Conclusions and recommendations
Agricultural funding
1.Allocating CAP funding within the UK on historic values does not reflect Scotland’s unique agricultural conditions and practices. This has resulted in Scotland losing out on much needed funds and led to criticism of the UK Government’s handling of the EU convergence uplift. We recommend that the Government work with the devolved administrations to develop a new fair and transparent funding arrangement which meets the needs and individual circumstances of all the UK nations post-Brexit. (Paragraph 10)
2.We welcome the commissioning of an independent review into intra-UK farm support post-Brexit and are pleased that the Government has clarified that the review’s conclusions will inform funding post-2022. (Paragraph 14)
3.The distribution of agricultural funding within the UK must be based on objective criteria that reflects each country’s conditions and situation. This should reflect the fact that Scotland has a much higher proportion of LFA land and recognise the social and environmental benefits farming this land provides. We recommend that the proportion of a nation’s LFA land be a central criterion in determining intra-UK agricultural funding. While we do not know the total amount of funding available, this should result in a significant increase in the proportion of agricultural support allocated to Scotland. (Paragraph 21)
4.We recommend that the Government consult on increasing the number of LFA categories used to make funding decision, to reflect the diversity of LFA land across the UK. This should ensure that farmers and crofters working in the most difficult and challenging landscapes get the support they need. (Paragraph 22)
5.Farming is a long-term industry, and the sector needs a financial settlement that gives farmers and crofters the certainty to make investments that will not see returns for several years. We therefore recommend that the UK Government set agricultural budgets on a seven-year basis and commit to a review half-way, to ensure it is still meeting the needs of Scottish agriculture. (Paragraph 26)
6.Rural communities in Scotland have benefited from the rural development funding provided by EU schemes. We therefore welcome the Government’s intention to use the Shared Prosperity Fund to help replace this valuable source of funding. However, the Government must provide more clarity on the purpose of the fund, how it will operate in practice, which existing EU funds it will replace and how much will be made available for rural development projects. (Paragraph 32)
Agricultural policy
7.Direct payments have an important role in supporting agriculture across Scotland. Without this support many farmers and crofters will become unprofitable causing economic, environmental and social problems for their communities. We welcome the unequivocal assurance from the UK Government that the Scottish Government’s existing direct payments will not be restricted by the UK’s WTO obligations. (Paragraph 38)
8.The uncertainty about the legal basis for continuing to make agricultural support payments to Scottish farmers after Brexit has been a cause of great concern. This has not been helped by the lack of a clarity from both the UK and Scottish Governments on when their respective Agriculture Bills will be passed. We recommend that the UK and Scottish Governments work together to agree a joint statement on the future of these payments to provide clarity about the future of these payments and announce timetables for the passage of their respective pieces of agricultural legislation. (Paragraph 45)
9.We welcome the firm commitment from the Secretary of State that agricultural common frameworks will not be imposed upon the devolved administrations but agreed by consensus on the basis of mutual and meaningful engagement from all parties These frameworks must ensure that the Scottish Government has at least the same flexibility over agriculture policy as it currently does under the CAP. We believe that a reformed JMC, as recommended in our Report on intergovernmental relations would provide a suitable forum for frameworks to be agreed and managed. (Paragraph 52)
10.While progress has been made on the governance and development of common frameworks, it has been difficult to obtain detail about their contents. We therefore urge the Government to publish 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. (Paragraph 55)
Trade post-Brexit
11.We are alarmed by the negative reaction Scotland’s farming sector has had to the Government’s temporary no-deal tariffs, which appear to provide significantly less protection than the current regime and give industry very little time to adapt. The Government must address these concerns during this consultation period on its permanent tariff regime. The Government should also provide more detail on the financial support it will make available to farmers and crofters to offset the impact of the EU’s high no-deal tariffs on their exports. (Paragraph 64)
