Join us for a lively panel discussion on the future of agricultural policy in Scotland chaired by agriculture communications specialist Claire Taylor. It features SRUC's Steven Thomson, John Kerr of the Scottish Government, independent agricultural economist Andrew Moxey, former NFU Scotland President Nigel Miller and Jonnie Hall, who is head of policy at NFU Scotland.

The panel conversation and audience question and answer session took place at SRUC's stand at this year's Royal Highland Show. The subjects covered ranged from the recent agricultural reform route map published by the Scottish Government and the importance of technology in the future of agriculture to a discussion around diversity in the sector and much more.

The panel was chaired by Claire Taylor (Claire Taylor (@cjtaylor92) / Twitter), a freelance writer and agricultural communicator. Claire is a current Nuffield scholar (Claire Taylor | Nuffield Farming Scholarships (nuffieldscholar.org)) and her study is titled turning the Tide on the Anti-Farming Agenda.  

Panel members: 

Steven Thomson (Steven Thomson (@StevenGThomson) / Twitter), a Reader in agricultural economics and policy at SRUC. He is also a Commissioner on Scotland's Independent Just Transition Commission and sits on the academic advisory panel that supports the Agricultural Reform Implementation Oversight Board (ARIOB).

John Kerr, Head of the Agricultural Policy division at The Scottish Government    

Andrew Moxey, an independent agricultural economist and policy adviser as well as a Director at ScotEID, the livestock traceability system for Scotland.   

Nigel Miller, a livestock farmer in the Scottish Borders and the previous President of the National Farmers Union of Scotland. Nigel was also Co-chair of the independent farming for 1.5 Degree inquiry and is also a board member of the Morden Research Institute.  

Jonnie Hall( Jonnie Hall (@nfusjonnie) / Twitter or NFU Scotland (@NFUStweets) / Twitter), Director of Policy at the National Farmers Union of Scotland. 

Rural Exchange

Rural Exchange by NISRIE 

Agriculture Bill

Latest information on the Agriculture Bill, due to be introduced into the Scottish Parliament later this year:

Agriculture Bill: consultation analysis - gov.scot (www.gov.scot) 

Agricultural Reform Route Map (ruralpayments.org) 

Basic Payment Scheme (BPS) 

Cross Compliance 

Agriculture Reform Implementation Oversight Board - gov.scot (www.gov.scot) (ARIOB) 

The Less Favoured Area Support Scheme (Scotland) Amendment Regulations 2019: BRIA - gov.scot (www.gov.scot) (LFASS)

Welcome to another episode of the SRUC Podcast.

My name is Steven Thomson and I'm a Reader in agricultural economics and policy at SRUC. I am also a Commissioner on Scotland's Independent Just Transition Commission.

Further, I also sit in the academic advisory panel that supports the Agricultural Reform Implementation Oversight Board that was set up to support agricultural policy reforms in Scotland.

Today's episode is a recording of a conversation and a question and answer session on the future of agricultural policy in Scotland that took place at SRUC’s stand at this year's Royal Highland Show.

On the day I joined a busy panel with many well-known faces in the Scottish Agricultural Policy arena, the panellists were:

John Kerr, who is head of agricultural policy division within Scottish Government

Andrew Moxey, who is an independent agricultural economist and policy adviser who's currently working on agricultural policy issues for government officials in England, Wales as well as here in Scotland.

Andrew is also a director at ScotEID, the livestock traceability system for Scotland.

Nigel Miller, who is a livestock farmer in the Scottish Borders and the previous President of the National Farmers Union of Scotland, Nigel was also Co chair of the independent farming for 1.5 Degree inquiry and is also a board member of the Morden Research Institute.

And finally, Jonnie Hall, who is director of policy at the National Farmers Union of Scotland.

As you will hear, the session was expertly chaired by Claire Taylor, a freelance writer and agricultural communicator. Claire is a current Nuffield scholar, and her study is titled turning the Tide on the Anti Farming Agenda.

Through her scholarship, she hopes to uncover examples of countries where farming has a voice at the decision making table and has strong relations with policymakers, the media and members of the public.

I really hope you enjoyed the discussion. If you like to share any of your thoughts on anything that you've heard, then you will find information on my contact details at the end of this episode.

We're not going to do any introductions from anybody. We are just going to go straight away into questions.

So we had a discussion about how we would run this session and I thought, well, they asked me if it would be useful to set out what we've announced today so that people are we're starting discussion in the same place because some of that maybe people haven't caught up with the day's speeches.

Because not everyone is as glued to ministerial speeches as the people who helped to write them.

So what we've set out today shouldn't really come as surprise. It’s a continuation of what we've been talking about for a while. So agricultural policy in Scotland has four broad objectives that we're trying to achieve. That's food production, so supporting people who produce our food.

And delivering for the biodiversity and climate crisis so we want to reduce as you know, gas emissions and also adapt to a changing climate. We want to improve the volume and the number of species on our farms and, in particular, get the biodiversity metrics in our farms environment going back in the right direction because they're still going in the wrong direction. And then finally, ensure a just transition as we move through that for the people that live and work in our rural environment.

So we've said really clearly that we're going to keep greening and cross compliance more or less as it is. We're going to introduce Whole Farm plans gradually and whole farm plans will be made-up of some baselining tools, carbon audits, soil testing, biodiversity auditing and business planning.

And we want to encourage the beef sector, in particular, to start making some of the improvements we know that they can make and we plan to introduce new conditions into the voluntary coupled support scheme to reduce calving intervals because we know that we've got a very diverse set of calving interval data. And the experts are here to talk to you about that, if you want to get into that discussion.

