1. Challenges post 2013: Rural Communities Dr Deborah Roberts Presentation to Scottish Government Conference Future Common Agricultural Policy for Scotland HolyroodHotel, Edinburgh, 16 March 2011

2. Overview of presentation 1.Current and future issues facing rural Scotland 2.Agriculture’s contribution to rural Scotland Farming – Production-related linkages – Local public goods Farmers (and farm households) – Social contributions – Non-farm business activities and off farm work 3.Policy implications CAP post 2013: Support for local public good provision from farming Support for re-linking farming and farmers to local economies

3. Trends and challenges: Rural People Steady population growth, particularly strong in accessible rural areas (but spatially variable) Population projections spatially variable  Pressure on housing, infrastructure and service delivery Older demographic profile than rest of Scotland Increased social costs associated with aging population Difficulties in accessing services May worsen with cuts in public finance Higher levels of fuel poverty Likely to worsen with increasing energy costs

4. Industrial structure masks key differences in types of businesses Micro, self employed, lower growth ambitions Reduction in public sector jobs may not be matched by growth in private sector employment Trends and challenges: Rural Businesses

5. Agriculture’s contribution : Farming (1) Policy emphasis given to importance of production-related linkages but capitalisation and specialisation plus changes in up/downstream industries  Farming has become “delinked” from local economies Contribution to GVA fallen from 4% 1973 to 0.8% 2009. Number of employees fallen by 31% since 1982 No. of Agricultural employees

6. Findings from the CAP-IRE project Location of farms in North East Scotland sample by postcode sector

7. Extent of local transactions, NE Scotland % of transactions within reach of nearest town % of transactions within reach of nearest City LocalNon-LocalLocalNon-Local Fertilizer 19.3 80.7 71.8 28.2 Chemicals 30.1 69.9 80.1 19.9 Seed 35.5 64.5 78.7 21.3 Feed 30.5 69.5 73.5 26.5 Machinery 56.1 43.9 90.0 10.0 Fuel 43.2 56.8 91.0 9.0 Services 53.9 46.1 95.5 4.5 Destination of main output 25.9 74.1 77.7 22.3 Both demand-side (age of farmer; attachment to local area) and supply-side factors (spatial concentration of agri-businesses) found to influence local transactions

8. Fertiliser purchases- Turriff

9. Fertiliser purchases- Main locations

10. Cattle Sales - Inverurie

11. Cattle Sales - Main destinations

12. Agriculture’s contribution: Farming (2) As dominant land use, farming provides local public goods (landscape amenities and access) Key driver of counter-urbanisation trends and increased demand for rural tourism and recreation. “Scenery” cited as top reason for choosing Scotland as a holiday destination (66%) (Harris Interactive, 2008) Aspects of neighbourhood particularly liked

13. Dumfries and Galloway Tourist Board Images of Rural Scotland Orkney Tourist Board Visit Scotland: Highlands

14. Agriculture’s contribution : Farmers Farmer contributions to social and cultural capital in rural communities weakening - threatens cooperative practices (Burton et al., 2005; IEEP, 2004) - Reduced farmers’ participation in village and community life (Lobely et al., 2005) Transition towards part- time suggests skills (and social capital) remaining in rural communities No. of occupiers

15. Re-linking: Diversification and off farm work Provides: a mechanism for re-linking farming and farmers with local economy (local farmer markets, local food networks, renewables) a means by which farmers can benefit from the positive externalities from farming activity (farm tourism, recreation) 55% Scottish farms have income from off farm work, Approx 40% have at least one diversification activity. SRDP committed funds to end March 2010: “Diversification Outwith Agriculture “ (Axis 3) £16.8m, 6% “Development/Creation Of Micro-Enterprises” (Axis 3) £7.7, 3% Source: http://www.scotland.gov.uk/Topics/farmingrural/SRDP/RuralPriorities/RuralPrioritiesStats/DataOption

16. Off farm work Percentage of farms selling output/ having off farm work within different market areas TownCity Local Non- Local Local Non- Local Place of off farm work 53.2 46.8 88.1 11.9

17. Policy implications To support rural communities, CAP post 2013 should Ensure local public goods associated with farming are maintained and/or enhanced Encourage re-linking of farming through – value added activities in food chain – Support farmer cooperative groups Encourage re-linking of farmers – on-farm diversification – Off farm activities with non-farm businesses Greening Pillar 1 Strengthen Axis 3 Pillar 2