Felly, gyda'r 10-e nodi arlaedd yn 2017 ar y Cymru Rúal Econome a Llaniadau Cymru. Rwy'n credu rwy'n credu weld y gwybodaeth yn fawr o pethosol yn cymdeithasol. Acoligion dechrau ei hyvwn yr ysgolod hynny, Richard Lyle, washed absolwydd i eu llunio y ddweud yn cymryd, gyda'r cyfnodd. Erdwg ystafell ar y hwn ar genddo honi yn y bwysig ar ddi i'r yr ysgolod o'r eu gweithio achiffarniadol yn ffawr. mae'n gweithio i'r gyffredin ni allanol iawn i'r sizio, ac yn credu o hyn yn gweithio i'r gweithio i'r gweld sits yn cyd-dweud i'n mynd i nhw'n mynd, at peth yw am ystafelloedd o hynny i'r gweithio i'r gweld i ni спins. Mae'n cael ei ddweud i gael teimlo eich hoffa dim yn gweld i'r comentaraeth. I will start that off, if I may. I am Edward Mountain. I am a regional representative for the Highlands and Islands. I am a convener of the committee and I declare an interest in that I am a member of a farming partnership. I am Gail Ross. I am the constituency MSP for Caithness, Sutherland and Ross. I am deputy convener of the committee. I am interested but no interests. John Mason, MSP for Glasgow Shettleston. Good morning. My name is Joanie Hall. I am director of policy and member services with NFU Scotland and I would also note that I am also currently on succumbent with Scottish Government assisting with their considerations about the implications of leaving the EU on Scottish agriculture. Rhoda Grant, MSP for the Highlands and Islands. Andrew Midgley, MSP for the Highlands and Islands. I am project and research manager at Scottish Land and Estates. I am student, Siemens and MSP, Bamshire and Buckingham Coast, home of the best beef in the world. I am Tom Hind. I am chief strategy officer at the agriculture and horticulture development board. I am Mike Rumbles, MSP for the north-east of Scotland. I am Pete Ritchie, director of Narris Scotland and a small farmer. I am Maen Baw. I am John Finnie, regional MSP for Highlands and Islands. Good morning. I am Stephen Thomson. I am an agricultural economist at Scotland's rural college and I am part of the Centre for Knowledge, Exchange and Impact, which is part of the strategic research programme. Jamie Greene, MSP, regional member for the west of Scotland, has no interest in the glare. Good morning. I am Stuart Goodall, chief executive of Comfor, which promotes the forestry and timber sector. Mary Evans, MSP for Angus North and Merns. Peter Chapman, regional MSP for the north-east. I declare an interest as I am a farmer in the north-east and I am also rural economy and connectivity shadow cabinet secretary. We have our clarking team and the official report members on the committee. I would like to conduct a discussion this morning around a series of themes. Each of the members of the committee will lead off with a theme. I will then look round and try to bring everyone in to the discussion, if I may. I will try to catch my eye if you would like to speak.  I hope that I will not need to do that. You can also collect the eye of any of the clarking team or Gail Ross, deputy convener, who will make sure that we bring you in. I think that what we are going to do is move on straight on to the first theme, and that is going to be introduced by John. Thank you, convener. Good morning, panel, and thanks to some of your written submissions. The first theme is about financial support to farming and forestry via cap. It is a total of £4.6 billion that will be available between 2014 and 2020. We are keen to hear what you think the benefits of cap are. A lot of the submissions have referred to whatever changes take place, the same level of funding should be made available. If you could say why public money should be used to support farmers, foresters and estates. Who would like to—Johnny? I am quite happy to kick that off. Support payments coming into Scottish agriculture in particular have been vitally important for a number of decades now under the CAP, and they remain so, without doubt. The very simple fact is that many, many farms and crofts in Scotland would not be viable in economic terms without that continuing support. Nevertheless, the question really looks going forward. Do we continue to utilise the same level of support in the same way? Our position would be no. We need the same levels of support, absolutely. As we go into a non-cap, non-EU world but with new trading and market opportunities, there is an opportunity to recast agricultural and rural support in Scotland. We should take that opportunity. What we really need to do is focus on the needs of Scottish agriculture rather than necessarily the wants of individual agricultural businesses. Having said all that, clearly direct support payments, which make up the bulk of the payments that he talked about, are critical to many, many agricultural businesses. We would not wish to see the pendulum swing too fast away from direct support payments to threaten some of those businesses. We are particularly talking about beef and cheap producers on more marginal and upland land, which will continue to struggle to make an adequate return purely from the marketplace. Nevertheless, we need to start to refocus support payments so that more agricultural businesses in Scotland are more competitive, more efficient, more market-focused, so that their reliance on support payments diminishes in the long term. It is not about reducing the quantum of support, but it is about reducing how we spend that support, which is going to be critical to the future of Scottish agriculture, because we are going in a very new operating environment in terms of our trading opportunities and so on. It is how we manage that change, which is critical. The last thing that the agricultural industry needs is any form of chaos rather than managed change. That will be a very difficult and arguably turbulent period for Scottish agriculture as we develop new market opportunities. Therefore, the role of support will remain critical, but how that support is played out and how it is used is the key rather than the quantum of money. I am going to bring Andrew in next.  John, I will let you come back in for me. Thank you, convener. The question started with the benefits. There have been considerable benefits in supporting our farming industries over a long term. It has been quite successful over the period that it has existed in doing that. When you start to think forward about maintaining the same amount, you get into more difficult territory because you have to start asking questions about why and so on. We would probably want to say that we should maintain support for farms for rural land management businesses. We would not want to see any radical change because there is a level of dependence at the moment across farming and land management on public support. If there is radical change, quick change, the impact on those businesses could be quite negative. It is important that we are relatively cautious. There is a need for change, but we need to be cautious about how we go about that change. That gets into questions about why we should continue to support. From the Scottish Land and Estates position, while we think that there should be a continuation of support, we could potentially move to a different rationale for why we do that. We have set out that we think that support could, in the longer term, be moved towards rewarding the delivery of public goods because this is public money being spent on land management. More clearly demonstrating what the public gets in return for that money would be a good thing. There has to be a transition to get there. At the moment, we have food producing industry, and that is a vitally important industry. We need to make sure that we do not damage it. We have to set out a longer-term process of how we change the regime to create a more robust rationale for maintaining support to farming and land management. John, just before I bring you back in, I would like to bring Pete in, if I may, to your left. Convener, I think that the benefits of CAP have probably been to slow down the period of consolidation in Scottish farming and keep more people on the land that has benefits in itself. However, I agree with Johnnie that what has tended to happen is that it has reduced innovation. It has reduced market orientation in farming. I am speaking on behalf of LINK, which brings together a lot of the different environmental organisations that we have put this paper together. We argue for retaining the level of investment, as Andrew says, partly because we want to shift the focus towards public money for public goods. We want to see that money going in three directions. One, very much supporting our farmers to be competitive and market-oriented, investing in change, investing in skills, investing in just more market orientation for our farming, improving performance. When you look at the figures, the top quarter of farms are doing okay. It is bringing others up to that level. That is really the issue and the challenge for Scottish farming. A lot of investment in advice and support, and if necessary, loans and grants to facilitate change. However, we also see a transition towards agroecology and towards a more integrated approach to land management across the piece, with more money going into public goods. Whether that is integrating trees with farming, whether it is putting some land into trees as long as it is the right trees in the right place, or whether it is for more generic rural development, particularly in those areas of Scotland where there is an underdeveloped rural economy and where rural development money, which is where this comes from, could be used effectively. We do see a transition, but, like the other speakers, we recognise that the industry needs time to adapt, and we want to see a planned transition towards some clear public goals, not a shambles. John, do you want to come back in?  I would like to bring the other people in as well. If I can add another strand into that convener, then please. At the moment, Scotland gets 17 per cent of the money that the UK gets under the ordinary formula, post Brexit, that would be 8 per cent. It is about how—quite rightly everyone has talked about transition—how well equipped the agriculture and forestry sector is to the inevitable transition that is coming. However, it ends up. Stephen, do you want to come in? You indicate that you did, and I might bring in a couple of the other committee members. Just on John's point about the budget, everybody understands that we punch above our weight in terms of the budget going into CEP in terms of population. If you did it in another way, agricultural value of agricultural output works out about 11.5 per cent, so there are lots of different ways of cutting this that people are not—we need to think about these going forward. I am not coming from a lobby group perspective, so I have no qualms here, and I am not making a position statement. However, what we have seen out of the cap is that I agree with Pete that we have reduced innovation, so the CEP has led to people having a more relaxed time in terms of driving forward innovation and making business developments. However, what it has done is that it has made sure that we have had a continuous food production. We have animal welfare standards, probably second to none. We have environmental conditions, probably second to none. The Scandinavians might have higher conditions. With the CEP, as a carrot, we have managed to deliver a lot of things. Under pillar 2, we have the support for the less favoured areas. That is a very broad definition of what a less favoured area is, but we are maintaining farming activity in the hill and mountain areas that Johnnie referred to. Without those, you do not have the grazing regimes. Without the grazing regimes, you do not have the environmental benefits that are derived from land management. There are a whole host of things there. The one that people probably do not realise is just how much CEP has made food cheaper in this country. By supporting the agriculture this way, through a taxpayer, you are taking the payment or some of the burden away from the consumer, so you are actually the richer paying more proportionally for food production in this country. One of the other things that is probably a negative on the CEP and what it has delivered is that it has meant that we have probably had people hanging on for longer and longer in terms of intergenerational change, new blood coming into the industry, land values are constantly going up. That is not all down to CEP. You will read a lot that the CEP is capitalised into land values, but there are so many other factors at play, including capital gains tax, rollover relief and so on. Those kinds of things are driving land price inflation, but it has stymied intergenerational transfer of farms. It is something that we need to look at going forward. Finally, I agree with everyone that we need to move to a much more outcomes-based approach rather than the past dictating. We are kind of past dependent on all of this, so the past is dictating what we do in the future. We need to have a once-in-a-lifetime opportunity to make a change. I will bring in Maureen. I am interested in your comment that the CEP has made farmers relaxed. I am not sure that someone would agree with that, but I think that you wanted to make the comment. Maureen, unless there is a point specifically on CEP, a minus is slightly separate to that. I will just call that later again. Can I bring in that? Stuart, you were next. It is just a process point. Picky on when Johnny said that he wants to avoid turbulence. I just wanted to be clear that we have an idea of how that is all going to happen. Can I suggest that what I am hearing is that we are in what I would describe as a preparatory phase? In other words, that is the phase that ends at the day X Brexit happens until we see what Brexit looks like. We cannot commit to anything, but we can prepare. Then, immediately at the point of Brexit, we enter a review phase, where we check back on all the preparatory and see what we can implement and then we move to implementation. I just wanted to test that that is a reasonable characterisation of the process that we want to see. We cannot eliminate the uncertainty until we get to Brexit because there will be changes, but we can prepare for a range of outcomes. If we look at it in that sense, without engaging in the policy