We also want to stay align with Europe where we can. We have the opportunity to introduce protection for wetlands in a similar way to what they have done in Europe with our geek two type of approach to protect wetlands, cause we've got a lot of work to do on peatland estoration so that that that's where that comes in.

So perhaps I'll leave it at that. Those are the main points, but perhaps get into some of the detail in discussion, so hopefully that that helps set the scene a little bit.

Thanks very much, John and what we'll probably do then is if you want to raise your hand, if you'd like to ask the questions. Is anyone dying to ask the question first up.

Raise your hand as we go and wave at me so I know to come to you.

But I'm going to come back to you, John, a little bit there. Can you give everyone a bit of an update on the Agricultural Bill. Where are we at with that and how can everyone in the room engage on it?

Yeah. OK. So we have already run the consultation process. And we were all around the country talking to farmers and rural communities about that. We ran our own events and Nourish Scotland actually helped us reach out a bit more into civic Scotland.

So we have two sets of data: our own and that one, and of course the written consultation and we have been using an external analysis group to look at the results of the consultation analysis, and that was published today.

So we've got the consultation analysis and we will take time to reflect on that as government and we'll be introducing the Bill later in the year.

Jonnie, do you want to come back on that?

Yeah, could I also add in terms of the Bill - and I'm sure John would agree with me - that the Bill is a framework Bill. It just creates powers for ministers to use. The most important thing, as far as we're concerned, is how those powers are used in the future.

Because at the end of the day, it will create powers. It will be down to Scottish Government to deploy those powers to the best effect to tackle that triple challenge around food, climate and biodiversity.

So the bill is essential. You know, I hear a lot of commentary from our members in particular – ‘what's in this bill?’. What's this bill all about? It's not telling us enough detail.

I don't think we should get too hung up about the Bill. But the Bill is critical because the big issue after that is how that Bill is then deployed and that's the questions that really we need to get into more and more. Is that fair comment, John?

Can I next ask: Are the current three regions fit for purpose. I'd be interested to hear what people might say about that.

Do you want me go first? From my perspective, no. A few years ago we were asked to do some analysis for Scottish Government on this.

And I questioned why. And Andrew would have questioned why - we discussed it. We didn't think it was necessary. But the more that we've delved into it the more I think that the three region model that we've currently got doesn't fit conditionality.

The biggest issue for me is that if you've got a rough grazing region and you're in region 3, current region 3 or region 2.

And the conditions are the same in rough grazing - why would you differentiate payments between those two areas? So, to me, we need to evolve this model and we need to rethink those regions. And for me, just looking at all of the conditions that people are talking about in Tier 2.

It naturally, in my head, aligns to: crop grass, rough grazing. And what that would do would redistribute money within the system and push some of the money up the hill.

It covers some of the LFA considerations within that, and I think we really need to look at. But, of course I’m not a policy maker and these are decisions that have to be made further down the track.

Nigel, can I pick your brains on that one because, of course, when you were in your role at NFU Scotland that was when during was CAP reforms on the region areas, so if you want to comment on that.

Yeah, I mean, it was probably quite hard fought for the Union to get 3 regions and it was all about getting the budget to work.

It was a small budget and to actually get meaningful amounts of money into where farming was active, you had to be targeted with the way you use it and that that third region had a lower rate. Because the stocking rates were extraordinarily low in that region.

And therefore the level of costs and activity was lower, but it was compensated by the fact that there was a coupled sheep payment so that people that did have stocking on that, what was designated a very extensive region, actually got a top up and that wasn't available in the rough grazing you know in region 2.

So it was quite a smart tool to actually get money to farmers that were active. And if you can remember that CAP reform was all about targeting money at active farming rather than empty acres.

So if you're obviously the modelling is being done and numbers are being crunched and they have concerns about, you know, whether this is smart after all. But if you change it, you know, you've got to be really aware that you have a have a real chance of undercutting the support for active farming. And the reality is that, yeah, biodiversity and climate change are things that I'm quite passionate about and we need to actually make a move on.

But the real issue is food and people. And if you get that wrong, then we've got nothing. So that basic payment is absolutely vital. And the way it's targeted is absolutely vital.

So I think the question is a good one because we do want to address the issues that come out of the analysis in terms of is, is it the smart thing to do now? And Nigel has explained why some people thought it was a smart thing to do then. I'm not convinced that that was right but I wasn't part of that decision making. So I could perhaps point to that and say, why did you give me this problem to solve.

It Was right. That was right.

Was, yeah. OK. Not everybody agrees with that point, and maybe some of you.

Some people are wrong though, that’s the thing (laughs).

But I think so the question is: what do we try to change for the sector? And what order do we try to do that in?

And so that's the issue that we're wrestling with within government, so I'll be completely candid about that. We've identified that we do need to address the region model, but we also want to with, as much urgency as possible, address the climate and nature crises. So what we've done is we've said in our route map that we're going prioritise Tier 2, the mechanism for how we make that central part of our framework that is supposed to help incentivise farmers to do more for nature and more for climate. That Tier 2 part we want to get that bit done quickly so that you guys - the sector - can start demonstrating to the public the value that it's giving for society that goes beyond just the food production part.

And face down some of the criticism that the sector constantly has from the outside world about emissions or nature laws. So we want to get that bit right first and then we intend to come back to the region question, of course, that that throws up a whole set of questions about how do you get that right first if you're not getting the payment right in the first place to each business. But we have to choose because we don't have the capacity to do it all at once.

