By Fergus Ewing
Cabinet Secretary for Rural Economy and Connectivity
"NOW WE know the clear intention of the UK Government is to take Scotland and the rest of the UK out of the EU and the single market, rural Scotland faces a very uncertain future.
Policy, regulation and crucially, funding are all currently driven by EU-wide approaches, though many of the powers over these areas are devolved to Scotland. Indeed much of the development undertaken in rural Scotland since devolution has only been possible through EU funding support – around €4.6 billion on CAP between 2014 and 2020 alone.
With the challenges rural Scotland faces as a result of the decision to leave the EU, we need urgent action from the UK Government on a number of outstanding issues to help ensure a fair deal for Scotland. No better example of this is in relation to the so-called convergence funding issue.
There is currently no level playing field north and south of the border. Farmers doing the same job in different parts of the UK, do not presently receive comparable levels of payment for their hard work. For example, by 2019, English moorland famers will receive around €65 of area-based support per hectare, or roughly six times the rate a farmer in Scotland can expect to receive farming similar land.
This is despite the fact that under the last CAP reform, the EU set out to redistribute direct payments more equitably across member states based on average Euros per hectare instead of historic subsidy levels. Under the changes, all member states receiving less than 90% of the EU average rate per hectare would close the gap by one third by 2019 and achieve at least a minimum rate of €196 per hectare. This uplift was known as external convergence.
As a member state, the UK Government qualified for a convergence uplift because the UK-wide average rate per hectare was below the 90% EU threshold. The UK received increased funding because Scotland’s average rate (€130 per hectare), was only around 48% of the EU average, and brought the UK-wide average below the threshold. Without Scotland’s contribution, the UK would not have qualified. Yet, the UK Government has continually failed to deliver this money to Scotland in full.
Back in 2013, the then DEFRA Secretary of State, Owen Paterson, wrote to the devolved administrations regarding how the UK’s CAP budget allocation would be distributed. Given Scotland’s hitherto poor allocation, we argued that, at the very least, the convergence uplift should come to Scotland where it was earned. This position received cross-party support at the Scottish Parliament and would have seen up to £190 million (over 6 years) returned to Scotland instead of the £30 million or so we will receive under the UKG allocation decision. However, the UK Government ignored our appeals, instead arguing that based on average payments per farm business, Scottish farmers did very well from the CAP under the existing allocation arrangement. This argument diverged from the methodology used by the EU and was misleading because it didn’t compare like with like.
The result is that by 2019, Scotland will have the lowest average rate per hectare of any country within the EU. Scottish farmers, whether livestock or arable, hill or lowland, will therefore be paid less than their counterparts in other parts of the UK. This is simply wrong and inherently unfair.
The move to area-based payments was supposed to spread funding more fairly, but this hasn’t happened in the UK. It is time the UK Government accepted that this situation cannot be allowed to continue and has to change. We are clear that agricultural support must be allocated more equitably, on an area basis, in future and the full convergence monies should be returned to Scotland where they were earned.
The Scottish Government is also very clear about our expectations around powers in a post-Brexit situation. Simply, devolved powers should be repatriated directly from the EU to Scotland. Powers on rural policy, which are still reserved should be transferred and where additional powers are required to enable us to support our rural communities more fully, these should be devolved also.
With the Brexit legislation now passed, the clock is ticking and we are running out of time. But I will use every minute to fight rural Scotland’s corner to secure the best possible outcome for our farmers, crofters and the wider rural economy they support."