issues that we will engage in, is that the way that Johnny in particular was envisaging that we should do things? Factor is going to influence how the process pans out. I do not think that we can sit here today and say that we are going to have a certain preparatory phase or a certain review and then implementation phase. There are so many other variables at play here. Clearly, this is going to stray off the current CAP issues and all the rest of it, but what will be fundamental in terms of Scottish agricultural and rural support going forward is the other big negotiating issues of what sort of trade deals are negotiated beyond our withdrawal from the single market. Theresa May has set out a course, and the Scottish Government has set out a separate course, but the outcome of those discussions, particularly on free trade agreements, will take a very uncertain length of time. Therefore, we will require some sort of certainty within that from an agricultural industry point of view. In my opinion, there is absolutely no guarantee that on day 1 of Brexit, we will have a market situation that will then allow us to shape a new agricultural support package to make us more competitive in that new market situation. There will be an on-going need for support through whatever transition or review phase that we have as your colleague has set out. Therefore, I think that we have got to be very, very light on our feet as to how we approach this. I do not think that we should fix ourselves to anything here and now in terms of what we want in terms of an agricultural support package, because that will be largely determined by what sort of trade deal outcome the UK and, therefore, Scotland will get. I take that point. I move on to Tom, because maybe you would like to clarify that on issues relating to the future. Just as with Stephen, I am not here for a representative organisation, so I will avoid making the case around the money. However, there were three points that I thought were worth bearing in mind. The first is in relation to what the cap originally set out to do and measured against the treaty objectives that underpin the common agricultural policy. You could argue that it has been tremendously successful. The debate is whether those objectives under a future UK or Scottish agricultural policy are the right ones. That is one for you guys to discuss. Secondly, one of the key benefits that we tend to ignore is around the fact that the cap has at least provided a common framework that is linked very closely to the EU's external commercial policy, i.e. trade policy and also competition policy. Once we remove ourselves from that common framework, there is a debate not only about the common framework that exists in relation to direct support payments, which farmers are very close to because they see it and feel it, but also some quite important issues that we tend to ignore in the debate around price and market support policy, the presence of intervention at a European level, some of the competition law exemptions that exist under the CAP and so on. The final point that I wanted to make was what I think is a really big question, which is the one that Johnnie hinted at there, which is the relationship between a future British and Scottish agricultural policy and the trade in relationship that ultimately the UK has not only with the rest of the European Union, which of course is fundamental in terms of our existing markets, but also with other markets as well. We can only anticipate what those scenarios might be, and we can speculate around that. Under most scenarios, we can expect that we will see an industry that is at risk of more global market exposure, potentially having to compete among some of the best in the world in terms of competitiveness and probably exposed to greater volatility. Not only do we have to think about the past and the benefits of the CAP in the past and now, but also what kind of policy instruments do we need to help the industry to deal with those scenarios that we will see in the future? I will bring Peter in. You have kept very quiet and below the radar. I would quite like to hear your views, as I am sure that the committee would on forestry, after we have heard just a question from Peter. There is more of a statement than a question, but it is reflecting some of what we have already heard. We have been discussing that this is public money that has to deliver public goods. I just want to reinforce what Stephen had to say about that. This is a subsidy on food, really. There is no question about it in my mind. Without that support for agriculture, the high-quality food that Scottish agriculture produces would not be able to be produced at the price that it is. It is only the fact that this money that is supporting agriculture allows us to trade in a very difficult marketplace where food has never been so cheap. You could argue that this subsidy is a subsidy for the general public and that food is cheaper now because of that, and it would otherwise be. That is the first point that I would make. The other thing that I would like to say is that 16 per cent of the cap money comes north of the border at the moment. If we went to the Barnett formula, as John was suggesting, that would come back to about 8 per cent. That is not a way forward for support on agriculture in Scotland, I would argue. We need to keep that rough figure of 16 per cent coming north of the border, so that the Barnett formula cannot deliver it. I just think that there are opportunities ahead. Obviously, there are opportunities to do this in a different way. I think that the agriculture industry is up for that, but it has to be a gradual process that cannot happen overnight, otherwise the fallout would be absolutely horrendous in the industry. Before I bring Stuart in, I noticed that John actually, I think, disagreed with your definition of the 8 per cent. Is that what you want? No, no. Just for the avoidance of doubt, I was quoting some figures there. I am not commending the Barnett formula for obvious reasons. You are not supporting the Barnett formula. Sorry, can I bring Stuart in and then come to you? I am trying to work through the list in the order of people that have come up. It is quite difficult, and you will definitely get in. If we are looking for reasons of why 17 per cent of the funding should come north of the border as opposed to 8 per cent, then the forestry sector in Scotland is 50 per cent of the forestry sector across the UK, so that justifies significantly additional support. The thing to address is why does cap fund tree planting, rather than forestry, because it does not put funding into matured forests? The variable funding goes into forestry generally, and it is just the tree planting that received cap funding. The funding in effect is seeking to tackle market failure, because we would argue that if cap did not exist, if there was not a funding regime supporting agriculture, there would have been a lot more forestry in Scotland. It is not just because of the benefits of answering the why question in terms of climate change mitigation, flooding mitigation and the contribution to the rural economy. We know that, from studies carried out by SEC, forestry, compared to sheep farming in uplands, delivers three times as much economic return to the sheep farmer and puts twice as much money into the local economy. There are a lot of good reasons for supporting it, and when those payments are made, part of it is a payment for establishing the forest, but part of it is a payment to incentivise a farmer to move out of agricultural land. That flags up the opportunity for us, as we move to a post-cap situation in Scotland, to see how we can come up with integrated rural policy, which allows landowners to look at forestry as an integrated opportunity in farming. I am happy to say more about it at the moment. At the moment, I would like to say that there is a huge opportunity there that we need to consider as part of the discussion. The key issue from what I can see of the whole theme is about money, and it is about structures, and structures come first rather than money. Under the Scotland Actors, we are all aware, agriculture and forestry are not reserved, and they are devolved. Under the current regime, under the legal situation, when those mechanisms are repatriated from the European Union, they will come to Scotland. If that happens in that way, then, like everything else in the Barnett formula, it will come under the Barnett formula. However, I am aware that the UK Government is in discussions with the devolved Administrations to say that perhaps there should be an agreement among the devolved Administrations on the UK Government that will have a separate overarching function here. What I am asking our witnesses is, which do you prefer? Do you prefer a structure in which the devolved Administrations and the UK Government can work together on a new scheme for those repatriated funds? Do you feel that the repatriated funds under the Scotland Actors should simply come back to Scotland and receive the funds in a normal way? I am very interested in finding out what our witnesses' views are. Stephen, do you want to start that off and then I will try to work round the table here, because I see hands going up everywhere? I suppose that the real issue here is whether we want to create internal UK trade issues. If the current CAP framework is decided at EU, we then buy into it, then there is quite a lot flexibility in that framework. If we had four individual schemes or operations of CAP that are not particularly related, so if Scotland has its own CAP mechanisms, England has its own, we could very quickly end up with a trade distortion between our biggest trade partner, which is south of the border. We are already seeing it partially with the existing CAP in that the payment rates per hectare for uplands in England is much higher than it is in Scotland, but of course we have a heritage payment on cattle, and there is a heritage payment on new hogs in some of the rough grazing areas. There are some real difficulties that we would face if we controlled our own destiny to say where our CAP monies went. I think that a framework where all the devolved administrations and Westminster Government come together to come up with a flexible enough package that allows us to do our own things within that package is probably the best solution, because otherwise we are going to end up with internal trade issues. I am going to catch Johnnie, and then I would like to bring Rhaedrym before I come to Andrew. Thank you, convener. Just to follow up on certainly the question that has been raised, and then one or two of the points that Stephen made, I think that in terms of funding, the funding settlement is critical in many ways. We see this relatively simply, from the other question, if you like, of how you devolve or otherwise the settlement on support. The funding settlement is all about the renationalisation of the CAP funding that the UK would have got, and that will go back to the UK Government. The budget responsibility will still rest with the UK Government, in my view. Therefore, it is vital that Scotland makes the case to retain, at the very least, the same share of that existing budget, not the same share of a declining budget if the UK Treasury seeks to reduce the amount that it spends on agriculture compared to what the UK currently receives from the CAP, but it is the same share of the existing quantum. I think that Mr Finnie referred to earlier about £4.5 billion coming into Scottish agriculture and the rural sector over the 2014 to 2020 period. We want to see that same commitment from the UK Treasury in effect coming into Scotland. The question is about the powers, if you like, about the choices over how you then spend that money. That is this issue, and it is a very important issue that we are discussing all the time, whether you go for a UK approach or a Scottish, Northern Irish, English and Welsh approach in terms of different agricultural and rural policies. As Mr Rumble has quite rightly said, we have had devolved agricultural responsibilities since 1998, and by and large that has worked very well in Scotland's interests. It does today under the CAP, and what Scotland does is different from England, Wales and Northern Ireland. In fact, all four corners of the UK do things differently under a common agricultural policy, but we operate to the same standards in terms of animal welfare, environment, plant protection products and so on. There are those common standards that allow that intra-UK trade that Stephen referred to but also allow intra-EU trade currently. What we want to see happen in our view is that it is very clear that the devolution settlement gives Scottish ministers the discretion to set a policy that is appropriate for Scotland's needs, and Scotland's needs are very different from the rest of the UK. The profile of Scottish agriculture is significantly different from other parts of the United Kingdom. We do everything—it is very diverse—soft fruit production, seed potato production, cereals, fattening beef, lamb, milk, everything that you can possibly think of moving up the hill to very extensive hill sheep grazing. Fitting an agricultural policy to that and ensuring that each sector and each business have an opportunity to move forward is extremely difficult, but a one-size-fits-all UK policy would not work. It would not be in Scotland's interests, so what we are looking for is each of the devolves to develop their own approaches, but within that you would have to have some sort of common framework that allows for the intra-UK issues to be addressed, such as animal health and welfare standards, pesticides and all those other bits and pieces that allow the broad-brush baseline standard to enable trade to continue. It is definitely not, and in our paper I refer to a deference-centric one-size-fits-all. That would not be in the interests of Scottish agriculture, and you will find that there are similar views held in Wales and Northern Ireland, but it is vitally important that we also do not do something that is so perpendicular from the rest of the United Kingdom or, indeed, the rest of Europe or anywhere else that then thoughts our efforts to then trade. I am going to stop you there. Can I gently remind you, Johnny, to look this way occasionally just so that we