Hansard

I very much welcome the opportunity to debate what is an important subject for rural Scotland—and the whole country—and to discuss the implementation of the new common agricultural policy, which supports our farmers and crofters to put food on our tables and manage our landscapes and in turn helps the downstream industries to sustain jobs.

As I said at the NFUS annual general meeting last month, farming is facing a perfect storm. Unfortunately, the bad weather that we have experienced over the past 12 months and unfavourable market conditions have coincided with the biggest CAP reform ever. That is no exaggeration: never before have both pillar 1 and pillar 2 of the policy been reformed in the same year. Not a single scheme from the previous CAP—in either pillar—has come through unchanged into the new policy. Every one of the old schemes has been changed or replaced by a new scheme—or sometimes by more than one new scheme.

Over 2015, the Government launched about 20 schemes across the whole CAP, which are being taken forward this year. Some of those schemes are radically different from their predecessors, not least that which relates to the biggest reform—the allocation of about £400 million on the basis of a business’s land area rather than historical activity. On top of that, we have greening and the new rural development programme.

That is why it was essential for us to engage deeply and in detail with our stakeholders from the very beginning of the reform process. Throughout that process, the industry in general and the NFUS in particular gave us—the Government and the negotiators—a very clear message. They were adamant that the top priority was to get the right policy outcomes. After all, decisions that were taken in the most recent reform will determine how the CAP operates for many years to come.

After a lot of discussion and negotiation, we finally agreed with the industry that we needed new activity rules to halt and phase out the scourge of slipper farming. That move was supported by all parties in the Parliament. We agreed that, as part of the new basic payment scheme, Scotland should be split into payment regions with different payment rates for different types of land, in order to deliver the right level of payments to the right places. That move was widely supported by all the political parties in the Parliament.

We agreed that coupled support or headage payments must be extended to the sheep sector and that we should look after the needs of beef producers—particularly those on our islands, where the payment rate would be different. I remember that that, too, attracted widespread support in the Parliament. Finally, we agreed that we must not repeat the mistakes of the past, when unlucky new entrants found themselves frozen out of payments for the life of the previous CAP reform.

We spent many months developing those policy details with stakeholders. Like, I am sure, most people—except Alex Fergusson, given his speech—I believed then and firmly believe now that they were the right decisions to take. Europe imposed on us a complex new policy that covers greening, the move away from historically based payments and so on, and our decisions here in Scotland, which were taken jointly with industry and supported by the Parliament, added a lot more complexity on top.

The timescale for getting those decisions implemented was tight. For pillar 1—or direct payments—the EU did not adopt the main regulations until about a year before the new schemes had to start, and the detailed rules came later than that. For pillar 2—the rural development pillar—the situation was even worse. Strictly speaking, the new Scottish rural development programme should have started on 1 January 2014, but Europe had not even set out all the rules by then. It was only because of the transition arrangements, which the Scottish Government fought for, that we avoided a disastrous gap between rural development programmes.

In the light of that timescale, we made it very clear to stakeholders that the extra policy details that they were asking for—and, in some cases, insisting on—would inevitably affect payments to some degree, at least in the first year. After all, in the first year, we have a new system being implemented for the first time and many one-off tasks to undertake. We all knew that achieving the same timetable as applied under the previous CAP was a tall order but, as I said at the time, we were determined to get payments out as early as possible within the seven-month payment timetable window that Europe had laid down. As the industry has acknowledged, we all knew the risks, but we all agreed that they were worth taking.