 To the 13th meeting of 2015 of rural affairs climate change and environment committee for to remove the first item in the agenda. I remind people not to leave their mobile phones switched on as they outfit the broadcasting system. You may notice some committee members consulting tablets during the meeting, this is because they provide meeting papers yn digital format. Agenda item 1 is the decision on taking business in private. The first item on the agenda is to consider whether to take item 5 on consideration of the committee's work programme in private later this morning. Are we agreed? We are agreed. Agenda item 2 is subordinate legislation, and this item is regarding five negative instruments, as listed on the agenda. Reservoir Scotland regulations 2015, SSI 22015, slash 90. Reservoirs, panels of reservoir engineers, sections under which members may be appointed. Scotland order 2015, SSI 2015, 92. Waste recyclet quality Scotland regulations 2015, SSI 2015, slash 101. The alien and locally absent species and aquaculture Scotland regulations 2015, SSI 2015, slash 103. The Crofting County's Agricultural Grants Scotland variation scheme 2015, SSI 2015, slash 105. Two of those instruments have been drawn to the committee's attention by the Delegated Powers and Law Reform Committee. The first is the Reservoir Scotland regulations 2015, SSI 2015, slash 90, which has been drawn to the committee's attention under reporting ground age, as the meaning of regulations 10 and 17 could be clearer and under the general group, as there is a drafting error in regulation 8. In support of the Delegated Powers and Law Reform Committee, it noted that the Government had agreed to address the matters that were reported in relation to regulations 8 and 10 at the next opportunity, and that the committee suggested that the Government consider clarifying the drafting of regulation 17 brackets 2 at the same time. The second instrument that has been drawn to our attention is the Crofting County's Agricultural Grants Scotland variation scheme 2015, SSI 2015, slash 105. Again, Delegated Powers and Law Reform Committee has drawn to our attention the general reporting ground as there is a minor drafting error. Scottish Governments agreed to correct this drafting error at the next opportunity. I refer members to the paper. Does anyone have any comments? Sarah Boyack. Thank you, convener. I think that these are all welcome statutory instruments, particularly given that we have been discussing biodiversity, and one of them is on alien species. It is very good to see that coming forward in the waste recycling one as well. The point that you make is that we have had to note one or two errors in them. Previously on cap reform, there was an error. I would normally suggest that we write to the minister, but given that the minister is in the room, the fact that we just note those errors would be just useful to get that comment made that we have picked those up and they are on the record. There have been a few technical errors. There is not a policy problem with these, but there are technical errors. We have had to have these drawn to our attention. Thank you very much. Indeed, there have been, and I suppose that there are different sections of the minister's responsibilities that deal with each of those areas. I think that the point is well made. Anyone else want to comment? I agree that they do not have any great overall policy implications. The issue that was brought to our attention by NFUS on the cap reform one would have had very serious practical implications had it not been picked up, so I just want to reinforce what Ms Boyack has asked for. Thank you. Are we agreed that we do not want to wish to make any recommendations in relation to those instruments? We are agreed. I move to agenda item 3, which is a review of agricultural holdings legislation final report. We are joined today by the Cabinet Secretary for Rural Affairs, Food and the Environment and members of the review group. I welcome the Cabinet Secretary, Richard Lochhead. Good morning, with Andrew Thin and Haimish Leen. Good morning to you. Do you wish to make any opening remarks, Richard? Yes. Thank you very much, convener. I will just say a few remarks to open, because we are very pleased to be here. I am clearly joined by Andrew Thin and Haimish Leen from the review group. Ian Mackay was hoping to be here, but I understand some transport problems getting off of the island of Mull, and other members are unfortunately ill today. I am pleased, though, that we have two members of the review group here to help me to answer some of the questions from the committee today, because a lot of really good work was put in over the duration of the inquiry. Andrew and Haimish and their colleagues travelled length and breadth of Scotland and spoke to literally hundreds of tenant farmers and landowners and others with an interest in the future of tenant farming in Scotland. We are very proud of reports. We clearly believe that our recommendations point a way forward to creating and protecting a vibrant tenancy sector in Scotland, which is so important for the future of agriculture, and particularly for giving opportunities to new entrants to enter the industry and get on to the first run of ladder and often securing a tenancy is the best way to do that. We do believe that the recommendations are the right way forward, and we look forward to answering your questions today. I should say that there are three broad aims of the inquiry and the recommendations, first of all, to promote productive relationships between tenants and landlords. Secondly, to enable older tenant farmers to retire with dignity, which in turn would help to facilitate new entrants being able to get into the industry. Thirdly, to provide letting vehicles and a structure for the sector, which of course is fit for purpose in the 21st century. No doubt you will be asking questions on various recommendations and the behind them, and we look forward to that discussion. I should say that in terms of one particular recommendation to create a tenant farming commissioner, the industry of course will make in the case, too, that whilst we await the legislation to be put in place, it would be helpful to have had a kind of interim farming commissioner put in place. What we are announcing today is that we are going to appoint an independent adviser to work with the industry in the interim while we await the actual legislation to establish a tenant farming commissioner. That independent adviser will work with all sectors involved in tenant farming, and the idea will be to continue the constructive working relationships that have been built up over the past few years, particularly during the inquiry. Clearly, the industry is keen that we do not lose the momentum of that working together and constructive approach, which has perhaps been lacking in past years, but finally appears to be working to a degree. Hopefully, the independent adviser, once appointed, will be able to keep up the momentum and work across all the sectors and make sure that we are all pointing in the same direction. It is just to confirm that we are making that announcement today. In terms of taking the legislation forward, I should point out that it is our intention at this stage to use the land reform bill as a vehicle for the agricultural holdings legislation. Clearly, there is a range of recommendations. Some will require legislation, some will not require legislation, but clearly, that is the most obvious vehicle for us to use. At this stage, it is our intention that the Government will make more announcements in due course in terms of the land reform bill. We will say too much more about the contents of the land reform bill at this stage. Thank you very much, Cabinet Secretary. We have perhaps some questions to ask. I welcome the appointment of an interim adviser. Obviously, I have to discuss how that would work in terms of the sort of things that we expect an interim or a commissioner to actually do. Codes that the commissioner will prepare would be statutory. What remedies would the commissioner have in dealing with issues that arise? Clearly, given some of the serious issues that have risen in the tenant farming sector over recent years, we have had the inquiry, but even before that, there was the tenant farming forum and there has been a lot more attempt to have some collaborative work across the sector bringing landowners and landlords together with tenants and other players in the sector to focus on some of the sore points that perhaps are preventing better relationships between landlords and tenants. Over the past few years, we have seen agreements and codes drawn up in terms of rent reviews, land agents and other areas of sometimes controversy within the sector. That has been quite a new approach over the last few years. The rationale behind the tenant farming commissioner was following the consultation and the evidence that was taken by the inquiry. There was a desire to continue that kind of working and collaboration. It felt that we needed a role established to take that forward and make it happen. One of the roles clearly of a tenant farming commissioner would be to facilitate better relationships between landlords and tenants. Part of that clearly would be looking at the codes and any future codes that would be required and best practice and so on. It would certainly be our intention that that would be underpinned by statute. That is something that I will seriously look at in terms of the bill that is underpinning it by statute. Clearly, we have a bit more thinking to do with the detail of that as to whether the codes that are put into statute or whether the codes are not within statute but are underpinned by statute in that the law would refer to them. Therefore, the codes would be taken into account by any legal proceedings in the future. That is where we are at the moment of thinking. There will be statute underpinning as a minimum. Clearly, the tenant farming commissioner will be a new post and will keep a focus on building those relationships that are so essential to a successful and vibrant tenant sector in Scotland. You forgive us by saying that we have been through the business about having voluntary codes before. The way in which we mentioned a statutory code for aquaculture did not necessarily make it possible for us to believe that it could be easily carried through and interrogated because I think that the aquaculture code of good practice is 147 pages, if I remember rightly. If there are several different codes, it would be a concern for us if there was not some means to make sure that they dovetail and that they are answerable to legal interrogation. I want to bring colleagues in seconds to give evidence to the committee about what I have said already in response to your points. I have said all along throughout the past two or three years that I would not hesitate to make the codes statutory. What I have said to you a few moments ago is that clearly you can underpin codes by statute in that they are given legal recognition or you can actually incorporate the codes into the bill. I think that the farmer's problem is the sensible way forward at this stage but clearly we will take a decision in due course once we publish the bill. I can give you an assurance that there will be some form of statute underpinning of the codes. I would like to bring in Andrew or Hamish because I think that they have got strong views on this and have been heavily involved in the inquiry in this regard. Do you want to say anything on the codes? Can I use the rents as an example? Very controversial area, source of great angst. Tenant farming forums sometime go produced guidance on rent procedures. It was only two pages so it can be done succinctly. That was probably two succinct. The industry bodies got together last year with our help-help from the review group and they produced something much closer to a code even then it was only five pages. That clearly was a voluntary industry self-regulation code. Nonetheless it had a significant, widely acknowledged, significant difference on rent review procedures last autumn. However some people did not adhere to it and that is the weakness. As the cabinet secretary says, tackling that weakness is why a statute will need to put some teeth behind us. I think that that is quite helpful. Some developer points on that, Mike Russell. I think that it is the discussion that we had last week on whether or not there