And does the industry have the capacity to absorb that level of change all at once, as well? So these are trade-offs that we're tussling with and people have strong views. I can see Andrew’s looking at me from the audience.

People have strong views on this and they’re totally legitimate but ultimately, it’s the Cabinet Secretary that has to come up with the choice of what we do first.

Andrew do you want to give a response, then?

John said earlier that he thought there is more of a biodiversity crisis problem. I would disagree with that remark from the window I look out of every day. I represent the arable sector – would you be able to describe, Stevie, who does most of the heavy lifting on the biodiversity side and what hectarage is probably used to make that happen?

I assume from our previous conversations that we’re talking about ecological focus area. Of course 30% of current direct support payments or the BPS in greening is attached to the greening element of it to which, let's be honest, there is only ecological focus areas that is now left.

So the arable sector does do that heavy lifting in terms of the environmental enhancement or biodiversity enhancement that's currently going on within the sector.

And, let's be honest, the upland farms and the grazing farms don't have those same level of conditions at this moment in time. We really need to be careful about how all of this plays out in terms of all this. But Andrew may have a point on how even within the current system, we're not actually acknowledging all of those factors in terms of the benefits that farmers may be actually delivering.

Yeah. So it comes off the back of the three regions. At the moment we have lots of things called ineligible features which are taken out and you’re not paid on them. Well, actually, those ineligible features are actually the things that we're now looking to value.

So those are going to have to come back into the system. If you're going to be making that change, it's an opportunity to revisit the three regions and I will recognise the pain that we went through to get the three regions.

It was the right thing at that time, policy objectives have evolved and as Steven said, when we first looked at this 2-3 years ago, we said leave the three regions alone. And then we got different facts and we went, you know what? Actually, I think we need to change them to move forward.

Jonnie briefly from you and then I want to go to the floor, if that's OK.

Yeah, just a very brief point for me is that obviously the rhetoric around this is about conditionality and the new kid on the block is Tier 2. And there's this big focus about attaching conditions to so-called Tier 2 direct support payments.

I think it would be lazy of us if we if we just think of Tier 1 as being unconditional. You know we currently have to comply with a whole series of good agricultural environmental conditions and statute of management requirements and so on. So there's an awful lot of outcomes that already comes from the fact that there is conditions attached to currently BPS and so on.

Whether they're smart enough for what we want going forward is another question. But I wouldn't just discount the role of Tier 1 as being the building block. And we have had this discussion at ARIOB (the Agricultural Reform Implementation Oversight Board) - very snappy title - that actually, you know, Scottish farmers are already in a place whereby they are meeting a base level of requirement in terms of environmental conditions and other conditions attached.

That to me, if we get that bit right, that then provides the platform to do what we've started to touch on in terms of the Tier 2.

I totally agree with Nigel because we shared the scars at the time of why we went for the three region model. It was the right thing to do at the time, but the context has now shifted considerably. We didn't have targets around emissions reductions, we didn't have forthcoming targets around biodiversity.

So the current 3 tiers are right or were right, but I also agree with Stevie and Andrew to say actually, given that we're now expecting the Tier 2 element to be the big difference going forward then I think we need to align what we're going to do under Tier 2 with the Tier 1 bit of regions and get that right. Otherwise that platforms are disjointed if that makes sense.

And we'll move on to John, you've got question then David you are next.

Yeah. Thanks, John Grey, Angus Soft Fruits. We’re soft fruit growers and I just wanted to ask a question about fair work. 60% of our production costs are labour and at the moment we have a slight disadvantage through the Wages Board in terms of hours and overtime.

And it seems that same time that UK government are being a little bit more supportive around access to seasonal labour were there getting extra costs lumped onto us by Scottish Government. The industry’s in crisis at the moment in terms of margins.

It's a great place to grow soft fruits. It’s a great product, but it's going to be even harder if that’s what happens.

We actually our farm in England as well and this incentivises us to invest more there rather than in Scotland, which is which is home. So I just wondered if the panel could comment.

So the Scottish Government made its position really clear that it wants everybody who is supported by Scottish Government funding to be a Fair Work employer. So we want everyone who is in receipt of some form of government grant, and that will include agricultural support going forward, to be a Real Living Wage employer. So that's the position that the government has taken and we are working through that for the agriculture sector and as you said, there's a dispensation for agriculture in that regard – and the Cabinet Secretary has been really strong on that because she's heard really clearly the voices like you've expressed just now.

And I think if she were here, she'd strongly make the point that the UK Government’s small concession on incoming labour from outside of the UK is not sufficient and not what we've been lobbying for as a government in terms of welcoming workers in. So yes, they've conceded but have they really addressed the problem that was created by leaving the European Union? We don't think so. But I'll leave that for politicians to make us more than political point.

So the position is yes, we do intend for Real Living Wage to be those businesses in receipt of any form of public grant.

And Johnny, what are your members saying?

Well, exactly what has just been said really, particularly in the soft fruits sector, that clearly Fair Work conditions which then relate to the Real Living Wage puts those labour costs, which are a huge component of the overall costs of those businesses, at a competitive disadvantage to those South of the border it is as simply as that.

And therefore we're operating an internal market on a on a very uneven playing field. So that that's the first point I would make. The second point I would also make - moving into a bit more political territory - is that if you impose the Real Living Wage, you're basically making redundant the Scottish Agricultural Wages Board because it completely riding rough shot over it.

