Fees for seed testing, seed certification and associated seed functions: consultation

Annex D: Partial Business & Regulatory Impact Assessment

Purpose and Intended Effect

Background

Seeds regulations implement European law, allowing certain kinds of agricultural seeds to be marketed. Only after official or licensed examination can the seed being certified as meeting specific minimum seed quality standards, and therefore be marketed. This process ensures that farmers and growers receive seed of a minimum known quality.

Objective

In their role as an official service provider / supervisor for seeds marketing, Scottish Government has an obligation to ensure full-cost recovery for all the services it provides, which includes field inspection of crops, testing of seed and the training and examination of people who undertake these activities. Within the Scottish Government, the Certification Authority, part of Science and Advice for Scottish Agriculture ( SASA), take lead responsible for the technical and administrative work associated with seed certification.

Rationale for Government intervention

This work contributes to the Scottish Government's Wealthier and Fairer strategic objective by creating a high quality public service, which we are continually improving and looking at way of make cost efficiency savings that still allows for sustainable future growth for the seed industry in Scotland. It also ensures that the cost of public services is met by those who benefit directly and the cost to Government is neutral.

Consultation

Within Government

Scottish Government's policy team have consulted with the Certifying Authority, who working closely with RPID and the Official Seed Testing Station ( OSTS) for Scotland, have reviewed the processes and procedures to provide the information contained within this BRIA. The Certifying Authority have provided the costings for undertaking this work, and have predicted the increases required to make full cost recovery in seed certification year 2018/19.

Public Consultation

This partial BRIA will accompany the 12 week consultation which will be issued on the 13 February 2018. The consultation documents will be sent electronically and by post to all interested parties registered with Scottish Government (~130 businesses /individuals). An electronic copy will also be placed on the Scottish Government and SASA websites. No informal consultation has taken place.

Business

Further to this, in line with Scottish Governments Better Regulation practises, around 10 to 12 individuals / companies will be interviewed, in order for Scottish Government to establish what these proposed changes will mean to their business.

Fee Structure Options

To meet the stated aim of introducing a full cost recovery regime for the seed certification, seed testing and associated functions, we have considered the following options:

1. Maintain the status quo, no increases in fees.

No change, will not achieve full cost recovery and any deficits will continue to rise. Essentially, failing to make full cost recovery means, the Scottish tax payers subsidising services that should be covered by the industry using it.

2. Increase fees to achieve full cost recovery in financial year 2017/18.

This option would deliver the Scottish Government's aims to recover the full cost of the service. Fees would increase so that those who benefit from the service would be required to meet the true costs of providing a Scottish seed certification scheme.

Over the years the Certifying Authority at SASA have implemented a number of cost savings, one of which is MySEEDS.

Introduced in 2015, this database which is a combination of seed certification and seed testing data, allows registered individuals / companies to enter seed lots, crops, view seed test results and other functions online.

The Certifying Authority are encouraged by the level of uptake of MySEEDS by the seed industry and having seen early efficiencies last year, are keen to see others benefit from its use and therefore are proposing a 5% decrease in the costs for online applications as an incentive.

A business growing 200 Ha of a cereal seed crop and certifying 1500 tonnes the annual saving through use of MySEEDS could be £246.50.

An increase of 8% is proposed for seed testing fees, to allow full cost recovery at the Official Seed Testing Station. The cost of seed testing each year is dependent on quality of seeds, which is effected by the growing and harvest conditions. Poor harvest conditions and quality of seed, requires additional time for testing and assessing the samples. The average cost recovery for seed testing over a four year period has been 87%

A recent pay and grade review of the seed analysts that work at the OSTS, has also added to the need to propose a 8% increase for seed testing fees.

In 2016 the review concluded that the work undertaken by seed analysts requires highly skilled labour. Further to this it recognised that a fully qualified seed analyst requires a minimum of 5-6 years training. Any seed analysts not yet on the minimum grade (B1) recognised for costing certification work, were moved to this position.