should be statutory or not. Tended to indicate that the examples that we were receiving and Andrew has just given another one in terms of rent was that even with the best will in the world and sometimes there isn't the best will in the world in this particular area, there is a difficulty in making non-statutory codes work. I think that if the evidence is that strong and it seems to be, then I hope that the cabinet secretary will not just give statutory underpinning but make sure that it has statutory force because a tenant farmer commissioner and a code are going to be at the heart of making the legislation work. I hear the message that I am clear and I am sympathetic to what you are saying. Good morning, cabinet secretary. Mr Thin and Mr Leen, I am sure that your contributions won't be thin and lean. I am sure that they will be substantial. I just need to follow on from the point that Mike Russell made there. It will depend very much on what statutory underpinning looks like. I have had lots of experience in a previous incarnation to do with statutory codes and voluntary codes. As has been said already, the problem is the good comply and the bad ignore. If you want those things to work, you really have to have a stick that you can use, hopefully sparingly, but if the sticks are there, then the bad will be forced to comply. Good decent people will always go along with codes. I will be very interested to see exactly what the statutory underpinning is because it could be as simple as there will be codes and that would be statutory or it might be much stronger than that. I do not know if you wish to comment further. Clearly, we are considering how best to take this forward until the bill is published. I cannot give you in black and white exactly what it will look like. I am sympathetic and supportive of having statutory underpinning as a minimum within the bill. What does that mean? That means that the law will recognise the codes and therefore it is not simply a voluntary code which people can just think, am I going to pay attention to this or not? They will have to be very conscious that if they do not pay attention to it and there are court proceedings, that will be used against them in the courts because it will have a statutory underpinning. That would give teeth to the voluntary codes but, as I said, we will certainly take on board the committee's views. How will the commissioner work alongside the Land Court and with the potential for arbitration? Clearly, the concept at the moment of a tenant farming commissioner is to work with the sector and all the players, as I said before, and bring them together trying to achieve consensus on some issues or compromise on some issues clearly. That will be their role. The Land Court, of course, is the legal route and therefore there is a very distinctive difference between the two roles. The commissioner will be working with all the players to try and achieve collaboration to address concerns that will still continue to exist within the industry. Alex Ferguson. Thank you. Can I just follow that up a little bit? Would there not need to be some sort of interrelationship between the commissioner and the Land Court? Given the subject matter that they are going to be looking at. I am sure that the tenant farming commissioner will have to be very familiar with the legislation but, in terms of the Land Court, that is a court of law that is a different role entirely from the commissioner. The commissioner is opposed to work with the industry looking at issues facing the industry and to bring everyone together and trying to address those issues. That clearly is not the role of the Land Court. The Land Court is a judicial body and therefore it has got a distinctive role. Amy Shlean might want to come in as a legal person. Where the codes of practice might have an interaction with the Land Court decision making, obviously if people follow a code of practice they can still, at the end of the day, have a disagreement about the correct resolution of the problem in which case it will have to be dealt with by the Land Court. However, where one party to the dispute has not followed a code of practice, that might be something that the Land Court would take into account, for example, in respect of a decision in relation to expenses. Therefore, it is likely to be a relationship or an interaction in actuality. Thank you. Good morning, cabinet secretary, and to both of the people from the review group. It's a quite quick supplementary. It was just that I'd noticed that the STFA had made the suggestion of a possibility of shared offices between the commissioner for tenant farmers and the lands commission in view of the fact that a lot of the issues were interrelated with land reform if that recommendation indeed went ahead. I just wondered if you had any thoughts on that at this stage. Clearly, we have not taken a decision yet and we do not even have the draft bill published, so we will take into account that view of the STFA. There may be pros and cons, so I will have to consider them. I am not ruling anything out at this point. Thinking about rent and rent reviews, the stakeholders broadly accepted the review's proposal for adopting a budgets approach for calculating rents for 1991 act tenants. They called for worked examples to be provided to show how that would work in practice, but SAVA has said that it might lead to more disputes as assessing the productive capacity of a holding involves more subjectivity. Do the panel think what difference adopting a budgets approach might mean for rents and how can productive capacity of a holding be assessed objectively? Clearly, as Andrew Thin said earlier, the controversial area of the tenant farming debate is how rents are determined and set. The review group took the view that productive capacity should be the guiding principle of determining rents and not open markets. Clearly, that is seen as fairer and more proportionate and realistic. As you say, convener, the question is what factors should be taken into account, how that should be modelled, and are there other working examples that could be put together to help to give some guidance to the industry? We are actively working on that at the moment. Officials are working on some modelling and worked examples. We will also work with the industry to put those together. All I can say is that will be made available and that work is under way. We are thinking generally that questions about the market are going to play much less of a part in your thinking than before. Yes, I will bring Andrew in to see if we can evolve heavily in the rents side of things. We do not have an effective market in tenant farms. There is a massive over-demand under supply, so there is not an effective market. The market to operate rents will go well above productive capacity in the short term, which cannot be in the public interest, I do not think. That is the fundamental point here. If we take a long-term view, if this market equilibrates, then one can allow market forces to be fine when markets are balanced, but they are not fine when markets are unbalanced. That is the fundamental here and that is the grounds for regulated rents behind it. Will that lead to more disputes? There are strong recommendations in the report around testing and modelling and developing model budgets in order to address exactly that point. I do not believe that it will lead to more disputes. I think that it can be modelled very well. Simply to echo Andrew's point, the basic rent review test at the moment for a secure 1991 act test is a qualified open market test. The problem with that is that there has not been an open market in respect of secure tendencies for at least the last 40 years, possibly longer. The productive capacity test does not solve all of the problems and there will of course be scope for parties to disagree about the productive capacity of a holding. There are industry standard measurements of production and so on which are available and the process should be more straightforward and certainly fairer than adjusting against open market lettings for limited duration tendencies, against secure tendencies, for example, which happens at the moment. Thank you for that. That gives us a clear steer, I would say. Turn to investment improvements, compensation and wego. Jim Hew. Thank you very much, convener, and good morning to the panel. There was a bit of questioning from some of the stakeholders as to what value a tendency would actually be, obviously, if registered. I would be quite interested in, if you've actually talked with any lenders, to confirm how they would value and lend to a tendency if granted security against a tendency. I would also be interested in wego, but I'll maybe come back to that in a supplementary. In relation to being able to take a security against a lease, that, of course, is possible at the moment in the commercial world in respect of leases which are for 20 years and longer, they are capable of being registered in the land register and lenders will take security over them, essentially on the basis that, if they take up the tenants' interest in the lease, that is then capable of being assigned on the open market for value and there is therefore a return on the loan made. We did meet with various banks and the Agricultural Lending Committee of the banks and they said to us that, in respect of their lending decisions, really what they're looking at first and foremost is the business proposition being put before them. Is it actually workable? Do they think that this particular person can make it work? Is it affordable and so on? However, one of the factors when coming to a decision about making a loan is whether or not there is security available and therefore one of the aspects of the decision making process would be to look at available security and if in fact it was capable of having a secure lease registered in the land register and therefore a bank taking security over that that may well make the difference in some particular lending decisions. Okay, thanks for that. That looks like this in due process going forward there. There's been fairly was that on that very point? Was it on that point? If that's possible, yes. I'm sorry, thank you for allowing me in. Can I just, Mr Lean mentioned 20 years. Is there any evidence to show that a longer security gives greater borrowing capacity if I can put it that way? We certainly didn't hear evidence about that although in fairness we didn't ask the bankers about that. There would be no reason to think that the length of the lease if it was capable of being secured would have a factor because of course what the bank is looking at is the tenant's shoes if he defaults or he or she defaults on the loan and then disposing of the lease for value in order to recover their lending. So from that perspective the length of the lease isn't really material. Security rather than the length. Yes, but of course the value of that lease on the open market to somebody who was interested in buying it from the bank that the value would reflect on the duration of the lease. If a secure tenancy was registered in the land register then of course we are proposing that that is capable of being converted into a 35 year LDT and assigned on the open market so a bank calling up a security on a secure tenancy would go through the conversion process and then as it were sell the resulting 35 year LDT. That's what we've well, we have proposed a 35 year conversion. Yes, I'll come back to that later. Thank you very much, that's really useful. Back to Jim. No, no, that was very useful. It's just regarding the proposed three year amnesty there's been fairly broad support for that. I think one organisation wanted just to be a one year amnesty. I just wonder why we have to limit that to a three year amnesty? I mean, if somebody's made an improvement why can that not be registered at any point in the future because I'm thinking in the future of perhaps when there are improvements that are not and should have been registered for wiggle purposes. What we identified was a historical problem really in that in years past tenants haven't always been aware of the formal notification procedures and respect of improvements and that on occasion it's the case when a tendency comes to an end that a particular improvement which still has value isn't compensated because the proper notification procedures haven't been carried through. That's much less common because tenants tend to be more aware