Sustainable and regenerative agriculture: code of practice

Annex A: Background Information

Vision for Agriculture

The Vision for Agriculture, aligned to the key objectives of the EU CAP, makes clear Scotland will have a robust and coherent framework to underpin our future agricultural support regime from 2025 onwards, that delivers climate mitigation and adaptation, nature restoration and high quality food production. It is important to ensure that high quality food can be produced in a way that delivers for climate and nature. The Vision established a transformative agenda for public support of farming and food production. It expects that all aspects of future support will contribute towards Vision outcomes, notably that of becoming a global leader in sustainable and regenerative agriculture. Fundamentally, enabling the essential role of Scotland’s producers in helping to feed the nation and contribute positively to nature and climate obligations.

The Vision made clear that active agriculture will continue to play an important role in maintaining thriving rural and island communities.

The five guiding environmental principles of the Scottish Government are at the core of the Vision for Agriculture:

• Protect the environment
• Anticipate potential environmental impact
• Prevention of damage
• Damage to environment must be repaired
• The polluter should pay

Agriculture and Rural Communities (Scotland) Act 2024

The Agriculture and Rural Communities (Scotland) Act 2024 was passed by the Scottish Parliament on 18 June 2024 and received Royal Assent on 30 July 2024. This legislation provides the powers required to deliver the Agricultural Reform Programme and realise the ‘Vision for Scottish Agriculture’.

The Vision for Scottish Agriculture will support agriculture and rural communities and is aligned to the key objectives of the EU CAP. Scotland will have an agricultural support framework from 2025 onwards, that delivers climate mitigation and adaptation, nature restoration and high quality food production.

The powers of the Act will be used to introduce the Future Support Framework to enable conditional payments to be made under four-tiers: Base, Enhanced, Elective and Complementary.

The Agriculture Reform Route Map was published in February 2023 and outlines what information, guidance and financial support the industry can expect and when it will be available.

The Act provides flexibility to respond to geopolitical, economic, climate and nature challenges.

The Act sets the overarching objectives of Scottish agricultural policy as:

• the adoption and use of sustainable and regenerative agricultural actions aligned to a set of principles.
• the production of high-quality food,
• the promotion and support of agricultural practices that protect and improve animal health and welfare,
• the facilitation of on-farm nature restoration, climate mitigation and adaptation, and
• enabling rural communities to thrive.

The Act introduces new requirements including the publication of a “Rural Support Plan” and a “Code of Practice for Sustainable and Regenerative Agriculture”.

This Code must include:

• An explanation of what the Scottish Ministers consider to be sustainable and regenerative agriculture,
• The agricultural activities and methods which they believe constitute best practice for sustainable and regenerative agriculture,
• Any other information and guidance on sustainable and regenerative agriculture that Scottish Ministers consider appropriate.

The Code must be reviewed and, if necessary, revised, every five years. Any Code or revised Code must be consulted on with people that Scottish Ministers "consider likely to be interested in or affected by it". It must be laid in Parliament, and Scottish Ministers must take appropriate steps to promote awareness of the code.

The Agricultural Reform Programme (ARP)

The Agricultural Reform Programme (ARP) will deliver the Vision for Agriculture and brings together work including the Route Map, the Agriculture and Rural Communities (Scotland) Bill, Future Support Framework, the Agriculture Reform Implementation Oversight Board (ARIOB) and other Transitional Support.

The Scottish Government is transforming how we support farming and food production in Scotland to deliver the Vision for Agriculture and become a global leader in sustainable and regenerative agriculture.

The Vision, aligned to the key objectives of the EU CAP, makes clear Scotland will have a robust and coherent framework to underpin our future agricultural support regime from 2025 onwards, that delivers climate mitigation and adaptation, nature restoration and high quality food production (in a way that delivers for climate and nature).

Scotland’s agricultural sector is at the heart of our economy and our rural communities. As we take on unprecedented economic and environmental challenges, we want to make sure the sector not only survives, but thrives.

That is why we have committed to working closely with farmers and crofters to make Scotland a global leader in sustainable and regenerative agriculture. To do that, we must transform agricultural support.

We have set five key goals against which we will measure success:

• High Quality Food Production – we want Scotland’s food production sector to be a successful part of the economy and to meet more of our own food needs sustainably
• Thriving Agricultural Businesses – we want profitable and resilient agricultural businesses that support local livelihoods, supply chains and the wider rural economy
• Climate Change Mitigation and Adaptation – we want to reduce greenhouse gas emissions from the agricultural sector. We also want to help farmers and crofters be more resilient to the impacts of climate change
• Nature Restoration – we want to protect and restore Scotland’s natural environment
• Support for a Just Transition – we want to support farmers and crofters through the climate and nature transition

Routemap

The Agricultural Reform Route Map provides further clarity on how we intend to deliver the ambitions set out in the Vision.

The Route Map sets out the process for changing to a new agricultural support framework with information on important dates, the measures being considered now, when current schemes will transition or end, the support available, and how to prepare for these first changes from 2025.

