 Good morning, everyone, and happy new year. Welcome to the first meeting of the Rural Affairs, Highlands and Natural Environment Committee in 2022. Before we begin, can I ask those committee members using electronic devices to turn them to silent? Our first item of business is to decide whether to take item 6 and 7 in private. Are members agreed? Please type N in the chat box. Do not agree, otherwise I presume that members are content. Agenda item 2 is the Scottish Government 2022-23 budget. We will consider its budget. This morning, I welcome to the meeting Mary Gougeon, the Cabinet Secretary for Rural Affairs and Islands, Carol Cowan, head of EU exit, Marine Scotland, Brie Donnelly, head of finance, James Muldoon, head of agricultural support policy development unit and Philip Reigns, interim deputy director for rural economy and communities directorate from the Scottish Government. I would like to ask the cabinet secretary to give us an opening statement. Thank you. Thank you very much, convener, and members. When I made my first appearance before the committee in September last year, I set out the priorities for the rural affairs and islands portfolio, so I am really pleased to come back today and to set out how we intend to fund and support these priorities in the coming year through the Scottish budget presented by the Cabinet Secretary for Finance and Economy in December to the Scottish Parliament. The budget is published one year after the first Covid vaccinations were rolled out and it comes at a really crucial juncture for Scotland. As the emergence of the new variants demonstrates, we have to remain vigilant in responding to current and emerging public health challenges and to work out how to manage those risks sustainably into the future. We also have to be mindful of the need to recover sustainably from the impacts of the pandemic and, particularly for rural and island communities and businesses, we have to do what we can to mitigate the impacts of Brexit. Despite all that and particularly being in the middle of a global pandemic, the UK Government has cut the funding that is available for the Scottish Government, and the UK spending review in October fell short of the Scottish Government's ambitious capital spending plans. That has constrained our ability to invest in the infrastructure required to support our economy and public services and to deliver the green jobs and technology required to reach net zero. The Cabinet Secretary for Finance and Economy has been really clear that this is a budget of choices and there are areas where she would have wanted to go further. However, in the face of those pressures, the Scottish Government is firmly committed to using the full resources at its disposal to make Scotland fairer and greener. One of my key priorities is to support rural industries and businesses during the pandemic and in the aftermath of the decision by the UK Government to leave the EU. Much-needed cash flow into our rural areas will come through my commitment to keep basic farm payments at the same level throughout this Parliament, with more than £630 million to be provided in on-going agricultural support in 2022-23. We are also maintaining support where £65 million into our most fragile and marginalised areas. Rural businesses and especially those who are involved in exporting food to the EU are still absorbing the extra cost and barriers created by the laws of freedom of movement and free trade with our biggest export region. We are continuing to support a world-class food and drink sector in its recovery and supporting it to thrive and flourish into the future. This investment in Scotland's rural businesses and communities provides them with a secure foundation to create growth, prosperity and opportunity, and I want to help them to do that. That project provides funding to help to build that future. As part of that, we are investing more than £8 million in the coming year in Scotland's islands, and that includes funding to create the first-ever island bonds and the first-ever carbon neutral islands to support the population retention and growth and to create innovation and energy hubs. When I was at committee in September, I spoke about the immense potential that rural and island businesses in Scotland have and the vital role that they have in achieving net zero and enhancing biodiversity. Transforming our agriculture and marine sectors will be key in securing all of our futures. We are investing £25 million to start work on transforming farming and food production in Scotland to be world-leading in sustainable and regenerative agriculture. We are also delivering a new round of agri-environment investment as part of an overall budget of £36 million to support biodiversity, and the new AICS application round will open later this month. In addition to that, I have also made a commitment to future rounds until 2024. That is essential while we explore other ways in which farmers can be supported to deliver a nature-rich Scotland. Alongside that, to protect and enhance our marine environment and increase offshore renewable energy generation, we are increasing marine resources by almost £10 million. Allocating funding between those different priorities is difficult, but I believe that the balance that we have achieved for the coming financial year is a proportionate one. Particularly as we approach our multi-year resource spending review in the spring, we will be fully supporting Scotland's rural economy and our people during these really difficult times. At the same time, we will provide funding that will enable rural businesses and people to continue to build towards a sustainable future, helping them and Scotland to become fairer and greener. Thank you, convener, and to the committee members. I look forward to our discussion this morning. Thank you very much, cabinet secretary. I will kick off some questions before moving to other members. Can you tell me whether there are still areas of on-going uncertainty? Given that the other parts of the UK have further advanced their future policies on agriculture and rural support, Scotland is some way behind in that. What are the implications of that uncertainty? Whether the rural affairs and islands committee budget is expected to change over the course of this Parliament, and whether there are any implications for the portfolio, for the medium-term financial strategy and the resource spending review? Thank you for those questions. I would not agree with the assertion that we are lagging behind the rest of the UK. I think that a part of our process in developing future policy is the work that is being taken forward through the agriculture reform implementation and oversight board and taking that co-development approach with the very people that the policies are going to impact. That is why we have established the national test programme, which no doubt will come on to discuss later. It is an important and vital approach that we have taken when we look to develop the future programmes for support that we work with our stakeholders in doing that, but that is also why we committed—and the previous cabinet secretary for the rural economy committed—to a period of stability and simplicity to exactly try to do that and provide some stability for the sector while we go through this period of transition, which has been absolutely critical here, too. In relation to your questions about the further impacts or, as we look at the resource spending review, the review in the medium-term financial strategy that we are going to build on last year's five-year capital spending review. Those will all come together to give a really comprehensive picture of Scotland's public spending multi-year plans. As you will be aware, the UK Government's three-year spending review took place at the end of October last year, but what that tells us overall is that the block grant is less than the current aggregate for 2021 and 2022. That is why I said in my opening statement that the budget that we are producing this year has really been about those hard choices. The cabinet secretary for finance has been really clear about that, too. As I have already said, even though we face those hard choices, the budget that I am producing for this portfolio supports our agricultural fisheries and rural populations across Scotland to recover from the twin crises that we are facing, as well as help them to start their journey towards transformation for the future. It is not possible for me at this moment in time to pre-empt what the resource spending review process and what the outcome of that is going to be, because it is obviously a Government-wide exercise and it is currently out for consultation at the moment. I would come back to what I stated in terms of the Government's priorities. We have three key priority areas that have been outlined by the cabinet secretary for finance. That is to support progress towards meeting our child poverty targets, addressing the challenges that we face in relation to climate change and to secure a stronger, fairer, greener economy. In order for us to do that, I have already committed to continuing the pillar 1 direct payments and not to lower that basic payment scheme rate throughout the term of this Parliament. In terms of the pillar 2 payments, that includes reopening the eighth round in 2022 and further committing to developing future rounds of that up to and including 2024. I have already mentioned the national test programme, so we really have worked hard to work towards those key priority areas that have been identified right across Government. I feel that the budget that I have put forward and what I am proposing for the portfolio goes a long way to achieving that. On the outcomes that you are looking forward to when it is clearer about which policies will be put in place for rural and agricultural support in the future, do you expect the budget requirements for that vision to go up or go down in the future? As I have said, I have already committed to maintaining the current level of payments. It is really important that when we are going through such a huge period of change and there are so many uncertainties for people to be able to give that commitment about maintaining the same level of payments, that is absolutely critical. Again, that is something that I have already committed to in relation to the pillar 1 payments and also trying to give that certainty in future clarity when it comes to future rounds of aches as well. When it comes to further rural development, you will see the commitments that we have in the budget to increase the budget in some of those areas. When it comes to previous EU schemes, when you look at the leader programme, which has been absolutely vital for our rural areas, we have had to supplement that with our own domestic funding to ensure that we are still investing in our rural communities. That is a commitment that we have made that we will be trying and continuing to invest in those areas for our rural economy. I want to ask a general question. You have commented on the fact that there have been hard choices to make within the budget round. When you are creating budget, budget headings do not remain constant and there needs to be some flexibility to ensure that the budget is allocated to appropriate areas. Will the cabinet secretary please outline some of the changes that she has made to ensure that rural and island Scotland have fair allocations to meet the challenges of EU exit and recover from Covid, as well as continuing to develop our rural and island economies? It is an important question that has been raised by the member. As the cabinet secretary for finance said, we have faced difficult choices right across government in relation to the budget settlement that we have. That is where we have taken a lot of careful work to identify the key priority areas and looking at the areas where we need to invest, where we need to protect, but that always includes difficult choices throughout that. I mentioned one of my previous responses. For example, when we look at the leader programme and we have invested over the course of the last year to introduce a test of change programme for that programme, we look to invest with our own domestic funds in relation to that programme as well, because that funding has been absolutely vital for our rural communities and the sheer diversity of the projects that is being able to fund. I believe that the overall funding amount for that was £3 million over the course of the last year. As I said, there has been an increase in that budget for this year as well. We have also seen an increase in the budget for Marine Scotland in the region of around £10 million. Again, we have identified the work that needs to go on there in protecting and enhancing our marine environment. When we look to offshore renewables as well and the extra resource that we need to be able to put in place to deliver on the ambitious commitments that we have set out in the programme for government as well, there are a number of different areas where we have looked at the spend, where we have either increased the resource or taken learning and re-adjusted spend or re-profiled that over the coming years. When you look at the islands, for example, there is over £8 million of funding, as I mentioned in my opening statement there, that we are looking to invest in, which is going to be critical for our island communities. However, there are also areas of spend that impact on rural areas and our island communities that do not necessarily fall within the remit of the budget, which will continue to be very important. Thank you, cabinet secretary. That leads on to my next question, in that Covid and EU exits cut across all portfolios. Are there other budget allocations and other portfolios that rural areas might benefit from? In your introduction, you talked about the decrease of the funding settlement from the UK Government. I would like to drill down a bit more on that and ask what difficult decisions you have had to make as a result of that, if possible, cabinet secretary. Thank you. As I have just said, there are a number of areas across Government that spend in other portfolios that will impact on rural areas. An example of that is when you look at the spend and the support for the enterprise agencies, particularly the South of Scotland Enterprise and Highlands and Islands Enterprise. The investment in those agencies is at the highest level since 2010 and 2011. There is also the funding for Visit Scotland. The funding for the three enterprise agencies and Visit Scotland, for example, is something that has been protected. Obviously, that will be vital because the enterprise agencies deliver advice and support and target funding opportunities across the areas that help small businesses to grow and develop, create jobs and ultimately sustain in our rural communities. Alongside the support in some of our more traditional rural businesses based on food and drink tourism in creative industries, they are also promoting the growth of new and innovative rural growth industries, such as renewable energy and space. They also have a critical role in helping us to reach our net zero ambitions. There are also significant contributions from other areas and national programmes, for example, at the green jobs fund. Given the importance that the growth in the environmental-related sectors will have in those areas, there is also the five-year place-based investment programme. Even though that is not directly within the portfolio, rural communities can be expected to benefit from that support. You also touched on the point about the decrease in funding from the UK Government and where that has had an impact. You can see that, especially when we look to the replacement of EU funds, we were promised that those would be replaced in full, but that has not transpired. The European Maritime and Fisheries Fund is an example that I have used previously, where we have just over £40 million identified for that fund, but our entitlement to that should have been in the region of £62 million. We are also expecting a shortfall of around £95 million in funding for agriculture up to 2025. Of course, if we had what we were promised and the full investment of those funds, that would enable us to go further in terms of what we are proposing. Thank you, cabinet secretary. Thank you, convener. We move on to Alasdair Allan. Following on from Jenny Minters' question, you mentioned the Scottish Government's commitment to maintaining payments and some of the difficulties that she will say about the UK's commitment