of the need to go through formal procedures. But we felt that in the interest of fairness across the whole industry looking at both the landlord and the tenant's perspective that an amnesty period would be suitable for everybody bringing their affairs up today as it were and there would be a clear process and a window of opportunity. Now of course there may be tenants out there who don't take up the opportunity and at some stage in the future carry out an improvement without proper notification and that may result in a problem in the future. But it's very difficult to do anything about that. If I may, I suppose then it's up to government in some respects to make sure and ensure that tenants etc are aware that they have to register for the future. So I just wonder if you would recognise that and take that on board to ensure that tenant farmers that perhaps are not members of organisations such as NFUS or STFA are educated about their rights. Yes, I mean I'll take that point away and we always are trying to think of new ways of doing that because that applies to all aspects of the legislation, not just this particular area of policies. We'll take that point away. I'm talking about alternative letting vehicles a little later on but there's a couple of points that we need to make on this first of all. Graeme Dey. Just because it's possible to borrow in principle doesn't mean that that will happen in reality. Many owner farmers have great difficulty getting funds from banks. From the discussions you've had how confident are you that in reality banks will take a positive view in this regard? What banks said to us is that it would simply be one of several factors which they would take into account in their lending decision. If banks aren't lending for a variety of reasons with or without security then the fact that a secure tenant can offer up the lease of security probably won't help but it would be more helpful than the situation which exists at the moment. The banks weren't telling us that this was a magic bullet to lending decisions but they also made clear to us that they did lend to tenants and primarily what they looked at was the business case for the particular borrowing which was being sought. Was it realistic? Could it be achieved? Was it affordable? Thank you. Alex Ferguson. I'm sorry to keep coming back in but I think there's a really important point here. I'm aware that I'm trying not to stray into the next topic of questioning but it was put to us quite strongly last week that open assignations would massively increase the ability of tenants to borrow. Did you find any evidence to back that up? May I ask? I think that the short answer to that is no, although again in fairness it wasn't a question that we put directly to bankers. I think that we'll pursue that just in a minute or two but in terms of WAGO the STFA have suggested a two stage approach to this where firstly because at the moment a tenant has to serve an irreversible notice to quit before reaching agreement over WAGO I understand that to be the case and they're saying well firstly a notice of intention to quit served one year in advance subject to compensation being reached six months before the end of the tenancy and secondly confirmation of notice to quit following agreement of WAGO compensation and vacation of the holding following payment of that compensation have you had any thoughts about that process to make WAGO more practical? I can probably pick that up on one view that's unnecessary it's within the tenant's gift to serve a notice of intention to remove once served of course it's irretrievable the tenant is then bound to vacate the holding but there's nothing at the moment which would prevent the tenant approaching the landlord and saying if I serve a notice of intention to remove against a particular termination date what will you pay me in terms of WAGOing and compensation and the parties and then work to an agreement and the tenant has a figure which is acceptable or isn't acceptable so probably there's no need for such a technical process because it's something which could happen at the moment and in fact does happen from time to time Do you have any other points Jim? Let's move on to retirement succession and assignation Mike Russell, the lead There was obviously a considerable discussion last week regarding the issue of assignation and a particularly strong contribution from Scottish land in the States who said that the Cabinet Secretary would be liable for £600 million the moment this was brought into any legislation I'd be interested in the views of the panel on that particularly those who've been through this process over a period of time but I want to particularly focus on a question to the Cabinet Secretary I raised last week the 1948 bill and the 1948 bill that essentially allowed open or free assignation was a bill which result took place because of the imperative that the UK Government at the time had for growing more food and I think that that illustrates quite starkly that the issue of what the length of assignation would be, the type of assignation it takes place is above all a product of the national policy on farming it's not really a matter for technical discussion between experts and that's really what it was beginning to become so I'd really like to know from the Cabinet Secretary what his policy is towards farming and farming sector and therefore in his view what the right level of assignation should be whether it lies as many of us think much more closely to the 1948 model or whether it lies in the more restrictive model that has developed since then the changes in the 1950s came about because of a restriction that landlords wish to see placed on that open assignation and I think that political intention should then guide whatever the legislation does in terms of any technical discussion I'm not trying to be rude about lawyers but the technical discussion between lawyers or experts on land holding OK, thank you I should assure you that your cabinet secretary's broke just now and can't afford £600 million so we'll perhaps return to that subject later on in terms of your question about how this inquiry this report, the recommendations fit into our vision for agriculture in Scotland it's a good question which is relatively succinctly but what I would say at the outset is that in terms of Government policy in terms of my policy is vitally important we have active agriculture in this country and we maintain the ability to produce foods for our people to do that we have to ensure our land is productive and we have people to work the land and essentially that's the vision that we have to realise so in terms of the role the Tennessee sector fits into the vision for Scottish agriculture well clearly as I said at the outset the aims of these reforms are to ensure that our land has been used productively and that we have people who are able to enter agriculture, choose a Korean agriculture to maintain the skills in this country to produce food and therefore ensuring tenancies are available as a first rung in the ladder for new entrants and for people who want to farm the land who clearly don't have several million pounds in the bank to buy land is very very important to help to take the vision forward asignations and the way in which we've approached that with our recommendations are clearly designed to keep land in tenancies in other words for instance if there is a 1991 tenancy a secure tenancy and there is a danger that the land will be lost to tenancy because of a lack of successor for instance making some proposals that will keep that land in the tenancy sector bringing the benefits I've just described not only that the open asignation of the tenancies will allow perhaps older farmers to retire with dignity as we all know one feature of the tenancy debate in Scotland for a long long time long before I've been in post is that it's sometimes difficult for older farmers to retire to take away the next generation and that can act as a bit of a blockage now clearly if there's a way in which the older farmer is able to vacate the tenancy and receive some return that allows a dignified retirement or to move on to the next stage of their life then that opens up opportunities of others and allows that dignified retiring from farming so that fluid and flexible working of the tenancy system is very important to the future of agriculture in Scotland the 1948 bill as Michael Russell quite rightly says I wish Sir Crispin Aging who was here, one of the review group members was an expert in that bill but I'm sure my colleagues are as well of course was out of the post war situation in Scotland to make sure our land was used for growing food and sometimes we have to take radical steps to ensure that's the case I believe there are radical steps in this report that will help ensure that's the case but I should of course point to other employment policies that are important in the regard of the agricultural vision so for instance as Michael Russell and others are aware we are looking for opportunities to use publicly owned land to open up opportunities for food production and new tenancies to help new entrants to get their opportunity so this is not just about this bill the vision clearly is about using our land and using other areas of policy to deliver that Pursue that for a moment I think what you're saying very much agree with the result of a restriction any restriction and assignations from where we are and conversely therefore a benefit from being more flexible of assignations is are pretty clear if you restrict assignations you're likely almost inevitably to reduce the numbers of people who are actively farming you're going to increase the centralised power of a smaller number of owners you may well influence the market and there's interesting Andrew's view on the lack of market in tenancies you may influence the overall market and include the food market because price controls will come from fewer people but there's another link I want you just to see if you will comment on which is a link to community empowerment certainly in the areas I represent the availability of the tenant farms and a larger number of people active in agriculture has a strong community benefit it is good for the community and indeed if there are fewer people involved in active participation in farming or work in the land the community is then weakened so presumably when we come on to the question of intervention where intervention may be necessary in terms of failing landlordism you would recognise there and will recognise here the link to assignation as a positive community benefit absolutely and it's a very good point to make and the reason why it's a very good point to make clearly is if we have a situation be it in Mr Russell's constituency or anyone else's constituency where we have for sake of argument an elderly relative wishing to retire from the farm who has a keen nephew or grandson or whoever who's keen to take over the farm and therefore it means that the next generation in that community can continue to have a job locally make their living locally continue the way of life in agriculture then we should make that opportunity available so it's very much a community impairment issue and for the health of our communities in Scotland therefore we would be campaigning on the slogan back to 1948 could be I understand I think wanted to comment on it too could I just follow through yep but then we've got several I mentioned the supplementary that's fine we have under supply in the market land coming forward we have one of the lowest proportions of farm land in tenancy in Europe so we have to do two things and the review group was focused on achieving two things against this one we have to protect the current supply two we have to stimulate and build confidence in order to stimulate additional new supply and those two go together are very important so to protect current supply we suggested widening succession which will in fact protect most supply and for those who don't have a successor we suggested a conversion in our 35 years so current supply is effectively protected under these recommendations for 35 years that's the effect of it at the same time we've sought to build confidence in the landowning sector that if they let there will still be sufficiently flexible flexibility there to enable them to restructure and so on over time into the future and I think were we to follow the crofting model of open assignation and effectively