 Be gyn, everybody! Welcome to the ninth meeting of the rural affairs and islands committee in 2023. Before we begin, I remind all of those members using electronic devices to please switch them to silent. Our one item of business today is the pre-legit of scrutiny of Scotland's future agriculture policy, and we'll be taking evidence from the national farmers union of Scotland. I welcome to the meeting, Johnnie Hall, the general manager and director of policy I must put on record that I am a bit disappointed that despite us inviting other conveners from the different sectors, the NFU have only sent you now, that doesn't put your quality of being a witness anywhere in doubt, but given that we've got little time to consider the agriculture bill and we've got a very busy schedule, it is somewhat disappointing that we haven't got, potentially, conveners from livestock or LFA, which we think was a particular area of interest to us. That said, we've got 90 minutes and we've got a range of questions and I'll kick off with one which is fairly straightforward but very broad. Can I ask what the NFU SR would like to see in the upcoming agriculture bill and is there any red lines that you would like to put on record today? First of all, can I just respond by saying that we're very grateful that I have this opportunity to speak on behalf of Benefuse Scotland. Clearly, the committee is going through a whole process of speaking to various stakeholders and so on. I recognise some frustration from the convener about the fact that it's only me, but having said that, given my role and my responsibilities, I would hope and I would expect me to give answers that represent the true view of NFU Scotland. Some individuals might not be here, but it was relatively short notice and we have other commitments today. There are other stakeholder meetings going on and so on. Apologies if apologies are necessary on that front. In terms of the bill itself, we've been calling for this primary legislation for some time. We see this as absolutely vital, absolutely critical to the whole of the future agricultural and rural support package that Scotland requires and how that needs to differentiate itself from where we are today under the CAP, which we're still operating under and will do so for this year and next year at very least without any significant change. It's very clear to us and has been for some time that we need the primary legislation, the enabling legislation, to give powers to ministers in order to do certain things. The crux of it all, and I've said this to our members time and time again, is that whilst the powers are one thing, it is how the powers are deployed and used in the future that is critical. The bill itself and the legislation that will come from this place does not create policy, it creates powers. Ultimately it's how those powers are used that is going to be absolutely vital to the prosperity of farming and crofting in Scotland but also in terms of the role and responsibility farming and crofting has in delivering on the very clear agenda around food production, climate, biodiversity and wider rural development. So the bill is absolutely essential. We haven't actually seen a draft bill, we've obviously only had a consultation, so I am very eager and very enthusiastic, not particularly to see all the consultation responses which will be published imminently, but more in order to see the draft bill which will be introduced into this Parliament because that will clearly outline what powers may or may not be available and where they will sit. My view during the consultation period itself was that the Scottish Government had already jumped the gun on a few issues in terms of not only setting out powers and the framework for future support but also in almost making some of those policy decisions ahead of time. I'll name one for example, but there are others. For example, if you looked at the consultation on the bill it talked about some sort of disadvantaged area support to replace the less favoured area support scheme which is critical to so many farming businesses in our remote or remote disadvantaged areas. It talked about placing an element of that type of support, a power for that type of support as part of the tier 4 complementary measures whereas we all know that actually its functionality is very much part of the direct support measures and should be in tier 1 and tier 2. You talked about red lines convener and that was one in particular. The same goes for coupled support. We will continue to need an element of coupled support particularly for our suckler beef herd and where that was placed was again in the complementary tier 4 stuff. Equally, in terms of the conditionality attached to the base payments for example, the tier 1 payments, it was clearly inferred in the consultation that greening and a whole farm plan would be part of the conditionality attached to that. Again, that was making a policy decision before we've even got the primary legislation. I'm not overly concerned about what the bill actually says as long as it creates the power. As I said, the key thing is there after what happens in secondary legislation and how that bill is used. Is there anything—you've set out about LFA's less favoured areas, coupled support, conditionality or whatever—what do you want to see in the face of the bill? We're expecting this to be a framework bill as you say. It will provide powers and provide the ability for payments to be made. Is there anything that you would want to see in the face of the bill? I think that the bill absolutely needs to be explicit about the direct support element, i.e. the proposed tier 1 and tier 2 elements, being very much about enabling agricultural businesses to deliver on the outcomes that are expected of it. Therefore, it's about explicitly saying that you do need those elements that you've just referred to, convener, around coupled support and less favoured area support in a new form, in a new guise, nevertheless, to be in those tier 1 and tier 2 components, i.e. components of direct support. We also absolutely need to be very, very clear on the face of the bill that, actually, without the viability of agricultural businesses producing food, then the other ambitions in terms of outcomes intended of this bill around climate and biodiversity and wider rural development cannot and will not be delivered. Therefore, the primary purpose of an agricultural bill must be to put agricultural businesses and their needs, and I stress the needs, not necessarily what they want at the heart of the bill, in order that they can then deliver on the wider outcomes that we all require. It's about enabling agricultural businesses to deliver. Without viable agricultural businesses, the length and breadth of Scotland across every sector, each commodity and so on, we will not achieve the ambitions that we have set ourselves in terms of delivering on climate and biodiversity. The aims for the bill and the unions' views on those aims will sit in a wider context. I am keen to have a brief understanding from you of how you think the bill would fit into that context. You have told this Parliament previously that you feel that, for instance, the United Kingdom Internal Market Act drives a coach and horses through the principles of common frameworks and almost renders them redundant. Is that still your view? If so, what does it say about the context that the bill is going to sit in and how that affects its aims? Clearly, agricultural policy and rural policy and an awful lot of environmental policies is devolving quite rightly too. We need to be able to adapt and deliver agricultural support that fits the profile of Scottish agriculture, which is very different from the rest of the UK and is certainly very different from England. The concern that we've had over the past three or four years around common frameworks, around the UK Internal Market Act, leading into the subsidy control act as it is now, and also what we're seeing in terms of the retained EU law bill that is going through Westminster, is that that has the potential to undermine decisions taken here by this Government in order to deliver the outcomes that we require. It can be very convoluted, it can be very complex, but nevertheless it would definitely undermine the devolved nature of agricultural policy, for example, if there was a competitive advantage afforded to one part of the United Kingdom within the single market of the United Kingdom that wasn't afforded to another. Therefore, we need to be able to have an agricultural policy that is not undermining that way at all. At the end of the day, so many of the issues that we face are shared by other parts of the United Kingdom. We need all of the United Kingdom to be focused on an agricultural policy that delivers on food, climate, biodiversity and all the rest of it, but if we have it doing it in certain ways that are, if you like, perpendicular to one of us, the chances of achieving that are really quite difficult or quite slim. One of my great concerns around this, and I will, I hope, be able to talk a bit more about funding during the course of the next wee while, is that clearly what's happening in England and the defferer approach to agricultural support and the erosion and the phasing out of direct support in England could have a significant impact on the funding available to Scotland going forward, and therefore we need to be very, very mindful about what's happening in other parts of the United Kingdom. Thanks for joining us today. Really following on from my colleague Dr Allen's point, when I'm travelling around my constituency, it's very clear that one size doesn't fit all, and you can talk about that within Scotland, but then also, as you've just explained, the comparison between Scotland and other parts of the United Kingdom as well. If you could perhaps expand on that point a wee bit and then also think if you could let us know what the key challenges are for the farming and crofting sector and how new rural policy could overcome those. You're absolutely right. Farming and crofting in our guile is very, very different from farming and crofting in East Anglia, which I've just referred to, but it's also very different from farming in Fife. In many senses, the diversity of Scotland's agricultural profile is fantastic. We do everything from soft fruit and veg to cereal growing in the east coast and finishing livestock and so on, quickly moving west to your part of the world and went to very extensive livestock systems, and therefore fitting an agricultural policy which works for all, a one size fits all, is impossible. It's always been a challenge for us. Throughout the iterations of the common agricultural policy, it's been very, very difficult to fit something into the profile of Scottish agriculture, which works for everyone, but going back to Dr Allan's point, the very fact that we have the devolved capacity to do something very different now, not 90 per cent are given from Brussels as part of the CEP package, whereby we had a little scope for flexibility or adaptability. We've now got a real opportunity to say what is it that Scotland really requires for the 21st century to move away from blunt area-based payments, which is largely incentivised inertia, and focus on payments that will incentivise and encourage farmers and crofters to drive productivity, drive efficiency, deliver for biodiversity in climate and so on. To me, this bill, we've been on this journey since at least 2018 ourselves, pressing for change in how we