The Scottish Government

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Introduction

1.1 This 2 ^nd Annual Report on progress made in implementing the Scottish Executive's Organic Action Plan (published in February 2003) has been drawn together in collaboration with the Organic Stakeholder Group. It sets out the Scottish Executive's actions to support development of the organic sector and provides a wider picture of actions taken by stakeholders in stimulating a prosperous organic farming and food sector in Scotland. It commits the Scottish Executive to a series of further actions which will deliver the Forward Strategy for Scottish Agriculture's priorities for the organic sector and responds to the High Level commitments of "A Partnership For A Better Scotland". It also points to a series of further actions that will be taken by stakeholders.

1.2 The Organic Action Plan sets out the Scottish Executive's vision of a prosperous organic farming and food sector which ensures that, as far as possible, demand for organic products is met by Scottish producers, and which makes a strong contribution to the sustainable environmental management of Scotland's agricultural land and water resources. While much has yet to be done, many positive steps have been taken towards attaining this vision and this work will continue throughout the coming year.

1.3 The following overview gives an update of the specific action called for in the Action Plan, as well as an indication of the range of activity that has been taken in support of the organic sector. A fuller account of activity can be found in the body of the report.

Our commitment to action

1.4 The Organic Action Plan committed the Scottish Executive, within the powers and resources available, to remove barriers and create conditions to help the sector to develop such that:

1.5 To help the organic sector achieve these targets, the Action Plan proposed action which in the past year, has been supplemented by a range of complementary activities in a number of areas that are outlined below.

Support for Organic Farming

1.6 Changes were introduced to the Organic Aid Scheme in 2004, including:

1.7 Throughout the year the Scottish Executive increased funding by 20% to £234,000 for SAC's Advisory Activities in support of the Organic Aid Scheme and Organic Farming. This activity covered SAC's Organic Demonstration Farm Network, policy seminars, the SAC organic farming web-site, plus general and specific advice to farmers and crofters. In 2004 the advisory activity also funded the launch of a new Soil Association organic open farm at Elmwood College in Fife and an Organic Producers Policy Forum during organic week.

Marketing

1.8 The partnership between key stakeholders in the organic sector in Scotland was strengthened further in January 2005 with the creation of the Organic Stakeholders Marketing Group. This new group will take forward the work of the Scottish Food and Drink Organic Project as part of the overall Organic Action Plan.

1.9 The Scottish Executive's Processing and Marketing Grant Schemes and Marketing Development Scheme, have awarded almost £7 million, since 2001, to support projects which help organic producers exploit market opportunities.

1.10 During 2004 and 2005, Scottish Enterprise have continued to fund and develop events and support programmes to improve the marketing capability of organic enterprises in Scotland.

1.11 The Organic Market Link Project was established in 2004 with funding from SEERAD and Scottish Food and Drink. Through this project, the Market Link Coordinator has facilitated a greater degree of information exchange between producers and processors, leading to a major Scottish meat processor commencing regular monthly slaughtering of organic beef for the first time.

Research

1.12 Two main pieces of research on organic food and farming in the UK have been commissioned by the Scottish Executive.

Standards

1.13 The Scottish Executive have been actively involved in the appointment of members to the Advisory Committee on Organic Standards ( ACOS), resulting in 3 Scottish members. The significant role that Scottish experience is playing in advising the UK government on the development of organic standards, was reflected in ACOS' decision to hold their Spring meeting in Scotland.

2.1 The payment rates for all agri-environment schemes including the Organic Aid Scheme are being reviewed following the recent CAP Reform and extensive consultation with stakeholders. The review is necessary to avoid double funding, as a number of the agri-environment scheme payment rates include an element to compensate for CAP subsidy foregone as a result of undertaking the scheme management. We have taken this opportunity to ensure that the rates still reflect the cost to the farmer of participating in the schemes.

2.2 The review of rates aims to provide the right level of support and encouragement to farmers. The revised payment rates have not been confirmed at the time of printing.

Number of Organic Aid Scheme Agreements in Place

2.3 The number of Organic Aid Scheme agreements increased substantially in the period between 31st March 1999 and 31st March 2001, with a large number of hill farmers joining the scheme at this time. The reduced number of agreements in 2004 and 2005 reflects the majority of these producers reaching the end of their five year agreements.