can… I can assure you, convener, I deliberately looked at the questioner in order to avoid your… You will not escape that in future. Rhoda, you wanted to come in. Just on that point, because obviously our trade agreements will create the overall parameters of how we operate after Brexit. There will be an overarching UK policy to an extent, because that will be framed by the trade agreements that we have, especially with the EU. In a way, that continues that process, but surely within that we can then have devolved administrations making the decisions that support their own particular circumstances within the parameters of the trade deals that are set up. Andrew R.T., do you want to comment on that? Yes, I think that's right. In answer to the original question, our starting point was, where are we at the moment? In terms of the cap, we have the overarching envelope that provides the context of the decisions that we then make. We have the power to tailor within that overarching envelope provided by the cap, and that gives us the benefits in terms of being able to trade within the EU, and the benefits of the trade relationships of the EU with other countries. We also get the benefit in terms of the support that comes through the common agricultural policy. The cap works in a way where there's an overarching framework and then the ability to tailor under that. Our starting point was probably that we would support a UK framework that replicated that arrangement. The context of that overarching envelope would provide the stability that would allow and facilitate trade within the UK, so there wouldn't be any distortions in that way. The key part of that is that Scotland's powers would stay the same in terms of being able to tailor the policy as it does now. We wouldn't see a huge difference in that. The difficulty comes when powers in that overarching envelope way, if they were to do this, were to move from Brussels to London. We hit the devolution problem about the degree to which Westminster determines that envelope. For us, we would be more than very keen—we think that it would be a requirement—that any overarching policy had to be jointly developed and equally developed so that we didn't have some situation where that overarching envelope of policy was determined for us. We had to be out of the table. That speaks to other points that were made earlier about preparation, about where we are at the moment. We need to know what we want so that we can be helping to develop that policy now, because it will be taking shape when people start to think now about future support structures, whether we should be moving the degree to which we should have direct support, and so on. We, collectively—the Scottish Government—need to be developing quite sophisticated ideas about what our future should look like, because that will determine the sorts of arguments that we make as we develop policy today. Before I bring you in, Pete, it's just got a relevant question there, I think, if it's a quick one. It's a quick question whether the answer remains to be seen. There are bodies already in existence—the British Waterways Board was an example, the appointment of members to the climate change committee as another—that involve all the UK and the four devolved Administrations and require unanimity of view. I wonder whether, if there were an overarching framework, it would be thought to be reasonable that it would require a unanimity of view as to what the overarching framework might be, and what the pros and cons of that approach, rather than, ultimately, being something that Westminster decides regardless of the views of all the Administrations. So, a shared approach. Andrew, do you want to answer that quickly, because you've developed that, and I'd like to go over to Pete, if I may? I think that we would probably need something like that in order to be able to sign up to it, but if we think about what we'll be talking about, what the CAP does at the moment, it sets out the broad principles that the policy is trying to achieve. Those are overarching objectives that I suspect, actually, we would have a great deal of agreement about in terms of wanting to support food production, support land management, enhance environmental outcomes, and so on. So, I think that we would probably be moving in the direction where we would have the same objectives. Where we'd start to get into more difficult conversations are on the structures that you might put in place to help deliver those things, but that's where the devolved power comes in, that you get the ability to tailor. So, the actual overarching agreement could potentially be something that there are more agreements on than we might think. Okay, I'm going to bring in Pete now. Can I just say that we are on the first theme, there are nine of them, and I've let this one run on a wee bit, because I think it's the linchpin for all of it. So, I will have to ask you all to give shortish answers without diluting what you're saying. Sorry, Pete. Okay, so very briefly, yes, we would agree that you need a consensual framework, and we'd probably argue that the Republic of Ireland should be involved in some of those conversations, too, because they're industry-so-integrated in many ways. But just to make a more general point, there have been lots of criticism of the common agricultural policy, not just in its operation, but as a policy framework where people have said, we don't just need an agricultural policy, we need a land-use policy for Europe, we need a food policy for Europe. Agriculture is too narrow a container for a policy, and certainly in Scotland, if you look at the national performance framework and our existing policy architecture, we have a policy on land use, we have land use strategy, we have policies on climate change, we have sort of implicit policies around rural development and subsidising some of the essential services in rural areas, and we have a food policy, particularly expressed in recipe for success in a good food nation. And in a sense, agriculture policy isn't a domain on its own, and we should make sure that it's understood as an integral part of those other policy frameworks and not separate from them. So our concern would be not that we don't develop our autonomous approach to this in Scotland and we need to develop our policy goals for those areas about integrated land use, about food and about rural development. I'm going to stop you there because integrated land use, which we're going to come on to as a specific theme, I'm sure you can develop that. I think that the committee understands what you're saying, but I'd like to say that you're rightly going to bring up a little bit. Just briefly, let's not transpose the architecture of the common agricultural policy into a Scottish agricultural policy. Stuart, I think that you wanted to say something briefly before we moved on. Yeah, just very quickly. In terms of forestry, my feeling is the more detail that's agreed at the UK level, the less opportunity there will be for devolved administrations to operate flexibly, to be inclusive, to look at things like forestry. I think that it's better to have a high level of detail. Also, practically speaking, we lack confidence in the UK Government's ability to live on forestry. We've had an effort committee report yesterday, which is pretty damning of their performance on forestry, whereas in Scotland, with cross-party support, it's been far more successful. We'll not dwell on targets at that stage. I'm going to ask John Lennon to move on to the next theme. Sorry, I didn't have a question that was related earlier, but it was a separate point to what's being discussed. I think that just talking about the financial support to farming and forestry, but also in terms of the financial support to the wider rural economy of Scotland, for example, in my constituency, the leader funding is of huge importance to us. It's worth £2.8 million to South Aberdeenshire, £2.7 million to Angus, so it was just to get your opinions on what sort of funding you think there should be available to the wider rural communities as well, because I think that's a vital aspect of what we're going to be looking at here. Gosh, that's a whole different theme. No, you're right, it doesn't slip in, but it's an important thing. John Lennon, if I'll be as brief as I can be. I think that the point that you make is very important indeed. It's not just about where the money is spent but what then happens to that money. I would make a very clear point about the direct support payments of pillar 1 of the CAP that come into Scotland. Right now, Scottish agriculture and crofting receives in the order of about £500 million per year in CAP payments, but agriculture and farming and crofting in Scotland spends £2.7 billion per year on all sorts of costs related to activities in terms of farming the land, and therefore we might well receive half a billion, but we spend £2.7 billion five and a half times that amount, and that is driving the rural economy, and that is a very, very important point. The same is true of other fundings that you've referred to, Leida, and there's lots of other elements of pillar 2, which again generate incomes and jobs and all sorts of other things downstream, upstream and really underpin so much that goes on in our rural communities. It's not just the headline figure that we should look at, it's what happens to it. I don't think that anyone's going to dispute with anyone on the importance of rural farming. I'm sorry, we could take this on and there are still people waiting to come in. I apologise to them. I want to move on to John with his next theme, please. Having not decided where we're going, we still need to decide how we're going to get there. The theme has headed up untangling domestic policy from EU legislation, but what I'm particularly interested in is the great repeal bill, which we have been promised. As I understand it, that will repeal the European Communities Act and the idea is to incorporate or transpose European law into domestic law. How are we actually going to get there? If I heard you correctly, you said that we didn't want to transpose the CEP straight in here. The question then would be, do we need new legislation therefore, in which case the new legislation presumably has to be in place for the 1st of April 2019, which is two years next weekend? We really need to start that legislation now, so I wonder if that's what you're saying. I notice what the NFUS says in your last paragraph about regulations and standards, and I'm suggesting that it might want to stick with the EU standards in many cases and regulations, because then we could export more easily. In that case, you could just say, even though we're out of the EU, we will still do all that the European Commission tells us to do, would be another extreme. That would be nice and simple, but I'm not sure that it's what everyone wants. Can we explore that area? Would you like to come in, Pete, on that? Briefly, yes. Everybody would agree that if we want to trade within the EU, we're going to mirror to a large extent all the EU regulations that govern trade, so any trade agreement will involve regulatory compatibility. To that extent, not much will change. I honestly don't know whether we need new legislation to administer elements of a devolved policy in Scotland. I'm not sure we do. At the moment, we're still—the agriculture acts from 1947 onwards are still on the statute book, which permits ministers to do lots of things in terms of supporting agriculture if they choose to do so. I'm not sure what the state is the treaty of Rome is after the great repeal bill, but that's the treaty that governs the common agricultural policy. One option is to give Government ministers, be that Scottish or UK, huge powers to do anything that they want. The regulations from Europe would not automatically come through here, so we will have to say that they will automatically come through, or we have to give the ministers the power to bring in equivalent ones. I understand that there are four defining regulations that define the common agricultural policy, and my guess is that those might be transposed. That doesn't transpose all the detail of administration, and certainly by April 2019, we won't be in a position to know what administrative detail we want, but Johnny will probably have more detail on that issue. I'm going to bring in Stewart now, and then Tom, if I may. Thank you very much. Again, it's a process point, convener, in that it's estimated—I think it's probably speculated, perhaps even rather than estimated—that there may be as many as 10,000 pieces of secondary legislation required at Westminster across all policy areas related to Brexit. Clearly, quite a lot of them will touch on this policy area. I'm just concerned that there were negative instruments—in other words, those that don't require direct approval by Parliament—at Westminster. There is no scrutiny process of any kind whatsoever, as my colleague Alison Thewlis has just found this week in relation to her. I won't go into the details, if they are well known. Whereas here, even negative instruments go to two committees as a minimum here, and at least there is an opportunity. Taking only occasionally, like to be fair, to properly scrutinise, and I just wonder if people in this room would care to express an opinion. I'm open to any answer. If Westminster were to say under these circumstances, we're going to put a formal process, perhaps similar, or learning from our one, into place, then we might be safe from an inadequately drafted negative instrument that had enormous consequences that really escaped parliamentary scrutiny. I just wondered how people felt about that, because we're in quite difficult process territory, it seems to me. Tom, do you want to come back on that short question? Yes, thanks, convener. I'd love to say that I had an answer to that, but one, I'm not a lawyer, and two, I'm not an expert in parliamentary process, either in Scotland or in Westminster, either. There were two points that I did want to make, though. The first is the status of agriculture within the Great Repeal Bill. Johnnie may or may not be able to confirm, but my understanding initially in relation to the Great Repeal Bill is that it will not seek to transpose the CAP into domestic legislation, hence agricultural policy remains in a bit of a void as to how that will be handled in terms of how it then gets transposed into domestic legislation. The second point is more of a practical one, and that's simply about capacity. Across Governments in Scotland and Westminster, we know that the capacity to make policy under a business-as-usual scenario has been quite significantly reduced as a consequence of government austerity reductions in resource expenditure, etc. The requirement to deal not only with business-as-usual in making setting policy and developing legislation compounded by Brexit is vast, and it strikes me not only at the desirable elements of maintaining the same legislative and regulatory framework after Brexit as there are now in areas such as Johnnie hinted at earlier in relation to animal welfare, food standards, crop protection, etc., but it may well be a practical necessity from the point of view of making new policy and legislation.  