Fruit and Vegetables Aid Scheme in Scotland: consultation analysis

3. Response Analysis (B): Views to inform future development of the Scheme

Context: In addition to the proposals set out in Section A, the Scottish Government welcomed more general views to inform future development of the Fruit and Vegetables Aid Scheme, and which will form the basis of a future consultation on more detailed potential changes.

There was a natural division in responses from those who have a hands-on working knowledge of the current scheme and those that represent the smaller-scale producers and others. Comments from both perspectives are welcome in forming the basis of any future consultation on a future scheme.

This section presents an analysis of responses to questions on Section B

Common themes evident in responses to these questions reiterate the importance of:

• Stability: for growers to plan and structure their business to give efficiency, resilience and innovation for advancement, and enhancing market access.
• Finance: match-funding encourages investment.
• Collaborative Working: contributing to higher rates of growth, reducing risks, knowledge exchange between growers fostering best practices.
• Investment: in environmental, and research and development measures.
• Simplification of processes: including administration, finance, inspections and audit.
• Support and funding for smaller-scale producers.
• Alignment with other Scottish Government priorities and policies.

Commonly mentioned disadvantages included:

• Eligibility to join the scheme: smaller-scale producers not being able to meet the criteria.

Q15. What are the key benefits of the current scheme that should be retained?

67% respondents (12 out of 18) offered comments.

The key benefits which respondents thought should be retained from the current scheme are in relation to:

Stability:

• Respondents appreciated the multi-year provision of the scheme which has been highly effective in allowing investment priorities for the benefit of growers and sustainable production in Scotland.

Collaborative Working:

• Respondents welcomed how the scheme has allowed for a higher standard of marketing, higher rates of growth for members, capital investment and, the ability to increase sustainability across all operations.
• In addition, through farmer collaboration there has been a reduced growing risk through a pooled model of collaboration as well as increased knowledge exchange and sharing of best practices.

Administrative Processes – transparency and accountability via one PO:

• A small number of respondents made reference to the administrative processes of the scheme being transparent and providing accountability, whilst many also acknowledged that improvements to the scheme administration were required (this is referred to further at Q17).
• Current members were appreciative that support is accessed via one claimant (the Producer Organisation) who undertakes specific agreed actions for the benefit of all producers in their organisation.

Market Access:

• Respondents currently involved in the scheme reiterated the importance of market access to drive economic empowerment for growers. This is seen to enable growers to tap into markets, infrastructure and innovation that would normally be out of reach.
• One respondent commented that improved market access made supply chains more resilient, backs environmental improvements as well as makes it possible to rely more on UK-grown produce.

Investment – Environmental:

• Respondents welcomed significant investment in this area, for example energy monitoring equipment, wastewater treatment solutions, and systems for reusing spent growing media.
• It was also mentioned how important actions relating to the reduction in the use of pesticides; climate change adaptation and mitigation; enhanced biodiversity; and the increased use of renewable energy were.

Investment - Research and Development:

• A number of respondents involved in the current scheme reiterated the crucial role research and development played in benefitting the wider industry. For example: helping to alleviate labour pressures through specialised machinery for production and harvesting; and reducing chemicals use and food waste by introducing UV light treatment for powdery mildew.
• Some respondents had taken part in Scottish based plant propagation trials, strengthening plant health and the quality of plant material.
• Continued research and development support helps trial new ideas, improve efficiency and helps members to stay competitive.

Knowledge Transfer / Investment – Technology:

• A number of respondents commented positively that through the scheme facilitating faster implementation of new technology and production techniques and knowledge sharing, it aided and enhanced the efficiency and competitiveness of growers.

Finance – Match Funding:

• Match funding gave Producer Organisations the chance to invest in items of better quality, have smarter ways of working and also encouraged investment all the while representing good value for public money.

Domestic Development:

• Respondents not belonging to a Producer Organisation recognised the importance of investing in domestic fruit and vegetable production. Further investment would allow for expanding homegrown produce vital for national food security, climate resilience and public health.

Producer Organisation definition:

• Whilst continuation of the scheme is paramount, there was criticism from some respondents that existing structures favoured large-scale producers with smaller growers being excluded.
• Responses supported the scheme opening up (even if in a different format) to include a wider range of producer types and organisational models.

It should be noted that changes in criteria, to be recognised as a producer organisation, in order to access funding via the Fruit and Vegetables Aid Scheme, are not being considered at this time. This is because on the UK’s exit from the EU, the legislative powers in assimilated regulations relating to recognition were transferred to the Secretary of State. Any changes would need to be developed with due regard to the legal framework.

Q16. What improvements could be made to ensure the scheme better supports Scottish growers?

78% of respondents (14 out of 18) offered comments.

