Rural Scotland People, Prosperity and Partnership

SCOTTISH AGRICULTURE

For many people, agriculture is rural Scotland. Some three-quarters of Scotland's total land area is agricultural, with 86% of that classified as Less Favoured Areas of which the majority is hill and upland grazing suitable only for sheep and cattle breeding and rearing. On average, Scottish farms are much larger in area than elsewhere in the United Kingdom or the rest of the European Community. In the Highlands and Islands there are also many relatively small crofts which are farmed on a part-time basis, but which form the core of rural communities and are invaluable in conserving outstanding wildlife habitats.

Table: Average Farm Size

The Importance of Scottish Agriculture

The Objectives of Agriculture Policy

The Common Agricultural Policy

The Common Agricultural Policy was undoubtedly successful in achieving its initial goal of eliminating post-war food shortages and making the European Community more self-sufficient in food production terms. These successes must, however, be set against the high cost of the policy, much of which is attributable to the fact that it has stimulated food production well beyond what would have been accomplished by market forces on their own. The need to address the problems created by this overproduction has led to a series of measures being introduced to eliminate surpluses, limit production, reduce costs and protect the environment.

The most significant changes were introduced under the 1992 CAP Reform mechanisms through reduced price support, compensated for by livestock headage and area based support which in turn was limited by supply controls such as quotas and set-aside. Most significantly, the 1992 reforms introduced agri-environment measures into the CAP for the first time.

While there is general agreement that Scottish farmers have fared well since 1992, Government policy is to pursue further changes in the CAP to create a more efficient and competitive farming industry capable of providing high quality produce while at the same time protecting and enhancing the environment. To achieve this and to cut the cost of the CAP to the taxpayer and the consumer, the Government will continue to press for progressive reductions in production-related support and targeting for remaining support more effectively on the social and economic needs of rural communities, particularly those which are most disadvantaged. There is also a desire to reduce the bureaucracy associated especially with supply controls and reduce the burden of form-filling which is placed upon farmers.

The goal of safeguarding and enhancing the rural environment should be at the heart of a reformed CAP, with policy mechanisms geared towards specific objectives. Progressive reductions in production-related support can be expected to yield large savings. Whilst it should not be assumed that all savings would automatically be available to farming or that action at EC level would always be the best way to approach environmental objectives, a substantial level of public funding to secure environmental benefits would be justified.

In addition to these internal pressures for change, there will also be external pressures which are likely to influence future CAP policy. One such pressure is the possible enlargement of the European Union which would place an unbearable strain on the Common Agricultural Policy as it is presently organised. The GATT agreement and subsequent further GATT negotiations towards the turn of the century will also bring change. It is important that these issues are addressed by the European Union over the next few years with environmental considerations occupying a prominent position on what will be a wide-ranging agenda.

Support to Agriculture

Our Commitment to Service

The Scottish Office published in 1993 the Charter Standard Statement "Serving Scottish Farmers" (and updated it in a second edition in 1995). It set out aims for the provision of a high quality service to farmers and listed over 25 targets relating mainly to the processing of applications and claims for grants and subsidies. Again in 1993, The Scottish Office, in conjunction with the Crofters Commission, published a Charter Standard Statement "Serving Crofting" for crofters. The Scottish Office publishes each year information on the extent to which it achieves its targets. In 1993-94, most targets were achieved to the extent of 90% or better.

The Government also provides substantial support to agriculture through research, development, education and advisory services. £71 million will be spent on these services in 1995-96, of which some £40 million relates to research. The "Policy for Science and Technology" reaffirms the Government's commitment to support all aspects of agricultural science, including non-medical biology, physical science and mathematics; research into productivity; land use and related environmental, economic and social consequences; and research on food and its nutritional effects on animals and humans where that has implications for agriculture.

Selling The Quality Scottish Product

Some two-thirds of the output of the Scottish food and drink industry (excluding whisky and other alcoholic drinks) is sold outside Scotland, a substantial part of it outside the United Kingdom. Recognising the increasing challenges and opportunities for Scottish agriculture in this highly competitive market at home and abroad, the Government have introduced a range of measures to encourage food marketing strategies. The food industry in Scotland has made good use of the incentives for investment available through processing and marketing grants from the European Community to strengthen its market position and develop new products. Support is also available through grants to producer groups and others under the Marketing Development Scheme.