at the other end of the balance sheet. Although that is a question that I am sure we will want to put to the UK minister in this committee at some stage 2, have the UK Government explained the position on that to the Scottish Government? What have you said to them? What kind of communication channels have you tried to set up to explain the Scottish Government's position to them? Well, we obviously try to engage with the UK Government on these matters as much in work as closely with them as possible, but despite assurances that we would have discussions about future allocations of funding, those have yet to transpire. We have regular monthly meetings with the devolved Administrations and the UK Government, where we discuss a number of items of mutual interest across the areas of agriculture, marine and various other sectors. In spite of that, any meaningful discussions that we were assured would take place are still yet to happen, but we make those representations repeatedly to the UK Government and we continue to do so. Thank you, and I supplement from Jim Fairlie. Thank you very much, convener. I would like to ask the cabinet secretary very quickly that the spice papers that we have been given show a 2.6 decrease in real terms due to inflationary pressures. Is there anything that the Scottish Government can do about that, given the fact that you have a decreased budget coming from Westminster? Is there any way that the Scottish Government can mitigate that 2.6 decrease in real terms? Well, that is the thing again, coming back to some of the points that I raised previously in relation to the replacement funding for marine. When we look at agriculture as well, we are facing a funding shortfall in the EU replacement funding. Again, that is what we had been promised so that we would see those funds replaced in full. As yet, that is yet to transpire. Again, we have the £14 million allocation for our marine industries. When we should be expecting to receive somewhere in the region of £62 million, and again the £95 million shortfall in agriculture spend as well. Obviously, if we had those funds available to us, that is targeted spend that would really help those industries and help us towards the transition to net zero and enhancing our work towards that we are undertaking in relation to climate change and enhancing biodiversity to help us to achieve all of those aims. Again, those are representations that we continue to make to the UK Government to ensure that they uphold their obligations and the promises that they made to replace those funds in full. Have you actually had engagement with the UK Government as to the inflationary pressures that your budget will face, given the fact that that inflation has been a relatively new thing, but it is rising exponentially? Have you had negotiations with them about that shortfall? The interaction that I have had with my counterparts in the UK Government has related to the shortfalls in the funding that we have faced in relation to agriculture and marine as well. In relation to the specific points on inflation, I would have to check back and see if that is a point that has been raised specifically, but I would be happy to come back and confirm that with the committee either way unless officials have that information. I move on to questions from Karen Adam. Good morning to the panel and to Cabinet Secretary. I would like to ask—we have seen that there is an increased budget allocation of 10 million for Marine Scotland. I wonder whether you could talk a bit about what that is intended to support and what assessment the Scottish Government has made of additional Marine Scotland operational costs associated with the EU exit? It has been vital that we have made that extra investment for Marine Scotland, because, since leaving the EU, there have been nearly 500 new obligations that relate to the marine environment that was previously undertaken by the EU commission member states, which might be transferred to the Scottish ministers. There are also 86 new powers, so, of course, that would mean that we need more resource and focus on managing all that. We also have ambitious targets in relation to what we want to achieve in the marine environment. There is the House agreement with the Green Party, where we have committed to establishing highly-detected marine areas and implementing management measures for our marine-detected areas, priority marine features. With all the commitments that we have made in relation to enhancing conservation and enhancing our marine environment, it is vital that we have the resource to put into that and to support that work. I have also touched previously in another response about offshore renewables and the work that needs to be done in relation to that. When you look at all those commitments and the transition that we need to make in some of those areas, it is vital that we have the resource in place to enable us to support that and to deliver on the commitments that we have set out as well. That is what that £10 million will enable Marine Scotland to do. Can I also ask the cabinet secretary that you touched upon the EMFF funding earlier with that current situation with the replacement funding. What is happening with that at the moment, especially with the UK seafood fund? What can you tell us about that? There has been quite a source of frustration for us in the Scottish Government. Obviously, we welcome any additional funding, but some of the key issues with the £100 million that is being allocated through the UK seafood fund is that it duplicates funds that we already have. We have the Marine Fund Scotland, which is in place to replace the previous EMFF fund. Some of what we have been funding through that, the £100 million fund from the UK Government, looks to duplicate and replicate. Ultimately, it is an area of direct spend of what is a devolved area. Given that we have our own priorities, we work closely with our stakeholders and with industry in Scotland, we think that that results into the devolved administrations so that we can best determine the priorities and how to spend those funds. However, unfortunately, the UK Government has decided to progress with that anyway. I have a supplementary question on that from Mercedes. I cannot hear you, Mercedes. I am afraid that we cannot hear you. What will we do? We will try to sort out that technical problem and move on to another question from Ariane Burgess. Thank you, convener. Thank you, convener. I was waiting for the tech to switch over there. Good morning, cabinet secretary, and thanks for your responses so far. I just wanted to pick up on—you mentioned this UK Government million pound UK seafood fund. What I understand is that funding is going to be allocated across the UK on a competitive basis. Could you just expand on that a little bit? I am just aware that competitive basis funding can be challenging. We talk about things like postcode lottery and that kind of thing. I would love to hear your thoughts on the impact that that funding, while it sounds like a good idea, is on Scotland. You have started to touch on that a bit, but I would love to hear a bit more of that. No problem. You welcome any additional funding that comes to Scotland, but the main problems are the expending in a devolved area. We have our own set of priorities here. Those are priorities that are set by the UK Government in determining how to spend the £100 million fund in which we in Scotland have had no say, even though it will affect the industries and sectors that are really critical to us. We have had very little involvement in terms of how the design of that fund has been developed or our let-alone input into how that should be spent. The concern is that, especially for our industries and stakeholders who would have an interest in the fund, there is the duplication of the marine fund in Scotland and what we are already trying to do here. I think that that causes confusion for people. Again, because this is a devolved area, we would expect and would have hoped that that funding should have been given to the Scottish Government directly because we are the ones that are best placed to determine how that should be spent on our industry in Scotland. I am going to pull back a little bit and shift to the area of business development. From the spice papers, we have learned that there is increased capital in budget that will support business viability and competitiveness, as well as creating and safeguarding employment in rural areas. I would love to hear from you what areas you want to see develop in rural and coastal communities. What kinds of business development would you be looking for? I can understand that sometimes the titles that we have in the budget do not quite do justice to what is involved there. However, that is a really critical part of the budget and, as you have outlined, it supports business viability, competitiveness and ensuring that we safeguard employment in rural areas. However, that budget includes a number of really important funds that we have. For example, it includes the farm advisory service, the knowledge transfer and innovation fund, the food processing, marketing and co-operation grant, as well as the crofting agricultural grant scheme and the small farms grant scheme. The budget is really helping to support and ensure that flexibility around transformation, as well as providing direct increases for a lot of those schemes, which will be really critical to us as we go through the journey of transformation across agriculture, farming and crofting. There is also a provision for financial transactions in that, which supports us in paying farmers, crofters and land managers quickly and in early too. Under that business development heading, there is quite a lot within that. Again, a lot of those funds are vital for the transformation programme that will be undertaken. I would just like to come in with a quick supplementary on that. You have listed all those really great programmes. It is good to hear that some things that were in place are continuing as well. I wonder if you could take a moment to underscore what you think are business development and support that really helps us in the just transition. In your opening remarks, you talked about the twin emergencies. Where can people go who really want to start taking action around climate and nature emergencies? Business development is going to be critical for that, so it would be great to hear your thoughts on where people should head if they want to start taking action in those areas. You are absolutely right. That is why the business development element is so important. If I just look at, for example, some of the funds that I listed there, the farm advisory service has been critical in offering advice and support to farmers. That service will continue to be important as we are looking to develop future policy and embark on the transformation programme, because we have to have that source of advice and support and be able to provide that for farmers and crofters as we are going through this big period of change. There is also the knowledge transfer and innovation fund. That has been really important in helping to encourage innovation in agriculture. Again, that is all going to be really important given the climate emergency and the crises that we face with biodiversity. Of course, there is so much good work that is going on already, but what those funds enable us to do is to kick-start specific projects, to tease them out, to look at things that might work or that could potentially go on to be done at scale. Enabling that kind of innovation and ensuring that we have that knowledge transfer is going to be absolutely critical as we go through it. That is certainly something that we have heard from stakeholders as well. Thank you very much for that. It is great to hear. Thank you. We will try to bring Mercedes back in. Thank you, convener. Is that working now? Can you hear me? Yes, go for it. Perfect. Good morning, cabinet secretary. I have three questions. The first one is about the overall budget allocations to different areas. As far as I can tell, there is quite a big disparity between agriculture and agriculture. It looks as though there is something like 36 million on agri-environmental measures alone versus 20 million fisheries as a whole. I wonder if you could tell us a bit about the sort of thinking behind that. Absolutely. In relation to the agri-environment climate scheme, so the budget that you see set out there, the £36 million, that is actually our financial commitment for the previous round of that scheme. Essentially what we see with the AIC scheme is that people enter contracts for five years. We also ran a limited round over the course of 2021 and just extended contracts in 2020. The amount that we see set out for AICs is what has been the commitment that we have already made in funding those projects. It is not possible for me to say, for example, to prejudge what the 22 round that we opened for AICs and what the spend on that will be next year. That is why there can be variations in what that budget looks like. I hope that that helps to explain that in some ways. Thank you very much for going into that. My next question is about the Marine Scotland budget. It looks as though that has grown by around 45 per cent since the last budget last year, but we are seeing some important policies such as the NPA network, which was due in 2015, ensuring good environmental status and ending wasteful practices such as discarding. Those policies, the targets, have been missed or pushed back. Has the additional funding that Marine Scotland has been getting in previous budgets been appropriately spent? Of course, I would say that the funding that we have had has been appropriately spent, but a lot has changed within the course of even just this past year. We have had the climate emergency and biodiversity emergency. We have faced similar challenges in the marine environment, which is what we face on land. As I previously outlined, the extra £10 million in resource will really help Marine Scotland to face up to some of those challenges. As well as I talked about the drive for offshore renewables, we need to make sure that we are enabling that work, whether that is in planning and consenting. We have the resources there to be able to scale that up. We have also had the house agreement with the Scottish Green Party, where we have had a look at our priorities, re-prioritise some areas and put in some ambitious commitments in there. That is where the extra investment in Marine Scotland is so important. Thank you. Ambitious commitments are definitely important, but most important is that they are met and delivered. I hope that we have that to look forward to. I also had a final question about the marine fund Scotland, which I believe is £14.5 million. We are seeing around the world in the wake of COP environment sustainability is important. It is something that campaigners and citizens across the world are calling to be prioritised. We are seeing funds targeted at things such as getting larger trawling boats to be more energy efficient or to have more efficient nets, rather than looking at things such as moving away from unsustainable practices such as dredging and trawling. I was wondering, with the £14.5 million for the Marine Scotland fund, are there any conditions attached to that to ensure the drive to more sustainable measures being used in fishing? What we try to do with the marine funds and any funds that we have is ensure that they align with the priorities that we have set out. We have the future fisheries management strategy as well, the priorities within that. Again, a lot has changed over the course of the past year, so that was the first year of the marine fund Scotland. What we would be looking to do is evaluate that programme and look at how that funding was spent and achieved as a result of that. We obviously want to make sure that, when we are developing the strategies for the funds that they meet the ambitious priorities and commitments that we have set out as a Government, they look to achieve that. Thank you very much. Obviously, I just want to say that if the committee would appreciate further information on the projects that have been awarded so far through the Marine Fund Scotland and the criteria that has been used for that, then I would be happy to send that on. Thank you. No further questions from me for now. Back to you, Gunwena. Thank you, Mercedes-Benz, and then we move on to Beatrice Wishaw. Thank you, convener, and good morning, Cabinet Secretary. You will not be