deliver agricultural support in order for it to work better for Scotland, better for the taxpayer, better for the consumer. We now have that opportunity, but it is difficult, it is extremely difficult, because every, you know, there's no two farms or crofts the same. They vary by size, type and location, and that therefore makes me scratch my head quite often that I wish Scotland was dead flat and every farm was the same size as the next one, they all did the same thing, because policy would be a walk in the park if that was the case, but it's not. Therefore, it's always going to be a degree of compromise, it's always going to be a degree of what's right for the majority to get the right outcomes we want. This is the key bit, allowing all farms and crofts the opportunity to adapt and change to that. Therefore, one of the keys in all this is avoiding any sort of cliff edge whatsoever in terms of how we move forward. There has to be, and this Parliament and lots of us out there in the policy sphere, we all talk about transition and adjust transition. There has to be a real transition and adjust transition for farmers in Argyll as there has to be in the north-east of Scotland or the borders or wherever, and that's key. Thank you for that. I'm also just thinking as well about farming. I think you've touched upon is a long term. You can't make decisions in a year, you've got to long term, so if you can comment on how perhaps the bill can help that and what challenges you think there are in the current situation with regards to long term planning. When we talk about frustrations and not only shared by any few Scotland, but other agricultural industries, sectors and interests, the certainty around where we are right now and where we will be in the future is key, because at the end of the day the 17,500 farms and crofts that make up Scottish agriculture are all individual businesses. They all have to make decisions. They're all making decisions today, based on all sorts of different risk factors, whether it's exposure to trade agreements or labour issues or whatever it might be, supply chain issues or, and significantly, whether it's about what's going to happen to future support. Over Christmas just gone and into the new year, we surveyed our members and had one of the largest responses to a survey that we've ever had about their intentions. The number one fear factor, as I like to refer to it, was future agricultural support in Scotland that came out as top in terms of the risk or the lack of confidence or driving decisions of all things, higher than markets, higher than input costs, higher than all sorts of other things that are clearly involved in running an agricultural business, future support. Having that certainty and therefore that confidence is being absolutely critical, and we've lacked that. To a degree, we've had an era of stability in the immediate post-Brexit era. In a 2016 to date, we're still in the CAP. Yes, there's been other challenges within that period around trade agreements and labour supplies and various other things. We've obviously seen an input cost crisis in terms of the impacts of the Ukraine War and other things happening to global markets, but we've had that consistency around the CAP and the operation of existing schemes, but we also need to know, or we also know and recognise, that we need to move on. At the end of the day, and I said it earlier on, the CAP hasn't done Scotland too many favours over the years. Yes, it's provided certainty, but it hasn't instilled confidence in what to do next. It's largely incentivised inertia in terms of how we've managed our land. I'd like to turn to the opportunities for the farming community from the policy reform, but on your survey you said that the highest level of anxiety was about the future of the policy. The Scottish Government has said, no matter what Westminster does, the Government and Scotland will maintain direct payments and support our nations and our nations producers. I'd like you to reflect on that for a second, but do you have concerns about what the future funding is going to look like? Ultimately, whatever policy we deliver, if there's no security of funding for future payments, where is the anxiety coming from? Is it a lack of certainty of future payments or is it a lack of the direction from the Scottish Government or is it both? It's a bit of both. You touch on probably the big elephant in the room in terms of where we're going from here, because at the end of the day Scotland can and I think will come up with a very good support framework and a package of measures that will, in theory, enable farmers and crofters to all contribute to the challenges we face around food, climate and biodiversity, etc. They're all going to be in a position to actually play their part, but it'll stack up to nothing. It will be a house of straw unless the funding is made available. Right now, as you all know, we have a funding commitment from Westminster up to the end of next year, so 2023-2024. Thereafter, all bets are off. One of our major lobbying tasks and priorities at the moment is to channel our thoughts and views to every party in Westminster to say, we need a commitment beyond 2024, beyond the lifetime of the current UK Parliament. Because without that funding commitment, then it's very, very difficult to see where we go next. So at the moment, Scottish agriculture currently receives about £620 million from the UK Treasury. We absolutely rely on that. Now, we're not saying for a minute that we then need to spend that money in the same way as we've done over the recent past, but we need to spend that money in ways that are going to be to the best effect of both enabling viable agricultural businesses, first and foremost, so that they can then deliver on the outcomes that we require. So there's an ownership responsibility on two governments here. Westminster to deliver the funding, and I think the cabinet secretary referred very clearly to that in her statement to the Scottish Parliament last week. But then the ownership responsibility absolutely on the Scottish government to ensure that that funding is committed to agriculture and committed in a way that gets or brings about the results that we all require. And that means, back to the policy, it means focusing the bulk of that funding on direct support and the direct support elements of the new policy being tiers one and tiers two. Can I just follow that up? That point that you've just made in terms of the tier one, tier two support and the opportunities, I think we recognise that there are opportunities for us to tackle the issues that we have with climate change biodiversity loss and all the rest of it, but we have to be able to firm viably. I have a concern, and you could maybe allay that concern or not, that the proposals that we're looking at at the moment, we're trying to do too much with a single pot of money, which is going to have to stretch much further than it needs to. Is that a genuine concern or is that something that you think that we can manage? I think it's a genuine and a real concern, and therefore it's one of the big risks as to where we go from here. So yes, we might secure a funding going forward, but as I say, the real responsibility thereafter is how that funding is utilised. Scottish government clearly set out a framework built on the four tiers, tier one and two being direct support but being split into that unconditional element and then tier three, the elective and tier four, the complementary stuff. Now again, as you say, we're asking that framework to deliver an awful lot, but the fundamental point, and you touched on it yourself, if we start to erode the viability of the agricultural businesses, remember farming and crofting in Scotland account for 70% of the land management that we have and so much of what we want to deliver has to come through land management, whether it's food, climate or biodiversity, then we need to retain a focus on the viability of those farms and crops. That means that bulk of that funding, as it is today, continually be focused on tier one and tier two. Yes, we need to make it work better more effectively to deliver outcomes, and that's why we're 100% supporting the split between tier one and tier two, but you need that base payment in tier one to underpin, if you like, to provide the foundations for a business to operate in what is a turbulent market with rising input costs and all sorts of other compliance challenges as well. That's the purpose of that base payment. Secondly, the new component, the very different component, is making sure that tier two offers practical pragmatic options for every farm, croft and croft, regardless of size, type or location, so that they can pick things and do management practices that work first and foremost with the grain of the business to then deliver the outcomes that are good for the business, but also good for Scotland and in terms of delivering on challenges and targets around climate and targets that will come for biodiversity under the natural environment bill, etc. You get that the wrong way around and the whole thing will implode pretty quickly. From what I said earlier on, I think that the policy is going in exactly the right direction at the moment. I think that the consultations will iron all those points out. Other people are saying that we are going in the wrong direction for this, that or the other reason. Do you feel that where we are at the moment is in a relatively good place to steer the bill to where it needs to be? I think that we are going in the right direction. The challenge and the issue that we've got right now is always going in the right direction quickly enough to meet the challenges that have been put in front of us. But you also said earlier on that we cannot face a cliff edge. If we do not do that gradually and fit it in to the ground—I also both know that farmers sometimes are not the quickest to respond to the things that we are trying to get done—is there a balance between making sure that we have not hit that cliff edge but at the same time allowing farmers to adopt the practices? Well, there's absolutely need to allow farmers and crofters to adapt to change. Change is all about how you manage change. A cliff edge of any sort would be a disaster for Scottish agriculture in many respects. If it's a disaster for Scottish agriculture, it's therefore a disaster for rural communities and all the upstream businesses and jobs and all the downstream businesses and jobs. What is a cliff edge though? Is it a payment stop-hanger or policy stop-hanger? A cliff edge for me right now, obviously there's a commitment to retain direct support in tier 1, but if the budget that goes into tier 1 and tier 2 is suddenly cut, that's a cliff edge. If the tier 2 component becomes overly onerous or it ends up that individual businesses have to spend money to get money, the so-called consultants charter, if it's about income foregone or additional costs or if it becomes a compliance night there, then again that will undermine and trip businesses up. We've already seen what's happening south of the border. As direct support is being phased out there and it's being replaced by environmental land management scheme and so on, the real temptation there is for farmers down south and this is what's happening to take a step back and say, well I can't make this work. If we do that in Scotland then I think we're not going to engage our farmers and crofters and it's about engaging and enabling our farmers and crofters because