compulsory letting of land we felt that that would undermine confidence and would make it very difficult to stimulate the new supply so there's a balance going on here between protection and stimulation in that case, Dave Thompson first very much convener and just really to follow on from the point touched on there by Andrew Thin the 600 million that was referred to by Mike Russell was in relation to the LDTs indeed I think what SLE said was that if open market assignation was imposed it would cost 1.7 8 billion which is an astronomical sum and I can't see the detriment is there might be minor detriment in a landlord transferring from one secure tenant to another secure tenant because in essence their position doesn't change so I just don't see where 1.78 billion would come from in relation to this maybe one way forward in terms of open assignations and you did mention a few moments ago open assignations one way would be to limit open assignations to new entrants and that would therefore limit the effect that Andrew Thin mentioned and it would also allow new entrants to come in to the system so I just wonder if the panel would comment on these two things just what were you meaning by open assignation and would having open assignation full open assignation but limited to new entrants how would that affect things well first of all your cabinet secretary is too broke to afford 600 million is certainly too broke to afford 1.78 billion so at the less silly reports we have like that more constructive and helpful will be moving this debate forward because I think that whole intervention at the time when we're supposed to be saying there's unprecedented collaboration and understanding of some of the key issues facing tenant farming I think you know these figures and that reports and its timing was unconstructive and unhelpful and given that we've not even published the legislation yet by which you could even begin to remotely work out any potential figures if you had one strong view on one side of the debate escapes me how they can come up with these figures so you do raise a good point in terms of having open assignations and for new entrants we did discuss this as a group and I don't pretend we have the answers but it's something we're thinking about in terms of moving forward with legislation because you are quite right it would be preferable if new entrants had a good opportunity to secure these opportunities so if a tenancy is made available on the market and the new entrants was able to secure that, clear that by beneficial for agriculture so we're giving that some thought that we don't want people simply snapping up every single tenancy that becomes available and then there's even more consolidation and we're not sure there's an easy fix to that but it's certainly something we're thinking about First of all we think we've made the public interest case clearly in the report for these changes so and I don't actually think that the Scottish Land and States is arguing with the public interest case so far as I understand it what they're saying is that somehow there will be a loss of value for which compensation would have to be paid were that to be the case you would expect land values to have fallen on publication of this report I haven't seen any evidence of that so I think you have to take this advice with a significant pinch of salt and let the government's law officers consider the things thoroughly we thought really hard about this it's a really important point that Mr Thompson is making it is actually very difficult to define a new entrant and therefore quite difficult in law to start doing this and it also of course potentially limits the value that the outgoer would obtain if you constrained the market you constrained the value the outgoer would get and therefore fewer would want to retire because the market would have been constrained artificially I think could be done here is that the commissioner could put in place a code of practice that governed how these assignations were conducted in order to ensure a process that increased the likelihood of that entirely justifiable public interest outcome occurring but done so in a managed in a managed way I think that could be done without having to go to statute and saying only new entrants can have these things Thank you Mr Chairman I think that it might be helpful for the committee to understand the groups reasoning behind this particular proposal bearing in mind of course that we have recommended widening the eligible class of family members who are entitled either to inherit or have a secure tenancy assigned to them bearing that in mind the question of assignation to a third party we saw primarily as a means of motivating an elderly tenant who wasn't farming a unit efficiently but who didn't have an eligible successor even under our new proposals to be able to convert that tenancy interest into something of value which would allow that tenant to retire and have a more efficient person take that tenancy on we saw the that likely person taking on the tenancy probably not really a new entrant but probably somebody who was at the second rung of the tenancy ladder so somebody perhaps who's coming to the end of a 10 year limited duration tenancy who has acquired capital expertise perhaps a general partner and a limited partnership tenancy who's coming to an end in those circumstances they will now have an opportunity to move into another form of tenancy and will be able to afford the value which will incentivise the assigning tenant actually to convert assign, sell and retire and have something upon which to retire the question of whether the assignation should be like for like secure tenancy or there should be a conversion process we discussed that length within the group but really for the public policy reasons which Andrew's already explained we came to the view that that we could support assignation on conversion that's very helpful convener just a couple of little points in there that I'd like to follow up on I think I read somewhere and I can't find it just in front of me just now that around 30% of tenancies would be in the position where they wouldn't have one of the new criteria the parents and living descendants et cetera that's quite a lot and you have answered up to a point the reason for converting into LDTs but the combination of those two things would lead to a further lessening of tenancies overall am I right in saying that I don't think that is right Mr Thompson because conversion and then assignation doesn't result in the loss of a tenancy it results in a conversion from a 1991 act tenancy to a 35 year tenancy and it would only be if at the end of that 35 year tenancy that the land wasn't further let out that there would be a loss but there's certainly no immediate loss and if the proposals contained within the report are successful then there will be a regular supply of land available for let coming to the market you've confirmed the point that there would be a long-term loss potentially potentially but not if our proposals are as successful as we hope they will be okay thanks and then Graham Day and then Alec Ferguson thank you very much it's really useful to tease behind the recommendations of the review in this point because there's two public policy issues and one is about the capacity for people who are currently tenant farmers to make their decision to stop being tenant farmers and there's the point of those who are kind of mid-career tenants who've got the 1991 tenancies and it's about how they leave farming at what point they leave farming and what value have they built up that they can take with them and then there's what influence do they have over who comes after them and how do they work with the person that comes after them and there might be a crossover point that's quite important to tease these out and the other issue I was interested in is recommendation 16 where you talk about the need for national and local planning policies on retirement options in terms of housing for farmers who are retiring because for many tenant farmers the farm is their home so you're not just talking about leaving your paid employment but you're also talking about seeking a new home and making sure you've thought through all those issues is actually quite important and I would have thought that recommendation 16 is both really important but actually quite difficult to deliver because you're talking about a relatively small number of people in a given area who might have actually quite distinct needs so I think following that through is actually quite a challenging recommendation Yes and you've pinpointed important issues and that is of course why the review group did highlight the issue of our planning policy and giving the opportunity for any retiring farmers to have their own home delivering that of course no doubt will be challenging I recall writing to all local authorities a few years ago asking them all to be sympathetic towards retiring farmers in terms of their planning policy for homes in the farm and of course sometimes that does happen I've visited many elderly farmers who now live in the house and their sons or daughters are now farming the land and living in the main farmhouse so we will continue to look at ways of making that a reality and easier to happen so that's a case of planning policy both in terms of national guidance but also in terms of recruiting the support of Scotland's local authorities that's near and stress as well that we hopefully support that Is there a presumption favour of being able to build houses where there is a ruin? In wider planning policy there are, just from personal experience I happen to know that local authorities do pursue that I can't speak for all local authorities but certainly some do that If that's the case you would think it would be easier for many an estate or a landowner to be able to provide a site for the very kind of house that Sarah Boyack was talking about Oh Yes Also in my experience I think it varies from local authority to local authority quite a lot For us to pursue Graham Day A couple of questions The first one is how you can achieve all that you indicate to Mike Russell you try to achieve in your original answer whilst adequately safeguarding the reasonable rights of landowners I'm thinking of a question that arose last week where there was some doubt raised as to whether the grounds for objection and the landlord of suitability in terms of characterability and financial resource whether that will be maintained I'm a second question as well and you've weighed out what you're trying to achieve with Assygnation but how will you avoid a situation where perhaps a merchant banker comes along purchasing the expertise of an advisor so they have the money they have the apparent expertise to stop them snapping up and assigning tenancy just clearly what you wouldn't want to happen First of all in respect of the qualifications of the successor or the Assygnate what we envisage is that the existing tests which have to do with skills and experience and financial resources and character grounds to a certain extent that those all remain in place and those in the merchant banker situation that you describe it would be the merchant banker personally who would have to demonstrate that he had the skills and experience albeit he might ultimately want to delegate them so that that would prevent I think the sort of situation which you've described Ariza That's fine, thank you, queers at all Any other points on this just now? No, okay, well thinking about the role of right to buy Claudia Beamish Thank you, convener There was quite a lot of discussion on this with stakeholders in our session last week and I wonder if Cabinet Secretary you could clarify first of all in relation to the requirement for tenants to register their interests before they could exercise the right to buy whether you have formed a view on that yet Well, we have accepted the recommendation that there should be an automatic statutory preemptive right to buy as opposed to having to proactively register so therefore that is a recommendation and I've accepted that recommendation Right, thank you Could you say something perhaps about the implications of the proposals on widening, assignation and succession in relation to what effect they might have on the valuation process under the preemptive right to buy if there was a preemptive right to buy and how that would alter the valuation process Well, I'm not sure there'll