9 VIEWS OF THE PROPOSED TOP UP FUND
The establishment of a top up fund
9.1 Question 5.11 asked "The Inquiry suggests establishing a top up fund ( TUF) which would be available to farmers in receipt of direct payments, in return for a commitment to transformational change which will improve their competitiveness and sustainability. Do you agree with this suggestion that a TUF be established?"
9.2 Of the 102 respondents who answered this question, 24 respondents said they agreed with the establishment of a TUF. Half of those who answered this question (51 respondents) said they agreed but added a caveat to their response (e.g. it would depend how it was implemented). Twenty-three respondents said they did not agree with the proposed TUF and 4 were undecided. No clear pattern emerged in relation to respondent sectors.
9.3 The most common response in favour of the TUF was that this could help to facilitate public goods delivery (e.g. High Nature Value ( HNV), Organic and Agri-environment Schemes). This was mentioned by 7 respondents, including 4 from the Environment sector. For example, one respondent from the Environment group argued, " TUFs would offer a way of using a significant proportion of the overall budget in the form of investment for specific purposes - offering more transparency and the possibility of increasing the supply of certain public benefits".
9.4 Concerns raised about the proposed TUF included:
- A TUF may be complicated and expensive to administer and there is a need to keep it simple and easy to access (mentioned by 28 respondents);
- Linked to this, negative experiences of the administration of previous and / or similar schemes were highlighted (9 respondents);
- Concerns about duplicating what could be done under the Scottish Rural Development Programme ( SRDP) or suggestions that this should be done through SRDP instead (10 respondents);
- It must be directed at active farming only, or directly linked to activity (7 respondents);
- TUF funding must be non-competitive (9 respondents);
- TUF funding should be ring fenced (8 respondents);
- TUF funds should remain in Pillar 1, or the TUF should remain an integral part of direct support (8 respondents);
- There should be a focus on the use of direct payments instead (e.g. one Local Authority respondent questioned the relevance of a TUF if the direct payments stream is drawn up on an equitable basis) (7 respondents);
- Concerns or queries were raised about how the system would work in practice (6 respondents);
- Concerns were raised about issues of fairness or access to TUFs (mentioned by 5 respondents, 4 of whom were Individuals);
- While some respondents supported the idea of a TUF, they also commented that it must be set up and operated legally within World Trade Organisation ( WTO) constraints (4 respondents).
The size of the proposed top up fund
9.5 Question 5.12 asked "As the TUF will provide money to help achieve outcomes at the expense of the direct area payment, deciding the size of the fund is critical. The Inquiry's view is that for the TUF to be meaningful it must be at least half the amount that would be paid out as new direct area payments, what is your view?"
9.6 Eighty-six respondents answered this question, with 21 broadly agreeing with the Inquiry's view. Ten respondents reiterated their opposition to the idea of a TUF and therefore did not wish to comment on the size of the fund, while a further 10 said they were undecided or would need more detail on the proposal before making a judgement. The remaining 45 respondents provided alternative suggestions or comments. There was no clear pattern in overall agreement to this question between respondent sectors.
9.7 Very few of the 21 respondents who agreed with the proposed split between direct payments and the TUF gave reasons for their view.
9.8 Of the 45 respondents who provided any further comment on this issue, 37 gave their views on whether the proportion of the TUF should be bigger or smaller than proposed. Twenty-three of these argued for the TUF to be bigger, while 14 said it should be smaller. Most notably, 4 Local Authority respondents, 2 from the Environment sector and 2 from the Wider Interests group said the TUF fund should be bigger, while no one from any of these sectors said it should be smaller.
9.9 Among the respondents who said the TUF should be bigger, the following key points emerged:
- General support for a high proportion of the budget going into the TUF relative to area payments, or arguments that the TUF should be as large as possible, to reflect a wide range of public benefits (10 respondents);
- The TUF should be at least double the area rate (4 respondents, including 2 from the Farming sector).
9.10 The respondents who said the TUF should be smaller made the following key points:
- The proportion allocated to the TUF should be much less or as low as possible (these respondents did not recommend a proportion) (7 respondents, 3 of whom were from the Farming sector);
- The scheme should start with a smaller proportion but review and increase this over time (4).
