Spotlight on Scottish sporting estates

Land reform proposals and CAP reform will have serious consequences for grouse moor owners

2014 will be a very important year for Scotland. Not only is there a referendum on independence but we have also seen reviews into land reform, agricultural holdings legislation and the Scottish Government’s intentions regarding the implementation of the reformed Common Agricultural Policy.

The Land Reform Review Group’s final report was published on 23rd May. Those of you who have read the recommendations in the report will understand the potentially dramatic changes suggested. These will have the greatest effect on Highland sporting estates through ownership, land management and governance. We can be in no doubt that, whatever the result of the referendum on 18th September, land reform will be extremely high on the Scottish agenda.

Cabinet Secretary for Rural Affairs, Richard Lochhead announced the Scottish Government’s proposals for CAP reform on 11 June, almost a full year after DEFRA had issued its report south of the border. Over a five year period the proposals will gradually take Scotland out of its historically based subsidy system to flat rate area payments for three separately defined payment regions in the country. Much of the finer detail about eligibility, particularly around ‘active farming’ and minimum activity levels, is still unknown. The parameters around these definitions are yet to be published and are still being developed by the Scottish Government.

At the beginning of the consultations on CAP reform, the principal aim was to get subsidy payments directed to active farming businesses and away from ‘slipper farmers’ buying entitlements as investments. The outcome of this is the intention to extend the negative list of entities not eligible under the future payment scheme to include non-agricultural sporting estates from 2015. They will sit alongside railway services, airports, real estate services, and permanent sport and recreational grounds. The current proposal aims at removing sporting estates whose principal activities are not agricultural.

Many grouse moors run commercial breeding sheep flocks, others use cast ewes and wedders to manage the moorland for tick, and many use a combination of both of these. Removing  subsidy from legitimate farming enterprises because they take place on sporting estates is a proposal many owners and managers are going to have to fight in the coming year. No doubt there will be loopholes, and lawyers will conjure up suitable structures to allow farming businesses on Scottish sporting estates to continue to trade and be eligible for flat rate payments. Scottish Ministers are pressurising owner occupiers in Scotland’s remote rural areas to question if they should continue with their farming businesses. Many will already run at a loss with the inclusion of subsidy payments but shepherds are employed and communities are retained on these estates. In the majority of the country there is not a mass of potential farmers willing to take on a lease of this type of ground. The argument is fundamentally flawed. Owner occupiers of sporting estates with a legitimate farming enterprise  should be entitled to the same support as tenant occupiers of the same ground. No distinction of this nature will be made in low ground Scotland.

Going forward, there is going to have to be careful consideration by landowners and by Government on how the conditions for admittance to the scheme by those on the negative list are drafted and enforced. 

Moorland farming businesses will need to plan ahead and make informed decisions to ensure they do not fall foul of any ‘principal’ activity rules which are implemented by the Scottish Government in 2015.