Scotland farming: What is the Agriculture Bill and what does it mean for farmers?

The Bill is due to be brought to the Scottish Parliament this year.

Pressure is mounting on the Scottish Government to publish its long-awaited for Agriculture Bill.

The Bill will lay out proposals on how Scotland’s farmers and crofters will run their businesses and manage the land in a way that helps the country build towards a more sustainable, food secure and environment-friendly future.

A Government consultation on the proposals opened in August last year and closed in December.

Scotland's Agriculture Bill is due to be tabled this year. Picture: Sandra Angers Blondin

While analysis of the answers was published at the end of last month, there is still no specific date as to when the proposals will be written up for farmers and crofters to see. The Bill is due to be tabled at some point this year, but ministers have been unable to confirm when.

In total, there were 392 valid responses to this consultation – 225 from individuals and 167 from organisations.

What’s the aim of the Agriculture Bill?

After the UK withdrawal from the EU in January 2020, the Scottish Government had to develop a support scheme to replace the existing EU subsidy system, which comes to an end next year.

The Bill also aims to introduce ways the farming sector can achieve a 31 per cent reduction in agriculture emissions by 2032 and develop more nature-friendly farming practices to prevent further biodiversity decline.

It will include conditions that farmers and crofters have to meet to be eligible for payments.

The Bill also looks to include plans for financial support for modernising tenant farming and to address animal welfare, food production and agriculture wages.

What are the headline proposals for the Bill?

Future Payment Framework

The new plans have a proposed new payment scheme to support farmers, which has four tiers – base, enhanced, elective and complementary.

Base is said to likely be a small percentage of the current direct payment to provide some support to businesses on the proviso they meet some basic “essential standards” such as basic environment practices and statutory management requirements.

Enhanced is set to financially incentivise payments for businesses that are highly effective in reducing greenhouse gas emissions and carrying out nature restoration and enhancement.

Elective will be more targeted funding for climate mitigation projects and nature recovery as opposed to enhancing agricultural production practice. The complementary tier provides supporting services to farmers doing continuous professional development (CPD), advisory services, tree planting, woodland management, and peatland restoration and management.

Headline consultation responses

A total of 62 per cent of respondents agreed to the four-tiered approach, while 23 per cent disagreed.

Supporters and opponents alike demonstrated concern that a four-tiered system was too complicated or unwieldy. Many expressed concerns the complexity of this system would require consultants to complete, disproportionately impacting small farmers and crofters – adding further strain to an already struggling group.

A large number of responses felt the consultation lacked sufficient detail, such as how the finances would be weighted.

A total of 86 per cent of respondents agreed the new Agriculture Bill should include mechanisms to enable the payment framework to be adaptable and flexible over time depending on emerging best practice, improvements in technology, and scientific evidence on climate impacts. A total of 5 per cent disagreed.

What do the critics say?

Direct support for Scotland’s farmers and crofters adds up to about £550 million a year at the moment, but with no certainty beyond 2024. With the total figure for Scottish Government’s Agriculture and Rural Economy (ARE) spending equivalent to about £680m, it means some 80 per cent is paid out as direct support. The National Farmers Union Scotland has called for at least 80 per cent of the future support package funding to be used for Tiers 1 and 2 as a form of direct support to farmers, with 20 per cent going to the other tiers.

Recent updates to the Bill

Rural affairs secretary Mairi Gougeon gave more detail this month on the conditions farmers will have to meet to be eligible for the future payments.

From 2025, a new condition will be introduced to basic payments, with the sector expected to reach a certain standard for protecting peatlands and wetlands to help restore the 250,000ha of degraded peatlands by 2030.

Existing cross compliance conditions will also be maintained as a minimum in the new support framework and will apply across all four tiers of support.

The foundations of the Whole Farm Plan will go live in 2025. This included soil testing, animal health and welfare declaration, along with carbon and biodiversity audits.

Support to help farmers and crofters ‘prepare for sustainable farming' will be available, including financial support towards having a carbon audit performed.

Up to a maximum of £1,250 is available over two years to deliver animal health and welfare measures, with access to herd data for cattle keepers.

The suckler beef support scheme will see new conditions linked to calving intervals to encourage livestock keepers to reduce the emissions intensity of their cattle production systems.

