Steven Thomson, SRUC economist warns of policy shift

Steven Thomson, SRUC economist, said: “There are still many people unaware of the agricultural policy changes coming in. The new Ecological Focus Area (EFA) rules will mean that grassland, specifically temporary grassland, will need five percent of land put into EFA measures from next year if their total arable area is over 15%, rising to seven percent by 2027. Permanent grassland may also be brought into EFA requirements in the future, so there is a lot of groundwork needed to get ready for that. Farmers should take a look at the Scottish Government website to see the new measures and options available.

“There has also been some resistance to the calving interval changes to the Beef Calf Scheme. One idea being discussed is whether we should introduce a slaughter premium to encourage a lower age at slaughter, which could help reduce emissions.

“There’s been a lot of chat around the Basic Payment regions. We have three regions at the moment, and I have questions over whether we should move the SUSSS payment from a hog payment to a gimmer payment to support breeding stock, and how we define the degree of activity in rough grazing regions. The Scottish Government is asking what agricultural activity really means. There are over 60,000 hectares in Region 1 being claimed for alternative practices that involve little or no agricultural work. Those claims will be looked at.

“We need to think carefully about what an active farmer or crofter is, and what eligible land actually means. The number of BPS claimants has already fallen by around 500, and anecdotal evidence suggests that small producers have left the system due to bureaucracy and the complexity of the whole farm plan. There could, perhaps, be a future simplified scheme for small producers who face higher compliance costs.

“I’m not overly concerned about payment capping, but front loading is a good idea. It could be transformational for smaller businesses if it’s done properly. Continuing to add extra conditions won’t make much difference unless we get the fundamentals right.

“Less Favoured Area (LFA) support, currently at £64 million, is no longer really fit for future policy. Stocking rates have been frozen for too long and when I’ve done some rebasing analysis not many producers would benefit for any future rebasing exercise due to changing livestock numbers and mixes. We need to rethink how we support LFA areas because it’s quite astonishing how much extra cost people face just to farm in remote parts of Scotland.

“We’re still getting over the EU mindset. Much of the administration of farm support is based on old EU penalty matrixes, which perhaps need to be reviewed. We’re also confined by the IT system, which shapes how support can be delivered. If we want a to evolve policy that delivers for everyone, we’ll need to ensure it fits within the current administrative IT structures.”