surprised by my questions around islands issues. I wonder whether looking at the budget for highlands and islands enterprise looks as though it has had a reduction where the South of Scotland Enterprise Agency and Scottish Enterprise have had an increase. I think that we can all agree that business development is so important in order to support rural and island areas. I wonder if you could explain the reduction in the HIE's budget. As I said in one of my previous responses, the overall funding for the three enterprise agencies is at the highest level since 2010. In relation to highlands and islands enterprise, the spending power that they have over the coming financial year has not been reduced. The budget has been protected as far as possible because, as you have said, the enterprise agencies have a critical role in supporting economic recovery right across the different parts of Scotland. It was based on the agency's forecast of their needs. It was the non-cash allocation that was reduced. I am sure that Shiree might be able to come in with more information in relation to the non-cash allocations and what exactly that means. However, the non-cash budgets are utilised for the accounting charges such as depreciation of assets and the needs that are set based on accounting standards. The reduction in HIE's non-cash allocation does not have an effect on the ability to continue the work that it is doing in improving business and community resilience and really protecting and creating jobs. Again, I am sure that Shiree might be able to offer more information on that. Yes. As the cabinet secretary said, it covers accounting items such as depreciation and impairments. The reduction is simply for presentational purposes. It is a separate and distinct budget category that does not impact the spend that is available for rural communities. It is just to reflect as accounting for depreciation through our books. Has the spending available to businesses been the same as it has been in previous years? The non-cash reduction does not impact on the spend that is available to businesses. I think that what I am trying to get to is has HIE, if it is the same as last year, and other enterprise agencies have seen an increase. I am just trying to establish what the difference is between HIE and HIE. For HIE, the budget is marginally the same between financial years and the funding available for businesses. I have a second question about island bonds. We note from the spice papers that £300,000 has been allocated for island bonds for this next year, £2223, which could potentially benefit six households if we are looking at £50,000 each. Do you think that that is a sufficient fund to support island depopulation? I can give you an example of a constituent who has been looking to try to build a house that is quite a modest house in one of the outer islands. Given the high cost of getting materials to Shetland and then onwards to one of the islands, there is a cost of around £350,000 to build a modest house, but at the end of that, it might only be valued at around £160,000. I wonder how you see the island bond helping somebody in that situation. I completely understand the points that you have raised. I heard that directly when I visited Shetland in the summer about the increased costs that people face for construction costs and various issues like that. I would say that island bonds have never been seen as a blunt tool that is going to fix all those problems. I know that I have had questions in chamber about the island bond. It is just one strand of work that we are looking at to try to stem depopulation and to support our populations in fragile communities. When we look at that work in the round, that involves so many other areas in ensuring that we tackle some of the other issues that can lead to depopulation. It is just one element that we feel can help to retain populations in fragile areas, as well as depopulated areas. However, what I have been keen to do throughout all that is to ensure that, as we have been looking to develop the bond, we undertake as much engagement as we possibly can to make sure that, if we are implementing that measure, we do it right and that we do it in a way that is going to work. I think that there has been a lot of misconceptions about what the bond will do and what it will look like. That is why that engagement is so important. Officials have undertaken extensive engagement so far, and that engagement is going to continue. That has led to us proposing the funding that we have in the budget this year. Of course, when you break it down, it looks like it may only help a specific number of households. However, it is based on the engagement that we have had that we are reflecting on the feedback that we have received. As you can imagine, there have been lots of different opinions as to how that might work, how it might look or different ways it might work. It is important that we listen to that, and that is exactly what we have tried to do. Essentially, what that funding will allow us to do is test some of the different approaches to the delivery of the bond at a scale that will enable us to measure and understand the challenges and the opportunities that are associated with the policy. The learning from that will allow us to develop a more effective and meaningful intervention for future years. The commitment still remains with the funding for the island's bond, but it has been developed in this way purely based on the listening and the learning that we have done along the way. Of course, that engagement is going to continue. I would like to ask a question that relates to the additional pressures that we see rural fishing communities facing with change in climate and additional pressures across the board from looking at protecting marine environment and so on. What consideration did you make to, on the back of a report from last year's eclair, that suggests that inshore fisheries groups should be funded? What consideration did you give in your budget to funding inshore fishery groups? In relation to funding inshore fisheries groups, I would have to ask Carol for the specific information on that. Sorry, I hadn't thought that my microphone had come on. I'm afraid that I don't have the exact detail, so I think that it might be best if we write to the committee with further information on that, if that's okay. Okay, that's fine. I appreciate that. A question from Ariana Buntris. Thank you, convener. Yes, cabinet secretary. I just wanted to come back in on if you could let the committee know that we've got this good food nation bill that is going to and a local food strategy is going to start coming through. If we will need any more additional funding for the food sector area to be able to deliver on that bill? Currently, from what we're expecting in relation to the spend, we've set out some of the costs associated with that in the financial memorandum that accompanied the bill, but the main costs are administrative. In relation to the consultation, the publication of the good food nation plans as well. Initially, we had estimated that, for the first yearly cost, for example, someone in the region of around £30,000, it would decrease after that for subsequent years. We don't expect the costs associated with that to be a huge burden, but that's set out in the financial memorandum that accompanies the bill. Thank you. Oh, thanks. We're going to move on to further questions on islands and I'll go to Alasdair Allan. Thank you very much, convener. If I may begin, before looking specifically at the islands, if I can think of highlands and islands here a little and think of the Croft and Commission of American, convener. Looking at the budget, the budget around the Croft and Commission seems to be up. I wonder if, minister, you could say a bit more about what the plans are as to how to spend that. I mean, you'll be more than aware of some of the frustrations that have been around delays and so forth with dealing with the Croft and Commission, which, at the moment, is not a criticism of their staff. I wonder if you could say a bit more about what the plans are as to how to use the budget around the Croft and Commission in new ways this year? Yeah, I'd be happy to. I mean, as you've highlighted, there is an increase in the budget that's there. Obviously, there's been the section 22 report on the Croft and Commission, which, and as a result of that, there's been a programme of work under way to make the necessary improvements, and there have been various pieces of work that the Croft and Commission has undertaken. In relation to some of that, for example, there was one of the recommendations within that was to undertake a workforce review, which we're considering the implications of, and to really look at what needs the Croft and Commission has to carry out its functions and to enable it to deal with the backlog of cases that have been emerging as well. That's where we feel it's important that there is this increase in funding to enable some of those changes to take place and to ensure that the Croft and Commission has the necessary resources to enable it to carry out its functions and to ensure that it's dealing with cases as effectively as it comes. Excellent. Welcome to hear what you say there about recognising that the backlog that has been in many of the ways in which Crofters interact with the Commission. Is it an opportunity for the Commission to do things in a different way in the future? I mean, what I'm thinking of here, for instance, is the fact that part of the Commission's function is to tackle derelict or essentially all but abandoned Crofts, as well as what one might hope in the future to deal with the growing problem of speculation in Crofts. It is the review of the staff and the review of the budget, and it is an opportunity to do some of those things differently in the future. Yeah, I think that you're absolutely right. I think that it will enable that to happen, because I think that it will help to provide that necessary resource and provide the resources to be able to deal with the backlog, which should enable the Commission to look at some of the other issues that you've talked about as well. To tackle vacant and derelict Crofts, to try to attract more new entrants and implement the development plan for crofting. Of course, that is something that will continue to monitor closely. I have regular engagement with the Crofting Commission, the convener and the chief executive as well to discuss any on-going issues, to look at the improvement plan and to ensure that those improvements are being made. I think that that is why the extra resource is so important, because it will enable that work to happen and to take place. Before I talk about some of the issues around funding of island areas in the budget again, maybe relating to both islands and in some ways perhaps relating to crofting. I know that you're very aware of the housing problems that there are on the islands, and I know that you're not the housing minister. I know that you've spoken about that before. However, where in the Government's thinking does the rural housing crisis come into the work that you're doing as well? You're absolutely right. Housing is a critical issue. It's an issue that I do hear about a lot, and that is continually raised with me. I talked when I was responding to Beatrice Wishart there in speaking about the island's bonds and how that can't be seen as a blunt instrument that's automatically going to solve all the problems that are experienced on islands, because so many of those other issues are vitally important to housing and wider connectivity. I have regular engagement through the island strategic group, where we discuss those items, and we also have regular engagement with colleagues across Government. Shona Robison, for example, the Cabinet Secretary for Social Justice and Housing, attended the last strategic meeting that we had to discuss the Government's plans for housing. Again, that's another area where, even though the spend doesn't necessarily fall within the portfolio, there will be an action plan for rural and island housing being developed and coming forward, which will look to tackle and address some of those critical problems. It's something that is raised repeatedly, but it's something that we are committed to tackling. On some of the things in the budget headings, you have talked about backloading some of the things in the island programme. Can you explain some of the reasons for that and what that means? Yes, absolutely. When you look at the spending that we have had for the island's programme this year, we decided to separate that out into three separate strands of funding. We had the islands infrastructure fund, the communities fund and the healthy islands fund, which the projects from that were announced last week. We had committed to spending £30 million up to 2025 over the course of a five-year period. I just want to emphasise that we still have that same commitment and we are committed to spending that £30 million over the course of the next five years. However, what we are proposing here is a reprofiling of that spend. Essentially, what that will enable us to do by putting forward the amount that we have put forward this year enables us to work on some of the longer-term infrastructure projects and enable us to take that forward in a slightly longer timeframe. We are not constrained, in a sense, by the budgetary years. All that essentially means that, while there is a £4 million allocation for that this year, there will be an increase in spend as we move through further financial years. Thank you, convener. I want to specifically ask about the progress on the carbon neutral islands. Budget Scotland has allocated £3 million to that and the plan is for at least three carbon neutral islands by 2040. That, as you know, was supporting the Scottish Government's aim to demonstrate the low-carbon potential of Scotland's islands as hubs of innovation. I wonder whether you could let the committee know how you were progressing with that. Yes, absolutely. I know that our initial commitment had been to progress three islands as part of that project and as part of the carbon neutral islands project, but we have extended that to six now. We have developed the internal and external working groups to look at the criteria that will inform the selection of islands that will be part of that project. We are also making sure that we are working right across Government with existing policy and funding approaches to ensure that we are not duplicating other areas. We have also recently commissioned a mapping exercise that will contribute to the knowledge of carbon accounting and emissions reductions on islands to ensure that we are avoiding duplication when we begin the implementation phase of the project. By summer this year, we are aiming to publish a report that will set out the steps that we will take to support the six islands to move towards carbon neutrality. The £3 million that we have identified as part of the budget is going to support the implementation of that over the course of the coming financial year. However, as with the islands bonds, we want to make sure that we are engaging and consulting as we progress with those plans, because that is going to be critical as we move forward. Just before we move away from the islands, what contingency funding is available to you to address any issues that might come up as a result of policies and other portfolios to ensure island proofing? I am not sure if I understand the question. We want to make sure that it is an obligation to ensure that we, as we are introducing new policy, carry out island community impact assessments as part of that, so that that should be built into the process across Government as we are looking at any other particular areas. I do not know that answer to your question. I suppose that our portfolio addresses issues around rural disadvantage. If there are policies created in the health portfolio, for example, or transport portfolio, which has a detrimental effect on the islands, we have a rural proofing rule. If there is a detrimental island, do you have any contingency budgets to address those disadvantages? There is not a specific contingency budget identified, because I think that the whole aim of the legislation that we have is to prevent us from reaching that stage when it is making sure that that is built into policy and decision making. The island community impact assessments are required to assess and take into account the impacts of our policy strategies and services on islands