Climate change adaptation and mitigation and nature protection and restoration

The proposals for the Bill discuss how future payments to farmers, crofters and land managers should go towards supporting national climate change mitigation and adaptation objectives, deliver climate mitigation and adaptation measures, and to support integrated land management.

Headline consultation responses

The majority of respondents to these questions agreed the Bill should include measures to support climate change mitigation (77 per cent) and adaptation objectives (76 per cent).

Open responses to these questions focused on the need for support to reach these climate objectives – for example, providing grants to aid with the cost of replacing machinery.

Others noted their dissatisfaction at what they felt was an over-emphasis on climate change and not enough emphasis on high quality food production, which they felt should be the priority.

There was also a sense among a number of responses that agriculture was unfairly scapegoated on this issue and that many in the sector were already doing work being suggested.

Questions were raised in relation to the detail around the specifics of funding and whether these would complicate payment structures.

A total of 86 per cent of respondents said the new Bill should include a mechanism to protect and restore biodiversity, support clean and healthy air, water and soils, contribute to reducing flood risk locally and downstream and create thriving, resilient nature, while 9 per cent do not.

A further 80 per cent said the Bill should ensure payments are conditional on outcomes that support nature maintenance and restoration, along with targeted elective payments, while 8 per cent did not.

And 70 per cent said there should also be a powers to enable landscape/catchment scale payments to support nature maintenance and restoration, while 10 per cent did not.

What do the critics say?

The Agriculture Bill should recognise positive work that has already happened on farms and measures that are already in place to boost biodiversity.

Those farmers who have put thought, time and resources into this element of the land management aspect of their farms are penalised as they have less scope for new schemes.

Food production

The proposals suggest giving Scottish Government ministers powers to make changes on rules related to food, and new powers to support the agri-food sector, including a mechanism to enable payments which help deliver food production and, where appropriate, to provide grants to support the agri-food sector.

The Bill proposals also suggest giving reserve powers to support the agri-food sector, including powers to declare when there are exceptional or unforeseen conditions adversely affecting food production or distribution, and the ability to provide financial assistance, if necessary, to the agri-food sector.

Headline consultation responses

In total, 70 per cent of respondents agreed the powers in the Agriculture and Retained EU Law and Data (Scotland) Act 2020 should be extended to ensure Scottish ministers have flexibility to better respond to current, post exit, circumstances in common market organisation and easily make changes to rules on food, while 8 per cent disagreed.

A further 69 per cent agreed Scottish ministers should have powers to begin, conclude or modify schemes or other support relevant to the agricultural markets, while 10 per cent disagreed.

And 79 per cent of respondents agreed the new Bill should enable payments that support high-quality food production, while 6 per cent disagreed.

Animal Health and Welfare

The Bill aims to establish standards for animal health, welfare and biosecurity as a condition for receiving payments, to make payments to support improvements in animal health, welfare, and biosecurity beyond legal minimum standards and to collect and share livestock health, welfare and biosecurity data.

Headline consultation responses

In the consultation, 74 per cent of respondents agreed the new Bill should include powers to establish minimum standards for animal health and welfare as a condition of receiving payments, while 18 per cent disagreed.

A further 75 per cent agreed there should be powers to make payments to support improvements in animal health, welfare and biosecurity beyond legal minimum standards, and 68 per cent said there should be powers to collect and share livestock health, welfare and biosecurity data.

What do the critics say?

In general, several respondents argued existing welfare standards in Scotland are very high and covered by Assurance schemes, so there is no need to duplicate efforts or create a problem that doesn’t exist. Others said existing minimum standards are entirely insufficient, justifying the inclusion of new standards in the Bill.

Skills, knowledge, innovation

The Bill aims to continue to provide the full panoply of support for knowledge transfer, innovation and skills development within the agricultural, crofting and land management sectors and that future support mechanisms are designed in such a way that they meet emergent needs and remain flexible/adaptable to future pressures for change.

Headline consultation responses

The vast majority (92 per cent) of those who responded to this question agreed that support should continue to be provided in the area of skills, knowledge transfer, and innovation

Many said the current support is insufficient and should be extended or modified. There was a sense that agricultural training and support is often behind the agricultural supply chain and that the Scottish Government has not understood the complexity of the sector enough to deliver this support.

Administration

The proposals included several changes to admin suggestions including that Scottish ministers take the powers to set an annual and/or multi-annual budget to support the proposed future support framework and enable intervention for the purposes of supporting high-quality food production, climate change mitigation and adaptation, and nature restoration.

