Post-Brexit agricultural funding must 'meet the needs of Scottish farming', committee says

Brexit should be treated as an “opportunity” to make agricultural funding work better for Scottish farmers, a Westminster committee has said.

The Scottish Affairs Committee argued in a new report that whatever system the UK comes up with to replace the EU’s Common Agricultural Policy should “reflect Scotland's unique agricultural conditions and practices” and lead to a boost in funding.

Additionally, the report warned a no-deal Brexit would make the food and drink sector “uncompetitive overnight” and urged for “red-lines” to be introduced on negotiations involving famous Scottish products such as Scotch Beef and Black Pudding.

The committee spent several months investigating the support available to the agricultural industry in Scotland to determine the future options governments should consider once the UK leaves the EU.

While the committee said there is significant opportunity for major reform as a result of Brexit, the report said a “lack of clarity” from both UK and Scottish governments is causing great concern among farmers, and urged the governments to publish a joint statement on the future of agricultural support payments as soon as possible.

The inquiry culminated in a report that makes sweeping recommendations on agricultural policy, future trade and immigration schemes and technological solutions, concluding that “Brexit presents an opportunity to address failings in the agriculture funding formula.”

The report made a stand-out recommendation for a major overhaul of how money allocated to farmers and crofters across the UK is calculated.

Rather than mimic the current model, the committee recommended a complete rethink of the value associated with ‘Less Favoured Areas’ (LFA) that would see more money going to those places.

LFAs are designations of land where agricultural production is more difficult because of what the EU calls “natural handicaps” such as unfavourable terrain, soil or weather conditions.

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Scotland is home to more than half of the UK’s LFAs. These areas attract significantly less money from core funding, although top-up schemes do exist from the Scottish Government.

In future, the committee said LFAs should be considered “central criterion” when calculating funding. Such a change would potentially lead to much greater funding for Scottish farms.

While it is unclear how much money the devolved governments would actually get, the committee pointed to the consensus among witnesses in its inquiry that future funding should not be subject to the Barnett formula - something former Defra Secretary Michael Gove previously ruled out.

The committee did, however, recommend setting agriculture budgets on a seven-year basis with a mid-point review to ensure it still meets the needs of Scottish farmers and crofters.

As well as discussing the future of direct payments to farmers, the committee also looked at other areas that could have a direct impact on farmers, including trade and immigration policies.

Describing farmers and crofters as “the bedrock of Scotland’s booming food and drink industry” the committee cautioned against a no-deal Brexit, arguing that the imposition of new tariffs on products would make the sector “uncompetitive overnight”, leading to a severe knock-on effect for farmers.

Similarly, the committee urged the UK Government to protect Scottish products that currently fall under the EU’s ‘geographical indicators’ rule, such as Scotch Beef, Whiskey and Black Pudding.

It said these products should be a “red-line” during any future trade negotiations.

Furthermore, the committee criticised the UK Government’s new Seasonal Agricultural Workers pilot scheme, saying it was merely a short-term solution “which would not fix Scotland’s long-term labour crisis”.

The committee urged the government to make it much easier for a greater number of temporary workers to come to Scotland to bolster farming produce.

It also recommended a scrapping of the £30,000 salary threshold on immigrants to attract more workers to related sectors such as veterinary science.

As part of the inquiry, politicians from the committee explored potential technological solutions to some of these problems, including robotic milking and “vertical farming”.

The committee recommends the UK’s new Shared Prosperity Fund should give farmers grants to purchase new technologies.

Commenting on the report, committee chair Pete Wishart MP said: “Scotland has some of the most challenging farming environments in the UK, and yet Scottish farming is the cornerstone of Scottish food and drink industry and farms and crofts remain central to many thriving communities.

“It is nonsensical that funding through the Common Agricultural Policy has not recognised these challenging conditions, so my committee is calling on the UK Government to take Brexit as an opportunity to rewrite the rules of agricultural funding.

“A country’s environmental conditions and situation should be a central tenant of its funding settlement. If the UK Government accepts this principle, Scotland will be likely to receive a significantly greater proportion of funding allowing the agricultural sector to realise its full potential.”

“The government must also do much more to resolve the workforce crisis on Scottish farms,” Wishart added.

“The seasonal workers pilot must be quadrupled in size if it has any chance of addressing this.

“The uncertainty surrounding no-deal tariffs and future of geographical indications must also be resolved so Scotland can be confident its agriculture sector will be protected and enhanced post-Brexit.

“My committee’s report makes workable recommendations that the UK Government should implement to give Scottish farmers and crofters cause for optimism about the future of agriculture post-Brexit.”