It is regularly revised and outlines what information and guidance the sector can expect from 2025 and when it will be available.

Future Support Framework

Tier 1 Base Payment and Tier 2 Enhanced are direct payments.

Tier 1 Base Payment will provide an element of financial certainty for farmers and crofters engaged in food production and actively managing the land. Receiving this support will require meeting what will be called essential standards (e.g. Greening, Cross Compliance, Statutory Management Requirements, etc.).

Tier 2 Enhanced will support businesses while they do their part to deliver Scotland’s climate and biodiversity targets, building on the standards established in Tier 1. The enhanced tier goes a step further than Tier 1 and will focus on measures that will reduce greenhouse gas emissions and restore and improve nature. Eligibility is dependent upon successfully undertaking Tier 1 and demonstrating contribution towards the Tier 2 requirements.

Tier 3 Elective and Tier 4 Complementary are indirect payments.

Tier 3 Elective will support individuals, co-operatives, or groups to increasingly manage land more sustainably. This tier of support will focus on funding targeted actions for climate change or nature restoration. This could be specific to a particular species or habitat, support conversion to alternative forms of agriculture such as organic production, encourage innovation and provide supply chain support.

Tier 4 Complementary will complement the funding we are providing elsewhere with access to continuous professional development (CPD). This tier will focus on providing applicants with the skills and advice required to uptake the suite of management options, new practices and innovation under Tiers 1-3.

Whole Farm Plan

The foundations of the Whole Farm Plan will go live in 2025. As part of our commitment to enhanced conditionality, in 2025, in return for their basic payment, all farmers and crofters will need to have in place two out of five baselines.

The Whole Farm Plan was a recommendation from the Farmer Led Groups and will support farmers and crofters to take a holistic view of their farm or croft.

As part of our commitment to a Just Transition, businesses are being asked to undertake the plans and audits relevant to their business activities over a transitional period, starting in 2025. The intention is for all businesses to have completed their relevant plans and audits by 2028 at the latest.

In 2025, as part of the eligibility requirement for BPS in 2025, businesses must undertake two from the following five baselines: Animal Health and Welfare Plan, Biodiversity Audit, Carbon Audit, Integrated Pest Management Plan or Soil Analysis.

Businesses will be asked to declare which plans and audits they have in place as part of their 2025 SAF.

Legal Effect

The Code as such is not law, and it is not intended to create any legal obligations.

Section 9 of the Act enables Scottish Ministers to give legal effect to guidance, by specifying the consequences for not complying with guidance, or requiring that guidance is followed as a condition of support.

This is particularly relevant to the duty on Scottish Ministers, set out in Section 29, to prepare and publish a document providing guidance on sustainable and regenerative agriculture ('the Code').

A landlord and a tenant might provide for activities permitted under the lease to be carried out in a sustainable and regenerative manner. The courts might have regard to the terms of the Code when interpreting a relevant condition in a lease.

The Scottish Ministers may make regulations under section 9 of the Agriculture and Rural Communities (Scotland) Act 2024 that specify the extent to which guidance on a particular topic (including the guidance in the Code) is relevant in determining whether a person has complied with a statutory duty or condition of support.

Alignment to EU

The Scottish Ministers have had “due regard” to the five guiding principles in the European Union (Continuity) (Scotland) Act 2021 (“the Continuity Act”) when developing the Code, namely:

• the principle of integration,
• the precautionary principle,
• the preventative principle,
• the rectification at source principle, and
• the polluter pays principle.

This helps support the Scottish Government’s objective to maintain and improve environmental standards, contribute to Scotland’s response to the twin crises in climate and biodiversity, and maintain EU alignment as far as possible.

This alignment recognises the interdependence between the health of the environment, animals and people, and the direct and indirect linkage between the welfare and wellbeing of people and animals.

Tenant Farming

The Land Reform Bill, introduced to Parliament on 13 March 2024, includes provisions to modernise tenant farming and small landholding legislation to allow them to participate in sustainable and regenerative land management. This Code of Practice will complement the proposed statutory provisions relating to sustainable and regenerative practices in the Land Reform Bill.

The Rules of Good Husbandry applying to tenant farmers, and the Rules of Good Estate Management applying to landlords, are defined in the Agriculture (Scotland) Act 1948. As a result, they focus on how agriculture was required to work post World War II. The Rules will be redefined so that a tenant farmer will be expected to farm in a way to achieve both efficient production and sustainable and regenerative production.

The Bill also significantly updates the list of agricultural improvements by moving towards a more flexible principle based approach by changing some of the existing fixed lists to illustrative lists. It will facilitate activities that will promote the development of sustainable and regenerative agriculture. This will allow tenant farmers more opportunities to deliver improvements to the land they work, to become more sustainable and productive and be rewarded for their investment of time and resources.

Diversification provisions applying to tenant farmers and small landholders take into account environmental consideration and how the proposed non-agricultural activity will impact on the whole holding for sustainable and regenerative practices in the future. A tenant farmer or small landholder may be entitled to compensation at the end of tenancy where the diversification has value to a hypothetical incoming tenant.