I sit on the agricultural Wages Board for NFU Scotland and the Wages Board - we've all got a different view on it - but I now really, and our members are really, questioning why we've got a Wages Board at all.

Yes, there are other issues around accommodation offsets and sick pay and overtime and things like that, but really the pinch point is that if you impose a Real Living Wage, it renders the Wages Board redundant and the wages order. I just think that if that's the direction of travel and get rid of the Wages Board as well.

Stevie you're nodding there. Do you think it renders it redundant?

I did a study for the Scottish Government a few years ago with the abolition of the Wages Board in England, the feedback we were getting from the producers was that they were already at a competitive disadvantage over overtime issues.

So the Scottish sector had very strict overtime rules, whereas south of the border those overtime restrictions had moved on.

It's not my forte, but I've been following this from a distance and I too agree that this sector is a sector that everybody talks about - we need to produce more fruit and veg from Scotland, from our lands. And we are at risk just now in that the sector could constrict because of the issues you've just raised.

The only thing I should have added that we're not actually minimum wage employers, so through how we incentivise production rates, we actually pay about 11% on average above, which is about where the Living Wage Foundation is.

But if you if you increase the base then you increase the average. All the other principles as far as I recollect in terms of fair work and worker voice and no zero hours contracts etc etc. The fruit and veg sector is leading the way with that and so we smash all those targets and lots of other targets that government sets. But when you when you increase what is 60% of our costs and an already unsustainable sector in a product that is healthy and people want more of.

All I would ask is if you really do your homework to understand the impact to the sector.

We went to Mexico.

Just to respond. So this isn't something that we've taken lightly and we've got a team that are dedicated towards making sure that the employment issues, particularly in your sector, are properly addressed.

And obviously the governments is balancing a key tension here. We absolutely want to feed more of our own people with our locally grown foods, especially fruit and vegetables.

But we also want to make sure that workers’ rights are also protected. That's an important thing that the government wants to deliver and we do recognise the good work that the sector's doing. But we also want to make sure that we work with you to get it right. And we've given ourselves a bit more time to do that for the agriculture sector, so I think we want to just keep talking with you.

We've got a team that does know what they're talking about, and that's specifically addressing that point. In fact they may be even in the room.

I’ll come to you next, Davy. You had a question.

Davy McCracken, SRUC. I have a comment and a question. The comment is given the scale of the change that we need to see going forward, we need to be honest in all these discussions that even if the arable sector believe that the ecological focus areas are where they are doing the heavy listening, it's not enough, biodiversity is still declining. And so there is, and there will be a need to do more. The question is particularly for John, although others may want to comment. John you said at the start that you want to get the nature and the climate side of things right from the beginning.

From the nature side of things, what is right in your mind? How is that going to be achieved?

So what does right look like is a question that I would like you to give us the answer to, since you have been studying it for a long time.

One of the really challenging things about getting the biodiversity policy right is that that means something different for every farm. Every croft, every estate, because they're all different habitats. Supporting a different range of species or should be supporting a different range of species.

So that's much more complicated than just saying, here's your carbon footprint get it down a bit. That's already quite difficult, but it's at least something you can put a number against and then track against that number.

So what does good look like is challenging, and we're working with Nature Scot to build biodiversity auditing tools. Or, you know, biodiversity baselining for farms and then that should give each farmer, crofter and estate owner a sense of the habitats that they've got and how do they then make sure they're in good condition.

And we're working through the complexities of building that into something that you can then reasonably ask all these 18,000 businesses to then go and practice and report back on. And that's a challenge we're likely going to have to iterate on it and there'll be some compromises.

But I think the key thing, Davy, is the point you've made is that actually we need to start getting on and doing it and it’s a point that the ARIOB members frequently make to us.

Also, you want to come back Davy very quickly.

Very quickly, I mean, yes, but I'll take time and serve as far as the conditions that we're talking about you too and plenty of biodiversity related conditions to be applied tomorrow that will make it decent benefits from a biodiversity perspectove.

I think a lot of panel want to come on this. I’m going to come to you first Nigel with your work on Farming for 1.5 Degrees.

Yeah, I guess this has been at the centre of the last or the recent publication from the Farming for Wildlife Working Group. And I guess that the whole idea of what the 1.5 was every farmer had to contribute to the goals that society requires.

But not necessarily in the same way. So that, you know, that there would be different weightings or choices for farmers. And I think, you know, to ensure that people are motivated and that they can fit their business, it's important there are choices and that reflects the topography and the business and whatever in the land class.

But basically the report suggested or has proposed that every holding should allocate 10% of their area towards biodiversity gain. Now that doesn’t mean that it won’t have value in production terms, but it must have some biodiversity gain. That would be in three categories. Either it would be permanent features like what had actually been excluded from CAP payments in the past.

[Microphone feedback]

Maybe we could turn this off and I'll shout. So that would be, you know, a new area coming in which people could use, you know, things like scrub and scree and, you know, woodlands that haven't been mapped and steep areas around water and things like this. So they would come in to that 10%.

But also you could agree have agri-environment type prescriptions or you could have habitat type prescriptions like what you might find in wetlands or around the pond. So they'd have three choices they could draw down for to make the 10%, and that would be conditional to your base payment.

So it's Tier 1 levels of intervention. Then you'll because there are farms that can actually contribute a lot more. The suggestion was that some farms should actually elect to allocate 30% of their land area to biodiversity, 30% of their land area to actually storing or sequestering carbon.