we can't deliver the outcomes we want without them and therefore it's about putting that horse before the cart in terms of the agricultural business and that therefore means we must have a clear focus on food production and what we then sell as an agricultural industry. How we feed that into our food and drink industry and sector, how we get a better return from the marketplace, ultimately ultimately we want to be less reliant on direct support but at the moment given the challenges that the farm businesses of Scotland face and their multiple and some of them are political, some of them are economic and some of them are physical in terms of many parts of Scotland, there will be a need for support in one form or another. Now some of that is direct support on an annual basis to underpin the business, other things are things like investment in the supply chain in terms of processing capacity and other things. We have got significant challenges and this bill therefore bringing it back to that is fundamental to helping address those but equally as we've just been touching upon, unless we've got the fuel in terms of the funding, we're not going to take this vehicle anywhere at all. Can I ask one very quick supp on that, on the point that... Very, very quick. I promise I have supplementaries on this. I do apologise. You said that farmers in Englanders are taking a step back. Given the amount of support that is required in order to keep farming in Scotland viable, how do farmers in Scotland take a step back if they don't like the policy? The step back is the cliff edge. The step back is basically, well, there are other things I could do with this land but if you're a tenant farmer there's less things you can do with this land and given the limited scope to change your enterprises in terms of agricultural land in Scotland, as I say, we're not all East Anglia and we're not all Fife, there are limited options within much of Scotland to actually change what you do and therefore it gets to the point where if you're overladen with debt and overdraft for the bank, you have no successor, you're making a loss year in and year out, that's not sustainable and I use that sustainable word properly in the sense that... My apologies, I've taken up too much time already John, my apologies. I've got about six supplementaries. Now, I know Rachel has got to leave the meeting at quarter two so I'm going to bring in Beatrice and then Rachel and then Ariane. My question's been answered. It's been answered, okay. Rachel. On the previous question, we know that farmers have been disappointed by the lack of progress by the Scottish Government. We saw them outside the Holyrood Parliament protesting on this particular issue with a lack of clarity. I was wondering, Johnny Hall, if you believed that there would be, with the time left, the possibility of the Scottish Government carrying out a pilot scheme on the tier payment scheme, would that be useful? Clearly, the Scottish Government has set out a route map that was published on the 10th of February and that clearly has some very important dates and I think that in itself, if we're all mindful to look at that, that does give us a guide as to timelines and when things will and won't change. But in terms of testing where we are today, I think the most important thing we can start to test as a matter of urgency are the proposed options or measures within tier 2, which were also published on the 10th of February, because that's the real departure. That's the real difference in terms of where we are today, in terms of something that's very, very new, very, very different. That goes back to the programme for government commitment to have a 50-50 split between the base payment and these enhanced payments of tier 2. That's what our members are constantly asking us about. What will those measures mean? What will I have to do? How will they fit in with my agricultural enterprises, my business and so on? It's probably the thing that we've made most issue with with Scottish Government in being clearer and sooner about that, about what is necessarily involved. At the end of the day, what's being published has come from things like the farmer-led groups, has come from opinion and thought like ourselves, but I still think that we've got a long way to go in order to say that this is ready to run. There is still little or no detail in behind things like eligibility requirements, payment rates, the waiting of those options and so on. That's what we're trying to get to grips with right now. We're engaging with our own membership on this as best we can to gauge what they like, what they don't like, what they see will work, what won't work and what's missing, because there are significant gaps already in the proposed list of measures. That's where I think the focus should be rather than piloting anything else. Taking into account the comments that you made in response to Finlay Carson's question around LFA's and coupled supports and the concern that you have in the tier 1 payment around the whole farm plan, do you believe that—I know that your members agree with that—the food security element should be at the heart of the bill and one of the major drivers of tier 1? By and large, yes. We've been very clear that food production, food security, if you want to use that language, needs to be front and centre of this piece of legislation, going back to what should be on the face of the bill. You just have to witness what we've seen over the last 12 months or so, how shocks to global food markets—and I'm obviously talking to the impacts of the Ukraine War—have an impact on all sorts of things, obviously in terms of input costs to how we produce food here, but also in terms of availability and supply of products that affect global markets and so on. As a country, we're a very small country in terms of global markets, but we're not immune to anything that happens on a global market either. I think that there's both a political and moral imperative to say that if we can grow that food here, i.e. temperate produce and particularly livestock-related produce, given our comparative advantage in growing grass and the fact that it rains—and I say that in no jest whatsoever, we should be actually happy about that on occasion—then I think that we ought to be clearly prioritising food production in terms of where we go from here, but I will paraphrase the cabinet secretary in her statement to the Parliament in November that there is no contradiction between food production and also delivering on climate and biodiversity and wider rural development. In fact, the four things go hand in hand, but it's about sequencing. You have to have—and it goes back to the early commentary—viable agricultural businesses that derive a return. It's not the right level of return yet from the marketplace. If those returns aren't there, that's the role of government to step in and ensure that those industries or those businesses don't simply implode and collapse. If they do, our ability to deliver so many of the things that we want to in a just transition way will be lost. My final question, convener, if I may, is if the Scottish Government, as their wishes, align policy with the EU. In the sphere of the agricultural bill, which areas do the NFUS believe will affect farmers if there is a divergence across the United Kingdom? That's within the sphere of the agricultural bill purely, because it's important to eke out those parts that you haven't given examples for to the previous questions from Jenny Minto and Jim Fairlie. In terms of the agriculture bill itself, clearly what the agriculture bill is setting out is that Scotland will retain an element of direct support, which is different from the rest of the UK—well, not the rest of the UK—different from England. Having said that, if we continue with direct support in tier 1 and tier 2, there will be conditions attached. I'm concerned that farmers and policy makers in England will look north of the border and say, well, that's a competitive disadvantage straightaway. Therefore, is there then pressure brought to bear to bring that down to the lowest common denominator, which is probably to get rid of support altogether? I think that that is a real risk going forward. You could probably tolerate a lot of that risk if, as you say, you're farming on the fennlands of East Anglia, but you can't tolerate that if you're farming in Arden American or Mull or somewhere like that. You just absolutely can't. Yet your contribution to climate, biodiversity and rural communities is arguably greater because of your presence in those remote areas and the landscapes that you manage than perhaps it is in other parts of the United Kingdom. I'll have to be careful what I say. Therefore, I think that it goes back to the point that Alasdair Allan raised about we need to retain our ability to do things in a devolved capacity. Your point also raised the issue about alignment with Europe. That gives me equal cause for concern, because I've said in various committees in this Parliament before I have a real dilemma about how you square a triangle because we've got a triangle of Holyrood, Brussels and Westminster. Clearly, if there's an alignment between Holyrood and Brussels on a number of issues, but there's clearly a divergence from Westminster and we have an internal UK market, then that could really stretch what Scottish agriculture can and cannot do and may expose it to risks that are yet to be played out in terms of some of the internal market act and so on. That remains another risk factor as far as I'm concerned. I was trying to work out what are the threats that we need to look at when we look at the bill itself so that we can look at it in the sphere of the agricultural bill and look at what your concerns are around that divergence. I don't think that we have time for other people wanting to come in and perhaps it's something that we can build upon or write to us. I'm happy to do that. You've touched on some of my questions and I'm going to go a little bit deeper. This is around the payments and the fact that we've got over half a billion pounds coming. I share that concern around the potential cut-off in 2024. NFUS has said that it would be in favour of some form of front-loading with an uplift in payments on the first number of hectares, but remains opposed to capping payments or tapering them down above a certain size of holding. I'd be interested to hear why you'd not support capping payments per farm at, for example, £50,000 per farm, which could then free up money to put to the other aspects. You've talked about the importance of food being central, but you also recognise that farming can take us forward with the climate and biodiversity issues and rural development. Two issues there. First of all, front-loading, which, to give its technical term, is a redistribution payment. It's an option that already exists under the common agricultural policy that's been used in Wales and other parts of Europe. Scotland didn't choose to go down that route in 2015, but we certainly view that additional support for smaller and developing businesses as being something that the Scottish Government should seriously consider going forward, because your economy is a scale, if you like. Your costs are greater per unit, etc., etc., when you're operating a smaller scale. If I've got into the real practicalities, the costs of having 10 cows are probably the same in terms of capital and all the rest are probably the same as having 50 or 100 cows, but per cow they become