COMMONS

Post-Brexit agricultural funding must meet the needs of Scottish farming

31 July 2019

In its final report on the future of Scottish agriculture, the Scottish Affairs Committee argues that Brexit presents an opportunity to address failings in the agriculture funding formula, which has led to Scottish farms and crofts receiving low levels of funding.

The Scottish Affairs Committee calls on the government to depart from an outdated method of allocating funding which has failed to reflect Scotland's unique agricultural conditions and practices and introduce a new system where a nation's proportion of Less Favoured land is a central criterion in determining how much funding it receives. The report recommends that revising the funding formula would ensure that those farmers and crofters working in the most challenging environment receive the most support and lead to an increase in the proportion of the UK-wide agricultural funding allocated to Scotland.

The report also criticises the Government’s pilot seasonal agriculture scheme for not providing enough workers to address Scotland’s agricultural workforce crisis let alone enough for the whole of the UK. The Committee calls on the Government to increase the pilot to 10,000 workers and scrap application and visa interview fees to open the scheme to all motivated workers, not just those who can afford to apply. Further, the Committee also calls on the UK Government to address the challenges and opportunities presented by Brexit by:

  • Setting agriculture budgets on a seven-year basis with a mid-point review to ensure it still meets the needs of Scottish farmers and crofters;
  • Issuing a joint statement with the Scottish Government on the continuity of farm payments to give certainty for Scottish farmers and crofters;
  • Revising its no-deal tariff regime for imports, which industry argue would lead to many Scottish agricultural products being out-competed domestically by cheap imports;
  • Protecting Geographical Indications - such as Scotch Beef - by making them a red line in future trading negotiations;
  • Publishing its draft agricultural frameworks and set out a timetable for their agreement so Scottish farming groups can help shape their final form and start preparing for any changes they introduce;
  • Removing the £30,000 salary threshold for all migrants in future immigration plans to help sectors like veterinary science where the average salary is below this level;
  • Using its research and development budget to encourage new technologies and innovations which boost agricultural productivity.

Chair's comments

“Scotland has some of the most challenging farming environments in the UK, and yet Scottish farming is the cornerstone of Scottish food and drink industry and farms and crofts remain central to many thriving communities. It is nonsensical that funding through the CAP has not recognised these challenging conditions, so my Committee is calling on the UK Government to take Brexit as an opportunity to rewrite the rules of agricultural funding. A country’s environmental conditions and situation should be a central tenant of its funding settlement. If the UK Government accepts this principle, Scotland will be likely to receive a significantly greater proportion of funding allowing the agricultural sector to realise its full potential.

The Government must also do much more to resolve the workforce crisis on Scottish farms. The seasonal workers pilot must be quadrupled in size if it has any chance of addressing this. The uncertainty surrounding no-deal tariffs and future of geographical indications must also be resolved so Scotland can be confident its agriculture sector will be protected and enhanced post-Brexit.

My Committee’s report makes workable recommendations that the UK Government should implement to give Scottish farmers and crofters cause for optimism about the future of agriculture post-Brexit.”

Funding for ‘Less Favoured Areas’

The report outlines that Scotland’s agricultural sector is the bedrock of Scotland’s booming food and drink industry – which contributed £3.18 billion to the economy in 2018 – despite the vast majority of farmers and crofters working on land which is classified as ‘less favoured’. This means that the land's condition makes it less productive, with much of its use restricted to lower-value farming practices such as livestock grazing.

The report criticises the principles that have historically been used to determine agricultural funding pots for England, Scotland, Wales and Northern Ireland under the EU Common Agricultural Policy and argues that leaving the EU presents an opportunity for a complete rethink of agricultural funding. The Committee urges the Government to base the distribution of agricultural funding within the UK on criteria that reflects each country's conditions & situation and recommends that the proportion of a nation's ‘less favoured area’ land be a central criterion in determining intra-UK agricultural funding.

Seasonal agricultural workers

The report cites ‘overwhelming evidence’ that the Government’s seasonal agricultural workers pilot scheme is insufficient to meet the demand for labour in Scottish farms, let alone the whole of the UK. At present the scheme only allows for 2,500 workers to come to the UK, and Scottish farmers have raised concerns that this few workers, coupled with delays in the scheme, has resulted in unharvested produce being left to rot. Bureaucratic delays and unwieldy fees for applicants have also made the scheme uncompetitive within Europe, particularly among students who cannot afford the upfront costs. The Committee urges the Government to recognise these failings by increasing next year’s pilot to 10,000 workers and scrapping application and visa interview fees to open the scheme to all motivated workers, not just those who can afford to apply.

The future of farming: innovation and immigration

The Government is keen that all sectors, including agriculture, look to technology to reduce its reliance on foreign labour. The Committee is not convinced by the Government’s confidence that innovative agricultural technologies will decrease the need for foreign labour but notes that new technologies can be used to boost productivity in other ways, particularly given the high proportion of low-quality land in Scotland. The Committee recommends that the Government explore the option of using the Shared Prosperity Fund's rural development budget to help farms purchase new technology & equipment through innovation grants.

The Committee is also concerned that the Government’s proposed £30,000 threshold for skilled workers will have a detrimental impact on professions which are reliant on non-UK workers, like the veterinary sector. The report recommends that the £30,000 cap be removed to ensure Scotland’s agriculture sector retains essential workers from outside the UK.

Trade post-Brexit: no-deal tariffs and Geographical Indications

The Committee heard significant criticism of the Government’s no-deal tariff regime. Numerous representatives from Scotland’s agricultural sector told the Committee that the tariffs would result in many Scottish food and drink products, such as red meat, becoming uncompetitive overnight. Under the Government's no-deal regime, many agricultural products, such as cereals, fruit, vegetables and eggs, would receive a lower form of protection than under the current EU regime. The Committee calls on the Government to address these concerns during the consultation period on its permanent tariff regime.

The Committee reiterates its view that recognition of Geographical Indications should be a ‘red line’ in all future UK trade negotiations, to protect important Scottish food and drink products such as Scotch Beef and Stornoway Black Pudding.

Further information

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