TABLE 1: NUMBER OF AGREEMENTS IN FORCE AS AT 31 MARCH EACH YEAR ¹

¹ Figures amended since 1 ^st Annual Report to correct errors and take account of participants completing their agreement and leaving the scheme.
² This includes 384 Conversion agreements and 69 Maintenance agreements.

Expenditure

2.4 Expenditure on the Organic Aid Scheme has risen from £1.2m in 1999-00 to £5.5m in 2002-03. Expenditure for 2004/5 was £3.1 million. As in Table 1, this reflects the large number of hill farmers who joined the scheme in 1999 finishing their five year Organic Aid Scheme agreement.

TABLE 2: EXPENDITURE AS AT 31 MARCH EACH YEAR (£k)

Land covered by the Organic Aid Scheme

2.5 Due to the extended deadline for scheme applicants to register with an organic private inspection body, which was introduced in 2004, all 2004 applicants have not yet been fully processed and approved. Therefore the following 2005 figures are an estimate of hectares covered by the conversion and maintenance scheme as at 31st May 2005. The total land covered by the scheme is 171,206 hectares (134,486 rough grazing, 19,675 improved grassland, 16,961 arable and 84 fruit & vegetable).

2.6 Changes introduced to the scheme in 2004 were targeted towards attracting low ground conversion, with a view to these areas comprising 30% of Scotland's organic area by 2007. The 2005 figures demonstrate a reduction in land covered by the scheme. This reflects a number of hill farmers and others leaving the scheme after completing their 5 year conversion agreements and the fact that the improvements made to the scheme in 2004 have not yet fully impacted on these figures. The proportion of good quality land has risen to 21% of Scotland's organic area.

TABLE 3: HECTARES UNDER AGREEMENT AS AT 31 MARCH EACH YEAR ¹

¹ Figures amended since 1 ^st Annual Report to correct errors and take account of participants completing their agreement and leaving the scheme.

2.7 While these tables relate to farmers currently participating in the Organic Aid Scheme and not to the total land organically farmed in Scotland (see Para 2.8 and 2.9), we have taken and continue to take action to address this downward trend. The improvements to the scheme in 2004 have resulted in the biggest annual uptake since the introduction of discretionary applications in 2001. This is extremely encouraging during what has been a period of transition for Scottish farmers. We are also reviewing OAS payment rates to ensure that they offer suitable encouragement for farmers to convert to organic production.

TABLE 4: APPLICANTS FOR ORGANIC AID SCHEME

¹ The maintenance scheme was introduced in 2004 and accounted for 115 of the applicants and 66 of the successful applicants.

Total Number of Organic Farmers in Scotland

2.8 The figures in Tables 1 to 3 refer to land and agreements in the Organic Aid Scheme. The following statistics reflect the total number of organic farmers in Scotland including those outwith the Organic Aid Scheme. The figures are compiled by Defra and based on certifying bodies' membership and inspections.

2.9 As at 1 ^st January 2005 there were 632 producers and 166 processors and or importers in Scotland. The land in conversion is 15,199 ha and the fully organic land is 344,416 ha. The total of in conversion and fully organic land in Scotland has decreased by 3% on the previous year.

SAC Advisory Activity

2.10 SAC provides SEERAD-funded advice in support of the Organic Aid Scheme and Organic Farming. From April 2004 until March 2005 SEERAD provided £234,000 for advisory activities including telephone advice (including the SAC Organic Helpline), farm walks and technical meetings based on a network of six demonstration farms, technical publications, market information and the SAC organic farming web site ( www.sac.ac.uk/organic-farming). In 2004 SAC launched an Organic Market Link project as part of this Advisory Activity programme, in order to improve the flow of supply and demand information in the organic sector (see Paragraph 3.14).

2.11 The SAC Advisory Activity programme is offered through a group of 20 organic advisers located at SAC's network of advisory offices, backed up by a Senior Organic Farming Specialist and a group of subject specialists. For more detailed individually tailored advice, SAC offers a charged consultancy service to producers.