much higher, if that makes any sense. Enabling smaller businesses, developing businesses, particularly in our crofting sector, to have that additional support to recognise some of those challenges and issues, I think would be of significant benefit. We've always argued for that. We used to have front-loading in our couple support scheme for calves prior to 2015, for that very reason. You then talk about capping. Capping the way it's been framed, certainly by the Scottish Government in the consultation and previously as well, incredibly blunt arbitrary. You said 50,000, but why 50,000? Why not 25,000? Why not 75,000? It's a very blunt tool simply to top-slice businesses. Big isn't necessarily bad, in fact it quite often isn't when you're trying to deliver on key outcomes. I would bear in mind the fact that, whilst Scotland has, under the CAP, the lowest payment rates per hectare in Europe, we have in Scotland the highest payments per business in Europe. The very fact is that, given our landscape and our land type, a lot of agricultural businesses to be viable have to be large in area and payments are based on area. I think that it would be very very foolish just to come in with any sort of arbitrary cut-off point of direct support without understanding what's in behind that business. What happens if that business employs six, seven, eight full-time agricultural workers and that direct support element is cut by a significant amount, let's say, from the £150,000 to your £50,000? That then makes a big difference to what that business then does. That could lead to all sorts of issues around, well, we can't operate with this number of employees because we're going to have to cut back on certain activities. What's the socio-economic damage of that? I clearly get the argument around top-slicing payments and recycling those into other activities or funding for other elements of support, but I go back to the fundamental point. If we erode the viability of agricultural businesses in any way, shape or form, whether it's a budget cut or that it's capping, then you risk undermining the business altogether. If we undermine the business altogether, then that's a rapid way of meeting or getting to that cliff edge and individual businesses having nowhere else to go. I would see that as being a significant risk in Scotland. The profile of agricultural businesses in Scotland would suggest that capping is not the way to go. I would put conditionality on some of that direct support and make that conditionality work for the agricultural businesses to drive efficiency and productivity and create opportunity to deliver on climate and biodiversity. That is a big departure from where we are now. No difficulty whatsoever in saying that blunt area-based payments aren't working. We've said that for long enough now, but capping payments for larger areas or larger holdings doesn't make any policy sense at all. There's a lot in there. We've just come back to the fact that we talked about the just transition. I think that there's an awareness that work needs to be done to make sure that there aren't any cliff edges. I'd be interested to hear how the payments are based per area, but then you talked about the need for conditionality. Would that be outcomes? Would we move towards outcome-based payments rather than per area? In an ideal world, I think that we would all say outcome-based, because if we're talking about policy and we're talking about public funding being delivered into an agricultural business, whether it's a large grain and beef producing unit in Aberdeenshire or a croft in in Skye or Lewis or wherever, we're looking at wanting to deliver outcomes for that. Let's put our hand up and say that we are spending the public purse here, so we want to deliver on interests and public goods. Clearly, there are different ways to do that. In an ideal world, you'd say that if you can deliver that outcome, that's great. There is a lot of work going on in terms especially in the biodiversity area and measures around that to pay on outcomes. However, the reality is that farming and crofting in Scotland is quite often beyond your own control. You can do an awful lot of good management practice year in and year out, week in and week out, but there are that many other factors beyond your control, not least the weather, not least disease, not least the market forces and so on, that mean that you won't necessarily meet your outcome, so you could put all the endeavour and all the effort and all the public purse into something, but if you don't meet the outcome, does that mean you don't get paid for your endeavours? If that's a risk, that's a risk too far for many farmers and crofters who would not sign up to those things, and again that would not incentivise them or encourage them to do the right thing, and that's what we want to do here, so outcomes in an ideal world but actually pay people to do management practices that are likely to bring the outcomes that we want, but don't pay them only by results, because if it's only by results there are too many things out with the control of the farmer or the crofter. I hope that makes a wee bit of sense. That's actually a very helpful response, thank you. I've got Alasdair Allan, then Karen Adam. Thank you. Can I ask him about the opportunities for achieving mainstreaming? We often use this word and rarely define it, but what are the opportunities for achieving mainstreaming and the best practice that we can use in terms of climate change, mitigation and farming, and how should we incorporate that in legislation? I quite like the word or the term mainstreaming climate change actions. At the end of the day, we have got a challenge at the moment. At the moment, if you think about agri-environment schemes in Scotland, we've got about 3,000 agricultural businesses signed up under the current agri-environment climate scheme, and that's 3,000 out of about 17,500. So, yes, they're doing good things. They are targeting particular management, and there's funding in behind delivering on habitats and species and climate objectives and so on. So, about 3,000, 3,500 businesses out of 17,500. But if we're going to achieve our goals in terms of Scotland as a whole, we're never going to get there with 3,000 out of 17,500. What we need to do is mainstream climate actions, biodiversity actions, and that would be best done through the direct support element of tier 2, whereby you get most, if not all, agricultural businesses doing something and therefore the sum of those individual parts adding up to the greater amount of just 3,000 doing a lot. I hope that makes a wee bit of sense. So, the way Scottish Government and ourselves would lay this out is exactly in that let's make the tier 2 direct support payment work better in terms of giving each farmer and crofter options that work for he or she in terms of their business, what they're trying to achieve, but in addition to that, drives productivity and efficiency to reduce emissions, drives the opportunity to sequester more carbon in our soils, in farm woodlands, and drives the opportunity to create biodiversity and a hand-spire of diversity on every farm of every type. And that's going to be done through tier 2 rather than the tier 3 stuff or the current agri-environment schemes as we've currently got. So, at the moment, we drop big blobs of jam here, there and everywhere. We'd like to see that jam spread across everywhere so that we get the whole of the industry bought into delivering it for the ambitions that we have. Before I leave that, convener, just a final point, which is that that jam, of course, is spread quite thinly when it comes to the forms of agriculture, which are already ticking quite a lot of boxes when it comes to sustainable agriculture and sustaining biodiversity, if you look at what the average crofter or, indeed, some cases, upland farmer receives. So, if we're trying to mainstream that good practice, do you think the kind of payments on offer there, at the moment, are getting the balance right? Well, there goes back to the challenge that we talked about with Jenny Minto about how do you get this to deliver for the diversity of Scottish agriculture. And I think it is about creating, again, the key element of why we're going next is this tier two, making sure that there are options realistic, pragmatic and practical options for every different farm and croft, regardless of size, type or location. Now, that's going to be difficult, but that's where we are right now. That's why we need to really dive into the tier two options that have been published. We need to understand what else we need so that there is something for each of those, so that a crofter in Lewis has the same options available as somebody growing grain in Fife, but they're going to be very, very different options because they're very, very different agricultural activities. Allianne, do you have a supplementary ministry, Mike? Yeah, I do. So, we've heard from the UK Climate Change Committee, IPCCC, UN Environment Programme and scientists that there needs to be a reduction in meat and dairy consumption and production in order to meet our climate targets. I know we've had folks here, and I've been talking to people as well, that many livestock farmers and crofters aren't happy about this, but I know that some have taken it to heart and are willing to try diversifying, reducing their herd size and supplementing with horticulture tree planting, peat restoration and other measures. You may not have this, but I'm interested to hear roughly what percentages you have a sense of, maybe from the survey of your members, would be willing to explore that diversification that we need and how do we support them to do that in the kind of like moving faster mode? In the moving faster mode, I think if we move too fast too soon in that respect, I think we're running or introducing greater risks. At the end of the day, Scotland as a whole... I'll just say that I didn't say that in the moving faster mode, and I just really would like to get to a point where it's clear that we need to move to diversification. How do we get there? Diversification of land use is primarily what you're talking about. I think that there is clear scope to diversify land use without compromising agricultural businesses. It's not about reducing herd numbers or flock numbers. It's about integrating land use better so that we actually manage our soils better. We increase the carbon content of our soils through better management. In order to do that, we need to baseline what we do. We need to ensure that we're all carrying out carbon audits and we're all doing soil analysis as a consequence of understanding nutrient management and organic content within that or carbon content. I think that the biggest risk that Scotland has of failing in terms of its contribution to climate change is simply to wind down or undermine agricultural production here and continue to increasingly rely on imports. The more we import, the more we export our responsibilities around climate change. The more we export our emissions and the more we export our responsibilities around animal welfare. My argument very clearly is that we have a comparative advantage in growing roughage grass and an awful lot of Scotland isn't the best quality grass, so we can't substitute into vegetable production and horticulture and so on much of Scotland's land mass. Therefore, I think that we have an obligation to utilise our hills and glans to best effect by proper grazing management to deliver habitats and biodiversity