The improvements that respondents thought could ensure better support for Scottish growers are in relation to:

Current PO’s – support and funding:

• A commitment to additional funding and real-term budget stability enabling greater investment to deliver improved sustainability of POs. Helping to accelerate innovations, environmental adaptations, and climate change mitigations and expand resilient production to benefit more and new growers.
• One respondent highlighted a preference of a fixed percentage of VMP which signals confidence and rewards productivity that aligns to rural policy objectives more clearly.
• Ensure that specific challenges such as labour shortages, water issues, and rising costs are taken into account.
• Ensure that there is accurate and up-to-date scheme guidance available.
• Introduction of a five-year cycle would give growers more stability, allowing for longer-term planning, and reduce administrative burdens.

Other Producer types – support and funding:

• All respondents representing smaller-scale producers and others stated that those types of growers should be included in the scheme. The minimum turnover of £1m is seen as too high for this group of growers.
• There was significant support for an entirely new scheme suitable for those representing the smaller-scale producers which include local fruit and vegetable growers, market gardeners and small-scale field producers and who sell directly to customers, or to small businesses.
• One respondent suggested that three funded actions would be required, which included:
  • Good Food Supply Scheme – similar to existing scheme but extended to all food types produced and sold within a local area
  • Market Garden Support Scheme – supporting the high costs of labour
  • Fruit and Vegetable Production Capacity Scheme – to include support in areas such as a new training academy, start-up investment, planting of crop trials.
• Allow smaller/newer growers to form consortia or join transitional producer modes without facing financial/paperwork burdens. It was highlighted that smaller businesses often cannot raise large sums of money upfront.
• One respondent suggested that labour/training should count toward in-kind match funding.
• Funding bonuses for growers selling directly through local communities, Community Supported Agriculture (CSA’s), farmers markets, local shops and, restaurants and which reduces reliance on longer supply chains.
• Financial and pre-recognition support for smaller-scale producers, particularly in rural, remote, post-land reform areas as well as women-led, youth-led and socially inclusive enterprises. One respondent mentioned that the scheme should, as well as rewarding scale alone, reward contributions to Scotland’s food, land, and community future.
• Establish a mentoring scheme or partnership incentives between larger, established organisations and small, emerging groups.
• Ensure there is alignment with other Scottish Government priorities and policies which would enable this scheme to be copied across into other sectors, the aim being to replicate the benefits of focused objectives that stimulate environmental efficiency, resilience, and innovation for the advancement of producers and their local rural communities.

Simplification of Processes – administration, finance, inspections

• Many respondents, both with a hands-on working knowledge of the current scheme and those representing the smaller-scale producers and others highlighted the need for a simplification in processes as there was some concern/criticism around the overly complex processes.
• Finance: shorter payment timelines (currently it can take between 3 and 9 months) would be welcome and beneficial to supporting cash flow throughout the operational programme and avoid financial burden placed on growers whilst awaiting reimbursement.
• Inspections: process should be expedited (allowing for financial burdens to be reduced).

Investment - Research and Development:

• Deemed as crucial and consideration given to expanding this type of support to the wider horticulture POs to enable continued investment.

Q17. What improvements could be made to make scheme administration more efficient and reduce bureaucracy?

72% of respondents (13 out of 18) offered comments.

The suggestions of what improvements could be made to ensure efficiency and reduce bureaucracy were in relation to:

Other Producer types – support and funding:

• Allowing smaller-scale producers and other growers to be part of the scheme.

Simplification of processes – administration, finance, inspections, audit:

The majority of respondents suggested ways to simplify processes, which included:

• Digital first application platform with clear, assisted guidance (with practical examples and FAQs).
• Pre-approval for certain costs or activity categories, with capped funding levels and automatic audit triggers only when necessary.
• Streamlining documentation requirements.
• Having shared resources available e.g. web platform, constitution, etc.
• Learning from other European countries.
• Creating regional support networks, offering outreach, compliance training, and real-time support.
• Those administering the scheme to visit production sites to develop a clearer understanding of operation and activities.
• Extending the scheme from a three-year to a five-year programme cycle.
• Ensuring good coordination between the Scottish Government and Rural Payments Agency in relation to PO recognition requirements.

More specifically for those currently in the scheme:

• Extending programme application submission deadlines (enabling POs time to conduct thorough market reviews of seasonal performance).
• Lowering the level of inspections (whilst maintaining the integrity of the scheme).
• Adjusting the requirement for 100% checks to a more proportionate level.

More specifically for smaller-scale producers:

• ‘Light touch’ compliance routes for lower-tier or first-time applicants.
• Use of template operational plans and simplified reporting for organisations under a certain turnover threshold.
• Having a dedicated case officer.
• Advance payment to reduce borrowing risk and cost.

Q18. Given the finite resources, how should priorities be set to maximise impact?

83% of respondents (15 out of 18) offered comments.