12.Geographical indications have been crucial in protecting the provenance of many iconic Scottish products, and we are pleased that the UK Government has acted on our recommendation and established a domestic register. While we are reassured that the Government is committed to continued recognition of UK products, the Government must provide more clarity on how it will ensure the future protection of Scottish GIs in the EU given that this may be revoked by the EU if a reciprocal arrangement is not reached. We also repeat our call for GI protection to be a red line in future UK trade negotiations. (Paragraph 70)
Agricultural workforce
13.We welcome the Government’s decision to launch a Seasonal Workers Pilot Scheme, however there is overwhelming evidence that 2,500 workers will be insufficient to meet the demands of the agricultural sector in Scotland, let alone the rest of the UK. We recommend that the Government increase the size of the pilot to 10,000 workers next year. We also recommend that its scope be broadened to cover other sectors reliant on seasonal workers such as floral and meat processing. (Paragraph 78)
14.It is clear to us that a permanent Seasonal Workers Scheme is needed to meet the demand for seasonal agricultural workers post-2020. We therefore recommend that the Government commit to running a version of the scheme on a permanent basis. (Paragraph 79)
15.We welcome the additional support the UK Government has made available to the pilot scheme following our intervention. However, we are concerned that there remain difficulties in processing workers in Ukraine and Moldova to allow them to reach farms on time. This has not been helped by the additional costs expected of workers to book a visa interview on-top of the £244 visa fee, which could deter student workers. This is substantially more than comparative schemes in Europe and risks pricing the UK out of the market for agricultural workers. If the Government wants the best and most motivated workers, not just those who can afford to pay, we recommend it abolish visa interview fees and review the cost of Tier 5 visas, to ensure the pilot remains competitive internationally. (Paragraph 84)
16.We were disappointed to hear that some foreign workers have expressed a reluctance to work in Scotland’s seasonal agricultural sector, based on preconceptions that we do not recognise. While it appears that many concerns are based on misconceptions, it is important that these are addressed to ensure that Scottish farms continue to attract the best workers. We welcome the work that Concordia and Pro-Force are already doing on these issues and recommend that the UK and Scottish Government work together to identify ways to address the concerns raised by Pro-Force and Concordia. (Paragraph 87)
17.We welcome the Secretary of State’s assurance that the Government will consider the sectoral needs of Scottish agriculture in its future immigration policy, but this is not reflected by the proposed £30,000 salary cap for skilled workers. This will have a detrimental impact on supporting professions like the veterinary sector which are reliant on non-UK workers. We recommend that the £30,000 salary cap be removed and welcome the fact the Government appears to be asking the Migration Advisory Committee to revisit this issue. (Paragraph 93)
18.The proposal of a temporary 12-month visa for low skilled workers will likely only increase training and recruitment costs for businesses and prevent them from relying on returnee workers. We recommend that the Government remove the cooling off period for temporary workers, at least for the broader agricultural sectors, and consult on how businesses can best be supported in reducing their dependency on overseas workers. (Paragraph 96)
19.Automation and technology can help reduce Scotland’s reliance on non-UK workers in the future and help make the agricultural sector more productive, but this is not the silver bullet to solve the labour shortages facing the sector and there will still be a need for additional agricultural labour in Scotland for the foreseeable future. (Paragraph 100)
Agricultural innovation
20.We welcome the additional funding the UK Government has made available for agricultural research; however, it must ensure that the outcomes of this research lead to technologies and techniques that are of practical relevance to farmers. We recommend that the Government stipulate that bids for UK funding for agricultural research must include proposals for how the outcome of the research will be shared with agricultural businesses, including proposals to trial or demonstrate new technologies where appropriate. We also recommend that groups of farmers and farming cooperatives be allowed to bid for funding to trial new practices. (Paragraph 107)
21.While the uptake of new innovations may not be right for all farm businesses the substantial costs associated with adopting new technology is proving a barrier to some. We therefore recommend the Government explore the option of using the Shared Prosperity Fund’s rural development budget to help farms purchase new technology and equipment through innovation grants. (Paragraph 111)
Published: 31 July 2019