The cost of supervising the Licensed Seed Testing Stations is proposed to increase by 3%. However, there will be no increase for the through put fees, paid by the LSTS for checking of reserve portions.

Scottish Government propose, all other seed certification fees, including training and examination course fees, will rise by the 3%, the CPI figure announced on 16 January 2018.

Preferred Option

Option 2 is preferred by the Scottish Government. A 3% increase in line with CPI for all services, with the exception of an 8% increase for seed testing, no increase for through put fees and a reduction of 5%* ^[3] for online applications to allow Scottish Government to make full cost recovery on the services provided.

Sectors and groups affected

• Professional Seed Operators
• Seed Merchants
• Seed Processors
• Seed Packers
• Licensed Seed Testing Stations ( LSTS)
• Licensed Seed Samplers
• Licensed Crop inspectors
• Farmers

Based on the information we hold, we have provided an estimate of costs that an 8% increase in seed testing fees and 3% increase for all other seed certification service will have on a 30 tonne seed lot of cereal and a 10 tonne seed lot of Timothy is attached in ( Annex E).

Scottish Firms Impact Test

To obtain a better understanding of what these proposed increases will mean for Scottish individuals / companies, Scottish Government will need to speak to a cross section of the seed industry. Interviews will take place during March/April, and our findings will be summarised in the Final BRIA, which will be published along with a summary of the responses we receive.

• Competition Assessment;
• We do not anticipate any impact on competition; however we will update this section after interviews with industry;
• Test run of business forms;
• No new forms for business to fill in will be introduced as a result of our proposals.

Legal Aid Impact Test

Having consulted with the Legal Aid Team, we do not anticipate that the contents of this BRIA will impact the Legal Aid Fund.

Enforcement, Sanctions and Monitoring

The Scottish Government Accounting System ( SEAS) team, the Certifying Authority & the OSTS Scotland all work together to insure invoices are issued timeously. The normal action for non-paid invoices is used by the SEAS team for any statutory services not paid for by an individual or company after the time allotted.

Non-compliance result in companies or individuals being put on a client blacklist. Failure to pay for a service means no further work is carried out by the Certifying Authority or by the OSTS.

Implementation and Delivery Plan

Any increase will be implemented by way of The Seed (Fees) (Scotland) Regulations 2018, with the exception of the seed testing fees which uses Section 24(4) of the Plant Varieties and Seeds Act 1964, as it provides Scottish Ministers with powers to allow the Official Seed Testing Station for Scotland to make charges for services they provide.

The proposed increases of 3% and 8% fees would come into force on the 1 July 2018. As would the 5% reduction for online applications.

Post-implementation review

Scottish Ministers have given their assurance to the Rural Economy and Connectivity Committee, that the statutory fees charged for seed testing, seed certification, and associated licensed activities should be reviewed on an annual basis.

Summary and Recommendation

Scottish Government preferred option is Option 2, a 3% in line with CPI to maintain full cost recovery for seed certification and associated fees, and an 8% increase for seed testing fees, to reduce the deficit that the OSTS currently have for providing seed testing services. The proposed increases are anticipated to bring full cost recovery.

Summary costs and benefits table

This section will be updated at Final BRIA stage.

Declaration and Publication

I have read the impact assessment and I am satisfied that, given the available evidence, it represents a reasonable view of the likely costs, benefits and impact of the leading options. I am satisfied that business impact will be assessed with the support of businesses in Scotland.

Signed:

Date:

Minister's name:

Title:

Scottish Government Contact point:

Carol Scott
(Ext: 49504)

Partial Business and Regulatory Impact Assessment

This partial BRIA will accompany the 12 week consultation which will be issued on The 13 February 2018, and indicates the projected fee increase for 2018. The consultation documents will be sent electronically and by post to all interested parties registered with Scottish Government (~130 businesses/individuals). An electronic copy will also be placed on the Scottish Government and SASA websites.