be a direct relationship between the valuation and the preemptive right to buy Clearly, we've explored that some length the rationale behind widening assignation and the potential family members who can be successors and I think we've outlined the reasons for that but I don't see any direct correlation I'll look to colleagues here in case anything come up in the report on that No, it's hard to see how that would impact on the valuation And could you say something about the trigger points for the preemptive right to buy in relation to the landlord failing to meet their obligations and the possibility to go to the land court and also the ministerial intervention and how that would work in the tenant farming context Right, oh, clear us two issues you mentioned during one sentence one is a preemptive right to buy and then one is the enforced sale So I think you were just maybe completing two separate recommendations So firstly in terms of the preemptive right to buy I've explained we have removed the need to register for the right to buy preemptively in that it will be automatic and also you asked in the same sentence about triggering the preemptive right to buy and during the evidence issues were brought to our attention that perhaps the triggers had to be looked at as to what triggers the preemptive right to buy and we have therefore got a recommendation in the report to widen the triggers for the preemptive right to buy because clearly there could be circumstances I'm trying to recall the exact one we used in the report where the transfer of summer all the shares of a company clearly in effect that could be a trigger for the preemptive right to buy because there's a substantial change in the ownership of the farm so it's like putting on the market so therefore we have a recommendation to look at that and again to that we'll have to wait for the draft bill but in terms of widening the triggers for the preemptive right to buy that's one circumstance that the report highlighted so I've got to answer two or three points so the third point that you're asking about of course was the review group clearly took the position not to support the absolute right to buy because of the public policy issues that Andrew laid out a short while ago in terms of maintaining conference in the letting sector because we have to have a flow of let land in Scotland again for the reasons outlined before to give opportunities for new entrants and because it is a key sector of Scottish agriculture however there were very clearly cases brought to the groups attention around Scotland where the current arrangements do not work and are not in the public interest and in those cases we took the view that there should be the ability of the tenant to enforce the sale of the tenancy of the farm where the landlord is not meeting their obligations so therefore as I think I said in the chamber we have a situation now where we're bringing forward a radical proposal which I believe will address a situation where good landlords and there are many good landlords in Scotland and many good relationships between landlords and tenants perhaps the vast majority are good and well have nothing to fear but bad landlords who are not fulfilling their obligations now know that the tenant has been empowered to take steps to enforce the sale of the tenancy in the farm and we think that's a proportionate and sensible way forward that's certainly the public interest and certainly make sure the land has been used properly and the tenant's been treated with respect and of course it's healthy for the future of tenant farming in Scotland or Scottish agriculture more widely where there's no forced sale to take the land out of tenancy but allow it to be found properly right and that's just one final supplementary point I've got in relation to ministers right to intervene when they're addressing barriers to local sustainable development would there be any concerns that you would have about compensation issues in relation to that well clearly there's a seconds route for addressing obstacles to sustainable development for land being used properly in Scotland and that is through the land reform bill itself and through the land reform legislation and as you know and well this is not what exactly the review group we're discussing today looked at but it did refer to it as an important route we are proposing as a Government to introduce the right for ministers to intervene on the basis of promoting sustainable development in terms of land ownership so therefore in some situations in Scotland and I know the committees aware of some situations perhaps in Bute or Eilor elsewhere in the country that were highlighted to the review group during our evidence sessions where there are community issues perhaps that could be addressed which would be to the benefit of the tenant farmers that live there so effectively there may be a community solution where the community effectively is a group of tenant farmers therefore that is one route to empowering tenant farmers where there's clearly obstacles to sustainable development alright, thank you Mike Russell there's a sort of matrix of legislation building up here you've got the land reform legislation you've got the community empowerment legislation and this controversial but I'm sure soluble issue of abandoned neglected land and you have the issue of agriculture tenancy reform just to be entirely clear this is important to a number of my constituents in a number of different places you are committed to the issue of ministerial intervention in terms of agricultural tenancies in circumstances where there is a community impact on a small or fragile community yes, in terms of the community routes which would benefit the tenant farmers in question and clearly as you quite rightly say there's a programme of land reform and community empowerment under way at Scottish Government level in the case of this review we're discussing today into the tenancy sector there are measures we've just been discussing in power tenant farmers through land reform legislation there are powers in power communities and clearly the community empowerment bill also has a range of measures to empower communities in different ways as well we must be careful however this very important issue does not fall between three different stools and I just want to press you a little on this so I should have just added there that in terms of land reform legislation of course it empowers ministers as well as the communities and tenant farmers being in power through this legislation indeed and there are circumstances quite clear circumstances and Claudia Beamish has pressed to on these where the failure of an individual landlord over a period of time may trigger the purchase and there should be no charter for bad landlords but there's a wider role of landlords within small and fragile communities island communities are clearly obvious but there are other communities and I just want to be assured because I know my constituents will want to be assured the new circumstances the right of ministerial intervention will be guaranteed in that community and I'd like to just be clear where that will be in legislation will it come in this legislation reform legislation will it be well the community and parliament legislation is going to the third stage so it's a little late for it to be specifically focused on this precisely where will this be because I don't want us to come to the end of this process and find that somebody says oh we thought it was in some other piece of legislation okay so a bad landlord will now have to be aware that in light of the will of parliament we expressed with the legislation brought forward in due course that tenant farmers individually will be empowered through the agriculture holdings legislation notwithstanding parliament's views and the actual legislation once it's brought forward to take action and through the land reform legislation also part of the proposed land reform bill but still to be presented to parliament we are saying we are committed to powers to intervene on behalf of the community and therefore the landlords will be aware that there are several routes by which either ministers or tenant farmers can take action to empower themselves and overcome the situations which we want to rectify in our society and one of the triggers in the land reform bill for community action would be the failure of a landlord in terms of tenancies, more than one tenancy presumably in fragile communities I just want to be absolutely clear about that because it could be that a community might not see itself as being empowered to act alongside tenant farmers and I just want to be absolutely clear that that's in your mind as the begetter of this legislation that that will be a trigger for action well as you'll be fully aware all I can say at this moment is that yes that is a potential scenario I cannot commit because we have not presented to Parliament the land reform legislation and this committee will of course have a role in scrutinising that legislation once it comes forward but at this stage what I can assure you is that these are potential scenarios that could be addressed by the proposed legislation I'm fully familiar with ministerial caution and I'm satisfied with the gleam in your eye at least, thank you Alec Ferguson and then Sarah Boyack Yeah just very briefly there will inevitably be scenarios of the sort of situations you've just been describing whereby a land manager or owner will have a different view of the way that land is being managed to the community and the community might well say this is inappropriate we wish to ministerial intervention so that we can take it over where the land owner or manager saying well it's perfectly reasonable what sort of arbitration process do you envisage in all this? Forgive me you'll have to wait for the draft bill to be presented to Parliament and that's a do you envisage an arbitration process that will be clarified later on? Well clearly any legislation will lay out the process and it is capable of being challenged therefore you're asking me to dream up hypothetical situations but what I'm saying is that of course there will be an ability to challenge because the legislation will have to lay out the grounds by which action can be taken and ultimately it's up for the courts to interpret that in due course so you'll have to wait for the legislation Thank you We are trying to tease out the direction of travel in terms of the policy intention because it does go back to the point that Andrew Finne made earlier about different ownership patterns and about a much higher proportion of tenanted farmers in other countries and it's just thinking through how that all joins up and as Mike Russell said which bit of legislation whether there's arbitration opportunities and coming back from the dairy farming discussions yesterday about issues about co-operation between farms and about producers having power so actually it's quite important in terms of what kind of farming and what policy approach be think is important for farming moving forward into the next 30, 40 years Well clearly I think that goes back to some of the comments perhaps I made to during my answer to Michael Russell's question about the vision for Scottish agriculture and Scotland is a country blessed with fantastic fertile land and it's the national interest we're using that land productively and in a fair way that treats the people working on the land with respect The land reform legislation is to ensure that our land works for the people and the people as I said before to operate in a fair and just environment So how our land is used is very central to the land reform legislation and indeed to this review and the recommendations we're discussing today it's important that our land is productive and that we have people who are able to work the land and access the land to work it If there are obstacles to that happening the obstacles in our view are therefore not in the public interest and that's why we have various measures that are being adopted through legislation in due course to give us the power to intervene or to empower the farmers or tenants Okay, I just want to ask you about this point the practicalities of tenancies and owner occupancy and I understand that the government's now proposing to conduct research into the differences in investment levels between owner occupied and tenanted holdings whether there are wider benefits of owner occupation Can you