Agriculture and Rural Communities (Scotland) Bill: supporting evidence and analysis

1 Introduction

1.1 Purpose

The evidence and analysis in this report outlines the current position of the Scottish agricultural sector, with evidence aligned to the objectives in our Vision for Agriculture. This sets the scene for why the powers in the new Agriculture and Rural Communities (Scotland) Bill are required. It also provides information on the Scottish Government’s approach to assessing new policy proposals as they are taken through secondary legislation, to ensure they are balanced, coherent and deliver against intended objectives.

1.2 Context

Following the UK’s withdrawal from the European Union (EU) in January 2020, the Scottish Government’s priority for agriculture and rural development was to provide stability and security for producers, land managers, and businesses. To this end, legislation was enacted that ensured EU Common Agricultural Policy (CAP) payments and schemes would continue for a period of stability and simplicity after EU Exit.

In March 2022, the Scottish Government published a Vision for Agriculture. This outlined the Scottish Government’s long-term aspirations for Scottish agriculture and made the following commitment:

“We will transform how we support farming and food production in Scotland to become a global leader in sustainable and regenerative agriculture. This commitment will sit at the heart of a robust and coherent framework to underpin Scotland's future agriculture support regime from 2025 onwards. Scotland will have a support framework that delivers high quality food production, climate mitigation and adaptation, and nature restoration.”

Source: Scottish Government’s Vision for Agriculture

The Scottish Government consulted on proposals to support the values and principles outlined in the Vision for Agriculture, publishing analysis of responses to the consultation in June 2023. This feedback has informed the new Agriculture and Rural Communities (Scotland) Bill, which will give Scottish Ministers the necessary powers to support Scottish agriculture following the UK’s withdrawal from the EU, and help deliver the Vision for Agriculture.

For more than 50 years, Scottish agricultural policy has been led by the EU through the CAP. Article 39 of the Treaty on the Functioning of the European Union sets out the specific objectives of the 2014-2020 EU CAP that is currently operating in Scotland:

• to increase agricultural productivity by promoting technical progress and ensuring the optimum use of the factors of production, in particular labour
• to ensure a fair standard of living for farmers
• to stabilise markets
• to ensure the availability of supplies
• to ensure reasonable prices for consumers

The EU has stated that the 2014-2020 CAP has supported a fair standard of living for farmers; helped ensure a stable, safe and healthy food supply; and provided clear food information to consumers.

As a result of the UK leaving the EU, the Scottish Government must create a replacement for the CAP. This has to deliver the objectives set out in the Vision for Agriculture and, where practicable, stay aligned with new EU measures and policy development. This will require different choices to be made compared with the 2014-20 EU CAP. The EU has stated that their new CAP “draws many lessons from the policy during 2014-2020”, noting “results [from the 2014-2020 CAP] in enhancing environmental protection and climate action by raising standards and encouraging change were mixed”. This concurs with published research into the effectiveness of the CAP (papers outlined in Annex A), which suggests there is scope for a replacement CAP to be more efficient and deliver greater value for money.

1.3 Delivering the Vision for Agriculture

Figure 1 distils the Vision for Agriculture into four clear objectives and outcomes. It also outlines the range of proposed metrics we will use to assess whether policy proposals deliver on our objectives. This analysis will be supplemented by further qualitative analysis to capture other key aspects of the Government’s Vision for Agriculture, such as alignment with the EU.

Figure 1. Vision for Agriculture objectives, outcomes and potential metrics

Objective: High quality food production

Outcome: The primary food production sector is a productive and sustainable sector of the economy that helps ensure that Scotland’s people can live and work sustainably on our land

Potential Metrics: Calories and protein produced for human consumption

Objective: Just Transition for agriculture

Outcome: The transition to net zero supports the rural economy and supports efforts to reduce rural poverty and inequality, targeting support to those who need it most

Potential Metrics: Value of output Employment Profitability

Objective: Climate mitigation and adaption

Outcome: Reduced greenhouse gas emissions from the agriculture sector

Potential Metrics: Million tonnes of carbon dioxide equivalent

Objective: Nature restoration

Outcome: A substantial regeneration in biodiversity, ecosystem and soil health

Potential Metrics: A suite of indicators, in development

It is essential that careful analysis of policy proposals for a replacement CAP is undertaken to ensure they are focused on activity and outcomes that are rooted in science and tested in the real world. This will help ensure they deliver the outcomes in the Vision for Agriculture in a way that secures value for money.

The Scottish Government’s approach to appraising future policy proposals is guided by best practice, as set out in the HM Treasury Green Book and the Scottish Public Finance Manual (SPFM).

“Good appraisal entails being clear about objectives, thinking about alternative ways of meeting them, estimating and presenting the costs and benefits of each potentially worthwhile option, and taking full account of risks.”

Source: Scottish Public Finance Manual

The purpose of analysing policy proposals in this way is to ensure that they deliver against Government objectives in a balanced and coherent way.The goal of analysis is to ensure that decisions are informed by, and based on, the best available evidence and in setting out our approach in this way we are being transparent about how we do that.

It is essential to bear in mind that analysis can only be based on models and the best available evidence, so results will be estimates with some margin of error. The intention of analysis is not to dictate an absolute answer; the purpose of appraisal is to support a methodological and consistent development of policy, identifying any key issues and framing outcomes and impacts in ways to help decision makers.

This briefing proceeds with evidence outlining the current position of the agricultural sector, with respect to the four Vision for Agriculture objectives. The Scottish Government has previously published a series of papers providing a wide range of evidence relating to the agriculture sector, which can be found in Annex B.