The Scottish Government

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REVIEW OF AGRI-ENVIRONMENT SCHEME PAYMENT RATES: MEETING WITH STAKEHOLDERS HELD ON 13 JUNE 2005 IN PENTLAND HOUSE

NOTE OF MAIN POINTS

Present:

Ingrid Clayden, SEERAD- FBRD (Chair) Craig Campbell, NFUS

Linda Rosborough, SEERAD-CAPM Jonathan Hall, SRPBA

Andrew Moxey, SEERAD- ASD Douglas Bell, SAC

John Henderson, SEERAD-Agriculture Staff Alison Mcknight, FWAG

Valerie Blackie, SEERAD-CAPM Lisa Schneidau, LINK

Derek Cowie, SEERAD- FBRD Carey Coombs, Soil Association

Roger Burton, SNH Brian Kaye SOPA

Jenny Johnson, SNH Becky Shaw, SCF (by audio conference)

Ann Cowan, SEERAD- FBRD

1. Following welcome and introductions, it was explained that the purpose of this Group would be to review agri-environment scheme payment rates following concerns about the impact of the proposed changes to rates announced on 9 May. These proposed changes had subsequently been withdrawn. This meeting would discuss the scope of the review, people issues, review process and timetable for future meetings. This Group would look first at the rates then the impact of any changes on individual businesses. It was agreed that discussions on the detail of individual rates would be the subject of future meetings.

2. A table had been circulated prior to this meeting indicating which of the agri-environment scheme rates announced on 9 May had gone down, up or stayed the same. It was agreed that for consistency, all the rates should be reviewed, not just the ones it had been announced would decrease.

3. Legislation requires that double funding is to be avoided and the review of payment rates was intended to address the implications of the new Single Farm Payment (SFP) in that regard. While the SFP Regulations provide for two options for dealing with the double funding of participants in agri-environment schemes, SEERAD has opted to use powers to amend the agri-environment rates. Legal advice is that Section 98 (1) and (2) of the Environment Act 1995 give the power to vary rates and that this is effected by the laying of a Scottish Statutory Instrument containing new rates. Legal advice also indicates that as SEERAD has the authority to vary rates then we must do so, and that it would not be possible to reduce the SFP instead of the agri-environment scheme payment rates. There was some suggestion from the NFU and SRPBA that SEERAD did not, in fact, have to take action to amend the rates that apply to existing scheme participants and it was agreed that SEERAD would consider any legal advice obtained to this effect.

4. It was noted that under the terms of EC Regulations, agri-environment scheme management payments could only be based on income foregone, additional costs and an optional incentive element of up to 20%. A good starting point for the review would be to look at income foregone in the post de-coupled era to see what issues arise. It was important not to include any double funding. Turning to the impact on individuals, it was noted that there were a number of different groups who would be affected differently. Those who do not receive an SFP, those who joined a scheme before or after 2002, those who have made a successful or an unsuccessful challenge to their SFP and so on. For information, it was noted that there had been 824 challenges from businesses arising from agri-environment participation, 375 of which had been totally successful, 284 totally rejected, 161 split decisions and 4 outstanding. Within each of these groups there may be further variations in effect relating to business decisions. SEERAD agreed to consider the possibility of more than one set of rates if that proved necessary. It was agreed that SEERAD would endeavour to set out the different groups for reference during the review and circulate this to the review group (Attached)

Action: SEERAD

5. All agreed that while there were issues specifically relating to the impact of revised rates on existing scheme participants, that the rates did need to be revised for new entrants. It was similarly agreed that in order to encourage increased participation, rates would need to be seen as attractive. It was confirmed that the aim would be to strike the most appropriate rate for each measure within the constraints of legislation.

6. Looking to the future it was also agreed that we should aim for a smooth transition from this RDR programming period to the next, so that scheme participants did not find themselves with more difficult decisions in 2007. It was noted that the 20% incentive element has been removed from the new RDR and replaced by "transaction costs" which included management time. This should be kept in mind when reviewing the rates, but significant changes to the scheme, including this and the possibility of more than one application point for OAS, were beyond the scope of this review. Nevertheless, it was acknowledged that a broader review should run alongside this one on a slightly slower track. What we were aiming for was a further notification of rates to the EU and not a modification of the scheme.

7. The question was raised as to whether any additional support would be available if the RSS was delayed for 2 months because of the review and, as a consequences, plans had to be rewritten. Consideration would be given to this request.

8. Following discussion, it was agreed that the Group would begin the review with those rates that had caused particular concern when announced on 9 May. This would be followed up with consideration of remaining rates as necessary. The first rates to be reviewed would be:-

(1) Management of Hedgerows,

(2) Stock Removal,

(3) Unharvested Crops,

(4) Extensive Arable Cropping,

(5) OAS improved grassland (conversion and maintenance),

(6) Retention of cattle on small units,

(5) Conservation Headlands,

(6) Management of Native Woodlands,

(7) OAS maintenance payments (a further 3 rates),

(8) Management of Rush Pasture and Management of Wet Grassland for Waders.

8. As for the timetable for review, the best case scenario would be to finalise the rates by the end of July and seek Ministerial approval during August. The rates could then be submitted to the EC as a Notification. EC approval could take 3 months. It would also be necessary for new Regulations to be introduced. The bottom line was that it would be possibly November/December before any changes to the rates could be introduced. A number of concerns were raised about the consequences of the delay e.g. half the hedge planting season already gone. It was recognised that there were a number of practical issues that required to be resolved, However it was pointed out that for RSS 2005 no agreements had yet been entered into. A request was made for information on regional uptake of measures, so that the Group could look at the geographical spread of the prescriptions. This information would be provided if it was possible to obtain on an Area Office basis.

Action: SEERAD

9. Further meetings were scheduled for:

23 June, from 10:00am - 1:00pm (to be held at NFUS HQ at the Rural Centre, Ingliston)

29 June am 10:00am - 1:00pm (Pentland House)

7 July, from 10:00am - 1:00pm (Pentland House)

14 July, from 10:00am - 1:00pm (Pentland House)

21 July, from 10:00am - 1:00pm (Pentland House)

28 July, from 10:00am - 1:00pm (Pentland House)

4 August, from 2:00pm - 5:00pm (Pentland House)

SEERAD FBRDJune 2005

GROUPS WHO ARE AFFECTED BY CHANGES TO THE AGRI-ENVIRONMENT PAYMENT RATES

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