confirm that that's happening and when will we see some results from that? I mean, I don't have that information to hand in terms of the timescale but I'd be happy to come back to the committee on that there's various streams of work under way I'm quite right to highlight that but if you want an exact timescale I'd be happy to come back to the committee with it It'll be interesting in the context of the debate about the land reform bill in due course I think it's essential to understand what it takes to invest Thank you Letting vehicles for the 21st century Thank you, convener Yes, moving on to the proposals for letting vehicles as we move forward Cabinet Secretary has already stated earlier that assignations are designed to keep land in tenancies and Andrew Thun quite rightly talked about the huge demand for tentative land and the very limited supply of it and that there was also a need in all of this to create a balance to try to create more let land to satisfy that demand I'm also interested that I think twice at least members of the panel have referred to coming to the end of the proposed 35-year tenancies whereas my understanding is that the proposal is that the 35-year tenancies should be a minimum of 35-year tenancies not a maximum I suspect there might be more willingness for people to let land to look at that if it was a maximum actually rather than a minimum because I suspect that that length of term might be a deterrent for people to let land I'd be interested in panel members' views on that but can I just ask in that context I've always said that if we can get this right we will free up we will free up more land for the rented market and that has to be the aim surely if we are to have a truly reinvigorated tentative sector, something that we all want so can I just ask why you think that the proposals that you're putting forward will create that environment of bringing more land on to the market for rent I'm happy to come in but I think Andrew wants to answer the point right at the beginning of this review we identified and said very clearly this review is about confidence among tenants and confidence amongst landowners and everything in the review is about confidence so what you see set out in that report is an integrated package of measures all of which at the back a lot of detailed technical stuff but at the back is about building confidence on both sides and we believe that if implemented by and large of course there's detail but by and large as a package there's nothing in there that I think landowners is damaging to landowners confidence there's everything in there about fair rents about security of tenure we've dealt with the issue of right to buy and so on so it's not obvious to us that there's anything there that a landowner should say is undermining to confidence however tenants confidence is also enormously important because if tenants are not confident in the system they will campaign for change, rights to buy and all the rest which in turn undermines landowner confidence it's a circular process so there is a lot in there that is also about strengthening tenants confidence in the system confidence that they retire with dignity get their money out that they can they don't have to be succeeded by their son that sort of stuff so I think if you look at the whole thing in the round and actually I think we are hearing it actually from the stakeholder bodies while there are quibbles over detail most of the feedback is saying yes this package is okay this package will give us more confidence so I think the evidence is already out there I don't disagree with anything you've said except the confidence to let the confidence that 35-year leases and I accept that only in certain circumstances but I think you talk about quibbles around details I think that's one of the details that might that has the potential to undermine the confidence to let that land which we all want sorry I was going to make a point that at the moment it's a secure 1991 tenancy but there's also the full repairing lease sorry proposal which would also be for a minimum of 35 years and that's an option that would be an option available for people to choose why 35 years 25 years is the traditional meaning of a generation and that seems a reasonable and I just feel that that little difference okay you call it quibbling with details but I do feel and I get the impression talking to people that that length would actually give a little bit more confidence on that side of the partnership first of all dealing with the full repairing lease of 35 years what we felt was that that letting vehicle involves no obligations of any sort on the landlord in relation to fixed equipment and as a result the landlord can let that land where the tenant has the whole repairing obligation but also has to provide modern fixed equipment if that's necessary for the efficient running of the holding we say in balance that therefore the rent for that holding should be on a productive capacity basis which means that you look at the lack of fixed equipment provided by the landlord so there is fairness there we think but also in fairness to the tenant who is taking on a very badly equipped holding or even a holding which is not equipped at all there has to be a sufficient length of time which would allow them a decent return on their investment and our understanding at least is that that aspect of our recommendations is fairly widely accepted by industry and that landlords are not particularly hostile to that and can see the advantages of that our recommendations would allow landlords to let land for much shorter periods of time but they have slightly more onerous obligations with regard to providing fixed equipment of a suitable standard at least at the outset of the tenancy so what we think our proposal achieves is proportional fairness from both sides of the industry for that particular issue so that we have a very poor or non-existent fixed equipment where the landlord doesn't want to take any obligation again I absolutely understand everything you're saying but I merely just leave it with you as a thought that the needs if you really want to restore that confidence and bring that extra land onto the market I think we need to be talking about maybe a maximum of 35 years rather than a minimum of 35 years and I maybe just leave that with you as a thought I don't know if other members want to come in on this before we move on to SLDTs is there a question on the section but not on this issue convener well it's not part of our next thoughts it's something separate you're okay go on sorry convener I was just wondering if Andrew had wanted to come in on this the vast majority of new supply will come forward on an LDT at 10, 15, 20 years the vast majority there's some quite unhelpful communication I think there's some clarification needed here on the communication being chucked around in a moment about 35 years 35 years minimum only applies to conversion of secure tenancies and these really quite relatively unusual full repairing leases the vast majority of supply will not be anywhere near that and I think there's we've got a job to communicate that so Claudia yes convener it was in relation to limited partnership tenancies which obviously the committees looked at a lot and there may well be good reason but I was disappointed not to see unless I've missed it much about limited partnership tenancies in the review recommendations and it's an emotive word I'm going to use but I'm going to use the word the plight of those who are in this difficult situation at the moment really are through no fault of their own and that the STFA believes that it's essential to put some measure in place to afford these tenants greater protection before solutions can be found to give them a stable and secure future and one suggestion that the STFA makes is the possibility of granting a right to convert their tenancies to LDTs and I wondered if new cabinet secretary or other members of the panel had any comment on this or more broadly on the situation of limited partnership tenancies I'll make a couple of comments briefly and no colleagues will want to come in on this. My initial response was yes, it is a challenging issue and the committee or the review group did have a lot of conversations about limited partnerships I guess my answer would be twofold firstly, limited partnerships in the past perhaps have arisen out of consequences from other measures and therefore the review group's focus was on trying to get the other things right that perhaps in the past led to limited partnerships so trying to focus on the root issues secondly, limited partnerships are so variable and there are so many different circumstances out there to do with limited partnerships that if you were to pick one circumstance that created limited partnerships and then come up with recommendations that addressed all limited partnerships you could be intervening in many many good relationships that are out there where limited partnerships play a valid role so it's quite difficult to come up with simple recommendations that are a catch-all for all the different circumstances out there so it's just quite a complicated situation therefore the review group took the view that there are issues with limited partnerships and we need the industry to tease out those issues and perhaps come up with some solutions as opposed to being able to come up with solutions given what I've just said so that a lot of colleagues want to continue with that First of all, we very much very strongly agreed and thought very hard about this that the desirable outcome would be that these things are converted to LDPs there's absolutely no argument about that whatsoever there are two reasons why we decided not to recommend that that's made mandatory or compulsory for a statute one was, and again I come back to this point about the impact on confidence which in the land-owning community can impact on confidence in the land as I have and the second was that because most of these things are already very close to the end of their lives that it might well lead to a flurry of terminations and actually be counterproductive however there is a recommendation and I want to underline the recommendation which is that the industry moves fast to get in place code processes and so on to make it highly likely that the majority will be converted into LDPs as good reason for not doing so and I think that's an issue that the commissioner might then follow through on later and I know because we're helping them that the industry is working on a code right now it's already drafted I do appreciate thank you for that Andrew Thin but I also do appreciate having found it quite hard to grapple frankly with the different groups within the limited partnerships when we were looking at it in committee because of the complexities but I wouldn't want those often quite small numbers but of very vulnerable tenants to be left in a difficult situation and I'm not sure that I would agree with the cabinet secretary about the issue of simply because it wasn't it was a consequence of something that therefore one shouldn't be addressing it within the review I take on Bodger comments I think the point that I was trying to make was in terms of new limited partnerships from creating the future hopefully through the recommendations other vehicles will be more attractive Dave Thomson a supplementary yeah thank you convener it was just maybe to get a little bit more information on the thinking as to why 35 years was appropriate and not 50 or 90 on the conversion from 90 110 and 62 well my subplans of that again colleagues when is that 35 years was seen as a career in farming and therefore to make it attractive long term certainty stability conference 35 years is a career and you can have a career in agriculture and be a farmer for your working life so next year me 35 years you've been working I've not been minister for 35 years yet I'm only a third of the way so 35 years perhaps not in politics but for agriculture as seen as a sensible length of time for a career is more attractive but I don't have any other views on 35 year limits touching on earlier comments which I made which was that we envisage in the main the people who are bidding for the 35 year converted secure tendency will be people who are on the second rung of the tenanted farming ladder and are likely to be people in their mid to late 30s or perhaps early 40s that 35 year vehicle would be a suitable vehicle to take