And those land areas could be the same or it could be totally different. You could choose. But it would all have to be underpinned by audit and condition scoring and a management plan and you get paid to do it and there's payment rates there that we've suggested. And obviously production would be still there, there would be, you know, 60 percent, 70% might be focused on production as just now, but 30% would be looking at these public goods.

And the idea is that with these two different systems, people could choose which they want, but together the whole agricultural sector could have a meaningful level of biodiversity and sequestration.

And that's pretty important because whatever we do, we're going to have to keep producing food, we're going to use nitrate fertilisers for the foreseeable future and we're going to have animals producing methane for the foreseeable future.

We've got to have sequestration areas as well. So it's like creating a circle for the whole agricultural arena and there's quite a lot of detail about how you do it, but that's basically where we are. And I think that maybe fits with some of the principles that you feel are important as maybe Nature Scot as well.

So, I think we’ll come to Andrew next then Stevie, then Jonnie and can you keep it very brief when we go on to the next question, please.

Sure. OK. Thank you for the question Davy. This is all difficult stuff and we can get frustrated with the lack of progress from Scott Gov. I think it's also important to bear in mind what the alternatives might be and if you look to what England are doing, what Wales or Denmark or Netherlands do, there are different approaches that government could be taking here.

So the approach that we're taking here of trying to get this conditionality right, I think is the right approach. It could go a bit faster, John.

Stevie, do you want to pick up on that?

Yeah, I'm not going to pick up on speed at anything like that, but it was more to the point on we’ve have 18,000 businesses that currently in the system and one of my biggest concerns is that there is a disproportionately large cost associated with small producers coming into schemes where they have to do plans and have to meet all the rigmarole on a per hectare basis.

These costs could be quite large for the very smallest producers and we really need to think through that carefully because some of the work that Andrew and I has been doing in Wales, really starts to identify the huge disparity in the additional cost of income forgone of meeting their objectives, their universal actions.

Very similar to what Nigel's suggesting, and the Farming For Nature Group have suggested in terms of 10% towards nature.

So we have to be really careful. Because I also sit on the Just Transition Commission and we have to bring the industry along. We have to give everybody the opportunity to come along and don't leave small producers - or very large - behind in all of this. And that's why some of this takes longer than perhaps the industry actually would like.

Steve's just almost stolen my thunder, but not quite.

I mean, Davy’s original comment that John responded to you about and then talked it got into the idea of baselining around carbon biodiversity and so. That takes us straight in the realms of this concept of a whole farm plan. Which the Cabinet Secretary talked more about this morning about developing that whole farm plan concept. Now the point that Stevie has just made, I think is absolutely critical. And you said it yourself, Davy, this is going to take time.

So where do we start with that process? And I think say for example, if we took those businesses that receive less than £5,000 of direct support out of the equation to begin with, so there or there abouts you're probably talking about 6,000 businesses of 18,000. So let's focus on where you get the biggest bang for your buck. First of all, in terms of that process. So that that would be my place as part of this going forward.

Now we know we've got to work on the detail of the whole farm plan and this baselining approach. But we do have a capacity issue to deal with here. We can't just have everybody doingeverything straight away.

So the buzzword at the moment seems to be sequencing. How do we sequence this? So how do we actually lead those businesses that can make the biggest difference sooner into that process sooner?

And in some ways have a light touch for those smaller units, crofting countries and so on. And not that they're gonna do nothing but tailor it as Nigel says to what they can do. Every farm is different in that sense. So I think a real bit of pragmatism has to kick in as to how we deliver the outcomes that we want on this.

And I do think if we get the whole farm plan bit right rather than being a tick box eligibility requirement. It actually becomes a really important tool for individual farmers and crofters to think that's where I am today and here are my Tier 2 options, in particular, Let's use that as a segue into doing the right thing in the right place at the right scale.

Johnny just mentioned something there in terms of the tool and actually I was in discussions this morning on the food and drink sector and Scope 3 Emissions, which is upstream/downstream for the retailers and processors.

I didn't realise how quickly this was coming until I had that conversation today and that the processors are already getting letters from retailers asking them about their emissions and their upstream, ie into farm emissions. This is coming faster than anybody can imagine, and the way they were talking about it is that you won't be able to sell into a market unless you comply.

So policy has an an opportunity here to help the industry and taking that step change and actually taking them and leading them down the path in order to deliver against private sector objectives.

I'm going take the next question. Sorry. So we've got three questions. John, gentleman at the back and then we've got Pete there as well.

So we'll go to John and if we can keep our answers a little bit more brief and maybe say you'd like to direct it to.

And so the question is on the tiers one and two has there been any modelling or guessing even how many people will actually take up Tier 2? Everything gets Tier 1, are we thinking 50% Tier 2? Everyone’s got the option to do it but how many will actually go for it? And if we only get 50% pickup does that money go back into the pot?. Can we get assurances that's going to go back to Tier 2 folk or does that go somewhere else?

I think that's you, John.

Yeah, look. Well, I expect these guys might pick up on what I say.

I'm a bit reluctant to turn the microphone around, to be honest, because of the feedback.

So we expect that everybody will be eligible to apply for Tier 1 and Tier 2. We haven't categorically decided the budget split between Tier 1 and Tier 2, though we’re working towards that.

The industry generally is aware that we want to make more of our money, 50% more of our money conditioned. But if we add more conditions into the Tier 1, then you could arguably say we've discharged that commitment. So that we do have some ability to decide how we land the Tier 1 and Tier 2 policies once the enhanced mechanism - that Tier 2 mechanism – is worked up.

So there's a trade off again. I mentioned trade-offs before. Do you get all of your ambition to deliver for nature and for climate delivered through Tier 2 and make it sufficiently robust that you hit your targets?

