Following on from the Scottish Government’s Vision for Agriculture (March 2022) and the consultation on Scotland's Agriculture Bill (launched August 2022), the Scottish Government have published the Agricultural Reform Route Map (February 2023). The Route Map sets out brief details and timescales for the phasing out of the current farming support policy in Scotland and the phasing in of the new support policy and provides the industry with some of the detail on what is being proposed so that businesses can start to prepare for the future. The Route Map sets out that "in the future at least half of all funding for farming and crofting will be targeted towards outcomes for biodiversity gain and a drive towards low carbon approaches to improve the resilience, efficiency and profitability of the sector."
Rural Affairs Secretary, Mairi Gougeon, delivered a statement to the Scottish Parliament on 15 March 2023 on delivering the Vision for Agriculture through the Agricultural Reform Route Map in which she set out that the intention is for Scotland to be a global leader in sustainable and regenerative farming. The statement sets out that responses to the consultation on the Agriculture Bill will be published in Spring but, in the meantime, the Agriculture Reform Programme will still be progressed and whilst there are still questions to be answered the Route Map provides clear details of when current schemes will transition or end and when more information will become available.
So, what can we expect going forward?
In terms of the immediate future, it is confirmed that the existing framework of support in Scotland will continue in 2023, 2024 and mostly for 2025 but with new conditionality to be introduced to the Basic Payment Scheme (BPS) from 2025.
However, going forward, in order to deliver the Scottish Government's Vision for Agriculture it is proposed that the framework to deliver Scotland's agriculture support package is split into four tiers.
Tier 1 Base Payment
This will still provide for an element of direct payment to businesses who are engaged in food production and actively manage the land. However, businesses will require to meet "essential standards" in agricultural activity; climate response; biodiversity gain; business efficiency outcomes; safeguarding animal health and welfare and worker rights. It is not yet clear what these "essential standards" might include but Greening, Cross Compliance requirements (Good Agricultural and Environmental Conditions (GAECs) and Statutory Management Requirements (SMRs)) are all under consideration.
Whole Farm Plans (WFPs) are also under consideration for inclusion under "essential standards". There is no guidance on what these might include or how they could be used to deliver the Scottish Government's Vision for Agriculture but they are being considered as a tool to encourage businesses to think about the sustainability, efficiency and resilience of their operations.
Tier 2 Enhanced
This will build on the standards established under Tier 1 and eligibility will depend upon successfully undertaking Tier 1 and demonstrating contribution towards Tier 2 requirements. Tier 2 will focus on measures to reduce greenhouse gas emissions, restore and improve nature and support producers and incentivise sustainable and regenerative farming with an aim of providing support to meet Scotland’s climate and biodiversity targets. See further detail below on the proposed measures which are being discussed under the new framework.
Tier 3 Elective
This will focus on the sustainable management of land by way of targeted actions for climate change or nature restoration. For example, this might be specific to a particular species or habitat, support conversion to alternative forms of agriculture (such as organic production) or encourage innovation and provide supply chain support.
Tier 4 Complementary
This will complement the funding under Tiers 1 to 3 by providing access to continuous professional development (CPD) and providing applicants with the skills and advice required to uptake the suite of management options, new practices and innovation under the new framework.
In terms of timescales, it is proposed that Tier 2 Enhanced Support will launch in 2026 followed by Tier 3 Elective and Tier 4 Complementary in 2027 and BPS will transition to the Tier 1 Base Payment from 2027.
What does that mean for existing schemes?
Basic Payment Scheme (BPS)
It is proposed that BPS, in its current region model, will continue up to and including 2025 but with new conditionality being introduced in 2025. This conditionality will make the support conditional on meeting the "essential standards" as discussed above.
BPS will end in 2026 and will be split into Tier 1 Base and Tier 2 Enhanced Support as set out above.
Come 2027 the region model will have been reviewed and changes will reflect the transition to a more economic and environmentally sustainable model for the industry.
Voluntary Coupled Support (VCS)
It is proposed that VCS will continue up to and including 2025 but with conditions being introduced from 2025 such that essential standards will require to be met.
Proposals indicate that VCS is expected to continue in 2026 but it may be delivered differently, and consideration is still being given to how this type of support will be delivered from 2027.
Less Favoured Area Support Scheme (LFASS)
It is proposed that LFASS will continue up to and including 2026 but with conditions being introduced from 2025 to support the transition towards a more economic and sustainable model for the sector. It is still under consideration how this type of support will be delivered from 2027.
Agri Environment and Climate Scheme (AECSS), Forestry Grant Scheme (FGS) and Targeted Capital Support (TCS)
These are all expected to continue up to and including 2026 to deliver elements of Tier 3 and Tier 4 until the new Tier 3 Elective and Tier 4 Complementary Support is implemented from 2027.
Some of the options available under these schemes are being considered for inclusion in Tier 2 and changes to the scoring, budgets or options may be made to support the transition towards a more economic and sustainable model for the sector.
Farm Advisory Service (FAS)
The Farm Advisory Service will continue up to and including 2026 to deliver elements of Tier 4 and will adapt to deliver the new Tier 4 Complementary Support mechanisms introduced from 2027.
Preparing Actions for Sustainable Farming
This support is aimed at encouraging farmers to prepare for future transitional arrangements and, therefore, it is proposed that this support will end by March 2025.
Click here to view, at a glance, the Pathway to Reform table.
What measures will require to be met going forward?
As set out above, "essential standards" will require to be met from 2025. Businesses will also be asked to undertake specific actions that support efficiency and improve resilience whilst meeting climate and biodiversity targets and, in doing so, it is intended that future support will be available to businesses across all four tiers set out above.
The Scottish Government has produced a list of potential measures being considered for inclusion for support within the Guidance on the List of Measures. As set out above, the measures focus on reducing greenhouse gas emissions, restoring and improving nature and supporting producers and incentivising sustainable and regenerative farming with an aim of providing support to meet Scotland’s climate and biodiversity targets. Measures aim to reduce greenhouse gas emissions from soils, sequester carbon, help businesses and land adapt to the impacts of climate change and halt the loss of biodiversity. In terms of livestock, measures aim to deliver lower emission production through nutrition, genetics and health.
The guidance provides information on some of the specific types of actions which might be expected from businesses who wish to receive support payments in the future. It is not a final list of measures and the Scottish Government has confirmed that there will be a wider range of measures that may be supported to ensure that all sectors of the industry have the opportunity to contribute towards nature and climate targets, however, it gives an idea of the types of measures which might be included. More detailed information on the conditions for support and guidance will be set out over the next two years.
Preparing for change
Support is currently available to help businesses prepare for the proposed changes with support available for conducting carbon audits, soil sampling, support for animal health and welfare activities and access to herd data for Suckler beef producers through MyHerd Stats. Support might also be available through various Agri-Environment Climate Schemes, Forestry Grant Schemes, Peatland Action Schemes and the Nature Restoration Fund and businesses would be well advised to discuss these various support options with their professional advisors.
In terms of Scotland's future support policy, whilst the finer details are as yet unknown the direction of travel is quite clear and, therefore, businesses should be giving consideration to their future plans and how support payments will fit in with that - especially if that will secure the future for the business. We would encourage businesses to engage with their professional advisors on this to ensure that they are aware of how the changes will affect their business and what opportunities that might present to them so they can ensure that they have everything in place to be in a position to benefit from those changes going forward.
Contributors
Senior Associate
Partner