them through to retirement and give them a productive working life on the unit balancing all of the other interests which would be which were involved. If I may convene us with one very quick full up that would take them to the end of their working life but then they don't have anything of value to sell at the end of it because the tenancy will be nearly over so 2 or 3 years is not going to have much value whereas if it was a bit longer then they could retire at 60, 65 or 70 and still have something worth passing on to someone else selling to someone else but really any length of period has that ultimate problem Mr Thomson at some stage there will be a tenancy which is coming to an end and therefore doesn't have a value based on its duration at least but there will be a certain amount of value built up for example in the tenants investment which can be compensated at Wego. Right, we'll move on to new entrants I think. Oh sorry, I like Ferguson first of all another question on SLDT This is quite a brief one I think which is simply we've had a lot of evidence particularly from the agricultural sector to suggest strongly I mean Andrew Thin quite rightly has mentioned that most of the new lets will be 10, 15, 20 years and I absolutely accept that but we have been given evidence that there is a need for something between one and ten years particularly for some different forms of agricultural practice fruit growers and others but there is a need for something in between Is it the intention of the recommendations that SLDTs be abolished basically and what are your thoughts on something between one and ten years Well we are aware of some concerns expressed by the agricultural sector and the point I would make is that we don't have closed minds or clearly I don't have closed minds because now it's in the hands of the Government to take forward and implement the recommendations so I don't have a closed mind on this and I'm listening closely to the representations that have been made for the need not to scrap the shorter tenancies and if there is a requirement to maintain the five-year limited duration tenancies or whatever I'm chewing that over at the moment clearly what we have here is recommendations from a review group we have to translate that into legislation where appropriate they don't all require legislation so I'm hearing what people say and we're flexible on that Just to follow that up very briefly would you be minded to bring forward recommendations to have this in the legislation addressed or would you be more likely to be through amendment to the legislation I suspect that we should take a decision that quite soon so we can reflect it in the legislation Now we can move on to new entrants and reducing barriers to entry Sarah Boyack The last few minutes we have been talking about intergenerational issues but how people who are tenants might pass on to the next generation there's also proactively how we create new opportunities for a new generation of tenants on new land and the recommendations 36 and 37 in the report I just want to tease out them 36 is about publicly owned land whether it's forestry commission crown estate land or whether the Scottish Government itself might potentially buy new land that could be made available for tenants I think that's exciting so I'd like some comments on how you see that happening The second recommendation is about beginning of a dialogue with landowners of particularly large agriculture estates to talk to them about how they might create more opportunities for new entrants so I'm interested both in the public sector opportunities from existing public sector land, forestry commission crown estate or new land that you might buy or also could of course be community new land The other angle though is how you see the private sector bringing forward new opportunities for lettings Okay Well it's a subject close to my heart and I think it's important that the Government looks for cases to intervene on behalf of the public interest to ensure that we have new opportunities opened up for new entrants in Scotland and you'll be familiar with the fact that a few years ago I asked the forestry commission to look at using publicly owned land under their remit to create starter units and also recently we used the opportunity of Scottish Government own land to create a starter unit outside Inverness at Ball Roberts and I met the family there and the young children, the young family and it was very exciting to speak to them on Government owned land that's been creating the new starter units so we are using Government owned land forestry commission land to create starter units and I'm very very open to looking for further opportunities to use publicly owned land to have starter units for new entrants into agriculture in Scotland the recommendations we're discussing today will help but clearly we know there are still going to be obstacles in some shape or form to having opportunities for new entrants and therefore I am open to radical solutions and we are currently investigating further radical solutions and other ways in which we can use publicly owned land to create even more starter units I think we'll soon have 11 new starter units created in Scotland through publicly owned land but I clearly want to continue to investigate how we can increase that number dramatically in the times ahead in terms of private states and agricultural states I should say that ironically we have a lot of measures we're discussing today to open up new opportunities for new entrants but if we had the tax powers in this Parliament the need for a lot of this would perhaps not be as great as what it is just now because we could just use fiscal measures in the tax system to incentivise let land in Scotland so I think one of the easiest ways and most sensible ways to incentivise large estates and agricultural holdings to make more land available for letting is to use the tax system to put in incentives through the current constitutional arrangements and debate that may become possible who knows in the foreseeable future if not we may have to continue to make representations to the UK Government but I do think that tax powers and tax incentives are certainly a important way forward for encouraging the largest estates to make more land available for letting that's our next question minister can I just go back to the issue about how you identify new land to what extent are you doing work on a regional basis and the opportunity you've been able to bring about in Inverness are you asking public sector or private sector organisations to identify land and is there a regional aspect to this in terms of areas where we are particularly short of new tenant opportunities what we've found is that there are in some respects in a positive way a huge number of people in Scotland who wants to let land in new starter units and that is very encouraging and optimistic for the future agriculture but the negative side of that of course is unfortunately we can't find land for everyone that wants it in Scotland at the moment because the supply is not keeping up with demand so we do have to keep looking for more opportunities our agencies are actively looking for opportunities to let more land and the forestry commission have come forward with proposals relevant directors have come forward with proposals so they are proactively looking in terms of the regional approach the many young people who want to find a farm will go effectively anywhere in Scotland to farm so what we do find is the applicants for the starter units to become available are from all over Scotland so whether it's in Invernessshire or whether it's in another part of Scotland we find people from all over the country apply maybe that's a sign of the fact that there's such a severe lack but it's also a sign that people are very enthusiastic clearly it's a great opportunity to get a farm so they're willing to move to do that so we don't have a regional approach per se in terms of identifying regional shortages perhaps we should do and I'm not saying that's a bad idea it's certainly something I'll give thought to that's very helpful cabinet secretary and the recommendation 38 was about new financial support you've mentioned tax which is going to come next but there was also the issue about using incentives from larger established operators to redirect to new entrants I wonder if you'd say a little bit more about how you see that would work and what the impact would be on existing operators all I can say at this point in time is the recommendations there and we have to consider how to take it forward and believe there are big players out there in Scotland that can help and can do more and we have to have a better dialogue with them and ask them to be creative to open up opportunities for new entrants in terms of financial instruments again there is a belief that there's more that can be done to help it make the financial support available for new entrants clearly within the rural development programme but in terms of lending from banks or other vehicles there's perhaps more we can do there to have bespoke packages for new entrants in Scotland and that's something that we want to explore Thank you Hamish Lane talked in an earlier answer about tenants who were in the second rung of the ladder but getting from a new entrance holding to the second rung is something that I'd like to explore a little with you just now because are there barriers to entry into the second rung as there are barriers to entry into first-time holdings? I'm sure there are and clearly the recommendations are aimed at having a more fluid tenants sector in Scotland so that all farmers at all stages of their career have opportunities there because overall there's different letting vehicles and it's more attractive to let land so clearly that's the outcome we're seeking I don't know in your experience do you have any comments on the second rung? Essentially the principle barrier at second rung stage if you like is availability of supply of opportunity which of course is what we're trying to address Okay The recommendation on tenancy apprenticeships is entirely relevant here because the main barrier as a shortage of supply at times says the other barrier is capital if you can stage that transfer so you can stage the acquisition including working your way into it which does happen in other countries you can stage the requirement for the capital That's one of the most exciting recommendations in the reports and one that I'm very proud of is the fact that we are a bit innovative and if we can find opportunities for effectively apprenticeships in agriculture to have a staged transfer of tenancies over time that will be a really exciting innovative route for new entrants in agriculture Good, thanks I'm glad I asked that Any points in taxation Angus MacDonald has not been covered already? Yes, thanks, convener Picking up on the issue of tax incentives cabinet secretary clearly there's some examples of where there could be assistance with regard to for example, that exemption on letting land or the way that rent is treated as investment income rather than a trading income Have you or your officials had any discussions to date with the UK Government about changes to reserve taxis which could encourage the letting of land or is that an option for the future? Tax incentives and fiscal measures are very important tools for opening up new opportunities for letting land in Scotland It's the one thing that would make a material difference and very quickly and to be transformational If we got it right we'd have to be designed very carefully the specific fiscal measures If we affect the tax bills of larger state owners it's one incentive that would perhaps lead to more letting land in Scotland Unfortunately when I have raised this with UK ministers in the past I get the blanks there and I wish we could persuade UK ministers this is quite a big important priority in Scotland and we have made representations in the past we have a UK election in a few weeks and what I can say to the committee is that I'll be making again strong representations to the next set of UK ministers to persuade them that these measures would be really helpful to Scotland but not only that, it would be far easier of course if the powers were transferred to this Parliament and we could just do it ourselves Just before we bring in Jim Hume On this matter incentives yes underlying the availability of land is the fact that the saleable value