Rural Support (Improvement) (Miscellaneous Amendment) (Scotland) Regulations 2024: islands communities impact assessment

Scottish Suckler Beef Support Scheme (SSBSS) : Island Communities Impact Assessment

Name of policy, strategy or service

The Rural Support (Improvement) (Miscellaneous Amendment) (Scotland) Regulations 2024 provisions for the Scottish Suckler Beef Support Scheme (SSBSS)

Step 1: Develop a clear understanding of your objectives

The SSBSS is a coupled support scheme, which gives direct support to beef producers with payment made on each eligible beef calf claimed by a producer. A reform of the SSBSS with the addition of a calving interval condition would reduce the calving interval between calves for every dam, which will improve the productivity of suckler businesses, reduce Greenhouse Gas emissions, and continuing payments will support businesses through the change as part of the Scottish Government’s commitment to a Just Transition for Agriculture.

The payment rate on each calf varies each year because the SSBSS budget is divided by the total number of eligible animals claimed, which determines the payment rate per animal. This is then divided into two separate budgets: a mainland budget of circa £34 million, and an island budget of circa £6 million. For example, in 2022, the payment rates were £101.42 per mainland calf and £144.48 per island calf.

The reform does not propose that either the mainland or the island budget allocation will change. However, the introduction of a calving interval condition will favour areas with calves with a lower calving threshold.

At a meeting between the Cabinet Secretary and SG officials on 8 February 2024, the Cabinet Secretary approved a single payment option for SSBSS going forward, and the introduction of a calving interval condition of 410 days for 2025, with the intention to reduce this calving interval threshold in future years, with details provided in advance. She intends to continue SSBSS beyond 2026 to allow calving interval conditionality to become established, and she wishes to note the work of smaller producers with options developed by officials for different ways to support them.

Step 2: Gather your data and identify your stakeholders

The 2023 paper “Calving Intervals in Scotland’s Cattle Population: Conditionality Options” provided the following analysis on the impact of calving interval conditionality on regional variation in Scotland:

“Regional variations matter, as any future conditionality clause introduced on coupled beef support would have to consider the impact on Scottish Islands, per the Islands (Scotland) Act 2019. Annex 2 provides some Parish level maps that show the variation within regions (note parishes with fewer than 5 ‘beef’ holdings have been redacted to meet disclosure requirements).” (para.28)

The report shows that there is a range of eligibility across different regions in Scotland. In 2021, Shetland and Orkney achieved 89% and 86% performance of 410 day or less calving intervals, while the lowest performing regions were Eileanan an Iar (the Western Isles), Argyll & Bute and Ayrshire, achieving 79%, 79% and 80% respectively. There is a separate island budget for the scheme, but the stronger performance of the Northern Isles when compared to Eileanan an Iar and Argyll & Bute could see a greater proportion of the budget being received by Shetland and Orkney Claimants over their Hebridean counterparts.

There are currently no derogations or exemptions in place for island communities. The higher payment per island calf is intended to compensate for the harsher conditions which affect island producers, as opposed to mainland producers.

Key stakeholders include the National Farmers Union (NFU) Scotland, the Scottish Beef Association (SBA), the Scottish Crofting Federation (SCF), and SAOS.

Step 3: Consultation

In September 2023, a reform stakeholder group was formed to assist officials in considerations which emerged from the principle of implementing a calving interval condition to support development of detailed policy advice for the reform. The stakeholder group met from September to December 2023 and included representatives from NFU Scotland, the SBA, the Scottish Crofting Federation, SAOS, and more.

There has been no public consultation on the reform. However, the intention to reform the SSBSS has been communicated more broadly through stakeholder groups, including at the NFU Scotland’s Autumn conference 2023 and Spring conference 2024.

The SSBSS Reform Stakeholder Group were asked to consider a number of questions relevant to developing a policy on implementing a calving interval condition for the SSBSS. In summary, the group were of the following mind:

1. A soft transition into changes to eligibility criteria will support a Just Transition. The stability of a base payment would ensure a safety net for producers, while the top-up payment would act as a driver for ambitious efficiency targets.