as a consequence of that in order to continue to produce food here because we're going to consume. We, as a nation, will continue to consume and everything that we consume has some sort of emission attached to it. It has a carbon footprint, so let's try and do that best here, reduce the emissions and also increase the sequestration in our own farming businesses and so on. I think that that's where the policy needs to take us. The wider food and drink sector and the supply chains—obviously, the agriculture sector is integral to our food and drink sector. Where do you think the new policy can take, or how will it support, a well-functioning food and drink supply chain? That is one of the critical points that we all can take our eyes off all too easily, is that agriculture is the linchpin not only in the rural economy but in that entire food and drink sector. A point that I should have made in terms of Ariane's comment is that if we reduce agricultural production, particularly in the livestock sector here in Scotland, we're reducing the critical mass. The critical mass is so key to maintaining our processing capacity and our ability to produce high-quality food, which is going to be the bedrock and the mainstay of Scotland's economy going forward. It goes back to the bill. It goes back to the fact that we actually need to put food front and centre of that because without food production, without agricultural production, as the starting point in that supply chain, we don't have a food and drink sector, but it won't take much to make it wobble. If you look at the new Dunbeer plant at Solcoats in Ayrshire, employing 350 people locally, it's a £12 million investment involving Scottish Government funding, and it relies on about 1,000 beef producers in Scotland supplying on a regular basis to keep that going. If that falls to 750, does that start to look a bit iffy? Probably. If it falls to 500, I think it collapses. We'll lose all that infrastructure and capacity. Every time we talk about the importance of agricultural funding coming into agriculture, it's not about lining the pockets of farmers and crofters. It's about ensuring that all the upstream businesses and jobs that service and supply inputs to agriculture are maintained as well. If you think about every small market town or settlement in rural Scotland, there is a tractor dealership, there is a veterinary practice, there are hauliers, there are feed merchants, seed merchants, all reliant on active farming and crofting. Going back to your point, everything that then leaves the farm and goes beyond the farm gate, because every farm on crofter I know produces something, that's what they're there to do. That then is the kernel, if you like, of the supply chain. That then fuels the 365,000 jobs that we have in the food and drinks sector in Scotland. We're rethinking about our ambition 2030 around the food and drinks sector, but it's certainly worth in excess of £15 billion per year. I think it becomes critical that we continue to support that sector, because if you don't support the linchpin, then you're really failing on the upstream and the downstream sides of that. If you come back to the hard numbers on this, the hard numbers are, yes, we've talked about £620 million of UK government funding, so about £650 million in total coming into Scottish agriculture, but that being, if you like, the catalyst to grow an industry that's worth £15 billion to the Scottish economy in terms of food and drink. It's also, as I say, the mainstay of all those jobs and incomes of the upstream sector of Scottish agriculture. Think of your own rural constituencies and think about how much depends upon farming and crofting in one form or another. Not necessarily directly, but definitely indirectly. Are you winning that argument when we hear Chris Stark suggesting that we need to reduce meat consumption and reduce cattle numbers? We have NGOs coming to committee on a weekly basis saying that we need to reduce stock numbers to reduce outputs. Are you winning that argument? If you're not, what are you doing to ensure that critical mass, the whole story about critical masses, is out there? What can the agriculture bill do to ensure that we maintain that critical mass? Jim Walker said we're at it now. If we lose any more of our shluck or cows, that's it. That's the cliff edge. How can agriculture well help that? If anybody has any real genuine intent around just transition, they will understand that we cannot simply meet our climate change targets by reducing production, because that would be another cliff edge that we would face. It's interesting. I find it really fascinating that Chris Stark, as the chief executive of the CCC, says one thing, but his chairman says another. His chairman has definitely changed tax slightly about integrated land use more than it being about changing diets. If it's about integrating land use, actually in Scotland we're pretty well placed to do that, given the right tools and incentives, and that takes us back to agricultural policy. I think there is huge scope to lock more carbon in our soils, huge scope to invest in farm-scale woodlands that add benefit and value to an agricultural business, and also lock up carbon and create a habitat and wildlife and all the rest of it. If we get the signals right and if we get the policy right, I mean right now, Scottish Forestry are consulting on a new iteration of the forestry grant scheme with a specific intent of trying to make it more attractive, more appealing, more practical for farm-scale woodlands. That's the direction that we should be going in. Let's focus on what we can do rather than what we can't. That's the key message for me, because the collateral damage of undermining Scottish agriculture is potentially enormous, as we've just discussed. Absolutely. Jim Fairlie then, Mr Isval Alba. Yeah, we've kind of wrapped, sorry, I think that Ariane was before me. No? No, I don't think so. Sorry, my apologies. We've kind of roamed about on this one. I'm going to go back to the opportunities for the, I presume we're looking at the subs on six? Yes. The opportunities from the food and drinks that you touched on it in your question to Ariane. In terms of the ability of farmers to be able to diversify, we've had the CCC saying last week that we needed to reduce numbers and all the rest of it, and you then touched on the critical mass, which I'm very glad you mentioned, because that's the bit that I want to talk about. What would be the effect if we, for instance, decided to say, right, we're going to pay £1,000 for every calf that's born on a hill, but you need to reduce your numbers by 20% or 30% of the suckler cows you produce? What would be the net effect of that? Because then you're, my thinking is, you're targeting one specific problem, so we're targeting it in that way. What would be the net effect of it? Thinking very quickly off the top of my head, I don't think that's sustainable. In what sense? So you said that you'd pay £1,000 a calf? Yeah, so I'm plucking that figure off the top of my head. If somebody who used to receive calf payments, I'm thinking, right, okay, we want to reduce, if we're going to reduce the numbers of cows, as we're being told, that that's the only way to do it. Well, you'd support those cattle, which would be, but if there was a, you're basically saying you'd have to have a quota of cows that you're allowed to keep, so that would cap the amount of payment. But where would that be set? And if that number is, you know, currently we've got just over 400,000 suckler cows in Scotland, if that falls to 300,000, what's the net effect? That's the question I'm asking. And I think the net effect is actually, you really start to close down the Scottish beef herd pretty quickly because that calf has just been born on the hill. You know, if it's been born on the hill on the west coast, it's a store calf. Who's then going to come and buy it? Who's going to take it off your head and pay you a reasonable price for it? Yeah, you might be getting £1,000 of the cow, but you know, I think that might dry up if there's then nobody to come and buy a calf, because, you know, keeping suckler cows is an expensive business, and seriously expensive business. But yet, I just think that as a consequence of that, that the longer term impact would be downstream of where you're paying that money. You might be paying it on the hill calf being produced, but the real implications would be downstream and the whole critical mass issue that we've just discussed. So effectively what we're saying is for a whole supply chain to work, you can't take each individual bit and try and find a solution in that individual bit. You've got to take it across the whole system that we haven't taken. Absolutely, and that's arguably what's wrong in many ways with the fact that right now, if you look at the whole supply chain in just about every sector and every commodity, there's that inequity, if you like, within the supply chain with the primary producer being squeezed at one end and the consumer definitely being squeezed at the other, but somewhere in the middle of somebody is still making big profits. And we've seen that over the last 12 months in particular. So in many, many ways, processes and retailers need to start to pay an adequate return to the primary producer in order to safeguard the supply of foods. If you look at egg shortages through 2022, absolutely nothing to do with bird flu. That was a complete smoke and mirrors job. But everything to do with the fact that last Easter, last spring, egg producers in Scotland were warning Tesco's in Co, I should maybe shouldn't said Tesco, there you go, a supermarket, that unless they paid the right amount, they couldn't operate those businesses anymore. So I'm going to stop you there. You mentioned earlier on about the public good in terms of how we deal with that biodiversity and the rest of it, but is producing food not a public good? Technically, no, but it's absolutely in the public interest. How do you mean technically? A public good is defined by something that I cannot buy or sell it to take it away from you. But anything that has a price and is marketed and sold is not a public good by definition. It's an economic term, public good, and we get confused around this. So public goods are things like water quality, air quality, landscapes, habitats. All sorts of things like that are in our public goods. But nevertheless, food is absolutely in the public interest, both in terms of its quality and the standards it's been produced to, and of course, its affordability. So food is definitely in the public interest, but I think everybody needs to be aware that public good and public interest are not necessarily the same thing, because there is a strict definition of what a public good is. Just to finish on that, one of my biggest problems about the sustainability of delivering public goods is that, at the moment, too many public goods are delivered at private cost, and you cannot do that sustainably in the longer term. If you want public goods, public purse has to pay. If you really want to get me the economic theory of it all, which is actually a reality, you read something called the tragedy of the commons, which will tell you that there is no incentive to continue to deliver in the public interest or the public good unless you get a return from your endeavours. I am not sure that the question that I have is within the scope of today's session, so I will be guided by the convener on this, but while we are on the