Written Question · S2W-08799 · Session 2
Whether the feasibility study to be carried out into the future of the Bull Hire Scheme will consider the (a) introduction of a replacement…
The question
To ask the Scottish Executive whether the feasibility study to be carried out into the future of the Bull Hire Scheme will consider the (a) introduction of a replacement grant scheme and (b) refining of the current scheme, in line with recommendations in the Scottish Agricultural College's Report on the Review of the Crofters Commission Livestock Improvement Schemes to make the scheme compliant with EU state aid rules and best value.
The answer
We have chosen to continue to invest in support for cattle improvement in the crofting counties and are looking with stakeholders at a range of options.
Any future support measures must bring measurable improvements, give the taxpayer value for money and comply with EU state aids rules, in particular the Community Guidelines for State Aid in the agricultural Sector. It is our view that in order to get approval of a new scheme for state aid purposes the support to crofters should take the form of a grant. This makes it transparent how much support is being given, provides a mechanism for linking support with measurable improvement and enables us to deliver the assistance in a manner that complies with the guidelines.
We would have refined the existing scheme to deliver measurable improvement as suggested in the Scottish Agricultural College (SAC) report if we had thought it feasible to do so. However, we could only have done so if there were no on-going subsidy to crofters within the scheme and thus no state aid. The cost of hires in that circumstance would be extremely high and more than we believe crofters would be prepared to pay. Furthermore, many of the costs we would need to recoup are fixed costs so if demand were to drop fees would inevitably increase even further.
We do intend to ensure that any new scheme will deliver genuine and measurable improvements in the quality of stock. A number of the SAC recommendations on what is required to deliver better quality and better value for money will therefore be taken on board. A grant scheme need not take the form envisaged in the SAC report and such an approach is not what we currently intend. Payment of assistance through grant does not rule out features of the existing scheme such as supply of bulls from a stud facility on hire or provision of facilities for over wintering of stock. The crucial issue is that any service provided by government must be on a full cost recovery basis in the first instance.However, it may be possible to partially offset some of these costs by grant payments. This is precisely the kind of issue which we are currently discussing bilaterally and in focus groups with interested parties.
Any future support measures must bring measurable improvements, give the taxpayer value for money and comply with EU state aids rules, in particular the Community Guidelines for State Aid in the agricultural Sector. It is our view that in order to get approval of a new scheme for state aid purposes the support to crofters should take the form of a grant. This makes it transparent how much support is being given, provides a mechanism for linking support with measurable improvement and enables us to deliver the assistance in a manner that complies with the guidelines.
We would have refined the existing scheme to deliver measurable improvement as suggested in the Scottish Agricultural College (SAC) report if we had thought it feasible to do so. However, we could only have done so if there were no on-going subsidy to crofters within the scheme and thus no state aid. The cost of hires in that circumstance would be extremely high and more than we believe crofters would be prepared to pay. Furthermore, many of the costs we would need to recoup are fixed costs so if demand were to drop fees would inevitably increase even further.
We do intend to ensure that any new scheme will deliver genuine and measurable improvements in the quality of stock. A number of the SAC recommendations on what is required to deliver better quality and better value for money will therefore be taken on board. A grant scheme need not take the form envisaged in the SAC report and such an approach is not what we currently intend. Payment of assistance through grant does not rule out features of the existing scheme such as supply of bulls from a stud facility on hire or provision of facilities for over wintering of stock. The crucial issue is that any service provided by government must be on a full cost recovery basis in the first instance.However, it may be possible to partially offset some of these costs by grant payments. This is precisely the kind of issue which we are currently discussing bilaterally and in focus groups with interested parties.
In the Official Report
No contribution in the Official Report cites S2W-08799 by reference.