communities. That is the work that our officials do every day to ensure that the needs of island communities are fully considered as part of any existing policies that we have and any policies that we will be creating in the future. We are now moving on to the theme of climate and nature crisis, and we will kick off with Jim Fairlie. I want to look at the agricultural transformation fund. It appears that it has been reduced by 46 per cent. I am not quite sure whether Jim Fairlie has just transferred some of that money to other areas of the budget. If he did, why? What was the purpose behind that? Yes, there have been some changes to the agricultural transformation budget, but we have committed to £25 million overall in relation to agricultural transformation this year. Part of that funding is identified in the budget this year, but there is also the £51 million that has been identified for the national test programme, which has spend that we have allocated over the course of the next three years. One of the main reasons that you will have seen that the agricultural transformation budget has been reduced is that there are not any financial transactions as part of that for this year. That has been for a number of reasons. For example, there has not been the availability of equipment, which has meant that it is difficult to identify options to regress a loan scheme that would be available for capital projects. In relation to loans, any loans that we might have been able to offer would have had to have been at commercial rates to ensure that we avoided any state aid issues. Of course, that would mean that it was unlikely to be attractive to quite a wide range of people compared to existing loan products that are currently on the market. There is no readily available mechanism that would allow us to—or commercial type loans—to be administered by ARPD or elsewhere in the Scottish Government. That overall reduction in financial transactions relates to £20 million, so it does not make any sense for us to have either looked to include that in the budget when we know that, realistically, there was not a chance that that budget would be utilised for the reasons that I set out. Is that the explanation that we have in the notes at that point? The question about how the £40 million that we spent over the first year of 2021 was raised in the last year's budget scrutiny in the Rural Economy and Connectivity Committee that, at that point, only £18 million had been committed under the pilot scheme, was that £18 million committed because it did not get enough applications, or was it that there were products that people could not get a hold of? What kind of product could they not get a hold of? Where was the product coming from that they could not get a hold of? As I am sure that the committee will be aware, I would be happy to follow-up with specifics and further information on your talking in relation to the sustainable agricultural grants scheme that we had as well. A lot of those issues have transpired that have been completely outwith our control or outwith anybody else's control that has been applying for specific pieces of equipment as well. Unfortunately, budgets have not been able to be fully utilised purely because we have not been able to get access through the equipment that would enable them to apply to the fund. Again, it is issues that have been entirely outwith our control. When we look at the financial transactions specifically, we did not include that as part of the budget this year, because there is no point in taking an allocation that we know that we would not be able to spend. That is why we also did not have another round of the fund open last year, because if we had opened another round of the agricultural grants scheme, I would have created more problems with the availability of the equipment. The allocations that we have here are set out realistically what we know that we can spend. I hope that that is helpful. If you would like more specific information on the capital grants scheme, I would be happy to provide more details to the committee, or I do not know if James would have any follow-up information that he would like to add. I would like to understand why, as somebody who has been in farming, I cannot understand why a farmer would not find a way of spending money when there was money available to them. I would just like to understand what it is that puts up a blockage to them by being able to access that money. What are they not able to buy? It is the supply issues. It relates to the suppliers of the equipment. They just have not been able to supply the equipment on time. That has been some of the issues that we have seen in relation to construction, people not being able to get materials, and it has been the same issues that we have seen in relation to agricultural equipment as well. It has not been possible to get that. It is not a problem of government creation or something that farmers have not done or tried to do, but the equipment has not been available for them to access. I do not know if James has any further information to add at that point. James, would you like to come in? All that I can offer is a bit more emphasis on what the cabinet secretary has said. Colleagues of mine have been in contact with external partners. It comes down to supply issues, manufacturing supply chains coming back online after Covid, etc. We are on-going discussions with our external partners to monitor the situation and advice that the cabinet secretary has provided on that basis. It is very much in that case that the money was unlikely to be spent according to the information that we got, so decisions were made accordingly. Just for my own clarity, there is a reduction in about 44 per cent of cash, but has some of that been transferred to the national test programme and the development support programme? The national test programme comes from previously ring-fenced funding, which has specifically been ring-fenced for agriculture. 10 million pounds of the £25 million identified is for the national test programme from that. The £10 million that we have put in the budget for this year is part of the overall £51 million that was announced as part of the national test programme that I announced last year. In relation to the £25 million identified for this year, we have the £10 million identified that I have just outlined there. There is the £5 million capital spend, as well as a further £10 million for development support identified as part of that as well. I hope that I have been able to explain that. Just before I move on to Rachael Hamilton, I have a practical question. Can you give us an update on what consideration has been given to open up some of those agricultural capital grants to agricultural contractors who do not have holding numbers? We are very much aware that equipment such as slurry injection equipment is expensive and sometimes smaller agricultural units are not economically viable from purchase. What consideration has been given to open up those grants to agricultural contractors and those working through machinery rings and whatever to get the biggest bang for our buck for the best return on investment to businesses that do not have agricultural holding numbers? In terms of getting the biggest bang for the buck, that is exactly what we want to try to do with the spending that we have there. Obviously, we identify an amount that we know that we can spend and that we can hope to spend over the course of the coming financial year. On holding numbers, it would be happy to get back to you if there have been specific issues there in relation to the last round of the grant scheme that was drawn and if people were not able to access that. Of course, we have been evaluating that previous scheme and it is also part of the discussions that we are looking at with the implementation board to look at, perhaps, can the fund be better targeted to learn the licence from the first pilot round that was drawn and to see how we can better utilise and spend the resource that we have allocated in the budget this year. I am happy to follow-up on that specific issue and get back to the committee on that. Thank you. I know that this is about environmental questions, but I want to take Cabinet Secretary back to the initial point that you made. First, we know that future fund support is guaranteed until 2024, but taking into account the Scottish Fiscal Commission analysis of the Scottish budget, there is £190 million tax receipts shortfall anticipated for next year and beyond that, within the next four years after that, up to half a billion shortfalls. The Scottish Government also faces slower growth in income tax revenues compared with the rest of the UK. Post-2024, where will the agricultural support budget come from? Again, we have made a commitment about the funding that we have and how that will be spent to try and give some stability. I give security to our agriculture sector that they can rely on those payments and know what their income is going to be over the course of the next few years. Obviously, in relation to agriculture funding, a lot of the spend across my portfolio previously came from the EU. There are still some legacy schemes that are being funded, but that will taper off and the full amount of funding will be coming from the UK Government. As I have said in previous responses, we are not getting the full replacement funds that were promised, which, on top of some of the issues, identified means that we will face a £95 million shortfall in agriculture, as well as the significant shortfall that we face year-on-year in relation to median funding. It does not really answer my question with regard to where the money will specifically come from the Scottish budget. On the national test programme, the NFUS has called for the front-loading of £10 million so that we can support Scottish agriculture around carbon audits, baselining, soil testing and nutrient management. Is that something that you have agreed to? Again, those are subject to the discussions that we have with the implementation board, which you will be aware that I co-chair with the NFUS president, Martin Kennedy. Discussions are on-going as to exactly how the funding will be allocated or how we will be progressing the spend to roll out what we have set out in part 1 of the national test programme in relation to rolling out the carbon audits and nutrient management plans. Of course, there are other factors that we are looking to introduce as we progress over the years of the programme, but those are all subject to the discussions that we are having at the moment. Cabinet Secretary, it is on record that the national test programme will be rolled out in spring of this year. Hopefully, the committee and the Parliament can get an announcement very quickly, rather than referring to the oversight implementation board continually, because we are looking for certainty here. I take you on to the comments by the Climate Change Committee, which said that agriculture was one of the areas of concern that they raised in its annual progress report. They say that no strategy is in place to achieve emission reductions and say that ambition is not deliverable. With the need for farmers to make decisions and to ensure that they have the ability to plan and give them certainty with regard to some of the schemes that you are supporting in the budget, why has the agri-environment climate scheme been cut from £55 million to £34.2 million? We also know that the application system is very restricted and has had huge criticism from farmers. I will probably come back to the response that I gave to Mercedes Villalba in relation to AICS. That is not a straightforward assessment of how the budget works, particularly the lines in relation to AICS. The £36 million that we have in the budget line for AICS this year is contract spend from previous years that has been committed to and reflects the projects that have been funded through the 2021 round. Again, it is not possible for me to predict right now, given that we will be opening that round this month for 2022 applications and what the budget for the following year will be. It simply reflects previous contracts and financial commitments that we have made. To portray it as a cut is not quite accurate. In relation to that, we had to run a more restricted round last year. We did an extension of contracts in 2020, purely because we were not getting the financial certainty from the UK Government to enable us to open another round. AICS contracts run for a period of five years and without any financial commitment or certainty it was impossible for us at that time to enable full rounds to reopen, which I know was a huge cause of concern and frustration. I heard directly from a lot of farmers about that at the time as well, but we were left with little of any other option in relation to what we could do. It would have been irresponsible to open full rounds over the course of the past two years without having a bit more clarity. That is what I hope that the announcement that I set out about reopening the round this year and committing to do that up until 2024 gives clarity and assurance that this is a pro-plan that we are committed to continuing. Cabinet Secretary, the new green and SNP co-operation agreement, I wanted to ask you if you believe that the Scottish budget is in terms of voting it through, is just a done deal and what you feel is the right way that the Parliament can scrutinise the budget because clearly you have your partners now that will support the budget. If you could comment on whether in the future they have made an agreement to look at the same trajectory as England in terms of the environmental goals and the public money for public goods policy? In relation to your last point about taking the same trajectory as England, we are taking a different road to that because we do not agree with the policy decisions that have been taken in relation to future agricultural support in England, which is why it is vital that we formulate our own policy here. I think that one of the key commitments that we outlined in our manifesto was about maintaining direct payments, and we have also committed to making half of those payments conditional by 2025. That is very much the road that we want to go down because we want to support active farming food production as well as ensuring that we are doing that while tackling climate change and the biodiversity crises that we face. That is quite a different approach to the approach that has been taken in England, which has been met with quite a lot of concern from the agriculture sector. Finally, I want to reiterate that the Climate Change Committee had said that there is no strategy in place to achieve emission reductions and say that your ambition is not deliverable. It is in black and white that the agriculture transformation fund has been cut by 8.9 per cent. How do you think that you are going to deliver that when the funds that you have are not being specifically allocated to achieve that? I would not agree with that assertion at all. I hope that I have been able to explain in previous responses into some of Jim Fairlie's questions about why we have set out in the budget what we have and that there is no point in us allocating money or looking to protect monies or getting more within the budget that we know for a fact that we will not be able to spend because of some of the issues that I have outlined, whether that is in financial transactions or in relation to the capital schemes and funding equipment. In future appearances at the committee, you would be criticising me if there were huge underspends on budgets in areas that we had not been able to progress because of that. I think that what I have set out is the realistic level of spend that we can hope to achieve over the coming financial year while firmly setting us on that path of transformation. Again, I would come back to the work of the implementation board as well, making sure that we co-develop that approach with our stakeholders and with industry. That is where the national test programme and as that work progresses from the spring and onwards from there is going to be so vital. That is about taking the whole industry with us and some of the measures that we set out as part of that. I hope that we will enable that to happen. Sorry, convener. I completely do not agree with the cabinet secretary on that, because we are talking about the new money, which is £51 million, which is not new money. I cannot see the Government putting commitment to the national test programme. This