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

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

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

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

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

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

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

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

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

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

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

As I said, there are a number of areas of spend in portfolios across Government that will impact on rural areas. An example of that is the spend on, and support for, the enterprise agencies, particularly South of Scotland Enterprise and Highlands and Islands Enterprise. The investment in those agencies is at the highest level that it has been since 2010-11. There is also funding for VisitScotland.

The funding for the three enterprise agencies and VisitScotland has been protected. That will be vital because the enterprise agencies provide advice, support and targeted funding opportunities across their areas, which helps small businesses to grow and develop, thereby creating jobs and, ultimately, sustaining our rural communities. Alongside supporting some of our more traditional rural businesses that are based in food and drink, tourism and the creative industries, they are promoting the growth of new, innovative rural growth industries, such as renewable energy and the space sector. They also have a critical role in helping us to achieve our net zero ambitions.

There are also significant contributions from other national programmes. An example is the green jobs fund, given the importance that the growth in the environment-related sector will have in rural areas. There is also the five-year place-based investment programme. Even though that is not directly within my portfolio, rural communities can be expected to benefit from that support.

You asked about where the decrease in funding from the UK Government has had an impact. You can see that impact in the replacement of EU funds. We were promised that they would be replaced in full, but that has not transpired. The European maritime and fisheries fund is an example that I have used previously. Just over £14 million has been identified to replace that fund, but our entitlement should have been in the region of £62 million. We also expect a shortfall of around £95 million in funding for agriculture up to 2025. If we had received what we were promised and the funds had been invested in fully, that would have enabled us to go further in our proposals.

Exactly.

I note that we are not subject to subsidy control. We are able to operate effectively under the trading co-operation agreement that is in place at the moment. Again, because of its very nature and the fact that we need those interventions, the situation with agriculture is very specific and separate to other subsidy control or state aid regimes. However, that is not to say that it is not monitored. As I said previously, we have the WTO agreement on agriculture. It is therefore simply not necessary for it to be caught by the bill. That is where it is frustrating, because, with that information so far not having been shared with us, it is hard to understand the rationale for its inclusion. We see no reason why it should be included when it is covered by those other schemes.

There has been collaboration on the common frameworks. As I said, it is now up to the legislators to approve what has been set out. There has been collaboration there, which is why it is disappointing when we see pieces of legislation such as the 2020 act and the Subsidy Control Bill, because they undermine the process in which are all engaged in good faith.

As I said, I believe that the process for engaging on the frameworks that have been published has already been set out. However, it will be up to the committee to determine how it undertakes that scrutiny. Obviously, I am willing to engage in that process with the committee. I want to be open and transparent and to work with you as much as possible. If you want to have a discussion about some of the frameworks that will be coming forward and how we will undertake that process—although some of that is for the committee to determine—I am more than open to engaging in that process with you.