2. Split payments would mitigate the need for a small herd claim exemption, as small herds have lower eligibility due to higher calving intervals. However, under a single payment option, a small herd exemption could be considered. At a cross-party group meeting on 10 January 2024, crofters pushed for a small claim derogation to be included in any reform.

3. While previously-registered births would be used to establish the calving interval, unregistered births or premature stillbirths would make the next calf ineligible under the calving interval condition, result in no payment on a claim made, and increase the calving interval, which would affect the next future claim for a calf from that dam. Split payments might reduce the need for a bespoke solution to this problem. However, if reform is to be introduced in 2025, there will have not been enough time to communicate the need for accurate registration of calves born in 2023 to mitigate against the impact of longer calving intervals for those animals. Policy officials would have to consider this issue further, as well as stillborn or aborted calves.

4. Changes to the calf retention period should not be a priority at this stage as they complicate the work of driving forward calving interval reform, and could be considered at a later date as calf retention changes could help reduce mortalities and ensure a greater focus on getting calves to weaning.

5. The group favoured simplicity to the reform, with few exemptions allowed. This makes the transition simpler, as not having exemptions in place allows the reform to be delivered in a way that can be easily communicated and understood. This was emphasised in the view that there should be no exemptions for:

a. different beef breeds who might have different calving intervals;

b. cows who have been bought in to supplement their breeding herd (and whose calving interval might not, currently, be a consideration when purchasing);

c. cows having their second calf (whose interval between the first and second is higher than the overall herd average); and

d. the immediate future progeny of cows that have given birth to twins/multiple offspring, who generally take longer to get back in calf.

The key stakeholder lobbying for exemptions for small herds and islands is the Scottish Crofting Federation.

In a letter to the Livestock Production Policy Branch on 19 January 2024, the Scottish Crofting Federation Chief Executive requested “a derogation from the calving intervals for small herds, with respectively minimal claim sizes.”

Details of the reform were discussed at a meeting of the Agriculture Reform Implementation Oversight Board (ARIOB) on Friday 8 March 2024. Crofting representatives asked whether a small herd derogation was going to form part of the new scheme rules. SG Officials replied that there would be no derogation built in to the policy in the interest of simplicity. The President of the National Farmers Union Scotland (also ARIOB co-chair) asked whether SG Officials could re-assess the impact on small businesses as part of the reform, while also asking for details to be made public at the earliest opportunity. The ARIOB exists to support the Cabinet Secretary in implementing policy, and the Cabinet Secretary did not request that officials re-evaluate the effect on small herds following the meeting.

Step 4: Assessment

SCF are of the opinion that efficiency needs to be increased. However, it may be more labour intensive in small herds, low-input systems and remote locations. In their letter dated 19 January 2024, they expressed the following concerns:

1) that more evidence must be provided that lower calving interval thresholds can be achieved for small herds in the Highlands and Islands region;

2) that crofters will have no control over the exact intervals because many do not have their own bull and rely on hiring a bull from other farmers or through the Scottish Government’s Crofting Cattle Improvement Scheme (Bull Hire Scheme). Thus, crofters cannot be held responsible for not complying with calving intervals if this is due to the provided bull not working.

3) that crofters’ business may suffer from dysfunctional transport links including ferries.

4) in light of the above concerns, SCF would urge for a derogation from the calving intervals for small herds, with respectively minimal claim sizes.

In addition to the barriers to achieving reduction of calving interval thresholds, noted by SCF above, the Cabinet Secretary has stated that her priority in reform is to see adequate support in place for the types of businesses more likely to see their payments reduce to zero.

According to research conducted by SRUC, using 2022 data, provided to the Scottish Government, 66 Island herds would have 0% animals qualifying under a 410 day calving interval, compared with 193 Mainland herds (SRUC presentation, p.11). However, this will vary year on year.

SG officials in Livestock Production responded by letter on 1 February 2024 to the concerns raised by SCF and stressed that, in progressing this reform, the Scottish Government will need to balance simplicity and deliverability concerns. With respect to SCF’s concerns, SG are of the following opinion:

1) Research carried out by SRUC, on behalf of the Scottish Government, illustrates that cows across all breed types and in all regions can meet higher calving interval thresholds. However, claimants will have to consider what farming practices best fit their own business requirements and what importance they place on support delivered via the SSBSS, as they already do.