is not new money. I mean, I have already said that the money that we have identified for this has been ring-fenced and specifically for this purpose and looking at agricultural transformation, and that is exactly what we are spending the money on. I will leave it there, convener. Okay, thank you, and move on to Jenny Mentor. Thank you, convener. I would like to return, if possible, to the questions that Jim Fairlie was asking and the issues around the supply chain for procuring agricultural equipment. I just wondered if the cabinet secretary could explain what the impact of Brexit has been on this. I doubtedly, Brexit has had a huge impact right across the portfolio and has undoubtedly led to a lot of the issues that we are experiencing, whether that is in agriculture or in fisheries, as well as right across our food and drink industry. There has undoubtedly been a huge impact right across the portfolio when it comes to Brexit. Thank you. Okay, we do not have any further questions on the budget. So what I plan to do is call this moment to a halt and we will come back to discuss EU exit on agenda item 3 at 10.30, so we will have just over a 10-minute comfort break and we will reconvene at 10.30. Our third item of business this morning is to take evidence on the impact of EU exit on the rural affairs and island remit. We welcome back the cabinet secretary and Kara Cowan again, along with Jesus Gallego, for deputy chief veterinary officer and Jen Willoughby, head of national and international alignment unit. I invite the cabinet secretary to give an opening statement. I do not have an opening statement, convener, so I am just happy to move to questions. Okay, thanks very much. I would like to look at the impact on the common frameworks, particularly around the future Scottish agricultural policy. We have been told that consideration will be given to the role that Parliament might have in the on-going monitoring and scrutiny of the frameworks post-implementation. The clear committee raised concerns about the lack of transparency around the development of the common frameworks in the previous session of Parliament. What specific role is there for stakeholder engagement and parliamentary scrutiny in the process of putting those common frameworks together, particularly in relation to the exclusion of certain provisions from internal market access principles? No problem. I think that the scrutiny of the frameworks is, of course, important. We absolutely remain committed to working collaboratively on common frameworks, where they are in Scotland's interests on the basis of consensus, in line with the principles that have been agreed. Essentially, what the frameworks do is offer a model for progress by agreement and collaboration between equals, which we think can be used to apply in our governmental relations in the UK more widely, and recognise that there is going to be policy divergence, but that is the means by which we can try to manage that. However, I think that we face significant threats to the common frameworks process that we engage with in good faith, which predominantly come from the UK Internal Market Act, as well as the subsidy control pill, which is currently working its way through the UK Parliament, which we believe is an assault on devolution. It is something that we have not seen the like of since the Scottish Parliament was established and we remain fundamentally opposed to the imposition of the act on Scotland. In relation to the Parliament's role in scrutiny and the role of stakeholders for them, we were committed to transparency, and stakeholder engagement and parliamentary scrutiny are a critical part of the frameworks process. That is why we are clear that the greater clarity on the impact of the Internal Market Act and the framework's interaction with some of the wider cross-cutting issues was needed before the meaningful scrutiny by the devolved Administrations and the different legislators in the UK and stakeholders could commend. We remain committed to ensuring that the full scrutiny of each framework can take place and that the stakeholder engagement occurs. The outcome of those processes needs to be reflected in common frameworks before their final agreement and implementation. However, I would emphasise at this point that the frameworks are policy neutral and their intergovernmental arrangements for managing and agreeing policy are not in themselves. In many cases, they reflect existing arrangements and agreements that we have between Governments at the moment. I know that there are a number of frameworks that are relevant to the portfolio that will be due to be published. I believe that that is going to happen at some point this month. I have taken part in the scrutiny of one of the other frameworks that the Scottish Parliament was asked to consider in one of my previous roles. That is where the scrutiny is really important. However, the frameworks that fall within the committee's remit will be available shortly. Just more specifically, what is your understanding of Parliament's role in scrutinising the development of those common frameworks? In the future, what will be Parliament's role in the process of scrutiny in the future within its remit? What impact does that mean in the past and in the future? I think that the parliamentary scrutiny of it is important and we are committed to engaging in that process. However, it is up to each parliamentary committee to determine whether that is a length of time in the depth of scrutiny that is going to be needed for each of those frameworks. I know that the process for that has been agreed at official level between the Scottish Government and the Scottish Parliament. That has been set out by the then Cabinet Secretary for the Constitution, Mike Russell, earlier towards the start of last year. That set out what was a flexible approach and really depended on the size and complexity of the proposed area that was being considered. Obviously, the four legislators will review the same version of the provisional frameworks and they are not going to be finalised until all parliaments have had a chance to fully scrutinise the relevant frameworks. As I have said, I have already taken part in the scrutiny of one of the frameworks in a previous role that I held by the health committee, which was at the start of last year. That was one of the frameworks that has already undergone that formal scrutiny process by the Scottish Parliament. I think that there were others in relation to hazardous substances planning and nutrition, labelling, composition and standards. The four Governments have agreed to revise the timeline that really sets to secure ministerial cleanances for the final frameworks to be delivered ahead of the start of the pre-election period in Northern Ireland, which has been precipitated to take place in March this year. Delays in the UK Government in obtaining ministerial cleanances to publish the other frameworks does now leave a limited window for scrutiny to be completed ahead of that pre-election period. As it stands at the moment, the earliest opportunity for the publication of the other frameworks for parliamentary scrutiny will be the end of this month. As I said, there are another six frameworks that will be relevant to the immediate work of the committee in the portfolio interest. In practice, what is your understanding of how Government will engage with the Parliament with regard to future frameworks that revolve around Scottish agricultural policy? In practice, how will you engage with the committee? The frameworks will be published. I believe that the process for that has already been set out is how that will take place. However, it will be up to the committee itself to determine how you undertake that scrutiny. Obviously, it is a process that I am willing to engage in with the committee. I want to be open and transparent and work with you as much as possible. If that is a particular discussion that you want to have in relation to some of the frameworks that will be coming forward and how we undertake that process, some of that is for the committee itself to determine. However, of course, I am more than open to engaging in that process with you. I welcome the details of exactly how the Government will engage with the committee going forward on that topic. I ask Jim Fairlie for his questions, please. Thank you, convener. I am not sure if you can hear me. Cabinet Secretary, I would like to delve into the impact of the UK Internal Market Act and common frameworks on our devolved remit. I clearly remember after the Brexit vote in 2016 I raised concerns then about where competency would lie in terms of how the Scottish Government could continue to fund and work with agriculture in Scotland as a devolved piece of legislation. At that time, I clearly remember a lot of talk from the UK Government talking about those common frameworks, but they could never quite tell me what those common frameworks meant and where the powers would ultimately lie. I know from the Scottish Government's view that the common framework approach should provide all the claimed objectives of the UK Internal Market Act and guarantee market access across the UK, while respecting the devolved competence and, crucially, effectively providing and agreed minimum standards that all producers can meet, avoiding the risk of competitive deregulation, for example producers and consumers, clarity and certainty. Can you tell me what impact you feel or the Government feels that the UK Internal Market Act will have? Is it necessary when we are supposed to be having common frameworks that should work across the UK? No, I do not believe that it is necessary, because it completely undermines the common frameworks process. As I said in the previous response, it is a process that we engage with in good faith. Obviously, there is going to be policy divergence along the lines, and what the common frameworks process meant to address is a policy neutral framework. What it meant to address is a means of the devolved demonstrations working together on an equal basis to manage that policy divergence and recognising and respecting the specific rules of the devolved governance. Essentially, what the Internal Market Act has done and what the subsidy control bill will do is that it completely undermines the process and meaningful engagement that we were expected to have, because it ultimately means that the UK Government has the power to impose measures on devolved Governments. Again, that completely undermines the process that we engage with. The common frameworks was a collaborative approach and was built on the basis of parity in respect for devolution. As I understand at the moment, the AX market access principles would in many, if not most, circumstances undermine any policy divergence agreed in a common framework. A process that has been developed to ensure policy divergence agreed in frameworks is protected from the AX market access principles. I know that UK ministers have confirmed that in a statement to the UK Parliament on 9 December. That process reflects commitments made by UK ministers during the bills that passed in December 2020, where policy divergence would be agreed through a common framework. The UK Government is committed to using the powers in the act that compares on UK ministers to exclude that policy area from the effect of the act. However, it is absolutely vital now that UK ministers honour that commitment consistently, because the sustainability and viability of the framework processes relies on that as well. What is also frustrating about the various pieces of legislation is that we had members of the EU through the principles of subsidiarity. We were able to develop and tailor our own policies to our own needs. That is a complete backward step that completely undermines the powers that we have to set our own policies for what best meets the needs for the people in Scotland. We will come back to the subsidy control bill later on, and I want to come back to you about that later. Perhaps either the clerks or the convener can confirm that. We have invited George Eustice, the minister from the UK Government, to come to talk to the committee about the impact of Brexit and the internal market act's impact on the involved powers. Are there specific areas that we need to be concerned about in terms of what we are trying to do here in Scotland in an agricultural sense that could be undermined by the UK Government's use of the internal market act? That is not in our committee, but if we look at a minimum unit of pricing for alcohol, that is something that the UK Government could do. Is there anything in our specific remit that we need to be concerned about at all at this moment? I know that there are specific concerns around some areas. As we have been going through the process, we have been seeing those policy areas gradually start to emerge. I remember from my previous appearance at the health committee discussing one of the other frameworks that I mentioned, the food and feed safety and hygiene framework, where discussions were held on that about potential divergence in GMO policy, which could well be impacted by that. I know that there are areas that are emerging too, but I would be happy to follow that up with the committee and outline the current areas of concern that we have in relation to the internal market act, if that would be helpful. However, specifically in relation to agriculture at the moment, I think that one of the key concerns—when you said that we will probably come on to this at some point later in the meeting—is the subsidy control bill, given that it is working its way through the UK Parliament at the moment. I would like to confirm that we have a UK minister coming to attend the committee. Thank you, Jim. We wrote to George Eustice that we got a response. He was unfortunately unable to attend on the date that we asked, but I am confident that we will have in front of us at some time in the near future. I am now going to move on to questions from more cities while Alba is on keeping pace powers. Thank you very much, convener. I want to start with a question that relates to fisheries. The cabinet secretary will be aware that the EU has taken action to put an end to the practice of discarding in fisheries. I understand that it is the current Scottish Government's stated position that it wishes to rejoin the EU. With regard to keeping pace powers, can the cabinet secretary confirm whether the Scottish Government is committed to a discard ban, and what steps is it taking to bring such a ban forward? You are absolutely right. It is a commitment that the Government has made in relation to keeping pace that we want to align with the EU and potentially go further, where that is within our best interest to do so. Ultimately, we want to become an independent country and to see ourselves join the EU, and we want to make that as streamlined a process as possible. In some areas, it is not necessarily—it is not always going to be possible to replicate everything that is happening in the EU. Some of that will not be relevant. Some of that may not be legally possible either. However, that is our stated policy intention to align with the EU as much as possible. In relation to the specific policy that you have talked about there, that is an area that has been on-going for a number of years, and it is already an area that we have applied in Scotland. My second question is about the management of fisheries. I understand that UK fisheries are currently managed under the UK Fisheries Act and that that legislation was opposed by the SNP and Westminster, but that it was given legislative consent by the Scottish Government here in Holyrood. Could the cabinet secretary confirm whether the Scottish Government intends to bring forward its own legislation to govern fisheries in Scotland—for example, a Scottish fisheries bill? We do not have plans in relation to fisheries for legislation in that regard, no. Just before we move on from this topic, the Scottish Government undertook, in session 5, to work with Parliament to agree an appropriate and proportionate decision-making framework for parliamentary scrutiny for the commitment to maintain a regulatory alignment that would provide an appropriate level of consultation at the early stage of policy development. As you have said, we are absolutely committed to working with Parliament to consider that scrutiny. I know that there have been representations from the committee, as well as from the constitution committee, on the approach that is taken in that regard. I know that the cabinet