In 1993, the Government set up the Scottish Food Strategy Group to identify opportunities for the Scottish food and drink industry, particularly with regard to exporting. Support for food exporters comes from the enterprise network and Food from Britain among others. Food exporters will benefit from improved co-ordination of export support as a result of the Export Strategy for Scotland, which is led by Scottish Trade International and has the support of all the key export support agencies in Scotland.

One of Scotland's advantages in marketing its produce is its reputation for an unspoilt natural environment and high quality husbandry. The major retail outlets are placing increased emphasis on quality products in response to consumer demand. Scottish Quality Farm Assurance, developed by the National Farmers' Union in Scotland with support from the Government, has an important role to play. A number of quality schemes for Scottish farmed produce have been established in recent years and the new Scottish Food Quality Certification Ltd will provide a focus for future developments.

Whisky

Scottish Milk

Scottish Potatoes

Developing Scottish Agriculture

Scotland's farmers and crofters have benefited from a range of development programmes over the past decade. The Integrated Development Programme for the Western Isles and the Agricultural Development Programme for the Scottish Islands (excluding the Western Isles) contributed nearly £60 million to farming and crofting, while the Rural Enterprise Programme for the Highlands and Islands offered support of more than £14 million for economic diversification. Almost all of Scotland's rural areas are now covered by designations under Objectives 1 and 5b of the European Commission Structural Funds and this will mean substantial extra support for economic development in Scotland's most fragile rural areas.

The Highlands and Islands Agricultural Programme: Objective 1

The Highlands and Islands Agricultural Programme is part of the £260 million Objective 1 Programme for the area which is being funded by the Government and the European Commission. Over the 6 year period of Objective 1 designation the Programme will provide over £23 million additional funds to farmers and crofters in the area. The Programme has three separate schemes designed to meet the special needs of farmers and crofters in the Highlands and Islands:

The Scottish Office provides reports to the local partnership which oversees the progress of the Objective 1 Programme. The level of interest in the Programme and the uptake of grants suggests that it will be a major success.

Diversifying Scottish Agriculture: Objective 5b

Farmers and crofters are increasingly recognising the need to diversify into activities other than agriculture and to explore the opportunities for both new agricultural products and the use of conventional crops for non-food purposes. Government support for diversification was available through the Rural Enterprise Programme in the Highlands and Islands and will form the basis for the new Objective 5b Agricultural Diversification Programmes.

Four of Scotland's rural areas have been designated under Objective 5b by the European Commission: Borders, Dumfries and Galloway, North and West Grampian, and Rural Stirling and Upland Tayside. Agriculture contributes considerably to the economy and employment in all of these areas, but the Government and the European Commission wish to assist farmers to widen their economic bases by encouraging activities which will provide income from non-agricultural sources.

The local development plans (known as Single Programme Documents) for all four Objective 5b areas include measures to encourage agricultural diversification. Following a wide-ranging consultation exercise, The Scottish Office is preparing detailed diversification programmes which will provide around £10 million in Government and European Commission funds to farmers in the Objective 5b areas. Subject to approval of these programmes by local partnerships (and Parliamentary approval of enabling legislation), it is proposed to provide assistance towards a wide range of innovative and exciting projects. For example, farmers in the four Objective 5b areas could receive assistance to grow crops for pharmaceutical purposes or alternative energy sources as well as moving into high added value produce, such as mushrooms. Alternative livestock breeding and rearing, for example fibre-producing goats, rabbits, shellfish and snails, are also eligible for assistance.

The Scottish Agricultural College

Educational support is provided through the Scottish Agricultural College which offers a wide range of courses to its 1,200 students, covering agriculture, horticulture, land use, food handling and hygiene. Funding for educational support through grant-in-aid in 1995-96 to £7.3 million. The College also receives financial support for providing advisory services to farmers through its network of field advisers who are located throughout Scotland. Grant-in-aid to the advisory services in 1995-96 is £6.4 million, and farmers are charged for some services.

The Future for Scottish Agriculture

Increased farm incomes and direct payments to farmers in recent years have put Scottish Agriculture in a good position to face the challenges and opportunities of a more competitive market place in the future. We believe that, against the background of the development of the Common Agricultural Policy and GATT, progress will increasingly depend on the ability of farmers and food processors to meet the needs of the consumer with lower levels of public support. Scotland' s reputation for high quality husbandry and produce, based on an attractive and unspoilt natural environment, is a powerful marketing advantage on which Scottish farmers can build. We are committed to providing a framework within which agriculture can compete and wider rural development and environmental objectives be achieved.

Farm and Crofter Forestry

We welcome your comments on this site.
Reviewed 21 April 1997