricultural production or distribution. Given the threat of climate change and the previous challenge of Covid-19, this proposal was generally seen as logical and necessary. Where critical of this proposal, responses expressed concern with the implementation of the crises mechanisms – including definitions of crises and the source of crisis funding.

Without strict definitions of ‘major crises’ and ‘unforeseen circumstances’, a few responses thought that the breadth of the agricultural industry – spanning vastly different products – might mean that there were nearly continual crises for this fund to deal with.

Additionally, if funding for emergency payments is reserved from other tiers, crises payments could undermine base level supports. In light of such a possibility, responses were hesitant to agree to crises payments held in reserve from other tiers, and suggested that these payments were taken from a separate pool.

Beyond these challenges, some responses noted tension between this question and the aims of the Bill to promote environmentally safe and sustainable practices. These responses feared that emergency provisions would erode the protections this Bill aims to endorse, leading to more damage to the environment, and encouraged mechanisms that would help the sector in times of crises while ensuring environmental protection.