subject of a well-functioning food and drink supply chain, I want to ask to what extent your members see challenges in the existing trade agreements that we have in terms of their ability to maintain Scotland's agriculture sector and also to improve food security for the nation? I think that it is a very valid question whether it is in the scope or not. I think that it is something that we all need to be aware of. Clearly, the UK has agreed free trade agreements with both Australia and New Zealand in 2021 and there are others coming down the track. Of course, Australia and New Zealand in particular, let's focus on them, are exceptionally important and productive agricultural economies. They compete directly in terms of what they produce in terms of red meat sector and grain, and New Zealand to a certain extent is the dairy sector too, and indeed a bit of horticulture as well. I am going to stop you because it is not directly related to what is going to be an agricultural bill, but if we have time at the end, we will absolutely come back to that if you do not mind. I was glad that you started to answer that, because I was going to ask you to unpack a bit what you meant by food. Earlier, in your response to me, I felt that horticulture was really getting pushed out of the picture. I just want to understand what you mean by food in Scotland. Horticulture is definitely not being pushed out of the picture. If you look at our horticulture, our soft fruit veg sector in Scotland occupies about 1 per cent of our agricultural land yet is accountable for about 16 per cent of agricultural output, so it punches way above its weight in terms of its value. It is an extremely important component of Scottish agriculture, whether it is producing soft fruit or veg or potatoes or whatever it might be. It has been largely unsupported for decades, and it has clearly got its own set of challenges right now, particularly around labour issues and so on. It is vitally important, but our ability for most of Scotland's land mass to move into horticultural activities is extremely limited. It is interesting that you have said that it has not been supported. Given that we had lack of fruit and vegetables on our shelves recently, I understand that we could move towards, through glass houses, a lot more Mediterranean type foods. If we were supported to do that, we could increase that sector. We could indeed, but that would rely on a significant amount of capital investment rather than underpinning agricultural incomes, which is the basis of tier 1, tier 2 type payments. Capital investment is clearly important, and not just in glass houses or polytunnels and all the infrastructure that is required. We have an issue in certain parts of Scotland. We certainly had it last year of water shortages. We had drought in Berwickshire. We certainly had it in the Eden in Fife and in and around the Tynes catchment in East Lothian. In our veg and horticulture areas, investment in things like boreholes, reservoirs and so on for on-farm use and efficient water management would be beneficial as well. We need to encourage those sectors, but those sectors are exposed to a significant number of risks right now. You can say some of them are Brexit-related and some of them are just market-related as well. For example, on Friday last I was on a farm in the East Nuka Fife and they grow about 100 hectares of broccoli every year. It costs £10,000 per hectare to establish that crop, so we are talking about 100 hectares and we are talking about £1 million of investment up front. If you do not know whether you are going to have enough workers to pick that broccoli, do you make that decision? To be honest, the decision is being made for people like that to say that I cannot withstand that loss or potential loss, so I will not. I have an easier option. I will just plough it and I will grow grain. That would be a huge risk to the diversity of Scotland's agriculture. It would be a huge risk to what we could produce in terms of fruit and veg, which is clearly part of that package around the Good Food Nation Act, etc. However, without the certainty and confidence of doing those things, because of other risk factors involved, it becomes extremely difficult for those individual producers. That is interesting and clearly the more support needs to be made, the more certainty that you talked about at the beginning for producers in that way. However, I would like to just move the conversation on a little bit, continuing with the food supply chain piece. We have been talking here a bit and you mentioned a supermarket here and the issue with eggs. I would be interested to hear your thoughts on supermarkets and alternative options for farmers to get their food to market on the idea of subsidising the price of Scottish fruit and vegetables at the point of sale. In general, short supply chains are always better, particularly when you are looking at perishable goods anyway, which is what we are talking about with foods. Short supply chains selling locally would add huge benefit to Scottish agriculture but also a huge benefit to the consumer. I think that there are a number of vehicles—let's refer to tools in the toolbox this time—that could be available. I am thinking about procurement and issues like that, which are clearly challenges and issues that I think have been identified by the Good Food Nation Act, but what are we actually doing about it? What are we really committing to as a nation to say, yes, there are certain things that we can grow to a high quality, that we can source ourselves and we can put into supply chains that are local, short and therefore make it accessible and affordable, which comes back to your latter point for the vast majority of consumers. The ways and means of which you make things affordable, I think, are always going to be challenging because at the end of the day food production does commit a cost, but we want to make sure that that cost isn't unreasonable to use that word for the vast majority of consumers because nothing would please Scottish agriculture more if Scottish consumers would commit to buying Scottish produce, whether it's red meat, dairy product, fruit and veg, whatever it is, and say, yes, we can do this. Clearly, we have costs of production here in Scotland, given the nature and scale of Scottish agriculture and some of the compliance costs that go with that, that do push the price of food up, so how do you square that one in terms of government intervention? I guess that there are ways and means to do this, that historically there have been ways and means of doing this whereby if you support the actual food product, you subsidise, and I'll use the word advisedly there, you subsidise the consumer, but indirectly you support the producer as well. We've seen plenty of examples of that over the years in different parts of the world, so I think there's scope to look at that. Thank you, convener, and thank you, Johnny, for being really interesting thus far. I really wanted to touch upon, you spoke about there that we shouldn't really be outsourcing, so I'm going back a bit and just picking up a few of the points that you've said up to this moment, but we shouldn't be outsourcing animal welfare or carbon footprint, et cetera, and looking more to that domestic markets as well, but in the same breath we're talking about the impacts of Brexit or labour shortage and how that is limiting the diversification of what's going on here and what produce that we can produce. I'm just wondering how do we marry that up and how do we manage to ensure that the future of Scottish farming is diverse, that we aren't just going down one path? How do we do it within this bill as well? How do we get that focus right? That's a very interesting question, and it's not an easy route to tread. We do, I think, one of the strengths of us. I referred to it as being a bit of a challenge, but the diversity of Scottish agriculture in terms of how you set policies, one thing, but I also think it's one of our strengths is that there are so many interrelated aspects of Scottish agriculture that we don't actually want to lose that. We'll never be a monoculture because our landscape won't allow us to be a monoculture. We will always have a combination of mixed agriculture, so we'll do certain things in certain places and do it very well. We'll do other things in other places and do it very well. We want to retain that. I think that it almost goes back to that confidence and certainty that any producer anywhere wants. There have been a significant number of uncertainties whether you're producing soft fruit and veggie in fife around things like labour and the impacts of Brexit and so on, or whether you're producing blackface lambs in our guile and the impacts of potential loss of support and so on. I think that there is a huge responsibility on this agriculture bill to say that it doesn't matter what sort of farm type you have, we want to enable you to utilise your agricultural business to deliver to best effect for a what the market wants in terms of food production, and be what society needs you to do in terms of the climate, the biodiversity piece and all the rest of it. It's not going to be easy but I think it's the challenge that we all have to face up to and at the end of the day that will also involve therefore intervention. That's the role of government in this because I think left to its own devices, left to pure market forces, we would see an absolute and rapid decline in some areas and the economic and social consequences of that, and we would see large parts of other parts of Scotland continue to be farmed but not in that diversity, high quality, high value food products that we know. We'd just grow grain down the east coast and we'd have a bit of livestock on the better marginal land and we'd have nothing further north and west and that's a scenario I absolutely do not want to see happen. We are having to mitigate quite a lot of the impacts of Brexit within this. Undoubtedly, we talk about perfect storms and it's a bit of a cliché to say so but if you think about the perfect storm of where Scottish agriculture has come from in the last wee while, it's now almost seven years ago since the EU referendum and we've been scratching our heads about how do we depart from the EU on a basis that doesn't undermine us in terms of our trading partners etc. How do we operate on a global scale? How do we operate without the CAP? That's the big challenge in front of us now in terms of our own domestic agricultural policy. How do we operate without that flow of labour that's been so vitally important to not only the food growing sector but the processing and the supply chain. In a context also where we've seen a pandemic which has changed all sorts of behaviours and patterns and equally now where we're also exposed to some incredibly volatile issues around input costs and global food markets because of the Ukraine war so it just undermines how vulnerable and exposed we can be. We are fast running out of time and there's still quite a few questions to get through so can I ask everybody to keep their questions tight and Johnny your responses as briefly as you can. Mercedes Thanks, convener. I'll do my best. Johnny, NFUS members will of course be all too aware of the interdependence between food production and having a thriving natural environment and biodiversity so three questions for you. Firstly, what opportunities do your members see for the farming sector in supporting biodiversity and nature restoration? Secondly, what