I'll try and be brief on this. I think that Pete identified that there are four main EU regulations that govern the CAP. Behind that, there are also delegated acts, and then there are implementing acts. Behind that, again, there are Scottish statutory instruments that enable Scottish government to make payments and to carry out inspections and do various processes. There are a whole raft or layers of legislation that will have to be teased out very carefully, indeed. I would say that, although that is a primary concern, there is a whole host, as Tom or a previous speaker just referred to, about the whole range of possible other pieces of legislation that will have to be, in my view, cut and paste on day one. Over time, with the right capacity, can we then start to see whether they are fit for purpose for Scottish or UK circumstances? If you think about nitrates directive, birds directive, habitats directive, all the animal health and welfare, traceability legislation, food and feed, hygiene regulations, the list is endless, and they all have an impact on agriculture, crofting, land management, per se, and various other things. We will have to draw a line in the sand. We will continue to operate under that EU legislation, but we will slowly, but surely, try and modify it to the point where we want to remove things that are either inappropriate or we can change and still operate to a standard that still allows us to trade. Are you saying then that you would kind of stop the EU input on 1 April 2019 and then anything new we would just do ourselves and we would change the existing system gradually over time, or are you saying that even after 1 April 2019 you would continue to feed in, you would accept feed in from the European level? Again, I think that that is partly unanswerable at the moment, because we still don't know what sort of trading arrangements we might negotiate with Europe or anywhere else. And if one of the terms and conditions of the trading agreement is that we maintain a standard that Europe wants on, let's say, use of plant protection products, pesticides, for example, then I think we will have to then come, so in some ways the influence of Europe will not go away if we want to trade with them. But I do think that there is clearly an opportunity under CAP regulation and all the rules surrounding that to actually say, well, we can still meet a standard on things like traceability inspection, verification, all these sorts of things without necessarily being tied up by what we consider today or many consider today to be over bureaucratic red tape. Okay, Andrew, cut and paste European regulations, is that what you're going to suggest? I think, and not quite cut and paste, but I think we can't, I think it's almost impossible to overstate the size of the task that we face in terms of regulation and legislation. Just that task alone is huge and for the benefit of stability across land-based businesses, I think it's really important that people know where they stand, so we have suggested that we do roll over lots of legislation and then, in a similar way to what Johnny was saying, subsequently tweak, tailor, remove the bits that we think need to be changed. I have to reinforce Tom's point about capacity. The size of the task is so great in terms of the resource that will be required to go through the legislation, and we've already started talking about future policy. That in itself requires inputs and government resources in terms of staff time and so on. It's not clear to me at all that the Scottish Government has the resources to manage the task. Okay, Stephen, do you want to come in? I would kind of agree with everyone here in terms of, particularly Johnny's point, wider regulatory rules that exist within the EU. Having spent about two and a half years of my life with Brian Pack looking at red tape in agriculture, it drove me insane at times looking at all those different regulations. Particularly the approaches, so DG Agri is in their interpretation of tagging, which is a DG Sanko rule that drives the penalties that we get, but that's also driven by the Scottish Government's interpretation of DG Agri's rules. There's a real mix in here in play, but I think that we're going to have to just basically take on all those regulations, because otherwise, as Andrew said and Johnny said, we don't have that capacity. It's not there. We cannot conceivably implement rules for all those areas that are covered within two, three years. We have to adopt those rules and then weed out the ones that we think are unfit for purpose where there's issues. However, we also have to look at how we're implementing those rules internally, because some of it—we came across it in the review—was when you start reading the regulations, you're thinking, why are we doing it this way? It's because of somebody's interpretation that that's what they are, and that's driven by the fear culture of audit. The fear culture of audit has driven us into some of the implementation rules that farmers and lawn managers are faced with. There's a whole series of activities that need to be done. That's just before we even start considering the next ag policy that we have. That's probably the perfect point to move on to the next theme, which Regis is going to take us to. Yes, it's about future policy. I think that people have big shopping lists as to what they think the future Scottish agriculture policy should be. Rather than asking for a big shopping list, I guess I'm asking for what the basic principle should underpin it. What is the most important issue that we need to try and replicate going forward? Or, indeed, maybe not replicate, maybe get rid of to make a big difference. Okay. Everyone's desperately making notes. Stuart, you've avoided answering first at any stage, so we might bring you in first just to see if you've got a list. Thank you, Gavina. Going last gives me time to collect my thoughts. One quick thing, just on the previous point, I would say that there's a huge issue around interpretation of legislation. There's a big grey area. We've got an example just now where, in the sawmilling sector, tens of thousands of pounds are being spent to meet an EU requirement, new legislation and licensing to do with wood treatment. We look across the rest of the EU and virtually no other country is doing anything, even though they all operate exactly the same systems. What we are told by CEPA is that that's because they're not interpreting the legislation correctly. There's a huge issue around there. In terms of future policy, how we would like it to look, I think that I could encapsulate it by saying that we would like a common countryside policy rather than a common agriculture policy. We think that when we leave the EU, whatever arrangement there is that takes place, and we leave the common agriculture policy, there's no need for us to carry on just folding everything forward, as has already been said. We see that forestry is a sector that's grown hugely over the last 30 years in Scotland. We now become, in many ways, another part of a fundamental part of the rural economy. Picking up Johnny's point about support and contribution, the forestry sector receives about £36 million. That's almost all for planting. None of it's for managed forestry, but it contributes £1 billion to the economy in rising. However, there are opportunities to develop that point about leader and support diversification. I think that what we need is an opportunity to look at how we have sustainable, successful rural areas delivering for the environment, delivering for local economies and for society as a whole. We would like to see a policy approach that is based around sustainable development, where we truly are trying to see how to balance all the different interests of economy, environment and society. In forestry, we've gone through that process 20, 25 years ago in response to huge pressure around the forestry that was planted in the last century and how we are managing a forest. We've developed detailed standards with environmental organisations, society, societal organisations, access to organisations, and we would like to see that principle shared more widely. Recognising, however, just to conclude that Johnnie and others have said that it doesn't make sense on 2019-2020 to suddenly say that everything changes and that it's now a completely new landscape. However, we would like to see a process of transforming as quickly as we can from a very narrow approach to supporting rural areas principally focused around agriculture to one that is focused more widely and based on sustainable development principles. Johnnie, do you want to— I think that I probably mentioned it earlier on and I certainly made reference to it. Going forward, we would like to see a policy that leaves farming and crofting obviously less reliant on direct support payments and much more focused on returns from the market, whatever their market might be, and obviously to deliver on a number of environmental objectives as well. Now, moving this tanker, super tanker of the CAP and actually turning it around is really going to be quite a difficult task in doing that. I think, as I also mentioned earlier, that it's going to be about managing the change. If we suddenly switch off the CAP as we currently know it and move to something where we might want to be at some point in the future, then there might be such a upheaval in the process that it would be extremely damaging not only to agriculture and food production but to many rural areas and so on. In broad principle terms, my shopping list would be that we still will require some sort of income stabilisation tool for many sectors in Scottish agriculture, particularly the red meat sector, to cushion against market volatility and to provide some sort of basic income support where we know that the market returns are still not covering costs. I think that there's still a very strong case in Scotland to retain a less favoured area support element too. It is quite clear that in significant areas of Scotland that agriculture will always struggle to generate enough income from the land to cover the costs, but the benefits of retaining those grazing systems that I think Stephen referred to earlier are not just about food production, but about keeping people in remote communities and delivering grazing management and all the benefits that come with that. However, I think that we do need to deliberately start to turn focus on more support in investment and innovation in building business resilience, allowing businesses to become more competitive to embrace new trading and new market opportunities. It's that switch from farming for support payments, which I think an awful lot of individual businesses have done for far too long, to farming for the market, which is vital. Above all, I mean this absolutely we must build in to all of this better delivery on environmental and other public good aspects of what farming and crofting are all about, because if we don't put those front and centre, then the case for public support is significantly diminished. Scottish agriculture as primary land use has significant responsibilities in delivering on biodiversity, water quality and climate change. I think that we have an opportunity to put those things rather than a bolt-on that becomes a bureaucratic responsibility, which has certainly been the case with things such as the CAP's greening rules, which have just dropped on Scotland and don't really fit Scottish circumstances, and have just become another cross-compliance issue—a tripwire, if you like. We need to build in environmental delivery as part of what we do, and why farmers and crofters continue to get support. Okay, Andrew. Just before I bring you in, I think—in fact, it was Tom, no, it's not Andrew—just before I bring you in, as a convener, you don't always get a chance to ask all the questions you'd like, but here's my chance to ask a question. I would like, if possible, for you to build into your answers how we are going to convince farmers that they're going to get paid value for money for what they produce, and not again to have to rely on subsidies to make up the difference in the shortfall between what they receive at the farm gate from the people who are buying the produce. For example, barley farmers may be producing barley at £130 a tonne, knowing that it costs £130 a tonne, and the mulsters will offer them £130 a tonne, knowing that the subsidy will make up the difference. That obviously doesn't seem right, and I would like to know how, when we're changing agricultural policy, we're going to convince people to pay a proper price.  