Measures for use in the proposed top up fund
9.11 Question 5.13 asked, "At this stage the Inquiry has identified the principle of establishing a TUF but, as well as developing its own ideas, is looking to canvass ideas on what the various measures might be and how they might be applied. Please provide your thoughts?"
9.12 Seventy-nine people provided comments in response to this question, although 6 of these simply reiterated their lack of support for a TUF. There was no clear pattern in responses between sectors.
9.13 Environmental issues were commonly mentioned, by a range of respondent groups. For example, 11 respondents said the TUF should be used to meet the challenge of climate change mitigation or to support climate change reduction measures. Two also suggested the TUF should encourage tree planting as part of climate change mitigation. Using the TUF for environmental protection and enhancement, to encourage use of sustainable resources or in the delivery of biodiversity protection measures etc was mentioned by 16 respondents. Three also suggested using a TUF to support High Nature Value farming systems.
9.14 Thirteen respondents said that the TUF should encourage the improved efficiency of the use of resources and promote good land management (e.g. reduced use of nitrogen, fuel efficiency, field margins, production benefits, disease free actions). Five respondents (2 of whom were from the Farming sector) mentioned adherence to acceptable standards of production (e.g. membership of quality assurance schemes) and supporting high quality production. Eleven respondents (including 3 from the Livestock / Supply Chain sector) mentioned animal health and welfare or the implementation of specific animal health measures as requirements for TUF payments.
9.15 Ten respondents argued that the TUF should be used specifically to support the livestock sector, particularly the beef industry (this included 2 respondents from the Farming sector, one Local Authority and one from the Livestock / Supply Chain group).
9.16 Issues relating to employment were raised by 11 respondents (including 4 from the Farming sector and 2 Local Authorities), such as suggestions that the TUF should benefit farmers who provide employment or encourage young people into farming through apprentice schemes etc.
9.17 Six respondents commented that a TUF could be used to encourage innovation and improvements in farming, such as promoting new technologies, skills or best practice, or investment in research and development (this was mentioned by 2 Local Authorities, one respondent from the Farming sector and one from the Wider Interests group).
9.18 Five respondents, including 3 from the Environment sector, suggested a TUF would be best spent on capital items or could provide capital investment grants, to bring about specific changes to farm businesses to improve performance.
9.19 Again, respondents highlighted the need for any TUF to be as simple as possible and easy to administer (mentioned by 7 respondents, including one Local Authority, 2 from the Farming sector and 2 from the Environment group).
9.20 Four respondents also argued that the TUF should continue the principle of Article 68 beyond 2013 (i.e. to mitigate unforeseen consequences arising from changes to the SFP), suggesting that a TUF may need to be set up to deal with certain cases during a transitional period, to avoid the danger of a sudden redistribution of payments.
Individual claimants funds
9.21 The Inquiry suggested that top up funds might be directed at individual claimants in proportion to their direct area payment in return for certain specified outcomes with any unclaimed funds being used as a general pot.
9.22 Question 5.14 asked "Do you agree with this concept of, in effect, having an individual area claimant's fund or should it be much more measure-specific for example, with some funding dedicated to supporting particular sectors?"
9.23 Seventy-one respondents answered this question, 23 of whom agreed with the Inquiry's proposal relating to an individual area claimant's fund. A further 11 agreed but provided caveats in their response, and 29 did not agree. Four respondents were undecided, and another 4 reiterated their disagreement with the concept of a TUF and therefore did not provide a response.
9.24 While most sectors were represented across the different responses, respondents from the Farming sector were more likely to agree or provide a mixed response (only one respondent from the Farming sector said they disagreed).
9.25 Common responses were:
- The TUF needs to be accessible to all sectors and it is not fair to fund particular sectors over others (10 respondents); for example one Individual respondent argued: "individual sectors could take too much of the money with the vast majority of claimants not being able to get to the TUF";
- If the TUF is directed at individual claimants in proportion to their direct area payment this will give individual businesses a degree of certainty in the next funding period or will allow people to plan their businesses properly (3 respondents).