2.12 Between April 1998 and March 2005, SAC dealt with a total of approximately 8200 enquiries from Scottish farmers, and has organised and/or presented talks at 228 farmers meetings/farm walks on organic farming in Scotland, with approximately 7500 attendees. During the year to 31 March 2005, SAC dealt with 1110 organic farming enquiries in total and its staff made presentations at 22 producer meetings.

2.13 The level of interest in converting to organic farming in Scotland remained more or less static for most of 2004, but towards the end of the year, prior to and after the decoupling of statutory support from production and the introduction of the Single Farm Payment on 1 January 2005, farmers began to express more interest in converting. This led to an upsurge in telephone enquiries in early 2005 from farmers considering extensifying production and converting to organic. These farmers were mostly mixed arable/livestock farms. In the final quarter of the year the number of enquiries was double the number received in the equivalent period in the previous year.

2.14 In addition to organising SAC producer meetings, SAC staff provide technical input at meetings of the local organic producer groups and at technical events organised by Soil Association and SOPA.

Organic Producer Events and Demonstration Farms

2.15 The Executive has a commitment not only to promote sustainable organic stewardship to farmers but also to improve the public perception of organic farming, particularly through producer events and demonstration farms.

Fig 1. SAC organic producer event

2.16 SEERAD provides funding to SAC for the organisation of farm walks and seminars. The aim of this programme of producer events is to improve technical efficiency and marketing, and to provide farmers who are considering converting with an opportunity to find out more about the practicalities of organic farming and to study commercial organic farms in practice. Meetings were based primarily around SAC's network of demonstration farms, including its own organic farm at Craibstone near Aberdeen which is used regularly as a demonstration and research resource.

Table 4: SAC programme of technical meetings in 2004

2.17 The Soil Association operates an Open Farm Network, which is designed to re-establish the public's links with the land and expand their knowledge of how food is grown.

2.18 The Deputy Minister for Environment and Rural Affairs launched a new organic open farm at Elmwood College Farm in Cupar, Fife during Organic Week. The Open Farm, funded by the Executive through SAC's advisory activity budget, was an addition to the Soil Association's "Organic Farms Network" and the fifth of its kind in Scotland. The Soil Association has adapted existing educational materials for the Scottish curriculum and contacted 190 schools in Fife inviting them to the Open Farm.

Fig 2. Deputy Minister, Allan Wilson, at Launch of Elmwood College organic open farm

2.19 Soil Association Scotland has also initiated a two-year education project that aims to demonstrate the links between healthy food and a sustainable Scottish countryside. The "Seeing is Believing" project has received funding from Heritage Lottery Fund, SNH and SEERAD. The project will expand the open farm network; create tailored activities on open farms; facilitate school visits; and provide training and support to teachers and farmers. The focus will be on creating experiences that change lives and the work is being carried out by a full-time Education Officer.

Organic Producers Policy Forum

2.20 In support of Organic Week SEERAD hosted an Organic Producers Policy Forum. SAC assisted in the organisation and delivery of the seminar, which provided a vital opportunity for key stakeholders and representatives of the Scottish organic sector to come together to discuss issues facing the sector in Scotland. Over forty delegates, from Dumfries to Shetland, attended the event.

Royal Highland Show Organic Trail

2.21 In 2004 the Organic Trail was introduced at the Royal Highland Show and organised by Scottish Food and Drink. There were 25 participants in the Trail from processors and producers to sector bodies and support agencies.

2.22 Stands which participated in the Organic Trail displayed a green rosette, including the SEERAD Pavilion in recognition of the Executive's support to the organic sector. The Minister's programme covered a number of exhibitors carrying the green rosette including SAC, Wiseman's, the Soil Association and the Scottish Organic Milk Producers' Association.

Fig 3. Ross Finnie visiting the SOMPA stand at the Royal Highland Show

Soil Association Producer events

2.23 The Soil Association has organised and hosted a number of producer events over the past year covering topics as diverse as organic poultry and making a livelihood from farm woodlands, to cultivating communities.

2.24 Their market advantage through animal welfare event was funded by Scottish Enterprise and attendees included representatives from SSPCA and QMS as well as producers. The event provided an excellent opportunity for information exchange.

