Calls for radical measures to increase productivity
While the growth in Scottish agricultural productivity might be ahead of that in England, it still lags well behind that achieved in many other countries around the world – and radical measures, including boosting education in the sector, reducing levels of direct support and changes to the tax regime could be required to improve performance.
A report drawn up by Scotland’s Rural College (SRUC) and released this week revealed that Scottish agricultural productivity had shown “erratic but positive” growth to average 1.5. per cent between 2000 and 2015 – but while this was above the UK average of 1 per cent, it was below that of France (2.4 per cent) and Denmark (2 per cent).
Commissioned by the Scottish Government, the report – Boosting Productivity Growth in Scottish Agriculture – identified a broad range of interventions that could be explored to support growth in productivity across the sector.
Andrew Barnes, a professor of rural resource economics who led the research, said that productivity growth was a key pillar of resilience and would need to be achieved alongside wider Scottish Government goals such as meeting greenhouse gas emission targets.
The report accepted that climatic and biophysical disadvantage were a major factor influencing productivity growth in Scotland but added that inappropriate management, low levels of technology uptake and lack of willingness to adopt techniques and systems which may be more efficient and resource-saving also played a role.
Improving the educational attainment of the farming population was highlighted as one route to lifting performance – with the participation in education not only of the next generation of farmers but also the “continuous improvement” of the current farming population, “whatever their age” likely to be beneficial.
The report also concluded that reductions in farm support levels had also led to improvements in productivity, highlighting the New Zealand experience – however it conceded that while this would lead to an overall uplift in industry productivity, it could come with a “high social and environmental” cost.
Changes to the tax system which encouraged the longer letting of land by offering tax relief on leases of ten years and more had been highly successful in the Republic of Ireland – and had not only increased the number of longer lets but had also seen productivity improve.
“Similar changes to the tax system could incentivise a similar shift within Scotland, encouraging the shift of land management from older farmers and farming investors who own the land to active and often younger farmers,” concluded the report.
Commenting on the publication Barnes added: “I have been studying Scottish rural productivity for over 20 years and never have I seen such pressure from the potential shocks that the current external factors may have on the structure and sustainability of the industry.
“This report sets out some blue sky thinking towards what could work in Scotland and, while some is quite radical, I would argue now is the time to follow through on how we support this and the next farming generation going forward.”