Thank you, convener. That wasn't quite the question that I prepared for, but I'm prepared to have a stab at it at the end of this. The point that I did want to make is that we're not a trade association, so I don't come with an exhaustive shopping list. I will say one thing. In order to unlock global opportunities and perhaps linking them with your question, convener, in order to compete in a marketplace that can, at times, be brutal, the only sure way of enabling farmers and growers to do that is to grow productivity by which their ability to convert inputs into outputs. Unfortunately, we have a systemic challenge across UK and Scottish agriculture that productivity growth is at best flat, so we absolutely have to focus our future policy on growing agricultural productivity. We can spend a lot of time trying to diagnose the reasons for that, and it's important that we understand the productivity challenge and why we have such a big problem. To my mind, it's down to three things. It's down to the rate at which innovation is taken up on farm, it's about knowledge exchange and knowledge transfer, and it's about skills. Andrew, would you like to come in? Peter, I think that you're wanting to come in, so we'll take Andrew next. In answer to the original question, in broad terms, I echo what Stuart said in terms of integrated land management, the land as a resource delivers a great deal to society. Obviously, it has primary importance in lots of ways in food, but it also produces timber, but it also has lots of services in terms of environmental services, climate change mitigation, water quality and so on. I think that, as an organisation, we're keen that any future policy approaches land management in an integrated way. Thinking within that, what's important to Scottish Land and States is that we come up with the strongest justification for supporting land managers, given the context that we're in in terms of austerity, in terms of threatened budgets, in terms of pressure on public services. We have to come up with the strongest possible justification for why the public should invest money in land management. From our point of view, the strongest argument is around delivering things to society that society needs and the strongest argument there is around public goods. That, though, is our long-term objective. We do believe that we have to face the challenges of where we are now, and that comes to the points that have already been raised. The first one there is about the problems around profitability and productivity. I've also written down things around innovation, knowledge exchange, diversification and so on. In question about the farmers getting value, the thing that immediately comes to mind again is co-operation in terms of trying to get greater market power in the marketplace. It's not easy, I know, and people already co-operate, but there could be a role for government to help in terms of enhancing profitability and productivity but also help in terms of getting farmers in a better place so that they can operate in the market. As well as the profitability and productivity point, we also think that there will be an ongoing requirement to prevent, in some places, land abandonment, where that could be a potential challenge. At the moment, the LFA provides funding in order to do that, but there are question marks around the LFA in terms of the area that it covers, in terms of the nature of support, and that probably needs to be looked at again, but there are large areas where farming in particular is quite challenging, but we need that farming to continue because it delivers a wide range of things, not to society in terms of rural communities and environment. Going forward, there's a range of things. I think Pete, you are next. That's great, and I don't want to repeat the other things people have said about improving productivity. It's clear, but particularly it seems to us that in the red meat sector, we could be doing a lot more with the whole supply chain and your point about Malting Barley similarly, looking at the whole supply chain and looking at where we can improve synergy within that and a fair return to farmers, but there's not all that much knowledge, certainly in the red meat supply chain, that's transferred. There's also a huge range of performance, and I do think that we have to address that and recognise the fact that the top performers are doing okay, in fact doing very well in global terms. Let's celebrate that, but recognise that we've got a very long tail to deal with too. We want to see support for the food industries that were part of a broader good food nation approach to food production and consumption and look at the whole issue about how do we produce food that's inevitably going to be premium, prominent quality in the food and drink approach, but that we can make it affordable to people across Scotland, including people on low incomes. We do need a food policy that, if one of the central public goods of our farming system is food production, we need to make sure that public good is shared among everybody in Scotland, so we need a more sophisticated approach to food policy that looks at consumption as well as production and that builds in support. We don't need support at the moment for horticultural soft fruit, those things are doing very well without cap support, but we do need to recognise that they can make a major contribution to Scotland's health because we actually need to eat more fruit, soft fruit and more vegetables. It's arguable that some of the other things that we produce, which are wonderful, we need to eat or drink so much more of. A cross-cutting food policy that we think is important, I agree with Andrew entirely that we need an integrated land use approach and we'd like to see much more regionalised land use frameworks getting down into what public goods in this region or this catchment area are most important and having democratic engagement in that. You're on to the integrated land use, it's a very big topic and it's going to come up in a separate thing. Okay, there's the shopping list. Other people have just talked about integrated land use, I'm saying the only point I'm adding to that is that we'd like to see some sort of democratic engagement in that to identify the priorities locally or regionally for public goods, because they'll differ in different areas. Picking up Mary's point earlier, we also want to see a strong rural development approach that's targeted on the more deprived rural areas and recognising that population maintenance in rural areas is really important, but it's not all down to farming. We've seen population increases in remote Scotland not as a result of new farming enterprises but as a result of lots of other different industries. Okay, before I bring Stephen in, I'd like to just bring Peter in if I'm out. Thanks, convener. It's really just to highlight the point you made yourself, really. It's how we can get the marketplace to work better for us as food producers. Scotland food and drinks worth £14.5 billion and it's seen as a huge success story, but the primary producers, the guys right at the end of the chain, they don't seem to see much benefit from that. How can we get the marketplace to work better for us? Do we need a stronger supermarket ombudsman? Our problem is producers. We are all very small businesses and we trade with very large and powerful businesses. How can we get a bit more fairness into the marketplace so that primary producers can share a bit better in that £14.5 billion food, Scotland food and drink, which is a success story? I'll bring Stephen in on that and then maybe I'll look round. Do you want to come in, John? I'll just sit and smile. I'll try and be as brief as possible. In our rural Scotland and focus report recently, we suggested that we need to think about what our overall rural policy or rural development objectives are, to which agriculture ties in. Agriculture isn't always all of rural development. There's an awful lot of other business that goes ahead. We need an overarching rural policy before we consider what we do with ag policy, because agriculture fits in with that. As Johnnie says, it's incredibly important in terms of the amount of expenditure that farmers have in the wider economy—not always rural, but they spend an awful lot. In terms of the basic principles, no matter where you read it, in terms of the EU cap that is going to go this way, they are talking about becoming much more outcomes-focused, in terms of delivering for an environment and delivering for a climate change, delivering for small holders is the way CAP looks to be going, giving a bigger chunk of money to small holders because of the role they play in maintaining the countryside and maintaining populations in some remote areas. Going to that outcomes-based approach to make the farming sector or ag policy more justifiable to the taxpayer, that is a fundamental challenge that we are going to have in the UK, because the EU currently dictates where the money goes. It decides how much CAP money comes into all the countries. It dictates that agriculture is important. Under Brexit, we are going to have to justify to the taxpayer why we should continue to support agriculture, so making sure that those outcomes are absolutely explicit in our policy is essential. It is important that we have a more resilient sector. Some of the stuff that we are doing shows that a lot of non-viable businesses are within the farming sector. There is an awful lot of evidence that suggests that hill farmers are not reinvesting in their businesses, which means that buildings, the conditions of buildings, etc., are becoming poorer. Pete is absolutely right. We have some real champions in terms of agriculture in this country. Some of the top producers are real go-setters. They are agri business. I am not convinced that we are ever going to pull this tail that everybody keeps talking forward. If you look at the statistics, 20 per cent of the holdings in Scotland—or the people with sheep—control 80 per cent of the sheep. 20 per cent of the holdings with beef control 80 per cent of the beef. 20 per cent of the cereal holdings control 80 per cent of the cereals. If you are talking about food production, you are focusing on 20 per cent of the holdings largely. If you are talking about a wider agricultural policy that supports farmers, crofters and small holders, you sometimes have to think of different objectives. Perhaps we need to start thinking about what we actually want out of agricultural policy. Coming back to the element that you mentioned about how we get more value for the farmer or more of the retail value. Working with organisations such as SAOS is absolutely essential. We need more co-operation. We have shown that some of the co-operatives that work in Scotland have shown that by co-operation you can make significant gains in terms of the profitability to your sector. I am always amazed that, with Scottish Whiskey, everyone talks about Scottish food and drink and the value to the economy, of course, and most of that is to do with whisky. Why is not there a concordant of agreement between the barley producers of Scotland and the whisky sector that they will, where possible, try and make sure that they source Scottish barley? Those approaches are not hugely innovative, but we need collective action and get that collective action is difficult because, as a sector, agriculture has been pretty poor at coming together, particularly in the mainstream agriculture and the pig sector, the poultry sector and the fruit sector, the horticulture sector, which have historically not been supported. You have seen much more co-operation. Tom, I will come in very briefly, if I may, because those of you who will have noted that we are still on theme 3 and that we have a long way to go, but it is interesting. Tom, if you could come in very briefly. I will do my best convener. I have the experience of having worked for a farming organisation and, indeed, for a major retailer. I have seen different ends of the supply chain. In my view, you cannot book the market. If your supply chain is relatively undifferentiated, commoditised, raw material, you have to accept that you are competing on the basis of cost. There are two elements to that. First, can you compete on cost? In some sectors of British and Scottish agriculture, we can. Dairy has been one example where, in European terms, we have some of the most efficient dairy farmers in the European Union. We talked about fruit and vegetables earlier, but in other sectors, the opportunity lies in differentiating and creating value. There will always be an existential challenge about how to get the value down from one end of the supply chain to the other. I will not go over the arguments about co-operation, but I will bring Pete's point earlier about value chains. How can we ensure that we have the best value chains that eliminate waste and strip out transaction cost? That is a real opportunity for Scottish agriculture and Scottish food and drink to excel more than we do elsewhere in the world. The final thing that I will say is about extracting value from other parts of the world. Our experience in working with pygmy processes across the UK to grow export markets for the fifth quarter of the pig carcass, we have been able to not only increase the value back to the pig processing industry but also back to producers as well—probably estimated £35 a pig in 10 years. I think that we are going to leave it there and move on to the next theme, which is, well, Jamie is going to tell us. Sorry, that is a smile that I cut across his bows last week, but it is my way of apologising to Jamie. Your theme? I think that, given the longevity of the first three themes, we have perhaps covered quite a bit of this, but I would like to focus a bit on trade, if I may. I do not mean just to hypothesise what deals might or might not look like but to look at some of the logistics around export and import deals. Just to set the scene from the evidence that we were given in writing, we export around £105 million of agricultural products to the EU. I think that there seems to be a general consensus among the written submissions that we should protect as much of that as possible, but the other figures that we were also presented are quite interesting, and that is that we export £245 million to the rest of the world and over £625 million to the rest of the UK as well. There clearly is a huge export market, but there is also, on the other side of that, an import market too. Being part of the EU at the moment naturally allows importation from other EU countries, but outside the EU there are certain lower zero tariff countries that we trade with too. I am looking for some views from some of the witnesses on what they think an ideal solution might look like in a post-Brexit environment. For example, the SLE in its submission said that if we restrict exports but open up the import market it could be devastating. The NFUS, on the other hand, said that we should be prioritising deals with certain target markets, such as Canada, the US and the UAE. I am quite keen to hear us develop that theme a little bit more. What I