2) The bull scheme is a service that Scottish Government provides, but it is up to the crofters if they wish to use in. In choosing to use the scheme, the conditions of hire clearly state that “SGRPID accepts no liability for a bull proving to be a non-server or infertile not for loss in respect of any outbreaks of contagious or infectious diseases. In additions while every care is taken in the selection of bulls used in the Scheme, no liability can be accepted should any bull leave defective progeny”.

3) It is unclear what impact concerns around dysfunctional transport links will have on all Highlands and Islands businesses.

With regard to transport links, whilst connectivity is a key issue for island and remote rural communities, this policy change is only indirectly linked to transport issues. The higher island rate available through the SSBSS already takes account of additional pressures on island producers.

On 2 February 2024, advised the Cabinet Secretary for Rural Affairs, Land Reform, and Islands that for the calving interval threshold with respect to “small” businesses the following has been considered:

1. The additional modelling from SRUC, using 2022 data, suggests that under a 410 day threshold circa 25 island businesses and circa 50 mainland could see their SSBSS support reduced to nil as indicated in advice provided by SRUC in January 2024;

2. These businesses represent circa 1.2% of total businesses. The modelling suggests, however that these business produced fewer than 4 calves per business in 2022 on average;

3. These represent fewer than 250 calves, out of a total of circa 350,000 in 2022 – less than 0.1% of modelled SSBSS eligible calves. Using the SRUC modelling and actual 2022 payment rates the average island business in this cohort could have received an average support of circa £420 total, and the average mainland business could have received support of circa £365 total.

At the ARIOB meeting on 8 March 2024, fellow ARIOB members responded to SCF and NFUS’s request for a re-evaluation of the impact on small herds. Concerns were expressed around the ARIOB as a larger advisory body requesting re-evaluations when the Reform Stakeholder Group had already discussed these matters in detail. Additionally, it was emphasised that the reform should not divide the Scottish herd into larger and smaller businesses and create division in the industry. Rather, it should be equitable across all businesses.

A full Islands Community Impact Assessment is NOT required

In preparing the ICIA, I have formed an opinion that our policy, strategy or service is NOT likely to have an effect on an island community which is significantly different from its effect on other communities (including other island communities). The reason for this is detailed below.

Reason for not completing a full Islands Communities Impact Assessment:

During the course of assessment it has been determined at this stage that a full ICIA is not required. This is primarily based on four considerations, reiterated from the above section:

• Research carried out by SRUC, on behalf of the Scottish Government, illustrates that cows across all breed types and in all regions can meet higher calving interval thresholds. However, claimants will have to consider what farming practices best fit their own business requirements and what importance they place on support delivered via the SSBSS, as they already do.
• The bull scheme is a service that Scottish Government provides, but it is up to the crofters if they wish to use in. In choosing to use the scheme, the conditions of hire clearly state that “SGRPID accepts no liability for a bull proving to be a non-server or infertile not for loss in respect of any outbreaks of contagious or infectious diseases. In additions while every care is taken in the selection of bulls used in the Scheme, no liability can be accepted should any bull leave defective progeny”.
• It is unclear what impact concerns around dysfunctional transport links will have on all Highlands and Islands businesses, whilst connectivity is a key issue for island and remote rural communities, this policy change is only indirectly linked to transport issues. The higher island rate available through the SSBSS already takes account of additional pressures on island producers.
• During detailed discussions with both the reform stakeholder group and the ARIOB the broad consensus was that the reform should not divide the Scottish herd into larger and smaller businesses and create division in the industry. Rather, it should be equitable across all businesses.

Any change to support, or the introduction of new support, will be impact assessed during the co-development process within the Agricultural Reform Programme.

Screening ICIA completed by (name)

John Armour

Position

Head of Livestock Production Policy

Signature and date

17/10/2024

ICIA authorised by (we recommend DD level)

John Kerr

Position

Head of Agriculture Policy (DD)

Signature and date

John Kerr 17/10/24