The suggestions on how priorities should be set to maximise impact, given the finite resources, were in relation to:

Smaller scale and other producer types – support and funding:

• Support for growers who supply local markets, including schools, hospitals, and public food contracts.
• Support for new and existing enterprises where local fresh fruit and vegetable provision is geographically marginal.
• Financial and training support for smaller businesses, young farmers, sustainable and regenerative producers (e.g. those reducing reliance on imported fertilisers, pesticides, or fossil fuels), community owned or managed farms and, businesses that do not already receive an area-based payment.
• Training support for new entrants.
• Rewarding environmental and climate actions.
• Ensuring funding circulates through local economies and not just in larger organisations.

Alignment with other Scottish Government priorities / policies:

• The majority of responses highlighted that cross-departmental priorities should be taken into account, in particular: health, environment, the economy, and rural development.
• Ensure alignment with the Good Food Nation Act, Local Food Strategy, and Agriculture and Rural Communities Act.
• Responses highlighted an emphasis on areas such as sustainable and regenerative production, local food system resilience funding, fair work and employment standard, agro-biodiversity and crop diversity.

Current POs – support and funding:

• Respondents commented on the wide benefits for PO members going through a single point of contact was highly efficient.

Simplification of processes – administration, finance, inspection, audit:

• Respondents reiterated the points made in response to question 17 but also highlighted that: digitising processes would reduce errors and significantly save time for all involved; and the need for those administering the scheme to partake in on-site visits to get a better understanding of the real impact that funding has on growers’ businesses.

Investment – Research and Development:

• Continued support for research and development projects would boost automation and improve sustainability across the sector.

Q19. How can the Fruit and Vegetables Aid Scheme better support new or emerging growers who are not currently part of a Producer Organisation?

89% of respondents (16 out of 18) offered comments.

Suggestions as to how better support new or emerging growers not currently part of a Producer Organisation were in relation to:

Promotion and encouragement to join existing POs or establish a new PO:

• Supporting the growth of existing co-operatives / POs to access new markets and meet demand.
• Supporting new or emerging growers to join an existing PO.
• Introduce a co-op support scheme - to aid the establishment and effective good governance of new and existing POs and co-operatives to deliver grower, community benefit, and value for money through targeted policy development.
• Strengthen public understanding by giving clear, positive messaging on the role that PO’s play in supporting growers, improving market access and driving innovation across the sector.

Introduction of a separate scheme for new entrants / smaller-scale growers:

• Introduce a specific support scheme for those focussing on businesses producing local fruit and vegetables. Whilst similar to the current scheme the eligible criteria could be adjusted, for example: a registered business operating on less than 30ha of land, with no minimum land area; applicant must be growing and selling fruit and vegetables to their community – with a minimum £20,000 turnover in local vegetable sales by end of year 2; must grow a minimum of 20 varieties of fruit and vegetables for commercial purposes every year; and applicant must pay the Real Living Wage to themselves and their staff.
• Introduce a dedicated funding stream for new entrants to help growers cover essential setup costs such as infrastructure, equipment, or training as well as helping towards forming a legal structure and meeting initial standards.
• Introduce a ‘starter organisation’ category which had reduced compliance for 1-2 years; mentorship models; and support for non-traditional landholding models.
• Develop a dedicated market garden support scheme providing tailored support for their business model.

Establish a ‘surplus subsidy’ – redistributing surplus produce for charitable purpose:

• One respondent championed the development of any future scheme to incorporate an element of surplus subsidy, meaning that any grower could redistribute their surplus produce for charitable purposes, at no cost disadvantage. For example, if a grower spends £10 per tonne to dispose via anaerobic digestion but it would cost £100 per tonne to redistribute to charities, the subsidy level would be £90 per tonne, provided directly to the producer / producer organisation.

Q20. Are you content with the range of crops eligible for support within the scheme?

72% of respondents (13 out of 18) offered their view in relation to the range of crops eligible for support within the scheme.

Views on the range of crops eligible for support were:

Those who were satisfied:

• Six respondents were satisfied with one commenting that it appropriately targeted sectors within horticulture that are characterised by higher risk profiles, shorter product shelf life, and greater requirements for capital investment. Those crops also faced disproportionately higher input costs, particularly in relation to labour, and are at the forefront of driving innovation and technological advancement within the industry.

Those who were dis-satisfied:

• Whilst acknowledging that the existing list was reasonable, it was suggested that a regular review by an independent advisory panel would be preferable.
• Suggestions for additional crops included:
  • Those that have become climate-resilient
  • Traditional Scottish heritage varieties
  • Crops that are suitable for glass house, no-dig, or regenerative production
  • Mixed horticultural systems (e.g. leafy greens, salad mixes, herbs, diverse vegetables)
  • Seed potatoes
  • Edible flowers