2.25 Scottish Food and Drink funded the Soil Association's direct meat marketing event, which was held at United Auctions, Perth and at Highland Drovers. Topics covered included profiles of direct marketing and producing a strategic marketing plan. The forty attendees were mostly producers, with representation from SAC, QMS, and Newcastle and Glasgow Universities. Their feedback suggested the opportunity to see the practical application of direct marketing was very useful.

2.26 In addition to running events, Soil Association Scotland provides comprehensive support and advice to organic producers. This is a subscription service, available to all farmers regardless of licensing body. There is a telephone helpline staffed in Scotland with backup from the UK producer services team. An extensive range of technical information and briefing sheets are available and two new Scottish briefings have recently been produced: 'Scottish Abattoir and Marketing Organisations' and 'Sources of funding for organic food and farming projects in Scotland'. Subscribers also receive the quarterly magazine 'Organic Farming' which provides invaluable technical and market intelligence and which includes a dedicated Scottish section.

EU Action Plan

2.27 The action plan, published in June 2004, contains a list of 21 policy measures to provide a strategic vision for the contribution of organic farming to the Common Agricultural Policy ( CAP). Such measures include improving information about organic farming, streamlining public support via rural development, improving production standards and strengthening research. The UK organic industry has welcomed the plan, particularly referring to the improved information campaign and the proposed improved European organic farming standards as positive moves.

2.28 The Scottish Executive also welcomes and supports the European Action Plan. The plan recognises the important role that organic farming has to play in European agriculture and what organic farming can offer in terms of sustainable development, environmental protection and rural development. The European Action Plan will support the existing Scottish Organic Action Plan

2.29 During the course of the forthcoming UK Presidency the EU Commission will develop and implement the action points of the Action Plan.

3.1 In its first Organic Annual Report the Scottish Executive recognised that sustainable growth in the organic sector must be market led. With the UK organic market now valued at over £1bn the opportunities for Scottish producers and processors are clear.

3.2 In January 2005 a subgroup of the Organic Stakeholders Group was established to help the industry exploit key market opportunities through contributing to policy and developing practical solutions.

3.3 The work of the Organic Stakeholders Marketing Group will be fully aligned to the Scottish Executive's Organic Action Plan and contribute by delivering services to support market development, information flow and supply chain links. It will build on the work carried out by the Scottish Food & Drink Organic Project (October 2004).

3.4 The remit of the marketing group includes:

3.5 The marketing group will also consider other market-related means of improving long-term industry competitiveness.

3.6 At a strategic level the, Organic Stakeholders Marketing Group will contribute to the objectives of the Executive's Partnership Agreement for supporting the food industry; A Forward Strategy for Agriculture; the Executive's Organic Action Plan; and the Scottish Food & Drink Strategy

3.7 Wherever possible, operational activity will be integrated with generic support mechanisms (eg. Scottish Food & Drink UK Premium Markets Project, Farm Business Review, and Marketing Grants). Organic-specific solutions will be developed where a clear business case exists.

3.8 To help strengthen the position of Scotland's organic food processors and, in turn, its organic farmers, the Executive's Processing and Marketing Grant Schemes ( PMGS) and Market Development Scheme ( MDS) give priority to projects which strengthen the organic food chain.

3.9 Since May 2001, almost £7 million in grant assistance has been awarded to
45 Scotland-wide projects under these schemes for the processing and marketing of organic produce. The majority of these are part of a combined facility although there are a number of organic stand-alone processing units. The grant awards have supported over £37m of investment in the food industry and range from under £1,000 for marketing costs to over £400,000 for processing facilities. 34 of the awards were made in Lowland Scotland and 11 awards were given to companies in the Highlands and Islands. These projects triggered additional new investment and helped companies with investment in buildings and equipment, to develop added value processing of organic produce. Other projects help develop a more co-ordinated organic marketing chain and quality assurance and certification for the organic sector.

3.10 Scottish Enterprise has continued to support the industry over the past 12 months through a series of events and other projects designed to improve the marketing capability of individual enterprises across the sector. 36 organic businesses participated in their events during 2004-05 and six of these planned to introduce new business practices as a result. Two organic businesses received direct support from the Scottish Enterprise Supplier Excellence Programme, which provides extensive support to enable Scottish suppliers to access retail markets, during 2004-05.