am going to do, because I think that it is really to each of the witnesses, is to start off with you, Tom, and then work round. If you do not want to say anything, that is fine, but if you want to add something in, please do, Tom, if you would like to start. We have quite important interests in export markets given the role that we play working with food companies, particularly in the meat sector, in developing market opportunities. I would, as a plug, if anybody wants to know more about the trade opportunities and threats, the report that we produced back in September last year documents that across the whole of agriculture and horticulture in terms of the key opportunities and threats. Undoubtedly there are tremendous opportunities and probably one of the biggest opportunities of moving out of the European Union, moving out of the customs union in particular, is the ability to establish and strike new trade opportunities with other third countries. There are opportunities there, not only in the ones that are listed in the NFU Scotland paper, which are very true, but also big opportunities in China. We see that through the trade missions that we undertake to China and also through the agriculture councillor post in Beijing, the HDB funds. We have been able to exploit and unlock those opportunities and they are significant and tremendous, but we cannot understate the importance not only of entry UK trade to Scottish agriculture, but in particular, especially for the red meat sectors, the importance of EU trade. In particular, when we see tariff levels of in excess of 50 per cent for meat products, were we to face the situation of a cliff edge after 2019 with the risk of the prospect of paying the common external tariff to export sheep meat at which 90 per cent plus goes to the rest of the European Union and of which the UK is the single biggest exporter in the European Union? The risks are cataclysmic for certain sectors of Scottish agriculture. I will keep it brief, because there are great potential challenges and opportunities. My point to add to that would be that trade is potentially the linchpin here. We have already talked about our future agricultural policy and regulation and rolling out those things over, and the UK framework or not. The degree to which there is future trade deals could be really important and have an impact on those other things. Those things could slot into place or could fall apart, depending on the future of those relationships. Since day one, the outcome of the referendum, we have made it clear that our position has been that we want to see continued unfettered free trade with the EU and non-EU. We realise that that has become more and more difficult to attain, given that we are not going to be members of the single market or a customs union, and we are going to go through a process of negotiating free trade agreements. Even those free trade agreements, if they are true to what they say, should allow certainly agricultural produce, in our opinion, to be both tariff-free and distant, if you like, from other regulatory barriers that might be put in place. That is not just with the EU, but obviously all other EU, non-EU countries as well. We refer to different potential export markets in our paper, as you referred to. A number of individuals over the last year or so, particularly in the referendum campaign, made an issue about the fact that coming out of the EU would allow the UK to suck in cheap food imports, and that would be good for consumers.  However, more significantly—I think that that is an important point—you are also exporting the responsibility for animal health and welfare standards and the environmental standards that we farm to within the United Kingdom and Scotland. Stephen MacDonald referred to the exceptionally high standards at which we operate, and nobody wants to see that rollback. As Tom MacDonald referred to, we, as a Scottish agriculture, will never compete on high, massive volume markets with very, very tight margins. We have to maximise our value in terms of the provenance issue and the story behind the product in terms of the standards at which it has been produced. I think that it is extremely dangerous for us to be contemplating anything that might threaten Scottish exports capacity, but equally we have to work hard at creating new opportunities as we go forward. Thank you, Johnnie. I just keep looking at you. That will come with consequences. Stuart, can I bring you in and then Jamie? There is not a great deal that I can add from the forestry side to basically we export very little of the production that we have outside the UK and a little bit more of panel boards than there is a somal equipment material, but principally it is exported from Scotland to the rest of the UK, but it is a significant market. We produce far more than we consume in Scotland, so trade with the rest of the UK is the big issue for us. Do you want to come in? I was very briefly just in response to your… I just wanted to, if you could clarify a point for me just so that we could understand some potential outcomes. In the Britain submission, it says that moving to an EEA or an FTA model similar to that held by Norway would exclude most agricultural products. Existing deal that Norway has? Right, okay. In that respect, is your preference for complete unfettered access in the way that we currently have access to this? That has been our preference from day one. Okay, thanks for clarifying. Yeah, there's a number of issues. I think you're right in the sense of UK is a net importer. We net import to the value of something like £20 billion. Our biggest trade partners are within the European Union, so Ireland and Netherlands, I think they're about £7 billion or £8 billion of our imports come from there. I'm sure they're not going to try and just cast us aside in any trade deals, so there's an awful lot to play here. There's member states with vested interests in making sure that they still have free access to the UK market. How we get around that is an entirely different thing. We certainly won't be going into an FTA type approach or an EEA approach, given that the UK Government don't want to basically sign up to the four freedoms, particularly the freedom of movement of people. That approach appears to be out, which means that we are negotiating our own deal and trying to negotiate free access to those things. If you look at QMS's figures, QMS estimates that about 10 per cent of our red meat is in terms of exports, but its quarter of the sheep meat sector is exports of which half of it goes to France and another 27 per cent goes to the Benelux countries. If we are faced with the tariffs that exist under WTO rules, the sheep meat sector and the beef sector are in for a very, very torrid time. Part of that is to do with the exchange rate, so there's a relatively small percentage tariff, but then there's quite a chunky euro per ton tariff that we have. With the euro sterling rate, the way it is just now, that means that that tariff essentially has gone up quite significantly in the last while. Okay, fine. Pete, can I also, if you've got a short response on that as well? Yeah, very short. Obviously, the Scottish sheep sector is a vanishingly small part of the UK economy and won't feature highly on trade negotiations, but Tom's much better at me at saying that it's potentially cataclysmic in terms of our landscape as well as our industry, so we have to be prepared for the worst, actually, as well as hoping for the best. We'll move on to the next theme, if we may, which, Mari, you'll get. I think, Stuart, I've got to move on to the next one. You could have said by now. I'm going to move on to Mari, Mari, if you could move on to the next theme. Thank you, Cymru. Yes, the next theme is access to labour and scientific and research expertise, so it's really just to get your views on what the implications will be for labour across agriculture and in forestry as well from leaving the EU. Okay, Stuart, would you like to start on that, please? Yes, I can do. In forestry we use seasonal labour and migrant labour. Seasonal labour is primarily when we're establishing new forests, so it's something that we do in wintertime. It's a seasonal activity and it involves people planting, fencing, and it's an activity driven by Grant, which has been very much going up and down for some time. Everybody working in that sector has built businesses based around having flexibility with labour. We also have a lot of migrant labour in harvesting. Because we're now harvesting enough lot more forestry than we have in the past, we haven't organically grown the same amount of Scottish-based harvester operators. Therefore, we have relied on bringing people in from overseas. At the moment, we're already seeing some impact on that because they're working here in order to send money back. If sterling is 17, 18 per cent stronger than it was, sorry, 17, 18 per cent weaker than it was, sorry, the 17, 18 per cent less money to go back, so we're already starting to see some impacts. What we are keen to see is that whatever form it takes in the future, there is a need for the forestry sector to be included in any seasonal or migrant labour scheme that we put in. There will be needs and we're expecting forestry activity to be increasing in coming years. In terms of research, forestry research, so the Forestry Commission's research agency does access significant sums of money, hundreds of thousands of pounds every year in EU cooperative projects. As a sector that is relatively immature, we're operating on 40-year cycles. We've grown hugely over the last 30 years, so as a sector that is still relatively immature in terms of our understanding of forestry practices, how we can breed trees, how we can be more successful, how we can deliver more for the environment, having the opportunity and access to common research programmes is important. So there's a big issue there about access to these EU-wide projects as well as the funding themselves. Stephen, do you want to add anything to that? I would ask you to be brief if possible. I'll be as brief as possible. Just a matter of interest, the Scottish Government has issued a call for a study into migrant labour in agriculture just recently, just the last couple of days, so they're undertaking some work on that. What we have to remember is that, again, going back to the rule of Scotland focus report, I pulled out some statistics for that and I was flabbergasted that there was half a million work hours from migrant labour. I put a figure in of 2,500 FTEs. Of course, they're not working full-time, so if you make that into two months a year or one month a year, multiply it by 10 or nine or whatever, it's quite a lot of people. But we forget that that's just in agriculture and in the processing sector. We're pretty heavily reliant on foreign labour in terms of the meat processing sector. In terms of research, access to EU funds is incredibly important in the horizon 2020, the old framework programmes. They add significant value to our knowledge base within the main research providers in terms of agriculture and food and environment. There's quite a lot of foreign or overseas researchers. We have an incredible knowledge base built on migrants, people who have relocated to Scotland in terms of their expertise. Accessing that EU funding base is incredibly important, but also accessing the skill base in terms of their research knowledge. Pete, do you want to come in? It's pretty much coming to the opinion of how important they are. Tom, would you like to come in? Yeah, just to perhaps provide some numbers to give some context around labour. According to the ONS, 2015, there were 22,517 EU nationals employed permanently in UK agriculture and horticulture. Given that there are about 115,000 full-time employees in the industry across the UK, it's probably not unreasonable to assume that 20 per cent of them are therefore EU nationals. That probably masks the scale of the importance of the horticulture, the fresh produce sector in particular, where there's a much greater demand for seasonal labour. It's probably not unreasonable to assume that somewhere between 50 and 90 per cent of the workforce in the fresh produce sector, particularly in pack houses and in picking or other EU nationals. Food manufacturing, 38 per cent of the workforce are migrants, so the issue is particularly significant for the food manufacturing sector. Therefore, the uncertainty around the availability and access to labour will have an impact on the decisions that companies make going forward. That's pretty comprehensive, but do you want to add to that? Only briefly, in terms of migrant labour, it's important that the question is, well, what do you do about it? There's certainty required, but previously, seasonal worker schemes had existed, but were stopped when freedom of movement restrictions were removed. There's potential to recreate mechanisms that provide migrant labour, but those need to be developed for them. The six key strands to labour are vitally important to Scottish agriculture, but not just agriculture on its own—the whole food processing and the supply chain. There's the seasonal and the permanent, the on-farm, the off-farm and the skilled and the unskilled. We need to make sure that we cover each and every element of that. At any one time in Scotland, there are about 15,000 seasonal workers in Scotland in any year. Within our agriculture and food processing sectors, there are about 8,000 full-time equivalents. Particularly in sectors such as red meat, in abattoirs and cutting plants, the role of that labour is really important, but the skill levels are also very important to remember as well. We are looking at an awful lot of veterinary services in Scotland that are provided by European vets. We cannot overestimate how important they are to making sure that the wheels, if you like, of agriculture keep on turning. One of the big questions is that every conversation that we've had with the UK Government about this has been that the issue was all about free movement of people, but now they're talking about controlled movement of people. What we can't get out of UK Government is an answer as to what controlled movement means. It then goes back to things that Andrew has just raised. We used to have the seasonal agriculture workers scheme sores, which obviously was