secretary for the constitution, Angus Robertson, is going to respond to that in due course. I move on to questions from Alasdor Allan. We have talked just now quite rightly about the legislative constitutional, as it were, fallout from Brexit. If I could ask you a little about some of the economic consequences in rural Scotland, particularly the impact on population in rural areas, you will be relieved to me that I am not going to give a village-by-village account of the impact of Brexit in my constituency on population suffice to say that there are fragile communities where it has made a difference. I can ask what the evidence is or what the information is that you have about the impact of, particularly, people from Eastern Europe or their absence, to some extent, on rural Scotland? The evidence that we have has shown that there has been a dramatic drop. You will have heard a lot of that articulated in the debate that took place yesterday. It is something that, particularly in my role in rural affairs and islands, I have a responsibility for the food and drink industry, who have all been so heavily affected by Brexit. You can see that there has been a massive shift and a drop in relation to the labour needs that we have. There is no doubt that there have been dramatic changes there. That is why we have had to look at specific things that we can do within our own powers. Yesterday, I announced some of the rural visa pilots that we will consider. It is very frustrating that, when it comes to our labour needs and our population needs, that tends to be ignored by the UK Government. There have been a number of approaches that have been made by myself and my colleagues across Government to UK ministers in the Home Office, which have largely been ignored. It was over 19 attempts at the last count, whether that is by letter, to try to address some of the issues that we are facing at the moment. However, there is just a refusal to engage with us on some of those issues, unfortunately. You mentioned one sector or some sectors in food and drink. I would be interested to know what contact you have had on other sectors, the ones that are obviously fishing and fish processing, but also things such as the care sector and tourism. I would be interested to know what approach Government has had from businesses about what they feel the impacts are. The impacts are absolutely massive. I undertake extensive engagement with stakeholders right across the piece. Labour is the issue that has been raised first and foremost above any others, where a lot of businesses have been at crisis levels. There is a fortnightly meeting of the food sector resilience group, where we engage with our food and drink stakeholders and just hearing about some of the issues that have been experienced there. 63 per cent of seafood processors have experienced shortages, some of them up to 15 per cent down. It heard story after story about various businesses losing out on multimillion-pound contracts purely because they were not able to fulfil the orders that were required of them because they did not have the staff available to them. We also heard the announcement on Christmas Eve about the seasonal agricultural workers scheme, which, disappointingly, is going to be tapered off over the course of the next few years. There has been a lot met with anger by a lot of our stakeholders and by the NFUS in Scotland, too, who are seriously concerned about the impact of labour shortages on the sector. Time after time, those are the issues that we continue to raise with the UK Government because shortages are at absolutely critical levels. When it comes to social care and tourism, in relation to some of the figures there, I would be happy to check that with colleagues. I am responsible for those areas and come back to the committee with further information as to some of the impacts that are being seen there. As acute as those shortages are across the sectors that I am responsible for, there are acute shortages right across the piece, which disproportionately impact our rural communities. You touched earlier on the issue of the UK Government's approach to finding well, perhaps that solution is too strong a word, but in response to some of those issues, for instance, we have seen approaches around things such as lorry drivers and care workers. They have all been relatively short-term proposals for short-term interventions around things such as visas, but for rural Scotland, given the interconnected nature of communities and local economies, do those short-term proposals work or do we need longer-term solutions? No, they do not. That is probably being shown by some of the numbers that have taken up some of those initiatives. When you look at it the opposite way around, I think that that was part of the problem when we were looking at some of the visas that had been extended or certain occupations that were given visas a few months ago. We looked at butchers, for example, where the visa was for about six months. I think that it is who is going to operate their life for such a short period of time, knowing that there is not the opportunity that they could potentially then stay on beyond that period. That is essentially what it would ask people to do, to operate their lives, move to another country for such a short window. I do not think that a lot of people have found that to be worth their while. I think that some of the initiatives were only for a few months. When we analysed the actual time that it would take or the time that somebody would be able to spend in the country by the time their visa application would be processed, it actually transpired to be somewhere in the region in about six to eight weeks in some of the occupations that have been proposed that we could have visas specifically for about three months. Again, those are all very short-term issues that do not go any way to addressing the crises that we face in a lot of those industries. I know that there are a lot of sectors that feel that there have been very specific exemptions, whether that is in relation to butchers, but there has not been the same exemptions that have been applied to other sectors where they are facing other critical shortages, which I know has caused a lot of concern. There remain a lot of outstanding issues. That is why we have repeatedly called to try to address some of those issues. Again, as I mentioned yesterday, some of the pilot work that we are trying to do ourselves, we can look to trying to address on the medium to longer term. We very much want to work with the UK Government in addressing those solutions, but it takes both of us to be willing to look at that and to meaningfully engage on that issue. We are certainly willing to do that. I have two brief supplementaries on the topic. I want to pick up on some of the previous conversations that the committee has been having, particularly with the depopulation in the islands. If you recognise that, prior to Brexit, there were long-standing issues with perception of some of the types of part-time work that was offered here, and the general perception of the jobs that are on offer, the geographical and transportation challenges, the lack of affordable housing. You would recognise that those were issues that were long-standing. Perhaps they have been exacerbated by Brexit, but we are still attracting workers, but not necessarily into Scotland. I do not think that there is any question that has perhaps been exacerbated by Brexit, because Brexit absolutely has exacerbated a lot of the issues that we are facing. You talk about depopulation in some of our rural and islands areas, and that is why from the previous session and some of the initiatives that I spoke about there in relation to the islands bond, the rural and islands housing plan and the investment in connectivity is so vital in trying to address some of the endemic issues that we face. I engage with our stakeholders, I go out and I speak to our farmers, our fishers, I speak to our feed and drink businesses. All that I am saying to you is exactly what I am hearing and repeated to me about the availability of labour. There was a point before Christmas, and I think that the Prime Minister had said at one point that it is because all the jobs are low-paid and people need to improve their conditions, and that would solve all the problems, which really was not the case. It would not have mattered how much some of those businesses were offered and they just have not been able to attract the people to fill them. It is in addressing some of the really critical issues in the immediate term that we really need some meaningful interventions to try to address. That is why we have repeatedly called for a number of different initiatives to try to address some of those problems and repeatedly called for that meaningful engagement from the UK Government to try to address some of those issues. I think that it is disappointing that the Scottish Government is not concentrating on ensuring that the industry is attracted to domestic workforce. That is not the case at all. There are a number of employment initiatives that we are looking at because we want to encourage people into these different sectors. When you look at the food and drink industry, it is such an exciting sector and there is so much work that we can do there to promote that as an area for careers for people and that we want our young people to engage in and get involved in. There have been a number of initiatives that we have been working on in relation to that, as well as a number of initiatives that we are looking at as I said previously to try to tackle de-population. I do not think that there is any getting away from the fact that, of course, we can do those things, but those are medium and long-term interventions that we can work on, but they are the immediate issues that are the most critical in helping some of those businesses to survive. That is what we really need to try to address. I appreciate your warm words, cabinet secretary. For example, if I use the answer that I got back regarding the number of female butchers in Scotland, there are 12. If we are looking at addressing workforce planning, it is being left short by this Government. I do not agree with that at all. Is there scope to try to get more women into some of those industries? Absolutely. That is where I would come back to some of the investment that we are making through the budget. If we look at agriculture, we have increased our investment to £400,000 this year to try to develop the skills and to get more women involved in agriculture, as well as it makes up a number of different strategies, whether that is in fisheries and aquaculture too, where we have commitments and where we have work under way to deliver on that. A short supplementary question from Jim Fairlie. Thank you, convener. I am slightly confused by the last line of questions. I do not think that there is any doubt that Brexit has caused massive problems to our workforce. I have had constant correspondence from businesses in my constituency and across the country about the huge lack of labour that we have. I take the point that some of the demonising of some of the industries that are called low-skilled or that is only labour. A lot of the jobs that we are talking about are highly skilled. I think that the loss of our European workforce has been significant. I had a discussion with a butcher recently, and his point was that he can increase his wages by 10 or 15 per cent, but all he is doing is taking people from someplace else. The labour pool is stagnant. It is stuck where it is because we do not have the freedom of movement. Cabinet Secretary, my question to you is, and it is a question, what steps are you taking? I know that you have instigated a discussion with the UK Government about a Scottish visa scheme to try and specifically tackle the Scottish issue. There is something about a rural migration pilot scheme as well. Could you maybe outline what those are and how they might help us to get through the current crisis of shortage of labour? Just to come back on a point that you made that is really important. The portrayal is a lot of jobs as being low-skilled. It is just a term that I refuse to use because you are absolutely right. Those jobs are highly skilled and I do not think that it helps to portray them in a light like that. What I outlined and announced yesterday was on the back of the Migration Advisory Committee's recommendation to pursue the development of a pilot scheme on rural migration. Our expert advisory group on migration and population has published a report on potential options that could be explored when we were looking to develop that visa pilot scheme that was published in February last year. There were three potential options that were outlined in the report. First of all, we are looking at options here. It is not as if we are doing something completely new. There are different schemes in operation right throughout the world. There are so many different examples that we can learn of. One of the three potential areas that I talked about had been outlined in that previous report, for example, is one that was modelled on a Canadian Atlantic pilot scheme, which is the remote and rural partnership scheme. That is employment-based, but it is part of a wider partnership with local authorities, employers, public services and the voluntary sector that plays a more active role in identifying what types of areas employers would benefit the most from the scheme. They would be engaged in delivering what would be an integration plan. There are also proposals for a Scottish visa, looking at how we can expand the skilled worker route. We are very much keen to work with the UK Government and, hopefully, to work together in delivering a lot of those. However, the previous Home Secretary had been willing to commit to it, so we hope that the commitment is delivered in full. We get the support to continue the work, but it is certainly the case that we are not standing still on this. We have lots of different ideas as to how that can work in Scotland's best interests, and some of those ideas are put forward yesterday. I am sure that Brexit has an impact, but, given that we are where we are, can I ask what work the Scottish Government is doing to identify the numbers that we have seen reduce? How much of that is down to Brexit? How much is down to the Covid pandemic? What is down to other issues that we are facing in other European countries? Prior to Brexit and prior to Covid, Scotland appeared to attract less overseas workers coming into the UK. A small percentage of those coming into the UK ended up in Scotland. What work are you doing to identify all the impacts to look for the solutions to address the labour shortages? I hope that I have been able to outline in some of my previous answers some of the work that we are looking at to try to address that. Whether that is looking at tackling depopulation in our rural areas and on our islands, I have just outlined some of the pilot projects that we are looking at to try to deal with some of the issues that we are experiencing. I do not think that it is scared to categorise it to say that everybody in Europe is facing those problems. That is an oft-voted line in relation to HGV drivers in particular, where there have been shortages experienced across the piece. However, there is no denying that that has been particularly acute since Brexit. Again, what I am outlining today is exactly what I have heard from speaking to businesses and about the different impacts that they have seen. That is the information that we would have. We would be happy to follow up with the committee and give more specifics on that if you would find that helpful. However, I hope that some of the work that I have outlined today in relation to what we are trying to tackle those problems will hopefully start to have an impact. However, again, it comes back to the critical issues and the immediate issues that we are facing right now that we need that engagement. All we are asking for is for the UK Government to work with us on addressing some of those problems. Absolutely. Thank you for that offer. We would be interested to find out how we can allocate percentage of reduction to the various crises that we are facing in the labour market. That would be most helpful. I will now move on to questions from Rachel Hamilton and then Ariane Burgess. Cabinet Secretary, we have been told by numerous witnesses, including the NFU, that a seamless UK internal market is integral to Scottish farming. I want to ask how will changes