Scottish farmers have laid out their priorities for CAP (Common Agricultural Policy) Reform implementation and warned that current Scottish Government proposals could seriously undermine production in many sectors if left unchanged.

In a letter to Scottish Cabinet Secretary Richard Lochhead, NFU Scotland has outlined four key proposals as agreed by its Board of Directors.  The proposals are underpinned by a series of meetings across Scotland in the past two months, attended by more than 1500 members and a survey on CAP that has been completed by more than 1000 farmers.

The Union has written to the Scottish Government as it prepares its response to the ongoing consultation on CAP implementation, which closes at the end of February, and ahead of a debate on CAP taking place in the Scottish Parliament tomorrow (Wednesday, 29 January).

The four key priorities for the Union are:

• focusing available support only on active farmers and actively farmed land
• increasing the number of payment regions in the rough grazing area.
• Scottish Government must scope a managed approach to the transition of existing businesses from historic to area payments using a ‘Scottish’ tunnel
• refocussing limited rural development funds on measures that will create more efficient farm businesses

 The move to area based support is going to create real pressures on the rural economy.  This CAP reform process will leave some farm businesses looking down the barrel at significant payment reductions and with that may come a significant fall in farm output.

NFU Scotland President, Nigel Miller said:

“It is clear from the many farmers who have now done their sums that the core implementation programme for CAP, as outlined in the Scottish Government’s current consultation, fails to provide a viable support framework for a significant part of Scottish farming.  If unchanged, these proposals will exert a downward pressure on production across a number of key sectors at a time when we are looking to grow our food and drink sectors.

“Backed by members, our Board of Directors has agreed four priorities that can refocus the new CAP support package to safeguard businesses and production. Our package is for all sectors and all regions, it lifts budget efficiency, and supports activity.  The consultation is nearing a close.  It is important that in the remaining days we step up efforts to develop a package that is tuned to Scottish farming and protects our ability to produce.

“Firstly, focusing support only on active farmers and actively farmed land is a shared goal.  It is fundamental to the responsible use of public money and key to optimising area support levels in Scotland.  

“The so-called Scottish clause appears unable to deliver a barrier that can exclude inactive land through a requirement for minimum stocking.  As an alternative, we propose a suite of measures for consideration.  These include a more aggressive negative list; economic tests to define agricultural activity and limiting the allocation of new entitlements in 2015 to the number claimed in 2013.  The last comes with the proviso that developing businesses in the 2013 to 2015 period are recognised through a national reserve.

“Secondly, the single area payment approach to the rough grazing (RGR) region, as proposed by the Scottish Government, is fundamentally flawed and risks production, communities and infrastructure in our largest and most fragile payment region.  Any single payment rate is inevitably going to over compensate very low intensity areas.  In stark contrast, the more intensively stocked hills will be subject to heavy cuts in support that are likely to trigger accelerated de-stocking.

“More targeting through at least two payment regions in Scotland’s hills is essential to focus the appropriate levels of support to different farm businesses, and to use Scotland’s limited funds more efficiently.   Whilst this is challenging, NFU Scotland would welcome the opportunity to work with officials on what might be possible.

“Farm-based case studies from several regions demonstrate that there are extreme gaps in the support of heavily stocked rough grazing farms with losses of well over 50 percent of support. These productive units must have access to an appeal system to allow land to be re classified as permanent pasture where appropriate. That process may be a way to provide a future lifeline to production.
 
“Thirdly, established businesses will continue to be the basis of Scottish production in 2015 and beyond.  Their level of activity is key to the wider rural economy, jobs and food processing but cuts in direct support to these businesses of 20%, and in many cases significantly more are likely to trigger a refocusing of production strategies.  

“Transition management is crucial.  The Scottish Government’s proposed transition plan will push many established productive farm businesses over a cliff to area-based payments in 2019, and without a safety net.  A Scottish tunnel, however, could provide Scotland with managed transition and the option for the Scottish Government to select a fast or slow route once the impact of a 60% or 70% move to area based payments is achieved.  To ignore this more managed approach is not about fairness, it would be an abdication of responsibility.

“Fourthly, Scottish agriculture can contribute to climate change targets and the rural and wider economy through more imaginative Pillar 2 measures focusing on efficiency. There is an opportunity to move the rural development emphasis away from woodland expansion as our simple solution to climate change challenges, and towards a more innovative and carbon efficient agriculture through SRDP options focused on farming enterprises.

“There are also positives in the proposals.  Scottish Government's commitment to the new generation of farmers excluded from historical support has the wholehearted support of NFU Scotland.  Bringing new entrant businesses that farm without entitlements, or with partial or low value entitlements to full area support in 2015 is an important step.  The adoption of an on-going National Reserve is another important safeguard against future exclusion.

“At the same time, the previous CAP period, and the operation of the historic reference period, has created anomalies for those establishing or developing businesses in the period running up to 2004.  We are happy to engage with officials to scope out possible solutions for these farms, and new entrant businesses, and the operation of the National Reserve.”

Notes to Editors

• The Scottish Parliament will consider the following motion tomorrow (Wednesday 29 January) - Common Agricultural Policy—That the Parliament notes the importance of the new EU common agricultural policy to Scotland in helping to deliver viable food production and sustainable management of natural resources; welcomes the publication of two Scottish Government consultation documents on its implementation and notes that these are based on detailed and extensive discussions with stakeholders; recognises the complexity in implementing the policy changes adopted by the EU; supports the Scottish Government’s determination to ensure that future farm payments are made on the basis of active land; agrees that the options available to the Scottish Government to implement the proposals are further limited due to the poor budget settlement from the UK Government, which failed to recognise Scotland’s distinct needs and confines it to the lowest per-hectare funding in Europe for both direct funding and rural development, and welcomes the Scottish Government’s commitment to seriously consider issues raised during the consultations and to take the right decisions for the future of Scottish agriculture prior to the final implementation.
• Click here to view a copy of NFU Scotland’s briefing on CAP implementation for MSPs ahead of tomorrow’s debate. This includes a number of case studies that highlight the financial implications that current support proposals would have on existing farm businesses.

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Contact Bob Carruth on 0131 472 4006