about temporary work, but what about those who are already here, permanent employees and so on? We need some questions pretty quickly from the Home Office in particular. We do keep writing to Amber Rudd, but she doesn't seem to respond. We need some answers from the Home Office about those sorts of things. Can I just finish on the research issue? The research issue is essential as well. The funding for research clearly is the underpinning of innovation, and a lot of comments have been made about the need for innovation. If we don't have the drive in research that we have had for many, many years in Scotland, then Scottish agriculture can then utilise in changed practice and utilise new technology and so on, we will never be able to compete. The research investment is just as important as the on-farm investment in making sure that the agricultural industry keeps moving forward. I can let you come back very briefly to make a comment. It was just a quick supplementary to that, because it is an area that is vital for my constituency and also into Angus south, where there is a lot of soft fruit production, and EU-magnant labour is particularly important. I met a business last week, who is already closing down part of their business because of the uncertainty over the access to EU-magnant labour. Are you seeing impacts elsewhere across the sector already with that uncertainty? Can I just come in there? No, sorry. You have had quite an input at the moment. Can we please go to Stephen to come back? I was just going to make a point of clarification from Stuart Stevenson. In terms of the Netherlands, I should have made it clear that it acts as a major hub in terms of imports coming into the EU, which then comes into the UK. It acts as a hub, so not all that product is from the Netherlands, but it is still of vital importance in terms of that. I am sure that he could have made that point in the 12 words that he said he would. That is genuinely nurtured as well, sorry. Can I go to Tom at the end, please? I think that it is difficult. Probably Johnny would have a better sense from his members about whether businesses have seen a practical impact. I am certainly aware of an impact in the short term, but some of that is related to exchange rates and, of course, the salary differential that the workers have seen in the short term. Andrew is right. We need to look to the future and not just talk about the risks and the threats. What are the potential solutions? We have already had the solution flagged around looking at control migration and some kind of both seasonal and permanent worker scheme. That will impose some capacity challenges on the home office, but that is quite important. The case has been made by the farming unions. There is an opportunity to improve labour productivity. Labour productivity in agriculture is not as high as some other industries, so what can we do to improve skills and training of the workforce that might improve productivity? Increasing automation goes back to the point about investing in innovation. What can we do to reduce long-term dependency by increasing automation through both farming and the supply chain? Finally, what can you do to get more of the underutilised or unemployed in the UK into the workforce? I am afraid that we will have to move on to the next theme, which is theme number six. I think that we can probably go through that fairly quickly, because I think that we have already touched on it, but it is about regulations and standards. In other words, red tape. Some regulations are international agreements, but many of them do come from the EU. Brian Park's red tape reviews have already been mentioned by Stephen, and there is a quote from Brian. He said that there must be an easier, more efficient, less costly way to regulate Scottish farming and land management. I think that we could all agree with that, but is it really practical and well-leaving the EU to enable a change in industry standards? We have touched on this, so we might be able to move fairly quickly. Andrew, do you want to start on that? Thank you, convener. Yes, in the longer term, potentially. In the longer term, yes. As I said earlier, our broad position is that we need to acknowledge the challenge of changing from one regime to another. That creates a really quite significant capacity problem. Our approach is that we take a phased or transitional approach to regulation, as well as future policy, so that we roll over where we are and then look at what we can change. There are limits to that, unfortunately, and those will be related to trade. In order to be able to trade, ultimately, we probably need to be able to satisfy the requirements of trading partners. Given that our biggest trading partner outside the UK is the EU, we will probably end up having to do something similar. As long as it meets its requirements, there has to be opportunity in there to be able to still meet their broad requirements without having to follow the letter of their rules. I think that that is where the opportunities will lie. If I may, I will bring in Peter. By that response, because reading the question, we are leaving the EU unable to change industry standards, in other words, the implication is, with a red tape, that we are able to drop standards. Surely we cannot drop standards if we are to maintain or market share in the rest of the European Union. Surely, if anything, it might be quite the reverse of what we are trying to get into in other areas, where we have to maintain and improve those standards. Far from reducing red tape, it could actually increase it. I do not quite understand how we could be in the business of reducing red tape. Can I bring in Peter and then I will come to Johnnie? I will make it clear on behalf of the environment link that we think that the EU environmental ackee has been almost entirely progressive. It has helped us in the UK to have cleaner water and cleaner air and protected species. It has been a good thing. We certainly do not see it as an environment link. We cannot wait until the EU stops and we can get off the bus. We want to stay on that bus and we want our regulations not always slavishly to follow things but to follow that process of better regulation but raising standards. We also believe that improved regulation or tighter regulation, if you like, regulatory stringency, drives technical efficiency. You only have to look at the building industry to see how much better our buildings are. They are not better because builders are better people than farmers. They are better because regulations drove efficiency in our buildings. Better regulation drives efficiency, so we do not think that regulation equals red tape. It is quite the country. Johnnie, do you want to come in on that? I tend to echo that point that Peter Smith just made. We are not in the business of trying to bring the standard down. Absolutely not. We must be seen and must be clear that we are meeting standards in all sorts of aspects, but we definitely have an opportunity of coming out of the EU, of unpicking some of the bureaucratic issues that are not fit for purpose, and I think that Stephen referred to them earlier on, which are not adding to the standard, but they are adding to complication and compliance risk and therefore ultimately to business costs, but not adding anything in terms of value from the public interest. I think that a whole range of those certainly riddle throughout the CAP regulations in terms of validation, verification, audit, inspection and all the rest of it, but also in lots of other spheres that we touched on in various directives. We are definitely not in the business of wanting to do a road standard or reduce standards at all. That would be to our detriment. We need to be seen and be clear that we are producing the very high standards, the highest standards, in order to capture markets, but at the same time we can unpick some things that just really do not add value at all that we have to comply with because we are part of the EU currently. Tom, you wanted to come in. Just very quickly, convener. We probably should distinguish between red tape regulation and standards, the first point. The second point is when we look into the future, not only do we have the capacity challenge that we highlighted earlier from a regulatory perspective, but if we want to be able to access and open up new market opportunities overseas in places like China, like the US, then it will be important that we can demonstrate the high quality traceability safety integrity of the products that we provide. It strikes me that we are likely to continue to want to trade off the back of having high standards as opposed to low standards. In terms of looking at the separation of red tape, that does not mean that there is not the opportunity to make things a bit simpler and a bit easier for people. I think that I am going to leave that there because there seems to be a general theme across this about not letting standards. Who feels that? There are red tape regularly because I do not know what they are. Could you, convener, like a list of things that you think are the red tape? I do not know what they are. I think that it would be helpful to have some examples of red tape, if that is possible. The absolute thing that we need to look at is Brian Park's report, which came out a year or 18 months ago. He identified many areas where we could cut back on red tape. That is the document that we should be looking at. That is the document that I hope the Scottish Government is looking at, because there are issues there that could be addressed. As Johnny says, they do not add anything, they just add grief and grievance in the paperwork for the farm, and that is what we can do with it. I am sure that the clerks will direct the committee to where to find that report. Stephen, you want to come in very briefly, but it must be very briefly. On the PAC report, I have hard copies that can give people if they want a hard copy. On that point of the regulatory burden, on the external trade, we might see regulations increase because you have to deal with rules of origin, you have to deal with new labelling requirements, so it is not all about the existing. Within the existing, there are some crazy rules regarding mapping that we might be able to drop. I always remember when we were doing the review that you are looking for something half the size of a tennis court in the largest field in Scotland is 44,000 hectares, and you are looking for combined features that add up to half the size of a tennis court. That is where it is ridiculous, and if we can drop them, that is good. The deputy convener now wants to go on with the next theme. Pete will be delighted to know that it is about an agree land use policy. The Scottish Land and State has called for, and you have all mentioned it in your written submissions. I am just going to let Pete talk. Very briefly. It is in our submission, and I think that there is going to be much descent here about the fact that we are building on an existing land use strategy, the Land Reform Act, a framework for land use in Scotland. We can take credit for the fact that people are getting together and talking about that. Our concern is that, at the moment, we have fairly high-level principles in terms of land use strategy. It would be helpful to try to bring that down more into a regional level and to improve the governance of that so that more different actors are involved in that, but that we can and must find ways of using our land to produce multiple objectives. Everybody said that. We have got a climate change imperative, and I pick up Stuart's point about the way that cap actually disincentifies tree planting, where it would be very sensible to do that. I think that a regional land use framework, or even looking at things at a catchment level, can allow not just land owners and land managers, the environment agency's government, but also communities to have some say in what are our priorities locally, what can we do to this, and to engage communities in that conversation, rather than, as can happen in parts of Scotland, people feel the forest came in and they displaced the farms and it is not that terrible, but they are actually saying, how can, as Stuart says, we get some benefit out of that for everybody, how can we plan that so that the communities gain houses and can get built, the whole thing can improve rather than land use decisions are just made by people, and then everybody else has to live with it. So an integrated framework seems sensible to us. The next logical person to come to is Stuart to talk about how he can integrate forestry within the agricultural schemes and how, because I'm sure you'll have views on how integration with livestock could work, but is currently restricted. Yes, thank you, convener. Looking at our reflecting back, as you say in our submission, we just feel that the existence of the common agricultural policy just basically sucks all the oxygen at the room. We talked to politicians, we talked to civil servants, we talked to commentators, and over the last 20 years, everybody, even though forestry was included in 1992 as an activity, everybody thinks about agriculture, everybody thinks about how do we make agricultural systems work, how do we get the payments out, how do we structure everything around agriculture, and it just doesn't leave any opportunity for thought time and activity to be saying, step back, how do we actually have successful rural areas because agriculture may have been the dominant part of rural communities in the beginning of the 20th century, but it's not the beginning of the 21st century, so we do need to look at how we have successful green rural areas. We would put forward the opportunities that we're starting to see emerge, and you mentioned the ability to integrate forestry within livestock, and it's a great frustration for us that very few farmers, land managers out there who are looking at how they could plant trees on part of the land and then reap the benefits in terms of shelter for sheep, so the sheep need to eat less food, the better quality, the reduction in sheep production, or meat production, in most cases that we've seen is nil, or in actual fact there's higher quality production, and then you have on that land the opportunity to convert to something that doesn't require a long-term subsidy, which