challenges if any do they see in this? Thirdly, importantly, with reference to the proposed agriculture bill, what policy is needed to support your members in this? I think that all three of your questions actually sort of merge into one and that might keep the convener happy if I can be as brief as possible on this but in very short terms, biodiversity is key key to thriving natural environment of which agricultural land management is a component thereof. We use all sorts of jargon around natural capital and so on and at the end of the day, agricultural systems rely on utilising natural capital of which biodiversity pollinates for example, classic, I don't have to say it but agriculture also has a key role in providing habitats. Agriculture, I sometimes say it flippantly but it actually does illustrate the point, there is often a clue in the words we use so I quite often talk about corn crakes on the west coast and corn buntings on the east coast, there's a clue in the name is or not, you know why they call corn bunting, why they call corn crake because there are so aligned with land management systems, traditional agricultural practices that have given rise to flourishing populations and I think that's where we need to focus is looking at farming systems that deliver the right sort of grazing and habitat for things like waders, curlews, lap wings, oyster catchers, that doesn't come for nothing, you need somebody to do it. The worst thing we could do would be to run down at the agricultural sector that is responsible for managing habitats just in the same way as if we ran down the agricultural sector to reduce emissions but we'd still pull in lots of imports instead so you need agricultural land management to do the right thing in the way that fosters nature restoration and that requires the right incentives and the right sort of advice and so on so cutting it short this agriculture bill has to have a responsibility around what it does in terms of biodiversity and to me, yes, there's a Scottish biodiversity strategy and yes, there will be a natural environment bill coming into this Parliament but the vehicle for delivering what it seeks will be the agriculture bill. I think some of these issues will have been touched on but in terms of supporting biodiversity going forward, first of what's the policy that's needed to support that but rolling back a little bit to something you said earlier, obviously some of that policy will depend on, all of that policy will depend on the funding envelope available so what is, that you alluded to earlier on, what is the union, your union doing to lobby UK Government about that question about uncertainty over funding? So two important points there, you're absolutely right, in order to achieve what we want to deliver on biodiversity, we need accessible, manageable, non-prescriptive measures. The biggest problem we've had with traditional agri-environment schemes from pillar two under the common agricultural policy is that it's been largely prescriptive and largely about stopping particular practices to do something else and that hasn't recognised what I just referred to in the previous question as the actual agricultural land management that gives rise to the outcome we want. So you can fence off an area and you can remove the stock but actually the vegetation goes ranked pretty quickly and probably chokes out the very interest that you wanted to preserve in the first place. I've seen it time and time again so we need to get away from the prescriptive stuff therefore the tier two measures that we're talking about, so light touch management options around biodiversity are really key and clear so I think there's a real opportunity there. Your second part of that is it does go back to this funding issue, what are we doing about it? Well myself, Martin Kennedy and Beatrice Morris who's behind me I think she might have left the room. We were in London just at the beginning in this month, we will be in London continuously and we are pressing every political party in Westminster not only to attempt to open the doors of treasury so that we can actually get in and make our arguments directly to treasury officials and ministers but secondly what we absolutely need a commitment on from every party in Westminster is a commitment to go beyond 2024 around the funding package for UK and therefore Scottish agriculture. We want that commitment to be ring-fenced, we want that commitment to be multi-annual because that's what it is under the CAP so if we talk about alignment to Europe then follow the EU lead and saying yes we're going to commit to agriculture and we're going to commit to it over this timescale and to this amount and I think that's then translates back as I say to the Scottish Government responsibility to do that as well and to say we're going to effectively spend this money to best effect within agriculture to deliver the outcomes we want. It will not be easy to secure that funding but I think we've got some cast iron arguments in terms of the return on the investment that the taxpayer gets whether you measure it by agricultural production and activity or whether you measure it in terms of environmental delivery or the socio-economic piece around all the other jobs and the communities that rely on that support. It's very easy to set out and we continue to do so. It's a huge return on investment. One last thing on that, £620 million of taxpayer funding spent on agriculture in Scotland. Scotland's total public spend according to the House of Commons library is about £99 billion so we're talking less than 1 per cent coming through agricultural support measures and agricultural policy but yet delivering so much in the wider context in the interests of Scotland. Thanks. We're going to come back to funding at the end but I've got a question on it. So at the moment there's the £620 million that comes from the UK Government and it's a bit like through CAP, it's ring friends for agriculture but going forward you know that the Scottish Government get a block grant are you saying that agricultural payment should be separate from that block grant and how would that be the amount to be dictated so would it be the UK Government deciding how much money came to deliver what are ultimately devolved priorities how does it work in practice you know you don't want it to be linked Barnett formula wise because agriculture is significantly different south of the border that is up here so are you expecting the Westminster Government to set a budget on something that's actually devolved to deliver what the Scottish government's priorities are I'm not just sure what you're asking for well quite clearly where we are now the UK government because it was a Tory party commitment in 2019 the UK government have said that up to 2024 the lifetime in the parliament that would honour the 2019 CAP spending that the UK received and it would distribute that across the devolved in the same proportions as was the case under the CAP and that's the situation we haven't so we have a degree of continuity but it's historic continuity it is not ring ffence however unlike that certainly the direct support element was under the CAP it does come to Scotland as part of the block grant it is then down to the Scottish government and it was Mr Swinney's last budget just before Christmas there that basically continued to honour that so at the moment it's effectively been ring ffence but it's not explicitly ring ffence in terms it could go anywhere within the Scottish government spending portfolio so I go back to the point we made earlier or I made earlier that we absolutely need a commitment from the Westminster government about the quantum of funding and you're quite right convener that we need that to be based on an overall settlement for UK agriculture of which Scotland continues to get what is about 17 percent because that was our historic share if we went to a barnatised function that would be about nine percent and that would be essentially almost a halving of that budget even if the budget stayed the same so we absolutely don't want that so there's an argument in itself so and then once it comes into Scotland we absolutely need it to be committed on a multi annual basis and ring ffenced now I know governments don't traditionally like multi annual things and they don't like ring ffencing things because they like to be light on their feet but I go back to the argument about the fact the agricultural industry and everything that relies on the agricultural industry needs that certainty over time to be able to plan and commit the investment that's required. I still don't understand what your ask of Westminster is is it to identify a sum of money based on what? Scottish Government priorities? No, it needs to be a sum of money that will continue to flow into Scotland to enable the investment in Scottish agriculture to deliver what's being asked of Scottish agriculture. We cannot continue to deliver on food, climate, biodiversity and wider rural development without that funding. But how will you quantify that? What is your ask? Are you going to the treasury and saying can we have 620 million and that index linked over the next few years? The bare minimum is 620 million but we all know that that in real terms has come down significantly over the years but 620 million is the absolute bare minimum that we require. But on going? On going? How's that negotiation going to go? Are you going to go down to Westminster every year or if you get multi year payments every five years and explain what the Scottish Government priorities are to spend that money and ask for 700 next year? I don't understand how we can work that out because again it's a bit like the block grant. Westminster decides how much to spend on NHS. There's a Barnett formula consequence that then comes into the Scottish block grant and the Scottish Government have the decision to make whether they spend it on the NHS or spend it on something else. What is the formula given that agriculture policies devolved? What is the formula? How is it going to work when Westminster delivers a budget that we want to be ranked first in agriculture? The formula right now in our head is that the bare minimum is 620 million. There's nothing that then stops the Scottish Government co-financing that to some degree or using some of the other Barnett consequentials. Last week- Last week's budget delivered 300 million Barnett consequentials to Scotland. Five years time when Elms develops arms and legs or the agricultural budget south of the border is cut and more put into biodiversity and environmental schemes, what then happens to the Scottish budget? That's the risk. That's the absolute risk because right now that's why we need to be really aware of what's happening south of the border because at the moment with the phasing out of direct support in England to me the Treasury will simply look at that as a cost saving. They won't necessarily divert that money into capital investment for farming or indeed biodiversity measures or whatever. They will view that as a cost saving. If they run down the overall budget for the UK, Scotland's share of that overall budget even if it was at 17% will dwindle. Then if it comes into Scotland and if we then start to skew the amount of money that moves to tier 1 and tier 2 versus tier 3 and tier 4 then I think the risk is you're looking at a huge undermining of the amount of funding that is required to sustain agricultural businesses first and foremost. If you do that I don't think you'll