made in devolved the devolved context to domestic policy affect the integrity of the important agricultural market in Scotland? Do you envisage any issues on deciding to align with the EU on, say, a ban on glyphosate or not wishing to progress with gene editing, leaving the cost of production, for example, in Berwickshire higher for farmers in Scotland than compared to in Northumberland, which is in England? Will your decisions be a backward step, leaving Scotland's farmers at a disadvantage? Again, some of those issues are on-going with the EU at the moment. Of course, those are areas that we continue to monitor. As members of the EU, we had the potential to set our own policies. There was the ability to have that divergence, which did not cause any particular issues. For example, we had specific schemes in Scotland that did not exist elsewhere in the UK. Those specific schemes, because of the specific constraints and the types of land that we have in Scotland, are now very much under threat through the internal market act and the subsidy control bill. There is no getting away from some of the issues that we face there. I will come back to the common frameworks process. The frameworks process is there to help us to manage that divergence, because it is only fair that, given the powers or the responsibility that is rest with the devolved Administrations, it is up for those Administrations elected in those countries to take the policy decisions that best work for the populations that they represent. It is up to me to deliver the commitments that we have set out in our manifesto and what we have set out in the programme for government. All that we want is the ability to enable us to carry out that work. As I have highlighted in a previous response to that, we see the agriculture policy taking a different road in England as to what we have set out. We are going to do in Scotland to make different commitments. That is where the feed of the internal market act and the subsidy control bill come in, because it could well constrain our policy choices in the future. Can you give examples of what your policy-making decisions might constrain on farmers in Scotland, if you do not adopt the same, that will not affect the internal market in terms of the integrity of the important agricultural market that Scotland relies on throughout the UK? We also have other important markets that we no longer have access to because of the exit, unfortunately. That is why we have the common frameworks process that all Administrations engage with in good faith in helping to manage the policy divergence that is there. That is not a threat to any one Government. It is something that we did when we were members of the EU and that all we are asking is that we have the ability to continue to do in Scotland. That is where, particularly with the subsidy control bill, we are going to see if that goes through in its current form and will constrain our policy choices in the future. For example, we have support payments for our less favoured areas that do not exist in other parts of the UK, and we have the ability to continue to do that and offer that kind of payment, meaning that we will be put at risk given the powers in the bill as they are currently set out. I reiterate what I just said at the moment. It is not just the Scottish Government that has raised those concerns. We have had the same concerns raised from Northern Ireland and the Welsh Government that are all seriously concerned about the powers that are in those pieces of legislation that completely undermine the collaborative work that we have all been through to establish those frameworks and that completely undermine how we may just lose faith in that process altogether, because it means that the UK Government is retaining the powers and trying to retain a control and constrict the policy-making powers of the developed administrations. What kind of domestic policy choices do you want to make that the rest of the UK do not want to take and how those will affect Scottish farmers? Yes. One of those, for example, is maintaining direct payments, which the UK Government has said is going to phase out. Again, that is where the subsidy control bill could have a serious impact on our ability to do that and offer payments for less favoured areas, support schemes and some of the other coupled support that we have that either do not exist elsewhere or where there is going to be a policy divergence in the future. So the only policy divergence that you can foresee is on the direct payments? No, that is one at the moment, but I would say that that is a fairly substantive area given the size of the payments that that involves and the fundamental nature of the support for the whole of that agriculture sector. You mentioned earlier in answer to a previous question, but can we get a little bit more detail on what progress has been made in developing the common frameworks? Do you believe that the Scottish Government has the power to make regulations on such things as food regulation, for example? In relation to the common frameworks, I know that there are six relating to the committee's area. Again, those frameworks will be published, I think, that should be towards this month at some point, and then it will be up to the committee to engage under the scrutiny within that. Sorry, I have forgotten the last part of your question as well. Do you believe that you have the necessary powers to make regulations on such things as food regulation, which you have previously stated that you did not have? I do not know if there are particular issues in relation to that. I do not know if officials have further information on food regulation. No, no volunteers. That is one area that I would be happy to follow up with the committee afterwards. Okay, just to give you a helping hand. Without the power to keep pace with changes to EU law, the Scottish ministers would lose the ability to introduce amendment or update secondary legislation on livestock matters in line with EU legislation and bearing in mind that your goal is to keep pace with those powers. That is what I am getting at. I know that there are powers within the Scottish legislation that we have introduced, such as the Agriculture Act 2020. That gives us the powers to maintain alignment with the EU, and I know that that includes matters such as marketing standards. That covers a wide range of food products within that as well. I believe that we have the necessary levers within that, but I would be happy to look into that and follow up with the committee in more detail. It would also be helpful for the committee to give us a more financial implications that you are talking about with regard to domestic policy decisions, particularly on the direct payment front that you have mentioned, but also to give us an insight into what you are actually thinking. We are running out of time here without any future fund policy direction, as it were. We have already said that we are committed to maintaining that level of spending and certainly doing that throughout this Parliament. I know that the committee is aware of the work that is under way with the Implementation Board in helping to design and develop our future policy. It is not possible for me to come back to the committee with the full financial impact, because I think that that is the problem with the subsidy control bill. It could well constrain our ability to make future policy decisions, so I do not think that it is possible to quantify when I was talking about figures earlier. I am just talking about the scale of the overall investment that we make in our agriculture sector and the fact that we are constrained in our policy choices as to how that would be directed. I am very conscious of time. I am going to move on to Alasdor Allan for a very brief supplementary and then on to Ariane Burgess. In the question from Rachael Hamilton, a view is attributed to the NFUS about support for the single market bill. There is certainly support for access to markets in England, but more than one committee of this Parliament has had representations from NFUS about their concerns about the legislation. I am interested to know whether you have two. For instance, Mr McCormack, Andrew McCormack, the president of NFUS said that the UK internal market proposal is put forward to limit the devolved administration's ability to act if any standards were lowered to give the UK Government a final say in areas of devolved policy. That is something that has been said publicly by them. With representations from the industry to more than one committee, have you had representations about yourself as a Government about some of those concerns, too? Yes, absolutely. Some of the concerns that I have outlined today about the subsidy control bill in the internal market act are shared concerns. That is why we have continued to raise them with the UK Government. I mean, again, coming back to the subsidy control bill and to probably further explain just some of the impacts that we can expect to see with that. Obviously, agriculture is an area that is fully devolved. As I have already said, the farmers in crofters in Scotland face challenges that do not exist elsewhere in the UK. However, the principles that are set out in schedule one of that bill put at risk our ability to develop future policies that are tailored to meet them. For example, the income and coupled support payments play a vital role in many of the businesses operating in some of our most remote and constrained areas, yet they would be incompatible with the proposed principles that they have set out in the subsidy control bill, particularly the principles about encouraging change and economic behaviour of the beneficiary. What we are asking for in the subsidy control bill is the fact that agriculture is carved out of many subsidy control regimes. It is covered by the WTO agreement on agriculture. The fact that it is covered by those areas does not make sense for it to be included in the subsidy control bill as it is going through Parliament. I have been told by the UK Government that a consultation was undertaken where the vast majority of the respondents to that agreed for this. We have asked for that consultation information to be shared with us, but, as yet, that has not materialised. First, we were told that it could not be because of data protection. We have asked for anonymised examples to try and better understand the rationale for including this in the subsidy regime, because it is unusual for it to be included in this way. The bill, as it is right now, could also prevent us from retaining alignment with the EU if future schemes that we want to adopt and develop are then incompatible with the UK regime. We are looking forward to meeting with the relevant UK minister this week to discuss some of the significant issues that we have with the subsidy control bill as it stands at the moment. I am trying to better understand the rationale for some of the decisions that have been taken, but it is unusual for agriculture to be included when it is carved out of so many other regimes. There is also a separate cover for this under the WTO agreement on agriculture. Now, we move on to questions from Jenny Minto. In a previous committee session back in November, we were looking at the continuity act policies. One of the things that stood out to us was a comment on behalf of Scottish ministers. The statement said that the constraints under the Scottish ministers under which the Scottish ministers currently operate, in particular as a result of the working of the UK internal market act, mean that they judge that to align in full that this time would not serve Scotland's wider interests. I wonder if you could expand a bit. I think that you are beginning to touch on that in some ways, but I want to hear that connected specifically to the UK internal markets act. Where are the issues to do with powers that the Scottish ministers have or don't have? It is those pieces together that ultimately I think that what we are finding is that it is a huge step backwards from being in the EU, where we had the freedom to exercise those powers and developing our own policy, the internal market act and subsidy control bill, then remove and put in the hands of UK ministers, which, as I have said in previous responses, undermines the common frameworks process, which was essentially designed to resolve or to try and work through some of the policy divergence that it will have in some areas. Again, it is within every devolved Government's right to set the policies that are right for the people that elect them to those positions and for us to deliver on the commitments that we have set out. That is essentially what the internal market act and subsidy control bill do, is to remove our ability to do that, because the ultimate end decision rests with the UK Government, which, when it comes to those devolved areas and critical areas and importance for devolved Administrations, completely undermines the powers that we have and means that they can overreall us in devolved areas of policy. Thank you very much for clarifying that. It is quite concerning from my perspective in terms of the work that we have to do for Scotland and other colleagues have outlined that we have a very unique set of circumstances here. Scottish ministers need to be able to take forward the things that we need for Scotland, for our island communities and for our rural communities here. Exactly. I would say that, in relation to subsidy control too, we are not subject to that. We have the trade and co-operation agreement that is in place at the moment where we are able to operate effectively. Agriculture is something that is very specific and separate to other subsidy controls or state aid regimes, because of the very nature of it, too, and the fact that you need interventions. That is not to say that it is not monitored, because, as I have said previously, you have the WTO agreement on agriculture. It simply is not necessary for it to be caught by the east of legislation. Again, I think that that is where it is frustrating, because, without having that information shared with us so far, it is hard to understand the rationale as to why that has been included when we see no reason as to why it should be, and it is covered by those other schemes. Can you clarify that you seem to have contradictions? One moment you were saying that there were lots of collaboration over common frameworks, and then you were saying that there was none. Is there good collaboration over common frameworks or not? We are talking about two different things here. In relation to the subsidy control bill, to be honest, it has been just as I was talking about different areas with population and the different departments of the UK Government that we can deal with, where sometimes we get no engagement whatsoever and so far in relation to the engagement over the subsidy control bill, it has been difficult to get that information, though, as I say, I have heard many things in common frameworks. In the common frameworks, there has been collaboration on that. It is up to the legislators now to prove what has been set out there. There has been collaboration there, which is why it is disappointing when we see those pieces of legislation, such as the Internal Market Act and the subsidy control bill, because it undermines that process that we all engage in in good faith. Question time from Jenny Mantle. I just want to reflect a bit on the subsidy control bill. I am a member of the SEAC committee, and we took evidence from Johnny Hall of the National Farms Union Scotland. He raised concerns that the subsidy control bill could be used as a tool to say that the Scottish Government has to stop giving certain types of support as it is affording Scottish farmers an advantage. He cited areas such as Northumberland and Cumbria in that and being areas that are very similar to the farming in Scotland. Thank you for the information that you gave with regard to what the Scottish Government is doing with regard to challenging Westminster on the subsidy control bill. I was interested to hear that you commented on the fact that there was a reticence from the Westminster Government to provide the Scottish Government with the information to behind the questions and the evidence that it gathered to include agriculture in the subsidy control bill. I am also interested to get your thoughts about general procedures between Westminster and the Scottish Parliament. As a result of legislation, we have had a lot of statutory instruments coming to us at short notice. I