But in doing so, is the result of that that everybody opts out and you don't get anything. So we've got to work through that.

So how rigorous are the conditions? How much money do we put in there, and what happens if people don't come with us in terms of delivering the outcomes.

And then there's the residual question which you asked about. Well, what if nobody opts in to do it? What do you do with the money.

So on the money question, the Cabinet Secretary will be absolutely livid with us if we don't get the money out to you. So our objective is to spend the money that we have at our disposal supporting sector being a global leader in sustainable and regenerative agriculture. That's our objective and we want to use all of the money that's available to us to do that. That’s clear commitment.

We don't know what the money is going to be beyond the UK parliament. Because the next UK Government might decide to cut the budget and they may do that, we don't know.

They haven't made a specific commitment around that, so we're worried about the budget. But whatever budget we have, we want to spend for that purpose. But we have to get that middle bit about making the conditions sufficiently strict to deliver the outcomes, but not so strict that we lose the industry.

We want you all to come with us basically, and that probably means some phasing and bringing people with us. So in that regard we're really working closely with the sector with NFUS, with the arable sector, with the beef and sheep sectors to try and get that right.

And we haven't nailed that down yet, but that is our objective in the core development part of the process that that Paul Easton is leading for Tier 2.

That’s our objective as well, John.

Can I take the next question?

Yeah. Thanks so much. It’s Bob Yuill here for ScotEID.

I think what’s missing here is that there is a technological revolution happening.

If you want to see, it is here. It’s the President’s initiative and see some bits of technology is here like the sensor networks - sensor systems to sense how many birds there are, how many bees there are, how wet the peatland is, how good the ventilation is in cattle sheds, how do you reduce ammonia. That technology is now available.

If you want to be worried about something it should be that our competitors are moving at pace. One of those competitors is Australia and they are spending millions of Australian dollars into the agricultural sector to put in the sensor network systems to drive the data to get the base level indicators there. If you want an example of it in Scotland, we did it with DPD. Slightly different but it gave our industry all of the tools that are required for the testing to be done.

What worries me, you know from panellists, is that we're trying to do the most complicated change without the tools and you won’t do it. We'll have to do it very, very quickly and we'll have to use the latest technology and incentivise farmers to do it and it’s here at the Highland Show.

I would agree with you, Bob. A cliche is ‘necessity is the mother of invention’ and we know we need to do more and I think what we're focused very much on Tier 1 and Tier 2. But there's going to be something called Tier 3 and particularly Tier 4, which is those complementary measures to help underpin the…

The problem is Jonnie that you’re trying to micromanage on farms… You can’t do it.

If you think of Tier 1 as being payments for management. One is the stability-based payment to underpin the viability of the business. We absolutely need that. Tier 2 is all about management options. But at some point you're going to have to commit to some of the capital investment you're referring to in order to make those things happen.

And therefore I think there's a clear role and function for the significant capital investment. Obviously, the research and the technology to deliver it, but also in order to then be able to apply that on a scale to get the outcomes that you want.

So you know, yes, we are focusing on management, but we cannot afford not to think about the required capital investment.

Capital investment, even right now, you know, we've got places in Scotland burning up and the prospect of abstraction licence has been suspended and all the rest of it. Where's our resilience about water resource management?

So that sort of area, you know, that should focus our minds right now and we had it last year as well and all of a sudden these things are coming a bit more frequently.

So we cannot afford to just think of the tier one and Tier 2 stuff. We need those bolt-ons to enable the right management and to build that resilience for all sorts of sectors across the piece.

And John, you wanted to add quickly and then Stevie.

Well, Stevie might be about to say the same thing as me, and so I would give you three cast iron examples of where we're using new tools that we haven't had before.

So carbon audits. Most producers will be using an Agrecalc approach to that. Developed here in Scotland, funded by us.

So OK, so we've got, we've got carbon auditing tools that we develop. We've got My Heard stats, which you know more about than me, that's helping to allow us to put forward the beef conditions that we're going do and we've got biodiversity auditing tools being developed by Nature Scot and they're all things that we couldn't have done 10 years ago because we've done the prework on that.

Does that mean that we've got it all right? And have we got a central way of processing all that data? Not yet.

But we're producing the enabling technologies to allow farmers to have that under their own control. I hope. We could do better, of course, I concede the point and we've got team in the middle of the room here who will help us get that more right, more in the future. But I think we're in a good place and we've been leading the way in Scotland on this.

So I'm gonna say everybody wants to speak. So even just a few sentences each please.

I agree with you, Bob. In the technology and I've always said that technology will land us where we need to get to at some point in the future. We have to take the leap of faith that technology will deliver.

And part of that will be a private sector investment. So if the Tier 3, the scope 3, measures are coming down the food and drink sector, they're going to have to invest in their primary producers and we need to make sure that discussion starts immediately. Not next year, not two years down the track. Tomorrow. It needs to start now.

And the industry needs to realise that that sector, that the whole of that supply chain is embedded in here, the thing that nobody has talked about in this discussion today is that within the framework, there's a thing called the Transformation Fund.

And the Transformation fund in my mind is to deliver what you were saying to help people deliver and give them the capital support to put in the infrastructure to change the system in order to deliver for the future. But we get stuck with Tier 1 and Tier 2.

And we shouldn't call it tier 1 Tier 2. Sustainable farming and then farming for nature and carbon.