3.11 Scottish Enterprise has continued to develop information services through the Organic Zone on the industry website - scottishfoodanddrink.com. This contains updated information on the organic market, products, customers and consumer trends, as well as the latest news and events listings. The site also includes a Buyers Guide which now lists over 150 suppliers of organic produce. It also features the Soil Association 'Organic Marketplace' which helps organic farmers sell and source livestock, forage and grazing.

3.12 The increasing focus on developing high quality organic produce for today's demanding marketplace was recognised at the Scottish Food & Drink Excellence Awards 2005, where two organic businesses picked up awards:

Organic Market Link Project

3.14 A poor flow of supply and demand information has often been blamed for difficulties in the marketing of organic produce from Scotland. In order to address this, funding was provided to SAC by SEERAD and Scottish Food and Drink (through its Graduate into Food Business Programme) to establish a one-year Market Link project. Caroline Bayliss was appointed as SAC Organic Market Link Coordinator.

3.15 A survey of organic producers has for the first time provided reliable information on the supply of organic finished beef, lamb and grain from Scotland. Supply information from this survey was circulated to all meat and grain traders and processors, and regular contact between the trade and the Market Link Coordinator has provided useful information to feed back to all producers via Market Link Producer Newsletters. This improved flow of information has facilitated a greater degree of farmer to farmer trading in feed grain, and has given traders and processors confidence in the availability of Scottish supplies of grain and meat. For example, information from the Market Link project has encouraged a major Scottish meat processor in Scotland to commence regular monthly slaughtering of organic beef for the first time.

3.16 SEERAD is continuing to fund the Market Link project as part of the SAC organic advisory activity programme and a second annual producer survey is currently underway. In addition, the SAC Organic Market Link Coordinator continues to liaise regularly with producers, traders and processors, encourages other marketing initiatives, and serves on the SEERAD Organic Stakeholder Group Marketing Sub-Group.

Healthy Eating

3.17 In May 2004 the Scottish Executive published Eating for Health - Meeting the Challenge, which set out a strategic framework for food and health with the objective of achieving the Scottish Dietary Targets.
( http://www.scotland.gov.uk/library5/health/efhmtc-00.asp)

3.18 A food chain approach containing five major strands has been used for the framework and is the basis on which food and health policy is being developed. The strands are:

3.19 Eating for Health also contains an action plan for food and health for 2004-05.

3.20 Food for Life is a Soil Association project which aims to get unprocessed, local and organic food into schools. Funded primarily by private donors to SA Scotland, with contributions from Scottish Food & Drink, Highland Council, and the Scottish Community Diet Project. The project promotes and co-ordinates the work of Food for Life in Scotland in the context of the school meals catering service at the level of school catering services, both private and local authority, and individual schools. It works with local farmers, food processors and suppliers to develop supply chains that can work within procurement regulations. It also aims to increase the awareness of the benefits of Food for Life within the context of Hungry for Success.

3.21 The Soil Association received funding from the Community Fund for a three year local food project which ended in March 2005. Community Supported Agriculture ( CSA) is a relationship of mutual support between a farmer and those who eat the food they produce. CSA encourages communities to participate in the development of new local food initiatives and are as varied and innovative as the people involved. In Scotland the project supported the development of 3 new CSAs, 6 existing CSAs, and 10 that are still in development. Further information is available on www.cuco.org.uk.

Scottish Food and Health Council

3.22 The Council has been established with a remit of providing leadership and expert advice to the Scottish Executive; further integrating cross-cutting elements of the food aspects of Scottish Executive health improvement policy and the strategies of the Food Standards Agency Scotland; focusing on delivery and being responsible for the planning and implementation of an annual Scottish Food and Health Action Plan.

3.23 Membership of the Council is comprehensive, with representation across the Scottish Executive and its strategic partners, and from public health, public health nutrition, food policy, food industry/processing and manufacturing, food retailing, nutrition academic research, education, agriculture/primary production, food access, and health inequalities. The focus for the Council in its first year will be to develop an action plan for 2006 - 2010, with a focus on food and health inequalities, obesity, and identifying action arising out of the results of the monitoring of the dietary targets and progress towards meeting the Scottish Diet Action Plan recommendations (due towards the end of 2005).