would be interested to know how you are working with or informing Westminster that they take proper account of our procedures within the Scottish Parliament to enable us to be able to do the proper scrutiny that is required. I know that that is an absolutely critical point that you make. That is something that we continually re-emphasise to the UK Government and to highlight the processes that we have in place, and to continually make that point that is recognised in the parliamentary processes is hugely important to enable the scrutiny that you need to undertake. I can only apologise for the late notice with which you get notification, particularly some of the pieces of secondary legislation, but some of those issues are out of our control because we try to keep the committee up-to-date and informed as much as we possibly can, but then there are occasions where we get the information very last minute or decisions have been taken that completely change the initial policies. There was an instance of that just before Christmas, with the official controls regulations and some of the changes that were proposed there. Those discussions had taken place at a meeting that devolved in ministrations were not attending, only for then a huge policy shift to become a parent. They were asked at very short notice to sign up to and agree to that. Again, I know that the committee will be aware, because you will have had the various notices from me that then have to be revoked and changed because that is just the environment that we are working in. We take every opportunity to remind the UK Government of the processes that are essential to going through for parliamentary scrutiny. Again, some of that is out of our control because we are genuinely trying to give the committee information as and when we receive it to ensure that we allow as much time for scrutiny as possible, but that is not always within our unit. I thank the cabinet secretary for that. Just moving on, we need to talk about agriculture. Is there any concern with regard to the subsidy control bill or in telemarkets bill with regard to fisheries? When it comes to fisheries, it is a more complex area when we look at it in relation to the subsidy control bill, so I will bring on Karol on that point. Thanks. I am just waiting for the microphones on me. Fisheries is in quite a different position. You will be aware that I am sure that there are live WTO negotiations on going. I think that they originally hoped that they would be completed this year, and they broadly match our views on fisheries subsidies. The EU would have supported the direction and no questions for alignment. It is also worth noting on fisheries that you have a very mobile resource and a mobile fleet, so you need to ensure that, hence the WTO, that you cannot have the sustainable management of fisheries. Also, to a certain extent, to have a level playing field, I am afraid that I do not know enough about the agriculture side to be able to compare it. It is a thing where we are in a very, very different position because of these WTO negotiations. Of course, we expect to be engaged by UK Government as they develop a position on that, but because of the live negotiations, they are not at that stage yet. I think that both of those answers are important to recognise the engagement and to take the Scottish perspective when the UK Government is negotiating on our behalf to ensure that we get recognised that one size does not fit all. Okay, thank you. I will ask Karen for her questions and then I will move to Rachel for a brief supplementary. Thank you, convener. Quite a lot of my questions have been answered, to be honest. Before I ask something, I would like to say that I expressed disappointment that a UK Government minister cannot come before the committee next week has planned and, hopefully, before we have to change our work plan up again to accommodate for that, that has taken into consideration. It would be really helpful if that was any time before the completion of the subsidy control bill, because we seem to have quite a lot of questions around that today. Cabinet Secretary, I would like to ask—we have spoken quite a lot about agriculture and we have touched a little bit upon fisheries just then—is there anything that we really could be doing and what we can be doing in Scotland to help prepare our Scottish fishing industry for what is ahead of them in light of the EU exit? Yes, there are still a number of changes that are due to come into force. Obviously, we will face changes towards the end of this week with new export health certificates that need to be used, for example. We are continuing to see those changes. There have been a number of changes and transitional arrangements put in place in relation to border checks and controls and checks and imports, for example. We are trying to use the connections that we have with stakeholders and concerned businesses to work with our industries as much as possible to be prepared for any changes that are coming their way. That can be difficult, and it has been a source of frustration, especially when we look at the continually moving goalposts for import checks. For example, I know that that is a source of frustration when our exporters are put at a specific disadvantage, given that they have had to align with and implement checks and satisfy all the requirements for export health certificates and all the other barriers that they have had to face, whereas imports into the UK have not had to face those same barriers. The deadlines for that just keep on shifting and keep on moving backwards, but we try to work with our industries as much as possible to try to prepare as best we can for any of those issues that are coming their way. OK. Any further questions? No. Move on to Jim Fairlie. I thought that you were asking Rachel Hamilton to come in with a supplementary before me, convener, but if you are happy for me to carry on, I will do. Rachel, have you got a supplementary on that topic? Just on Jenny Minto's point there, with regard to the evidence given by Johnny Hall at the Seek Committee, which I followed with great interest. He mentioned on the subsidy control bill that, with regard to the Scottish Government's policy choices, that there are already international safeguards with regard to WTO rules that would ensure that, if the Scottish Government decided that it wanted to keep those direct payments, Scotland would not be at a competitive advantage. Therefore, there are safeguards in place, and I just wanted to make that point. That is not the case with the subsidy control bill, because what it does is opens us up to legal challenge from other parts of the UK. If we are providing support—I have talked about some of the types of support that we provide—if we continue to do that, because it conflicts with the principles that have been outlined in that bill, that is where the problem lies. I think that we need to get clarification on that, because that was directly taken from evidence from Johnny Hall. What I would be happy to do with the committee is to outline our concerns outwith the specific parts of the bill, if you would find that helpful. You have answered an awful lot of the stuff that I was looking to drill into with you. I have very serious concerns about the subsidy control bill as a very recently retired farmer. I know how absolutely vital the direct payments will be to farmers right across the country. I have written in here why the UK said that agriculture has not been taken out, given that there are protections with the WTO. You answered that on the basis that they had a consultation. The question that sprung to my mind was who did they consult, because I cannot think of a single farmer or farming organisation in Scotland who would see a subsidy control bill in its current form. If I am not right, if I am not wrong, in the second reading in the House of Lords, so it is imminently going to happen, who did they consult with? I cannot see how the Scottish agricultural industry would have agreed to the subsidy control bill going through in its current form, so did they give you any indication of who they consulted? That has been part of the problem. We had to ask for the consultation responses to be shared with us, but we were told that because of reasons of data protection that they could not be. That is why we followed that up by asking for anonymised responses. That was about trying to understand the rationale as to why people responded asking that agriculture be included. We followed on from the meeting that it had on Monday, but we have been told that information will be shared with us, but we have not received that. Would it be worthwhile going to the farming unions or farming representatives and asking them have any of them been asked about the consultation? Has anybody in Wales or Northern Ireland been asked about the consultation, or is this an English-only consultation? I simply cannot understand where the consultation was done, who was asked the questions and how it could ever be then described as being okay for us here in Scotland or the other devolved nations. I just can't get my head around that. Jim, can I suggest that we might be more appropriately addressed to the UK Government minister when he appears in front of the committee rather than asking the cabinet secretary who obviously does not have the information in front of her? I will be delighted to ask the UK Government minister, but as we do not have a date for that to happen at the moment, I am pressing the cabinet secretary to do homework on our behalf so that we can find it if the Scottish agriculture industry has been consulted. Okay, thanks for that. I'll move on to questions from Beatrice. Thanks, convener. My question is about the child meat products import and export. I wonder if you could tell me what the long-term plans are regarding that and whether you expect the derogation to be rolled on. If I could bring in Jesus Gallego on this point, please. Thank you, cabinet secretary. Jesus Gallego, deputy chief secretary officer. So the current derogation is expected to run for the duration of the staking period, that is at the point where the transitional period for the introduction of checks expires during this year. The long-term plan for what we call the prohibition and restrictions, which include the prohibition on fresh and refiliated minced meat and meat preparations, is to come to a technical agreement with the EU, so the conditions that apply are the same in both directions. The UK Government with Scottish Government involvement has put the case to the EU on a risk assessment that shows that there is no scientific ground for the prohibition of refiliated minced meat to be traded internationally. Our objective would be to have that restriction lifted in both directions. If we can import fresh meat and fresh meat preparations, there is no reason why we cannot import or export refiliated minced meat and meat preparations. However, at the moment, the prohibition occurs in both directions, so we have treated it as a technical discussion through the trade and co-operation agreement to come to a consistent view of what the rule should be, both for imports and for exports. I have a quick question on SSIs. Prior to Christmas, we saw that the Scottish Government withheld agreement to an SI relating to border controls. A Scottish SI was brought in, which I believe we will be looking at next week. Can you go through the process that the Scottish Government follows to decide whether to agree to an SI or to put an SSI in place, which ultimately has the same outcome? At what point do you make the decision to agree to a UK-wide SI or to bring in your own? As we have seen particularly with the border controls, which was a decision taken at very last minute? That is because there had been a significant policy change that we were only made aware of at the very last minute, so I understand that at the timing of that was not ideal. Normally, in the policy notes, a company, the SI notifications that we sent to the committee will explain what it is looking to achieve, why we are content that the Scottish ministers are content to agree that the UK does that on our behalf. A lot of the time that it can save our time and resource for the UK to do that on our behalf with our consent. In relation to that, I cannot think of many other instances where we have done this off the top of my head. I do not know if officials will have further information, but I think that the extent of the policy that was changing in this SI, we needed to be able to take the time to fully consider what the ramifications of that were going to be, which is why we decided to bring forward our own secondary piece of legislation. However, I would like to bring in Jesus, who I think will have more to add on this. Thank you, cabinet secretary. In respect to the instrument just before Christmas, in fact, it released that we were not given the option. The UK Government has the ability to legislate on behalf of Scotland, but it does not have the obligation. We cannot introduce a UK SI unless we are given that opportunity. What happened before Christmas is that the UK Government introduced these last-minute changes to the island of island checks and requested that Scottish Government consented either to the whole instrument or nothing. Since we were not in a position to consent to the whole instrument, we had no choice but to withdraw from the rest of the instrument, including the provisions that we were prepared to consent to. Those provisions were introduced through a separate Scottish instrument just before Christmas. Officials preferred the option to continue with a UK instrument for the provisions that we had agreed, but we were not given that option. Thank you very much. That is very useful information. Finally, I have a supplementary question from Rachel. Yes, convener. It was just to pick up on Jim Fairlie's point, because I was interested as well who had been involved in the subsidy control bill. It seems that there is a statutory requirement, a statutory duty, under sections 53 of the UK internal market 2020 to consult with devolved Governments. Therefore, unless Jim disagrees with that, it seems that they did offer and invite the devolved Governments to make representations within that consultation that they received 234 responses. Okay. That was just to put it on the record. I do not think that you were expecting a response from the cabinet secretary. I do not see any further questions from members. I thank you very much, cabinet secretary and your officials, for taking part. That has been most useful and I am sure that we will visit some of these topics again in the near future. Thank you. We will now move on to agenda item 4. It is consideration of animal products, transitional import conditions, miscellaneous amendment, Scotland regulation 2021, SSI 2021-221-432, and I refer members to paper 3. As some provisions were made under the European Union Withdrawal Act 2018, we first need to consider whether the parliamentary procedure designated to this instrument by the Scottish Government is appropriate. Members will note that the negative procedure has been designated, and the Delegated Powers and Law Reform Committee agreed with this designation when it considered the matter on 7 December. Are members content that this negative procedure is appropriate for the SSI 2021-432? Could you please type in in the chat box if you do not agree? Otherwise, I will presume that members are content. We are content, thank you. We now move on to agenda item 5 in consideration of that SSI 2021-432. The instrument that came into effect in 1 January extends a previous derogation allowing chilled meat to be imported from countries in the European Economic Area, the Faroe Islands, Greenland and Switzerland, and the derogation is extended to 30 June 2022. The instrument also removes, for the period that transitional arrangements are in place, the health certification requirements for annual products that would otherwise have applied from 1 January 2022. No motion to annul has been lodged. Does any member have any comment to make about the instrument? If so, could you please type R in the chat box? Are members content to note the instrument, or does any member wish to make a recommendation about the instrument? Once again, if you wish to do so, could you please type R in the chat box? I see no comment, so members are content to note the instrument. That brings us to the end of the public session. We will now move into private session on agenda item 6. We will take a short break.