Chamber and committees

I hope that I have been able to outline in previous answers some of the work that we are doing to try to address that issue. For example, we are looking at tackling depopulation in our rural areas and on our islands, and I have outlined some of the pilot projects that we are considering to try to deal with some of the issues that we are experiencing.

I do not think that it is necessarily fair to characterise the situation by saying that everybody in Europe is facing the same problems. That is an oft-quoted characterisation in relation to the issue with heavy goods vehicle drivers in particular, with shortages being experienced across the piece, but there is no denying that the situation here has been particularly acute since Brexit.

I am outlining to the committee exactly what I have heard when speaking to businesses about the various impacts that they have seen; that is the information that we have. I am happy to follow up with the committee and provide more specifics, if that would be helpful. I hope that some of the work that we are doing to try to tackle those problems, as I have outlined today, will start to have an impact. However, I come back to the critical and immediate issues that we are facing, on which we need engagement. All that we are asking is for the UK Government to work with us on addressing some of those problems.

I know that there are powers in legislation that we have introduced in Scotland, such as the Agriculture (Retained EU Law and Data) (Scotland) Act 2020, that enable us to maintain alignment with the EU. The 2020 act includes provisions on matters such as marketing standards and covers a wide range of food products. I believe that we have the necessary levers in that act, but I would be happy to look into that and follow up with the committee in more detail.

A number of changes are still due to come into force. The industry will face changes towards the end of this week, with new export health certificates needing to be used, for example. There have been a number of changes, and transitional arrangements have been put in place in relation to border checks and controls on imports, for example. We use our connections with stakeholders and concerned businesses, and we work with our industries as much as possible, to prepare them for any changes that are coming their way, but that can be difficult.

A source of frustration has been that the goal posts have continually been moved in relation to import checks. Our exporters are being put at a specific disadvantage because they have had to be aligned, to implement checks, to satisfy all the requirements for export health certificates and to face all the other barriers, whereas imports into the UK have not faced the same barriers. The deadlines keep shifting and moving backwards, but we work with our industries as much as possible to prepare as best we can for any issues that come our way.

Yes—that is because there had been a significant policy change, which we were made aware of only at the last minute. I understand that the timing of that was not ideal.

Normally, the policy notes that accompany the SI notifications that we send to the committee explain what the instrument is looking to achieve and why Scottish ministers are content to agree that the UK does that on our behalf. Often, it saves our time and resource for the UK to do that on our behalf and with our consent. Off the top of my head, I cannot think of many other incidences where we have taken the decision that we took with the border controls instrument. I do not know whether officials have further information, but, because of the extent of the policy that was changing in that SI, we needed to be able to take the time to fully consider the ramifications, which is why we decided to bring forward our own piece of secondary legislation. Jesus Gallego will have more to add on that.

Again, we have made a commitment about the funding that we have and how that will be spent to give people in our agriculture sector some stability and security by letting them know that they can rely on those grants, which means that they know what their income will be over the next few years.

Obviously, a lot of the spend on agriculture funding across my portfolio previously came from the EU. There are still some legacy schemes that receive funding from the EU, but that will taper off, and all the funding that we get will come from the UK Government. However, as I have said in previous responses, we are not getting the full replacement funds that we were promised. On top of some of the issues that I identified, that means that we will face a £95 million shortfall in agriculture as well as the significant shortfall that we face year on year in relation to marine funding.

Equipment suppliers were just not able to supply equipment on time. People have been unable to get materials in construction, and we have seen the same issues in relation to agricultural equipment. It just has not been possible to get it. That is not a problem of governance or something that the farmers have not done; the equipment has just not been available for them to access. James Muldoon might have some further information on that point.

Those things are the subject of our discussions with the implementation board, which—as the committee will be aware—I co-chair with the NFU Scotland president, Martin Kennedy. Discussions are on-going as to exactly how the funding will be allocated and how we will progress the spend to implement what we have set out in part 1 of the national test programme, with regard to rolling out the carbon audits, the nutrient management plans and other elements that we will look to introduce over the years of the programme. Again, however, I note that that is all subject to the discussions that we are currently having.

I have already said that the money that we had identified for that has been ring fenced specifically for that purpose, and for looking at agricultural transformation. That is exactly what we are spending the money on.

I do not agree with your assertion that we are lagging behind the rest of the UK. Part of our process in developing future policy is the work that is being taken forward through the agricultural reform implementation and oversight board taking a co-development approach with the very people the policies will affect. That is why we have established the national test programme, which no doubt you will want to discuss later. It is important and vital that, in developing the future programmes for support, we are taking the approach of working with our stakeholders. That is also why we and the previous Cabinet Secretary for Rural Economy and Tourism committed to a period of stability and simplicity for the sector while we go through this period of transition. That has also been absolutely critical here.

You also asked about the further impact as we look at the resource spending review. The review and the medium-term financial strategy will build on last year’s five-year capital spending review. They will all come together to give a comprehensive picture of Scotland’s multiyear public spending plans. As the committee will be aware, the UK Government’s three-year spending review took place at the end of October last year, and it told us that, overall, the block grant is less than the current aggregate for 2021-22. That is why I said in my opening statement that this year’s budget has really been about those hard choices. The Cabinet Secretary for Finance and the Economy has also been really clear about that.

As I have already said, even though we face hard choices, the budget that we have produced for this portfolio supports our agriculture, fisheries, and rural populations right across Scotland to recover from the twin crises that we are facing, as well as helping them to start their journey towards future transformation.

At the moment, it is not possible for me to predict the outcome of the resource spending review process, because it is a Government-wide exercise and it is currently out for consultation. Again, I come back to what I stated about the Government’s priorities. The Cabinet Secretary for Finance and the Economy has outlined three key priority areas: to support progress towards meeting our child poverty targets, to address the climate change challenges that we face and to secure a stronger, fairer, greener economy. In order that we can do that, I have already committed to continuing with the pillar 1 direct payments and not lowering that basic payment scheme rate throughout the current parliamentary session. The pillar 2 payments include the reopening of the eighth round in 2022. We are further committed to developing future rounds up to and including 2024. I have already mentioned the national test programme.

We have worked hard towards the key priority areas that have been identified across the Government, and I feel that the budget that I have put forward and what I am proposing for the portfolio go a long way to achieving that.

We try to engage with the UK Government on those matters as much as possible and we work as closely with it as possible. However, despite assurances that we would have discussions about future allocations of funding, those have yet to transpire. We have regular monthly meetings with the devolved Administrations and the UK Government at which we discuss a number of items of mutual interest across agriculture, marine policy and various other sectors. In spite of that, the meaningful discussions that we were assured would take place are yet to happen. However, we make representations repeatedly to the UK Government.