deliver the outcomes you want and that's what we all need to be mindful of. You can't deliver the public good and the public interest agenda on private cost. I'm still confused given how different agriculture is in England and in Scotland and how you can negotiate a settlement with Westminster when agriculture policy is actually devolved but we'll come back to that so that's a long discussion I think. I still don't understand what your ask is going to be in two or three years time and how you're going to base that. The ask has to be now because at the end of the day we're going to have a UK Government election next year and that commitment is only till next year so we should all be asking that question now. We should all be asking that question of our own parties across the UK. We all have MPs in Scotland of different parties and we should all be asking them to put that into each and every manifesto that they are committing resources to UK agriculture but particularly to Scottish agriculture. I'd like to ask about the opportunities for improving farm incomes and competitiveness from the future rural policy but I am bearing in mind one of the things you said earlier on about consumers are squeezed at one end farmers at the other and there's this big chunk in the middle. How can this policy affect that or is it this policy that it's the vehicle to do that or do we need to get the supermarkets in this room asking them how they're going to pay more to farmers and charge less to consumers? There's clearly two ways to improve the bottom line of any agricultural business is what you're talking about. It's to improve the margin in terms of what you sell and I think there's big scope within Scottish agriculture to do that. Let's not kid ourselves. Some sectors are brilliant, other sectors there is huge scope to improve the margins, to understand our costs better, to drive costs down and seek a better return on what we actually sell. Then there's the bit you've just touched on about getting a fair share of the margins in the supply chain. The first thing first, the agriculture bill in itself I think has to be used as a vehicle to drive efficiencies and productivity at the agricultural business level, actually producing the crop or the lamb or the beef or the milk or whatever it might be. We drive our costs down relative to the return we get from the marketplace but part of that as well as driving costs down per unit of output we also need to ensure we get an adequate and fair return on what we actually sell. We get a fairer price for what we sell so that that's when you get into the supply chain issues of it. Now the bill itself won't, in my opinion, get anywhere near the supply chain issues. It's all about agricultural land management this side of the farm gate and driving efficiencies and driving productivity and so on, which is good. What we need beyond that and this tends to be a UK issue is how do we get fairness in the supply chain? If you look at the UK Agriculture Act 2020, section 6 of that is all about fairness in the supply chain because if you look at the grocery code adjudicator and the codes within that and the elements of leverage that that can bring, it's very very limited. It doesn't even touch the primary producer so we need things like the UK Agriculture Act to start to change things and we're seeing a good example of that in the dairy sector right now with milk contracts. That's the first real sector that's started to use that legislation at a UK basis. I think depending on the outcome of that process there could then be a template to introduce contracts, legally binding contracts for your land producer, your beef producer, grain producer, whatever it might be. That's where we need to get to. We do need some legislation. There are two things that you touched on earlier on in the session. One was the cost of producing broccoli in fife. The other one was about berries. I know from my own area in Persia that there was a long-established berry farm that simply pulled the berries out of the ground. We're talking blueberries here, we're talking high-value quality foods, superfoods and yet where we are at the moment it seems to be that we're undermining the ability for these unsupported industries, sections of the industry, to be able to produce the kind of food that we want our population to eat while at the same time they are being squeezed to the point either through labour shortages as a result of Brexit or as a result of supermarket power being able to say we can bring that in cheaper from Peru so therefore the price that we're going to give you makes you no longer sustainable. It seems to me that if I were to come back to the point that I made earlier on, while we're trying to do many things with this bill, there are areas that we are missing because we're focusing on this bill, but there are areas where we should be doing a lot more for the country and for our producers that we're actually missing as a result of stuff that are effectively out of our control. I couldn't agree more with you. You summary of the challenges facing your blueberry producer and I know exactly who he's talking about. At the same time trying to encourage fruit and veg production here in Scotland, but because of the risk factors around labour and the influence and control of the retail sector to be able to source that product from somewhere else in the world and do it simply on price and price alone, that remains a huge challenge. How government can intervene in that situation I think is beyond the scope of this bill as it's likely to be written. I think there'll be very little if anything in that. I can't see anything certainly in the consultation that will help us with that, but I do think we have to go back to the UK agriculture act itself or indeed look at things like the good food nation act, which is obviously for Scotland and think is there any leverage we can utilise in that to put an obligation on the supermarket to buy effectively Scottish first and then take it from there because that would not only shorten that supply chain but it goes back to something we've touched on throughout this. It would give confidence to the primary producers here in Scotland and also give confidence to the consumer to say, well I know I'm going to be able to buy Scottish blueberries at a reasonable price and it goes back to the comments earlier around that. You'll be pleased to hear we're hopefully getting the supermarkets in at some point in the near future. Jenny Minto. You've actually just asked my question because I was going to ask about the connections with the good food nation act and then also I was wanting to go on as well to ask about communities and how the importance but you covered that in earlier questions as well. Thank you. I've got Karen Adam, Mercedes and then Beatrice. Thank you, convener. What can we do within the scope of this bill to attract new entrants into farming and to include more diversity in the people as well? If we look across other industries when there is greater diversity within that, it does help the industry itself as well and also focusing on how do we get more women in farming? Really valid questions. How do we get more new entrants and then how do we increase diversity? I think that there are definitely scope within the bill because there's elements in there about skills and so on. I think that I'll be really blunt. The best thing that we could do in Scotland about creating opportunities for new and developing businesses would be to get rid of blunt area-based payments. Blunt area-based payments, which is currently what we do under the CAP, means that the occupation of land is the means to unlock your support payment. By moving towards a system whereby you have to manage the land in certain ways to unlock your support payment, I think it will help. It won't go all the way and clearly there are issues around agricultural holdings legislation and other things as well. There's a number of barriers. The most important way to attract both diversity and younger people into the industry is to make it attractive, make it profitable and make people look at it as a career opportunity. That means going right through the education system, creating the opportunity for people to develop the right skills, creating the opportunity for them to get a foothold or the first rung of the ladder into agriculture, which has always been challenging to say the least in Scotland. The diversity piece, I think it is a significant challenge for us, but let's not lose sight of the fact or let's remind ourselves of the fact that invariably, in my opinion, behind every successful agricultural business is actually a woman doing a lot of the business making decisions and the administration and the understanding of where that business needs to go. We don't recognise that. We don't celebrate that enough. It's certainly a challenge for the industry that needs to be addressed. The only way that I see it happening is to create an opportunity for them to take a step forward and to become more involved in the public arena around agriculture in Scotland. That's really interesting. You're saying that, and if I make a leaner, just because when I've been looking within my constituency itself as well in regards to agritourism, it seems to be women that are really at the forefront of that and the driving force behind the diversification in farms as well to expand their incomes. Perhaps it's not that we need to attract more women into a specific type of farming, but there maybe are already there, as you're saying, but perhaps their voices aren't being heard enough. They aren't at that decision making tables, is that what it is? There's certainly a huge unlock potential, and definitely my experience, and a lot of this is just based on experience, is that the real driving force behind things like diversification opportunities is invariably coming from the female in the farming household. It's that drive that we need to try and capture and create opportunity for. It's not easy, but that's one focus that we need to try and create. Thank you. That brings us to the end of a mammoth session. Thank you very much, Johnny. We certainly got our money's worth this morning. That has answered a lot of questions, but it also leaves some questions that we need to be asking of the bill when it comes forward. Just one last thing before you conclude or I'm booted out or whatever the expression is. Can I just extend an invitation to the committee to come out onto farm with us as NFU Scotland at some point in a summer recess, for example? I know that probably most of you have been on farm with us one point or another, but we would see huge value in taking you all out collectively to discuss some of the practicalities and the issues and the challenges, because, while this is a very nice, pleasant environment, you need to be on a windy hillside in August and it's lashing down a rain to get a real understanding about what it's all about. That's no disrespect, by the way. Thank you, Johnny. You'll be pleased to hear that we've got about six visits that will get us out of this building, organised between now and August, I believe. So, we're certainly going to be taking the opportunity to get out, hopefully, I'll not be right, but we will, no doubt, be taking our wellies, but I think that actually seeing farmers in practice is going to be an important part of us understanding what the bill's got to include. Thank you very much, Johnny, once again, and I'll bring the public part of this session to a close.