Scottish Food and Health Alliance

3.24 The Alliance has been set up in partnership with the Food Standards Agency Scotland, and is intended to be a communications network for those with an interest in food and health policy in Scotland. There are already around 500 members including representatives from the organic sector.

4.1 The Scottish Executive already funds £0.5m per annum or about 25% of the government research effort on organic food and farming in the UK. Recent and current SEERAD-funded research has included investigating key factors in sustainable ley-arable farming systems and in the conversion from ley to arable; modelling weed population dynamics in organic agriculture; genetic resistance to disease in pesticide-free systems; and research on maintaining a competitive position in the Scottish organic fresh food market. Further information is available from the Science and Research Group at SEERAD.

4.2 Acting on advice from the Organic Stakeholders Group the Scottish Executive commissioned a study to evaluate organic farming research needs for Scotland in 2003. The study was published in May 2005 following an external peer review. The study was broad and shallow and highlighted a large number of areas for research.

4.3 The report as it stands, represents the views of the contractors and not necessarily those of the Scottish Executive. The study does, however, provide a valuable assessment of the current state of the organic sector in Scotland and as such can act as a baseline for the industry to inform future decisions regarding organic research.

Market Share

4.4 In order to gain a clear picture of progress toward the Action plan target to increase the market share of Scottish organic produce sold in Scotland from 30% to 70%, the Executive has commissioned a new market penetration report to provide an up-to-date snapshot of the market. The research study into the market penetration of Scottish organic produce is being undertaken by Soil Association and is designed to identify the level of market penetration of indigenous Scottish products and to identify strategies for increasing organic sales in line with the targets set in the Scottish Executive's Organic Action Plan.

Organic Supply Chain Development Processor Project

4.5 To support Scottish Food & Drink's objective to identify and fill gaps in the organic supply chain infrastructure, specifically in relation to organic processors, Scottish Food & Drink funded a study of organic supply chain development, which reported in October 2004. It identified barriers to business development in the sector, established interest levels in new market development, and investigated the area of local sourcing. This project has provided a useful basis for the Organic Stakeholders Marketing Group in developing its Action Plan.

Advisory Publications

4.6 SAC continues to maintain and update regularly its Organic Conversion Information Pack which contains a range of useful information for farmers considering converting to organic production.

4.7 The main SAC advisory publication series for organic farmers is the Organic Farming Technical Summary series ( OFTS). They can be accessed on the SAC organic farming website www.sac.ac.uk/organic-farming and printed off as pdf files as required. This series now contains over 50 titles. Nine titles were added during 2004-05.

4.8 In addition to the above, SAC staff regularly contribute technical articles to the Soil Association 'Organic Farming' magazine and to the SOPA Newsletter.

4.9 SOPA continues to produce regular newsletters, updates and technical leaflets for members of the organic sector. SOPA held five evening meetings in March throughout the country to keep organic producers informed of the changes to the Feed Derogation limits. The redesigned SOPA website acts as source of available livestock, cereals and grazing along with regular news and events here in Scotland, www.sopa.org.uk.

4.10 SOPA has also assisted with the development of the organicXseeds website which indicates the availability of organic seed and records quantities used and Seed Derogations issued.

4.11 The Soil Association Scotland Public Information Service includes a telephone helpline for consumer and media enquiries about organic food and farming, and an in depth online resource at www.soilassociation.org/scotland. Dedicated materials are provided in response to demand: for example, an information sheet listing all organic box schemes operating in Scotland has recently been produced.

4.12 The Soil Association produce an award-winning membership magazine ('The Living Earth') with a supplement for Scottish readers ('Organic Scotland'), which features writers such as Monty Don and Sophie Grigson. They have also launched 'Why Organic?'(www.whyorganic.org), an online organic club with special offers, prizes and topical articles.

Advisory Committee on Organic Standards

5.1 The Advisory Committee on Organic Standards ( ACOS) is an advisory Non Departmental Public Body, established for the provision of advice to Defra and the devolved administrations, on matters relating to standards, certification and research relevant to organic food and farming.

