Rural Support (Improvement) (Miscellaneous Amendment) (Scotland) Regulations 2024: business and regulatory impact assessment

Business And Regulatory Impact Assessment

1. Title of proposal

The Rural Support (Improvement) (Miscellaneous Amendment) (Scotland) Regulations 2024 (the “Regulations”)

2. Purpose and intended effect of the Regulations

Context

The Regulations implement the following improvements to the operation of the provisions of legislation pertaining to Common Agricultural Policy support schemes:

Cross Compliance – Good Agricultural and Environmental Condition (“GAEC”)

New conditions will be introduced to Cross Compliance in 2025. These are new peatlands and wetlands requirements which will be added to existing GAEC 6 – Maintenance of soil organic matter. These requirements will subject to certain exceptions, prohibit the following activities on peatlands and wetlands or on land adjacent to peatlands or wetlands where it causes damage to vegetation cover or causes drying of that land:

• reseeding,
• new drainage or maintenance of existing drainage systems that causes drying out of the peatland or wetland,
• application of pesticides, fertilisers including manures, or soil conditioners,
• creating roads and tracks,
• planting trees,
• activities that cause damage to the vegetation cover exposing the soil, and
• specifically in relation to wetlands, the carrying out of activities which disrupt connections between rivers/water courses and wetlands that will lead to the drying of the wetland.

Existing GAEC 6 aims to maintain soil organic matter levels by restricting ploughing on rough grazing or semi-natural areas. Cultivating these areas without first ploughing the land can result in the same damaging effect as ploughing. To provide enhanced protection cultivating will be added to existing GAEC 6 alongside ploughing as a prohibited activity to maintain soil organic matter levels on rough grazing or semi-natural areas.

Voluntary Coupled Support: Scottish Suckler Beef Support Scheme(“SSBSS”)

Calving interval is a key efficiency measurement for beef production. Longer calving intervals mean not only longer periods when a cow is incurring costs (e.g. feed, veterinary care) but also emitting greenhouse gases without contributing to beef production.

From 2025 onwards, the Regulations will introduce a new eligibility condition incorporating a calving interval threshold of 410 days to the SSBSS. This condition is designed to help balance productivity and profitability with the opportunity to address climate impact of emissions.

Objectives

The Regulations form an integral part of plans to transition from CAP Legacy schemes to new schemes to be introduced under the Agriculture and Rural Communities (Scotland) Act 2024 (the “ARC Act”).

If the Regulations are not brought into force for 1 January 2025, it will not be possible to implement these changes for the 2025 claim year as has already been communicated to applicants. This would undermine plans to transition towards additional enhanced conditions for improved outcomes to address environmental and climate change concerns in preparation for the new schemes to be introduced in terms of the ARC Act.

Rationale for Government intervention

Cross Compliance - Good Agricultural and Environmental Condition (GAEC)

Scotland has around 2 million hectares of peatlands of which around three quarters (1.4 million hectares) are degraded through drainage, extraction, overgrazing, afforestation and development. The remaining quarter, roughly 0.5 million hectares, of peatlands are in good condition. Degraded peatlands are a source of greenhouse gas (GHG) emissions, currently accounting for around 15% of Scottish annual net total. The new requirements are intended to limit further GHG emissions by restricting certain damaging activities.

The amendments made by the Regulations will however also support enabling the land use change needed to meet our climate change, environmental and biodiversity ambitions and help transform farming and food production in Scotland to be more sustainable and regenerative.

SSBSS

Calving interval is a key efficiency measurement for beef production. Longer calving intervals mean not only longer periods when a cow is incurring costs (e.g. feed, veterinary care) but also emitting GHG without contributing to beef production.

From 2025 onwards, a new eligibility condition incorporating a calving interval threshold of 410 days will be introduced to the SSBSS. This condition is designed to help balance productivity and profitability with the opportunity to address climate impact of emissions.

The new condition will be measured on an individual animal basis, rather than herd averages and will apply to the offspring of cattle with an established calving interval of 410 days or less. The first calves registered as born to its mother will be exempt from the calving interval threshold, and will remain eligible for payment provided that all other scheme conditions are met.

This measure will help address environmental concerns relating to GHG emissions and commences the transition to and will help beneficiaries prepare for new schemes to be introduced under the Agriculture and Rural Communities (Scotland) Act 2024.

Assessment of the impact of the improvement on stakeholders and members of the public

The Regulations will have no impact on members of the public as they only make a change to agricultural industry payment schemes to help applicants transition to and prepare for new schemes to be introduced in terms of the bill. The changes made by the Regulations seek to address environmental concerns relating to GHG emissions, land use and biodiversity and the rural support schemes will continue as before with these changes.

The Regulations should have a positive impact on stakeholders/scheme beneficiaries for rural support as with effect from the 2025 claim year and subsequent years, these changes should help them prepare for future schemes to be introduced under the ARC Act.

3. Consultation

Within Government

Responsibility for the schemes affected by the improvements being made by these Regulations and related issues lie with the Agriculture and Rural Economy (“ARE”) Directorate. The Directorate discussed the improvements with the relevant ARE officials namely, the Risk Assurance and Fraud team and the Payment Strategy Board which represents all Scheme, Inspection, Finance and Area Office team interests.

Public and Business Stakeholders

The Scottish Government consulted on the Agriculture (Retained EU Law and Data) (Scotland) Bill. The Regulations will be used to deliver on the stated objective of the Bill “to enable the continued operation of current CAP schemes and policies, but also to allow them to be progressively improved and simplified”.