Oddly enough, I agree with you, Bob. I was just going to make a point that information is of value to the private businesses and supply chains, but it's also a public value. Ad the key point here is that Government needs to be collecting and collecting this data to get a national view on this, otherwise we're wasting our time.

You're gonna have to have two or three ways we're gonna get methane down by 30%. The only alternative is cutting your heard. And nobody wants that.

So now. Tomorrow. You need two or three ways to cut your emissions and then the technology, the genetics implementation, bringing farmers along with you, the KE that all comes behind.

But without those very stark, hard goals, all these things are useless. That's the reality. We can't change without those solid, solid goals.

And to be honest, now we're running out of time on methane. Probably we're talking about validating some feed additives and we kill cattle younger and we have genetics, which is almost licenced either through bull licencing or semen licencing. So we drive our heard into a, you know, low emission economy.

It's too late now to bring everybody with us and all the do the nice things we'd like to do. They'll be part of it, but that that isn't a goal.

Peter, I'm going to come to you next.

Of course I agree with Nigel. Why wouldn’t I? And really following what Steven was saying – and what you were saying as well Bob - about getting stuck on Tier 1 and Tier 2. We've got to get that right, but we’re in a big transformation.

It seems to me that Tier 4 - that the horizontal method you were talking about Johnny - needs some big investment. Whether it’s in genetics, whether it’s supporting the food and veg sector, which is so important to us, whether it’s developing new food products and new supply chains. That sort-of sense of a transformation towards being a Good Food Nation.

I just want to ask the panel, what would their wish list be for Tier 4 and what would they want to see in there?

Who would like to answer the first on a short wish list, Andrew?

OK, I'll kick off and say we need some better information, advice and training provision.

I would agree with Andrew about that. You know that's where we we've lacked. But also add into that very briefly that we need to invest beyond the farm gate. We've focused an awful lot over recent history on this side of the farm gate/farm business, etcetera, et cetera. We really we need to think - and it goes back to Scope 3 and all the other things - we really need to think about the supply chain and how do we ensure that that delivers for the primary producer.

But you know that's almost a forgotten thought in so much of what we've done over the last 15/20 years. We've focused this side of the farm gate rather than thinking beyond the farm gate.

So I think that that's broadly right and my team will be pleased - some of them are here - to hear that that means more money for them to spend on helping people make the journey and some capital investment not necessarily all on farm. But in in things like ScotEID and tags and all those sorts of things that make it work.

A bigger budget. I don't think we've ever had the honest discussion about decarbonisation of the electricity sector or the energy sector. Decarbonisation of the transport sector, decarbonisation of business sectors. When you start looking at how much money has been ploughed in today and we're trying to do all this in the same budget and that's a real danger.

So we're trying to deliver nature regeneration or nature recovery for the whole of Scotland. We're trying to deliver 20%. We are responsible in this sector 20-22% of emissions. We're trying to deliver a reduction in that based on the same declining real term budget.

The real term budget is a real issue here because the buying power from government is shrinking by the day. Every time a day goes by with inflation, the buying power or government declines. So at some point we need to have a real, honest discussion about the budget.

It doesn't have to go into direct support but it might be better off spent in transforming and supporting the industry and creating those vertical supply chain linkages and better integration there.

I've gotten really nothing to add, but just to agree with Stevie that the budget is critical and the reality is it's absolutely madness to think that, you know, we can actually maintain food production and also deliver all these extras on a declining budget.

And it's not just a higher cost system, it's actually requires a new infrastructure, which is got to be paid for.

And that infrastructure is on farm, but it's also, you know, upstream and downstream as well. So, you know, this is this is new money that's needed. And you know we've got to actually make that that and the perceived wisdom that that your budgets are going to get smaller. If that thing happens, the whole thing crashes.

So John, I mean, how can Scottish land, the land managers, deliver the expectation of the government on the current budget?

So I recognise completely the challenges that that Stevie and Nigel are talking about. I would love to have more money. That would make some of these trade-offs not trade-offs anymore in terms of where you put the budget to get the leverage to support.

Is there ever room for it to increase?

Well, so there's there's definitely a a really cogent argument. I don't disagree with the point. There's been plenty of work done to say that we could do with more money to get to drive the objectives.

There is quite a lot of talk about green finance plugging the gap. But in all honesty, those tools are not ready yet and people who are using them now are taking risks, I think. But that's really difficult and challenging position thing for a government official to say, cause I'm pretty sure there isn't going to be more money.

Yeah, just that green financing. It's the biggest risk to the sector at this moment in time. Nigel and I have had this conversation. Well, I've had this conversation with lots of people is.

You're risk selling off the crown jewels of the sector if scope 3 emissions are coming in or scope 3 is getting driven by the retail sector. We have to really be careful of what we're looking for. In my mind, green finance: tax. Then put it through the system

If we're going to be brutally honest about these industries - or polluting industries - having to pay more in order to offset their emissions, put it through the tax system and put it through the government.

Let's not leave it to individual actors for one beneficiary to or one individual to benefit hugely in other individuals to be left behind.

Can I take one from the floor – Roddy?

Roddy McLean, Royal Bank

545 days to deliver. What are the milestones?

And what we've said today is that we'll phase it in. So we're giving ourselves some room to make sure that we we target those who can help most first. And so I guess our Plan B is on scale.

But I think if you don't - you said it, Nigel - if you don't give yourself a challenging target we won't get anywhere.

Can I follow up? You set out the timetable. Has the modelling been done to show that that timetable will deliver the required emissions reductions?

So in terms of emissions reductions, we know we've got a challenge because we know that we can deliver about a mega tonne by the end of the journey and we need to deliver 2.4.