5.2 The Scottish Executive played a key role in the appointment of members to the committee which resulted in 3 Scottish representatives being appointed. The level of expertise now available to government through the membership of this committee is extremely valuable. The Executive welcomes the significant role that Scottish experience is playing in advising the UK governments on the development of the organic sector.

5.3 In light of its involvement with ACOS, the Executive encouraged ACOS to hold their 2005 spring meeting in Scotland. This was the first ACOS meeting to take place in Scotland and provided the opportunity to hold a Scottish Organic Producer Forum in Perth during the day, and an evening reception to welcome the ACOS members to Scotland and introduce them to key Scottish organic stakeholders.

Fig 4. ACOS members and Scottish producers at Tarrylaw Farm in Perth.

5.4 The visit of ACOS to Scotland marked an important step forward for Organics in Scotland and provided an invaluable opportunity to increase the Committee's awareness of Scottish standards issues.

5.5 Whilst there is increasing demand for more environmentally sensitive farming, consumer confidence in the quality and integrity of organic produce is critical to achieving growth. The Scottish Executive is confident that the advice of ACOS to ministers is pivotal in setting and maintaining organic standards in order to strengthen the sector's reputation and capacity to grow.

Feed derogation

5.6 The prospect of the EU feed derogation ending in August 2005 has been a serious concern for many Scottish producers, especially organic dairy farmers. The Scottish Executive and Scottish stakeholders worked closely with Defra and ACOS to ensure the Scottish perspective was considered in representations to the EU regarding feed derogation.

5.7 As a result on 1 ^st July 2005 the EC Standing Committee on Organic Farming agreed formally on an extension to the derogation on conventional feed with a phased in reduction in the percentage of conventional feed to be used. After 25 August 2005 the maximum percentage of conventional feed allowed on annual dry matter ( DM) basis will be:

The maximum percentage of conventional feed allowed on a daily DM basis remains at 25%.

6.1 The principle of organic aquaculture, especially for salmanoids, is well established. During the past year organic aquaculture standards for the gadoid family (which includes cod and haddock) have been developed by a number of certifying bodies.

6.2 The principal goals of the Soil Association's Aquaculture Development Programme continue to be the progression of organic salmon standards, development of standards for new species, and the development of a common EU aquaculture standard.

6.3 The programme continues to work on the sustainability of feeds, the recycling of nutrients, sea lice prevention and control, and reductions in environmental contaminant levels in farmed fish.

6.4 New standards for bivalve molluscs are at the final stage of development, and the programme has recently committed to the development of an organic standard for cod. Interest in these (and other) new species has been high, with farmers ready to certify when the standards are available.

6.5 The programme continues to take a lead role in working with the major European certifiers on the development of aquaculture standards equivalence across Europe.

Anna Ashmole, Soil Association Scotland
Elizabeth Baird, Scottish Executive, Food Marketing and Policy
Timothy Brink, Bio-Dynamic Agriculture Association
Craig Campbell, National Farmers' Union Scotland
Ingrid Clayden, Scottish Executive, Farm Business Restructuring Division (Chair)
Carey Coombs, Soil Association Scotland
Brian Kaye, Scottish Organics Producers Association
Gillian Kynoch, Scottish Executive, Health Education and Scottish Diet Action Plan
Mary Lawton, Scottish Consumer Council
Richie Malloch, Scottish Enterprise
Ceri Ritchie, Food Business Management Economist, Scottish Agricultural College
Lisa Schneidau, Scottish Environment Link
Ron Vass, Scottish Executive Farm Business Restructuring Division
Donald Watson, Scottish Organics Producers Association
David Younie, Senior Organic Farming Specialist, Scottish Agricultural College

Membership of Organics Stakeholder Marketing Group

Anna Ashmole, Soil Association Scotland
Caroline Bayliss, Scottish Agricultural College, Organic Market Link Coordinator
Timothy Brink, Bio-Dynamic Agriculture Association
David Lamb, Scottish Agricultural College, Food Marketing Team Leader
Richie Malloch, Scottish Enterprise
Elaine McGregor, Scottish Executive, Food, Marketing and Policy
Ron Vass, Scottish Executive, Farm Business Restructuring Division
Donald Watson, Scottish Organics Producers Association

NB. Chair of the Organic Stakeholder Marketing Group rotates around the three sector bodies.

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