Seòmar agus comataidhean

Thank you for clarifying that, and I am sorry that I did not respond to that question the first time.

You are absolutely right about the agricultural transformation fund. There have been a number of asks from the industry on what that funding could be used for. It was important that we had those discussions with industry to see how that funding could best be allocated and used.

It is also important that that money is additional. Our greatest requirement has been for capital funding, which is why it is capital funding. It could have all come back in one year, but it is important that we are able to spend that funding, so the lion’s share of it will be returned next year. That is positive, because it enables us to fully utilise the funding within a year, knowing that there will be a return of that funding next year as well, depending on what schemes we are looking at.

There have been some suggestions. I will list some areas that I am keen that we look at, on which we are undertaking work at pace or that we have heard about from our stakeholders. There is concern that we have not had a food processing, marketing and co-operation grant for a number of years because of the significant constraint that we have had on our capital budget. Are there options for that? What can we do for the next generation—new entrants to farming? Can we provide them with capital support that could be helpful?

I am afraid that, at the moment, I do not have cast-iron plans for how that funding will be spent, but I would be more than happy to keep the committee informed when we know how the agricultural transformation fund as a whole is intended to be utilised.

I see that George Burgess is nodding, and I am nodding as well, because we are very cognisant of that. We do not want to make it too onerous for people to apply to the scheme, let alone for us to administer it. I completely appreciate your point.

The year 2024-25 was due to be the last one in which we offered support for carbon audits and soil sampling, but I am keen that that continues in the coming year, given that some of the audits will become mandatory. I will look to confirm further details of that in due course. I am not in a position to say exactly when that will reopen or relaunch, but that is what we are considering for the coming year.

You are right in relation to the carbon audits that the farm advisory service was offering, but we also had that avenue available through the PSF scheme, and I believe that people were being redirected to that.

I do not know whether George Burgess has more information on what exactly will be available through FAS next year. That has been part of the offering in previous financial years, and I would expect that to be the case this time round, but perhaps George has further information.

It is not available at the moment, but, as George Burgess said, we are providing FAS with a slight increase in funding during the coming financial year, so I expect that that will still be the offering. It is my intention to run the PSF scheme in the coming year, but I will update the committee when I have more details on that.

Yes, it would, because we would have the security of knowing what we were going to receive and when. That would enable us to do it. If we had a multi-annual commitment, we would be in a better position to look at that.

Sometimes, how the budget is set out does not necessarily help, because it does not always cover the full extent of a scheme when it is under a more general heading and a number of different schemes are within it. The biggest element of funding is what we pay through the basic payments scheme and greening, which now have their own conditions attached through voluntary coupled support.

However, one of our key schemes, which you rightly mentioned, is the agri-environment climate scheme. It is probably the most key of the schemes that help us to achieve what we are trying to do with food production and working with the land in a way that also works for climate and nature. It is important to point out that, when it comes to the way that the funding for that is presented in the budget, it looks as though a fairly small capital element is allocated to the AECS scheme this year; however, as I touched on, a climate change fund is available, of which some has been allocated to AECS, so the full AECS funding is not listed in the RALRI budget. That other element falls within the net zero budget line; we are due to receive an extra £4.15 million, I think, in capital, to support the AECS scheme for the coming year. That would enable us to bundle the eligible applications that we received for last year’s round as well as fund the five-year contracts on which AECS runs, including all our previous contracts.

However, that is by no means our only scheme for doing that. Last year, we also used the agricultural transformation fund to support AECS, to help businesses on their way to adhering to the water environment regulations that will come into force at the start of next year. That involved slurry storage, irrigation lagoons and, a couple of years ago, slurry spreading equipment.

Within the business development line of the budget, too, we have a number of schemes—for example, the knowledge transfer and innovation fund, as well as a host of others—that people can apply to. Such funds are important in supporting and encouraging the innovation that we want in farming and crofting. Our key fund for achieving all our outcomes is probably the AECS, but it is important to point out the others.

Another thing that I have so far neglected to mention is the funding that we provide to NatureScot, which is helping us to pilot different approaches. Over the past year, we have supported its farming with nature programme, which has been piloting biodiversity audit and the app that is being considered. It has also been looking at piloting an outcomes-based approach for farming. We have provided funding to enable it to undertake that work for us, which has proved vital. Especially for biodiversity auditing, having such tools available is important.

Yes, I would be happy to set that out for the committee and show what will be available. On top of that, as you were speaking, I was reminded that we also provide funding for the Scottish dairy growth board. That is another example. We have a number of different funding schemes to help industry both directly and indirectly. I would be happy to set that out for the committee to provide transparency.

We have not as yet opened the round for the coming year, and we are considering that at the moment. Over the past couple of years, we have had to have more restricted rounds because of the capital situation that we have faced. It is all part of what we are considering at the moment, but, again, I would be happy to take that point away and consider it for future iterations of AECS.

The fact that the funding has now been Barnettised, in essence, means that we will be tied to that. I will hand over to George Burgess, who will be able to provide more detail.

Your characterisation of the position is absolutely right. As I have said to the committee previously, we were absolutely not where we had hoped to be in relation to woodland grants and support for forestry creation, because of the significant cuts to that budget over the course of last year. However, it has been really positive to see the increases in the budget that we have allocated to forestry, with an increase of 18 per cent this year.

As you have outlined, and as you have heard from different stakeholders in evidence, we will not meet the 18,000 hectares target. The peak of the planting over the course of last year was 15,000 hectares. We had been on such a positive trajectory, and it is really unfortunate that, because of last year’s budget cuts, we were not on track to meet the 18,000 hectares target and will still not be on track to do it this year. I go back to your characterisation of the situation as like trying to turn a tanker around, because it is going to take time to build that figure up again.

Even if there had been an even bigger increase in the budget for woodland creation or the funding available for Scottish Forestry, I do not know whether all of that could have been used. We have to match the funding to projects that we know can come through the pipeline. I hope that, now that there has been an increase in funding, we can continue on a positive trajectory and rebuild confidence in the sector, so that it can continue to plan and invest.