Local Added Value

39. Adding value to the products of rural areas is an important way to support the economic growth of rural areas, through creating direct and indirect employment and helping to prevent the leakage of benefits to urban centres. Rural areas have direct access to some of the highest quality resources that Scotland possesses: its scenery, natural resources and cultural assets. Adding value to these resources so that rural communities get the maximum benefit from them should be a central aim of policy.

40. Value can be added to the resources available to rural areas by local processing, so that the product leaves the area in a more finished state. This has always been the case with some products, as "Rural Framework" described, such as Scotch Whisky, Harris Tweed and woollen textiles. The Local Enterprise Companies and local authorities aim to increase the range of goods processed locally through schemes which provide workspace, and give assistance with finance, marketing and training. Specialist food-industry training and business and technology advice is also provided by SAC and will be further developed through its Food Technology Transfer Centre. The food and drink sector has been the focus of new activity, for example Strathaird Salmon with fish farms on Skye and processing plants in Inverness and Grantown on Spey; the Orkney Food Initiative which uses the regional identity of food products for marketing purposes; and a number of premium ice cream producer such as Mackies in Rothienorman and the Cream O'Galloway Dairy Co Ltd which operates from a farm base in Castle Douglas. Scottish Farm Venison Ltd has been set up with Scottish Enterprise and the Scottish Agricultural Organisation Society support, to bring together venison producers in Scotland through joint marketing initiatives. New markets for organic products and bottled spring water are also being used to add value to a local resource, for example Strathmore Mineral Water is now the top selling brand in the UK, outselling Perrier.

41. EC schemes have been introduced to assist in the processing and marketing of both agricultural and fishery products. New schemes were opened in July 1994 to provide capital grants from 1994 to 1999 to improve the structures for marketing products. Their basic objective is to benefit the primary producer (farmer, grower or fisherman) by processing more of their products or adding value to produce through improved quality, further processing, developing new products, making use of waste produce or securing better market outlets. Complementing these schemes is the Marketing Development Scheme, also introduced in 1994. This seeks to improve the efficiency of the UK food marketing chain by helping farmers, growers and processors improve their marketing and commercial expertise. The grant can help fund feasibility studies into collaborative efforts between producers and processors to produce what the customers want. This might include product development, designing packaging, using local names, or producing for export. Grants are also available to employ a marketing manager to ensure a consistent product grown to prescribed specifications is available all year round, thus maintaining a reliable supply for processing. One of the components of the Objective 1 Highlands and Islands Agricultural Programme is a scheme to assist with the marketing of rural goods and services. Assistance of £400,000 per annum will be available up until 1999 to assist farmers and crofters in the Highlands and Islands area.

42. The forestry industry is another important rural employment sector and one where there is clear potential for growth. The establishment of the Forestry Contracting Association as a scheme across Scotland, supported by the Forestry Commission, HIE and Scottish Enterprise is addressing this issue and is now being introduced in England, based on Scottish success. An example of timber processing using local material is Norbord which has developed a major plant near Inverness, employing 160 people, and produced an innovative construction board using large quantities of locally grown conifer. The management of native woodlands can also be combined with opportunities for wood processing. The Highland Birchwoods project, Argyll Broadleaves and a number of similar initiatives are identifying such development potential through the use of native timber for craft industry, specialist timber products and even innovative new forms of production such as mushroom growing. The creation of new woodlands in Central Scotland is also being undertaken with a view to long-term sustainable management and the need for a local and commercially viable product market. Multi-purpose woodlands, including farm woodlands, are a priority, even if the crop may only be harvested in thirty years or more.

43. There may be opportunities for increased value added activities through import substitution, as demonstrated for example in the local bakery in Fort William and dairy in Shetland; by producing soft ripened cheeses (such as Brie) or mature hard cheeses in Scotland rather than other EU countries. Processing imported goods is another way that local businesses can grow: Arran Provisions, Ortak Silverware in Kirkwall and Highland Stoneware in Lochinver are all examples of companies which operate in this way. Businesses can add value by exploiting the tourism potential of their activities. Whisky distilleries, and food processing industries such as Baxters of Speyside have invested successfully in visitor centres.

44. The popularity of Scotland's countryside for tourism and outdoor activities means that there are increasing employment opportunities in maintaining and creating footpaths and other facilities. A good example of increasing tourism based on the environment is "Wild Argyll", a marketing campaign involving a wide range of environmentally related businesses. The cultural heritage also provides work, for example the Aros Centre is a major cultural attraction in Skye involving a partnership between the private sector, Skye and Lochalsh Enterprise, SNH and the Forestry Commission. There has also been notable activity recently in film making and broadcasting including projects using the Gaelic language.

45. Training and skill development add value to the human resources of rural areas. In remote and sparsely populated areas the delivery of training is more difficult and expensive because of the lack of providers and economies of scale. There has been development in rural training structures through the establishment of ATB-Landbase as an Industrial Training Organisation with a wide rural remit. However, many of the problems of local training delivery remain to be addressed. A number of distance learning initiatives have been taken by the Further and Higher Education institutions and these add to the provision available through the Open University network. However, only with an expansion of electronic communication links and with a full use of information technology to make the connections between local students and distant tutors will the problems of training access be satisfactorily addressed.

46. There are opportunities for local business development, particularly in the food processing sector, but advice is needed to facilitate the establishment of small businesses and to provide the support necessary to help them develop small scale production systems that fully meet modern standards of hygiene and product safety. In the forestry sector, there may be further scope for increased wood processing close to where the timber is grown, and for greater involvement of local labour. There are a number of research projects and initiatives looking at increasing the level of economic, social and community benefits which local people can obtain from forests. These include the Forests and People in Rural Areas initiative, the Scottish Rural Development Forestry Programme, and research being undertaken by the Forestry Commission. Within the HIE area there are training schemes in operation in the Moray, Badenoch and Strathspey LEC. A scheme relating to chainsaw techniques and other forestry skills has trained 430 people so far, while a new entrant scheme encouraging newcomers to the industry has already reached its target of 12 persons.