It also said Scottish ministers should have the power to amend retained EU law for CAP legacy schemes as needed to ensure their continued effective operation and regulation until they expire and also to ensure Scottish ministers have flexibility to better respond to current, post EU exit, circumstances.

Headline consultation responses

While the consultation responses didn’t seem to directly answer the question over Scottish ministers having the power to set a budget, 81 per cent of respondents agreed the Government should be responsible for creating a system that provides for an integrated database. This would be to collect information in relation to applications, declarations and commitments made by beneficiaries of rural support. A total of 7 per cent disagreed.

Around two-thirds (65 per cent) of respondents agreed technical fixes should be made to the Agriculture and Retained EU Law and Data (Scotland) Act 2020 to ensure Scottish ministers have flexibility to better respond to current, post exit, circumstances. A total of 11 per cent disagreed and 24 per cent said that they did not know.

Modernisation of tenancies

The proposals suggest Scottish ministers determine what is an acceptable diversification to enable national biodiversity, climate change mitigation and adaptation is met by tenant farmers.

They also suggest introducing a set timescale to conclude the process of waygo – the date at which a tenant relinquishes possession of an agricultural holding or of agricultural land.

There were also suggestions to change the law to remove rent sections in the Land Reform (Scotland) Act 2016 to make the following three things important for each lease – considering other tenant farmers’ rents if they have secure or fixed-time length tenancies; valuing the possible money to be made farming by that tenant farmer using a farm budget; and thinking about the future economic outlook for the next 3 years.

Headline consultation responses

A total of 50 per cent of respondents said Scottish ministers should have a power to be able to determine what is an acceptable diversification, while 28 per cent disagreed.

There was some agreement that Scottish ministers should be able to determine what diversification is to encourage biodiversity and combat climate change.

Conversely, some responses noted businesses need to diversify to survive, and such steps towards resilience should be permissible without a link to biodiversity or climate change.

Many responses also believed it was fair and important that both tenant farmer and landlord have certainty around when they will receive any money due to them when a tenancy comes to an end. However, some responses were hesitant to see Government intervention in this area without a clear understanding of the timeframes proposed, as it may take some time for companies to arrange money at waygo. However, many responses felt a timeframe of about a year would be suitable in most cases.

On the rent review, 56 per cent of respondents agreed adaptability and negotiation in rent calculations are required to meet the global challenges of the future, while 5 per cent disagreed and 39 per cent did not know.

What do the critics say?

As plans for future support evolve and look to include financial rewards to farmers for non-agricultural activities, the Scottish Tenant Farmers Association is anxious this could lock out tenants who have leases limited to agricultural activities. Schemes, such as planting small woodlands or shelter belts, could end up impossible to undertake for tenants if special measures are not included in the bill.

Scottish Agricultural Wages

The consultation paper proposed Fair Work practices, including the real Living Wage, are applied to all Scottish agricultural workers.

Headline consultation responses

The majority (68 per cent) of respondents to this question agreed Fair Work conditions, including the Real Living Wage, should be applied to all Scottish agricultural workers, while 10 per cent disagreed.

Responses in favour of the Real Living Wage made the argument that to pay these wages would be fair, that many agricultural workers were already paid at this level and that it may attract and keep high-skilled workers.

Others argued that a requirement to pay the Real Living Wage would have a financial impact on businesses and that many businesses in the agricultural sector would like to pay workers more, but it was not financially viable to do so. Such a requirement may lead to businesses having to cut jobs or increase food prices.

Young farmers

In consultation responses, several barriers to young people working in agriculture were identified. These were that renting/buying land is very difficult for young farmers, that many young people are lacking in rural skills, and that farming is not appealing to young people because of low wages and lack of housing in rural communities.

Some answers suggest the proposals put forward for the new Bill would reduce the number of jobs available for young people. A few respondents cite wage changes, general constriction of the farming sector and reductions to production levels to reduce emissions and drivers of this.

Several responses drew on personal experience of not having sufficient support as a farming family and thus not encouraging their children to stay in the family business.

Others, however, said increasing wage rates for young people could make farming more appealing to this group. And a few respondents highlighted the positive impact more sustainable agriculture would have on the next generation by protecting them from the worst impacts of climate change.