is far in excess of the economic value of units and when you talk about encouraging landlords to lease land to tenants we'd need to try in the system not just to think about incentives but perhaps I heard a hint there about the tax bills of estates and so on I'd be interested to know if you have any further proposals about how we're going to get land values back in kilter with the actual economic value because at the present time it's ridiculously expensive for anyone getting on to any rung in the agricultural ladder at this time It is and to understand underlying factors behind land values in Scotland I think you'd need Albert Einstein to come and give us a helping hand because it's so unbelievably complicated and it is of course incredible that in some cases barren land in Scotland not doing anything is worth knowing about due to people not wanting to invest in perhaps less secure less tangible assets given the recent experience of the last few years of what's happened with the banks however we're not talking about ownership necessarily here we're talking about land that could be let and of course the land would still be owned by whoever owns it and therefore have been an income from letting it so what we have to do is find ways in which we can incentivise that because ironically we have on-going references during this discussion to the lack of availability of land there's actually plenty of land in Scotland it's just not being put on the market and therefore that's the key point here we have to address okay Jim thank you very much the UK budget as you will know has just announced that income tax for farming will be smoothed over five years rather than two years I just wonder if that was something you'd welcomed and something that you'd been pushing for with any of the ministers in UK yes we do welcome the fact that farmers have been afforded the opportunity under the recent budget to average their tax management over a five-year period which is particularly helpful to the dairy sector for instance given the volatility recently with dairy prices clearly that is the first measure we've seen in quite a while and it's a modest step forward for those farmers who will benefit from that but what we're speaking about here is actually getting some incentives into the system that will encourage the letting of land in Scotland Sarah Boyack just to follow up on that point your recommendation 41 was to look at the whole issue of non-domestic rates in advance of the 2017 revaluation and the suggestion by the land reform review group that you should be looking at land value taxation I was wondering if that's something you've had a discussion with the local government minister on because that's a fairly major piece of work that's being done as I understand it over the next year to look at scope to change or maybe think about local authority taxation well clearly I communicated the views of the review group on that and the commission that's been set up to look into local taxation will be considering those issues so they'll have the opportunity to do that and it will happen and of course no doubt your committee will want to pay close attention to that thank you that's fine are there any other points now that people wish to make if not thank you very much cabinet secretary we look forward to developing these matters and there's many more that flow from them it's been a most useful session and thank you to you and your supportive officials and the review group itself has been a very very big help I think after what seems to me to be a very long period of time in trying to reach this point where we might make a breakthrough I'll be slightly optimistic the glass is half full we'll see what happens next so thank you very much for that we have another item in public in a minute but we'll just clear the decks just now and have a very brief recess just now and that final item is item 4 before we go into private it's with regard to consideration of PE01490 or 0 by Patrick Krausa on behalf of the Scottish Crofting Federation on the control of wild geese numbers I refer members to the paper and I invite comments from members on the petition Mike Russell the issue is a declaration of interest in constituency but the goose issue is an example if you get to experience everything twice in life I experience it as minister and I now experience it as a member for a gallon butte with a very severe goose problem I just want convener to draw attention to two documents which I think are important the first is the Eilid goose strategy drawn up by the SNH amongst others and paragraph 1.5 this was last October paragraph 1.5 reads for two reasons 1. Damage by barnacle geese on Eila continuing at a level which causes serious agricultural damage on-going high levels of damage threaten the viability of farming on Eila which underpins economic and social viability as well as providing wider biodiversity benefits at the same time December 2014 shortly after that was issued there was a press release from the RSPB Stuart Housden is quoted as saying the evidence base in which the cull and there was no cull is proposed is fundamentally anagwet we fully acknowledge that grazing geese sometimes affect agricultural operations but past experience on Eila has shown that with barnacle goose numbers at their current level on the island less destructive means of managing these impacts are available the reality is over 10 years or more there has been an attempt to get a bridge between those two positions the bridge that's one position that says the increasing goose numbers or even the very high numbers that they're at now which seem moderately stable are entirely tolerable and create no difficulty and those who are actually on the ground who are running farms, who are running crafts and are seeing the damage that's taking place and the reality is that the damage remains considerable and whilst there is an attempt and I pay tribute to the Scottish Government for continued attempts to try and make sure that there is a reconciliation of these positions that have not been adequately reconciled and Patrick Currie is quite right to draw attention to the fact that there needs to be more substantial action to protect the livelihoods of those who are involved in the western isles in Orkney to some extent but certainly in the Argyll islands and now increasingly on the Argyll mainland where the number of barnacle geese continues to rise I very rarely hold constituency surgeries in Lismore or Campbellton or Kentire or Gia and increasingly even further into Argyll that I don't get people saying to me that the goose numbers are causing them considerable problems in the running of their farms or crafts I don't think that this is resolved I think it requires considerably more work and I think there also needs to be a recognition that the convention that governs this does give delegation to those farmers and crofters who find that their crops and livelihoods are being adversely affected and I think that the right attitude to this petition is to take the issue back to the Scottish Government and to press the Scottish Government to get the widest possible delegation for agriculture so that the existence of agriculture in fragile parts of Scotland is not actually put at risk by what is taking place Alec Ferguson and Sarah Boyack Can I again using a constituency theme here very much endorse what Mike Russell has just said I'm grateful that the communication problems that led to the Solway scheme not providing evidence to us, written evidence earlier was resolved and that they have been able to do so and indeed I'm grateful that the minister felt able to meet with them fairly recently both here in the Parliament and indeed she visited the Solway scheme on site. That scheme has been hugely successful it has doubled the number of Svalbad barnacle grease it's the only place in Scotland where they come to and it's a very important part of their life cycle but the fact is the problems that the farmers are facing is now exacerbated by the fact that the cap reforms are reducing the amount of support available to farmers in that part of Scotland and these guys, a lot of them are at the end of their tether and now threatening to come out of the scheme would be a disaster given the amount of funding, the amount of resources that's gone into it so successfully over the years and I very much endorse the position taken by Mike Russell though in regard to my constituents in the Solway scheme which is I think the second biggest after the Islay scheme I think. Sarah Boyack Thank you very much, convener. I had four brief points I wanted to make. First, I think it demonstrates the need for continued data gathering and analysis so that we can see what schemes are effective and which are value for money. Secondly, I think the point that was partly made by Mike Russell but certainly made in the response from Patrick Krauser which is about the balancing between food production and wildlife management and I think getting the analysis of the research is actually quite important to guide that investment for the future. Thirdly, you can definitely see investment in different geographical areas making a big difference and I think learning the lessons from that is quite important going forward. Fourthly, the point about goose meat opportunities I thought that was quite an interesting issue to pick up in the context of we're in the year of food and drink and just looking at the opportunities either for public procurement or for new market research so that where geese are actually called that there's something that comes from that that's a positive by-product and I think it would be good to go back to the ministers and raise the particular issues that colleagues have also mentioned. Thank you for that. We've got Angus MacDonald first then me and then Graham. Okay, thanks convener I certainly agree with Mike Russell's point and Sarah Boyack's that the issue is not yet addressed properly and does need further action. I think the submission from the Scottish Crofting Federation has raised a number of further points or existing points which still require clarification from the Scottish Government. For example there's still an issue in the use they haven't hit their targets so it has to be asked whether SNH is failing to deliver on this. Although on a plus point it's worth noting that the programme in Lewis, the end of Lewis is under way and the Government is allowing the sale of goose meat on Lewis and Harris as well so that's a plus but we're still not where we want to be and I think the Government need to clarify a number of points as pointed out by the Scottish Crofting Federation. I'd like to make a point about the US and in this very room last night we had a celebration of the 2015 UN international year of soils and the chief executive of the Scottish natural heritage Susan Davies pointed out that the two major issues they were tackling in this are one the peatland issues which we know much about but also the fragile mackers in USTS particularly and these issues have to come into play when we're talking about the way in which geese affect the fragile nature of those grasings and those lands in USTS so there's a very good reason why we need to take those into account and they haven't been taken into account in the Government's response at the present time. Graham? Thankfully I don't have a constituency interest in this regard unless it's a hugely important issue and I think the answers that we've received thus far from the Government by any reasonable judgement have not been as comprehensive as we were seeking I think that Patrick Krauser has used the words incomplete and inadequate I think that's a fair assessment so I think that as a parliamentary committee we should be pursuing both the lack of response to the specific questions that we've posed alongside the very important on the ground issues that we noted. That sums up in a way what we're needing to have done we need to go back to the Government I think at the present time and get those answers and if we're agreed then we should write to the Government on the basis of Patrick Krauser's arguments and back them up by saying that we'd like complete answers as soon as possible from the Government. Are we agreed? In that case we'll go into private after this at our next meeting 22 April we'll consider the Aquaculture and Fisheries Scotland Act 2007 fixed penalty notices order and I wish everybody great Easter recess so we'll now move into private.