9.26 Seven respondents who agreed with the proposed approach also suggested ways in which the unclaimed funds should be used; 4 of these (including 2 from the Farming sector) said they should support new entrants.
9.27 The most common argument against the proposed approach was that if there is to be a TUF then it should be measure specific and aimed at particular sectors, rather than being used to create an individual claimants fund (mentioned by 9 respondents). For example, one respondent from the Wider Interests sector stated "We disagree that the TUF payments should be in proportion to direct payments for individual claimants: this would merely retain a distribution of funds that lacked specificity as to what was to be achieved. The amount paid should depend wholly on what is to be delivered and measure specific".
9.28 There was particular support for targeting funding at the livestock sector (mentioned by 7 respondents). Perhaps unsurprisingly, respondents from the Farming and Livestock / Supply Chain sectors were most likely to suggest this.
9.29 The provision of public goods was raised by several respondents. Four, including 2 from the Environment sector, were against the proposed approach because funding should not be tied to an area or a specific sector; rather it should reflect the public benefits provided by an active user's management of land and stock. Some respondents agreed with the proposed approach only if both direct payments and the TUF are based on provision of public goods rather than on the Macaulay Land Capability for Agriculture classification ( LCA) (mentioned by 3 respondents, including 2 from the Environment sector).
Sector-specific use of the TUF
9.30 Question 5.15 asked "If you believe that a proportion of TUF monies should be used for sector specific measures, a) What proportion of the total TUF should be allocated and b) Which sector or sectors should TUF support and why?"
9.31 Sixty people answered at least one part of this question, of whom 51 gave a response to the first part of the question.
9.32 Twenty-eight respondents said that they did not believe that a proportion of TUF monies should be used for sector specific measures, or reiterated their lack of support for a TUF in general. These responses tended to repeat previous arguments made in response to other questions. A further 10 respondents were undecided or commented that it was too early to determine these details. There was no clear pattern in responses between sectors.
9.33 Thirteen respondents provided a clear answer to the first part of this question. The only suggestions for what proportion of TUF monies should be used for sector specific measures mentioned by more than one person were 100% and 50% (both of which were suggested by 3 respondents).
9.34 In terms of the sectors that should be supported by the TUF, 19 respondents made suggestions and the 2 that were mentioned by more than one respondent were:
- The beef sector (because the beef industry is in decline, or in greatest danger etc) (mentioned by 6 respondents - 4 Individuals and 2 from the Livestock / Supply Chain sector);
- The livestock sector (red meat producers in particular) was also mentioned by 8 respondents (2 from the Livestock / Supply Chain sector, 4 Individuals, one Local Authority and one from the Farming sector), because of the relative importance of the livestock sector to Scotland's agriculture.
Questions 5.11 to 5.15 focused on views of the proposed top up fund, and responses were given by between 60 and 102 respondents (40% and 68% of the 149 who responded to the consultation).
Views were mixed on the establishment of a TUF: 24 agreed, 23 disagreed and half of those responding (51) agreed but added a caveat to their response. The most common response in favour of the TUF was that this could help to facilitate public goods delivery (7). The most frequently cited concerns about the proposed TUF were that this may be complicated and expensive to administer (28), and that it may duplicate what could be done under the SRDP (10).
Again, views were mixed about the proposed size of the TUF fund. Although 21 respondents broadly agreed with the Inquiry's view that the TUF should be at least half the amount that would be paid out as new direct area payments, 23 argued for the TUF to be bigger and 14 said it should be smaller.
Suggestions about measures to be applied in the proposed TUF included environmental protection or enhancement, or encouraging use of sustainable resources (16) and measures relating to improved efficiency and promotion good land use management (13).
There was no consensus about the Inquiry's proposal relating to an individual area claimant's fund (23 agreed, 11 agreed but provided caveats, and 29 did not agree).
The 2 sectors suggested for particular support by the TUF mentioned by more than one respondent were the beef sector (6) and the livestock sector (and red meat producers in particular) (8). Unsurprisingly, respondents from the Farming and Livestock / Supply Chain sectors were more likely than others to request support for the beef and livestock sectors, while those from the Environment sector were most likely to mention public goods. Individuals were most likely to raise concerns about fairness and access to the TUF.