We've said that publicly before. So we've got a gap to fill as well. Nigel's right about we've got to be honest about that.

I just. I'll just make a brief point there in in terms of I think where Scottish Government is that they're looking at this as policy development from the macro at the macro scale. This is all about the triple challenge of food, climate, biodiversity, looking at sectoral basis on an industry wide basis.

From our members’ point of view, they're looking at this through the lens of their own business. What will it mean for me? What will I have to do in the future? And at the moment there's a big gap between the development of policy at the macro level if I can be as blunt as that.

And the understanding at the micro level, the farm level, for individuals. And that's what's causing the concern and the issues that are being certainly raised with us about where we are in terms of this process. That clock's ticking as you say, roughly 500 days or whatever. But the clock's been ticking for a lot of days already.

And the biggest thing I get asked about. Is what will I have to do when?

And I can't tell them. Because it's still at that sort of architectural piece at the moment and it's still about targets at a national level, sectoral level... all these other things.

So we need to plug that gap pretty quickly and I think that comes down to a communication exercise in many ways but that's what's losing people now.

Andrew, can I bring you in here?

Yeah. So two points. One, I think there there's a risk here of the perfect being the enemy of the good and that we're taking too long to get and say this is the way. As opposed to saying this will do and if it's not quite right, we can tweak it.

The other point I'd make is certainly on the emissions side, success here is judged in terms of what the national greenhouse gas inventory says we've achieved.

I think that inventory needs are looking at in terms of does it accurately reflect what agricultural land use is actually doing and changing.

I just want to ask, so this morning I was at the Women Agriculture Breakfast and we were discussing the lack of diversity in agriculture and the marginal groups are unrepresented and one of the things was diversity of people is diversity of thoughts.

Thoughts. And I would ask all of you - is there a lack of diversity in agriculture? Is it holding back some of these changes.

$64 million question (laughs).

Well, a brief answer to this question.

There is a lack of diversity.

So there's lack of diversity. Do you think we're doing enough to overcome it?

No.

I'm not sure that's right. I mean, it's a long time since I was a vet, but when I was a vet, you know the range the range of clients, the range of personalities and the range of approaches to farming was quite extraordinary. And the number of women that were involved in farming, the number of women that actually controlled crofts was immense - they were a big percentage.

They were probably the majority on many crofts, actually were driving force of the crofts.

I'm bloody old. I'm just about to die [audience laughs] This was 40 years ago and we think that this is all new and that diversity is something we bloody invented. We've forgotten about it. The past generations, actually had it and did it. And that’s still there.

There's still crazy people farming. That's the reality. All sorts of interesting people and really, you know, lateral thinking people. Yeah encourage it and foster it and value it but don't actually say we haven't got it you know.

Yeah, I I'm thinking I'm thinking beyond women.

I'm talking about women and men, you know, those wider contexts

Well, we've definitely got a challenge about age. You've said it yourself.

Let's look the age thing. We've done research on this and the age thing is a business-owner-across-the-board issue.

Age will sort itself out – we'll die. [audience laughs]

So it's not purely about farming. If you go and look at the age profile of vets or vet practices before it became commercialised or corporatised you would have a very aged male population in the vet sector. In the wider business sector, we’ve done some work and it's a very similar age profile for the business directors and owners of businesses. Rodney would know this from looking at bank data.

So that diversity of age, it's an issue across all sectors. I think the biggest problem isn't the diversity question per say, but embeddedness of ideology, ideological approaches to farming. In that we are very – well not we, I ain’t a farmer - resistant to change. Change is challenging.

And it's actually embedding it and getting people over the hurdles of what change is. That's where I think the biggest issue is and we are seeing huge diversity in terms of different approaches coming through.

Every day I read in Twitter or social media or in the press, somebody's got a new idea, doing something differently. So the diversity of ideas are there. So it’s all about that definition of diversity.

I'm sure that's part of the theme of this year's Oxford Farming Conference, as well – that diversity of thought. We are actually over time, we just start slightly late. I was going to quickly come back I mean Andrew or John if you very briefly want to add anything?

So I think that I think that the points been made are right and they've been contradictory, but I think that, actually, we have got quite diverse voices talking to Government now. So we've got a gender balanced ARIOB, but, actually, the ideas that are being expressed by those people are also quite different from across the piece and the challenge is distilling that down.

So I think there's a way to go and getting the voices heard, but I do recognise the diversity of the sector.

Right.

Can I just thank everybody for your questions and time today. Johnny, John, Andrew, Stevie and Nigel.

Thank you so much for your time and everybody wants to go into the sunshine and have a cider.

And I would really like to thank Claire for stepping in and chairing this session so well. [audience claps]

Well, that is as at the end of our conversation on some of the key issues in the evolution of Scottish agricultural policy. Although the discussions around the new Agricultural Bill, which is due to be introduced into the Scottish Parliament by the end of this year, are very much still ongoing.

If you'd like to get in touch with me about anything you've heard today, then you'll find my e-mail address in the show notes.

You'll also find details there on the rural exchange, which is an exciting new platform we've developed to allow people living and working across Scotland's rural and island communities to have their voices heard in both research and policy making. To have a look for yourself, visit www.ruralexchange.

SRUC's Rural Policy Centre is a knowledge hub for rural Scotland. We engage and collaborate with researchers, businesses and communities to share the latest knowledge with policymakers in Scotland. To find out more about our work, please visit us at www.sruc.ac.uk/ruralpolicycentre