There has been and will continue to be regular informal consultation with ARIOB and a range of stakeholders such as the Food & Agriculture Stakeholders’ Taskforce (FAST) as well as other representative organisations such as NFUS and Scottish Crofting Federation.

Also the Scottish Government has created the Agricultural Reform Programme Design Authority to govern the business and digital design requirements that will deliver the Agricultural Reform Programme and the changes to be implemented in terms of the Regulations. The Design Authority will determine that relevant stakeholders have been engaged, while developing and exercising control with the appropriate policies and standards.

With regard to the specific changes to the Scottish Suckler Beef Support Scheme a stakeholder group was formed by officials to support the development of the policy. Membership of the Group included representatives from the Scottish beef industry, government policy, advisory bodies, and farmers. Organisations represented on the group were NFU Scotland, the Scottish Beef Association, the Scottish Crofting Federation and Livestock Health Scotland.

The group met regularly between August and November 2023. The group undertook detailed discussion of factors related to the SSBSS reform. These discussions were used to inform the development of the policy.

The SSBSS reform policy has also been discussed by the ARIOB.

The new requirements for peatlands and wetland are being added to the well-established Cross Compliance regime and implemented under existing GAEC 6. The requirements have been developed taking account of operational requirements, stakeholders views, the burden on the industry and has been informed by input from:

a) a Scottish Government working group including policy and delivery teams including , RESAS, NatureScot and SEPA

b) the Peatland Scientific and Technical Advisory Group

c) James Hutton Institute research material

d) the Academic Advisory Panel

e) discussion at ARIOB

f) ‘user research’ conducted with farmers and crofters as part of the internal Scottish Government discovery project

g) NFU Scotland

h) Scottish Crofting Federation (SCF).

4. Options

Option 1 – Introduce the Regulations

Option 1 is to introduce the Regulations for the approval of Parliament. This would have a positive impact for the environment , climate change and reduced GHG emissions.

Option 2 – do nothing

This would have a negative impact for the environment , climate change and the increase of GHG emissions.

Sectors and groups affected

Beneficiaries of rural support schemes including farmers, crofters and their businesses.

Benefits option 1

The Regulations will contribute to a positive impact for the environment , climate change and the reduction of GHG emissions.

Benefits option 2

The ‘do nothing’ option has no benefits.

Costs option 1

The changes being made by the Regulations will not create significant additional costs for scheme applicants and the Scottish Government. There is no change in the administrative checks that are carried out and these are maintained and completed using existing resources and staff. And the cost of amending the Single Application Form should be affordable.

Costs option 2

To do nothing will not create additional costs.

5. Scottish Firms Impact Test

There are no obvious adverse impacts on Scottish firms.

6. New Deal for Business Implications

These policy proposals has been co-developed with input from the relevant and appropriate stakeholders such as NFUS, Scottish Crofting Federation and the Reform Stakeholder Group, representing the Scottish livestock industry.

7. Competition assessment

There are no obvious impacts on competition.

8. Consumer assessment

We do not anticipate that the Regulations will have any adverse effect on consumers.

9. “Test Run” of business forms

There will be no new forms as a result of the change being made by the Regulations. Guidance will be made available to applicants to ensure they have all the required information relating to the proposals of the Regulations for which the Single Application Form will be amended.

10. Digital Impact Test

No impact is anticipated as a result of the Regulations.

11. Legal Aid Impact Test

No impact on the legal aid fund is expected as a result of the Regulations.

12. EU Alignment

The Regulations will align with recent changes to EU law, insofar as possible and meaningful. The measures will ensure broad alignment to EU CAP objectives. The new EU CAP will support European agriculture to contribute to the ambitions contained in the European Green Deal. This will emphasise actions in pursuit of achieving environmental and climate ambitions whilst contributing to the Green Deal targets. The Regulations will similarly contribute to ambitions to seek to tackle the climate crisis by addressing environmental matters of concern. These measures will not make it more difficult for Scotland to accede to the EU as an independent state.

13. Enforcement, sanctions and monitoring

There will be no change in the administrative and on the spot checks that are to be carried out on scheme beneficiaries.

14. Implementation and Delivery Plan

The improvement will be implemented by the above Agricultural Reform Programme Design Authority created by the Scottish Government to govern the business and digital design requirements that will deliver the new agricultural support programme to be delivered from 2025 onwards and the changes to be implemented in terms of the Regulations.

15. Post Implementation Review

The changes to be introduced by the Regulations will be reviewed annually to ensure the policy objectives continue to be met.

The Agricultural Reform Programme Design Authority will determine that relevant stakeholders have been engaged, while developing and exercising control with the appropriate policies and standards for implementing the changes introduced by the Regulations. The Design Authority will provide transparency to stakeholders and will ensure that they will be at the heart of how business processes and digital services are adapted or designed afresh. The Scottish Government will engage with them, understand their circumstances and seek to introduce adapted or new services that meet their needs in the most cost-effective manner.

16. Summary and Recommendations

We recommend the introduction of the Regulations for their approval by Parliament. Doing nothing would mean that it will not be possible to implement these changes in scheme requirements for the 2025 claim year as has already been communicated to applicants. This would have a negative impact for the environment , climate change and increased GHG emissions that will be reduced by the Regulations.

17. Declaration and publication

I have read the Business Regulatory Impact Assessment and I am satisfied that (a) it represents a fair and reasonable view of the expected costs, benefits and impact of the improvement and (b) the benefits justify any costs .

The Minister for Agriculture and Connectivity, Jim Fairlie

24 October 2024

Contact

Any queries regarding the BRIA should be addressed to :

John Armour

John.Armour@gov.scot (SSBSS)

Brian Service

Brian.Service@gov.scot (GAEC)