is providing environmental benefits, which is providing climate change benefits, it's mitigating flooding, and it's providing an economic activity to support rural businesses, so what we really want is the opportunity, as we move forward, as the Scottish Government, this committee is sending a signal to everybody thinking about commenting on rural policy, to look at the civil servants within the Scottish Government to say, don't just be thinking about agriculture policy and how we roll it forward, let's have some cross-thinking between forestry, civil servants, between agriculture civil servants, environmental civil servants, about how we can have a framework for policy in Scotland, which will allow us to take and transition from an agricultural policy, as we were saying earlier, to what we see as a countryside policy. Okay. Andrew, you wanted to come in. Echo those comments, really. The land delivers a whole range of things, and to a certain extent, policy determines land use significantly by the amount of money that's provided through things like the common agricultural policy, and sometimes that can be a barrier to the maximising the output, so it really focuses on producing one output because that's what we as a society decided, actually. We really need some food right now, so we designed a policy to maximise that, if we could, or to support farming. Policy really drives the degree to which or the way in which the land is used. There's an opportunity to reframe it, and it's a once-in-a-generation, once-in-a-forty-year opportunity to do that. It's not in any way easy, and there are some real challenges, and Pete picked up on one of them, and there's a governance challenge. So at the moment, the way that things tend to work is through those different sectors, so the farm sector has policy, and forestry has its policy, and they've kind of come together a little bit in the way that forestry had to be brought within the rural development programme, but there's a very much a sexual approach, and rural development is kind of, again, seen as separate. If you're talking about integrated land use, how do you deliver that? Pete started talking about a regional approach. That raises really quite significant problems for how the Scottish Government develops. How do you go from developing a national policy, which you hope is delivering integrated land use, to enabling it to be developed through a regional approach where you might have greater participation at that regional level? You go from silos into regions, and that's an issue. It was tried relatively recently, to a degree, through the previous SRDP, where regional priorities were created as a mechanism to try and identify what priorities were in different places, and it actually didn't work that well. There are some real challenges in how it's delivered, and I think that we need to come together to assess the mechanisms through which we could take that forward. Simple scoring might not work. Jonny, do you want to come in there? I certainly support the principles and always have done of integrated land use, but I think that we need to be careful about the scale. The principles are spot-on, as I say, but if you take it down to the individual hectare or even the individual business, it's almost impossible to do all things all the time to have any optimal or reasonable outcome. There are trade-offs. There's an opportunity cost of what you do with your land, because as soon as you plant it under trees, you can't then use it for food production or renewables or recreation or whatever it might be, but if we take a step back and actually look at it more at a landscape scale or a catchment scale and integrate things like flood risk management and all the other things, then I think we really can talk here. Just to make a point about Stuart's observations about sheep, upland sheep management in trees, just for the record, the NFU Scotland is 100 per cent supportive of that sort of initiative, but there are challenges there. The challenges aren't about the objectives of the farmer, in many senses. There are issues around many, many hill farms being tenanted, and it's not the farmer's choice as to whether he can plant trees or not. That's within the gift of the landowner, and therefore there are other issues there. As a principle, yes, but I think we need to be very, very careful about what we do expect from every hectare of land, but I would take up Pete's point, and I think it's an important one. There are certain areas that you could certainly look and say what are the priorities that we want to try to achieve here. If we've got prime agricultural land in Scotland and we haven't got much of it, let's make sure that its prime use is agricultural. Then in other parts of Scotland, where agricultural values become more marginal, let's look at other alternative uses if that might be the case. I would say that that largely happens by the drivers of the markets as much as anything else. Yes, there have been stifled to a degree by where support payments go, and that's created inertia, but going forward under a new policy settlement, that inertia might be broken down because it won't just be about occupation of land to get an agricultural support payment. It will be about activity on the land to get a support payment, and that's the principle that we should be going for. Just really quickly, in a sense, there could be one or two words. Are there any countries where it's currently working? A regional? No, just an integrated land. I'm afraid that I've got to move on to the next point, which will be introduced by Stuart. Thank you, convener. Tom talked about opportunities that come in developing markets in China, and Andrew talked about opportunities that come from the change that we're facing. I'd like to give perhaps initially others the opportunity to bring forward any opportunities that we have that come from the change from our no longer being in the EU. Who would like to lead on that? Andrew, would you like to? Well, I guess the biggest one from our perspective is actually what we've been talking about already, which is the opportunity to redesign policy in such a way that suits us. The step of leaving the EU potentially creates those opportunities in terms of regulation, in terms of more targeted support, potentially integrated land management. The opportunity is great because we could potentially redesign policy that really delivers for Scottish land managers but for Scotland as a whole. The challenge is also great in doing that, but it's there if you want to grab it. Sorry, I'm going to challenge you slightly. Turn that into something specific that I can touch, feel and think about. What would be the first thing you would do given that opportunity? Given the previous arguments, we have to acknowledge that we need to avoid a cliff edge. We're not talking about just turning a switch from one thing to another. We have to be on that trajectory, where we change policy. For example, at the moment, we have a structure of support where the majority of support that goes to farmers goes through direct support with a small proportion to rural development, agri-environment and so on. There's an opportunity to rethink that structure so we don't necessarily need to have the pillars in support. We could change the way that we deliver that. We could change the degree to which we provide direct support. We could provide a base level of support, which is a safety net, but then put a greater level of support to enhancing the industry's productivity and profitability. We could focus much more on the agri-environment public goods, so we could put a greater proportion at least of the budget towards that. We could provide a great deal of certainty to the forestry industry so that they have the stability that they need. The opportunities there are great. Those are the things that we have to decide on. Tom, would you like to… I guess that I've already covered off in a sense that the key opportunities that we'd see are in a sense the opportunities to be able to go out there and develop new trading arrangements in a much more fleet-of-foot fashion than perhaps the European Union has been able to do. It's taken seven years to conclude negotiations on seater the Canadian trade agreement. It's not exactly a complete free trade agreement, but it's taken a long time to do it. There's a potential with the right resources and the right will and skill for us to be able to do that. The question is, do we have the resources, the will and skill, and also what are the trade-offs? For example, if we do go out there blindly seeking a trade agreement with the United States, what are the potential consequences? There are some probably upside risks, but also downside risks as well. The big opportunity really for us isn't being able to go out there and develop new markets for British agriculture, horticulture and specifically for Scottish products. Pete, do you want to come in on that? Just to say, I think that the big opportunity is to open up the debate. We've got a not a clean bit of paper. We've got a fresh start that we can make. Involving the widest set of possible people in that debate is really important. There's lots of things that we would want to see as a link that we could do within the cap. Integrated land use management is not prohibited from doing that by the cap. Moving towards agriculture ecology, we've argued for that. The cap allows us to do that in a way that France has done that. The cap hasn't stopped us doing that, but having, if you like, control over the resource and the structures that we put into place opens up a public debate. There's also the possibility that we floated that some of the money that we come from in agriculture could be used to support nutrition for people on low incomes. 80 per cent of the US food farm bill doesn't go to farmers. It goes to cities to support people on low incomes. Now, we may not want food stamps or anything like it, but it does open up those possibilities of thinking again about how do you support farming, maybe support farming by subsidising consumers to buy veg from Scottish farms rather than the other way around. On the trade, there's obviously opportunities there. We've got a very strong brand in whisky. Salmon's got a very good reputation. Scotland's scene is pretty organic, if even though it's not organic, natural. We've got an opportunity to trade on that. The problem that we have with trade deals is that you can't just cherry pick parts of your sector or your economy. You have to pretty much go with all your trade to America, or you can't just say, let's go on a beef trade deal. We can't just do that. There are opportunities, but there are real challenges within that. Within the wider policy sphere, we know that farmers and land managers are very quick to react to proper incentives. All you need to do is look at the renewable energy and how successful that has been in terms of changing our landscape. If there are the right incentives there, you can get land management change on private, on the market driving change. We've seen that happening and we're seeing it happening in the beef sector with the penalties on heavy animals going into abattoirs. If the signals are right, whether they're policy or market, we can't actually drive change in agriculture and land management. Those are the kinds of opportunities that are thinking smartly, how we incentivise things and getting the market signals right. Stuart, would you like to add anything to what's been said? Johnny, signals from the market will make changes? Signals from the market, yes. Other people have covered some of those opportunities. I think that we have a very, very quick opportunity. By withdrawing from the CAP, we could finally break this who do, if you like, of spending lots and lots of money on relatively empty or completely empty hillsides and we could focus our support payments on activity. That is going to be critical going forward if we have less budget to play with than hitting the target becomes absolutely vital. We as an organisation do not want to see money going to those who simply occupy land rather than manage the land, take risk on the land and try to generate a reward from the land. We have a clear opportunity in that sense that we could recast the activity requirements that we currently have to live with, which are a European construction, and make the focus of support spending in the future no matter what the activity is, but the activity gets it rather than the inactivity. I will pick up at Johnny's point. It is a European requirement that their condition relates to the agreement on agriculture. Trade deal in terms of WTO is important because we cannot just go down the activity rule under their rules. We have to be really careful. I agree with you that it is important that we only support active people, but we have to be careful on how we do it. John Lennon is fully aware of blue box green box and amber box rules then. There is an issue in terms of the debate. We have come to the end of this session. We have had a wide-ranging discussion and I thank everyone for their input. If there is anything as a result of this session that anyone feels that they have not had the chance to raise, which I would be disappointed if there was much that you felt you had not had the chance to raise, I would ask you to write into the committee and to let us know your views if there are specific areas. On behalf of the committee, I would like you to thank you all for your attendance today. I am briefly going to suspend the meeting now to allow you to leave the room. Thank you very much. The second item on the agenda is subordinate legislation. It is a negative instrument as detailed on the agenda. The committee will now consider any issues that it wishes to raise in reporting to the Parliament on that instrument. Members should note that no motions to a null have been received in relation to this instrument. There have also been no representations to the committee from any outside agency. Does any member of the committee wish to make comment on the instrument? Does the committee therefore agree that it does not wish to make any recommendation in relation to this instrument? That is therefore agreed. That concludes today's meeting, ladies and gentlemen. I would just like to talk very briefly to the committee now that meeting is concluded.